Tik Tok has the power to modify people's behaviour and therein lies its danger. The demographic that has an interest in TikTok is young, has the time and is rewarded for being on the application.

1. TikTok’s Sleight of Hand
Dr Sarma VANGALA
CEO
Metastrategy, Inc
Toronto, CANADA

3. Does Sen. Cruz have a point?

4. Time to Acquire 1 Billion Users
8 years
7 years
8 years

5. Time to Acquire 1 Billion Users
4 years

6. Come from Behind
……the opportunity of defeating the enemy is
provided by the enemy himself.
SunTzu
Military strategist
Circa. 500 BCE

7. Facebook’s Fumbles
• Privacy concerns;
• Whistleblower’s revelations
– Data privacy
– Misinformation
– Censorship
• Spectacular collapse of Diem and Libra cryptocurrency;
• The belief that, ‘If it is associated with FB, it’s tainted’;
• “Zuckerberg is a real problem”, according to Joe Biden;
• Perception that “Metaverse is vapourware”

8. Acknowledgement
• Zuckerberg mentionedTikTok 5 times on a
February earnings call

10. Evolution
• 2012 ByteDance founded
• 2013 Neihan Duanzi {Inside Jokes*} launched
• 2013Toutiao {Headlines**} launched
Inside Jokes and Headlines use AI to learn the type of
sketches or stories users like
* sharing gags
** news aggregator

11. Evolution
2016 Douyin {shaking sound *} launched
based on Musical.ly, a Chinese app popular in US
2017 Released Douyin’s twin in US with identical interface but called
TikTok
• Interface, algorithm identical but different content
2017 Bytedance bought Musical.ly and transferred its 300 million users to
TikTok
Meteoric rise ofTikTok since then
* sharing and recording lip-sync videos

12. A Crucial User Demographic
• 45% of USTikTok users are below 25 yrs of
age
• 16% of US FB users are below 25 yrs of age.

13. AI Algorithm is the Secret
• TikTok’s discovery algorithm dangles
prospect of viral success to novice creators
• FB rewards those who have a large following

14. • Athletes and celebrities have most followers on FB;
• Regular folks have the most views onTikTok
• No log-in needed, no network needed, no searching
• Just random videos presented until preferences learnt
• Hence, extremely addictive {average user spends 45 mins a day
onTikTok}

15. • Ad revenue will outstrip Meta’s by 2024;
• Forays into e-Commerce will give results
• FB is copying some ofTikTok’s methods, e.g.,
‘discovery engine’ to serve up content from
internet, as well as the new product Reels.

16. Uncompetitive toThreat
• In 2020 FTC considered the market uncompetitive and
launched an anti-trust case against Meta;
• Now,TikTok is considered as a national security
threat
• Meta has lost 50% market cap. in 2022 andTikTok has
taken a large proportion of their users.
• Market is now viewed as competitive but ……

17. Corporate Profile
• Incorporated in the Caymans
• Global investor base;
– SoftBank {JP}
– General Atlantic {US} *
• HQ in Beijing
• Data centre in US
* CEO Bill Ford considers TikTok as a global internet company with Chinese heritage.

18. ‘Everything is seen in China’
Quote from whistleblower who works with TikTok’s Trust and Safety Department

19. Don’t become too Powerful
China’s meddling in successful companies is
legend;
– ‘Enforced radio silence’ of Jack Ma of Alibaba;
– ByteDance’s Neihan Duanzi {joke-sharing app} shut
down because ‘it went against core socialist values’.
– Ant Financial’s IPO cancelled on the day prior to
listing

20. China’s Minor Objective
• Data from over a billion+ users;
• Facial and voice profiles now easily accessible

21. China’s Major Objective
Not to learn about users
but to make the users learn.
A powerful news medium
Social media companies in democracies face little
regulation.
Regulators can see what a print medium publishes but
cannot see what news drops onto the screen of a phone.

25. Sen. Cruz DOES have a point.

27. Options
BuyTikTok
– This is a non-starter since the Chinese government has
outlawed the sale of intellectual property, the AI engine
De-platform the app
– This will hurt the hosts, Apple and Google, more thanTikTok
Allow for 3rd party oversight of code
– This solution may work but China will have final say in allowing
it

28. SarmaVANGALA, Ph D
Chief Executive Officer
Metastrategy, Inc.
• SarmaVangala is a corporate consultant
specialising in Strategy, M&A and Business
Transformation
• Based inToronto, CANADA
• BTech (IIT(M)); PhD (Exon.); Professional Engineer
• sarma.vangala@metastrategyinc.com

29. Dynamics