While Spotify has been reportedly valued at $8.5 billion, its founder and chief executive says the company could have 'died' a few years ago.
Speaking during a talk at the Slush technology conference in Helsinki on Wednesday, Daniel Ek said the company didn't realize the significance of mobile early on.
Before 2013, Spotify only had a mobile product that required people to pay a subscription for. On desktop, the music streaming service had a freemium model – with both a free and premium tier. In the short term, Spotify benefited with people paying for the mobile product, but it was missing out on further growth.
"For a long period of time, that was great because whenever people wanted to use it on a mobile device, they ended up paying for the product," Ek said.
When Spotify introduced a free mobile product at the end of 2013, the start-up's metrics spiked, according to Ek, who said he had to "bet the entire company" to transition to mobile. If this hadn't had happened, the company could have gone bust.
"I remember the day we turned on this free service, had we probably gone on for about six more months I think we might have died as a company. So that was a really defining moment and that was as late as 2013," Ek said.
"Every great company has at least three near-death experiences."
Spotify – which was founded in 2006 in Sweden – now has 40 million paying subscribers, according to the company, and 100 million users in total. The music streaming start-up is reportedly planning an IPO next year.