ByteDance: The Vision of Yiming Zhang

ByteDance is currently the world’s most valuable start-up, with a valuation estimated at $400 billion.

The company was started by Yiming Zhang in 2012, who studied computer science in college and became an entrepreneur. Zhang began his career at a travel start-up before working briefly at Microsoft; he then became the CEO of a real estate start-up before creating ByteDance.

At that time, Zhang’s most important insight was to shift the paradigm of the search business. Instead of users proactively looking for information, machine learning recommendation algorithms could propose relevant information to users. Despite having no formal training, Zhang’s belief in this shift was the idea behind ByteDance’s initial products.

Zhang’s second insight was the observation that China’s tech development was becoming mobile-first. A decade ago, China became the world’s leading supplier of smartphones. His thinking was part of an obsession with capitalizing on trends, which would also influence his other strategies.

In guiding ByteDance, Zhang pursued a strategy of launching multiple products around the same time to test which platform would work best. He learned from his previous experience that iteration was crucial

As a leader, Zhang also believed in taking the best things from each company, integrating best practices from around the world at both the management strategy and product levels of his company. ByteDance’s company culture was cobbled together by implementing features from successful Silicon Valley firms. He ran the company like a product, constantly trying to discover the next thing and disrupting itself.

Along these lines, one could observe that ByteDance continuously builds internal tools and sells them externally, and despite its past success in algorithms, the company is constantly looking to reinvent itself.

His practical philosophies were not apparent to everyone at the time. Fundraising was difficult, as Chinese venture capital firms would only invest in proven business models, and ByteDance was a trailblazer in its own category.

When ByteDance’s news app Toutiao became a hit, the company found it much easier to raise capital. ByteDance raised $2 billion in its latest round of funding with a rumored valuation of $180 billion.

There are also hints that the company will go public on the Hong Kong Stock Exchange later this year. The company’s valuation is remarkable, with secondary market transactions as high as $400bn. Media reports suggest that the company earned about $35 billion in revenue and $7 billion in operating profit in 2020.

ByteDance may be much smaller than Facebook and Alibaba, but it has been doubling its revenue. Reliable estimates suggest that this year’s revenue will exceed $45 billion.

ByteDance is a remarkably transformative company that has the potential to be China’s first truly global firm.

At the end of last month, I sat down for a discussion with Rui Ma of Tech Buzz China, to discuss the impact of ByteDance around the world.

The panel was a part of our China Transformed series - a focus on the 20 groundbreaking companies radically altering China and beyond.

To find out more about China Transformed, our previous panels and our upcoming ones, head to the US-China Series website.