The Return of the Genie • Daniel was right. The genie was out and there was no going back despite the best efforts of record companies. • Napster may have been sunk by a legal broadside in 2001 but others sprung up to take its place. • The genie had granted every music fan their wildest dream. No less than every piece of music ever recorded for free. • The record companies went to desperate extremes to stop it. They sued piracy services and even private individuals. • Meanwhile artists from Britney Spears to Metallica railed against the illegal downloders saying it was as bad as shoplifting CDs. • Musicians had lost trust in their fans and fans lost trust in musicians. Trust was in an all time low across the board and this was Daniel’s opportunity. • The main take away from the conversation is that Daniel saw the opportunity to make a name for himself in the tech world by developing a music streaming service that would restore trust between musicians and their fans.
Reid Hoffman
Was right. The genie was out, and there was no going back, despite the best efforts of record companies. Napster may have been sunk by a legal broadside in 2001, but others sprung up to take its place. The genie had granted every music fan their wildest dream, no less than every piece of music ever recorded for free. The record companies went to desperate extremes to stop it. They sued piracy services and even private individuals. Meanwhile, artists from Britney Spears to Metallica railed against the illegal downloaders, saying it was as bad as shoplifting CDs. Musicians had lost trust in their fans, and fans lost trust in musicians. Trust was at an all-time low across the board. And this was Daniel’s opportunity.
Daniel Ek
I thought long and hard about what I was passionate about and what made me get into technology to begin with. Funnily enough, I took a stint off for a few months and just played guitar like as a on the road with various Swedish artists. So I was kind of like doing more soul searching than anything else. And what came back to me was like, I had these two passions in life, music and technology.How Spotify Became the Most Popular Music Streaming Service in the World • Daniel Ek is a relentless optimizer who pushed his product team to make Spotify as fast as possible. • However, Spotify wasn’t always as fast as it could be, and it relied on some timely misdirection to make it feel instant to the human brain.
Daniel Ek
Read in this book that the human brain takes about 200 milliseconds to perceive anything like at all. So I said to the engineering team, we’ve got to get this down to 200 milliseconds.
Reid Hoffman
And at that time, 2006, that was considered crazy. Daniel never gave up his so-called crazy emphasis on speed. He pushed his product team relentlessly until they made Spotify so fast, it seemed like magic. And like any good magic trick, it relied on some timely misdirection.
Daniel Ek
We never got it down to 200 milliseconds consistently. We got it down to about a half a second. But when you play then with things such as, you know, the throbber.
Reid Hoffman
The throbber is the animated symbol that indicates a piece of software is working on something.
Daniel Ek
And you cognitively make it move even before there’s sound. The human brain perceives it to be instant, even though technically it wasn’t. So there’s a lot of things that you could do. And I got really into the details there of just creating an amazing experience that solved the end goal. But I think I was very clear from the beginning that this needed to feel like you had all the world’s music on your hard drive. And meeting entrepreneurs today, I would say it’s very rare that I hear someone who can articulate what the end state is of that product that they’re trying to build. And you realize if you do solve that, that’s going to be a huge thing.
Reid Hoffman
OneHow Daniel Ek Built a Music Company Without the Music Industry • The better the free product is, the more users it will convert. • The most engaged users are the ones who want the additional features and want to avoid ads. • To get the music industry on board, Daniel needed to trust his users and build longterm relationships.
Gustav Söderström
Give you a free product, and the better that free product is, the more you use it, the more you’re going to convert. It’s the most engaged people. They want the additional features, they want offline mode, they don’t want the ads, they want speakers, all these things, right? Which, when you think about it, is kind of obvious. But it says something. It says that your free product should be as good as possible to capture as many people as possible and make them as engaged as possible. They clearly didn’t think it was worth
9.99. So instead of assuming a finite world of people who are already convinced, we have this machine that kind of creates music lovers, whereas most of the rest of the industry have the opposite. They’re saying, like, what if we frustrate the free users as much as possible? Surely we’re going to push them over. What happens is they push them out.
Reid Hoffman
Daniel found shortcuts to trust with his users, and he kept building and building on those long-term relationships. But there was still an important hurdle he needed to cross, one that would be fatal to his plans if he failed to clear it. He needed the music industry on board. AndHow Larry Page Saved Google • Larry Page, the cofounder of Google, walked in on a private moment and was surprised to see Larry Page, the co-founder of Google, there. • Larry Page decided to put Netscape’s interest ahead of his own and helped them out by taking their website down.
Speaker 3
In and Heather, the office manager, said, like, we’re down, like Google’s offline. And it turned out that Netscape, we thought they were going to send us one-fifth of their queries, but for a period of time they sent us all their queries, and it basically was more capacity Than we could handle. And it knocked us offline.
Reid Hoffman
They had to decide, keep their own website up and disappoint their partner or service their partner and take their own site down.
Speaker 3
So they actually took our site down and put up a line saying, in service to our partners, you know, Google.com will be off service, you know, basically until further notice. But it was, you know, a really, really chaotic day. And I remember it was not very confidence-inspiring because we had this little kitchenette for snacks, and there was kind of a little cranny. And I walked in there, and like, I think I found Larry, like, in the cranny.
Reid Hoffman
That’s Larry Page, Google’s co-founder.
Speaker 3
I was kind of surprised. I turned around and like saw him there, and I was like, I was like, hi. And he’s like, I just need a minute to think about what to do. This is my private moment. I was like, okay.
Reid Hoffman
By putting Netscape’s interest squarely ahead of his own, Larry was making a strategic shortcut to gain their trust and build the foundation for a long-term relationship. But itBuilding Trust with Spotify • Spotify is still working towards a longterm relationship with the record companies,. • Consistency over time is part of trust.
Daniel Ek
A community where people have known each other for 20-plus years. If you’d only been there for like 10 or 15, you’re kind of like a newcomer, like maybe you’ll be around, maybe you won’t. So I’m still a bit considered like the outsider, but what I realized was when I started getting included in the conversations that they were having, that’s when the general acceptance Started happening. And that’s where we could build mutual trust and start working together on what I think will be the next level of growth for the company, where music in and on itself will change.
Reid Hoffman
They may have hacked trust to get the initial buy-in, but Spotify is still working towards the long-term relationship they want with the record companies.
Daniel Ek
At the end of the day, it’s about trust. And if you say that what you’re going to do and then keep on doing that you will do pretty well and if you think about what we’re now trying to do as a public company it’s exactly that you know I didn’t realize it but it’s been quite a cultural shock for even wall street to start realizing and i’m hoping that they’ll get to it and eventually start trusting us well consistency Over time is part of trust indeed
