Spotify

Media companies buying media: the new acquisition playbook

Shaan frames a pattern: non-media companies acquiring media/community brands to own an audience. Examples include Robinhood buying Snacks, Stripe buying IndieHackers, HubSpot buying The Hustle, and Spotify buying The Ringer.

“Robinhood bought, uh, Snacks, which was like a kind of a media company. So Robinhood, this exchange, not a media company, buys a media company. Stripe bought IndieHackers, right? Stripe, not a media company, bought IndieHackers, this community of kind of makers. HubSpot buying The Hustle. And there's a few other ones that are actually somewhat prominent. Spotify buying, let's say, The Ringer or things like that.”

Steal thisIf you run a software company, consider buying an audience instead of building one from scratch.

Songs got shorter because Spotify pays per stream, not per minute

Shaan's channel-market-fit example: average song length dropped from ~5 minutes to ~2.5 because Spotify pays per stream regardless of length, and songs are now engineered backwards from TikTok virality (with dances baked into the lyrics).

“The average song length has actually gone down. Why? Because Spotify just pays you per stream, not per minute streamed. So instead of 5 minutes for a song, they're doing 2.5 minutes per song, because why would I want a long song? The second thing is TikTok. A lot of songs are now being written working backwards from, okay, if this was going to go viral on TikTok, how would I do it?”

An artist incubator: own your masters, distribute yourself

Shaan's build-out of the YC-for-music idea: tell up-and-comers to skip the label, take a tiny fraction, let them own their work. It's viable now because artists distribute via YouTube/Spotify and get famous on their own social media without label-radio deals.

“every up-and-coming artist, don't sign with a record label, come to our— come to the incubator first. We're gonna take a tiny fraction and you're gonna own your own shit and we're gonna try to blow you up. Um, because today we don't need to put the same amount of money and resources into each creative talent as the record labels did before, because today you're able to distribute through YouTube and Spotify and you get famous through your own social media.”

Steal thisRecruit creators pre-fame, take a small cut, give them ownership, and lean on self-distribution to cut label-level costs.

Steve Bartlett bought theme accounts for $1K and built a fortune

Sam tells how Steve Bartlett, a former 20-year-old shit employee, built tens of millions by buying non-personality Instagram/Twitter theme accounts (like 'I Love Food' with 6-7M followers) from teenagers for ~$1,000, aggregating them, and selling reach to brands like Spotify.

“And he was figuring— he figured out pretty early, wow, the people who run these accounts with a million, million followers, it's an 18-year-old kid, and I can offer them $1,000 and I can get the account. And he's just, you know, doing affiliate links for protein powder. But if I aggregate all these, I can go sell this to Spotify as a great way to reach the masses, and I can control these.”

Steal thisAggregate cheap theme accounts with zero personality risk and sell the combined reach to brands.

Second Measure: read any company's revenue from credit-card spending data

Shaan explains Second Measure, which analyzes aggregate credit-card spending to estimate how much money a company is making, even private ones, and to see which player is winning in a category (e.g. which food delivery app leads).

“so Second Measure takes credit card spending data and can tell you essentially like how much money something is making just by analyzing how many people are charging Spotify per month. And then they're like, okay, cool, right? Imagine Spotify was not a public company. You'd be able to see here's how much revenue that they're making.”

Steal thisUse a proprietary 'source of truth' dataset (card spend, web traffic, SEC filings) to sell visibility into numbers companies want hidden.

Direct listing = liquidity without raising capital

Shaan explains why Slack and Spotify chose direct listings over IPOs: a direct listing gives a company public liquidity without selling new shares to raise capital, and it's faster and cheaper than a traditional bank-underwritten IPO.

“So it's what a direct listing is, is it's the liquidity of being public without raising capital. So if you go public in an IPO, it's your initial public offering, you're selling shares in order to raise money.”

Spotify didn't buy The Ringer for ad revenue, it bought exclusive content to cut churn

Shaan argues Spotify's ~$300M for The Ringer has nothing to do with podcast ad revenue: as an audio (not just music) company it buys exclusive key content like Bill Simmons so listeners switch to and stay on Spotify, the same content-wars logic as HBO and Netflix.

“it's like the HBO model or whatever, Netflix. They're all trying to do the same thing, which is how do we get the key content here so that our subscribers stay subscribers or new people become subscribers? And that's the math. And so it has nothing to do with what The Ringer can do in its own revenue. That's irrelevant to them. It's what they think they can do if they— the key content in the key podcast verticals.”