1996. Mixtapes labelled with George Michael, Pearl Jam, R.E.M., and Bon Jovi—CDs and cassettes gathering dust on shelves stacked with memories. Music was physical and personal but limited by hardware. But what if your entire collection could live in one digital space, accessible by the tap of a button?
Years before the arrival of streaming giants made this a reality, two twenty somethings envisioned bringing to life the bold endeavour of a ‘digital living room.’ By the year 2000, Unsurface was born. Through the music venture, co-founders Sandeep Murthy and Ritesh Bhavnani wanted to provide users anytime, anywhere access to their personal media.
Murthy and Bhavnani envisioned a future where technology could digitize everything—photos, home videos, and movies. “Think of it as Spotify, Netflix, and Google Photos rolled into one,” says Sandeep, reflecting on one of the boldest moves of his entrepreneurial journey: building a venture through the boom and bust of the dot-com era.
In a conversation with Lightbox, Sandeep shared his passion for music, efforts to create holistic solutions for record labels battling online piracy, and the pivotal moment that led to the sale of the company to Sony as the dot-com bubble burst.
Sandeep remembers tinkering with technology to build himself a home music server in a world that clung to DVDs and CDs. He patiently ripped every CD he owned, loading them onto a server to stream across his home network. He went to the length of securing a static IP address, granting himself access to his entire collection through a custom web interface.
An investment banker at the time, he had this itch to be part of something groundbreaking. It was the best of times. The internet, despite its infancy, had captured rapt attention. The dot-com boom was in full swing. Entrepreneurs risked freely as venture dollars flowed in. All wanted a piece of the future.
A kind friend introduced him to Ritesh, a software employee from Stanford with a burning desire to innovate. The two shared an instant connection over their love for music. Together, they would co-create a technology a decade ahead of its time, long before the arrival of Spotify or even the iPod.
After months of countless iterations, Ritesh cracked something revolutionary. He developed a system that could use a CD's metadata—the digital fingerprint containing information like track names, lengths, and other identifying markers—to verify legitimate ownership.The idea was unique. Napster and MP3.com, infamous for the proliferation of online piracy, shook record labels, making them distrustful of new inventions. Amidst the scepticism, Sandeep and Ritesh’s idea offered hope.
Soon enough, a tech giant saw the potential.
Sony had launched its incubator at the perfect moment—a bold initiative to back fearless new-age businesses. For Sandeep and Ritesh, this was serendipity. Their innovative technology caught Sony's attention, leading to a landmark $10 million investment.
With the backing of one of the biggest legacy music companies, it seemed like a success story was waiting to be told. But the game-changing deal came at a significant cost—a 90% equity stake in the company.
The loss of control was sizable but not enough to deter them just yet. “We didn’t care. All we wanted to do was build a cool business,” Sandeep reminisced.
Sometimes, even the brightest ideas meet their fate simply because of timing.
Sandeep and Ritesh, deeply passionate about digital engineering for music, realized how complex the business could be early in the game. They were in this speedy race against battery life, bandwidth, and storage capacity. “iTunes promised ‘1,000 songs in your pocket’ because storage had outpaced bandwidth. Our idea—everything in the cloud—came too soon. We were a decade ahead of our time,” Sandeep said.
Sony Electronics would soon push for a mandate Unsurface could not afford—integration with Sony's proprietary Digital Rights Management System (DRMS), a clunky and expensive addition to their technology. But this was not the gravest of their worries. Their worst fear was confirmed as the dotcom bubble burst, jolting markets.
The NASDAQ Composite, which had skyrocketed nearly 600% from around 750 points in 1995 to over 5,100 by March 2000, came crashing down—plummeting by 75% over the next two years and wiping out most of the bubble-era gains.
Investors got spooked. Capital dried up. And the high-flying dot-com companies? They came crashing down. New ventures, regardless of potential, struggled to survive. Ritesh and Sandeep’s authentication business was no exception. As Sony re-evaluated their investments, possibilities of experimentation dwindled further.
The two hired the best resources that could make the integration with Sony seamless. But for a while now, there was no solution in plain sight and the venture’s wings remained clipped. In the end, a difficult choice had to be made. Selling their innovation seemed like the only plausible outcome.
But these challenges help Sandeep shape a perspective he did not have back then. Yes, they were crestfallen but there is no way the business would have worked, he confesses years later. “Looking back, if we had accepted the record label’s terms, even if the business model was flawed, we would have launched. But we would have secured a ton of money and would eventually have shut down," he says connecting the dots backwards.
"Timing is king," Sandeep reflects. Sometimes, being too early can be just as costly as being too late. Bandwidth limitations, not their idea, were the real hurdle. But hindsight brought clarity: market readiness can make or break a venture. The other critical lesson? Storytelling is everything. Ideas don't sell themselves—founders must make people believe in their vision. "You're not just building a product," he says. "You're explaining why it matters."
And above all: tenacity. "Detach," he advises. "You are not your business." It's the resilience to move forward that defines a true entrepreneur.
Sandeep sees echoes of the dot-com era in today's AI frenzy. India's AI innovation is picking pace, much like software did in the U.S. years ago. But B2B AI remains a hard sell in a consumption-driven market. Witnessing and innovating through the crests and troughs of various technological booms—dot-com, mobile, Saas, and now AI—has taught him well. There's a saying: we often overestimate the impact of short-term technology but underestimate its long-term potential.
