Gustav Söderström

that is public is the free tier that I told you about. We only had a paid mobile tier. You actually paid to get mobility on Spotify. Now smartphones are scaling. Users don't have a computer. We need a free tier. The competition that was YouTube, they were foreground on demand with video. The pattern recognition, the obvious thing would have been to... Say, let's do that. It's proven.

that is public is the free tier that I told you about. We only had a paid mobile tier. You actually paid to get mobility on Spotify. Now smartphones are scaling. Users don't have a computer. We need a free tier. The competition that was YouTube, they were foreground on demand with video. The pattern recognition, the obvious thing would have been to... Say, let's do that. It's proven.

But what we did instead, and specifically attributed to a person named Charlie Hellman, was to reason around it from first principles and say, okay, let's look at our usage of Spotify. If we limited our license to the same thing, it only works in the foreground. As soon as you look at the screen, the music stops. How much of the listening is in the foreground?

But what we did instead, and specifically attributed to a person named Charlie Hellman, was to reason around it from first principles and say, okay, let's look at our usage of Spotify. If we limited our license to the same thing, it only works in the foreground. As soon as you look at the screen, the music stops. How much of the listening is in the foreground?

Turns out back then it was 9% or something. So you have 91% of the use case being in the background.

Turns out back then it was 9% or something. So you have 91% of the use case being in the background.

probably want to get something else the user need there is probably background listening and then you look at the app store is there a way to listen to music for free in the background in the app store the closest thing was pandora but that was radio you could not listen to your favorite songs so then we said we would like a consumer product where you can listen to your favorite songs with your phone in the pocket for

probably want to get something else the user need there is probably background listening and then you look at the app store is there a way to listen to music for free in the background in the app store the closest thing was pandora but that was radio you could not listen to your favorite songs so then we said we would like a consumer product where you can listen to your favorite songs with your phone in the pocket for

forever for free. So the problem with that is that's almost a premium use case. If we just launch that, it's going to cannibalize our premium tier. So what do we do? Then we looked at the premium usage and we saw that premium users, about 50% of the time, they were shuffling their playlist.

forever for free. So the problem with that is that's almost a premium use case. If we just launch that, it's going to cannibalize our premium tier. So what do we do? Then we looked at the premium usage and we saw that premium users, about 50% of the time, they were shuffling their playlist.

They were using on-demand features, searching and clicking and playing specific songs 50% of the time, but they were shuffling playlists 50%. So then we thought, what if we take this that seems to be something that even when you have on demand, you voluntarily shuffle. It's a big use case. We give that away for free.

They were using on-demand features, searching and clicking and playing specific songs 50% of the time, but they were shuffling playlists 50%. So then we thought, what if we take this that seems to be something that even when you have on demand, you voluntarily shuffle. It's a big use case. We give that away for free.

That should mean that none of the premium users convert back to free because they still want their 50% on demand. But you're giving a lot of value away. for free. So we tried to model a consumer need, reason around it, came up with this shuffle background here that was very, very, very unintuitive. Even the people inside the company said that's a terrible idea.

That should mean that none of the premium users convert back to free because they still want their 50% on demand. But you're giving a lot of value away. for free. So we tried to model a consumer need, reason around it, came up with this shuffle background here that was very, very, very unintuitive. Even the people inside the company said that's a terrible idea.

But we trusted the data, and I was even skeptical of it myself. I was like, look at this on demand. Shouldn't we try time caps? A lot of people just want us to try long, free trials. But the problem with the free trial is, even if Nokia, I think, Nokia comes with music, they tried a year-long free trial.

But we trusted the data, and I was even skeptical of it myself. I was like, look at this on demand. Shouldn't we try time caps? A lot of people just want us to try long, free trials. But the problem with the free trial is, even if Nokia, I think, Nokia comes with music, they tried a year-long free trial.

But even then, the user knew that if I start investing in Playlist now, a year from now, my Playlist investment is going to disappear. So they never started investing. So we went with this shuffle tier, and this is what made growth explode. And to this day, that's our differentiation against the other services. It's the only way to listen to music for free forever with your phone in your pocket.

But even then, the user knew that if I start investing in Playlist now, a year from now, my Playlist investment is going to disappear. So they never started investing. So we went with this shuffle tier, and this is what made growth explode. And to this day, that's our differentiation against the other services. It's the only way to listen to music for free forever with your phone in your pocket.

So that's an example of theorizing and explaining rather than pattern recognition.

So that's an example of theorizing and explaining rather than pattern recognition.