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money in Interwoven, and he had passed. If he had listened that time, “I would have made hundreds of millions of dollars,” Alsop said.

When she called this time, Alsop had already heard of Napster and had just invested in another digital-music company. Alsop came to Napster's office, meeting with Shawn, Parker, CFO Lyn Jensen, and Richardson, and they explained the company, including the legal issues and the unpleasant role being played by Fanning. But they were so vague about the business plan that Alsop never got around to thinking seriously about the other problems. He reported back to his partners that it wasn't so much that Napster had no business plan: As he saw things, it didn't have a business. A business implies customers, Alsop said. And a customer—derived from the word “custom,” as in a tax or a duty—is someone who pays for something. Even when his partners encouraged him to look harder, Alsop said, “I couldn't see a business at all.” Richardson gave a presentation to a committee of NEA partners, but the pitch went nowhere without Alsop's support. Later, Alsop wrote in Fortune: “Here's the sad truth about Napster. The company's legal argument is untenable, its business model is terrible, and its software isn't even all that good.”

Napster's money kept flowing in the wrong direction. The company spent $1.6 million in the first three months of 2000, including a half-million dollars on legal bills and the same amount on research and development. Richardson and marketing VP Liz Brooks honed their financing pitch, putting together a PowerPoint slide show in February. It included a flow chart of the management structure, short biographies of Richardson, Brooks, Kessler, and Jensen, and eye-popping statistics on Napster's growth—still as much as 35 percent in a day. The presentation gamely tried to make the lawsuit a plus, arguing that it had put the brakes on more cautious competitors. The business model resembled a smorgasbord. Under “revenue assumptions,” the slides listed advertising sales, CD sales, subscription revenue for premium content, and even direct e-mail marketing to consumers.

When the number of users, already passing 5 million, multiplied a few more times, Richardson and Brooks said, it would be in the industry's best interest to settle. The record companies spent millions of dollars to promote new bands, most of which disappeared without a trace. On its computers, Napster was building the world's premier database of who