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TikTok is a cringe-fest, filled with lipsynching and quirky dancing, but it's also the most
downloaded app in a quarter, ever. During these times of isolation, the app's popularity
skyrocketed.
Besides achieving great success with teens and young adults, the minds behind the app
have managed to evolve to fit a more diverse, massive market. TikTok's success isn't due
to chance but rather attention to detail and constant improvement.
So, let's do the stair shuffle and lipsynch to cheesy songs. Well, no. Let's not do that,
but today we will talk about TikTok and how it became one of the most prominent players
in the world. This is Company Forensics: TikTok.
TikTok was born in China as Doyuin in 2016, the product of giant ByteDance. Just for reference,
in case you haven't heard from them, ByteDance, according to some tech analysts, is a Chinese
version of Facebook and is Google's only real competition. It owns popular social networks
and apps in China, with millions of daily users.
ByteDance's first product was Toutiao, a newsfeed in which you could have friends, but neither
you nor them could upload content. Instead, it filled your feed with hyper-targeted content
and ads. As dull as it sounds, it was a huge hit and, at its peak, had 200 million daily
active users.
Despite this success, ByteDance's founder and CEO Zang Yiming wanted more; his goal
was to go global. China might seem like a big market, but in his own words, it only
accounts for one-fifth of internet users globally, and he wanted the other four-fifths.
The challenge centered around how both markets operated. China has particular restrictions,
and stringent controls, which often clash with policies from other countries like the
U.S. To dominate both is nothing short of admirable. And we'll get into this later.
Yiming's first idea revolved around sharing short videos, but this idea wasn't new in
China, as competitors like Kuaishou and Meipai already had a considerable share of the market.
Still, a growing generation of young Chinese users with high mobile phone use, meant this
market was only bound to grow.
To stand out, Yiming had to continually revise and improve his product to keep it exciting,
with new filters, special effects, and icons.
At first, the app didn't catch. It wasn't until ByteDance tapped on the power of celebrities;
they invited the likes of Yang Mi and Lu Han, who already had massive fanbases. To further
enhance its reach, they allowed integration with Chinese chat services such as Q.Q., Weibo,
and Wechat, which were already established and had millions of users.
They didn't stop there. ByteDance also ventured into monetization and partnered with big Chinese
brands like Harbin Beer and international giants like Chevrolet. Then, within a short
time, ByteDance updated the app so that it could include live streaming.
This strategy paid off. With such aggressive promotion and an app that was fun to use,
people started talking about Douyin.
By August 2017, Douyin had reached 1 billion views, and users in China were downloading
the app like crazy. In 500 days, it overtook its competition and became the number one
app for short video sharing. But, you know Yiming didn't want to stop there.
To achieve global success, Yiming knew he first had to succeed in one market: the U.S.,
and it wasn't impossible to achieve. Another Chinese brand, Musical.ly, was enjoying considerable
success in the United States.
Musical.ly was the brainchild of Alex Zhu and Lulu Chang, who aimed to create an educational
social network based on short videos. But it failed to garner interest. Still, Chang
and Zhu managed to reinvent the app into an app that made it easy for users to shoot music
videos and share them with their friends.
It had been successful in China, but it was in the U.S. that Musical.ly hit it big. Teenagers
got hooked on lip-syncing the latest pop hits, and this is key to its success. Musical.ly
had joined companies like Warner Music Group, which meant the latest hits with no copyright
issues.
This recipe was what Douyin needed. So, instead of creating its own, ByteDance purchased Musical.ly
for about $1BN. Now, Douyin had a presence in the U.S., access to tons of the latest
music, and an already established audience. All they had to do was exploit it.
Both Douyin and Musical.ly ran in a parallel fashion for a little under a year. Eventually,
ByteDance announced it would join both platforms and maintain the Douyin name in China. For
the rest of the world, the name would be TikTok.
The merger was a hit. Here are some numbers: in June 2018, it was the #7 downloaded app
in the U.S. and #3 in the world, and, by November of that year, it was #2 in the U.S., and maintained
#3 rank worldwide.
The demographics changed as well. Before the merger, about 2.6 million adults used the
app. Less than a year after the merger, that number was 7.2 million. As more and more people
used it, TikTok caught the attention of major celebrities like Jennifer Lopez, Selena Gomez,
Arnold Schwarzenegger, and many more.
By the end of 2019, TikTok was the number one app, as well as the most downloaded app
of any quarter, ever. Though ByteDance seldom releases official user numbers, it did announce
that TikTok had reached 1.5 billion monthly active users, coming from 150 different countries.
Yiming indeed has reached his goal.
So, yes, it's been an enormous success. But TikTok isn't the only video-sharing app, so
why was it such a hit?
Amongst many things TikTok does well, it excels in one: being immersive. The moment you open
the app, there's no login, just an endless video feed. There's no pause, and all you
can do is like, comment, share, and move on.
Plus, contrary to other social networks like Instagram, TikTok dedicates the entire screen
to video. It draws you in with its relentless, rapid-fire sequence of high energy videos.
Then there's the video itself. TikTok is easy to use; anyone can record and upload a video
for millions of possible viewers to see. Anyone and everyone is a creator. Editing, if you
want to, is easy, fast, and done right in the app. No need for outside editing software.
Plus, why edit? TikTok's videos are easygoing. Cringey, yes. But very easy and people love
it.
Then, there's brand placement. To export a video, you first have to post it in the app
where a watermark will automatically appear, and only then can you share it on other apps.
And so, the TikTok logo is in front of millions of users, many of them teenagers.
More than 40% of its audience is between 16 and 24, a generation with tons of energy that
gets bored quickly. But they are permanently connected to mobile phones; capture them,
and the road might be just a bit easier. From the start, aided by the merger, TikTok did
just that.
This combination of individual successes propelled TikTok to the top, so what does it have to
prove it? Besides billions of users and worldwide presence, it now has a whopping $75 BN valuation.
But, it's not all dances and laughter. Things can get political.
TikTok has achieved what few can. It's massively popular in both China and the U.S., and it's
this popularity that has some people quite uncomfortable.
Let's start with censorship. Leaked documents appear to show that ByteDance purposely censored
users based on, get this, whether they were ugly or not, or if their bodies didn't conform
to a certain standard. Pretty twisted, but it doesn't end there.
Censorship had also targeted people from the LGBT community and other minorities. But TikTok
said it was to stop those accounts from getting bullied. If that's their goal, shouldn't they
censor the users bullying them instead?
Eventually, TikTok did own up to the allegations. All this did was help in showing that ByteDance
has more robust censorship policies than many of its counterparts.
Then, there's the audience. Many TikTok users are underage, and their safety is critical.
In an investigation, however, the Federal Trade Commission found that TikTok "illegally
collected personal information from children" by not obtaining their parents' permission
before they signed up, putting it in violation of COPPA — the Children's Online Privacy
Protection Act.
TikTok had to pay $5.7 million in settlement to those affected. But it doesn't end there.
According to U.S. lawmakers, one of the most significant issues with TikTok is the way
it handles its data, all the while the app continues to be more influential within the
country. It makes sense, TikTok is the most popular app in antagonizing countries, after
all.
And, even though TikTok spokespeople expressed their interest to be in good terms with the
U.S., the app has been considered a risk to national security. So much so, that many branches
forbid its use in the government-issued phones.
Then, let's combine politics and censorship. Take, for example, the Hong Kong protests.
Mysteriously, TikTok has very little content, if any. Yet the company insists they are not
censoring anyone.
And yes, social networks don't necessarily have to be beacons of social activism. However,
in these current times of global tension, having a voice, whichever means necessary,
is a must.
What’s the sincerest form of flattery? Imitation, and TikTok is no exception. During May, an
app named Zynn climbed up the app ranks to number one. Want to guess what is was about?
Short music videos. Specifically, it was TikTok’s videos. But that’s not all because it was
also a pyramid scheme, in which users “earned money” from watching videos and referring
other people. Any time you have to “refer” a friend, it’s probably a trap.
But the app was very successful, having millions of downloads in the past months. And due to
its popularity, people noticed that videos from Instagram, Facebook, and TikTok suddenly
appeared in Zynn without consent.
Google and Apple eventually did take down the app, but they took too long and neither
company has openly addressed the situation. Which is weird, to say the least. So, Zynn
was so effective at cloning TikTok it even dragged along controversy.
Hey, let's face it. It's OK if you get bored in these crazy times of lockdown. Imagine
if you are a teenager and can't go outside, see your friends and hang around. Wait, do
teenagers still do that? Anyways, that's where TikTok's genius comes in.
Currently, in countries like Spain, the U.K., and the U.S., the app is used more than Netflix
and Youtube. Reports have found an increase of 200% compared to two years ago, and remember
they already had billions of users before all of this.
ByteDance has been nifty. Practically everyone has been in lockdown, not just teenagers.
So, as more and more millennials use the app for distraction, TikTok has added content
that is more focused on DIY projects, tutorials, and live Q&A videos.
A genius move. At the end of it all, yes, TikTok has the teenagers all to themselves,
but as Yimin had said in the beginning, they didn't have the rest. And it looks like they
are on their way.
There's a caveat, though. Teens get bored quickly. Stair shuffles and lipsynching can
go out of style, especially when your aunt starts doing it. So, TikTok, watch out. You
don't want to lose your core audience.
Now, we get tons of questions around the tools we use to make these videos.All the background
animation is done in Adobe After Effects. I found a thorough course by Jake Bartlett
that goes over all the details on Skillshare, that I am happy to recommend.
Skillshare agreed to give us 1,000 codes to get 2 free months on the platform, which you
can access from the link in the description. Another course I can recommend is Caleb Babcock’s
iPhone Filmmaking. It’s a quick 30 minute class on Skillshare, on creating Cinematic
Video With Your Phone.
We publish 2 weekly videos on startup advice and company success and failure stories, a
series we call Company Forensics. So what do you think?
Will there be another Forensics video on the death of TikTok?
Let us know in the comments. See you next week.