Daniel Ek: Life After Spotify, Broken Healthcare Incentives, Catching Disease Early & AI's Potential

Jason Calacanis (0:00)

All right, everybody, welcome back to the All-In Interview Show, where we, the All-In Podcasts, dedicate an hour to just some of the great thinkers, creators of our time. And today will be no different. Daniel Ek is with us. You know him, the co-founder of Spotify, which he started 20 years ago, and he ran it for those two decades to an extraordinary state of affairs today.

Well over 700 million active users, over 300 million premium subscribers. But on January 1st this year, he shifted and became the executive chairman with me and David Friedberg today. Daniel Ek, how are you, sir? Welcome to the program.

Daniel Ek (0:47)

Well, thank you so much for having me. It's good to be on.

Jason Calacanis (0:50)

Yeah, it's good to see you. We've known each other for 20 years. I remember the first shack, your partner leaned into me at a Internet summit or something and said, hey, check this out and he showed me Spotify. But this was at a time when nobody had a subscription service. We're going to talk today about your new startup, which is incredible in the healthcare space. But take us back to the launch of Spotify and how that crazy idea got started, and then how hard it was to break through with the music industry, which are also known as the hardest partners in the world.

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Daniel Ek (2:00)

Yeah, well, I usually start off by sort of saying whenever anyone asks me about the story, it's like, well, I had hair when I began this, and by the end of this, I obviously end up being bald. So you can see that it wasn't an easy journey. All jokes aside, I mean, just to kind of set the scene, I mean, I started Spotify in 2006 I was 23 at the time, and the world looked a little bit different. So this is pre-iPhone, pre-I mean, Facebook existed, but it was college only. YouTube didn't exist. So just like that kind of dates me, but this is before all the things we now take for granted.

And the world at that time, and the music industry at that time was in freefall, because music piracy was kind of rampant. So we had Napster, we had Kazaa, we had all these things, and there was an organization called the RIAA that went around and actually sued individual consumers in the US for illegally downloading music. And so I was sitting in Sweden and I was thinking to myself, this is wild and this is crazy. There's no way to put the genie back in the bottle. And me and my co-founder Martin, we were kind of sitting and spitballing startup ideas at the time. And Martin asked me like, well, if you could do anything you'd like to do, what would you do? And I said, well, my real passion is music, but that seems like a really stupid idea. And he's like, well, why is that a stupid idea? And I kind of told him about, it's really hard because you have to do all these deals with the record companies, you have to then figure out how to do licensing and copyright and you have to do all of these different things. And he said, well, what if you did this? And then he kept asking these what if questions. And eventually I ran out of reasons to say it. I said, well, I guess you could do something. And if you did something, it would feel like you had all the world's music at your fingertips. And he's like, well, that sounds pretty good. And I said, well, okay, well, let's give it a try.

We started trying to license music.

Originally, the idea was to try to go global from day one. And everyone was just laughing at us when we were originally saying that. But I sort of lucked out because it turned out that one of the worst music markets in the world was my home country, Sweden. And part of the reason why it was one of the world's music markets was because we had super fast broadband already from the early 2000s. So we were kind of living in the future where people had such quick bandwidth connections that they could download pretty much whatever they wanted. So they were doing it and iTunes actually wasn't even available in the marketplace. So there was literally no legal options. So I think the music industry had lost like 80% or something of its revenues. And so it was like, it was kind of this crazy of, you know, coincidence and kind of all of these things, the conflicts of events where we figured out, you know, that me and my apartment, we basically took all of our own money that we had made from prior startups and we set the record labels. What if we would guarantee you that basically you'd keep your bonus for the next year and you make your budget for the next year? You know, if this really is as bad as you think it is, then you just shut it down after a year, but you still made the bonus. And if this actually works, you win as well. So you win no matter what. They're like, okay, well, this seems kind of like an interesting idea. And eventually, after a few years of negotiation agreed to it, we launched in late 2008