Creating Product Stickiness – Will Robbins

How should we think about competitive moats for companies like Spotify that aren’t quite marketplaces yet still have data and multiple parties involved? Is defensibility (or lack thereof) inherent to the market structure, or can you create stickiness out of thin air? Is there another category of defensive strategy yet to be fully explored? For Spotify, the traditional network effects model doesn’t quite work as it would for Facebook or Twitch. Sure, you have consumers on one end that incentivize labels to add more content to the platform. You can also add original content, or build things like playlists that are mildly high-friction to transfer. But labels can raise prices until they capture most of the value. Competing platforms can offer the same content at a different price. And switching-cost fundamentally doesn’t get stronger with scale. In fact, product friction often incurs a tradeoff between usability and stickiness. Spotify ultimately leans heavily on product design, branding,

How should we think about competitive moats for companies like Spotify that aren’t quite marketplaces yet still have data and multiple parties involved? Is defensibility (or lack thereof) inherent to the market structure, or can you create stickiness out of thin air? Is there another category of defensive strategy yet to be fully explored? For Spotify, the traditional network effects model doesn’t quite work as it would for Facebook or Twitch. Sure, you have consumers on one end that incentivize labels to add more content to the platform. You can also add original content, or build things like