Latest / The Bob Lefsetz Podcast / Shelly Banjo

Transcript

Shelly Banjo · The Bob Lefsetz Podcast

• 0:08
  Speaker 1: Welcome, Welcome, Welcome back to the Bob Left Sets podcast.
• 0:12
  Speaker 1: My guest today is Shelley Banville, the TikTok expert. She
• 0:17
  Speaker 1: is the New York World chief at Bloomberg and also
• 0:20
  Speaker 1: host of the Foundering podcast Shelly. Good to have you here.
• 0:24
  Speaker 1: Thanks so much for having me. Okay, how long you've
• 0:26
  Speaker 1: been following TikTok? So, I've been following TikTok about three
• 0:29
  Speaker 1: or four years now. Then what inspired you to start? So?
• 0:33
  Speaker 1: I was living in Hong Kong at the time and
• 0:35
  Speaker 1: covering tech, and I had flown back over to the
• 0:39
  Speaker 1: US and my US tech editor said to me, what's
• 0:41
  Speaker 1: the biggest story that everybody is missing in Asia? And
• 0:45
  Speaker 1: I said, the rise of TikTok, hands down. We need
• 0:48
  Speaker 1: to be writing more about TikTok and its parent company
• 0:51
  Speaker 1: by Dance. Okay, So, at the time, it was still
• 0:55
  Speaker 1: musically in America. It hadn't been purchased yet. It had
• 0:59
  Speaker 1: been it had already been purchased yet Let's just assume,
• 1:02
  Speaker 1: you know, a lot of people need to be brought
• 1:03
  Speaker 1: up to speed here. So when was musically purchased by TikTok?
• 1:08
  Speaker 1: So it was purchased in the end of seen, but
• 1:12
  Speaker 1: it didn't actually switch over to TikTok in the US
• 1:16
  Speaker 1: until Um, okay, so you say this to your editor
• 1:21
  Speaker 1: in New York, what's the next step. So the next
• 1:24
  Speaker 1: step is, you know, we start digging into this company.
• 1:27
  Speaker 1: Byte Dance, I mean musically had been a big hit.
• 1:30
  Speaker 1: This was right after bite Dance had acquired Musically. They
• 1:34
  Speaker 1: had spent a billion dollars basically trying to buy this app.
• 1:38
  Speaker 1: Uh that most people thought of was just this like
• 1:40
  Speaker 1: nothing karaoke kids app. And when suddenly they spent a
• 1:44
  Speaker 1: billion dollars on it, people started saying, Okay, maybe there's
• 1:48
  Speaker 1: something to this that we should be paying attention to. Okay,
• 1:51
  Speaker 1: so you start digging into bitte dance, what do you find? Um?
• 1:55
  Speaker 1: So we I this. I started working on this business week,
• 1:58
  Speaker 1: um newspaper, new news magazine story to kind of tell
• 2:02
  Speaker 1: the story of this company, like who are they? And
• 2:05
  Speaker 1: so what I started realizing was that even though a
• 2:10
  Speaker 1: lot of people in China knew what Bye Dance was,
• 2:13
  Speaker 1: people in the US didn't really realize it was this
• 2:15
  Speaker 1: kind of sleeping giant that was starting to buy up
• 2:18
  Speaker 1: a whole bunch of US tech startups. Um, they didn't
• 2:22
  Speaker 1: quite understand what they were doing. And meanwhile, this company
• 2:26
  Speaker 1: was getting just bigger and bigger and bigger in China,
• 2:28
  Speaker 1: getting amassing more money and then using it to buy
• 2:31
  Speaker 1: up companies UM in in the US. Okay, uh, we're
• 2:36
  Speaker 1: pretty ethnocentric in the US. What is the landscape of
• 2:40
  Speaker 1: these internet companies in China? You know, we hear about
• 2:44
  Speaker 1: we Chat, we hear about byte Dance. You know how
• 2:48
  Speaker 1: many of these companies are there, and what's the barrier
• 2:51
  Speaker 1: to entry? It is ruthless. I mean you think about
• 2:55
  Speaker 1: business being tough here in the U S and China,
• 2:57
  Speaker 1: it is just like people are going at each other
• 3:01
  Speaker 1: left and right. There is no kind of decorum. They're like, oh,
• 3:05
  Speaker 1: I'll I'll be in this, you know, area of the internet,
• 3:08
  Speaker 1: and you be in that area of the internet. You know,
• 3:09
  Speaker 1: like we kind of had we used to have UM
• 3:12
  Speaker 1: in the US with like Google and Amazon and Apple
• 3:14
  Speaker 1: kind of staking their their their ways. And in China
• 3:17
  Speaker 1: it's all like super apps, right, So like all these
• 3:20
  Speaker 1: companies like UM, the biggest ones like ten Cent, Byte Dance,
• 3:24
  Speaker 1: Ali Baba, they're into everything UM. They're into literally you
• 3:29
  Speaker 1: wake up in the morning, you can buy your breakfast
• 3:31
  Speaker 1: on it. You buy your Starbucks on it, you chat
• 3:34
  Speaker 1: with your friends, you buy airplane tickets, it's it's it's
• 3:38
  Speaker 1: you know, everything on these kind of super apps. So
• 3:41
  Speaker 1: at the time, it was really these two big companies
• 3:43
  Speaker 1: Ali Baba in ten Cent, and all of a sudden
• 3:46
  Speaker 1: came along this third company, Byte Dance UM, which is
• 3:49
  Speaker 1: the owner of TikTok Uh. First starting with um Jokes,
• 3:54
  Speaker 1: an app about jokes, then getting into news. Suddenly they
• 3:57
  Speaker 1: were the biggest newsreader in the entire world, meaning like
• 4:00
  Speaker 1: nobody got their news any place else except for this
• 4:03
  Speaker 1: one app UM. Then they went into short video. Now
• 4:07
  Speaker 1: they're in e commerce and payments, you name it, education, um,
• 4:12
  Speaker 1: you name it, They're they're in it now. Okay. You
• 4:15
  Speaker 1: know Nixon opened up China back in the seventies, and
• 4:19
  Speaker 1: then we had the former guy, as they say, who
• 4:22
  Speaker 1: has had a trade war with China. And it's like
• 4:25
  Speaker 1: a lot of citizens have not traveled at all, you know,
• 4:29
  Speaker 1: us citizens, never mind going to China. So my question is,
• 4:32
  Speaker 1: since you were there, and I assume you also went
• 4:34
  Speaker 1: to mainland China, correct, Yeah, for the average person, what
• 4:39
  Speaker 1: is life like? On one hand, we hear about these
• 4:41
  Speaker 1: people working you know, six days a week, all day
• 4:44
  Speaker 1: and factories that we think are sweatshops. On another level,
• 4:48
  Speaker 1: we see people buying tesla's. I mean, what is the
• 4:51
  Speaker 1: socioeconomic status there? It is so big that it is
• 4:56
  Speaker 1: really hard to make one monolithic case. Or you know,
• 5:00
  Speaker 1: if you're in um, if you're in Shanghai or Beijing,
• 5:04
  Speaker 1: you know, working in an office tower, you kind of
• 5:07
  Speaker 1: feel like anywhere else New York or London or something
• 5:10
  Speaker 1: like that. If you're in the countryside, it feels very different.
• 5:13
  Speaker 1: But one very big unifying factor is an app like
• 5:17
  Speaker 1: TikTok which um in China is called doying and um.
• 5:21
  Speaker 1: Whether you're rich, you're poor, you're young, you're old, you're
• 5:24
  Speaker 1: using using the Chinese version of TikTok to um to
• 5:29
  Speaker 1: make videos, to pass the time to you know, have
• 5:32
  Speaker 1: a laugh with your friends. UM. It certainly is something
• 5:35
  Speaker 1: that like cut across all different um you know sphere,
• 5:39
  Speaker 1: socioeconomic um you know, you name it. Okay, So if
• 5:44
  Speaker 1: you're one of those people living in the city, we
• 5:47
  Speaker 1: you know, these apps are multifarious, much more than in
• 5:49
  Speaker 1: the United States, would you say that they are actually
• 5:54
  Speaker 1: technically more advanced than we are. Dependent on the Internet
• 5:58
  Speaker 1: more less the same. So I think that people in
• 6:04
  Speaker 1: China are just more on the Internet. I mean, we
• 6:07
  Speaker 1: think about how the phone with the phone is kind
• 6:10
  Speaker 1: of an extension of our arms. You know, we kind
• 6:12
  Speaker 1: of joke about that. But you know a lot of
• 6:14
  Speaker 1: people still buy things on buy things in stores, go
• 6:17
  Speaker 1: grocery shopping in stores. In the big cities and China,
• 6:21
  Speaker 1: it's like unheard of to go into a store to
• 6:23
  Speaker 1: buy your groceries or to buy clothes, or to buy anything.
• 6:26
  Speaker 1: Really everything is e commerce, and um, so much more
• 6:30
  Speaker 1: of your life is on the is on the internet. Um.
• 6:33
  Speaker 1: In terms of the advancement, I think at the time
• 6:37
  Speaker 1: that Bye Dance and TikTok we're starting out, the artificial
• 6:41
  Speaker 1: intelligence for those particular apps were probably more advanced than
• 6:46
  Speaker 1: what we're seeing now. But they also took a different
• 6:49
  Speaker 1: tax to social media. So like the facebooks and twitters
• 6:53
  Speaker 1: and youtubes of the world, where you know, the facebooks
• 6:56
  Speaker 1: and twitters and snapchats of the world, we're basically created
• 6:59
  Speaker 1: around of friends. Like this idea of Okay, I care
• 7:02
  Speaker 1: about this thing because my friend cares about this thing,
• 7:05
  Speaker 1: so I'm going to show you that thing. But Bye Dance, Um,
• 7:08
  Speaker 1: because of the influence of UM of the Chinese government
• 7:13
  Speaker 1: really like they don't want you to have those kinds
• 7:14
  Speaker 1: of social media networks. They don't want you to build
• 7:17
  Speaker 1: these networks of communities and things like that because they
• 7:20
  Speaker 1: don't want you to, you know, gabelle against the government
• 7:23
  Speaker 1: or have a place to talk about it. So it
• 7:25
  Speaker 1: was mostly built around yourself, the individual. What can I
• 7:29
  Speaker 1: show to you that will keep you addicted on this
• 7:32
  Speaker 1: app based on what you like, and then that change
• 7:35
  Speaker 1: as you change, it changes UM. So you're seeing something
• 7:38
  Speaker 1: different than your friend is saying, than your mom is saying,
• 7:41
  Speaker 1: than your dad is saying, UM, because that appisode personalized
• 7:46
  Speaker 1: to you. So we've seen a lot of that with YouTube,
• 7:49
  Speaker 1: but this almost takes it to like a complete, you know,
• 7:52
  Speaker 1: other level. They're just a couple of back China questions
• 7:56
  Speaker 1: before we go. Now we read about being able to
• 7:59
  Speaker 1: pay things, pay for things with your phone. Is it
• 8:02
  Speaker 1: very technically advanced like that in the cities? Yeah, everything
• 8:07
  Speaker 1: you can't UM. I remember one of the first takeaways
• 8:11
  Speaker 1: when I UM traveled. I would spend about a week
• 8:14
  Speaker 1: of every month in Shanghai or Beijing or shen Jen,
• 8:17
  Speaker 1: and you can't UM can't use cash anywhere. Nobody takes cash.
• 8:21
  Speaker 1: You try to give a taxi driver a bill and
• 8:24
  Speaker 1: they look at you like you have two heads, like
• 8:26
  Speaker 1: why are you handing me the sturty piece of cash?
• 8:28
  Speaker 1: Like pay with your phone. That's how I'm going to
• 8:30
  Speaker 1: take payment. That begs the question, what is the crime
• 8:34
  Speaker 1: like in the big cities? Um, Penny crime is fairly low.
• 8:39
  Speaker 1: I mean they are very Um, it kind of depends
• 8:42
  Speaker 1: where where you are. Um. The real big crime is
• 8:46
  Speaker 1: like you know, white collar crime and things like that
• 8:49
  Speaker 1: that can definitely still happen, corruption and things like that. Okay,
• 8:53
  Speaker 1: So it's a vast country territorially and as you said, economically,
• 8:57
  Speaker 1: to what degree to people lie on wireless? Is their
• 9:02
  Speaker 1: primary interconnect net connection? What I mean by that is
• 9:05
  Speaker 1: that is their only Internet connection? Or is the country
• 9:09
  Speaker 1: pretty wired out hard wire? So in the big cities, um,
• 9:13
  Speaker 1: it's all wireless. Like there are lots of people kids
• 9:16
  Speaker 1: that you talked to, who have never had a desktop computer.
• 9:20
  Speaker 1: They don't really understand what that is. You know, it's
• 9:22
  Speaker 1: all about this mobile phone in your hand and in
• 9:25
  Speaker 1: your pocket because it became so cheap, um that everybody
• 9:30
  Speaker 1: basically has a mobile phone and then even in the
• 9:33
  Speaker 1: even in the countryside and things like that, like everybody
• 9:35
  Speaker 1: has a phone and is coverage pretty much universal? Or
• 9:39
  Speaker 1: can you go somewhere we have a dead spot? Definitely,
• 9:42
  Speaker 1: can go somewhere where you have a dead spot. But
• 9:44
  Speaker 1: you know, I remember hiking in the mountains, um outside
• 9:49
  Speaker 1: this town outside the city called guillen Um and these
• 9:53
  Speaker 1: you know, you're in these rice patties and you see
• 9:55
  Speaker 1: these farmers literally getting rice. But you have this perfect
• 9:59
  Speaker 1: cell signal and you can post on it, you know,
• 10:02
  Speaker 1: on online and things like that. Okay, just to go
• 10:05
  Speaker 1: deeper into a point you made, if you know, in
• 10:09
  Speaker 1: certainly I don't like get too far ahead. But we
• 10:10
  Speaker 1: talk about the algorithms in sharing. Let's just use the
• 10:14
  Speaker 1: YouTube as a model. So let's assume I create a video.
• 10:19
  Speaker 1: To what degree can that go viral in China and
• 10:22
  Speaker 1: to what degree can I garner fame as a result. Yes,
• 10:27
  Speaker 1: So the algorithms around TikTok enjoying in China are still
• 10:34
  Speaker 1: a black box as they are in other you know,
• 10:37
  Speaker 1: with other places. Um. But some of the differences is
• 10:41
  Speaker 1: that I can just get such a bigger audience because
• 10:44
  Speaker 1: it doesn't rely what you're seeing in the videos that
• 10:46
  Speaker 1: you're seeing doesn't rely on how many friends or connections
• 10:49
  Speaker 1: or likes that you have. You see videos based on
• 10:53
  Speaker 1: anyone and it could be anyone from around the world.
• 10:55
  Speaker 1: So you have not only like global atmosphere, but it's
• 10:59
  Speaker 1: also tied to your friends. And because so much of
• 11:02
  Speaker 1: it is tied to music, UM, language isn't as much
• 11:06
  Speaker 1: of a barrier. So if you think about when you
• 11:07
  Speaker 1: post on Twitter, someone you know, UM, you know, someone
• 11:12
  Speaker 1: in Africa or someone in the Middle East might not
• 11:16
  Speaker 1: necessarily want to read about your English your English post
• 11:20
  Speaker 1: and things like that. But when you when you think
• 11:21
  Speaker 1: about a music video, it's it's universal. So you can
• 11:25
  Speaker 1: gain fame. You just can't connect with other people and
• 11:29
  Speaker 1: create a social network. I mean, you can definitely still
• 11:32
  Speaker 1: connect there is you know, you can add connections and
• 11:36
  Speaker 1: things like that, but that's not necessarily why you're being
• 11:39
  Speaker 1: You're you're being showed the videos that you're saying. Okay,
• 11:42
  Speaker 1: So a company like byte Dance, what where does it
• 11:45
  Speaker 1: get its financing? So with byte Dance, what they were
• 11:51
  Speaker 1: really smart about was very early on they got a
• 11:55
  Speaker 1: lot of Western venture capital money. UM. They used money
• 12:00
  Speaker 1: from UM all sorts of big venture capital firms in
• 12:04
  Speaker 1: the in the West, like Sequoia General Atlantic. They also
• 12:07
  Speaker 1: got money from soft Bank um in in Japan. Uh
• 12:12
  Speaker 1: also got Chinese money as well. But they have a
• 12:15
  Speaker 1: really big global base of investors and they raised a
• 12:18
  Speaker 1: lot of money, making them the most valuable private UM
• 12:22
  Speaker 1: tech company right now. They're more valuable than Ali Baba
• 12:26
  Speaker 1: inten sin. Well, those are public ali baba intense about
• 12:32
  Speaker 1: a private company. Just to get into the law, don't
• 12:35
  Speaker 1: they have laws in China that Western people can only
• 12:38
  Speaker 1: own a certain percentage of the company. So with a
• 12:42
  Speaker 1: with a private venture capital firm, UM, there's not really
• 12:47
  Speaker 1: necessarily the same kind of laws around those things. UM.
• 12:52
  Speaker 1: Now right now they're talking about, you know, doing an
• 12:54
  Speaker 1: I p o UM, maybe going public, taking parts of
• 12:58
  Speaker 1: their company public, and are there are you know, more
• 13:02
  Speaker 1: ditrect laws around that. Who's the driving force of Byte Dance,
• 13:07
  Speaker 1: The CEO of Bye Dances, this guy named John Imming.
• 13:09
  Speaker 1: He grew up in a part of China that um,
• 13:12
  Speaker 1: you know, really opened up to the world of business
• 13:16
  Speaker 1: much earlier than the rest of China, and his parents
• 13:19
  Speaker 1: were both civil servants, UM. But he got into tech.
• 13:22
  Speaker 1: He was a big self described tech nerd. During college,
• 13:25
  Speaker 1: he helped fix computers and um, that's kind of he
• 13:28
  Speaker 1: tells the story of how he met his wife by
• 13:31
  Speaker 1: offering to fix fix our computer, and um. He worked
• 13:35
  Speaker 1: at a number of startups over the years and then
• 13:37
  Speaker 1: decided he was going to start his own and um
• 13:39
  Speaker 1: that's what turned into Bite Dance. And how old a
• 13:42
  Speaker 1: guy is he today? He's in his late thirties, um,
• 13:48
  Speaker 1: and he's you know, at the time, I think he
• 13:51
  Speaker 1: was thirty two when he started his his company. UM,
• 13:54
  Speaker 1: so he definitely was not the like eighteen year old,
• 13:58
  Speaker 1: you know, Mark Zuckerberg in a door room story. He
• 14:01
  Speaker 1: had been around the block. He had worked at a
• 14:03
  Speaker 1: number of successful tech companies and um, he even worked
• 14:07
  Speaker 1: at Microsoft for a brief amount of time. So when
• 14:10
  Speaker 1: the company started, Bye Dance started, When by Dan started in, Okay,
• 14:17
  Speaker 1: what was their ages? What was their purview? Starting in
• 14:20
  Speaker 1: what did they start with? By Dan started with a
• 14:23
  Speaker 1: jokes app called Neandwans And basically what that is is
• 14:28
  Speaker 1: it was very simple. They showed you these jokes or
• 14:31
  Speaker 1: memes and if you liked it, you'd give it a
• 14:34
  Speaker 1: thumbs up, and if you didn't like it, you'd give
• 14:36
  Speaker 1: it a thumbs down, and over time, the more it
• 14:39
  Speaker 1: got to know you, how long you kind of hovered
• 14:41
  Speaker 1: on that joke, which ones you liked, which ones you
• 14:44
  Speaker 1: did in it kind of got to know really like
• 14:46
  Speaker 1: your sense of humor. And they were able to kind
• 14:49
  Speaker 1: of learn that was kind of like their learning app
• 14:52
  Speaker 1: of how they did that. Um. But where they really
• 14:55
  Speaker 1: made their mark was a company called Totia, which is
• 14:57
  Speaker 1: a newsreader and they used the same exact thing that
• 15:01
  Speaker 1: they learned about with the jokes app to Taylor news
• 15:04
  Speaker 1: to you. So if you think about the newspapers in
• 15:07
  Speaker 1: the US, you know, you've got real people editors who
• 15:10
  Speaker 1: are choosing what they think is important based on news judgment,
• 15:14
  Speaker 1: and you know, it's it's this kind of um, you know,
• 15:17
  Speaker 1: meat and potatoes approach where they're giving you things you
• 15:20
  Speaker 1: want to know but also the things you need to know.
• 15:22
  Speaker 1: Tokyo the newsreader app was never never had human editors
• 15:27
  Speaker 1: in the early days. It was all based on, you know,
• 15:30
  Speaker 1: what people were reading and what they liked and getting
• 15:33
  Speaker 1: to know their personalities, and they would learn kind of
• 15:36
  Speaker 1: what you liked and offer you up that kind of news,
• 15:39
  Speaker 1: which was so unique in China because most of the
• 15:42
  Speaker 1: news that you get in China is government owned UM publications. Okay,
• 15:48
  Speaker 1: So when did they view veer into the music sphere. So,
• 15:53
  Speaker 1: the first kind of entrance into music UM in the
• 15:57
  Speaker 1: US was with this company called lipogram Um, which I
• 16:01
  Speaker 1: don't know if you ever remembered, but it was this
• 16:05
  Speaker 1: is a bike dance company. No, it was a company
• 16:08
  Speaker 1: that they bought in the US. Okay, No, but okay,
• 16:11
  Speaker 1: so they had no presence in music until they bought Flipogram.
• 16:16
  Speaker 1: Well they had they had launched the TikTok version dotying
• 16:20
  Speaker 1: in in China before they launched it globally, and so
• 16:24
  Speaker 1: that is that would be their first foray into music UM. Okay,
• 16:28
  Speaker 1: So in China. So what year was at uh they
• 16:32
  Speaker 1: launched doing? I think in twenty seventeen. Okay, were other
• 16:38
  Speaker 1: people in that space in China? Who was the big
• 16:41
  Speaker 1: cahuna in that space? Yeah? So similar a similar company
• 16:45
  Speaker 1: called Kaisha. It was startup that was UM owned by
• 16:50
  Speaker 1: or not owned by but backed by ten Cent, which
• 16:53
  Speaker 1: is you know a big music UM plays very big
• 16:57
  Speaker 1: in music UM. But they weren't really no for music,
• 17:01
  Speaker 1: right it was it was it was a lot of video.
• 17:03
  Speaker 1: It was not as much as music. Okay, so why
• 17:08
  Speaker 1: does bite dance by Flipogram? So early on they realized
• 17:15
  Speaker 1: they were kind of just stealing the music for these things.
• 17:18
  Speaker 1: They were ripping off these UM fifteen second iTunes previews
• 17:23
  Speaker 1: off the Internet, and just because they were so short
• 17:26
  Speaker 1: and because they were such a small company, nobody was
• 17:29
  Speaker 1: really paying attention to what they were doing. And at
• 17:32
  Speaker 1: a certain point their Western backers Sequoia g A others
• 17:36
  Speaker 1: said to them, you know, if you're going to grow bigger,
• 17:38
  Speaker 1: you're going to have to do this legally. And music,
• 17:41
  Speaker 1: as you know, has had a long battle of legal
• 17:45
  Speaker 1: rights and I P and things like that. So what
• 17:48
  Speaker 1: Flipogram had was a lot of these contracts with music companies.
• 17:53
  Speaker 1: They had already negotiated a bunch of contracts with different
• 17:57
  Speaker 1: UM labels and that was one of the are just
• 18:00
  Speaker 1: reasons why they bought it, and just um a reminder
• 18:03
  Speaker 1: because it was a small app at the time, flipp
• 18:06
  Speaker 1: Agram was this kind of slide show app. It would
• 18:08
  Speaker 1: kind of allow let you make these slide shows really
• 18:10
  Speaker 1: really quickly and allow you to then share them over
• 18:13
  Speaker 1: Twitter or Facebook or things like that with music put
• 18:16
  Speaker 1: to it. And so flipp Arogram had done it the
• 18:18
  Speaker 1: right way. They had you know, negotiated with with all
• 18:21
  Speaker 1: these records labels and whatnot, and By Dance just bought
• 18:25
  Speaker 1: them and then inherited shut down the app and inherited
• 18:28
  Speaker 1: all the music label um agreements. So why did dance
• 18:38
  Speaker 1: by musically? So at the time, they were wanted to
• 18:44
  Speaker 1: become a global company, and so they were saying, okay,
• 18:48
  Speaker 1: well we want to launch TikTok globally, which they did.
• 18:51
  Speaker 1: It didn't really take off in the US at the time,
• 18:54
  Speaker 1: and musically they saw was just um, you know, growing
• 18:58
  Speaker 1: like Gangbusters top of the Apple Music charts, and they
• 19:02
  Speaker 1: knew that there was a lot of interest in it
• 19:05
  Speaker 1: from you know, Facebook considered buying them, other companies had
• 19:09
  Speaker 1: discussions with them, and then they found out that Kaisha,
• 19:14
  Speaker 1: their Chinese competitor, was also in talks to buy musically,
• 19:18
  Speaker 1: and that really got them going because they were like, well,
• 19:21
  Speaker 1: I'm not gonna let my biggest competitor in and buy
• 19:24
  Speaker 1: this and get these in roads and all of a
• 19:26
  Speaker 1: sudden get you know, a hundred million, two hundred million
• 19:29
  Speaker 1: US users just like that, And so they decided, okay,
• 19:33
  Speaker 1: we're gonna buy Musically we're gonna also inherit those those
• 19:38
  Speaker 1: contracts with music labels which they had started to get
• 19:41
  Speaker 1: at the time and automatically get you know, a user
• 19:45
  Speaker 1: base of a hundred two hundred million people depending on
• 19:48
  Speaker 1: how you count it in the US, which they didn't
• 19:50
  Speaker 1: have before. Okay, so they had TikTok before they bought Musically.
• 19:55
  Speaker 1: Were they essentially equivalent platforms in the way they operated?
• 20:00
  Speaker 1: It was a little different because Musically was really focused
• 20:03
  Speaker 1: on karaoke and lip syncing and um, you know, dancing
• 20:07
  Speaker 1: and singing. TikTok was a big that was a big
• 20:10
  Speaker 1: portion of it, but not all of it. They also
• 20:12
  Speaker 1: wanted to build it out to all sorts of things
• 20:15
  Speaker 1: like comedy and pranks and um, you know, cooking. Uh,
• 20:20
  Speaker 1: there's you know, hacks, life hacks, all sorts of different
• 20:24
  Speaker 1: ways you could do it. So that would be the
• 20:25
  Speaker 1: one big difference between the two. Okay, so when did
• 20:29
  Speaker 1: Musically launch When did they start? So Musically started around
• 20:34
  Speaker 1: um um they didn't really um, they didn't. What people
• 20:43
  Speaker 1: didn't really know was that Musically was also a Chinese company.
• 20:47
  Speaker 1: People seem to kind of forget that that that it
• 20:50
  Speaker 1: was started in um by two guys that were had
• 20:54
  Speaker 1: half the half the operation in Shanghai. They had a
• 20:57
  Speaker 1: number of people in l a UM and they started
• 21:02
  Speaker 1: because they wanted to be an education app at first,
• 21:05
  Speaker 1: and then realized, okay, kids don't want to learn online,
• 21:09
  Speaker 1: they want to they want to have fun, and so
• 21:12
  Speaker 1: they totally pivoted and in thirty days built a completely
• 21:15
  Speaker 1: new app all around singing and dancing and things like that,
• 21:18
  Speaker 1: and quickly realized that you know, people in China, we're
• 21:22
  Speaker 1: not jumping onto this, but people in the US were
• 21:25
  Speaker 1: loving it. And so these like small towns and you know,
• 21:29
  Speaker 1: Texas for example, was one really early place where like
• 21:32
  Speaker 1: this high school in Texas was loving Musically and m
• 21:37
  Speaker 1: and they started realizing like, wow, we have a knack.
• 21:39
  Speaker 1: We've hit it with American kids UM, and they just
• 21:42
  Speaker 1: kept focusing more and more on the US and getting
• 21:44
  Speaker 1: bigger here. So tell us about the founder of Musically
• 21:48
  Speaker 1: and when he started. Yeah, so Alex j is the
• 21:52
  Speaker 1: way to hear people talk about Alex Jew to me
• 21:55
  Speaker 1: is one of the more interesting things of this Podcas asked,
• 22:00
  Speaker 1: because people describe him as, you know, like a poet
• 22:04
  Speaker 1: or a dreamer or you know, just this kind of
• 22:08
  Speaker 1: totally the opposite of what you think about and like
• 22:10
  Speaker 1: a Silicon Valley tech you know, bro culture type of thing. Um.
• 22:15
  Speaker 1: You know, he had this vision of connecting people around
• 22:19
  Speaker 1: the world with music and really cultivating the users. So
• 22:25
  Speaker 1: you know, at the time, it's funny to think back
• 22:27
  Speaker 1: on it, you know, but you know, a decade ago, Twitter, Facebook, others,
• 22:31
  Speaker 1: they all saw themselves as a tech platform. But but
• 22:35
  Speaker 1: musically they were like, no, we we really want to
• 22:37
  Speaker 1: focus on these create these creators, these stars. You know,
• 22:40
  Speaker 1: they were building that from the beginning. And so, you know,
• 22:43
  Speaker 1: we hear these stories about him, about Alex talking about, um,
• 22:49
  Speaker 1: you know, taking out these these creators to dinner, calling
• 22:53
  Speaker 1: their parents at home, um, you know, just making fake accounts. Um.
• 22:58
  Speaker 1: In the in the uh found during podcast, we we
• 23:02
  Speaker 1: hear him talking about how he would make these fake
• 23:03
  Speaker 1: accounts just to like interact with some of these kids
• 23:06
  Speaker 1: who were like eight nine years old. And here you
• 23:09
  Speaker 1: have this thirty six year old Chinese guy basically like
• 23:12
  Speaker 1: chatting with eight year old kids to like really get
• 23:14
  Speaker 1: into their minds and kind of like figure out, you know,
• 23:17
  Speaker 1: like what do they want, what do they like? That
• 23:19
  Speaker 1: kind of thing. Okay, and ultimately they merged the two.
• 23:26
  Speaker 1: Uh you say in the podcast that TikTok I mean
• 23:30
  Speaker 1: that Musically's algorithm was superior to TikTok's. Is that true? Um,
• 23:36
  Speaker 1: the other way around. So TikTok, what TikTok infused into
• 23:40
  Speaker 1: musically was the algorithm. So music, well, musically was great
• 23:43
  Speaker 1: at that was um this whole idea of really getting
• 23:47
  Speaker 1: the zeitgeist of what kids want and what's popular and
• 23:51
  Speaker 1: kind of getting them to download the app. And Um,
• 23:55
  Speaker 1: what TikTok brought with them was this algorithm that would
• 23:58
  Speaker 1: get them addicted, that would get them, you know, get
• 24:00
  Speaker 1: them really obsessive with the app and checking it and
• 24:04
  Speaker 1: on it for hours and hours because it started to
• 24:07
  Speaker 1: really get to know who you were, what you liked,
• 24:09
  Speaker 1: and continue to offer that up and kinda get you
• 24:12
  Speaker 1: hooked onto this app. Okay, let's jump all the way
• 24:16
  Speaker 1: forward to today. What do we know? Unlike yourself, most
• 24:20
  Speaker 1: of the media is run by older people who don't
• 24:25
  Speaker 1: understand this, who are doing their jobs, not spending hours
• 24:28
  Speaker 1: on the Internet and the nooks and crannies, and they
• 24:31
  Speaker 1: tend to miss what is really going on. To use
• 24:34
  Speaker 1: some cliches, Facebook is for old people. Okay, Instagram, certainly
• 24:40
  Speaker 1: young people went there, they had private accounts. Snapchat has
• 24:45
  Speaker 1: not really grown out of the younger demo, and there
• 24:49
  Speaker 1: are these battles between Now we even have clubhouse in
• 24:51
  Speaker 1: this Where does TikTok sit in the landscape? So I
• 24:57
  Speaker 1: think before the pandemic, the landscape that TikTok fit into
• 25:04
  Speaker 1: was really this younger gen Z demographic. You know, these
• 25:08
  Speaker 1: kids were too young. You know, they don't get Facebook,
• 25:12
  Speaker 1: they have Instagram, but it was like too much for them.
• 25:15
  Speaker 1: They wanted a place where they could kind of be
• 25:18
  Speaker 1: more themselves. Gen Z is a lot more. You know.
• 25:20
  Speaker 1: You you talk to any fifteen year old and you
• 25:24
  Speaker 1: hear the word authentic in like the first ten minutes
• 25:26
  Speaker 1: of them talking, and you're like, what the heck does
• 25:27
  Speaker 1: that mean? You know, and um, this at least it
• 25:31
  Speaker 1: was this idea that they could be themselves and have
• 25:34
  Speaker 1: fun on this app without having this picture perfect, manicured
• 25:38
  Speaker 1: Instagram post um. So I think that's where they fit in.
• 25:41
  Speaker 1: But during the pandemic, you know, everybody was shutting their
• 25:44
  Speaker 1: homes with literally nothing to do, and people said, Okay,
• 25:48
  Speaker 1: well download this thing TikTok that everyone keeps talking about
• 25:51
  Speaker 1: and um, then you started really seeing the proliferation of
• 25:55
  Speaker 1: like moms on TikTok or cooking on TikTok, you know,
• 25:59
  Speaker 1: things that more are adults, um you know, wanted to
• 26:02
  Speaker 1: take part in. And so once they have you, I
• 26:06
  Speaker 1: mean the hardest thing that the hardest battle for TikTok
• 26:09
  Speaker 1: is getting you to download it. Once they have you,
• 26:12
  Speaker 1: they can figure you out in a number of days
• 26:14
  Speaker 1: and start to show you videos that that you want
• 26:17
  Speaker 1: to see. UM. So the more adults that were on there,
• 26:20
  Speaker 1: the more kind of grown up content there is. And
• 26:23
  Speaker 1: the difference between Facebook and TikTok is when Facebook, when
• 26:27
  Speaker 1: all the old people showed up on Facebook, the young
• 26:29
  Speaker 1: people left because they didn't want their parents to see
• 26:32
  Speaker 1: them or they didn't want to see their parents. But
• 26:34
  Speaker 1: with TikTok, you never see your parents because they don't
• 26:37
  Speaker 1: show you those videos and vice versa. And that's why
• 26:39
  Speaker 1: it's hard for adults to keep track of what their
• 26:42
  Speaker 1: kids are doing because they never see what their kids see. Okay, Certainly,
• 26:46
  Speaker 1: at this point in time, UH, most Americans are aware
• 26:50
  Speaker 1: of the power of Zuckerberg and Facebook and What'sapp and
• 26:55
  Speaker 1: uh Instagram, But historically, like with the Microsoft lawsuit twenty
• 27:00
  Speaker 1: years ago. The government and the public at large are behind.
• 27:06
  Speaker 1: Can TikTok you surp the power of Facebook or do
• 27:10
  Speaker 1: they have to exist side by side. I don't think
• 27:13
  Speaker 1: they can necessarily usurp all of the power of Facebook, um,
• 27:18
  Speaker 1: but they can certainly give Facebook a run for its money.
• 27:21
  Speaker 1: And that's what you're seeing. I mean, reporting for Foundering Um.
• 27:25
  Speaker 1: For the podcast, we just kept running into Zuckerberg over
• 27:28
  Speaker 1: and over and over again. You'd you'd realize that, like
• 27:31
  Speaker 1: you know, UM, Facebook cared about TikTok. They were paying
• 27:35
  Speaker 1: attention about TikTok. They they they're worried about TikTok. They
• 27:39
  Speaker 1: tried to imitate TikTok and have not really successfully done that,
• 27:43
  Speaker 1: And so I think it is definitely giving them a
• 27:46
  Speaker 1: run for their money. And from an advertising perspective, which
• 27:51
  Speaker 1: is really important to Facebook's future growth, all the advertisers
• 27:56
  Speaker 1: are um on TikTok now and a lot of money
• 28:00
  Speaker 1: is going there, and so right now I think they
• 28:02
  Speaker 1: can kind of exist coexist UM. But at a certain point,
• 28:06
  Speaker 1: as TikTok gets bigger and more sophisticated, some of that
• 28:10
  Speaker 1: money is going to just flat go away from Facebook.
• 28:12
  Speaker 1: And over to TikTok. Okay, let's assume someone's a complete movie.
• 28:17
  Speaker 1: You download the app. What happens next? So you download
• 28:22
  Speaker 1: the app and all of a sudden, your full screen
• 28:24
  Speaker 1: is taken up by a video. It's probably the first
• 28:27
  Speaker 1: video you see is going to be somebody dancing and singing,
• 28:30
  Speaker 1: and probably your first reaction is like, Okay, this isn't
• 28:33
  Speaker 1: really for me. And then you're gonna scroll up um
• 28:36
  Speaker 1: on the on the screen, UM, as if you were
• 28:38
  Speaker 1: scrolling through Instagram, and you're gonna see another video, probably
• 28:42
  Speaker 1: not for you. And then you'll see that third video
• 28:44
  Speaker 1: and be like, oh, that's interesting, and you're gonna linger
• 28:47
  Speaker 1: on that video for a few minutes and then like boom,
• 28:49
  Speaker 1: that's the first data point that that company knows. Okay,
• 28:52
  Speaker 1: you don't like those two videos. You like this video
• 28:54
  Speaker 1: because you've lingered on it for more than a half second. UM,
• 28:58
  Speaker 1: they'll know where you're, where you might be touching it
• 29:01
  Speaker 1: sometimes they'll um. They'll be able to also analyze all
• 29:07
  Speaker 1: of your data points that come with it. Where do
• 29:09
  Speaker 1: you live, what location are you at, who are you
• 29:11
  Speaker 1: friends with, what age are you, what's your demographic? They'll
• 29:15
  Speaker 1: match all of that information about you behind the scenes too,
• 29:19
  Speaker 1: the types of videos that you like, and in about
• 29:22
  Speaker 1: a week, you're going to be seeing all the videos
• 29:24
  Speaker 1: that you really want to see, and then in about
• 29:27
  Speaker 1: two or three weeks, you'll probably be spending an hour
• 29:29
  Speaker 1: or two on the app like if if you really
• 29:31
  Speaker 1: end up liking it um at a time because it
• 29:35
  Speaker 1: because it just gets to know you. Okay, once again,
• 29:38
  Speaker 1: for those who think they don't need it, what kind
• 29:41
  Speaker 1: of content might you see on TikTok? So you'll see
• 29:47
  Speaker 1: whatever you're like psyche wants to see, which sounds a
• 29:51
  Speaker 1: little bit crazy, but you it's like, it's the things
• 29:55
  Speaker 1: you don't even necessarily know you like that you that
• 29:58
  Speaker 1: you might end up saying. So let's say you're really
• 30:00
  Speaker 1: into cooking. I have an editor who loves cooking and
• 30:03
  Speaker 1: he is just obsessed with it and he's starting to
• 30:05
  Speaker 1: see a lot of it. UM Around the elections, I
• 30:09
  Speaker 1: was doing a lot of digging into what kids and
• 30:12
  Speaker 1: others were seeing around UM the US elections, what kind
• 30:15
  Speaker 1: of Trump content, Biden content that there was out there.
• 30:19
  Speaker 1: So you can kind of train the app UM if
• 30:22
  Speaker 1: you're looking for something in particular, people talking about politics,
• 30:26
  Speaker 1: UM there's a lot of dancing, there's a ton of music. UM,
• 30:30
  Speaker 1: there's a ton of um of different you know communities.
• 30:36
  Speaker 1: For a time, there was a military TikTok. There's fitness TikTok,
• 30:40
  Speaker 1: there's eating TikTok. There's kind of any any little corner
• 30:45
  Speaker 1: of the Internet that you want to find, you can
• 30:47
  Speaker 1: find it on TikTok Okay would I literally join that
• 30:50
  Speaker 1: or the algorithm would just get me to see videos
• 30:53
  Speaker 1: of that? So you can search. There is a tab
• 30:57
  Speaker 1: on their UM a discover section. Uh. You know that's
• 31:01
  Speaker 1: kind of like the discover section on Instagram, UM, where
• 31:05
  Speaker 1: if you want to search for some of those things
• 31:07
  Speaker 1: you can and there are you know, they do push
• 31:12
  Speaker 1: content out to you, UM, so you'll see some of
• 31:16
  Speaker 1: that content UM if you want to UM. But a
• 31:22
  Speaker 1: lot of the kids you talked to, they're like, do
• 31:25
  Speaker 1: you ever look at that discover section? And they're like, no,
• 31:28
  Speaker 1: I just kind of see what's shown to me, which
• 31:31
  Speaker 1: is called the four you for you page. UM. But
• 31:34
  Speaker 1: there is there is a discover section you can search
• 31:36
  Speaker 1: if you're looking for something in particular, UM, But most
• 31:39
  Speaker 1: people just kind of look through whatever whatever pops up
• 31:43
  Speaker 1: for them. What percentage of the videos or music most videos.
• 31:49
  Speaker 1: I don't have a I don't have a number off
• 31:51
  Speaker 1: the top of my head, but I would say, like,
• 31:55
  Speaker 1: even if it's a cooking video, you'll put it to music, um,
• 31:58
  Speaker 1: and they'll use like text on the on the video
• 32:02
  Speaker 1: to to kind of show you what you're like a
• 32:04
  Speaker 1: ten step video of how to make guacamole. They'll be
• 32:07
  Speaker 1: like a track. Um. And there's a whole library, like
• 32:11
  Speaker 1: it's called the sound library. You can save clips that
• 32:15
  Speaker 1: you like, um. And you know, for the for the
• 32:19
  Speaker 1: Foundering podcast, we weren't really deep into this whole idea
• 32:23
  Speaker 1: of the sounds library. Because what TikTok can do is
• 32:27
  Speaker 1: they can see, okay, who's saving this song or this
• 32:30
  Speaker 1: clip of this song, and they can see kind of
• 32:33
  Speaker 1: the velocity of that, and so they'll be able to
• 32:36
  Speaker 1: tell you what song is about to go viral, you know,
• 32:39
  Speaker 1: a week from now, because they can tell who's saving
• 32:41
  Speaker 1: the song to make these videos with it later. Okay,
• 32:45
  Speaker 1: Why would someone be on TikTok as opposed to watching
• 32:48
  Speaker 1: reels or something else on a different platform. What is
• 32:53
  Speaker 1: what is the raw addiction that makes TikTok superior? Well
• 32:58
  Speaker 1: reels came later, so I think it's still kind of
• 33:00
  Speaker 1: dealing with some of that meat, you know, copycat stuff. Um,
• 33:05
  Speaker 1: you know, before there was reels, there wasn't really a
• 33:08
  Speaker 1: place to go it is. I mean, real is basically
• 33:11
  Speaker 1: copied TikTok. It's pretty pretty similar. Um. The differences is
• 33:16
  Speaker 1: that what TikTok is able to do is give you
• 33:18
  Speaker 1: a whole host of different video editing tools that make
• 33:23
  Speaker 1: your videos look really cool but are really easy to make.
• 33:26
  Speaker 1: So things that you might have been able to do,
• 33:30
  Speaker 1: you know, five years ago, only with like a very
• 33:33
  Speaker 1: sophisticated video editing tools or software, you know, you can
• 33:36
  Speaker 1: just do right there in the things like you know,
• 33:39
  Speaker 1: the filters and the different effects like you can make
• 33:41
  Speaker 1: you look like a mirror effect or you know, things
• 33:44
  Speaker 1: like that, um that you know people have fun with. Okay,
• 33:49
  Speaker 1: let's assume I'm passive and I decided to become active.
• 33:52
  Speaker 1: One of the steps in creating and posting a video,
• 33:58
  Speaker 1: so you basically really hit this plus button and you
• 34:02
  Speaker 1: shoot a video. And you you could make a basic
• 34:05
  Speaker 1: one where you're just literally, you know, shooting a video
• 34:10
  Speaker 1: of you know, yourself talking about the weather or whatnot. Um,
• 34:14
  Speaker 1: but what most people do is I'll usually choose a
• 34:17
  Speaker 1: sound to go along with it, which is like a
• 34:19
  Speaker 1: fifteen third clip of a song. Um, they might make
• 34:23
  Speaker 1: a dance up to um to that song, like very
• 34:27
  Speaker 1: tailored to that song. UM. They might go on and
• 34:31
  Speaker 1: see other trends like and copy those trends, but like
• 34:35
  Speaker 1: put their own spin on it. So if there's a
• 34:37
  Speaker 1: dance trend going on, or a prank or a joke
• 34:41
  Speaker 1: um or something like that, they would do that with
• 34:44
  Speaker 1: their own spin. UM. For example, there was a trend
• 34:47
  Speaker 1: awhile back that was popular about these gummy bears singing
• 34:52
  Speaker 1: to the Adele song, and so people would like take
• 34:54
  Speaker 1: out all these gummy bears and put the song and
• 34:56
  Speaker 1: make it shoot the video as if like the gummy
• 34:59
  Speaker 1: bear as for singing the adel song. And then people
• 35:02
  Speaker 1: would just like do that in all sorts of different ways. Um.
• 35:05
  Speaker 1: When you follow a trick like that or a trend
• 35:08
  Speaker 1: like that, UM, they tend to get picked up a
• 35:11
  Speaker 1: lot uh and and get more popular and more viral
• 35:15
  Speaker 1: because the company is usually putting some of that marketing
• 35:19
  Speaker 1: muscle behind behind those trends. Okay, does everybody make the
• 35:23
  Speaker 1: video right in the app or to some people with
• 35:27
  Speaker 1: better tools make it on the computer and then uploaded
• 35:29
  Speaker 1: to the app. Some people do that. UM, I think
• 35:35
  Speaker 1: that's a lot more on the like on YouTube, people
• 35:38
  Speaker 1: will do that. UM. On TikTok, a lot of people
• 35:40
  Speaker 1: do end up doing it within the app. But they
• 35:44
  Speaker 1: might spend hours on a video even just to create
• 35:48
  Speaker 1: like a thirty second video. They might spend hours trying
• 35:51
  Speaker 1: to create something and then finally get it right or
• 35:54
  Speaker 1: edit or stitch it together the exact way that they
• 35:57
  Speaker 1: want to do it. Um. And so you know, as
• 36:00
  Speaker 1: a kid, you're kind of going through this and you're like, oh,
• 36:02
  Speaker 1: that's so cool. You know it's thirty seconds long. How
• 36:06
  Speaker 1: long could it take to make? But like some of
• 36:08
  Speaker 1: these really professional creators will spend you know, two three
• 36:12
  Speaker 1: four hours on just one video. It is there any
• 36:15
  Speaker 1: time limit? So when they first started, there used to
• 36:19
  Speaker 1: be like a fifteen second time limit, and now um,
• 36:22
  Speaker 1: they brought in that out. You can do a minute
• 36:25
  Speaker 1: for some some big creators they give um, they give
• 36:30
  Speaker 1: more like time limits too. But the idea is like
• 36:33
  Speaker 1: bite bite size bits of content, So you really want
• 36:36
  Speaker 1: to do something short. Most most videos are thirty seconds long,
• 36:40
  Speaker 1: So let's assume I make a video, how's anybody gonna
• 36:43
  Speaker 1: see it? So UM, you can put a whole bunch
• 36:48
  Speaker 1: of fat hashtags on it if you want people to
• 36:50
  Speaker 1: be able to search it UM, and if you are
• 36:54
  Speaker 1: a popular creator, you will have followers the same way
• 36:57
  Speaker 1: you would be anywhere else. But otherwise it's UM. It's
• 37:02
  Speaker 1: this kind of black box of the algorithm. They're showing
• 37:04
  Speaker 1: it to to people that you know they think are
• 37:07
  Speaker 1: gonna want to see it. And so your hope is,
• 37:10
  Speaker 1: if you're trying to get popular UM, is that you
• 37:14
  Speaker 1: know it it gets UM, it gets pushed out to
• 37:18
  Speaker 1: a whole bunch of people, but you really don't know
• 37:19
  Speaker 1: how how it happens. UM. For some of the creators
• 37:24
  Speaker 1: that are starting out and they want to really make
• 37:26
  Speaker 1: a career out of it, they'll jump on the trends
• 37:29
  Speaker 1: that are already happening, like that gummy bear thing I
• 37:31
  Speaker 1: told you about, because that way they know that they're
• 37:34
  Speaker 1: going to get views. And the more that they kind
• 37:37
  Speaker 1: of do that, the more views that they think they're
• 37:39
  Speaker 1: going to get. And then once you have a popular video,
• 37:44
  Speaker 1: the chances are that your next video becomes popular increases. Okay,
• 37:49
  Speaker 1: let's assume I make a shitty video, Is it possible
• 37:52
  Speaker 1: that nobody sees it? Yeah? Okay, what if I want
• 37:57
  Speaker 1: to juice it? Can I tell all my friends, Hey,
• 37:59
  Speaker 1: go watch my video. Try to move it up the algorithm.
• 38:03
  Speaker 1: You can, Um, you can do that. It just um
• 38:08
  Speaker 1: there's not like a retweet button the same way there
• 38:11
  Speaker 1: is on Twitter, So it would have to be it
• 38:14
  Speaker 1: would have to be like you reaching out to your
• 38:18
  Speaker 1: your friends being like, Okay, go to my TikTok account
• 38:22
  Speaker 1: and click on that video. Um. It's a lot harder
• 38:25
  Speaker 1: to share that way, and it puts a lot more
• 38:28
  Speaker 1: of their kind of responsibility into the company's hands to
• 38:31
  Speaker 1: know like what's going to go, what's gonna go viral,
• 38:33
  Speaker 1: and what's not. Okay, Well, in all these other platforms,
• 38:36
  Speaker 1: these music platforms, there are all these people trying to
• 38:39
  Speaker 1: manipulate them. Okay, can you manipulate TikTok? Can you manipulate TikTok?
• 38:47
  Speaker 1: I'm sure you can. I mean people try it all
• 38:49
  Speaker 1: the time. They are all these groups of creator TikTok
• 38:52
  Speaker 1: creators that they have like their side groups, their side chats, um,
• 38:56
  Speaker 1: where they have like these texts being like oh, you know,
• 38:58
  Speaker 1: like this trend is try ending you we should jump
• 39:01
  Speaker 1: on it now. Um. They the company also sends out
• 39:08
  Speaker 1: you know, emails to the top creators or even you know,
• 39:12
  Speaker 1: not even the top creators, like thousands of popular creators
• 39:16
  Speaker 1: saying like, hey, these things are trending, you should jump
• 39:19
  Speaker 1: on these trends. Um. So it's all kind of directed
• 39:23
  Speaker 1: by the company, And if you follow the way that,
• 39:26
  Speaker 1: if you kind of follow what the company wants you
• 39:28
  Speaker 1: to do, the more, um, the more views that you get,
• 39:31
  Speaker 1: kind of as like a regular user type of thing.
• 39:34
  Speaker 1: I mean, some kids, they they they treat it just
• 39:38
  Speaker 1: like they do with Facebook right there, like a twelve
• 39:40
  Speaker 1: year old, fifteen year old, and they just want to
• 39:42
  Speaker 1: make videos for their friends and themselves to see it.
• 39:45
  Speaker 1: There's a lot of there's a lot of people who
• 39:46
  Speaker 1: just do that as well. Do we know how many
• 39:50
  Speaker 1: people are active as opposed to passive? So the numbers
• 39:54
  Speaker 1: haven't been that great, um in the US in the
• 39:58
  Speaker 1: sense of um like clarity, because they are a private company,
• 40:01
  Speaker 1: so we don't actually know. We we mostly know downloads
• 40:04
  Speaker 1: and so we know it's been downloaded about two billion
• 40:08
  Speaker 1: times globally, um, but about two million or so in
• 40:13
  Speaker 1: the US. Okay, let's assume I'm at home, I'm a
• 40:16
  Speaker 1: total nobody. I make a video to a song that's
• 40:20
  Speaker 1: become come out within the last twelve months, and people
• 40:24
  Speaker 1: love my video. What's going to happen next? Yes, So
• 40:28
  Speaker 1: if people are spending time on it, if they're watching it,
• 40:31
  Speaker 1: if they're watching it over and over again, um, it
• 40:35
  Speaker 1: might be picked up in what's called the four you page,
• 40:39
  Speaker 1: which is the page that you see when you open
• 40:41
  Speaker 1: up the app in lots of people's fore you pages,
• 40:43
  Speaker 1: and so you know it's in TikTok's best interest to
• 40:47
  Speaker 1: get people. TikTok has two goals. One is to have
• 40:52
  Speaker 1: people spend as much time on the on the app
• 40:54
  Speaker 1: as possible, and to once they have people spending as
• 40:58
  Speaker 1: much time on the app as popular as possible, to
• 41:02
  Speaker 1: um sell advertising against that. Um So, the more time
• 41:07
  Speaker 1: you spend on the app, the better. So the more
• 41:09
  Speaker 1: TikTok can show you things that will keep you on
• 41:10
  Speaker 1: the app, the better. So if you have a video
• 41:14
  Speaker 1: that tends to be like that people like, they're gonna
• 41:17
  Speaker 1: want to push it out to as many people as possible.
• 41:20
  Speaker 1: And so that's kind of where you see these viral
• 41:23
  Speaker 1: these viral posts going out. So, for example, I spoke
• 41:26
  Speaker 1: to one of these creators, UM, a dancer in in Houston, Texas, UM,
• 41:33
  Speaker 1: and she made this video to the Megan the Stallion
• 41:37
  Speaker 1: UM dance and UM Savage. And this actually wasn't a
• 41:43
  Speaker 1: paid promotion. She just made it and she loved it
• 41:46
  Speaker 1: and she will she you know, had UM a lot
• 41:49
  Speaker 1: of followers, but she wasn't like a famous star or
• 41:51
  Speaker 1: anything like that. But it was a fun dance. People
• 41:54
  Speaker 1: loved Savage, but loved the song. It was super catchy.
• 41:57
  Speaker 1: And then you know, people started making dance and then
• 42:01
  Speaker 1: some of the really popular creators started making the dance
• 42:04
  Speaker 1: and once that happened, it just took off. And so
• 42:07
  Speaker 1: then it became in TikTok's best interest to promote that
• 42:10
  Speaker 1: dance because what it was doing was promoting engagement, and
• 42:14
  Speaker 1: it was promoting engagement with a song that they had
• 42:17
  Speaker 1: happened to have, you know, a partnership with that they had,
• 42:20
  Speaker 1: you know, spent marketing dollars with the app to help
• 42:23
  Speaker 1: promote and so you know, TikTok is scouring those things.
• 42:26
  Speaker 1: They're looking for things that are taking off UM and
• 42:29
  Speaker 1: they can spot it early on the rate of velocity
• 42:33
  Speaker 1: of something taking off and then just blow it up
• 42:36
  Speaker 1: in a way that um, you know, Twitter and and
• 42:38
  Speaker 1: um Facebook just don't tend to do. Okay, first, you
• 42:42
  Speaker 1: talked about followers. I can actually follow a creator, you can,
• 42:47
  Speaker 1: and then I will see all their new work. Yes,
• 42:50
  Speaker 1: I mean you can go actually to their page if
• 42:53
  Speaker 1: you want to just see their work, and then if
• 42:55
  Speaker 1: you follow them, their stuff will come up in your
• 42:58
  Speaker 1: in your feed. But it's not relegated to just your followers. Okay,
• 43:03
  Speaker 1: so let's assume I'm that woman in Houston. Let's just assume,
• 43:07
  Speaker 1: for the sake of discussion, million people watch my clip
• 43:12
  Speaker 1: on YouTube. I literally that's monetized, and I get a
• 43:15
  Speaker 1: check what happens on TikTok. Right, So, right now, they
• 43:21
  Speaker 1: don't have that ability. I wouldn't put it past them
• 43:24
  Speaker 1: for it to happen in the future. It sounds like
• 43:26
  Speaker 1: it's something that's on the horizon and could probably happen
• 43:29
  Speaker 1: very quickly. But um, what does happen is that you
• 43:34
  Speaker 1: get deals. You get deals with advertisers, you get deals
• 43:37
  Speaker 1: with record labels, um, you get featured in all sorts
• 43:43
  Speaker 1: of um you know, different kind of spotlights, and TikTok
• 43:48
  Speaker 1: has kind of created this business where they're they're connecting,
• 43:52
  Speaker 1: they're connecting creators to these brands. And so the brands,
• 43:55
  Speaker 1: you know, they want some creator to make it seem
• 43:58
  Speaker 1: like they're authentically loving. They're like microwave oven pasta. This
• 44:02
  Speaker 1: is a real story. Uh. So they like find five
• 44:06
  Speaker 1: creators to like make a dance around microwaving their their
• 44:09
  Speaker 1: pasta and um and it works, you know because people
• 44:13
  Speaker 1: see it and they're like, oh, that's cool. Or this
• 44:15
  Speaker 1: energy drink is like, uh, energy drinks have been all
• 44:19
  Speaker 1: over TikTok and you don't realize it's an ad. It's
• 44:23
  Speaker 1: just like some person you like, because you know, constantly
• 44:25
  Speaker 1: drinking this energy drink in their um in their videos.
• 44:28
  Speaker 1: But they're getting paid for it. Um. So it's not
• 44:31
  Speaker 1: directly monitorizable right now the way it is with YouTube. Um.
• 44:36
  Speaker 1: But these people are making are they're making money. I
• 44:38
  Speaker 1: mean they're making you know sometimes you know, millions of
• 44:41
  Speaker 1: dollars a year. Okay, So you talked earlier about authenticity.
• 44:47
  Speaker 1: If these people are aligning themselves with brands, doesn't that
• 44:50
  Speaker 1: undercut authenticity? Yeah? So this is what m my biggest
• 44:55
  Speaker 1: takeaway from this whole foundering uh podcast is that TikTok
• 45:00
  Speaker 1: accomplished is a remarkable marketing feat making everybody think that
• 45:05
  Speaker 1: this is this fun, authentic, totally spontaneous place to be,
• 45:11
  Speaker 1: and then behind the scenes making it as inauthentic as
• 45:14
  Speaker 1: as possible. And so the bigger they get, the less
• 45:18
  Speaker 1: and less and less and less everything really is authentic.
• 45:21
  Speaker 1: The popularity, the trends, all of that. Um. The more
• 45:24
  Speaker 1: you dig into it, the more you ask questions, the
• 45:28
  Speaker 1: more you realize so much of it is staged and
• 45:30
  Speaker 1: so much of it comes from you know, TikTok's headquarters
• 45:33
  Speaker 1: UM in Los Angeles and UM and in China. Okay, So,
• 45:37
  Speaker 1: but the lack of authenticity is not causing people to disconnect,
• 45:43
  Speaker 1: not yet. You know, you do talk to you do
• 45:47
  Speaker 1: talk to people who are saying, oh, well, you know,
• 45:51
  Speaker 1: like I'm not into it anymore. You know, some of
• 45:53
  Speaker 1: the some of the older teams I spoke to were saying,
• 45:56
  Speaker 1: you know, it's just not really for me anymore. So
• 45:59
  Speaker 1: you're seeing some that UM. But right now, I mean,
• 46:02
  Speaker 1: their growth is they're the most popular app last year,
• 46:05
  Speaker 1: you know, like the growth has not subsided. Okay, is
• 46:10
  Speaker 1: there a place on the app I can go to
• 46:12
  Speaker 1: see the top ten or so, so that there is
• 46:15
  Speaker 1: a sense of community amongst TikTok participants. So you can
• 46:21
  Speaker 1: go to this tab called discover um, but it's not
• 46:27
  Speaker 1: necessarily what's I mean? They say it's all about it's
• 46:30
  Speaker 1: all trending, but it's not really based on what's the
• 46:34
  Speaker 1: most popular. It's based on what the company wants you
• 46:37
  Speaker 1: to see or what advertisements advertising deals that they have,
• 46:42
  Speaker 1: So it's not really there's no way to tell like today,
• 46:46
  Speaker 1: if I open the app, there's no way I could
• 46:48
  Speaker 1: personally tell what's the most popular video on TikTok today.
• 46:51
  Speaker 1: There's just no way you would be able to do that. Okay.
• 46:54
  Speaker 1: Trump had a speech approximately a year ago in Oklahoma,
• 46:59
  Speaker 1: and uh TikTok ers gathered together to try to get
• 47:05
  Speaker 1: tickets such to the point it looked like the event
• 47:07
  Speaker 1: was sold out when it was not. How did they
• 47:09
  Speaker 1: do that? So what they started doing was putting on UM,
• 47:16
  Speaker 1: you know, one of these one of the really popular
• 47:18
  Speaker 1: TikTok's UH stars UM you know had this had these ideas,
• 47:22
  Speaker 1: you know, Trump is putting out this rally, let's all
• 47:25
  Speaker 1: buy tickets and not show up. And then they started
• 47:28
  Speaker 1: organizing through TikTok, but also off of TikTok on Twitter,
• 47:33
  Speaker 1: through chat groups, um, all sorts of different places around
• 47:36
  Speaker 1: the Internet, saying like, everybody go do this, sending emails
• 47:39
  Speaker 1: to their friends, you know, a word of mouth. You know,
• 47:43
  Speaker 1: it became not just a TikTok thing. Um. But you
• 47:46
  Speaker 1: know people were really you know, activating all over the place. UM.
• 47:52
  Speaker 1: But a bunch of really popular TikTok stars jumped on this.
• 47:55
  Speaker 1: They made all sorts of funny videos about how to
• 47:58
  Speaker 1: do it and what to do, and and they did
• 48:00
  Speaker 1: it and you know, kind of joking at Trump's expense. Um.
• 48:04
  Speaker 1: And so it just started showing up to more and
• 48:06
  Speaker 1: more people because the more people were engaging with it,
• 48:09
  Speaker 1: the more the algorithm pushed it out to people. UM.
• 48:13
  Speaker 1: So you know, some of it is some of it
• 48:15
  Speaker 1: it's definitely still um, spontaneous. You know, it's not like
• 48:20
  Speaker 1: TikTok as far as we know, you know, did that
• 48:24
  Speaker 1: on purpose. But when something starts to gain traction, what
• 48:28
  Speaker 1: TikTok can do then, and what TikTok's algorithm is set
• 48:31
  Speaker 1: to do is to just really push it and pull
• 48:34
  Speaker 1: those levers and make it even bigger than it already
• 48:37
  Speaker 1: is okay, Let's assume like this girl in Houston, I
• 48:47
  Speaker 1: make a video and it starts to become successful at
• 48:51
  Speaker 1: what time? And will I at all here from the
• 48:54
  Speaker 1: brass at TikTok? So pretty early on, it's not scientific. Um.
• 49:03
  Speaker 1: You know, there there's been stories that we've heard from UM.
• 49:09
  Speaker 1: This rapper for example, that we talked to in the
• 49:12
  Speaker 1: podcast flow Millie. UM. You know, she was this uh
• 49:17
  Speaker 1: teenager from Mobile, Alabama. Nobody really heard about her. She
• 49:22
  Speaker 1: was just making tracks on her own, posting them up
• 49:25
  Speaker 1: on SoundCloud, you know, on the internet. UM, and then
• 49:28
  Speaker 1: someone started using it on TikTok and it blew up.
• 49:30
  Speaker 1: And she didn't even have a TikTok account, but because
• 49:33
  Speaker 1: it was so popular, TikTok's head of music Partnerships called
• 49:36
  Speaker 1: her up, flew her out to l A, had her
• 49:39
  Speaker 1: in the office, set up a TikTok account for her,
• 49:42
  Speaker 1: you know, really encouraged her to get on the app
• 49:45
  Speaker 1: and UM and she did, and she did a really
• 49:48
  Speaker 1: good you know, she really amassed a lot of followers
• 49:50
  Speaker 1: and she signed up with a record label and you know,
• 49:53
  Speaker 1: now she was UM nominated for b ET Best New
• 49:57
  Speaker 1: Artists and you know, UM and It's funny because in
• 50:02
  Speaker 1: the podcast flow Millie says, you know, I didn't set
• 50:05
  Speaker 1: out to be a TikTok star, but it just happened,
• 50:07
  Speaker 1: and I'm going to take advantage of it. Um. And
• 50:11
  Speaker 1: that's what TikTok bets on, right that if everyone along
• 50:14
  Speaker 1: the food chain makes money, everybody's happy. Right. So if
• 50:18
  Speaker 1: the record label makes money, if the artist makes money,
• 50:21
  Speaker 1: if TikTok makes money and advertising makes money, everybody's happy.
• 50:25
  Speaker 1: Let's assume I don't want to be a musician for
• 50:28
  Speaker 1: whatever reason, I create great dances, great clips. At what
• 50:32
  Speaker 1: point will I hear from TikTok to the dances have
• 50:38
  Speaker 1: been interesting talking to some of these professional dancers on
• 50:41
  Speaker 1: TikTok I was really fascinated by because I'm what they
• 50:45
  Speaker 1: end up doing is the record labels have figured this out.
• 50:48
  Speaker 1: This started, Um, this started kind of organically where the
• 50:53
  Speaker 1: record labels We're seeing these dancers, you know, make up
• 50:56
  Speaker 1: dances to their music and um, and they would help
• 50:59
  Speaker 1: help GoF on TikTok because once you had something to
• 51:02
  Speaker 1: do with the music, you know, some sort of interaction,
• 51:05
  Speaker 1: it became like a stickier song and um, and then
• 51:08
  Speaker 1: the record labels caught on and they were like, oh, shoot,
• 51:11
  Speaker 1: well we can actually just like pay these creators to
• 51:13
  Speaker 1: do it. We don't have to wait for someone to
• 51:14
  Speaker 1: create like a good dance. And so a lot of
• 51:18
  Speaker 1: them started paying these creators to create these dances, and
• 51:21
  Speaker 1: then TikTok would catch on to that and they would
• 51:24
  Speaker 1: you know, promote, They would do some deal with the
• 51:26
  Speaker 1: record label company and then push those push those videos
• 51:30
  Speaker 1: out to more people and so um and so a
• 51:33
  Speaker 1: lot of these people who make up dances on um
• 51:38
  Speaker 1: on TikTok started becoming popular creators in themselves because they
• 51:41
  Speaker 1: would get more followers and be pushed out, you know,
• 51:44
  Speaker 1: across the across the app and and become famous in
• 51:48
  Speaker 1: their own right. Okay, let's stop and start with the
• 51:52
  Speaker 1: music business. To what degree are the music labels and
• 51:57
  Speaker 1: individuals interacting with tick talk or individual TikTok ers to
• 52:03
  Speaker 1: try to boost their music. So every music label now
• 52:08
  Speaker 1: has a group of people who are glued to TikTok.
• 52:12
  Speaker 1: Who are you know, whose life is to learn TikTok,
• 52:16
  Speaker 1: to know TikTok, to talk to them. Um TikTok is
• 52:19
  Speaker 1: starting to do more and more live music um, which
• 52:22
  Speaker 1: they started during the pandemic, um or a little bit before,
• 52:25
  Speaker 1: but really picked up during the pandemic. And um you
• 52:29
  Speaker 1: know that I foresee being an even bigger thing. Um
• 52:33
  Speaker 1: And TikTok not only helps these labels, but also helps
• 52:37
  Speaker 1: connect them with the creators who you know kind of
• 52:40
  Speaker 1: make the dances and things like that to help promote
• 52:42
  Speaker 1: the songs as well. Okay, the way business works, and
• 52:45
  Speaker 1: it's not only the music business. If I am a
• 52:48
  Speaker 1: large corporation and there are three of them in the
• 52:50
  Speaker 1: music business today, a I put out a steady stream
• 52:54
  Speaker 1: of product, be that influences my relationship with in this
• 52:59
  Speaker 1: case tick talk and see, there can be a exchange
• 53:02
  Speaker 1: of money. What's the landscape in this area? So on
• 53:07
  Speaker 1: what I will put aside? You know they are there
• 53:09
  Speaker 1: are deals with the record companies, um, you know, to
• 53:13
  Speaker 1: use their music library and all of that. And that's
• 53:15
  Speaker 1: a completely kind of different, um different business trans You know,
• 53:20
  Speaker 1: if you use it, you get paid. But we're talking
• 53:22
  Speaker 1: about starting the fire or promotion right exactly. So UM,
• 53:28
  Speaker 1: a lot of these artists, you know, TikTok doesn't necessarily
• 53:32
  Speaker 1: pay these artists to be on TikTok. Um. What they'll
• 53:35
  Speaker 1: do is they'll connect. Let's stop. Let's stop for a second.
• 53:39
  Speaker 1: Let's not even get that far. Let's assume I am
• 53:42
  Speaker 1: at one of the three major labels. I have a
• 53:45
  Speaker 1: song by an artist who is not even on TikTok,
• 53:49
  Speaker 1: but I believe that if TikTok has made videos, it
• 53:53
  Speaker 1: would start the fire on this song. Hey, what do
• 53:57
  Speaker 1: I do? First? Do I contact individual TikTok ers? Do
• 54:01
  Speaker 1: I contact TikTok the company? And do I pay TikTok
• 54:06
  Speaker 1: any money? Is there any way I can make money
• 54:08
  Speaker 1: other than the usage? And see, since I'm such a
• 54:12
  Speaker 1: big company, do I edge out the smaller players? Got it? So?
• 54:17
  Speaker 1: I think, Um, you'd probably take a two pronged approach. First,
• 54:21
  Speaker 1: you would deal with the company, and you deal with
• 54:22
  Speaker 1: them their music and the music marketing company you could pay,
• 54:26
  Speaker 1: you know, add dollars to um. You know, get that
• 54:29
  Speaker 1: sound up in the sound library. You know you can
• 54:33
  Speaker 1: you can take out like what's kind of the equivalent
• 54:36
  Speaker 1: of banner ads basically, but for for an individual sound
• 54:39
  Speaker 1: that pops up and says, hey, consider using this sound
• 54:42
  Speaker 1: with your video. Um, so you could literally transactionally pay
• 54:46
  Speaker 1: TikTok o. There, let's stout there for talking. You have
• 54:49
  Speaker 1: any idea what that might cost and how many people
• 54:52
  Speaker 1: do it? Would I go on that page now and
• 54:53
  Speaker 1: see tend people offering to you that you say, use
• 54:56
  Speaker 1: my music one none. Um, I don't know how much
• 55:01
  Speaker 1: it costs at this point. UM. I do know that
• 55:04
  Speaker 1: it can be substantial. UM, but I don't know how
• 55:08
  Speaker 1: much it costs. UM in terms of the sounds that
• 55:12
  Speaker 1: show up, you know, I will check right now while
• 55:15
  Speaker 1: we talk and see how many that they're offering. Okay,
• 55:19
  Speaker 1: So in terms of like what I'm seeing when I'm
• 55:21
  Speaker 1: about to make a video and to make a sound,
• 55:23
  Speaker 1: so you so you pull it up and there is
• 55:26
  Speaker 1: a kind of a banner ad at the top, and
• 55:30
  Speaker 1: those are kind of sponsored sounds. So you know right now, UM,
• 55:35
  Speaker 1: I'm seeing like guest playlists. I'm seeing um different um,
• 55:40
  Speaker 1: different artists that are being you know, showcased. UM. There's
• 55:46
  Speaker 1: uh kind of a list of different playlists that TikTok makes.
• 55:49
  Speaker 1: They get like famous people to make playlists. There's like
• 55:53
  Speaker 1: trending feature sounds. You know. UM, there's dozens of UM
• 55:59
  Speaker 1: sounds up here are being suggested to you, UM from
• 56:03
  Speaker 1: from um from TikTok to be able to to use
• 56:06
  Speaker 1: and then um, you know, there's depending on like what.
• 56:10
  Speaker 1: Let's say you want to make a country, so you're
• 56:12
  Speaker 1: looking for country songs. So then you pick country and
• 56:15
  Speaker 1: up pops you know, hundreds of different sounds that you
• 56:18
  Speaker 1: can kind of go through, and people who are into this,
• 56:21
  Speaker 1: they'll spend hours looking through these sounds and listening to
• 56:24
  Speaker 1: them and stuff like that. But if you're a casual
• 56:27
  Speaker 1: TikTok user, you want to put a sound on your
• 56:30
  Speaker 1: video real quick, You're going to click on the first
• 56:32
  Speaker 1: thing that you see. And often that spot, you know,
• 56:35
  Speaker 1: is paid for by them. You know, I would say
• 56:38
  Speaker 1: a hundred percent of the time that spot is paid
• 56:40
  Speaker 1: for by a by a record label. Okay, let's assume
• 56:43
  Speaker 1: I'm on the very first page. Do I have to
• 56:47
  Speaker 1: go to the next level to get a list or
• 56:49
  Speaker 1: do I see the ads in the players? And also,
• 56:52
  Speaker 1: don't give me like ten songs. These are the trending songs. Yeah,
• 56:55
  Speaker 1: so there's a little thing that says like recommended and
• 56:58
  Speaker 1: it's kind of some of the trending songs out there. Um,
• 57:02
  Speaker 1: but when we say trending, it's like trending for you.
• 57:06
  Speaker 1: So what they it's trending but they think that you're
• 57:08
  Speaker 1: gonna like So it's kind of like it's not like
• 57:10
  Speaker 1: a Billboard Top one type of thing. It's like a
• 57:13
  Speaker 1: mix between what's popular but also what they think you're
• 57:16
  Speaker 1: going to want based on the previous videos that you've
• 57:19
  Speaker 1: made before. Can I pay to be in that trending list? Yeah?
• 57:24
  Speaker 1: You can, yes, as far as I understand. Yeah. Okay,
• 57:29
  Speaker 1: So let's assume I'm a big deep pocket. I come
• 57:32
  Speaker 1: with an act, I go to the people and I say, hey, listen,
• 57:35
  Speaker 1: I'm gonna jam this. Say okay, by a band a
• 57:38
  Speaker 1: rod pay to be on the list. Then what so
• 57:43
  Speaker 1: TikTok will push back. So during that podcast, during the
• 57:47
  Speaker 1: Foundering podcast, we talk about um this experience with Megan
• 57:51
  Speaker 1: the Stallion where Megan's label said, you know, we want
• 57:56
  Speaker 1: Captain Hook to be, you know, our focus track, and
• 58:00
  Speaker 1: the TikTok's had a music partnerships told me that what
• 58:03
  Speaker 1: she said back to them was no, no, you might
• 58:06
  Speaker 1: think that it's Captain Hook, but we want to see
• 58:09
  Speaker 1: what the users think first, and so what she said was, Okay,
• 58:12
  Speaker 1: don't just put all your money behind Captain Hook. Put
• 58:15
  Speaker 1: out five songs on the app, and then let's let
• 58:19
  Speaker 1: it simmer and see what people make. And then they
• 58:21
  Speaker 1: kind of dipped into the sound the private sound libraries
• 58:26
  Speaker 1: of everybody, UM, of all their users, and they started
• 58:29
  Speaker 1: saying that actually, no, out of those five songs, like,
• 58:31
  Speaker 1: it wasn't Captain Hook that got the early traction, it
• 58:34
  Speaker 1: was Savage that people were into. And so they saw
• 58:38
  Speaker 1: that and they said, okay, this is an indicator that
• 58:41
  Speaker 1: you know, people are savage is really better suited to
• 58:44
  Speaker 1: TikTok because of the music the way that the way
• 58:46
  Speaker 1: it is UM and because of this dance that was
• 58:49
  Speaker 1: also trending UM. And so it was then that they waited, uh,
• 58:53
  Speaker 1: you know a number of days that then they put
• 58:56
  Speaker 1: up the banner ad and then they put up they started,
• 58:59
  Speaker 1: you know, using all that money to UM for the promotion.
• 59:02
  Speaker 1: And so it's not just record labels saying, hey, TikTok,
• 59:07
  Speaker 1: here's money, let me tell you what to do. It's
• 59:09
  Speaker 1: oftentimes TikTok saying, hey, record label, let me tell you
• 59:13
  Speaker 1: what to do based on what I'm saying, And what's
• 59:16
  Speaker 1: going to be the most popular because it can't. It's
• 59:19
  Speaker 1: not going to take off if if it's not if
• 59:22
  Speaker 1: if people don't want to play with it, you know,
• 59:24
  Speaker 1: the same way you know on radio, you're you're stuck, right,
• 59:28
  Speaker 1: you can't go anywhere. You're in your car, you're listening
• 59:30
  Speaker 1: to radio. The song is on. You hear it ten times,
• 59:33
  Speaker 1: you know, maybe after the tenth eleven time you hear
• 59:36
  Speaker 1: it it becomes popular. You don't have a choice. Yeah,
• 59:38
  Speaker 1: you can change the station, but your choices are limited, right,
• 59:43
  Speaker 1: And TikTok is like, okay, well, we want to see
• 59:46
  Speaker 1: what people are already doing and then just like you know,
• 59:50
  Speaker 1: put that on steroids versus telling them exactly what to do. Okay,
• 59:54
  Speaker 1: But you say, when they seeded five songs, if I
• 59:58
  Speaker 1: heard you correctly, they within a matter of days what
• 1:00:02
  Speaker 1: the successful song is. I mean, they know it a
• 1:00:04
  Speaker 1: matter of hour. They could see it immediately probably, but
• 1:00:08
  Speaker 1: what they did was they did wait a number of
• 1:00:09
  Speaker 1: days to see Because what this sounds folder is is
• 1:00:13
  Speaker 1: someone saving a sound to make a video in the future.
• 1:00:17
  Speaker 1: That could be tomorrow, that could be a week from now.
• 1:00:20
  Speaker 1: They don't know that, um, But what they do know
• 1:00:22
  Speaker 1: is someone cared enough about this song or liked it
• 1:00:25
  Speaker 1: enough to be like, hey, I like that, I'm gonna
• 1:00:26
  Speaker 1: save that and so It's such a powerful indicator that
• 1:00:30
  Speaker 1: it's like you can't even describe it because it's like
• 1:00:33
  Speaker 1: literally the way people think. You know, people are thinking, Okay,
• 1:00:36
  Speaker 1: I like this song, so I'm going to save it
• 1:00:39
  Speaker 1: um and so TikTok can see that. In a way
• 1:00:42
  Speaker 1: the record labels can't see that, and so then they know, Okay,
• 1:00:45
  Speaker 1: this is probably going to be popular because in a
• 1:00:47
  Speaker 1: matter of day it's a leading indicator. In a matter
• 1:00:49
  Speaker 1: of days, there's gonna be a ton of videos using
• 1:00:53
  Speaker 1: this song, and then that's going to become viral. Okay,
• 1:00:56
  Speaker 1: let's assume I'm a deep pocket, I have a million dollars,
• 1:00:59
  Speaker 1: I have an act, lives in next door to me.
• 1:01:02
  Speaker 1: Can I get access to the music department at TikTok? Well?
• 1:01:07
  Speaker 1: I think a lot of this is relationships. So all
• 1:01:09
  Speaker 1: the big record labels have these relationships with TikTok, and
• 1:01:14
  Speaker 1: so you know, chances are if you are one of
• 1:01:17
  Speaker 1: the big record labels, you already have that relationship with
• 1:01:19
  Speaker 1: TikTok and you're in constant contact with them. So what
• 1:01:24
  Speaker 1: are the odds if I'm an independent are there? Do
• 1:01:26
  Speaker 1: I have any chance at all? Oh? I see what
• 1:01:29
  Speaker 1: you're saying, um, I think you have a chance. I
• 1:01:33
  Speaker 1: think it's in TikTok's best interest to build out these music, um,
• 1:01:39
  Speaker 1: these music capabilities, particularly in different niches. So you know,
• 1:01:44
  Speaker 1: they've got the popular songs cover, they've got your billboard on.
• 1:01:48
  Speaker 1: What they're focusing even more now on, is you know,
• 1:01:51
  Speaker 1: what country music are we building out? What Latino music
• 1:01:54
  Speaker 1: are we building out? Like what you know, these kind
• 1:01:57
  Speaker 1: of very specific kinds of music, because remember, what you
• 1:02:02
  Speaker 1: see is different from what everybody else sees on TikTok,
• 1:02:05
  Speaker 1: So they have to build out something really good for
• 1:02:09
  Speaker 1: each very particular group of people. And so it's not
• 1:02:13
  Speaker 1: enough to just have one thing that's popular for everyone.
• 1:02:16
  Speaker 1: They also need to build out all these other things.
• 1:02:18
  Speaker 1: So if you're an independent label that's maybe a little
• 1:02:20
  Speaker 1: bit off the beaten path or has a niche or
• 1:02:23
  Speaker 1: something like that, then I think you have an even
• 1:02:26
  Speaker 1: better chance at succeeding because they are actually looking for
• 1:02:29
  Speaker 1: that kind of thing. Okay, the very first relationship do
• 1:02:35
  Speaker 1: I have to pay TikTok to talk to them? That
• 1:02:41
  Speaker 1: I don't know the answer to. I mean, I really don't,
• 1:02:44
  Speaker 1: because I think that TikTok would say, you know, they're
• 1:02:47
  Speaker 1: constantly scouring for new and interesting and cool things. But
• 1:02:51
  Speaker 1: if you're an executive at TikTok, I've got to imagine
• 1:02:54
  Speaker 1: that you're busy and there's only so many meetings that
• 1:02:57
  Speaker 1: you can take each day. Um. You know. The way
• 1:03:01
  Speaker 1: around that, and you kind of alluded to this is Okay,
• 1:03:03
  Speaker 1: let me find a popular creator, pay them fifty dollars
• 1:03:08
  Speaker 1: to make a dance with my music. Um, that can
• 1:03:12
  Speaker 1: maybe have like a quicker, bigger bang for your buck.
• 1:03:15
  Speaker 1: And if that song and that video does really well,
• 1:03:17
  Speaker 1: then TikTok will notice. You do we have any idea
• 1:03:21
  Speaker 1: how many views of a video one of those big
• 1:03:24
  Speaker 1: creators gets. Oh, can be you know, tens of millions.
• 1:03:29
  Speaker 1: I mean, Charlie Demilio is one of the most popular
• 1:03:31
  Speaker 1: people on TikTok, and she has over a hundred million followers.
• 1:03:35
  Speaker 1: So just let's assume every one of her followers sees it.
• 1:03:40
  Speaker 1: That's just a hundred million, and that's not even the
• 1:03:42
  Speaker 1: people that don't follow her, you know. So Um, And
• 1:03:46
  Speaker 1: then the thing about TikTok is that, like, once it
• 1:03:49
  Speaker 1: gets really popular on TikTok, it's spills into everyday life,
• 1:03:52
  Speaker 1: and so you're starting to see those things in UM,
• 1:03:55
  Speaker 1: there's a ripple effect into Twitter, Facebook. You know, you'll
• 1:03:59
  Speaker 1: see it on the g ME Fallon show, You'll see
• 1:04:01
  Speaker 1: it um you know on your local news station. You know,
• 1:04:05
  Speaker 1: it starts to become like a larger than life type
• 1:04:08
  Speaker 1: of situation. Okay, let's assume I do want to pay
• 1:04:12
  Speaker 1: one of these creators. You're throwing out the figure of
• 1:04:14
  Speaker 1: fift K. Is that what it costs? It depends. I mean,
• 1:04:18
  Speaker 1: I've spoken to some creators who got paid five thousand.
• 1:04:21
  Speaker 1: I've spoken to some creators who have gotten paid a
• 1:04:23
  Speaker 1: hundred thousand. UM. You know, there's there. There have been
• 1:04:28
  Speaker 1: instances where someone's gotten paid a million dollars for one
• 1:04:31
  Speaker 1: post um. So it just really depends the level of
• 1:04:37
  Speaker 1: of creator that you're going after. Let's assume I do that.
• 1:04:41
  Speaker 1: When you're saying let's just use a hundred K for
• 1:04:43
  Speaker 1: an example, is it a hundred K for one video
• 1:04:47
  Speaker 1: or do I have to have a campaign make multiple videos?
• 1:04:51
  Speaker 1: It just depends how you structure it. So some of
• 1:04:53
  Speaker 1: these people could could do a hundred K for one
• 1:04:56
  Speaker 1: very unique video. Most of them will do. Most of
• 1:04:59
  Speaker 1: them will do like three or four because the first
• 1:05:02
  Speaker 1: one might not be better might not take off. They
• 1:05:05
  Speaker 1: might like test three or four of them and see
• 1:05:08
  Speaker 1: which one. Um. The woman who created the Savage dance,
• 1:05:12
  Speaker 1: which she was not paid for, um, but she has
• 1:05:16
  Speaker 1: this is a woman who does get paid for her dances,
• 1:05:18
  Speaker 1: but the Savage one, in particular, she did not get
• 1:05:20
  Speaker 1: paid for. She made about five different dances to savage
• 1:05:25
  Speaker 1: until one of them took off. Um. And so you're
• 1:05:28
  Speaker 1: kind of playing with it to see, you know what
• 1:05:30
  Speaker 1: what hits. So if I have a successful track, I
• 1:05:35
  Speaker 1: can only watch the video. I cannot listen to the
• 1:05:39
  Speaker 1: complete song unless I go to another platform. Correct. Correct, Okay,
• 1:05:45
  Speaker 1: Let's say I am nobody from nowhere and I realized
• 1:05:49
  Speaker 1: it's a fast moving landscape. But the classic example here
• 1:05:53
  Speaker 1: is little Nazax with Old Town Road. Can you explain
• 1:05:57
  Speaker 1: how something like that becomes successful? Yeah, So Wills X
• 1:06:04
  Speaker 1: is kind of like this, um, like the early story
• 1:06:11
  Speaker 1: that kind of woke the record industry up to all this. UM.
• 1:06:17
  Speaker 1: You know he was, um, he he spent I think
• 1:06:22
  Speaker 1: it was like twenty or nineteen weeks at the top
• 1:06:24
  Speaker 1: of the billboard, uh chart. I think like it was.
• 1:06:30
  Speaker 1: I love this story because he kind of like it
• 1:06:32
  Speaker 1: kind of came out of nowhere. Um, but you know
• 1:06:37
  Speaker 1: what it what it opened people up to the possibility was,
• 1:06:40
  Speaker 1: is like what he could do with it? And so
• 1:06:42
  Speaker 1: then they realized, Okay, well you could like actually, you know,
• 1:06:45
  Speaker 1: pay someone. Uh you know, he could actually like pay
• 1:06:48
  Speaker 1: someone for it to do to do what he kind
• 1:06:51
  Speaker 1: of started to do, um naturally you know, but he
• 1:06:58
  Speaker 1: you know, he like promoted himself. He created memes to
• 1:07:03
  Speaker 1: promote old Town Road. Um. You know, he he like
• 1:07:08
  Speaker 1: would go on Twitter to talk about it. He made
• 1:07:12
  Speaker 1: um these different challenges. You know, he he really gamed it.
• 1:07:15
  Speaker 1: He really tried hard, um, you know, to do that.
• 1:07:18
  Speaker 1: And so what the record companies realized was like, oh,
• 1:07:22
  Speaker 1: I could just do that. I could build like a
• 1:07:23
  Speaker 1: whole I could build a whole campaign around you know,
• 1:07:28
  Speaker 1: doing kind of like what he did and building off
• 1:07:30
  Speaker 1: of his his creativity. There. Okay, we live in a
• 1:07:34
  Speaker 1: tower of Babel society. Let's assume I create a smash
• 1:07:39
  Speaker 1: in my bedroom and I don't gamify it. I don't
• 1:07:43
  Speaker 1: basically say, you know, compete here. I don't blast people
• 1:07:47
  Speaker 1: watch my video. Is there any chance my video can
• 1:07:51
  Speaker 1: make it? Yeah, there's definitely still serendipity that happens on TikTok.
• 1:07:57
  Speaker 1: You know, I don't think you can say everything is.
• 1:08:00
  Speaker 1: I think there's definitely still you know, fun stuff that happens,
• 1:08:04
  Speaker 1: and it's different and unique and it's fun, and you know,
• 1:08:07
  Speaker 1: people jump to it and it suddenly gets um popular.
• 1:08:11
  Speaker 1: The thing about the TikTok algorithm is that it can
• 1:08:16
  Speaker 1: it can recognize that very quickly early on, and so
• 1:08:19
  Speaker 1: what that does is it rewards it rewards that engagement,
• 1:08:24
  Speaker 1: and so there's definitely if you're a songwriter, you know,
• 1:08:28
  Speaker 1: I think that hope is is definitely out there. It
• 1:08:30
  Speaker 1: just gets harder the bigger it gets, and the more
• 1:08:33
  Speaker 1: the more money that gets involved, the harder it gets. Okay,
• 1:08:37
  Speaker 1: So if I'm in a good little Nazics a couple
• 1:08:40
  Speaker 1: of years ago, but I am an artist and I'm
• 1:08:42
  Speaker 1: starting to get traction, I kind of asked this, but
• 1:08:46
  Speaker 1: let's you know, at what point will I hear from
• 1:08:49
  Speaker 1: the somebody at TikTok saying hey, you know, we want
• 1:08:51
  Speaker 1: to be involved with you pretty early on? I mean,
• 1:08:54
  Speaker 1: they have relationships with with so many people and this
• 1:08:58
  Speaker 1: is their job. I mean, music is so important to
• 1:09:01
  Speaker 1: TikTok because it keeps people on the platforms. It keeps
• 1:09:04
  Speaker 1: people coming to the platforms, it keeps them new and
• 1:09:08
  Speaker 1: interesting and different, and so it's in TikTok's best interest
• 1:09:11
  Speaker 1: to you know, continuously bring new and different and interesting
• 1:09:15
  Speaker 1: people onto the app. And so there are you know,
• 1:09:19
  Speaker 1: the woman we interview in our podcast UM Isabel can
• 1:09:23
  Speaker 1: terrisa news. Her whole job head of Music Partnerships is
• 1:09:26
  Speaker 1: to constantly be out there meeting with people, talking to them.
• 1:09:30
  Speaker 1: And yes, she has these relationships with these big record labels,
• 1:09:34
  Speaker 1: but she's also reaching out, you know, to the flow
• 1:09:37
  Speaker 1: millions of the world who didn't have those you know,
• 1:09:40
  Speaker 1: record label UM contacts yet and because she wants they
• 1:09:45
  Speaker 1: want to know these people first. It's it's in their
• 1:09:47
  Speaker 1: best interest to UM, you know, find them first. And
• 1:09:51
  Speaker 1: I think she told me that in the last year
• 1:09:53
  Speaker 1: they had UM, they had partnered up with musicians, I
• 1:09:58
  Speaker 1: think like fifty musician before they had gotten signed by
• 1:10:01
  Speaker 1: record labels. Do you have any idea how many people
• 1:10:04
  Speaker 1: are working in that department? I don't. I mean in
• 1:10:08
  Speaker 1: the US, it's not that big of a company, like
• 1:10:10
  Speaker 1: it's you know, a thousand people or so. It's not
• 1:10:13
  Speaker 1: this huge, massive behemoth. I mean in China. Um, you know,
• 1:10:18
  Speaker 1: I think they're up to like sixty seventy people at
• 1:10:21
  Speaker 1: byte Dance and so, um, you know. But it's but
• 1:10:24
  Speaker 1: here in the U s it's it's not that many people. Okay.
• 1:10:27
  Speaker 1: How many countries is uh? TikTok in like every country?
• 1:10:33
  Speaker 1: Like a hundred markets or something like that. Okay, Now
• 1:10:36
  Speaker 1: this is something we've gotten from the internet. You know,
• 1:10:39
  Speaker 1: it's a big world out there. So if I have
• 1:10:41
  Speaker 1: success in America, okay to me, even if the song
• 1:10:45
  Speaker 1: is in English, what are the chances will be pushed
• 1:10:49
  Speaker 1: in foreign countries? Hi? So all of these all of
• 1:10:54
  Speaker 1: these videos are pushed around their global I mean, there's
• 1:10:57
  Speaker 1: a separation between China and the rest of the world.
• 1:11:00
  Speaker 1: So I would, um, you know, caution that what you're
• 1:11:03
  Speaker 1: saying in China is not what you're seeing in the
• 1:11:05
  Speaker 1: rest of the world. But China excluded. Um, it's all over,
• 1:11:10
  Speaker 1: it's global, Okay. You also said that TikTok will reach
• 1:11:15
  Speaker 1: out to creators, talk to their parents, pay them, give
• 1:11:19
  Speaker 1: them hints. Can you amplify that or see if I
• 1:11:23
  Speaker 1: even have it correct? Yeah, So we talked to a
• 1:11:27
  Speaker 1: number of creators that were assigned these kind of like
• 1:11:29
  Speaker 1: individual agents the TikTok um you know, managers, and these
• 1:11:34
  Speaker 1: people can do all sorts of things from hey, my
• 1:11:38
  Speaker 1: video was blocked, can you figure out how you know,
• 1:11:40
  Speaker 1: tech support issues? Um? Can you figure out why why
• 1:11:43
  Speaker 1: that happened? Or why I'm offline and why can't get
• 1:11:46
  Speaker 1: on something like that? Um. They also send out these
• 1:11:50
  Speaker 1: emails that are saying like, Okay, this trend is trending.
• 1:11:53
  Speaker 1: We just introduced this feature. Everybody use that. If you
• 1:11:56
  Speaker 1: use that, it's gonna trend and your video is going
• 1:11:59
  Speaker 1: to get more people. UM. Same with hashtag hashtags. And
• 1:12:04
  Speaker 1: then um, what they call challenges, which is this idea
• 1:12:07
  Speaker 1: of like um, you know there's like a dance challenge
• 1:12:11
  Speaker 1: or like you know remember the like water um most
• 1:12:14
  Speaker 1: of like the water bucket challenge a million years ago,
• 1:12:16
  Speaker 1: Like that's something that would have been on on TikTok
• 1:12:19
  Speaker 1: you know, like um this challenge. And so what creators
• 1:12:23
  Speaker 1: realized was if they listen to the managers, if they
• 1:12:26
  Speaker 1: if they watch what's happening in these emails and they
• 1:12:29
  Speaker 1: do what they're they're asked to do, that their stuff
• 1:12:32
  Speaker 1: does get more viewership. You know, because TikTok we'll sign
• 1:12:36
  Speaker 1: some sort of a lot of these challenges are sponsored
• 1:12:39
  Speaker 1: by brands that are um. You know, brands are paying
• 1:12:43
  Speaker 1: TikTok for this, and they're being guaranteed a certain number
• 1:12:45
  Speaker 1: of views. So then TikTok will go and push those
• 1:12:49
  Speaker 1: videos out to more people, and the creators that follow
• 1:12:52
  Speaker 1: those challenges will get their videos seen by more people,
• 1:12:56
  Speaker 1: they'll up their follower accounts, they'll get more money in
• 1:12:59
  Speaker 1: the end, and it's all kind of a um a
• 1:13:01
  Speaker 1: flywheale from there. Okay, are there any individual ads? Were
• 1:13:05
  Speaker 1: all ads are embedded in the videos. There are also
• 1:13:10
  Speaker 1: now like you'll be scrolling and it's like a takeover. UM.
• 1:13:14
  Speaker 1: So yeah, those are ads that are that are there
• 1:13:17
  Speaker 1: already and um and they're coming more and more. And
• 1:13:22
  Speaker 1: the other interesting thing that they're testing out is now
• 1:13:25
  Speaker 1: e commerce where you can literally buy something within somebody's video,
• 1:13:29
  Speaker 1: Like you click on that link to buy that item
• 1:13:32
  Speaker 1: that that creator is UM is talking about at the moment. Okay,
• 1:13:37
  Speaker 1: if they send one of these emails, like manager emails,
• 1:13:40
  Speaker 1: how many people are getting them? You know that I
• 1:13:43
  Speaker 1: haven't been able to get down to the bottom of
• 1:13:45
  Speaker 1: but I have spoken to dozens of creators and every
• 1:13:50
  Speaker 1: single person I've every creator I've spoken to is getting
• 1:13:52
  Speaker 1: these emails. So I don't know what the threshold is,
• 1:13:57
  Speaker 1: you know, I if I were to guess, I would
• 1:13:59
  Speaker 1: say something like fifty followers or something like that. Um,
• 1:14:04
  Speaker 1: but every creator that I've spoken to with more than
• 1:14:07
  Speaker 1: fifty hundred thousand people are getting have been getting these emails.
• 1:14:11
  Speaker 1: Let's assume I'm on the list. How often will I
• 1:14:13
  Speaker 1: get an email? It was like once a week or so.
• 1:14:17
  Speaker 1: Um for a number of times I got on the
• 1:14:21
  Speaker 1: email list somehow, and UM, I was getting them once
• 1:14:24
  Speaker 1: a week or so. I think it's less frequent now. Okay,
• 1:14:29
  Speaker 1: So does TikTok today or did they ever literally paid
• 1:14:35
  Speaker 1: direct cash to creators In UM China, they paid direct
• 1:14:41
  Speaker 1: cash to creators and that was and they also paid
• 1:14:43
  Speaker 1: people to come on UM and you know from from
• 1:14:47
  Speaker 1: other platforms. When TikTok launched in the US, the US,
• 1:14:51
  Speaker 1: the global version, the X China TikTok Um, they also
• 1:14:55
  Speaker 1: paid some creators to make videos. These days, it is
• 1:15:00
  Speaker 1: more of a UM, hey, let me set you up
• 1:15:04
  Speaker 1: with this brand. And there they do matchmaker and you know,
• 1:15:06
  Speaker 1: they take a cut sometimes and sometimes they don't. Okay,
• 1:15:09
  Speaker 1: let's assume I'm successful on TikTok and TikTok knows who
• 1:15:14
  Speaker 1: I am. I'm literally going to get an email from them,
• 1:15:18
  Speaker 1: Hey we think or they're going to contact me. However
• 1:15:21
  Speaker 1: that uh, you know this brand is interesting you should
• 1:15:23
  Speaker 1: were or am I going to have to get a
• 1:15:25
  Speaker 1: manager who's going to work the relationship? How does it work?
• 1:15:28
  Speaker 1: So both ways? So if you have a manager, they'll
• 1:15:31
  Speaker 1: talk to your manager. If it's just you, they'll talk
• 1:15:34
  Speaker 1: to you and yeah, you'll get contacted by them and
• 1:15:36
  Speaker 1: be like, hey, we identified you, or this brand is
• 1:15:39
  Speaker 1: interested in working with you. Or they'll send brands like
• 1:15:43
  Speaker 1: a dossier of like fifteen people being like, hey this
• 1:15:47
  Speaker 1: these people would fit with your brand. Um, you know
• 1:15:49
  Speaker 1: you should you should reach out to them. We'll give
• 1:15:51
  Speaker 1: you connect or you know, we'll connect you with them.
• 1:15:54
  Speaker 1: Let's assume I've had some success and I say, this
• 1:15:56
  Speaker 1: is what I want to do for my occupation. How
• 1:15:59
  Speaker 1: do I make sure other than doing great content, how
• 1:16:03
  Speaker 1: do I make sure that opportunities come my way? Most
• 1:16:09
  Speaker 1: of the people that we speak to you for the podcast,
• 1:16:12
  Speaker 1: um for the Foundering podcast had agents, you know they
• 1:16:16
  Speaker 1: really they started out without one and then at a
• 1:16:18
  Speaker 1: certain level, they ended up getting a manager or getting
• 1:16:21
  Speaker 1: an agent, and a lot of the things they do
• 1:16:24
  Speaker 1: is those brand partnerships. Um. But oftentimes, you know, like
• 1:16:28
  Speaker 1: the brands will just message them or you know, sometimes
• 1:16:31
  Speaker 1: they start off with free stuff. Hey, I'll give you
• 1:16:33
  Speaker 1: this free sweatshirt if you wear it in your in
• 1:16:35
  Speaker 1: your in your video, or like these unboxing videos where
• 1:16:40
  Speaker 1: they're like, you can keep the stuff we send you, um,
• 1:16:43
  Speaker 1: as long as as long as you make a video
• 1:16:45
  Speaker 1: about it. So that's kind of like the gateway drug
• 1:16:47
  Speaker 1: of of this marketing is like people will start that
• 1:16:50
  Speaker 1: way with like free merchandise, um, and then they kind
• 1:16:53
  Speaker 1: of build up from there. And this can be done
• 1:16:55
  Speaker 1: without any involvement from the TikTok organization. Correct. Okay, how
• 1:17:01
  Speaker 1: many people are making an excess of fifty thousand US
• 1:17:04
  Speaker 1: on TikTok? Oh? Gosh? I mean alone for the Foundering podcast,
• 1:17:11
  Speaker 1: we spoke to a dozen, so you know, um, there's
• 1:17:15
  Speaker 1: definitely you know, people who are making a lot of money.
• 1:17:20
  Speaker 1: I don't have a number for you though. Okay, how
• 1:17:22
  Speaker 1: many people are making seven figures? I think you know
• 1:17:27
  Speaker 1: Forbes did this uh Forbes did this piece uh that
• 1:17:32
  Speaker 1: were like the richest TikTok stars, like their seven highest
• 1:17:37
  Speaker 1: earning TikTok stars. Um, I remember they did this, I
• 1:17:42
  Speaker 1: think yeah, last summer and um, and so they had
• 1:17:48
  Speaker 1: you know, this woman Addison Ray five million dollars, Charlie Demilio,
• 1:17:53
  Speaker 1: you know, two million dollars a year. Her sister Dixie
• 1:17:57
  Speaker 1: Demelio three million dollars a year. You know, these are
• 1:18:00
  Speaker 1: people who are probably now making double that, given the
• 1:18:04
  Speaker 1: given the popularity. Now, okay, that's a lot of money. UM,
• 1:18:09
  Speaker 1: let's assume they pay me a million. I'm making a
• 1:18:11
  Speaker 1: million dollars a year. Forget taxes. How much of that
• 1:18:14
  Speaker 1: has net to me? Their estimation was this pre tax,
• 1:18:22
  Speaker 1: pre tax earnings. UM. You know, if they don't, um,
• 1:18:28
  Speaker 1: take some of that out, I'm assuming some of that
• 1:18:30
  Speaker 1: goes to their managers. My question. You know, if you're
• 1:18:33
  Speaker 1: a successful musical artist, you have the manager, you have
• 1:18:36
  Speaker 1: the lawyer, the accountant, you have the agent, and they're
• 1:18:39
  Speaker 1: chipping away at the gross and many of them take
• 1:18:41
  Speaker 1: off the top. So in this particular case, if I
• 1:18:44
  Speaker 1: get a million dollars, let's assume I gotta pay an agent.
• 1:18:49
  Speaker 1: Am I gonna have to pay anybody else? I spoke
• 1:18:52
  Speaker 1: to one TikTok star who told me that he, you know,
• 1:18:55
  Speaker 1: he makes seven figures on TikTok and then he was
• 1:18:58
  Speaker 1: mostly doing it himself. That he he had hired an assistant,
• 1:19:02
  Speaker 1: some young kid out of college, and um, you know,
• 1:19:06
  Speaker 1: he had a manager. But when I asked him, you know,
• 1:19:08
  Speaker 1: how much are you making personally? You know, he said
• 1:19:11
  Speaker 1: seven figures. Um, so I'd imagine it was still you know,
• 1:19:16
  Speaker 1: his his his manager and agent is also making enough
• 1:19:19
  Speaker 1: that it's worth it to them, you know, to continue
• 1:19:22
  Speaker 1: doing that. But a lot of these managers, you know,
• 1:19:24
  Speaker 1: they're managing dozens of people at a time. They have
• 1:19:27
  Speaker 1: these kind of big houses of of folks. Um. You know,
• 1:19:31
  Speaker 1: so I'm sure that that all that that that all
• 1:19:34
  Speaker 1: adds up. Okay, you have any idea what percentage the
• 1:19:37
  Speaker 1: manager takes. I don't. It's a good question though, Okay,
• 1:19:42
  Speaker 1: So let's talk about these houses. Give us the history
• 1:19:45
  Speaker 1: in the status of these houses. Oh, the hype houses. Um,
• 1:19:50
  Speaker 1: so they're called hype houses or TikTok mansions, and um,
• 1:19:54
  Speaker 1: you know, I think this started it back in the
• 1:19:56
  Speaker 1: Vine days. I don't know if you remember Vine, but um,
• 1:20:00
  Speaker 1: I certain yeah, like they would call it. They all
• 1:20:03
  Speaker 1: there was like one house on Vine Street that they
• 1:20:06
  Speaker 1: found in l A. And it was like this collaboration
• 1:20:09
  Speaker 1: houses where they would all make videos together. And what
• 1:20:12
  Speaker 1: they what these folks realized was that, you know, the
• 1:20:16
  Speaker 1: more they make videos together, the more they can boost
• 1:20:20
  Speaker 1: their view counts and the more followers they get because
• 1:20:24
  Speaker 1: people are like suddenly invested in the drama. And so
• 1:20:27
  Speaker 1: it's this like real World, you know meets Shark Tank
• 1:20:33
  Speaker 1: kind of um experience where it's like ten kids living
• 1:20:37
  Speaker 1: in a flashy house in Los Angeles making you know,
• 1:20:41
  Speaker 1: doing brand deals and with for brands, it's great, right,
• 1:20:44
  Speaker 1: you make one deal with the house and you're suddenly
• 1:20:46
  Speaker 1: in ten popular kids videos. Um. You know, it's a
• 1:20:49
  Speaker 1: much more efficient way of doing some of these deals.
• 1:20:53
  Speaker 1: And then like the their followers get invested in the drama,
• 1:20:56
  Speaker 1: and then you have like the Hollywood Reporter and other
• 1:20:59
  Speaker 1: like you know, l A magazines and stuff following them
• 1:21:02
  Speaker 1: around and and stuff like that, and so it starts
• 1:21:05
  Speaker 1: to drum up even more business and even more followers
• 1:21:08
  Speaker 1: for them. How many of these houses are there, there's definitely,
• 1:21:15
  Speaker 1: I mean I can count on my like top of
• 1:21:18
  Speaker 1: my head. Maybe you know, a dozen or so, but
• 1:21:21
  Speaker 1: you know, I'm sure there's a lot more smaller collaboratives
• 1:21:24
  Speaker 1: of people who are like trying to trying to break
• 1:21:26
  Speaker 1: into it. Okay, let's talk about a house. You know,
• 1:21:31
  Speaker 1: especially some of these are enrichy neighborhoods and they're large.
• 1:21:34
  Speaker 1: Who gets the house started? You know, they have you know,
• 1:21:38
  Speaker 1: maybe ten or twenty K a month to rent the house. Yeah.
• 1:21:41
  Speaker 1: So the person we spoke to Alex Warren, who lives
• 1:21:45
  Speaker 1: in what was originally called the Hype House. Um, he
• 1:21:49
  Speaker 1: was the one who started the house with his friends
• 1:21:52
  Speaker 1: and kind of recruited people. UM, I don't remember if um,
• 1:21:59
  Speaker 1: I don't know who ended up footing the bill there,
• 1:22:02
  Speaker 1: like the original rent for all of this. Um. But
• 1:22:06
  Speaker 1: you know it's this like ten bedroom they have a pool,
• 1:22:09
  Speaker 1: they have like a pool table in a movie theater,
• 1:22:12
  Speaker 1: in a game room, and you know, a million bedrooms. Um.
• 1:22:16
  Speaker 1: And then they all kind of like live together and
• 1:22:19
  Speaker 1: they have a they order to take out all the
• 1:22:20
  Speaker 1: time and things like that. Um. There have been stories
• 1:22:25
  Speaker 1: and some you know, cautionary tales around managers who end
• 1:22:31
  Speaker 1: up putting the down payment, you know, like the rental, Like, um,
• 1:22:36
  Speaker 1: the what's it called when it's a down payment for rental,
• 1:22:41
  Speaker 1: it's a mortgage or it's a rental, it's at least well, yeah,
• 1:22:44
  Speaker 1: like the first like two months put you know, putting
• 1:22:47
  Speaker 1: up front, like the first two months or something, and
• 1:22:50
  Speaker 1: then like they're not making it as much money as
• 1:22:53
  Speaker 1: they wanted to and then the manager stuck with like
• 1:22:55
  Speaker 1: all these kids who you know. So there's been some
• 1:22:59
  Speaker 1: there's been some um cautionary tales around some of the
• 1:23:02
  Speaker 1: managers who kind of take who have kind of taken
• 1:23:04
  Speaker 1: a chance to kind of try to start their own
• 1:23:07
  Speaker 1: and then um and then having it, you know, go
• 1:23:11
  Speaker 1: into utter failure. Well, there was a recent story. I
• 1:23:13
  Speaker 1: think it was one of the Paul brothers, I'm not
• 1:23:15
  Speaker 1: absolutely sure, and they said he had the house and
• 1:23:20
  Speaker 1: he was giving a certain percentage to the other people
• 1:23:25
  Speaker 1: in the house and taking the lion share a great
• 1:23:27
  Speaker 1: deal for himself. Is that sometimes a case? Yeah, I
• 1:23:31
  Speaker 1: mean it's not that expensive I mean to rent some
• 1:23:35
  Speaker 1: of these houses. I mean the Hiphe house, I remember,
• 1:23:37
  Speaker 1: I think it was like a nine million dollar house.
• 1:23:40
  Speaker 1: But you're renting it, so you're not you know, you're
• 1:23:42
  Speaker 1: paying maybe twenty something like that, um, maybe even less.
• 1:23:48
  Speaker 1: You know, for these things and you're dividing it up
• 1:23:50
  Speaker 1: between ten. Some of them are stuffing like fifteen people
• 1:23:53
  Speaker 1: into it, and so you know, you could take a
• 1:23:56
  Speaker 1: cut that way. Um, you know, every every month, you
• 1:24:00
  Speaker 1: could take a cut that way. Okay, let's just say
• 1:24:03
  Speaker 1: I'm a guy in Kansas, I'm making a hundred k year,
• 1:24:07
  Speaker 1: I'm moving to the Hype House. Am I all already
• 1:24:11
  Speaker 1: going to have to give a percentage of that to
• 1:24:13
  Speaker 1: the hype manager just for living in the Hype House? Yeah?
• 1:24:17
  Speaker 1: I think you have to pay rent, you know, for example,
• 1:24:20
  Speaker 1: and you know some of the houses though, they've gotten sponsorships,
• 1:24:24
  Speaker 1: so like they'll get an energy drink to like sponsor
• 1:24:28
  Speaker 1: the house, and then you could that's your pay that's
• 1:24:30
  Speaker 1: your payment right that they're paying their they're paying their
• 1:24:33
  Speaker 1: monthly rent for the house. Okay, if you are a
• 1:24:37
  Speaker 1: successful creator, how often do you have to post a
• 1:24:40
  Speaker 1: video constantly? So we uh we we did this event
• 1:24:46
  Speaker 1: with one of the people, um Karen Spencer, who we
• 1:24:49
  Speaker 1: um interviewed on our podcast, who's a managers who's been
• 1:24:53
  Speaker 1: in digital and social media for a long time. And
• 1:24:56
  Speaker 1: you know, she says that you know, you're incentivized to
• 1:24:59
  Speaker 1: post often when you drop off, your fans drop off,
• 1:25:03
  Speaker 1: and TikTok um you know, shows you no love when
• 1:25:06
  Speaker 1: you don't show them love. And so you know it,
• 1:25:09
  Speaker 1: it goes back to the original goal of TikTok which
• 1:25:13
  Speaker 1: is to keep people on as long as possible. If
• 1:25:15
  Speaker 1: there's not enough content, they're not keeping people on. And
• 1:25:18
  Speaker 1: if there's not enough content from the popular people, you're
• 1:25:20
  Speaker 1: not keeping these eyeballs. And so, you know, you don't
• 1:25:24
  Speaker 1: realize how much time it takes to make these videos,
• 1:25:27
  Speaker 1: and so you know, your you might look like you're
• 1:25:31
  Speaker 1: spending the day lounging around in the pool and it
• 1:25:33
  Speaker 1: looks super you know, glamorous, but you're really spending many
• 1:25:37
  Speaker 1: many hours a day to make many videos a day
• 1:25:40
  Speaker 1: UM to be able to keep people, keep people interested.
• 1:25:44
  Speaker 1: And what about would you say, one video a day,
• 1:25:48
  Speaker 1: one video a week, multiple videos a day, multiple videos
• 1:25:53
  Speaker 1: a day. Okay, let's talk about the issue of bad
• 1:25:57
  Speaker 1: actors on the weather, young people on the format, people
• 1:26:01
  Speaker 1: getting information they shouldn't have, trolling these people privacy, what's
• 1:26:07
  Speaker 1: going on there? Yeah, So we devoted all of episode
• 1:26:11
  Speaker 1: for the Foundering Podcast to this issue of UM, the
• 1:26:16
  Speaker 1: young kids that are on the app, and so I
• 1:26:20
  Speaker 1: think you know, the takeaway is bad stuff happens on
• 1:26:23
  Speaker 1: all social media apps. Um, the differences is too. One
• 1:26:28
  Speaker 1: is some of these kids are really really young. They're
• 1:26:32
  Speaker 1: eight years old, they're nine years old, they're in elementary school,
• 1:26:36
  Speaker 1: and they're seeing some really really mature things. UM. The
• 1:26:40
  Speaker 1: second thing is that it's so difficult to see what's
• 1:26:44
  Speaker 1: going on. Apparent has a really difficult time monitoring and seeing.
• 1:26:49
  Speaker 1: Unless you're literally physically sitting next to your child, it
• 1:26:53
  Speaker 1: is hard to see what they're looking at. And you
• 1:26:55
  Speaker 1: can set all sorts of different things, you know, you
• 1:26:58
  Speaker 1: could set words to alter out, you could set time
• 1:27:01
  Speaker 1: limits on them, you can set all different things, but
• 1:27:04
  Speaker 1: at the end of the day, unless you're physically sitting
• 1:27:06
  Speaker 1: next to them, you don't know exactly you know, what
• 1:27:09
  Speaker 1: they're looking at. And so, you know, we tell this
• 1:27:12
  Speaker 1: story where we talked to a woman UM who told
• 1:27:16
  Speaker 1: us her her story about an eight year old family
• 1:27:19
  Speaker 1: member who UM, you know, started using TikTok and you know,
• 1:27:25
  Speaker 1: started getting comments from older, older men or what they
• 1:27:28
  Speaker 1: thought were older men, asking telling him what to do,
• 1:27:30
  Speaker 1: what kind of videos to make, and he made a
• 1:27:33
  Speaker 1: video of himself in his underwear because he was told
• 1:27:37
  Speaker 1: to make a video of himself and his underwear dancing
• 1:27:39
  Speaker 1: around to it, posted it on his feed. His feed
• 1:27:42
  Speaker 1: got you know, twenty hits or something, twenty views, nothing,
• 1:27:46
  Speaker 1: But then one of these men downloaded his video and
• 1:27:51
  Speaker 1: then reposted it up on their TikTok account, and then
• 1:27:53
  Speaker 1: it got thousands, and suddenly this eight year old is
• 1:27:56
  Speaker 1: in his underwear and that's on the internet forever. And
• 1:28:00
  Speaker 1: you never know what these people are going to do
• 1:28:02
  Speaker 1: with that. You never know, like what some of these
• 1:28:05
  Speaker 1: people are are doing, how they might find him, how
• 1:28:07
  Speaker 1: they might use the app. You know. UM. In recent years,
• 1:28:12
  Speaker 1: like in January a few months ago, UM TikTok made
• 1:28:15
  Speaker 1: a number of changes to make this a safer place. UM,
• 1:28:19
  Speaker 1: but it's still you know, your You get exposure to
• 1:28:23
  Speaker 1: things like an arexia suicide, you know, UM, anti vax stuff, UM,
• 1:28:30
  Speaker 1: just all sorts of really mature content that you don't
• 1:28:33
  Speaker 1: necessarily want, you know, an eight year old looking at now.
• 1:28:38
  Speaker 1: In the past year, the US government, specifically under the
• 1:28:42
  Speaker 1: former guy, wanted to shut TikTok down or sell it
• 1:28:47
  Speaker 1: to an American company because of privacy data issues. What's
• 1:28:52
  Speaker 1: the real story there? So the most frustrating part about
• 1:29:00
  Speaker 1: doing this foundering podcast and spending so much time studying
• 1:29:03
  Speaker 1: TikTok is that we still don't have the answer as
• 1:29:07
  Speaker 1: to whether or not this app is a national security
• 1:29:10
  Speaker 1: threat or not. And so that was kind of the
• 1:29:12
  Speaker 1: whole thing, right from Trump saying, we think that all
• 1:29:15
  Speaker 1: this very personal data that powers your algorithms is at
• 1:29:20
  Speaker 1: the end of the day, owned by Chinese company. And
• 1:29:24
  Speaker 1: in China there is a law that says, if the
• 1:29:27
  Speaker 1: government asks for this data, you have to give it
• 1:29:29
  Speaker 1: to me. Now, TikTok says, all of our data is
• 1:29:32
  Speaker 1: stored in the US and with backup servers in Singapore,
• 1:29:37
  Speaker 1: and it's not stored in China, and TikTok itself is
• 1:29:39
  Speaker 1: not available in China, and so therefore we're not giving
• 1:29:42
  Speaker 1: money away to the Chinese government. Now, if you take
• 1:29:46
  Speaker 1: them at face value, it could be true right now,
• 1:29:49
  Speaker 1: they could also not be giving data to the Chinese government.
• 1:29:54
  Speaker 1: That doesn't mean they're not amassing a massive trove of
• 1:29:57
  Speaker 1: really personal data, really, you know, kind of these personal
• 1:30:02
  Speaker 1: profiles of um tens of millions of Americans that could
• 1:30:06
  Speaker 1: be used for nefarious purposes in the future, or that
• 1:30:09
  Speaker 1: could be hacked, you know, by a government actor who
• 1:30:13
  Speaker 1: might have keys to the castle. Like you don't really
• 1:30:15
  Speaker 1: know any of those things because it's impossible to prove
• 1:30:18
  Speaker 1: a negative or something that will happen in the future.
• 1:30:21
  Speaker 1: And so that at the end of the day is
• 1:30:23
  Speaker 1: the crux of the issue is that the facts are
• 1:30:27
  Speaker 1: TikTok collects a lot of data that could eventually be
• 1:30:30
  Speaker 1: dangerous and dangerous hands UM, and that they are owned
• 1:30:34
  Speaker 1: by Chinese company subject to Chinese laws. So those are facts.
• 1:30:38
  Speaker 1: What you don't know is has anything wrong been done?
• 1:30:42
  Speaker 1: You don't we we don't know that there's no publicly
• 1:30:44
  Speaker 1: available data. And Trump never made the case and UM
• 1:30:47
  Speaker 1: publicly at least, and when he left office, everything was
• 1:30:52
  Speaker 1: just one big question mark because the Biden administration came
• 1:30:56
  Speaker 1: into power and UM basically put a hold on everything.
• 1:31:02
  Speaker 1: And so this idea of banning the app or selling
• 1:31:05
  Speaker 1: it to a US company or all the lawsuits that
• 1:31:08
  Speaker 1: are currently held up in court, um we're frozen. And
• 1:31:13
  Speaker 1: the Biden administration said, yes, we're going to look at
• 1:31:15
  Speaker 1: this UM, but not right now because we have COVID
• 1:31:19
  Speaker 1: and the economy and other things that that are that
• 1:31:21
  Speaker 1: are pressing, and that we're going to focus on right now. Okay,
• 1:31:24
  Speaker 1: you talk about the vaunted algorithm, which is obviously great
• 1:31:28
  Speaker 1: for TikTok. Is there some special skill byte Dance has
• 1:31:33
  Speaker 1: that there are algorithms are better or just good for
• 1:31:36
  Speaker 1: their platform, Like do they write better algorithms than Facebook
• 1:31:39
  Speaker 1: and other platforms? It's hard to really know the answer
• 1:31:43
  Speaker 1: to that. Um. You know, we speak to a lot
• 1:31:46
  Speaker 1: of people who say the answer is flat out yes,
• 1:31:48
  Speaker 1: that is just much more sophisticated. The other UM answer
• 1:31:53
  Speaker 1: that I get to that question is they have so
• 1:31:55
  Speaker 1: many more years of data. If you remember, they started
• 1:31:58
  Speaker 1: in two thousand and twelve, bite Down started in two
• 1:32:01
  Speaker 1: thousand twelve. So here is nine years of training your
• 1:32:04
  Speaker 1: data on people and the way people think. And so
• 1:32:08
  Speaker 1: it doesn't necessarily matter that that was in China, Like
• 1:32:12
  Speaker 1: they share a lot of that technology and the way
• 1:32:15
  Speaker 1: that the algorithm works, and so you just have a
• 1:32:18
  Speaker 1: more sophisticated way of of analyzing a lot of this
• 1:32:22
  Speaker 1: data that they've been able to amass over the years. Um.
• 1:32:26
  Speaker 1: What I know is that TikTok to me feels so
• 1:32:29
  Speaker 1: much more addictive UM than Facebook or or Instagram do
• 1:32:35
  Speaker 1: and um and so much more personalized and so you know,
• 1:32:39
  Speaker 1: I'm not an expert, Like, how do you really know
• 1:32:41
  Speaker 1: who has a better algorithm unless you're inside those companies
• 1:32:45
  Speaker 1: and able to identify that. But it seems to be
• 1:32:48
  Speaker 1: working for them because more and more people are downloading
• 1:32:50
  Speaker 1: it and staying on it. Okay, if we move towards
• 1:32:53
  Speaker 1: the future, I would call all of the social media
• 1:32:58
  Speaker 1: platforms i e. The audience can move anywhere. And certainly
• 1:33:03
  Speaker 1: since my Space, which ultimately faded away, all of these
• 1:33:07
  Speaker 1: things have continued to exist, but they are not the
• 1:33:09
  Speaker 1: hot platform. Okay, what is going to happen to TikTok?
• 1:33:15
  Speaker 1: I know you actually predict the future, but predicted yeah
• 1:33:19
  Speaker 1: so so in uh in our last episode of the
• 1:33:22
  Speaker 1: Foundering podcast, which isn't out yet It will come out
• 1:33:24
  Speaker 1: next week. Um, but I'll give you a preview is um.
• 1:33:29
  Speaker 1: You know my bad is on this company getting bigger
• 1:33:32
  Speaker 1: and better and they are moving fast. They are hiring
• 1:33:35
  Speaker 1: more people. Uh. They got Trump off their back for
• 1:33:38
  Speaker 1: at least a year. You know, they have the U. S.
• 1:33:41
  Speaker 1: Government who has let them not paid attention to them
• 1:33:44
  Speaker 1: for the last six months as they continued to grow.
• 1:33:47
  Speaker 1: They had the pandemic help them get more people on
• 1:33:50
  Speaker 1: there and they are expanding. So right now they're expanding
• 1:33:53
  Speaker 1: into e commerce. Like if you think about that opportunity,
• 1:33:57
  Speaker 1: Facebook has totally failed in e commerce and degram is
• 1:34:00
  Speaker 1: not really realized it's full potential. Same with Pinterest, Like
• 1:34:03
  Speaker 1: if they can crack e commerce, um faster and better
• 1:34:07
  Speaker 1: than everyone else, then it opens up a whole new
• 1:34:11
  Speaker 1: avenue for them in a way that you know hasn't
• 1:34:14
  Speaker 1: really been done before in the US, though is being
• 1:34:17
  Speaker 1: done a lot of in China. So you know, I
• 1:34:19
  Speaker 1: think they go up from here. I don't think it's
• 1:34:22
  Speaker 1: a fad. Um. You know, we can do this again
• 1:34:26
  Speaker 1: in five years and see if I'm right. But um,
• 1:34:29
  Speaker 1: but I do think that there's a that, you know,
• 1:34:31
  Speaker 1: if they continue on this trajectory of moving fast and
• 1:34:36
  Speaker 1: um constantly iterating new features for people, that um that
• 1:34:41
  Speaker 1: they'll just keep going with their success. Now it is
• 1:34:43
  Speaker 1: a Chinese company, as you stated earlier, these are multi
• 1:34:46
  Speaker 1: furious companies. They're giving your news, they're giving e commerce, etcetera.
• 1:34:50
  Speaker 1: Do you believe that model can be replicated in the
• 1:34:53
  Speaker 1: US and possibly by Bye Dance? So I think the
• 1:34:58
  Speaker 1: hardest thing to be replica get in the US as
• 1:35:00
  Speaker 1: the payment because payments are so heavily protected in the
• 1:35:04
  Speaker 1: US compared to UM. You know, Walmart, for example, has
• 1:35:08
  Speaker 1: been trying to get a payments license for decades and
• 1:35:11
  Speaker 1: hasn't been able to do that, And so I think
• 1:35:14
  Speaker 1: it would be so hard for a Chinese company to
• 1:35:18
  Speaker 1: be able to take payments in the US. And without payments,
• 1:35:22
  Speaker 1: I think it would be really hard to become as
• 1:35:25
  Speaker 1: big as they are and ubiquitous as they are in China,
• 1:35:28
  Speaker 1: because that's what kind of how they got it in
• 1:35:30
  Speaker 1: China is like they became the wallet and so everything
• 1:35:33
  Speaker 1: is purchased on there and so um and so you
• 1:35:36
  Speaker 1: just started doing everything on those apps. Now they could
• 1:35:40
  Speaker 1: get around that they could partner with someone they could
• 1:35:42
  Speaker 1: partner with like a PayPal or Amazon or someone like that.
• 1:35:45
  Speaker 1: Like you have no idea how they would do that, UM,
• 1:35:50
  Speaker 1: but I think that that would be one big roadblock
• 1:35:52
  Speaker 1: for them. Well, in America today we go to multiple
• 1:35:55
  Speaker 1: sites for our information literally news and you know, social etcetera, etcetera.
• 1:36:03
  Speaker 1: And whereas in China, to my understanding is these platforms
• 1:36:06
  Speaker 1: are a black hole that will cover all three sixty
• 1:36:09
  Speaker 1: degrees of life. I think byte dance wants to do that.
• 1:36:13
  Speaker 1: Do you in America? Do you think it's replicable. I
• 1:36:17
  Speaker 1: think that they would love to do that, UM, but
• 1:36:19
  Speaker 1: I think we're far off on that. And I think
• 1:36:21
  Speaker 1: that they're big roadblocks in areas like um, you know,
• 1:36:25
  Speaker 1: like payments that they wouldn't wouldn't necessarily be able to
• 1:36:28
  Speaker 1: do UM in a way that they can in China.
• 1:36:31
  Speaker 1: Like in China, bitte Dance has a payments license and
• 1:36:35
  Speaker 1: that they got last year. I think, UM, and they
• 1:36:39
  Speaker 1: are doing that, and so you can starting to buy
• 1:36:42
  Speaker 1: more things there, you're reading your news. They're like more
• 1:36:45
  Speaker 1: and more touch points are happening in the US. I
• 1:36:48
  Speaker 1: think it's just much harder UM. So I think for
• 1:36:51
  Speaker 1: now they're going to stick with entertainment. But and but
• 1:36:55
  Speaker 1: but expand into e commerce, probably education, probably language like
• 1:37:00
  Speaker 1: things like that, UM that are a little less sensitive
• 1:37:05
  Speaker 1: given that they are still a Chinese at the end
• 1:37:07
  Speaker 1: of the day, still owned by a Chinese company. Okay,
• 1:37:10
  Speaker 1: you said at the beginning, you told your editor years back, WHOA,
• 1:37:14
  Speaker 1: this TikTok is happening. You're not only covering TikTok? What
• 1:37:19
  Speaker 1: else is happening right now that we should be aware of?
• 1:37:23
  Speaker 1: In tech, our music or well anything tech primarily, but
• 1:37:29
  Speaker 1: you can put all these different elements together. Let me
• 1:37:32
  Speaker 1: think about that one. I mean you brought up clubhouse.
• 1:37:36
  Speaker 1: I think clubhouse is definitely interesting. Um. You know, I
• 1:37:41
  Speaker 1: am in the kind of anti clubhouse camp. I think,
• 1:37:44
  Speaker 1: like I don't see the future as much as some
• 1:37:48
  Speaker 1: of the people that I'm talking to. You're you're preaching
• 1:37:51
  Speaker 1: to the choir. My goal is to never talk on
• 1:37:53
  Speaker 1: the phone. If the younger generation won't even have voicemail,
• 1:37:56
  Speaker 1: who wants to sit there? You know, it was driven
• 1:38:00
  Speaker 1: primarily by high profile people on an exclusive basis, and
• 1:38:04
  Speaker 1: we've learned with clubs if you can't get in while
• 1:38:06
  Speaker 1: that drives. It's not even on the Android yet, and
• 1:38:09
  Speaker 1: now everybody's trying to imitate it. I don't think it's
• 1:38:11
  Speaker 1: ultimately a big company or feature. But listen, we have
• 1:38:16
  Speaker 1: all the craziness with robin Hood apps, so you never
• 1:38:19
  Speaker 1: know in reality anything else you can say that might
• 1:38:22
  Speaker 1: be on the horizon. Yeah, I mean I do think
• 1:38:25
  Speaker 1: this investing. Um. Speaking of investing, I mean, I don't
• 1:38:28
  Speaker 1: think people are realizing this um massive interest from gen
• 1:38:34
  Speaker 1: Z and investing and using TikTok and Facebook and Reddit.
• 1:38:38
  Speaker 1: I mean, we saw with the power of Reddit, and
• 1:38:42
  Speaker 1: in the financial markets, um to Rock, game Stop and
• 1:38:46
  Speaker 1: other other stocks. There's a there's an account on TikTok
• 1:38:53
  Speaker 1: of like financial investing, and you know, I've spoken to
• 1:38:56
  Speaker 1: one creator who was saying, like, yeah, in the stock
• 1:38:58
  Speaker 1: market now because I learned all about it on TikTok.
• 1:39:01
  Speaker 1: And so you don't realize like how much social media
• 1:39:05
  Speaker 1: is interacting with the financial markets and how much these
• 1:39:09
  Speaker 1: young kids like gen Z and younger are learning about
• 1:39:12
  Speaker 1: the markets and investing real money, and they're learning all
• 1:39:15
  Speaker 1: about it through through these platforms. And I think that's
• 1:39:19
  Speaker 1: kind of an overlooked area that people aren't quite realizing.
• 1:39:23
  Speaker 1: And that begs a question of n f t s.
• 1:39:25
  Speaker 1: Any n f t s in the TikTok world, what
• 1:39:28
  Speaker 1: do you think is happening there? I am sorry, like
• 1:39:31
  Speaker 1: I just don't. I still I don't. I don't get
• 1:39:35
  Speaker 1: n f t s. I don't understand it. I feel
• 1:39:37
  Speaker 1: like such an old person when people talk about n
• 1:39:40
  Speaker 1: f t s and um, I don't know, I don't.
• 1:39:45
  Speaker 1: I don't get it. But I also, um, it's not
• 1:39:50
  Speaker 1: my strong suit, Like I'm not an expert of that
• 1:39:52
  Speaker 1: kind of stuff and like, but yeah, I am a
• 1:39:55
  Speaker 1: complete neo fight when it comes to my question is
• 1:39:57
  Speaker 1: is anybody on TikTok or Bite Dancer they monetizing via
• 1:40:01
  Speaker 1: n f T s Oh, you know, I wouldn't put
• 1:40:03
  Speaker 1: it past them. I know, I'm not aware of anything
• 1:40:06
  Speaker 1: um that TikTok is doing with n f T s UM.
• 1:40:11
  Speaker 1: I think that um, there was I think I've read
• 1:40:15
  Speaker 1: there was one TikTok star that sold one video like
• 1:40:20
  Speaker 1: as an n f T. But I don't think that
• 1:40:22
  Speaker 1: um TikTok itself like had a role in that. UM.
• 1:40:27
  Speaker 1: But yeah, I mean I think that they're putting you know,
• 1:40:31
  Speaker 1: some of these creators themselves are seeing the value in
• 1:40:34
  Speaker 1: in selling an n f T of their videos. But
• 1:40:36
  Speaker 1: I haven't seen TikTok itself do it well. As Jimmy
• 1:40:39
  Speaker 1: Kimmel told me, it's imaginary baseball cards. On that, I
• 1:40:44
  Speaker 1: think we've covered the landscape. Thank you so much for
• 1:40:48
  Speaker 1: doing this well, Thank you so much in your article
• 1:40:52
  Speaker 1: just like picking apart every little bit and relating it
• 1:40:56
  Speaker 1: and putting it, you know, using your vast you know,
• 1:40:59
  Speaker 1: not a an experience of the record label industry and
• 1:41:03
  Speaker 1: talking about um, you know, just kind of picking apart
• 1:41:06
  Speaker 1: one by one the article. I was just so floored
• 1:41:09
  Speaker 1: away by your thoughtful response to it, so thank you
• 1:41:11
  Speaker 1: so much for that. Well that's it, you know, as
• 1:41:13
  Speaker 1: they say in today, no one can be an expert
• 1:41:16
  Speaker 1: on everything, although to a great degree the information is
• 1:41:20
  Speaker 1: out there if you know where to look. And the
• 1:41:22
  Speaker 1: old days, there are a hundred records on the chart.
• 1:41:24
  Speaker 1: Everybody who was in the business new all a hundred records.
• 1:41:27
  Speaker 1: No now records go number one, you've never heard of them.
• 1:41:29
  Speaker 1: So I was so impressed with your article that it
• 1:41:32
  Speaker 1: went into depth and certainly was never covered in the
• 1:41:35
  Speaker 1: music press. So for those listening, we certainly have gotten
• 1:41:40
  Speaker 1: the top line. If you want to go deeper, as
• 1:41:42
  Speaker 1: Shelley says, you can go to the Foundering podcast, easily
• 1:41:45
  Speaker 1: searchable online, where they go further in depth. Once again, Shelley,
• 1:41:49
  Speaker 1: thanks so much for doing this. Thank you. Until next time.
• 1:41:54
  Speaker 1: This is Bob left sex O