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The below is a translation from the first of four parts of a 2-hour interview on March 20, 2018, with Zhang Yiming, Bytedance founder and global CEO. It was conducted by Professor Qian Yingyi, who was the Dean of the School of Economics and Management at the time. For greater context and understanding, we have annotated it with our comments in italics.
Fun aside, I convinced Professor Qian to be the faculty sponsor for a few student run-classes on entrepreneurship that I created at UC Berkeley when I was an EECS undergrad there and when he was still in the Economics Department there, and was his student again when I enrolled in the Tsinghua-INSEAD EMBA program from 2013–15, which he masterminded and was top-ranked at the time and remains a Top 10 program.
More relevantly, Professor Qian’s long stay in the United States and Silicon Valley in particular gave him great motivation to grow the School’s international connections and renown, and also leading to the addition of many tech entrepreneurs to an Advisory Board (50+ members) that is composed of many global business leaders. So you’ll recognize names such as Elon Musk, Mark Zuckerberg, Jack Ma, Pony Ma, and the like. Those videos of the Zuck speaking Chinese (e.g. Q&A 2014, speech in 2015) at Tsinghua University? Those were part of his visits to the school as a member on the SEM Advisory Board (appointed 2014). Anyway, the below interview with Zhang Yiming is one of the benefits I miss of being a student on campus — as China’s “Harvard”, Tsinghua has a ton of such events free to students and alumni.
Qian Yingyi: Tonight we will do a sharing with Tsinghua students, starting from your student days and early days as an entrepreneur. You were born in 1983 and were admitted to Nankai University in 2001. You initially applied for a biology major. When you entered the school, you were transferred to the microelectronics major (ie, electronic engineering), and later you transferred to the software engineering (ie, computer). Can you share with us the story behind all that?
Tech Buzz: Nankai is generally considered a top 20 university in China and very well regarded. The Chinese education system is very different from the US one and admissions is largely based on the results of the annual college entrance exam (gaokao). Depending on your score, you qualify for different schools and the majors therein. Here it seems that Biology was Zhang Yiming’s first choice but it might have been too impacted, and so he agreed to be transferred to a less impacted major that he also qualified for.
Zhang Yiming: Why apply for the Biology Department? At that time, people believed that this subject will spearhead the 21st century, and so it was all the rage. I was also interested in it. When I was in high school, I participated in a biology related academic competition and read a book called “General Biology” written by a Peking University professor, which impacted me greatly.
Organisms and ecosystems seem complex, and there are many variations in species, but the laws behind them are very simple and elegant. It lends itself easily to analogies which you can use to design systems or to view enterprise economic systems with.
As for the transfer into the microelectronics major, I am also very interested in microelectronics. But after learning for a while, I thought there were too few opportunities for experimentation. Or rather, it is more difficult to put the knowledge learned from our textbooks into practice. It happened that we also studied computer science in my freshman and sophomore years, so I switched to software engineering in the second half of my sophomore year.
Learning computer science has an advantage. As long as you have a computer and Internet access, you can teach yourself. If you have an idea, you can go ahead and make it. Even as a student, you can also publish products to many users, and this is what got me into computers.
A diverse knowledge base has also been rewarding for me. Starting a business requires you to look at everything, and I’ve also studied business administration.
Tech Buzz: A few points to note here. Zhang Yiming will eventually “teach himself” how to write a recommendation engine from resources on the internet, the technology / insight that is at the core of Bytedance. No one on staff knew how to write one and there were no detailed reference texts available in Chinese at the time (although he tried to get his hands on one that hadn’t yet been published, but was unsuccessful). The fact that he doesn’t eschew other subjects and remains curious about them is also a positive sign. His passion for business though, could probably be explained by the fact that his parents started their own electronics-related business when he was young. He has also been influenced by his good friend and previous boss Wang Xing, founder and CEO of Meituan-Dianping, who is also similarly fascinated by multiple disciplines and is known for cloning and adapting Western ideas. They actually worked on a Twitter-like clone together. The two, by the way, also share the same small(ish) hometown in China, which is considered a close affiliation.
Qian Yingyi: From the brief introduction just now, we see that your interests are very extensive and span across electronics, biology, computers, and business management. Out of your four years of university, which experiences do you think had the greatest impact on you?
Zhang Yiming: Our school is in Tianjin, unlike in Beijing, and we didn’t have access to that many extracurricular activities. So I had a lot of time to read a wide assortment of books. In my first two years, I read a lot of books outside of class, and biographies accounted for a large part of these.
The main purpose of reading is to shape your interest and aesthetics. After reading all those biographies, I was a lot more patient later when it came to choosing my career and designing my career path. You see that a lot of great people led pretty nondescript lives when they were younger, and their success is gradual. Everyone starts off being an ordinary person.
You have to be patient, and when you continue to deepen your expertise in a field, you will eventually achieve corresponding results. I have always felt that if you can only choose to read a few books in the world, there are two types of books are worth reading: biographies and textbooks.
Tech Buzz: You’ll find that a lot of Zhang Yiming’s philosophies come from other famous business leaders. Steve Jobs is a favorite, as is Jack Welch, whose book “Winning” he refers to a lot. If you find these pretty unsurprising, I’d have to agree with you … these are pretty typical choices. But maybe the takeaway is that he is very much into “borrowing” from the wisdom of others, as you’ll see all throughout Bytedance. It’s not about being original, it’s about being effective and successful. Lots of things about Bytedance — from product to commercialization to company structure — are borrowed from others. Pragmatism is a central concept for Zhang Yiming — he actually calls Bytedance a “pragmatic romantic” company.
Qian Yingyi: Reading biographies have made you more patient, that’s a very important learning. Impatience is a big problem among students these days. I heard that you were already thinking about the efficiency of information flow when you were in college. Under what circumstances did you think about this problem, and how does it relate to your startup experiences later?
Zhang Yiming: This is the main theme of my startups. I like to acquire lots of information. In addition to reading a lot of biographies and miscellaneous books in college, I also read a lot of newspapers and magazines when I was in middle school, cover to cover. At the time, I felt that the transmission of information was a very big deal. Differences in the efficiency of how information is transmitted could lead to very large differences in the efficiency of and cooperation across all of society, as well as in individual cognitions.
When the newspaper was first invented, it was considered a very luxurious product. I believe that after 10 or 20 years, youth who were born in the 2010s and 20s, when they find out that in order to deliver a message, people used to manually deliver tens of thousands of words to places hundreds of kilometers away through lettering and mimeographing, they would find it very strange.
The flow of information itself has a very profound impact on society, and I even think it may be the basis for the efficiency of other systems. The speed of information flow or the degree to which information can be organized in an orderly manner will produce great gains.
When I studied computer science, we also studied MIS (management information systems), storage systems, and how to present things in 3D — it was all about information. The IT industry is the information industry. Of everything, the organization and distribution of information result in the greatest gain. If the information is already there, but it is not effectively organized and distributed, the value generated is actually very limited.
After I graduated, whether I was working on a search engine or a social networking site, it was really all about distributing information. Search engines organized the distribution of information, while social networking sites used people as nodes to organize the flow of information, and recommendation engines use users’ interests to more granularly organize the distribution of information. Even Douyin is also really just for more efficient creation and distribution of information. There is actually an efficiency engineering department within our company that specializes in optimizing the flow of information within the company.
Tech Buzz: You might think this is just one of those abstract company mission statements, but actually, there seems to be more truth to it than not. Bytedance is a notoriously flat company — by Chinese standards, anyway — and the reason Zhang Yiming gave was not because of some moral judgment on workplace hierarchy, but because this allows for the best, most unobstructed flow of information within the company and thus the best chance for success. That is, the best ideas will not get buried. In fact, if there is one thing you should take away from this interview, it is this point — that Bytedance has an obsession with efficiency and information flow, not just in its products but also in its very organization. The Efficiency Engineering department is the one that first built Lark (Feishu in Chinese), the office collaboration software that has been called a Slack clone. It has also built other products, like People, an HR management software. It’s the embodiment of Zhang Yiming’s statement to “develop a company as a product,” another one of his favorite aphorisms of sorts. Whether or not the company is succeeding at this is entirely up to debate — you can find plenty of complaints that it is not as free of politics nor as efficient as it claims or wants to be — but it seems to be trying. This is a central idea that will come up again and again in interviews and our analyses of the company.
Qian Yingyi: In the seven years between your graduation from university in 2005 and the establishment of Toutiao in 2012, you have had a wealth of entrepreneurial and work experience. You have been involved in four startups, office automation (collaboration software), Kuxun (travel search), Hainei (social networking), 99 Fang (real estate search), and in the middle you went to work for Microsoft. How did you envision and plan for your career in those seven years, and how did you adjust it in practice?
Zhang Yiming: In the beginning, I was mostly doing tech-oriented entrepreneurship. My experience in social media gave me the opportunity to observe users, and it was very helpful in understanding users and products on an emotional level. Social products deal with people, and many users will give you feedback directly. Also doing a startup with Wang Xing … that business was obsessed with product quality. We would pay close attention to each pixel and color choice.
When I started my own business, 99 Fang, it was like doing a dress rehearsal for Bytedance. I was the CEO. Before, when I finished my duties, I would report any problems to my boss, but as the CEO, there was no one to report to and I needed to make independent decisions. Recruitment and dismissals can not be pushed to others, which really allowed me to prepare for starting Bytedance. Luckily, when the mobile Internet wave finally started, I already had these experiences.
Tech Buzz: The point Zhang Yiming is making here is echoed in nearly all of his interviews. While yes, the insight regarding recommendation engines was important, the timing of when Bytedance was founded (March 2012) is equally important. Q3 2011 was when smartphone shipments in China exceeded that of the US, leading many analysts to proclaim 2011 to be the Year of the Smartphone in China. Of course, as we now know, that lead would grow and China would lead the world in smartphone shipments for the next five years. Without these favorable macro conditions, it is unlikely that Bytedance would have grown as quickly as it did.
Qian Yingyi: The era and timing of entrepreneurship are very important. When you started Bytedance with seven years of experience, was your original intention at the time to make a company like this, or was it just an accident?
Zhang Yiming: The process of starting Bytedance is atypical. The search engine company I had founded was doing fine. But I took the initiative to establish a new company and choose a new direction. Later, the (former) business was still greatly affected, and we had to transfer it to another partner. But that just shows entrepreneurship is a very active choice.
Tech Buzz: It is true that most entrepreneurs do not give up on their startup unless it is failing or perhaps they’re burned out. However, as he will explain below, Zhang Yiming felt that he saw a better opportunity and so went for it without much hesitation. This kind of opportunistic behavior is probably one of the most interesting things about him and is the reason behind the creation of Douyin / TikTok. It’s not that initial moneymaker Toutiao was not doing well enough — it’s simply that he saw a more lucrative opportunity and was willing to shift resources there. Douyin’s origin story is fascinating and something we’ll go into depth later, but effectively, the field was rife with competition when Bytedance entered, which signaled to Zhang Yiming that it was a huge market not to be missed. Anyway, Bytedance has thus far thrived on playing this kind of offense. But will this continue to work? That’s the trillion-dollar question.
Qian Yingyi: Why did you make this active choice?
Zhang Yiming: Mainly because I saw that the wave of mobile Internet was going to be very, very large, and I had felt its presence even earlier in 2008. In 2007, Apple released the first iPhone. I was shocked when I bought it. I could build a website or write a program on it. When you put it inside your pocket, it’s difficult to imagine a website is lying in your pocket, and you can write a web browser to visit the website you wrote. Putting an operating system on mobile devices was very disruptive.
Later, in the process of making social networking sites, we found that the growth rate of the mobile Internet is a few ten thousandths per week, which was still very small, but it had been rising. When we were working on search apps in 2011, the growth rate was very fast, and we made several internet applications for real estate, which were successful.
At the end of 2011, it was basically judged that the transmission medium for all information would change from paper-based media to mobile phones. Real-time, bi-directional, multi-modal, able to transmit all sorts of different information, including from sensors … information propagation has changed greatly. In this situation, instead of a vertical business versus a platform one, the opportunity to make a platform product is very rare, so I actively chose to do it.
This also has something to do with reading biographies. In the face of big trends, people are often oblivious and don’t feel anything until afterwards. In 2011, I really felt that the progress of science and technology will create a new field. I foresaw that there will be major and profound innovations and profound changes. This change has yet to stop.
Now in the past six years, from 2011 to 2016, the entire list of listed companies is all because of changes in the mobile internet, and the per capita output value of the top five has increased by 10 times. We are now doing overseas internationalization and have gone to many countries and found that the mobile internet has changed the economic, cultural and social outlook of many countries. This trend has not stopped, and video is a “sub-wave” that has been accelerated by mobile.
I felt more strongly about this in 2011. Indeed, I thought, this is a huge wave. You only live once and generally speaking don’t have the luxury of examining it because you are in it. But you do get to do that in a biography. Although it is someone else’s life, you can place yourself in the story. When you read these books, you can see for yourself how people are changed when in the midst of these huge waves.
Tech Buzz: While it is easy to dismiss this as hindsight and narrative fitting, a cognitive bias we are all guilty of, there is evidence that Zhang Yiming really did feel this way. Not only have his earlier interviews been largely consistent around this story, but his Weibo social media posts from the time — which have been analyzed in detail — seem to confirm these sentiments. That being said, I’m sure there was a lot more uncertainty at the time than he is letting on. Nothing is ever that simple and clear-cut.
Qian Yingyi: This feeling is very interesting. You take the initiative to give up an already successful startup to go to another one. The inspiration here is that you were able to experience other people’s major changes while you were reading their biographies.
In 2016, when you participated in the Dialogue TV program on CCTV, you mentioned: “do not compete with other companies’ core competencies, which will involve a lot of energy and no advantage. In other words, besides competition, don’t go into fields others are excelling at, do something else.”
This idea is very groundbreaking. I am reminded that Zuckerberg said something similar when he walked into Tsinghua SEM last year. The students asked him where they should start a business. He said, “You should find a field that is of interest to you, preferably not to others.”
At the time, I added that, unfortunately, what often happens is that we are interested in a certain field often because others are interested in this field, and so everyone does the same thing at once, and won’t be very successful.
It seems that you and Zuckerberg have similar views on this point, very different from most people. The biographies of others are very inspiring for you. What suggestions do you have for students who want to start a business, such as taking note of big waves like you just mentioned.
Tech Buzz: The CCTV2 Dialogue interview of Zhang Yiming mentioned above remains one of the best interviews around, and briefly features Colin Huang of Pinduoduo and recently departed Bytedance SVP of Corporate Development Liu Zhen as well. It’s in our pipeline of primary sources to translate and annotate, so wait for it!
Zhang Yiming: Big waves depend on the timing. There will be waves, but they have a certain periodicity. Wait for the opportunity, as different eras have waves in different fields. You really need to find your own interest. Some people call it interest, some people call it ambition, some people say passion. The opportunity for entrepreneurship is when you look at the world from a different perspective. You see something different. You may be able to see this thing ahead of others. And you can eventually create it.
If you regard society as a system, you will find that you are not fighting for others’ share, but creating new elements. If you can do that, it is a win-win situation. Then for you, it’s not about doing things repeatedly, you’re not copying a business. For society, there are new elements. If you’re not interested in it, you might abandon it because of industry fluctuations. If you really are interested, and you believe what you see, you can overcome industry influence or public opinion.
Qian Yingyi: You’ve said a lot, and it’s been very enlightening. Most of us will see timing, business opportunities, or waves, these are objective things. But from a subjective point of view, you mentioned that you need to look at the same thing from another perspective. When you have a different perspective is when you see something different. When you adopt the same perspective as others, then you all just see the same thing. That is the first thing.
Second, interest and ambition are very important. Why? The world is constantly changing, and there are fluctuations. If it’s not what you’re interested in and ambitious about, you will change. But it is precisely because of your perseverance, that when others change, and you hold on, that it will work out.
Zhang Yiming: Actually, I have observed the following — I have recruited many people and many of my classmates and friends have worked in various industry positions for a long time, but there really aren’t too many people in society who are really interested in doing a certain thing for a long time. If you can do that, you can probably do pretty well.
Tech Buzz: Sure, perseverance is a great trait in general, but Bytedance also does not hesitate to stop investing in or pivot products that aren’t working well, such as several of its edtech initiatives. (This is a key complaint, by the way, from former employees who say that there can be very little job stability because the company is running so many “experiments” at once.) That being said, the company is continuing to pour resources into education despite not having yet found a winning formula, and perhaps this is what Zhang Yiming means by “perseverance.” After all, after determining the basic intent of “information that finds you,” the opposite of search, which is the user finding information, Bytedance made no less than 12 content community apps (the only one to survive being Neihanduanzi, which was the first one to be made) before sticking with growing Toutiao. If anything, Bytedance is a huge believer in the Lean Startup methodology and data-driven decision-making, which will become even more obvious later.
Unique insights and takeaways on China tech that don’t always make it into English language coverage.
The article was originally published on Who is Zhang Yiming, Bytedance Global CEO, maker of TikTok?