''You're a white guy!?'' that was Simmons' first reaction to meeting Rubin at a party. Simmons couldn't believe a Caucasian had produced his then-favorite rap single, T La Rock and Jazzy Jay's ''It's Yours,'' the first release to bear the logo of Rubin's new indie label, Def Jam. ''That record sounded like the records I used to make very spare, very hardcore,'' says Simmons. ''It was obvious Rick was the next big thing.'' Soon the two new pals were hanging out in Rubin's New York University dorm room (which doubled as Def Jam's headquarters), and they eventually became partners. Before Rubin left in 1988 to start Def American, Def Jam released era-defining albums by the Beastie Boys, LL Cool J, Public Enemy, and others. Twenty years on, Def Jam is still going strong (it's now owned by Universal). ''It's a full-fledged major record label,'' notes Rubin, who looks back on the early days as ''really fun. We had no expectations, and then to see all this stuff happen, it was unbelievable. There truly wasn't any precedent for it.''