The Spotify Play Read online

  “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 o
ccasionally 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 e
xample 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.

  Spotify TV

  SPOTIFY WAS ALWAYS A HIGHLY secretive company. Licensing deals with the record labels were strictly confidential, and staff were often asked to sign nondisclosure agreements (NDAs). They generally remained loyal, and leaks were rare. This only made the press more eager to cover the goings-on at the rapidly developing streaming company.

  In mid-2011, following the launch of Spotify in the United States, Daniel embarked on a secret pet project. He formed a new unit within the company, kept separate from all other departments. Details of the project would remain unknown to the outside world for years, and the full picture would not emerge until the publication of the first Swedish edition of this book.

  In the fall of 2011, Daniel assembled a small team that he and his colleagues would internally refer to as Magneto. It was named for the figure in Marvel’s X-Men series who, by controlling magnetic fields, could steer target-bound bullets, missiles, and trucks in any direction. Daniel’s goal was to steer millions of music listeners toward a different media format: video.