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How Spotify Started?


Spotify is a Swedish audio streaming and media services provider.


It is the world's largest music streaming service provider, with over 381 million monthly active users, including 172 million paying subscribers.


The Founders

Spotify was founded by the duo Daniel Ek and Martin Lorentzon.


Daniel Ek is a Swedish billionaire entrepreneur and technologist. He studied engineering at the KTH Royal Institute of Technology before dropping out to focus on his IT career.


Ek also served as the CTO of the browser-based game and fashion community Stardoll.


Ek later started another company Advertigo, an online advertising company, but he sold it to another company.


After that, he briefly became the CEO of μTorrent, working with μTorrent founder Ludvig Strigeus. This ended when μTorrent was sold to BitTorrent on December 7 of 2006.


On the other hand, Martin Lorentzon is a Swedish entrepreneur and co-founder of Spotify.


In 1990, Lorentzon began his studies at the Chalmers University of Technology where he studied industrial economics and later finished with a master of science and engineering degree.


He attended economics courses at the Gothenburg School of Business, Economics and Law.


Lorentzon also studied economics at the Stockholm School of Economics and took courses in rhetoric and argumentation at Stockholm University.


How Spotify Was Created

In April 2006 Ek and Lorentzon decided to start a new company. Lorentzon gave one million euros to Ek to help Spotify start off.


In June 2006 Spotify was registered. Spotify was started as a music streaming service earning its profits from online advertising, a business that they both knew very well.


They created Spotify as a way to deal with the problem of music piracy. Before the music streaming services got popular, there were many who downloaded pirated music files which was a huge blow for the whole music industry.


Daniel and Martin realized that music streaming has a huge potential which made them start Spotify.


In the same year, Spotify managed to have licensing deals with Universal Music Group, Sony BMG, Warner Music Group, and more.


The year 2010, when Mark Zuckerberg agreed to a partnership between Facebook and Spotify.


In addition, Spotify released the most remarkable upgrade that enables subscribers to connect Spotify to Facebook, the capacity to publish music profiles on the web.


The Name Spotify

The name 'Spotify' happened when Ekl and Martin were yelling out some possible names for their music streaming business


Ek misheard the name 'Spotify'. When they searched the internet they found that the name was not taken which made them settle on the name 'Spotify'.


Spotify is made up of two words "Spot" and "Identify".


Global Expansion

In February 2009, Spotify opened public registration for the free service tier in the United Kingdom.


Since the rush for it was too much, Spotify halted registration for the free service in September, returning the UK to an invitation-only policy.


Spotify launched in the United States in July 2011 and offered a six-month ad-supported trial period.


In January 2012, the free trial periods began to expire, and limited users to ten hours of streaming each month and five plays per song. A few months later, Spotify removed all limits on the free service tier indefinitely.


Spotify announced a major expansion of its United States operations, approximately 1,000 new jobs and retaining 832 existing positions in September 2017.


The following year, the company announced a total of 13 new markets in the MENA region, including the creation of a new Arabic hub.


How Spotify Remained Relevant

First off, the company has not rested on its laurels. Spotify has a clear customer retention strategy.


Which is, the end-of-year Wrapped music reports, constant suggestions for new content, and encourage you to share what you're listening to are three examples.


Spotify works to continuously improve its existing features, like revamping its podcast charts to help you discover new favorites.


Secondly, Spotify's free membership is a natural lure for those who want to listen to music on the go.


Although there are ads, it is still better than apps such as Apple Music, or Amazon Music whereas the free versions are limited.


Thirdly, strong branding. Its aesthetic is on-point, from the green and black logo to the fonts and colors it uses in its graphics. One look at it, you will instantly know what it is.


Lastly is a nurturing environment. Spotify is headquartered in Stockholm, a city with a thriving startup and tech ecosystem.


Being in the heart of Sweden, a company famed for its work-life balance also helps. And even for other employees outside of Sweden, these two values have spread across its offices.



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