So, I text Daniel E this morning. I was like, "Hey, I'm recording with Gustaf. You've known him for, you know, two decades. Tell me what I should ask him." And he goes, "Ask him to tell you how he prepared for the CEO role. We did something quite unusual. Can you describe what happened?"
Daniel's very big on preparing. You know, Daniel, he's not very rash in decisions. And so, this was one of those decisions as well that I think grew with him for a long time. So already about three years ago, he asked me and Alex Nordström to step up and become co-presidents and sort of start to run the day-to-day of Spotify for him. He was still the CEO and so he's been gradually like giving us more and more rope to run the business day to week to week and then month to month. So when it actually came to sort of taking over as CEO, we already knew that part like by heart and we had ran it for 3 years, the full P&L and balance sheet and so forth. And then there was still a lot of new stuff to learn. You know, all the stuff that was Daniel's responsibility alone, like, you know, PR, government, being the public face of the company. But we were very well prepared for taking over the business. I think that's unique with Daniel. I worked for Daniel for almost 18 years. And I don't think I'll work for anyone except Daniel again. I've had both great bosses and not so great bosses. Daniel is the great one. And he's incredibly delegating, you know, already from the start. I remember when I joined Spotify was back in 2008, 2009 and then we were going to go to the US and Daniel knew Zuckerberg at Meta then Facebook and we wanted to do this pretty deep integration with him and yeah I was new on the job at Spotify and Daniel just said like can you just go there and like talk to Zuck and met them like over Facebook at the time and like set this up. I'm like that's a lot of trust for someone who's new. So he's always been like super delegating and that is also I think why I've stuck around for almost 18 years because you get so much responsibility. It's like you get a new job almost every year. And so this like co-CEO or co-president partnership that he started 3 years ago was one of those journeys where you know Alex and I got to step up and try taking on the full business. We actually changed completely how we run the company from the way Daniel runs it.
You know when it comes to organizational models in themselves, this is not something I came up with. I think you know Steven Sinofsky said this a bunch, you just can't win. There's no organizational model, you know there are many and they all work like Amazon is organized in a certain way, trillion dollar company. Apple in another way also trillion. Elon does his thing, you know also produces trillion dollar companies. So there is no right way. You just have to pick one that fits your personality. So I actually think organizations are quite based on personalities. And Daniel has a very specific personality. I think he is not the typical sort of alpha male founder which I think is one of the reasons why it's so successful in this type of business because if you think about what Spotify is, yes it's a technology company doing sort of hardcore technology innovation but it's also a media company working in an industry with a bunch of, you know, first music labels and then book publishers and podcast publishers, some of these very big personalities in the media business as you can imagine. So he needed to be able to both rally a team and build world-class technology, but also get all of these people with the big personalities to work together and get to do something that they didn't want to do individually and not as a group. And I still don't understand exactly how he managed to get all of these people to do sort of what he wanted, but it certainly wasn't through like alpha male force. It was through not being threatening, being very logical. He's very humble, but I think maybe most, you know, Americans specifically can mistake humbleness for weakness. It's the opposite. He's insanely tenacious. Insanely tenacious. Just never gives up. So he has a very specific leadership style and that shaped the company. And as I said, there are a bunch of incredible advantages to his leadership style. One thing that I think that I do choose to do differently is Daniel loves to talk in a star pattern one-on-one with many people. So he would talk to me about something, separate meeting then with Alex Nordström about something the same thing but from the business angle and then maybe with PR and finance he just talked in star pattern, he doesn't like to have meetings everyone in the room and that can be frustrating at times, you know it's like he says something to me, something to Alex and then Alex and I meet I'm like this is what we're going to do and Alex is like not quite that's not what he said to me and so then you know we go back and we call him out on it. But he likes that star pattern. Alex and I chose to do something very different. We chose to synchronize the whole company. And so you can think about Spotify as sort of a two-function org. I run product and technology by and large. Alex runs sort of business and content by and large, but instead of sort of doing the divide and conquer, which is a good idea, you divide and conquer because it's more effective. But it has the cost that you're unsynchronized. So instead of doing the divide and conquer in separate swim lanes, we do this thing which I've called synchronized swimming where we kind of swim together which is much harder to do than competitive swimming. And when you mess it up, it is ugly to look at, but when you do it well, it's a beautiful thing to look at. So we decided to instead of having our the usual sort of you know I meet with my director reports and we talk about product and technology he meets with his and talks about business and content and then our people meet in the org somewhere and they fight it out which is how most companies work. We chose to say we're not going to have our own leadership meetings. We have a single one with all of our SVPs. So we have a single meeting every Tuesday called the E-team for three hours with all the SVPs of all the internal functions like you know marketing, ads, subs but also all the product and technology functions in the same meeting.
How many people are in this meeting?
What happens is we meet every week to talk through the entire company. So we talk through you know machine learning problems that are blocking on a user experience problem, problems where you know we want to ship this music video feature and so forth but often that music video feature is blocked maybe on a licensing discussion that sits in Alex's org. So the whole reason for the E-team meeting was that previously actually under Daniel's sort of tenure we were in so many meetings where someone said like well I'm blocked on that person in that org or that person is not in the meeting. So people said, "Let's take it offline." And we got so tired of hearing this phrase, "Let's take it offline" that we did a meeting and we said, you're never allowed to say, let's take it offline again. Everyone that represents all functions should be in this one meeting so that when you say like I'm blocked on licensing, well, licensing is right there across the table. Now, let's talk it out in real time. So, we changed how the company operates and we have this synchronized operating model that is expensive in time. You have, you know, 14, 15 people times three hours per week. That's a lot of leadership time and the conversations are not relevant for everyone at every time. Sometimes we talk a lot about content that may be not that relevant or ad strategy that may not be that relevant to someone in personalization but the cool thing is we talk about everything. We talk about P&Ls and balance sheets and we talk about machine learning problems in there. So you have now 14 people that have the full CEO perspective.
Yeah, I was going to say you use the word not relevant. I just finished reading Kelly Johnson's autobiography. He's the one that did Skunk Works inside Lockheed and his whole thing it was like no separation between any department like engineering, designing, manufacturing, it's all the same thing. We're all working together. We all want the same context, the same shared base of knowledge.
So it's like it is kind of relevant.
It's just a question of time scale. So this thing about, you know, the person in experience understanding a lot about the ad stack, it won't seem that relevant right then, but then like the fact that this person understands how we make money is going to affect their product decisions in the future when they build a product because guess what? There are ads in the product. So now they're not going to make decisions that go against our monetization strategy. So it is very relevant. It's just relevant on a longer time scale. So I think of it as investment but it is contrarian. I think many people would say like you should not sit in a meeting. I hear people saying like the second you're in a meeting you feel it's not fully relevant leave.
And like I said he's not wrong. He's built some of the most successful companies on earth. It's just different approaches. We've chosen this approach.
So we have a very senior group that has a complete perspective of the company and I think that's right for our company because there's so many dependencies between you know licensers and relationships we have and contracts we have and how we can build a product and all of these things. It's very hard to divide and conquer a product like Spotify and I think you know there's this truth out there that eventually your org chart shows up in your product.
And because we have a single experience strategy, our strategy is literally a super app. We try to build first music, then podcast and books and more things into a single product. I think our biggest risk is to ship the org chart. So if we divide it and set everyone just run in parallel, I think it will feel very good for about 6 months. Then the experience will just start crumbling because you're externalizing all that complexity to the user instead of taking the fight internally and coming up with like a single experience. So in terms of organizational models, you have functional orgs where it has the benefit of clear leadership, clear ownership but supposedly hard to cooperate when you want two functions to work together. You have the matrix org which has the benefit that it optimizes for sort of the use case but it's unclear even who you're reporting to. Then you have sort of the division based org like a Riot Games. You know you organize by game and you break out the technology platform into its own org. Amazon is actually kind of a gaming org like divisional with a strong platform underneath. And so on that scale, I've chosen to be actually very close to Apple because I think they cracked the problem of building something that is very very complex underneath the surface like insanely complex and it still feels like it was built sort of by a single person for a single person. So that's what...
Tell me how you think Apple's run. What I think is interesting about Apple is when I look at it from the outside, it's a functional org, right? And functional orgs. I used to work at Yahoo for a while.
At Yahoo. I sold one of my companies there. And what I thought I didn't learn anything there, but I learned a lot about what not to do. It was a completely messed up company back then as well. I think I had four CEOs in like two and a half years or something. But all the EVPs and SVPs, they fought each other to the death and try to hide information from each other. So supposedly on paper I think Apple should not be very well positioned to be able to build that kind of product. I always marvel that why aren't those functional leads just fighting each other? That's what usually happens. The only answer I've come to as I've spoken to people there is that it actually has to do with tenure of leadership which is one of the principles I've also tried to internalize at Spotify. So they have very long tenure at the senior leadership which means that these functional leads have found a way to work together to synchronize. So sometimes it's the hardware function that innovates and takes the lead and then software and services follow and sometimes it's a software function that takes the lead and they follow. That only works if you have super high trust in the leadership which I think stems all the way back from Steve Jobs and they managed to keep that but in theory I think functional orgs tend to dissolve into politics without the tenure, without the key.
So at Spotify, most of the people that work for me, many have worked for me for 14, 15 years. I think the average is maybe seven, eight years. And then it works to have a functional org. If you don't have trust in the leadership, I think functional orgs just dissolve into politics.
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This speaks to your previous statement that there's not one right way to do it. There's multiple different ways. I just had this conversation with MrBeast and we talked about this and because you know I was like very curious especially in media like your top creative talent is so hard to manage and to integrate to keep. I was like do you have a lot of turnover on I'm not talking about like the people on the production. I mean your actual your top five most talented people. There's a lot of turnover there. And he's a huge fan of founders. And so we talk about entrepreneur history every time we speak. And I was like what's interesting to me is you take Larry Ellison who he believed that one of the secrets of success at Oracle is the fact that they kept I think he said the core kernel of the product team together for like two decades or something like that or maybe decade and a half. And you take Elon Musk who again Larry mentored. Elon says that you know one of the few people he goes to for advice is actually Larry Ellison who says the opposite. He's like I want fresh blood. I want to keep turning through people as possible. It's like, oh, it's like Oracle's super successful. Elon is super successful.
I think this is the whole thing. You can't win. You can only not lose as much.
So the way I think about it, you have a bunch of organizational principles and as I said as I joined Spotify and had to like when I was at Yahoo, I said I never want to work in a big org.
I joined Spotify when I was like 30 something. I never expected it to get to thousands. Eventually I had to do the big org thing. And then I try to read a lot about organizational principles and models and I think at the time and I read a lot of Steven Sinofsky.
And his I think the thesis is you can't win. There is no right org. And companies they sit with one type of org and then you're going to be good at something and terrible at something. People look at the terrible thing and say like well if we flipped to like a matrix org we'd be great at this. They flip now they're great at this and terrible at the old thing. You just have to choose dimensions. So what we did at Spotify was we said we have to choose like the best outcome is that you're optimized for the thing that is important for the company and you suck at the thing that is not as important. The worst outcome is you're really good at the non-important thing and you suck at the important thing. So like figure out what's important then optimize for that and just accept that you're going to be average at the others. And so one thing we chose to optimize for was the single experience. We're really good at building a single experience that actually does a billion different things and most people don't even realize that on the back end it's even more complicated because you have a music business that is a royalty pool like so it's percentages out of a fixed pool music business that has a very different structure, podcast business that has ads. So when you click something in Spotify it triggers all kinds of different business models like on the back end it is insanely complicated.
I'm a huge obviously love to read. I read books for professionally for a living, but I also have hundreds of audio books on Audible. And I remember asking Daniel like how the hell like why did no one think like oh I like this book just press play it to go instead of like a five minute like audible like I can listen for 5 minutes I have to do the credits like awkward and I was like how the hell did you do that on the back end? He was explaining to me like the complexity on the back end too.
Yeah it's a very complicated model on the back end.
Especially because you guys are designing this super app though.
Let me if it was three different apps you could have again you could have had like different teams running in parallel. So, you're optimizing for a single experience, but do you have I feel you have an organizing principle like a northstar and this is why I spend so much time and I really admire like I've been to Stockholm like I think four times in the last like 14 months because I think of like the best founders usually can explain just a handful of words like what their life's mission is. So like we mentioned Apple. Let's talk about Steve Jobs. Steve Jobs did it in three words. He said insanely great products. You could hear him when he was 25. He talked about insanely great products when he was dying. Insanely great products. You want to make insanely great products, then you come with me. But you knew what was important to him. And I feel I don't know if you guys do this internally, but I've talked to, you know, Alex and Daniel and you a bunch. I feel your organizing principle is time well spent.
If you look at what we focus on and what we optimize for, you have a strategic lens, then you have sort of a business lens, and then an emotional lens. So the strategic lens is really that we saw a long time ago that the biggest challenge in the world is going to be distribution. You know when the iPhone came out, it felt like distribution was free. People went to the app store every day and looked for like what's the top charting free and paid app that stopped working. There was a lot of distribution through Facebook with all the install ads. That all went away. So from a strategic point of view when we were going into podcast which was like the first second product we did we looked at that and said okay there again it's all a trade-off we could do a separate app would be easier for us as an org because we can divide the org and people can run in parallel and so forth but is that the biggest problem to design the experience or is the biggest problem actually getting distribution and then we looked at in the app store and I think there was maybe it's probably 10, but at least seven really good podcast apps in there like Overcast and all these apps. And when we looked at their usage, I think Apple Podcasts was still like 98 and a half percent. So like the problem wasn't that there wasn't a good enough podcast product. The problem was that they didn't get distribution. So we chose to take that pain of doing a single app with all the complexity comes with that for the benefit of reaching what was then already 300 and something million users maybe. But it was much harder. We chose like pain and cost somewhere to get benefit somewhere else and we said like you know it's just software it should be able to adapt to the use case right which was contrarian at the time and then with audiobooks we do the same thing. So there was a strategic lens to that. Second thing we care deeply about is when we have to prioritize we do prioritize the user over ourselves over publishers and labels we do prioritize the consumer experience.
You saying we prioritize the user over ourselves is super important. So, a few months ago, we were racing cars together in Sweden. We and then we took a break from racing cars and we had lunch. It was me, you, Daniel, and Pia, who works at Prima Material. One, I know you're super competitive. How did you feel about losing racing to a girl, by the way,
I felt great about losing to Pia. She's an awesome driver.
She's It was very well deserved. She's one of my favorite people. I do anything for Prima Betteria. I love the entire team there. But this is where I kind of understood your philosophy because we also previously had multiple conversations. We had this really long lunch one time. But this is what I think you guys are special in the technology industry and why I like spending time and Spotify's you know what out of the whatever your favorite AI chatbot like chat app. It's like what's the best apps on your phone like Spotify is in the top two you know for anybody that uses it. But it's that you we talked at lunch. You knew there's dark engagement patterns and you can put into Spotify right now that would have people use the app more would have more retention maybe bring more users but it's not good for them.
Yeah. So this is our guiding principle like what does it mean to care about the user? You can care about the user experience, but if you really care about the user in some deeper way, it would be how they feel about what you do. And what happened with Spotify is you can say that we lucked into it because we started in music. Music is by most people considered almost an unequivocal good. Maybe there's bad music somewhere, but you know, very few people feel that music is a bad thing for the world. And it also happens to have a very large TAM. There is almost no one that doesn't listen to music. It's like bigger than social networking, right? Not everyone does social networking, but everyone does music. So, we started in this space which was very positive for the world.
And I think that was a deliberate decision from Daniel. He was passionate about music. He wanted to do something was meaningful. I don't think it was luck because if you look at the things he's doing now, it's in that same space of being good for the world and for Europe etc. rather than just more money.
Yeah. So I don't think it was an accident, but still you could say we lucked into it. But then we realized that this is important. We're bringing a lot of joy. So when we looked at what to do next, we looked at podcasts and we saw this thing where there was this, you know, the pattern on the internet already back then was shorter and shorter form content, shorter and shorter attention spans. And it looked like the world was lost, like this is just going to go to hell. But then you looked at podcast and you said no at the same time there are these very long deep discussions where people speak in full sentences get to explain full ideas. They don't necessarily get attacked. They get to retort and so forth. We said that we think this is actually good for the world. We didn't know how big it was going to be. So we had to take a chance on that but we thought it was a business opportunity and good for the world. That's our lens. So we went into that and we built podcast into Spotify. And it was the same thing with audiobooks. We think that books is one of the most important things that happen in the world and I'm very passionate about books but it's also a good business opportunity and we were fortunate to be in Sweden that for some reason tends to be pretty advanced in media habits. So in Sweden audiobooks is already very big things. We had quite high conviction over the market. So we've kept going into these things that are considered by ourselves and users time well spent, but we never fully articulated that as a strategy externally. We've only recently started talking about it.
Did you articulate it as a strategy internally though?
For a long time, we've had a strategy called no regrets, but we largely haven't said that externally. And I don't know if no regrets is the best. I think time well spent, you know, it's like that's a low bar. But we've said it again and again like is this really no regrets? What that comes from is interesting. We surveyed our users through a third party anonymously. We do that all the time. Someone comes and asks you what do you think of these media services without seeing who they represent. So you get the truth. That's how we understand how we're doing versus competitors and so forth. So we had them survey across all the big media platforms. And this is where the no regret come from. We asked the question like how do you feel about the time you spent using Spotify? All of them, the time you spend on Spotify, YouTube, Apple Music, Amazon, TikTok, all of them just understand how you felt about it. But then we also asked the opposite question. How much of your time did you regret afterwards? And what was interesting was when we got that survey back, there were two things that surprised me. One didn't surprise me so much. We were actually the lowest regret content sort of on the internet in terms of the platforms we asked for. Or if you flip it around, some of the time most well spent on the internet with, you know, Gen Z saying that they value almost 90% of the time they spend, they feel very good about it afterwards. So that was good. But what surprised me was the opposite without naming which ones on many of the big platforms people regretted almost 60% of the time they spent or more. And these were young people, you know. And what shocked me was before I saw that survey, I knew that these were insanely high engagement platforms, but I kind of mistakenly thought that they were there because they wanted to be there. I'm like, they're probably enjoying it. Turns out when you ask them, they're like, "No, I'm trapped. I feel horrible about the time I spend." So, I was mistaken in thinking that, you know, they were there and they loved the time. It's just very very captivating. So, then we decided, okay, we've had this as a saying internally for some time. Let's just make it an actual strategy to be some of the most time well spent on the internet. And so when we look at something, you know, we're talking about fitness now, for example. Why? Because we think very few people regret doing a workout or being...
What do you mean you're talking about fitness?
We just announced some partnerships with a bunch of companies and we're investing in more, you know, three quarters of almost 70% of people on Spotify work out with Spotify. So, we're investing more into fitness into becoming an even better fitness app. So, this is one area kind of like you know music, podcast, books. We're just investing more in it.
What would that look like? My partner Rob was running through Central Park this morning listening to Spotify. So, he was exercising while using your app.
Okay. So, this is going to come out in a few weeks. So, I'll tell you kind of what we're going to talk about at Investor Day. I'm a runner. I'm passionate about running and we see a lot of people running with Spotify and they make their own playlists. One of the things I want to be possible that's going to be possible very soon is that you go into Spotify, you just tell Spotify, this is one of the good use cases of AI. I think you say to Spotify, you know, I want a running playlist for like an 8 minute mile and I want it to be in my taste, but I want it to be on the downbeat either on both my feet or just one of my feet, right? And I want you to update it weekly. It's a pretty complicated task. So then what we want to be able to do is to first calculate like an 8 minute mile. What does that mean? Well, roughly if you're average height maybe 165 steps per minute or something like that. Okay. Now we got to go and find music in either 160 or half of that 80. So it's either in every downstep or every other downstep. Okay. You're going to find some music there but not a lot. So now you want to look a bit broader. And then you actually want to speed them up or slow them down to exactly 160 or exactly 80. And then you actually want to mix them together with perfect beat match transitions, right? And then you actually want to overlay commentary on top of it saying like now you're going to go into the interval part. And now you're going to slow down and so forth. So these are the kinds of experience that we're building. This is what I mean with going deeper into fitness. That's one of those no regrets areas or time well spent.
No one spends an hour in the gym or an hour running and come out and feel like, "Oh my god, I regret 70% of that." You don't.
So it's been our guiding principle. And what I think is interesting about it is, you know, I'm 50. I've done a lot of interesting things in my life. You got to figure out what you actually want to spend your life on, right? And I want to spend my life on doing something that I feel good about personally and that I kind of feel proud of. You feel good, but you know, like the way a human is going to feel good is if what they're doing is actually in service of other people. This is a I know you're into philosophy. This is a human truth for thousands of years ago. This is not a new idea. It's something that was true thousand years ago. It's true today. It will be true now.
Me and Milan, who's sitting over there, I was talking to he works at Spotify right before you came. I was talking to him about this because he's like, "You have two different podcasts on the business charts right now." And I was like, "Listen, this new show, I'm addicted to doing it. I can't sleep. I get wired from these conversations. I'm doing it selfishly. It's another form of education. But I really feel that like Founders Podcast is like my life's work. And the way I feel like when I put that out, I know it's good for the world. I know these conversations are good for the world. I was like, I'm not going to make podcast slop. It's not I'm not trying I want it to be entertaining, but at the core, it's like I want you to be inspired and educated by these people that have accomplished great things. And then the point was just like that knowing that like you can do it, too. That is good for the world. I feel good doing that and it's not like I need to make certain it's not tied to anything else other than like it's not like oh I wouldn't do this unless I can make X dollars like I don't give a shit about that. I care the money will take care of itself. I care about putting out good things to the world."
And I think to your point everyone gets there and every philosopher in history got there. The question is just like how late in life do you get there? I think you got there a lot earlier than some people.
It took me 32 years to find my path and another five and a half of struggling until it actually could sustain me. And then now I wake up every day like I have no doubts about what I'm doing. I was like I'm going to build again. I'm mining these old books of somebody did something amazing for ideas and insights that we can push down to the next generation of entrepreneurs. And I'm having conversations like this where we talked before I was like everybody's like oh you know you asked this perfect question for your audience like I'm having these conversations selfishly because I just know there's 10 million Davids listening to this that have the same interest that want to know what is in you. You said you're 50. You've been working at you sold your first startup then you work you have such a singular life experience is what me and Daniel were talking about earlier like who the hell sells their startup works at a big company for 18 years then become CEO.
It's a different path it's an unusual path.
I want to talk about AI because...
Can you say something on the previous thing first? What I think is interesting with this time well spent is these things are sort of easy to say I think everyone convinces themselves that they're doing good for the world even the ones who don't because most you know it's very I think it's very hard to be honest with yourself. Totally honest and saying like I'm not actually doing anything good for the world. Very few people do that. They convince themselves.
I have an example of this. Yeah.
That I want to talk about.
So, we get obviously all these pitches and don't forget that hopefully don't forget the way you're thinking.
But like listen, no disrespect. One of my favorite movies is The Godfather. And one of my favorite scenes is where Sollozzo goes to meet Marlon Brando and he's like, and Marlon's like, "Hey, it's none of my business how another man makes his living, but I can't get involved in that because, you know, you're dealing drugs to kids and it's not interesting to me." And so I feel the same way. It's like I mind, one of my principles I teach my kids is like number one, rule number two is like mind your own business. But I had somebody pitch me. They're like, "We want to partner, do a deep partnership as one of the prediction markets." And I'm on the phone with them and I didn't know anything about them, but the way they describe themselves, they're like, "We're building a maximum truth-seeking machine." And I pull up on my phone. I go to I'm not going to say the company. I type it in and I go, "Dude, the first thing I see on your website is who's going to win the coin flip for the New England Patriots game." If you're just saying we want to gamble and make a ton of money, I respect that. But don't give me this other shit there. You're building maximum truth-seeking machines.
Yeah. But that's my point. I think almost everyone has to convince themselves of all of that. So to kind of call bullshit on us then does it actually mean anything to do this? Well it means you have to stay away from some things. So one decision that we did recently was you know how old podcasts are turning into video podcasts and so we follow that.
The only reason I do video is because you guys harassed me.
Exactly. So they are very popular but there was a problem which was that you know a lot of people specifically parents who felt that you know they had this time well spent now they started seeing these videos in there that they didn't want to see there right so they felt that their time well spent was going down and then if we were faced with the decision like video is good for engagement but these people feel it is not good for their time well spent. So we made the decision sort of the anti-engagement decision to allow people anyone to turn off video if they want to and just listen not just for their kids but for themselves. So and that may mean that you know we take some engagement hit on that person. But so if you're going to have these principles you kind of have to live with them and they're going to have consequences. Now, we still think this is very good business because most of our revenue is from subscribers paying for their experience. You know, like almost 90% of the revenue. And I think that what you pay for when you vote with your wallet every month, you're not going to pay for your engagement or time spent. You're going to pay for the value you feel, right? If you feel that this was time well spent, if you feel that this was high value, you're going to say, "I want to pay for this." So I think when you pay with your own money that is very well aligned with optimizing what is good for the user whereas if in a pure advertising based model your incentives are clearly to maximize time spent at any cost. So I think it's a luxury for us because most of our revenue come from subscription to not have that pressure. Maybe we lucked into that business model maybe with some deliberate.
That's what I was going to ask you. There's no way you could have predicted that when you chose a subscription model but it had to be subscription model based on your very first product which is music.
Yes. So now that we see it we're doubling down on it and I think it's going to be the right bet for Spotify. I think people are getting more and more aware of how their time is getting captured and how they have less and less control over their life. This by the way leads us into AI which everyone is talking about and you know there's a lot of negativity around AI now which I understand and for good reasons. There is a promise for generative AI to be the most addictive algorithm you have ever heard of because now we can understand you so deeply. There is potential for darkness over there, right? But what we're trying to say is like there is, but it's a dual-use technology. You could choose to do something else with generative AI. And so what we're choosing to do for example is to give back users control over the algorithm. So the other thing you can do is which we're doing. So you can say like, hey David, here's who we think you are using LLMs and yeah, based on all your listening, this is who we think you are musically. This is the podcast we think you're interested in. These are the audiobooks that we think you're interested in. Then we can put a box where you can say like no you're wrong. Maybe that's what I do but it's not what I want to be you know I want much more I want even more biographies you know I want to get back into classical music which is something I've tried. But because I listen to mostly EDM. So now I can go in and say like now I want to have classical music and now I get classical music. The best way I think to describe generative AI is that finally computers understand English. Like it used to be a small population of about 1 million developers on GitHub who could talk to computers. Now we all can. And so I think consumer companies could and should give everyone access to talk to them in plain English. So it means that at Spotify we used to have these user research teams that sat with you know 10 users trying to understand deeply what they felt and what they did. Then we took those 10 users and tried to apply that to 761 million users. What if you could do that deep user research with every single user all 761 million of them all the time because you talk to them and they talk back in English high fidelity and the experience just adapts to what they want. So my mission now is to sort of give back control to consumers over these algorithms and it's contrarian but I think it's the right bet.
People like you and I will probably want more control but like you have 700 million users like what percentage of them do you actually think I feel like people just want you to do it for them.
