The Tao of TikTok

By Restoring the Soul of Business Archives
Cover image for  article: The Tao of TikTok

In the past 1000 days the growth of TikTok has disrupted the media landscape. It has shot past Google to be the most popular domain. The time spent daily on it is greater than all of Meta's properties (Facebook, Instagram and WhatsApp) and it is potentially even carving into the time spent watching analog television and Netflix!

TikTok has become the key cultural currency and meme generator unleashing thousands of creators with followings of over a million people all around the world. This article by Professor Scott Galloway is an absolute must read to understand the breathtaking rise of the platform. Every individual and business stand to learn lessons from this amazing rise and its implications on the future of business, media and culture.

A moat can become a noose

The key asset of Facebook was the network effects of its social graph (all your "friends" were there) making it very difficult to launch a new competing entity. One of the few companies that did so with some success was Snap, driven in great part by its sheer product and design ingenuity. Its growth was blunted by Instagram carbon copying Stories and leveraging the strength of its scale.

TikTok practiced asymmetric warfare by eschewing the social graph and replacing it with an interest graph. Its algorithm and learning loops allowed individuals to be exposed to a spectrum of great content without having to bring any friends or create any content! It then positioned itself as an entertainment platform versus a social platform.

Now Meta is responding by dialing down its social graph and working to create intent graphs with its Reels projects and by dialing up algorithmic results versus social graph results, injecting all sorts of drugs into Instagram, irking its users and creating some lurching Frankenstein mix of image/video and social/content graph.

One should never underestimate Mark Zuckerberg and the very deep talent pool at Meta as they seek to dramatically pivot their business, but a lesson to be learned is that assets can become anchors and to win as an outsider one needs to change the rules of the game.

Every company should pay attention to whether what made it great can keep it great and wonder whether its competitors are the usual suspects sharing its perch in heaven or someone emerging from the slime with audacious new rules of engagement.

Focus and simplicity wins

Everything about TikTok is built around focus and simplicity. You can start right away. It's simple to use. You do not need friends. You do not need to create content or enter any data to begin to enjoy the product.

And it is focused. It's just video -- one video that takes over the phone screen vertically. No distractions for the viewer.

But more importantly for the algorithm and the learning models which do not have to deal with anything else, it sees everything and learns everything fast. And as your interests change (do you swipe, linger, replay?) it morphs and can stay current with your interests, tastes and passions. Fast, clean and simple.

Companies and individuals who focus on core competencies and keep every part of the experience and what they do as simple as possible tend to win. We see it in spades with TikTok.

God-like power to unleash creators

While a significant part of TikTok's success is driven by its algorithms and training sets based on video usage plus simplicity, a third factor is the very powerful tools it gives creators that make it easy for people who want to create to do so. This includes all sorts of lenses and filters that give one much of the power of Adobe's Creative Cloud on a phone with no need for expertise, plus music tracks and the ability to sample, build and morph other creators works.

Every individual has in them an ability to create, and by enabling folks with amazing tools, the power of music, a set of starting blocks and an algorithm that enables newbies to break through (not just those with large followings, like the Kardashians on Instagram and Mr. Beast on YouTube), TikTok becomes the canvas for the rest of us.

For those unheard from. It is the platform for the rest of us. The Apple versus the IBM.

The best companies serve their customers and ideally enable, empower and give them God-like power. Steve Jobs said a computer was a bicycle for the mind. Apple has combined beautiful design, utter simplicity and empowering tools to become the world's most valuable company.

TikTok is following the same rule book. It is probably more loved by its creators and users than its competitors are because it enables, empowers and entertains them.

Too many companies give lip service to empowering and enabling but it is becoming the currency of success as power moves to individuals, talent, consumers and customers. Often senior leaders in companies are too far removed or too busy speaking to each other or drooling over some useless political machinations and power operas to understand the revolution that is upon them. Smart leaders leave the towers of power and start thinking like creators and the builders they once were once again.

The story and the spreadsheet versus just the story or the spreadsheet

For years the media business was driven by the belief that content was king. This began to be suspect as Google and Facebook and others hoovered up all the dollars proving that the people who could point to and drive traffic to content while capturing intent along the way were king.

Then the pendulum swung and it all became data, with Facebook combining excellent data skills that algorithmically transformed so-so content into an elixir that drove hundreds of billion dollars.

Netflix once had people believing it had a data sauce when its real success was driven by the genius of Reed Hastings to anticipate streaming, some first-class content they made for themselves and the nocturnal slumber of their content partners who woke up a decade later to understand they had been fueling their competitor with their content. Data played a part but just one part and by itself is no longer enough.

Now that Disney, HBO and others have caught up it is clear there is no special data sauce and its back to pricing and content. This August it is going to be House of the Dragon (HBO's prequel to Game of Thrones) versus Amazon's Power of the Ring (its Lord of the Rings spinoff) versus Netflix's Sandman and Disney's She-Hulk combined with all sorts of pricing bundles.

TikTok combined the power of math (algorithms and teaching models) with music and movies (video) to create a juggernaut.

TikTok is an example of story and spreadsheet coming together in harmonic balance. Every successful firm of the future will combine creativity and data, storytelling talent with data druids and technologists.

External forces intervene in every business

Every individual and business plan are at the mercy of the four forces driving the future. These are the forces of multi-polar globalization (vs unipolar or western centric globalization), demographic change including media behavior, technology and the long-term impact of Covid-19.

TikTok leveraged demographic shifts and technology of the second (mobile and social) and third (AI and 5G) connected ages to become what may be the future of entertainment and television. But the geo-political dynamics of multi-polar globalization and its pressures (ByteDance, the owner of TikTok, is a Chinese company) have limited its efforts to go public or buy a television network or more.

Geo-politics is the biggest near-term challenge to TikTok.

Mark Zuckerberg was not being subtle when he shared a picture of him surfing with an American flag in his hand. Scott Galloway, who is no fan of Mr. Zuckerberg, has constantly brought up some Manchurian Candidate-like scenarios that make him wary of TikTok, too.

A reality every successful individual and company CEO and company should never forget: The external forces of globalization, technology, demographic changes and covid-19 must be contended with.

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