Agile methodology, which focuses on the continuous monitoring and improvement of deliverables, is typically used in software development due to its flexibility and ability to detect errors early and often in the life cycle. Traditionally, the framework has been applied to singular projects; however, music streaming service Spotify’s entire business structure has maintained an agile mindset despite having 30 teams spread across three cities.

Spotify

Spotify has rapidly transformed the music industry since launching in 2008. The company currently boasts 15 million paying users and 60 million active users overall. As Spotify moves towards an inevitable IPO, many point to the company’s agile methods as a key factor in its rapid growth. In particular, Spotify relies heavily on scrum methods, a simple extension of agile methodology.

Squads

Spotify’s basic unit of development is the squad. Squads act as miniature startups that sit together and have the expertise and tools needed to design and release products. Self-organizing and autonomous, each team works on specific functions, such as radio, payment solutions and backend services. Sprints, or iterations, are a key feature of agile projects, serving as the time frame during which clients’ needs are developed and transformed into running products.  

Squads are encouraged to apply lean and agile principles, releasing products early and often during sprints. Since each squad works on one mission, members can become experts in their specific area. This effectively reduces the amount of errors at the end of each sprint, creating a lean environment.

Product Owner

The product owner monitors each squad and oversees the completion of items on the sprint backlog. While the product owner prioritizes the work to be done, the individual isn’t directly involved in the completion of work. Each squad at Spotify acts in full autonomy from other squads and only has direct contact with the product owner.

Agile Coach

In typical Scrum methodology, a ScrumMaster creates an encouraging work environment for teams to reflect on and discuss sprints and common workplace impediments. Spotify squads have access to an agile coach who develops and refines work processes. The coach runs retrospectives and sprint planning meetings to help squads continuously improve current and future sprints.

Tribes

Spotify has 30 squads across three countries. A collection of squads that work in related areas is called a tribe. The tribe acts an incubator for squads and provides each with the best possible conditions for completing work. This can range from physical office space and lounge areas to eliminating common impediments.

Like squads, tribes tend to remain autonomous; however, due to the number of squads per tribe, some dependencies do exist. Tribes contain no more than 100 people because politics, bureaucracy and waste develop with groups exceeding that size.

Chapters

By nature, agile methodology promotes self organizing and autonomy amongst different teams. However, there is potential for a loss of economies of scale when an entire company operates in this way. Spotify has integrated chapters in order to create a sufficient amount of dependency amongst the squads in a tribe. Chapters are organized by area of expertise and consist of team members from one tribe. For example, the developer chapter consists of five web developers from five different squads in a single tribe who meet to discuss work-related developments.

After chapters, there are guilds, which are even larger groups that can range across the whole organization. Guilds exist to foster communication and teamwork, though members do not necessarily have to share common expertise as these groupings tend to form organically.

The Bottom Line

Spotify has experienced rapid growth in 2014, with revenue surpassing $1.22 billion – a 45 percent increase from the prior year. The streaming service's success can largely be attributed to the organizational culture that it has built in completing goals. Following an agile mindset, Spotify’s business model centers around four simple steps; think it, build it, ship it and adjust it. As Spotify continues to grow, current and future employees must remain committed to the organizational structure and goals in order for it to succeed.

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