Spotify

“I think that it's gonna be tough to really materially impact Spotify, and it's hard to have a material impact on Apple's bottom line, so no matter what, it's a miss.”

“One of our first customers was this tiny startup at the time, 12 people, small, called Spotify.”

“Europe is producing the bulk of them. So think about it. So Spotify, Shazam, SoundCloud, Deezer, Songkick, I mean, these are all UK, European businesses that are leading the way. So I'm hugely bullish about what can take place in the music space.”

“And if I look at our current biggest winners Spotify and Avito, we invested in the A-round and Spotify just before the party finished in, in September of when the bull market was still very strong. And Avito reinvested in, in the deep bear market.”

“Spotify had just launched in the U.S., and the team in New York was still very small. It was about 30 people.”

“At that time, when, even before I had joined, you know, Yuri already had the vision of being global, which was a crazy idea at the time, and so we got started with DST only in, like, mid-二-thousand-nine or so, with a Facebook investment, and then we truly went…”

“I think it's pretty obvious now, whether it's companies like Spotify or Supercell or Atlassian or other companies of that form, that that is now an outdated view.”

“You look at the series A Funding times of the consumer decacorns that are out there, the Ubers, the Lyfts, the Airbnbs, the Snaps, the Pinterest, the Spotifys, those series A's were all done pre-二零 12.”

“You know, I'll mention Daniel Ek just because it's one that's top of mind for me, but, you know, his clarity of vision, the long game focus, I think is impressive, and we don't spend time talking about, you know, just the here and now. It's where are we going.”

“Spotify is actually one of the, it wasn't even in the United States yet when we found it.”

“I think even Spotify, I think, invested the direct listing to get around some structure that a PE firm went in around an IPO, and that's why they didn't do an IPO. They invented direct listings to get around a structure, as far as I know.”

“A lot of people just don't spend enough time trying to understand what the role that they're asking the person to fulfill. They think about the function, but not the actual task at hand that the person's supposed to fill.”

“I think the most important part of that mission is to try to see if we can have so that a million creative artists can live off of their art. That is a pretty ambitious target. I'm seriously set on trying to achieve that”

“It's a popular audio streaming subscription service with three hundred and forty five million users, including one hundred and fifty five million subscribers across 170 markets”

“When you can argue both sides of the argument you're trying to make, then you're at the point where you truly understand the problem.”

“In fact, I feel like it's almost a reprogramming for every person that we bring into the company because they sort of Intuitively struggle with this kind of notion about being open with failure and being open with mistakes too.”

“In Spotify's case, I like to believe that smart people will make mistakes, and if you're pushing the envelope, that's going to happen, and I will tolerate that. What I don't tolerate, however, and that's very clear from everyone who works with me, are two thin…”

“And I try to model myself not on necessarily other startup CEOs, but actually going to traditional industry, learning about accounting, learning about P and L's and how to look at that.”

“It was also important to me to not have any lockups, but actually let my employees have the same ability to trade their shares that any other investor would have, because that felt like the right thing to do.”

“I've been trying to convince him to come out of retirement for about five or six years, and I've been trying various different constellations of trying to get him to do it. Everything from rejoining me at Spotify to doing all of those things.”

“So first off, I think the person who deserves the most amount of credit for it is not me. It's Barry McCarthy, my former CFO. It's really his brainchild, so I don't want to take credit.”

“Founders need to think more about what success looks like for the candidate after a year or two, and be able to articulate that, and then learn, go backwards to then saying, okay, well, what kind of skills does that mean that person needs to have?”

“If you want to be a delegating CEO, you have to have, in my opinion, a very trusting culture like you talk about, but also a culture of transparency, because ultimately, if you're moving more and more of your decisions to the edges, having the edges know as mu…”

“So good example of this is that I think that like NFT powered commerce in Web three, NFT powered digital media and various kind of social media platforms. That I knew or believed were gonna happen in 10 years or so, I think are now possible in the next two to …”

“When we invested, it was sort of seventy-ish million in gross revenue. I mean, it's ten billion now. And It was about a million and a half paying users”

“The thing that we saw in the early days of anchor and still saw, you know, up until when I recently left Spotify was listening habits of podcasts are very, very hard to break. If you are an apple podcast listener, you're almost definitely never going to switch…”

“I think Spotify is sort of ahead of the curve of this recommendation media thing that they've sort of been doing it for a really long time.”

“We chose the former. We said that we're going to model this as an anomaly, and we kept investing in The world going back to normal”

“I think it is at least as large as social networking, you know, two, three billion plus. The way I think about it is I think music and actually podcasting is a Sort of a core human behavior like communication. And that means that the sort of time in, in, you k…”

“One is you separate new users from existing users. You're going to get very different metrics. Existing users have a habit. Your metrics may go down for a feature, and then if you tried on new users and never had that habit, you may see that if you're not taug…”

“So we actually made a bet on the shift from curation to recommendation or social media to recommendation media. Four or five years ago and rebuilt the application quite drastically. And today we, I would say we are a recommendations based company much more tha…”

“I've seen Spotify have negative growth, actually losing users and contracting at least twice.”

“What you should do instead of fighting is obviously to rethink your position, try to reposition yourself so that instead of having this wind blow in your face and slowing you down, you somehow get it at your back. And, you know, I've been fortunate enough to b…”

“Because they're often in Spotify because they're too nice. That's actually a bigger problem than being, than people being too aggressive. In other companies, you may have the opposite, that if it's unclear, people are gonna power grab. I've seen the opposite. …”

“But to your point, that took over a year before we had everything in place that people even expected from a podcast player. It was painful to spend that time, but it wasn't the problem of actually, you know, losing altitude in the meantime.”

“Because people now have shorter attention spans. You can see the chorus moving closer and closer to the beginning of the song, right? Everyone is trying to optimize for the first few seconds”

“I've chosen to do the complete opposite in my organization, because even if I have a really big organization with thousands of people, at the end of the day, it's just one user who is going to use this application. They're not going to care if it was, you know…”

“I actually think product is a hundred percent science and zero percent art, which I know is going to upset some people.”

“In fact, just talking and debating with really smart people who are not afraid of you importantly, which I think is also sort of a Swedish societal trait that you're not so afraid of authority is way cheaper than writing code. Writing code is one of the most e…”

“I had a lot of faith that conversion would go up because we had seen so many years that the core correlation was the more you use the free product, the more likely you are to convert to paid. We call it the more you play, the more you pay, which always made se…”

“And so I actually don't make a lot of the product decisions at Spotify.”

“And that's actually a problem with being big. We can't really just try things. We have to license them first, which means we take the cost up front.”

“We licensed a foreground, a background shuffled here where you can play any playlist you want in shuffle mode in the background forever, but you actually can't play on demand in the foreground. So it turns out that Spotify mobile Works exactly where YouTube mo…”

“Had to be licensed as the lowest common denominator between, you know, three, four majors with, you know, the impact of being wrong being three, four years. Cause that's a term of one of these licenses.”

“If someone had told me there's no chance I would have started statistically, it would have made no sense to join a music startup.”

“We had to wait all until, all up until we had stopped growing and actually started losing users before they agreed to give us the licenses we wanted.”

“People consume the vast majority of these shows in the, not the vast majority, the majority of these shows in the background, but they do bring it up every now and then to see what they are talking about, who is talking.”

“When I tried it, like everyone else, I just couldn't believe that it was true. I thought it was a fake. I thought they had a file server standing somewhere nearby because it was too fast.”

“There's a difference between being fast and being right. You can get, you can go very fast to nowhere, you know, ship code every day, but if you fundamentally wrong, you're just going to get to nowhere extremely efficiently and fast.”

“By the way, 70, 80% of Spotify, Pandora, et cetera, listeners, the main way they discover new music is FM radio.”

“Our radio group alone reaches 90% of Americans every month. Only two companies come close to that, and they don't surpass it. It's Facebook and Google. Everybody else, the biggest TV network in the US reaches about 35% of Americans. Biggest cable network reach…”

“And I would say the business model from a financial perspective was sort of a mess when I walked into, well, there was a lot of low hanging fruit. Let me put it that way. When I got involved in, in Spotify.”

“The decision-making process in a Swedish culture and at Spotify can at times to an American feel a little bit like watching them paint dry. I mean, the amount of time that Daniel invests in allowing the organization to work its way through the decision-making …”

“And from my experience on the board of Pandora, Spotify owned cool.”

“Daniel was using my pattern recognition skills as exceptional in his own way as Reed was exceptional in his way. Kind of, you know, one in twenty-five million.”

“And it ended up becoming the most streamed song in Spotify history for that time, right?”

“One is you need you need an app platform that allows apps to be built that are of equal quality to the core features of the platform. That is absolutely critical. And like, look at iOS. IOS is like a great example of this. Like when I open up a first party app…”

“I invested in Spotify a long time ago. I've never sold a share. You know, I'm a long, I'm a full believer.”

“And him and Shaq didn't let me invest in damn Spotify for another year. I was like begging Shaq and him, like constantly. I love those guys. And I'm very grateful I got in.”

“I think a company like Spotify is gonna grow 10% to 12% year over year for the next 10 years.”

“We started to see rap songs starting to become actually viral on, on Spotify as a result of this.”

“From Spotify's point of view most of the stuff we've built in-house, to Tamara's point, is actually mostly about cost.”

“Something that designers need to get good at in this world. They need to understand GPT-IV as well as they understand the user.”

“I actually think that in general, you know, we've seen the first wave of AI now where the technology is very impressive. It's starting to do useful things. But we still, usually the big changes come when that technology enables a new business model somehow. An…”

“So that's why, you know, there's no point in trying to compete with them for us because we don't even have the same goal. So we're trying to build exactly the things that we don't think they will build. And we would buy the things that they will build or someo…”

“My hunch would be though that In the longer term, you're going to be able to do most of what you want with reasonable size models and like having a much bigger model doesn't have that much. So I would still bet that having lots of user data and lots of high fi…”

“Initially, it was very hard to find talent on the technology side. That's now getting easier.”

“We literally had, have had, we have a bets board where we kind of stack crank what we're doing. We literally had a bet called AI is the product. For like two years to really emphasize the shift, getting people in that mindset”

“I think for Spotify, for example, when we started, it was the business model of streaming. That was the disruptive thing. The technology was you know, a bit of peer to peer and stuff, but it was a business model that took Apple eight years of collateral damage…”

“We experienced the shift to mobile. It was very scary. Our business model had to change, could have disrupted the company.”

“If you look at any of the big outcomes across our portfolio, whether it's you know, Spotify, Stripe, Airbnb, Palantir, SpaceX, Andrel stem centric. So if you look at all of these big outcomes for us, every single one of them, there was someone on the team bang…”

“One is Spotify, another one is Snap, another one's Airbnb, another one's LinkedIn. Those are the four that we had real opportunity in some fashion or another to manufacture the opportunity for Index to be in the round, and we failed for different reasons.”

“It was Peter and Brian Zingerman and Napoleon that took what did they take? I think they sold Spotify at the eight billion dollar price, pissed off, what's his name? Daniel. Daniel Ek, and rolled it all into Airbnb at the two and a half billion.”

“Crazy persistence and patience. Things at least two levels more profound than others. It's very logical and it's always a very friendly and well-rounded character. Yeah. And he has uncompromising ethics in everything he does.”

“So you could say when the time I was looking at Spotify, it was, I'm not sure, I wouldn't say it's illegal, but we had music and we didn't have the rights.”

“Like YouTube is more engaging than Spotify as measured by the amount of, you know, the ARPU for ads, for example, right?”

“I think that they probably reverse the causality. Things break on TikTok, and then they become famous on Spotify, but that is a function of both algorithms and people pushing music, and not necessarily only a function of the quality of the music.”

“Superficial statements, even explosive or Incendiary even, fall off the news line faster than you would expect them to. I think people's reputations recover and get managed and manipulated, and maybe it's true for companies too, but I think rational people hav…”

“The black background of Spotify actually resonated a lot more with users, with listeners who are active listeners. They wanted to discover, you know, they want, they had the X factor, and that mattered a lot more. It created an experience That gave them a sens…”

“The first phase of growth was purely product-led, where marketing did not exist? And this is true for Kraken, true for Spotify, true for Google, because the first phase of growth was either reality, network effects, or just a brilliant product in a category an…”

“You don't try to tame chaos, create a culture environment where you are thriving amidst healthy chaos, where you are running at a hundred miles an hour, even when you can see 10 meters ahead.”

“So repeat founders, they typically go for a much bigger goal. You know, Torsten did a gaming company, then he went into defense. And we can talk about Danny Alecke as the first company was e-commerce. And then he took on a massive challenge of building Spotify…”

“It's right up there with the top consumer subscription companies in the world. I mean, it's comparable to Netflix, Spotify.”

“We bought it like a 50% discount to the current financing round. And we just kept buying it there for the next two years.”

“At that time, the penetration of the usership in, in, in Sweden was like, 25% of the population used it. I mean, that's amazing. 25% of the population used the product.”

“40% of my third fund went into Spotify.”

“Spotify, early investment that he trusted our business model in, let's say eight to 10 X. Bolt, you have to be determined, but let's just assume it's somewhere between, you know, 50% and face value of what Sequoia paid. It's, you know, six, seven X.”

“Before we left the meeting, they were like, do you think you could buy a hundred and fifty million dollars worth of stock? And I said, sure. And I didn't have the money, because we were in the process of raising the fund, and I think we had like closed on a hu…”

“We then went on to become a top 10 global shareholder of Spotify. We went as far as to putting up signs in their break room. We'll buy your shares, buying all these odd lot transactions along the way and built a huge position. And it ended up being like a bill…”

“And in that you take a lot of concentration in Spotify, but on top of the concentration we had, we did another seven hundred million in co-invest.”

“I was the first institutional investor through the door. I just didn't have the fun to invest.”

“The example we always use at Index is, is Spotify. And to your point, it wasn't because of a bad investment, it was because of a mediocre investment, which is different. You know, we had just invested in Last.fm, which was a, you know, a totally reasonable out…”

“There's so many product directors at Klarna or at Spotify or these companies that have made it, that they're not incentivized to be curious. In a way, they're kind of incentivized to keep the company on the track it is.”

“All the other music startups based in the U.S. Got strangled at birth by lawyers, right, because it was all about IP property rights, and little old Spotify got going in a bunch of European countries that, let's be frank, your average Big Five record label did…”

“We have been trying to compete with Stripe and Adyen for five years, and we were like losing it. Like they were just, you know, crushing us. And we were like, this is it. And Adyen had just signed with Daniel X, Spotify, my neighbor. And I was like, this is ov…”

“Daniel might well get there with one of his companies, you know, Spotify, Helsing. I think those are two good options.”

“And by the way, AirPods made more money Then Spotify and almost every other audio company put together every single year for the last seven years.”