These funny, cute and sometimes silly videos are from TikTok,
one of the most popular social video apps in the world.
Over half a billion people mostly teenagers and millennials use TikTok
and its Chinese version Douyin to make and share short-form videos.
But you may have never heard of the app’s creator Bytedance,
a Chinese internet company with a lofty $75 billion valuation.
In fact, it’s the world’s most valuable startup.
This is the story of how Bytedance achieved extraordinary success in China
and how it’s pushing to be the next global internet titan.
When Zhang Yiming first founded Bytedance,
investors doubted the then 29-year-old and his ideas.
But Zhang proved them wrong.
In just seven years the company has evolved into a multifaceted empire
spanning about a dozen products available in 150 markets and 75 different languages.
Its apps are for everything from news aggregation and short videos to online education.
Unlike other Chinese companies it was thinking of expanding overseas relatively early on.
The founder, Yiming, was already talking about acquisitions and hiring from overseas,
places like the U.S. and Europe just 2.5 to 3 years into his company's lifespan.
Bytedance has created a significant following around the world in the early stage of its international expansion.
TikTok, its most popular app abroad, has reached over a billion downloads,
with about 25 percent from India and 9 percent from the U.S.
Even Apple’s CEO Tim Cook couldn’t resist a visit to the startup’s headquarters during a trip to Beijing last year.
Its relative success abroad has been partly achieved through smart acquisitions and strategic expansions.
Bytedance bought karaoke-style video app Musical.ly in late 2017.
Musical.ly was already very popular for teens and younger millennials in the U.S.
The company then merged Musical.ly into TikTok
and suddenly had a substantial user base in the U.S.
It's such popcorn entertainment that you can consume really quickly.
You know, you just keeps scrolling, and you see the next video and it's just 15 seconds each.
And on the other hand, by using their artificial intelligence targeting
they can get you the content that you're most interested in watching and seeing.
Bytedance’s success story started with its signature news aggregation app Toutiao in 2012.
The app uses AI to aggregate news and videos from tens of thousands of media outlets
and then pushes personalized feeds to users.
It is similar to Facebook’s news feed or Apple News.
Bytedance uses its AI engineers and AI engines to serve content you wanna see straight away,
so the idea is that the more you use it, the better it learns about your habits and your personality,
and the better suited the article becomes for you, and then, that becomes an addictive experience.
But not everybody was happy about Toutiao’s business practices,
especially publishers who felt their original content was stolen by the news aggregator.
After a flurry of copyright lawsuits from newspapers,
Zhang negotiated deals with media partners to share revenue.
Today Toutiao has become one of the most popular news services anywhere,
with more than 700 million registered users.
What’s remarkable is that Zhang and Bytedance managed
to create such hugely popular apps like Toutiao and TikTok without backing from China’s internet giants
Baidu, Alibaba and Tencent, also collectively known as B.A.T.
In fact, it often found itself at war with the three giants.
If you're not backed by B.A.T, it's very difficult to survive as an internet unicorn in China.
In many ways Bytedance survived by being underestimated by other Chinese internet giants.
The challenge now is how Bytedance can keep its momentum
while facing intense competition from local and international players.
Its main revenue comes from ad sales,
but the company barely met its 2018 revenue target amid a slower Chinese economy.
Bytedance also faces regulatory issues at home and abroad.
Last April, Bytedance had to shut down a popular joke-sharing app in China.
Its bread-and-butter Toutiao and Douyin was also suspended
by the Chinese government around the same time.
Content is also a risky venture in its overseas markets like the U.S.
In February, TikTok had to pay a record $5.7 million to settle claims by the U.S. government
that it illegally collected personal information from children.
And so Bytedance’s ambition to be a global internet titan might mean a tough road ahead.