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THE STORY BEHIND THE APP TikTok

ASHLEY R. PATTERSON

MASON CREST MIAMI

Mason Crest PO Box 221876, Hollywood, FL 33022 (866) MCP-BOOK (toll-free) • www.masoncrest.com

Copyright © 2024 by Mason Crest, an imprint of National Highlights, Inc. All rights reserved.

No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, taping, or any information storage and retrieval system, without permission from the publisher. First printing 9 8 7 6 5 4 3 2 1 ISBN (hardback) 978-1-4222-4782-2 ISBN (series) 978-1-4222-4773-0 ISBN (ebook) 978-1-4222-7047-9 Library of Congress Cataloging-in-Publication Data Names: Patterson, Ashley R., author. Title: TikTok: the story behind the app / Ashley R. Patterson. Description: Hollywood, FL : Mason Crest, [2024] | Series: Tech titans | Includes bibliographical references and index. Identifiers: LCCN 2023015344 | ISBN 9781422247822 (hardback) | ISBN 9781422270479 (ebook) | ISBN 9781422247730 (series) Subjects: LCSH: TikTok (Electronic resource) | Online social networks. Classification: LCC HM742 .P376 2024 | DDC 302.30285--dc23/eng/20230413

LC record available at https://lccn.loc.gov/2023015344 Developed and Produced by National Highlights, Inc. Editor: Andrew Luke Interior and cover design: Tara Raymo • CreativelyTara Production: Crafted Content LLC Publisher’s Note: Websites listed in this book were active at the time of publication. The publisher is not responsible for websites that have changed their address or discontinued operation since the date of publication. The publisher reviews and updates the websites each time the book is reprinted.

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CONTENTS

Chapter 1: Story of a Startup . ......................................... 7 Chapter 2: Rise to the Top . ..................................... 21 Chapter 3: Market Domination . ................................. 33 Chapter 4: Beyond the Boardroom . ........................... 47 Chapter 5: On the Horizon ............................................. 61 Series Glossary of Key Terms . ....................................... 74 Further Reading . ................................................ 76 Internet Resources ......................................................... 77 Index . ............................................................................... 78 Author’s Biography & Credits . ..................................... 80 KEY ICONS TO LOOK FOR:

Words to Understand: These words with their easy-to-understand definitions will increase the reader’s understanding of the text while building vocabulary skills. Sidebars: This boxed material within the main text allows readers to build knowledge, gain insights, explore possibilities, and broaden their perspectives by weaving together additional information to provide realistic and holistic perspectives. Educational Videos: Readers can view videos by scanning our QR codes, providing them with additional educational content to supplement the text. Examples include news coverage, moments in history, speeches, iconic sports moments, and much more! Text-Dependent Questions: These questions send the reader back to the text for more careful attention to the evidence presented there. Research Projects: Readers are pointed toward areas of further inquiry connected to each chapter. Suggestions are provided for projects that encourage deeper research and analysis. Series Glossary of Key Terms: This back-of-the-book glossary contains terminology used throughout this series. Words found here increase the reader’s ability to read and comprehend higher-level books and articles in this field.

WORDS TO UNDERSTAND

Series A funding: a company’s first significant round of venture capital fundraising, undertaken when it has developed a solid business model and proven its potential for growth Series C funding: often the last stage of a startup’s venture capital fundraising, undertaken when it is well established; Series C funding focuses on raising money to help the startup grow and capitalize on its success as quickly as possible venture capital: money invested into a startup company by private investors or financial institutions

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chapter 1

STORY OF A STARTUP

WHAT IS TIKTOK? Imagine a world where news traveled a lot slower. Sure, you could catch up with your friends between classes, pass notes, or talk on the telephone after school. But using the Internet to get constant updates about their daily lives? Unheard of! Just a few decades ago, the idea of being able to follow almost anyone online still sounded like sorcery to most people. However, right around the beginning of the twenty-first century, the game changer that is social media arrived on the scene. Now people can take their pick of platforms when it comes to effortlessly sharing pictures, thoughts, or videos. Social media has allowed more people to connect online than ever before, from regular people to celebrities and businesses. By now, most people have heard of powerhouse social media platforms like Facebook, Instagram, and Twitter. In 2016, a new short-form video-sharing platform appeared on the scene. In China, it’s known as Douyin, but you probably know it as TikTok.

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HOW TIKTOK WORKS TikTok is a social media platform that allows users to create and share videos with an online global community. Part of what makes the app so much fun is that it integrates features such as filters, movie clips, and a huge library full of popular songs. Creators can use the app to edit any of these elements into their own footage.

Making TikToks is now a passionate pastime for the new generation of mobile device users.

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TIKTOK

LUCKY LOCKDOWN TikTok has seen an impressive rise in popularity, especially since the start of the COVID-19 pandemic in 2020. Between 2018 and 2019, TikTok added 248 million users, which is impressive for any business. From 2019 to 2020, that number exploded to an additional 319 million. The app also uses a powerful and unique algorithm to connect users to videos based on their own unique interests. By tracking the types of videos that a user likes and shares, TikTok can then recommend similar videos in a customized “For You” feed. This not only helps popular videos go viral but makes it easier for users to connect with new friends who share similar interests. Whether users are into comedy, gaming, dancing, or beauty, TikTok will automatically help direct them to the most popular videos featuring the topics they love. Today, TikTok is used by hundreds of millions of people around the world. It has proven to be particularly popular among Generation Z (people born in or after 1997). However, the app the world knows today did not just materialize overnight. TIKTOK’S FOUNDER TikTok was founded by a man named Zhang Yiming, who was born in 1983 in Fujian Province, China. Zhang went to college at Nankai University, where he originally started out studying microelectronics.

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Story of a Startup

However, after realizing that his true passion was software engineering, Zhang ended up switching his major. In 2005, he graduated with a software engineering degree in hand and got a job as one of the first employees at a startup called Kuxun. Kuxun is a Chinese subsidiary of Tripadvisor and allows travelers to easily search for the best deals on flights and hotels throughout the country. When Zhang first started at Kuxun, he was just an ordinary software engineer who did his part to get the company up and

Zhang’s first job out of university was at Kuxun, which is owned by Massachusetts-based travel website Tripadvisor.

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TIKTOK

ByteDance, TikTok’s parent company, was Zhang’s second and more successful startup attempt.

running. He quickly discovered, however, that there was plenty of room for growth. By his second year with the company, he was in charge of a team of forty to fifty other employees. While his main responsibility was to oversee the technology behind the company, he also took an active role in product planning and problem-solving. Zhang’s enthusiasm for learning about every aspect of how the company worked would serve as a great foundation for his future. Armed with the skills and knowledge he needed to start his own company, Zhang ultimately launched his first business in 2009. His first venture was a mobile real estate platform called 99fang, which provided buyers with detailed information about various

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Story of a Startup

properties. The project did not hold Zhang’s interest, however, and after just three years, he decided to hand it off to another executive so he could focus on another idea. BYTEDANCE In 2012, Zhang founded ByteDance, a tech startup that would go on to become the parent company of TikTok. As Zhang knew all too well, not even the best ideas can get far without the funding needed to turn them into a reality. So, in early 2012, the ByteDance team began the quest for venture capital by launching their Series A funding round. Fortunately, they got a $5 million infusion from SIG China, a Shanghai-based venture capital and private equity firm, to launch its first project (which was not TikTok). Often, when a founder sets out to create a new business, it’s because they’ve come up with a unique way to solve a problem. The issue that Zhang noticed was that it was becoming harder for Chinese smartphone users to find relevant information online. While Google is the preferred search platform for many Americans, Chinese users often turn to a search engine called Baidu. Part of the problem was that Baidu searches were becoming overrun by advertising, which made finding a solid search result much harder. That’s why ByteDance’s first product was an app called Toutiao. Launched in September 2012, Toutiao is a Chinese information platform that uses artificial intelligence to create custom news feeds for its users.

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TIKTOK

Imagine being able to read a newspaper every day that was tailored specifically toward the topics that interest you. Plenty of people loved the idea and it quickly became a successful news platform that still posts an average of 600,000 pieces of content each day. By 2014, ByteDance had become established enough to enter its Series C funding round, which garnered an extra $100 million. While Series C funding is commonly the last round of a startup’s venture capital fundraising series, ByteDance didn’t stop there. Over the next few years, the company would go on to gain enough notoriety to attract multiple other venture capital investments. Their later investments would pull in not just additional millions, but rather billions of dollars from investors who believed in the company’s vision. One of the other apps that shot ByteDance to the top was released in September 2016. Known as Douyin, the app was an early version of what would later become TikTok outside of mainland China. Douyin certainly had its following, but it was the creation of another China-based app, called Musical.ly, that is crucial to the next chapter in the story of TikTok’s development. MUSICAL.LY In 2014, Alex Zhu thought he had what was destined to become a million-dollar idea. What if there were an educational app that featured short videos on a variety of different subjects? Alex and his co-founder Louis Yang were so convinced that the idea would be a hit that they managed to raise $250,000 in venture capital to make it happen. They then set out to use the money to develop an app called Cicada.

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Story of a Startup

Musical.ly was a big hit with US users right away, which is what got Zhang’s attention.

Unfortunately, it wasn’t until months into the project that Alex and Louis realized the terrible truth—the app was doomed to fail. As it turns out, it’s not so easy to condense expert information on any subject into a three-minute video. As short as the videos were, they also took way too long to make. Even when creators did make it through the process, the mini lessons just weren’t attracting fans. To make matters even worse, Alex and Louis had run through all but 8% of their financing. At this point, they had two options: apologize profusely to all of their investors or come up with another great idea—fast.

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TIKTOK

Learn the story of Musical.ly before it became TikTok.

That was when Zhu was inspired by a group of teens he once saw while traveling on a train. While half of the group had been taking selfies, the others had been listening to music. Why not create an app that lets people combine the fun of both? Zhu presented the idea to his team, who were able to turn it into an app called Musical.ly within just 30 days. Luckily for the team, the app became a hit as users around the world began logging onto Musical.ly to create lip-syncing videos and share them with fans. As it turned out, Musicial.ly and Douyin were launched around the same time. While each app had its own unique features, Musical.ly was the first to establish a strong following in the United States. Douyin had attracted plenty of followers of its own, but most of them were based in China and Thailand. That’s when Zhang and his team at ByteDance had an innovative idea.

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Story of a Startup

TikTok was released in 2018 and became an immediate hit with users.

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TIKTOK