How Spotify Competes With Apple, Google & Amazon — And Wins | Spotify Co-CEO Gustav Söderström

1. 0:00 – 2:30

   How Gustav Prepared To Become CEO

   1. DSDavid Senra0:00

      [typewriter] So I texted Daniel Ek this morning. I was like, "Hey, I'm recording with Gustav. You've known him for, you know, two decades. Tell me what I should ask him." And he goes, "Ask him to tell you how he prepared for the CEO role." We did something quite unusual. Can you describe what happened?

   2. GSGustav Söderström0:17

      Daniel's very big on preparing. You know Daniel, he's not very rash in his decisions. And so this was one of those decisions as well that I think grew with him for a long time. So already about three years ago, he asked, uh, me and Alex Norström to step up and become co-presidents and sort of start to run the, the day-to-day of Spotify for him. He was still the CEO, and so he's been gradually, like, giving us more and more rope to, to run the, the business day-to-day and week-to-week and month-to-month. So when it actually came to sort of taking over as CEOs, we already knew that part, like, by heart, and we had run it for three years, the full, the full P&A and balance sheet and so forth. And then there was still a lot of new stuff to learn. You know, all the stuff that, that was Daniel's responsibility alone, like, you know, PR, government, being the public face of the company. But we were very well prepared for taking over the business. I think that's unique with Daniel. I worked for Daniel for almost eighteen years, and, um, I don't think I'll work for anyone except Daniel again. [laughs] I've had both great bosses and not so great bosses. Daniel is the, is the great one. And, uh, he's incredibly, uh, delegating, you know, already from the start. I remember when I joined Spotify, was back in two thousand and eight, two thousand and nine, and then we were gonna go to the US and, um, Daniel, uh, knew, uh, Zuck at Meta, then, then Facebook, and we wanted to do this pretty deep integration with them. And yeah, I was new on the job at Spotify, and Daniel just said like, "Can you just go there and, like, talk to Zuck and Meta and, like-- or Facebook at the time and, like, set this up?" [laughs] I'm like, "That's a lot of trust for someone who's new." So he's always been, like, super delegating, and that is also, I think, why I've stuck around for almost eighteen years. Because you get, you get so much res-responsibility.

   3. DSDavid Senra2:09

      Mm-hmm.

   4. GSGustav Söderström2:09

      It's like you get a new job almost every year. And so this, like, co-CEO or, or co-president partnership that he started three years ago was one of those journeys where, you know, Alex and I got to step up and, uh, try taking on the full business. We actually changed completely how we run the company from the way Daniel runs it.

   5. DSDavid Senra2:27

      Say more about that.

   6. GSGustav Söderström2:28

      You know, when it comes to organization models

2. 2:30 – 5:06

   There Is No Right Org

   1. GSGustav Söderström2:30

      in themselves, I-- Th-this is not something I came up with. I think, you know, Steven Sinofsky said this a bunch. You just can't win. There is no organizational model, you know? There are many, and they all work. Like Amazon is, is, uh, organized in a certain way, trillion-dollar company. Apple in another way, also trillion. Elon does his thing, you know, also produces trillion-dollar companies. So there is no right way. You just have to pick one that fits your personality. So I actually think organizations are quite based on personalities, and Daniel has a very specific personality, I think. He is not the typical sort of, um-- I mean, you know him well, but he's not the typical sort of alpha male founder, which I think, uh, is one of the reasons why he's so successful in this type of business. 'Cause if you think about what Spotify is, yes, it's a, it's a technology company doing sort of hardcore technology innovation, but it's also a media company working in an industry with a bunch of, of, uh, you know, first music labels and then book publishers and, and, you know, podcast publishers. Some of these very, very big personalities in the media business, as you can imagine. So he needed to be able to both rally a team and build world-class te-technology, but also get all of these people with the big personalities to work together and get to do something that they didn't want to do individually and not as a group. And I still don't understand exactly how he managed to get all of these people to do sort of what he wanted, but it certainly wasn't through, like, alpha male force. It was through not being threatening, being very logical. Uh, he's very humble, but I think, uh, maybe most, you know, Americans specifically can mistake humbleness for weakness. It's the opposite. He's insanely tenacious. Insanely tenacious. Just never gives up. So, so he has a very specific leadership style, um, and that shaped the company. And as I said, there are a bunch of incredible advantages to his leadership style. One thing that I think, uh, you know, that I do choose to do differently is Daniel loves to, to talk in a star pattern, one-on-one with many people. So he would talk to me about something, separate meeting then with Alex Norström about something, the same thing, but from, you know, the business angle, and then maybe with PR and finance. He just talked in a star pattern. He doesn't like to have meetings, everyone in the room, and that can be frustrating at time. You know, it's like, uh, he says something to me, something to Alex, and then Alex and I meet. I'm like, "This is what we're gonna do," and Alex is like, "Not quite. That's not what he said to me." [laughs] And so then we, we go back, and we call him out on it, on it, you know. Uh, but he likes that star pattern.

3. 5:06 – 9:25

   Synchronized Swimming At Spotify

   1. GSGustav Söderström5:06

      Alex and I chose to do something very different. We chose to synchronize the whole company. And so you can think about Spotify as sort of a two-function org. I run product and technology by and large. Alex runs sort of business and content by and large. But instead of sort of doing the divide and conquer, which is a good idea, you divide and conquer because it's more effective, uh, but it has the cost that you're, you're unsynchronized. So instead of doing the divide and conquer in separate swim lanes, uh, we do this thing which I've, I've called synchronous-- synchronized swimming, where we kind of swim together, which is much harder to do than, than competitive swimming. And when you mess it up, it is ugly to look at. But when you do it well, it's a beautiful thing to look at. So we decided to, instead of having our u-the usual sort of, you know, I meet with my direct reports, and we talk about product and technology. He meets with his and talks about business and content. And then our people meet in the org somewhere, and they fight it out, which is how most companies work. We chose to say, "We're not gonna have our own leadership meetings. We have a single one."With all of our, uh, SVPs. So we have a single meeting every Tuesday called E-team for three hours with all the SVPs of, of all the internal functions like, you know, marketing, ads, subs, but also, you know, all the product and technology functions in the same meeting.

   2. DSDavid Senra6:23

      How many people are in this meeting?

   3. GSGustav Söderström6:24

      It's about fourteen people.

   4. DSDavid Senra6:26

      Okay.

   5. GSGustav Söderström6:26

      What happens is, we meet every week to talk through the entire company. So we talk through, you know, machine learning problems that are blocking on someone, experience problem, problems where, you know, we wanna ship this music video feature and so forth. But often that music video feature is blocked maybe on a licensing discussion that sits in Alex's org. So the whole, the whole reason for the E-team meeting was that previously, actually under Daniel's sort of tenure, we were in so many meetings where someone said like, "Well, I'm blocked on that person in that org, and that person is not in the meeting." So, so, so people said, "Let's take it offline." And, and we got so tired of hearing this phrase, "Let's take it offline," that we did E-team meeting, and we said, "You're never allowed to say, 'Let's take it offline again.' Everyone that represents all functions should be in this one meeting, so that when you say, like, 'I'm blocked on licensing', well, licensing is right there across the table. Now let's talk it out in real time." So we changed how the company operates, and we have this, this, um, synchronized operating model that is expensive in time. You have, you know, fourteen, fifteen people times three hours per week. That's a lot of leadership time, and the conversations are not relevant for everyone at some-- at, at every time. Sometimes we talk a lot about content that may be not that relevant, or, or ad strategy that may not be that relevant to someone in the personalization org. But the cool thing is we talk about everything. We talk about P&Ls and balance sheets, and we talk about machine learning, um, problems in there. So you have now fourteen people that have the full CEO perspective.

   6. DSDavid Senra7:52

      Yeah, I was gonna say, you used the word not relevant. I just finished reading, um, Kelly Johnson's autobiography. He's the one that did Skunk Works inside Lockheed. And his whole thing was like no separation between any department. Like, engineering, designing, manufacturing, it's all the same thing. We're all working together. We all want the same, uh, amount, like the same context, the same shared base of knowledge.

   7. GSGustav Söderström8:09

      Yeah.

   8. DSDavid Senra8:09

      So it's like it is kind of relevant.

   9. GSGustav Söderström8:11

      It's just a question of timescale. So this thing about, you know, the, the person in experience understanding a, a lot about the ad stack, it won't seem that relevant right then. But then, like, the fact that this person understands how we make money is gonna affect their product decisions in the future when they build a product.

   10. DSDavid Senra8:27

       Right.

   11. GSGustav Söderström8:27

       Because guess what? There are ads in the product. So now they're gon-not gonna make decisions that go against our monetization strategy. Um, so it is very relevant. It's just relevant on a longer timescale. So I think of it as investment. But it is contrarian. I think many people would say, like, you should not sit in a meeting. Um, I hear people saying, like, the second you're in a meeting, you feel it's not fully relevant, leave.

   12. DSDavid Senra8:49

       Elon says this.

   13. GSGustav Söderström8:50

       Elon says this, right?

   14. DSDavid Senra8:51

       Yeah.

   15. GSGustav Söderström8:52

       And like I said, he's not wrong. He's built some of the most successful companies on Earth. It's just different approaches. We've chosen this approach. So we have a very senior group that has a complete perspective of the co- of the company, and I think that's right for our company because there's so many dependencies between, you know, licensors and relationships we have and contracts we have and how we can build a product and, you know, all, all of these things. It's very hard to divide and conquer a product like Spotify. And, and I think, you know, this is tru-there's this truth out there that eventually your org chart shows up in your product.

4. 9:25 – 10:31

   You Ship Your Org Chart

   1. DSDavid Senra9:25

      Yeah.

   2. GSGustav Söderström9:25

      And because we have a single experience strategy, our strategy is literally a super app. We try to build first music, then podcast, then books and more things into a single product. I think our biggest risk is to ship the org chart. So if we divided it and said, "Everyone just run in parallel," I think it will feel very good for about six months. Then the experience will just start crumbling 'cause you're externalizing all that complexity to the user instead of taking the fight internally and coming up with like a single experience. So in terms of organizational models, you have all, you know, you have functional orgs, where it has the benefit of clear leadership-- clear ownership, but supposedly hard to cooperate when you want two functions to work together. You have the matrix org, which has the benefit that it optimizes for sort of the use case, but it's unclear even who you're reporting to. Then you have sort of the division-based org, like a Riot Games. You know, you organize by game.

   3. DSDavid Senra10:18

      Mm-hmm.

   4. GSGustav Söderström10:18

      You break out the technology platform it's, into its own org. Amazon is actually kind of a gaming org, like divisional with a strong platform underneath. And so on that scale, I've chosen to be actually very close to Apple

5. 10:31 – 11:48

   Why Apple's Functional Org Works

   1. GSGustav Söderström10:32

      because I think they cracked the problem of building something that is very, very complex underneath the surface, like insanely complex, and it still feels like it was built sort of by a single person for a single person. So that's what I want with Spotify.

   2. DSDavid Senra10:44

      So tell me how you think Apple's run, then.

   3. GSGustav Söderström10:46

      What I think is interesting about Apple is, when I look at it from the outside, it's, it's a functional org, right? And functional orgs-- I used to work at Yahoo! for a while.

   4. DSDavid Senra10:54

      At where?

   5. GSGustav Söderström10:55

      At Yahoo!

   6. DSDavid Senra10:55

      Yeah.

   7. GSGustav Söderström10:56

      I sold one of my companies there. And what-- I thought I didn't learn anything there, but I learned a lot about what not to do.

   8. DSDavid Senra11:01

      [laughs]

   9. GSGustav Söderström11:01

      It was, it was a completely messed up company back then as well. I think it had four CEOs in, like, two and a half years or something. But all the EVPs and as they, they, they fought each other to the death and tried to hide information from each other. So supposedly on paper, I think Apple should not be very well positioned to be able to build that kind of product. I always marveled at why aren't those functional leads just fighting each other? That's what usually happens. The only answer I've come to as I've spoken to people there is that it actually has to do with tenure of leadership, which is one of the principles I've also tried to internalize at Spotify. So they have very long tenure at the, at the senior leadership, which means that these functional leads have found a way to work together to synchronize. So sometimes it's, it's the hardware function that innovates and takes the lead

6. 11:48 – 13:31

   Tenure Is The Key

   1. GSGustav Söderström11:48

      and then, you know, software and services follow, and sometimes it's a software function that takes the lead and they follow. That only works if you have super high trust in the leadership, which, which I think stems all the way back from, from Steve Jobs, and they managed to, to keep that. But in theory, I think functional orgs tend to dissolve into politics.

   2. DSDavid Senra12:07

      Without the tenure.

   3. GSGustav Söderström12:08

      Without the tenure.

   4. DSDavid Senra12:08

      You think the tenure's the key?

   5. GSGustav Söderström12:09

      So at Spotify, most of the people that work for me, many have worked for me for fourteen, fifteen years. I think the average is maybe seven, eight years. And then, then it works to have a functional org. But if you don't have trust in the leadership, I think functional orgs just dissolve into, into politics.

   6. DSDavid Senra12:25

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7. 13:31 – 16:41

   Oracle vs. Elon On Churn

   1. DSDavid Senra13:31

      This speaks to your previous statement that there's not one right way to do it. There's multiple different ways. I just had this conversation with MrBeast, and we talked about this. And 'cause, you know, I was, like, very curious, especially in media, like, your top creative talent is so hard to, to manage and to integrate, to keep. I was like, "Do you have a lot of turnover on..." I'm not talking about, like, the people on the production. I mean, your actual-- the-- your top five most talented people. Are there a lot of turnover there? And, um, he's a huge fan of founders, and so we talk about entrepreneur history every time we, we, we speak. And I was like, what's interesting to me is you take Larry Ellison, who-- he believed that one of the secrets to success of Oracle is the fact that they kept, I think he said, the core kernel of the product team together for, like, two decades or something like that, or maybe a decade and a half.

   2. GSGustav Söderström14:15

      Yeah.

   3. DSDavid Senra14:15

      And you take Elon Musk, who, again, Larry mentored. Elon says that, you know, he-- one of the few people he goes to for advice is actually Larry Ellison, who says the opposite. He's like, "I want fresh blood. I wanna keep-"

   4. GSGustav Söderström14:25

      Exactly.

   5. DSDavid Senra14:25

      "-turning through people as po- as possible." It's like, oh, it's like Oracle is super successful. Elon's super successful.

   6. GSGustav Söderström14:29

      Exactly. I think this is the whole thing. You can't, you can't win. You can only not lose as much. So the way I think about it, you have a bunch of organizational principles, and as I said, a-as I joined Spotify and had to, like... I, I-- When I was at Yahoo, I said I never wanna work in a big org.

   7. DSDavid Senra14:44

      Yeah.

   8. GSGustav Söderström14:45

      I joined Spotify when it was, like, thirty-something. I never expected it to get to thousands. So eventually I had to do the big org thing, and then I tried to read a lot about organizational principles and models and, and I think at the time, you know, I read a lot of Steven Sinofsky.

   9. DSDavid Senra14:57

      Yeah.

   10. GSGustav Söderström14:58

       And, and his-- I think the thesis is you can't win. There is no right org. And companies, they, they sit with one type of org, and then you're gonna be good at something and terrible at something. People look at the terrible s- thing and say, like, "Well, if we flipped to, like, a matrix org, we'd be great at this." They flip, now they're great at this and terrible at the old thing. You just, you just have to choose dimensions. So what we did at Spotify was we said, "You have-- We have to choose..." Like, the best outcome is that you're optimized for the thing that is important for the company, and you suck at the thing that is not as important. The worst outcome is you're really good at the non-important thing, and you suck at the important thing. So, like, figure out what's important and then optimize for that and just accept that you're gonna be average at the others. And so one thing we chose to optimize for was the single experience. We're really good at building a single experience that actually does a billion different things, and most people don't even realize that on the back end it's even more complicated because you have a music business that is a royalty pool. Like, so it's percentages out of a fixed pool. Music business that has a very different structure, podcast business that has ads. So when you click something in Spotify, it triggers all kinds of different business models. Like, on the back end, it is, it's insanely complicated.

   11. DSDavid Senra16:10

       I, I'm, I'm a huge... Uh, I, I obviously love to read. I read books for-- professionally for a living, but I also have hundreds of audiobooks on Audible. And I remember asking Daniel, I was like, "How the hell?" Like, why did no one think, like, "Oh, I like this book," just press play and it goes instead of, like, a five-minute, like, Audible's like, "Okay, listen for five minutes, then I have to do the credits," like, awkward. And I was like, "How the hell did you do that on the back end?" He was explaining to me, like, the complexity on the back end too.

   12. GSGustav Söderström16:31

       Yeah. It's a very complicated model on the back end. And so-

   13. DSDavid Senra16:34

       Especially 'cause you guys are designing this super app though.

   14. GSGustav Söderström16:36

       Exactly.

   15. DSDavid Senra16:36

       Let me-

   16. GSGustav Söderström16:37

       If it was three different apps, you could have-- again, you could have had, like, different teams running

8. 16:41 – 18:24

   Finding Your North Star

   1. GSGustav Söderström16:41

      in parallel.

   2. DSDavid Senra16:41

      So you're optimizing for a, a, a, a single, um, experience. But do you have-- I feel you have an organizing principle, like a North Star, and this is why I spend so much time, and I really admire. Like, I've been to Stockholm, like, I think four times in the last, like, fourteen months because I, I think of, like, um, the best founders usually can explain just a handful of words, like, what, what their life's mission is. So, like, which we mentioned A- you mentioned Apple. Let's talk about Steve Jobs. Steve Jobs did it in three words. He said, "Insanely great products." You could hear him when he was twenty-five, he talked about insanely great products, when he was f- dying, insanely great products.

   3. GSGustav Söderström17:13

      Yeah.

   4. DSDavid Senra17:13

      You wanna make insanely great products, then you come with me. But you knew what was important to him.

   5. GSGustav Söderström17:17

      Yeah.

   6. DSDavid Senra17:17

      And I feel, I don't know if you guys do this internally, but I've talked to, you know, Alex and Daniel and, and you a, a bunch. I feel your organizing principle is time well spent.

   7. GSGustav Söderström17:28

      If you look at what we focus on and what we optimize for, you have a strategic lens, then you have sort of a, a, a business lens and an emotional lens. So the strategic len- lens is really that we saw a long time ago that the biggest challenge in the world is going to be distribution. You know, it g- when, when the iPhone came out, it felt like distribution was free. People went to the App Store every day and looked for, like, you know, what's the top charting free and paid app. That, that stopped working. There was a lot of distribution through Facebook with all the install ads. That all went away. So from a strategic point of view, when we were going into podcasts, which was, like, the first, second product we did, we looked at that and said, "Okay, there-- Again, it's all a trade-off. We could do a separate app. It would be easier for us as an org because we can divide the org and people can run in parallel and so forth. But is that the biggest problem, to design the experience, or is the biggest problem actually getting distribution?" And then we looked at in the App Store, and

9. 18:24 – 19:21

   Choosing Pain For Distribution

   1. GSGustav Söderström18:24

      I think there was maybe, um-There's probably, probably ten, but at least seven really good podcast apps in there, like Overcast and all of these apps. And when we looked at their usage, I think Apple Podcasts was still like ninety-eight and a half percent.

   2. DSDavid Senra18:37

      All of them.

   3. GSGustav Söderström18:38

      So, like, the problem wasn't that there wasn't a good enough podcast product. The problem was that they didn't get any distribution. So we chose to take the pain of doing a single app with all the complexity comes with that for the benefit of reaching what was then already three hundred and something million users maybe. But it was much harder. We, we chose, like, pain and cost somewhere to get benefit somewhere else, and we said, like, you know, "It's just software. It should be able to adapt to the use case," right? Which was contrarian at the time. And then with audiobooks, we did the same thing. So, so, um, there was a strategic lens to that. The second thing we care deeply about is when we have to prioritize, we do prioritize the user over ourselves, over, uh, publishers and labels.

10. 19:21 – 23:05

    Prioritize The User Over Yourself

    1. DSDavid Senra19:21

       But this is-

    2. GSGustav Söderström19:22

       We do prioritize the, the consumer experience.

    3. DSDavid Senra19:23

       You saying we prioritize the user over ourselves is super important. So a few months ago, we were racing cars together in Sweden. We-- and then we took a break from racing cars, and we had lunch. It was me, you, Daniel, and Pia, who works at Prima Materia. One, I know you're super competitive. How did you feel about losing the racing to a girl, by the way?

    4. GSGustav Söderström19:42

       I felt great about losing to Pia.

    5. DSDavid Senra19:43

       [laughs]

    6. GSGustav Söderström19:43

       She's an awesome driver.

    7. DSDavid Senra19:44

       She's, she's-

    8. GSGustav Söderström19:45

       It was very well deserved.

    9. DSDavid Senra19:46

       She's one of my favorite people. I'd do anything for Prima Materia. Uh, I, I love the entire team there. Um, but the con-- This is where I, I, I kinda understood your philosophy 'cause we ha-- I also previously had multiple conversations, and we had this really long lunch one time. But this is what I think you guys are special in the technology industry and why I like spending time, and, and Spotify's, you know, what? Out, out of the whatever your favorite AI chatbot, like, chat app, it's like, what's the best apps on your phone? Like, Spotify is in the top two, you know, for, for anybody that, that uses it. But it's that.

    10. GSGustav Söderström20:20

        Yeah.

    11. DSDavid Senra20:20

        You-- We talked at lunch. You knew there's, there's dark engagement patterns in it you can put into Spotify right now-

    12. GSGustav Söderström20:28

        Yeah

    13. DSDavid Senra20:28

        ...that would have people on use the app more, would w- have more retention, maybe bring more users, but it's not good for them.

    14. GSGustav Söderström20:36

        Yeah. So, so this is our, our guiding principle. Like, what does it mean to, to care about the user? Um, you can care about the user experience, but if you really care about the user in some deeper way, uh, it would be how they feel about what you do. And what happened with Spotify is you can say that we lucked into it 'cause we started in music. Music is, by most people, considered almost an unequivocal good. Maybe there's bad music somewhere, but you know, very few people feel that music is a bad thing for the world. And, and it also happens to have a very large TAM. There is almost no one that doesn't listen to music.

    15. DSDavid Senra21:11

        [laughs]

    16. GSGustav Söderström21:11

        It's, like, bigger than social networking, right?

    17. DSDavid Senra21:12

        Yeah.

    18. GSGustav Söderström21:13

        Not everyone does social networking, but everyone does music. So we started in this space, which was very positive for the world, and I think that was a deliberate decision from Daniel. He was passionate about music. He wanted to do something that was meaningful. I don't think it was luck because if you look at the things he's doing now, it's in that same space of being good for the, for, for the world and, you know, for Europe, et cetera, rather than just more money.

    19. DSDavid Senra21:36

        Yeah.

    20. GSGustav Söderström21:37

        So I don't think it was an accident, but still, you could say we lucked into it. But then we realized that this is, this is important. We're bringing a lot of joy. So when we looked at what to do next, we looked at podcasts, and we saw this thing where there was this y- you know, the pattern on internet already back then was shorter and shorter form content, shorter and shorter attention spans, and it looked like the world was lost, like it's just gonna go to hell. But then you looked at podcasts and you said, "No, at the same time, there are these very long, deep discussions where people speak in full sentences, get to explain full ideas. They don't necessarily get, get attacked. They get to retort, and so forth." We said that we think this is actually good for the world. We didn't know how big it was gonna be, uh, so we had to take a chance on that, but we thought it was a business opportunity and good for the world. That, that's our lens. So we went into that, and we built podcasts into, into Spotify, and it was the same thing with audiobooks. We think that books is one of the most important things that happen in the world, and I'm very passionate about books, but it's also a good business opportunity. And we were fortunate to be in Sweden, that for some reason tends to be pretty advanced in media habits. In Sweden, audiobooks is already a very big thing, so we had quite high conviction over the market. So, so we've kept going into these things that are considered by ourselves and users time well spent, but we never fully articulated that as a strategy externally. We've only recently started talking about it.

    21. DSDavid Senra23:02

        Did you articulate it as a strategy internally,

11. 23:05 – 25:21

    The No Regrets Strategy

    1. DSDavid Senra23:05

       though?

    2. GSGustav Söderström23:05

       For a long time, we've had a strategy called No Regrets, but we, we largely haven't said that externally. And I don't know if No Regrets is the best, uh-

    3. DSDavid Senra23:14

       I think time well spent-

    4. GSGustav Söderström23:14

       ...branding [laughs] You know? It's like, that's a low bar.

    5. DSDavid Senra23:17

       [laughs]

    6. GSGustav Söderström23:17

       Uh, but we've said it again and again. Like, is this really no regrets? W- what that comes from is interesting. We surveyed our users, uh, through a third party anonymously. We do that all the time. Someone comes and asks you, "What do you think of these media services?" without saying who they represent, so you get the truth. That's how we understand how we're doing versus competitors and so forth. So we had them survey across all the big media platforms, uh, and this is where the No Regret come from. We asked the question, like, "How do you feel about the time you spent?"

    7. DSDavid Senra23:43

       Using Spotify?

    8. GSGustav Söderström23:44

       Uh, all of them.

    9. DSDavid Senra23:45

       Okay.

    10. GSGustav Söderström23:45

        The sp- the time you spend on, on, on, you know, Spotify, YouTube-

    11. DSDavid Senra23:48

        Okay

    12. GSGustav Söderström23:48

        ...Apple Music, Amazon, TikTok, all of them. Just understand how you felt about it. But then we also asked the opposite question: How much of your time did you regret afterwards? And what was interesting was when we got that survey back, there were two things that surprised me. One didn't surprise me so much. We were actually the lowest regret content sort of on the internet in terms of the, the, the platforms we asked for, or if you flip it around, some of the time most well spent on the internet with, you know, Gen Z saying that they, they value almost, uh, ni- almost ninety percent of the time they spend, they feel very good about afterwards. So that was good, but what surprised me was the, the opposite. Without na- naming which ones, on many of the big platforms, people, people regrettedAlmost sixty percent of the time they spent or more. And these were young people, you know. And what shocked me was, before I saw that survey, I knew that these were insanely high engagement platforms, but I kind of mistakenly thought that they were there because they wanted to be there.

    13. DSDavid Senra24:49

        Mm.

    14. GSGustav Söderström24:49

        I'm like, they're probably enjoying it. Turns out when you ask them, they're like, "No, I'm trapped. I feel horrible about the time I spent." So I was mistaken in thinking that, you know, they were there and they, they loved the time. It's just very, very captivating. So then we decided, okay, we've had this as a saying internally for some time, let's just make it an actual strategy, uh, to be some of the most time well spent on the internet. And so when we look at something, you know, we're talking about fitness now, for example, why? Because we think very few people regret doing a workout or

12. 25:21 – 27:35

    Building A Running Playlist With AI

    1. GSGustav Söderström25:21

       being fit.

    2. DSDavid Senra25:21

       What do you mean you're talking about fitness?

    3. GSGustav Söderström25:23

       We just, uh, announced some partnerships with, with, uh, a bunch of companies, and, uh, we're investing in, in what, you know, three quarters of, of, uh, almost seventy percent of people on Spotify work out with Spotify. So we're investing more into fitness, into becoming a even better fitness app. So, so this is one area, kind of like, you know, music, podcast, books, we're just investing more in it.

    4. DSDavid Senra25:44

       What would that look like? My partner Rob was running through Central Park this morning listening to Spotify, so he was exercising while using your app [laughs] .

    5. GSGustav Söderström25:50

       Okay, so this is gonna come out in a few weeks, so I'll, I'll tell you kind of what we're gonna talk about-

    6. DSDavid Senra25:54

       Okay

    7. GSGustav Söderström25:54

       ... at, at Investor Day. Um, I'm a runner. I'm passionate about running, and we see a lot of people running with Spotify and they make their own playlists. One of the things I want to be possible, that's gonna be possible very soon, is that you go into Spotify, you just tell Spotify, this is one of the good use cases of AI, I think. You say to Spotify, you know, "I want, um, running playlist for, like, an eight-minute mile, and I want it to be in my taste, but I want it to be on the downbeat, either on my, on both my feet or just one of my feet." Right? "Uh, and I want you to update it weekly." This is a pretty complicated task. So then what, what we want to be able to do is to first calculate, like, an eight-minute mile. What does that mean? Well, roughly, if you're average height, maybe 165 steps per minute or something like that. Okay, now we gotta go and find music in, in either 160 or half of that, 80, so it's either on every downstep or every other downstep. Okay, you're gonna find some music there, but not a lot. So now you wanna look a bit broader, and then you actually want to speed them up or slow them down to exactly 160 or exactly 80. And then you actually want to mix them together with perfect beat matched transitions. Right? And then you actually wanna overlay commentary on top of it saying, like, now you're gonna go into the in- in, uh, interval part, and now you're gonna slow down and so forth. So these are the kinds of experience that, that we're building. This is what I mean with going deeper into fitness. That's one of those no regrets area, or, or time well spent there.

    8. DSDavid Senra27:22

       Yeah, no one spends an hour in the gym or an hour in running and they're-

    9. GSGustav Söderström27:24

       No, I come out and feel like, "Oh, my God, I regret seventy percent of that." [laughs]

    10. DSDavid Senra27:27

        [laughs] No.

    11. GSGustav Söderström27:27

        You don't. So, so it's been our, our, um, guiding principle. And, and what I think is interesting about it is,

13. 27:35 – 30:01

    Figuring Out What To Spend Your Life On

    1. GSGustav Söderström27:35

       you know, I'm fifty, I've, uh, done a lot of interesting things in my life. You gotta figure out what you actually wanna spend your life on, right? And I wanna spend my life on, on doing something that I feel good about personally, and that I kind of feel proud of.

    2. DSDavid Senra27:49

       You feel good, but you know- like, the way a human's gonna feel good is if what they're doing is actually in service of other people. This is a-- You're-- I know you're into philosophy. This is a-- Humans figured this out thousands of years ago. This is not a new idea. It's something that was true thousands of years ago. It's true today. It'll be true thousands of years from now.

    3. GSGustav Söderström28:03

       Everyone discovers it.

    4. DSDavid Senra28:03

       Me and, uh, Milan, who's sitting over there, was talking to, uh, he works at Spotify. Right before you came, I was talking to him about this, 'cause he's like, "You have two pod- two different podcasts on the business charts right now." And I was like: Listen, this new show, I'm addicted to doing it. I can't sleep. I get wired from these conversations. I'm doing it selfishly. It's another form of education, but I really feel that, like, Founder's Podcast is, like, my life's work. And the way I feel, like, when I put that out, I know it's good for the world. I know these conversations are good for the world. I was like, I'm not gonna make fucking podcast slop. It's not-- I'm not trying to-- I want it to be entertaining, but at the core, it's like, I want you to be inspired and educated by these people that have accomplished great things. And then the, the, the point was just, like, that knowing that, like, you can do it, too.

    5. GSGustav Söderström28:46

       Yeah.

    6. DSDavid Senra28:46

       That is good for the world. I feel good doing that, and it's not like a, I, like a, "I need to make certain..." It's, it's not tied to anything else other than, like-- It's not like, "Oh, I wouldn't do this if, unless I can make X dollars." Like, I don't give a shit about that. I care-- The money will take care of itself. I care about putting out good things for the world.

    7. GSGustav Söderström29:01

       And I think to your point, everyone gets there, and every philosopher in history got there. The question is just, like, how late in life do you get there? [laughs] I think you got there a lot earlier than many.

    8. DSDavid Senra29:09

       Well, it took me-

    9. GSGustav Söderström29:09

       And some people never get there.

    10. DSDavid Senra29:10

        It took me thirty-two years to find my path and another five and a half of fucking struggling-

    11. GSGustav Söderström29:14

        Yeah

    12. DSDavid Senra29:14

        ... until it actually, like, could sustain me.

    13. GSGustav Söderström29:16

        Yeah.

    14. DSDavid Senra29:16

        And then now it's like I wake up every day, it's like I have no doubts what I'm doing.

    15. GSGustav Söderström29:19

        Yeah.

    16. DSDavid Senra29:19

        It's like I'm going to build, uh, w- again, I'm mining these old books of somebody who did something amazing for ideas and insights that we can push down to the next generation of entrepreneurs.

    17. GSGustav Söderström29:28

        Yeah.

    18. DSDavid Senra29:28

        And having a conversation like this, where we talked before, I was like, everybody's like: Oh, you, you know, you, you, you ask this perfect question for your audience. Like, I'm having this conversation selfishly, 'cause I just know there's, there's ten million Davids listening to this-

    19. GSGustav Söderström29:39

        Yeah

    20. DSDavid Senra29:39

        ... that, that have the same interests, that want to know what is in-- You, you just said you're fifty. You've been working at-- You sold your first startup, then you wor- You have such a singular life experience. This is what me and Daniel were talking about earlier. We're like, "Who the hell sells their startup, works at a big company for eighteen years, then becomes CEO?"

    21. GSGustav Söderström29:53

        It's a, it's a different path.

    22. DSDavid Senra29:54

        It's a very different path.

    23. GSGustav Söderström29:55

        It's a very unusual path.

    24. DSDavid Senra29:56

        I wanna talk about AI, uh, because-

    25. GSGustav Söderström29:58

        Can I say something-

    26. DSDavid Senra29:59

        Go for it

    27. GSGustav Söderström29:59

        ... on the, on the previous thing first?

    28. DSDavid Senra30:00

        Do whatever

14. 30:01 – 32:25

    Being Honest About Doing Good

    1. DSDavid Senra30:01

       you want.

    2. GSGustav Söderström30:01

       What I think is interesting with this time well spent is these things are sort of easy to say. I think everyone convinces themselves that they're doing good for the world, even the ones who don't, because most, you know, it's very-- I think it's very hard to be honest with yourself, totally honest, and saying, like, "I'm not actually doing anything good for the world." Very few people do that. They convince themselves.

    3. DSDavid Senra30:20

       Oh, I have an example of this-

    4. GSGustav Söderström30:22

       Yeah

    5. DSDavid Senra30:22

       ... that I wanna talk about.

    6. GSGustav Söderström30:23

       Yeah.

    7. DSDavid Senra30:24

       So we get o- obviously all these pitches, and don't forget, uh, hopefully you don't forget where you're thinking.

    8. GSGustav Söderström30:29

       No, no. Go for it.

    9. DSDavid Senra30:29

       But, like, listen, no disrespect. One of my favorite movies is The Godfather, and one of my favorite scenes is where Sollozzo goes to meet Marlon Brando, and he, he's like-- And Marlon's like: "Hey-It's none of my business how another man makes his living, but I can't get involved in that because, you know, you're dealing drugs to kids, and it's just not interesting to me. And so I feel the same way. It's like I mind-- One of my principles I teach my kids is like, number one-- rule number two is, like, mind your own business. But I had somebody pitch me. They're like, "We want to partner, do a deep partnership as one of the prediction markets." And I'm on the phone with them, and I didn't know anything about them. But the way they describe themselves, they're like, "We're building a maximum truth-seeking machine." And I pull up on my phone, I go to-- I'm not gonna say the company. I type it in, and I go, "Dude, the first thing on-- I see on your website is who's gonna win the coin flip for the New York-- for the New England Patriots game. If you're just saying, 'We wanna fucking gamble and make a ton of money,' I respect that.

    10. GSGustav Söderström31:23

        Yeah.

    11. DSDavid Senra31:23

        But don't give me this other bullshit that you're building maximum truth-seeking machines."

    12. GSGustav Söderström31:26

        Yeah, but that's my point. I think almost everyone has to convince themselves of that. So, so, so to kind of call, call bullshit on us then, does it actually mean anything, uh, to do this? Well, it means that you have to stay away from some things. So one decision that we did, uh, recently was, you know how all podcasts are turning into video podcasts, and so we followed that.

    13. DSDavid Senra31:46

        The only reason I do videos is 'cause you guys harassed me. [laughs]

    14. GSGustav Söderström31:48

        Exactly. [laughs] So they are very popular. But there was a problem, which was that, you know, a lot of people, specifically parents, who felt that, you know, they had this time well spent. Now they started seeing these videos in there that they didn't want to see there, right? So they felt that their time well spent was, was going down. And then you, you're faced with a decision, like video is good for engagement, but these people feel that it's not good for their time, their time well spent. So we made the decision, sort of the anti-engagement decision, to allow people, anyone, to turn off video if they want to, and, and just listen, not just for the kids, but for,

15. 32:25 – 34:50

    The Anti-Engagement Decision

    1. GSGustav Söderström32:25

       for themselves. So-- And that, that may mean that, you know, we take some engagement hit on that person. Um, but so if you're gonna have these principles, you kind of have to live with them, and they're gonna have consequences. Now, we still think this is very good business, because most of our revenue is from subscribers paying for their experience, you know, like almost ninety percent of the revenue. And I think that what you pay for when you vote with your wallet every month, you're not gonna pay for your engagement or time spent. You're gonna pay for the value you feel, right? If you feel that this was time well spent, if you feel that this was high value, you're gonna say, "I wanna pay for this." So I think when you pay with your own money, um, that is very, very well aligned with optimizing for what is good for the user. Whereas if in a, in a pure engage-- in a pure, you know, advertising-based model, your incentives are clearly to maximize time spent at any cost. So I think it's a luxury for us because most of our revenue come from subscription to not have that pressure. Maybe we lucked into that business model. Maybe it was semi deliberate.

    2. DSDavid Senra33:27

       That's what I was gonna ask you. There's no way you could have predicted that when you chose the subscription model, but it had to be subscription model based on your very first product, which is music.

    3. GSGustav Söderström33:34

       Yes. So now that we see it, uh, we're doubling down on it. And, and I think it's gonna be the right bet for Spotify. I think people are getting more and more aware of how, how their time is getting captured and how they have less and less control over their life. This, this, by the way, sort of leads us into, into AI, which everyone is talking about. And, you know, there's a lot of negativity around AI now, which I understand, and for good reasons. There is a promise for generative AI to be the most addictive algorithm you have ever heard of, because now it can understand you so deeply. There is potential for, for darkness over there, right? But w-what, what I'm trying to say, what we're trying to say is, like, there is, but it's a dual use technology. You could choose to do something else with generative AI. And so what we're choosing to do, for example, is to give back users control over the algorithm, algorithm. So the other thing you can do is, which we're doing, so you can say like, "Hey, David, here's who we think you are, using LLMs and, you know, based on all your listening, this is who we think you are musically. This is the podcast we think you're, you're interested in. These are the audiobooks that we think you're interested in." Then we can put a box, a box where you can say like, "No, you're wrong. May-maybe that's what I do, but it's not what I want to be. You know, I want

16. 34:50 – 37:57

    Giving Users Control Of The Algorithm

    1. GSGustav Söderström34:50

       much more-- I want more, even more biographies. You know, I wanna get back into classical music, which is something I've tried. Uh, but, but because I listen to mostly EDM, at most, mostly EDM." So now I can go in and say like, "Now I want to be-- I want to have classical music." And now I get classical music. The best way I think to describe generative AI is that finally computers understand English. Like it used to be a small population of about one million developers on GitHub who could talk to computers. Now we all can. And so I think consumer companies could and should give everyone access to talk to them in plain English. So it means that at Spotify, we used to have these, uh, these user research teams that sat with, you know, ten users trying to understand deeply what they felt and what they did. Then we took those ten users and tried to apply that to, you know, seven hundred and sixty-one million users. What if you could do that deep user research with every single user, all seven hundred and sixty-one million of them, all the time? Because you talk to them, and they talk back in English, high fidelity, and the experience just adapts to what they want. So my mission now is to sort of give back control to, to consumers over these, over these algorithms. And it's contrarian, but I think it's the right bet.

    2. DSDavid Senra35:57

       People like you and I will probably want more control. But, like, you have seven hundred million users. Like, what percentage of them do you actually think-- I, I feel like people just want you to do it for them.

    3. GSGustav Söderström36:08

       No, you're not wrong. I think there's-- everything in the world is sort of a power law, right? Of whether it's, um, music listening, some people listen a little, and then some people listen extremely much. Everything is a power law. But I think what is interesting, what Spotify has gained from, if you look at playlisting, for example, some people playlist a lot. Most people have one playlist, maybe they're liked songs, maybe two playlists, you know, some indie favorites. Some people have, like, hundreds of playlists. So sort of the story of Spotify and why we got good at personalization and recommendation in the first place was that we had like, I don't know, ten billion user playlists, which is people carefully saying, "This track goes well with this track, goes well with this track." It's an incredibly valuable data set.But to your point, it was heavily skewed. It was a few use, not a few millions, but not hundreds of millions that did a lot of work that benefited the others. Those people saying these tracks go well together meant that the others who weren't that into music, they didn't keep up with the new, with the new releases of the back catalog, they got amazing recommendations from the work of these people. And so I think that's gonna be true here as well. And, and in fact, I know it is true. We see some people engaging a lot, talking to Spotify all the time, saying that, "No, that's wrong, that's bad. It should be s- should be like this." They're doing a lot of work. They're making their Spotify better for themselves. But then we know that someone else who looks very similar to that, but doesn't have the time or knowledge to do all of that-

    4. DSDavid Senra37:23

       They-

    5. GSGustav Söderström37:24

       ... actually probably want the same thing.

    6. DSDavid Senra37:25

       And they can benefit from the other work.

    7. GSGustav Söderström37:26

       So they benefit from the others.

    8. DSDavid Senra37:27

       The analogy I had, 'cause everybody's like, "Oh, you know, everybody's gonna be building everything they want," and I was like, "I don't think-

    9. GSGustav Söderström37:32

       I don't think everyone's gonna-

    10. DSDavid Senra37:32

        ... they're gonna build it all." I, I-- Tell me if this is a stupid analogy. I'm curious your personal opinion on this. But like if you even look at like how easy is it to post to social media, you, you put a picture, a q- like two buttons, and you're done.

    11. GSGustav Söderström37:42

        Incredibly.

    12. DSDavid Senra37:42

        And it's something like, you know, ninety percent comes from one person-

    13. GSGustav Söderström37:46

        It's a power law

    14. DSDavid Senra37:46

        ... and then you have the next ten percent do others, and then like ninety, eighty-five or ninety percent just lurk. They do nothing, but-

    15. GSGustav Söderström37:52

        Exactly

    16. DSDavid Senra37:52

        ... I feel like that's a good representation-

    17. GSGustav Söderström37:54

        Yeah

    18. DSDavid Senra37:54

        ... of humanity where like ninety percent is not gon- are not gonna-

    19. GSGustav Söderström37:56

        Yeah

    20. DSDavid Senra37:56

        ... build

17. 37:57 – 40:23

    The 1-9-90 Power Law

    1. DSDavid Senra37:57

       anything.

    2. GSGustav Söderström37:57

       There is this famous 1-9-90, right? One percent creates, nine percent curates, and ninety percent consumes.

    3. DSDavid Senra38:02

       Okay.

    4. GSGustav Söderström38:03

       Right? Something like that, and I think that's largely true. That's what I mean with the, with the power law. But, as I said, that one percent that creates and that nine percent that curates, it can be incredibly valuable for the other ninety per- percent that consumes.

    5. DSDavid Senra38:15

       And then allows you to do it for them-

    6. GSGustav Söderström38:17

       Yes

    7. DSDavid Senra38:17

       ... which I think is what most humans want. Deel is how the best founders turn the world into their talent pool. I've been studying how history's greatest founders operate for a decade, and one thing they all have in common is they understand that recruiting and hiring the very best talent is your most important priority. A players recognize other A players, which is why top companies like Ramp, Shopify, Eleven Labs, Uber, and DoorDash all use Deel. Many of the top founders I know have personally invested in Deel after using their product, and what they discovered is that Deel is the best company in the world at building infrastructure for global hiring. Deel will help your business hire, pay, and manage any worker anywhere in the world so you can retain the best talent anywhere and spend the rest of your time focusing on what you do best, delivering value to your customers. The founder of Eleven Labs has a great description of the value Deel can give your company. He said, "We built Eleven Labs to break down language and communication barriers. With Deel enabling us to hire and support exceptional talent anywhere, we can accelerate our innovation and bring more voices, stories, and ideas to every corner of the world." Deel is trusted by over forty thousand businesses. Learn how they can help your business today by going to deel.com/senra. That is deel.com/senra. There's some context I think people need here. Uh, so the fourth most listened to on my Spotify Wrapped for podcasts was, uh, Spotify: A Product Story, which you narrated.

    8. GSGustav Söderström39:41

       Oh, great.

    9. DSDavid Senra39:41

       That came out in two thousand twenty-one, '23, you remember?

    10. GSGustav Söderström39:43

        Yeah, something like that. Over a couple of years. Came out there.

    11. DSDavid Senra39:45

        Oh, long time ago.

    12. GSGustav Söderström39:46

        Long time ago.

    13. DSDavid Senra39:46

        And it tells the history, which I think more company-- I, I tell, I talk to founders about this all the time, because, like, uh, you essentially is like, "Why don't we just tell our own company history?" And then you interview the people that were there at the time, like Sean Parker's in there.

    14. GSGustav Söderström39:58

        Yeah.

    15. DSDavid Senra39:58

        Daniel Ek's there, people that played a role, even if they only played a role for a few years.

    16. GSGustav Söderström40:02

        Yeah.

    17. DSDavid Senra40:02

        But the crazy thing is you have entire episodes, I think from twenty- two thousand twenty-one or two thousand twenty-two, dedicated to how you're using AI in Spotify way before... You know, people have been talking about AI for sixty years, but even back then, way less people were talking about it than now. Tell me the difference of how you view AI back then in two thousand twenty-one, two thousand twenty-two to Spotify to, to today.

18. 40:23 – 43:55

    Getting Into AI Early

    1. GSGustav Söderström40:23

       Yeah. So my interest in AI, I think as many, uh, you know, I, I was always interested in growing up and then I became an engineer and so on in university, which was like in the late '90s. Um, yeah, I was interested in it. There were neural networks back then, but you couldn't do anything as computers were not powerful enough. And then I went into what was called IT, right? And I did my own companies and, and I started Spotify. And then when I came to Spotify, we already had one of these large data sets of, of music playlists. And so, uh, there were some very talented people there, specifically a guy named, uh, Erik Bernhardsson, who at the time, this is two thousand and nine, was doing machine learning, uh, something called collaborative filtering on what was the world's largest Hadoop clusters. And I'm like, "This is super cool." Like this scale of data and these algorithms, I haven't been thinking about it for a long time. So I got very inspired by that, kind of got back into it. And then what happened was DeepMind started doing these, uh, reinforcement learning based things. They had this thing called the DeepQ network that started beating Atari games, if you remember that.

    2. DSDavid Senra41:26

       Mm-hmm.

    3. GSGustav Söderström41:26

       And it looked like a toy back then, like everything does. But I was, I was so pilled already on, on like the, the idea of how do we actually work as humans from a philosophical point of view. And I didn't have a good answer. No one did. But I had this, this idea that m- maybe it is, maybe it is computational, uh, because it was the model of the artificial neuron. But it was hard to believe in the, in the '90s with these like DeepQ networks from, from Demis Hassabis and the, and David Silver and the, the whole DeepMind team. Uh, you could see the scaling of like it's, it's mo- it's handling more and more complex problems. So I got very deep into that. I went home, and I started coding again, and I did my own sort of recurrent neural networks and LSTM and GRUs and stuff just for fun, you know, during my vacations and evenings and nights. And we kept doing our recommendations problem, which was sort of old school AI, which was called ML, machine learning. But then when the, the what is called the Transformer paper came out in, I think, June of twenty seventeen, it was a paper called Attention Is All You Need. I think I read it like in the first few days, and I was completely blown away by it, and I started talking to anyone who wanted to listen. So I was just primed for that, uh, you know, happening. So then we started investing quite aggressively towards this. I think, you know, if you extrapolate it out, if you really believe in that exponential curve-Which I've tested a few times, then eventually, you know, computers would be able to start talking to you in reason, and you would be able to talk to computers. We started preparing for that quite early. We bought this company called, uh, Sonantic to be able to produce, um, voice. I mean, you, you can buy voice anywhere on the internet today, but it's quite expensive per minute. So if you wanna serve seven hundred million users with, like, a few minutes of voice per day, you're gonna go bankrupt. So we bought this company producing voice very, very cheaply with a different technology even before the LLMs were smart enough to produce the script for that voice, because we just bet on, you know, intercepting that curve instead of waiting for it and then, then building for it. So I think it comes from a personal interest of-- in AI and then a bit of luck being at a place like Spotify that had access to lots of data. And then when you see it, just, you know, have, have to bet on it. And, and I think the interest is, is a personal interest. Spotify is sort of my excuse to get as close as possible to, to, uh, the philosophical side of AI, sort of what it means to be a human.

19. 43:55 – 48:22

    You Are Your Thoughts

    1. DSDavid Senra43:55

       Say more about that.

    2. GSGustav Söderström43:57

       Well, I think, uh, you know, you go through life and, uh, I, I was, uh-- I was thinking a lot as a kid about things. And there were, there were a few problems that, that really, like, dumbfounded me when I learned about them. One was this notion, I don't remember exactly when, but someone told me, you know, all the atoms in your body or, like, ninety-nine percent of them get switched out every seven years. And I'm like, "Yeah. Wait, what? Every seven years? What, what do you mean?" They're like, "Yeah, every seven years, they're all switched out." But, but that means I'm not the same person. So if I thought I was my atoms, I thought I was my body-

    3. DSDavid Senra44:38

       Mm-hmm.

    4. GSGustav Söderström44:38

       Like, clearly this is me, and you're telling me we-- so I see you in seven years, and I'm someone else. So then what am I? If I'm not my atoms, what am I? You know, if you look at a rock, it is its atoms. You look at it, you come back seven years later, same atoms. But in you and I, like, your atoms may have been-- First of all, most atoms never get destroyed or created, right? They're largely the same. So, so you may have a bunch of Napoleon atoms in your body or something, and when you die, it's gonna go to someone else, right? So, so y- it's just the, the construction of tho-those atoms that is you for, like, a very brief time, right? So I got to that realization that, you know, you're not your atoms, you're the con-- you're the structure of, of your atoms. And, and another word for structure is information. So then I'm like, "Okay, so it's the DNA." Like, DNA is the blueprint, and, like, you arrange the atoms in a certain way, and that's you. And then someone said, like, "No, that's not really it either, because if you think about something for a long time, if you play the piano for a long time, so you think certain patterns, your brain will grow. You're gonna get an overdeveloped musical center. If you're good at languages, your language center develops." Or the, the most famous example are cabbies in the UK. You know, they have to learn all of London by heart. And they-- when you brain scan them, they have a very overdeveloped three-D-- center for three-dimensional thinking. So clearly it's not static. What you think about moves those atoms around in new patterns, and it's not even the same atoms. The, the atoms get switched out over time. So now you're not your atoms. You're not even the structure of the atoms. You literally are your thoughts. Literally. Not as an analogy. It's the only thing that is constant is the processing information pattern, right? Everything-- Like, the, the atoms that do the processing get switched out. So now I'm like, "Okay, shit, I'm information processing." And that, that was kind of a mind fuck. And then I got comfortable with it 'cause I'm like, "Well, now I can sort of live forever," 'cause if I'm information processing, I'm thinking in certain ways. That's really what I am. You could have instantiated me with some other at- some other atoms, et cetera. Then if I bring some of that into my kids, if they're thinking a little bit in the same way, like thirty-two percent of me is still living in them 'cause I am my thoughts, and then I transfer my thoughts. And, you know, if you're Ray Kurzweil, you say like, "Well, now transfer them to computer, and you get to live forever because you are your thoughts. And if that information processing lives there, that, that was really you. You were not your atoms." So this whole thing of, like, we probably are computational beings, things be-- information processing, I think it was-- is what got me into AI in the first place. But then at university-

    5. DSDavid Senra47:13

       Almost two decades ago.

    6. GSGustav Söderström47:15

       More than that. In university, in the late nineties, you couldn't do anything with it. The computers were not powerful enough. So when you try to instantiate those ideas, you built a neural network with, like, a few nodes, and it slowed to a crawl, and it was unimpressive. And you're like, "Nah, that can't be it."

    7. DSDavid Senra47:27

       Okay, so this is interesting. So you've been thinking about this for multiple decades. You had, you had to have this, like, favorable occurrence of events that now lead you to have-- I think you guys are the second-largest subscriber base in the world behind Netflix. Am I, am I correct?

    8. GSGustav Söderström47:40

       Yes.

    9. DSDavid Senra47:40

       And you have this huge data set. Now the technology can catch up with the thing you've been thinking about since you were in college.

    10. GSGustav Söderström47:45

        Yeah. It's a good excuse to get to spend all my day thinking about learning about these things, working with the best people in the business. You know, I get-- I have the fortune of meeting all of these people that, that are changing the world. I get to meet them and talk to them and ask my interesting, stupid questions about, you know, things. So it's just a fortunate position to be in, to get to do something that you're passionate about. But I feel very lucky 'cause I can do that, but I can do it in an area where I think it's still good for the world, and I can have impact on-- I can steer this towards what I think is a good outcome of AI, like giving back user control, for example.

20. 48:22 – 49:45

    Building Tools That Enhance Humanity

    1. DSDavid Senra48:22

       I don't wanna skip over that because I truly believe we've had enough private conversations, and I know you talk to all the other, like, people designing products with all the big companies. We talked about this privately in the past, and it's just like, yeah, some of them, you know, have made decisions where they know they have optimized. They're like, "Hey, we ran this test. This is great for engagement. It's terrible for the mental health." And they're like, "Push it." That's insane to me. That is insane. This is what we were talking about before we started recording was like, I told you, it's like, it, it sounds silly, but like-I deeply desire a world in which Steve Jobs is still alive because I obviously love technology, but I lo- I want the people building the technology that we all use on the scale that we all use it at to like build tool, tools, that's all technology is, that enhance humanity instead of trying to replace it or to make you dumber or fatter or just, you know, sucked into your phone and depressed, which I feel a, is a lot of what's going on now.

    2. GSGustav Söderström49:16

       Yeah.

    3. DSDavid Senra49:16

       Which is, I think what you said earlier is like, well, podcasts, we have this thing growing massively that's good for the world, assuming you're listening to the right podcast, and you should be listening to David Senra and Founders, of course. At the same time, when these people are like destroying their brains in fifteen, twenty-second, you know, five-second, one-second scrolling, and it reminded me when you said that earlier, I was like, oh, that ... You go back and read Jeff Bezos' shareholder letters, he talks about why he invented the Kindle. He said the Kindle was an anecdote to short attention spans. He was worried that people weren't

21. 49:45 – 51:57

    The Genius Of The Kindle

    1. DSDavid Senra49:45

       gonna read anymore.

    2. GSGustav Söderström49:46

       I'm deeply impressed by the Kindle, by the way, as a product, and it's not just the technology, like the, the passive screens and so forth. What people miss is the business model innovation they did. The whisper sync, where it silently just updates in the background because they bought a certain amount of, you know, mobile data. It's, it's a great product.

    3. DSDavid Senra50:02

       Explain the, the business model innovation on the Kindle.

    4. GSGustav Söderström50:05

       Well, normally you would have to pay for data, so if, you know, the a- if, if you would've been lazy, which they weren't, you would've said like, "Here's a, here's a Kindle. Now go and buy a mobile subscription monthly for that, for the books to update." Now what they did was they signed deals with these carriers. They calculated the average book size, and they made a fixed cost deal where all the data sort of forever was included in the price of the hardware. You bought this thing for a one-time cost, and it just magically updates. At the time, that was magic. There was good business model innovation on top of all the product innovation, which is something I'm very passionate about. I believe that technology is necessary ingredient for change, but not sufficient. I think you can cause havoc with technology like piracy, but when things really change is when you take a new technology and marry it with a new, often contrarian business model. This is the Spotify story of access versus, versus ownership, for example, uh, which is, by the way, why I would also love Steve Jobs to be around, but also not because, you know, he tried to kill us many times. [laughs]

    5. DSDavid Senra51:06

       [laughs] It's funny, we had this conversation, so we had Jimmy Iovine on the show earlier, and you know, Jimmy was in like top three people I wanted to meet of all time because I love Defiant Ones, the documentary of him and Dr. Dre.

    6. GSGustav Söderström51:16

       Yeah.

    7. DSDavid Senra51:16

       And I've watched it, I don't know, now ten times or something, and it's weird because me and Jimmy are friends, and we're like, we live close to each other, um, and [laughs] he swears up and down, he's like, "I was gonna kill him." He's just like, "Apple held me back." I was like, "Jimmy, there's just no way." He's like, "You're, uh, like a small part in a huge company that built the great- the most successful consumer product of all time. These were small guys in a tiny... There's like five million people in Sweden, something like that, and they had-- If Spotify, like there was-- They only had one thing. They had-- I, I always love this idea, it was like if you had to pick between, this is Josh Kushner's quote, where it's like if you had to pick the person that's like, uh, the most experienced or the smartest or wants it the most, you always bet on the person that wants it the most. They had to s-

22. 51:57 – 54:24

    When Steve Jobs Came To Kill Spotify

    1. DSDavid Senra51:57

       if they didn't succeed, they would've died. If Apple Music didn't work out, they would've been fine, and I think he said when he started the fight with you guys, you guys only had like, I don't know, three million or ten million or fifteen million subscribers.

    2. GSGustav Söderström52:07

       Yeah. We were tiny.

    3. DSDavid Senra52:07

       And then you just smoked them. [laughs]

    4. GSGustav Söderström52:08

       A lot of people were very, very scared at the time.

    5. DSDavid Senra52:11

       Because he was a legend, and-

    6. GSGustav Söderström52:12

       He was a legend

    7. DSDavid Senra52:13

       ... he still is. He's a killer. He's a-- I mean, dude, to this day-

    8. GSGustav Söderström52:16

       He's a killer

    9. DSDavid Senra52:16

       ... even though he's retired, I mean, me and Daniel talk about this all the time because it's just, it's just hilarious because they're obviously close friends, uh, too. And, uh, yeah, he's a, he's a formidable individual. But again, I think i- being onto a bigger company-

    10. GSGustav Söderström52:30

        Yeah

    11. DSDavid Senra52:30

        ... and again, like it was just very fascinating.

    12. GSGustav Söderström52:33

        But imagine that you're a fairly small Swedish startup, and you think you're good at product, and then the biggest, most respected product company in the world, and the person you see up, look up to the most, Steve Jobs, says that he's coming after you. But not only that, goes and buys Beats Music and brings in [laughs] Dr. Dre and Jimmy Iovine. It's like, "We're gonna kill you." That's what they literally said in their internal meetings. They gave us six months. It was, uh, those were hard times.

    13. DSDavid Senra52:58

        Yeah.

    14. GSGustav Söderström52:58

        We worked very hard.

    15. DSDavid Senra53:00

        [laughs]

    16. GSGustav Söderström53:01

        But it worked out. There have been a few of those moments.

    17. DSDavid Senra53:03

        There's a great line, though, about this because J- if you think about J- Jimmy's experience in the, in the music industry, it's just fascinating. They tell the story in the obviously documentary, you know, starting out sweeping the floor in the rec- in, in the, um, uh, the record plant and then, uh, you know, becoming a, a- an engineer and then a producer and then one of the most successful creators of a, a new record company, and then building products. Like the guy, the reason I, I recommend, you know, people studying his story is because, like the people that can succeed in so many different domains-

    18. GSGustav Söderström53:33

        Yeah

    19. DSDavid Senra53:34

        ... over multiple decades, that's not luck. There's something going on that we don't know.

    20. GSGustav Söderström53:37

        A hundred percent. Yeah, you don't get that lucky that many times.

    21. DSDavid Senra53:40

        Yeah.

    22. GSGustav Söderström53:40

        For sure.

    23. DSDavid Senra53:41

        So it had to be terrifying from, from your end. But the, the one thing I think of, there's great, uh, maxim from Game of Thrones, which I'm obsessed with, and it says, "Those on the margins often come to control the center."

    24. GSGustav Söderström53:50

        Yeah.

    25. DSDavid Senra53:50

        And if you think about it, it couldn't have been more marginal than i- these, these group of Sw- Swedish guys in this tiny country trying to take over and build the company you guys built.

    26. GSGustav Söderström53:59

        There were some good, hard reasons for why we, um, why we didn't get, get crushed then.

    27. DSDavid Senra54:05

        What do you think they were?

    28. GSGustav Söderström54:06

        Well, I think the content side of the business was incredibly worried because, because if it was, if it was only about content and, you know, only about musicians, you had, you know, hip hop, which is the, the, you know, has the largest appeal in the US and all these powerful people. But there were some structural reasons. One is

23. 54:24 – 57:07

    Three Bets Against Apple

    1. GSGustav Söderström54:24

       when we created our strategy, we bet on three things, and they were all basically counter positions to Apple deliberately. One was freemium. We believe that Apple would sh- if they even did a product, free product, they would struggle to do advertising.

    2. DSDavid Senra54:39

       Just because of the ads.

    3. GSGustav Söderström54:39

       They tried the iAd, but it wanted so much control it didn't work. So we bet that they wouldn't do a good free tier, and so we focused a lot on freemium and a really good free tier. The second was, uh, personalization because, because Apple was s-I would almost say against data at the time. We bet that they would never get good at personalization recommendation. And, and I, I, I, and we believed that was the future. The third was, uh, ubiquity. We bet that they were gonna prefer their own products and never get-- be good on a Samsung TV or an Android phone. So these were our three bets: freemium, personalization, and ubiquity. And I have to say, they panned out r-really well. We're s-- you know, they're still struggling on-- They, they didn't-- They had a free tier for a while at Radio. They pulled it back. Uh, ubiquity, you know, I think they still struggle to be good on non-Apple hardware. And, uh, personalization, I wanna say we're better. So there were real strategic reasons, and, and still are, for, for why I think we, we held out. But it was also, to your point, for us, this was not optional. We either died or-

    4. DSDavid Senra55:42

       You burn the boats

    5. GSGustav Söderström55:42

       ... or we did this, right.

    6. DSDavid Senra55:43

       They're your back against the wall. What are you gonna do?

    7. GSGustav Söderström55:44

       Where I think, to your point, I don't know what pride of Apple Music was at the time, but it was not more important than the iPhone-

    8. DSDavid Senra55:50

       [laughs]

    9. GSGustav Söderström55:50

       ... for sure.

    10. DSDavid Senra55:52

        I found one of my all-time favorite quotes when I was reading the book Zero to One. The quote says, "The single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas." That is exactly what AppLovin has done with their advertising platform, Axon. Axon connects you with over a billion potential new customers inside mobile games. Axon allows you to capture undivided attention. Axon ads are full-screen video ads that are watched for an average of thirty-five seconds. That is retention that blows other ad platforms out of the water. You can launch on Axon in minutes. You set the goal, and Axon achieves it. There's no complex setup, no expertise needed, and Axon scales quickly. They can put your ads in front of over a billion potential customers. Other businesses have seen immediate results, have scaled to hundreds of thousands of dollars of spend per day, and increased their revenue by millions. So you wanna get started quickly before all your competitors are on Axon, and you can do that by going to axon.ai/senra. That is axon.ai/senra.

24. 57:07 – 1:00:55

    Building A Personal AI Agent

    1. DSDavid Senra57:07

       Everybody's gonna know what Spotify is. I don't think, you know, many people know who you are. You've only done a few podcasts. The one you did with Patrick I thought was excellent. But I wanna go into some of the things that I know about you I think is very, uh, unusual. We talked about, like, the kinda the dangers of some of these social apps, and you have built your own AI agent. Can you explain how you, like, consume X, for example, what you've built?

    2. GSGustav Söderström57:30

       So this is something we're working on at, uh, at Spotify, and we released this just a few weeks ago, s-something called Save to Spotify. When you sit in your, your, uh, code code or codex or something, you can just, you know, you can ask, uh, these agents to go out and look at information for you, write your podcast script, and then generate a podcast, and then we allow you to upload that to Spotify, but privately, right? 'Cause you may put private information in there. Maybe you wanna, maybe you wanna prep for your interview as I did today. I don't want that to be all over Spotify. So we now support private pod-podcasts or personal podcasts. And so what I do is, I use these agents, and I take a combination of my personal information, so, you know, documents I have and things I wanna prep for, and then what I'm interested in based, you know, across my, my different, uh, services, all my interests. Spotify knows my interests pretty well from all my listening. It goes out and looks at what hap- what's happening in the world, and then it gives me this, this update that is deeply personal about what's happening in the world that I might be interested in. So it's kind of like a personal algorithm that filters out a lot of, of the noise and the, the crazy that I don't wanna hear and just gives me the stuff that I wanna hear. This is the kind of user control that I would like to give every user, but it's the kind of user control that you can have now if you're prepared to, to put in the work. And what's interesting is, I didn't expect this, but, um, I found so much music and podcasts through this. Then it's filtered to the people that I'm interested in, that I, that I follow on different social media and so forth. So it's the thing that is being talked about among the people I care about. So for example, your episode with Evan Spiegel came up again and again, with lots of commentary in my personal podcast saying, like, this stuff, this is really interesting for you. You should listen to this, 'cause there are product wisdoms in there and so forth. I listened to the whole episode, which I really liked, by the way. I'm thinking about stealing his framing of, like, you know, we used to have all the ideas but limited resources. Now we have all the ideas and all the resources. I really like that.

    3. DSDavid Senra59:25

       The thing about Evan, you know, people give m-me shit. They're like, "Yeah, but look at his market cap." I was like, "I don't care about his market cap."

    4. GSGustav Söderström59:30

       No.

    5. DSDavid Senra59:30

       I care about that you think he, he, he's truly differentiated.

    6. GSGustav Söderström59:33

       He is.

    7. DSDavid Senra59:34

       And I spent a bunch of time with him. At the end, I was like, "I just want him to win." I don't like-- I don't care about his, like, we can figure it out. And then everybody's like, "Oh, but his market, his, his, um, you know, his stock's down eighty percent," or something like that. So I just went to ChatGPT, and I was like, "How many times did Steve Jobs suffer a seventy-five percent decline?" You know. It was like four times. Like, this happens in everybody's career. The kid is young. He's not a kid.

    8. GSGustav Söderström59:55

       Yeah.

    9. DSDavid Senra59:55

       The guy is young. Like, let's see-

    10. GSGustav Söderström59:57

        Yeah

    11. DSDavid Senra59:57

        ... let's, let's see what happens over the next decade.

    12. GSGustav Söderström59:59

        Yeah.

    13. DSDavid Senra59:59

        You know? But the fact is, like, he's got a lot of very, very interesting ideas that no one else has. And he invented a, a, a pattern on social media that a billion people use every day.

    14. GSGustav Söderström1:00:06

        He invented several of them.

    15. DSDavid Senra1:00:07

        Yes.

    16. GSGustav Söderström1:00:07

        Right? The, the disappearing image, the stories, like all of these things.

    17. DSDavid Senra1:00:10

        You think that guy's not i-interesting to hear talk for an hour? You're fucking crazy.

    18. GSGustav Söderström1:00:14

        Of course. No, I, I, I, I like him. Maybe it's because I'm a product guy. Design guys are close, but I, I like him for sure.

    19. DSDavid Senra1:00:20

        This is one of the most fascinating things about you, and I think it's really, really important to drill down on, and it's really dangerous for people not to do. You are constantly trying to eliminate noise. The idea-- Even before you, you turned this into an audio, you're es-essentially taking text and turning it into audio now with the feature you just talked about. But when we talked about this, or maybe I heard you, I think you told me about it, or maybe I heard you talk about it on a podcast, but you were taking it-- You could read it, though, before, right?

    20. GSGustav Söderström1:00:43

        Yeah.

    21. DSDavid Senra1:00:43

        It was like stripping out all, like, the crazy shit that happens on X or the people fighting over politics, and it's just like that. What are the people I care about? What are they talking about?

    22. GSGustav Söderström1:00:51

        Exactly, so-

    23. DSDavid Senra1:00:51

        That's not gonna induce me-- Like, it's not gonna raise my cortisol levels or make

25. 1:00:55 – 1:02:27

    Premeditated Media

    1. DSDavid Senra1:00:55

       me sad.

    2. GSGustav Söderström1:00:55

       So I literally ask my agentUh, filter for rage bait, filter for, for clickbait, uh, filter for, uh, you know, politics. I just ask-- This is the kind of user control that you can have now, that very few people understand that you can have yet, and it's too complicated, but you can have all that control. So what, what I think is most people kinda know what they want, but you know, you get captured in the moment. You know, it's like you, you want something, and then someone puts candy in front of you, you're gonna take that candy. So what is interesting is, can you give people the chance to decide their own future ahead of time? This is the idea behind, like, the taste profile and behind these agents. Like, I'm not better than any-anyone else. I get captured all the time. So, so my specific pet peeve is road rage. I'm so fascinated by it. I just go down dark holes of road rage. 'Cause it's the weirdest thing. Like, these supposedly, you know, fully normal, smart people, they waste their entire lives and go to jail.

    3. DSDavid Senra1:01:47

       They shoot into cars and kill kids.

    4. GSGustav Söderström1:01:49

       Yes.

    5. DSDavid Senra1:01:49

       Like, it's disgusting.

    6. GSGustav Söderström1:01:49

       And then afterwards you realize that, no, they were pretty normal people. It's just somehow inside your car, you lose it. So I go down that rabbit hole, and I watch hours of road rage, [laughs] right? But what I can do now is I can say, like, "Don't show me road rage," 'cause I know what's gonna happen. So that, that, like, uh, what, what do you call it? Um, ahead of time, pre-premeditated.

    7. DSDavid Senra1:02:08

       Yeah, premeditated.

    8. GSGustav Söderström1:02:08

       Like, premeditated media-

    9. DSDavid Senra1:02:10

       Yeah

    10. GSGustav Söderström1:02:10

        ... is something that, that I think everyone should at least have access to if they want to. It works for me, and I think it will work for a lot of people, and I think it's-- I think that need is not gonna get less. I think it's gonna get... It's not gonna get smaller. It's gonna get bigger. So I, I happen to think it's also good business.

26. 1:02:27 – 1:05:16

    Who Tells You The Truth

    1. DSDavid Senra1:02:27

       Something that just popped to mind when, when you were, uh, speaking just now. I'm very curious, like, who influenced... So we're talking about, like, essentially your information diet, right? And what you're letting into your mind, you talked about earlier, we literally are our thoughts.

    2. GSGustav Söderström1:02:38

       Yeah.

    3. DSDavid Senra1:02:38

       Like, you're crazy to, like, let people get into your brain and affect you. And, uh, I was talking to MrBeast about this yesterday, where he's just like, "I don't think people should have Instagram," 'cause it's just like, it's just making all these young kids, like, comparison is the thief of joy, and all they're doing all day long is comparing, you know, somebody else's highlight reel to them, and it's just, like, very, very bad for you to let that into your brain. One of my favorite things, I think Daniel said it on this podcast last year, where, you know, I, I'm always curious when I get to meet people, especially very s- insanely successful people, it's just like they... "Who tells you the truth?" is a question I always ask, 'cause it's, like, very few. A lot of them kinda have, like, this almost, like, cloud of sycophants around them-

    4. GSGustav Söderström1:03:12

       Yeah

    5. DSDavid Senra1:03:12

       ... that are, like, filtering their knowledge that's getting into them.

    6. GSGustav Söderström1:03:14

       Yeah.

    7. DSDavid Senra1:03:14

       And what they'll do is, like, they'll seek out people they can trust and that'll tell them the truth. And I think he told the story of you being one of those people for him, for Daniel, because you pulled him aside, and you're like, "Hey, you're running product, and you, you're, like, not good at it, and you're kind of fucking this up." [laughs] And his response was, he went home, I think he told his wife, he's like, "Oh my God, I have to fire this guy" [laughs] . It was you. And then he goes, then he thought about it, he goes, "Oh, he's right." [laughs] It's like, "He just did me a service."

    8. GSGustav Söderström1:03:40

       Very few people are that strong-

    9. DSDavid Senra1:03:42

       Yes

    10. GSGustav Söderström1:03:42

        ... can take that kind of... But that's why he's successful.

    11. DSDavid Senra1:03:44

        Yes.

    12. GSGustav Söderström1:03:44

        Right?

    13. DSDavid Senra1:03:45

        And so I think this is really important. So who does that for you?

    14. GSGustav Söderström1:03:48

        So I, I do a version of the same thing. This is the, this is back to the thing of long tenure. So I have people who are long tenured. I've had, like, huge disagreements with them. Um, and they've realized that when they, um, when they talk back to me or they get upset with me, there are no consequences, right? But that takes, that comfort takes a long while to build. You can't expect someone to come in, especially if they've come from corporate America, and expect them to, like, stand up to you, 'cause usually there are consequences. You just get fired. So I've built-

    15. DSDavid Senra1:04:20

        Oh yeah, but people don't know, you're, look, you're a brown belt?

    16. GSGustav Söderström1:04:22

        No, no, no. I'm a blue belt.

    17. DSDavid Senra1:04:24

        Oh, blue belt in jujitsu, so you could also choke them [laughs] .

    18. GSGustav Söderström1:04:26

        [laughs] There are many people who could choke me out, so that's a risky, risky path to take.

    19. DSDavid Senra1:04:30

        Oh yeah.

    20. GSGustav Söderström1:04:31

        It's the tenure. I have a bunch of people around me who, who I, I think and hope feel comfortable saying like, "No, you're wrong. I, I think you're just not understanding this." And, and I think so because they do. And they've learned that, you know, I, I can't always control myself. I'm very passionate about something. I'm like, "No, you're wrong. Uh, that's stupid," blah, blah, blah. And then they know it's not gonna be consequences, so they say it anyway. I try to do that more in, like, one-on-ones or small groups. Sometimes there's a big meeting, someone who has worked with me for a long time feels very, very, uh, comfortable, just says like, "No, I think that's a, that's a stupid idea." And I'm like, "No, your idea is stupid." And everyone around is like, "Oh, shit. [laughs] Now, now everyone is gonna get fired." You know, so you have to build that trust over time. And so I, I have a version of the, of the same.

27. 1:05:16 – 1:07:28

    The Vulcan Mind Meld Of Tenure

    1. DSDavid Senra1:05:16

       Okay, so we, we talked about tenure at the very beginning of this conversation where I never finished a thought, uh, when I was asking MrBeast about turnover on his talent team, uh, like the, the most talented people in there, and he's just like, "There's a value here," because the guy that runs his operations has been there. They used to live together. They-- He's like, "I've spent not ten thousand hours talking to this guy, thirty thousand hours," where they walks on set, and since he's running his operations, they're running like ten at a time. MrBeast can walk on set, and he, like, before he'll look up and he, the guy, his name's Tyler, he's like, "I already know about this, and this is why I made this decision, and we're doing this. And oh, you may not like this shot, but we're doing this shot because it allows us to shoot from this angle." And, and then literally does- nothing has to even come out. It's like they're-

    2. GSGustav Söderström1:05:54

       Yeah

    3. DSDavid Senra1:05:54

       ... they're... What's the v- uh, from thing, Star Trek with the Vulcan Mind Meld, I think it was called?

    4. GSGustav Söderström1:05:58

       Yeah, exactly.

    5. DSDavid Senra1:05:58

       So see, that's what happens.

    6. GSGustav Söderström1:05:59

       Yeah.

    7. DSDavid Senra1:05:59

       He goes, he goes, and he said the greatest thing. He goes, "You don't get that in a hundred hours."

    8. GSGustav Söderström1:06:03

       So one benefit of, of tenure is the trust. People keep you honest. U-unless you, you know, you become too full of yourself, which is always a risk with success. Um, but the other benefit is just efficiency of, like, pe-people know. You don't have to give as much context. There are some downsides to tenure, which is opposite of Elon's. You don't get fresh blood as much, and so you need to be careful. Maybe you're just a, a group of old people eventually. Right, so you have to control for that. So I, I try to make sure that we also hire some new, but these are the two benefits, just efficiency and, and trust.

    9. DSDavid Senra1:06:33

       The group of old people you have to be very, very careful with. Think about, like, the, the most talented people that, uh, Walt Disney had. It was, like, these nine guys, these animators, I think they used to call them the Old Men after Walt died, and I just talked to Ed Catmull, the founder of Pixar.

    10. GSGustav Söderström1:06:45

        Mm-hmm.

    11. DSDavid Senra1:06:45

        And they're going in there as a, he's a young technologist trying to pitch them, "Here's a new way to animate." And Walt's dead. These guys are old.

    12. GSGustav Söderström1:06:52

        Yeah.

    13. DSDavid Senra1:06:52

        There's no fresh blood. They're like, "The computers will never be able to do it, the stuff that you're, you're talking about." It's like they-

    14. GSGustav Söderström1:06:57

        Yeah

    15. DSDavid Senra1:06:57

        ... uh, reject. It's very human nature-

    16. GSGustav Söderström1:06:59

        Yeah

    17. DSDavid Senra1:06:59

        ... to just reject these new ideas.

    18. GSGustav Söderström1:07:00

        So it's back to, like, you optimize for some things, but then you have to mitigate for the other thing, things. So if you optimize for tenure, you have to mitigate for the risk thatYou don't get fresh blood, that your career ladder is slow. So maybe people who are talented feel like, well, that's gonna take ten years to get up the career ladder. So then you have to create programs for that to give them exposure.

    19. DSDavid Senra1:07:18

        It took Gustav eighteen years to get to the CEO [laughing] .

    20. GSGustav Söderström1:07:20

        Yeah [laughing] . It took eighteen years to get to CEO. Wow, it's a long time.

    21. DSDavid Senra1:07:23

        [laughing]

    22. GSGustav Söderström1:07:23

        Finally made it. But, uh, but it is, it is the same principle.

28. 1:07:28 – 1:10:14

    Hiring For Spikes And Fresh Blood

    1. DSDavid Senra1:07:28

       Well, how do you get new talent then? Like, what are you guys doing literally at Spotify? 'Cause I know you, you, you have the same idea. You guys have the same idea that, um, Toby from Shopify talked to me about, and my friend Kareem from Ramp did.

    2. GSGustav Söderström1:07:39

       Yeah. Which was another great episode, by the way, the Toby episode.

    3. DSDavid Senra1:07:42

       Yeah. He's, he's the best. Um, but that you guys are fine hiring for spikes.

    4. GSGustav Söderström1:07:47

       Yeah.

    5. DSDavid Senra1:07:48

       So how do you-- Like, today, how are you getting in your huge platform business around for-- I think you just celebrated twenty-year anniversary, right?

    6. GSGustav Söderström1:07:55

       Yes, exactly.

    7. DSDavid Senra1:07:55

       Yeah. How are you getting new young talent then? How do you think about that?

    8. GSGustav Söderström1:07:59

       So it's, it's a couple of things. One is, um, you get, you get junior talent, and then we have this, this, um, Rising Stars program. We literally identify-- ask managers to identify, like these are, these are rising stars. So then we have a program for them every year. It's like maybe twenty, thirty people. And so they get to go on this program to-- where they go out into the different markets like India, US, you know, Germany, et cetera, and learn about the different problems in different markets. Then they go and sit with, uh, Alex and talk to him, then they sit with me. It's lit-literally this internal, you know, MBA program where you learn business, technology, product, and you build relationships across the org. Right? So now these people come out twelve months later, they know everyone in Spotify across the world, so they can get anything done. So now they're gonna start rising much faster. So we have these specific programs to identify the talent and help them accelerate versus like the organic path of them doing something, getting noticed, and slowly working their way up. So, so that's one thing. But then every now and then, you also just have to hire the more senior level, right? So if you look at, uh, when AI started happening, or what was called machine learning back then, I felt that we just weren't strong enough in deep learning specifically. We knew the old school fa-ma-matrix factorization stuff. So we did an acquisition of a company called The Econest in Boston just to get very close to MIT. And then we got a bunch of talent in that field and established ourselves. So sometimes you have to do acquisitions and just get-- when it's a completely new skill. Something like, you know, if you, if you need to get big in crypto quickly, yeah, you can wait for years for the organization to understand crypto and learn. You may have to acquire or hire at some senior level. You have to mitigate for the problems of tenure. And if I'm gonna make some far-fetched analogies, maybe this is one of the challenges that Apple had with machine learning and AI on average.

    9. DSDavid Senra1:09:57

       Siri showed that.

    10. GSGustav Söderström1:09:58

        They were slightly too old to see that. Pro-probably people in their org knew all about it, were all over it. It was just too late to see it. They should have like just gotten someone at a more senior level sooner. So sometimes you have to mitigate for the drawbacks of long tenure

29. 1:10:14 – 1:13:58

    What Keeps Him Up At Night

    1. GSGustav Söderström1:10:14

       as well.

    2. DSDavid Senra1:10:14

       What's the thing that keeps you up at night? Like, what do you think the weakest spot for S- for Spotify is right now?

    3. GSGustav Söderström1:10:19

       I think the thing that keeps me up at night is not surprising what, what AI truly means in the limit. I'm pretty sure that media habits are gonna change because of AI, and so I don't think it's an option to just sit still. But the way I think about it is the world moves in microwaves. You get some new technology, it, it often causes a bunch of havoc, then there's some new business model that emerges, and then things change, right? This was the original Spotify. We kind of rode on the microwave of cheap broadband and PCs, right? And then all of a sudden, they were so ubiquitous, and the, the broadband was so fast, you didn't actually need to own files anymore. You could just stream them, right? We realized that. We built a business model around it. That became very disruptive to the, to the, uh, download industry and so forth. And then you wait a few years, everything look-looked great. Then the smartphone came along, and now everything changes again. You have people that don't have a computer. We only had a free tier on the computers. We had no free tier. Turns out that while the PC and the internet, the desktop was-- had such low latency, you could stream it. If you try to stream a song over cellular back in two thousand and eight, it wouldn't even start. It was twenty seconds to start, and it would chop. So, like, everything changed again, and then we had to adapt to that. And we managed to. We came up with the offline sync business model and the mobile model and so forth. But then you get these periods of stability. So if I was an analyst, and I try to predict the world between two thousand and fifteen to two thousand and twenty-five, those ten years, just to-- you know, what will the world be like? I would have done really well to just extrapolate more mobile, more subscription, more ads, just more of everything, and you would have gotten really close to what happened. But if you would have shifted that ten years earlier, two thousand and five to two thousand and fifteen, you would have extrapolated PCs and internet. You would have missed the smartphone. You would have missed everything. You would have missed Uber. You would have missed the entire world. So the question is, which era are we in? Are we in the calm waters of extrapolation or in the macro change? I think we're in one of these where everything changes. So I can't tell you what's gonna change, but I'm pretty sure that things are gonna change. But the way we think of it as a company is the scariest periods are the periods of change. Guess when Spotify grew the most?

    4. DSDavid Senra1:12:39

       Periods of change.

    5. GSGustav Söderström1:12:40

       Periods of change. When things are stable, market share stays stable. You don't eat market share. So when there's change, there's risk. You can lose market share. But that is also when you have the most opportunity to, to, to eat market share if you adopt the change. So my principle is just always be first. Be first and adopt it first. Like, the world is gonna change. Just accept that and get ahead of the curve. So I, I think this is a time of great opportunity for us to do new things, but it is also the thing I'm thinking about constantly. What does it actually mean, and what are the right bets? Are the right bets to bet on user control and, and, and these things are-- you know, whereas others are gonna bet complete opposite of us. So that's, that's what keeps me up at night is we're still in this change. It hasn't finished yet. No one knows exactly where it's gonna end up. They're gonna be the Ubers and Airbnbs of, of this era. And may-maybe they are OpenAI and Anthropic, but maybe not. Maybe it hasn't even happened yet.

    6. DSDavid Senra1:13:32

       That's a perfect place to end. Gustav, thanks for doing this, man. Always good to talk to you.

    7. GSGustav Söderström1:13:35

       Thank you, man.

    8. DSDavid Senra1:13:36

       Appreciate it, man. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast, Founders. For almost a decade, I've obsessively read over four hundred biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders. [upbeat music]

Episode duration: 1:13:59