Daniel Ek – The Future of Audio

**Patrick O'Shaughnessy** (0:04)
Hello, and welcome everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com.

**SPEAKER_3** (0:24)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (0:49)
My guest this week is Daniel Ek, the founder and CEO of Spotify. In my conversations with Daniel, I found him to be one of the most interesting and thoughtful business leaders in the world. You'll see what I mean as you listen to our conversation. We talk about Spotify plenty, but what I so enjoy about Daniel is his way of thinking in systems and frameworks. He is committed to evolution, innovation and growth for both himself and for Spotify, and is on my short list of CEOs to emulate.
This was one of my favorite conversations on the podcast. I hope you enjoy it.
So Daniel, so when we were walking around the West Side Highway a couple months ago, I kept pulling up my phone to take notes for topics, because I knew we would be doing this one day. And one of my favorite stories that you told me was of a chocolate maker that you met, I think, in Dubai, and some management lessons that came from this gentleman. I'd love you to start by sharing that story and that lesson.

**Daniel Ek** (1:37)
Yeah, sure. It's almost a little bit embarrassing. But yeah, I was on vacation in Dubai and obviously couldn't help myself. So I found myself at a dinner one night meeting this couple of this older man, and he'd been golfing, I think.
And so I asked him what he did and he was telling me this story. He actually didn't want to get into it, but then eventually kind of told me the story about how he was in the chocolate making business.
And I'm really into business, so I ended up obviously asking him all these questions about what kind of chocolate, how does it work, who do you sell to, what's your custom line? Yeah, exactly. And long story short, we were talking about it for a while and I couldn't help myself because he ran a business that I think was growing at like maybe 10% a year, was widely profitable and he clearly was enjoying life quite a lot and he was mostly talking about how much he was golfing.
And I kept on pushing him on sort of the boundaries. Why couldn't he grow 30% or why couldn't he grow 50%? And after a while, I think he had it with me and he kind of just sat me down and said, Hey, Daniel, I'm just going to tell you this. I live a very, very comfortable life. And I do what I do because I can live the life that I want to live. But if I would have tried to grow at 30% or 50%, there would have been all these things that would have just started breaking. And that would have eventually meant that I couldn't hire, have the people that I have running my company and have to hire new people to run my company. And I'd have to be a lot more involved. So I choose not to do that. If you choose to be involved in your business and want to replace your people and you want to build your business and be really involved, that's your thing, but that's not what I want to do. And it kind of struck me in that moment because I think nowadays that growth is this really interesting. It's almost a function of a company. You can see very clearly, like you have to build all the processes, you have to build all the systems in anticipation of that growth, because it's so hard for people to comprehend what exponential growth looks like, or even see around corners and see where something three times the size of what it is today, what are some of the issues that you're going to run into at that point.
And so it was probably one of the most important management lessons I've ever learned, because I realized that I would have to think differently about how I build my company on the basis of how quickly we were growing.