1 00:00:00,080 --> 00:00:02,480 Speaker 1: John Poyt Bolton is one of those guys who never 2 00:00:02,560 --> 00:00:05,280 Speaker 1: wanted to work at a big company because he likes 3 00:00:05,320 --> 00:00:08,560 Speaker 1: the energy that comes with working at a startup. And 4 00:00:08,640 --> 00:00:13,080 Speaker 1: back in things were looking pretty good for John. He 5 00:00:13,119 --> 00:00:16,120 Speaker 1: was an executive at Flipogram. It's an app that lets 6 00:00:16,200 --> 00:00:19,799 Speaker 1: people stitch together photos and music to make little montages 7 00:00:19,840 --> 00:00:23,799 Speaker 1: for social media. We were just cruising at Flipogram. We 8 00:00:23,840 --> 00:00:27,000 Speaker 1: thought we were going to be the next Instagram because 9 00:00:27,000 --> 00:00:29,840 Speaker 1: the numbers we had were just staggering. And you know 10 00:00:29,920 --> 00:00:32,040 Speaker 1: what happens when you get big in the startup world, 11 00:00:32,600 --> 00:00:35,120 Speaker 1: either you get really really big and you go public 12 00:00:35,440 --> 00:00:38,960 Speaker 1: or you get acquired. And John was hoping Flipogram might 13 00:00:39,000 --> 00:00:41,880 Speaker 1: get bought by a big name tech company like Apple 14 00:00:42,080 --> 00:00:47,120 Speaker 1: or Facebook. I mean, if Facebook wanted Instagram, why not Flipogram. 15 00:00:47,159 --> 00:00:50,040 Speaker 1: But instead, the buyer that came calling was a company 16 00:00:50,040 --> 00:00:53,320 Speaker 1: in China that John had never heard of, called byte Dance. 17 00:00:54,040 --> 00:00:56,240 Speaker 1: The first time it came up, you know, like a 18 00:00:56,320 --> 00:01:01,800 Speaker 1: Chinese tech company, Like, we were like no, we were disappointed, 19 00:01:02,440 --> 00:01:04,760 Speaker 1: um because you know, we hadn't heard of it. We 20 00:01:04,880 --> 00:01:06,720 Speaker 1: you know, we were hoping for some big exit to 21 00:01:06,920 --> 00:01:09,880 Speaker 1: to a Facebook or you know, we wanted a high 22 00:01:09,880 --> 00:01:13,200 Speaker 1: profile company, you know, and yeah, and so to have 23 00:01:13,360 --> 00:01:16,720 Speaker 1: a Chinese tech company that we never heard of was 24 00:01:16,800 --> 00:01:21,040 Speaker 1: not exciting. But this was a company that acquired Flipogram. 25 00:01:21,160 --> 00:01:23,800 Speaker 1: Bye Dance had money to spend and they wanted to 26 00:01:23,840 --> 00:01:27,080 Speaker 1: have a bigger presence in the US. They also wanted 27 00:01:27,080 --> 00:01:29,640 Speaker 1: Flipogram because of the music deals it had with major 28 00:01:29,680 --> 00:01:33,959 Speaker 1: record labels. After the acquisition went through, the CEO of 29 00:01:34,000 --> 00:01:36,240 Speaker 1: Bye Dance flew to l A to check out the 30 00:01:36,280 --> 00:01:39,840 Speaker 1: American company he had just purchased. And I think it 31 00:01:39,880 --> 00:01:44,640 Speaker 1: was December when Yiming, the CEO By Dance, came to 32 00:01:44,800 --> 00:01:49,760 Speaker 1: our office and uh he told us about by Dance, 33 00:01:49,840 --> 00:01:52,480 Speaker 1: and I just remember him showing some of the data 34 00:01:52,600 --> 00:01:55,280 Speaker 1: and the products, and you know, I was like, oh, wow, 35 00:01:55,360 --> 00:01:59,320 Speaker 1: this is this isn't some unknown little Chinese tech company, 36 00:01:59,360 --> 00:02:02,640 Speaker 1: this is this thing is massive, This is really interesting. 37 00:02:04,280 --> 00:02:07,720 Speaker 1: Bye Dance was massive. They were valued at ten billion 38 00:02:07,760 --> 00:02:11,720 Speaker 1: dollars in and they had just raised a huge funding 39 00:02:11,760 --> 00:02:14,880 Speaker 1: ground from some major VC firms with one goal in mind. 40 00:02:15,240 --> 00:02:17,880 Speaker 1: I think they were trying to get a real footholds 41 00:02:18,040 --> 00:02:20,639 Speaker 1: in the United States and and you know, we're really 42 00:02:20,639 --> 00:02:23,600 Speaker 1: trying to branch out of China and Though the Flipogram 43 00:02:23,600 --> 00:02:26,120 Speaker 1: team was impressed by the size and scope of Bye 44 00:02:26,160 --> 00:02:30,320 Speaker 1: Dance by Dances, CEO John Uming brought along something else 45 00:02:30,360 --> 00:02:32,880 Speaker 1: to sweeten the deal. I think it was almost the 46 00:02:33,000 --> 00:02:36,080 Speaker 1: Chinese New Year, and so they had handed out, you know, 47 00:02:36,160 --> 00:02:39,280 Speaker 1: red envelopes with with cash in it, and I thought, well, 48 00:02:39,280 --> 00:02:43,160 Speaker 1: that's a that's a good start. I guess it's customary 49 00:02:43,200 --> 00:02:45,839 Speaker 1: in China to give small cash gifts during the New Year. 50 00:02:46,240 --> 00:02:48,520 Speaker 1: But it's so funny to me that Bye Dances paying 51 00:02:48,680 --> 00:02:51,919 Speaker 1: millions of dollars to acquire Flipogram, and the thing John 52 00:02:51,919 --> 00:02:54,760 Speaker 1: remembers is the fifty bucks he got in the red envelope. 53 00:02:55,639 --> 00:02:58,480 Speaker 1: Flipp Agram was not the first or the last startup 54 00:02:58,560 --> 00:03:01,120 Speaker 1: that Bye Dance would acquire, because a year and a 55 00:03:01,160 --> 00:03:04,760 Speaker 1: half later, Bye Dance buys a lip sinking app called Musically, 56 00:03:05,560 --> 00:03:09,000 Speaker 1: meaning overnight, by Dance goes from having almost no presence 57 00:03:09,040 --> 00:03:12,640 Speaker 1: in the US to having over a hundred million American users, 58 00:03:13,240 --> 00:03:16,840 Speaker 1: and the Musically acquisition was the basis for Bye dances 59 00:03:16,880 --> 00:03:24,880 Speaker 1: most famous product, TikTok. I'm Shelley Banjo. You're listening to Foundering. 60 00:03:25,840 --> 00:03:29,080 Speaker 1: In the previous episode, we told you about Musically and 61 00:03:29,120 --> 00:03:33,519 Speaker 1: its eccentric founder Alex jew Musically is important because it 62 00:03:33,600 --> 00:03:37,080 Speaker 1: served as a blueprint for TikTok. The apps even look similar, 63 00:03:37,600 --> 00:03:40,200 Speaker 1: and many of the Baby Musically users would grow up 64 00:03:40,240 --> 00:03:44,360 Speaker 1: to become stars on TikTok. But TikTok's global scale, it's 65 00:03:44,360 --> 00:03:48,960 Speaker 1: insane popularity, it's advanced algorithms. Well, that's all thanks to 66 00:03:49,040 --> 00:03:52,680 Speaker 1: Byte Dance. This episode will tell you the story of 67 00:03:52,720 --> 00:03:57,120 Speaker 1: Bye Dances Rise, It's ambitious CEO, John y Ming, and 68 00:03:57,160 --> 00:03:59,520 Speaker 1: how it grew to become the biggest startup in the 69 00:03:59,520 --> 00:04:14,240 Speaker 1: world after a quick break by Dances. Founder Johnny Ming 70 00:04:14,400 --> 00:04:17,640 Speaker 1: is not a household name, but he's fundamentally changed the 71 00:04:17,680 --> 00:04:21,560 Speaker 1: way people consume media on their phones. He's basically outplayed 72 00:04:21,600 --> 00:04:25,560 Speaker 1: Mark Zuckerberg and Evan Spiegel at their own game. John 73 00:04:25,600 --> 00:04:28,960 Speaker 1: says he was really surprised by Johnny Ming's personality when 74 00:04:28,960 --> 00:04:32,960 Speaker 1: they first met. Founders tend to be you know, loud 75 00:04:33,160 --> 00:04:38,880 Speaker 1: or you know, bullish or big personalities, overly charismatic, and uh, 76 00:04:38,960 --> 00:04:41,640 Speaker 1: you know, he just didn't have any of that. Quiet 77 00:04:41,760 --> 00:04:44,680 Speaker 1: and humble and and you know, always bowing in a 78 00:04:44,720 --> 00:04:48,200 Speaker 1: way and you know, very un American in a way, 79 00:04:48,360 --> 00:04:51,279 Speaker 1: right like, and that for someone to have created something 80 00:04:51,760 --> 00:04:55,800 Speaker 1: so compelling and so successful, and to carry yourself like that, 81 00:04:55,880 --> 00:04:59,360 Speaker 1: I think is actually a testament of character. Johnny Ming 82 00:04:59,440 --> 00:05:01,960 Speaker 1: was born in i teen eight three. He's the only 83 00:05:02,000 --> 00:05:05,880 Speaker 1: son of two government workers. He grew up in Fujian Province, 84 00:05:06,200 --> 00:05:08,800 Speaker 1: which is a coastal region in China where some of 85 00:05:08,800 --> 00:05:11,760 Speaker 1: the first private companies popped up when China started opening 86 00:05:11,800 --> 00:05:15,480 Speaker 1: up to the world. E Main studied software engineering at 87 00:05:15,520 --> 00:05:18,839 Speaker 1: Nankai University and was invited back to his alma mater 88 00:05:18,960 --> 00:05:23,159 Speaker 1: in sixteen to talk to the incoming freshman students. He 89 00:05:23,240 --> 00:05:26,200 Speaker 1: told them that making friends didn't come naturally to him, 90 00:05:26,240 --> 00:05:28,960 Speaker 1: so he relied on his love of computers to help 91 00:05:29,040 --> 00:05:31,360 Speaker 1: get him through college. So I put it, you can 92 00:05:31,400 --> 00:05:36,920 Speaker 1: put the taint. How did I socialize as a science 93 00:05:36,920 --> 00:05:40,799 Speaker 1: student who didn't usually participate in group activities. I mainly 94 00:05:40,839 --> 00:05:44,800 Speaker 1: relied to my interest in repairing computers. I helped classmates 95 00:05:44,880 --> 00:05:49,400 Speaker 1: choose components and assembled dozens of computers. Of course, a 96 00:05:49,440 --> 00:05:53,440 Speaker 1: lot of them were for female classmates. Repairing computers has 97 00:05:53,480 --> 00:05:55,920 Speaker 1: led to some of the great achievements in my life. 98 00:05:56,400 --> 00:05:59,040 Speaker 1: I met my girlfriend at the time, who is my wife. Now. 99 00:05:59,080 --> 00:06:10,680 Speaker 1: When I fixed the computer, you take a stuff. Uh well, 100 00:06:10,720 --> 00:06:14,120 Speaker 1: if that's not true love, then really what is? The 101 00:06:14,240 --> 00:06:16,839 Speaker 1: Means said he was bookish and quiet. He kept to 102 00:06:16,920 --> 00:06:23,159 Speaker 1: himself even in college when the other students who are 103 00:06:23,160 --> 00:06:26,279 Speaker 1: playing video games and card games. I spent that time 104 00:06:26,320 --> 00:06:30,440 Speaker 1: reading books. And I wasn't just reading books and computer programming. 105 00:06:30,800 --> 00:06:35,000 Speaker 1: I was looking at different biographies, local and international newspapers 106 00:06:35,080 --> 00:06:40,080 Speaker 1: and magazines. He means love of biographies is a detail 107 00:06:40,120 --> 00:06:43,720 Speaker 1: that really sticks out for me. It's something he mentions frequently. 108 00:06:44,240 --> 00:06:49,920 Speaker 1: Would face on that list. I have to say, biographies 109 00:06:49,960 --> 00:06:52,760 Speaker 1: work almost like a sort of chicken soup for the soul. 110 00:06:53,320 --> 00:06:56,279 Speaker 1: And I've read a lot of biographies. I learned that 111 00:06:56,400 --> 00:07:00,279 Speaker 1: many successful people seemed to lead ordinary lives. Four have 112 00:07:00,320 --> 00:07:04,839 Speaker 1: you achieved great success? The actions looked insignificant at the time, 113 00:07:05,400 --> 00:07:08,280 Speaker 1: but in the end, the dots connect and you can 114 00:07:08,320 --> 00:07:12,920 Speaker 1: see the arc of the success. It's fun to imagine, 115 00:07:12,920 --> 00:07:16,040 Speaker 1: you mean, as a college student spending his time fixing 116 00:07:16,080 --> 00:07:20,800 Speaker 1: computers and just devouring these biographies, he studied the lives 117 00:07:20,840 --> 00:07:24,640 Speaker 1: of these towering figures closely. I think that's because he 118 00:07:24,720 --> 00:07:27,320 Speaker 1: yearned to build something great, just like the men and 119 00:07:27,360 --> 00:07:31,160 Speaker 1: women in the books. Years later, after Bite Dance, had 120 00:07:31,200 --> 00:07:34,960 Speaker 1: already gotten pretty big. I visited its Beijing headquarters for 121 00:07:35,040 --> 00:07:38,880 Speaker 1: some interviews, and I remember seeing these oversized posters of 122 00:07:38,880 --> 00:07:43,080 Speaker 1: book covers hanging on their office walls. They were biographies 123 00:07:43,080 --> 00:07:47,840 Speaker 1: of legendary American tech founders like Steve Jobs and Jeff Bezos. 124 00:07:48,720 --> 00:07:52,080 Speaker 1: I found it so unusual. I snapped some pictures and 125 00:07:52,160 --> 00:07:54,800 Speaker 1: sent them to my editor. It's not every day you 126 00:07:54,880 --> 00:07:58,200 Speaker 1: see an oversized photo of Jeff bezos face hanging from 127 00:07:58,200 --> 00:08:01,680 Speaker 1: the walls of a Chinese company. I mean mentions this 128 00:08:01,800 --> 00:08:05,840 Speaker 1: again during his first interview with Western Media. My colleague 129 00:08:05,880 --> 00:08:09,800 Speaker 1: Peter Elstrom sat down with him in TV. Notice heming 130 00:08:09,840 --> 00:08:12,800 Speaker 1: only brings up American tech founders. This is role models, 131 00:08:13,200 --> 00:08:15,920 Speaker 1: not say a Chinese founder like Ali Baba's Jack Ma. 132 00:08:16,640 --> 00:08:19,840 Speaker 1: But I read quite a lot of story about Bill 133 00:08:19,920 --> 00:08:22,840 Speaker 1: Gates while I was young, and Steve Jobs and what's 134 00:08:22,920 --> 00:08:28,080 Speaker 1: nek well I graduated, uh graduate from university. I paid 135 00:08:28,160 --> 00:08:31,920 Speaker 1: quite a lot of attention to Amazon and Facebook. I 136 00:08:31,960 --> 00:08:35,080 Speaker 1: get two things out of this tape. One he means 137 00:08:35,120 --> 00:08:38,600 Speaker 1: not just some engineer who only cares about code. He's 138 00:08:38,600 --> 00:08:42,600 Speaker 1: paying attention to how businesses are running. And two, he's 139 00:08:42,600 --> 00:08:45,520 Speaker 1: got his eyes on the competition I paid attention to 140 00:08:45,559 --> 00:08:49,200 Speaker 1: Facebook from two thousand and six, so I think they 141 00:08:49,200 --> 00:08:53,240 Speaker 1: start company into Southerland four and I graduated to Southland five. 142 00:08:53,920 --> 00:08:57,680 Speaker 1: Notice how he emphasizes his attention to Facebook because a 143 00:08:57,720 --> 00:09:01,080 Speaker 1: few years after this interview, Meming Company would post the 144 00:09:01,120 --> 00:09:05,040 Speaker 1: biggest threat Facebook had ever seen. And here he's saying 145 00:09:05,040 --> 00:09:08,640 Speaker 1: that he was tracking Facebook closely, almost a decade before 146 00:09:08,640 --> 00:09:12,440 Speaker 1: bye Dance even existed. After college, I mean became a 147 00:09:12,480 --> 00:09:15,760 Speaker 1: software engineer. He worked at a bunch of startups and 148 00:09:15,760 --> 00:09:18,560 Speaker 1: did a brief stint at Microsoft, but quit because he 149 00:09:18,559 --> 00:09:22,480 Speaker 1: said it was too boring. Yeah, I disiplated several in 150 00:09:22,559 --> 00:09:28,200 Speaker 1: several stops. Most such engine companies or social network companies. 151 00:09:28,360 --> 00:09:34,240 Speaker 1: I think, oh for companies before our studies company in 152 00:09:35,080 --> 00:09:37,640 Speaker 1: He founded byte Dance out of a Beijing apartment when 153 00:09:37,640 --> 00:09:40,760 Speaker 1: he was twenty nine years old. His first product was 154 00:09:40,760 --> 00:09:43,360 Speaker 1: a mobile app that showed you jokes, and it was 155 00:09:43,400 --> 00:09:45,839 Speaker 1: really simple. You see a joke or a funny meme 156 00:09:45,920 --> 00:09:47,760 Speaker 1: pop up on your phone and you give it a 157 00:09:47,800 --> 00:09:51,640 Speaker 1: thumbs up or a thumbs down. The concept seemed pretty basic, 158 00:09:52,040 --> 00:09:54,480 Speaker 1: but it was the foundation for all of byte Dance's 159 00:09:54,520 --> 00:09:58,480 Speaker 1: future products. First, they figured out what makes each person laugh. 160 00:09:59,200 --> 00:10:02,160 Speaker 1: Then as the comp and expanded into news and video, 161 00:10:02,679 --> 00:10:05,880 Speaker 1: they were learning what individual users wanted to read and watch. 162 00:10:06,360 --> 00:10:10,079 Speaker 1: They were collecting reams and reams of data. Here's Lugen, 163 00:10:10,520 --> 00:10:14,440 Speaker 1: a former senior executive at Bite Dance in nineteen um. 164 00:10:14,559 --> 00:10:17,400 Speaker 1: So the company was actually founded, I think, with the 165 00:10:17,600 --> 00:10:23,480 Speaker 1: very simple purpose of connecting information people in a new way, 166 00:10:23,520 --> 00:10:26,839 Speaker 1: in a mobile way. Then later on we um addam 167 00:10:26,880 --> 00:10:30,280 Speaker 1: not only news but all formats of content, a variety 168 00:10:30,280 --> 00:10:35,560 Speaker 1: of contents, you know, funny jokes, entertainment. Later she would 169 00:10:35,600 --> 00:10:39,040 Speaker 1: like in the artificial intelligence behind the app to a child. 170 00:10:39,320 --> 00:10:41,439 Speaker 1: She told me. It takes time to build up the 171 00:10:41,520 --> 00:10:44,920 Speaker 1: child's intelligence, but once you do, they'll grow up to 172 00:10:44,960 --> 00:10:48,040 Speaker 1: be a super smart adult, capable of more and more things. 173 00:10:49,120 --> 00:10:52,080 Speaker 1: The technology that Eiming developed for the Joke's app would 174 00:10:52,080 --> 00:10:55,040 Speaker 1: fuel the rise of the company's next hit product, Tota, 175 00:10:55,520 --> 00:10:58,920 Speaker 1: a Chinese newsreader that would make Bite Dance ubiquitous across 176 00:10:59,040 --> 00:11:02,920 Speaker 1: China and catch the attention of venture capitalists around the world. 177 00:11:04,320 --> 00:11:06,319 Speaker 1: Let me try to convey to you just how big 178 00:11:06,360 --> 00:11:10,080 Speaker 1: Tokyo is in China. It's been downloaded more than seven 179 00:11:10,320 --> 00:11:14,280 Speaker 1: dred million times, the closest comparison in the US is 180 00:11:14,320 --> 00:11:17,560 Speaker 1: probably Google News, but Toteo is a much bigger deal 181 00:11:17,960 --> 00:11:20,800 Speaker 1: because for lots of folks in China, Tokyo has become 182 00:11:20,840 --> 00:11:24,000 Speaker 1: the only place they get the news. They've abandoned other 183 00:11:24,040 --> 00:11:27,240 Speaker 1: newspapers and media websites, which are largely controlled by the 184 00:11:27,320 --> 00:11:33,320 Speaker 1: Chinese government. Tokyo delivers a totally different experience. AI algorithms 185 00:11:33,400 --> 00:11:36,280 Speaker 1: pick and choose the articles you see based on your 186 00:11:36,320 --> 00:11:40,559 Speaker 1: preferences and personality, and that gives By Dance deep insight 187 00:11:40,800 --> 00:11:44,200 Speaker 1: into the minds of its users. Here's an interview with 188 00:11:44,240 --> 00:11:51,120 Speaker 1: you mean during a tech event in Shanghai Yo. What 189 00:11:51,160 --> 00:11:54,000 Speaker 1: if the day comes when Bye Dance knows me better 190 00:11:54,040 --> 00:11:57,280 Speaker 1: than my own husband? Are you worried about that that 191 00:11:57,360 --> 00:12:00,319 Speaker 1: there might be an app that understands you bader than 192 00:12:00,320 --> 00:12:07,320 Speaker 1: the people around you. Computer algorithms are getting smarter and smarter, 193 00:12:08,000 --> 00:12:13,120 Speaker 1: but very essentially simple and pure. How can I be 194 00:12:13,280 --> 00:12:16,440 Speaker 1: sure that the algorithm will remain simple and pure when 195 00:12:16,520 --> 00:12:20,959 Speaker 1: you're the guy behind the machines, well, I am also 196 00:12:21,040 --> 00:12:26,520 Speaker 1: very pure. Who can guarantee that they will stay pure? Honestly, 197 00:12:26,720 --> 00:12:30,400 Speaker 1: computers are basically simple and pure. A lot of people 198 00:12:30,480 --> 00:12:34,080 Speaker 1: worry that computers might become monsters and do evil things, 199 00:12:34,200 --> 00:12:39,240 Speaker 1: but honestly, computers break everything into small steps that people 200 00:12:39,440 --> 00:12:43,560 Speaker 1: observe and control. I think we probably don't have to 201 00:12:43,559 --> 00:12:46,760 Speaker 1: worry about computers, and maybe we should worry more about people. 202 00:12:49,200 --> 00:12:52,120 Speaker 1: I've never heard a CEO talk about his pure intentions 203 00:12:52,200 --> 00:12:56,160 Speaker 1: on TV. It's kind of bizarre. But the other thing 204 00:12:56,160 --> 00:12:58,839 Speaker 1: that's interesting here is that the news anchor is really 205 00:12:58,880 --> 00:13:01,640 Speaker 1: pushing him on deep day AATA mining and his apparent 206 00:13:01,720 --> 00:13:05,560 Speaker 1: disregard for user privacy, and heman kind of laughs it off. 207 00:13:06,040 --> 00:13:08,360 Speaker 1: He says he really believes in the purity of the 208 00:13:08,440 --> 00:13:12,679 Speaker 1: technology and of his own good intentions. It's funny to 209 00:13:12,800 --> 00:13:15,720 Speaker 1: listen to this tape all these years later, because the 210 00:13:15,760 --> 00:13:20,600 Speaker 1: biggest controversy around TikTok basically boils down to this what 211 00:13:20,640 --> 00:13:23,040 Speaker 1: are they doing with all the user data they've collected, 212 00:13:23,320 --> 00:13:26,640 Speaker 1: and as China's government have access to data from Americans. 213 00:13:27,600 --> 00:13:30,760 Speaker 1: Even now, ey Ming has maintained that all these fears 214 00:13:30,760 --> 00:13:34,560 Speaker 1: over national security are unfounded, and his message has been 215 00:13:34,600 --> 00:13:38,800 Speaker 1: pretty consistent. He's essentially saying, I'm a good guy and 216 00:13:38,840 --> 00:13:42,680 Speaker 1: I built a good product. You can trust me. Ming 217 00:13:42,840 --> 00:13:45,440 Speaker 1: is now one of the richest people in China. But 218 00:13:45,520 --> 00:13:48,480 Speaker 1: when he started his company, his success was anything but 219 00:13:48,559 --> 00:13:51,520 Speaker 1: assured because he was coming up during a boom time 220 00:13:51,520 --> 00:13:55,600 Speaker 1: for the Chinese tech industry. Competition was cut throat and 221 00:13:55,640 --> 00:13:57,480 Speaker 1: it was hard to know which companies were going to 222 00:13:57,559 --> 00:14:00,640 Speaker 1: flop and which ones would hit it big. You're watching 223 00:14:00,679 --> 00:14:02,720 Speaker 1: history from the floor of the New York Stock Exchange, 224 00:14:02,760 --> 00:14:05,480 Speaker 1: America's money mecca. Ali Baba will in fact be the 225 00:14:05,520 --> 00:14:10,520 Speaker 1: largest I p O in history. This is a profitable company. 226 00:14:10,559 --> 00:14:13,080 Speaker 1: It's a very very profitable company. And that's you know, 227 00:14:13,200 --> 00:14:14,560 Speaker 1: a lot of these I p o s are not. 228 00:14:14,920 --> 00:14:18,920 Speaker 1: A percent of Americans had no idea what Ali Baba was. 229 00:14:19,000 --> 00:14:20,880 Speaker 1: And you're talking about the biggest I p O in 230 00:14:21,000 --> 00:14:24,280 Speaker 1: U S history. Bigger than Visa, bigger than Twitter, bigger 231 00:14:24,320 --> 00:14:28,440 Speaker 1: than Facebook. This company is massive. That euphoria spiked in 232 00:14:28,480 --> 00:14:32,960 Speaker 1: September when Ali Baba listed on the New York Stock Exchange. 233 00:14:33,480 --> 00:14:37,080 Speaker 1: It was worth twenty five billion dollars and investors started 234 00:14:37,080 --> 00:14:41,120 Speaker 1: searching for the next Ali Baba, the next Chinese success story. 235 00:14:41,600 --> 00:14:44,360 Speaker 1: Around that time, you mean hopped on a plane to 236 00:14:44,400 --> 00:14:48,040 Speaker 1: California with a group of other young Chinese founders that 237 00:14:48,120 --> 00:14:51,000 Speaker 1: were I in the US market. There, they toured the 238 00:14:51,000 --> 00:14:55,200 Speaker 1: halls of hot Silicon Valley tech companies like Facebook, Google, Tesla, 239 00:14:55,760 --> 00:14:59,040 Speaker 1: and you Mean became convinced that a Chinese tech entrepreneur 240 00:14:59,120 --> 00:15:02,280 Speaker 1: like himself could compete with the Googles and facebooks of 241 00:15:02,320 --> 00:15:05,800 Speaker 1: the world. Eming even gave a speech at a conference 242 00:15:05,880 --> 00:15:09,720 Speaker 1: held on Facebook's Menlo Park campus about China's growing texting. 243 00:15:10,520 --> 00:15:15,840 Speaker 1: He called his presentation the Future of Information. During his speech, 244 00:15:15,920 --> 00:15:19,000 Speaker 1: he laid out a roadbap for his vision of social media. 245 00:15:19,720 --> 00:15:22,960 Speaker 1: He told the audience, we aggregate as much data as 246 00:15:23,040 --> 00:15:27,760 Speaker 1: possible and analyze every action from each user. I see 247 00:15:27,800 --> 00:15:31,840 Speaker 1: this is really foreboding. Eming went into Facebook's office and 248 00:15:31,920 --> 00:15:35,880 Speaker 1: gave them a peek into his own aggressive tactics. It 249 00:15:36,000 --> 00:15:38,560 Speaker 1: was like an early warning of what was to come. 250 00:15:44,120 --> 00:15:49,880 Speaker 1: We'll be right back. In China, the tech industry is 251 00:15:49,960 --> 00:15:53,960 Speaker 1: dominated by just two companies, Ali Baba and Tencent, and 252 00:15:54,000 --> 00:15:57,120 Speaker 1: they have lots of money. And one thing about China 253 00:15:57,560 --> 00:16:00,520 Speaker 1: is that, unlike the US, there wasn't a well established 254 00:16:00,560 --> 00:16:04,560 Speaker 1: system of venture capital, so Ali Baba and Tencent essentially 255 00:16:04,600 --> 00:16:08,640 Speaker 1: act as the vcs. They funneled billions to startups to 256 00:16:08,680 --> 00:16:10,680 Speaker 1: get a piece of what's coming and to head off 257 00:16:10,680 --> 00:16:13,840 Speaker 1: the competition. So if you're a hot tech startup like 258 00:16:13,920 --> 00:16:17,320 Speaker 1: Bye Dance, It's basically understood you'll choose one side or 259 00:16:17,360 --> 00:16:21,160 Speaker 1: the other, Ali Baba or ten Cent. For Bye Dance, 260 00:16:21,280 --> 00:16:24,280 Speaker 1: it was ten Cent that came calling. They approached you 261 00:16:24,360 --> 00:16:27,120 Speaker 1: mean to invest in his company, but you being made 262 00:16:27,160 --> 00:16:31,240 Speaker 1: a very unusual move. He turned the money down. Ballet 263 00:16:31,520 --> 00:16:35,560 Speaker 1: tin Atala. Earlier this year there was news that ten 264 00:16:35,640 --> 00:16:38,240 Speaker 1: Cent was interested in buying a stake and Bye Dance 265 00:16:38,440 --> 00:16:42,360 Speaker 1: and that you turned down the investment. Do you go? 266 00:16:44,160 --> 00:16:46,440 Speaker 1: When that news came out, a colleague told me he 267 00:16:46,480 --> 00:16:49,080 Speaker 1: didn't join by Dance to become a tense Cent employee, 268 00:16:49,720 --> 00:16:51,520 Speaker 1: and I told him I didn't found by Dance to 269 00:16:51,520 --> 00:16:55,160 Speaker 1: become a ten Cent employee either. It's not to say 270 00:16:55,240 --> 00:16:57,560 Speaker 1: we have a problem with working with ten Cent or 271 00:16:57,600 --> 00:17:01,680 Speaker 1: competing with Tencent or what I want is that we 272 00:17:01,760 --> 00:17:05,160 Speaker 1: become a company that builds a platform that adds value 273 00:17:05,320 --> 00:17:09,520 Speaker 1: to society, and that we do that by ourselves. That 274 00:17:09,600 --> 00:17:13,680 Speaker 1: was you mean? Speaking on CCTV in you can hear 275 00:17:13,720 --> 00:17:16,000 Speaker 1: the pride in his voice as he says he didn't 276 00:17:16,040 --> 00:17:18,880 Speaker 1: want to be beholden to anyone, even if it meant 277 00:17:18,880 --> 00:17:21,560 Speaker 1: turning down the money. He wanted to run by Dance 278 00:17:21,600 --> 00:17:25,119 Speaker 1: his own way. So as far as your own business goes, 279 00:17:25,240 --> 00:17:27,760 Speaker 1: are you running it as a democracy or a dictatorship? 280 00:17:28,760 --> 00:17:31,879 Speaker 1: I think there's a fine line. Internally, everyone in the 281 00:17:31,920 --> 00:17:34,880 Speaker 1: company is pretty equal. You can all communicate and express 282 00:17:34,880 --> 00:17:37,880 Speaker 1: our opinions when the CEO makes a decision. You shouldn't 283 00:17:37,880 --> 00:17:40,760 Speaker 1: make other people feel afraid to speak out. That's the 284 00:17:40,760 --> 00:17:43,879 Speaker 1: bottom line. You need to make sure of that, otherwise 285 00:17:43,920 --> 00:17:48,680 Speaker 1: you miss out an important information. Ideally, you'll left opportunities 286 00:17:48,720 --> 00:17:51,399 Speaker 1: to learn, and you can afford to make mistakes along 287 00:17:51,440 --> 00:17:54,120 Speaker 1: the way, and you can share the opportunities with your 288 00:17:54,160 --> 00:17:56,920 Speaker 1: team members so they have the agency to make their 289 00:17:56,960 --> 00:17:59,720 Speaker 1: own decisions. That was he mean on a Chinese talk 290 00:17:59,760 --> 00:18:03,920 Speaker 1: show in it sounds like he's modeling his business after 291 00:18:03,960 --> 00:18:07,600 Speaker 1: an American company rather than a Chinese One. Part of 292 00:18:07,600 --> 00:18:11,000 Speaker 1: that is because he took money and advice from American 293 00:18:11,080 --> 00:18:14,880 Speaker 1: and foreign VC firms, many of them in Silicon Valley. 294 00:18:15,200 --> 00:18:18,600 Speaker 1: By Dance even looks like a futuristic Silicon Valley office. 295 00:18:19,040 --> 00:18:21,800 Speaker 1: It's built out of a converted airplane hangar, so it's 296 00:18:21,800 --> 00:18:25,800 Speaker 1: an expanse of space. There are few walls, no real offices, 297 00:18:26,320 --> 00:18:30,080 Speaker 1: just rows and rows of engineers, staring at computer screens. 298 00:18:31,600 --> 00:18:35,280 Speaker 1: Ming also tried to subvert China's corporate culture, which tends 299 00:18:35,320 --> 00:18:38,720 Speaker 1: to be pretty hierarchical. It's common for employees in China 300 00:18:38,800 --> 00:18:43,159 Speaker 1: to refer to their managers by their formal titles. So hypothetically, 301 00:18:43,200 --> 00:18:46,359 Speaker 1: if Facebook were a Chinese company, Mark Zuckerberg might be 302 00:18:46,400 --> 00:18:50,480 Speaker 1: referred to as teacher Zuckerberg or boss Zuckerberg. But Eming 303 00:18:50,560 --> 00:18:53,400 Speaker 1: broke with that tradition in the office. He went by 304 00:18:53,440 --> 00:18:56,879 Speaker 1: classmate Eming, and in fact he had everyone referred to 305 00:18:56,920 --> 00:19:00,280 Speaker 1: one another as classmates to create a sense of equality 306 00:19:00,440 --> 00:19:08,280 Speaker 1: in the office. By Dance has a flat company structure. 307 00:19:08,720 --> 00:19:10,600 Speaker 1: The atmosphere is that you and your leader just call 308 00:19:10,680 --> 00:19:12,480 Speaker 1: each other by name, and you don't have to refer 309 00:19:12,600 --> 00:19:14,679 Speaker 1: to him as so and so teacher or so and 310 00:19:14,720 --> 00:19:18,280 Speaker 1: so boss. I think that's a good thing, because that's 311 00:19:18,280 --> 00:19:21,320 Speaker 1: sort of formality is pretty inhibiting. So when we were 312 00:19:21,320 --> 00:19:24,120 Speaker 1: talking about certain issues, we were really just addressing those 313 00:19:24,160 --> 00:19:27,640 Speaker 1: issues rather than feeling restricted by the differences in our rank. 314 00:19:28,520 --> 00:19:33,560 Speaker 1: I think By Dances flat structure helped are brutual. This 315 00:19:33,640 --> 00:19:36,719 Speaker 1: employee joined by Dance in when she was in her 316 00:19:36,760 --> 00:19:42,040 Speaker 1: mid twenties. She asked to remain anonymous into the scene. 317 00:19:42,880 --> 00:19:44,840 Speaker 1: Kind of economy in the past few years has had 318 00:19:44,880 --> 00:19:48,000 Speaker 1: its ups and downs and lots of uncertainty, but I 319 00:19:48,040 --> 00:19:50,680 Speaker 1: felt like Byte Dance was a different world. It only 320 00:19:50,720 --> 00:19:53,760 Speaker 1: had ups. You have infinite stuff to do and infinite 321 00:19:53,840 --> 00:19:57,320 Speaker 1: businesses to explore. I was so happy when I first joined. 322 00:19:57,440 --> 00:20:00,560 Speaker 1: The atmosphere was so energetic and the future felt good. 323 00:20:00,800 --> 00:20:03,399 Speaker 1: I could learn lots of stuff, and I remember just 324 00:20:03,480 --> 00:20:10,840 Speaker 1: feeling super pumped every day. This By Dance employee did 325 00:20:10,880 --> 00:20:14,119 Speaker 1: product research at the company. She says Huming was different 326 00:20:14,160 --> 00:20:17,520 Speaker 1: from other Chinese tech founders. Guys like Ali Baba's Jack 327 00:20:17,560 --> 00:20:21,480 Speaker 1: Maa were loud and pretty self important. In contrast, Aiming 328 00:20:21,560 --> 00:20:28,440 Speaker 1: was quiet, understated, and what strikes me the most about 329 00:20:28,520 --> 00:20:31,399 Speaker 1: him is that he's not someone who stands out. He 330 00:20:31,520 --> 00:20:34,720 Speaker 1: dresses really casually and he just doesn't have a strong presence. 331 00:20:35,240 --> 00:20:37,879 Speaker 1: He's not like I need three bodyguards and forces stems 332 00:20:37,920 --> 00:20:41,240 Speaker 1: to follow me around. He's low key in group settings, 333 00:20:41,920 --> 00:20:44,440 Speaker 1: and when slunchtime and a bunch of people squeeze into 334 00:20:44,480 --> 00:20:46,919 Speaker 1: the elevator, he'll just stand there and wait for the 335 00:20:46,920 --> 00:20:50,200 Speaker 1: next one. He's really good at fading into the background. 336 00:20:51,440 --> 00:20:54,040 Speaker 1: I've had like four different people tell me that at 337 00:20:54,080 --> 00:20:57,320 Speaker 1: first glance they misstook himing for a low level engineer. 338 00:20:57,840 --> 00:21:00,320 Speaker 1: He chew up to work in jeans at tatters Butcher 339 00:21:00,520 --> 00:21:03,280 Speaker 1: and his wire room glasses. He'd sit in the common 340 00:21:03,320 --> 00:21:06,320 Speaker 1: space and code on his computer. Sometimes he'd wear a 341 00:21:06,320 --> 00:21:10,440 Speaker 1: baseball cap pulled down really low. Here's John. You would 342 00:21:10,440 --> 00:21:12,879 Speaker 1: not know who the founder of the company was in 343 00:21:12,920 --> 00:21:16,800 Speaker 1: no way. Um and and I remember I was working 344 00:21:16,840 --> 00:21:21,240 Speaker 1: with a group and in at some tables, and you 345 00:21:21,240 --> 00:21:24,280 Speaker 1: know Yaman was over there at his desk the whole time, 346 00:21:24,480 --> 00:21:27,439 Speaker 1: working by himself. But even though you means strive to 347 00:21:27,440 --> 00:21:30,960 Speaker 1: create a casual work environment, employees say working at Bye 348 00:21:31,000 --> 00:21:35,400 Speaker 1: Dance was incredibly draining, intense. It was far more fast 349 00:21:35,440 --> 00:21:39,240 Speaker 1: paced and frenzied than at other companies. The employee we 350 00:21:39,280 --> 00:21:41,920 Speaker 1: interviewed said she burnt out after less than a year. 351 00:21:45,119 --> 00:21:47,639 Speaker 1: After a while, the excitement I felt disappeared, and I 352 00:21:47,680 --> 00:21:50,320 Speaker 1: started to feel like a worker on his subly line. 353 00:21:50,760 --> 00:21:53,359 Speaker 1: Every day. You entered the offices early, and when you 354 00:21:53,480 --> 00:21:56,120 Speaker 1: leave it's already dark. I didn't even know what time 355 00:21:56,160 --> 00:21:59,080 Speaker 1: it was because we sat on an open office floor 356 00:21:59,119 --> 00:22:01,320 Speaker 1: where the lights were always on and there was always 357 00:22:01,359 --> 00:22:04,400 Speaker 1: someone still at the office. The only way I could 358 00:22:04,440 --> 00:22:06,639 Speaker 1: tell the changing of the seasons was by observing the 359 00:22:06,680 --> 00:22:10,000 Speaker 1: leaves on the trees. When I first started, the trees 360 00:22:10,040 --> 00:22:13,639 Speaker 1: were green, Then the leaves were turning yellow. Then some 361 00:22:13,640 --> 00:22:17,160 Speaker 1: more time passed and the tree branches were bare. There's 362 00:22:17,160 --> 00:22:19,720 Speaker 1: a neighborhood nearby, and if I knocked off early, like 363 00:22:19,760 --> 00:22:22,280 Speaker 1: around seven or eight at night, I saw little kids 364 00:22:22,359 --> 00:22:25,399 Speaker 1: running around. I was jealous of them. They looked so 365 00:22:25,520 --> 00:22:29,840 Speaker 1: free and so relaxed. Leaving the office at eight at 366 00:22:29,960 --> 00:22:33,159 Speaker 1: night was considered early to her. Because people described China's 367 00:22:33,160 --> 00:22:37,159 Speaker 1: work culture as people are working from nine am to 368 00:22:37,320 --> 00:22:41,400 Speaker 1: nine pm, six days a week. Work hours are definitely insane, 369 00:22:41,480 --> 00:22:44,600 Speaker 1: There's no question about that. I think. I remember. The 370 00:22:44,600 --> 00:22:46,679 Speaker 1: funniest things that one said is they're like the hours 371 00:22:46,680 --> 00:22:49,119 Speaker 1: are actually they actually really respect work like balance here, 372 00:22:49,160 --> 00:22:50,560 Speaker 1: Like we only worked six days a week, and I 373 00:22:50,600 --> 00:22:54,040 Speaker 1: was like what, And then then like Saturdays the mandatory 374 00:22:54,040 --> 00:22:56,520 Speaker 1: basically and um. And then the second thing they were 375 00:22:57,000 --> 00:23:00,879 Speaker 1: we only have the stage and I was like, in 376 00:23:01,000 --> 00:23:03,720 Speaker 1: no universes that the case in the West. This person 377 00:23:03,800 --> 00:23:07,280 Speaker 1: worked with big name Silicon Valley companies for decades. He 378 00:23:07,359 --> 00:23:09,880 Speaker 1: spoke to me on the condition of anonymity, but this 379 00:23:09,960 --> 00:23:12,760 Speaker 1: is his real voice. He served as an advisor to 380 00:23:12,800 --> 00:23:15,399 Speaker 1: Bite Dance, helping them devise a plan to take on 381 00:23:15,440 --> 00:23:18,640 Speaker 1: Facebook and YouTube. I man China is here to win, 382 00:23:18,800 --> 00:23:22,040 Speaker 1: are they not. I'd say the thing that was different 383 00:23:22,040 --> 00:23:24,440 Speaker 1: about them versus the other company companies based in China 384 00:23:24,520 --> 00:23:27,840 Speaker 1: interacted with is this one felt more like a Google 385 00:23:27,880 --> 00:23:30,639 Speaker 1: Silicon Valley like company than the others. It's one of 386 00:23:30,640 --> 00:23:32,520 Speaker 1: the reasons. You know, they're able at by Dance to 387 00:23:32,600 --> 00:23:35,439 Speaker 1: like turn out features so so so quickly. Um and 388 00:23:35,480 --> 00:23:37,480 Speaker 1: the Chinese are known for copying, but like Bye Dances 389 00:23:37,680 --> 00:23:40,719 Speaker 1: is a different level of velocity UM. But like like 390 00:23:40,800 --> 00:23:43,320 Speaker 1: they're like material features that they could turn out within 391 00:23:43,359 --> 00:23:46,240 Speaker 1: weeks that would take another company months. Turning out new 392 00:23:46,280 --> 00:23:49,800 Speaker 1: features in a matter of weeks sounds almost superhuman. But 393 00:23:49,880 --> 00:23:52,640 Speaker 1: again that goes back to the intense work culture at 394 00:23:52,640 --> 00:23:56,240 Speaker 1: Byte Dance, which starts at the top. Lu Gen, the 395 00:23:56,320 --> 00:24:00,240 Speaker 1: senior executive at Byte Dance, work closely with Giming for years. 396 00:24:00,280 --> 00:24:03,320 Speaker 1: She said he's such a workaholic that he even travels 397 00:24:03,320 --> 00:24:06,160 Speaker 1: to other countries when there's a holiday in China because 398 00:24:06,520 --> 00:24:09,240 Speaker 1: he doesn't want to stop working. You know, sometimes when 399 00:24:09,520 --> 00:24:12,399 Speaker 1: it's a China holiday that email will say, let's go 400 00:24:12,480 --> 00:24:15,480 Speaker 1: to the US, because you know he's training here. Every 401 00:24:15,560 --> 00:24:18,480 Speaker 1: one doesn't work, but in the US we can still work. 402 00:24:19,960 --> 00:24:22,280 Speaker 1: Lu Jen and I spoke when I visited By Dances 403 00:24:22,280 --> 00:24:26,639 Speaker 1: Beijing headquarters in January, and I remember sitting in the 404 00:24:26,680 --> 00:24:30,359 Speaker 1: office cafeteria afterwards and staring at a TV playing this 405 00:24:30,600 --> 00:24:34,480 Speaker 1: weirdly emotional video of employee testimonies. It was right around 406 00:24:34,480 --> 00:24:37,200 Speaker 1: the New Year holiday. By Dance. Employees had taped a 407 00:24:37,280 --> 00:24:40,520 Speaker 1: video sharing last year's regrets in their New Year's resolutions. 408 00:24:41,240 --> 00:24:44,119 Speaker 1: What stuck out was this one employee apologizing to her 409 00:24:44,200 --> 00:24:46,639 Speaker 1: kids for staying at the office so late that she 410 00:24:46,720 --> 00:24:50,680 Speaker 1: never saw them. I jotted down her exact words, I'm 411 00:24:50,680 --> 00:24:52,840 Speaker 1: sorry to my kids that I'm never home, she said. 412 00:24:53,400 --> 00:24:56,240 Speaker 1: Another told her ex boyfriend, I'm sorry I just didn't 413 00:24:56,240 --> 00:24:58,240 Speaker 1: spare enough time for you while I toiled at the 414 00:24:58,280 --> 00:25:02,119 Speaker 1: office five away. When we asked By Dance about this, 415 00:25:02,320 --> 00:25:05,280 Speaker 1: they gave us a statement. By Dance is a unique 416 00:25:05,320 --> 00:25:08,520 Speaker 1: and exciting place to build a career. Our growth is 417 00:25:08,560 --> 00:25:11,480 Speaker 1: a testament to the dedication and commitment of all of 418 00:25:11,480 --> 00:25:15,320 Speaker 1: our employees. Our culture is similar to most early stage startups, 419 00:25:16,840 --> 00:25:19,600 Speaker 1: even as employees were working around the clock, there still 420 00:25:19,640 --> 00:25:22,040 Speaker 1: weren't enough people to keep up with the company's growth, 421 00:25:22,320 --> 00:25:25,080 Speaker 1: and Emi was aggressive with hiring. He wanted to get 422 00:25:25,119 --> 00:25:29,080 Speaker 1: the best engineers and executives, often poaching from his competitors. 423 00:25:29,800 --> 00:25:32,840 Speaker 1: He first approached Lugen while she was still running strategy 424 00:25:32,960 --> 00:25:36,000 Speaker 1: for Uber in China. But the thing about Emi is 425 00:25:36,080 --> 00:25:38,600 Speaker 1: Emi is a very mean as an introvert, you know, 426 00:25:38,640 --> 00:25:41,719 Speaker 1: he's engineered by trading, you know, not very social and 427 00:25:41,720 --> 00:25:44,560 Speaker 1: he doesn't like going out and socialized with a lot 428 00:25:44,600 --> 00:25:49,320 Speaker 1: of people. But when it comes to recording palents, he's 429 00:25:49,440 --> 00:25:54,040 Speaker 1: very persistent, aggressive, persistent. I don't know how many times 430 00:25:54,040 --> 00:25:57,360 Speaker 1: he comes to this little cafe near where I live, 431 00:25:57,480 --> 00:26:00,440 Speaker 1: near my apartment in baking you know, the east side 432 00:26:00,440 --> 00:26:03,399 Speaker 1: actually the opposite side of where the company is, where 433 00:26:03,400 --> 00:26:07,480 Speaker 1: he lives, and he's very persistent, can we meet? And 434 00:26:07,520 --> 00:26:10,040 Speaker 1: I said, a lot of people would say, hey, you know, hi, 435 00:26:10,320 --> 00:26:13,280 Speaker 1: take care. You know, I gave you some room. You 436 00:26:13,320 --> 00:26:16,359 Speaker 1: know that week we connect and email. It was very straightforward. 437 00:26:17,960 --> 00:26:21,320 Speaker 1: It is always a commmit. It sounds like lu Gen 438 00:26:21,440 --> 00:26:24,520 Speaker 1: and Iman had a friendly relationship, or else she probably 439 00:26:24,520 --> 00:26:28,119 Speaker 1: wouldn't be joking about him. Borderline stalking her. She was 440 00:26:28,160 --> 00:26:30,600 Speaker 1: speaking on a podcast called The Next Billion with Bye 441 00:26:30,680 --> 00:26:35,640 Speaker 1: Dance investor Hans Tongue. Around this time, Bye Dance emerged 442 00:26:35,720 --> 00:26:39,159 Speaker 1: as a different sort of Chinese employer. China has a 443 00:26:39,200 --> 00:26:43,040 Speaker 1: reputation for low wages and sprawling factories, but Eman was 444 00:26:43,080 --> 00:26:46,119 Speaker 1: paying some of the highest salaries in the market. Here's 445 00:26:46,119 --> 00:26:49,280 Speaker 1: what you mean with my colleague, Peter, what is the 446 00:26:49,320 --> 00:26:52,960 Speaker 1: top of the market in RUMs of AHAs? What kind 447 00:26:53,000 --> 00:26:58,800 Speaker 1: of salaries from unem sterily for the unlimited talent? She 448 00:26:58,920 --> 00:27:03,040 Speaker 1: all loved to hear that unlimited salary for unlimited talent 449 00:27:03,600 --> 00:27:07,320 Speaker 1: sounds like a platitude, but it's not. Let me underscore 450 00:27:07,359 --> 00:27:10,600 Speaker 1: how unusual this is. At Bye Dance, there was no 451 00:27:10,720 --> 00:27:14,200 Speaker 1: ceiling for how much top employees could earn. Sub engineers 452 00:27:14,200 --> 00:27:17,080 Speaker 1: were making one million dollars a year, and e Mean 453 00:27:17,200 --> 00:27:21,560 Speaker 1: was often paying fifty more than his competitors. Throwing money 454 00:27:21,600 --> 00:27:24,040 Speaker 1: at a problem became something you Mean would do again 455 00:27:24,040 --> 00:27:27,439 Speaker 1: and again. As his company grew bigger, he saw that 456 00:27:27,480 --> 00:27:31,439 Speaker 1: paying top dollar to hire employees, acquire other startups, and 457 00:27:31,480 --> 00:27:34,880 Speaker 1: by advertising could serve as a kind of shortcut to success. 458 00:27:35,320 --> 00:27:38,600 Speaker 1: That he could turbocharge his growth by just paying for it, 459 00:27:39,200 --> 00:27:41,640 Speaker 1: and as fast as he was spending money, even more 460 00:27:41,680 --> 00:27:45,480 Speaker 1: money kept flowing in from venture capital backers, many of 461 00:27:45,480 --> 00:27:49,680 Speaker 1: whom were American. You mean, raised almost eight billion dollars 462 00:27:49,680 --> 00:27:54,119 Speaker 1: in VC money in eighteen by Dancer passed Uber and 463 00:27:54,200 --> 00:27:57,800 Speaker 1: became the world's most valuable start up. It's even overtaking 464 00:27:57,800 --> 00:28:01,440 Speaker 1: companies like Starbucks and Goldman sack the buckets of cash 465 00:28:01,480 --> 00:28:05,160 Speaker 1: from big investors like soft Bank in Sequoia give Byte 466 00:28:05,240 --> 00:28:08,639 Speaker 1: Dance a mandate and the means to start expanding around 467 00:28:08,680 --> 00:28:13,119 Speaker 1: the world. Part of the purpose of that raise was 468 00:28:13,680 --> 00:28:16,840 Speaker 1: for Bye Dance to essentially go global, to go beyond 469 00:28:17,480 --> 00:28:22,880 Speaker 1: the borders of China and take their unique technology. Uh 470 00:28:22,920 --> 00:28:27,040 Speaker 1: and really with their secret sauce, is this AI that 471 00:28:27,200 --> 00:28:32,080 Speaker 1: can effectively learn a user users preference and serve them 472 00:28:32,160 --> 00:28:35,080 Speaker 1: content with a precision that you know, I've not seen 473 00:28:35,119 --> 00:28:38,880 Speaker 1: anyone else really do. That's John Again, who worked at Flipogram, 474 00:28:39,080 --> 00:28:42,960 Speaker 1: the slideshow app by Dance acquired in He said this 475 00:28:43,000 --> 00:28:45,959 Speaker 1: would be a big deal. No Chinese consumer app had 476 00:28:46,000 --> 00:28:49,080 Speaker 1: ever hit it big in the US. John state on 477 00:28:49,160 --> 00:28:51,560 Speaker 1: staff at Bye Dance for a couple of years, helping 478 00:28:51,560 --> 00:28:54,959 Speaker 1: the company buy more American startups and sign music deals 479 00:28:54,960 --> 00:28:57,840 Speaker 1: with US record labels. He says the first time he 480 00:28:57,920 --> 00:29:01,400 Speaker 1: walked into Bye Dances Beijing headquarters, he was floored by 481 00:29:01,440 --> 00:29:03,479 Speaker 1: just how many people were lining up to get in. 482 00:29:04,280 --> 00:29:05,800 Speaker 1: I think it when I joined it was a few 483 00:29:05,840 --> 00:29:08,479 Speaker 1: thousand employees, and when I left, it was like thirty 484 00:29:08,560 --> 00:29:12,040 Speaker 1: thousand or something. Crazy. But I remember the first day 485 00:29:12,080 --> 00:29:16,120 Speaker 1: in Beijing at headquarters, I was in the lobby and 486 00:29:16,160 --> 00:29:19,800 Speaker 1: there was I don't know, like a hundred people. I 487 00:29:19,880 --> 00:29:21,920 Speaker 1: met up with the woman I worked for there and 488 00:29:21,920 --> 00:29:24,040 Speaker 1: I said, what's what is that. It's like, oh, those 489 00:29:24,040 --> 00:29:27,040 Speaker 1: are new hires. And I was like, oh my god, 490 00:29:27,160 --> 00:29:30,840 Speaker 1: that's crazy. And then when I realized that happened every day. 491 00:29:30,880 --> 00:29:34,040 Speaker 1: Every day there was this huge, you know, group of 492 00:29:34,080 --> 00:29:46,400 Speaker 1: new employees. We'll be right back with billions of dollars 493 00:29:46,480 --> 00:29:49,640 Speaker 1: from venture capital in hand and an army of employees. 494 00:29:50,200 --> 00:29:52,640 Speaker 1: By Dance was pushing out dozens of apps at a 495 00:29:52,680 --> 00:29:55,920 Speaker 1: time to see what sticks they were, sometimes referred to 496 00:29:56,000 --> 00:29:59,040 Speaker 1: as an app factory, you mean, was trying to find 497 00:29:59,040 --> 00:30:02,200 Speaker 1: his next big product. He'd been following the success of 498 00:30:02,240 --> 00:30:05,080 Speaker 1: a lip syncing app called Musically as it hit it 499 00:30:05,120 --> 00:30:08,480 Speaker 1: big in the US, so he decided to copy it. 500 00:30:08,480 --> 00:30:11,719 Speaker 1: It might sound unsavory to some listeners, but China has 501 00:30:11,760 --> 00:30:15,200 Speaker 1: a reputation for taking technology that's popular in the West 502 00:30:15,480 --> 00:30:18,760 Speaker 1: and just adapting it to the Chinese market. Ali Baba 503 00:30:18,800 --> 00:30:21,840 Speaker 1: began as an eBay copycat, and wehe Chat was originally 504 00:30:21,880 --> 00:30:25,959 Speaker 1: a clone of WhatsApp. By Dance successfully copied musically and 505 00:30:26,040 --> 00:30:30,000 Speaker 1: created two products. One is called Doying, which was exclusively 506 00:30:30,040 --> 00:30:33,080 Speaker 1: for the Chinese market. The second was an early version 507 00:30:33,120 --> 00:30:38,200 Speaker 1: of TikTok which they released internationally. For simplicity's sake, I'm 508 00:30:38,200 --> 00:30:40,720 Speaker 1: going to call it TikTok one point Now here's you 509 00:30:40,800 --> 00:30:43,680 Speaker 1: being on a Chinese talk show. What you want to 510 00:30:44,320 --> 00:30:48,080 Speaker 1: This company in the US had similar products and services, 511 00:30:48,120 --> 00:30:50,920 Speaker 1: but if you take a close load, we offer a 512 00:30:51,040 --> 00:30:55,320 Speaker 1: user experience that's very different. Actually, there's a lot of 513 00:30:55,360 --> 00:30:59,040 Speaker 1: innovation behind what we made, and that's the main reason 514 00:30:59,080 --> 00:31:03,480 Speaker 1: why Doyan and satisfied in needs of Chinese users. To me, 515 00:31:03,880 --> 00:31:06,200 Speaker 1: what you mean is saying is that it's easy to 516 00:31:06,240 --> 00:31:09,760 Speaker 1: copy an idea, but it's much harder to execute on it. 517 00:31:10,400 --> 00:31:12,920 Speaker 1: TikTok one point Oh was successful in a handful of 518 00:31:12,920 --> 00:31:16,760 Speaker 1: Southeast Asian countries, but crucially, it didn't catch on in 519 00:31:16,800 --> 00:31:20,479 Speaker 1: the US, so it didn't quite fulfill you means global dreams. 520 00:31:21,240 --> 00:31:23,920 Speaker 1: You know, being big in Thailand is just not the 521 00:31:24,000 --> 00:31:27,320 Speaker 1: same as making it in America. So you mean determined 522 00:31:27,400 --> 00:31:30,360 Speaker 1: it wasn't enough to just copy Musically. He wanted to 523 00:31:30,400 --> 00:31:34,640 Speaker 1: buy it. At the time, Musically was shopping itself around. 524 00:31:35,080 --> 00:31:39,360 Speaker 1: They had met with Facebook and YouTube, but actually Musically 525 00:31:39,360 --> 00:31:42,960 Speaker 1: got the furthest in acquisition talks with another Chinese tech company, 526 00:31:43,360 --> 00:31:46,840 Speaker 1: Quai Show, which is backed by ten Cent. For you mean, 527 00:31:47,200 --> 00:31:49,800 Speaker 1: this was red alert. He was not going to let 528 00:31:49,800 --> 00:31:52,960 Speaker 1: a Chinese competitor beat him to the US market, so 529 00:31:53,000 --> 00:31:57,040 Speaker 1: he pounced. By Dance had deep pockets, and they offered 530 00:31:57,040 --> 00:32:00,400 Speaker 1: to buy Musically for close to one billion dollars so 531 00:32:00,480 --> 00:32:03,640 Speaker 1: Musically wouldn't fall into the hands of one of Ming's rivals. 532 00:32:04,400 --> 00:32:06,760 Speaker 1: A few people told me this was way more than 533 00:32:06,800 --> 00:32:11,400 Speaker 1: what Musically was worth. Inside By Dance, many people thought 534 00:32:11,440 --> 00:32:14,960 Speaker 1: this purchase was a mistake because By Dance had already 535 00:32:15,040 --> 00:32:18,120 Speaker 1: launched their own music video app. They thought the company 536 00:32:18,160 --> 00:32:22,120 Speaker 1: could take on the US without Musically. Also, Musically came 537 00:32:22,160 --> 00:32:25,600 Speaker 1: with a big problem, namely their super young user base. 538 00:32:26,280 --> 00:32:30,640 Speaker 1: Kids under thirteen years old aren't exactly dependable customers. You 539 00:32:30,680 --> 00:32:32,840 Speaker 1: can't tell if they'll grow up with the app or 540 00:32:32,920 --> 00:32:36,000 Speaker 1: ditch it. Here's where I'm a a former tech banker 541 00:32:36,040 --> 00:32:39,360 Speaker 1: in China and Silicon Valley. So my understanding of the 542 00:32:39,400 --> 00:32:43,760 Speaker 1: stories that basically Musically was very popular with a certain demographic, 543 00:32:43,840 --> 00:32:46,600 Speaker 1: but it failed to catch on with other demographics because 544 00:32:46,640 --> 00:32:50,880 Speaker 1: its content was too narrow right, So it was really 545 00:32:50,880 --> 00:32:57,080 Speaker 1: good for discovering and promoting these preteen stars that were 546 00:32:57,200 --> 00:33:00,640 Speaker 1: but not so good at adding to the BA on 547 00:33:00,680 --> 00:33:04,200 Speaker 1: the platform, and the preteen users led to a second, 548 00:33:04,280 --> 00:33:08,760 Speaker 1: more serious problem. The US government was already investigating whether 549 00:33:08,840 --> 00:33:12,680 Speaker 1: Musically had violated child privacy laws by collecting so much 550 00:33:12,800 --> 00:33:16,440 Speaker 1: data on kids under thirteen. The issues with child data 551 00:33:16,520 --> 00:33:20,920 Speaker 1: scared off potential buyers like Disney and Facebook, but Eming 552 00:33:21,040 --> 00:33:24,320 Speaker 1: wasn't faced by that. He thought the Musically acquisition would 553 00:33:24,360 --> 00:33:27,520 Speaker 1: fast track US growth. To him, the US was the 554 00:33:27,560 --> 00:33:30,400 Speaker 1: crown jewel in a strategy to spread his apps around 555 00:33:30,400 --> 00:33:33,760 Speaker 1: the world. Instead of spending time wooing tens of millions 556 00:33:33,760 --> 00:33:37,120 Speaker 1: of American users, by Dance could just buy them and 557 00:33:37,240 --> 00:33:41,080 Speaker 1: instantly become a global social media powerhouse. And that's what 558 00:33:41,160 --> 00:33:44,600 Speaker 1: they did. By Dance bought Musically and the companies held 559 00:33:44,600 --> 00:33:49,400 Speaker 1: this gigantic party in Hollywood in August. In a surprise move, 560 00:33:49,760 --> 00:33:52,680 Speaker 1: they announced they were shutting down Musically and folding it 561 00:33:52,720 --> 00:33:57,000 Speaker 1: completely into TikTok. This would be TikTok version two point oh, 562 00:33:57,160 --> 00:34:08,200 Speaker 1: the TikTok as we now know it pretty much the 563 00:34:08,280 --> 00:34:15,640 Speaker 1: same consa like Musically. That's Musically's founder Alex Ju speaking 564 00:34:15,680 --> 00:34:19,480 Speaker 1: on stage at the launch party. Alex is introducing byte Dance, 565 00:34:19,680 --> 00:34:23,360 Speaker 1: TikTok's parent company. One of the party goers shot this video. 566 00:34:24,239 --> 00:34:36,279 Speaker 1: Is growing super super fast. It's actually most done this 567 00:34:36,560 --> 00:34:51,200 Speaker 1: year Facebook aube. TikTok had invited hundreds of users who 568 00:34:51,200 --> 00:34:54,200 Speaker 1: had become famous on Musically to the party. There was 569 00:34:54,239 --> 00:34:58,000 Speaker 1: a lot of alcohol, dis pumping, flashing lights, and a 570 00:34:58,040 --> 00:35:01,160 Speaker 1: lot of selfies. In the weeks leading up to the event, 571 00:35:01,560 --> 00:35:04,480 Speaker 1: TikTok paid some of them tens of thousands of dollars 572 00:35:04,520 --> 00:35:07,800 Speaker 1: per video to post on the app, asking their followers 573 00:35:07,880 --> 00:35:11,720 Speaker 1: to follow them on TikTok instead of YouTube or Instagram. 574 00:35:12,880 --> 00:35:23,200 Speaker 1: Is your face new go? You couldn't have racial before 575 00:35:24,040 --> 00:35:36,840 Speaker 1: people I heard. At this point the crowd is going nuts. 576 00:35:37,320 --> 00:35:40,480 Speaker 1: Many teenagers are holding up their phones to record Alex 577 00:35:40,560 --> 00:35:59,759 Speaker 1: and screaming at the top of their lungs. Platool think 578 00:36:01,840 --> 00:36:17,440 Speaker 1: the black. Let's take a look. At midnight, the Musically 579 00:36:17,480 --> 00:36:21,080 Speaker 1: logo disappeared from tens of millions of phones. In its 580 00:36:21,080 --> 00:36:24,799 Speaker 1: place was the TikTok icon, a neon music note on 581 00:36:24,840 --> 00:36:28,400 Speaker 1: a black background. Many of the Musically users were upset 582 00:36:28,520 --> 00:36:30,359 Speaker 1: when they woke up the next morning and saw their 583 00:36:30,400 --> 00:36:34,080 Speaker 1: beloved app replaced. But the purchase of Musically would give 584 00:36:34,120 --> 00:36:37,200 Speaker 1: by Dance a strong foothold into the American market and 585 00:36:37,239 --> 00:36:41,760 Speaker 1: completely rewrite the story. By Dance's success. In the coming years, 586 00:36:42,040 --> 00:36:45,200 Speaker 1: TikTok would transform into a cultural force that chaps an 587 00:36:45,320 --> 00:36:50,319 Speaker 1: entire generation of young Americans through music, celebrity, culture, and 588 00:36:50,400 --> 00:36:53,399 Speaker 1: even politics. But the fact that all of this came 589 00:36:53,440 --> 00:36:57,560 Speaker 1: from a Chinese company with an ambitious founder operating under 590 00:36:57,560 --> 00:37:02,160 Speaker 1: an authoritarian government that would make TikTok's future anything but certain. 591 00:37:03,080 --> 00:37:12,520 Speaker 1: That's next time on Foundering. Foundering is hosted by me 592 00:37:12,800 --> 00:37:17,200 Speaker 1: Shelley Banjo. Sean Ween is our executive producer, Jap Huang, 593 00:37:17,320 --> 00:37:21,319 Speaker 1: Peter Elstrom, David Ramley, and Kurt Wagner contributed reporting to 594 00:37:21,360 --> 00:37:26,080 Speaker 1: this episode. Raymondo is our audio engineer, Mark Million and 595 00:37:26,280 --> 00:37:30,880 Speaker 1: Vandermay and Alistair barr are our story editors. Francesco Leviy 596 00:37:30,960 --> 00:37:34,760 Speaker 1: is a head of Bloomberg Podcasts. Special thanks to everyone 597 00:37:35,080 --> 00:37:37,760 Speaker 1: who helped us with the English language dubs of Chinese 598 00:37:37,760 --> 00:37:42,560 Speaker 1: news footage that includes Silvio Courio, Edwin Chen, Brian Christian, 599 00:37:42,880 --> 00:37:48,080 Speaker 1: Danielle Culbertson, Kevin Hines, Davy Kim, and Courtney Malone. Here's 600 00:37:48,080 --> 00:37:51,000 Speaker 1: my colleague japeing Huang, who's going to credit the Chinese 601 00:37:51,000 --> 00:37:54,600 Speaker 1: shows we excerpted from Hi. This is Joe pin Huangs 602 00:37:54,640 --> 00:37:58,040 Speaker 1: the reporters on the show. This episode, you have heard 603 00:37:58,120 --> 00:38:06,279 Speaker 1: audio from sho Ya Kwa and Gonja Mia. Be sure 604 00:38:06,320 --> 00:38:09,160 Speaker 1: to subscribe and if you like our show, leave a review. 605 00:38:09,680 --> 00:38:12,600 Speaker 1: Most importantly, tell your friends see you next time.