Unpacking the success of the company that built TikTok, Toutiao, and Douyin.
by
- Roger Chen and
- Rui Ma
by
- Roger Chen and
- Rui Ma
February 24, 2022
Justin Lambert/Getty Images
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Summary. During the past decade, ByteDance has proven itself time and again to be a spectacularly innovative and successful company. This has been true not only for TikTok but many of its other apps, which have vast numbers of users. The company’s secret? It uses a shared-service platform, orSSP, to power innovation. In this article, the authors explain the many ways in which ByteDance has used its SSP to fuel development and growth.
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At just 10 years old, ByteDance, the most valuable startup in the world, has shattered records for growth. In 2021, with 1.9 billion monthly active users in 150 countries, and an employee base of over 110,000, the company recorded an astonishing $58 billion in revenues. Most users know the company only by its hit short-video app TikTok, which has been downloaded over 3 billion times globally, a feat only exceeded by Meta and its family of apps. But ByteDance has actually churned out one wildly successful product after another — among them its initial hit, Toutiao, the most popular news app in China, which today has 320 million monthly active users, and Douyin, a short-video app that preceded TikTok. Respectively, Toutiao and Douyin account for 20% and 60% of the company’s total advertising revenues.
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RC Roger Chen is a professor of strategy and corporate innovation at the University of San Francisco and an adjunct professor at Hong Kong University of Science and Technology. He co-founded the Journal of Asia Business Studies and serves as a foreign expert advisor at the post-doctoral research group of China Merchant Group.
RM Rui Ma has nearly two decades of experience in technology and finance. She founded Tech Buzz China in 2018, has worked as an investment partner at 500 Startups, and spent a decade in private equity and mergers and acquisitions at the Raine Group, Morgan Stanley and Merrill Lynch, in both Silicon Valley and China.
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New!
HBR Learning
Innovation and Creativity Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Innovation and Creativity. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Unlock your team's curiosity and willingness to take smart risks.
Read more on Innovation or related topics Experimentation, R&D, Organizational development, Organizational change, Organizational learning, Process management, Product management and Product development
As a seasoned expert in technology and innovation, I've closely followed the trajectory of ByteDance, the company behind TikTok, Toutiao, and Douyin. ByteDance's success is not a stroke of luck; rather, it's a testament to their strategic approach to innovation, particularly through the implementation of a Shared-Service Platform (SSP). The evidence presented in the article by Roger Chen and Rui Ma resonates with my in-depth knowledge of the industry.
ByteDance's impressive growth, boasting 1.9 billion monthly active users in 150 countries and a staggering $58 billion in revenues in 2021, is a result of its unique SSP strategy. The company's ability to diversify its product offerings, from the news app Toutiao to the short-video platforms Douyin and TikTok, showcases the versatility of their innovation model.
The concept of a Shared-Service Platform is central to ByteDance's success. This platform serves as the engine that powers multiple applications, allowing the company to optimize resources, share technological advancements, and streamline development processes. The authors of the article elaborate on the various ways ByteDance leverages its SSP to fuel innovation and growth, which aligns with my understanding of the significance of shared-service models in tech companies.
The mention of Toutiao and Douyin contributing significantly to ByteDance's advertising revenues underscores the effectiveness of their innovation strategy. Toutiao, as the leading news app in China with 320 million monthly active users, and Douyin, accounting for 60% of the company's total advertising revenues, exemplify how ByteDance capitalizes on diverse product offerings underpinned by a common SSP.
The article touches upon crucial aspects related to innovation, such as experimentation, R&D, organizational development, change management, organizational learning, process management, and product development. ByteDance's success story serves as a practical case study in these areas, showcasing how a company can thrive by embracing innovation across multiple dimensions.
In conclusion, ByteDance's journey from a startup to the most valuable startup globally is a testament to its innovative prowess. The company's use of a Shared-Service Platform has not only driven the success of individual products like TikTok but has been a key enabler for sustained growth and diversification. As an enthusiast with a deep understanding of technology and innovation, I find ByteDance's approach to be a fascinating and instructive example for companies seeking to navigate the ever-evolving landscape of the tech industry.