What every growing business can learn from their big mistake
I was reading this article in Business Insider the other day, and it immediately resonated with my own experience as a longtime Spotify user.
The author shared how their Release Radar playlist—once a favorite for discovering new music—had started serving up a strange mix of rainstorm recordings, ambient noise, and random tracks that had nothing to do with their musical tastes.
For years, Release Radar felt like a friend making a mixtape. It introduced listeners to artists they would have never found on their own. But recently, it had become repetitive, irrelevant, and at times, completely off the mark.
It wasn’t just a one-off glitch. As the article explained, many Spotify users were noticing the same thing. The playlists that once made the app feel personal were now filled with random, often low-quality content.
And behind the scenes? A familiar story.
As Spotify scaled and pushed for profitability, they began cutting back on human curation—the very thing that made their discovery engine special. Layoffs and cost-cutting reduced the teams responsible for the music experience. Automated systems and algorithms were left to make decisions without human checks and balances.
The article pointed out what many listeners already sensed: Spotify’s efforts to please investors had come at the cost of the user experience.
They confused behavior with intent.
Spotify’s algorithm noticed that some users occasionally played sleep sounds at night. Instead of recognizing that as a specific context, it started assuming those sounds were now the user’s main music preference—leading to rainstorms and white noise filling playlists that were supposed to recommend new songs. This is a common mistake I see in growing businesses:
Behavior tells you what a customer did. Intent tells you why they did it.
Without understanding the “why,” even the smartest systems get it wrong.
They removed too much of the human element.
In an effort to reduce costs, Spotify let go of many of the people who blended human taste with data. This wasn’t just about cutting staff. It meant removing the very people who had the insight to prevent these kinds of errors.
They focused on the wrong metrics.
Instead of measuring customer satisfaction or quality of recommendations, Spotify prioritized engagement numbers like total listening time. But more listening hours don’t always mean people are happy. Sometimes it just means they left the app running—or were too frustrated to fix a broken playlist.
They chased growth at the expense of experience.
Like many businesses preparing to go public or satisfy shareholders, Spotify prioritized profitability over customer loyalty.
And the first visible sign? Layoffs.
That’s often when a company shifts from focusing on customers to focusing on numbers.
They compromised the very product that built their success.
Spotify’s magic came from two things:
- The quality and relevance of the music they licensed.
- The discovery system that connected listeners to music they loved.
By cutting back on both—licensing cheaper content and removing the human touch in curation—they weakened the core experience that made them an industry leader.
This is one of the biggest mistakes I see when companies grow.
You never sacrifice the product that helped you succeed in the first place.
What Spotify—and all growing businesses—should have done instead
Keep human insight, even as you automate.
Automation can be a powerful tool. But it should serve the customer, not replace the humans who understand what customers really want.
Measure customer satisfaction, not just behavior.
Track how customers feel about the experience, not just what they do. Numbers only tell part of the story.
Differentiate between short-term actions and long-term preferences.
Just because a customer tries something new doesn’t mean they want more of it forever. Context matters.
Stay loyal to the experience that made you successful.
Growth and profitability are important. But they should never come at the expense of what made customers fall in love with your business in the first place.
My takeaway: Growth should protect what made you great—not replace it.
Spotify’s mistake wasn’t just a technical problem. It was a business decision to prioritize numbers over customers. And that’s a path that rarely ends well.
Automation should make your customer experience better—not cheaper. Growth should protect what made you successful—not replace it.
If you’re growing your own business, whether you’re a solo entrepreneur or scaling a team, remember this:
The systems you build should strengthen your connection with customers, not weaken it.
Automation should enhance the customer experience, not make it cheaper or less thoughtful.
And no matter how big you get, your customer’s trust has to stay at the center of every decision.
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