TAKE A CHANCE ON ME
FOR 70 DAYS AT THE BEGINNING of this year, Daniel Ek and a group of friends competed to see who could cut their body-fat percentage the most. Ek, the 35-year-old cofounder and CEO of the streaming service Spotify, went on a special regimen, which included twice-a-day workouts and a single meal—specially configured for him—eaten at a set time each afternoon. “You look great,” teased music impresario Scooter Braun, a participant in the contest, who texted his friend after noting Ek’s slimmed-down physique during Spotify’s web-broadcast Investor Day presentation in late March. “Too bad you lost.”
When I see Ek a few days later, on the eve of Spotify’s listing as a public company on the New York Stock Exchange, he acknowledges that he’d been bested in the body-fat battle by several competitors. “I made a strategic error,” he says. In an analytical fashion that is typical of Ek, he then deconstructs both the limitations of the contest (“some folks were heavier to begin with,” he says) and the missteps that he made (“I lost too much muscle mass too early”). Somehow, he doesn’t sound like he’s making excuses; he’s focused on learning, on improving—a trait that has defined him, and Spotify, from the very beginning.
As for the next day’s stock market debut, Ek willfully downplays its importance. “I keep forgetting it’s tomorrow,” he says at one point.
Spotify’s IPO in early April, like Ek’s body-fat obsession, was unconventional. The company didn’t offer any new shares to raise money, instead listing ones already available. There was no bell ringing at the exchange, no public media blitz. Despite the lack of fanfare, though, it was a breakthrough success: Spotify ended its first day with a $26 billion valuation, making it one of the biggest tech IPOs in history. It quickly inspired speculation that other mega-unicorns, like Airbnb and Uber, might come to market via Spotify’s nontraditional method.
Ek is Swedish, and like the Swedish word lagom—which means “in moderation” and is often used to describe that country’s character—he has a proclivity for understatement. He deflects attention (“It’s never one person,” he told me at the outset of our first interview. “It’s the team”) and describes himself as an introvert (“I don’t really do social calls. I tell my friends that I like to be invited, but I probably won’t come”). But Ek isn’t shy about his ambitions: “What motivates me is impacting culture.”
Since its 2008 launch, Spotify has realigned the global music industry toward streaming, popularizing the idea of music as a service rather than goods that consumers own. As the company has grown—it now has 170 million users in more than 60 countries and 75 million of them are paying subscribers—it’s turned around the fortunes of what had been a declining industry. After global music revenues slumped from 2001 to 2014, streaming has put the recording business on an upward trajectory again, growing more than $3 billion in the past three years. Spotify reported $1.3 billion in revenue for the first quarter of 2018, and analysts expect it to generate more than $6 billion this year, 90% of it from subscriptions and 10% from advertising.
What emerged over my many hours of discussion with Ek in New York and Stockholm over five months, and was reinforced by interviews with more than three dozen key Spotify leaders, partners, artists, and competitors, is how unlikely Spotify’s rise has been and how central Ek’s character has been to the company’s evolution. The CEO is patient yet fueled by an internal intensity that can border on ruthlessness. He is a staunch believer in transparency (that Investor Day presentation went
