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If you’ve talked tech with me in the last twelve months, you probably heard me annoyingly mention ‘refining my social media thesis’ and listened as I blabbed on and on for like 10 minutes about how crazy TikTok is. There’s another Words with Wynn in the works outlining my evolved appreciation for social media, but today we’re going to tackle the latter part of the lecture.
TikTok is unmatched.
This isn’t news. I’m so late to the game on TikTok (damn Zoomers), it’s pathetic. But now that I’m here, I’m impressed. TikTok is emerging as the alpha predator of social media platforms, and its most recent launch of TikTok Shop in the U.S. is slyly positioning it to eat some of Amazon’s lunch as well.
Let’s dig in.
Exponential Interest Graphs
First, let’s set the stage. Why is TikTok so effective? For starters, TikTok’s structure differs from many of our legacy social media platforms like Facebook, Instagram, or Twitter insofar as its algorithm is primarily built around an interest graph instead of a traditional social graph.
In broad strokes, a social graph is built by linking users directly with other users of their choosing in concentric circles via similar friends or acquaintances. A social graph inherently depends on the user’s ability to find or source connections of interest (Are my friends on the platform? Can I find them to see their content?). This is a classic friction point which app designers since the early aughts have been growth hacking their way around. Builders usually sidestep this speedbump with strategies like allowing the app to access the user’s contacts or logging in with Facebook, then graphing to connections from those preexisting networks.
Now, in order to kickstart the requisite network effects that make a social graph valuable, a user needs to establish enough connections of interest (which are in turn producing enough content) that the underlying platform has utility and is engaging to the user themself. This is time sensitive for combatting user churn, and precisely why these apps have such a highly vested interest in connecting you to your friends ASAP.
An iconic example of this from tech bro lore comes from Chamath Palihapitiya. As an early VP of User Growth at Facebook, he recounted that the team zeroed in on a magical time-constrained number of connections (‘7 friends in 10 days’) above which it was exponentially more likely that a user would convert to becoming an active long-term member of the platform. This was the magical number where network effects would begin to hook a user, and drive viral growth for Facebook.
The key here is that the network effects of a social graph are created by YOUR friends producing THEIR content to populate your timeline. This can be a heavy lift as it requires a terminal velocity of friends generally and enough of them producing content to hook you specifically.
Compare this to the power of an interest graph like TikTok, which can bypass that friction point by arranging its network around nodes of interests instead of nodes of individuals. The network effects are driven by ANYONE producing ANY content that aligns with your interest, and the algorithm pushes that content directly to you.
But there are interest graphs like Reddit which are organized by interest-centric subcommunities specifically devoted to various topics (ex: r/memes, r/crypto, etc.) which haven’t created nearly the virality, market share, or addictiveness. Why?
The brilliance of TikTok from a product perspective was lifting the ‘swipe left/right’ functionality of earlier apps like Tinder, and overlaying it onto video content to hone the algorithms dictating its interest graph of user preferences with unparalleled speed and precision. Tiktok pushes the content directly to a user with increasing accuracy, as opposed to legacy social media that often required legwork by the consumer to go out and find the friends/communities/topics of their desire.
For a mathematical understanding, consider the following (emphasis mine):
The first generation AirPods were released three months after TikTok’s launch. The convenience of wireless audio devices has worked hand in hand with the rise of video-first social media. Its success can be partially explained from a data density perspective.
According to Facebook, people spend 1.7 seconds with a piece of content on mobile (2015), and it only took 0.25 seconds of exposure for a person to recall mobile feed content (2016).
At an average reading speed of about 240 words per minute, it is equivalent to reading a short sentence. That assumes the amount of time a person spends judging content has not decreased since Facebook last shared data in 2016.
‘Images are processed between 6 and 600 times faster than language.’ In the same amount of time, a user can scroll or swipe past 3-5 image posts. With video, using the standard 30 frames per second frame rate, that is equivalent to about 50 images in the same amount of time. That the higher data density of video results in paradoxically higher engagement for TikTok may be a testament to the quality of their artificial intelligence recommendation algorithms.
The increased data density of video forces a new paradigm for marketers and is changing the competitive landscape, especially with ecommerce. Instagram photo sharing elevated visual appeal on social media. In order to be successful on TikTok, the polished rules of Instagram don’t apply. TikTok is changing it to authentic sensory appeal. (Milunova, 2022)
This data density allows TikTok to refine its understanding of user preferences and drive content of interest back to them at a pace unparalleled in social media. Whereas text-based apps like X (formerly Twitter, a social graph) or Reddit (an interest graph) both require users to read, TikTok’s feed can capitalize on the eye’s ability to process visual information orders of magnitude more rapidly and adds the dimension of sound as well. This results in users swiping more quickly and the algorithm honing more precisely in an exponential fashion– faster feedback loops leading to more accuracy which leads to more engagement which drives more accuracy…
Furthermore, it also creates an exponentially stronger flywheel as it seamlessly sidesteps the cold start problems of Social Media yore. As soon as a user joins Tiktok, within a few dozen swipes the algorithm is already zeroing in on the individual’s likes/dislikes with a pace that social graphs simply can’t match. The social graph formerly known as Twitter particularly struggles from this problem where it doesn't really hook a user until they’ve proactively found some number of accounts or friends that suit their interests (enough to populate the timeline), which takes time and adds friction. Sure, the platform can ask some demographic or interest data about users and potentially prompt with “suggested” accounts as they join the platform, but this scarcely holds a candle to videos that can be devoured so rapidly. I would also speculate that the biochemical dopamine hits from video and sound probably nudge the brain more potently than textual content as well.
And oh how this combines to set the flywheel ah spinnin’:
Social Media Dominance
Once you’ve created a means of surfacing your users’ every hidden interest with precision accuracy and blazing speed, you can serve up content to scratch every itch, however niche. It’s an unbelievable mousetrap for attention:
But TikTok’s dominance isn’t simply constrained to Zoomers doing Fortnite dances. The platform has started to permeate its reach beyond core Gen Z/Millennial users as well:
So, you’ve built an incredibly addictive app with a demographically broadening user base that knows precisely what they like as well as when and how to serve it to them... Now what?
Always Be Closing
This attention economy has uniquely placed TikTok into pole position for some strategic Jui Jitsu. First, let’s examine its opportunities in traditional social media monetization channels (advertising), then let’s discuss its backdoor access to Amazon’s market share as well as some other potential beachheads.
Advertising, Typical Social Media Monetization:
With all eyes on TikTok, advertisers have taken notice:
The platform’s dopamine superhighway creates a self reinforcing money printer. Tiktok can feed its users more precise ads, given its more intimate understanding of their tastes. This deep understanding is just the kind of data advertisers dream of extracting. All the while, they can also push ads through more authentic feeling creator-audience relationships as opposed to faceless branded commercials (see: generic TV ads vs User Generated Content) to drive conversion as well. This kind of relationship-driven selling at which TikTok’s platform really excels continues to devour marketing spend:
All of which is underpinned by the macro trend of rising mobile commerce and social commerce:
But it’s not enough to clip referral dollars from clickthroughs out to other vendors’ platforms. The next logical step is to consolidate consumer purchasing in-house..
Tunneling beneath Amazon’s Moats:
Enter, TikTok Shop (launched September 13th in the US):
The addition of a devoted TikTok Shop functionality further decreases the friction between a user’s attention, product desire, and purchasing decision by embedding the retail experience directly into the app. The new feature set enables a number of shopping behaviors including live shopping, shoppable videos, and a standalone shopping tab:
Consider that TikTok Shop has introduced a standalone page for users to shop with much the same functionality as a traditional mobile Amazon experience, but the key differentiators for TikTok (in my opinion) stem from the data and ‘push’ side of the equation. Whereas the shopping experience on Amazon, akin to the social graphs above, is self-directed, TikTok’s structure empowers it to surface products of interest within the seamlessly blended entertainment experience of the app itself. Users rarely window shop on the Amazon app and consumer purchases are directed by the user hopping on the platform to search specific items (although, Amazon has made attempts to add more ‘casual shopping’ and social features with varying degrees of success). Juxtapose this to TikTok’s flywheel where users are always window-shopping, intentionally or otherwise, which is all reinforced by its creator generated content:
Tiktok has created a brilliant strategic position for penetrating Amazon’s impregnable stranglehold on eCommerce. Now, there are still very open questions as to whether they’ll be able to challenge Amazon on its world-class logistical front (which is, after all, the true triumph of Amazon’s business), but TikTok’s entrance into eCommerce leverages its core competencies and distinct advantages (user attention and higher fidelity understanding of preferences) in a way that may just be able to tunnel beneath the Amazon’s walls rather than suffer a bloody, capital-intensive frontal assault that competitors like Walmart have been forced to undergo.
And Much, Much More:
But the design space for TikTok’s assault doesn’t just stop at bodying Social Media competitors and circumnavigating Amazon’s defenses, the app’s video-based data extraction machine is uniquely positioned to extend beyond mere socializing…
It’s can be more than a simple social media network, it can become a motherf***ing search engine:
“In our studies, something like almost 40% of young people, when they’re looking for a place for lunch, they don’t go to Google Maps or Search,” he continued. “They go to TikTok or Instagram.” - Prabhakar Raghavan, SVP Google’s Knowledge & Information Org. (TechCrunch)
With its interest-based nodes, TikTok knows precisely what interests are trending (whether they’re directly searched for or not) and has an infinitely deep repository of user-based content to answer users’ most pressing questions. Video search plays on the same category of strengths that have helped TikTok compete in social (data density, etc.), but it also opens up a unique design space for other possibilities like attacking Google Maps. a16z’s Connie Chan wrote a really insightful analysis about what Chinese app use-cases can teach us about the future of video search. A particularly interesting example of how this can overlay Maps:
Discovering city guides
As Douyin [TikTok’s sister app beneath ParentCo Bytedance] increasingly becomes a discovery platform for local activities, users have begun leaning on Douyin’s city guides to plan—or frankly, just dream about—travel. For example, if you go into the Shanghai City Guide, it’s easy to put together a list of must-visit restaurants or family-friendly activities. Plus, not only is it easy to create bookmarks of places you want to save, but you can also browse other public bookmarks curated by creators and influencers, and then sort the bookmarks by location or distance. This type of bookmark discovery is a completely different use case than how we use Google Maps or Yelp today. Our Western location-based platforms use a manual, search-based process that primarily works for high-intent discovery. In contrast, thanks to the algorithms and user behavior on Douyin, the app can push new places to a user that he or she would never have thought to search for. Short video effectively enables the continuous discovery of the best places around you, and it gets better with every swipe as the platform better understands you and your interests.
Tiktok’s magical mousetrap provides a brilliant case study of disruption as well as a playbook for invading adjacencies beyond one’s primary markets.
Conclusion
Although Tiktok’s war with everyone is ruthlessly capitalistic in its competition to own our attention and pocketbooks, I think it’s worth considering the consumer surplus that the platform provides creators and users. TikTok has created a superhighway for connecting creators with audiences at scale in a way that few other apps have approached.
Pre-Internet, if you were into crocheting in Fort Worth, Texas, you might be able to go down to the single yarn store in town and find a local interest group of 10 people in your city that shared your hobby. Social media supercharged this. With the invention of platforms like Reddit, you could suddenly seek out communities that shared your interests at scale. TikTok has reduced the friction further, empowering virtually any creator (simply by virtue of their content creation) to be discovered and build an audience in a uniquely efficient way. The platform inherently pushes the creator’s content directly to its most receptive viewer. With the overlay of shop and superior monetization features, a creator is empowered to monetize their art, crafts, or inventions in a way they couldn’t previously. I think that it’s often understated how positive these kinds of social networks have been for the long tail of content creators and passionate individuals to connect with and live off of their various interests.
Of course, this kind of connectivity isn’t free. These efficiencies have very real (and often insidious) costs: slavery to the algorithm, shackles to a relentless publishing cycle, collapsing attention spans, mental health repercussions, etc. TikTok certainly exhibits many of the same evils of other social media giants as well as introducing many of its own (to say nothing of its Chinese ownership). Regardless, in the game for attention Bytedance has emerged dominant and for the observants of corporate strategy it presents a fascinating case study of orthogonal disruption.
Cheers,
- 🍋