Inside TikTok: Culture, strategy, monetization, and more | Ray Cao

Ray’s background (00:00:00)

• TikTok's core principle is "contact no control," encouraging employees to take ownership and make decisions without specific instructions.
• The company operates with a startup mentality, emphasizing continuous growth, a fast-paced work environment, and a strong focus on hard work and results.
• TikTok uses OKRs (Objectives and Key Results) to set clear goals and track progress, ensuring alignment across the organization.
• To succeed on TikTok's ad network, it's recommended to test at least 10 videos per week and understand the platform's unique characteristics compared to Instagram.
• Content that performs well on TikTok often leverages trending sounds, challenges, and visual effects, while authenticity and creativity are key.
• TikTok's culture is centered around experimentation and moving quickly, with a goal of 10x-ing experiment velocity.
• TikTok's strategy involves focusing on user experience, personalization, and localization, as well as leveraging AI and machine learning to deliver relevant content.

Cultural differences between Google and TikTok (00:04:55)

• TikTok is more customer-centric, considering the needs of advertisers, users, and creators.
• TikTok takes a more flexible approach to product development, experimenting with various features and optimizing the platform.
• TikTok has a truly global approach, launching products and initiatives in different regions based on market needs, rather than prioritizing the US market.
• TikTok focuses on understanding market needs and servicing clients, including advertisers, users, and creators.
• The company takes a flexible approach to product development, experimenting with different features and optimizing the platform.
• TikTok has a global approach, launching products and initiatives in different regions based on market needs.
• TikTok offers various monetization options for creators, including the Creator Fund, brand partnerships, and live gifting.
• The Creator Fund rewards creators based on video views and engagement, providing an incentive for high-quality content creation.
• Brand partnerships allow creators to collaborate with brands and receive compensation for sponsored content.
• Live gifting enables viewers to send virtual gifts to creators during live streams, which can be redeemed for real money.
• TikTok presents both challenges and opportunities for businesses.
• Challenges include understanding the unique platform dynamics, creating engaging content, and navigating the algorithm.
• Opportunities include reaching a large and diverse audience, building brand awareness, and driving conversions.
• Businesses should focus on creating authentic and engaging content that resonates with the TikTok audience.
• Understanding the platform's unique features and algorithm is crucial for success.
• Collaborating with influencers and creators can help businesses reach a wider audience and build credibility.
• Businesses should experiment with different content formats and strategies to find what works best for their brand.

Fine-tuning the algorithm for different markets (00:08:24)

• TikTok's algorithm is crucial for its success in various markets.
• The algorithm learns user preferences and tailors content accordingly.
• Local talent is essential to fine-tune the algorithm for specific markets.
• Understanding local culture and behaviors is key to successful globalization.
• Market research reveals cultural differences that impact product preferences.
• Customization based on local insights is more important than premium quality in some cases.
• Globalization requires a hands-on approach to understanding local cultures and behaviors.

Examples of fine-tuning the algorithm (00:12:15)

• Different markets and cultures require different content to be successful on TikTok.
• In Japan, for example, food-related content is more popular than dancing or singing.
• In Southeast Asia and Japan, introducing new technology and consumer electronics products is popular.
• In the US, TikTok started with lip-syncing videos but has expanded to include shopping behaviors and product discovery.
• Seeding the algorithm with the right use cases that a specific culture is excited about is important for success.
• Creative humans can work with technology to make more interesting and influential decisions for advertisers.
• Interpreting data points and business acumen are important for making judgment calls on trends and recommendations.
• TikTok relies on both machine learning and human experts to analyze trends and provide recommendations.

Core principles and values of TikTok (00:15:11)

• Encouraging employees to think outside the box and collaborate more.
• Breaking down silos and encouraging employees to take ownership of their work.
• Providing employees with all the information they need to make decisions without giving them specific instructions.
• Proactive thinking and reactive doing.
• Collaboration is smooth when everyone has the same mindset and context.

Hiring at TikTok (00:19:34)

• TikTok hires high-quality, high-caliber people to support its autonomous and free-working culture.
• Curiosity and a desire to learn new things are important qualities in potential employees.
• Discipline, the ability to follow guidance, collaborate, and prioritize are also crucial.
• TikTok aims to train its employees to develop these qualities for long-term career success.

Embracing the “always day one” mentality (00:21:38)

• Prioritize hiring curious, disciplined, and well-organized individuals.
• Maintain a startup mentality and avoid complacency.
• Encourage open communication and collaboration among all team members, regardless of their position or tenure.
• The engineering, product, sales, and data scientist teams work closely together.
• This collaboration enables the creation of products that meet market demands and user needs.
• It provides a significant advantage over larger companies where communication and collaboration can be siloed.

Collaboration between teams (00:25:09)

• TikTok has a structured meeting format called "doc reading" where engineering, product, and sales leaders, as well as team members, come together to discuss important matters.
• This meeting structure ensures that everyone is on the same page and that decisions are made collaboratively.
• In addition to the structured meetings, TikTok also encourages its product managers and R&D teams to meet with clients and partners regularly to gain insights and understand their challenges.
• This immersion helps the product and R&D teams to better understand the needs of the customers and to develop products that meet those needs.

Amazon’s cultural influence (00:28:38)

• TikTok has adopted several cultural practices from Amazon, such as the "It's always day one" philosophy and the memo culture.
• TikTok believes in learning from industry leaders and implementing best practices that fit their company.
• Examples of adopted practices include the OKR system from Google and the emphasis on cross-functional communication inspired by the co-founder of MBNB.
• TikTok's interpretation and implementation of these practices may differ from the original sources.
• TikTok operates at a rapid pace, emphasizing the importance of efficiency and productivity.
• The company encourages employees to prioritize the first half of the day to maximize productivity, similar to the concept of "It's always the morning of the first day."
• This approach aims to ensure that employees can maintain high levels of performance throughout the workday.

Setting up the product organization for speed and innovation (00:31:14)

• Set up global teams to acquire global talent and market knowledge.
• Deploy resources globally, focusing on key markets.
• Continuously reiterate PM and go-to-market teams based on market needs and growth.
• Break team structures and embed them with sellers to enhance go-to-market mindset.
• Majority of engineers and PMs are located on the West Coast of North America (Los Angeles and San Jose).
• Majority of go-to-market leads are located in New York.
• Heavily invested in Southeast Asia with engineering and PM resources deployed in Singapore.
• Teams undergo minor adjustments to cater to fast growth.
• Stability is important, but reiteration of product and teams is necessary for a fast-growing company.
• Not afraid to break team structures and embed them with sellers to enhance go-to-market mindset.

Building the go-to-market team (00:35:38)

• The goal was to hire 100 people in six months to support the global go-to-market structure.
• The first mistake was compromising hiring standards to meet the aggressive hiring goal.
• Hiring the wrong people slowed down progress rather than accelerating it.
• The second mistake was lacking context and control.
• Focusing solely on delivering the go-to-market strategy without considering sales and market context led to failure.
• The third mistake was leaders not having time to talk to clients and understand market details.
• Leaders need to find a balance between engagement and distance from reality to effectively identify and address problems.
• Pure people managers lose their competitive edge in the market.

What makes people successful at TikTok (00:40:18)

• People who are curious and adaptable tend to be more successful at TikTok.
• Joining a startup like TikTok requires a lifestyle change and may not be suitable for everyone.
• Ray Cao believes in creating a culture where employees are happy and can grow their careers, even if it means they eventually leave the company.

Thoughts on putting in long hours (00:43:02)

• Ray Cao advocates for working hard and putting in long hours, especially in a fast-paced startup environment.
• He believes that hard work and dedication are essential for success, but it should be a personal choice rather than a company demand.
• Long hours can be rewarding and lead to impactful career moments that individuals can be proud of.

OKRs and planning at TikTok (00:44:40)

• TikTok uses OKRs (Objectives and Key Results) to align the company towards common goals.
• The company aims to improve the input and output of OKRs, ensuring they are clear and connected.
• Ray Cao, the speaker, encourages learning from other companies that excel in OKR implementation.
• TikTok follows an annual planning cycle but emphasizes flexibility and adaptability to market changes.
• The company continuously experiments and iterates on its strategies, particularly in advertising and product development.
• The dynamic nature of TikTok's environment requires innovative approaches to go-to-market strategies and sales.
• TikTok's success in recent years validates their approach, but they acknowledge the need for ongoing improvement and structural optimization.

Tips for how to be successful on TikTok (00:49:12)

• Be unfiltered and authentic.
• Master one thing and showcase it.
• Continuously bring new content and test to find your competitive edge.
• Embrace the culture and community of TikTok.
• Listen and understand user behaviors on the platform.
• Adapt your messaging and presence to fit TikTok's unique characteristics.
• Experiment and try different things to find what works for you.
• Shabba: A singer who gained attention by rapping and covering songs in a unique way, embracing her minority identity and inspiring others to do the same.
• A music creator who found success by changing lyrics to make them relatable to his personal life, creating a fun and engaging connection with his audience.

Tips for advertising on TikTok (00:53:49)

• TikTok is gaining popularity as a new advertising network, attracting businesses eager to explore this platform.
• To succeed on TikTok, businesses should establish dedicated internal creative teams focused on producing content specifically tailored for TikTok's unique platform.
• TikTok's algorithm and user behavior differ from other social media platforms, necessitating a "test and learn" approach to optimize campaigns.
• Unlike Instagram, TikTok's content reaches a wider audience beyond friends and connections, increasing the potential for discovery.
• Advertisers should optimize backend settings, such as creative testing and campaign structure, to enhance their success on TikTok.
• TikTok's real-time trends demand advertisers to be responsive and adaptable in their strategies.
• TikTok's sales team offers guidance and counterintuitive strategies that may differ from other platforms.
• TikTok encourages experimentation through its "explore and exploit" method, increasing the chances of finding successful strategies.
• TikTok's ads reach a broader audience through its discovery feature, allowing advertisers to introduce their products to new consumers.
• Advertisers should leverage trending topics and challenges to increase engagement and relevance.
• TikTok is effective in building brand awareness, driving actions, and conversions, making it valuable for e-commerce and direct response advertising.
• TikTok's "TikTok made me buy it" trend inspired product development driven by user behavior and feedback.
• TikTok aims to be a full-funnel solution platform for advertisers, prioritizing business results over brand building.

Getting started with TikTok Ads (01:04:03)

• To explore TikTok as a growth channel, businesses should create a free business account, post videos, and test ad products.
• Businesses should use TikTok's reporting and insights to optimize their campaigns and track performance.
• It's recommended to spend at least a month running ads and creating at least 10 different ad creatives per week to understand user behavior and the platform.
• TikTok provides tools like CapCut to help businesses create high-quality video content easily.
• TikTok offers a service called "Tok uh Pro uh" that provides creative assistance to advertisers, with the level of assistance depending on the advertiser's status.

Common mistakes to avoid with TikTok advertising (01:08:42)

• Avoid remarketing or small niche targeting in the early stages.
• Use a broader targeting approach to understand the platform better.

Ray’s favorite TikTok account (01:09:44)

• Ray enjoys a TikTok account that does silent baby product reviews.
• He also follows a magician who uses everyday objects to perform tricks.

Where to find Ray (01:10:54)

• Ray can be reached on LinkedIn to discuss go-to-market challenges.
• He welcomes feedback and recommendations from the audience to learn and improve.