Spotify CEO Daniel Ek
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it is impossible to flowlessly executepodcast of this style yeah and thats the beauty of it you can what a bunch of stuff you want to talk about and then you end up having a real organic conversation and then it turns into a product and that product is totally different than what you envisionin your head but can still be great but i think the amazing thing is unlike you talk into a journalist that i is its truly a conversation one and the second part is theres enough time to actually elaborate on the thought and the idea wheres you have to be so susynct in how you express your idea and truly get it across in thirty were like you lose the moment in journalis want to move on Bryan chestkey is an example hes like the master on and he just switches it on and hes like so good for some reason he and i always ends up getting on the same panels and im right its game over even before have all the great stuff who got the true！

welcome to this episode of acquiredthepodcast about great technology companies and the stories and playbooks behind them， im Ben Gilbert， im David Rosnfall， and we are your hosts this episode we sit down with Daniel ec， the man who saved the music industry after Napster， and the piracy era killed the cd business some of the stats are mindboggling Spotify has paid 40 billion dollars to artist over their lifetime theyre now the single largest source of revenue for the entire music industry thats crazy specify also has over five hundred million monthly active listeners over two hundred million of which are paid subscribers both of those numbers are bonkers and in todays conversation were talking about one how Spotify manage to get to this five hundred million number by stacking all these different expansion strategies on top of each other over the years and two were going to dive into the current moment that Spotify is in theyventered podcasting in a huge way that is not only changed the experience for consumers but spotifies business and their future as a company， which is of course， very interesting to David， and i as acquiredsgrowth has really exploded on Spotify totally！

as i think we reference early on in our conversation with Daniel over sixty percent of acquireds audience is now on Spotify， which is up from basically zero four years ago wild in fact。

we were so interested in having this conversation that when Spotify as if we wanted to fly， the stockhome and record in person with Daniel in the Spotify studio， we jumped at the chance Daniel also foreshadowed some of whats to come with the cousin of podcasting audiobox who we cant wait to hear you think come discuss it after you listen to this episode in the acquiredslack acquireddatafm slash slack you should subscribe to our interviewshow our second showacq to you can find it in any podcast player and weve had some killer back to back discussions with the ceos of retool an angelist both about ai now without further ado this show is not investment advice David myself and our guest may have investments or many shares in the companies that we discuss and the show is for informational an entertainment purposes only now on to our conversation with danielac we wanted to start with like something kind incredible has happened in pig casting feel look at January first 29， we had less than a thousand listeners on Spotify yeah crazy and now its by far the majority of our listers and unless your us and your looking at the data all the time or other podcasters i think its easy to underestimate how sysmac of a shift has happened in the podcasting ecosystems since you guys doven and i just wanted the sort of acquiredstyle go to a moment in time and say how did that happen and how did you guys decide to become an audio company instead of a music company i like to say that there was probably this genius inside at some point in moment。

but thats certainly not in the case of Spotify true uh it is often quite certain dictis and for a long time you know i was kind of finding the urch on this， but we were often times trying to not think of ourselves as the users and customers because once you got through kind of a hundred million users， youre kind of like well， obviously， i shouldnbe the target demo i need to kind of listen to what the actual users are telling me and there are some part thats true with that， but then um more and more what i i realized is also that actually， internally， we probably have the best sounding board of a quite representative spotified user and what they might like and so uh one of my favorite topics is how often people game are platform ferences in Germany humbenoons to us， but one of the the sort of crazy things that end up happening was just people started uploading audio books because it turns out that um these music labels actually own a bunch of audiobook right， and so as the platform was taking off they realized what else can we put on this platform that gives us a leg up and creates more revenue for us and they realized they have this catalog audio box in on there， so i think that was kind of one realization where we kind of realized hey， this platform it doesnt seem the matter all that much what were putting on a people just like consuming content and then i and other subspotify we were big podcast listeners ourselves and we love that uh but we hate the fact that we had the switch app uh from our normal one we hate the fact that we couldnget the recommendations working we hate the fact that we couldn get this to work on my car speaker or my home speaker and all these things that we spent literally adapt um building for the music industry so kind of dawn a produce that podcasters have sort of the same problems that the music creators have， and we should be able to play a pretty big role and all the primitives the view build from music should work really well， in terms of discoverability in terms of uh， ubiquity that we call， which is sort of our ability to play on on any device and of course are frame in model where the ad supported and eventually paid models as well should be able to all work together and so the traces thing in the in the beginning was probably when when uh， we started talking about it as building it in the same app that was what the biggest resistance was because the common wisdom at the time was obviously well！

podcasting has to be a distinct own thing i mean this was like the youtalk about this before the constellation of apps was yeah you know oh the like all the range facebooks get all these different apps apps and apple is all these different apps and it has some a person who already defines myself as in the podcasting im never gonna click a podcast up to try and get in the podcasting you cant expand the Tam if theyre all in separate。

which this was a super nerdy thing even merchandicing podcasting is a very different problem the music it is actually one of the things that were still working on trying to crack the code on， but that was probably the most contrarian both inside and outside， but to us it was probably the most obvious one because we had already seen the behavior happening uh in Germany， um and uh once we had died uh on loading it for yourself， so that we could play around with the product was kind of obvious that this would be a great experience and its probably been the most interesting one for me where uh and what i often tell other entrepreneurs is like well um the fact the people doubt you in the beginning you cannot need to pay attention to that uh and here what ballet concerns they may have， but a bunch of that is just like theyre not used to concept uh and is going to change but by the time it changes it will have already passed over not that you were right but actually well， of course， this is kind of obvious right so my favorite one obviously streaming music where when we we began doing it， i always got this sort of push back of like why would i want to rent my music i want to own my music and the phrase streaming did not exist yeah， uh people were not talking about it and people actually conceptionized more around sort of renting things and what wise that good for me this is horrible um and you know that means that technically what happens uh if you guys dont wanna have that song anymore the song disappears and people care so much about their music like their identity like i want to own this i want my you know record collection yeah， it it exactly and we were finding a against that where it was so obvised to us that um because i grew up with piracy that no， actually all you want is access to it and it was such a hard notion for people to get conceptually， because weve been spending thirty years just getting people into that and i feel like most of the tech industry is spent a dekid plus a learning about having separate apps and we can have said no， no， no its doesnt really matter uh we can put it in the same map。

but actually people will love it even more because wesolving the same sort of user needs where did that inside come from was it you as a user was it else where in the company？

well， it was really a lot more of a first principles kind of thinking about it it didnt really make sense if you look that sort of like what are we trying to solve for and was it truly so different in terms of a consumer experience now， it was the same playing view slightly different， sort of modalities but totally possible and if you thought about it， us discovery OK well， thats a similar problem you bic with being able to play it on all these speakers made a lot of sense of having the same thing search all of these things were basically shared in for searchers that we can realize and um again if yousearching for a content， why um you dont really care all that much about it on YouTube， uh and on one end your listening to music on one side you had all these other short form， videos and sports and so on you dont think that those are distinctly different behaviors why do you think about it that way and is because you really think podcasting is a different format but actually， its audio alright！

yeah， go back the radio days， talk radio and music and sports they were all on the same device yeah！

i mean thats the thing with audiobooks to right like whats the difference between an audiobook and a podcasting well， you would say shappstring and some of those stuff uh！

we think of ourselves is like right on that line between a audio book and a pack actually！

we we love your help trying to solve this for ourselves， so we have recently realized that acquiredis the cononical episode of Nvidia episode or tsm c they are tailor swift yeah， the these are more like conversational audiobooks between David and i than they are podcast yeah， theyre four hours long they drop infrequently how does that kind of fit into？

uh， what you imagine is the job to be done by audio when is it an audio book is it a podcast？

my view i guess is the boundaries are from a four matt side is defining being blurred， quite a lot and an four right reasons but the better way to think about audio， books and podcast thing is its really around a business model mostly so one way to frame it and said would be podcasting is ad supported audio and audio boxes paid audio so for you guys i mean i also happened to know you spent so much time and effort on the research of that side you could imagine that in the future you have the um ad supported side of your podcast be certain types of episodes and and you to have for your subscribers um， the onlock where they get access to um you know these kind of deep dives， it said right and obviously this subscription thing could be as simple as like a your part of our other network and it doesncost money or you could pagate its uh all the way through but i think is more of a business model thats the big format differentation because as as we said， like the quality the mix were using related to an audio box there is no difference here using like high quality camera equipment um also very similar to more professional style than sort of do it yourself kind of equipment editing all these things is getting more， more bleu yeah！

which is so interesting like to us like we would live this over the past eight years like what pig casting is unlocked and now it Spotify bringing so many more people to the medium that wert consuming before is like a mass audience for nitch products like if we were authors and we wrote a book and we get pitch all the time on writing a book like the business model for us does not make sense anymore sure given the audience size that we have an yeah particular type of audience we monetize so much better with the ads supported content yeah， but like to make that unlike happen it needed to become a mass medium yeah， its interesting to think about would that change if audio books can access a mass audience in the same way yeah！

and and obviously are rvus we eventually think audio books should be much much larger on them what it is today hundredsamillions of people who are actually listening to audio box because the content is great rather than today whats tensimillions of people is at the market size today of yeah， we believe its like tensimillions its one of the fasts grown categories， which makes it interesting， but um its its again uh fundamentally its both a business model problem its um you know again the discovery problem！

and all this um other you had to get to pay a lot of money for a one of purchase yep， or you need to have a pretty expensive subscription， sure to a service that you may or may not use that and get value out there reminds me of music and yeah！

you guys are exactly right and and theyre probably needs to exist of uh different business model for all these things but you could even in your case i mean you guys have probably right now um a pretty defined audience i would guess and probably a very high value audience， which makes um you add support emonetization probably better than the average creator for you guys just given uh the type of audience that people want to， want to， get to， but you could even contemplate like some of your deep dipes like Ive iheard like actual hedge fund investors literally have that is the soul input to the entire process just terrifying yeah well！

yeah not investment advice yeah exactly！

but i mean you know it is one of the areas that im im kind of umm the most intriet about i think Ben Thompson had this peace very recently i think he called it like the unified content business model and peace i dont necessarily agree with everything he said， but but i think it is main takeaway is obviously that all media models automove to freemium its a someone whos been saying that for for fifteen years uh i always say agree with them there， but i think thats true in all format right like as i said， i think you know whats difference between audiobooks and pod casting there are defining differences but but the formats are bluring but the main one is is the business model as i said， so it is just it its talk audio but with a paid or an ad support a business model and i guess my advice to you guys would just be i think you should kind of like explore both thenswe to an extent whats possible yeah！

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a major partner of both Microsoft and Nvidia i was at nvidiasgtc earlier this year and Jensen brought up service now and their partnership many times throughout the Keynote so why is service now so important to both Nvidia and Microsoft companies weve explored deeply in the last year on the show well ai in the real world is only as good as the bedrock platform its built into so whetheryoulooking for AI 的 supercharged developers an it empowerent streamlinecustomerservice or enablehr to deliver better employee experiences service now is the platform that can make it possible interestingly employees can not only get answers to their questions。

but they are offered actions that they can take immediately for example， smarter selfservice for changing 41K contributionsdirectly through ai powered chat or developers building apps faster with ai powered code generation or service agents they can use ai to notify you of a product that needs replacement before people even chat with you with servicenals platformat your business can put ai to work today its pretty incredible that service now build ai directly into their platform so all the integration work to prepare for it that otherwise would have taken you years is already done so if you want to learn more about the service now platform and how can turbochargesthetimetodeployai for yourbusinessgoovertoservice now dot com slash acquiredand when you get untouch just tellthembedondavid sent you thankservice， now speakingof the podcasting business model theres the potential for podcasting to be a far better business at scale than musicstreaming obviously with musicstreaming you take thirty percent and you share seventy percent with the labels uh with podcasting um theres the potential for real operating leverage especially if you own the content to uh build a fantastic adnetwork or you know however， you want to monetize it， but you actually can take advantage of the scale of your audience in a way that it sort of hardoutrun your costs in the music world im curious how early in your sort of dreaming about becoming a podcasting platform did you start thinking about that uh or was it purely product driven well？

i think it was a bit of both um and you have to to contemplate that if youre making moves like a certainly of of our size because many of these investments that were making our multiyear once um and pretty substantial from a signaling point of view two and obviously public market investors wanna know like well is this ultimately a good business and why do you think that is and for meetupsaid well， we weve bought a bunch of companies， but i dont really know what kind of business will be probably not going to be the right um answer so obviously we contemplated that and we we thought about that but the reality is theres a lot of the grasses greener on the other side when when you go to deepen that， so always on the one hand if you deal with a lot of license content and um you know this case from some major labels and obvise a lot of indies uh as well， but still relatively supply constrained from from some big ones the natural tendencies for you to think well， this is much better because all the sudden you have this sort of much wider scope of different creators the matters its great uh you the mega get a fragment market yeah you you can do the aggregation theory thats thats all good great we we dont really contemplate all all that much is obviously theres other challenges for that business ball uh moderation all the sudden becomes a massive thing um you have to build an actual add network the probably then the scales so in theory yes， you right uh you may have an opportunity to gain um more more margin over time uh in this model， but fundamentally you have to do many more steps along the way like we dont have to contemplate content moderation as much when it comes to music we certainly dont have to have these very laborate systematic processes about what constitutes speech and um you know， um violence and we knew that because id seen enough for these obviously platforms but but it is important because if you think about it from a pnl， so so on the on the surface of these this models are great right， uh because a very high growth margins and and so one the so forth great at scale！

great offensive at small scale yes！

uh but even at scale if you think about it is the cost increasing or decreasing and if you think about um， you know right now obviously ai will come in and will be massive but i think at one point in time uh， Facebook or now meta had over a hundred thousand content moderators actually working for them what a hundred thousand i believe so i dont know an insane amount of people so it its tempting to believe that thats a fixed cost uh and that theyre right running this like unbelievably high growth margin advertising business yeah！

they can outrun those fix cos no problem but in reality， what your saying is actually， they build up a whole bunch a variable costs to that dont fit into this um playtonic form of ideal social media business model yeah for sure and in e an eventtoday if you think about it so alright！

a one maybe thats not a hundred thousand and war because theyve been able to automate some of that process but uh this cata mouth game as well so the other side is now using quite sophisticated they use open ai two yeah， exactly to to uh to do that and that means that your ai models has to be a lot more uh you know sophisticated and thatstill adds cost so i think the best case scenario i was looking at this uh this is very old data but i uh， but i believe at the time of facebooks ipo it was something like the cost for Facebook on board a user was like a dollar a user or something like that hmm in like hardware cost and all that stuff basically to have lifetime value of a customer and so at that time obviously the monetization was as vans， so that was what was burning cache for quite a while and then eventually， there growth rate probably slowed down enough where there monetization started uh kicking in and kind of scale up enough， where where those two effects kind of uh took out each other and they became uh very profitable but if you look at look at it now， uh i would i dont know what the cost would be but if i would guess uh if i would start a social media company today the cost may be an order a magitive more 嗯， right uh because of all the other things you now have to do uh the ad platforms are way more sophisticated they have to build the moderation tools are way more suv sophisticated now the good news so so you may then come to the to this and say well was that a mistake then well， we knew a lot about that going in and we werent entirely new it wasnt like we were starting an ad business from the scratch right um so we had already been Facebook for a long time yes！

um that too so we had we had relatively good idea of what type of problems we would encounter and to give you some credit look for listeners i think at the time you probably had maybe two hundred million people on the ads supported tier who werent in premium when you launch poidcasting maybe something like a hundred and fifty million， but you had a gigantic scale advertising business you just didnt have usergenerated content being the content that it was advertising against yes！

thats acrid and the amount of inventory obviously um that we were were monetizing it against was relatively small and and one of the big things right now is obviously this is a huge thing perhaps even more so than music for us to offer monetization to a lot of these podcasters that props on like yourself cant sell has unless youre in a net like ours if your subscale younever， gonna be able to access you know level or png or coke you know on your own or Nike so i wanna ask you about that because um i saw the um episode you guys David David senr by the way uh oh so so uh and in he， hes interesting because like in in my opinion， hes used to almost dig in more in like what made him successful and like tries to not at all year to broading the base out so how do you think about that like because you could just go serve your nish even better or you could try to like well， lets try include other forms of content and like how do you decide what what type of content to go after oh man！

we are right in the middle of figuringthis yeah！

i mean you always said for a long time youre like i would rather not have growth and keep our audience who they are im not sure id go that far but i would rather saturate our nitch yeah and then at so point stop growing then expand the nitch and then which i think we have three to four x headroom yeah yes！

we we still can expand in our net but but then we did our tailswift episode we did the mba we did the nfl and then we did lbm h LBMH！

we got 40 new subscribers wow and we were like okay， sut to your point about like some something is hacked here yeah！

like there is a theres a new phenomenon yeah something so we we have had to redefine what acquiredis basically， once a year since we started it used to be technology acquisitions that actually， went well hmm and then it was acquisition was not he talking that was still that and that it was you know and and so at some point， um， we expanded beyond just tech founders and engineers it became venture capitless also， when that it became their lps， theres a bunch of university endowment focus that listen and now werealizing as long as we keep making these really deep， really long， really esoterric stories and analysis you can create smart content for smart people that is not scoped to a particular industry and i think that thats our new sort of thats a new definition of the the job to be done from acquired hmm？

yeah， i think its brilliant how um youre able to both satisfy your own curiosity i guess and uh at the same time sort of it is it doesnt seem that for fetched some of the ideas um we were trying obviously of i would probably assume the tailor swift ones more out there than than something else but but the lv match one actually felt to me super natural uh and its its funny you know how well talked about it its been even among like what i would have not assumed would have been your crowd like i had a bunch of like really old school value investors that i honestly did even realized listen to podcast， which is pretty cool um so so i think theres a way where theres probably some overlap between the audiences。

but also kind of clearly but tracks on you yeah i mean its kind of like its a very very different scale and different business， but um its its a little bit like the Spotify adding podcast to a musically we have this audience that is like traditionally very tech focused we have this format that we were find uh and now were like well OK， if we bring something else into it is that can expand it yeah！

but i will say unlike Spotify， which you can by virtual being a tech platform you can aggregate a bunch of different audiences and then let them choose their own adventure on a really broad platform we choose the adventures， we we create the serial episodes and so， if we go on a Bender and do uh like we just did block it Martin and it hasnt hasncome out yet us we speak， but we could have done eight lockid Martin episodes and we chose two particular stories to sell and we call that the lockid Martin episode yeah if we want a Bender and did it， then like we do this under serving a lot of our other Niches we did two and a half episodes on Nintendo！

two unnintendo one on Sega and we had a blast and people who love video games had a blast but by the time the Sega episode came out the people who dont love video games in video game history had staff listening right， right？

but sort of diving deeper on that um im curious then um would have been that much more after for you guys to produce the eids or did you have the content but it just didnt make sense from an audience point of view i think we had high level concept in our headfor for eight but it it turns out uh most of the work is the last ten percent yeah yeah its like that its like soft engineering were like theres the first nine percent then theres the second ninety percent yeah and i think so much of the work is the last yeah ten twenty percent yeah there is usually one thing on the cutting room floor at those or so were playing with this id of shorts the what we did for Sega f o in approximately one hour uh can we take one thing that just we couldnt squeeze it in and uh， um until one more story hmm yeah！

i was just thinking about sort of touching upon where we sort of were a little hologo about sort of paid versus ad supported i bet you that there would be a very small one but there would be an audience of a listen to all eight whether you want to spend all the time right um doing the eights is a totally different a question it seems to me like the best creators just pursue whatever， they are interested in and some of it will work some of it wont work they dont really seem to care all that much obviously theyll learn from from what seems to be resonating and not but but thats the cool part like where were living in an internet where on the one hand everyone talks about this fap fifteenseconds kind of clips um thing and everyones uh sort of getting down in that rabbitable。

but then at the same time uh you could have like three four five hour long conversations in superc very very deep uh topics and people love that two its funny us uh Joe Rogan Lex at the same time that short form is having a breakout moment extreme longform is also having a breakout moment we want your views on this on our very small scale like were struggling like we have an acquire TikTok were on YouTube shorts we post on Twitter and like noneotherthat drives the needle for us like weve had videos on TikTok get couple million views and we dont know if it translated to a single new subscriber right to the many cases we do know it translated to a single new subscriber single subscriber brand like welcome both of you yeah， welcome both of you thank you for staying with us at the same time like you get your you are at least on the poi casting side the home of longform content and you just launch the new Wall Street all thinks its the TikTok ification of pigcast its the new home screen the new host yeah yeah the both the screen seems to work i believe one of the biggest problems we have in this new creator economy is um is the one of attribution right so you um many creators like you？

um have or try many of these different platforms and use it but um you know and they can they can see on each individual platform how well， they are doing but they its very hard for them to understand what actually drives what and i actually see both i see some creators who are like undernesting in other platforms and probably too singlarely just because they have success on one they can begin to worry all the others， which my advice told those is that feels kind of dangers to do because if there would be a algorithm change or any of the kind， i even you know unanticipated by the platform because you know， they may see that something uh resonates watch time resinates better with some other metric he doesnt have to be skute as a evil thing， it just could be something it actually， benefits the user， but it but if you build your entire livelof that one platform that could be a big problem for you， so i see them under investing in other platforms um and then the other one also feature， which is there overinvesting in too many and not realizing that that actually， they probably would do better in just focusing more on one or two， and so i think that there is two different problems i i believe um that for awesome why we care about this um， and certainly， why we design the law home， feed the way we did is um because fundamentally how we merchandise content has to be very different for music than it is for an audio， book or a podcast um and if you think about it， this kind of logical because um in a song， its a three minute commit ends of your time and you can actually probably tell within the first hand fifteen seconds whether this is worth investing your time in or not unless its a radio headsong that is true that is true but you probably then know the brand and you know how to give it the time in attention yeah to it because beer beer like well love radiso im gonna give this song a chance maybe not just once chance ill ill listen to it a few times before i make up my mind and obviously if you now think about that uh with podcasting i mean if if im listening to you guys and even if its a topic， i dont necessarily know that im interested in i might give it a shop because its you guys and i trust you because i build up this report with you its a much bigger commitment though it is a much bigger commitment for sure， but i may give it ten fifteen twenty minutes right because i have that relationship but if i never listen to you guys before yeah， that a one hook that gets me and that how many people you know marketing you usually had and in earlyspotify， we had eight people needed to have heard about Spotify before we were able to sign someone up oh interesting and so we realized that the geographical density in which that happened uh was actually key sort of contributor and a timeline so much of our early marketing efforts were in college cities in the us make sense you have like consumers for probably more a tune to music being a big part of their life um small geographical areas so we we kind bombarded it uh we did a bunch of different things said usually successful in retrispect now you godhow long fifteen years later was it almost like a benefit that you had to launch geographically specifically because of the label negotiations like that you could really saturate Sweden the uk a four moving oh oh yeah for sure we all believe that these like sort of internet companies the go global day one thats like the right approach i i actually think 99 P9 percent that this is just on true and false hmm the entraners have the revise we are all are benefit from constraining ourself to finding what our first audience is and it could be geographically nished it could be um that it actually is um you know again subset of a um demographic were or， or， or whatever， but but i， but i more often than that is actually jorgraphy helps limiting yourself to a city to a state to a country whatever， it might be and so that was a huge part i can tell you definitively Spotify would not have been alive today had it not been that we couldn launch in the ussr first market， 啊 thetime it was like a huge kind of step back to say well， i cant launched the most uh biggest market in the world and im irunning an internet company like come on！

i told the stories of uh you believed and you told investors like oh were gonna be live in the us in like three months yeah having the conversation yeah and then it was three years later oh！

yeah actually！

yeah you must have been so stressed yeah！

uh well， i had many uh， uh， many of those episodes and it is it always followed with an enormous wait gains uh and hair loss that was basically you literally ripped your hair out yeah！

pretty much like i i start when i started， i had hair and then like two three years later， i didnt have when you started Spotify you at hair yeah！

wow！

yeah！

theres like old pictures um of me with hair like from the first um year or something and then it kind of all disappeared wow， uh and i dont know anything wasnt it wasworth the trade um well， um so obviously i i， i， i think it has been but obviously i i cant recommend um it is an emotional role across the you guys know this being a launch banner its not for the feintarded and i think every really successful longevner in my opinion has had at least three near the f experiences with their company right where you just feel like im not sure whether this thing is gonna work not work uh whether were gonna be alive tomorrow or not and i cant hit um how media portraces this and sometimes how on entrepreneurs were were supposed to be served like were so big were like we understand everything from they want itcertainly not been my my journey like my journey was you know i i had a lot of luck i worked in seedlyhard um to get to to even half fulwherewe were today and then its been a true sort of emotional roller， coaster and it it is true would you say but like for me had you told me how hard this would have been i would have never done it im happy i i went through it but i would have never done it。

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we already got a compliance process in place and we cant integrate this new thing but now even if you already have a sock to vantomikesmaintaining your compliance even more efficient and robust theylaunched vendor risk management this allows your company to quickly understand the security postger of the vendors that youve inginastandardizeway the cutstone on security reviewtimes this is great and then on the customizationfront， they now also enabled custom frameworksbuilt around your controls and policies of course， thats in addition of the fact that with vanta， you dont just become compliant once you stay compliant with realtime data poldfrom all of your systems now， all of your partnersystems and you get a trust report page to prove it to your customers if you click the link in the shownote here or go to vanta dot com slash acquared， you can get a free trial and if you decide you love it， you will also get a thousand dollars off when you become a paying customer make sure you go to veta .com flash required we wanted to ask about um i wonder if you consider this one of those near death moments but because we did the t swift episode here we talked a lot about it on the show um the week that nineteen eighty nine draft entailer pulled off the platform like did you consider that one of those moments um this is twenty four twenty fourth yeah October twenty four yeah we really not know uh that thats thats the crazy part uh with it it was it was one of those where if you ask us uh externally it felt like this massive event but if you if you were inside of Spotify that moment？

um there was no one who thought that that was sort of did defining moment uh we certainly worried about OK well， this is the beginning of right like more artists um sort of pulling out etc um for a few days um and and then you know i spoke to a lot of artist but um i think there were certainly a lot of skepsices have about Spotify the time but but generally speaking there had been enough things in job where people really saw like no actually， this kind of works maybe doesnwork yet than the us maybe its better for her to do this thing but there was enough people that believe that that time that um it was only a matter of time before the us would be majority streaming to the sort of uh way its been pretrayed often times with Spotify in particular has been like the sort of dogmatic it has to be all in with me or not and actually does not have a advice artist workreaders i always tell them like this kind of and its kind of unusual thing because everyone wants to build their own platform in and so on but but my firm view is that um truly i believe in open as the model at its core and so my view has been like theres there some artist that at that time i dont believe its true anymore but like the address of the world that probably benefited from physical scare city that probably didnt need to be on streaming uh the probably uh should have done a windering type model um the number of those artists uh were going to be very very small yeah uh but she was certainly one of them was that because of the demographics of her uh audience so i think so but also， she on her own um can basically control the side guys right， like she can decide that this is a big cultural moment tier swift yes， yeah um it is remarkable not a lot of people in the world can get hundreds of millions of people around the world to wait yeah for a moment and she did a brilliantly with this album launch to i sing up till my night yeah， a lot of i i dont know if there was hundreds of millions but certainly tens some millions of people literally waited and sort of she got them in on the hour uh and was like at each hour was another sort of give so she played that to perfection um and shes really remarkable that understanding how to speak to her audience um and she doesnt authentically so she can do that and theres defining other artist can do the same but um was rares for her to have that kind of site guist um in connection with that uh deep connection with that audience the the the fan base that she has how figures uh and how intends they are at that scale thats the unique thing right was there something that changed between 2014 came back on Spotify uh where it may have made sense for her not to be here in 2014 then in 2017 or whatever that was that she came back that the world had changed enough where it did make sense and how did the relationship between like did you actually talk to her like how did that all go down yeah i think the predominant thing that changed was streaming just became the majority of the industry in in a bigger way so if the option was like hey mi am streaming or not on streaming， do i think she could reach the number one at that point without streaming probably not would have been the answer and shes super smart so she understed that um and can it your point like even in twenty fourteen in Europe that already happened， but it hadnhappened in the us no definitely hadnt happened in the us we were much earlier meanspotified that time was like shive three years in the us， streaming penetration was relatively low radio was like the pre dominant thing at that time physical sales i was still very big um you know， i remember i think it was little wain thats all like three million albums in that year， uh on a cosco out of all places where yeah its its some sort of demographic connection thing was going on i love that the intersection of like fairly Mongera little way in cost more chickens than anyone the us yeah in the world actually， Costco just is an unbelievable distribution channel if you can get it yeah i we were talking about it before but uh Starbucks and Howard choice was actually， one of the biggest retailers of cds uh in the west uh thats actually how i met in the first time oh really yeah because they were they were um yeah becoming a partner vars thats right you do a partner yeah we start box um exactly at that moment and got to know him， um huh spend some time with them so yeah i mean the world just look very different uh back at that time and i think that changed and and yeah！

i mean uh ever since shes been great with the team and and she supers smart that was our big takeway for the episode just like she is really really smart a daveni were talking before this episode are there other artists that youve got an interface with where you walk away and youlike better business accumen than any founder ive met any investor ive met we kind of become obsessed with like who are people who are top of their game artists and top of their game business people first quite a few of them。

um because i actually believe these days if you consider a mega artist of that stature， its like there， their own enterprise and there are the sea of that enterprise theres， theres， there certainly have people who help them but at this level today， theres almost no one of them thats not very active as well in on the business side and understand deeply what their audience wants whats authentic to them， um by making move x how does that affect that relationship and whatsupercool to me is that you know you you have everything from from the tailor swift of the world um and then you have um something like bts， which is like insane and how are they different because theyre reason！

theyre same word of megitude scale right？

i dont pretend to know all of taylors with business sides and have whos involved in everything um but from from what i would guess is she probably runs with a pretty lean team thats what we heard from your research in the episode yeah， um and thats really been our interaction with with her is like very tights， very lean um and then if you think about um uh something like bts， but i actually quite a lot of the Korean artist it is like an industry its huge 嗯， just on the song right inside this difference between i if entaille swift campits like two three four maybe at the top in some Koreans， its two hundred yeah writers what involved and thats like small part and then you have like everything from merchandizing theres another few hundred a talent development to like the pipeline to go from you enter into the k pop system to become a member yeah！

x， y！

z group is yeah well， that that that could be your next deep type because honestly it is fascinating how they do it and the three sixty how they think about it not just from sort of maximizing there recorded side。

but actually thinking about sort of fan development uh all the digital platforms they have their own developers uh programmers building specific platforms uh its its pretty cool one thing im really curious on that we hadnt thought about before we came here yesterday we were talking with other folks on the Spotify team im curious in this lens what uh the past few years have been with bad buddy and regular and ive heard you talk about theyre like you knew from the data on Spotify that this was going to be huge and now i think its the largest genre yeah on Spotify and many of our listeners will not know either of those two terms you just have and i think this is a broader trend right were now living in a very global world！

uh when it comes to culture， um at the same time， theres still a lot of local nuances right， so um its this extreme ity that we talked about on the one end， um you have this super super nicious， um that exists but then once every bluemoon， one of these nicious kind of develop into something thats actually quite sizable， and you kind of start realizing that maybe this has a global appeal， um on top of it so in last time as an example， uh， gospal music its quite big 哼啊 and funk music is also quite big OK， well， thats probably not what you associate with popular music yeah， um， but there are real things and obviously they exist in microcostumes elsewhere like you could probably guess in the south in us gaussbuild might be a larger gender etc um， so its not like its totally kind of isolated and just happening there but theres something that creates a sort of cultural restannounce uh， with um， those types of styles， and then you have something like regular， and and it is usually start pretty small um， and then actually in in each clusters， kind of like starts developing more broadly， and and when you really look at it， like it is pass often times a pretty huge diasper of outside of of that sort of near region as well something population， the us will be kind of an obvious one right pencil many years ago， we kind of started seen the them breaking out of their natural clusters and becoming a pretty big thing and it was from me at that time it was just pretty obvious that um if we invested in that gender um on a global basis， we thought that that would have a global appeal and yeah because before a platform like that obviously like it could happen and maybe the examples where it did but like thats like its just so what me maybe the acquiredaudience not as many people know bad buddy or like no the lyrics to his songs but like a large portion of nonspanispeaking Americans and like nonspaniking people around the world know all the lyrics can Spanish yeah to bad buddy songs that they may not know what the lyrics about the right that would yeah that would be a very different thing there is a lot of local cultural things that uh seems like what is talking about you know someone cheating with this one yeah all these kind of relationship stuff um thats the third local new length is um but but yeah， i mean yeah that thats the fascinating thing right but but the same same time uh you probably wouldnt have uh imagined um msg being sold out and like 20 if not more people singing Korean lyrics that doesnlook Korean by the way， like i know everyword to every lyric and thats the amazing thing right like when things catch on its music it makes people feel there something about the orders there something about how theycommunicating the resonates with us an individual um and it is the foundational storytelling we always use music it is so hard to describe art right like we we can objectively describe oh， theres art but how you feel why do you feel a certain way when youre looking at a painting， why do you feel a certain way？

when youlistingtosong， its really hard to describe that and and thats the amazing thing about what we are able to do and the really cool thing is your youre able to take artist that otherwise you know uh perhaps may not even have been able to be professional and and now they have a global audience i dont know how to express it other than that they have some sort of god given talent uh thats the best way i can describe this kind of genius when theyre able to express these things in a way that it just recenates with people uh all over the world just instantly like how do how do you do that it its clearly theyre tapping something and need to humans independent of culture which absent data if you were to ask me and say hey？

do you think that um someone is inventing a brand new genre of music today do you think its going to appeal to people similar to them or all humans yeah， equally in some way， i i would probably tell you like know whats more about nurture the nature yeah！

yeah， we its like we are talking about on the Nintendo episode like there are always only Gonna be a handful of Sugaromia motos in the world but until recently in the gaming industry is still pretty much the case like you need to also have the luck of being bean eventagram of a cigaro miumoto who happened to be the arcade cabinet designer at Nintendo yeah in order for like the possibility of Mario and sulted have yeah and like in music in pigcasting now in this world like everybody has the opportunity not everybody such care of my moto not everybody or you know a bad buddy more people arent but you have the opportunity to be one i think thats are interesting uh i was starting to teds randos about this。

um hes on on our board and um this was a number a month ago but like if you think about film making it still as as you said uh one of the things about in nattendos you have to have the resources enable to build a game and thats still not cheap um and its expensive and back in a day maybe you have to build the entire console in order to even have a chance yeah of doing it uh but these days you feel like triple a game uh is few hundred million dollars yeah uh very big product！

five years！

very big productions right and and uh sure you can build an indigame and so on a so forth but but but its so a very limited number of people theyre able to do that but even the in film making or in tv series， are the amount of people that used to be able to be showrunners or like producing or directing these things it was fairly limited group of people right？

yeah， very socially connected people hanging out and back lots in la part of the studio and it probably mattered a lot not this to diminish any of their talents。

but it probably matter who you knew um was an integral component and having talent， so you kind of have two different things but in the last few years， as the budgets have expanded and certainly in the Netflix case， um it would have been physically impossible to just keep this um same set of producer directors， etc right， because theyjust trying to make so much more contents so one of the interesting things is the same thing is happening now where theres last time directors and producers not just doing sort of local productions， but actually now coming get a stage and then doing that as well and ive seen it in in in my case， um theres been a bunch of Swedish， um writers， some produce source and uh actors now theyre theyre getting into Hollywood productions and is been you know fun to see um and and not just the usual names but actually like somewhere unknown talent uh making its way as well and there are more people trying， but there was also more opportunities and then obviously you mentioned on the podcasting side of the same is true there， but but its true on both sides thats thats a crazy thing but theres also more competition， which is yeah i think when when people are are talking about spotifying criticizing it thats the part i think is the biggest misconception because they hear so many many people who are trying and it doesnt work where theyre not making a lot of money of it theyre naturally a sort of join the conclusion that hey， there has to be something wrong with the model this model cant work， but reality both things could be sure at the same time right？

there are a lot more people who are failing， but there also a lot， more people who are succeeding like the exact total pool is so much bigger yeah！

and and i think thats podcasting is like much earlier and its maturity yeah， so we may not hear it plus， we dont have this sort of um im not sure a pod caster sees as uh its a sort of given that monetization is there， and it needs to be there from day one whereas， i think obviously with the professionization of music thats a much bigger part of the expectancy， but thats actually， a kind of a relatively limited part of our human historyits not been you know， its probably the less than hundredyears that weve had record in music and it being a form and yet its part of the copyright regime its part of like um some pretty um important loss uh so i think it comes with a different expectancy and im not saying thats wrong im just saying just the Ark of history and i was actually gonna latch on to something you talk about sort of being creative to one of the things i often think about when you think about sort of the history music going back to its at the time a most if i wanted to create music， the realities i had to be a musical genius cause i needed to hear every single tone in my head um every single note i needed to hear all the different instruments how they would all play together i could write them down， but i could never hear them all being played at once right many times the composers of that era they were only able to listen to their actual compositions like a few days before the actual 嗯， concert the they were doing and then making small tweaks well， but by that time， it had to be pretty perfect and so sure they could play a little bit on the piano but then they kind of needed to upvisualize， but so somehow uh internalize what what what that end of being so having a whole orchestra is the triple a game equivalent yes， exactly um and so obviously a very few could do that， but also the process the creation process was insane because you you needed to do so much um and then you know you you move forward and think about a sort of the era of playing instruments um and take jazz， which is highly technical right like every single member in a jaspan is excellent at the instrument right like really excellent and is really hard like its really hard to be that good of a musication and play Jess um and then you know fast forward a little bit more and take um someone like um you know Swedish avici as an example， he was a brilliant composer， he truly was， but um he didnt really know how to play any instruments um he turns out that technical。

musical proficiency mayor may not be correlated with making great music exactly and exactly my point but but he actually had a different tour。

he had a， he had software right， and hes actually， he was really good at that software， he know all the norms and um in a plug ins and all that stuff and how how are worked and a lot of musicians are that way today like if you actually look at the workflow its very technical， its very uh detail despite new ones like i have this uh thing that i do where i probably shouldnt mit this but like i said on YouTube on evenings i look at music producers oh there workflows and like when they get into the weeds of like um decoding how they do stop we were to we were like having just like our faces lit up we walk in the studio we like we think we are like highly technical podcast produces we think we are like we are point one percent of the well i think we i think we are ah you know better and then we walk into the studio here you know in spa in in stocom and were like this is just a skill beyond our imagination yeah the yeah we were were very fortunate and its a lot of fun because artist love just hanging out here to because we will account of everything that they like to to use and to do but my point a is i mean if you think about it， it is a kind of a very technical workflow that takes a lot of time to get into and some of the parts of that workflow you have to watch probably hundreds of hours of YouTube videosteven， decode or how to do it and like start getting into it and a lot of these uh todays composers are experts in their workflows right like theyve theyve kind of have the their plugin sets theyve got like these sixteen things that they see chain together in order to create that one effect that the finds them and so on and so forth so the barrier still like if you said today， i want to start making music and i want to make something that sounds pretty good its still look quite high at that barrier and its getting lower and lower and its its getting easier neser but but the but i would still argued the bar for you to sound make something that sounds professional would actually be ub ub highquality song it requires a lot of time and a lot of effort and it might be less catbacks and less equipment i mean you hear the the rise of the you know apartment music producer on the laptop yep but it still takes any normal amount of self training mastery creativity my opinion is it it takes a little bit too much to get started like its quite a barrier to entry still hmm i mean if you just want to make something like super simple， it doesnt take a lot theres， theres all small and all these other apps you can probably make something um， but that from there on to actually compose something getting into the the id of the workflows the plugins all that kind of concept its quite a lot to master and i think thats the potential power would something like ai obviously right， which is were most likely going to have another order a magnitude of simplicity you know on a on a personal level if if you like in that to coding um， i used code um， but i havent now for for about ten years and so probably a little bit embarrassing to admit but the barrier to entry or re entry uh for me was so high with all uh， you know know all of these different frameworks uh， i even setting my uh， my own workflow for me to be able to to do something in the Spotify ecosystem this is so hundreds of hours probably for me to kind of re uh exaint myself with all all the stuff right how do i install the php server？

yeah its i get bad news for you yeah yeah it it is changed a lot right and so the amazing thing is um i i just for the fun of it like wanted to start doing stuff and i ask gbt to help me and pretty much um on a few hours on a Sunday afternoon i was up and running and and uh because of that sort of starter help i had my own my own sort environment set up i was contributing code i was iterating did you contribute code to the Spotify code base no they wont let me do that yes， so i i got a little more work to do before before they allow get passecoding test yeah， i think out of spike they probably wert wont live in to that anyway， they pride themselves on on not uh i dont have any access to it any of the actual systems um but it was a such a liberating feeling because it made the re entry for me um so much easier uh and so much more enjoyable and so i think about that so if you think about the world of music now there are tens some millions of people uh in the world that probably are recording stuff but theres hundred two hundred million something like that is playing some kind of instrument and expressing themselves musically hmm yeah theres nothing the says that it wouldnt be possible for those hundred million plus people to make something that actually sounds pretty good now again um what what is that going to going to do with the music industry？

and is it really going to be that？

although sudden everything becomes commodatized i dont believe so because weve seen time in time again the quality rices to the top and actually becomes even more valuable um in that world photography being the sort of key reference point everyone Instagram key oh， no， no onegonna want photography but price of fine art photography actually increased， not decrease so my view is youre gonna see both extremes youre gonna see the middle getting wiped out more people participate， but the very very top is probably going to increase in value， as well theyll figure out other things to do with this technology but it is pretty cool for humanity and we talked about that being able to relate and like you know expressing ideas um every permantation of every cultural idea will finally be able to be expressed we never been in a world where thats been possible before hmm and will be really fascinating to see what a means for our understanding of other cultures are a ability to relate other people some really cool stuff she the this is kind of like already happened over the past few years in podcasting two right like there atara you probably know better than me millions back as out there two million！

two million plus im sure at this oh its about little bit more than double that now really yeah yeah wow so like its kind of like you these are numbers like you tok it theyre four to five million people out there theyre like i can make a podcast yeah and yet the very very top ones are still linked of a quality bar that is so high and getting higher yep but like i heard you guys talk about this that you now can take shows that are in a specific language， in a specific region that you can identify based on the data theres something really cool happens， yeah！

yeah， and then bring them to other around the globe to other audiences yeah and right now obviously thats a manual um process where um you know we have to hire voice actors that reenact that we have to kind of tweak the script， a little bit to make a culturally， relevant and obviously this wont be news to you， but perhaps the someway or listeners that i mean already probably today it wont be a high quality in the cost would be too expensive to express this， but theres theres no reason technically why you guys and i this podcast couldnt be done right now in Chinese with our voices what was gonna say as a see you have x now the ai dj yeah that speaks many languages well weve had him speaks Swedish uh for sure uh， and obviously doesnt Swedish um but but its um only today available uh， exeinteration is a little bit off uh so its its really only English language content and honestly thats probably just a training problem so if if we were training uh， the models on specific languages and not just x voice uh per se i i think that would have been totally possible uh and again the largest problem today is the cost per minute i would be too high for most podcast i think you guys could actually support it probably with your model， but average podcast couldn you know i dont know if you guys seem a seam this， but like mr beast has like a Spanish language channel i dont know if he has like a you know French one etc but we certainly has a Spanish language computer， translated or or humans re recording uh i think is humans re recording it at the moment uh but is huge uh i think it may have like fifteen twenty percent more subscribers uh a additional subscriber not more than the what the English language has um so so its， its its like a really um pay， really big deal and i think thats like the next step right like where where you know in your case like why wouldnt you take the lv match episode and make it all in French whatever is being French yeah！

our sponsorfor this episode is a brand new one for us statsig so many of you reached out to them after hearing their ceo vj on ack two that we are partnering with them as a sponsor of acquired yeah for those of you who havent listened bjstory is amazing beforefoundingstatic vj spent ten years of Facebook where he led the development of their mobile app ad product， which as you all know went on to become a huge part of their business he also had a front row seat to all of the incredible product engineering tools that let Facebook continuously， experiment and roll out product features to billions of users around the world yeah！

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its super cool stat sigletyou make actual data driven decisions about product changes tested them with different user groups around the world and gets statistically accurate reporting on the impact customerns include notion。

brax， open， AI， flip， cart， Figma， Microsoft and cruise Automation there are like so many more that we could name i mean im looking at the listplex and versell friends of the show at recroom Vanta who they like literally of hundreds of customers now also static is a great platform for rolling out and testing AI product features so for anyone whos used notions awesome generative AI features and watched how fast that product has evolved all of that was managed with stat seg yep if your experimenting with new AI features for your product and you want to know if its really making a difference for your KPI， stat sigsom for that they can now injust data from data warehouses so it works with your companydata wherever it stored so you can quickly get started no betterhow your feature flagging is set up today you dont even have to migrate from any current solution you might have were pumped to be working with them you can click the link in the shownotes or go on over to statom to get started and when you do just tell them that you heard about them from bedding David here on acquire ive been uncomfortable until now， um using any sort of ai for any seconds of audio in our podcast like we always played around with the descripts replacement of certain words but then we never shipped it to production because i was always like um， it doesnt sound quite as good and you know everything should be handmastered and required and then for the first time on a reason episode uh， we used an ai tool that drama our editor found it dramatically increase the quality， the sound quality of the episode based on the Mike that the guest was using and once you start doing that youre like well， i mean what was shouldni i do all sorts of things to our audio yeah yeah！

i mean i think were only in the beginning obviously and thats huge exciting for creators like yourself， but its also scary right because uh its totally possible uh first to make an entire episode where were saying totally different things than were were saying now and it at some point in the future might be virtually uh indistinguule from the real thing yeah and and platforms probably have a role to play and verifying authenticity like that that actually raises the value of platforms because uh platforms like Spotify？

YouTube you actually can point to we know for a fact that this was created by the creator and we can stamp it and say that this you know youre approved by the creator yeah yeah no！

no i think youre your entirely right which is why you know um？

theres been a lot of sort of debate around the yellow mosk， the subscriber uh thing um and actually as usual when you tease it out， theres many different the things in that controversy， but perhaps the most potent， the most interesting one has been the one around the the notion and idea around like staking as a way of reducing um， the bot um thing and i feel like so much of just end up being sort of hey， do you do i have to pay in order to reach my audience now that kind of switch through， but i think the more interesting one was kind of like well forget about if its paid or not but just increasing the cost of spam。

but also increasing kind of uh the quality of verification and uh being able to truly understand whats what in in the end twitter is so interesting that um we were talking with a friend is a creator peer but um his platform is twitter and you cant monetize twitter you like theres no Rev share yeah traditional social platforms like that youkind get them on one end of the spectram youve got Spotify what maybe Spotify podcasting and then Spotify music at the far and the spectram yeah and you get YouTube kind in the middle how do you think about what role for monetization？

maybe especially on the pocketing side um Spotify should play for creators yeah！

i mean um our goal is to be the best partner of creators um no not the only partner， but just the best um and and win by by basically， um not forcing the creator to do something but just offering a really good way for creators to work a low friction but also a lot of potential to customize their business way they would like to i think for some creators， the monetization aspect is absolutely critical they may even be a gate keeper uh， or a gate between them doing something on that platform or not， and maybe they have switching cost relative to what other stuff theydoing think about a creator thats in a traditional media ecosystem if they want like take their thing， OK well， maybe my uh， this would i would be less valuable on cable or whatever other thing im im on that would be one end of the spectram right um and then you have another creator that may have and entirely different business model i dont know about your other twitter creator friend， but um， i perhaps that creator either has a different business models somewhere else well？

you have to you cant have a business model on twitter yeah， you？

you you can do that but you know the question is if if thats truly a creator or you know， um you could argue vcse a lot of them have twitter as as their marketing extra right， yeah， uh just top of an fuck as yeah！

there are many different ways and needs are different um which is why you know for some of them they were probably happly for thin all the monetization because they feel like they have such a strong other business model hmm on on on the bad customization point is really interesting to and i think thats the thats the um really interesting new ones about about about YouTube because like on the one hand i think YouTube for creators is amazing because you can completely abstract the business like you just make the content and they take care of the business yeah， you get a check yep on the other hand like you know i can even remember if we have ads on uh YouTube ads on acquire accounts we dont it because like do we want a spray dad in the middle of this like no well， yeah， we want yeah creative control and like you lose that in a if the platform is like to opinionated about whats gahappening with monetization yeah！

most of us as platforms go uh we have to start out um very simple with our models right and it takes a long time to then change that default um setting but i mean um i as i i even talk about a music um it had to be like very binary you had to be on or you had to be off there was kind of no in between of like uh well， lets do windering， lets do this， and that etc because that was the only way my biggest uh problem was getting everyone of a piracy into this other model and i needed the consistency of user experience that was the model now， the next decade of music may look very different uh it may look like something where there is going to be a lot more options for what a creator shoes is to do um i certainly would hope so and we certainly got a work towards that avenue but any change that were doing with the scale that were having is going to be theres going to be winner solusers is almost impossible to find a single thing we can do thats just universely going to help and that naturally creates the constraints that its more of a one way door than a two way door where we can kind of like iterate an invest on it so i am im fairly certain that like what youre seeing now in this world of all platforms and and creator ecosystems is if you ask um YouTube um like hey， platform right now uh would you just make all the same decisions you made about discovery in monetization all over again the answer would probably not almost assuredly no yeah right um as evident actually by shorts that works a little bit different on their platform right， and theyre all different too because shorts uh obviously you have many more potential impressions over shorter period of time and you know an average YouTube video has been x minutes um and that means more intestsual ads um and then we have host red ads were the equivalent of of sort of um more native ads or paid promotional ads the both Instagram in utiba so were living in an ecosystem where on the one end ten fifteen years ago there uh， we were very primitive in terms of monetization and today， it is very very different yeah， and i kind of think about it in a way like this is not too the similar from mom and pop shops deep sort of like coming up in the us as a cultural norm， um， you know on the one hand， um， you you had physical infrastructure， urbanization driving these kind of things aware we both created these uh， mega， uh， walmarts of the world， uh method track consequence， but actually， the complete opposite was also true we have this hyperlocal thing， etc um and if you think about its today， these mom and pop stores the ones theyre still around theyre hybrid distinct in what theyoffering they are really focused on community many cases really knowing your customer theyre offering events around their stores theyreoffering of obviously online things through a shopify and so on and so forth and in a way i think about it in a very similar way for the creator economy to um， we had to start very simple it was based on a very simple model where there were free platform and support platforms and paid platform all of that is kind of not merging together in addition to that just monetizing the content in itself is probably becoming a auxiliary revenue sources around them three sixty very similar again to mom and pop uh shops like where you could do live events you could be doing merchandicing？

you could build um another business yeah like Kylie general or something on the side with cool like this is true its scale now two i mean tail swifts well monetizes through its everything youre talking about the same way mom and pop coffee shop does she just doesnt scale and its necessarily had to be because streaming while at first it looked risky and then turned out to be i dont think its blowing smoketo say you guys save the music industry like it is the thing that well， the industry was intermatic decline ended up making it so that the music industry now generates more revenue than it ever has before with by far， the largest thing being streaming at the same time if youre a tailor， swift or youre any bigartist， youre not making as much money streaming as you would have on cd sales in the cd sales hey day so you sort of have to figure out what the new business model looks like as a creator and you have to figure out what youre sort of unique constellation of revenue streams are because its not just gonna be walmarder target is gonna cut me the check from salon cds yeah！

the musiginduseries healthier than its ever been before but but um certainly when you think about it from a singlarartist point of view， um you know there was a point in time where um， the majority of the revenue could be drive from recording music but um the challenge to that what i would say is that the time in history where that was true was actually very short right was the hit of the cdr alright？

yes， i wasnt true back in the radio Ara and so the question is what what whats？

the analogy was it that like thats the right model or was it actually that having multiple revenue models was always answer um， but there happened to be a moment in time with recorded music was sort of the prevoluence um revenue source and i i dont know i mean i certainly dont say that to try to shy away from from sort of our role and and my goal is just like i think these people generally whether your podcast or whether your um musication are insanely creative people and i love seeing a people like yourself for a David or a Sandra or or tailor swift or whoever or your roganner or yeah or roganner or whoever that are like really deep um on whatever their passionabout and theyre able to get across the microphone and and having lots of people uh that can resonate with them what then opens up like so much more opportunity one of things we learned on the lvme episode is that Riana became the first female recording artist billionair。

because of fentive beauty yeah you know and like yeah imagine that in the cd air i like that would have happens oh！

yeah and that seems in part two right， because uh that fame， uh in a way it doesnt necessarily if its think about an Elvis presfully， uh what time did it take for Elvis Presley to get to a billion people that had heard him i dont know， but i would venture to say um it probably took a decade at the very least maybe to uh frame to do that and sure it was worth a lot that billion them but it was hot hard to scale to that and then you think about how many uh artist today get to be heard by billion people and actually that numbers away higher and its way faster for you to do it now but because its not a scarce anymore perhaps the the sociable value， slash monitor value whatever you want to put it on it maybe isnt the same because its not a scares but as you said if youre smarted how you do it um and this is the sort of the the side guys dont how you executed it doesnwork when its not authentic so you take the riot example， he worked because she had a way to do it， which was authentic to her but also authentic her audience if uh， she would try to uh flag something else that she didncare about it probably wouldnt work and thats the unique thing when when you realize and you think about yourself is an enterprise and you know jc um you know im a problem man im a business man exactly he on the sease soul this soul is champing company delvium h resaler fifty percent stake yeah， but back to that theyre incredibly talented um artists and theyre incredibly talented uh business people as well yeah well！

as we start to wrap up here， theres one question that ive really wanted to ask you， which is as ive studied Spotify over the last month and a half preparing for this it seems like you guys have been very intentional about the way that you grow and having a completely different strategy to add each next hundredmillion users you guys are now over five hundred million users ai didnt know the scale of that before i started researching its pretty unbelievable and be i sort of thought that well， you know they just let compounding do its thing but i think you guys it its its its not well understood by the public or certain wasnt wasnby me how you change strategy in order to go get that next group of people each time and im curious as you reflect back what advice would you have for founders who are scaling to sort of continually stack these s curves on top of each other and do completely new different business activities while maintaining the cohesiveness of one platform yeah！

i think is a very student observation um that youmaking that um its its not been sort of being able to just write on this Mac retail wind and just do that um but actually spend many different things thats driven this success of Spotify and the the way way i i often time talking about it is if you think about an exponential curve um if you really zoom in on that exponential curve， it actually is like a lot of a different linear uh curves stuck on top of each other that creates that kind of uh exponential curve and this will sound like a little bit of a clich but what i really realized props even in just the last two three years more i i， i， i， i knew it i could talk about it but i hadnt truly internalized that this um to be a intentional about the culture your building right， there are many different cultures that can be successful but there are tradeoffs with each cultural expression and often times today， what i see with younger entreveners is that theyre unintentional all about what type of culture there they are so they flip， flop between them so as an example， you know， we all um， you know many years ago i was certainly enamered with Google right， like the twenty percent projects and all these different things those are cultural expressions， not the culture itself but its the cultural expressions um so thats where uh？

where where the early ending socialize culture was like im sure almost every circle value company of that era um and then uh we all switch maybe became Facebook for a while and we all kind of took that of like moving， fast and breaking things and so on and so forth， and then you had like an Amazon kind of uh model where on the one end was incredibly long term， but also could maybe a little bit more bottoms up innovation than top down um， and then you see another cultural expression with like a Tesla where incredibly top down incredibly focused company actually for this type of scale um that theyre doing and my point is i think the most important thing um is to really really think through and be really really diligent about the culture you create， and we certainly were victims of that a Spotify because we had taken all these different things there were certainly things that were Spotify but we kept talking about all these other companies and were like what we like this thing that Amazon is doing switch copy that and oh we like this thing the Google students we should copy that and actually wouldnt end up happening was we were we were at one point in time almost like a little bit of a franchish time monster because we had some of the stuff from everyone and we had some of the bad stuff from everyone to um instead of sort of really lean leaning into that and then sort of without really being intential about it we we started iterating and improving on that culture and i often get this question so for instance uh you know when we launched certain things， people are like well you know， this thing wasnt very great and they have a mental model of what the expect of s of Spotify and the mental model may be pay your music app is so amazing how come um in 2019， your podcast is sucked and so that must mean that podcast in will work having a separate app must be the right thing to do etc， um， and and what people didnrealizes were actually， one of these companies， the help label release something out thats not great its probably have the right strategy。

but execution isnt super crispin perfect you said this about audiobooks at string on you got on stage to the public and said we have audiobox i dont think its great right now yeah！

um and its serve and its not great right now but we will make it great um but thats a different culture right and thats one where were iterating on but then the flip side of that uh would be something like aidj where um actually， i think it is really high quality and unlike a lot of other products um that are ai where is really kind of wanking weve made something thats actually working and is working very large scale probably one of the most popular ai products out there now in terms of reach we dont really talit it all that much but is huge in terms of like moving our metrics in a pretty substantial way like discover weekly， huge yes， uh and i i think itll even outdo discover weekly， um so it is really cool， but we had to be super in intentional about it because we knew that um it was an area where um， we had to think through the consequences of this because uh， it would be highly scrutinized so as you can imagine uh， one of the benefit by shoosing to do it for music and not for podcasting was obviously that it would have been a horrible if we somehow summarized or said something based on a podcast um that i wasnt safe or or or or cultually attention to say and yet with music its kind of the the primary cattle plus is is the one where we have a huge audience is listening in the background everyday uh and there really want more context and and my point being is um understanding when to do which um and understanding that theres， theres both these cultures are perfectly fine um but just being very intentful about when youre shooting to do what and having the right mental models and and not sort of becoming half as in everything， but actually become really good at what makes you you and i would say the probably other thing that is been hugely important and that i wish for people talked about is there are not many of us but there is a few of our few companies like Spotify which in a way is been heavily influenced by Silicon valley but we are not Silicon valley first so that sort notion of being on the side and watching um and sort of iterating in a corner spotifies definitysort of not the overnight success its been a sleeper for many many years and when you started the common wisdom was anybody whostarting an online music thing it will die i yeah i think you saw advice from hundreds of people who all told you dont do this yeah！

this category is toxic yeah！

youre youre exactly right and um but but but also， because we were kind of doing this in Europe for the first few years， we we started getting some some real uh first learnings， and i think this is like really key because if you think about the two the ones， we talk about as icony companies， the apples， the amazons of the world we all tend to forget a few things， but one is the many of them are quite old at this point there twenty plus years old， so they had a time they refine their cultures then and getting that that right and the other thing is they almost started in empty ecosystems and Amazon sure there was Microsoft， but they started an internet company in Seattle right where there was a software company that was really big yeah， but its not the same culture they didnstarted look about the same culture and i like to believe that that culture became very distinct also， by having to figure out its own things from first principles and from learning rather than just being able to gather through asmoses and that might have been going slower in the beginning uh to then go faster but um i i think itbeen hugely important for Spotify journey and where i feel like where were just right now getting into our own of like what is our culture in a very unique way that its probably the most exciting thing for me at the moment of still beanheritspotify 17 years in this is so gui love this as a final thought from you because uh it so math is something that surprised us from the lbh episode is this like all of those brands which are like you know the most iconic things you both own by lvhn ones that arent like armes and you know yeah！

they are all end of one you cant copy them they dont copy anybody else they are their own thing if yougoing to be around for 40 years that is by necessity the case youre not taking from anybody else yeah！

and i have to imagine its hard for you internally and that it takes a decator to to figure out what it is that makes you special to because when you started， you were， the company that figured out how to make it so music felt like it was on your hard drive and play fast when it wasnt through a hybrid of peer to peer and client server solutions yeah and thatsign at all thank you spark for summarizing by the way it has to be a a very like a methodical individual journey to to figure that that out yeah！

um eh and thats why i said i mean i i used to talk about culture but but i would honestly say uh it was probably two three years ago where were the very really clicked for me like oh thats what it actually means its not twenty percent worktime thats just an expression of a culture the more interesting thing is um the true culture of what makes Google， Google or um an Amazon， Amazon etc and and i dont even know whether thats possible to change going a dekid forward thats probably the most exciting thing for me to still contribute to and work on is the culture and i think thats whats driving at the moment pretty much every major decision were making oh， Daniel thank you so much thank you guys for coming really appreciated thank you for hostingus of course。

walousers thank you so much for tuning in for this conversation with Daniel wedlove here what you think of course in the slack idequire data fm slash slack where were always hanging out discussing episodes after we release them um but theres a new Spotify feature that weve been playing around with two David what is it yeah Spotify just launch this at stream on recently。

there is a question on the page in the Spotify up for this episode thatsays what did you think of this episode？

you can reply and leave your thoughts right there awesome will thank you so much listeners uh checkout in any podcast player acq two with the awesome recent interviews and many more to come i think we have the best interview line up that weve ever had here on acquiredcoming up so subscribe to ack two to get access to that and um i think thats it listers thank you so much thanks to Spotify and Daniel well， see you next time well？

see you next time who got the truth is you isnyou with you who got the truth now 哼。