Spotify's Secret for Competing with Apple, Amazon, and Google

How has Spotify managed to outperform industry giants Google, Apple, and Amazon? Scrum co-creator Dr. Jeff Sutherland reveals three ways Spotify’s implementation of Agile development is catapulting it past the competition.

Scrum Done Right: How Spotify Takes On Industry Giants | OpenView Labs

If you look at the roster of competitors that digital music service Spotify deals with every day, you might wonder how the European startup has managed to survive without getting crushed. Apple has iTunes. Google offers Google Play Music All Access. And Amazon (is there anything the company doesn’t sell?) has long been rumored to be developing its own subscription-based music service. That’s not to even mention other well-funded services like Pandora, Rdio, and Rhapsody.

That’s some stiff competition for a growing startup with a current valuation of $4 billion — several hundred billion less than behemoths like Apple, Google, and Amazon.

So, how exactly has Spotify taken on the challenge and stayed one step ahead of those industry behemoths’ services? Dr. Jeff Sutherland, co-creator of Scrum and author of the book Software in 30 Days: How Agile Managers Beat the Odds, Delight Their Customers, And Leave Competitors In the Dust, recently sat down with OpenView to discuss how it has a lot to do with how Spotify leverages Agile software development (listen to the full interview here).

“Spotify has approached (Agile) very systematically, and the reason for doing that is because of the competition it’s facing,” Dr. Sutherland explains.

Jeff Sutherland“Google, Amazon, and Apple could crush Spotify in a nanosecond if the company wasn’t perpetually striving to be faster, better, and cheaper. To survive, Spotify has to be Agile. They have to keep on running out ahead.”

— Dr. Jeff Sutherland, co-creator of Scrum

Of course, Google, Apple, and Amazon use Agile in some way, too. So, how has Spotify managed to turn it into an advantage?

Scrum Done Right: 3 Key Ways Spotify Excels with Agile Development

1) Incredible Management Buy-In

Spotify doesn’t just preach Agile, it lives and breathes the development methodology. According to Dr. Sutherland, Spotify insists that its Scrum masters also be experienced Agile coaches, and they’ve gone out of their way to recruit some of the leading Agile trainers in the world to fill Scrum master roles.

2) Utilization of Small, Totally Independent Teams

In this post for TechCrunch, Ingrid Lunden says that Spotify organizes its international team into small clusters that it calls “squads,” and treats those units like individual startups. Each squad is fully autonomous and focuses on a specific function within Spotify’s product. That organizational approach is key to quickly developing and delivering software updates without interruption, Dr. Sutherland says.

“By organizing their teams in ‘squads’ or ‘tribes,’ Spotify is able to give each team a piece of the product that’s completely theirs,” Dr. Sutherland explains. “That way, they’re able to deploy, change, and upgrade that constantly without breaking anything else.”

3) Constant Removal of Roadblocks and Waste

When a business is scaling as fast as Spotify, roadblocks will inevitably arise that can hinder the speed and quality of software development. Spotify deals with those issues by constantly monitoring potential obstacles, and removing them before they become a bigger problem.

For instance, Sutherland says the company noticed at one point that its operations team was too slow in executing deployment. So, it removed that impediment by handing over deployment responsibilities to the development team and having operations experts simply provide the right tools and procedures for executing that step. Ultimately, that streamlined Spotify’s deployment process and created greater consistency and predictability.

The Key to Competing with New Industry Standards in Software Development

The simple reality, Dr. Sutherland says, is that in order for your smaller, growing software company to compete with the big dogs, it has to nail Agile.

How can you ensure your team makes the best use of Scrum?

Teams working on ideas

Achieving Successful Scrum Team Dynamics

Of course, that doesn’t mean you have to try to mimic Google’s Agile practices (the search giant has been known to assign 15,000 developers to a single branch of code), but Dr. Sutherland says you do need to fiercely commit to Agile, or risk getting obliterated.

“Microsoft has a 3,000-person Scrum team for all of their development projects, and they deliver a brand new release of every product at the end of every three-week sprint,” says Dr. Sutherland. “That’s what’s going on today at most great businesses, yet so many companies I work with and train have no idea what they’re facing.”

Want to learn more about Scrum? See our Scrum Process and Resource Guide.

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photo by: Gavin Tapp

Share Your Thoughts

  • Jim Franklin

    What are the limits to the independence of teams? Which decisions are cenralized v decentralized? For example, if you are primarily Python shop, would you let an independent team build in Go?

  • http://www.kaptasystems.com/ Alex Raymond

    Jeff – great article. Question: how does Agile apply outside of the development team? What’s the scope for taking Agile to the C-suite, for example?

    • Jeff Sutherland

      As a company moves Scrum out of IT to the rest of the organization, some companies implement a C-suite Scrum. An interesting example is Systematic in Denmark. I began working with them in 2006 after they were appraised at CMMI Level 5. Scrum allowed them to deliver all projects at half the price so it became the standard methodology for the company. The C-suite runs a daily meeting and recently did an ROI calculation on all their meetings. Only the Scrum meetings had value exceeding the cost so they got rid of all other meetings.