TikTok Promotion: TikTok’s Growth Troubles!

Short videos were already in their infancy in 2011, but TikTok was not launched until the second half of 2016. As a latecomer, how did Douyin develop into a leading short video platform in just two or three years?

Today, I will analyze TikTok’s rapidly rising growth strategy from the perspective of platform strategy , as well as the current growth difficulties it is facing and the solutions it has taken, hoping to give you a new dimension of thinking.

What is a platform? Why are we talking about platforms today?

Simply put, companies that provide trading venues and value-added services for producers and consumers are platform companies (note: transactions do not necessarily include payments). For example, Douyin is a platform that provides a "trading venue" and value-added services for short video creators and consumers.

The following are the Chinese stocks with the highest market capitalization in the TMT field. You will find that except for China Mobile, the others are basically platforms. In a sense, platform-based companies have become the mainstream development trend of today's giant companies.

Therefore, it is very important to understand some platform strategic thinking.

The network effect of the platform - two important growth strategies

It was only launched in September 2016, but from January 2018 to January 2019, in just one year, its daily active users increased from 30 million to 250 million. What is Douyin's growth strategy?

First of all, let’s clarify a basic concept - network effect. How do we understand it?

For example, at the beginning of this year, three companies simultaneously launched three communication apps: MT Toilet, Duoshan, and Chatbao, but is anyone still using them now? No more, why?

Because the value of a platform depends on the efficiency of solving problems and network effects, not just the value of your product.

Another question is, why are network effects important?

Generally speaking, the purpose of traditional enterprises increasing the number of users is to reduce average costs and achieve economies of scale, which starts from the supply side. But for platform-based companies, the focus is more on the demand side, and network effects bring more value.

For example, why are almost all online games free for most users? Because it is the accumulation of these free users that enables these platforms to obtain revenue from paying users, such as purchasing weapons or additional products.

Based on this, how can platform-based companies achieve rapid growth?

1. From single-side drive to double-side drive

Generally speaking, every Internet platform, since it provides a trading venue, has at least two types of users. Which type of users should be driven to grow first is a question of which came first, the chicken or the egg.

For example, Didi. What will happen to consumers if there are no drivers on this platform at all? There's no car to call, right? It must have a certain number of drivers to attract passengers, and from the drivers' perspective, if there are no passengers at all, the platform is useless.

But what if the platform is just starting to develop and there are neither drivers nor passengers, neither chickens nor eggs?

• One-sided drive : only focus on the growth of users on one side, and achieve the growth of users on the other side through the growth of users on one side;
• Bilateral drive : hoping to increase users on both sides relatively at the same time.

Is it a single-sided drive or a double-sided drive? If it is a single-sided drive, which side should be driven first?

This is the strategy of Tik Tok. When it was first established, it actually adopted a one-sided drive - focusing more on the growth of short video creators.

Why do you say that?

Looking at the Baidu search index, before April 2017, the search volume for Douyin did not increase significantly. The reason is that in its early stages, Douyin focused more on attracting creators and did not conduct extensive ground promotion on the consumer side.

What was the slogan at that time? ——Let worship begin here . Douyin hopes to attract more consumers to the platform through top creators.

However, as the platform develops, it cannot always be driven unilaterally. Once it reaches a certain scale, it will have to shift from unilateral to bilateral.

Therefore, starting from April 2017, Douyin has slowly shifted from unilateral drive to bilateral development, and a series of operational activities have begun to unfold, transforming from subsidizing creators to attracting mass consumers. And the slogan was also changed to——

Record a beautiful life.

Through such a strategy, Douyin finally achieved a curve-like growth.

Further thoughts:

Is this strategic approach applicable to all platform-based companies? No.

Generally speaking, in the initial stage of a platform-based enterprise, who should be driven first or given priority in subsidies? (Supply side and consumption side), depends on which side the two parties are more dependent on and which side the users are more dependent on.

How to judge? Taking TikTok as an example, in the initial stage, who is more dependent on whom, the creators or the consumers?

You can assume two extreme situations, for example, this platform has no consumers, and I want to attract creators, what should I do? We can subsidize them. For example, if you post a video, I will give you 1,000 yuan. That is to say, if I attract 10,000 top creators, this platform may become very rich.

On the contrary, if there are no creators at all, and we want to subsidize consumers, for example, we give you 1 dollar and ask you to browse the platform for an hour, would consumers be willing to do that? Most wouldn't, right?

Therefore, you can determine which side is driven first by asking extreme questions.

2. Focus on local network effects

Choosing unilateral or bilateral drive is only the first step in formulating a growth strategy. Network effect is a complex effect.

The value of a platform increases as the number of users grows. Is this true for every user? Obviously not.

To be more precise, the value of the platform will increase as the number of users around us or that we like increases .

For example, although most people are using WeChat, what would happen to me if all my friends used Chatbot? I definitely won’t use WeChat anymore, since I can’t find them, and I will also use Chatbao.

In other words, platform-based companies must pay attention to focusing on local network effects, vertical segmentation, and conquering each one separately .

For example, as a latecomer, Douyin, in order to compete with Kuaishou, initially focused on young people, trends, and coolness. As of September 2017, 85% of Douyin users were under 24 years old, most of whom were born after 1995 or even 2000.

With the same idea, in order to prevent being surpassed by latecomers, in addition to Douyin, Toutiao has also launched a number of short video apps. Huoshan is comparable to Kuaishou, and Xigua satisfies viewers who want to watch relatively longer videos, such as 2-minute news short videos.

When leading companies deal with later competitors, they do not need to include all of their functions in their own products. Instead, they need to establish some new products separately to compete with others.

After the platform has grown to a certain size, it can also release local network effects. Douyin’s approach is to hold the Douyin Challenge, allowing top creators to drive more public participation.

However, young people will gradually grow up and their needs will change. As an enterprise, it is necessary to choose how to focus and release local network effects based on the development stage and capabilities of its own enterprise.

Negative Network Effects — Three Difficulties of Growth

The more platform users, the better? Not really.

As the number of users grows, negative network effects (the value of a product decreases as the number of users grows) will gradually become apparent. For example, Douyin is facing three growth difficulties, as follows:

In fact, these are not new problems for Internet platforms. Let’s take a look at e-commerce platforms. The problems are similar:

The competition between video creators is actually the competition between sellers, which is competition on the same side; the huge number of products makes it difficult for consumers to choose, which is essentially a problem of "information overload"; the quality of products is difficult to guarantee, which is essentially a problem of information asymmetry, that is, there is a piece of information that is known to users on one side, but not known to the platform and users on the other side.

Therefore, the problems faced by Douyin are not new. If you want to find a solution, you can actually learn from e-commerce platforms , as follows:

In fact, when running a business, it is often not necessary to invent a completely new strategy or tactics. What we need to do is first think about the existing strategies and tactics, and which ones we can use for our own benefit and are more suitable for the development of our own platform.

Based on this, let’s take a look at how Douyin solves the three major difficulties.

• Optimize content distribution mechanisms to make information more orderly - avoid contention among creators and reduce consumer choice costs

Give full play to the advantages of the matching model and match videos and consumers through big data analysis.

This is similar to the product recommendation model of e-commerce, but the foundation of Douyin is matching, and recommendation matching in e-commerce is only a part of it. In many cases, it still depends on user search.

However, every video creator wants traffic, and the traffic contributed by the total number of consumers on the platform is relatively certain. Isn’t this a zero-sum game? Whether it is matching or searching, creators are still competing for traffic, and it will still be fierce.

In other words, the essence of solving this problem is not matching recommendations, but making information more orderly through a matching recommendation system and creating an ideal scenario for a matching system, thereby achieving a win-win situation for creators and consumers .

For example, on Tik Tok, as long as you can provide videos that satisfy consumers, you can quickly become an Internet celebrity. The first user gained 800,000 followers within a month; the second user gained 400,000 followers within 7 days.

• Automatic and efficient quality monitoring - ensuring the quality of platform content

There are so many videos that it is difficult for consumers to choose. Can't this problem be solved by using a matching recommendation system?

But the problem is, if you can’t solve the quality of the video, even if you match it to the user, the user will not be satisfied. Therefore, we must focus on solving product quality issues.

If you are a heavy user of Tik Tok, you will probably find that many of the memes are similar. Gradually, if you watch 10 such videos a day, you will feel that the quality of this product is not very good.

How to solve it? Tik Tok’s approach is to make recommendations based on real-time feedback data . For example, what kind of videos can be promoted on a large scale? In addition to the like rate, there is a more interesting indicator - the completion rate. When you watch a video, have you finished watching it? In fact, this indicator can more clearly identify high-quality videos.

summary

If you happen to be in a platform-based enterprise today, it is recommended that you try to think carefully about some key issues:

First , can we use Douyin’s ideas to solve the growth difficulties faced by companies? You need to analyze the essence of the problem and find the right solution.

Second , how to unleash network effects and achieve rapid growth for the enterprise? What you need is to consider the overall situation, use a strategic vision, and plan the growth path from a larger perspective.

In short, good learning is not simply following a map, and directly applying existing solutions may not be effective. The key is to be able to see the essence through the phenomenon, learn from what is already available, and find the one that suits you best.

Related reading:

1. Tik Tok promotion: 40 popular Tik Tok title templates, it’s hard not to be popular!

2.2019 Tik Tok promotion and operation strategy!

3. Douyin promotion method: 6 types of content that Douyin limits traffic!

4. Tik Tok promotion skills: 3 steps and 7 key points!

5.What are the essential factors for Douyin promotion?

6. Sharing of practical tips on Douyin promotion and operation!

Author: Wu Yue

Source: Hundun University (ID: hundun-university)