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One operates out of a garden shed, the other a slick office. But both companies offer bands exposure via the Internet

In the business of the Internet, as in life, sometimes things just aren't fair. Take the example of two London companies. Both had the idea to start a website offering free music for download by artists who aren't signed to a major label.

In the business of the Internet, as in life, sometimes things just aren't fair. Take the example of two London companies. Both had the idea to start a website offering free music for download by artists who aren't signed to a major label.

One company was founded by a group of lads who had worked their way up through the rag trade and construction business and into the grimy world of music management. The other was founded by an elegant businessman who was a £100,000-a-year management consultant and had never, by his own admission, worked in the music industry.

Now one of those companies has millions of pounds of investment, and the other is operating out of a garden shed in Teddington, its owner dodging children's toys and dog mess on his way to and from various gigs and performances.

"Stay on the path," warns Aroon Maharajh, as he escorts visitors through his back garden to the offices of Musicunsigned.com. Maharajh says he came to music in a roundabout way. After spending years in the rag trade, he had morphed his business into selling merchandising to the music industry - T-shirts and hats for bands and radio stations promoting themselves. He gradually came to know many people in London's music world. Then in 1998, he was approached by an artist asking for representation.

Maharajh spent a few months hawking the performer to hundreds of artist and repertoire (A&R) representatives, the talent scouts of the recording industry. Frustrated by his fruitless attempts to get his artists noticed, Maharajh thought that there had to be an easier way to showcase the artists.

That easier way appeared to be the Web, and Maharajh began to think about building a site where unsigned bands could present their talents and get exposure to the A&R world. In January, Maharajh met Stewart Feeney through a friend. Feeney is a long-time "traditional A&R man", and while catching a lift to Hammersmith with Maharajh, heard the sense in what the former merchandiser was thinking about. "Everyone's talking about it, but no one in the music industry had got round to doing it yet," Feeney says.

There's obvious logic in the business plan espoused by Maharajh, and his uptown competition, Peoplesound.com. Both companies, though they come from opposite sides of the track, understand that there are basic inefficiencies in the recording industry as it is, and that the value of the new online communication medium can help.

With thousands of bands to choose from, consumers have an ever-more-difficult task in selecting music to buy. With thousands of unsigned bands beating down their door, record labels have a near-impossible task in selecting valuable new artists from the crowd. And in the face of all this competition, young bands are hard-pressed to get noticed by both consumers and money men.

Both sites offer free Web space to unsigned bands and free downloadable music to consumers. By tracking consumers' choices, they can report back to the record companies, and to the artists themselves, the appeal of different music to demographic groups, and what tracks are doing well.

In fact, aside from offices and accents, there's very little to differentiate the two companies. Except that Peoplesound boasts a multimillion pound startup investment, whereas Musicunsigned.com has sunk less than £50,000 into its business.

"Competition is healthy, just not $500m worth of competition," laughs Maharajh. "It will be interesting to see what they do, since they've got so much bloody money," his partner, Andy Barnett, adds.

But for Ernesto Schmitt, the founder of rival company Peoplesound.com, it takes money to make money. The 28-year-old, who has recently been featured in the numerous "Net millionaire" stories circulating in the national press, said that swank offices overlooking Trafalgar Square and impressive venture capital backing got the attention of the recording industry early on.

"When you're trying to show the industry you're serious, you can't be in a two-person startup in a garage in Brixton," Schmitt said.

Peoplesound.com, which Schmitt and his investors have valued at £12m, is raising more finance. The company hasn't revealed how much has been spent on the project, but Schmitt says that the next round will be "much higher".

Though Peoplesound has yet to launch, Schmitt's already has 35 employees, from customer service representatives to secretaries to a staff of four professional A&R people who review all of the incoming submissions. Schmitt says that when Peoplesound goes live the site will feature 1,000 bands. To collect this mass of talent, he is paying music industry people £100 a pop for any bands they recommend. Schmitt said between 400 and 500 of these commissioned industry people have agreed to take part in the talent hunt.

But Schmitt said he is walking a fine line between a display of wealth for the industry and keeping a modest profile for the artists. "If the artists get the impression we're getting rich off them, it would be disastrous," he said.

Early signs for both sites are good. Musicunsigned.com claims more than 150,000 page impressions in its first month since going live. Already, two of the 50 bands featured there have been signed to a recording contract, and the company has recouped some 10 per cent of its initial investment. Three other bands featured are negotiating with record labels. Schmitt said Peoplesound is garnering 10,000 pages views a day, before the site has even launched.

Barnett said Musicunsigned's business model doesn't rely on a massive injection of capital from outside parties. "We built this like a business," he said. "We have to invoice. We have to work. We have to be productive to keep this going."

Maharajh's said the company has been approached by investors but they haven't yet accepted any funding. "An injection of money would make our dreams come true," he said. "But they are our dreams. We are looking for investment that would enable us to do things the way we want to do it."

And for all of the lack of an impressive office space, Feeney said the interest from the recording industry has been powerful. "A lot of other sites don't have anything to do with music," he said. "We have A&R people down here every day. And we're not in the middle of London. They just want to get the jump on everybody. They're intrigued by how it all works."

Sometimes, he added, doing things a little differently can be a useful strategy. "When I was a talent scout, and all the record companies were going to Glasgow, I went to Southhampton," he said.

"There are perfectly good artists who try for a couple of years, jack it in and get day jobs. We're going to put their faces in front of the industry."