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21 May 2023 Lenny's Podcast Lessons from scaling Spotify: The science of product, taking risky bets, and how AI is already impacting the future of music | Gustav Söderström (Co-President, CPO, and CTO at Spotify)
“The team structure is more traditional, larger teams, less overhead. And we've been specifically working with where in the org do we put the autonomy because the extremes are at the leaves and we were there.”
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- 21 May 2023
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…Gustav Söderström This was something that we focused a lot on early and it turned out to be smart of us to name these things into squads and chapters and so forth. It wasn't really ... Well, maybe it was deliberately branding, but it wasn't for purposes of branding that we made it up. We made it up because we thought it was a good structure to use and we needed names for things and this was the early internet eras you were allowed to make things up. And so it was very good for where we were at the time and it certainly helped us in recruiting. It's become a little bit of a cost to us because people still think that we organize that way and it's not a very efficient way of being organized at this scale or maybe even if you started over right now because we've learned more. Gustav Söderström But I think the big difference is the idea with the squad specifically was twofold. They were supposed to be small and full stack. So squad should be about seven people and it should have front and backend, mobile, QA, agile coaches and so forth, and it should be very autonomous was the idea. And that's really what we shifted. So, first of all, as you grow the company, scaling in increments of seven engineers just creates a ton of overhead. So, obviously, our teams now tend to be much bigger, maybe two, three times that at least per manager to maybe have 14 or something instead of seven and just less overhead roles. So that's one. It looks more traditional as you learn more and is reasonable as you scale. The second big thing I think we struggle with was back then when I joined, the average age at Spotify was ... I mean, I was the oldest and this was 14 years ago. So I think the average age was probably under 30 or something and it wasn't most tech companies. Gustav Söderström And so we had coming from Sweden, which is a different culture than the US, and I love a lot of things about Swedish culture and I think we managed to keep the best parts, but Sweden is a very bottoms-up autonomous culture. There's this famous drawing on how you make decisions in Sweden. In the US, I think it's just a hierarchy. In Sweden, it's a circle. It's in a circle, no one is in the middle, there is no leader and so forth. Interesting. Gustav Söderström So I think by culture, we're very inspired by this super autonomous thing. And I think the idea with autonomy is very reasonable and the right one, which is we work and we are hiring the smartest people we can find and we pay high salaries for that. So if you're hiring smart people, one way to think about it is you're renting brain power. Gustav Söderström So if you're renting all of this expensive brain power and then you give them no room to think for themselves, that doesn't sound smart, then you should actually hire less smart people and keep your costs down or something. So I think you have to give a bunch of autonomy to actually maximize the value of the investment you're making. , then you should actually hire less smart people and keep your costs down or something. So I think you have to give a bunch of autonomy to actually maximize the value of the investment you're making. So that's very reasonable that you would give a lot of space for people to use as much of their talent and capacity as possible. But the problem with that is if you put autonomy very far towards the leaves of the organization, and also if you combine that with having a very junior organization, which we did back then, there's a fair chance that you're just going to produce heat. You're going to have a hundred squads with a hundred strategies running in a hundred directions. And Spotify has been there in that camp. Gustav Söderström I mean, we managed to get somewhere, for sure, in spite of this, but I'd struggle to say we were efficient in doing that. So we've done a few things. The team structure is more traditional, larger teams, less overhead. And we've been specifically working with where in the org do we put the autonomy because the extremes are at the leaves and we were there. The other extreme may be at the top, let's say maybe some Twitter, there's one person. Both have problems. If you have it at the leaves, you're going to produce a lot of heat. If you have it at the top, you need someone with a lot of capacity and Elon has a lot of capacity, but you are, by definition, going to bottleneck. All decisions have to go through there. And Daniel, it's not his personality that he even wants to make all the decisions. Gustav Söderström He wants to maximize throughput rather than to bottleneck the throughput. So the question is, if it's not at the top and not at the very bottom, where do you put it? And what we've found, which I don't think is very contrarian at all, I think this is the case in most companies, is around the VP level. So if you have Daniel, then you have the C level, myself and others, then you have the VP level, that is a good mix of instead of having one person in the company think, so only Daniel then and the rest just do, you have on the VP level in the company this many tens to maybe hundreds of people that have a lot of autonomy to think. So you get a good amount of freedom of thought and people thinking in different directions, but it's not like 8,000 people. And these people on the VP level are both quite a lot of them, but they're also usually quite senior. They have a lot of pattern recognition. Gustav Söderström So I think that solves for, it's a good ... If you think of it as an optimization problem, it's a good optimization space. So the autonomy level in Spotify now tends to be quite high at the VP level and then lower around those levels. And when you say autonomy, what does that actually mean? Is it the VP of, say, the podcasting product has a lot of say over what happens and there's not a ton of ... I don't know how involved are people above? And I know Maya's the VP of product, I believe, for the podcast product. Gustav Söderström Exactly. Who I think is going to come on the podcast someday. What does that mean in terms of Tommy for her, what practically?…
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