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Innovation

Succeed or die: Behind the scenes of Spotify, Summly and Coindesk

Dr. Andrew Fletcher  Director, Thomson Reuters Labs™ – London

Dr. Andrew Fletcher  Director, Thomson Reuters Labs™ – London

What does Shak Khan do?

Behind the title of Special Projects at Spotify, and the numerous other tech successes that Shak has been involved in, is the story of someone who had the hunger and drive to “get to where I want to get to or die.” He counts the four key ingredients that took him from being a high-school dropout to a successful entrepreneur as: loss of sleep, dreams, books, and pain.

A key part of this being able to balance the need to dream in order to have the vision of where he wanted to go, with the hard work to make it happen. His first business in the early 90s typified that hard work approach. He would read Loot and then drive around London buying broken mobile phones to polish and repair them. He’d then fly to Dublin on the same day where he could sell them for triple the price. He’d then count his money in the toilets at Dublin airport before flying home and repeating it again the next day.


Check out the full video (37:37)


Investing in new technologies

His first really big success came in 2008 when his company was acquired, and then in turn acquired again by AOL. What did it feel like to suddenly have money? He was depressed and lonely, finding that it was the hunger and journey that had been motivating him. It was around then that he met Daniel Ek, and they bonded over this same sensation – since Daniel had already sold a company. Spotify became Shak’s first investment – one which everyone told him not to do, because the music industry was in such trouble. The reason he invested was that he was not backing a music product, but instead backing the entrepreneur. Daniel was sleeping on Shak’s floor in London at the time and he would see him late at night working at his computer, and then again early in the morning asleep with his computer on top of him. He knew that Daniel was going to ‘succeed or die,’ the same trait he recognized in himself. When you invest in a company, it’s about buying risk. His faith in Daniel mitigated that risk, as did the fact he felt he could personally help.

So what does Shak do as the Head of Special Projects at Spotify?

He is the eyes and ears of the CEO, building relationships in countries two years before Spotify launches there. He is the advance party. Negotiations with the music industry were hard, although they were helped by starting with Sweden as a test case, since it is not one of the big markets internationally. If they had tried to first launch in the U.S. it would have never happened. Instead momentum was built by growing from Sweden to Norway to Finland to the UK. The backdrop of how technology was rapidly advancing was a huge enabler, through the availability of smartphones, broadband and 3G. Influential backers such as Sean Parker also helped, an intro which Shak made as part of his role to make sure the product was seen by the right people. Sean was introduced to the product at a barbecue by someone who had early access. Suddenly Shak was getting long emails from Sean saying how great he thought Spotify was. At first Shak didn’t know who he was, but when he found out he put him in contact with Daniel and the relationship sprung from there.

Li Ka-shing of Horizon Ventures had been an early investor in Spotify and he suggested that Shak meet Nick d’Aloisio, founder of Summly (which was later acquired by Yahoo). Shak met him and was struck by the amazing IQ and EQ, and quickly became convinced the 16 year old was exceptional. When he gave Nick no nonsense feedback during their first meeting, rather than running away, Nick asked Shak to be his mentor and as a result they traveled together around the tech event circuit, including an introduction to Yahoo CEO Marissa Mayer at DLD Munich.

Digital currencies and FinTech

Shak’s latest venture is Coindesk, a site for news, information and prices about Bitcoin and other digital currencies. Typical of Shak being plugged in to the next big thing, Matt first heard about bitcoin from him. Why did he think this could be an opportunity? Fundamentally, he feels that the financial system is ripe for disruption. For example, something as simple as paying someone back for lunch becomes overly complex and difficult if their account happens to be in a different country. His interest is more based in a belief that digital currencies will be part of that disruption. There is no magic formula; he doesn’t know exactly what thing will cause the disruption, but he is convinced financial services are going to change. Passion and desire make you do crazy things. Coindesk specifically came about at a time when Bitcoin prices were going through the roof, but there was nowhere for interested people to read about it. Four weeks after spotting that gap they launched the blog.

He sees financial services as the place where the London tech scene will find its big success, as can be seen by companies like Transferwise and DueDil. There is a race for talent; every company is looking for smart people. Shak sees a divide between entrepreneurs who have trouble hiring and students who want to work for a start-up, but have no experience. His advice is to find cool companies that you are interested in and reach out. Don’t waste time on networking events. Sonia Sebastian was curious about how Shak gets everything done, given that Matt just sees him drinking coffee with lots of people! Like those same start-ups, the only way Shak scales is with help, and what’s going on behind the scenes is eight people prepping him and moving things forward. Plus he works by paying in and calling on his ‘global favour bank.’

Shak’s advice to start-ups

When pitching, forget the idea and focus on the problem you want to solve. Unless you are the smartest person in the world someone will have already thought of your idea. Kelsey Smith pushed him further on this, since he had put a lot of emphasis on his interest in ideas, what about the technology and the design? He’s able to call on expertise in his team, such as a skilled technical person in his office who can come in and tell in three seconds if an idea will work. That way Shak can focus on the problem being solved, and whether the idea just might be the next big thing.


Learn more

Visit Innovation @ ThomsonReuters.com to learn more about how we are pairing smart data with human expertise and how you can get involved.


About the series

Thomson Reuters Labs™ partners with Cass Business School to bring you EntrepreneursTalk@Cass in London. These interview-based evening events feature founders of successful start-ups from London and take place at Cass Business School. EntrepreneursTalk@Cass are designed to inspire students, entrepreneurs and anyone interested in tech.

The talks are hosted by Axel Threlfall, Editor-at-Large, Reuters. Prior correspondent experiences include: Reuters TV, Wired UK, CTV News, and CBC Undercurrents.

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