Investor report, October 1999
Six weeks after the first investor presentations, Sean Fenlon sent them a progress report: an office at last, the first technical hires, a three-month build plan and news from the rivals.
Welcome first-round investors to the first of many ListenSmart.com progress reports. Although many of you have been able to stay abreast of information through the grapevine, I wanted to prepare an official collection of information/progress so that you can see the development of your investment.
The report, marked “Private & Confidential” and prepared on October 10, 1999 by Sean P. Fenlon, President & C.E.O., is summarized below. Quotations are verbatim.
“The Ridiculous Office Space Saga”
The biggest job since the LLC’s operating agreement was signed had been finding an office, which “consumed more time and effort than anyone had anticipated.” The search began after a lunch meeting on August 9, 1999, with Marc Contract taking the lead.
- Symphony Woods. A 5,200-square-foot sublease in Columbia, Maryland, room for 25–30 people. Terms seemed agreed by early September, and phone and data lines were ordered, but the lease didn’t arrive until September 20, and its language was “fundamentally different” from the deal offered.
- Community Title. A smaller space in the One Mall North building, offered by a company Marc part-owned, until two of his partners there “vetoed” it “in the eleventh hour.”
- Parkside Building, Suite 610. About 5,400 square feet of Class A space at 10500 Little Patuxent Parkway, “right next to Columbia Mall”, with the Rouse Company as landlord: move-in ready, a one-year lease with an option to extend to five years, and adjacent space to grow into. The lease was to be signed on October 12.
The team in October 1999
Sean, Marc, Brandon and Dave kept “in constant contact by phone and email on a daily basis” and met every Wednesday at 8:30 a.m. The technical team was “almost complete”, planned as three web developers, three database administrators and two web graphic artists.
| Name | In the report | Title |
|---|---|---|
| Sean Fenlon | Author of the report; budget, publishing and music-industry relationships | Founder & CEO |
| Marc Contract | Led the office search; now full-time, “managing the finances” and starting artist marketing | Head of Marketing |
| Brandon Pepelea | “Web site development project manager”; building the servers and leading technical interviews | CTO |
| Dave Seidl | Legal counsel, reviewing the lease; will help choose a music attorney and an accountant | General Counsel & Advisor |
| Syed Zaidi | The “lead” web developer, who had led a large web and e-commerce project for an Atlanta startup | Head of Engineering |
| Hyun Lee | Not named in the report; on the team as Lead Developer (Sean P. Fenlon, 2026) | Lead Developer |
| Sonny Suri | The “lead” database expert, a former colleague of Brandon’s at PSINet and a senior database designer at PSINet and Oracle | Consultant |
| Ben Fenlon | “Lead content coordinator” (quoted below) | Head of Operations |
Titles, and the Hyun Lee row: Sean P. Fenlon, 2026 (see the Team page). Sonny Suri wrote the company’s database requirements document, dated September 6, 1999.
Syed and Sonny both clearly see the enormous opportunity placed before them and their enthusiasm has already allowed the site planning and development to take off. It builds my confidence immensely to see two highly capable individuals share my vision and begin converting it into real-world results in such a short time.
Peabody, and Ben
Sean had begun talking with colleagues from the Peabody Institute about writing “all the wonderful essays about music that will help to make our site so unique”; the same musicians would be recorded for audio and video samples of “ALL the musical instruments of the world.” Those essays became Learn. Then:
We have also acquired my brother, Ben Fenlon, as the lead content coordinator. Ben will be focusing on preparing all of the content that will make learning about downloadable music and navigating our site a breeze. Ben will also help to edit the audio/video footage of the instrumentalists for preparation for the web and edit their essays. Additionally, Ben will help us to acquire independent artists content information from the web and assume many administrative duties during our first round.
The build, in three phases
Each phase was to take about a month:
- Templates and functionality: the whole site structure and the “look and feel” of every page, with dummy data.
- Population and content: the essays finished and in place, and test artists and members loaded.
- Beta testing: bugs, scalability and load (“can withstand the onslaught of 1 million unique visitors per day?!”).
The site went live privately on March 1, 2000 and publicly the next day (timeline; how it was built).
Relationships to come
- A music attorney, with Dave heavily involved in the screening.
- An accountant from one of the big six firms.
- An established independent music publisher for publishing administration.
- Alliances with the performance rights organizations, BMI and ASCAP, and a national songwriter organization “such as the Songwriter’s Guild of America.” By May 2000 the company was registered with BMI and ASCAP (see the 2000 plan).
On money: “we are still well within our budget projections.”
Industry developments
- AMP3.com’s “Dollar Download Debacle”. AMP3.com paid artists five cents a download by putting a 10-second advertiser jingle at the start of each song. It then announced $1 per download for artists who signed an exclusive contract, promised to post the contract within a week, and never did. “Amp3.com suffered a horrible blow to any credibility.”
- MP3.com’s featured-song auctions. MP3.com announced that its “Feature Song” spots would be auctioned to the highest bidder. “MP3.com is now TAKING money from independent artists under the pretense of exposure & promotion,” and the artist boards filled with talk of “payola.” Sean: “I only wish that they had made this announcement three months later!”
- Listen.com. A new venture round from the Barksdale Group, Hambrecht & Quist and Sony Music. The report calls Listen.com, a search engine and directory of downloadable music, “NOT a competitor of ours, but rather a potential symbiotic partner.”
All three are among the 24 sites the 1999 plan profiled.
The promise
I want each of our investors to know how valuable your investment and you confidence is in our project. We are all aware of the practice of taking investors money to hardly be heard from again. You will not ever find that practice with the ListenSmart.com team. That’s a promise!
Source: ListenSmart.com Investor Report, “Private & Confidential”, prepared October 10, 1999 by Sean P. Fenlon. Not reproduced: the third-party press release in the report’s appendix, and the name of the real-estate broker. Founding-team titles: Sean P. Fenlon, 2026.