Transcript of Most Replayed Moment: The One Habit Behind Every Breakthrough Idea - Spotify Founder

Like, it's like a— it's just an impossible task. It's what I just would have thought, okay, some things are the way they are, they're immovable objects. That is one of them.

But the other part, I think, also is that what I realized is, before even committing to this idea, the why-not part, I probably spent 500 hours learning about this problem. And the scarcest resource we have in the world today, by far, is time. And when you have high-quality people that spend thousands of hours on a problem, you find new solutions.

And so the biggest thing for humanity, I believe, is simply that. I believe we're capable of doing practically anything, but there aren't that many people that can see these multi-dimensional things with that right experience that happens to come in at that right time. They're spending thousands of hours trying to needle in a haystack, see that opportunity through that very, very tiny prism. And even today, when I think about some of my other businesses, it kind of worked the same way.

So I started a healthcare business about 5 years ago, but I was spending, I think the first interview when I mentioned it was in 2009. And I started the company 5 years ago, 2018. So I probably spent a decade thinking about this problem, and I couldn't figure out a solution.

But, you know, imagine you spending 1,000 hours a rocket not just kind of casually researching it. I am sure you will find novel ways of how to attack the problem. It may not be because, you know, if you're not a physicist, you may not come up with the next rocket engine, but you may find another twist, too, on how to attack this problem. And I don't really think it comes down to that. And so in the space of music, I didn't know anything about the music industry going into it, but I would argue a few years into it, I was probably one of the most foremost experts on copyright in the world around, like, the DMCA and what the U.S.

copyright regime looked like and what other regimes looked like and how, you know, performance rights, societies, label rights, and what kind of rights, mechanical rights, performing rights, all of those different aspects, all the different code IRC numbers, ISBN numbers, and how they related, and so on and so forth. And, you know, I find, like, people either get too muddled in on the details and don't see the bigger picture, or they stay too top-level picture to really see the nuance.

And the question is, how do you dive deep enough where you see it and figure out which problem to solve in what order? And I was at that point by probably 2007, having spent a year on Spotify, but the team was super small, so there really wasn't a big commit at that time. And I wasn't sure at that time, but then I realized that, hey, this is actually possible because we'd built the product that showcased the technology of what we were doing, and it felt like if you had all the world's music on your hard drive.

So then the real problem ended up being, can we get the music industry to accept this? And to that, I had no idea. But I felt like this is so obviously, if this came out in the marketplace, what consumers would ask for. Now the only question is, is the music industry going to allow this? And that took me another year and a half, 18 months, to learn the answer. And it was completely binary. We almost died probably 4 times in that process and ran out of money and record companies saying, no, no, no, this is never going to happen.

Until eventually one day the stars aligned and we were able to launch. But that was not a given, but it felt like the right bet to make because, you know, it was a binary outcome. Either we would fail, the price wasn't all too bad. If we would succeed, it was clearly so that at least this would resonate very well with consumers.

You're going to figure it out." And he just kept believing in me. And then he also said a few times, you know, when that wasn't enough, he said, "Don't worry about it. We'll figure out something else if this doesn't work out." And it felt to me like I always had that safety net, and it was just the amount of push that I needed to do this. And again, talking about not giving advice, but the advice that I do give to other people is to share the burden with someone. It is so important. And I know I get most of the credit for Spotify, but it is really a team effort from the Gustavs and Alex and all those people, but then also in the early days from Martin in believing in me and knowing this kind of supernatural ability that I'm going to pull it off somehow.

It's probably worth persuading. Obviously, that's the science part. The art thing is, okay, well, is it really 100 times? Is it 10 times? And have I already lost, but I'm just not aware of it. That's the art.

It may not be a great combo. You may want the CFO to be skeptical about the sales pipeline and a happy-go-lucky salesperson, or the inverse, maybe, like, really diligent that, and the CFO that may be sort of like, "Don't worry about it. We will sort it out." But I think so much about that is the subtleties. We don't have a perfect model of the world. And the more experience I have, it's a cheesy thing to say, but the less I realize that I actually know.

And so much of this are actually down in the nuances, and most people are above the nuances, don't really understand the issues well enough, or too bogged down in the details to understand the bigger picture. And going that sort of up and down, that's sort of super detail-oriented, but also being able to go up and see the big pictures. That is, and simplifying very complex concepts, I think some of the most amazing entrepreneurs in the world are experts at. And that is a superpower.

And that is certainly one that I'm trying to hone and work on. But when you see, like, Steve Jobs when he did very complex things, and people say he didn't understand engineering and technical problems, it's not true. Yes, he may not have been an engineer, he may not have known how to write code, but he certainly could empathize with what made an amazing engineer tick, empathize with different technical solutions will have different inputs and outputs.

And he understood it. And he was brilliant in taking very complex ideas and understanding how to make that resonate for the everyday person.

That certainly happened. And that taught me another thing, too, which is that these assistants, like, you better befriend them because they are the keys to the kingdom. And most people don't care about them at all, but they're very influential. They're very powerful. And, you know, that was hard in the beginning, but then I realized that they got to see me as an individual, I saw them as an individual, and eventually, you know, this is not, we tend to believe the world is more logical than what it is, but a lot of it is based on relationships.

So eventually, some of them started taking a liking to me. And so when there was the opportunity and they could prioritize 10 other things for that CEO to do, but I was there, I was friendly and easy to work with, show up at no moment's notice, even if it was 20 minutes before finding out about it, I would show up. And so I was easy to deal with. So take away all that complexity in order to achieve the outcome that I wanted to do. And sometimes that is as simple as it is. Just be consistent, be the easiest person to deal with, and you'd be surprised how many problems it solves.

But doing that on a seed stage back in 2007, that just was unheard of. It was usually $500K seed check sums, et cetera.

And then I always say, well, why don't you just bet on yourself instead? Why don't you just try to, like, work for one of these startups, like you said, and maybe take a little bit more equity and a little bit less pay and take out of your cash instead? Because that way you increase the likelihood, hopefully, if you know you're good, of the company being a success. And it just feels like the more prudent thing to do. And so I had a sneaky feeling that that was the right thing to do, but investing as much probably wasn't the smartest thing to do.

So we were concerned about it. And we were kind of doubling down on what our positioning was going to be. So you kind of, like, double and triple-checked whether or not, you know, you were deluding yourself into believing things to be true. And so, for instance, in our case, one of the big things, we had some strategic pillars that we were focusing on. One of them we called ubiquity because we always knew this would eventually be the case. We thought that consumers would value the ability to work across all devices and all ecosystems.

And our bet would be that any competitor we might have had would actually focus on reinforcing their own ecosystem and not care about all the other stuff. So the primary reason they were into a music service would be to make their own devices better, not to make the world's best music service. And so, you know, that's why we made such an effort of integrating into cars, integrating into all sorts of weird devices, smart fridges, whatever you might think.

And so it was kind of like reiterating that, but I felt pretty good about that position and going back. And then there's always the sort of, like, what if they figured out something that we just wouldn't have thought about? And I remember we were constantly talking to the product teams about this, and like, what if they come up with this? And we were literally trying this, game theorizing every possible angle on it. But I think at the end of the day, we kind of went through the thousand scenarios kind of thing.

We knew we had prepared as well as we could. We anticipated a certain type of product. There was this kind of 1% or 10% chance, whatever you want to quantify it as, where we would just be wrong, and they'd come up with something that widely superseded any of our expectations. But that very day, remember, we'd been preparing for that day for so long. So the first reaction was kind of them announcing it, which we expected them to do, and then seeing the walkthrough of the product and realizing that, okay, well, we prepared for this, we thought about this, et cetera.

And so weirdly enough, as the rest of the world kind of, like, gasped for air, we were thinking about it, okay, well, this was what we expected. And back to that point, distribution was the amazing thing. They hadn't come up with something on the product side that we just didn't anticipate. But it was really just about distribution. And there was nothing we could do to guard ourselves against it. But we felt like we had a superior experience on the personalization side.

The fact that, you know, if you have a Windows machine and an iPhone, Spotify would work, but Apple Music wouldn't at that time. So there were many of those things that we, I thought, had a better positioning than they had.

And those are perhaps two different sides of the same coin. But, you know, the way that manifests itself, I think that it's a company in many cases that still sees itself as an underdog, but don't realize that they've become Goliath. And so many of the tactics that made it the rebel kind of thing are now stifling innovation, and it's really hurting consumers to a great extent with the 30% you talked about, with the fact that, you know, Spotify can't, or any developer, if you don't pay the 30%, you can't even speak to your consumers.

It's kind of absurd. So, you know, there's a ruthlessness on the business side of Apple, and perhaps it's always been so. I don't know. I never got the opportunity to meet Steve Jobs, but where just from an ethos point of view, it's just not me. And I have a hard time squaring that with me as the consumer and me as the business leader. And needless to say, I do believe that Apple can and should play fair, and I think it would be way better for the world if they did.

And I think that it would actually help them in many regards to switch their tactics and realize that they are the Goliath at this point and not David. And so, yeah.

Are you aware of what that is, what those principles are?

But the best way is it's 17 years old now, and it is a teenager that's liberating itself. So it's not 100% me. In fact, it is this much broader, different being. There are aspects of it that hasn't taken after me at all. In product development, you know, Gustav is a formidable product leader as an example, and Alex is a formidable business leader. And the two of them are now leading more of the day-to-day, and they're certainly instilling their personal values and their personal perspective of the company too, which I think they're totally entitled to doing, having been with the company for 12 plus years, both of them.

But it is interesting seeing it because we're approaching things now in a way I wouldn't always do. It's not inconsistent with important principles of mine, but it's certainly not directed. And the other part is I started this as a 23-year-old. And the 23-year-old Daniel, while many parts are the same, the 40-year-old Daniel with two kids, having seen that, have changed perspectives as well. I have a different feeling about work and the importance of that in my life.

Still very important, but may not be the sole most important thing that I do, just to mention one. And so it has similarities, but there's differences to me as an individual too. But I think if you compare me, the 23-year-old Daniel to 30-year-old Daniel to 40-year-old Daniel, I've evolved too. And candidly, I'm in that period at the moment where I'm perhaps trying to figure out who the 40-year-old Daniel really is because it's a different one than the 30-year-old one.

Maybe it's subtleties, but I think in quite a big way also, and just thinking about something like culture, the 23-year-old Daniel's culture was having a ping pong table. 30-year-old Daniel would have said, yeah, culture is important, but didn't really understand why. And the 40-year-old Daniel would be, you know, the 30-year-old Daniel would be more strategy than culture, actually. And the 40-year-old Daniel is all about culture, almost to the point where strategy is secondary, if not even tertiary to that.

We just don't know how many we have. And so the people that have been successful have way more. So they have leniency and allowance in the culture of any organizations to do more than someone who just started and perhaps have lesser ones. And if you failed enough times, what's naturally going to happen is that you won't have the same agency in a large organization to impact things too. So then the counterpoint to that would be, well, how do you then create an environment where people are allowed to take risks and then balance that with, say, Spotify at this point where we have a huge amount of responsibility too.

We have tens of millions of creators that have their livelihood of the platform. So we can't just experiment with how we're paying out and so on and so forth, right? And 550 million consumers, we have to be responsible with their data. We can't, you know, put new things in front of them without testing them and so on and so forth. And so there's this constant tension between being innovative, taking risks, and, you know, at the same time, obviously being responsible.

And that's hard. But that's all about culture.