Zhang Yiming … founder of Bytedance, the world’s largest unicorn business … and the man behind the rapid growth of TikTok
August 14, 2020
TikTok competes with Snapchat and Instagram as the social media platform of choice for most young people.
Since its launch three years ago it has grown rapidly to 1 billion users, and is in the news because of its Chinese origins. While it is definitely a hit with young people, the US President is less keen, using security concerns as an excuse to escalate trade wars.
TikTok’s infectious 15-60 second videos, most often in the form of choreographed dances, have spread rapidly in lockdown. In the UK, for example, 27% of 18-24 year olds now use the app, compared to 7% back in March.
TikTok was created by Bytedance, often described as the world’s largest “unicorn”, founded in 2012 by Zhang Yiming. The business was recently valued at around $100 billion following substantial investment by SoftBank (double the potential value of its TikTok subsidiary).
Like his compatriot Jack Ma, 37 year old Zhang had an inauspicious start to his career. Having studied software engineering in Tianjin, he joined Chinese travel start-up Kuxun in 2006, its fifth employee, later becoming its technical director.
In 2008 Zhang joined Microsoft, but felt stifled by the corporate environment and soon left to join another start-up, Fanfou (created by Wang Xing, who later founded Meituan Dianping). When Fanfou failed, he returned to Kuxun, which was acquired by Expedia, formerly part of Microsoft. He left to start his first business, in online real estate, 99Fang.
Zhang now had the entrepreneurial bug, and saw in the rapid growth of mobile phone usage, an opportunity far beyond making calls. In China, and other emerging markets, phones were many people’s first experience of the internet, yet phone apps and interfaces were poor. Chinese users had a new thirst for information, and he saw the opportunity of artificial intelligence to push relevant content to users in more personal and intuitive ways.
Bytedance initially launched Toutiao (meaning “Headlines”) which focused on using AI to aggregate and recommend news to individuals, both from established media and user generated content. Most investors turned Zhang down for funding, seeing a Chinese tech market already dominated by the likes of Alibaba, Baidu and Tencent.
However Zhang soon found a profitable niche in entertainment apps, sharing viral jokes, memes and videos, It’s first app Neihan Duanzi gained 200 million users in 2017, but was closed down by Chinese censors for being “incommensurate with socialist core values”.
Zhang soon returned in 2016 with Douyin, a Chinese social network that creates short music, lip-sync, dance, and comedy, mostly in the form of short videos. This functionality was significantly enhanced with the acquisition of the American app Musical.ly in 2018, which also led to the launch of an international version of the app, branded as TikTok, later that year.
Zhang remained acutely aware of China’s censors, the concerns of other nations, and the experience of Huawei. He sought to separate the TikTok business where possible, for example by storing all of its data in USA and Singapore. In June, Kevin Mayer, previously chairman of Walt Disney International joined TikTok as CEO, and as Bytedance’s COO. TikTok, with over 1 billion users, is now twice the size of the Chinese version, Douyin.
In the last month, the US government threatened to ban TikTok from the USA, unless it was sold to an American company. Zhang’s old friend Microsoft stepped forwards, and is now exploring a $50 billion acquisition of the social media business. Having already acquired LinkedIn, Microsoft recognises that networks and content are as important as software to its future growth.