On the afternoon of May 7th, during a keynote speech at the STING Day 2015 event in Stockholm, Martin Lorentzon, co-founder and chairman of the music streaming service Spotify, was interviewed on stage for the invite-only group of startups, investors, students, and businessmen. SI News was there to get the exclusive scoop.
Q: What is your most-played song on Spotify right now?
I just started to play acoustic guitar. It must be something with two Mexican artists, Rodrigo y Gabriela. The track Tamacun is a fantastic song for two guitars. It must be my most played song.
Q: What would be your super power of choice?
It must be invisibility. I like the show 'The Invisible Man'…you can sneak in and listen to entrepreneurship meetings.
Q: If you were a hip-hop artist, what would be your stage name?
There has been a lot of talk about competitors: Apple…Dr Dre…so it must be something with a Doctor. So I think, 'Dr Martin.'
Q: What music would you like to play as you walk onstage?
In spite of my stage name, Dr Martin, I would probably pick Blur 'Song 2'…it has a lot of energy. And they have a new album on Spotify.
Q: What would you say to Jay Z (about the Tidal platform competitor)?
I would say that I have 99 problems but Jay Z is not one of them!
Q: Where does the Spotify name come from?
A lot of people think Spotify is a combination of 'spot' and 'identify'. It is not true. It was actually a coincidence. We were sitting, Daniel [Ek] and I in his mother's apartment and he was screaming something and I thought he said 'Spotify', but I misheard him, and at that time, .com names…all these domain names were free, and then we immediately bought the name. After its creation, we say it is a construction of the names, but that was not how it actually came about.
Q: What's the geekiest thing about you?
The geekiest thing about me is the geeky sports that I play. I really like pinball games, I play darts, table soccer and I play video games too, even though I'm too old for them.
Q: When you sit down with a potential employee, how do you know this is someone you want to work with?
Different people take different approaches. You have to find a path that feel comfortable with. I am very much for going with your gut feeling. A lot of people in Spotify are data-minded. But regarding recruiting, I listen to my gut feeling. I rarely check the CV. I ask the basic questions about a good education. But what I want is some nice energy. Skills are inferior to energy. I am always looking for energy and working hard.
Q: When it comes to starting a company with someone it's kind of like marrying someone, right?
I'm happy you're asking. In a relationship, when you marry someone, it's good to have similarities, a couple of hobbies in common. But in business, starting a company, you shoud go for different skills and hobbies. If I am a bit extroverted, I look for a partner who is more geeky. But it's important to have a partner, or you'll feel really alone.
Q: How do you handle conflicts that arise in a constructive way?
Of course there will be conflicts. Co-founder Daniel Ek and I do power-walks together and we don't always agree with each other, but then we debate back and forth, and when we are done we have to stick to it. We have to sit in the same boat and row together. Debate is important. It's bad to always have yes-sayers around you.
Q: When it comes to you and competition, how much is skills and how much is luck?
I think luck is important. The business idea is important and execution, that's maybe 97 percent, but if you can be a bit lucky, that helps too. If I had been unlucky maybe I wouldn't have gotten a test license for testing the program in Sweden and then it wouldn't work. I was lucky. But with that said, I'm not about to go to a casino and try to get lcky.
Q: Can a company be successful without generating profit? Why?
Yes. I would say that Spotify is successful. Customers are very happy with the service so I would say it is a successful company. You shouldn't always measure with money. In fact you shoudn't have too much money. Hungry wolves are the best hunters. We are always out raising money, but not too much – we must always be a little bit hungry.
We have a plan and a vision and we have exponential growth. I don't see any reason not to expand. We have been focusing on growth, and we have now started with Asia and will look into Africa as well.
Question from SI News:
What is it about Stockholm that makes it so successful for startups? It's number two in the world for unicorns. Why is that?
That's a good question. It's something I have seen before, it's something about cluster efffects. I come from Borås, I like to say I am 'El Torro from Las Borås'. In Borås we had this clothing thing, and a lot of financial services started there too.
When you got a clothing catalogue you wanted to buy much more than you could afford, so the financial solution was that you could take a loan so you could buy all the clothing in the catalogue. And Borås has kept this cluster effect, starting lots of companies around clothing.
And I see the same thing here in Stockholm built upon education, coding, music, creativity… Spotfy, iZettle…the founder was one of my first employees at TradeDoubler…My first employees are still living here and starting companies and investing. I see the same cluster effects around coding. That's why I am talking to the education department saying we should already have coding in primary school. It's important to get the girls a well because girls and boys are the same up until age 12 and then the girls are gone. We have to keep them interested.
We help each other here in Stockholm; it's the cluster effect.