Saturday – March 22, 2025 #33 | Breaking laws in the name of innovation How Spotify and Uber won: break the law, win the market, settle and "seek forgiveness" later This is a weird piece for me to write because at heart, I'm personally an ardent rules-follower. I like getting the gold star (one reason why I love social media so much: adulation from random strangers! 🥳) and I do what I'm told. (And to be fair, I do believe this quality has helped me immensely in being both a good employee and a good husband.) When it comes to startups and business though, I've definitely noticed a pattern: many of the success stories have often outright flagrantly broken laws to get to where they are today. Two companies that come to mind are Spotify and Uber. In the beginning, Spotify knew it had a flywheel problem: users would not subscribe if they didn't have a huge music library to stream. Labels wouldn't license music if there wasn't a huge subscriber base though. People may wonder why other streaming services never won the market first? Why did the Amazons, Googles, and Apples of the world, given their massive resources, lose the music streaming game? Because they followed the laws. Spotify got its start by initially streaming a lot of music it didn't explicitly have rights for. Eventually, in 2017, Spotify did finally agree to a $43 million settlement; but it was a small price to pay. Today, Spotify has over 30% of the global music streaming market and is the biggest music streamer on the planet; its net income was $1.2 billion USD in 2024. Uber has a similar story. As far as I can tell, Travis Kalanick's greatest insight with Uber was that he could simply just break all the laws and "seek forgiveness" later. Taxi services is a very regulated industry in many places of the world and in our biggest cities, medallions can cost hundreds of thousands of dollars. Uber basically just ignored all those laws and did its thing anyway...
Sat-Mar 22, 2025
#ScreenshotEssay #33: "Breaking laws in the name of innovation"
"I guess the closest thing to a lesson could be: for people who have the risk appetite and conscience for it, breaking the law doesn't matter as long as you win."
#r2025.03 #r2025 #rl33 #spotify #uber