“Winter is Coming”
DANIEL EK’S PARTNERSHIP WITH FACEBOOK brought seven million new listeners to Spotify within a few months. But, knowing that only explosive growth could ensure his company’s survival, the CEO was not content. The expression “Winter is coming,” the signature line from HBO’s Game of Thrones, began to spread among Spotify employees. The series constantly foretells the impending arrival of a long winter. The Stark family’s ultimate fear is that hordes of “white walkers” will break through their wall of ice and unleash an epic war. Spotify didn’t fear a humanoid invasion, but rather relentless attacks from the world’s largest technology companies. A number of them were already encroaching on music streaming. Apple was shifting iTunes to the cloud, and Jeff Bezos continued to develop the Amazon Cloud Player. Google appeared to be planning to revamp their own store, Google Play Music.
While he assured everyone that his service remained technically superior, Daniel did worry about the sheer size of his rivals. In mid-2011, Apple’s balance sheet carried funds of nearly $80 billion, a figure that was growing steadily. With that money, new CEO Tim Cook could buy Spotify forty or fifty times over. The nimble Swedish upstart opted to counter the threat by growing really fast. At scale, they might even be able to free themselves from the grip of the record labels. Artists might begin to come directly to Spotify to release their music. “Everything changes at scale,” as Daniel would often remind his C-level executives.
Push It
During the fall of 2011, many of Spotify’s new users dropped off, while others began to criticize the partnership with Facebook. Swarms of listeners had become upset that their choice of music was suddenly being shared widely on the social network. Shutting off the feature required several seemingly complicated steps. Daniel Ek began to fill in as customer support on Twitter.
“We’ll try lots of things, and probably screw up from time to time, but we value feedback and will make changes based on it,” he wrote.
A new version of Spotify was on its way, where users would be offered a private listening mode that did not broadcast their taste to the world. Yet the feedback also noted that Spotify was so visible on Facebook that it appeared to have taken over the social network.
“Our intention is not to spam you,” Daniel wrote in response to one of the complainants.
Another point of contention was that registering for Spotify now required a Facebook account. Many months would pass before Daniel budged on this point. His priority was to attract as many users as possible. Through Facebook, he saw an opportunity to make a dent in the US, and he felt it wasn’t happening fast enough.
“Why aren’t we growing faster?” he wrote in a one-line email to one of his associates as early results from the partnership began to appear.
His mantra at this time was “harder, better, faster, stronger,” four words lifted from Daft Punk that he would often use to sign off his emails. The young Swede was a demanding CEO known for hounding his top executives, appearing to never run out of follow-up questions. He occasionally would tell off individual staff members in front of their peers, as if to demonstrate his power. One senior staff member would recall how a friendlier Daniel approached a colleague after a meeting, asking them not to take his public scolding personally.
Back in the spring of 2011, Daniel had head hunted a growth specialist who lived up to his exacting standards. Alex Norström was a thirty-three-year-old hip-hop and R&B fan who had previously helped the Swedish fashion brand Acne with their e-commerce. He had recently left a senior position at King.com, whose mobile games reached tens of millions of users each month. His former gaming studio would become known as the inventors of Candy Crush, an addictive game that would dominate the mobile gaming charts for years to come. Alex’s new colleagues at Spotify saw him as a manager who both worked and played hard, was eager to rise through the ranks and sometimes made jokes at other people’s expense. Some would describe his management style as “American.” He would, at times, push people to greater heights and call out poor performance.
Daniel had given Alex a clear task: bring Spotify to one hundred million users. The figure was ten times what the company had at the end of 2011. Alex Norström became Spotify’s Head of Growth, a title that came with its own team and, crucially, its own small squad of developers.
Obsessed with growing quickly, Daniel gave this new team free rein and rarely interfered in their work. His growth team was built on the same model Mark Zuckerberg had used at Facebook. They had three goals: acquire new users, get them to activate their accounts, and turn them into frequent users. Their work centered around three buzzwords—“acquisition,” “activation,” and “retention”—that, if successfully executed, could make Spotify a dominant force in the music world.
Alex and his team would constantly devise new growth hacks to reach their aggressively set goals. They prompted all users who had connected Spotify to Facebook to invite all of their friends to join the music service. Alex kept a constant eye on the numbers. Metrics such as “second-day retention”—the extent to which a new user returned to Spotify on day two—would prove especially important.
Above all, Alex fixated on the number of daily and monthly listeners. The higher the daily number, the more engaged the users had become, and the more likely it seemed that they would eventually become paying subscribers. Like thousands of other third-party apps, Spotify could now access slices of Facebook’s user data. Several years would pass before that exchange became the subject of widespread criticism.
During the fall of 2011, Spotify was gaining tens of thousands of new users every day, but the intake from Facebook appeared to be of relatively low quality, including a large share of passive listeners. Alex and his team would eventually start recruiting in other ways. Their efforts centered around marketing campaigns through both Facebook and Google where Spotify would effectively pay a price for every new user. As long as the cost of attracting a new user was lower than the expected revenue from the same user over time—his or her “lifetime value”—Alex had no reason to take his foot off the gas.
Another way to grow was to expand into new territories. During 2011, Daniel brought Spotify to Austria, Belgium, and Switzerland. The following year, ahead of a much-anticipated launch in Germany, he finally scrapped the rule that required new users to sign up via Facebook. That requirement would have been a problem in the German market, where Facebook was nowhere near as popular as in Sweden or the UK.
By September 2012, Facebook had been removed as the sole entry point in all other markets too. That year, Spotify brought its services to Australia and New Zealand. The international expansion was led by the young business and marketing graduate Axel Bard Bringéus who, like Alex Norström, had spent a few years at King.com. During Spotify’s rapid global rollout, he would often find himself waking up in a taxi, wondering whether he was on his way to or from an airport.
Rocket Man
By mid-2012, Spotify had reached twelve countries and fifteen million active users. Daniel Ek now split his time between Stockholm and New York, where he had a second home in lower Manhattan. While in Sweden, he would arrive at the office at ten a.m. and stay until at least seven p.m. “An early New York time zone,” as he described his own schedule.
At home, about twenty minutes’ walk from the office, he would log on to his computer again. Work would usually keep him busy until two or three in the morning, around the time his contacts in Silicon Valley were getting ready to call it a day.
Daniel was now fully focused on the bigger picture. His Chief Finance Officer, Peter Sterky, had stepped in as acting CEO. That allowed Daniel to focus on his strengths: the company’s vision and matters that lay at least six months into the future. In Stockholm, he worked on product development; in New York, on deals with the music industry. On average, Spotify was now hiring one new employee every day. Within their first week, newcomers might be expected to guide even fresher recruits around their new office. Neither Daniel nor Martin Lorentzon were early risers. On a typical day, the headquarters would clear out only after midnight, and not fill up until mid-morning the next day.
During the summer of 2012, Spotify’s employees moved into the Jarla House, a few blocks down Birger Jarlsgatan. The music startup leased floors seven, eight, nine, and eleven in the recently renovated office building. Soon Spotify’s main offices had all the attributes of a startup company, with colorful furniture, graffiti art on the walls, a video game corner, and a ping-pong room. The canteen on the eleventh floor overlooked the characteristic metal roofs of central Stockholm. Martin would joke that they needed to “smoke out” the neighbors so Spotify could take over the whole building.
Many employees were now having the time of their lives. For some, the trips abroad were becoming frequent. In New York, they would stay at boutique hotels like The Standard, a glittering building that rose up over the Meatpacking District on concrete suspensions. Others booked rooms at the Dream Downtown on West 16th Street. They worked hard, ate well, and partied at night. Some of them ended up in each other’s rooms. There was no company policy against sleeping with coworkers. After all, this was a tech company in the music world, and Spotify’s fresh venture funding had things looking pretty rock ’n’ roll. Business and pleasure would frequently mix. Even the company’s chairman, Martin Lorentzon, slept with several employees over the years, three sources would claim.
Spotify’s travel budgets were generous. If a company offsite at a Soho House location was scheduled for Monday, it wasn’t unheard of for employees to check in the Friday before, all on the company’s dime. Some would even routinely upgrade their flights abroad to business class, and expense the cost. Eventually, the finance team mandated that business class would only be accepted for flights longer than eight hours, as one frequent traveler would recall.
The venture capital from Yuri Milner’s DST Global had given Spotify a fresh range of options. For the first time, Daniel was able to recruit executives from some of the world’s largest tech companies. Many Spotify employees would recall how a new layer of mid-level managers, often Americans, were ushered in far too quickly, and with decidedly mixed results.
Several early staff members recalled their new bosses fighting for months over territory instead of pursuing their goals. But with a billion-dollar valuation, Daniel now had to answer to new owners and transform his homespun Swedish startup into a competitive, international tech firm. He found he had to accept collateral damage within the organization.
Some of the new executives—such as the much-liked Chief Revenue Officer, Jeff Levick, who had previously spent time at AOL and Google—would remain at Spotify for years to come. Others did not stay as long. The company’s new Chief Marketing Officer, Teymour Farman-Farmaian, another Google veteran, left after about a year. He had a management style that some staffers found overly confrontational, as three people would recall. Farman-Farmaian himself would later put any friction down to growing pains at a “hyperscaling” company. He had been placed, he said, between Daniel and staff members who had previously enjoyed direct access to their CEO.
For new employees, Spotify could feel like a free and spontaneous work environment, with no clear hierarchy. New recruits sometimes found room to push out their predecessors. Several sources point to the arrival of the new marketing VP Erin Clift as leading to the departure of the internally admired Sophia Bendz, who had built hype around Spotify’s beta product in the early years and remained a key figure in marketing. To the dismay of several employees, Sophia returned after maternity leave only to find her role marginalized. (Such demotions are taboo in Sweden, which has one of the most generous parental-leave systems in the world.) Critics within the company accused Daniel of pandering to investors, too concerned about the optics to reprimand or fire high-profile recruits.
“With American money come American executives, and things are often never the same again,” as one person who spent years in the Stockholm startup scene would put it.
Throughout the years, Spotify was a place ridden with intense internal rivalries. Some would describe the atmosphere as downright Darwinistic. Daniel Ek would rarely mediate in a conflict, opting instead to let his subordinates duke it out themselves. Instead, his focus was on the grand chessboard, where he would map out new ideas and growth targets wild enough to seem fanciful to some of his colleagues.
“When it comes to team leadership and deciding on specifics, he doesn’t always deliver,” as one employee would put it.
Perhaps Daniel lacked interest in office politics because he was always looking a few years ahead. One of his highest priorities was to keep recruiting the sharpest minds available. People with strong resumes needed to be headhunted, whether or not they slotted easily into the corporate culture. “Come join the band,” as the company’s HR department would put it. For Daniel, a little organized confusion did not cloud the bigger picture. His goal was to make Spotify huge.
“I am quite simply rather naïve. Maybe that is why I dare to try to achieve what is impossible,” he said in an appearance on Swedish public radio in the summer of 2012. “Then—and this might not be very Swedish—I want to do something that can really change the world, even if it’s in a very small way.”
Those who had come to know Daniel Ek would rarely describe him as naïve. If anything, he might sometimes appear fairly calculated in his decision making. His friends and associates had become accustomed to his endless ambitions and would often praise his tendency to constantly challenge the status quo.
Eventually, the rest of the world would echo their praises. One of his many accolades hung framed on his office wall. It was a remake of the album art from Pink Floyd’s classic Dark Side of the Moon, where rays of light travel through a prism and create a color spectrum on the other side. In this version, the light passes not through a prism, but through the bald head of Daniel Ek. The illustration had appeared in Bloomberg BusinessWeek.
Daniel had seen how Facebook’s mind-boggling growth had made Mark Zuckerberg virtually immortal. He was therefore focused solely on one thing: how many active users Spotify could rack up every month. As long as his streaming service became a global sensation, petty workplace conflicts and internal rivalries didn’t matter.
I’m Coming Out
In 2012, Daniel Ek began to properly introduce himself to the Swedish public. In March, he sat for a primetime talk show interview on Swedish Television, charming the audience with stories of buzzing servers in his Rågsved apartment and his file-sharing habits as a young man. The host, Fredrik Skavlan, asked about his public appearances in the US, where the audience was used to Steve Jobs’s immaculate performances.
“It doesn’t come naturally to me. After all, I started as a programmer,” Daniel Ek replied.
A few months later, the Spotify founder appeared on the beloved summertime radio show Sommar i P1, where celebrities and public figures play songs and speak openly about their lives for ninety minutes straight.
“I have my lows, just like everyone else, when I feel down and above all inadequate,” he said during the show.
Before entering the studio, the staff had shown him around the massive record archive kept at Swedish Radio’s colossal Broadcasting House, on the outskirts of central Stockholm. Its roughly four million physical recordings made an impression on Daniel, who was taken aback by its sheer size. One of his hosts would later recall how the entrepreneur browsed the records in amazement, an experience he later addressed on air.
“This record archive was the image I used when I tried to explain what it was we wanted to build. Just imagine everything that’s in this archive—only on your phone,” he said.
In his carefully scripted radio performance he mentioned his family, growing up in Rågsved, and his first few assignments in the technology industry. This radio show was where Daniel first described his time as a confused young man in search of an identity, during which he bought a red sports car and, for a short period, fell into a depression. He also relayed how he spent his teenage years pulling “virtual pranks” in various hacker chat rooms and how he, much later, found that he and Sean Parker must have been part of the same online circles as teens.
“At some point then, we realized that we had both been hanging out in the same chat rooms and talked to each other. Most likely something about taking over the world. That’s how we were,” Daniel said. He also offered some banter on the music industry, describing how he once witnessed a famous drummer trash his manager’s office in New York.
Six years had now passed since he, as a twenty-three-year-old, had started Spotify with Martin Lorentzon. They now had 600 employees, enough for some of the reception staff not to know who he was.
“A couple of months ago I was almost denied entrance,” he said during the radio show.
The Swede now had met many of his idols. He mentioned U2’s frontman Bono and lingered on a particular anecdote about the singer-songwriter Neil Young. Daniel had just arrived in San Francisco, feeling dazed after trips to London, Singapore, and New York in quick succession. Neil Young stopped outside his hotel in a white Cadillac.
“He picked me up and we drove around for nearly two hours talking about music. Sometimes it feels like I’m living in a fairy tale,” Daniel told the listeners. Neil Young himself would emerge as a fledgling entrepreneur in the music space. In 2012, he launched a prototype of his own triangular, portable PonoPlayer. An accompanying streaming service would follow a few years later.
During his radio appearance, Daniel also mentioned how he had lunch at the Beverly Hilton Hotel on February 11, 2012, the day before the Grammy Awards in Los Angeles. He was accompanied by Neil Young and the legendary record executive Clive Davis, father of the music lawyer Fred Davis, who helped Spotify during the early years. Clive had served as Whitney Houston’s mentor for nearly thirty years. Now, she was due as the guest of honor at his annual pre-party ahead of the awards ceremony the following day. At one point during the lunch, Clive Davis answered his phone and quickly left the table.
“Neither I nor Neil Young understood exactly what had happened,” Daniel recounts on the program. Soon, they saw paramedics run by. Whitney Houston had passed away in a different part of the same hotel. Clive Davis’s pre-party turned into a wake, where those closest to the star gave in memoriam speeches and spoke openly of their grief.
Daniel could now move freely through the power structures of the music industry. During the same trip to Los Angeles, he posed for a photograph at an event hosted by Universal CEO Lucian Grainge, one of his main antagonists in the messy negotiations that led up to Spotify entering the US. Said to be uncomfortable at industry events, Ek was willing to show up and pay his respects to one of the industry’s most powerful people. Several other well-known faces had made it to the same party, such as the rapper Ludacris and the Universal executive Jimmy Iovine.
By this time, Daniel had parted ways with his girlfriend, Charlotte Ågren. While he had been committed to their relationship, he was often several time zones away. Things are said to have ended amicably in early 2011. Around the same time, Daniel left London and moved back to Stockholm.
During the past winter, the Spotify founder had taken some much-needed time off, traveling to the south of Brazil with Shakil Khan, among others. According to the gossip site Gawker, Mark Zuckerberg and Sean Parker had both flown south to join the fun. They would appear to have left Florianopolis with colorful memories.
During the spring of 2012, Daniel had begun exploring his options as a single man. Several people would recall that he dated a Spotify employee who held a junior role at the company. Both warm and kind, the pair were said to have a natural chemistry. They would sometimes head home together after going out for drinks after work with a larger group.
Tellingly, much of their interaction was said to have occurred online. That was partly because Daniel travelled a lot, but also because the virtual Daniel had a different swagger about him. In person, the now twenty-nine-year-old CEO still gave a quiet and shy impression. But online, he was charming, funny, and brimming with the confidence befitting a world-famous entrepreneur. Despite his age, fame, and riches, Daniel would still only feel truly uninhibited in front of a computer. In that sense, not much had changed since he flirted with girls in high school over ICQ.
After the secretive fling, Daniel threw himself into a relationship with another woman. He would give her a shoutout in his radio program that summer.
“I have now met someone who is special to me. But I’ve also realized that I need someone pretty special to deal with all my darting back and forth,” Daniel said during the broadcast.
He was referring to his future wife, Sofia Levander.
The Power of Love
The romance began when Sofia, presenting herself as a freelance writer, asked to interview Daniel. While waiting for a reply, she wrote a long email lambasting the Spotify founder for not answering. Something about her attitude piqued Daniel’s interest, as he would recall.
Before they had even met, Sofia Levander had shown the kind of unabashed confidence that was one of her defining traits. Like the Spotify founder, Sofia had grown up in surroundings that made her determined to get hers in the world. What she lacked in book smarts, she made up for in fearlessness, determination, and a captivating life story.
Born in late 1980, Sofia was two years older than Daniel. She had grown up in the affluent area of Djursholm, a suburb just north of Stockholm that was known for stately villas and a high concentration of power and money. Its residents included some of the most prominent names in Swedish industry and commerce, such as the Persson family, which had founded the fast fashion giant H&M shortly after World War Two. In Djursholm, children could grow up and become adults without once riding the Stockholm subway.
At school, Sofia and her older sister, Anna, mixed well with the children of the Swedish business elite. But unlike them, they did not come from a wealthy home. Sofia’s father was a professor of psychiatry and her mother would later become a psychologist. When Sofia was four years old, her father moved out. Throughout her childhood and teenage years, Sofia, her mother, and her sister lived with her maternal grandparents, as two people would recall. The house was big enough for the five of them and they were never poor, but in an area full of millionaires, they felt like the have-nots.
The Levander family lived down the road from the E18 highway, which led straight into Stockholm. Like Daniel, Sofia and Anna grew up with a single mother. Whereas Anna studied hard and eventually graduated from the Stockholm School of Economics, Sofia—or “Cookie,” as her close friends called her—chose a different path, one that often worried her loved ones. Soon after she graduated from the local high school, Sofia started studying abroad.
On September 11, 2001, while Daniel was in his final year of school, Sofia Levander was living in New York City. She was twenty years old and had just started studying PR and marketing at Pace University in lower Manhattan. Early that morning, she headed south from her apartment in the East Village, which she shared with three other people. The attack on the Twin Towers would leave an indelible impression on her.
“We’re watching as both skyscrapers burn and I’m seeing people jump from both of the buildings,” she told the Swedish daily newspaper Aftonbladet hours after the attack.
After leaving New York, Sofia studied media and communication at Stockholm University. Around this time, she starred as Nikki in the cable TV show Swedish Girls, a kind of scripted reality show that sought to emulate HBO’s smash hit Sex and the City.
“I can hardly stand watching her sometimes, she’s such a fool,” Sofia said about her character in a 2004 interview.
Talking to the reporter, Sofia was her candid self. She readily admitted that she was on the show to become famous, and that it would be “lame” to claim otherwise.
“But Nikki is extremely exaggerated. She might represent me at my worst state of drunken partying, like something that might happen once a year.”
As Daniel started building what would become Spotify, Sofia spent some time in Libya. There, she helped sell and produce advertorials about the investment climate in the oil-rich country intended for publication in Smart Money, a commercial supplement to the Wall Street Journal.
At this time, Libya’s dictator, Muammar Gaddafi, still ruled with an iron fist. It would be another few years before he was forced from power and brutally murdered following the Arab Spring. In her own book, The Minefield Girl, Sofia would recall how she, early on, found herself inside a Bedouin tent, where the all-powerful man gave her a creepy stare.
By some accounts, Sofia pounced on the opportunity to do business with the Gaddafi regime. She was said to have gotten close with one of the dictator’s sons, Saif al-Islam Gaddafi, a widely influential power broker. A rule of thumb among Libya’s business community was to keep one degree of separation from the ruling family. But Sofia Levander, now in her late twenties, was comfortable enough with Saif Gaddafi to call upon favors directly.
The details of Sofia’s time in Libya would long remain unclear, but by late 2008, she appears to have left the country. At that time, tensions had begun to rise in Gaddafi’s Libya.
“A series of events since last summer suggest that tension between various children of Muammar al-Qadhafi has increased,” a US diplomatic cable from 2009, subsequently published by Wikileaks, would conclude.
“Much of the tension appears to stem from resentment of Saif al-Islam’s high-profile as the public face of the regime.”
After the NATO-supported uprising in 2011, the dictator’s son would spend six years in prison. At the completion of this manuscript, he was wanted for crimes against humanity, and reportedly plotting a return to Libyan politics. His exact whereabouts were unknown.
Some of Sofia Levander’s dealings in Libya appeared to bear fruit. During 2007 and 2008, she reportedly acted as liaison between Libyan authorities and a Swedish mine-clearing company, Countermine, landing them valuable inroads in the dictatorship. Countermine would later attempt a capital raise on the Swedish public markets that ended in a legal quagmire, with many of its shareholders feeling duped.
Sofia Levander would also spend time in Costa Rica with Moha Bensofia, a charismatic Libyan with a blinding smile and washboard abs. The two were an item for a time, according to several people. They also lived together in Stockholm, reportedly in Sofia’s mother’s city apartment. Later, Daniel and Sofia would help Bensofia flee Libya on short notice and settle in Stockholm, where he entered the couple’s innermost circle.
In 2012, after Daniel received Sofia’s fiery email, the Spotify founder replied. A quick Google search would have returned glamorous photos of the young Stockholmer, perhaps from her brief stint as a reality TV star.
The couple started to date, and the relationship progressed quickly. At the start of the summer, Sofia quit her job as an account executive for Microsoft’s local ad sales team. By July, she and Daniel started posting pictures of each other on social media.
A few months later, Sofia Levander was pregnant. In June 2013, their daughter Elissa was born.
Animal
As Daniel Ek settled into family life, Martin Lorentzon would remain a bachelor for years to come. The elder Spotify founder would never take formal employment with the company, preferring to focus on areas where he felt he could be useful for the time being. One day he might court investors, only to interview a candidate for a key position the next. He also took pride in planning extravagant company parties. Few people could say exactly what Martin was up to at any given moment. Spotify’s largest shareholder followed his impulses and did not feel that he needed to prove himself to anyone.
As chairman, Martin would brief Sean Parker and the other board members ahead of each meeting. Many of the key figures that had built Spotify had come directly out of his personal network—such as the early investor and board member Pär-Jörgen Pärson, the company’s CFO, Peter Sterky, and the music-license broker Niklas Ivarsson. Yet among Spotify staff, the forty-three-year-old was best known as the mischievous and quirky co-founder who might suddenly ride through the office on his unicycle.
During the fall of 2012, Martin would frequent Riche, a swoosh restaurant-bar near the square of Stureplan. He would regularly meet up with the political strategist Per Schlingmann, and often sought to discuss political issues of importance to Spotify with people in power. He would occasionally turn up with celebrity guests at Spotify’s new headquarters. The Moderate politician Anna Kinberg Batra and Petter, a Swedish rapper turned entrepreneur, were two of many.
“Would you mind explaining what you’re working on,” the co-founder would ask a random employee, visitors in tow. When accompanied by journalists reporting on the hottest tech company in Sweden, he would strike a charming, boyish pose by the pinball machine, typically wearing a zip-up hoodie with a Spotify logo.
Martin exercised daily and would play squash, golf, and go cycling on his mountain bike. Most days, he would plan two outdoor activities. On one occasion, at the Jarla House headquarters, the energetic co-founder ambled over to one of Gustav Söderström’s assistants with an idea.
“Let’s go play golf,” he said to the junior colleague, who quickly understood that he had no choice but to tag along for a round of golf in the middle of his workday.
People who have worked with Martin often tell stories of his sudden whims, restless enthusiasm, and pranks that register somewhere between childish and inappropriate. Many also find him funny. In the middle of a meeting where English was being spoken, he is said to have turned to one of his Spotify colleagues and explained to her, in Swedish and with a straight face, that he really needed “to take a poo.”
“He won’t sit still. It’s impossible to get him into a room even for a short meeting,” as one former co-worker would recall.
The same person suspected that Martin’s goofy style was his way of deflecting the constant demands for his time, influence, and wealth, both at Spotify and outside the company. A conversation with Martin would often liven up his co-workers, even if it was hard to keep track of what he was trying to say.
“He is usually talking about five things all at once, jumping from one topic to the other. It gets confusing, but he always circles back to finish his points,” as one former employee would recall.
As Spotify made inroads in the US, the company’s press team began to see Martin as a liability, or a “loose cannon,” in interview situations. His English wasn’t great either. Underhandedly, they would lobby Daniel to dial back his co-founder’s official duties abroad. Martin reluctantly accepted, seeing the wisdom in letting Daniel mature into the company’s definitive spokesperson.
With time, Martin Lorentzon became known for his odd inside jokes. One weekend, he called a mid-level manager at the company who was out for a walk alongside his girlfriend. Startled by a phone call from Spotify’s chairman, the employee answered immediately.
“Hi, Martin,” he said.
“Squeal! Squeeeeal!”
For a second, the co-worker hesitated. Martin repeated his wish.
“I want you to squeeeeal!”
The Spotify chairman would not let up until his colleague made grunting animal sounds on the phone. His girlfriend wondered who the hell was on the other end of the call.
Over the years, Martin would ask many co-workers to squeal for him. He seemed amused by how everyone interpreted the request differently. Some were enthusiastic, others reserved. Some felt uncomfortable and that such behavior did not belong at an international workplace. Perhaps the squealing was Martin’s way of getting them to let their guard down. Perhaps he thought the noise each person produced revealed something about their personality. Perhaps it was just a form of bullying. Regardless, he made the request to everyone, from the company’s top managers to their personal assistants.
“Squeal a little, old boy,” Martin once wrote to Shakil Khan in a tweet written in Swedish.
Much later, the Spotify co-founder would explain how this inside joke had started at Tradedoubler, where he used the Swedish word “gny” (squeal) to teach a French coworker the quirks of Swedish pronunciation.
While Daniel continued to polish his leadership style, his co-founder remained relatively unchanged. By now, Martin had founded two wildly successful companies and saw no reason to alter his personality.
Hustlin’ Daze
In the year following Spotify’s US launch, Daniel Ek’s close advisor, Shakil Khan, had begun to explore opportunities outside of the company.
In March 2012, he announced that he was leaving Spotify to join the nascent networking platform Path. He would be “head of special projects,” based in London but with global duties. Daniel was sad to see his friend leave.
“I am kind of an introvert guy, and Shak is the definition of social, so he was the link to the rest of the world in many ways for me and for the company,” Daniel told the tech website, AllThingsD.
By now, Shak’s international network had grown, and the “global favor bank” he had amassed was proving useful. At a tech conference in Berlin, he would introduce his friend Nick D’Aloisio, a sixteen-year-old entrepreneur and programmer, to Yahoo! CEO Marissa Mayer.
In 2013, Yahoo! acquired D’Aloisio’s company, a natural-language processing startup called Summly, for a rumored $30 million. Three years after Apple acquired Siri, Yahoo had purchased its own language technology—thanks in part to Shakil Khan.
As an investor in Summly, Shak made money off of the deal. Others said to have invested included the news mogul Rupert Murdoch, the British comedian Stephen Fry, and the world-renowned artist Yoko Ono. Several of the other shareholders—including Li Ka-shing and the actor Ashton Kutcher—had direct ties to Shak.
In the years that followed, Shak would invest in a host of other international startups, among them the crypto-currency news website CoinDesk and Bitpay, a blockchain-based payments provider.
Spotify would, however, turn out to be his most successful bet by a distance.
Taxman
For Martin Lorentzon, Spotify was still the only show in town.
“I put all my eggs in one basket and watch them carefully,” as he would describe his investment strategy time and again.
Preserving his company’s Swedish heritage was important to Martin. He played an active role when new employees traveled to Stockholm for Spotify’s annual Intro Days, telling the streaming company’s origin story in his typically lively manner. After one of these presentations, a group of new hires from Italy approached him. Martin lit up when they asked him for a group photo, as one attendee would recall.
All of Spotify’s large-scale festivities were part of Martin’s remit. He jumped at the chance to celebrate Spotify’s collective achievements and forge a bond between the growing swaths of people representing the company across the globe. In June 2013, Spotify invited its roughly one thousand employees to Summer Jam, a days-long party that spared no expense. Martin Lorentzon is even said to have covered a part of the costs out of his own pocket. At Berns, where Spotify had held its first launch party in 2008, he roused his staff with a passionate speech. The week culminated inside a remodeled hangar at Arlanda Airport, where the British electronica band Faithless performed until the early hours.
Eventually, Martin began to take on commitments outside of Spotify. In April 2013, he took a position on the board of Telia, the telecoms company where he had spent some time as a trainee during the 1990s. His nomination to the board resulted in a media storm, after Swedish Radio reported that the Spotify co-founder had avoided paying taxes in Sweden by hiding his wealth in Cyprus and Luxembourg.
Familiarly, Spotify’s press department met the news with silence. Martin’s lawyer stepped in as spokesperson, claiming the ownership structure was established for “business” reasons. Eventually, the Spotify founder wrote a piece published in the opinion pages of Dagens industri, Sweden’s leading financial newspaper. In it, he defended his decision to minimize his tax contributions in Sweden.
“I am proud to have contributed to building two strong Swedish companies that have created many jobs in Sweden and abroad,” he wrote.
He claimed that he moved his money abroad because in the late 1990s, he had found it difficult to find Swedish investors willing to back his “crazy ideas.” By placing his money in tax havens, he was following the example set by venture firms like Northzone and Creandum.
“I realized early on that in future ventures I would have to finance my ideas on my own. Hence my investment company in Cyprus.”
The company, Rosello Company Limited, appeared to have struck few deals outside of Spotify. A few years later, Martin and Daniel would make an investment in their friend Shakil Khan’s company Student.com, but other than that small holding, Rosello functioned as the largest single shareholder in Spotify. It was certainly a risky strategy, but Sweden’s most successful serial entrepreneur in decades had put nearly all his faith in a single company.
While he enjoyed nights on the town, his other investments would remain modest for years to come. He was said to own an apartment in the northern ski resort of Åre. But Martin resided in the same apartment in Vasastan, a chic neighborhood minutes from the city center, that he acquired during his years at Tradedoubler. It was a modest abode for a man who, by 2015, would become a billionaire.