Sean Parker

Cofounder of Napster and founding president of Facebook

• Born: December 3, 1979
• Place of Birth: place unknown

Primary Company/Organization: Napster

Introduction

Sean Parker was the cocreator of the pioneering music file-sharing site Napster, which demonstrated the viability of distributing individual songs over the Internet as MP3 files. The success of Napster helped both artists and users bypass traditional record companies, tapping years of frustration at the music industry, and led to the creation of the Apple iTunes store, a profitable commercial operation selling individual songs over the Internet. Parker also played a crucial role in the creation of the social networking site Facebook, helping founder Mark Zuckerberg obtain funding; Parker also served as president of Facebook and has been involved with several other web products, including Plaxo and Spotify.

Early Life

Sean Parker was raised in Herndon, Virginia, in the Washington, D.C., metropolitan area. He began writing computer programs in the second grade, using an Atari 800 computer given to him by his father, an oceanographer at the National Oceanic and Atmospheric Administration (NOAA). His mother was an infomercial media buyer and thus employed in an arm of the technology business. Parker became known as a computer hacker by age fifteen, having broken into numerous companies' and universities' networks; he was sentenced to community service for these activities. At age sixteen, he designed a web crawler that won first prize at a Virginia state computer science fair, and interned with several companies, including FreeLoader and UUNet, during his senior year of high school. Parker did not attend college after graduating from high school; instead, he went to work with Shawn Fanning, creating the site that would become Napster. Parker has referred to this project as Napster University because he learned about law, finance, and entrepreneurship, as well as programming, while working on Napster.

Life's Work

Parker first met Fanning on Internet relay chat (IRC), where they discovered they had common interests, including hacking. Fanning enrolled at Northeastern University in Boston, while Parker skipped college and went to work for UUNet, an Internet service provider (ISP) for businesses. The first investor Parker signed up for Napster was Ben Lilienthal, who also referred the company to an angel investor with whom he was familiar.

When Yosi Amran decided to invest $250,000 in the company, Fanning and Parker moved to California to devote their full time to the business. Napster's business plan, such as it was at this time, amounted to building a large user base of people interested in trading copyrighted music; ideas for generating revenue included charging a subscription fee, charging for each song, and selling merchandise to subscribers.

By July 2000, Napster had more than 20 million users and had become so popular on college campuses that some banned it because it used so much bandwidth that it interfered with other uses of the computer system. However, such measures were met with student protests, often couched in terms of free speech and against the record labels, which were accused of overcharging for inferior music. In other words, Napster fit into the rebellious spirit that is characteristic of many college students. Napster also inspired some bands to bypass the record industry or expose their financial dealings. For instance, Courtney Love gave a speech at a Digital Hollywood conference in 2002, publicized through the website Salon.com, in which she pointed out how little money a band might make on even a highly successful album compared to how much the record company might make. In 2000, Radiohead promoted an album by releasing tracks on Napster, and the reggae-rock band Dispatch used Napster as a sort of radio service to publicize its work and build its audience for its live concerts.

Much of the music shared on Napster was copyrighted, and this drew the attention of the music industry. On December 6, 1999, the Recording Industry Association of America (RIAA) filed suit against Napster, charging copyright infringement. The lawsuit generated publicity for Napster, with front-page stories in The New York Times and Los Angeles Times and interviews on MTV. This publicity was reflected in a tripling of Napster users, from 50,000 to 150,000, over the course of the month, and trading music over Napster became for some users an act of self-righteousness and an expression of freedom rather than an act of theft. Napster argued that they could not be held responsible for any copyright infringement on the part of Napster users, because the service was acting merely as an innocent middleman, like the phone company or the manufacturers of videocassette recorders (VCRs).

The success of Napster pointed out to the major music companies that there was demand for a different way of obtaining music, and the fact that music could be obtained for free on Napster was not the only reason the service was popular. Some record company executives realized that their business was changing and looked into ways to capitalize on consumers' desire to obtain individual songs in MP3 format. For instance, after Mark Ghuneim of Sony Music observed that downloads on Napster increased sharply during and after the 2001 Superbowl half-time show (of songs performed by the bands featured in that show), he investigated the possibility of having his company release singles on vinyl. However, this proved impossible: Not only did Sony no longer produce singles, but the company could not efficiently meet demand, because it took fourteen days to get a product ready for sale.

In March 2001, Napster received an injunction to stop allowing users to trade copyrighted music on its service, and in July 2001 the company shut down its network. Napster paid substantial settlements ($36 million in total) to the music industry and attempted to convert to a subscription service model. However, this was unsuccessful and the company filed for bankruptcy on May 14, 2002. Although Napster ceased to exist in its original form, its existence left the music business unalterably changed. Not only did other services, such as Gnutella and Freenet, emerge, but in 2003 Apple Computer demonstrated that users would pay to download music from its iTunes music stores.

Parker became a managing partner in the venture capital firm the Founders Fund after leaving Facebook; this company, created by Peter Thiel, focuses on investing in technology companies at their early stages. Parker also founded Project Agape, a social network for political activists, as well as Plaxo, a free system to store and update contact information, similar to an online Rolodex. However, Plaxo had a dark side: When an individual signed up for Plaxo, the program would send an e-mail message to everyone in that individual's address book inviting them to sign up. The number of e-mails thus increased geometrically, because some of the contacts of the first user would sign up for the service, triggering a new set of e-mails, and so on. The details surrounding Parker's departure from Plaxo are not completely clear; he claims he was forced out by Ram Shriram, while others involved in the company said that Parker was no longer doing his job and was a disruptive influence.

Parker met Facebook cofounders Mark Zuckerberg and Eduardo Saverin in the spring of 2004 and then ran into Zuckerberg again a few weeks later in Palo Alto, where Zuckerberg and several others were living in a rented house and working on the new social networking site. Parker helped Facebook connect with potential investors in Silicon Valley and, according to Zuckerberg, played a crucial role in transforming Facebook from a college project into a real company. Parker is also credited with helping design the look of Facebook (he emphasized the importance of design as well as engineering) and for promoting the photo-sharing capabilities of Facebook. Parker's greatest influence on Facebook, however, may have come from the corporate structure he developed to give Zuckerberg complete control of the company; the structure gave Zuckerberg multiple board seats and “supervoting shares” (B shares, worth ten times as many votes as the A shares held by, for instance, Saverin). Parker based this structure on his experience with Plaxo, where he felt he was unfairly cut out of the business.

In 2009, Parker became involved with the Swedish music site Spotify, which is supported by advertising and offers users unlimited legal access to music. He left Spotify's board of directors in June 2017. He is also an investor in Airtime, a project created by Shawn Fanning to allow real-time communication and file sharing over the Internet. Parker and Joe Green created the Facebook application Causes.com, designed to use the power of social networking to support charitable causes. When a user posts a cause to a web page, the action is communicated to all that person's Facebook friends, creating social pressure for the friends to support the cause as well.

Philanthropy

In the mid 2010s, Parker pivoted from consumer Internet products, which he began to view as addictive and otherwise potentially detrimental to society, to working with scientists on life-changing and life-saving medical technology. In 2014, Parker, who has asthma and food allergies, started the Sean N. Parker Center for Allergy & Asthma Research at Stanford University. The following year he launched the Parker Foundation with $600 million in funding allocated for civic engagement, global health, and science. In 2016 the foundation made a grant worth $250 million to establish the Parker Institute for Cancer Immunotherapy (PICI).

Personal Life

In 2005, Parker was questioned by police in North Carolina after cocaine was discovered in a rented beach house registered under his name, but he was never charged or arrested. However, this incident, along with some internal disputes, persuaded him that it was time to leave Facebook.

Forbes estimated Parker's networth was $2.8 billion in 2022. He has been married to singer-songwriter Alexandra Lenas since 2013. The couple has two children.

Bibliography

Alderman, John. Sonic Boom: Napster, MP3, and the New Pioneers of Music. New York: Basic, 2003. Print.

Bertoni, Stephen S. “Sean Parker: Agent of Disruption.” Forbes 188.6 (2011): 58–73. Print.

Hartmans, Avery. "The Incredible Life and Career of Sean Parker, Who Got His Start as a Teenage Hacker Before Cofounding Napster, Netting Billions from Facebook, and Becoming a Political Megadonar." Business Insider, 22 June 2021, www.businessinsider.com/sean-parker-life-career-napster-facebook-billionaire-pictures-2020-3. Accessed 7 Mar. 2024.

Kirkpatrick, David. The Facebook Effect: The Inside Story of the Company That Is Connecting the World. New York: Simon, 2011. Print.

Knopper, Steve. Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age. New York: Simon, 2009. Print.

Malik, Aleena. "What Happened to Napster Founder Sean Parker After the Social Network." Screen Rant, 4 Nov. 2023, screenrant.com/what-happened-sean-parker-napster-after-the-social-network/. Accessed 7 Mar. 2024.

Mezrich, Ben. The Accidental Billionaires: The Founding of Facebook; A Tale of Sex, Money, Genius, and Betrayal. New York: Doubleday, 2009. Print.