WEBVTT - TikTok Part 1: An Epiphany on a Train 0:00:00.120 --> 0:00:03.120 Let me take you back to the summer of a 0:00:03.200 --> 0:00:06.760 pandemic is gripping the world, leading to hundreds of thousands 0:00:06.800 --> 0:00:10.200 of debts in the US alone. The economy took a 0:00:10.320 --> 0:00:12.960 dive and a lot of people were losing their jobs. 0:00:13.760 --> 0:00:17.799 And then, unexpectedly, the daily flood of headlines turned to 0:00:17.920 --> 0:00:24.000 something else, entirely a social media app called TikTok. A 0:00:24.160 --> 0:00:27.280 stern rebuke from the US President, We're not going to 0:00:27.360 --> 0:00:31.000 do anything to jeopardize security. White House alleges the popular 0:00:31.160 --> 0:00:35.040 Chinese based apps TikTok and wheat Chat are stealing American 0:00:35.159 --> 0:00:39.360 users private information, handing it to the government in Beijing. 0:00:39.960 --> 0:00:43.479 We want no security problems with China. It's got to 0:00:43.479 --> 0:00:46.080 be an American company. Has got to be American security 0:00:46.080 --> 0:00:48.960 has got to be owned here. They have millions and 0:00:49.000 --> 0:00:51.959 millions of US US. They're probably the single most popular 0:00:52.159 --> 0:00:58.040 social media app among people under age twenty. TikTok provided 0:00:58.160 --> 0:01:01.120 an escape from the anxiety and boredom brought on by 0:01:01.160 --> 0:01:05.080 the pandemic for tens of millions of Americans. Scrolling through 0:01:05.120 --> 0:01:08.360 never ending feeds of dance videos and funny memes seemed 0:01:08.360 --> 0:01:12.399 to make people feel better, and this cemented TikTok into 0:01:12.440 --> 0:01:15.640 the mainstream in a way we haven't seen with any 0:01:15.720 --> 0:01:20.679 other social media platform since Facebook. TikTok entered kind of 0:01:20.680 --> 0:01:24.080 a golden period, but then in the span of a 0:01:24.080 --> 0:01:30.560 few weeks, TikTok's fortunes changed. One night in late July, 0:01:31.000 --> 0:01:34.319 the US President threatened to ban TikTok because it was 0:01:34.400 --> 0:01:37.240 owned by a Chinese company that he thought was spying 0:01:37.240 --> 0:01:42.120 on American users. That night, people on TikTok freaked out. 0:01:42.440 --> 0:01:46.120 The app was flooded by videos of teenagers giving premature 0:01:46.120 --> 0:01:49.880 eulogies to TikTok, talking about how special it was, how 0:01:49.960 --> 0:01:53.840 much they relied on it, especially during the pandemic, how 0:01:53.880 --> 0:01:58.600 sad they were. It felt like a funeral. I don't know. Okay, 0:01:58.600 --> 0:02:00.400 so you know how we stopped freaking about what about 0:02:00.400 --> 0:02:06.920 tiktoking literally shaking um, yeah, yeah, this might be it? 0:02:08.680 --> 0:02:13.080 Well ship fuck vollowme on Instagram. I guess I know. 0:02:13.200 --> 0:02:15.240 You guys may think it's not that big a deal, 0:02:15.800 --> 0:02:19.400 but two creators like me and my brother and other 0:02:19.520 --> 0:02:23.120 creators is a big deal. Getting TikTok band. You're listening 0:02:23.120 --> 0:02:27.040 to Foundering, I'm your host, Shelley Banjo. This season will 0:02:27.080 --> 0:02:30.000 tell you the story of TikTok, how a mysterious tech 0:02:30.040 --> 0:02:35.400 founder from China outsmarted Facebook, YouTube and Snapchat to change 0:02:35.480 --> 0:02:39.480 the Internet while capturing the attention of an entire generation 0:02:40.040 --> 0:02:42.840 and becoming an obsession for the most powerful man in 0:02:42.880 --> 0:02:46.920 the world. TikTok almost got wiped out in the process, 0:02:47.400 --> 0:02:50.200 in a cautionary tale of what happens when you get 0:02:50.320 --> 0:02:52.520 so big you wind up in the middle of a 0:02:52.600 --> 0:02:57.520 standoff between the world's two greatest superpowers. I've been covering 0:02:57.560 --> 0:03:01.520 TikTok for three years out of Hong Kong, China and 0:03:01.680 --> 0:03:04.440 the US, and even though TikTok has been in the 0:03:04.440 --> 0:03:07.760 news for a while now, I realized few people really 0:03:07.800 --> 0:03:10.480 know the whole story. I want to tell you just 0:03:10.560 --> 0:03:13.640 how surprising it's been. Every step has been full of 0:03:13.639 --> 0:03:17.760 twists and turns, from TikTok's crazy rise to its run 0:03:17.760 --> 0:03:20.200 ins with the law, to its all out battle with 0:03:20.320 --> 0:03:24.080 Facebook and other Silicon Valley giants, all leading to the 0:03:24.160 --> 0:03:29.160 first ever social media powerhouse to emerge from China. For 0:03:29.240 --> 0:03:33.800 this season, you'll hear from current and former TikTok employees, investors, 0:03:33.840 --> 0:03:37.400 and influencers about what it was really like inside the company. 0:03:37.920 --> 0:03:42.040 You'll also hear from the CEO of TikTok's controversial Chinese 0:03:42.040 --> 0:03:45.760 parent company, Byte Dance, in one of his only interviews 0:03:45.760 --> 0:03:49.160 with Western media. We'll tell you more after this quick break. 0:04:02.320 --> 0:04:05.480 To truly understand TikTok, you have to spend time with 0:04:05.560 --> 0:04:08.800 someone like Katie Peeney. My name is Katie Heeney. I'm 0:04:08.840 --> 0:04:11.760 seventeen years old and I've been on TikTok since musically 0:04:11.880 --> 0:04:15.080 back in two thousand fifteen. If you haven't heard of TikTok, 0:04:15.240 --> 0:04:18.919 TikTok is the most addicting app in the entire world. 0:04:19.040 --> 0:04:20.839 If you get it, I'm warning you, you will be 0:04:20.920 --> 0:04:25.279 on it for four hours just scrolling through your four 0:04:25.360 --> 0:04:29.960 you page. Katie is a true TikTok evangelist for people 0:04:30.000 --> 0:04:32.400 who have never been on the app before. She tried 0:04:32.440 --> 0:04:34.839 to explain the appeal. I mean, it's like if you 0:04:34.880 --> 0:04:36.920 were to watch a movie for an hour and a half. 0:04:36.960 --> 0:04:40.720 I guess TikTok is like watching a movie. It's just 0:04:41.040 --> 0:04:44.000 it's that entertaining, like you could I mean, I could 0:04:44.000 --> 0:04:47.080 watch TikTok's longer than I could watch a movie. To 0:04:47.200 --> 0:04:51.200 explain how TikTok became a cultural institution with tens of 0:04:51.240 --> 0:04:53.880 billions of dollars. I want to take you back to 0:04:53.960 --> 0:04:56.920 its roots. The app that we now know is TikTok 0:04:57.279 --> 0:05:00.159 is actually based on a lip syncing app called music Lee. 0:05:00.920 --> 0:05:05.120 Musically became TikTok after it was acquired in ten by 0:05:05.120 --> 0:05:09.440 a giant Chinese tech company. It's users and design were 0:05:09.440 --> 0:05:13.039 all absorbed into TikTok. The two apps look and feel 0:05:13.080 --> 0:05:17.120 pretty similar. This episode will focus on the rise of 0:05:17.240 --> 0:05:21.040 Musically and the story of its founder, a thirty six 0:05:21.120 --> 0:05:23.560 year old guy from China who seemed to have an 0:05:23.640 --> 0:05:28.479 uncanny understanding of American teenagers. His name is Alex Jew. 0:05:29.160 --> 0:05:32.080 He kind of had a metal Jesus style haircut. This 0:05:32.320 --> 0:05:36.880 just long, black, flowing hair. That's Josh Ellman. He was 0:05:36.920 --> 0:05:41.040 one of Musically's first investors. Josh likekens Alex to an 0:05:41.120 --> 0:05:44.159 artist or a poet. He totally looks like a poet, 0:05:44.640 --> 0:05:48.640 like an ancient Chinese painter sitting by the side of 0:05:48.640 --> 0:05:52.320 a river, you know, doing one of those giant scroll paintings. 0:05:52.440 --> 0:05:55.840 Alex was a mysterious figure. He was also really hard 0:05:55.880 --> 0:05:59.480 to pin down. Multiple people told me that when they 0:05:59.520 --> 0:06:03.080 wanted to connect for a business deal, they literally couldn't 0:06:03.120 --> 0:06:07.680 find him. Here's Josh introducing Alex at a conference. I 0:06:07.760 --> 0:06:09.000 was like, Oh, I'd love to meet up. Are you 0:06:09.040 --> 0:06:10.800 in San Francisco maybe l A. He was like, no, 0:06:10.839 --> 0:06:13.599 I'm in Shanghai, China, And that's where the entire team 0:06:13.640 --> 0:06:15.360 was based on where they were, where they were building 0:06:15.360 --> 0:06:18.039 it out, and and so I think he just has 0:06:18.040 --> 0:06:21.120 this incredible perspective of building this company, you know from 0:06:21.320 --> 0:06:24.159 China that you know, American teenagers are using kind of 0:06:24.200 --> 0:06:25.760 more than anything right now, So that I'd love to 0:06:25.800 --> 0:06:30.200 bring up Alex you. Alex was known for being kind 0:06:30.200 --> 0:06:34.839 of out there for years before creating musically. He worked 0:06:34.839 --> 0:06:38.000 at a big global software company and he had a 0:06:38.080 --> 0:06:43.160 super vague job title. They called him a futurist. Futurist 0:06:43.520 --> 0:06:47.560 songs to be a fancy job title, but actually the 0:06:47.720 --> 0:06:51.640 job was pretty easy. What I did as a time 0:06:52.160 --> 0:06:55.800 was quite a simple sitting in my tent, playing it 0:06:55.839 --> 0:07:01.320 around with my small crystal ball telling the future. Futurist 0:07:01.400 --> 0:07:04.120 is one of those wacky titles in the tech industry, 0:07:04.400 --> 0:07:07.159 but it played right into the way Alex approached life. 0:07:07.960 --> 0:07:10.680 Many people I spoke to told me Alex was a thinker. 0:07:11.360 --> 0:07:14.280 His head was in the clouds. So I got really bored. 0:07:14.560 --> 0:07:17.760 I want to walk out of my tent. I want 0:07:17.760 --> 0:07:21.280 to be a black smith. I want to be a carpenter. 0:07:21.400 --> 0:07:23.920 I want to be a fisherman. I want to be 0:07:24.040 --> 0:07:29.440 a duel carpenter, blacksmith, fisherman. Alex speaks in these sort 0:07:29.480 --> 0:07:33.560 of extended metaphors, but what he's getting at is that 0:07:33.600 --> 0:07:36.200 he's ready to walk away from his job and start 0:07:36.240 --> 0:07:40.800 his own company. First, Alex made an education app. He 0:07:40.920 --> 0:07:43.880 had this idea that people could teach each other lessons 0:07:43.920 --> 0:07:47.520 online by watching short videos that though I got a 0:07:47.560 --> 0:07:52.520 brilliant idea, everybody can be ta true, everybody can learn 0:07:52.600 --> 0:07:58.000 from everybody else. We spent seven months creating the first 0:07:58.680 --> 0:08:03.160 education and finally it turned to be a very miserable 0:08:03.360 --> 0:08:07.480 fidel and it was a failure because people didn't want 0:08:07.480 --> 0:08:10.440 to learn that way. They mostly used their phones to 0:08:10.520 --> 0:08:14.680 socialize or have fun. And this was the breakthrough that 0:08:14.800 --> 0:08:18.320 led to musically the app that would one day become 0:08:18.400 --> 0:08:23.280 TikTok In. Alex was doing a stint in the US 0:08:23.520 --> 0:08:26.640 and living in the Bay Area. One day he was 0:08:26.760 --> 0:08:29.400 riding the train and he sat across from a group 0:08:29.440 --> 0:08:34.040 of teenagers. One day I was on Cultread from Mountain 0:08:34.120 --> 0:08:39.079 View to San Francisco, and on that train so with 0:08:39.240 --> 0:08:43.000 lots of high school students, and I was observing their behavior, 0:08:43.800 --> 0:08:46.200 he says. Watching these teenagers good for around on their 0:08:46.240 --> 0:08:51.600 phones gave him an epiphany. So we're listening to music 0:08:52.720 --> 0:08:59.280 and the other they were taking videos and photos selfies. 0:08:59.800 --> 0:09:06.840 So that give me some idea. First, entertainment is going 0:09:06.880 --> 0:09:11.360 to be much easier the education, because education is against 0:09:11.400 --> 0:09:15.720 the human nature, and entertainment is basically following the human nature. 0:09:17.160 --> 0:09:21.000 Education is against human nature. This is the moment Alex 0:09:21.080 --> 0:09:24.120 abandoned his education app and he went all in on fun. 0:09:24.760 --> 0:09:28.000 He turned his new idea into musically in just thirty days. 0:09:28.520 --> 0:09:33.280 It launched in July for high school students, especially in 0:09:33.320 --> 0:09:37.360 the US, that spent laws of time on social media 0:09:38.200 --> 0:09:43.160 and the love music to love videos, and can we 0:09:43.280 --> 0:09:49.280 combine these very powerful elements into one platform, creating a 0:09:49.280 --> 0:09:55.040 social network around music and around video music videos and 0:09:55.120 --> 0:10:01.000 American teenagers. It sounds a lot like TikTok. I'm always 0:10:01.040 --> 0:10:04.200 struck by how clear and immediate Alex's vision for the 0:10:04.240 --> 0:10:08.520 app was. Honestly, Alex is so smart about design and 0:10:08.640 --> 0:10:12.920 user experience and He's also so eccentric and captivating in 0:10:12.920 --> 0:10:16.200 the way he speaks. These are the sorts of founders 0:10:16.280 --> 0:10:20.000 that the tech industry usually loves, But Alex Ju isn't 0:10:20.000 --> 0:10:23.320 a household name, and in fact, as TikTok grew bigger, 0:10:23.600 --> 0:10:27.840 they even replaced him with an American CEO. You gotta 0:10:27.920 --> 0:10:30.840 wonder if Alex wasn't from China, if he would be 0:10:30.920 --> 0:10:34.880 more famous. For a new social platform, a new a 0:10:34.960 --> 0:10:39.280 new social media to take off. It's about it to 0:10:39.440 --> 0:10:44.480 have young people as an early adopter, especially the teenagers 0:10:44.600 --> 0:10:48.960 in the US. Why they got a love time. When 0:10:49.000 --> 0:10:52.560 we talk about musically and TikTok, now, it almost sounds 0:10:52.559 --> 0:10:54.959 like it was an accident that so many young children 0:10:55.080 --> 0:10:58.600 ended up on the platform. But early on Alex comes 0:10:58.720 --> 0:11:02.080 right out and says that teenagers and even preteens were 0:11:02.080 --> 0:11:05.680 the target audience From the get go. He understood that 0:11:05.760 --> 0:11:09.480 teenagers would help the app grow explosively. What he didn't 0:11:09.520 --> 0:11:12.280 realize was just how much trouble the kids would get 0:11:12.280 --> 0:11:16.520 the company into later on, and Alex was obsessive about 0:11:16.559 --> 0:11:20.000 seeing how young people behaved on his platform. He wasn't 0:11:20.040 --> 0:11:24.080 just looking at data, he was looking at them. I 0:11:24.240 --> 0:11:28.920 personally register a lot of fake accounts, right, and it 0:11:29.040 --> 0:11:32.319 uses this fake identity to talk with the users on 0:11:32.400 --> 0:11:35.720 the platform, comment on their videos and see why they 0:11:35.720 --> 0:11:38.840 posted these videos, and just to try to understand them, 0:11:39.160 --> 0:11:42.480 try to give us empathy. I want to underscore just 0:11:42.559 --> 0:11:45.520 how unusual this is that a guy in his mid 0:11:45.559 --> 0:11:49.680 thirties has launched fake accounts to interact with his users online. 0:11:50.360 --> 0:11:54.120 These are mostly preteens. It sounds kind of creepy, right. 0:11:55.120 --> 0:11:58.679 And it went beyond fake accounts. I've heard stories from 0:11:58.720 --> 0:12:03.200 famous musically person ladies that Alex went even further. He'd 0:12:03.200 --> 0:12:05.760 called their parents at home, He'd take them in their 0:12:05.800 --> 0:12:09.800 families out for dinner. He was meticulous in learning everything 0:12:09.880 --> 0:12:14.400 about them. To me, this is something really important about 0:12:14.400 --> 0:12:20.640 the roots of musically and later TikTok. TikTok feels impulsive, fun, organic, 0:12:21.080 --> 0:12:24.920 like this really spontaneous app where people can really be themselves. 0:12:25.360 --> 0:12:28.600 But it's not the people who got famous, the trends 0:12:28.640 --> 0:12:33.000 that were popular. Everything was centrally planned by Alex and 0:12:33.040 --> 0:12:36.760 the people he hired. Here's Katie Feeney, the TikTok or 0:12:36.840 --> 0:12:39.800 we heard from earlier. She was only twelve when she 0:12:39.840 --> 0:12:43.959 got on Musically. Yeah. So I was very young and 0:12:44.080 --> 0:12:46.520 my friends and I were just super excited when this 0:12:46.920 --> 0:12:49.680 new app called Musically came out. So you would just 0:12:49.720 --> 0:12:52.160 make fun videos, and I did a lot of dancing 0:12:52.240 --> 0:12:55.200 videos with my dance team. It was like a big 0:12:55.240 --> 0:12:57.480 way for us to just you know, have fun with 0:12:57.520 --> 0:13:01.040 each other. Similar to TikTok. You would just scroll and 0:13:01.080 --> 0:13:04.280 there was like an endless amount of videos you and 0:13:04.440 --> 0:13:06.120 you would never get bored on it. You could just 0:13:06.280 --> 0:13:10.360 like continuously watch for hours, and it really intrigued me 0:13:10.440 --> 0:13:13.280 and all my friends. Katie remembers the first time one 0:13:13.320 --> 0:13:16.360 of her videos blew up. Musically featured one of her 0:13:16.440 --> 0:13:20.960 dance clips on its homepage. I probably started crying because 0:13:21.480 --> 0:13:24.120 I like it was my dream to get featured, and 0:13:24.400 --> 0:13:26.280 a little part of me kind of always wanted to 0:13:26.320 --> 0:13:28.800 be famous, I guess you could say. So. I think 0:13:28.840 --> 0:13:31.400 I was just in my room or something and I 0:13:31.440 --> 0:13:36.199 was bawling. Katie was on Musically during its early days. 0:13:36.240 --> 0:13:38.679 Back then, the app looked like a long shot to 0:13:38.800 --> 0:13:42.880 people in the tech industry. Silicon Valley dismissed Musically as 0:13:42.880 --> 0:13:46.199 a niche karaoke app for preteens. No one thought it 0:13:46.200 --> 0:13:49.760 would grow to become a major cultural force. We'll be 0:13:49.880 --> 0:14:01.600 right back in social media seemed almost locked up. Facebook 0:14:01.640 --> 0:14:05.720 and Instagram were already so dominant, Snapchat had cornered the 0:14:05.720 --> 0:14:08.920 teen market. Twitter had bought a video app called Vine, 0:14:09.280 --> 0:14:13.160 which failed a few years later. Investors had been skeptical 0:14:13.200 --> 0:14:17.920 about putting money into another social media app, but Josh Allman, 0:14:18.160 --> 0:14:21.520 the investor we met earlier, said Musically was doing something 0:14:21.560 --> 0:14:24.880 different because the app made it easy for anyone to 0:14:25.000 --> 0:14:27.640 create their own videos, and then you were just seeing 0:14:27.920 --> 0:14:32.440 regular people around the country dancing and performing and lip 0:14:32.520 --> 0:14:35.480 syncing in ways that you know, I had never seen 0:14:35.480 --> 0:14:39.480 that fountain of creativity, you know before, especially not in video. 0:14:39.880 --> 0:14:44.280 And by July, about a year after it launched, Musically 0:14:44.320 --> 0:14:46.440 had shot up to the number one spot in the 0:14:46.480 --> 0:14:50.240 Apple App Store. It never fell out of the top forty. 0:14:50.320 --> 0:14:53.520 Investors wanted to know who was behind it. Well, you know, 0:14:53.560 --> 0:14:56.280 this app just came out of nowhere, and it just 0:14:56.320 --> 0:14:59.800 became top five or something very very quickly, and all 0:14:59.840 --> 0:15:01.600 of the son and it just really skyrocketed. So I 0:15:01.640 --> 0:15:05.080 think a lot of vcs we're wondering, like, you know, 0:15:05.400 --> 0:15:08.160 like who are these people? You know, where they're coming from? 0:15:08.240 --> 0:15:11.320 That's jogilely out. She was working at a venture capital 0:15:11.360 --> 0:15:14.240 firm at the time. Her bosses were literally trying to 0:15:14.280 --> 0:15:17.440 give Alex money and couldn't find him. It was not straightforward. 0:15:17.520 --> 0:15:20.320 It wasn't like another, you know, Slicon Valley based founder 0:15:20.360 --> 0:15:22.240 of who we could find in thirty seconds to be 0:15:22.240 --> 0:15:25.560 a LinkedIn. It was a bit more digging. It might 0:15:25.600 --> 0:15:28.720 seem strange that people were so confused by Alex being 0:15:28.760 --> 0:15:31.360 in China, but this is where you got to remember. 0:15:31.720 --> 0:15:36.160 Silicon Valley is a small, insular place. These investors would 0:15:36.200 --> 0:15:40.640 be confused if Alex was in Ohio, so China was 0:15:40.640 --> 0:15:44.680 almost unthinkable to them. But I've also wondered if Alex 0:15:44.760 --> 0:15:48.240 was intentionally being coy about where he was based. I'm 0:15:48.240 --> 0:15:51.160 not saying that Musically was overtly trying to hide their 0:15:51.240 --> 0:15:55.040 Chinese roots, but the company clearly wasn't advertising it either. 0:15:56.280 --> 0:16:00.120 Here's mar J Roberts, an early Musically employee. Something a 0:16:00.120 --> 0:16:02.960 lot of people don't know are they are starting to 0:16:03.000 --> 0:16:07.160 recognize now, is that Musically was always first and foremost 0:16:07.240 --> 0:16:12.360 a Chinese company. Our headquarters was based in Shanghai. Inside 0:16:12.360 --> 0:16:15.440 the company, it was clear the bosses in China were 0:16:15.480 --> 0:16:18.720 calling the shots. No, it definitely did not feel like 0:16:19.080 --> 0:16:23.040 an American company. Were in constant everyday contact with the 0:16:23.160 --> 0:16:25.840 Chinese team. We very much took a lot of our 0:16:26.160 --> 0:16:30.520 cues from the Chinese team, especially since our founders are 0:16:30.520 --> 0:16:34.080 based there for the majority of the time. That was 0:16:35.600 --> 0:16:38.600 so a Chinese social media company in the US raised 0:16:38.600 --> 0:16:42.360 a few eyebrows, but it wasn't considered a geopolitical threat 0:16:42.720 --> 0:16:46.680 the way some politicians are looking at it now. That year, 0:16:47.080 --> 0:16:49.920 Musically opened its first US outpost in the scrappy We 0:16:49.960 --> 0:16:53.400 work in San Francisco. Here's marj We worked in a 0:16:53.440 --> 0:16:57.000 rework room. There was one room, yes, so we crammed 0:16:57.040 --> 0:16:59.840 in as much as we can. That was very much 0:17:00.200 --> 0:17:03.240 like Harry Potter in a closet. There was a lot 0:17:03.280 --> 0:17:07.600 of urgency and excitement. Here's Jogia, who was so impressed 0:17:07.600 --> 0:17:10.920 by Musically's rise she decided to go work for them. 0:17:10.960 --> 0:17:12.640 You know, we were ready to kick it off our 0:17:12.840 --> 0:17:15.760 second summer, and really it's important time because it's one 0:17:15.840 --> 0:17:17.760 kids are out of school and they were born at home. 0:17:18.640 --> 0:17:20.600 You know, it was a great opportunity for us to 0:17:21.080 --> 0:17:24.240 take the grove to the next level. And that's when 0:17:24.240 --> 0:17:30.040 the venture capitalists rushed in by Musically had raised over 0:17:30.080 --> 0:17:33.280 a hundred and fifty million dollars from some of Silicon 0:17:33.400 --> 0:17:37.760 Valley's biggest BC firms. It surpassed over a hundred million downloads, 0:17:38.320 --> 0:17:41.560 and the app was a huge sensation among teenagers, even 0:17:41.600 --> 0:17:44.840 if it was virtually unknown to adults. Here's March again. 0:17:45.440 --> 0:17:50.560 Musically was very underground, but I discovered that gen z 0:17:51.160 --> 0:17:55.120 knew all about it, but no one else did. So um, 0:17:55.119 --> 0:17:58.600 I actually reached out to my knees. She's a preteen 0:17:58.640 --> 0:18:00.840 at the time. I was like, do you know what 0:18:00.920 --> 0:18:06.479 this app is called? Musically? And this was the moment 0:18:06.520 --> 0:18:09.119 of truth. She literally almost had a heart attack. She's like, 0:18:09.320 --> 0:18:12.400 oh my god, it's the biggest It's the coolest app ever. 0:18:12.520 --> 0:18:15.520 I love it. I'm obsessed with it. I'm like, what 0:18:15.800 --> 0:18:19.399 is going on? This was a really special moment for video. 0:18:20.080 --> 0:18:24.200 A landslide was about to happen. Remember back then people 0:18:24.240 --> 0:18:28.080 were just figuring out video on mobile phones. Instagram was 0:18:28.119 --> 0:18:32.160 mostly pictures. YouTube was barely on mobile at all. Shooting 0:18:32.240 --> 0:18:36.600 video was considered difficult and expensive, and you needed editing software, 0:18:36.960 --> 0:18:40.360 not to mention the skills to use it. But Musically 0:18:40.400 --> 0:18:42.520 allowed you to shoot a video and then with a 0:18:42.560 --> 0:18:47.040 touch of a button at effects and a soundtrack. Within seconds, 0:18:47.160 --> 0:18:51.120 you had this striking finished product to be a British stereotype. 0:18:51.600 --> 0:18:58.120 Loves of t and gen Z took to it. You're 0:18:58.119 --> 0:19:03.560 going to my head because I love you. So the 0:19:03.720 --> 0:19:08.600 short form video format is very perfect for younger folks 0:19:08.640 --> 0:19:13.320 because it requires very little attentions fan quite honestly and 0:19:13.359 --> 0:19:15.840 I think ultimately, which is very easy to get using. 0:19:16.119 --> 0:19:18.360 You know, it didn't require you to create an original 0:19:18.400 --> 0:19:21.440 song or create, you know, an original joke. You could 0:19:21.440 --> 0:19:24.200 get started on the platform very easily by using um 0:19:24.200 --> 0:19:28.040 an existing clip or an existing song, because I know, 0:19:28.240 --> 0:19:32.639 in the hell and then their team users got the 0:19:32.680 --> 0:19:35.080 hang of it quickly, and some of them were so 0:19:35.119 --> 0:19:38.760 good at making these entertaining short videos. They were getting 0:19:38.760 --> 0:19:41.200 famous on the app. Thanks to all you guys on 0:19:41.359 --> 0:19:43.439 musically for supporting me, and I hope you guys like 0:19:43.480 --> 0:19:46.440 my EP. We would have some of our users come 0:19:46.480 --> 0:19:48.639 in and meet the team, and they were so excited 0:19:48.680 --> 0:19:51.680 to meet us because they thought that, you know, we 0:19:52.200 --> 0:19:54.840 make them famous sometimes. Um So it was pretty great 0:19:55.000 --> 0:19:57.280 just to be there, like on the ground there and 0:19:57.320 --> 0:20:00.480 by famous, I mean just a massive number of eyeballs 0:20:00.480 --> 0:20:04.000 were on these teen influencers, even though musically hadn't hit 0:20:04.040 --> 0:20:07.840 the mainstream yet. They were even beating out Beyonce on Instagram. 0:20:08.119 --> 0:20:12.280 Beyonce on Instagram posted this picture of herself announcing her 0:20:12.280 --> 0:20:16.000 pregnancy I think um, and it had a million views 0:20:16.080 --> 0:20:20.960 or likes in twenty four hours. The unique difference with 0:20:21.080 --> 0:20:25.879 musically is that our everyday influencers who were not traditional 0:20:25.920 --> 0:20:30.520 celebrities were getting three million likes in a in an hour. 0:20:31.240 --> 0:20:34.360 And because musically was getting so big and so influential, 0:20:34.800 --> 0:20:39.159 celebrities started to join. I remember the first big artist 0:20:39.359 --> 0:20:43.080 on musically was Jason Darue and he was really active 0:20:43.200 --> 0:20:49.840 forecasting from dancing in his studio. Here's pop star Jason 0:20:49.880 --> 0:20:52.840 Derulo in one of his first videos he made for musically. 0:20:53.640 --> 0:20:55.080 I want to do some spect I'm gonna do something 0:20:55.080 --> 0:20:57.080 a little different. I want you to be a part 0:20:57.440 --> 0:20:59.879 of the next music video. And all you gotta do 0:21:00.160 --> 0:21:02.560 to be flown out to Elaine Barb, which you boy 0:21:02.720 --> 0:21:08.120 is post a music video to musically. And then more 0:21:08.160 --> 0:21:12.240 and more artists the camp like Selena Gomez, UM, Lady Gaga, 0:21:12.680 --> 0:21:16.840 Katy Powery. I think Lady Gaga was probably Uh, one 0:21:16.880 --> 0:21:21.240 of the artists I personally felt so excited about because 0:21:21.400 --> 0:21:27.320 I loved no personality for Unique Nix. Famous musicians flocked 0:21:27.320 --> 0:21:29.119 to the app as a new way to connect with 0:21:29.119 --> 0:21:32.400 their fans, and users love the easy access to their 0:21:32.440 --> 0:21:37.199 favorite songs. But Musically was basically stealing the music. Ja 0:21:37.720 --> 0:21:40.919 the early employee, describes as they did it. When Musically 0:21:40.960 --> 0:21:46.160 started out um back in UM, the company had actually 0:21:46.200 --> 0:21:50.760 been rapping the fifteen second song clips from the iTunes review. 0:21:51.400 --> 0:21:53.800 If you didn't hear her there, she's saying they were 0:21:54.000 --> 0:21:58.160 ripping the songs, like literally taking the music for free 0:21:58.200 --> 0:22:01.560 from iTunes, and so none of the music labels cared 0:22:01.560 --> 0:22:04.159 about it about us doing this in the beginning when 0:22:04.200 --> 0:22:06.119 we were just a small company, but then as we 0:22:06.200 --> 0:22:09.560 got bigger over time, the music labels were basically like, 0:22:09.600 --> 0:22:12.439 you know, we want a piece of this success. Like 0:22:12.560 --> 0:22:16.399 many Silicon Valley startups, Musically was sort of skating around 0:22:16.400 --> 0:22:19.399 the rules, but as they grew they had to figure 0:22:19.400 --> 0:22:22.080 out how to work with the music industry rather than 0:22:22.119 --> 0:22:25.840 against it. By the way, when we asked TikTok about this, 0:22:26.040 --> 0:22:29.760 they gave us a statement TikTok places a high priority 0:22:29.800 --> 0:22:33.520 on its work with record labels and artists. Another big 0:22:33.560 --> 0:22:36.480 part of the app success was that it felt so personalized. 0:22:36.880 --> 0:22:39.720 Here's Josh Shellman. You know, how do you make sure 0:22:39.760 --> 0:22:43.040 that the feed has content that's relevant to you? You know, 0:22:43.080 --> 0:22:45.840 if you're twenty two, you want to see different content 0:22:45.880 --> 0:22:50.080 than somebody who's sixteen. Musically showed different people different things, 0:22:50.600 --> 0:22:54.520 and that personalization made it incredibly engaging. But by the 0:22:54.560 --> 0:22:57.240 same token, it also made it hard for parents to 0:22:57.280 --> 0:22:59.639 track with their kids were doing on the app, so 0:22:59.720 --> 0:23:03.400 it might come across damaging clips about eating disorders, while 0:23:03.400 --> 0:23:07.280 that teenager's mom might see videos of cute puppies. Each 0:23:07.280 --> 0:23:11.399 feed was tailored. Musically studied who you were over days 0:23:11.520 --> 0:23:14.600 or weeks. Multiple people told me it felt like it 0:23:14.680 --> 0:23:18.560 could read your mind, and this was intentional, according to Alex, 0:23:19.400 --> 0:23:24.119 so we have to focus on the mechanism the invisible hands. 0:23:24.400 --> 0:23:27.680 The invisible hands of Musically are way more controlling than 0:23:27.720 --> 0:23:31.679 apps like Facebook or Instagram. You're not choosing what videos 0:23:31.720 --> 0:23:34.879 you see. You don't curate your own fee. The app 0:23:34.960 --> 0:23:38.160 chooses for you. Even though it feels care free and fun, 0:23:38.480 --> 0:23:43.080 it's actually very deliberate. Music Lease technology was considered advanced 0:23:43.080 --> 0:23:46.560 for its time. Behind the app. There was an engineering 0:23:46.600 --> 0:23:49.920 team in Shanghai that was working like mad. There was 0:23:49.960 --> 0:23:52.320 even a name for this kind of work culture in China. 0:23:52.880 --> 0:23:57.080 It's called nine nine six meeting. These employees worked nine 0:23:57.080 --> 0:24:01.120 am to nine pm, six days a week. To this day, 0:24:01.480 --> 0:24:04.760 many people at TikTok still work these hours. You know, 0:24:05.119 --> 0:24:09.159 China tends to have a nine nine six work culture um, 0:24:09.160 --> 0:24:12.440 which is even a little bit more intense than many 0:24:12.520 --> 0:24:14.560 startups that I know in Silicon Valley. And so the 0:24:14.680 --> 0:24:17.160 rate at which they were just building and putting out 0:24:17.240 --> 0:24:20.840 features and putting out new things in their creation flow 0:24:21.240 --> 0:24:26.320 was felt phenomenally fast. With this insane workload and crazy growth, 0:24:26.880 --> 0:24:30.000 the Musically employees could barely keep up. So the company 0:24:30.040 --> 0:24:31.560 was kind of in this spot of like, Okay, how 0:24:31.600 --> 0:24:34.520 do we get really big? How do we make sure 0:24:34.560 --> 0:24:37.359 that we're a network that's here to last? And they 0:24:37.359 --> 0:24:41.600 were struggling. They were actually struggling to higher engineers fast enough, 0:24:41.880 --> 0:24:46.439 especially deep algorithmic engineers, because people in China weren't as 0:24:46.480 --> 0:24:49.560 interested to work on a product they didn't use. By 0:24:49.560 --> 0:24:53.400 the fall of people in Silicon Valley started to hear 0:24:53.440 --> 0:24:55.760 that Musically might be willing to sell itself to a 0:24:55.760 --> 0:24:59.920 bigger company, and one of the contenders was Facebook. Here's Josha, 0:25:00.000 --> 0:25:02.280 a man you know. Around the same time, when there's 0:25:02.280 --> 0:25:05.440 something with that much traction and activity, folks at Facebook 0:25:05.480 --> 0:25:08.640 would come kind of calling me or calling others involved 0:25:08.640 --> 0:25:10.960 with the company and saying, hey, should we get to 0:25:10.960 --> 0:25:13.840