THE STORY

In 2005, Daniel Ek and Martin Lorentzon met in Stockholm for the first time. Despite having different skill sets and personalities, the two hit it off instantly and became friends. That year, they spent most of their time at Ek’s apartment discussing business ideas.

During their hangouts, the two would regularly listen to music on Ek’s home theater system. They couldn’t help but notice how complicated it was to find and download the music they wanted. It was a time when Napster was king, making it possible to (illegally) download music, for free.

In fact, illegal downloading had been around for years, causing painful losses to the music industry. Although legal solutions existed, they were either unattractive financially (iTunes, $2/track) or just unattractive 👹. So, the two wondered: “What if there was an easy and cheap way to access music, legally, without the hassle of downloading it illegally?”.

Suddenly, an idea dawned on them. In 2008, Ek and Lorentzon began developing Spotify, a music streaming platform unlike any other. For a mere $10/month, users can access over 30 million songs, hassle-free. But users were not the only winners. With their revolutionary model, Ek and Lorentzon offered the dying music industry a way back to revenue—and to life.

Many have tried to compete with Spotify. Recently, Apple tried to fight back through Apple Music. But 10 years later, Spotify remains the leader of the music streaming industry, with over 140 million active users worldwide.

From left to right: Martin Lorentzon and Daniel Ek.

 

ABOUT MONOPOLIES

When customers get in the habit of using a (user-friendly) solution, it is very hard to make them switch to a competing service. Thus, detecting a problem early on and building the ideal solution can make you an industry leader for a long time.

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Sources:

© Story by Tarek Issa.

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