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

1. 0:00 – 4:55

   Ray’s background

   1. LRLenny Rachitsky0:00

      (instrumental music) We rarely get a peek into what it's like to work at TikTok. What are some core principles or values or just how TikTok operates?

   2. RCRay (Jiayi) Cao0:07

      The number one thing is context, no control. That's the reason why we're always encouraging people to think themself as a business owner.

   3. LRLenny Rachitsky0:14

      You give them all the information they need and then let them just do things without specific instructions.

   4. RCRay (Jiayi) Cao0:18

      How do you actually solve the puzzle by connecting the, all the dots together? Just like how I see some of my, uh, friends, their kids playing LEGOs. If you don't really see the full picture, you won't be able to make the LEGO as a one thing at end of a day. You have to see the other pieces.

   5. LRLenny Rachitsky0:31

      What also important cultural values of TikTok, of how TikTok operates that everyone always has in mind when they're building?

   6. RCRay (Jiayi) Cao0:36

      We always have this mentality we are a startup, we are a young company, we're always hungry for growth. In a very reactive way is like, "How can I run my second half of my marathon faster than the first half?"

   7. LRLenny Rachitsky0:47

      (instrumental music) Today my guest is Ray Tsao. Ray is the global head of monetization product Strategy and Operations at TikTok, where he's been for over four years. Prior to TikTok, Ray spent six years at Google helping scale Google Shopping globally. TikTok is interesting for two big reasons. One, it's one of the most successful businesses in history, last valued at over 80 billion dollars, and its parent company is the most valuable private company in the world, last valued at over 200 billion dollars. Two, TikTok is quickly becoming one of the biggest advertising platforms alongside Meta and Google, and generated nearly 10 billion dollars in advertising revenue just a couple years ago. So for both these reasons, TikTok is a really interesting business and team to learn from. And I've seen very few podcasts and even media get a peek inside how TikTok operates. In our conversation, we discussed TikTok's culture, their core principles and values, how they hire, how they move so fast, their emphasis on working hard, how they do OKRs and planning. We also get into how to succeed on TikTok's ad network, why you want to be testing at least 10 videos a week, how it's different from running ads on Instagram, how to make content that does well on TikTok, and so much more. This episode has a lot of interesting lessons and insights. Obviously, TikTok is at the center of a lot of debate globally. Some people love it, some people hate it. But no matter your opinion of TikTok, there's a lot that we can learn from their success. If you enjoy this podcast, don't forget to subscribe and follow the podcast on your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes and it helps the podcast tremendously. With that, I bring you Ray Tsao after a short word from our sponsors. This episode is brought to you by WorkOS. If you're building a SaaS app, at some point, your customers will start asking for enterprise features like SAML authentication and SCIM provisioning. That's where WorkOS comes in, making it fast and painless to add enterprise features to your app. Their APIs are easy to understand so that you can ship quickly and get back to building other features. And hundreds of other companies are already powered by WorkOS, including ones you probably know, like Vercel, Webflow, and Loom. WorkOS also recently launched AuthKit, a complete authentication and user management service. It's essentially a modern alternative to Auth0, but with better pricing and more flexible APIs. AuthKit's design is stunning out of the box and you can also fully customize it to fit your app's brand. It's an effortless experience from your first user all the way to your largest enterprise customer. Best of all, AuthKit is free for any developer up to one million users. Check it out at workos.com/lenny to learn more. That's workos.com/lenny. This episode is brought to you by Eppo. Eppo is a next generation A/B testing and feature management platform built by alums of Airbnb and Snowflake for modern growth teams. Companies like Twitch, Miro, ClickUp, and DraftKings rely on Eppo to power their experiments. Experimentation is increasingly essential for driving growth and for understanding the performance of new features, and Eppo helps you increase experimentation velocity while unlocking rigorous deep analysis in a way that no other commercial tool does. When I was at Airbnb, one of the things that I loved most was our experimentation platform, where I could set up experiments easily, troubleshoot issues, and analyze performance all on my own. Eppo does all that and more with advanced statistical methods that can help you shave weeks off experiment time, an accessible UI for diving deeper into performance, and out of the box reporting that helps you avoid annoying prolonged analytic cycles. Eppo also makes it easy for you to share experiment insights with your team, sparking new ideas for the A/B testing flywheel. Eppo powers experimentation across every use case, including product, growth, machine learning, monetization, and email marketing. Check out Eppo at geteppo.com/lenny and 10X your experiment velocity. That's geteppo.com/lenny. (instrumental music)

2. 4:55 – 8:24

   Cultural differences between Google and TikTok

   1. LRLenny Rachitsky4:55

      Ray, thank you so much for being here and welcome to the podcast.

   2. RCRay (Jiayi) Cao5:00

      Thank you, Lenny, for having me. It's a pleasure.

   3. LRLenny Rachitsky5:02

      It's my pleasure. I am really excited to have you here because it feels like we rarely get a peek into what it's like to work at TikTok, how TikTok builds product and operates, also how to be successful on TikTok as a business, as an advertiser. So I have all these kinds of questions for you and so I'm really happy to be chatting. I want to just start with a little bit about your time before TikTok, which was at Google, and kind of comparing that to TikTok. So you were at Google for six years, I believe. Now you're at TikTok. I'm curious what stood out to you about the cultural differences between how Google operates and TikTok operates.

   4. RCRay (Jiayi) Cao5:37

      Three major things, I would say. Number one is really how these two company, uh, thinking about innovation, right? So I think Google has a very, uh, strong philosophy of, you know, we are engineering led and there is a lot of technology driven and a lot of pieces they are not necessarily always, uh, trying to, uh, I would say cope with the market even, right?However, I think at TikTok, I think, uh, besides the technology part, we do have a very keen, I would say, appetite to really understand what the markets really want and also how can we really service our clients in a better way. And the clients here is not necessarily only for advertiser, including our user and also creator altogether. So that's one of the things I think it's very different in terms of TikTok way of work, it's very customer-centric in a way. And again, the customer here is not necessarily only for the business partner, but also for our regular user and the creators on the platform. And the second one is really thinking about how we, uh, take approach on, uh, product development, right? So a lot of times that, you know, uh, we take a very rigid, uh, approach in terms of product development, and oftentimes you see us that, you know, experimenting a lot of different things, uh, at all the same time. And also we do have a lot of, uh, engineering and -project in the backend to really understand how can we optimize better, uh, for the platform. So a lot of time, these are the things that I think TikTok is doing really, really well. The last piece I have to say is approach for global prioritization, right? A lot of times that you see a US-born company go global and oftentimes still they are really, like, rooted with the US market, and there's nothing wrong with it, to be honest, because this is the biggest market for, for them. As a, I would say, Far East-born, uh, company, I think a lot of times that we can take approach with truly how do we thinking about globalization, and for example, we launch a lot of product, not necessarily first in North America. We launched in, uh, Southeast Asia, for example, for our shopping, uh, really, like, very big initiative in- internally for shopping, and, uh, we launched, uh, our really, like, uh, creator fund here in North America. Uh, we launched our gaming approach really, like, service our EUI, uh, gaming advertisers really, really strong over there. So do a lot of different approach in terms of how do we in- like prioritize our go-to market and also product development. So that's the part I feel like, you know, we're very unique in the market, uh, or unique to some of the, I would say, tech company born, uh, in the US.

3. 8:24 – 12:15

   Fine-tuning the algorithm for different markets

   1. RCRay (Jiayi) Cao8:24

   2. LRLenny Rachitsky8:24

      It reminds me, there's this piece by this, uh, smart guy, Eugene Wei, who wrote a few things about TikTok over the years-

   3. RCRay (Jiayi) Cao8:30

      Mm-hmm.

   4. LRLenny Rachitsky8:30

      ... and just like why it's been so successful, and one of his really big points is that TikTok can work really well in other markets 'cause it's basically you don't need to know a ton about the market because it's this algorithm that figures out what people in each market want. Is there anything along those lines you've seen that just has been really fundamental to it working so well in many different markets?

   5. RCRay (Jiayi) Cao8:51

      The, the algorithm is definitely helping, right? Is because it is basically the machine is doing a lot of heavy lifting. Uh, that's actually, I think across the board on the technology company today. The difference is, is actually how much you are willing to take the heavy lifting over there in the market. Uh, by that I mean really, like, sending your troops into the market, hiring your local talent, understanding the culture, and really understanding the behavior from, from those users and understand, like, the machine can do things, but also at the same time that need to actually get local talent to fine-tune the machine, right? So there are a lot of conversation about how I would say technology is able to change our life, but I do think that at the end of the day, I do believe technology is a tool. So if we do have a ambition to go global, you have to do one more thing is actually take your step into global rather than having the machine do the heavy lifting. You have to really understand the local culture. I had a fun background, uh, for my first job is to really doing, like, a go-to market research in the Southeast Asia area. I think there was only one thing, uh, open my eyes after a year and a half in this career path is different market have totally different, I would say, culture, and these market behaviors are actually coming out of this culture. Uh, one of the fun example I always been using was, uh, I was doing market research for one of the suppliers for toner and also these ink cartridges for Thailand as a, uh, like a go-to market research. One of the things is always concern to my at that point the, uh, the client was they, they cannot figure out why their premium product cannot sell in Thailand, and then we just figure out like, you know, because they... the quality of their, their printing machine and also their ink cartridges are premium, and, uh, the quality of the paper and everything is very good. But when you actually do talk to those consumers in those market, the answer is very eye-opening. They literally told me at that time is, "I don't care. I don't care if your ink cartridges or your printer is at the premium, uh, quality. Maybe the printer I can use, but I can use compatible ink cartridges or toner for that because my consumer won't care about your printing quality, or the majority of my consumer won't care." So in that case, you should not necessarily worry about if you are a premium product. It's actually more about how long, how durable, how reliable you're able to print things and people can read. So I think these are the insights I think a lot of times will be neglected from some of the clients or, you know, the, the manufacturers or even the, the owner of the business because they think that, you know, we want to serve this segmentation, but however, this segmentation is that big in this area, right? So that's really why I said, you know, the culture is really the key part from the market. If you don't understand the culture, you won't, you won't be able to understand the behavior over there. It's more about that, I think, when we say about globalization or take the product go-to market in a global scheme.... or even build up the product. You have to get your hands dirty and to really understand the local culture, so that you can understand local behavior.

4. 12:15 – 15:11

   Examples of fine-tuning the algorithm

   1. RCRay (Jiayi) Cao12:15

   2. LRLenny Rachitsky12:15

      I love that advice. The way you described it, which I love also, is that you kind of have to fine-tune the algorithm and the product to work in different cultures. Is there an example of how that was done with TikTok, like a tweak that had to be made or some kind of fine-tuning that happened for it to work in a different market?

   3. RCRay (Jiayi) Cao12:32

      Yeah, I think, uh, we did a lot of, uh, fine-tuning on our, uh, user product side to really think about content, right? So that's the number one thing. Gonna be super diff- super different coming from each of the market and also from each of the culture, right? For example, in Japan, how do you actually get more content that relevant for the culture? A lot of people may think, okay, uh, are you guys only doing dancing or doing singing for, for Japan? The answer is not. It is actually more food on the, on the TikTok side.

   4. LRLenny Rachitsky13:04

      Mm-hmm.

   5. RCRay (Jiayi) Cao13:04

      Like how do you actually introducing new food restaurant or, uh, new recipes? And also sometimes that you're introducing a new technology, uh, I would say 3C product, like consumer pro- uh, consumer electronics product over there. So these other content get really popular sometimes in, uh, Southeast Asia or even Japan area, and versus in the US as everybody knows that we're starting from, uh, really like lip syncing at a very early stage.

   6. LRLenny Rachitsky13:30

      (laughs)

   7. RCRay (Jiayi) Cao13:30

      But now really there we are expanding to shopping behaviors and also a lot of people using us as a really main platform to acquire new discovery, uh, for the product, right? So these are the, these are the things I think, yeah, different market definitely deserves and demand different kind of treatment. And if you are able to do this a lot, you're able to find success over there.

   8. LRLenny Rachitsky13:53

      That's really interesting because you could think it's just this algorithm that figures everything out for you, but I think what you're pointing out is you have to seed it with the right sorts of use cases that that culture is most excited about.

   9. RCRay (Jiayi) Cao14:04

      Another good example will be creative, right? So it's a very good example how human can work with technology together. Uh, we have a ton of creatives, and we have a ton of content, right? So of course we use machine to label those content, uh, use metadata to analyzing those content. However, a lot of times you can find that, you know, when we are really thinking about how creative can help advertisers, humans actually make a more interesting or more, I would say, influencing decisions over there. For some of the verticals, we can say that, "Oh, you know what? Maybe we can try a, uh, coupon image with a new product, uh, like a, a, a sticker on the top." This maybe actually work better compared to some of the price promotion even. So a lot of things is, is really depends on how do you actually interpreting the numbers and interpreting the data points, but also at the same time, your business acumen is gonna be very important here to make a judgment call for some of the situation like that. I think we still rely on, a lot on both machine and also our own experts to analyzing those trend and give the recommendations.

5. 15:11 – 19:34

   Core principles and values of TikTok

   1. RCRay (Jiayi) Cao15:11

   2. LRLenny Rachitsky15:11

      Awesome. Okay. So there's a few threads I'm going to follow later. You talked about the product development process, so I'm gonna, I want to spend time there. Also about how to be successful on TikTok both as a creator, also as a business. I'm excited to hear your advice there. But I want to spend a little more time first on just what it's like to work within TikTok and the culture of TikTok. What are some core principles or values or just like how TikTok operates? If you had to identify, like, here's the ways that we all think about what we want to do right, and the most, most important to your day-to-day work.

   3. RCRay (Jiayi) Cao15:41

      Yeah.

   4. LRLenny Rachitsky15:41

      What, what words and concepts come to mind?

   5. RCRay (Jiayi) Cao15:43

      The number one thing, uh, reasoning with r- really, really well with me is context, not control. Oftentimes when we are looking around, uh, companies, different sizes, when you, when you're looking at how they're collaborating, oftentimes we see the behavior that a lot of people just working on a smaller piece based off their job description, right? So hey, you're working on go to market, and you're working on data analytics, and you're working on this book of business, uh, e-commerce, and you're working on auto industry, for example. Uh, a lot of times that these, like, human made silos is actually slowing things down, right? Because humans are not, or our, our talent, they're not supposed to be categorized into different basket. They may have their own majority of responsibility for sure, but we don't want to, like, cap them into this kind of a box we created. That's really why we're always encouraging people to think out of the box and think more, and think themself as a business owner rather than a, you know, uh, a piece of machine, like keep the machine running. Oftentimes I will say, "Context, not control." That means you actually can go above and beyond to really think about your whole business problem as your own problem, and your piece is maybe one part of it to solve the puzzle, but how do you actually solve the puzzle by connecting all the dots together? We're encouraging other people to think like that way. And by that I think we kind of mentally break out those walls. So encouraging our team members to do a little bit more thinking is very important. It's a little bit more thinking because the think part is very important, right? And then now in terms of getting things into behavior or changes or getting to action, then you need to really collaborate with other teams because we don't want necessarily creating, you know, hey, you're on other people's working group now. You're actually stepping on other people's toes now. It is not the situation we're trying to encouraging, but we're encouraging more is context, not control. Think more about how you can change it, and then when you do really actually take some actions, be active. You reach out to the who i- who's supposed to be the owner of that and then have a discussion, right? So then you can able to really like, you're able to connecting the dots all together. So that's one thing I think is very unique to our culture. I think it's very, very important for us to continue to grow at this speed because everybody have a, I would say, full visibility towards or full ownership to their mindset, uh, how they can contribute.

   6. LRLenny Rachitsky18:16

      And the key there is context implying you give them all the information they need and then let them just do things without giving them specific instructions, "Hey, I need you to hit this goal, work on this project, launch this thing." It's, "Here's what we know."

   7. RCRay (Jiayi) Cao18:29

      Yeah.

   8. LRLenny Rachitsky18:30

      "Do the things you think are best," roughly. I know it's not just like anyone does anything, but that's, I imagine that's kind of the implication there.

   9. RCRay (Jiayi) Cao18:35

      Yeah, I think it's context no control plus proactive thinking and reactive doing, right? So you have to do more proactive thinking with this context. Now, reactive doing means that you need to collaborate. But when everybody has this kind of mindset, the collaboration should be, uh, very smooth because people have the context altogether, right? I think the, the part that I see other, maybe some of the other company, uh, facing challenges is actually there's too many IOs in between and you have people that are just protecting their own thing and working their own thing, and then I'm delivering. But just like how I see some of my friends, their kids playing LEGOs, if you don't really see the full picture, you won't be able to make the LEGO as a one thing at the end of the day. You have to see the other pieces. So I think that's the part I just think is really powerful and reasoning really, really well, uh, when we're really thinking about product development and also product go-to-market, right? So it's, uh, it's a pretty full cycle. People have to see this, and then they have

6. 19:34 – 21:38

   Hiring at TikTok

   1. RCRay (Jiayi) Cao19:34

      the context.

   2. LRLenny Rachitsky19:35

      I love this, and this has come up actually a few times recently when I was talking to the CTO of Netflix and also OpenAI. They're very similar in culture where it's give people a lot of autonomy and freedom, and not a lot of, "Do this, do this, do this." The key there is to hire very high quality people and very high caliber people 'cause-

   3. RCRay (Jiayi) Cao19:54

      Yeah.

   4. LRLenny Rachitsky19:55

      ... if not, then things won't work out too great. Is there anything along those lines that you can share of just like, yeah, the kinds of people you end up hiring and how you hire people that can work well in that environment?

   5. RCRay (Jiayi) Cao20:05

      Uh, I agree with you, right? So the caliber of these, uh, these people is actually pretty important to support the structure I just talked about. And oftentimes, I can see some people that with the quality of, you know, always curious. Curiosity is a very important quality, uh, when I'm actually talking to my interviewers, because I wanna see that they are naturally curious to new things, they wanna learn more about the new things and don't really get stuck towards their own things. That's- that's one thing. And the other thing is the- the discipline, because like I said, it is actually a double sword, a double-edged sword in this case, right? So it could potentially introducing some of the chaotic situation in the company because everybody is thinking everybody, ev- every- everything. The discipline here is actually how you are really following the guidance on reactive doing, be always thinking about how to collaborating. And the discipline here and also the- the rigorous approach here is also gonna be very important. One of the good example that is the ability prioritize, because I don't believe one thing is everybody can do everything. You have to do, uh, prioritize properly so that you're able to push the right agenda. So I think that's more of a kind of a quality of the- of the people we're looking for, is... It is hard. Don't get me wrong, like it is really hard to say that we can find everyone like that, but we would love to, uh, believe that we can train our employees like that so that they are able to even do better in their longer term career.

7. 21:38 – 25:09

   Embracing the “always day one” mentality

   1. RCRay (Jiayi) Cao21:38

   2. LRLenny Rachitsky21:38

      Essentially what you look for when you're hiring people is making sure they're always curious, they have high discipline, and that they prioritize well. Coming back to the cultural pieces of TikTok, so the main one you've shared so far is this idea of context not control. What else are important cultural values of TikTok, of how TikTok operates that everyone always has in mind when they're building and- and, you know, in meetings making decisions?

   3. RCRay (Jiayi) Cao22:04

      Yeah. Uh, another internal, uh, thing that we always say is, uh, always day one. We wanna make sure that, you know, we always have this mentality we are a startup, we are a, um, young company, we always hunger for growth. Uh, we don't wanna fall into the trap that, you know, uh, people may think, "Oh, you guys are very successful in the market and then you're not necessarily, you know, need to worry about your existence anymore." I think it is actually something we trying to avoid. Uh, we always want to make sure that, you know, our team members always think like, "Okay, if this is actually a new day for you and what are the things that you always wanna keep in your mind you wanna do?" And also to keep that spirit is very important. Um, a lot of times that I can see, uh, some of the mature company, they are not necessarily losing the edge of, um, I would say this competition or losing the edge of being innovative. I think it's more about like, you know, some of the- the culture has been shifted because you have a lot of new employees diluting your culture. So not necessarily it's not gonna be like the old days that the co-founder is sitting above of you, right? So, but I do think this company has a very interesting behavior I see there is I can talk to anyone at any time via our internal communication system. I can ping Shou right now. I can ping the co-founder if I want to, uh, tomorrow. We always keep this kind of mentality internal is that we're still a young company, we wanna grow, and you can feel free to talk to anyone. We don't have limitation for that. As long as you have a good opinion, I would love to hear from you. Is that creating some of the, I would say, the, you know, chaotic situation? It might be. But I do think that this keeps the company, uh, very energetic. People willing to share, people willing to engage, that's very important. Uh, I wanna add in one more thing we just talked about. You asked me what is actually the uniqueness of TikTok and, uh, versus the other company? It's very tied up to that is I have never seen a company, the engineering team and the product team and the sales team are so close. That's definitely one of the aha moment I had because if you're thinking about, like if your- your engineer does not really know what the market wants and if your PM doesn't really know what is actually their client's feedback...They won't be able to get a right product in the market. It j- they j- d- just won't be. And they won't even tell a good go-to-market story to advertisers, or even to our users, because they just don't know what are the, you know, the end user thinking. So I think it's a very secret sauce for us, is that our sellers and our engineering team, and our eng- uh, product team, and also data scientist team, we're all collaborating really, really closely. And that's very much a, I would say, a such big advantage for us compared to, you know, when a company becomes too big and nobody talk to each other. So, uh, I do hope that it is the thing that we're gonna continue, uh, reinforce along the years where we are continue to grow the company.

8. 25:09 – 28:38

   Collaboration between teams

   1. RCRay (Jiayi) Cao25:09

   2. LRLenny Rachitsky25:09

      What does that actually look like? I imagine people hearing this are like, "Yeah, we're gonna, we're gonna make sales and product and eng very close." I imagine many people don't actually do this too well. How do you actually execute that? Is it they report to the same leader, they sit next to each other or, I don't know, Zoom next to each other? What, what actually makes that work?

   3. RCRay (Jiayi) Cao25:28

      Yeah, I, I think a couple of things. Number one is a, like a structure, right? It ha- ev- everything has to go as a, a structure. So we do have a meeting structure that we call it, like use- used to be by month, and now it's actually a quarterly level. Uh, we get everybody together, engineering leader, product leader, and also not necessarily only the leader level. Some of their, uh, the team members were joining the team, uh, were joining the force together to have a big meeting. That meeting is 180 people-ish. It's crazy to have a meeting as that, at that size. Uh, especially that, you know, there are different kind of functionality there. But one thing we keep it really well is actually we are using a, uh, reading format of meeting. So it's a doc reading. We just reading comments and understanding the context. Again, it is the doc bring everybody together, and then we discuss the things that we wanna make a decision with, or the things that we feel is a blocker, or things that we need to celebrate. So that meeting structure keep everybody together, and consensus. Again, not necessarily only for the top leaders, right? It, it's normal for the engineering leader and product leader and sales leader at the company level, they talk to each other, but we made that happen for their core team members. At the very beginning of my time here, that was literally, uh, getting to the IC level. So it is pretty eye-opening for me to join that meeting first time, because I was get so used to their level of different meetings out of Google. But here, it's like, okay, everybody read one documentation, and then you just understand what are people talking about and thinking about. It is intentional, but I do think that that structure is a very big secret sauce, I would say. Not necessarily we, we invented it, right? We also learn from the other companies, right? So it is actually one of the things that we, I'd say, deployed pretty well, uh, today here to keep that structure running. And the other thing is really feed, feed those, I would say, uh, market, firsthand market information to our PMs and RDs. That means we took them out with us. We're just inviting them together to join the force together to meet the clients. And a lot of the company, if you wanna meet APMs, if you wanna meet the engineering leaders, it's literally like once a year maybe, and also if you're investing a ton with some of the platforms. For us, I think it's always on. To junior PMs, senior PMs, and engineering leaders, we invited them together to this immersion trip, we called it, to really get face time with our clients, to really feel the heat they are actually re- facing as challenge by using our own product, right? So that kind of a, I would say, the aha moment is bringing a lot of, uh, I would say, insights to them, and then also get them to feel, uh, the heat of the, the, the pains the sellers may feel. So that worked really well too, right? I think oftentimes is a, is a battle, right? It is not necessarily the, the general. You have to stay in the back. You sometimes have to go to the front. But we just make that, make sure that the f- the general go to the front quite often in our company to do that.

   4. LRLenny Rachitsky28:35

      I love that concept of having them feel the

9. 28:38 – 31:14

   Amazon’s cultural influence

   1. LRLenny Rachitsky28:38

      heat. An interesting trend I've noticed is there's a lot of Amazon influence on the way you all operate. There's the it's always day one idea. There's the memo culture you just described. Any idea where that comes from? Is there like a senior Amazon person that came in and helped influence those sorts of things? Is it just, "Hey, Amazon's killing it and they're..." I've noticed, interestingly, Amazon has influenced the most companies in all of their ways of working, so it's not a surprise. I'm just curious if there's anything else there that's interesting.

   2. RCRay (Jiayi) Cao29:04

      I think we have the, we have the benefits to standing on the shoulder of other giants, right? So we learn definitely always there was the culture that, you know, Amazon was always championing. I think we, we learn from them, right? So this is something that we, I would say, like, you know, always trying to listen and trying to learn from the industry. The doc fashion is also learned from, from Amazon, right? So we kind of studied, "Oh, this is maybe the, one of the best practices we can employ here or deploy here." So we tried it. Not even mention we have the OKR system, right? So it is actually a very good learning from early stage from Google. So, uh, all these, I think definitely we do have some of the, I would say, benefits being the newcomer to the market, and then learn a lot of the best practices coming from our, uh, our industry peers, and really, like, deploy it here hopefully successfully. And some of the things that we just tweak it, right? So for example, our culture, always day one, is definitely very similar to Amazon, but the implementation of that could be different. And also, the context, no control pieces. I believe other companies may have the similar idea, but for us, I think we just need re- really need to implement it in a, in a way that gonna be fitting to us. Uh, I happened to listen to your podcast with, uh, the Airbnb co-founder, uh, the other day. Uh, he also mentioned that, you know, how he break out the IOs. I think it is very similar approach among industry right now, trying to really make sure the team is able to talk to each other because...... I think a quote from him, like if he- "If your PM doesn't know how to sell the product they are creating, you won't be able to do it, do your job better," right? So this is literally how we're thinking about it too, in a lot of way.

   3. LRLenny Rachitsky30:40

      I know that you all move very fast and I wanna actually talk about that next. Uh, and with that it feels like you're- you're co- your values should be, it's always the first half of the day, instead of it's always day one. It's always-

   4. RCRay (Jiayi) Cao30:50

      Yeah.

   5. LRLenny Rachitsky30:50

      ... it's always the first, it's the morning of the first day.

   6. RCRay (Jiayi) Cao30:53

      I, I think, um, the, the value if I, if I put it in the, in a very reactive way is like, "How can I run my second half of my marathon faster than the first half?" So that's how, uh, I, I think about it, and how do we really like continue pushing for it?

   7. LRLenny Rachitsky31:10

      Wow. That sounds very hard and painful.

   8. RCRay (Jiayi) Cao31:12

      Yeah.

   9. LRLenny Rachitsky31:12

      But I like that metaphor.

10. 31:14 – 35:38

    Setting up the product organization for speed and innovation

    1. LRLenny Rachitsky31:14

       Okay, so let's talk about how you set up the product org to move as fast as you move. I think there's this idea of just like running fast. I don't know if that's a phrase you use, but just how is the product org set up speciallly different from other teams that you've seen that allows it to move as quickly as you move and innovate as often as you all innovate?

    2. RCRay (Jiayi) Cao31:33

       Our product teams are setting, um, I would say like very importantly is global, right? So we wanna actually, uh, like I said, the number one step is if we want, really wanna do global business, have to go global. So we set up teams, uh, really across the board in the global locations to really acquire global talent, who knows the market and who knows the competition too, right? So they're, we're able to really getting the, let's say, jump start in the local market. So for example, uh, we have the majority of the engineer, uh, and also PMs currently located in the West Coast of the North America, right? So Los Angeles and also San Jose. These are the key hubs we have for our tech, uh, folks. And also for North America-wise, we do have our, uh, majority of the go-to market leads sitting in the New York to get closer with our seller and also, uh, with our clients at the same time, right? Uh, also, you know, it is not necessarily only for North America. Like I said, we heavily invested in Southeast Asia, so you can see that a lot of our engineering and also PM resources are deployed over there in Singapore to enable them to get closer to our clients over there as well. So really like deploy your resources globally and also focusing on the key markets you wanna penetrate, that's the commitment I think, uh, we're doing, uh, pretty, pretty good in this case. And the second one is to really, again, I think the PMs and the product team settings are oftentimes, uh, I would say like if, because we are growing so fast, oftentimes we have to do a lot of, uh, minor team adjustment to catering for that, right? So it is very usual, uh, uh, usual or common for teams to do a little bit re-org on an annual basis or even like a, on a two years or three years cycle. Uh, the stability is important, uh, don't get me wrong, but I do think that as a faster growing company, we need to consistently to re- reiterate not only the product but also our teams. So how can we do reiteration on the PM side, on the go-to market side? It is actually, um, something that, you know, I have seen this company doing really, really well. Not necessarily we're bonding to one team structure. We're actually bonding to the marketing and we're bonding to the growth we're looking for. So, uh, we're not afraid to break out things. And actually I literally break out my team last year to, uh, make sure that my team having more go-to market mindset, uh, to actually embedded them with seller directly. So these are the things that, you know, very, uh, I would say inconventional to a, a size of this company, right? But I do think that's necessary, uh, and also that's a, a good mentality for the team to, uh, really run faster with this kind of a rigid approach. So yeah, these are the two things I think very, uh, unique to us. Uh, I think could also be, uh, continuously helping us in the next phase of the growth.

    3. LRLenny Rachitsky34:33

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11. 35:38 – 40:18

    Building the go-to-market team

    1. LRLenny Rachitsky35:38

       I know you mentioned earlier when we were chatting offline is when you were trying to build a go-to market org for this stuff, you failed in some ways, and there are some things you learned from that experience. What went wrong when you first tried to approach this?

    2. RCRay (Jiayi) Cao35:51

       Yeah. When I, when I joined the company, there were, there were only two people on the go-to market side.

    3. LRLenny Rachitsky35:57

       For the advertising business?

    4. RCRay (Jiayi) Cao36:00

       Yeah. There were only two people, and, and by that time there, the US and plus I would say Europe business together were having like less than 80 people. But the business needs to grow and we need to hire really fast. The first mistake I made was... By the way, the goal is to hiring, uh, 100 people in the sixth month to support the go-to market. That's the speed we're into, right? So that is early 2020 to middle of 2020. So within six months, I need to hire, I would say, 100 people to supporting the global go-to market structure and build everything.Then the first mi- the first mistake I made, just right that, at the right point, because we're trying to grow too fast, and sometimes as a hiring manager, I have to compromise the standard we're trying to, we're trying to hire. So that's the mistakes I think, uh, I made first, and I think nobody should repeat that mistake, is you need to always run for the quality rather than the quantity. So it's a, it's a easy mistake you can fall into the trap because the business demand you to go faster. If you don't have the manpower, you won't be able to, but get, I would say, believe me when I say this, this is a pain, right? When you have the wrong people on the team, it's not necessarily gonna make you make, move faster. It's gonna actually slow you down. So that's one of the biggest mistake I made for my, for my first year when I, when I created the team. And not necessarily myself only, right? So my also, my reporting manager, sorry, uh, the, the managers reporting to me, they are facing the same pressure, and then it's cascading down. So it's definitely, uh, the mistakes we made at early stage. The second thing I can think about is really on the context, no control. It is not necessarily I'm born into, to be honest, because I was trained really like, you know, "Hey, this is your box. Finish your work here, and then you're good." But the reason why I value that, really, like, the attitude more today is literally I failed at the very s- early stage of my, uh, time here. Because I was trying to creating that kind of a very black and white discipline for my team. "You h- you can do this. You cannot do that." But technically speaking, that's literally slowing things down, because a lot of times we can see that, hey, we're delivering our go-to-market strategy, and we're good. But literally what you don't know is your goal is not to deliver the go-to-market strategy. Your goal is to land your go-to-market strategy with sales together. So if your job only is delivering, no, you're, you're failed oftentimes, because you, you're not really getting the market context. You're not even talking to your clients. So that was the, literally another mistake I think taught me how to really, like, embrace the culture here is context, no control. Right? And the third piece, I think it's also a mistake, uh, so really, like, a big aha moment for me as well, is for the past couple years now I've been managing a such big global organization. Oftentimes, even not myself, my managers, they don't have time to go detail and to go talk to the clients, which is very scary, because if you don't know, again, you don't hear, uh, what is happening in the market, you won't know the details in the market. You won't be able to take the right movement or take the right approach to go-to-market or even give the feedback to the engineering team. So it's very important that, you know, the leader at any level needs to be situational. You cannot always down to the weed, and you cannot really distance yourself from the reality. So you need to find the balance to really get engaged and also throw yourself out there to getting, I would say, getting deeper into the problems, identify the problems, and then you're able to perform even better, because I don't believe one thing is you're the pure, um, I would say, people manager. Uh, you cannot do that, because when you do that, you're very, very... At the, at the very, I would say, like, uh, position to really thinking about your career, (laughs) because, uh, you're losing your competitive edge from the other, I would say, you know, equivalence talents in the market.

12. 40:18 – 43:02

    What makes people successful at TikTok

    1. RCRay (Jiayi) Cao40:18

    2. LRLenny Rachitsky40:18

       I love these stories. I love stories of things not working out. So I appreciate you sharing these things. When someone doesn't work out at TikTok, and they have a bad time, and they get let go or they leave, what's the most common reason, like, other than just they're not good enough? Is there, like, something that just doesn't stick with people that often leads to, like, "This is not the place for me"?

    3. RCRay (Jiayi) Cao40:36

       Yeah. I wo- I would try to really thinking about this in a different way. I can tell, like, you know, how people can be more successful here, right? So I definitely can see, like, we just talking about, people being very curious, and people very being, like, you know, nimble. They can be more successful here. At the same time, I think, uh, we have to admit one thing. Join a startup and join a rocket ship is a, a lifestyle. It is not necessarily a job you're, you're, you're working on from 09:00 to 05:00, right? So it is a different lifestyle, and it is not built for everyone, right? So if you are not able to adjust your mentality towards some of the work that, you know, we are here to do, and it's maybe, like, not right fit for you, I'm not saying that that candidates is incapable. I think they could be capable, uh, in the other scenario for sure. But is it the right fit? I think that is a, I would say, like, you know, very much towards the situation or the company's status, um, in the market. I can see lot of people that, you know, they left and become very successful too, right? So it is not necessarily that, you know, "Oh, uh, we think you're not good, and then you're gonna be, you know, not good for every single other company." That's not the case. Uh, and one thing, and also this is my team culture I try to create is, I'm happy to say that when a employee reach out to me, uh, say, "Hey, Ray, I'm, uh, I'm actually leaving the company," as long as they are telling me that they are going to a better place or a place that they can continue to grow their career, I'm happy for them, because o- oftentimes, my, my, uh, last question during my interview is, "What is actually your goal in the next three to five years?" And also, like, you know, I'll be really honest with them, say, "Hey, I don't think this is the job for you forever," right? Nobody gonna work in this forever. If you can, great. But what is really, like, you know, your North Star? I think that's the part that I would love to co-partner with you, because I always believe one thing is, it is not only about achieving the company goal. It's also achieving your really, like, career goal or your employee's career goal together.So I want to create in that culture here as well, so yeah, I think I'm doing so far so good. Most of my team members, uh, when they actually moving, uh, moving on internally or externally, uh, I'm able to say that, "Okay, that's a good choice. If I were you, I may probably do the same thing." It is actually a very good culture, I think, or I would love to champion,

13. 43:02 – 44:40

    Thoughts on putting in long hours

    1. RCRay (Jiayi) Cao43:02

       uh, across.

    2. LRLenny Rachitsky43:03

       On that first point, I'm also a huge advocate of just you will be successful if you work very hard. I know there's a bit of a backlash at working a lot and, and thinking too much-

    3. RCRay (Jiayi) Cao43:12

       Yeah.

    4. LRLenny Rachitsky43:12

       ... about work-life balance, and I feel like it's actually really important to work a lot and work long hours often to be successful, especially at a company that's going through this, 'cause that's not gonna last forever.

    5. RCRay (Jiayi) Cao43:22

       I think at the end of the day, it's a personal choice, right? It's a, it's a very much like a personal choice. If you are excited about this, if you want to grow together, yeah, this maybe is a, is a g- good thing for you. And also depends on the life stage, right? So some of the, the people they wanna actually getting more family time. I think that's also, uh, the right choice too, but it just depends on your personal, uh, I would say eliminate your personal, uh, choice rather than if the company demands that. I mean, I cannot force my team to working long hours. I don't, I don't want them to like working long hours. I think it's, it's more about like if you're able to deliver, right? If it requires a bit, uh, longer time to contribute, I think it's okay, but you'll also get rewarded very well too, right? So what's getting, what's get out? So I, I think it's, again, I do believe that this is the, the quality and also the, the value we're, we're evaluating here as well.

    6. LRLenny Rachitsky44:19

       And even though it's hard in the moment, I find that those are the times you remember most and most fondly in your career when you just go all in, "I'm gonna work really hard and do the best possible job I can do." Assuming that doesn't last forever, those are, end up being the most impactful, helpful to your career, most proud moments when you're just like, "Look what I accomplished." And so-

    7. RCRay (Jiayi) Cao44:38

       Yeah.

    8. LRLenny Rachitsky44:39

       ... I'm on the same page.

14. 44:40 – 49:12

    OKRs and planning at TikTok

    1. LRLenny Rachitsky44:40

       I wanna talk about being successful on TikTok as a creator, as a business, as an advertiser, but a couple more questions real quick on how TikTok operates. You mentioned you do OKRs just briefly. Is there anything that you've learned about being successful doing OKRs within TikTok? Maybe is there anything different that y'all do versus how other companies think about OKRs?

    2. RCRay (Jiayi) Cao44:59

       It is a definitely a company alignment that we are using OKR as our, basically the, uh, the system to, uh, make sure that everybody is working towards the same goal, right? Implementing wise, I think definitely we have a lot of room to improve, right? So h- how often do you actually see your team able to go the OKR at the end of a quarter and also putting the OKR really two weeks or one week before the beginning of a quarter? I have to say that, you know, shame on me, I sometimes, uh, you know, delay it a little bit, but I think the, the goal is always there to using OKR system as our north star to drive the behavior and also to align. Again, it's very important to align on the OKRs because I can see a lot of times the OKRs are putting, but they are very siloed and that is not really necessarily helpful, uh, for the company we wanna achieve in really high growth. So I think it's very important that, you know, we don't take OKR as a shell, but we, we take OKR as its core is cross-functional alignment, cross-functional goal settle. So these are the, uh, the things that we're still continuing i- improving.

    3. LRLenny Rachitsky46:06

       Is... The way the OKRs work at TikTok is they're an OKR per team and they all kinda trickle up to a company level OKR? Is it less structured that way and teams kinda decide if they wanna use OKRs or not? How does that roughly work?

    4. RCRay (Jiayi) Cao46:17

       The structure is basically the guidance is you using, uh, the key result to evaluating and then you put the steps in between, right? So that's how at least my team has been using this. I think the, the things that we can improve is the input and output, right? So the output is very clear, but what is actually the input sometimes is debatable, sometimes I have to say. And also, oftentimes your output is other people's input. Are you able to connect in the dots over there too? Then that's actually the part that, you know, requires a lot of def- a lot of, I would say, reinforcement on alignment. Uh, definitely we're getting better, don't get me wrong. We're totally not perfect for sure. Uh, but I do see there is a lot of, uh, move, I would say momentum to leveraging this system better. If you know other companies doing this really, really good, please shoot in my way. I would love to learn from them.

    5. LRLenny Rachitsky47:07

       One last question here. You do planning, you have OKRs. Just briefly, d- how often do you all do planning? Is there a yearly plan that you put together and then a quarterly detailed plan?

    6. RCRay (Jiayi) Cao47:16

       Yeah, we do, we do have a annual planning cycle, but I have to say that, you know, our annual planning cycle is the baseline. Uh, we often do a lot of, uh, iterations in the middle of the year, uh, and also on a quarterly basis that, you know, we're able to pivot in really nimbly to really catering to the things that we see in the market, right? Some of the longer term strategy won't change, just like the platform we wanna always creating, uh, you know, inspiring and also a frictionless and immersive experiences for users. This won't change, but anything into the core of like how do we realizing that, there always a consistent experiment, uh, over there. I cannot speak for the user product side, but at least from advertising product side that, you know, this is always the rigorous approach we're, we're taking. And for the go-to market part, that's also creating a very different behavior for us, right? Because oftentimes if you have a solid and kind of a, a static part of roadmap, you can do go-to market relatively easy, I would say, because everything is planned, but with a environment like that, that basically make the go-to market and also the product feedback loop much more shorter and faster. So there's a lot of, I would say, pressure or actually put it nicely, there's a lot of innovative things that, you know, on the go-to market side and also on the sell side, the company, uh, or the teams need to actually do to make sure that we're able to catering for that. Uh, but again, this is a team work rather than, uh, only one side of the work. So far so good, I would say. Uh, a lot of things that we've been able to achieve within the past couple years-... uh, has been already proven that, you know, this approach has been working for us, uh, but not necessarily they are, uh, always like, you know, yes, perfect already. Always room to improve to make sure that, you know, we have more structural approach as well, so that the market able to keep the pacing with us. We don't wanna overwhelm our advertisers or our users either. So that's also the other part that, you know, we need to continue optimizing too.

15. 49:12 – 53:49

    Tips for how to be successful on TikTok

    1. RCRay (Jiayi) Cao49:12

    2. LRLenny Rachitsky49:12

       Okay. Let's talk about a different topic, which is being successful on TikTok. So the way I think about it in my head is there's how to be successful as just a regular human creator person, how to be successful as a business trying to just create viral content, and then being successful as an advertiser, which I know is where you spend a lot of time. So, uh, let me just ask, is there a tip you could share for someone to be successful, say, AKA be vi- go viral on TikTok? I imagine your answer will be just produce something people love and wanna share and like, but I guess is there any, is there anything that could be tactically useful when you're creating content on TikTok to help you go viral?

    3. RCRay (Jiayi) Cao49:47

       I think if I know that, I definitely will already become a very successful creator, I have to say. Our system is very much smarter than I am. Uh, I cannot trick the system. But I have seen a couple good cases, right? So number one thing is that you have to really, like, be unfiltered. I mean, you don't really need to be perfect on this platform. I mean, that's the beauty of it. You can be yourself, and you can really share the things that you like, and if you're really master at one thing that you're really, really good at and you want to showcase, this is the platform for you to try. Because not necessarily that, you know, we are fully saturated, right? And also our algorithm distributing the content in a very different way, right? Uh, some other, other platforms they are, I will say, like, are people-based or friendship or friend-based. I think for us, it's purely based on actually you're creating something that, you know, everybody want to see, so let's see if we can distributing more. Right? So I think continuously to bring new content to this platform and testing and finding your own competitive edge gonna be very important as a successful creator. And most of our creator has been doing that. Uh, and though I can see some of our biggest TikTok stars, they are literally practicing this every single day. And I do think that creativity and that part of, I would say, getting the nuances is the key part that, to be more successful on the, on the TikTok community. And the second thing is, uh, is including also for, for brands as well, because our consumer brands is our creator as well. They really need to embrace the culture and the community here, right? So really listen and understand what are the user behaviors on the platform to understand what do they like to see, and also the, the messages or the presence could be very different from your other, other media channels. Or as a creator, you could be very different from your other, uh, other platforms. So that's the other thing that, you know, it's gonna be challenging, because for them to shift in the mindset, but I do think that, you know, definitely worth trial, right? So some of the, I would say our early adopters has already been proven that when you do embrace the culture here, you're able to acquire a ton of different kind of, uh, user or, you know, the audience to your channel. And you can show a different side of yourself as well. So yeah. I've been trying to do that. I have not really like finding my competitive edge, I have to say. But I'll keep trying.

    4. LRLenny Rachitsky52:14

       Is there an example you could share of someone that has done that really well, either be really authentic and also embrace the community? A business specifically that has done this really well and has taken off not as an advertiser?

    5. RCRay (Jiayi) Cao52:25

       There was, uh, one creator I remember called, uh, Shuba. She's a singer, and she is able to caught my eyes because she was able to basically rap and also doing, uh, some of the songs cover in a very different way because she's a minority, and she was able to basically using her minority identity as actually, A, everybody was thinking that I'm supposed to be doing like Bollywood music, but actually, you know what? I'm not. I'm doing a lot of very, uh, like, you know, just hip-hop and also the music that, you know, people may think that I'm not good at. Right? So, uh, it is pretty fun to watch that kind of a comparison or the contrast between a creator. And also she's able to put a lot of ou- our original music on the platform to really inspire more people to do the same thing. There's another music, um, I would say TikTok creator, so he was pretty big on the other platforms, but the total approach from him is he's basically changing the lyrics, make it very relatable as a personal life because, for example, he can totally change the lyrics from a old Backstreet Boys song or *NSYNC song to make it like, uh, related with his, uh, daily communication with his wife, making them really, like, relatable and fun. So these are the things I think is very unique to us. Like, if you are able to test and find something like new like that, you're able to find a new batch of audience and even go viral on the platform.

16. 53:49 – 1:04:03

    Tips for advertising on TikTok

    1. RCRay (Jiayi) Cao53:49

    2. LRLenny Rachitsky53:49

       Okay. So then switching to the advertising network. A lot of listeners here are thinking about, I imagine, advertising on TikTok. There's kind of classically been Facebook and Google are the two places to do, run paid ads. Paid ads are a huge growth driver for tons of companies. It's one of the easiest, you could say, or one of the most traditional way to grow. TikTok obviously is emerging and has already emerged as one of the newer advertising networks. So there's a lot of people thinking about how do I succeed as an advertiser on TikTok? So what advice do you have for people? One, who is it best for? I imagine TikTok isn't the best place to advertise for every sort of business, so what sort of businesses are best aligned to be successful on TikTok? And then just what advice can you share to do well as an advertiser on TikTok?

    3. RCRay (Jiayi) Cao54:37

       Yeah. I see a lot of, uh, really different type of advertiser already find their success on the platform. One thing that they actually can do that is really due to a couple of things that they're doing. Number one is, like I said, they are embracing, uh, this platform.They actually do a lot of things as TikTok first. I have a couple of advertisers, they have actually creating their own internal creative team just dedicated for TikTok, right? So they actually produce a ton of creative every single day to actually test and learn, to understand the platform and understand the community they're engaging with, so I would say leaning in is the first part. It's harder, but, uh, it is not that hard. As long as you try it, you will feel that every single day is getting easier. So, and also we make a lot of tools to make things easier for them as well, like creative we have. Also a lot of resources on the platform, the creative hub and also we have creative analytics help you. So these are the things that, you know, we're able to basically help the advertiser to lean in more. Um, the other angle to leaning in more is test and learn. A lot of times that people don't know how to really run ads on this platform, right? Google is very much search, like, search, uh, fronts. Like, they are really leading on the intent graph, and Meta is really on the, the people graph there, they're making. I mean, TikTok is the content graph. It's very different, uh, I would say machine compared to the other two, and it requires different way to optimizing and to leveraging the tools we have, right? So if you're applying the, the same logic from Meta or Google into TikTok, not necessarily you will be able to see, uh, great success, I have to say. So you have to really like get to the detail and to learn how to operate in this platform at the very beginning. Of course, like I said, we're trying to make things as simple as possible because we strongly believe that advertiser's job is to taking care of their own business and our job is to service them. So we definitely make things a bit easier and along the way, but still it's a little bit learning for advertiser to change their mindset when they engage, uh, with us the first time. And I can see that again, for example, last Q4, I can see a lot of advertiser taking this approach to really like listen to us and understanding what is our best practices. They actually see a very successful Q4 on the platform. So I do think that if you want to do more, just do more test and learn with us and to really understand the impact from TikTok.

    4. LRLenny Rachitsky57:17

       Just to understand this point about versus Instagram, 'cause I think a lot of people probably running them on both platforms and try to see which one's working better. Your point is the same content won't work as well on one versus the other. So just so people understand what the main difference there is, I know you talk about there's the friend graph versus TikTok just spreads it all over and anyone can see it, you don't have to be friends-

    5. RCRay (Jiayi) Cao57:36

       Yeah.

    6. LRLenny Rachitsky57:36

       ... and it's really good at getting content out. So what is it that you would do differently if you're making a ad video for Instagram versus TikTok?

    7. RCRay (Jiayi) Cao57:44

       I think the, the TikTok video, it's more about the backend settings, right? So how do you, how often do you actually changing creatives? I think for us it is actually pretty, uh, we get... You want to actually test more creatives on this platform and see which one is actually working, and then we also have really detailed guidance on how do you set up your campaign structure to make sure that you're able to be more successful on the platform, right? So these are the, I would say, the basic hygienes we talked about. You can see those guidance are very different from, uh, what Meta has today or even Google has today because we're just basically different platforms. And oftentimes you can also hear that we requires a bit more real time, uh, react on the platform due to some of the trends we have seen. So that is the part I feel like if advertiser, uh, wants to engage more with our, really the sales team and they're able to provide more guidance to you and you're able to see more success there, but a lot of things will be counterintuitive I would say, because the intuitive you have learned is coming from the other platforms-

    8. LRLenny Rachitsky58:49

       Mm-hmm.

    9. RCRay (Jiayi) Cao58:49

       ... but technically we are not, right? So a lot of things that, "Oh, this doesn't make sense to me." But why don't you try it? And we make actually that really easy because we're sharing a lot of, uh, I would say ad credit to intensify, uh, incentivizing our advertisers to try it. At end of day that hopefully they can see the, uh, the result is proven itself.

    10. LRLenny Rachitsky59:11

        Got it. I think that's such an interesting point, this idea of testing more, which basically you're saying with Instagram certain people will see it and they're not, and they're not just going to be... That's not going to be shown to tons of random people so you basically have one shot at getting this in front of the Instagram crowd versus TikTok just tries it, this explore and exploit kind of approach is like we'll just keep trying stuff until something sticks.

    11. RCRay (Jiayi) Cao59:33

        Yeah. I think e- exactly like that. 100%. I think a lot of, uh, a lot of times that I think advertising whe- especially when digital advertising becomes a thing, right? So we kind of think everything can be calculated because you have the data, but the beauty of advertising is never like that. The core value of advertising is to tell people don't know you exist and tell them the what you're doing for them and then creating this demand, right? Discovery is the core of advertising to me because I would never expecting my wife telling me that what she going to buy when she walk into a shopping mall. If I know that, I will stop her already. She oftentimes that, you know, get out something different, right? So this is not planned. I think that's literally one of the behavior I would love to, like, emphasize more is you want to be open up your door to more consumer because we are a digital version of word of mouth. I alwa- always compare us to that because it is the way that how the digital era becomes more human because it is actually helping advertiser, uh, helping user to discover new things just like what they used to do, right? There was a new place in a, in a certain area you just go explore. It is just like that. So I think that's the reason why I think at the very beginning-Continue doing this kind of open-minded testing with us will be a very good approach to get some early s- learning, and eventually that you can refine your approach. But at the beginning, I would highly recommend that just be opened up and also take some risks with us together and we're able to show you, uh, you know, how much we can actually benefit in the business.

    12. LRLenny Rachitsky1:01:15

        Awesome. And on that point, that was the other piece of advice you shared is pay attention to the trends so that you can connect your ad to things that people are already laughing at or finding really interesting. I feel like, um, Duolingo is incredible at this. Their videos are hilarious and I think they're all just organic videos and a lot of them connect to trends that are-

    13. RCRay (Jiayi) Cao1:01:33

        Yeah. It, it's funny-

    14. LRLenny Rachitsky1:01:35

        ... trending.

    15. RCRay (Jiayi) Cao1:01:35

        ... you brought up Duolingo because I'm actually now have become a heavy user of Duolingo myself, because-

    16. LRLenny Rachitsky1:01:39

        Me too. Me too.

    17. RCRay (Jiayi) Cao1:01:40

        ... I, I, I found, uh, I, I watched a video on the, on the TikTok. I think just basically kids, uh, like, just randomly learn a different language and make a lot of mistakes, and it's really funny. And then I just downloaded the app because I didn't know. I've been using, uh, Duolingo for the past 40 days as a New Year resolution. I'm committing myself to learn Japanese.

    18. LRLenny Rachitsky1:02:01

        Wow. 40-day streak?

    19. RCRay (Jiayi) Cao1:02:03

        Yeah.

    20. LRLenny Rachitsky1:02:04

        Amazing. I'm at 25 days.

    21. RCRay (Jiayi) Cao1:02:06

        Okay, great. We're, we're on par pretty much.

    22. LRLenny Rachitsky1:02:09

        Are you in the Ruby League or, uh, Emerald League? Which league are you in right now?

    23. RCRay (Jiayi) Cao1:02:12

        Emerald right now.

    24. LRLenny Rachitsky1:02:13

        Emerald? Okay. I think I'm in Emerald too.

    25. RCRay (Jiayi) Cao1:02:15

        So we're, we're on par. Yeah.

    26. LRLenny Rachitsky1:02:17

        Just to close the thread on this. So you're talking about one of the benefits of TikTok ads is awareness building, basically more top of funnel. I know you also focus a lot on taking action, not just brand-

    27. RCRay (Jiayi) Cao1:02:30

        Yeah, 100%.

    28. LRLenny Rachitsky1:02:30

        ... awareness. There's also a lot of... So maybe talk a bit about that, just like that's also a big part of advertising on TikTok.

    29. RCRay (Jiayi) Cao1:02:35

        Yeah, I think the beauty of word of mouth is actually, you know that word of mouth leads to actions, right? So I think TikTok, we oftentimes the, w- where people are thinking that, "Oh, TikTok is really good for building awareness, building upper funnel, uh, or some of the discovery funnel." But I really wanna say that we wanna prove and also we already proved a lot from the studies we have seen from third parties that we're driving actions at the same time. And this is literally the ambition we're trying to really, like, talk to our advertisers, especially on the, the commerce front that, you know, shopping and TikTok Shop and Shop Ads, it, it is actually the, the proven points that we see. And also this is not necessarily coming off of our illusion, right? Because we see there was a biggest trend on TikTok is TikTok Make Me Buy It. We have billion level views on that. It's continued growing and this literally inspire us to do this product. Like I said, you know, one of the very important thing here is we drive our product by listening to our user and see the behavior from that. And we see the behavior and now we're trying to capture that and provide the best service to our user and also, uh, help advertiser to really shaping their product. So I do think that, you know, this year people will see us more as a full funnel solution platform rather than only, you know, building the brands, because we want to actually impacting on full funnel for our advertiser. Again, driving their business result is more important to us.

17. 1:04:03 – 1:08:42

    Getting started with TikTok Ads

    1. RCRay (Jiayi) Cao1:04:03

    2. LRLenny Rachitsky1:04:03

       Say a startup is starting to think about advertising on TikTok. Maybe they've done some Google ads and Facebook ads. What do you recommend they plan for in order to just see if this could work for them? Like, how much time should they give it? How many ads should they run? How much budget should they allot to just explore this as a growth channel for them?

    3. RCRay (Jiayi) Cao1:04:23

       I would say at the very beginning, um, the investment will be coming from they're leaning into creating a business account with us, right? So this is actually how you're engaging with your community. But even before that, I think just do some research on the platform and be the user as a TikTok to really experiencing it and see the differences. And then you are thinking about how can you actually connecting your behavior or your, uh, your desired behavior coming from the user with your business. And then you're creating content around it, and that's the moment I think this first step is creating your business presence on the TikTok.

    4. LRLenny Rachitsky1:05:00

       And the idea there is just an organic account you create, let's say Lenny's Podcast, which actually have my, Lenny's Podcast is on TikTok, so we can use that as an example maybe. So you're saying start off just creating free business account on TikTok and posting videos just to see how it feels and how it goes?

    5. RCRay (Jiayi) Cao1:05:14

       Yeah, just see how it feels, right?

    6. LRLenny Rachitsky1:05:17

       Okay.

    7. RCRay (Jiayi) Cao1:05:17

       So maybe some of the videos-

    8. LRLenny Rachitsky1:05:18

       Okay. Great.

    9. RCRay (Jiayi) Cao1:05:18

       ... you don't get any views and some of the views you get, you get more views, right? And the end of the day, you can test some of the advertising products drive those awareness and see if it's actually driving impact for you, right? And then you have to do more maybe like, you know, testing with us or A/B testing or geo splitting testing even eventually, you know, depends on how big, how big the investment is. You can see there is actually a, like a directional impact on your business, right? So, and also we are giving you reporting and insights on how you're doing on the platform, right? So you can optimizing towards that. But obviously the very important part is trying to get a feeling of the platform by creating your organic presence and then try to launch the ads account to make sure that you're able to drive more traffic to your desired destination or to a desired actions that you want a user to take, and continue refining that. Along the way, there are a lot of things that you're gonna learn. For example, how can you leveraging automation solutions on the platform and how can you leveraging some of the, I would say, creator trends you detected on the platform and also some of the tools that we're creating to help you to generating, uh, those scripts, right? So these are all the things that you can learn from the platform. In terms of time investment, I think at the beginning of the month, uh, definitely it's gonna be, I hope it'll be a little bit more intensive, uh, learning so that you're able to get a rhythm in there. And along the way that as long as it gets, become more automated and also get more understanding towards the business, you're able to actually creating, I would say, more relevant content for the platforms by leveraging our creators or by leveraging some of your own, I would say, resources of, um, their third party, for example. So I think, yeah, it takes a little bit a learning curve, but I do think that the result will surprise you.

    10. LRLenny Rachitsky1:07:02

        And was the implication there give it a month? Like spend a month running ads. Or is that not what you're saying?

    11. RCRay (Jiayi) Cao1:07:07

        I think, um, oftentimes we say, like, a month's minimum, um, to run the ad because I think it's actually-

    12. LRLenny Rachitsky1:07:12

        Yup.

    13. RCRay (Jiayi) Cao1:07:12

        ... a learning curve for advertiser to really get into understanding the behavior in the platform.

    14. LRLenny Rachitsky1:07:17

        And how many ads would you suggest? And I know there's not, like, a rule of thumb. But just how many ads would you suggest they try to run in that month to give you a r- real sense of, like, this is could work or, like, not?

    15. RCRay (Jiayi) Cao1:07:27

        The more the better. Um, I would say at least 10 different, uh, other creatives, uh, will be ideal per week and the more the better.

    16. LRLenny Rachitsky1:07:37

        10 per week?

    17. RCRay (Jiayi) Cao1:07:37

        Yeah.

    18. LRLenny Rachitsky1:07:37

        Oh, wow. Okay.

    19. RCRay (Jiayi) Cao1:07:38

        Per week.

    20. LRLenny Rachitsky1:07:38

        So 40 potentially.

    21. RCRay (Jiayi) Cao1:07:39

        Yeah, 10 per week.

    22. LRLenny Rachitsky1:07:41

        Awesome.

    23. RCRay (Jiayi) Cao1:07:41

        And also I would say, like-

    24. LRLenny Rachitsky1:07:42

        Great.

    25. RCRay (Jiayi) Cao1:07:42

        ... we can see that it is a, a little bit of, uh, I would say, like nuances there because a lot of... Oh, I don't have that resources. But as simple as possible, we can give you a tool, right? We have CapCut as a tool. I created my, uh, anniversary video, uh, for my wife by using that tool. Uh, don't tell her. One minute, now everybody knows. (laughs) Uh, but she thinks that-

    26. LRLenny Rachitsky1:08:03

        She, she might not listen all the way this long.

    27. RCRay (Jiayi) Cao1:08:05

        Yeah. She, uh-

    28. LRLenny Rachitsky1:08:05

        At the end of this episode.

    29. RCRay (Jiayi) Cao1:08:06

        She's thinking it takes a lot of time. Literally, uh, the production is amazing. We creating that tool specifically for our creator and also for our advertiser and the user in general. So you're able to do a lot of, I would say, automated and, uh, customized way in the app. So you're able to generating those content at your fingertips. So it will be a really good help for advertiser that wanted to be more self-service, right? On the other hand, we also have third parties to... Like, you know, certified TikTok, uh, pro- uh, service providers on the creative side to help you as well. So depends on the level of, I would say, advertiser you are.

18. 1:08:42 – 1:09:44

    Common mistakes to avoid with TikTok advertising

    1. RCRay (Jiayi) Cao1:08:42

    2. LRLenny Rachitsky1:08:42

       Is there a most common mistake people make when they try this out where you're just, like, often being like, "You fool, here's what you did wrong." Is there something there just, like, "Just don't do this thing 'cause a lot of people make this mistake and then they fail on TikTok"?

    3. RCRay (Jiayi) Cao1:08:53

       Yeah. The, the first one is, like, uh, I can see a lot of advertiser want to do, um, instantly they want to do, uh, like, remarketing or they want to do, like, a s- very small niche targeting on the platform because you're limiting yourself. Like I said, it is more about, like, you know, getting to the rhythm to understand more about the platform. So a broader targeting approach is actually recommended at the very early stage. And most of advertisers are already doing that today because previously I can see, like, for the first two years in the business, especially when we acquire new advertisers, oftentimes they get on the platform and say, "Hey, I want to do this and that. Like, I want to really refine my targeting," et cetera. And then we just recommend, "Hey, why don't we do this comparison? You have a campaign set up like this going on, but this is our recommendation and you can see the difference." And literally-

    4. LRLenny Rachitsky1:09:40

       Mm-hmm.

    5. RCRay (Jiayi) Cao1:09:41

       ... lo- most of them, they will see a very big difference over there on

19. 1:09:44 – 1:10:54

    Ray’s favorite TikTok account

    1. RCRay (Jiayi) Cao1:09:44

       it.

    2. LRLenny Rachitsky1:09:44

       Amazing. Ray, I know you have to run. I'm gonna skip the lightning round, but let me ask you just one question from that lightning round. Do you have a favorite TikTok account that you've been just, like, really loving these days? I'll share mine real quick and then see if anything comes to mind. There's this lady who I found recently who does silent baby product reviews-

    3. RCRay (Jiayi) Cao1:10:03

       Ooh.

    4. LRLenny Rachitsky1:10:03

       ... where her baby's, like, sleeping in the room and she's like, "Shh." And then she just, like, goes through 20 different baby products, like, very quietly and it's hilarious. I'll link to it in the show notes. If you have a kid, you'll love it. Is there anything that you love or want to highlight?

    5. RCRay (Jiayi) Cao1:10:18

       Uh, I do have one creator I- I'm actually active following is on, uh, like, m- sh- he's a magician. He basically use very, uh, I would say very, like, normal things, just handy around him to make something that, you know, look, like, very cool magic. I always were like, you know, "How, how did he make that?" So I'm actively following that and getting more inspiration on myself is like, "Can I do that?" No. (laughs) I think that's more about my hu- uh, my personal hobby to see something like that. It's very, very, uh, cool to see people can do these kind of, uh, tricks by using normal stuff around them.

20. 1:10:54 – 1:12:16

    Where to find Ray

    1. RCRay (Jiayi) Cao1:10:54

    2. LRLenny Rachitsky1:10:54

       Ray, thank you so much for being here. Two last questions. How can folks reach out if they ever want to learn more about this stuff, if they can? And how can listeners be useful to you?

    3. RCRay (Jiayi) Cao1:11:03

       Uh, I think feel free to reach out to me on LinkedIn, uh, if you want to discuss more about, uh, like, you know, some of the go-to market challenges you're facing. I think, uh, we're facing a lot of, I would say, similar, uh, challenges every single day. And also in terms of, you know, on a, on a product standing point, different company have a different product philosophy. I don't think we are, like, always right. I was always r- re- uh, recommending to receive a lot of, uh, feedbacks or recommendations and that would be really, really nice to have to form these kind of, uh, you know, leveraging your audience in my community to, to teach me a lesson sometimes. That would be even better.

    4. LRLenny Rachitsky1:11:39

       Amazing. Ray, again, thank you so much for being here. I feel like people don't have a ton of insight into the way TikTok operates and appreciate making time to do this.

    5. RCRay (Jiayi) Cao1:11:47

       No, it's a, it's a pleasure, Lenny. Thank you very much for having me.

    6. LRLenny Rachitsky1:11:50

       Bye, everyone. (instrumental music) Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

Episode duration: 1:12:16