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Tiktok's Key To Success?

An article we liked from Thought Leader Eugene Wei:

TikTok and the Sorting Hat

I often describe myself as a cultural determinist, more as a way to differentiate myself from people with other dominant worldviews, though I am not a strict adherent.

TikTok and the Sorting HatIt’s more that in many situations when people ascribe causal power to something other than culture, I’m immediately suspicious.

The 2010’s were a fascinating time to follow the consumer tech industry in China. Though I left Hulu in 2011, I still kept in touch with a lot of the team from our satellite Hulu Beijing office, many of whom scattered out to various Chinese tech companies throughout the past decade. On my last visit to the Hulu Beijing office in 2011, I was skeptical any of the new tech companies out of China would ever crack the U.S. market.

It wasn’t just that the U.S. had strong incumbents, or that the Chinese tech companies were still in their infancy. My default hypothesis was that what I call the veil of cultural ignorance was too impenetrable a barrier. That companies from non-WEIRD countries (Joseph Henrich shorthand for Western, Educated, Industrialized, Rich, and Democratic) would struggle to ship into WEIRD cultures. I was even skeptical of the reverse, of U.S. companies competing in China or India. The further the cultural distance between two countries, the more challenging it would be for companies in one to compete in the other. The path towards overcoming that seemed to lie in hiring a local leadership team, or sending someone over from the U.S. who understood the culture of that country inside-out.

For the most part, that has held true. China has struggled, for the most part, to make real inroads in the U.S. WeChat tried to make inroads in the U.S. but only really managed to capture Chinese-Americans who used the app to communicate with friends, family, and business colleagues in China.

In the other direction, the U.S. hasn’t made a huge dent in China. Obviously, the Great Firewall played a huge role in keeping a lot of U.S. companies out of the Chinese market, but in the few cases where a U.S. company got a crack at the Chinese market, like Uber China, the results were mixed.

For this reason, I’ve been fascinated with TikTok.

Here in 2020, TikTok is, for many, including myself, the most entertaining short video app going. The U.S. government is considering banning the app as a national security risk, and while that’s the topic du jour for just about everyone right now, I’m much more interested in tracing how it got a foothold in markets outside of China, especially the U.S. with its powerful incumbents.

They say you learn the most from failure, and in the same way I learn the most about my mental models from the exceptions. How did an app designed by two guys in Shanghai managed to run circles around U.S. video apps from YouTube to Facebook to Instagram to Snapchat, becoming the most fertile source for meme origination, mutation, and dissemination in a culture so different from the one in which it was built?

The answer, I believe, has significant implications for the future of cross-border tech competition, as well as for understanding how product developers achieve product-market-fit. The rise of TikTok updated my thinking. It turns out that in some categories, a machine learning algorithm significantly responsive and accurate can pierce the veil of cultural ignorance. Today, sometimes culture can be abstracted.

TikTok's story begins in 2014, in Shanghai.

Alex Zhu and Luyu “Louis” Yang had launched an educational short-form video app that hadn’t gotten any traction. They decided to pivot to lip-synch music videos, launching in the U.S. and China. Ironically, the app got more traction across the Pacific Ocean, so they killed their efforts in their home country of China and focused their efforts on their American market.

The early user base consisted mostly of American teenage girls. Finally, an app offered users the chance to lip synch to the official version of popular songs and have those videos distributed to an audience for social feedback.

That the app got any traction at all was progress. However, it presented Alex, Louis, and their team with a problem. American teen girls were not exactly an audience Alex and Louis really understood.To be fair, most American parents would argue they don't understand their teenage daughters either.

During this era where China and the U.S. tech scenes have overlapped, the Chinese market has been largely impenetrable to the U.S. tech companies because of the...

Read the rest of this article at

Thanks for this article excerpt and its graphics to Eugene Wei.

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