Snocap – Profile
HQ: San Francisco, CA
Founded: October 2002
Management: Founded by Shaun Fanning, who was Napster. In addition to Fanning, Napster co-founders Ali Aydar and Jordon Mendelson are co-founders. Fanning runs Snocap’s strategy. Ron Conway, an investor who became sufficiently famous during the bubble to have a biography written about him has been named President, but clearly the company is in recruitment mode to hire an Eric Schmidt-type CEO.
Investors: Company received angel funding from Ron Conway – who previously invested in Napster. In December 2004, it did a $10M led by WaldenVC and Morgenthaler Ventures.
Business Model: A legalizing clearinghouse for peer-to-peer music. Snocap would embed “fingerprints” on shared music files. The company has created a database platform to be licensed by record companies, individual musicians or other copyright holders to manage the sale and distribution of their work. The technology is designed to let copyright holders set prices or other terms of distribution. Unlike Napster, Snocap’s clients are not consumers but music labels. Fanning and company are in one sense turncoats to the original Napster cause by selling their know-how to the bad guys. More importantly, they are going from a B2C company to a B2B company -which is much more of a stretch than the founders might want to believe. First label to sign is Universal Music Group.
Competitors: It appears at this point to be a uniquely ambitious undertaking.
Dirt: Everyone from the WSJ and BusinessWeek to bloggers have covered this one and nobody knows if it will work. There are some enormous boulders in the way – record labels and music services to begin with. Snocap needs everyone to work together for their business to work and if they don’t the emperor will have no clothes.