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former hotel on the wharf in Hull, which was itself not much to look at. Fast-food containers littered the place. Next to the old hotel lobby sat Tom Carmody, a former Reebok marketing executive who owned the house next to John Fanning's. To the left sat Fanning, wearing black Reeboks and pink Bermuda shorts. In the back was what appeared to be a card table, where Shawn sat coding away on his laptop. The entire Napster brain was in that laptop, connected to the Net by a cable modem.

Lilienthal wasn't looking for much. Mainly, he wanted to make sure that Shawn was a true hacker. Clearly, he was. Lilienthal's first impression of Shawn's uncle was altogether different. “We're going to have to manage you,” he thought. Fanning knew he was on to something—more power to him. But he was somehow overexuberant. Lilienthal and Grosfeld took turns talking seriously with Shawn while the other occupied his uncle. “We sat there and listened to how impressed this guy was with himself. All I wanted to do was talk to the kid,” Grosfeld said. When it was Grosfeld's turn to set the pick, Fanning started peeling through a stack of business cards on his desk, bragging about his contacts. Among the cards, he said, were those of Steve Jurvetson, of the well-known Menlo Park venture firm Draper Fisher Jurvetson, and Ben Rosen, the veteran venture capitalist who had founded Compaq Computer Corp., then the world's largest PC company. Grosfeld smiled appreciatively. “If Ben Rosen knows this putz, I'll eat my hat,” he thought.

While Lilienthal and Grosfeld realized that Fanning was going to be a problem, they both took to Shawn. “He seemed pretty bright, and he had a nice way about him, an innocence,” Grosfeld said. “I was looking for bright people, and I was looking for a competitive advantage, or something that had already gained such traction in the underground that it sort of had a momentum of its own. I got an inkling of what was germinating.” When the two men who might soon be running the company asked about the legal issues, if Fanning had hired a lawyer, he brushed them off. “My first question was, have you consulted a lawyer,” Grosfeld said. “They said no, but it's perfectly acceptable.” Fanning turned on the hard sell, telling the pair that Napster needed money quickly to keep the momentum going.

Fanning seemed ecstatic about his new partners, at one point handing Lilienthal options to buy shares in Napster Inc. The documents hadn't

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