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ByteDance, a Beijing based software company introduced TikTok, their social media streamer app two years ago, and since then it has grown to epic proportions; half a billion users. Today it looks like it will try to eclipse Instagram and possibly compete with Snapchat too.

What makes ByteDance such a competitor is that it has expanded globally, opening up windows in the west with subsidiaries for expanding its reach beyond the Chinese borders.

With the social media scene being dominated by western companies such as Facebook, Instagram, Snap, and Twitter, it’s interesting to see when ByteDance will eclipse its western competition.

The trend in social media is short video clips. The ability to edit them in a flash, and add various features and functions is what is taking the new generation of users by storm. Streaming is the new God of CyberSpace, and based on app downloads there are three leaders in this field: Instagram (owned by Facebook), TikTok and Vigo (Both owned by ByteDance).

Since ByteDance has been so successful in their expansion, they are currently seeking investment from specific sources, including Japan’s SoftBank, the one company every venture wants behind them. According to sources, the investment being discussed with SoftBank will value ByteDance at around $75 billion. The only other start-up with such a value is Uber.

Size Matters

ByteDance is no small operation; this is not a garage deal, it’s a very large company that sits in some impressive offices and employs thousands of personnel.


So what makes TikTok and Vigo so successful?

It seems that AI is the solution. An AI that use ML (Machine Learning) to detect patterns and trends in user usage.

According to ByteDance, they are an AI company, and they use proprietary algorithms to learn what users like and adapt the content to their tastes. What gave BYteDance their edge and experience started in 2012 with Jinri Toutiao, their AI news app that would curate news feeds based on what an individual read the most, or showed interest in. The AI was so successful that today the average Jinrin user spends 74 minutes daily reading news via the app, and there are 240 million such users.

Another great AI app is Douyin, their video app which was introduced during 2016. This is a Snapchat like an app that creates 15-second video feeds with all kinds of add-ons and digital effects. Today this is now a ”verb” in the Chinese daily language “shua Douyin” which means “scrolling through Douyin.”

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The ByteDance Global Initiative

ByteDance has no intentions of remaining only in China and introduced the English app Top Buzz in 2015.

This was then followed in 2017 by the addition of TikTok, which was their English Douyin They managed this by investing in LA-based start-up Flipgram, as well as buying musical.ly for $800 million. Musical.ly is a software lip sync app that enhances the TikTok brand with its software.

Initially, the app was known as Vigo, but the musical.ly users were transferred over to TikTok at the beginning of 2018. With TikTok in the west and Douyin in the east, ByteDance is beginning a campaign to grow beyond its competition, an advantage they have since they started out in China, where most western apps cannot penetrate.

Size does Matter II

As of today, ByteDance is the world’s fifth largest most downloaded app. In fact, TikTok’s downloads have increased by 5 times when comparing the third quarter of 2018 with the same quarter in 2017. Based on ByteDance reports, the combined active monthly user base of TikTok and Douyin are 500 million. This eclipses Twitter and is double that of Instagram. Take into account that both western apps are blocked from operating in China.

Money Talks

Apple CEO Tim Cook visited BYteDance in the first week of October, and investors are attracted to this ever-growing system due to the exponential profit potential it has yet to realize.

While figures are sparse, according to the ByteDance Toutiao income from 2017 reached $2.9 billion. Remember these are only income figures from their China-based operations.

Everlasting Youth

The secret to success in social media apps is how to attract the younger users, those starting in first-grade elementary school and following through all the way to their adulthood. Teenagers are now the middle road users, and the future success in any online social media app is how to build continuity by attracting the user of tomorrow today.

This means that companies must stay relevant, while the oldies are still good and hold the market due to “habit,” this does not mean that a newcomer cannot come and upturn the usage scale. What is happening today in the social media world is very similar to what happened at the beginning of the automobile industry. Where Ford did start out as the first line produced the car, but after a while, there were competing models, and over time, competing models that overtook Ford.

Being the first does create a dedicated list of reliable users, but if you don’t introduce upgrades and updates, and remain innovative, constantly bombarding the mind’s eye with new features, you will lose your customers to other products.

It’s all about the limited attention span, and the ability to trap the eye into an app for hours. To add fuel to this bonfire of vanity, ByteDance provides digital coins that are made through using the app, which is very similar to the way Bitcoin is made from use. The more you interact, the more coins you make and then you can use these coins to tip others and unlock online features.

If you survive in China, you can dominate the World

China is a hard country to succeed in, and ByteDance founder, 35-year-old Zhang Yiming, who worked for Microsoft, knows only too well how to navigate these still socialist waters.

Last year, TouTiao was shut down for 24 hours due to what regulators claimed to be inappropriate content. One of the biggest issues that social media platforms have is the management of content, which can be very stupid to downright terrorist-controlled media. ByteDance’s thousands of employees are mainly in the area of censorship and data review. This came about after the government ordered the permanent closure of Neihan Duanzi due to the nature of the content being published online.

As such ByteDance issued a public apology and immediately employed thousands of employees to review the data as and when it comes online. I suppose that AI is still not efficient enough to do this for them, although the AI does pick out the most relevant content for censorship.

The bottom line is this, if you can survive the strict rules of China, you can dominate the world., and that is exactly what Zhang intends to do.