Shawn Fanning

Cofounder of Napster

• Born: November 22, 1980
• Place of Birth: Brockton, Massachusetts

Primary Company/Organization: Napster

Introduction

Shawn Fanning is a pioneer of peer-to-peer technologies and social networks. After releasing Napster, a revolutionary software application enabling Internet users to exchange music files, he launched various projects aimed at enhancing social interactions on networks. A computer programmer, entrepreneur, and angel investor, he has helped shape the digital society with ventures such as SNOCAP, Rupture, Path.com, Airtime, and Helium.

Early Life

Shawn Fanning was born on November 22, 1980, and was raised by his mother, Coleen, in the Boston area. Despite financial difficulties at home, he demonstrated some talent at school and emerged as a good basketball player. His friends gave him the nickname Napster in reference to his short, nappy hair.

His uncle, John Fanning, who watched over his nephew, played the role of a substitute father. While seeing Shawn regularly and offering him guidance, he bought him his first computer, an Apple Macintosh. Shawn quickly became obsessed with programming and networking via Internet relay chat (IRC). He worked during the summers at his uncle's company, NetGames, a platform for playing chess online. He also became friends with Sean Parker and Jordan Ritter, two other teenage computer enthusiasts, who lived respectively in Virginia and California. Animated by his passion to explore and learn, Fanning taught himself how to program in the Unix environment. In 1998, after graduating from high school, he enrolled at Northeastern University on a scholarship.

Life's Work

The year Fanning arrived at the university coincided with the breakthrough of the MP3 format for compressing CD-quality music into digital files. However, despite the rise of the Internet, it was still difficult to share MP3 files online. Around the end of 1998, Shawn got an idea to solve the problem, and he embarked on the creation of a music-file-sharing platform, with his two IRC friends Parker and Ritter. Immersing himself in his project, he increasingly skipped classes at the university.

After some months, Shawn's project had taken form, and in May 1999 his uncle, John, who had sensed the opportunity, encouraged him to incorporate a company. With years of experience in the high-tech sector, his uncle persuaded Shawn to let him run the company and to assign 70 percent of the business to him. In June, Shawn distributed a test version of his program to a handful of friends he had met on the IRC. The success was immediate, and dozens of copies quickly circulated on Internet forums, enabling any Internet user to share music easily and freely. After some improvements, the so-called Napster service was officially launched in September 1999.

Quickly identified by venture capitalists as the next Internet's “killer app” (application), Napster, Inc., was approached by angel investor Yosi Amram. In exchange for $2 million, he obtained the nomination of experienced manager Eileen Richardson as chief executive and the relocation of Napster's team to San Mateo, California.

With a rapidly growing number of potential customers exchanging music files freely and building libraries of songs without any consideration for copyright owners, it did not take long for the Recording Industry Association of America (RIAA) to sue the company. In December 1999, a complaint was filed for “contributory and vicarious copyright infringement.” A few months later, Metallica, the heavy metal group, backed the RIAA. In July 2000, a federal judge ruled against Napster and ordered the closing of the service. However, with the victory of website MP3.com against the RIAA in mind, Napster had good reason to appeal against the decision. Moreover, use of the Napster service was at the same time skyrocketing.

Despite the serious blow to Napster's reputation, the immediate effect of the trial was a fantastic increase in the success of its service. One year after it was launched, Napster had 4 million users worldwide. It was becoming a global brand. This led Hummer Winblad Venture Partners to enter the capital with $65 million, with the idea of developing a commercial service. Some months later, with the support of German publishing conglomerate Bertelsmann, owner of the BMG label, the future looked bright. In October 2000, twenty-year-old Shawn Fanning was featured on the cover of Time magazine. He was identified as the rising star of the so-called new economy.

The situation did not go as expected, however. The Napster team proved unable to control the traffic of copyrighted materials on its network. As a consequence, when the first judgment was confirmed by the court of appeals, in February 2001, the only solution was to negotiate with the principals or shut down the servers. After more than a year of litigation, on July 11, 2001, the service was closed. The service had been able to attract more than 50 million unique users.

Far from putting an end to the exchange of music files, the closing of Napster was synonymous with the opening of a new era, full of new possibilities as well as new fears. New technical systems were made available on the Internet that allowed exchanging files of any kind without appealing to servers. These totally virtual systems, which eventually became the bane of copyright owners, were soon united under the banner of peer-to-peer systems.

After Napster filed for bankruptcy protection, Roxio paid $5 million for the company's name and its intellectual property. Shawn Fanning briefly served as a paid consultant. Sensing the need of copyright owners, in 2003 he and former Napster's chief architect Jordan Mendelson founded SNOCAP, aiming at protecting digital rights. With the support of influential angel investor Ron Conway, they developed a system used by new entrants into the digital economy, including Sony-BMG and Myspace. However, with people using peer-to-peer systems, the digital music market did not really take off, and the company never really grew up. In April 2008, the company was sold to Imeem, Inc., a social networking company. At that time, Shawn had already embarked on a new project.

Exchanging digital files quickly proved to be part of a larger need for social interactions on networks. Recognizing this, Shawn launched Rupture in 2006. At the moment when his former counterpart, Parker, had launched himself into the Facebook adventure, his solution offered enhanced communication between members of global multiplayer online role-playing game World of Warcraft. A few months later, his technology was acquired by World of Warcraft operators Electronic Arts for $15 million. He and his team kept working for the company until November 2009, when he invested in a new project.

In 2010, former Facebook executive Dave Morin joined with Fanning to create a social networking–enabled photo-sharing and messaging site, Path.com. Capitalizing on the Facebook experience, the duo wanted to help people enhance existing relationships; thus, Path.com limits each user's social network to fifty close friends. With millions of dollars injected by angel investors, including longtime friend Conway, the service was launched in 2011.

In parallel, Fanning imagined Supyo, a live video social networking service, which has been compared to the Chatroulette service, a digital jukebox of human interactions. Envisioning the future evolution of social networks and with the idea of helping people build new relationships rather than reinforce old ones, Fanning decided to reunite with old friend and Facebook founding president Parker. This service of the former Napster pals came to be known as Airtime.

In only ten years, Fanning not only saw the fruition of the peer-to-peer revolution but also launched a range of services, all focused on improving social interactions in the digital society. More than ever, he appeared to be at the core of a promising online ecosystem. By 2013, he had cofounded another venture, Helium, with the goal of facilitating the building of connected devices. Helium was purchased by Nova Labs in 2022. As of 2024, Fanning was the CEO of the social networking site Rupture.

Personal Life

After moving with his Napster pals to the Bay Area in the summer of 1999, Fanning settled in Mountain View, California. In 2002, he adopted his fifteen-year-old brother and offered to move him to the West Coast. He married and had a child, a daughter.

With the success, as well as controversy, surrounding Napster, Fanning has been in the limelight since the age of twenty. Not only was he identified by the Massachusetts Institute of Technology's Technology Review as one of the TR35 (thirty-five top innovators under age thirty-five) in 2002; he has also appeared on various magazine covers since this period, including Time magazine. In 2013, he appeared in the documentary Downloaded, which tells the story of the birth and growth of the digital society.

Bibliography

Alderman, John. Sonic Boom: Napster, MP3, and the New Pioneers of Music. Cambridge: Perseus, 2001. Print.

Benkler, Yaochaï. The Wealth of Networks: How Social Production Transforms Markets and Freedom. New Haven: Yale UP, 2006. Print.

Brafman, Ori, and Rod A. Beckstrom. The Starfish and the Rider: The Unstoppable Power of Leadersless Organizations. New York: Trade Paperback, 2008. Print.

Garg, Anuradha. "Shawn Fanning Developed Napster, Business Moves Made Him Millions." Market Realist, 29 June 2022, marketrealist.com/p/shawn-fanning-net-worth/. Accessed 7 Mar. 2024.

Giblin, Rebecca. Code Wars: 10 Years of P2P Software Litigation. Northampton: Edward Elgar, 2011. Print.

Menn, Joseph. All the Rave: The Rise and Fall of Shawn Fanning's Napster. New York: Crown, 2003. Print.

Oram, Andrew. Peer-to-Peer: Harnessing the Power of Disruptive Technologies. Sebastopol: O'Reilly, 2001. Print.

Palfrey, John, and Urs Gasser. Born Digital: Understanding the First Generation of Digital Natives. New York: Basic, 2010. Print.