The article is written by Zishuang Cheng on Substack, republished on TheLowDown with the author’s permission. You may reach out to him at zishuang[email protected]. Read part 1 here

Before we dive into the other lessons that can be drawn from how TikTok was created, I’d like to point out that the Musical.ly team:

1. Had a leader with minimal, if any, consumer technology experience, having worked at SAP prior to his startup
2. And was far removed from the generation of his target audience, being a Mainland Chinese in his mid 30s targeting teens in the United States
3. The entire team was based out of Shanghai initially, while targeting a market in a different timezone and culture

Why I think it succeeded:

1. When the first version of the startup looked like it was going to fail, they did not delude themselves and carry on, nor did they give up and return the money to their investors or phoned it in. They made a hard pivot based on lessons learnt Resilience and reacting to reality instead of how you wish reality was is a very underrated trait
2. They were constantly experimenting and tweaking to see what works
3. The team not only had a bias to action, but thought deeply about the psychology of their users and the nature of social networks
4. Based on the 3 points above, they clearly ignored conventional wisdom 🙂

Quick recap of Part 1:

Top 10 takeaways:

1. Do not go against human nature
2. Make it dead simple for your users to create content (or key action)
3. Focus on young people for social products
4. Social Platforms must have a connection to real life
5. Focus on a niche during the zero to one phase, then diversify the use case
6. Focus on utility, then build community
7. Stay close to Your Users
8. Make your early adopters rich, and the rest will come
9. For pivots, you have to change the value proposition
10. Make your users need to feel invested

 

Carrying on from part 1

 

6. Focus on Utility, then build community

“We have to focus on utility aspect, like the first user of Instagram 1.0, they didn’t use Instagram for the feeds, for the likes, for the comments, they use Instagram for the amazing filters, then post on other social media[s] right? Before you have the critical mass of the users, you have to focus on content and utility”

Chris Dixon famously talked about this. However, this is by far not the only strategy to get a network going. Facebook and Twitter weren’t single player tools in the beginning. However, it is a good strategy to the cold start problem when you are starting with zero users and the value of the network is correspondingly zero, which makes it difficult to attract any users to add value to said network.

Key Question: Am I narrowing down my audience enough?

 

7. Stay Close to Your Users

“We have to stay really close to our users, different kind of users, we call this Participatory Design. Involve the end users in the design process from the very beginning, actually we have hundreds of users on Wechat … We have daily conversations, not only conversations about the product and ideas, but what they think, making jokes, be immersed in the American teen culture … for every design.. we present the ideas, share the wireframes before we do any coding”

An interesting fact about Alex and his team was that they were based in Shanghai while targeting the American market. This is something for SEA founders to note if you’re launching a social product, given that history has shown that most large consumer global products start in the US as they are still leading the world in terms of culture. This will probably be true for the next 5 years at least.

This is a use case for how you don’t have to be ‘solving your own problem’ or be part of the user demographic. What the product manager really needs is a deep insight to the consumer’s behaviour, and the best way to do this is being in constant contact with them. This helps to add a lot more context to any data collected.

Key Question: Is my product team and I talking to my users everyday?

 

8. Make your early adopters rich, and the rest will come

“In the early stage, building a community from scratch is like you just discover a new land, you give it a name, America, you want to build economy, you want to build population, you want people from Europe to migrate to your country right? And Instagram is Europe, Facebook is Europe, how can you do it? Economy in Europe is very developed, and in your country there’s not so many things going on, there’s no economy, how can you get those people to come in? The problem with Europe is, the social class is stabalised, for [the] average citizen of Germany, of France, they have almost zero opportunity to go up in the social class. Now you have [a] new land … the important thing is to build a centralised economy, which means from wealth distribution point of view, you make sure, majority of the wealth is distributed to a small percentage of people, make sure they get rich first, these people become role models for other people of Europe …”

While cash is the most tangible form of attraction, the other carrot to dangle is status. Eugene Wei talks about this in much more detail. This ties in with Alex’s thoughts on targeting young people. Since people are status seeking monkeys, and young people would find it much easier to accumulate status as opposed to cash, finding ways to help them attain status is a viable strategy.

The key is, what innate human desire can you tap into that will lure your first batch of users in? A good way to think about this is along the line of the 7 deadly sins, You can think of how each sin has spawned a great tech company:

1. Lust – Tinder, M17
2. Gluttony – Food Panda, Ubereats,
3. Greed – Amazon, Robinhood
4. Sloth – Amazon, Lazada, Grab, Uber
5. Wrath – Facebook
6. Envy – Instagram
7. Pride – Linkedin

“Very importantly, you have to do decentralisation at the same time. Having an American dream is good, but if it’s only a dream, people will wake up… they know they don’t have [the] chance .. you have to decentralise your traffic model, you have to give the opportunity to average people, and make sure they got satisfaction, make sure they have a middle class coming up”

Most of the existing platforms give early adopters a large advantage. It’s much easier to build a Twitter following if you started early, launch your app on the Appstore when it first launched, built credibility on Upwork, or even getting a good domain name. This is unbridled capitalism manifested in online platforms, this isn’t sustainable as it leaves a vacumn for a new platform to emerge which new users will flock to. The interesting thing about the Tik Tok algorithm is that if new users produce good content, they too, can easily rise to the top. There probably is opportunity to apply this thinking to other verticals.

Key Question: How can I either incentivise my users with either cash or status?

 

9. For pivots, you have to change the value proposition

“In order to make an unsuccessful product successful. Adding features doesn’t help, one product can become successful, because there is one core feature, became a killer feature, so you have to change the value proposition in order to change your growth curve.”

In the case of Musical.ly, Alex and the team realised that 50% of the users upload videos from the camera roll, but this only occurred on a weekly basis. He thought that they were in danger of losing momentum and the product wasn’t sticky enough as it wasn’t habitual for users to do so, this should happen on a daily basis, which was the challenge most video platforms faced, that there are very few use cases for video to be uploaded on a daily basis

Key Question: If I’m going to pivot, is the core value proposition changing? Like in the case of Musical.ly, from video generation to lip synching, this does not mean change in a lot of features, but what the user is going to the platform for.

 

10. Users need to feel invested

“We make sure, people invest. Invest basically means posting, so we send a notification for new users, post your own Musical.ly, and that dramatically increased the retention”

The product team probably looked to the Hook Model which is where:

1. Trigger (External or Internal): This is the actuator of behaviour. It cues the action that then builds a habit. In Musical.ly’s case, it would range from creative expression to social validation
2. Action: Behaviour executed in anticipation of the reward. In Musical.ly’s case, it would be posting a lip synch.
3. Variable Reward: The problem that’s solved because of the action taken reinforces the cycle of behaviour. Reward types include Rewards of the Tribe (social rewards based on connection and acceptance), Rewards of the Hunt (search for material resources), and Rewards of the Self (personal gratification in the form of mastery or self-realisation). A small group of users would fall under the category of Rewards of the Self, where they are trying to post the perfect lip synch video and spend countless hours getting it right. A majority will fall under Rewards of the Tribe where they get likes and comments, receiving affirmation from their friends.
4. Investment: An action that improves the product or service in the future. This action for Musical.ly would be sharing video across their social networks.

Key Question: What drives my users? What can I do to fulfil this and trigger this? What can I make them do to feel invested in the product’s success?

 

Summary:

Lessons Learnt:

1. Do not go against human nature, building a consumer internet platform is tough enough. Also, there isn’t a historical use case where large consumer internet company didn’t start out catering to the Limbic part of the brain.
2. Make it dead simple for your users to create content (or key action). In today’s attention scarce world, any additional second your user spends struggling to complete an action makes you just a little worse than your competitor.
3. Focus on young people for social products. They have the most time, creativity and inclination to use, share and more importantly, get your product.
4. Social Platforms must have a connection to real life. People are more interested in watching their friends do mundane things than strangers doing interesting things.
5. Focus on a niche during the zero to one phase, then diversify the use case. In the beginning, you can only serve your community well when it’s ridiculously tailored to a niche (like lip synching), you can expand the use case once you have distribution.
6. Focus on Utility, then build community. To solve the catch-22 situation of needing an existing network to build the network, you can accumulate this community by providing a useful tool where your users can be connected one you gain critical mass.
7. Stay Close to Your Users. It’s the only way for you to understand who you’re building for.
8. Make your early adopters rich, and the rest will come. People are creatures of imitation , they will follow what they see works.
9. For pivots, you have to change the value proposition, adding incremental features does not solve the core problem.
10. Users need to feel invested to want to continuously contribute to and share your platform.

 

Key Questions

1. Is my product catering to the most primal instincts of human nature or looking to serve a higher need?
2. Can my users create content (or complete action) while watching TV?
3. Is my product social or new (even shifts in music genres)? If so, I should probably target teens.
4. Is my product social at it’s core? Am I aiming to get to 100m DAU? If so, there has to be a link to the user’s real life.
5. Is my product social at it’s core? Am I aiming to get to 100m DAU? If so, there has to be a link to the user’s real life.
6. Am I narrowing down my audience enough?
7. Is my product team and I talking to my users everyday?
8. How can I either incentivise my users with either cash or status?
9. If I’m going to pivot, is the core value proposition changing? Like in the case of Musical.ly, from video generation to lip synching, this does not mean change in a lot of features, but what the user is going to the platform for.
10. What drives my users? What can I do to fulfil this and trigger this? What can I make them do to feel invested in the product’s success?