Having worked in the overseas short video departments of Tencent, Alibaba, and YY, directly competing with ByteDance, I was truly frustrated and left the industry with tears in my eyes.
I entered the overseas short video market at the end of 2016, belonging to the first wave of short video companies going global. Later, I worked in this field, from India to the US, Brazil, Mexico, Southeast Asia, and back to China, constantly working for different companies, always among the earliest to establish a presence in their respective markets. Then I watched ByteDance gradually erode our market share. Why was ByteDance able to achieve a late-mover advantage?
The reasons are as follows
: One: High salaries + high growth opportunities, quickly building a highly effective team.
Don't be fooled by my different markets and companies; the various business leaders at ByteDance I worked with were all former colleagues, either from Alibaba's UC or YY. Why were they willing to leave Alibaba and YY to join ByteDance? It's simple: the pay is good, and the opportunities are plentiful. Take Alibaba, for example; every step from P5 to P6 to P7 to P8 is fraught with hardship and obstacles. ByteDance, on the other hand, directly heads business roles. There's no one else in that market, so they don't care about rank; you just get the job done, and they offer money and stock options. These elites poached by Alibaba with huge sums of money are well aware that it's about getting a prestigious resume, building an international profile, and then finding a high-ROI job. Generally speaking, Alibaba is generous to its talent, but perhaps because it's a listed company, it can't be as decisive in spending money to expand the market, missing many opportunities. YY, well, let's not talk about it. It's a wealthy listed company that isn't favored by investors, but it's very determined to expand overseas. The pay and titles are good, but the length of stay is a mystery. They're mass-producing million-dollar-salary directors. Tencent? The domestic short video market isn't even settled yet, and they're already going global…
II: ByteDance's Always Day 1: Entrepreneurial Spirit
I asked classmates who switched to ByteDance what the differences were compared to Alibaba and YY. There are four details.
1. OKRs are written by myself.
2. No need for PowerPoint presentations; just write down the details clearly to apply for budgets, advance projects, and secure resources.
3. Even directors don't show up on Lark. Often, directors don't have subordinates; they handle collaborative documents, discuss requirements, and directly drive details forward. Everyone is focused on progress.
In contrast, at some large companies, even ordinary employees, let alone directors, have their PowerPoint presentations done by interns. Over time, the difference in efficiency and market sensitivity becomes apparent. I remember watching interns work until midnight every day, wondering if they would pass on these unspoken rules to the next batch of interns after they became full-time employees—it's like a food chain. 4.
Business trips are generally not restricted. At one large company, applying for business trips was so difficult I questioned my existence, internally grappling with various thoughts. There was no travel allowance; if I didn't genuinely want to advance the business… they were even afraid I'd go on business trips—I'm afraid of getting malaria too!
Thirdly: The middle platform is truly impressive.
Having worked at several major companies, I admire YY's technology the most. They were incredibly dedicated, but it felt like they were trading their lives for speed.
I was always the last to leave work. YY had several top-notch tech guys who led by example, working tirelessly to meet any demand – truly impressive, and always before deadlines.
However, in terms of data and algorithms, the gap between these companies and ByteDance is enormous. Basic data is fragmented; getting even a single piece of data requires begging and various permissions. Furthermore, data dimensions are inconsistent across departments, resulting in a lack of unified user profiles. How can recommendations be implemented under these circumstances? As for the most crucial aspect of short video recommendations, besides algorithms, it's traffic allocation. At one major company, traffic was essentially controlled by operations, with different account whitelists (unspeakable) and recommendation pools. The algorithm lacked a learning and training phase, leading to a vicious cycle where operations blamed technology, and technology blamed operations…
Ultimately, the valuable headcount of these major companies was used to acquire a bunch of category operations staff, working overtime until the early hours to catch up on trends, with the boss criticizing operations for not being fast enough, and operations criticizing suppliers.
In the early stages, manpower was sufficient, but what happened later? Everyone was on the verge of collapse. No problem, cash bonuses as incentives + paid traffic/traffic exchange + traffic redirection through various channels. Externally, they didn't report VV or dwell time, only MAU.
Fourth: They didn't hesitate to invest resources
in YY and Alibaba. They spent a lot of effort hiring the best people, but didn't provide enough resources. Actually, that wasn't wrong. Now that they've started their own businesses, they think, "I'll give you a monthly salary of over 10,000, so you should at least give me one article with over 100,000 views a month." If they want me to spend money on promotion, why hire them? They'd just find an intern.
ByteDance is different. You think celebrities are useful for brand and content launch? They give you tens of millions to invest and see the effect. But once the traffic picks up, they start calculating ROI. They let the market test the waters first.
Back then, to find the first batch of influencers in India at the lowest market price, they went to various cities to personally entertain and persuade them. The same thing happened in North America; with a budget of less than $100,000, they signed hundreds of influencers. They were too embarrassed to admit they were a publicly listed company; they pretended to be a startup. In the end, the influencers they painstakingly cultivated were snatched away by others for three times the price. What can you say?
Talent alone isn't enough; you also need to provide the tools.
Five. Strong Commercialization and Monetization Capabilities
ByteDance has grown from 15 billion RMB in 2017 to 50 billion RMB in 2018, and now to 140 billion RMB (reportedly) this year, maintaining a geometric growth rate every year. Why is commercialization and monetization capability ByteDance's breakthrough to surpass BAT (Baidu, Alibaba, Tencent) or maintain its monopoly in the short video industry?
The short video industry is essentially a content-intensive, two-sided market with synergistic effects.
Therefore, while the initial barriers to entry for short video platforms are low, they become extremely high later on. This requires:
1. Ensuring a sufficient amount of content
; 2. Ensuring efficient distribution
; and 3. Maintaining user consumption habits
. All of this is achieved through massive financial investment. This is why ByteDance, in any market, initially invests heavily in content creators. With a large volume of content and massive amounts of consumer data, continuous tagging, tag cleansing, structuring, and algorithm training are conducted to optimize the algorithm. Once user consumption habits are established, dwell time increases, leading to greater two-sided and synergistic effects. Furthermore, more content consumption generates more traffic, which in turn stimulates the emergence of more UGC and PGC creators.
Since short videos are a money-burning business model, the key is to calculate the ROI of the content model better. What are the monetization methods for short videos? Currently, it seems that news feed ads, similar to Facebook's main monetization model, are suitable for ByteDance. So, what is the monetization formula for news feeds?
Advertising revenue = DAU × VV × Average user time spent × ECPM × Adload.
VV and average user time spent are clearly correlated with the algorithm and content inventory, which is ByteDance's strongest capability.
What are ECPM and Adload related to?
This depends on how many advertisers ByteDance has.
ByteDance actually has a large and powerful sales team, and the construction of this team is inseparable from one person: Zhang Lidong, who was recently promoted to Chairman of ByteDance China. Who is this person? He
is the former Deputy General Manager and Director of the Advertising Center of the Beijing Times. He essentially controlled the advertisers of the print media era. It is said that when building the sales team, he poached the entire advertising sales team from Baidu's information flow platform.
Therefore, in my humble opinion, ByteDance has a high probability of success in the information flow field. ByteDance has formed a strong competitive advantage in the three core areas of information flow: algorithm, monetization, and content inventory.
Despite the criticisms, YY's Likee, Tencent's Weishi, and Alibaba's Vmate still hold a certain market position in the global short video arena. The outcome is still uncertain, but seriously, these achievements are the result of hard work and sacrifice. Moreover, they are basically looked down upon within their companies, with only superficial respect. It's not easy.
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