Speaker 1: More than one million people around the world visit TikTok
Speaker 1: every month, but with immense growth comes scrutiny and competition.
Speaker 1: In this episode of the David Rubinstein Show Peer to
Speaker 1: Peer Conversations, I sit down with TikTok CEO shows E
Speaker 1: two to discuss TikTok's future and also find out if
Speaker 1: I could become TikTok famous. Now. I am older than
Speaker 1: many of your TikTok followers. I believe I maybe you
Speaker 1: have some people my age, but my impression is it's
Speaker 1: for younger people. Is that wrong? There is really something
Speaker 1: for everyone on TikTok. I would I would have you
Speaker 1: installed TikTok yet do it? Well? I'm not an expert
Speaker 1: on TikTok. I have looked at it, but I haven't
Speaker 1: seen anything that you know looks like me. I think
Speaker 1: you may be surprised, uh. For for example, for example,
Speaker 1: there was something called book talk on on TikTok. It
Speaker 1: is a hashtag and it really is a trend where
Speaker 1: people share short videos on their favorite books. And you'd
Speaker 1: be probce how many views they have. We have forty
Speaker 1: billion views on book talk alone. There are many other categories.
Speaker 1: There is clean talk, which is about people cleaning thirty
Speaker 1: billion views. You know, I personally am a very amateur golfer.
Speaker 1: Hashtag golf has more than ten billion views on TikTok
Speaker 1: as well, So I believe there is something for everyone.
Speaker 1: The way we want to present this is we have
Speaker 1: a machine learning recommendation engine which personalizes your experience when
Speaker 1: you use TikTok, and we believe there's something for you
Speaker 1: as well. Okay, so can anybody put a video on TikTok, Yes,
Speaker 1: very easily. All right, How do you control of somebody
Speaker 1: puts something on that's dangerous or pornographic or or not appropriate.
Speaker 1: This is a great question. One of the most important
Speaker 1: things that I have been focusing on since I took
Speaker 1: on the role nearly a year ago. It's on the
Speaker 1: safety of our platform is something we take absolutely seriously,
Speaker 1: and we have elevated this as a top priority for
Speaker 1: myself and for the company. We put a significant amount
Speaker 1: of investment into it h and we believe that we
Speaker 1: need to continue to invest in trust and safety to
Speaker 1: stay ahead of our growth because of the growth of
Speaker 1: the platform. So, for example, making sure that making sure
Speaker 1: that our community guidelines which are published transparently online, are
Speaker 1: well understood by our users, making sure that we have
Speaker 1: the tools and the capabilities to ensure a safe environment,
Speaker 1: a safe and inclusive environment on our platform, so that
Speaker 1: our users feelings I feel like feel that is a
Speaker 1: trusted environment to to publish and to inspire the creativity
Speaker 1: they want to. So let's suppose I want to be
Speaker 1: a TikTok person. I want to be on TikTok, but
Speaker 1: I have to make a living. Um can I make
Speaker 1: a living by just being on TikTok or the people
Speaker 1: that make a living just by being on TikTok. Most
Speaker 1: of our users come on TikTok to to share how
Speaker 1: they feel into to inspire, you know, to inspire the world.
Speaker 1: But there are people who come on TikTok, and this
Speaker 1: is something we're extremely proud of. Um. We have an
Speaker 1: able them. We have given them the platform and the
Speaker 1: tools to actually make a proper living. And most of
Speaker 1: these are small businesses or individuals. I can give you
Speaker 1: an example. I have been looking at my own TikTok
Speaker 1: recently and I saw this video on t case Surf
Speaker 1: and Turf. It is a restaurant in Denver. I think
Speaker 1: it's the first black owned, family operated seafood restaurant in Denver. Uh.
Speaker 1: What I've heard is during the pandemic, business was poor
Speaker 1: for a lot of restaurants, including them. But what what
Speaker 1: one creator did was to create videos on what, you know,
Speaker 1: how great the restaurant was. It became an overnight sensation.
Speaker 1: It went viral, and our business is booming for for
Speaker 1: that company. So and there are thousands upon thousands of
Speaker 1: examples like that across the US and across the world.
Speaker 1: And well, you know, this is something that we are
Speaker 1: immensely proud of that we have a platform the small
Speaker 1: businesses can make use of to get to grow their business.
Speaker 1: Spose I want to be a TikTok performer and I
Speaker 1: want to get paid for it. Do I do something
Speaker 1: that says this restaurant is great and hopefully restaurant won't
Speaker 1: pay me. Is that how people get paid by being
Speaker 1: on TikTok. There are several mechanisms to do it. The
Speaker 1: first is if you become if you have enough followers,
Speaker 1: certain brands will get in touch with you, either through
Speaker 1: us or otherwise two for you to represent their brand,
Speaker 1: So you become the brand ambassador. So that's one way.
Speaker 1: Some of our creators get paid. Beyond that, we have
Speaker 1: provided them with tools to monetize, you know, to get
Speaker 1: in touch with the followers and the monetize that that
Speaker 1: that as well. For example, we have a live streaming service,
Speaker 1: so as a creator, you can you can launch, you
Speaker 1: can have a live streaming session and that is an exclusive,
Speaker 1: exclusive session where you can interact with the followers and
Speaker 1: your followers can give you virtual gifts, and that's one
Speaker 1: way you can monetize. The other example is e commerce.
Speaker 1: We provide our creators with the tools to be able
Speaker 1: to sell merchandise on the atform as well. This is
Speaker 1: do a new part of our business, but it's something
Speaker 1: that people are very very excited about. How do you
Speaker 1: make money? Then other words, somebody goes on TikTok and
Speaker 1: they're making money for this restaurant in in Denver, How
Speaker 1: do you make any money? We make money primarily through
Speaker 1: advertising and also providing services like live streaming and decommon
Speaker 1: style uses. And we we do have a service fee
Speaker 1: that that we charge to provide those services. But if
Speaker 1: somebody just uploads their video on TikTok, do they pay
Speaker 1: you a fee for that or not? No, it's absolutely free.
Speaker 1: Are there companies now that specialized in making people TikTok stars.
Speaker 1: Somebody says, I want to be on TikTok. I want
Speaker 1: people to watch me. Maybe I can sell my my
Speaker 1: services to an advertising company or some way. Um, there
Speaker 1: are the people that polish up people's TikTok presentations the
Speaker 1: way our platform works, and my advice to anyone who
Speaker 1: wants to be famous on our platform is to just
Speaker 1: beat themselves. What we have found is that this community
Speaker 1: is is This community wants real tent, They want the
Speaker 1: real roar content. They want to see people being themselves.
Speaker 1: So um, the many people tell me it's a breath
Speaker 1: of fresh air, is the sunny corner of the internet.
Speaker 1: So my advice to anyone who wants to be famous
Speaker 1: is really to beat themselves. So recently, Mark Zuckerberg announced
Speaker 1: at his quarterly earnings after explaining why the stock went
Speaker 1: down by as a result of the declining use of Facebook,
Speaker 1: he attributed to TikTok and TikTok was becoming a big rival.
Speaker 1: He said, how did it feel to be blamed by
Speaker 1: Mark Zuckerberg for the decline and value of Facebook? We
Speaker 1: are a very young company at this point, and they
Speaker 1: are still very big competitors in the market. Some of
Speaker 1: them have been around for a long time with a
Speaker 1: lot of resources. So the way we look at it,
Speaker 1: there's still a long way for us to go in
Speaker 1: terms of achieving the mission that we want to achieve.
Speaker 1: We think that there are a number of things that
Speaker 1: makes us unique in the market. The first is that
Speaker 1: we are pineers in what we do. We have innovated
Speaker 1: this form of short video combined with a four you feed,
Speaker 1: and we are confident that in the coming years we
Speaker 1: will continue to innovate on that front and bring the
Speaker 1: best and the most interesting value proposition to our use this.
Speaker 1: So if Mark Zuckerberg we're here, would just say, don't
Speaker 1: worry about us, We're not a big competition to you,
Speaker 1: or we'll just say we're coming after you. I think
Speaker 1: for us, David, we are more focused on ourselves. I
Speaker 1: think over the long run, the biggest competitor that we
Speaker 1: have as Cliche is going to sound is going to
Speaker 1: be ourselves. We have a mission which is to inspire
Speaker 1: creativity and to bring joy, and we believe that our
Speaker 1: most important focus is to focus on delivering that mission.
Speaker 1: But let me ask you this, most of the large
Speaker 1: Chinese technology companies. Let's say Ali Baba, Bai Do ten Cent.
Speaker 1: They have gigantic market values and they're very prominent in China.
Speaker 1: Not as prominent outside of China as obviously in China,
Speaker 1: and certainly not that prominent the United States. TikTok, by contrast,
Speaker 1: is not in China, but it's gigantic outside of China,
Speaker 1: the United States and everywhere. What did TikTok do that
Speaker 1: enabled a Chinese based company parent company at least to
Speaker 1: do so well outside of China. We think it's challenging
Speaker 1: to build a global company in general, but the best
Speaker 1: ones we have seen so far are ones that take
Speaker 1: very consistent global learnings in adapt them to the local,
Speaker 1: to the local, to the local countries that they are
Speaker 1: operating in. So you need to be global and local
Speaker 1: at the same time. And it's something that we're investing in.
Speaker 1: For example, here in the US, we have a very
Speaker 1: sizable team here in New York and Austin in l
Speaker 1: A at this point in UH, becoming more local is
Speaker 1: something we will continue to invest in. Okay, let's talk
Speaker 1: about the beginning of of TikTok. So what is byte
Speaker 1: dance byke Dance was the parent company, When was byte
Speaker 1: Dance started and who was they founder a byte Dance.
Speaker 1: I was very fortunate about ten years ago to have
Speaker 1: to have had the chance to participate in the company
Speaker 1: as an investor. Back Dance was founded in t Bye Eiming,
Speaker 1: and the original Like any good start up story, the
Speaker 1: original the original product has evolved over time and there
Speaker 1: were many hits and mrs you know, as in the
Speaker 1: evolution of the company. One thing that has remained very
Speaker 1: consistent for Bye Dance is the mission. The mission for
Speaker 1: by Dance today is to inspire creativity and to enrich life.
Speaker 1: And what I've noticed over the course of the decade
Speaker 1: that I've known the company is that they have been
Speaker 1: very consistent in wanting to deliver this mission to as
Speaker 1: many people as possible and driven by this mission. What
Speaker 1: struck me in the early days of by Dance was
Speaker 1: the desire to be mobile, the focus on machine learning recommendation,
Speaker 1: and this desire to be global, and it's been very
Speaker 1: system over the last ten years. I should disclose that
Speaker 1: my own investment company is an investor in Bye Dance.
Speaker 1: We took an investment a number of years ago and
Speaker 1: then I assume it will be a good investment. I
Speaker 1: don't know. But let's talk about how TikTok evolved out
Speaker 1: of byte Dance. So when did TikTok come along. The
Speaker 1: original apps that were developed by byte Dance had a
Speaker 1: very similar concept, which was to recommend content to use
Speaker 1: this based on machine learning. Machine learning algorithms that tries
Speaker 1: to understand the user's behavior. The first iteration of it
Speaker 1: that was successful was a news app, so it took
Speaker 1: news content and it recommended news to use this based
Speaker 1: on their own behavior on the app. Now, sometime between
Speaker 1: sixteen that evolved into short video and that evolved into TikTok.
Speaker 1: And did anybody think it would turn out to be
Speaker 1: as global phenomenon at the beginning? No? No, all right,
Speaker 1: So let me ask you about TikTok and regulation. Under
Speaker 1: President Trump, there was a concern that certain information that
Speaker 1: TikTok was getting from people using TikTok was somehow going
Speaker 1: to be detrimental to the United States, and there was
Speaker 1: an effort to force TikTok to sell its US business.
Speaker 1: What happened to that effort. We believe that our approach
Speaker 1: to all the governments that regulators around the world is
Speaker 1: to be collaborative and to be very transparent, to be
Speaker 1: available to explain what we do and who we are,
Speaker 1: and answer any questions that we have. That's the approach
Speaker 1: we have taken in that approach has been an approach
Speaker 1: that has been very beneficial for us over the course
Speaker 1: of the last few years. But there was a proposal
Speaker 1: at one point that require you to sell the TikTok
Speaker 1: business in the US. I think it was going to
Speaker 1: be sold perhaps to Larry Elson's company Oracle. Is that
Speaker 1: off the table now and right now you're not being
Speaker 1: forced to sell anything. Is that right? We have moved
Speaker 1: beyond that conversation. It is okay. And the current administration
Speaker 1: and bid the administration have they picked up the cudgels
Speaker 1: and said, well, we want to engage in the same fighter.
Speaker 1: Right now, you don't have to worry about that again.
Speaker 1: We are taking the approach now to be very transparent,
Speaker 1: to be very engaged, very collaborative, and to answer any
Speaker 1: questions that they may have. Okay, But the biggest concern
Speaker 1: that people had, at least some people in the Trump
Speaker 1: administration had it, maybe other people, is that the data
Speaker 1: that you have on your computers about who's watching what.
Speaker 1: I presume the data you have would somehow get fed
Speaker 1: back to China and China would have it for its
Speaker 1: use the Chinese government. Is that true that your data
Speaker 1: is subject of being given to or you're forced to
Speaker 1: give it the Chinese government. We disagree with that the
Speaker 1: ways TikTok is set up today. First of all, TikTok
Speaker 1: is not available for download in China. It operates outside
Speaker 1: of China. The datas the data for TikTok uses is
Speaker 1: thought in Virginia and in Singapore, with the backup in Singapore,
Speaker 1: uh and we believe that we have a very rigorous
Speaker 1: and robust system to protect the data security of our uses.
Speaker 1: What do you do with the data? So let's suppose
Speaker 1: I on TikTok and I like certain kinds of things
Speaker 1: to watch. You presumably can in your algorithms know that
Speaker 1: what do you do with that? That you sell it
Speaker 1: to another company or do you do nothing with it?
Speaker 1: It is our recommendation engine. The best way to think
Speaker 1: about it is that it's just pure mathematics. It's it.
Speaker 1: It digests the behavior that ill uses have on our platform,
Speaker 1: including likes. You know what videos do you like? The comments?
Speaker 1: How long you stay on the particular video, so on
Speaker 1: and so forth. So signals like behavioral signals like that,
Speaker 1: and it recommends him, It recommends the content that you
Speaker 1: could potentially be most entertained by. So so that's really
Speaker 1: how the that's really how the data is being used
Speaker 1: on our platform. And how many countries are you in
Speaker 1: now outside of China and India essentially all the other
Speaker 1: every country? Okay? And today you have something that's proprietary
Speaker 1: such that somebody couldn't come along and compete. In other words,
Speaker 1: there's always people coming along trying to disrupt companies, and
Speaker 1: that certainly happens a lot in the tech where all
Speaker 1: are you worried that somebody is going to come along
Speaker 1: with a new product that's slightly better than yours or
Speaker 1: do you think it's unlikely given how dominant you are
Speaker 1: in the business now, David, This this is a very
Speaker 1: competitive space and in our industry there are players with
Speaker 1: like but bigger muscles. They have more resources, they have
Speaker 1: been around for a longer period of time, and I
Speaker 1: think it keeps us on our toes. No, we have
Speaker 1: you know, we have our strengths. We are pineers in this.
Speaker 1: You know, we believe that We are innovative and we
Speaker 1: will continue to innovate. And we have a very unique
Speaker 1: community that we talked about that that we believe is
Speaker 1: very special and not easily replicable. So we have our advantages.
Speaker 1: We are confident, but at the same time, competition is
Speaker 1: very intense. Now China has been a little tougher, some
Speaker 1: people would say, on Chinese tech companies than it was
Speaker 1: a year or two ago, and there's been what some
Speaker 1: people would say clamp down on Chinese tech companies. Has
Speaker 1: that affected you in any way? I think in in
Speaker 1: in this day and age, we have to be very
Speaker 1: collaborative and be very transparent and have an active dialogue
Speaker 1: with regulators and governments around the world to help them
Speaker 1: understand our business and to answer any questions that you
Speaker 1: may have. As I mentioned earlier, my my firm did
Speaker 1: invest in it, but I don't have any inside information,
Speaker 1: and I don't know if you're going to give me
Speaker 1: the inside information. But is there any plan to take
Speaker 1: Bite Dance public at some point? Our current focus, given
Speaker 1: the growth of our company, is to really focus on
Speaker 1: the business. There's just so much we can do, especially
Speaker 1: for TikTok that really our management focuses on growing the
Speaker 1: business at this point and making sure that we are
Speaker 1: investing in the right things that we invest in. At
Speaker 1: some point we will access the capital markets. At some
Speaker 1: point we will, but that is really not the priority
Speaker 1: at this point. And when you go go into the
Speaker 1: public markets, what do you think when your public documents
Speaker 1: are revealed will be the biggest surprise. It's the size
Speaker 1: of the platform or the profitability of it. What do
Speaker 1: you think is likely to be the biggest surprise. That's
Speaker 1: a very good question. I need to go back and
Speaker 1: think about it. I think most of what we do
Speaker 1: is is followed and many people sort of you know,
Speaker 1: thankfully you have a lot of interest in in our
Speaker 1: business today, so I'm not sure whether there will be
Speaker 1: any big surprises. Let's talk about your own background. So
Speaker 1: you mentioned your Singapore and were you born in Singapore.
Speaker 1: I am born in Singapore, okay, And did you go
Speaker 1: to college and high school in Singapore. The thing about
Speaker 1: growing up in a small island like Singapore, David, is
Speaker 1: you get won the lust at a very young age.
Speaker 1: It's a tropical paradise. It's a tiny island. I love it,
Speaker 1: but it's very small. So after high school and after
Speaker 1: the National Service. We have National service there. I, you know,
Speaker 1: went to the UK for college and then subsequently to
Speaker 1: hear in the US V Business School where I and
Speaker 1: my wife. All right, you went to Harvard Business School?
Speaker 1: I did? And so how do you think Harvard Business
Speaker 1: School was? Was it smarter? The people they're smarter than
Speaker 1: your thought or not as smart as you thought they'd
Speaker 1: It was a great I had a great time there.
Speaker 1: The most important moment was I met my wife in
Speaker 1: business school, So to me, this is a you know,
Speaker 1: it was a great two years. Okay. So you graduate
Speaker 1: from Harvard Business School in what year? All right? So
Speaker 1: what did you do then? After business school? I joined
Speaker 1: an investment company called DST which invests in internet companies.
Speaker 1: Is this your A Milners company? Yes? And so what
Speaker 1: did you do for him? You look for Internet related investments.
Speaker 1: That's what I did, okay? And how many years were
Speaker 1: you there? I was there for about five years, and
Speaker 1: it was doing this time that I got to meet
Speaker 1: and meet and invest in Byte Dance. Okay, So after
Speaker 1: you left your A Milners operation, what did you do?
Speaker 1: I joined a company called shell Me, where I initially
Speaker 1: was the CFO and then ran the global operations for
Speaker 1: the company. Okay, so you did that for a while
Speaker 1: and then a head hunter called you up and said,
Speaker 1: guess what we want you to come to Bite Dance
Speaker 1: or how did that happen? It wasn't a head hunter.
Speaker 1: The I've stayed very close to the folks and Bitte
Speaker 1: Dance because of my early relationship with them, so they
Speaker 1: reached out. There's a little known fact about me, which
Speaker 1: is I used to be a creator. I actually had
Speaker 1: a hundred and eighty five thousand follow us on that account,
Speaker 1: and so I've had to go through that process of
Speaker 1: learning how to connect with my followers and using the product,
Speaker 1: and it was an amazing way. I found the product
Speaker 1: so amazing in terms of being being able to communicate
Speaker 1: the messages I wanted to my followers. So I love
Speaker 1: the product. I've known the team for a long time.
Speaker 1: I think that the mission is something that I really
Speaker 1: truly believe in. So when the opportunity opened up, it
Speaker 1: was very organic for me to trave ad followers. Now
Speaker 1: I did you did? Now you've given them up? Or
Speaker 1: what do you have now? That account was used to
Speaker 1: sell products. So I have since transitioned into a sort
Speaker 1: of a more consumer based a more sort of personal account.
Speaker 1: All right, So you were recruited to become the CFO
Speaker 1: of byte Dance, right, and you have that job, You're
Speaker 1: the CFO a Byte Dance, and after just like five
Speaker 1: weeks they promoted you to be the CEO of TikTok
Speaker 1: Is that right? It was after it was after a
Speaker 1: couple of months. A couple of months, okay, So was
Speaker 1: that a promotion? I think it's that the nature of
Speaker 1: the job is very different. And what is the biggest
Speaker 1: challenge that you have as a CEO? Is it to
Speaker 1: keep the regulators away or to get more customers, more advertisers.
Speaker 1: What is the biggest challenge? There are a couple of
Speaker 1: things that you know keeps me awakend night, And I
Speaker 1: think that's the question. Um. The opportunity that we have.
Speaker 1: I believe that we have something that's very unique. We
Speaker 1: pioneered this sort of short video format, and would we
Speaker 1: have a very unique community today that has all these
Speaker 1: kind of raw, authentic content that people love. And I
Speaker 1: think the opportunity that we have to take this to
Speaker 1: more people around the world to inspire them and for
Speaker 1: them to bring more joy to more people. This is
Speaker 1: a great and unique opportunity. Excuse me, very very excited.
Speaker 1: At the same time, there are challenges that we have
Speaker 1: to work through, for example, making sure that we are
Speaker 1: investing enough more and more into safety to stay ahead
Speaker 1: of our growth, because it is something that's very important
Speaker 1: to us. So challenges and opportunities they, you know, both
Speaker 1: excite me equally. Since so you took the job of
Speaker 1: CEO of TikTok, we've been living in COVID. How hard
Speaker 1: has it been to manage a company during COVID? Are
Speaker 1: you've mostly been isolated or how have you been operating
Speaker 1: during COVID? It has been a challenging time. I think
Speaker 1: for many businesses around the world, including ours. We are
Speaker 1: a growing company, it is difficult for new employees who
Speaker 1: are joining us do not have the opportunity to mingle
Speaker 1: and interact with other people offline in the offices. So
Speaker 1: it is something that you know, Uh, thankfully we are
Speaker 1: at the stage of the pandemic where we can start
Speaker 1: thinking about return to office. It is something that you know,
Speaker 1: we want to vite, especially the newcomers in our company,
Speaker 1: the right opportunities to to integrate and to blend in
Speaker 1: and to make sure that they have, they have the
Speaker 1: right opportunities to interact with with as many people as
Speaker 1: they want. So if you look at TikTok, what is
Speaker 1: your favorite single thing you've watched on TikTok? Is there
Speaker 1: one thing you've watched and you said this is my favorite? Uh,
Speaker 1: there are a number of them. I am an amateur golfer,
Speaker 1: So hashtag golf has ten billion views more on TikTok.
Speaker 1: It's it's very, very entertaining. So if you watch golf
Speaker 1: on TikTok, do you get to be a better golfer
Speaker 1: or not necessarily unfortunately, not necessarily help. Okay, when you
Speaker 1: are not working at TikTok and you're not golfing, there's
Speaker 1: there any outside interest you have or you don't have
Speaker 1: any outside time? I do, I do. I'm a very
Speaker 1: I'm I'm an amateur theoretical physicist, as in I'm reading
Speaker 1: books on theoretical physics and and trying to understand it.
Speaker 1: So that's something that I love. I've interviewed many people
Speaker 1: over the years. I've never interviewed anybody who said that
Speaker 1: they're hobby was amateur theoretical physics, so that must be unusual.
Speaker 1: Um So do you regret not becoming the next Albert
Speaker 1: Einstein or something like that. I don't think I have
Speaker 1: the ability to be that. I hardly understand the mathematics
Speaker 1: behind some of the more complex theories, but I find
Speaker 1: it very interesting. So today, as you look forward to
Speaker 1: what you're going to be doing over the next year
Speaker 1: or so, what are you most focused on. I'm most
Speaker 1: focused on trust building. We are a young company, and
Speaker 1: I think trust is something that we have to earn
Speaker 1: through actions, for example, through our continued investment in safety.
Speaker 1: So that is a big focus for me that we
Speaker 1: are focused on not only growing out business, but earning
Speaker 1: trust with the right stickholders around the world along the way.
Speaker 1: Thanks for listening to hear more of my interviews. You
Speaker 1: can subscribe and download my podcast on Spotify, Apple, or
Speaker 1: wherever you listen.