Speaker 1: Let me take you back to the summer of a
Speaker 1: pandemic is gripping the world, leading to hundreds of thousands
Speaker 1: of debts in the US alone. The economy took a
Speaker 1: dive and a lot of people were losing their jobs.
Speaker 1: And then, unexpectedly, the daily flood of headlines turned to
Speaker 1: something else, entirely a social media app called TikTok. A
Speaker 1: stern rebuke from the US President, We're not going to
Speaker 1: do anything to jeopardize security. White House alleges the popular
Speaker 1: Chinese based apps TikTok and wheat Chat are stealing American
Speaker 1: users private information, handing it to the government in Beijing.
Speaker 1: We want no security problems with China. It's got to
Speaker 1: be an American company. Has got to be American security
Speaker 1: has got to be owned here. They have millions and
Speaker 1: millions of US US. They're probably the single most popular
Speaker 1: social media app among people under age twenty. TikTok provided
Speaker 1: an escape from the anxiety and boredom brought on by
Speaker 1: the pandemic for tens of millions of Americans. Scrolling through
Speaker 1: never ending feeds of dance videos and funny memes seemed
Speaker 1: to make people feel better, and this cemented TikTok into
Speaker 1: the mainstream in a way we haven't seen with any
Speaker 1: other social media platform since Facebook. TikTok entered kind of
Speaker 1: a golden period, but then in the span of a
Speaker 1: few weeks, TikTok's fortunes changed. One night in late July,
Speaker 1: the US President threatened to ban TikTok because it was
Speaker 1: owned by a Chinese company that he thought was spying
Speaker 1: on American users. That night, people on TikTok freaked out.
Speaker 1: The app was flooded by videos of teenagers giving premature
Speaker 1: eulogies to TikTok, talking about how special it was, how
Speaker 1: much they relied on it, especially during the pandemic, how
Speaker 1: sad they were. It felt like a funeral. I don't know. Okay,
Speaker 1: so you know how we stopped freaking about what about
Speaker 1: tiktoking literally shaking um, yeah, yeah, this might be it?
Speaker 1: Well ship fuck vollowme on Instagram. I guess I know.
Speaker 1: You guys may think it's not that big a deal,
Speaker 1: but two creators like me and my brother and other
Speaker 1: creators is a big deal. Getting TikTok band. You're listening
Speaker 1: to Foundering, I'm your host, Shelley Banjo. This season will
Speaker 1: tell you the story of TikTok, how a mysterious tech
Speaker 1: founder from China outsmarted Facebook, YouTube and Snapchat to change
Speaker 1: the Internet while capturing the attention of an entire generation
Speaker 1: and becoming an obsession for the most powerful man in
Speaker 1: the world. TikTok almost got wiped out in the process,
Speaker 1: in a cautionary tale of what happens when you get
Speaker 1: so big you wind up in the middle of a
Speaker 1: standoff between the world's two greatest superpowers. I've been covering
Speaker 1: TikTok for three years out of Hong Kong, China and
Speaker 1: the US, and even though TikTok has been in the
Speaker 1: news for a while now, I realized few people really
Speaker 1: know the whole story. I want to tell you just
Speaker 1: how surprising it's been. Every step has been full of
Speaker 1: twists and turns, from TikTok's crazy rise to its run
Speaker 1: ins with the law, to its all out battle with
Speaker 1: Facebook and other Silicon Valley giants, all leading to the
Speaker 1: first ever social media powerhouse to emerge from China. For
Speaker 1: this season, you'll hear from current and former TikTok employees, investors,
Speaker 1: and influencers about what it was really like inside the company.
Speaker 1: You'll also hear from the CEO of TikTok's controversial Chinese
Speaker 1: parent company, Byte Dance, in one of his only interviews
Speaker 1: with Western media. We'll tell you more after this quick break.
Speaker 1: To truly understand TikTok, you have to spend time with
Speaker 1: someone like Katie Peeney. My name is Katie Heeney. I'm
Speaker 1: seventeen years old and I've been on TikTok since musically
Speaker 1: back in two thousand fifteen. If you haven't heard of TikTok,
Speaker 1: TikTok is the most addicting app in the entire world.
Speaker 1: If you get it, I'm warning you, you will be
Speaker 1: on it for four hours just scrolling through your four
Speaker 1: you page. Katie is a true TikTok evangelist for people
Speaker 1: who have never been on the app before. She tried
Speaker 1: to explain the appeal. I mean, it's like if you
Speaker 1: were to watch a movie for an hour and a half.
Speaker 1: I guess TikTok is like watching a movie. It's just
Speaker 1: it's that entertaining, like you could I mean, I could
Speaker 1: watch TikTok's longer than I could watch a movie. To
Speaker 1: explain how TikTok became a cultural institution with tens of
Speaker 1: billions of dollars. I want to take you back to
Speaker 1: its roots. The app that we now know is TikTok
Speaker 1: is actually based on a lip syncing app called music Lee.
Speaker 1: Musically became TikTok after it was acquired in ten by
Speaker 1: a giant Chinese tech company. It's users and design were
Speaker 1: all absorbed into TikTok. The two apps look and feel
Speaker 1: pretty similar. This episode will focus on the rise of
Speaker 1: Musically and the story of its founder, a thirty six
Speaker 1: year old guy from China who seemed to have an
Speaker 1: uncanny understanding of American teenagers. His name is Alex Jew.
Speaker 1: He kind of had a metal Jesus style haircut. This
Speaker 1: just long, black, flowing hair. That's Josh Ellman. He was
Speaker 1: one of Musically's first investors. Josh likekens Alex to an
Speaker 1: artist or a poet. He totally looks like a poet,
Speaker 1: like an ancient Chinese painter sitting by the side of
Speaker 1: a river, you know, doing one of those giant scroll paintings.
Speaker 1: Alex was a mysterious figure. He was also really hard
Speaker 1: to pin down. Multiple people told me that when they
Speaker 1: wanted to connect for a business deal, they literally couldn't
Speaker 1: find him. Here's Josh introducing Alex at a conference. I
Speaker 1: was like, Oh, I'd love to meet up. Are you
Speaker 1: in San Francisco maybe l A. He was like, no,
Speaker 1: I'm in Shanghai, China, And that's where the entire team
Speaker 1: was based on where they were, where they were building
Speaker 1: it out, and and so I think he just has
Speaker 1: this incredible perspective of building this company, you know from
Speaker 1: China that you know, American teenagers are using kind of
Speaker 1: more than anything right now, So that I'd love to
Speaker 1: bring up Alex you. Alex was known for being kind
Speaker 1: of out there for years before creating musically. He worked
Speaker 1: at a big global software company and he had a
Speaker 1: super vague job title. They called him a futurist. Futurist
Speaker 1: songs to be a fancy job title, but actually the
Speaker 1: job was pretty easy. What I did as a time
Speaker 1: was quite a simple sitting in my tent, playing it
Speaker 1: around with my small crystal ball telling the future. Futurist
Speaker 1: is one of those wacky titles in the tech industry,
Speaker 1: but it played right into the way Alex approached life.
Speaker 1: Many people I spoke to told me Alex was a thinker.
Speaker 1: His head was in the clouds. So I got really bored.
Speaker 1: I want to walk out of my tent. I want
Speaker 1: to be a black smith. I want to be a carpenter.
Speaker 1: I want to be a fisherman. I want to be
Speaker 1: a duel carpenter, blacksmith, fisherman. Alex speaks in these sort
Speaker 1: of extended metaphors, but what he's getting at is that
Speaker 1: he's ready to walk away from his job and start
Speaker 1: his own company. First, Alex made an education app. He
Speaker 1: had this idea that people could teach each other lessons
Speaker 1: online by watching short videos that though I got a
Speaker 1: brilliant idea, everybody can be ta true, everybody can learn
Speaker 1: from everybody else. We spent seven months creating the first
Speaker 1: education and finally it turned to be a very miserable
Speaker 1: fidel and it was a failure because people didn't want
Speaker 1: to learn that way. They mostly used their phones to
Speaker 1: socialize or have fun. And this was the breakthrough that
Speaker 1: led to musically the app that would one day become
Speaker 1: TikTok In. Alex was doing a stint in the US
Speaker 1: and living in the Bay Area. One day he was
Speaker 1: riding the train and he sat across from a group
Speaker 1: of teenagers. One day I was on Cultread from Mountain
Speaker 1: View to San Francisco, and on that train so with
Speaker 1: lots of high school students, and I was observing their behavior,
Speaker 1: he says. Watching these teenagers good for around on their
Speaker 1: phones gave him an epiphany. So we're listening to music
Speaker 1: and the other they were taking videos and photos selfies.
Speaker 1: So that give me some idea. First, entertainment is going
Speaker 1: to be much easier the education, because education is against
Speaker 1: the human nature, and entertainment is basically following the human nature.
Speaker 1: Education is against human nature. This is the moment Alex
Speaker 1: abandoned his education app and he went all in on fun.
Speaker 1: He turned his new idea into musically in just thirty days.
Speaker 1: It launched in July for high school students, especially in
Speaker 1: the US, that spent laws of time on social media
Speaker 1: and the love music to love videos, and can we
Speaker 1: combine these very powerful elements into one platform, creating a
Speaker 1: social network around music and around video music videos and
Speaker 1: American teenagers. It sounds a lot like TikTok. I'm always
Speaker 1: struck by how clear and immediate Alex's vision for the
Speaker 1: app was. Honestly, Alex is so smart about design and
Speaker 1: user experience and He's also so eccentric and captivating in
Speaker 1: the way he speaks. These are the sorts of founders
Speaker 1: that the tech industry usually loves, But Alex Ju isn't
Speaker 1: a household name, and in fact, as TikTok grew bigger,
Speaker 1: they even replaced him with an American CEO. You gotta
Speaker 1: wonder if Alex wasn't from China, if he would be
Speaker 1: more famous. For a new social platform, a new a
Speaker 1: new social media to take off. It's about it to
Speaker 1: have young people as an early adopter, especially the teenagers
Speaker 1: in the US. Why they got a love time. When
Speaker 1: we talk about musically and TikTok, now, it almost sounds
Speaker 1: like it was an accident that so many young children
Speaker 1: ended up on the platform. But early on Alex comes
Speaker 1: right out and says that teenagers and even preteens were
Speaker 1: the target audience From the get go. He understood that
Speaker 1: teenagers would help the app grow explosively. What he didn't
Speaker 1: realize was just how much trouble the kids would get
Speaker 1: the company into later on, and Alex was obsessive about
Speaker 1: seeing how young people behaved on his platform. He wasn't
Speaker 1: just looking at data, he was looking at them. I
Speaker 1: personally register a lot of fake accounts, right, and it
Speaker 1: uses this fake identity to talk with the users on
Speaker 1: the platform, comment on their videos and see why they
Speaker 1: posted these videos, and just to try to understand them,
Speaker 1: try to give us empathy. I want to underscore just
Speaker 1: how unusual this is that a guy in his mid
Speaker 1: thirties has launched fake accounts to interact with his users online.
Speaker 1: These are mostly preteens. It sounds kind of creepy, right.
Speaker 1: And it went beyond fake accounts. I've heard stories from
Speaker 1: famous musically person ladies that Alex went even further. He'd
Speaker 1: called their parents at home, He'd take them in their
Speaker 1: families out for dinner. He was meticulous in learning everything
Speaker 1: about them. To me, this is something really important about
Speaker 1: the roots of musically and later TikTok. TikTok feels impulsive, fun, organic,
Speaker 1: like this really spontaneous app where people can really be themselves.
Speaker 1: But it's not the people who got famous, the trends
Speaker 1: that were popular. Everything was centrally planned by Alex and
Speaker 1: the people he hired. Here's Katie Feeney, the TikTok or
Speaker 1: we heard from earlier. She was only twelve when she
Speaker 1: got on Musically. Yeah. So I was very young and
Speaker 1: my friends and I were just super excited when this
Speaker 1: new app called Musically came out. So you would just
Speaker 1: make fun videos, and I did a lot of dancing
Speaker 1: videos with my dance team. It was like a big
Speaker 1: way for us to just you know, have fun with
Speaker 1: each other. Similar to TikTok. You would just scroll and
Speaker 1: there was like an endless amount of videos you and
Speaker 1: you would never get bored on it. You could just
Speaker 1: like continuously watch for hours, and it really intrigued me
Speaker 1: and all my friends. Katie remembers the first time one
Speaker 1: of her videos blew up. Musically featured one of her
Speaker 1: dance clips on its homepage. I probably started crying because
Speaker 1: I like it was my dream to get featured, and
Speaker 1: a little part of me kind of always wanted to
Speaker 1: be famous, I guess you could say. So. I think
Speaker 1: I was just in my room or something and I
Speaker 1: was bawling. Katie was on Musically during its early days.
Speaker 1: Back then, the app looked like a long shot to
Speaker 1: people in the tech industry. Silicon Valley dismissed Musically as
Speaker 1: a niche karaoke app for preteens. No one thought it
Speaker 1: would grow to become a major cultural force. We'll be
Speaker 1: right back in social media seemed almost locked up. Facebook
Speaker 1: and Instagram were already so dominant, Snapchat had cornered the
Speaker 1: teen market. Twitter had bought a video app called Vine,
Speaker 1: which failed a few years later. Investors had been skeptical
Speaker 1: about putting money into another social media app, but Josh Allman,
Speaker 1: the investor we met earlier, said Musically was doing something
Speaker 1: different because the app made it easy for anyone to
Speaker 1: create their own videos, and then you were just seeing
Speaker 1: regular people around the country dancing and performing and lip
Speaker 1: syncing in ways that you know, I had never seen
Speaker 1: that fountain of creativity, you know before, especially not in video.
Speaker 1: And by July, about a year after it launched, Musically
Speaker 1: had shot up to the number one spot in the
Speaker 1: Apple App Store. It never fell out of the top forty.
Speaker 1: Investors wanted to know who was behind it. Well, you know,
Speaker 1: this app just came out of nowhere, and it just
Speaker 1: became top five or something very very quickly, and all
Speaker 1: of the son and it just really skyrocketed. So I
Speaker 1: think a lot of vcs we're wondering, like, you know,
Speaker 1: like who are these people? You know, where they're coming from?
Speaker 1: That's jogilely out. She was working at a venture capital
Speaker 1: firm at the time. Her bosses were literally trying to
Speaker 1: give Alex money and couldn't find him. It was not straightforward.
Speaker 1: It wasn't like another, you know, Slicon Valley based founder
Speaker 1: of who we could find in thirty seconds to be
Speaker 1: a LinkedIn. It was a bit more digging. It might
Speaker 1: seem strange that people were so confused by Alex being
Speaker 1: in China, but this is where you got to remember.
Speaker 1: Silicon Valley is a small, insular place. These investors would
Speaker 1: be confused if Alex was in Ohio, so China was
Speaker 1: almost unthinkable to them. But I've also wondered if Alex
Speaker 1: was intentionally being coy about where he was based. I'm
Speaker 1: not saying that Musically was overtly trying to hide their
Speaker 1: Chinese roots, but the company clearly wasn't advertising it either.
Speaker 1: Here's mar J Roberts, an early Musically employee. Something a
Speaker 1: lot of people don't know are they are starting to
Speaker 1: recognize now, is that Musically was always first and foremost
Speaker 1: a Chinese company. Our headquarters was based in Shanghai. Inside
Speaker 1: the company, it was clear the bosses in China were
Speaker 1: calling the shots. No, it definitely did not feel like
Speaker 1: an American company. Were in constant everyday contact with the
Speaker 1: Chinese team. We very much took a lot of our
Speaker 1: cues from the Chinese team, especially since our founders are
Speaker 1: based there for the majority of the time. That was
Speaker 1: so a Chinese social media company in the US raised
Speaker 1: a few eyebrows, but it wasn't considered a geopolitical threat
Speaker 1: the way some politicians are looking at it now. That year,
Speaker 1: Musically opened its first US outpost in the scrappy We
Speaker 1: work in San Francisco. Here's marj We worked in a
Speaker 1: rework room. There was one room, yes, so we crammed
Speaker 1: in as much as we can. That was very much
Speaker 1: like Harry Potter in a closet. There was a lot
Speaker 1: of urgency and excitement. Here's Jogia, who was so impressed
Speaker 1: by Musically's rise she decided to go work for them.
Speaker 1: You know, we were ready to kick it off our
Speaker 1: second summer, and really it's important time because it's one
Speaker 1: kids are out of school and they were born at home.
Speaker 1: You know, it was a great opportunity for us to
Speaker 1: take the grove to the next level. And that's when
Speaker 1: the venture capitalists rushed in by Musically had raised over
Speaker 1: a hundred and fifty million dollars from some of Silicon
Speaker 1: Valley's biggest BC firms. It surpassed over a hundred million downloads,
Speaker 1: and the app was a huge sensation among teenagers, even
Speaker 1: if it was virtually unknown to adults. Here's March again.
Speaker 1: Musically was very underground, but I discovered that gen z
Speaker 1: knew all about it, but no one else did. So um,
Speaker 1: I actually reached out to my knees. She's a preteen
Speaker 1: at the time. I was like, do you know what
Speaker 1: this app is called? Musically? And this was the moment
Speaker 1: of truth. She literally almost had a heart attack. She's like,
Speaker 1: oh my god, it's the biggest It's the coolest app ever.
Speaker 1: I love it. I'm obsessed with it. I'm like, what
Speaker 1: is going on? This was a really special moment for video.
Speaker 1: A landslide was about to happen. Remember back then people
Speaker 1: were just figuring out video on mobile phones. Instagram was
Speaker 1: mostly pictures. YouTube was barely on mobile at all. Shooting
Speaker 1: video was considered difficult and expensive, and you needed editing software,
Speaker 1: not to mention the skills to use it. But Musically
Speaker 1: allowed you to shoot a video and then with a
Speaker 1: touch of a button at effects and a soundtrack. Within seconds,
Speaker 1: you had this striking finished product to be a British stereotype.
Speaker 1: Loves of t and gen Z took to it. You're
Speaker 1: going to my head because I love you. So the
Speaker 1: short form video format is very perfect for younger folks
Speaker 1: because it requires very little attentions fan quite honestly and
Speaker 1: I think ultimately, which is very easy to get using.
Speaker 1: You know, it didn't require you to create an original
Speaker 1: song or create, you know, an original joke. You could
Speaker 1: get started on the platform very easily by using um
Speaker 1: an existing clip or an existing song, because I know,
Speaker 1: in the hell and then their team users got the
Speaker 1: hang of it quickly, and some of them were so
Speaker 1: good at making these entertaining short videos. They were getting
Speaker 1: famous on the app. Thanks to all you guys on
Speaker 1: musically for supporting me, and I hope you guys like
Speaker 1: my EP. We would have some of our users come
Speaker 1: in and meet the team, and they were so excited
Speaker 1: to meet us because they thought that, you know, we
Speaker 1: make them famous sometimes. Um So it was pretty great
Speaker 1: just to be there, like on the ground there and
Speaker 1: by famous, I mean just a massive number of eyeballs
Speaker 1: were on these teen influencers, even though musically hadn't hit
Speaker 1: the mainstream yet. They were even beating out Beyonce on Instagram.
Speaker 1: Beyonce on Instagram posted this picture of herself announcing her
Speaker 1: pregnancy I think um, and it had a million views
Speaker 1: or likes in twenty four hours. The unique difference with
Speaker 1: musically is that our everyday influencers who were not traditional
Speaker 1: celebrities were getting three million likes in a in an hour.
Speaker 1: And because musically was getting so big and so influential,
Speaker 1: celebrities started to join. I remember the first big artist
Speaker 1: on musically was Jason Darue and he was really active
Speaker 1: forecasting from dancing in his studio. Here's pop star Jason
Speaker 1: Derulo in one of his first videos he made for musically.
Speaker 1: I want to do some spect I'm gonna do something
Speaker 1: a little different. I want you to be a part
Speaker 1: of the next music video. And all you gotta do
Speaker 1: to be flown out to Elaine Barb, which you boy
Speaker 1: is post a music video to musically. And then more
Speaker 1: and more artists the camp like Selena Gomez, UM, Lady Gaga,
Speaker 1: Katy Powery. I think Lady Gaga was probably Uh, one
Speaker 1: of the artists I personally felt so excited about because
Speaker 1: I loved no personality for Unique Nix. Famous musicians flocked
Speaker 1: to the app as a new way to connect with
Speaker 1: their fans, and users love the easy access to their
Speaker 1: favorite songs. But Musically was basically stealing the music. Ja
Speaker 1: the early employee, describes as they did it. When Musically
Speaker 1: started out um back in UM, the company had actually
Speaker 1: been rapping the fifteen second song clips from the iTunes review.
Speaker 1: If you didn't hear her there, she's saying they were
Speaker 1: ripping the songs, like literally taking the music for free
Speaker 1: from iTunes, and so none of the music labels cared
Speaker 1: about it about us doing this in the beginning when
Speaker 1: we were just a small company, but then as we
Speaker 1: got bigger over time, the music labels were basically like,
Speaker 1: you know, we want a piece of this success. Like
Speaker 1: many Silicon Valley startups, Musically was sort of skating around
Speaker 1: the rules, but as they grew they had to figure
Speaker 1: out how to work with the music industry rather than
Speaker 1: against it. By the way, when we asked TikTok about this,
Speaker 1: they gave us a statement TikTok places a high priority
Speaker 1: on its work with record labels and artists. Another big
Speaker 1: part of the app success was that it felt so personalized.
Speaker 1: Here's Josh Shellman. You know, how do you make sure
Speaker 1: that the feed has content that's relevant to you? You know,
Speaker 1: if you're twenty two, you want to see different content
Speaker 1: than somebody who's sixteen. Musically showed different people different things,
Speaker 1: and that personalization made it incredibly engaging. But by the
Speaker 1: same token, it also made it hard for parents to
Speaker 1: track with their kids were doing on the app, so
Speaker 1: it might come across damaging clips about eating disorders, while
Speaker 1: that teenager's mom might see videos of cute puppies. Each
Speaker 1: feed was tailored. Musically studied who you were over days
Speaker 1: or weeks. Multiple people told me it felt like it
Speaker 1: could read your mind, and this was intentional, according to Alex,
Speaker 1: so we have to focus on the mechanism the invisible hands.
Speaker 1: The invisible hands of Musically are way more controlling than
Speaker 1: apps like Facebook or Instagram. You're not choosing what videos
Speaker 1: you see. You don't curate your own fee. The app
Speaker 1: chooses for you. Even though it feels care free and fun,
Speaker 1: it's actually very deliberate. Music Lease technology was considered advanced
Speaker 1: for its time. Behind the app. There was an engineering
Speaker 1: team in Shanghai that was working like mad. There was
Speaker 1: even a name for this kind of work culture in China.
Speaker 1: It's called nine nine six meeting. These employees worked nine
Speaker 1: am to nine pm, six days a week. To this day,
Speaker 1: many people at TikTok still work these hours. You know,
Speaker 1: China tends to have a nine nine six work culture um,
Speaker 1: which is even a little bit more intense than many
Speaker 1: startups that I know in Silicon Valley. And so the
Speaker 1: rate at which they were just building and putting out
Speaker 1: features and putting out new things in their creation flow
Speaker 1: was felt phenomenally fast. With this insane workload and crazy growth,
Speaker 1: the Musically employees could barely keep up. So the company
Speaker 1: was kind of in this spot of like, Okay, how
Speaker 1: do we get really big? How do we make sure
Speaker 1: that we're a network that's here to last? And they
Speaker 1: were struggling. They were actually struggling to higher engineers fast enough,
Speaker 1: especially deep algorithmic engineers, because people in China weren't as
Speaker 1: interested to work on a product they didn't use. By
Speaker 1: the fall of people in Silicon Valley started to hear
Speaker 1: that Musically might be willing to sell itself to a
Speaker 1: bigger company, and one of the contenders was Facebook. Here's Josha,
Speaker 1: a man you know. Around the same time, when there's
Speaker 1: something with that much traction and activity, folks at Facebook
Speaker 1: would come kind of calling me or calling others involved
Speaker 1: with the company and saying, hey, should we get to
Speaker 1: know the team? Is there something here? This is something
Speaker 1: Facebook is known for. They are aggressive when it comes
Speaker 1: to scoping out the competition. Here's my colleague Sarah Fryar.
Speaker 1: She's been covering Facebook now for almost a decade. Facebook
Speaker 1: takes every potential competitor extremely seriously, and TikTok in particular,
Speaker 1: was on their radar before it was even TikTok back
Speaker 1: when it was musically, and musically was happy to take
Speaker 1: Facebook's call because they thought maybe Facebook could help them
Speaker 1: get even bigger. You know, they decided, hey, look, we
Speaker 1: should at least take the calls and get to know
Speaker 1: the teams. Alex was not in the US that often,
Speaker 1: so I believe at some point Facebook sent a team
Speaker 1: over to Shanghai to visit and to talk deeply about
Speaker 1: strategy and the numbers. But nothing ever seemed to make
Speaker 1: sense or or came together on either side. There. Sarah says,
Speaker 1: the Musically executives visited Facebook to the founders did come
Speaker 1: down to Menlo Park and meet with Mark Zuckerberg and
Speaker 1: the growth team at Facebook, and they had a few
Speaker 1: discussions about whether it was a good idea to acquire
Speaker 1: them and ultimately decided no. Facebook saw some red flags
Speaker 1: they started to look at some of the downsides. Facebook
Speaker 1: was very worried about the liability of having an audience
Speaker 1: that wasn't verified to be over the age of thirteen,
Speaker 1: because they worried about running a foul of child data
Speaker 1: privacy laws. Uh. They also worried about the Chinese ownership.
Speaker 1: Some people at Facebook that working with the Chinese company
Speaker 1: might mean complications down the road. See Facebook had been
Speaker 1: blocked in China since two thousand and nine, so they
Speaker 1: knew that doing a deal with a Chinese company might
Speaker 1: be difficult the government might not approve. In the end,
Speaker 1: both sides walked away. Josh says that back then Facebook
Speaker 1: didn't think Musically was a serious threat. They thought musically
Speaker 1: super young user base wouldn't stick around that long. I
Speaker 1: think somebody somebody once said, um, hey, look, I think
Speaker 1: that their churn is high enough that if we just
Speaker 1: wait a couple of years, they won't be much bigger
Speaker 1: and we can just add those features by then. But
Speaker 1: Facebook was wrong. Musically would go on to exceed everyone's
Speaker 1: expectations because it would morph into TikTok and become the
Speaker 1: biggest competitor that Facebook had ever seen. Here's Joja again,
Speaker 1: the early Musically employee for me. I thought it was
Speaker 1: quite amazing that a team of founders from China built
Speaker 1: such a massive consumer social app that was used the
Speaker 1: time by American teenagers. And I don't think the teams
Speaker 1: at that time knew that their favorite app was may
Speaker 1: by to two guys in China. After TikTok's power and
Speaker 1: reach grew bigger and bigger, you gotta wonder if Facebook
Speaker 1: regrets walking away from these negotiations. Facebook's exit left the
Speaker 1: door open for a massive Chinese internet conglomerate to come in.
Speaker 1: This new company would supercharge the Musically app at even
Speaker 1: more advanced artificial intelligence, collicked even more personal data on
Speaker 1: each of its users, and rebrand Musically as TikTok, a
Speaker 1: social media platform that would be downloaded around the world.
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