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Innovation and Disruption: 5 Growth Lessons from Uber, Spotify, and Airbnb

GrowthHackers Team — Fri, 02 Jun 2023 13:09:05 +0000

In the age of rapid technological advancements and changing consumer behaviors, companies like Uber, Spotify, and Airbnb have emerged as pioneers in their respective industries. These disruptors have not only revolutionized their markets but have also demonstrated exceptional growth strategies.

By analyzing their early growth strategies, we can uncover valuable lessons that can be applied to other businesses seeking accelerated growth today. In this article, we will explore five growth lessons from Uber, Spotify, and Airbnb, diving deeper into each lesson with relevant examples.

Read the full story: Airbnb, Uber, Spotify, HubSpot, Etsy, Slack, WhatsApp and more. The strategies they used from early start to scale-up!

1. Embrace a Culture of Constant Testing and Learning

Uber, Spotify, and Airbnb recognize the value of continuous learning through experimentation. They prioritize creating an environment where employees are encouraged to explore new ideas, test hypotheses, and learn from both successes and failures. This culture of experimentation allows them to iterate quickly, adapt to changing market dynamics, and identify growth opportunities.

For example, Uber’s success is partly attributed to its willingness to experiment with different service offerings and business models. The company initially started as a high-end black car service but soon expanded into various segments like UberX, UberPOOL, and UberEATS. By experimenting with different offerings and learning from user feedback, Uber refined its services to cater to a broader customer base and maximize growth potential.

Other remarkable experiments by Uber are the Surge Pricing Experiment, where they experimented with dynamically adjusting prices based on supply and demand, and then later on further tested on adjusting messaging each public. In an effort to reduce costs and increase efficiency, Uber introduced UberPOOL as an experiment. This feature allowed riders traveling in the same direction to share a ride and split the cost. The experiment aimed to test the viability and user acceptance of shared rides, and it eventually became a successful offering that contributed to Uber’s growth.

Airbnb also leveraged experimentation for growth since the very start. Among the many experiments AirBnb runs at any given time, one experiment from their early days exemplifies how they apply an experimentation mindset not only to improve conversions but to provide an overall superior experience for hosts and guests. Recognizing the importance of high-quality photos in attracting guests, Airbnb conducted an experiment where they offered professional photography services to hosts. The experiment aimed to determine whether professional photos could significantly impact booking rates and improve the overall user experience. The results showed that listings with professional photos had higher booking rates, leading Airbnb to incorporate professional photography as a standard offering.

To expand beyond accommodations, AirBnb experimented with the Experiences feature. This allowed hosts to offer unique activities and experiences to travelers, ranging from cooking classes to city tours. The experiment aimed to diversify Airbnb’s offerings and provide users with a more comprehensive travel experience. The success of the Experiences feature led to its integration as a core part of Airbnb’s platform. Today, AirBnb runs over 500 tests consecutively to improve every aspect of their community’s journey.

Spotify’s growth trajectory is also filled with constant experimentation. A note-worthy example is their personalized playlists. Spotify continuously experiments with personalized playlists to enhance user engagement and satisfaction. They use machine learning algorithms to analyze user listening behavior and preferences, and then create curated playlists tailored to individual tastes. This experiment aimed to test the impact of personalized recommendations on user retention and engagement. The success of personalized playlists became a hallmark feature of Spotify’s platform.

Another interesting experiment was the podcast expansion. Recognizing the growing popularity of podcasts, Spotify conducted experiments to expand its podcast offerings. They acquired podcast networks and exclusive content, such as The Joe Rogan Experience and The Michelle Obama Podcast, to attract new users and increase engagement. These experiments helped Spotify become a significant player in the podcasting industry and diversified its content portfolio.

These examples highlight how Uber, Airbnb, and Spotify continuously experiment with new features, services, and pricing strategies to enhance their offerings, attract users, and drive growth. By conducting these experiments and leveraging the insights gained, these companies have been able to iterate and optimize their platforms, ultimately contributing to their remarkable success.

2. Make Data-Driven Decisions:

Companies with an experimentation mindset leverage data to drive decision-making. They understand the power of data in validating hypotheses and informing strategic choices. They gather and analyze user data, market trends, and performance metrics to make informed decisions on product development, marketing strategies, and expansion plans.

Spotify, for instance, continuously conducts A/B testing to evaluate new features and user interface changes. By measuring user engagement, retention rates, and conversion metrics, the company gains insights into what resonates with users and drives growth. These data-driven decisions enable Spotify to refine its product and deliver a better user experience.

Airbnb also relies on data analytics to drive decisions such as smart pricing and search ranking algorithms. Smart pricing leverages data on location, property type, seasonality, and demand trends to suggest optimal prices for hosts, increasing bookings and earnings. Airbnb’s search ranking algorithms utilize data on user preferences, search queries, and reviews to deliver personalized and relevant search results. These data-driven approaches empower hosts to optimize their pricing strategies while enhancing the overall user experience by providing accurate and personalized search results.

Uber’s data-driven decision-making is evident in its implementation of surge pricing and dynamic routing. Additionally, Uber’s algorithms leverage data on traffic patterns and road conditions to provide drivers with the most efficient routes. These data-driven strategies enable Uber to enhance the user experience, ensure reliable service, and maximize efficiency within their transportation network.

These examples demonstrate how Uber, AirBnb, and Spotify utilize data-driven decision-making to optimize their offerings, personalize user experiences, and drive growth. By leveraging vast amounts of data, these companies can make informed choices that enhance their services, improve user satisfaction, and maintain a competitive edge in their respective industries.

3. Encourage Risk-Taking and Fail Fast

Innovation and growth often go hand in hand with risk-taking and a willingness to embrace failures as valuable learning experiences. Companies that encourage risk-taking and embrace the concept of failing fast are better positioned to drive innovation, adapt to market dynamics, and achieve sustainable success. This holds true for industry disruptors like Uber, Airbnb, and Spotify. These companies have fostered cultures that not only tolerate failure but actively encourage employees to take risks and learn from their mistakes.

Uber has fostered a culture that encourages risk-taking and embracing failures as learning opportunities. The company understands that innovation requires taking calculated risks and acknowledges that not all experiments will yield positive outcomes. Uber empowers its employees to explore new ideas, test hypotheses, and iterate quickly. The company embraces the concept of “failing fast,” which means acknowledging failures early, learning from them, and pivoting accordingly. This approach is exemplified by Uber’s willingness to experiment with different service offerings and business models.

Airbnb empowers its employees to challenge the status quo and think creatively. The company encourages teams to experiment with new features, offerings, and marketing strategies. They understand that not every experiment will be successful, but the key is to fail fast and learn from the outcomes. This mindset is reflected in Airbnb’s growth journey, where they faced initial challenges in building trust among users. However, by iterating on their platform, implementing user feedback, and fine-tuning their offerings, Airbnb was able to overcome obstacles and achieve exponential growth.

Spotify’s data-driven approach plays a crucial role in their risk-taking mindset. By analyzing user data, engagement metrics, and feedback, Spotify gains insights into what resonates with users and what doesn’t. This knowledge allows them to iterate quickly and make data-informed decisions. Spotify’s experimentation mindset is evident in their continuous A/B testing of new features and interface changes.

5. Foster Cross-Functional Collaboration

An experimentation mindset thrives in a collaborative environment. Uber, Spotify, and Airbnb emphasize cross-functional collaboration, bringing together teams from different disciplines to ideate, experiment, and learn together. This collaboration ensures diverse perspectives, encourages knowledge sharing, and leads to innovative solutions.

Airbnb recognizes the value of cross-functional collaboration in delivering a seamless user experience and driving business growth. The company promotes a collaborative environment by encouraging teams from different functions, such as engineering, design, marketing, and customer support, to work together on cross-functional projects. For instance, when launching new features or enhancing the platform’s usability, cross-functional teams collaborate to ensure that all aspects are considered, from the technical implementation to the marketing and customer support requirements. Airbnb also fosters collaboration through regular cross-functional meetings, knowledge-sharing sessions, and team-building activities. By fostering collaboration, Airbnb leverages the collective intelligence of its teams to deliver innovative solutions and meet the evolving needs of its users.

Spotify places a strong emphasis on cross-functional collaboration, recognizing its role in driving innovation and delivering a superior user experience. The company encourages employees from different disciplines, including engineering, design, data science, and content curation, to work together in cross-functional teams. These teams collaborate closely to develop and refine Spotify’s product offerings, ensuring seamless integration of technology, design, and content. Additionally, Spotify promotes a culture of transparency and open communication, where teams are encouraged to share their knowledge, ideas, and insights. This collaborative approach enables Spotify to harness the diverse expertise within the organization and continuously enhance its music streaming platform.

Uber has successfully fostered cross-functional collaboration by breaking down silos and encouraging open communication and knowledge sharing across departments. The company promotes a culture of teamwork and collaboration, where individuals from different functions work together to solve complex problems. For example, Uber’s operations team collaborates closely with the product team to identify areas for improvement and develop innovative features that enhance the user experience. Furthermore, cross-functional teams are formed to tackle specific projects or initiatives, ensuring that diverse perspectives and expertise are incorporated. By fostering collaboration, Uber maximizes efficiency, promotes innovation, and drives continuous improvement across its operations.

By breaking down silos, promoting open communication, and encouraging teamwork, these companies leverage the collective intelligence and diverse skills of their teams. Businesses can learn valuable lessons from their approaches, emphasizing the need to cultivate a collaborative culture, form cross-functional teams, and provide opportunities for knowledge-sharing and collaboration.

5. Focus on Seamless User Experience:

In today’s highly competitive business landscape, delivering a seamless user experience has become paramount for companies aiming to stand out and succeed. By prioritizing user experience, companies can build strong customer loyalty, drive engagement, and ultimately achieve long-term growth. Uber, Airbnb, and Spotify are renowned for their commitment to providing seamless user experiences, setting industry benchmarks and revolutionizing their respective markets.

Uber has revolutionized the transportation industry by placing a strong emphasis on creating a seamless user experience from the moment a user opens the app to request a ride. The app’s user interface is designed to be user-friendly and straightforward, allowing users to easily request rides, track their drivers in real-time, and pay seamlessly through the app. Uber has also prioritized safety and convenience, implementing features like driver ratings, real-time ETAs, and cashless transactions. By focusing on these aspects, Uber has successfully created a seamless user experience that has disrupted the traditional taxi industry and made ride-hailing more accessible and convenient for millions of users worldwide.

AirBnb has transformed the way people travel by offering a seamless user experience in the realm of accommodation. With a user-friendly website and mobile app, Airbnb enables users to effortlessly search for unique and personalized accommodations, book their stays, and communicate with hosts. The platform provides detailed property listings with high-quality photos, transparent pricing, and user reviews, ensuring that users have all the necessary information to make informed decisions. Furthermore, Airbnb’s emphasis on trust and safety through verified profiles, secure payments, and reliable customer support has further enhanced the user experience. By prioritizing seamless interactions and trust-building, Airbnb has redefined the way people book accommodations and created a global community of travelers and hosts.

As a leader in the music streaming industry, Spotify has set the standard for delivering a seamless user experience. The platform provides a vast library of music accessible across various devices, allowing users to effortlessly discover, create, and curate personalized playlists. Spotify’s user interface is intuitive and visually appealing, with features like easy search functionality, personalized recommendations, and seamless transitions between devices. By consistently focusing on the user experience and leveraging data-driven insights to refine their recommendations and features, Spotify has cultivated a loyal user base and remained at the forefront of the music streaming industry.

In conclusion, Uber, Airbnb, and Spotify have demonstrated a strong commitment to delivering seamless user experiences, redefining their respective industries in the process. By prioritizing user-friendly interfaces, convenience, trust, and personalization, these companies have captured the hearts of millions of users worldwide. By understanding and applying the lessons learned from their strategies, businesses can strive to create exceptional user experiences and differentiate themselves in a competitive marketplace.

Back to You

The success stories of Uber, Spotify, and Airbnb provide valuable insights into the strategies and approaches that can drive accelerated growth in today’s rapidly changing business landscape.

These disruptors have not only revolutionized their industries but have also exemplified exceptional growth strategies. By analyzing their journeys, we can extract several key lessons that businesses can apply to their own growth endeavors.

Learn by example! Read other growth studies here.

The post Innovation and Disruption: 5 Growth Lessons from Uber, Spotify, and Airbnb first appeared on GrowthHackers.com.

How HubSpot Grew a Billion Dollar B2B Growth Engine

GrowthHackers Team — Tue, 02 May 2023 14:34:37 +0000

HubSpot invented the term Inbound Marketing, and has lived it’s mantra, driving their business from an idea in 2004 to a $50M+ run rate in 2012 in the competitive marketing tools and services category. But is the story that simple? A deeper dive reveals that a deep belief in metrics, an organizational focus on growth, and a commitment to sales excellence has fueled their explosive rise.

In 2004, HubSpot co-founders Brian Halligan and Dharmesh Shah met at the Massachusetts Institute of Technology. Or, as Halligan says, “HubSpot was born out of the loins of MIT.” [1] Founded in 2006 on the concept that traditional marketing is broken, HubSpot offers an inbound marketing software platform that helps businesses “market to humans.” [2]

The Cambridge-based company’s growth has been impressive. HubSpot began in 2006 with just three customers, and they ended last year with 8,440. [9] In 2011, the company did $29 million in revenue, which was a full 81% growth over the previous year [3], then jumped to almost $53 million in 2012. [9] As of 2012, their Average Customer Value (ACV) was somewhere around $6,220 per customer ($52.5m / 8,440 customers).

HubSpot has chosen to focus on growth rather than profit for now, and that dedication is evident in the numbers above. So how has HubSpot made such huge gains, so quickly?

Gaining Early Traction by Practicing What They Preach

Inbound Marketing

Both Shah and Volpe say that HubSpot uses a combination of inbound and outbound marketing [19], but data that speaks to how much is spent on what isn’t available.

In 2009 Halligan and Shah literally wrote the book on inbound marketing—Inbound Marketing: Get Found Using Google, Social Media and Blogs. True to form, HubSpot offered promotional resources like free eBooks with content sneak peeks.

Volpe says that inbound leads are generally cheaper to acquire, and it should come as no surprise that inbound marketing has been critical to HubSpot’s growth:

“I cannot emphasize enough the importance of inbound marketing in our growth. (I know I am biased and I know it is self serving, but that does not make it a lie.) ” [3]

The company’s inbound marketing strategy covers the spectrum, but one area in which they’ve really excelled is content marketing. From the outset, HubSpot has offered resources like expert blog posts, webinars, and tools. For example…

Website Grader

Between 2006 and 2011, HubSpot’s free Website Grader was used to grade more than 4 million websites. [7] Anyone could enter a URL and get insight about which aspects of a site were performing well and which ones could be better.

Like the best free resources, Website Grader was good for both Hubspot and prospective customers—first, it helped users understand that their sites weren’t performing as well as they could be, making the value proposition of an inbound marketing system more appealing. Second, it did this for free, functioning much like a free consultation, yet the time and hassle of speaking to someone was replaced by a simple web experience. Hubspot didn’t have to pay sales staff to walk users through the process because it was automated.

This is why Website Grader (and free-but-valuable tools like it) are a win-win. Website Grader was easier to market than the actual HubSpot product, because it required no up-front investment yet provided instant value. Additionally, Website Grader brought visitors one step closer to becoming customers by showing users the need for HubSpot and collecting contact information for sales, generating tons of inexpensive leads.

Twitter Grader

Hubspot went back to the free tools playbook in 2009. When business owners were still working to figure out the appropriate application and ultimate value of social media, HubSpot launched Twitter Grader, generating a ton of buzz among influential social media types and making HubSpot a part of the growing conversation around social marketing.

Twitter Grader generates diagnostic reports of Twitter users, measuring their influence based on factors like follower ratio, update frequency, and level of community engagement; and playing off of powerful motivators such as vanity and game mechanics (like how users rank among Twitter users in their areas).

CTO Dharmesh Shah explains, “What Twitter Grader is trying to measure is the power, reach and authority of a Twitter account. In other words, when you tweet, what kind of impact does it have?” [6] Similar in form and function to Website Grader, this free tool gets tens of thousands of uses per month. [4]

When Twitter Grader first launched it set off a wave of viral awareness, with people sharing their Twitter scores with their followers, perpetuating a seemingly-endless cycle of more and more people checking their Twitter cred. Again, this free tool drove leads and tons of awareness for the company.

HubSpot’s Blog—Inbound Hub

When searching HubSpot’s blog Inbound Hub for “landing page,” you get 4,480 results. That’s a lot of content, most of which comes in the form of resource posts like “What Is a Landing Page and Why Should You Care” and “11 Simple (But Critical) Tips for Creating Better Landing Pages”—each with a relevant call to action at the end. Volpe claims that HubSpot’s addition of a Call to Action at the bottom of every blog post tripled the number of leads they were getting from the blog. He explains:

“A lot of people have calls to action, or offers in the sidebar of their blog, and those work. But having one… and again, it wasn’t the same one on every single article, it was tailored to that article. So if you’re reading an article about, you know, optimizing landing pages you’ll have an offer at the bottom of that blog article that has something to do with a landing page optimization webinar or something like that.” [8]

As HubSpot has become more sophisticated in identifying onsite visitors and personalizing the experience, they’ve been able to drive calls to action not just for new visitors, but to re-engage existing customers as well. For example, the marketing on Inbound Hub for customers suggests new tools to try in the HubSpot suite, while new visitors will be driven to ebooks or free tools.

Inbound Hub generates real results, the blog is full of useful and shareable content that results in 20% of all of HubSpot’s organic leads. [5]

Webinars

In response to a question on Quora about how HubSpot got so many Twitter followers, Mike Volpe writes:

“As far as I know, we were the first company to hold a webinar on the subject of “Using Twitter for Marketing and PR” – we got over 3,000 registrations for it, and tons of new followers that day back in 2008. And during that webinar and all of the webinars after it, we used Twitter as a discussion tool during the webinar, to allow people to chat and ask questions. I am also pretty sure we were the first company to use Twitter for discussion during webinars – we started that in 2008. Because of this, many of the hashtags for our webinars have become trending topics on Twitter – most recently #emailsci, but I think more than 5 of our webinars have been global top ten trending topics since 2008.” [4]

Just like with Website Grader, Twitter Grader, and Inbound Hub, HubSpot uses webinars to educate users, generate buzz, and attract thousands of new website visitors—a number of whom will eventually become customers. [5] One of their most popular webinars, Volpe reports, had 13,000 signups. [8]

Through focusing on inbound marketing as a means of establishing themselves as an authority in the field, HubSpot was and is able to generate a huge volume of relatively low cost (especially when compared to outbound marketing), high quality leads. [3] How do these leads compare to those resulting from outbound marketing? Volpe explains:

“The conversion rate from those leads, if you compare…inbound leads vs outbound, or paid, the types of things where you’re annoying people and kind of getting in their face…the comparison between the two of those, the conversion rate is more than double…for the organic leads, or the inbound leads.”

Written by Morgan Brown

The post How HubSpot Grew a Billion Dollar B2B Growth Engine first appeared on GrowthHackers.com.

How Spotify Turned Free Music into a $10+ Billion Valuation

GrowthHackers Team — Wed, 24 Feb 2016 19:32:43 +0000

Spotify is a truly remarkable growth story. In just six years the company is valued at more than $10 billion and has more than 50 million users, 12.5 million of which pay for the service. But how did the company get to where it is today and what is its growth engine? We dive deep into Spotify’s story to uncover the key elements that helped them grow to incredible heights. We’ll look at:

Existing Growth Levers:

A best-of-breed product that beat out existing players on every vector including: music catalogue, product features, pricing model and user choice
A freemium business model that bridges the gap between piracy and the pay-per-track model of iTunes
A massive US launch driven off the buzz of their European growth and invite-only system
An exclusive deal with Facebook to be the “default music service” of Facebook with their integration in 2011
Controversy between artists and the company over royalty payments and catalogue availability

Future Growth Levers:

Continued international expansion and mobile growth
Create new distribution channels with partnerships and new platforms
Winning over artists as suppliers to the Spotify ecosystem

Read on as we break down their unique and revolutionary growth story.

Spotify founders Martin Lorentzon (left) and Daniel Ek via Mashable

Introduction

Spotify founders Martin Lorentzon and Daniel Ek met in Sweden in 2005. On a Quora thread about the startup’s early days, Ek explains:

“We discussed a lot of ideas back and forth and spent a lot of time hanging out in my apartment in a suburb to Stockholm. … We sat around my media htpc machine quite a lot and thought that it was cumbersome to get content, despite the technology having been around (Napster) since at least 2000. I think that’s why we got stuck on the idea of Spotify.” [1]

After a period of closed beta, Spotify officially launched on October 7, 2008, with $21.6 million in Series A funding from Li Ka-shing, Creandum, Northzone, and Horizons Ventures. In August of 2009, the company received another $50 million in Series B funding from Li Ka-shing, Horizons Ventures, and Wellington Partners, followed by $16.1 million in Series C funding from Founders Fund and Sean Parker in February 2010. [2] By September 2010, just shy of two years post-launch, Spotify’s catalog had grown to over 10 million tracks—closing the gap between Spotify and iTunes, whose catalog at the time included 11 million tracks. By March of 2011—just four months prior to the company’s US launch—Spotify had grown to 6.67 million users, one million of whom were paid subscribers. [4] By November of that year, the number of paid subscribers had more than doubled to 2.5 million.

Just one year later, in December of 2012, the service had grown to 20 million users and 5 million paid subscribers. [6] In that time, three more rounds of funding from investors such as Digital Sky Technologies, Kleiner Perkins Caufield & Byers, Accel Partners, 137 Ventures, AFSquare, The Coca-Cola Company, Fidelity Ventures, Lakestar, Goldman Sachs, and Technology Crossover Ventures, brought the company to its current total of $537.8M in funding, [2] with the most recent round at an estimated valuation of more than $4B. [7]Since that last round in 2013, the company is likely at or near the $10 billion valuation range. [66] The company’s most recently-released data, dated November 11, 2014, puts Spotify’s total user base at 50 million—12.5 million of whom are paid subscribers.

So how did the company that began in “a tiny office-cum-apartment with a broken coffee machine” [4] grow into the music industry disrupting giant that we know today?

Initial Traction / Early Growth

A Disruptive Product

As Kartik Ayyar explained on Quora just days after Spotify launched in the United States, the value proposition is at once fairly simple and quite profound: “Almost all of the music in the world at any time or place for only 10$ [sic] a month.” [14] Options for accessing music online were limited prior to Spotify—consumers could listen to streaming services like Pandora, though they couldn’t actually pick their own songs, or they could purchase tracks from iTunes. Other streaming services like MOG and Rhapsody existed, but hadn’t gained much traction with consumers, due to a combination of the pricing models, catalog of music and feature sets. Spotify, by contrast, aimed to give users complete control and access to any song, on demand, for just $10/month, along with a free option that offered more than simple radio-style streaming—not to mention the fact that it was totally legal. Though other companies are now attempting to offer the same service—more on those in a bit—Spotify was one of the first to offer this value proposition, and it has been overwhelmingly integral to the company’s success as a truly disruptive force in the music market. Discussing not only Spotify but music streaming services in general, journalist Scott Timberg explains:

“It’s no coincidence that album sales peaked, at $14.9 billion, in 1999—the year Napster ushered in the digital era of music by effectively making all recorded music free to anyone with an Internet connection. By 2009 album sales had fallen by more than half, to $6.3 billion. For a while, digital music sales, chiefly through iTunes, made up some of the difference. But after half a decade of consistent growth, downloads of individual tracks declined for the first time in 2013, by 5.7 percent, and by 13 percent in the first six months of this year, according to Nielsen SoundScan. Streaming music over the Internet via services like Spotify, Rdio, and Pandora, by contrast, is up 42 percent between the first half of 2013 and the first half of this year.”

There’s no denying that Spotify and services like it are revolutionizing the way that people listen to music. Yet unlike many streaming options, Spotify puts the control firmly in the user’s hands, allowing them to select specific songs and create playlists instead of roughly approximating terrestrial radio by choosing an artist or station and listening to or skipping whatever song comes on.

The fact that Spotify is interactive certainly gives the service an edge over some of its competitors, and this control is a big part of the must-have nature of the product, driving the company’s growth.

Yet there’s much more to the disruptive power of Spotify, even if the everyday user doesn’t fully leverage or grasp the implications of these other features. For starters, users can also upload local tracks to Spotify, which means they don’t have to leave their own libraries and playlists behind in order to make the switch to Spotify—significantly decreasing the friction of adoption. That’s one less reason for users to open iTunes, or, as LinkedIn’s Mario Sundar asserted on Quora in July 2011, “Spotify is to Apple iTunes as Google is to Newspapers.” [14]

After focusing primarily on delivering on-demand streaming, in late 2011 Spotify expanded to offer a Pandora-style radio service that allows users to expand any song, artist, album, or genre into a station and learns from users’ tastes over time. [15] This—in conjunction with Spotify’s Discover feature, which makes predictions about which artists users will like based on what they’ve listened to—went a long way toward helping Spotify to position itself as not only a replacement for iTunes, but as replacement for Pandora as well as pretty much any other platform through with users previously accessed and interacted with music. The combination of on-demand streaming and discovery through both algorithmic and editorial curation has helped round out the product for music listeners of all types.

Spotify music discovery. Image via Mashable.

The company introduced a browser-based version of the service in late 2012, making Spotify available to those who for whatever reason couldn’t download the desktop program—in particular, users on work or library computers, or netbooks like the Chromebook for which there is no desktop version.

Finally, in late 2013 Spotify made mobile streaming available to all users (it had formerly been available to Premium subscribers only).

These factors combine to increase accessibility and decrease the time it takes for new Spotify users to reach their “aha moment” with the service.

Pretty soon, it’s more than simply a music streaming service—it’s the primary way in which users interact with music. The disruptive potential of Spotify was apparent very early on. Just five months after launch in the company’s home country of Sweden, Spotify had already generated more revenue for Universal than iTunes. [3] By September 2010, Spotify’s music catalog had almost caught up with iTunes—the companies had 10 million and 11 million tracks, respectively. At the time, however, iTunes had 160 million users and Spotify—still negotiating the terms of a US launch and thus yet to tap into the world’s largest music market—had just 10 million.

In order to grant users legal access to the music that makes the service what it is, Spotify had to to negotiate a fair deal with record companies. As ReadWrite’s John Mitchell explains, these deals included “unlimited free samples of music, frictionless sharing among friends, and a future industry free of the massive overhead of record manufacture and breakage, old-school promotion, and the bottlenecks of regional radio dominance.” [20] Still—perhaps because Spotify didn’t initially offer terms with which they were happy, or maybe because they were unwilling to accept Parker’s assertion that the war against piracy had indeed been lost—negotiations over a mutually beneficial agreement between Spotify and the four major US record companies took quite a while. When Spotify finally made it to the US, Ken Parks, chief content officer and managing director for Spotify North America, claimed:

“We have full catalogues from all the major labels and a raft of independent labels including those represented by Merlin, which means all of their artists are being fairly compensated for their creativity every time people enjoy music through Spotify.”

Freemium Business Model

In many markets, disrupting the pricing model allows new entrants to shrink the existing market made up of legacy players who charge a premium for a similar service. For example, Encarta (and then Google and Wikipedia) shrunk the encyclopedia market from a $1 billion market to essentially zero. Encarta, $99 on CD compared to $1,000 for Encyclopedia Britannica, grew to $100 million in its first five years as it shrunk the market. It’s a powerful growth opportunity for companies that can pull it off. iTunes similarly shrunk the music market while taking a massive chunk of cash from existing players like Tower Records. What’s interesting about freemium in music however, is that is not just a market shrinking mechanism, but also a potential growth mechanism, as it can act as a bridge between piracy and legacy buying options. Before Spotify, there was little other choice than pay-per-track, or CD, or pirate music. But with Spotify’s freemium version, people who only pirated out of ease or economic necessity now have another way to get music legally. Spotify’s big bet then is that it can increase the market of new listeners (or return those lost to piracy) through a freemium pricing model. Consumers have certainly flocked to the idea. 37.5 million of Spotify’s 50 million users listen to an ad-supported version of the product. In theory those 37.5 million would otherwise be pirating music, listening on YouTube, or not listening at all. That’s Spotify’s argument anyway. Artists, as we’ll see later, are yet to be convinced. This unique dynamic of freemium not just as a market shrinking mechanism, but one that can also grow the market is the big promise of Spotify’s unique value proposition. Let’s take a look at how the company architected a freemium model in a tricky, rights-based market. Initially the company offered three tiers of pricing, but now there are just two:

Free — Spotify’s free tier is ad-supported, with skip-restricted shuffle and ready-made playlists available on mobile and the ability to choose any song, any time on tablets and computers.
Premium — As with a free membership, paid subscribers can listen to any song at any time, only they can do so at a higher bitrate, via their mobile devices, in offline mode, and without ads. A Premium subscription costs $9.99 per month, though Spotify offers a free 30-day trial along with a discounted $5 per month plan for students.

Furthermore, though streaming has always been unlimited in the US, in some markets Spotify placed streaming caps on free accounts after the first six months of use. Time limits were abolished for all users in January of 2014. [59] Of course, freemium comes at a big cost, especially with royalties being paid for each song played. Spotify has worked hard on its royalty payment model to help mitigate the costs of freemium while compensating artists fairly. In order to fully understand how hard freemium is in this type of space, it helps to understand Spotify’s payment structure. Approximately 30% of revenue is retained by the company, while around 70% is split among rights holders in accordance with the popularity of their music on the service (though, as Spotify points out, it is up to the label or publisher to divide royalties and accounts to each artist, depending on their individual deals). [26]

Royalty payouts by Spotify. Image via Spotify.

There is no fixed “per play” rate for tracks on Spotify. Instead, royalty payments are calculated according to several factors, including: the country in which music is being streamed, the number of paid Spotify users as a percentage total users (a higher percentage of paid users results in higher royalties), the relative premium pricing and currency value in different countries, and the artist’s royalty rate. “Recently,” Spotify explains, “these variables have led to an average ‘per stream’ payout to rights holders of between $0.006 and $0.0084 … across our tiers of service.” They note, however, that “per stream” payout generated by Premium subscribers is “considerably higher.” [26] Though the names of artists have been replaced with descriptions, the chart below shows, in USD, actual royalty payments for a range of albums for the month of July 2013.

Spotify royalty payouts by album type. Image via Spotify.

As with companies like Evernote and Dropbox, the freemium business model has been an important factor in Spotify’s success, and the revenue in question is generated by monthly subscription fees from Premium users along with revenue from advertisements for Free users. Still, Spotify would obviously prefer users pay monthly subscription fees, and the company is is working hard to convert free users into paying customers—including the aforementioned free trial and student rate, along with running Premium ads within the free service (though data as to the success of these efforts is unavailable). According to a recent company blog post, 80% of Spotify subscribers began as free users. Billboard’s Glenn Peoples also points out that in 2013, Spotify grew subscription revenue 42% in the United Kingdom—yet another indicator of a strong free-to-paid conversion mechanism. [58]

As for its free tier, Spotify currently runs six types of ads—audio, display, billboard, homepage takeover, advertiser page, and branded playlist. Though Spotify has always used some form of freemium, the fact that free memberships were initially invitation only when the service first launched certainly served as incentive for users to purchased paid plans. Currently, Spotify only offers just two tiers of service—Free and Premium. Free users experience limited mobile capabilities.

European Launch: Building Anticipation through Invitation-Only Free Accounts

But long before Spotify launched in the US in 2011, the company gained significant traction throughout Europe. Spotify officially launched in the UK, Germany, France, Italy, Spain, Finland, Norway, and Sweden in October of 2008, but the service had been operating in closed beta for over a year—a move which served to not only control costs and the early user experience, but also to increase the hype and anticipation surrounding the new service. Many of Spotify’s beta testers were influencers and tech reporters, and their praise of the service further heightened the anticipation. Upon official European public launch, these beta accounts were immediately transitioned to free Spotify accounts, and access to paid Spotify accounts was also made instantly available, while invitations for free accounts, were gradually released “into the wild” over the next several months. Their scarcity further served to build anticipation among Spotify’s target market. It wasn’t until February of 2009 that Spotify tried offering no-invitation-required free accounts in the UK. Spotify’s Andres Sehr explains via the company blog:

“We’re taking our first baby step to open up Spotify to a larger audience today. Up until now we’ve kept a close eye on controlling our user growth with invitations so that we don’t run into any problems and to ensure that everyone gets a really good music experience when they signup, so far so good.”

Sehr claim that if growth happened too quickly, the invitation-only system may be temporarily reinstated. In September this proved to be the case, as signups swelled in the days following the launch of Spotify’s mobile service and invitations were temporarily reinstated. [By the time Spotify had finished up negotiating with record labels and was ready to launch in the States, the service had already grown to more than 6.67 million users, 1 million of whom were paid subscribers.

From Europe to the US

Anticipation of the service’s arrival to the US began building long before Spotify was available Stateside, and this anticipation created huge potential energy for the product launch in the States to ramp growth dramatically. Just as they had in Europe, Spotify leveraged this momentum to their benefit, gaining press attention from places TechCrunch, Lifehacker, and Mashable—sources of, as Andrew Dumont of Moz puts it, “those coveted, tech-loving early adopters”—as well as outlets such as MTV and Rolling Stone for music fans. [53] Referring to Spotify as “the best music app on the planet,” journalist and beta tester Eliot Van Buskirk explained in early 2009:

“Those who have tried Spotify know it’s like a magical version of iTunes in which you’ve already bought every song in the world—and it’s free to use if you can put up with a 20-second ad every half an hour.” [22]

It wasn’t just influencers and beta testers who got to try Spotify early. Those outside Western Europe came up with several inventive, backdoor ways of accessing Spotify, the most common of which involved using a UK-based proxy server and a London zip code to “trick” the service. [23] Spotify was in such demand—not just in the US, but across the globe—that blog posts, forum threads, and entire websites were devoted to such workarounds, like LifeHacker’s How to Get Spotify Free Without an Invite. Though the company initially claimed that Spotify would be made available in the United States sometime in 2010, negotiations with the four major record labels proved to take a bit longer. In the fall of 2010, Wired UK’s Duncan Geere explained:

“Some have speculated that if Spotify ever does launch over the pond, those negotiations will have yielded a severely cut-down version without a free, ad-supported option and with fewer benefits for people who subscribe.”

Though the wait for Spotify’s US launch was the unintentional result of drawn out negotiations with record labels, it nevertheless served to increase anticipation. Spotify finally launched paid and invite-only free accounts in the US on July 14, 2011, [24] and US users piled onto the site to subscribe or sign up for an invitation:

Spotify.com traffic growth. Image via Moz.

Initially, Spotify offered three tiers—Free, Unlimited, and Premium. Ad-supported Free accounts were invite only and featured unlimited desktop listening for the first six months, after which users were limited to 20 hours of streaming per month. Capitalizing on the anticipation that had been building up to that point, both paid plans were immediately available to users who didn’t want to hear ads or couldn’t wait for invitations to become available. The (no longer available) Unlimited plan cost just $4.99 and included everything in the free plan but lacked ads and a streaming limit. The Premium plan cost $9.99 and included everything in the other plans, along with mobile access to Spotify via iPhone or Android app and the ability to download content for offline access. [24] Early praise for Spotify came from celebrities like Ashton Kutcher, Britney Spears, Trent Reznor, and Talib Kweli. [53]

As part of the launch, Spotify also partnered with several large brands—including Coca-Cola, Chevrolet, Motorola, Reebok, Sonos, and The Daily—to extend their reach and distribute the limited invitations to their free plan.

One particularly popular promotion involved social media influence ranking service Klout. On launch day, there was so much interest in the Klout-Spotify promotion that both Klout and Spotify almost crashed. The service was forced to temporarily stop issuing invitations.

It seems that not just the US, but in every country where Spotify launched, the private beta period, along with the resulting scarcity of Spotify invitations (whether merely a marketing tactic or a legitimate result of concerns over the service crashing) generated buzz and increased demand among potential users.

Just as sites were devoted to accessing Spotify before it was available in certain countries, in the wake of the US launch there were plenty of blog posts and forum threads outlining the various means of getting a Spotify invite code without having to wait. Within a year, the company had gained more than 3 million US users, 20% of whom were paid subscribers. [54]

Social: Discovery and Sharing

Yet another way in which Spotify is similar to earlier file sharing programs is its attitude toward sharing and discovery. In September 2011 at Facebook’s f8 developer’s conference—at which Spotify CEO Daniel Ek was a speaker—the social network announced a new partnership Spotify, among other media companies, that would allow these companies to publish listening, reading, and viewing activity to users Timelines. Though now this kind of activity is just considered the way people share music, at the time it was totally novel. The chart below illustrates the impact that the integration had on Spotify’s active users:

Spotify adds 1 million subscribers following f8. Image via AppData.

Today, Spotify users can register for the service via an email address or through Facebook connect, and once registered, users can see their friends’ activity within the app—including what they’re listening to, who they follow, and any public playlists they’ve create—as well as in the Facebook News Feed if they’ve chosen to share it. For Ek, sharing is at the core of the music experience. As he explained to Greeley, “I want to replicate my first experience with piracy.” As a teenager, he said, when he found someone on Napster with similar music taste, he would copy their entire library—when he discovered Ella Fitzgerald this way, “the world opened up.” Ek goes on to assert, “Napster, as a service, worked for the consumer. What eventually killed it was that it didn’t work for the people participating with the content.” [18] Similarly, in a statement following Spotify’s US launch, Ek cited sharing as one of the driving forces behind the service:

“We believe that music is the most social thing there is and that’s why we’ve built the best social features into Spotify for easy sharing and the ultimate in music discovery. Even if you aren’t a total music freak, chances are you have a friend who is and whose taste you admire. I’m looking forward to connecting with some of you in Spotify and discovering some cool new tracks.” [21]

From the start, Spotify was built in a way that facilitates the intrinsically social nature of music. Partnership with the super-platform Facebook has only served to magnify this element, helping it to drive Spotify’s growth. Spotify also offers users the option of automatically publishing tracks to Last.fm, as well as sharing individual tracks, artists, albums, and playlists via Twitter, Facebook, Tumblr, private message, or embedding them into a blog or website. Collaborative playlists allow friends to work together to curate music for parties, road trips, and everything in between.

Spotify has worked to enhance social sharing and discovery over the past couple years. Three more recently added features are Messages, Following, and Browse—all of which debuted in 2013. Messages allows users to engage in conversations within the service and, as with Facebook, the Spotify inbox saves messages with each friend as lifetime treads, chronicling all the music you’ve ever shared. Messaging is available for desktop, web, and mobile versions of the service, and it also works as a simple messenger, allowing users to send compliments, ask for recommendations, and have conversations. Spotify switched from a system of “subscribers” to “followers” in March of 2013. Users can follow friends, artists, influencers, celebrities, and organizations and receive updates when artists they follow add music to their catalogues. Powered by Tunigo (which Spotify acquired for an undisclosed amount in May of 2013), Browse allows users to search for playlists made by friends, influencers, and other Spotify users based on a variety of factors including genre and mood. According to the company blog post announcing the feature, Browse offers music for every moment and mood, along with “all the latest album and single releases from your favourite (or soon-to-be favourite) artists, and a collection of our top lists.” As Spotify product manager Miles Lennon explains:

“If it’s five minutes before friends arrive and you think ‘shoot, I haven’t put together the music I need’, you’re two clicks away from a playlist designed for having friends over for dinner.” [15]

As with the company’s earlier addition of radio stations, the Messaging, Follow, and Browse features represent how Spotify is working to make other music services obsolete. Lennon spells out the company’s strategy:

“It’s important to have it all under one roof. Our hypothesis is that the best discovery experience will combine social—recommendations from people you trust, influencers, and artists; intelligent recommendation algorithms based on your listening history and tastes; and human curation by experts and millions of community members. The way we move the needle is by satisfying more use cases.” [15]

Spotify as Music Identity Layer: Acquisitions, Apps, and APIs

In addition to the company’s acquisition of Tunigo, in March of 2014 Spotify acquired The Echo Nest—the industry’s top music personalization and discovery API—for around $100M. [41] The two companies had worked closely in the years prior to the acquisition, as Ek explains:

“We have a long relationship with the guys at Echo Nest that stems back to 2007 before Spotify was even launched as a service publicly. We’ve been working together for a few years. We look at the world in the same way.” [38]

Echo Nest CEO Jim Lucchese agrees, explaining, “We’ve both invested in platform approaches to music. To combine those creates such a cool opportunity for developers anywhere that music lives.” [38] Lucchese goes on to claim that combining The Echo Nest’s understanding of music with Spotify’s technology, platform, catalog, and huge audience will allow both companies to connect more people to music on a scale that wasn’t possible otherwise. As far as short-term applications go, Lucchese and Ek claimed that Echo Nest technology would be implemented in the months following the acquisition, and users could expect “instant” improvements Spotify’s radio algorithm, discovery suggestions, and more. Then in June of 2014, the company announced that music discover data from Echo Nest had contributed to Spotify’s newly-released, expanded set of web APIs. Spotify’s Web API endpoints return metadata in JSON format about artists, albums, and tracks directly from the Spotify catalog. Subject to user authorization, the API also provides access to user-related data such as playlists and music saved in a “Your Music” library. In a statement regarding the new APIs, the company claimed:

“Spotify and subsidiary The Echo Nest are more committed to the developer community than ever. Our newly combined platform makes it simpler than ever before to provide amazing music experiences on the web, and these enhancements are just the beginning.”

As for longer-term, larger scale implementations like the ones Ek and Lucchese mention in their announcement of the acquisition, TechCrunch’s Josh Constine speculates about what those might look like:

“Imagine being able to authenticate your Spotify account in other apps the way you sign in with Facebook today. But instead of bringing your social graph and bio data, Spotify Connect would you let you listen to full songs and your playlists on demand in whatever app you wanted. Essentially, it would set Spotify’s app platform free from its green walls, and let legal music bloom all over the Internet.” [38]

In other words, The Echo Nest could help Spotify to become, as Constine refers to it, “the music identity provider across the web and mobile the way Facebook has become a social identity provider,” arguing that an API-centric Spotify could solve the music licensing program for every developer. [38] Uber, the ridesharing company, for example integrated Spotify into its app to offer the streaming music service to its riders. [68] These mobile SDKs serve as further evidence of Spotify’s commitment to the developer community and indicate that Constine’s predictions might not be so far off. Debuting in May of 2014, the integration of Algoriddim’s iOS app djay with Spotify gives us a sneak peek into what Spotify as music identity layer might look like.

Prior to the integration, djay users were limited to the music in their personal collections. A Spotify Premium subscription (the app comes with a 7 day free trial), however, now grants them access to the 20 million tracks in Spotify’s library as well, along with Match and Automix Radio—two new features that leverage the Spotify integration. Match recommends songs that would be a good fit to play after the current track. DJ and Algoriddim CEO Karim Morsy said that prior to Spotify’s Echo Nest acquisition, he’d believed this kind of technology could never be automated.

The second new feature, Automix Radio, creates and entire mix, complete with transitions, based on a single song. [39] Spotify’s ambitions as a platform hasn’t been without its bumps. The aforementioned APIs served to replace the Spotify app ecosystem, which, originally launched with much fanfare, is currently being phased out. Introduced in 2011, the Spotify Apps platform at one time hosted apps such as Tunewiki and musiXmatch, both of which provided lyrics; along with Pitchfork, Billboard Top Charts, Last.fm, and Soundrop—which in June of 2012 became the first Spotify app to attract major funding with $3M in Series A funding from Spotify investor Northzone. [42] Formerly accessible through the Spotify desktop player’s App Finder, the company announced in March of 2014 that they would no longer be taking Apps submissions [54] and then in November of 2014 that they were killing the App platform entirely, suggesting developers look into their web API instead. [56]

Mobile

Spotify launched their mobile app for iOS and Android devices in the fall of 2009. Initially, mobile access was exclusively for Premium subscribers, but as of December 2013, limited mobile streaming became available for free users as well. According to Spotify, the share of users listening on mobile tripled between 2013 and 2014.

As mobile grows, the constrained free plan is likely a powerful conversion point to paid accounts where users want the same control they’re used to on the desktop version.

Controversy Spurs Awareness and Growth

One of the most common arguments in favor of Spotify is that, as Sean Parker claimed, Spotify is getting people who previously didn’t pay for music to start paying. According to studies done in Sweden, Norway, Denmark, the US, the Netherlands, and the UK—all of which are cited on Spotify’s page for Artists—that may very well be the case. [26]Still, many artists claim that, though legal, the revenue generated by Spotify and services like it simply isn’t enough to live on. David Byrne, formerly of Talking Heads, refers to the royalties artists receive from streaming services as a “pittance,” arguing that “if artists have to rely almost exclusively on the income from these services, they’ll be out of work within a year.” [28]

Echoing that sentiment, Patrick Carney of the Black Keys claims, “For a band that makes a living selling music, [revenue from streaming] isn’t at a point where it’s feasible for us.” [29] Country singer-songwriter Rosanne Cash, who has recorded 13 albums since the 1970s, told a House subcommittee that she was paid $114 for 600,000 plays on an unnamed streaming site. Cash argues, “Everyone gets paid except the music creators. We are creating a culture where content creators are a new servant class, and paid as such.”

While the debate is long from settled about whether Spotify adds value or destroys it for music creators, there is no doubt that the controversy around it spurs awareness of Spotify and acts as a growth driver for the company. Every time a high-profile artist gets into a public dust up with Spotify over royalties, the company has an opportunity to make its case for the value they create for listeners and artists, driving greater awareness and new users in turn. The most recent example of this mechanism was seen with Taylor Swift, who a week before the launch of her Billboard-topping album 1989, pulled her entire catalog of music from the service.

While obviously a critical loss for Spotify, the company received a ton of exposure in consumer publications, blogs, a TV news programs around the world. The controversy creates a platform where Spotify can put a fine point on its value proposition to listeners.

Future Growth

Can Spotify Make Artists Happy?

This seems to be the essential question that will determine the long term viability of Spotify. While Spotify is clearly a bridging technology between piracy and paid, will they be the long-term winner, or will they be usurped by bigger players such as Google or Apple? Going back to the encyclopedia example, Encarta won in the short term, but was ultimately eliminated by services like Google and Wikipedia. Similarly in the entertainment space, RedBox, a video rental kiosk business, has won in the short term of video rentals but faces increasing pressure from video on demand services from cable providers and companies like Netflix and Amazon Prime Video. In a recent thread on GrowthHackers.com, the community discussed how to best grow Spotify, paying particular attention to the current controversy between Spotify and rights holders. After all, there’s obviously more at play that simply user acquisition. As Joseph Bentzel explained, it’s not really a growth problem that Spotify is currently experiencing, but a product/market fit problem. He explains:

“Spotify’s full ‘product’—at its core—is really a form of ‘two-sided marketplace’ in which its ‘producers’—i.e. artists and writers—benefit from providing their offering via a paid and/or ad-sponsored revenue model.

What Taylor Swift basically did was say that from the producer perspective of the two-sided marketplace model—she didn’t see value in participating anymore. Rather, she saw ‘channel conflict’ between Spotify’s model and her other revenue generation channels.” [50] So while Spotify has clearly found product/market fit on one side—hence the 50 million people who currently use the service—if artists withhold their music, then the system breaks down. Spotify must address the issues on the “producer” side of the marketplace. Yet as Ek explained in the wake of Swift’s breakup with the company, in a blog post entitled “$2 Billion and Counting:”

“When I hear stories about artists and songwriters who say they’ve seen little or no money from streaming and are naturally angry and frustrated, I’m really frustrated too. The music industry is changing – and we’re proud of our part in that change – but lots of problems that have plagued the industry since its inception continue to exist. As I said, we’ve already paid more than $2 billion in royalties to the music industry and if that money is not flowing to the creative community in a timely and transparent way, that’s a big problem. We will do anything we can to work with the industry to increase transparency, improve speed of payments, and give artists the opportunity to promote themselves and connect with fans – that’s our responsibility as a leader in this industry; and it’s the right thing to do.”

In other words, Spotify is doing all it can to ensure that artists are compensated for their work, and if record labels don’t share, then it’s not their fault. Nevertheless, if artists choose to remove their music because they aren’t happy, it doesn’t matter whose fault it is, because Spotify—and its users—will be the ones to suffer.

Platforms and Partnerships

One way to grow the Spotify user base is through new partnerships and platforms. The company has released SDKs for iOS and Android developers and has launched high profile integrations with companies like Uber. It’s not hard to imagine Spotify shipping on Samsung or HTC phones, Spotify on Xbox One, Spotify on PS4, Spotify on Roku, Spotify in your BMW, and so on.

Starting in November of 2014, Uber began rolling out something along these lines in London, Los Angeles, Mexico City, Nashville, New York, San Francisco, Singapore, Stockholm, Sydney and Toronto (with more cities added in the following weeks). The car service now allows its customers to remotely control the music that plays through their ride’s speakers.

To integrate the two services, users connect their Spotify accounts from the Uber Profile screen. After that, whenever they request a ride from the Uber app and are matched with a music-enable dUber, a music bar will appear at the bottom of the Uber app. Users tap the music bar and choose a song from any of their Spotify playlists while waiting for the car to arrive. The Spotify + Uber partnership is available to Spotify Premium users only, though Spotify does offer a free, no-credit-card-required week of Premium so that Uber customers can try out the service. [62] By making these integrations available only to premium subscribers, Spotify may be able to drive not only user growth but upgrade conversion to paid accounts.

Final Thoughts

There’s no denying that Spotify has turned the music market on its head, providing a value proposition attractive enough to decrease digital piracy and convince millions of people that music is worth paying for. Only time will tell, however, whether that business model is sustainable.

Written by Morgan Brown, co-author of Hacking Growth.

The post How Spotify Turned Free Music into a $10+ Billion Valuation first appeared on GrowthHackers.com.