Skype and Kazaa: Niklas Zennström

**Guy Raz** (0:00)
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This thing is growing. There's a lot of excitement around it. Meantime, you do get served with papers from this previous lawsuit.

**Niklas Zennström** (2:43)
Yeah, I was walking out with my wife, and then someone comes up and calls my name. So I start running, because I didn't want to be served. Then someone else steps in in front of me, and then there's a motorcycle coming. So there's all these people from all different directions, and then of course a slip, and you get this thick pile of papers with a lawsuit.

**Guy Raz** (3:08)
This is like a movie.

**Niklas Zennström** (3:09)
Yeah. That was the moment that we wanted to avoid, but we knew it would happen at some point.

**Guy Raz** (3:22)
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how a small team of Scandinavian entrepreneurs disrupted two global industries and built two iconic brands, Kazaa and Skype.
The 1990s were a really different time. In those years, before Spotify and Amazon and Apple Music, if you wanted to listen to a specific song, you had to buy the whole CD at a record store. And if you lived in one country and wanted to talk to someone in another country, it was gonna cost you a lot of money, like a dollar or more per minute. But both of those frustrations disappeared practically overnight in the early 2000s. Music became widely accessible and shareable, and audio calls from one country to another became free. Now at first, it might seem like music and international phone calls have nothing to do with each other. But the new startups that were disrupting both the music and the telecom industries were all powered by the same provocative idea, peer-to-peer networking. Basically, you remove the middleman, be it big telecom or the music industry, and you let users find each other on the internet. And this was a totally revolutionary concept. Two friends, one Swedish, the other Danish, helped pioneer the technology that enabled much of this upheaval. Their names are Niklas Zennström and Janus Friis. The first platform they built was called Kazaa. And when it was released in the early 2000s, it made it easy for anyone to share a media file with anyone else on the internet. Kazaa was really cool and it was loved by many people. But it was soon crushed under the weight of several lawsuits by the recording industry. To them, what Kazaa was allowing was basically online piracy. So Niklas and Janus decided to try something else, to take the idea of peer-to-peer networking and apply it to telephone calls. In 2003, they launched Skype. Overnight, anyone with an internet connection and a cheap microphone could call anyone else with those things and talk for free as long as they wanted. Skype was eventually sold to eBay and then, in 2011, sold again, this time to Microsoft, for $8.5 billion. Since then, Skype has become less of a force. In fact, just recently, Microsoft announced plans to retire it. But regardless, in their respective moments, both Skype and Kazaa rattled powerful industries and helped upend the top-down hierarchy of the early internet. Niklas Zennström was and still is a serial entrepreneur who grew up in Uppsala, Sweden. It's a university town where both his parents were teachers. The family would spend their summers sailing around the islands in their small boat in the Baltic Sea.