Daniel Ek: The Self-made Billionaire

shutterstock_226042204.jpg

It’s hard to imagine life without music - especially for students, without Spotify. The music streaming platform has enhanced the music listening experience for many and have allowed users to indulge in new social dimensions through music sharing. In the present day, the reliance on music to liven boring commutes, muffle background noises or bring life to parties has become the norm; resulting in us searching for a platform that can cater to our ever-changing lifestyles.

Spotify has revolutionised the music listening and sharing experience by creating opportunities for emerging artists and growing new communities within the music industry itself.

So why do so many people use Spotify? How did it become the number 1 most used music streaming service - pushing its competitors such as Apple Music and Google Play Music into the dust?

  Meet Daniel Ek - a 35 year old entrepreneur from Stockholm, Sweden; co-founder and CEO of Spotify.

Meet Daniel Ek - a 35 year old entrepreneur from Stockholm, Sweden; co-founder and CEO of Spotify.

With so many music streaming or downloading services available prior to the emergence of Spotify in 2008, how was Spotify able to make their mark in the industry?

Operating with a ‘freemium’ business model, Spotify allows basic services to be free, whilst additional services are available through a paid subscription.

Due to its innovative business model and simplicity, Spotify has gained the upper hand on competitors by providing access to music through either advertisements or its subscription service, rather than charging for song downloads. So with so many listeners opting for the more user and wallet-friendly option, Spotify has emerged to become the pioneer of music streaming.

  “I’m not an inventor. I just want to make things better”

“I’m not an inventor. I just want to make things better”

At the young age of 13, Ek began his entrepreneurial journey by teaching himself how to write code and utilised this self-taught skill to build websites for local businesses. Working from his bedroom or high school computer lab, Ek initially designed website home pages for close friends charging $100 to $200 - and it was through this he saw an opportunity to expand his business with the exponential growth of the internet in the 1990s. Riding the dot-com boom, he began working for local companies and started charging up to $5,000 for his services.

Pursuing his love for music and programming, the tech pioneer set out to chase ambitious goals. At the age of 16, Ek was already earning more money than his mechanic father; the young tech entrepreneur mentioned in a 2013 interview that his parents had “no clue about his lucrative businesses” until they noticed the teen had a growing collection of expensive guitars and video games piling up. By the age of 18, the tech entrepreneur was already managing 25 employees and earning around $50,000 a month.

“I don’t think there were many 13 year olds that had a 1957 Fender Stratocaster in original condition and things like that, but I did”.

Whilst being enrolled in the KTH Royal Institute of Technology, Daniel Ek realised he had different visions and aspirations; leading him to eventually not complete his studies and quit without his degree in engineering after only the first eight weeks.

At age 23, Ek founded Advertigo - an online marketing company which he later then sold to a Swedish digital marketing firm for around $1.25 million. It was already at this age Ek had built a stellar career background that was unrivaled. The young tech pioneer then later worked for uTorrent as CEO and continued to build the foundations of his music streaming service, Spotify.

Teaming up with the co-founder of TradeDoubler, Martin Lorentzon, the pair put the plan of developing the now ubiquitous music streaming service into action. By 2008, they had obtained licenses with record companies to allow the launch of Spotify into the European market, and despite the little interest being expressed from the music industry due to the service earning the industry less revenue, Spotify continued to become increasingly popular amongst not only users, but also investors after its successful launch internationally.

Daniel is now a self-made billionaire with a net worth of around $2.5 billion as reported by Forbes. Today, Spotify provides access to more than 30 million songs to over 150 million active users and 70 million premium subscribers - making itself to be the world’s largest streaming service.

 

Sources:

Startups.co

Forbes

CNBC

Expressen