Sean Parker, On Product-Led Partnerships

In technology circles, Sean Parker needs no introduction. He’s the Managing Partner at Founders Fund, and co-founded category defining companies like Napster, Plaxo, and Causes.

Yet, thanks to Justin Timberlake’s portrayal of him in The Social Network, he’s probably most famous for his short time at Facebook.

If you’ve not seen the movie yet (spoiler alert), he befriends Mark Zuckerberg, helps him raise his first few rounds of funding, hosts a party, and exits stage left. In reality, however, he contributed way more than that to the success of Facebook.

Arguably his biggest impact came from his contribution to the launch and growth of Facebook Platform, through identifying and launching some insanely impactful Platform Partnerships.

Spotify was one of the earliest, and most successful.

I recently stumbled across this email exchange between Sean and Spotify’s co-founder, Daniel Ek. It’s a masterclass in how Product-Led Partnerships are created.

Here’s some of my favourite quotes from it.

On the importance of creating the best user experience:

“Most of these deals would have resulted in the wrong user experience and I’ve done my best to stop them where they didn’t make sense.”

On incumbents vs disruptors:

“Business development teams have a bias for working with the top player in a given market, especially when they don’t understand that market.”

Creating a shared vision, in a sentence:

“Ever since Napster I’ve dreamt of building a product similar to Spotify.”

Creating a shared understanding of mutual challenges:

“What’s clear is that the labels never quite understood the way people really consume/share/experience digital music.”

Sharing genuine excitement:

“At that time, I wasn’t aware that your licenses were somewhat different from what I’d seen in the past. So as you can tell I’m pretty excited about what you’ve built…”

Defining the incumbent to disrupt:

“The iPod monopoly has effectively stifled innovation in the market.”

Hinting at the power of a Platform approach:

“As product designers we can never have exactly what we want, when we want it. We have to start by understanding the really important parts and building that core functionality first, then building additional features around that core.”

Simplifying the product pitch:

“My goal for the second generation Napster (once we’d gotten around to cleaning up the messy interface) was to implement social/sharing features. This would have dramatically increased the volume of sharing happening through the system.

Based on the comment you made to Zuck, I suspect that you’re moving in this direction. You should build this capability directly into the client, using Facebook connect to authenticate and then leveraging the viral communication channels to spread Spotify rapidly across the world.”

Defining a mutual goal:

“You guys are likely going to be the first major success story with Facebook connect.”

Suggesting Public APIs as a strong jumping off point:

“If you need some help navigating Facebook platform, in particular the viral channels, then I’m happy to lend a hand.”

Defining steps to earn a more “exclusive” partnership:

“Direct integration with Facebook is a good idea too but this should happen via an exclusive partnership and you should wait until you have more leverage in the marketplace otherwise the economics won’t be very favorable to you.”

Adding some lavish praise:

“Napster was my first attempt at building a company, and one of my early attempts at building a usable product. While I’m proud of the impact we had, I’m not particularly proud of the interface we built, nor of the design/aesthetics of the product. You have surpassed the product experience we built at Napster in all of these ways.”

Re-iterating a shared understanding of technology choices and challenges:

“Final thought: I’m glad that you guys resisted the temptation to build a web based app. I remain a strong believer in the desktop client approach in music for a number of reasons.”

The @vcstarterkit close:

“Let me know how I can be helpful to you with Facebook, platform, viral optimization, investment, etc. I’m eager to participate in all of these ways and more. You should consider me both a fan and supporter of yours!”

As we all now know, this particular partnership was a mutual mega-win.

Facebook is, well, Facebook. And Spotify built market share quickly - primarily through Facebook - to a point today where they’re a $65 billion market cap company.

Read the full memo here.