I recently listened to the TikTok podcast Bloomberg did on their "Foundering" series. Whilst this obviously more focused on the cult social media sensation from a business perspective, there was some very human factors which are worth understanding.
A less known fact is that the founder, Zhang Yiming, first business idea was actually an educational business... which proved to be a flop. He noticed it was against human nature to exert energy on learning whereas people could effortlessly consume more entertainment & humour at any time of the day. He then went to found a joke-suggestion app with limited success, however, the algorithm from this later came in handy for the hugely successful Tiktok
There is a story of Zhang catching a train full of teenage kids and observing how they past the time listening to music, dancing, lip syncing out loud on the train. As a distinctly introverted character - he found this intriguing. He also later realised how much spare time adolescents can spend on social media (as concerning as this trend is) boosting their value as followers.
So what was so special about TikTok given how many social media start-ups there seems to been? The real secret sauce of TikTok was there was limited barriers to creation of content (often copyrighting others music), it gave users the sense that they could create huge followings without being celebrities/influencers and finally TikTok financially incentivised users who got a big following.
This concept of rewarding "creators" of content really came from the failed takeover of Vine by Twitter. When Twitter bought Vine in 2012, they made the fatal error of paying the big creators very little, forgetting that the real heroes of any platform was the creators. A mere three years after being bought, Vine was shutdown all because the original creators left (or stopped making vignettes) and there was no appeal from the users
Years later, now TikTok has been a massive success, the app has actively tried to curb the profitability of huge influencers (e.g. Addison Rae, Khabane Lame etc) by shifting users away to up-and-coming influencers but by now TikTok it is so ingrained in the social media scene that it does not matter.
So how did TikTok manage to grow so big without being taken out by competitors like Facebook?
One of the key benefits was that Facebook had been burnt in China and were reticent to acquire more operations here. This meant Bytedance/TikTok managed to really fly under the radar away from Facebook for longer than usual. It also certainly helped that Zhang was a super low-key kind of person which managed to avoid a lot of mainstream media.
The big irony about this was that Facebook and Instagram actually did not block TikTok from advertising on their platforms. Arguably not because of the fact they saw it did not recognise TikTok as a threat, but because it underestimated how well it would grow 2017 onwards.
By the time TikTok had acquired flipstagram (a lip syncing software with big music content ) in 2017 and raised significant VC funding from Softbank in 2018, the company had grown significantly. At this point, product placement and "native advertising" was still a bigger part of their revenue (and their traditional advertising remains cheaper than most)
All throughout this growth story, TikTok still continued to manage hashtags and trending topics, unlike Facebook & Twitter, a key difference between the two platforms. This ability to "curate" has raised some concerns amongst various social groups. For example, their algorithm can seamlessly remove content where it is deemed politically driven. Whilst this has managed to censor a lot of inappropriate content it has also censored real events (e.g. Hong Kong riots or Black Lives Matter)
Fast forward to 2020 when President Trump made a move to ban ByteDance/TikTok. I will not go into privacy concerns raised by the public for TikTok however, TikTok actively made changes to push against this forced sale (not least of which because of the $7.5bn of VC capital that had been invested into TikTok since inception needed to show a return). They intelligently made changes include hiring a lot of US political lobbyists, advertising about that data is held in Singapore for US operations and moving the content curation to US.
At the end of all of this hoopla, TikTok announced that it would sell a non-controlling 20% stake in a subsidiary to Oracle-Walmart. Interestingly, that did not even happen but no one really spoke about it again...
Commentaires