Shouzi Chew

♪ This is my kitchen table and also my filing system.

David, voice-over: Over much of the past 3 decades, I've been an investor.

David: The highest calling of mankind, I've often thought, was private equity.

[Laughter] David, voice-over: And then I started interviewing.

I watch your interview because I know how to do some interviewing.

David, voice-over: I've learned in doing my interviews how leaders make it to the top.

I asked him how much he wanted.

He said, "250."

I said, "Fine."

I didn't negotiate with him.

I did no due diligence.

I have something I'd like to sell.

David, voice-over: And how they stay there.

You don't feel inadequate now because being only the second wealthiest man in the world, is that right?

[Laughter] I'm at the New York offices of TikTok and I'm about to interview the CEO of TikTok about how I can become a TikTok star, among other things.

Now, I am older than many of your TikTok followers, I believe.

I--maybe you have some people my age, but my impression is it's for younger people.

Is that wrong?

Shouzi: There is really something for everyone on TikTok.

I would--I would--have you installed TikTok yet, David?

David: Well, I'm not an expert on TikTok.

I have looked at it, but I haven't seen anything that, you know, looks like me.

Shouzi: I think you may be surprised.

For example, for example, there is something called BookTok on TikTok.

It is a hashtag and it really is a trend where people share short videos on their favorite books.

And you'd be surprised how many views they have.

We have 40 billion views on BookTok alone.

There are many other categories.

There is CleanTok, which is about people cleaning.

30 billion views.

You know, I personally am a very amateur golfer.

#golf has more than 10 billion views on TikTok as well.

So, I believe there is something for everyone.

The way we want to present this is we have a machine learning recommendation engine, which personalizes your experience when you use TikTok, and we believe there's something for you as well.

David: OK.

So, can anybody put a video on TikTok?

Shouzi: Yes, very easily.

David: All right, how do you control if somebody puts something on that's dangerous or pornographic or not appropriate?

Shouzi: This is a great question.

One of the most important things that I have been focusing on since I took on the role nearly a year ago is on the safety of our platform.

Is something we take absolutely seriously and we have elevated this as a top priority for myself and for the company.

We put a significant amount of investment into it and we believe that we need to continue to invest in trust and safety to stay ahead of our growth because of the growth of the platform.

So, for example, making sure that-- making sure that our community guidelines, which are published transparently online, are well understood by our users, making sure that we have the tools and the capabilities to ensure a safe environment, a safe and inclusive environment on our platform so that our users feel like it's a trusted environment to publish and to inspire the creativity they want to.

David: So, let's suppose I want to be a TikTok person, I want to be on TikTok, but I have to make a living.

Can I make a living by just being on TikTok?

Are there people that make a living just by being on TikTok?

Shouzi: Most of our users come on TikTok to share how they feel and to inspire, you know, to inspire the world.

But there are people who come on TikTok, and this is something we are extremely proud of.

We have enabled them-- we have given them the platform and the tools to actually make a proper living.

And most of these are small businesses or individuals.

I can give you an example.

I have been looking at my own TikTok recently and I saw this video on TK's Surf & Turf.

It is a restaurant in Denver.

I think it's the first Black-owned, family-operated seafood restaurant in Denver.

What I've heard is during the pandemic, business was poor for a lot of restaurants, including them, but what one creator did was to create videos on what, you know, how great the restaurant was.

It became an overnight sensation, it went viral, and now business is booming for that company.

So--and there are thousands upon thousands of examples like that across the U.S. and across the world.

And we are--you know, this is something that we are immensely proud of, that we have a platform that small businesses can make use of to get--to grow their business.

David: Let's suppose I want to be a TikTok performer and I want to get paid for it.

Do I do something that says, "This restaurant is great" and hopefully the restaurant will pay me?

Is that how people get paid by being on TikTok?

Shouzi: There are several mechanisms to do it.

The first is, if you become-- if you have enough followers, certain brands will get in touch with you, either through us or otherwise, to--for you to represent their brand.

So, you become their brand ambassador.

So, that's one way some of our creators get paid.

Beyond that, we have provided them with tools to monetize, you know, to get in touch with their followers and to monetize that as well.

For example, we have a livestreaming service.

So, as a creator, you can launch-- you can have a livestreaming session and that is an exclusive session where you can interact with your followers and your followers can give you virtual gifts, and that's one way you can monetize.

The other example is e-commerce.

We provide our creators with the tools to be able to sell merchandise on the platform as well.

This is still a new part of our business but it's something that people are very, very excited about.

David: Well, how do you make money, then?

In other words, somebody goes on TikTok and they're making money for this restaurant in Denver, how do you make any money?

Shouzi: We make money primarily through advertising and also providing services like livestreaming and e-commerce to our users.

And we do have a service fee that we charge to provide those services.

David: But if somebody just uploads their video on TikTok, do they pay you a fee for that or not?

Shouzi: No, it's absolutely free.

David: OK.

So, who is the most popular person in the world on TikTok?

Shouzi: I believe the most followed person on TikTok today is Charli, Charli D'Amelio.

She's very talented and she has been posting some amazing content on our platform and her followers love her.

I think the most interesting thing about this community that we've built, David, is that it is unique in the sense that it is-- the content that's being produced is very raw, it's very real, and is very authentic.

It is not over-polished.

It is not glossy.

And it just feels very-- it just feels very real as people sort of publish, you know, what-- their best selves.

I can give you another example.

So, our second most followed creator today is a gentleman called Khaby.

Khaby lives in Italy.

As far as I know, he is originally from Senegal, and what he does is he uses a--he uses Stitch.

Stitch is a feature on our platform.

What it allows you to do is to take another video and then add your own reaction to that video.

So, he uses this feature, he makes fun of over-the-top life hacks.

There was a video about teaching you how to eat a banana with a fork and a knife, which is really over the top.

So, Khaby takes videos like that and then he reacts, you know, he basically gives this expression, and people love it.

He has over 100 million followers.

Now, I think this symbolizes and-- symbolizes the sort of authentic content that is on our plat-- I don't think Khaby has any production costs in making all these videos.

David: Are there companies now that specialize in making people TikTok stars?

Somebody says, "I want to be on TikTok.

I want people to watch me.

"Maybe I can sell my services to an advertising company or some way."

Are there people that polish up people's TikTok presentations?

Shouzi: The way our platform works, and my advice to anyone who wants to be famous on our platform, is to just be themselves.

What we have found is that this community is-- this community wants real content.

They want the real, raw content.

They want to see people being themselves.

So, the--many people tell me it's a breath of fresh air.

This sunny corner of the internet.

So, my advice to anyone who wants to be famous is really to be themselves.

David: Let's suppose I say I like TikTok and I'd like to be a TikTok star.

How can you make me a TikTok star?

What do I have to do?

I have to dance around?

What do I have to do?

Shouzi: David, I think people would love to see more of you on TikTok.

I've actually searched for you and there are many videos of you today.

I think people would love to see more of you, the more personable side, the more personal side of you that they don't get to see elsewhere.

David: So, recently, Mark Zuckerberg announced at his quarterly earnings after explaining why the stock went down by 25% as a result of the declining use of Facebook, he attributed to TikTok, and TikTok was becoming a big rival, he said.

How did it feel to be blamed by Mark Zuckerberg for the decline in value of Facebook?

Shouzi: We are a very young company at this point and they are still very big competitors in the market.

Some of them have been around for a long time with a lot of resources.

So, the way we look at it, there's still a long way for us to go in terms of achieving the mission that we want to achieve.

We think that there are a number of things that makes us unique in the market.

The first is that we are pioneers in what we do.

We have innovated this form of short video combiner for your feed, and we are confident that in the coming years, we will continue to innovate on that front and bring the best and the most interesting value proposition to our users.

David: So, if Mark Zuckerberg were here, would you say, "Don't worry about us.

We're not a big competition to you" or would you say, "We're coming after you"?

Shouzi: I think for us, David, we are more focused on ourselves.

I think over the long run, the biggest competitor that we have, as cliche as it's going to sound, is going to be ourselves.

We have a mission, which is to inspire creativity and to bring joy, and we believe that our most important focus is to focus on delivering that mission.

David: But let me ask you this.

Most of the large Chinese technology companies, let's say Alibaba, Baidu, Tencent, they have gigantic market values and they're very prominent in China.

Not as prominent outside of China as, obviously, in China and certainly not that prominent in the United States.

TikTok, by contrast, is not in China, but it's gigantic outside of China, the United States, and everywhere.

What did TikTok do that enabled a Chinese-based company, parent company, at least, to do so well outside of China?

Shouzi: We think it's challenging to build a global company in general, but the best ones we have seen so far are ones that take very consistent global learnings and adapt them to the local countries that they are operating in.

So, you need to be global and local at the same time.

And it's something that we're investing in.

For example, here in the U.S., we have a very sizable team here in New York, in Austin, in L.A. at this point, and becoming more local is something we will continue to invest in.

David: Let's talk about the beginning of TikTok.

So, what is ByteDance?

ByteDance was the parent company.

When was ByteDance started and who was the founder of ByteDance?

Shouzi: I was very fortunate about 10 years ago to have had the chance to participate in the company as an investor.

ByteDance was founded in 2012 by Yiming and the original--like any good startup story, the original product has evolved over time and there were many hits and misses, you know, as in the evolution of the company.

One thing that has remained very consistent for ByteDance is the mission.

The mission for ByteDance today is to inspire creativity and to enrich life.

And what I've noticed over the course of the decade that I've known the company is that they have been very consistent in wanting to deliver this mission to as many people as possible.

And driven by this mission, what struck me in the early days of ByteDance was the desire to be mobile, the focus on machine learning recommendation, and this desire to be global.

And it's been very consistent over the last 10 years.

David: I should disclose that my own investment company is an investor in ByteDance.

We took an investment a number of years ago and it--I assume it'll be a good investment.

I don't know.

But let's talk about how TikTok evolved out of ByteDance.

So, when did TikTok come along?

Shouzi: The original apps that were developed by ByteDance had a very similar concept, which was to recommend content to users based on machine learning algorithms that tries to understand the user's behavior.

The first iteration of it that was successful was a news app.

So, it took news content and it recommended news to users based on their own behavior on the app.

Now, sometime between 2012 and 2016, that evolved into short video, and that evolved into TikTok.

David: And did anybody think it would turn out to be this global phenomenon at the beginning?

Shouzi: I--no.

no.

David: All right, so, let me ask you about TikTok and regulation.

Under President Trump, there was a concern that certain information that TikTok was getting from people using TikTok was somehow gonna be detrimental to the United States and there was an effort to force TikTok to sell its U.S. business.

What happened to that effort?

Shouzi: We believe that our approach to all of the governments and regulators around the world is to be collaborative and to be very transparent, to be available, to explain what we do and who we are, and answer any questions that they have.

That's the approach we have taken and that approach has been an approach that has been very beneficial for us over the course of the last few years.

David: But there was a proposal at one point to require you to sell the TikTok business in the U.S.

I think it was gonna be sold perhaps to Larry Ellison's company Oracle.

Is that off the table now and right now you are not being forced to sell anything?

Is that right?

Shouzi: We have moved beyond that conversation at this point.

David: OK. And the current administration, the Biden administration, have they picked up the cudgels and said, "Well, we want to engage in the same fight" or right now, you don't have to worry about that?

Shouzi: Again, we are taking the approach now to be very transparent, to be very engaged, very collaborative, and to answer any questions that they may have.

David: OK, but the biggest concern that people had, at least some people in the Trump administration had, and maybe other people, is that the data that you have on your computers about who's watching what, I presume the data you have, would somehow get fed back to China and China would have it for its use, the Chinese government.

Is that true, that your data is subject to being given to or you're forced to give it to the Chinese government?

Shouzi: We disagree with that.

The way TikTok is set up today, first of all, TikTok is not available for download in China.

It operates outside of China.

The data's--the data for TikTok users are--is stored in Virginia and in Singapore with the backup in Singapore, and we believe that we have a very rigorous and robust system to protect the data security of our users.

David: What do you do with the data?

So, let's suppose I go on TikTok and I like certain kinds of things to watch.

You, presumably, can--and your algorithms know that.

What do you do with that data?

Do you sell it to another company or do you do nothing with it?

Shouzi: It is our recommendation engine.

The best way to think about it is that it's just pure mathematics.

It's--it digests the behavior that our users have on our platform, including likes, you know, what videos do you like?

The comments.

How long you stay on the particular video.

So on and so forth.

So, signals like-- behavioral signals like that.

And it recommends content that you could potentially be most entertained by.

So, that's really how the data is being used on our platform.

David: And how many countries are you in now?

Shouzi: Outside of China and India, essentially all the other-- David: Every country.

OK. And today do you have something that's proprietary, such that somebody couldn't come along and compete?

In other words, there's always people coming along trying to disrupt companies, and that certainly happens a lot in the tech world.

Are you worried that somebody's gonna come along with a new product that's slightly better than yours or do you think that's unlikely, given how dominant you are in the business now?

Shouzi: David, this is a very competitive space, and in our industry, there are players with, like bigger muscles.

They have more resources.

They have been around for a longer period of time.

And I think it keeps us on our toes.

You know, we have our strengths.

We are pioneers in this.

You know, we believe that we are innovative and we will continue to innovate and we have a very unique community that we talked about that we believe is very special and not easily replicable.

So, we have our advantages, we are confident, but at the same time, competition is very intense.

David: Now, China has been a little tougher, some people would say, on Chinese tech companies than it was a year or two ago, and there's been what some people would say a clampdown on Chinese tech companies.

Has that affected you in any way?

Shouzi: I think in this day and age, we have to be very collaborative and be very transparent and have an active dialogue with regulators and governments around the world to help them understand our business and to answer any questions that they may have.

David: As I mentioned earlier, my firm did invest in it, but I don't have any inside information and I don't know if you're gonna give me the inside information, but is there any plan to take ByteDance public at some point?

Shouzi: Our current focus, given the growth of our company, is to really focus on the business.

There is so much we can do, especially for TikTok, that really our management focuses on growing the business at this point and making sure that we are investing in the right things that we invest in.

At some point, we will access the capital markets.

At some point, we will.

But that is really not the priority at this point.

David: And when you do go into the public markets, what do you think when your public documents are revealed will be the biggest surprise?

The size of the platform or the profitability of it?

What do you think is likely to be the biggest surprise?

Shouzi: That's a very good question.

I need to go back and think about it.

I think most of what we do is followed and many people, sort of thankfully, have a lot of interest in our business today, so, I'm not sure whether there will be any big surprises.

David: Let's talk about your own background.

So, you mentioned you're Singaporean.

Were you born in Singapore?

Shouzi: I am born in Singapore.

David: OK, and did you go to college and high school in Singapore?

Shouzi: The thing about growing up in a small island like Singapore, David, is you get wanderlust at a very young age.

It's a tropical paradise.

It's a tiny island.

I love it, but it's very small.

So, after high school and after national service, we have national service there, I, you know, went to the UK for college and then subsequently to here in the U.S. for business school, where I met my wife.

David: Right.

You went to Harvard Business School?

Shouzi: I did.

David: And so, how do you think Harvard Business School was?

Was it smarter?

The people there smarter than you thought or not as smart as you thought they'd be?

Shouzi: It was a great-- I had a great time there.

The most important moment was I met my wife in business school.

So, to me this is a, you know, it was a great two years.

David: OK, so, you graduated from Harvard Business School in what year?

Shouzi: In 2010.

David: All right, so, what did you do then?

Shouzi: After business school, I joined an investment company called DST, which invests in internet companies.

David: Is this Yuri Milner's company?

Shouzi: Yes.

David: And so, what did you do for him?

You looked for internet-related investments?

Shouzi: That's what I did.

David: OK, and how many years were you there?

Shouzi: I was there for about 5 years and it was during this time that I got to meet and invest in ByteDance.

David: OK, so, after you left Yuri Milner's operation, what did you do?

Shouzi: I joined a company called Xiaomi where I initially was the CFO and then ran the global operations for the company.

David: OK.

So, you did that for a while and then a headhunter called you up and said, "Guess what?

We want you to come to ByteDance," or how did that happen?

Shouzi: It wasn't a headhunter.

The--I've stayed very close to the folks in ByteDance because of my early relationship with them.

So, they reached out.

There's a little known fact about me, which is I used to be a creator.

I actually had 185,000 followers on my account and--so, I, you know, had to go through that process of learning how to connect with my followers and using the product, and it was an amazing way.

I found the product so amazing in terms of being able to communicate the messages I wanted to my followers.

So, I love the product.

I've known the team for a long time.

I think that the mission is something that I really truly believe in.

So, when the opportunity opened up, it was very organic for me... David: Do you have 185,000 followers now?

Shouzi: I did.

David: You did.

Now you've given them up or what do you have now?

Shouzi: That account was used to sell products.

So, I have since transitioned into sort of a more consumer-based, a more sort of personal account.

David: All right.

So, you were recruited to become the CFO of ByteDance, right?

And you had that job, you're the CFO of ByteDance, and after just, like, 5 weeks, they promoted you to be the CEO of TikTok, is that right?

Shouzi: It was after a couple of months.

David: Couple months.

OK.

So, was that a promotion?

Shouzi: I think it's a--the nature of the job is very different.

David: And what is the biggest challenge that you have as the CEO?

Is it to keep the regulators away or to get more customers, more advertisers?

What is the biggest challenge?

Shouzi: There are a couple of things that, you know, keeps me awake at night.

I think that's the question.

The opportunity that we have.

I believe that we have something that's very unique.

We pioneered this sort of short video format and we have a very unique community today that has all these kind of raw, authentic content that people love.

And I think the opportunity that we have to take this to more people around the world, to inspire them, and for them to bring more joy to more people, this is a great and unique opportunity.

It keeps me very, very excited.

At the same time, there are challenges that we have to work through.

For example, making sure that we are investing enough, more and more into safety to stay ahead of our growth because it is something that's very important to us.

So, challenges and opportunities, they, you know, both excite me equally.

David: Now, since you took the job of CEO of TikTok, we've been living in COVID.

How hard has it been to manage the company during COVID?

Are you mostly been isolated, or how have you been operating during COVID?

Shouzi: It has been a challenging time, I think, for many businesses around the world, including ours.

We are a growing company.

It is difficult for new employees who are joining us to not have the opportunity to mingle and interact with other people offline in the offices, so, it is something that, you know, thankfully we are at the stage of the pandemic where we can start thinking about return to office.

It is something that, you know, we want to provide, especially the newcomers in our company, the right opportunities to integrate and to blend in and to make sure that they have the right opportunities to interact with as many people as they want.

David: So, as you look at TikTok, what is your favorite single thing you've watched on TikTok?

Is there one thing you've watched and you said, "This is my favorite"?

Shouzi: There are a number of them.

I am an amateur golfer, so, #golf has 10 billion views or more on TikTok.

It's very, very entertaining.

David: So.

if you watch golf on TikTok, do you get to be a better golfer or not necessarily?

Shouzi: Unfortunately, not necessarily.

David: OK.

When you are not working at TikTok and you're not golfing, is there any outside interest you have, or you don't have any outside time... Shouzi: I do, I do, I do.

I'm a very-- I'm an amateur theoretical physicist, as in, I'm reading books on theoretical physics and trying to understand it.

So, that's something that I love.

David: I've interviewed many people over the years.

I've never interviewed anybody who said that their hobby was amateur theoretical physics, so, that must be unusual.

So, do you regret not becoming the next Albert Einstein or something like that?

Shouzi: I don't think I have the ability to be that.

I hardly understand the mathematics behind some of the more complex theories, but I find it very interesting.

David: So, today, as you look forward to what you're gonna be doing over the next year or so, what are you most focused on?

Shouzi: I'm most focused on trust building.

We are a young company and I think trust is something that we have to earn through actions.

For example, through our continued investment in safety.

So, that is a big focus for me, that we are focused on not only growing our business but earning trust with the right stakeholders around the world along the way.

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