Hello folks 👋,

First of all, I would like to welcome the 2,023 new members to our little family 👨🏽‍🍼 since last week. First 1000 is this close(👌) to 20,000 members. 

Today's case study is on Tiktok. After downloading the app and deleting it like 17 times, I finally caved in last week (as I was preparing for this piece.) Soon enough, it was 2 in the morning, and I haven’t written a single word of the first draft I set out to do, all in the name of "research." 

TikTok's history is complicated. It started off as three separate apps:

  • Musical.ly: a Chinese based startup targetting the US teen market

  • Douyin: an app by the Chinese company Bytedance (best known for building Toutiao: an app that leveraged AI for hyper-personalized news) targetting the Chinese market

  • Tiktok: The global version of Douyin (that would later acquire Musical.ly)

Musical.ly came about two years before Douyin, but has intentionally decided to ignore their home turf and focus exclusively on the American market.

Alex Zhu, founder, and Co-CEO back then saw the competitive- and arguably more evolved- consumer-social space in China as an investment & operation heavy undertaking. For a company just getting started, the US market just made more sense to tackle first.

That was in 2014, fast forward two years (in 2016), ByteDance would take the signal from Musical.ly enormous success abroad (hitting the #1 app in the app store) and launch a competitor for the Chinese market named Douyin (in just 60 days🤯). Douyin took the would take the Chinese market by a storm and grow to over 100 million users in a year. No one, not even Muscial.ly, the OG creators themselves, could compete in the Chinese then.

A year later, in 2017, Musical.ly would settle for *just* a billion dollar acquisition, and the world would never be the same again.

History Lesson: Musical.ly

Musical.ly was founded by Alex Zhu, an ex-SAP employee who split his time between Shanghai and San Francisco during his 4-year tenure. During that time, he spent his days researching the future trends in education & learning. His job was writing thought-pieces, and creating presentations for the senior leadership to help them develop product roadmaps that looked 5-10 years down the line.

His job title was a "futurist."

Naturally, after almost spending half a decade thinking about the future of education, when Alex decided to leave and venture on his own, he created an educational app, a Coursera meets Twitter kind of app.

The idea was to allow users to create 3-5 min educational videos and the hypothesis was, with this constraint, the noise to signal ratio would be extremely high.

But it quickly and decisively failed. For two reasons:

  • From the creator side: While the videos were short, creating a 3-5 min educational video was notoriously time-consuming.

  • From the consumer side: Education is inherently against human nature. People need an intrinsic and/or an extrinsic motivation to pursue the learning journey. Ultimately, people didn't care enough to spend 300-500 minutes of their life learning about 100 different random topics…that they were just not that into.

The genesis of Musical.ly

Musical.ly’s idea came to Alex after observing some teenagers on the train in San Francisco. From his vantage point of view, teenagers only did two things: either listen to Music or scroll through their social media. By putting one and two together, Musical.ly was born. 

Alex already had all the creation tools and infrastructure in place(from his previous educational app), in a month time, Musical.ly was launched.

Musical.ly took all the best pieces of the educational app (creating and editing videos natively on mobile) and stripped away all the things that did not work (turning the process of creating videos from extremely hard (having to think a plan a 3-5 min educational course), to extremely easy (just adding music to videos from the camera roll.)). 

Deep Dive 🧐: Content Liquidity.

The problem with users generated content platforms is that only a single digit percent of users ever create content...and for a young entertainment-driven platform like Musical.ly needed a significant portion of the users to contribute to keep users engaged for hours. Musical.ly pulled this off by making it easy to create content, whenever and wherever you were.  When you log in to the app at 9pm PJs, you could still be producing videos if you want to, because all the raw ingredients lived right there in the app ("inspiration", music, edits and filters). Unlike other social media platforms there were no externalities that dictated when it was socially acceptable to create content for Musical.ly.

The 15-30 sec video format genius is that it allowed users to churn out A LOT of content, and made the entry point to being a content contributor ridiculously low (not that it catered to the short attention span of users...as many would argue.) In a twisted way, it is Musical.ly's ability to generate enough content to the fulfill the ever-increasing attention users gave the app that made it the success it is today.

Getting their very first customers

Musical.ly acquired its very first customers by piggy-backing off the app store search traffic for Instagram and Messenger. Instead of naming the app "Musical.ly" on the app store, they named it "An app for creating short-form videos for Instagram, Messenger, and more."

Back in 2014, the app store gave the title of the app a much heavier weight than the description or search terms of the app. So when someone typed in Instagram or Messenger...Musical.ly was right there in the very top results. This nice little hack doesn't work anymore, but it was how Musical.ly managed to get a few hundred downloads every day in the very early days, by having a tiny fraction of the people that searched for Instagram or Messenger download their app...just out of curiosity (or confusion...who knows 🤷‍♀️)

Maintaining Their Early Users

Getting customers is one thing, but maintaining them is a whole other story, especially for Musical.ly, where users came with zero expectations. 

Similar to Instagram, Musical.ly focused primarily on utility. They served as a tool to add Music to videos from your camera roll that you can later post to other social media platforms. 

1/ Ignoring influencers

But with a few hundred users flowing in every day, building a community played a big role in the success of the company. Instead of trying to put their resources into the uphill battle of convincing influencers to join their platform, Alex and the team focused on the every day consumer…by creating what he would dub the "Musical.ly" dream.

The Muscial.ly dream is the opportunity for regular folks on other platforms to become big and become big really fast on Musical.ly, something they could not achieve on larger, more established platforms. 

The idea was to focus solely on the “middle class” citizen of other platforms, make them big on his and they would ultimately serve as an inspiration for others

If SHE did it (became famous on Musical.ly) then so can I.

Every new user on Musical.ly/Tiktok.

The faster newbies grew, the more motivated they were to continue to produce content on Musical.lu, and the more people flocked to the app in an attempt to fulfil their lifelong dream of being internet famous.

Deep Dive 🧐: Wealth Distribution.

Looking at Tiktok today, this strategy seems obvious, feasible and genius. The problem is, in the very early days, when you only have a few thousand users, how do you get people big..fast? There just isn't enough traffic to go to everyone. 

The way Alex engineered this opportunity-as-a-value-proposition was by intentionally creating a massive wealth(traffic) inequality. A handful of users would get the "rich" quick in the then hand-selected Discover feature...and everyone else would just to be extremely poor.

This could only sustain for a few months; normal poor users continuing to produce content under the guise or hope that they will get rich one day. By then, Alex hoped that the growth of Musical.ly would continue to accelerate and soon enough they would have enough traffic to decentralize the operation (i.e., develop an algorithm) and give everyone an actual real shot at becoming "rich" and amassing a following. 

2/ Creating with your users

The second thing Musical.ly did to maintain their early cohorts of customers was to create with their customers. Because the team was sitting in China, they had to overcompensate by talking and understanding their users.

🥸Fake accounts

For starters, for the first six months of the app's life, Alex would create dozens and dozens of fake accounts to interact with users on the platform. He would comment & share feedback on users' videos, trying to understand how and why people use his app. It has even been reported that he would (allegedly) call up some of the most engaged users and invite them and their parents to free dinners in an attempt to understand the mysterious Teen American mindset. 

✍️Soliciting feedback

Beyond just creating fake users, the first Musical.ly app had a button that says "my ideas" (not feedback or support...there is something about using First Person that made users more prone to clicking it) When users opened it, it asked them to list three things they love about the app and three things they hate.

This was the entire product roadmap; fix things people hate, improve the things people love. 

🎨 Designing with users

The last thing they did was to adapt the participatory design principles as a gospel within the company. Alex onboarded hundreds of early users on a WeChat group, and no engineer in the company was allowed to work on a new feature, without sharing the mockups and wireframes in WeChat first and getting initial feedback from them. 

Musical.ly or Tiktok on the surface may look like a serendipitous "magic in a bottle" product, but rest assured, this magic was not stumbled upon it was engineered!

This is it for today, See you next Sunday 😉,

Ali Abouelatta

P.S: If you ever make a Tiktok video on First 1000, shoot me the link (by replying to this email) and I ll feature you (or your company) in my next issue