Overview

Anywhere.FM was a cloud music locker service founded in San Francisco in 2007 by Sachin Rekhi, Anson Tsai, and Luxiou Chen—three engineers who built the product during Y Combinator's Summer 2007 batch. The service let users upload their existing iTunes, WinAmp, or Windows Media Player libraries and stream them from any browser, wrapping the experience in an iTunes-style web player with social profiles and a music discovery feature called Friend Radio. The product was technically excellent—TechCrunch called it the best upload and player interface in the space—and achieved genuine early traction, accumulating somewhere between 60,000 and 100,000 users and over 9 million uploaded songs within six months of launch. But the company raised under $100,000 in total, never resolved its monetization model, and was acqui-hired by imeem in January 2008 for an estimated $2–5 million. The core thesis of failure is straightforward: Anywhere.FM optimized for launch velocity when the category required licensing infrastructure, label relationships, and a sustainable monetization architecture that took years—not months—to construct.

Founding Story

Sachin Rekhi, Anson Tsai, and Luxiou Chen came together in 2007 with elite academic credentials and meaningful industry experience. Rekhi had studied at the University of Pennsylvania; Tsai and Chen both held degrees from MIT.^[1] Before founding Anywhere.FM, the team had worked at Xbox, Amazon, and Microsoft—backgrounds that gave them engineering depth but also a product sensibility shaped by large-platform thinking.^[2]

The founding story begins not with a great idea but with a great team. When the founders pitched their original concept to Y Combinator in the spring of 2007, Paul Graham rejected the idea outright. Rekhi recalled the exchange directly: "I hate your idea, but I really like your team. So, you guys are in YC only if you come up with a new startup idea."^[3] The original idea has never been documented publicly, which makes it impossible to assess how much the forced pivot shaped the company's ultimate direction. What is clear is that the team accepted the challenge, pivoted to the Anywhere.FM concept, and built a working product within the same summer.

Rekhi later described the YC experience as formative: "I did Y Combinator the Summer of 2007 in Boston with two awesome co-founders."^[4] The batch ran in Boston, and the team built Anywhere.FM from scratch during those months—a demonstration of strong execution velocity that would become both the company's greatest asset and, ultimately, a contributing factor in its failure.

The insight behind the product was simple and real: people had spent years building music libraries in iTunes, and those libraries were trapped on a single computer. If you were at work, at a friend's house, or traveling, your music wasn't with you. Cloud storage was nascent, streaming services were either nonexistent or legally murky, and the MP3 era had produced millions of users with large, carefully curated local libraries. Anywhere.FM's answer was to treat those libraries as personal property—which they legally were—and give users a browser-based player to access them from anywhere.

The team launched publicly in August 2007—roughly two months after entering YC—and received immediate press coverage from TechCrunch. The speed from pivot to launch was remarkable. Whether that speed was a virtue or a liability is the central question of the company's post-mortem.

Timeline

• June 2007 — Team accepted into Y Combinator S07 after Paul Graham rejects their original idea but backs the team; they pivot to the Anywhere.FM concept and receive approximately $15,000 in YC seed funding.^[5]

• July 2007 — Y Combinator Summer 2007 batch runs in Boston; Anywhere.FM is built during the batch.^[4]

• August 2, 2007 — Anywhere.FM launches publicly. TechCrunch covers the launch, driving early user growth. Product offers iTunes library upload, web streaming, social profiles, and Friend Radio.^[6]

• November 19, 2007 — Press coverage documents the product's features, legal locker framing, SESAC royalty payments, and beta-stage free upload model with future paid tiers planned.^[1]

• January 28, 2008 — Imeem acquires Anywhere.FM for an undisclosed sum (estimated under $5 million, possibly approximately $2 million), including technology and all employees. At this point the product has approximately 60,000–100,000 users and over 9 million uploaded songs.^[7]

• September 2008 — A Wikipedia-sourced archive snapshot records 14.5 million songs uploaded by 88,000+ users—suggesting the Anywhere.FM product continued operating under imeem post-acquisition.^[8]

• 2009 — Imeem, the acquirer of Anywhere.FM, is itself shut down after being acquired by MySpace, completing the collapse of the first-generation cloud music locker category.^[9]

• 2010 — After serving as Entrepreneur-in-Residence at Trinity Ventures, Sachin Rekhi co-founds Connected (contact management) with Ada Chen.^[10]

• October 2011 — Connected is acquired by LinkedIn, marking Rekhi's second and significantly more successful exit.^[10]

What They Built

Anywhere.FM was a cloud music locker—a service that let users store their personal music collections on remote servers and access them through a web browser from any computer with an internet connection.

The core product experience began with a Desktop Uploader, a small application users installed on their home computer. With a single click, the uploader scanned the user's existing music library—whether organized in iTunes, WinAmp, or Windows Media Player—and transferred the entire collection to Anywhere.FM's servers. Critically, the uploader preserved metadata: personal playlists, song ratings, and play counts all migrated intact.^[11] This was not a trivial technical achievement in 2007. Competing services often required manual uploads or lost library organization in the transfer.

Once uploaded, users accessed their music through a web player that deliberately mimicked the iTunes interface—a familiar column-browser layout with album art, sortable columns, and playback controls. The design choice was intentional: users already knew how to navigate iTunes, so the learning curve was near zero. TechCrunch described it as "a new online music player that looks and feels a lot like a web based version of the iTunes player."^[6]

Beyond the personal locker, Anywhere.FM layered in social features. Users could create public profiles and share their libraries. The Friend Radio feature generated a continuous radio stream drawn from the music collections of a user's friends—an early implementation of social music discovery that predated Spotify's social graph integration by several years.

The legal architecture of the product was carefully constructed. Rekhi framed it explicitly as a digital locker service: "Anywhere.FM serves as a digital locker service for users to upload their licensed music and listen to it anywhere. Users are legally allowed to make personal backup copies of their songs for use with this service."^[12] The company paid royalties to SESAC, one of the three major U.S. performing rights organizations, as part of its licensing compliance.^[13] This framing—personal backup rather than distribution—was the legal theory that distinguished music lockers from piracy services, though it would later prove fragile when tested in court by competitors.

The monetization model was never implemented during the company's independent life. The beta was entirely free. Plans under consideration included affiliate commissions on music sales for songs users didn't own, audio advertisements inserted into radio streams, and direct music sales.^[6] There were also vague plans to charge a small fee for users uploading large libraries after the beta concluded.^[14] None of these were tested before the acquisition.

What made Anywhere.FM different from alternatives was the combination of upload fidelity, interface quality, and social features in a single product. Competitors like Mp3tunes focused on storage without the social layer; imeem had social features but weaker upload tools; Streampad and Songbird operated in adjacent spaces without the locker model. TechCrunch's acquisition write-up was unambiguous: Anywhere.FM had "the best upload and player interfaces I've seen."^[7] The product quality was not the problem.

Market Position

Target Customers

Anywhere.FM targeted music-engaged consumers who had built substantial personal libraries during the iTunes and MP3 era—roughly 2001 to 2007—and wanted access to those libraries beyond their home computer. The ideal user had hundreds or thousands of songs organized in iTunes with ratings and playlists, owned a laptop or desktop as their primary music device, and regularly found themselves wanting their music in contexts where that device wasn't available: at work, at school, traveling, or at a friend's home.

The social features—Friend Radio and public profiles—extended the target to users interested in music discovery through their social graph, a behavior that services like Last.fm had already validated. But the core use case was personal access, not social sharing.

Market Size

The addressable market in 2007 was large in theory. Apple had sold over 100 million iPods by April 2007,^[6] and the iTunes Store had processed over 2.5 billion song downloads by that point. Tens of millions of consumers had meaningful digital music libraries. The question was not whether the market existed but whether those users would pay for cloud access to libraries they already owned—and how much.

The structural problem was that the market was simultaneously large and price-sensitive. Users had already paid for their music once. Asking them to pay again for access—even convenient access—faced a high psychological barrier. The alternative monetization paths (ads, affiliate sales) required either significant traffic to generate meaningful revenue or label relationships to enable direct sales. Neither was achievable at Anywhere.FM's scale and runway.

Competition

The competitive landscape at launch was already crowded. TechCrunch noted that Anywhere.FM entered "the increasingly crowded online music locker services" space, naming Mp3tunes, Maestro, imeem, Streampad, Songbird, and MediaMasters as contemporaries.^[15]

Mp3tunes, founded by Michael Robertson (who had previously founded MP3.com), was the most legally sophisticated competitor—it had explicitly designed its locker service around the personal backup doctrine and was already in dialogue with labels. It would later be sued by EMI in a case that dragged through courts until 2014, ultimately losing on the grounds that its "sideload" feature (which let users add songs they didn't own) constituted infringement. That litigation outcome, while post-dating Anywhere.FM's existence, illustrates the legal fragility of the entire category.

The more consequential competitive threat was not a direct competitor but a parallel company: Spotify. Founded in Sweden in 2006 by Daniel Ek and Martin Lorentzon, Spotify was building a licensed streaming service that would make the locker model obsolete by solving the underlying problem differently—not by storing what users already owned, but by giving them access to everything through label licensing deals. Spotify spent approximately two years in development before launching in Europe in October 2008, nine months after Anywhere.FM's acquisition. The contrast in approach—Anywhere.FM shipping in weeks, Spotify building for years—would become the central lesson Rekhi drew from the experience.

Business Model

Anywhere.FM operated on a free beta model with no revenue during its independent life. The company raised approximately $15,000 from Y Combinator^[5] and an additional amount from angel investors, with total financing under $100,000.^[16]

Three monetization paths were under consideration at launch: affiliate commissions on music sales for songs users didn't own, audio advertisements in the Friend Radio stream, and direct music sales.^[6] A fourth option—charging users a small fee for large library uploads after the beta period—was mentioned but never implemented.^[14]

None of these models were tested before the acquisition. The company had no revenue at exit. With under $100,000 in total capital and no path to near-term monetization, the runway was measured in months, not years. The absence of a business model was not a secondary concern—it was the binding constraint that forced the acqui-hire.

Traction

Anywhere.FM achieved genuine early traction, driven primarily by TechCrunch coverage at launch in August 2007.^[17] The press hit generated a meaningful user spike, and the product's quality sustained engagement beyond the initial wave.

User count figures are inconsistent across sources and cannot be reconciled with confidence. TechCrunch reported 60,000 users at the time of acquisition in January 2008.^[7] Rekhi himself later cited over 100,000 users.^[18] A Wikipedia-sourced archive entry, citing the Anywhere.FM player page as accessed in September 2008, reported 88,000+ users.^[8] Luxiou Chen's professional profile claims 250,000+ users.^[19] The September 2008 figure likely reflects post-acquisition growth under imeem's platform, which would explain why it exceeds the January 2008 acquisition-time figures.

Song upload volume is more consistent and arguably more meaningful: approximately 9 million songs at acquisition per TechCrunch,^[7] growing to 14.5 million by September 2008.^[8] At 60,000 users and 9 million songs, the average uploading user had transferred 150 songs—a meaningful engagement signal suggesting users who tried the product genuinely used it.

Despite these numbers, Rekhi concluded the company had not found product/market fit: "Despite following Lean Methodology to the letter, garnering glowing press reviews, and growing to over 100,000 users, we still ultimately failed to find product/market fit."^[20] The engagement metrics masked the absence of a monetization path and, likely, a retention ceiling that the team never had time to measure.

Post-Mortem

Anywhere.FM was acqui-hired by imeem on January 28, 2008—less than six months after launch and less than a year after founding. The exit price was undisclosed, estimated at under $5 million by TechCrunch^[7] and at approximately $2 million by Golden.com.^[21] Against total funding of under $100,000, this was a thin return—and against the company's potential, it was a failure. Rekhi said it plainly: the team was "acqui-hired by imeem for the impressive tech we had developed, but our dreams of building an independent web music player were over."^[22]

The failure had multiple causes, but they were not equal in weight. The following analysis orders them by importance.

Primary Cause: No Business Model, No Runway

The company raised under $100,000 in total—approximately $15,000 from YC^[5] and a small amount from angels.^[16] With no revenue and no near-term path to revenue, the runway was exhausted within months of launch. The team had identified three potential monetization approaches—affiliate music sales, radio stream advertising, and direct music sales—but none were implemented before the acquisition.^[6]

The attempted remedy was to grow users first and solve monetization later—a standard early-stage playbook. But the playbook requires enough capital to reach the point where monetization experiments are possible. At under $100,000 total, the company had no margin for iteration. When the runway ran out, the only option was acquisition. Rekhi acknowledged this directly: "Despite this momentum, we failed to secure a viable business model, leading to our eventual acquisition by imeem for our technology."^[18]

The deeper problem was structural: the monetization paths available to a music locker in 2007 were all difficult. Advertising required scale the company hadn't reached. Affiliate sales required label relationships the company hadn't built. Direct music sales required licensing infrastructure that took years and significant capital to negotiate. The business model problem wasn't a failure of creativity—it was a reflection of how hard the category actually was.

Secondary Cause: The Category Required Infrastructure That Speed Could Not Substitute

Anywhere.FM launched in weeks. Spotify spent approximately two years building before its October 2008 European launch. At the time, Rekhi and his team encountered Spotify and dismissed it—the Swedish startup was taking too long to ship, which seemed like a weakness from a Lean Startup perspective.^[23]

The dismissal was a strategic error. Spotify's two years of development were not wasted time—they were spent negotiating licensing deals with the major labels, building the legal and technical infrastructure for licensed streaming, and constructing a monetization model (freemium with premium subscriptions) that could actually sustain a business. These were not problems that could be solved by shipping faster. They required time, capital, and relationships.

Anywhere.FM's locker model was legally defensible in theory—personal backup copies are permitted under U.S. copyright law—but it was commercially limited. Users could only access music they already owned. Spotify's licensed model gave users access to everything. The locker model was not wrong; it was simply a smaller solution to the same underlying problem. And it was a solution that required the same label relationships to monetize (through affiliate sales or direct sales) that Spotify was building from the ground up.

Rekhi later reflected on this directly: "The experience of watching Spotify's meteoric rise, while failing on Anywhere.FM, led me to become obsessed with isolating what separates those brands that find true product market fit from the rest."^[24]

Tertiary Cause: Crowded Market with No Durable Differentiation

At launch, TechCrunch noted that Anywhere.FM was entering "the increasingly crowded online music locker services" space, with Mp3tunes, Maestro, imeem, Streampad, Songbird, and MediaMasters already operating in adjacent areas.^[15] Anywhere.FM's differentiation was product quality—the best upload interface and player in the category. But product quality is a durable advantage only if it can be defended over time or translated into a monetization premium.

With no revenue and no capital to invest in maintaining the quality lead, the differentiation was temporary. Imeem, the acquirer, was itself a well-funded competitor in the social music space—it acquired Anywhere.FM specifically because it wanted the technology and the team, not because it couldn't build comparable tools eventually. The acqui-hire price reflects this: the technology was valuable enough to buy cheaply, but not valuable enough to sustain an independent company.

The competitive dynamic also illustrates a broader category problem: every player in the space was struggling with the same monetization challenge. Mp3tunes was later sued by EMI and lost. Imeem itself was shut down in 2009 after being acquired by MySpace.^[9] The entire first generation of cloud music services failed. The category was not broken because of execution failures at individual companies—it was broken because the licensing and monetization infrastructure necessary to sustain it did not yet exist.

The Lean Startup Paradox

Rekhi's most pointed post-mortem observation is about methodology, not market. He explicitly used Anywhere.FM as a case study against over-reliance on Lean Startup principles: "Despite following Lean Methodology to the letter, garnering glowing press reviews, and growing to over 100,000 users, we still ultimately failed to find product/market fit."^[20]

The Lean Startup approach—ship an MVP, gather feedback, iterate—produced press coverage and users. It did not produce a business. The feedback loop that Lean methodology relies on assumes that user behavior will reveal what to build next. But when the core problem is not product design but licensing infrastructure and monetization architecture, user feedback cannot point the way forward. Users can tell you they love the product; they cannot tell you how to negotiate a deal with Universal Music Group.

The attempted remedy—iterate based on user feedback—was the wrong tool for the actual problem. The company needed capital and time to build the infrastructure the category required. It had neither.

Key Lessons

• Launch velocity is not a substitute for strategic depth in infrastructure-dependent categories. Anywhere.FM shipped in weeks; Spotify spent two years building label relationships and a monetization model before launching. In categories where the core competitive moat is licensing, legal architecture, or platform infrastructure—not product design—speed to market can be actively misleading. A fast launch generates users and press; it does not generate the relationships and agreements that determine long-term viability.^[23]

• User traction and product/market fit are not the same thing. Anywhere.FM accumulated 60,000–100,000 users and 9 million uploaded songs within six months.^[7] Rekhi concluded the company still failed to find product/market fit.^[20] The distinction matters: users who love a free product are not the same as customers who will pay for it. Traction metrics that don't connect to a monetization path are signals of engagement, not signals of a sustainable business.

• Undercapitalization in capital-intensive categories is fatal regardless of execution quality. With under $100,000 in total funding and no revenue, Anywhere.FM had no margin for the iteration that finding a business model requires.^[16] The team was technically excellent and executed quickly. Neither quality saved the company when the runway ran out. In categories where monetization requires label deals, regulatory compliance, or platform-level infrastructure, the capital requirements are orders of magnitude higher than a YC seed check.

• Category-level structural problems sink individual companies regardless of relative quality. Anywhere.FM had the best product in its category by press consensus. Its acquirer, imeem, was shut down within 18 months of the acquisition.^[9] Mp3tunes, the most legally sophisticated competitor, lost its EMI lawsuit and eventually shut down. The entire first generation of cloud music lockers failed. When a category is structurally broken—because the monetization infrastructure doesn't exist yet—being the best player in the category is insufficient protection.

• The acqui-hire outcome reflects the gap between technology value and business value. Imeem paid an estimated $2–5 million for technology that had attracted 60,000+ users and 9 million uploaded songs.^[21][7] The technology was genuinely valuable—valuable enough to acquire. But technology value and business value diverge sharply when there is no monetization model. The acqui-hire price is the market's assessment of the technology in isolation, stripped of the business that was never built around it.

Sources

1. Anywhere.FM encyclopedia entry (en-academic.com, sourced from Wikipedia), November 2007
2. Sachin Rekhi, "The Value of the Y Combinator Experience," sachinrekhi.com
3. Sachin Rekhi interview, "User Feedback Strategies," leanb2bbook.com
4. Y Combinator company profile, Anywhere.FM (S07)
5. Golden.com company profile, Anywhere.fm
6. TechCrunch, "Listen To Your iTunes Library On The Web With Anywhere.FM," August 2, 2007
7. TechCrunch, "Imeem Gobbles Up A Young Startup, Anywhere.FM," January 28, 2008
8. Sachin Rekhi, "The Problems with Lean Startup Methodology," Reforge blog
9. Alchetron, "Imeem" entry
10. Wharton Global Youth Program, "Serial Tech Entrepreneur Sachin Rekhi: Relationships Build Careers"
11. Sachin Rekhi, SoftwareSuggest Blog interview
12. Luxiou Chen profile, The Org (RentHop)
13. Anson Tsai / Cardpool reference, PayGarden About page
14. Sachin Rekhi personal blog, page 36 (imeem period)
15. Mixergy interview with Sachin Rekhi (NoteJoy)
16. Crunchbase company profile, Anywhere.FM
17. Wayback Machine archive index for anywhere.fm, 2007–2008