Ron Conway Talks Napster And The Sharing Economy Problem That “Never Got Solved”

On stage at Disrupt NY 2013 today, serial investor Ron Conway and filmmaker/actor Alex Winter took the stage with CrunchFund’s MG Siegler to talk about the documentary Downloaded about the rise and fall of Napster. Ron Conway described being an early investor (his Angel Investors fund put around $500,000 into Napster, he said) and how the process of taking them through the ordeal went. One of the biggest issues, he said, is that the sharing economy problem Napster identified never got solved.

Napster made it very clear that there was a strong desire among people to share and collaborate in order to make the most out of resources among a community, but there was just too much of a reaction against that from people who were already established in the industry. And that’s something that never got worked out, which Conway said was one of the most disappointing parts of the whole affair.

“Technically speaking it never got solved,” Conway said. “Today we have all the sharing economy companies, like ride sharing and AirbnB, and all the local authorities are acting like the record labels. You can’t stop innovation, and it amazes me that people still don’t know that.”

Conway’s referring to problems that companies like Uber have run into, including its closure of taxi services in New York City back in October of last year, and a new policy that will help it do more ride sharing, as a way to side-step regulation and licensing requirements around taxi and livery services in place in most major cities throughout the U.S.

Referring back to the Napster issue and how it ran into major roadblocks around the music industry, record labels and artists, Conway lamented that no one found a way to work through the issues that were causing both sides to be essentially at each other’s throats.

“If people just left their ego at the door, I believe the problems would’ve been solved [long ago],” Conway said. “But everyone immediately went into macho mode.”

Sharing economics drive a lot of startups these days and it’s true they often seem to run into regulatory problems, resistance from incumbent players and more. It’s probably to be expected when you’re taking markets that once made a lot of money separately from individuals, and combining them into one that makes less spread across a much larger group, but people clearly want these to work, and as Conway notes, ignoring that won’t help anyone solve the problem any faster.

For more of Alex Winter’s thoughts on why Napster was a real community, and his predictions about 3D printing template piracy, check out his follow-up interview with our writer Josh Constine.