Supported by Greenhaven Road Capital, finding value off the beaten path.
Daniel Ek spoke with Patrick O’Shaughnessy about Spotify. It was fantastic. Music streaming seems like a difficult business because of the supplier power, competition, legacy agents, defaults, bundles, and varied stakeholders but Ek and his teams seem well prepared. Let’s see how.
The theme of Spotify’s success is to think about the job-to-be-done for suppliers and consumers. Ek believes that discovery is a common job to both music and podcasts.
“We don’t think the job-to-be-done is different at all between podcast and music. It is really the same thing, audio. And people are more than happy to have one service fulfill that… If you’re listening to music but also discover other things you may care about, that could be a great source of a way to learn about new shows.'”
But not for Spotify Kids:
“Maybe the most important part is that it’s a 100% curated experience, we don’t let anything into our kids product that isn’t vetted by our editors. So the job to be done, even though it’s similar content, ended up being vastly different because of the constituents.”
Musicians have a different job too: distribution. Ek said musicians earn 80% of their revenue from touring. Artists hire Spotify for marketing.
Jobs-to-done can be difficult to figure out. Uber’s job is transportation, sometimes via bus. Wine’s job was for Saturday, but become employed Tuesday too. Cinnabon’s job is decadence, not low-cal. Businesses succeed when they find a job and help their customers do it.
For Spotify their first job was to make listening easier. When asked how he competed with the early (illegal) download sites, Ek noted that the experience was awful. You had to find the song, hope it was what it was, get the song and son in. Though the music was free, the transaction costs were high. “It was clear from the beginning the magic experience would be if you had all the world’s music on your hard drive. That’s the feeling I wanted to invoke.” That was the job.
Identifying ‘the job’ can be tricky. Only buyers aren’t liars and businesses would do well to administer The Mom Test. At Spotify, they identify jobs partially thanks to their decentralized command.
“In our case, we do hack weeks like many other companies. But unlike maybe most, we don’t force people to go in one direction or another. We give them helpful context and guidance for things we’re interested in as senior leaders, like, ‘Here is where the strategy is going.'”
But don’t take ‘hack week’ or ‘decentralized command’ and copy-paste it. Ek said, “Unless you understand the system, you can’t just take one of the concepts out of it and expect it to work in your company.” As Chris Johnson explained, Discover Weekly was built by four engineers.
Thanks for reading.