Daniel Ek: Life After Spotify, Broken Healthcare Incentives, Catching Disease Early & AI's Potential

Well, thank you so much for having me. It's good to be on.

Yeah. Well, I usually start off by sort of saying whenever anyone asks me about the story, it's like, well, I had hair when I began this and by the end of this, I obviously ended up being bald. So, you can see that it wasn't an easy journey. All jokes aside, I mean, just to kind of set the scene, I started Spotify in 2006. I was 23 at the time. And the world looked a little bit different. So this is pre-iPhone, pre-I mean Facebook existed but it was college only, YouTube didn't exist. So just like that kind of dates me but this is before all the things we now take for granted. And the world at that time and the music industry at that time was in freefall because music piracy was kind of rampant. So we had Napster, we had Kazaa, we had all these things. And there was an organization called the RIAA that went around and actually sued individual consumers in the US for illegally downloading music. And so I was sitting in Sweden and I was thinking to myself, you know, this is wild and this is crazy. There's no way to put the genie back in the bottle. And me and my co-founder Martin, we were kind of sitting and spitballing startup ideas at the time and Martin asked me like, well, you know, if you could do anything you'd like to do, what would you do? And I said, well, you know, my real passion is music but that seems like a really stupid idea. And he's like, well, why is that a stupid idea? And I kind of told him about, you know, it's really hard because you have to do all these deals with the record companies, you have to then figure out how to do licensing, copyright, and you have to do all of these different things. And he said, 'Well, what if you did this?' And then he kept asking these what-if questions and eventually I ran out of reasons to say no. So I said, 'Well, I guess you could do something and if you did something, it would feel like you had all the world's music at your fingertips.' And he's like, 'Well, that sounds pretty good.' And I said, 'Well, okay. Well, let's give it a try.' We started trying to license music. Originally the idea was to try to go global from day one and everyone was just laughing at us when we were originally saying that. But I sort of lucked out because it turned out that one of the worst music markets in the world was my home country, Sweden. And part of the reason why it was one of the worst music markets was because we had super fast broadband already from the early 2000s. So we were kind of living in the future where people had such quick bandwidth connections that they could download pretty much whatever they wanted. So they were doing it and iTunes actually wasn't even available in the marketplace, that there was literally no legal options. So I think the music industry had lost like 80% or something of its revenues. And so it was kind of this crazy coincidence and kind of all of these things, the confluence of events where we figured out, you know, that me and my partner, we basically took all of our own money that we had made from prior startups and we said to the record labels, what if we would guarantee you that basically you'd keep your bonus for the next year and you make your budget for the next year. You know, if this really is as bad as you think it is, then you just shut it down after a year, but you still made the bonus. And if this actually works, you win as well. So, you win no matter what. And they're like, 'Okay, well, this seems kind of like an interesting idea.' And they eventually after a few years of negotiation agreed to it. We launched in late 2008. And it instantly became a huge hit. We then took it to the UK, and made it a huge hit there. And then in 2011, 15 years ago now, we launched in the US. And yeah, I mean, and the rest is sort of history.

Yeah. But you know, the crazy thing is I'm on the same journey now again.

Or maybe I just have a high pain tolerance. I'm not sure which one.

Yeah, it's kind of crazy. I had forgotten about it but my team now showed me very recently like I apparently did this launch with the FT interview in I think 2012 or 2013 or something just after the US launch of Spotify where I was talking about healthcare already back then. So I've been thinking about healthcare specifically for a very, very long time. And it's just been, you know, I think a lot of people just talk about sort of all the stuff that's going bad in the world, but my view is that actually most things are going pretty well and it's kind of up and to the right on the technology curve and all the things that we're getting, but I try to focus on the problems that aren't going that well. You know, one of those happens to be healthcare. So, I've been kind of interested about this as like, you know, how is it that we're spending more and more money on healthcare but getting worse and worse outcomes? And what can we do about it? And so, that really kind of got me into the space. I think healthcare is kind of unique and kind of special. I honestly didn't have any money until Spotify went public. So, I wasn't a prolific angel investor.

That was 2018. We went public, right? Yeah.

Yeah. The more instruction they need, probably the less chance they're going to succeed.

I started researching the space a very, very long time ago. Maybe just as a quick primer for the audience, the US is spending 18% of its GDP on healthcare. It's the single largest line item in the budget right now. And if you take heart disease alone, it's in the hundreds of billions of dollars that are being spent on that disease group alone in the US alone. I mean, it's just insane. It's larger than Fortune 10 companies' revenues, just one disease group. So it's a gigantic problem as I mentioned and so I started looking into everything from like, you know, drugs to, you know, can you make more efficient drugs, is it about cancers and basically started like targeting like what are the real reasons why it looks that way and I think the real conclusion ended up being there's lots of reasons, not one. You know, we see, but we see a few really big ones. Cardiology or heart health is a major one. We see skin cancer, melanomas being another big one. So there's a few sort of major groups of illnesses that is over-representative. But the major one is really chronic disease overall. And the crazy thing about chronic disease when you read about it is that if you discover these things early, they're totally preventable. And the cost of dealing with them is very small and the suffering for the person, you know, that are having it in their family and community is very small too. So the key thing is if you discover things early, you're actually good and so then the question is well why don't we discover things early and it happens to be that we don't have enough data. Everyone in the entire healthcare industry is in agreement that we have to take healthcare from reactive to preventative health and but then now all the disagreement starts which is how do you do that and our view, my co-founder Yalmer and I, our view is really that it all starts with having better data. If you have better data, you're going to be able to discover things much more easily. And that in itself then leads to have a chance of discovering those things much earlier which then creates this virtuous flywheel of then changing healthcare.

Yeah, that's the holy grail is to get to that point and essentially our view is that the way you get there is that you need a lot more data than you have today both from each modality that you gather data but also across multiple modalities and you need it longitudinally. So you need it over time. So if you had a lot more data and you had it over time, you'd be able to have a lot higher likelihood of doing those kind of predictive analysis. And then what we then said was well, okay, how do we do that? And it so happened to be that if you think about really what's happened in the last 20 years one of the biggest innovations of course is the smartphones and we've had more and more sensors packed into those smartphones. So there's more and more cheap sensors and cheap electronics that's available to us. So our view was like, okay, well we should be able to utilize this to build a lot more sensors than what's been able to be built before. And then the other thing, you know, we started pre the LLMs and everything like that but it was then called machine learning but today we talk about it as AI, we should have a lot better intelligence. So if we have all of these massive data sets, we should be able to make really good predictions about it. And obviously again similar to that, this is exactly what we learned with Spotify too. The more data we're able to gather, the better predictions we're able to give you about what song to play next. And so this is exactly the same thing that you now need to do in healthcare, but obviously it's across multiple modalities and now across longitudinal data sets as well.

Yeah. Maybe I'll start there and then we can get into it. So in a very simple way, the experience of Neko today and in Gen 2 is it's $499. It is a reinvented healthcare experience from the ground up, vertically integrated. We do everything from building our own facilities to having our own nurses and doctors on staff to building our own diagnostic equipment to doing everything on our own on the software side. So it's really kind of an end-to-end solution that we've designed from the ground up and we designed it with the goal of creating the most valuable hour you can invest in your health. That's the mission that we have. And that's what we're coming to work to do. You know, every day at work the experience is really you come in, the first thing you typically tend to do is that you draw blood from us. So we then measure 53 blood markers. You then go through our skin rig where we have a camera system that takes over 6,000 super high-res images across your body where we index every mole and lesion and all of the possible rashes and rednesses you may have as well. That gets indexed. We then look into your heart and blood circulation. And we look at grip strength. All the sort of traditional markers that we have very good scientific evidence are a valuable indicator as you think about sort of health. Then at the end of this visit that lasts for about an hour, you get uninterrupted time with the clinician and you go through all of the results including the blood works during that hour. So you have a complete set where you can go through your values within that hour with your doctor and the doctor will answer any questions you may have but you will also with that clinician sit down and go through results, you know, about things you may even want to improve as well when it comes to your health. So that's the experience that we're launching with today in New York in the US and obviously we'll launch in many more places across the United States over the coming months.

I think first and foremost the important thing to mention is as I mentioned we started this in 2018. So this company's been around for 8 years. We've done more than 100,000 scans already. So we actually publish data every year. So we've just published our third year data survey where we go through the health outcomes that we have across our members and around 1% of our members have a serious underlying medical situation that is undiagnosed that we discover. So, you know, again the good news is many of our members are healthy and we're just talking about improving their current health status and as you correctly pointed out a lot of that ends up coming around stress, around diet, around sleep and those things. But the most encouraging thing we're finding now as we've done these studies for three years in a row is that the people with the worst health status are the ones that are improving the most. So it turns out that this ability of having a clear visual understanding of where you are in your health journey currently today and having a clinician that sits down with you explaining the situation and possible remedies to that is a huge benefactor for getting people to start improving things around lifestyle. So we've seen members that have gone from year where they've been smoking to not smoking as part of then having to do this Neko and prioritizing their health. We've obviously seen people with severe medical underlying illnesses that have gone from discovering those and then treating them and having much better overall health as a result. So it's really kind of all across the basis but I'll give you a very concrete example. So take dermatology as a great example. The average person at Neko today has 950 moles. It's pretty crazy.

Yes.

Some percentage you can't tell I guess is the punch line here. They're like not detectable by the... well if you really went through your skin you'd be surprised how many you'd find. I mean it's a big dispersion. Some have, you know, many, many thousands. Some of them have...