Baidu, China’s equivalent of Google, was dominant but burning users’ trust by making adverts look like real search results.
The solution, Zhang figured, was artificial intelligence (AI) that learned users’ preferences as they browsed.
Chinese venture capitalists turned him down flat. It was an American venture capital firm, Susquehanna International, that gave him his big chance with a $5m funding round, allowing him to launch the app for which ByteDance is still most famous in China.
Toutiao, meaning “headlines”, shows its users news stories and learns their interests through its AI. The app has grown to more than 260 million monthly users.
Like many tech bosses, Zhang is adamant that Toutiao is “not a news business”, but it’s not a social network either. “We are more like a search business or a social media platform,” he said in 2018. “We push information, not by queries, [but] by news recommendation.”
That strategy of picking users’ content for them, freeing them from the burden of choice, was what supercharged TikTok’s growth in the West.
TikTok uses AI to suggest viral videos to its users
Called Douyin in China and aimed at young users, the app’s first version was built in 200 days and had 100 million users within a year. Zhang himself didn’t know what teenagers wanted to see, but he didn’t need to: AI could do that job for him.
Twitter and Facebook have the fundamental problem that they are useless until new users follow someone or add a friend. Both companies have spent years furiously trying to lower that first hurdle.
TikTok, however, just runs right through it, requiring no input before showing music videos and skits to its users. Instead of picking from a menu of options, users make tiny and often unconscious choices: liking this video, skipping that one, letting another play for just a few seconds longer than normal. TikTok watches, and it does not judge.
For a while Zhang too only watched (“it’s a product mainly for young people”, he said at the time). But then he started to make his own videos, and soon imposed on all his senior managers a brutal regimen requiring them to post TikTok content and hit a quota of likes or else do press-ups.
TikTok has conquered the West
TikTok only achieved major international growth after Zhang acquired Musical.ly, a Shanghai start-up which had attracted more than 200 million users and had opened an office in California.
Zhang’s acquisition of Musical.ly was a clear signal that his ambitions weren’t limited to success within China. Instead, he saw a global audience for ByteDance’s stable of apps.
“Google is a company without borders,” Zhang said in 2019. “I hope Toutiao will be as borderless as Google. Personally, I hope to do things that are interesting and meaningful to society.”
It was a good dream, and why shouldn’t it have come true? China’s app makers are no less ingenious than America’s. TikTok is one of the very few advertising-based apps that has come anywhere close to challenging the market dominance of Facebook.
In the first four months of 2020 it was downloaded at three times the rate of Facebook-owned Instagram.