How ByteDance took over the world

TikTok’s parent company has a secret weapon to building viral products — organizational structure.

It may not surprise you to hear that ByteDance, TikTok’s parent company, is the most valuable startup in the world.

How ByteDance took over the world

But TikTok isn’t the company’s only massive product.

ByteDance has 3 others that have eclipsed 100m+ daily active users: Toutiao (a news app), Douyin (TikTok’s predecessor), and Xigua Video (an online video platform).

How does ByteDance drop hits so consistently?

Per Harvard Business Review, the secret is ByteDance’s organizational structure — particularly how the company employs shared services.

While companies often share some resources (e.g., legal, HR), ByteDance takes it to another level. The company’s shared service platform (SSP) includes:

  • Technology that can be used or customized across products (e.g., algorithms)
  • Technical staff — like engineers and market analysts — who work on multiple projects instead of a single product line.

The goal of the SSP is to allow ByteDance product teams to stay small and focused on users, and to make it easy to apply lessons from one product to the rest of its portfolio.

Powered by its shared services platform…

… ByteDance has been able to pursue 3 seemingly contradictory strategies simultaneously:

  • Broad exploration: In the span of 2 years, ByteDance created 140+ apps in app stores, spanning 11 verticals
  • Rapid iteration: ByteDance moves fast — releasing products rapidly, terminating underperformers immediately, and cycling employees to new products as needed
  • Selective focus: The company hones in on themes for years at a time — before going all-in on short-form video, the company focused heavily on text and photos

Paired with ByteDance’s data-driven culture, its SSP allows the company to leverage one insight into multiple breakthroughs. Case in point — a spike in video views on Toutiao led to the development of Douyin, and eventually to TikTok.

As a result…

… ByteDance has been valued as high as $400B by some investors. In 2021, the company reached 1.9B active users across 150 countries, and generated $58B in revenue.

The scary part? The nature of ByteDance’s shared services is that each product draws on success from the past — meaning TikTok might be just the beginning.

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Topics: Apps

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