Spotify

Entrepreneur: Daniel Ek, 27
Funding: Undisclosed, from investors that include Creandum and Northzone Ventures

European Internet users are delighting in free music offered on Spotify. Listeners hear ads in exchange for the ability to find and play 8 million songs through their computers or mobile phones. Spotify also sells an ad-free version.

Toughest decision: Last year, co-founder Daniel Ek found out that some users' passwords may have been exposed. Instead of keeping it quiet, Ek chose to notify Spotify users to inform them. "We got a lot of positive feedback from users and developers, who appreciated us being so up-front," he says.

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