In this episode of "20 VC," host Harry Stebbings interviews Daniel Ek, the founder and CEO of Spotify, who shares his journey from a non-entrepreneurial background in Stockholm to pioneering the music streaming industry. Daniel discusses the challenges of transitioning from founder to CEO, emphasizing the importance of empathy, courage, and perseverance. He also stresses the role of culture in delegating effectively and creating an environment of safety and transparency. Additionally, Daniel and Harry touch on the direct listing of Spotify, the importance of prioritizing personal life after having children, and the future impact of Ek's new venture, Prima Materia, which aims to tackle significant societal problems with a long-term, impact-driven approach. The episode also features Ek's gratitude to Shaq Shashir for his instrumental role in making the episode happen, as well as his admiration for leaders like the Dalai Lama and Charlie Munger.
"Shaq, I thank you for your friendship and I thank you for this episode." "And so with that, I could not be prouder to release today's episode with one of the great entrepreneurs of our time, an individual who's revolutionized his industry." "Woody at TCV, Christina Stenbeck, Shaq Shashir at Coder, Bill Gurley, Alex Nordstrom and Gustav Soderstrom at Spotify. I so appreciate all you did to make this schedule so special."
These quotes highlight the importance of collaboration and support in creating the podcast episode and introduce key contributors to its success.
"No one around me was an entrepreneur. No one I knew was an entrepreneur." "I only had two hobbies growing up. Music and technology." "I had basically an illegal sweatshop in school with all the kids who were good at math. I taught HTML and all the kids that were good at art. I taught how to run Photoshop and do web pages."
Ek's quotes provide insight into his initial lack of entrepreneurial aspirations, his passions for music and technology, and his early business experiences, which inadvertently set him on the entrepreneurial path.
"I don't think I necessarily ever knew that I couldn't do it." "I've always been more focused on the journey itself and liking the pressure of having a lot of people that expect you to come through."
Ek's perspective on self-doubt is rooted in a positive attitude towards challenges and a focus on the process rather than the outcome.
"My way of approaching a problem is to try to understand if we're dealing with a high variance or a low variance problem." "Is this a one-way door or is it a two-way door?"
These quotes explain Ek's strategic approach to problem-solving and decision-making, focusing on the potential impact and reversibility of decisions.
"The perfect point to which I feel like I understand the problem well enough, would be when I can argue the counterpoint to why something works and why something doesn't work." "You start seeing the elements that make up that city. You start to see the nuances much, much further."
Ek's quotes shed light on his methodical approach to learning and mastering new areas, emphasizing the importance of understanding the nuances and core elements of a subject.
"How do you know how to hire world class people if you have never seen world class?" "A lot of people just don't spend enough time trying to understand what the role that they're asking the person to fulfill."
These quotes address the difficulty founders face when hiring for roles outside their expertise and the necessity of deeply understanding the role to make informed hiring decisions.## Role of the CFO
"Are you looking for an operational CFO? Are you looking for a financial driven CFO? Are you looking for a strategic level CFO?"
This quote highlights the different CFO roles that a company might be looking to fill, emphasizing the need to tailor the search to the organization's current needs.
"So you have to actually spend a lot of time educating the organization, even before you're getting to a point where you can delegate things to them."
Daniel Ek emphasizes the importance of educating the organization on decision-making as a prerequisite to effective delegation, underlining the need for a supportive culture.
"I think the natural instinct in people are obvious to try to not talk about the bad things, but to promote the good things."
Daniel Ek acknowledges the human tendency to avoid discussing negative issues, which can be a barrier to fostering an open and honest company culture.
"Now, like many ceos, I would say that my worst mistakes were usually around letting things linger for way too long, and I was dragging the decision forward before acting on it."
Daniel Ek reflects on his past mistakes of delaying tough decisions and the importance of acting decisively for better outcomes.
"I think it's one that we should actually pay a lot more attention to, first and foremost, because I think the common belief at the moment, in especially Silicon Valley lore, is that the founder should always be the CEO."
Daniel Ek challenges the prevailing notion that founders should always transition into the CEO role and suggests that this is not always the best path for a company.
"And so I was motivated by that journey."
Daniel Ek expresses his motivation to grow and learn throughout his journey from founder to CEO, emphasizing the importance of embracing the learning process.
"I think the hardest thing that founders don't realize about becoming a CEO is that you have to change along the path, and it's as much of a journey of learning skills as it is a personal growth journey of becoming a great leader."
Daniel Ek discusses the personal challenges and growth that come with transitioning from a founder to a CEO, highlighting the transformation required on both a professional and personal level.## Personal Growth and Adaptation
"But since it is a teenager at this point, I have to realize that I can no longer dictate what they do."
This quote illustrates the idea that as a company grows and matures, like a teenager, the founder cannot control everything and must adapt their leadership style.
"I'm a huge introvert as an example, and weirdly enough, I don't have a problem speaking in front of very large audiences."
Ek shares a personal aspect of his character, highlighting the difference between his comfort with public speaking versus interacting in smaller, more intimate groups.
"I had to start actually going up to people I don't know, ask them a bunch of questions, which is scary as hell."
Ek describes how he pushed himself out of his comfort zone to engage with unfamiliar people, a necessary change for the benefit of his leadership and company culture.
"My view is I don't think you can ultimately change anything about yourself unless you're happy about that change."
Ek expresses his belief that personal changes are only sustainable and positive if they are aligned with one's happiness.
"I'm mostly still who I am, an introvert, but I'm a somewhat well functioning leader in the sense that I can be approachable."
This quote highlights Ek's balance between maintaining his introverted nature while adapting to be an effective and approachable leader.
"We're trying to do things that can impact not in the next five or ten years, but has a major impact in 20 or 30 years."
Ek outlines the long-term vision of Prima Materia, differentiating it from the short-term focus common in venture capital.
"It's not like I ever wanted not to talk to other people, right? I wanted to, but I was just shit scared about it."
Ek reflects on his personal challenge with social interactions, emphasizing the difference between desire and fear, and how he worked to overcome it for the sake of his leadership role.
"There are certain types of problems where the foundations doesn't exist to allow you to get a product to market quickly, where you have to actually solve not one science problem in order to get it to market, but you may have to solve two or three."
Ek identifies the unique challenges in addressing complex problems that cannot be rushed by traditional funding cycles.
"He has an insane ability to find talent and to help nurture that talent and see things in others that they may not even themselves realize yet exist."
Ek commends Shaq for his exceptional talent detection and development skills.
"I think all of that was true. I'm not so sure it is true anymore."
Ek challenges the notion that European founders lack ambition or sell too early, suggesting a shift in mindset has occurred.
"What I don't think necessarily exists is the cluster of the ecosystem to the same degree that Silicon Valley and Seattle in particular have."
Ek points out the lack of a robust, concentrated tech ecosystem in Europe, which is necessary for the region to compete globally.## Accelerating Startup Growth with Talent Infusion
"Maybe there should be five or ten really strategic initiatives where you just stack it full of talent, like insane talent, like next level talent, the types of people that have been there, done that before."
The quote underscores the strategy of concentrating talent in a few strategic initiatives to enhance the growth and success potential of startups.
"This type of scale that we're talking about before. And it's just super fascinating thing here is like, this thing has the potential of really changing the whole car."
The quote highlights the transformative potential of Green Steel's project on the automotive industry and its environmental impact.
"How do I tell a story that touches them in a way where they are inspired to do the best work in their career?"
This quote reflects on the challenge of creating a unifying and inspiring narrative that can reach and motivate a diverse group of employees.
"It's all about fairness and transparency."
The quote encapsulates the rationale behind Spotify's decision to pursue a direct listing, emphasizing the importance of equitable treatment for all investors and stakeholders.
"Empathy for other people, other people's situations."
The quote highlights empathy as a crucial trait Ek wishes to instill in his children, reflecting a broader understanding of diverse life experiences.
"I will never, ever miss one of their birthdays."
This quote illustrates Ek's commitment to prioritizing family events and the impact of fatherhood on his leadership and time management.
"I probably look up more to leaders that are very far from me in my own sort of mentality and my own skill set."
The quote reveals Ek's admiration for leaders who offer perspectives and skills that differ from his, indicating a respect for diverse forms of leadership.
"I would feel very pleased if one of these things had the impact of something that was really material to society."
This quote conveys Ek's aspiration for Prima to have a tangible, positive effect on society, particularly in solving critical global challenges.