Background:
Daniel was born February 21, 1983 in Stockholm, Sweden. Ek grew up in Ragsved, near Stockholm, and when he was a teenager he created websites for businesses. He did all of this out of his own bedroom.
Ek had an entrepreneurial mind ever since he was a teenager. Innovation and learning is what drove him to become what he is today.
He dropped out of college and worked for several Web-based companies before founding Advertigo, an online marketing firm that he sold in 2006 to the Swedish company Tradedoubler. After his small business that he ran out of his room, he decided to move onto bigger and better things thus cofounding Spotify.
Creation of Spotify:
Daniel Ek cofounded Spotify, which is an Internet music-streaming service that provides listeners with legal access to millions of songs, with Tradedoubler’s cofounder Martin Lorentzon.
Spotify’s business model for providing access to music online differed from other services in that it did not involve charging for single song downloads. Users could listen to songs for free if they were willing to have an ad played here and there. If customers wanted to get rid of the ads, they could pay a monthly subscription.
The music industry didn’t show too much enthusiasm about this product because Spotify’s license to stream music earned the industry less revenue per song than it got from a music download service like iTunes.
Ek responded to these claims by saying that Spotify discouraged online music piracy by providing a low cost alternative and the company would gain money over time.
Launch of Spotify:
Even though the music industry wasn’t really on board, Spotify launched in 2008 and quickly became popular with both users and investors. By 2010 Spotify started earning some real money and in 2012 Spotify had 18 million songs and more than 20 million monthly users (not all were subscriptions).
Five years later, however, the site had more than 35 million songs and had almost 160 million monthly users, more than 70 million of them were subscribers. Spotify had a market value of about $27 billion in the first 9 years of opening.
Today, the company’s market value is around $21 billion and Spotify has made $2 billion in revenue.
I think it’s awesome that he was an entrepreneur as a teen! Even though the music industry wasn’t sold on this idea, Ek continued to create Spotify and eventually launch it! This is a great example to show that not everyone will like a business idea. If you like the business and see the potential, you should continue to create and improve that business/product.
I love that despite peoples’ distaste for the idea of Spotify, Daniel Ek pursued the idea with optimism and excitement for what’s to come. Speaking from personal use, I wouldn’t trade Spotify for any other music platform, and that’s certainly due to their supply of songs and free downloads.
I think this is a very well written blog post and I found it inspiring that although Daniel Ek didn’t have a college degree and people shot his thinking down, those circumstances didn’t stop him from becoming who he is and were his brand his taken him. Much success has come from Spotify and I am grateful that someone thought of this wonderful music streaing platform. Over the years, I have seen how Spotify has grown in popularity and I think that Daniel Ek’s entrepreneurial mindset and determination has been a contributor to his success.