Big Technology Podcast - The Risks of TikTok's Rise — With Bloomberg's Shelly Banjo

Episode Date: August 4, 2021

Shelly Banjo is Bloomberg's New York Bureau Chief. She's also the host of Foundering, a podcast mini-series that documents TikTok's rise. Banjo joins Big Technology Podcast for a conversation about how TikTok's massive global reach creates serious data security risks and also opens up rival countries to influence operations from the Chinese government.

Hello and welcome to the big technology podcast, a show for cool-headed, nuanced conversation, of the tech world and beyond. Our guest today is Shelley Banjo. She's Bloomberg's New York Bureau Chief and host of the latest season of Foundering, a narrative podcast that tells the inside story of TikTok's rise. Shelly, welcome to the show. Thanks for having me. It's great having you. I thoroughly enjoyed listening to your season of Foundering across six episodes. We'll do one here today, and then hopefully everybody after our conversation gets a taste of what's coming and goes and listens to your season. It is really good.

I think the best place for us to start is to ask this question, what is TikTok? Because it's not like a social network. Like you aren't adding friends. Maybe you're following people like a Twitter, but it's also a, very algorithm-heavy. So how should we think about TikTok? What sort of, you know, box do we want to put it in when we think about social networking, social media, media? What is it? Yeah. So for people who've never used TikTok, it's an app where you open it up, you swipe, and videos start automatically playing in bite-sized pieces. The way I think about it is way less like a

social network like Facebook and Twitter and way more like an entertainment portal like YouTube, where you really use it to waste time, to be entertained, to get music and, you know, fun. And can you give us a sense? And also, I guess one interesting thing about it before we go to the next question is that it is starting to appear on Facebook in the form of reels. And TikTok is, sorry, YouTube has its own copy called Shorts, which looks exactly like TikTok. So it is interesting to see it start to pop up in these other platforms. How popular is it on its own right now? Yeah. So TikTok is just starting to grow like crazy all around the world, becoming the first non-Facebook app to hit 3 billion downloads. So this is, this is huge. I mean, basically half the world is, you know, downloading TikTok on their phones. And it's the fastest growing app, certainly in many parts of the world as well.

Yeah, I think the data from Censor Tower shows that month after month it is the most downloaded app in the world beating everyone else. Is that something you've seen as well? Yeah, I mean, when you talk to people about what new apps they're getting, you're definitely seeing that growth. And it's not growing as fast in the U.S. as it is, I think, globally. But the U.S., it is certainly up there. Because, you know, they started with young teens. And now they're really expanding to, you know, adults. And I think the pandemic was what supercharged that growth. And, you know, you don't have to be just a teenager to download TikTok anymore. Right. So it's obviously running some controversy here in the United States. So I'm just going to throw this question out there. Was Trump kind of right to ban it? I mean, I know he did it sort of in retribution for or trying to use China as a scapegoat for the pandemic. But, you know, there is this China national intelligence law that requires organizations in China and citizens to, quote, support, assist and cooperate with the state intelligence work. And there There was also this CNBC story and talked about how the boundaries between TikTok and bite-dance, the Chinese parent company, were so blurry to be almost non-existent and TikTok employees, I believe, actually had to ask the bite-dense employees for data on their own users. So just from a national security standpoint, you know, is this big burgeoning social app here in the U.S. and across the globe, is there some worry there? And is there some legitimate concern that the government should have in terms of the way. that data is collected. We'll start with data and then we'll move on to culture. But let's start with data. Is there some legitimate concern there? I don't think anyone who has studied this

will tell you that there is not a concern there. So nobody took issue with the content of what Trump was trying to do, which is to take a really close eye at this app and all the data that it was collecting. I think from a bipartisan, you know, cross the board, even teenagers that we spoke to for the podcast said, you know, this is something that we should be keeping an eye on. The issue from a Trump perspective is, okay, how do you go about doing that? And if you just, you know, randomly go and ban an app, is that really going to achieve the goals that you want? Because it might be TikTok now, but what about all the other companies as well? And, you know, what's going to happen there? And so creating kind of, you know, an actual law or an actual kind of framework in

which to judge these companies in which to research them, I think it's something, you know, everyone can agree on. Yeah, and it's kind of where I went with kind of right. Like I think that the action that he took was pretty, uh, it was blunt, a blunt action. And maybe something more surgical would have been better. But I do really wonder, um, maybe, you know, there's that we can I guess agree that there were some legitimate concerns there. So I'm curious, um, you know, and I guess Trump initially signed this law that it should be banned or did this executive order. It should be banned and then said maybe, you know, my friends at Oracle can buy it. Microsoft was in the game. Eventually, I think nothing really happened. But the original concern that, you know,

you're you're allowing this app in from a country that has a pretty poor record in terms of preserving people's data privacy. And that initial concern hasn't really been resolved, wouldn't you say? Right. So just to, you know, take a step back. You know, this was this most important business story of the year that didn't happen because it was like this constant news headlines like what's going to happen to TikTok? Is it going to be banned? And who's going to do it? And am I going to not be able to use TikTok anymore? What's going to happen to all these creators? And there was so much angst and buildup. And then in the end, it didn't happen. And you know, we talk about in the Foundering podcast that one of the most stressful and upsetting and

kind of frustrating parts about the whole process is that you never really get down to the bottom of this. Like, is this a national security risk or not? And, you know, the answer is like two things are true. Like, one, TikTok is creating tons and tons and data. They say they're not giving it to the Chinese government. And two, the Chinese government, by law, can go into any Chinese company and say, give me your data. Yeah, there's a law there. There's two things. So how you can't trust it. Right. Exactly. Like, there's two things that they can't, that they can't, that they, don't necessarily get along. And TikTok's way of describing how they do that is just being like, oh, yeah, there's a wall between us. Like, we don't share data. Yeah, which is, you know,

the reporting says that that's not true. So, yeah, or even if it is true, there's nothing to stop them from doing it in the future or with the next CEO. Like, let's really say that TikTok is like 100% honest here. And they have not given one more so of data. There's no way to prove a negative that it couldn't happen in the future. And by that time, they have dossiers on $30 billion globally around the world that the Chinese government could get their hands on. And what type of data do they collect? Because there has been some discussion of the fact that TikTok might collect what you have on your clipboard, your keystrokes. What do you know about that? So if you go into their terms of service, which I highly recommend, it sounds really boring, but it's super interesting

because it just says it all out there. We collect your keystrokes. We can collect your GPS data. We can figure out where you are, what you type, what you like, how many seconds you spend watching X type of videos, where your eyes are going, how old, you know, you are. And also matching it up with reams and reams of data from bot services, like paid, you know, data on there. The keystrokes, I mean, the clipboard thing, they say they stop doing. but there was a time where if you copy and paste something into your clipboard,

they'd be able to see, you know, what's going on there. And then also what you're messaging to other people on, you know, Facebook and whatnot. And what I'm saying now could be totally different in three months or even, you know, a few weeks because things are just constantly changing. Right. So how do you? And so this is, again, getting back to like how does a government address this stuff? it's i would say the hottest app in the u.s right now probably the world people are continuing to spend more and more time on it i mean people give a lot of crap to facebook for its data

privacy issues and you know the worst case scenario we've seen with facebook is that someone broke their terms of service and then passed it on past you know years old data on to cambridge analytica which used them and probably poorly targeted at in the 2016 presidential election. This to me seems far more concerning. I mean, think about all the data you've just listed being ticked off. The fact that this is becoming an extremely popular app worldwide and the Chinese government is not too far away from accessing some of that data.

You could think of all different types of ways that they end up using that, whether it's to profile American users, get data on some people. of interest, use it for black male or just, you know, you know, intelligence, pure curiosity, use it for location monitoring of people in the military, et cetera, et cetera. I'm saying they've done any of this stuff, but the concerns are valid. So how do you handle something like that? I mean, most of the, you know, a lot of people are, I guess the most like idealistic viewpoint is that if you have actual rules on the books against all companies and Chinese companies

would also fall under that. So right now, you know, the whole, the Chinese, you know, you talk to a lot of Chinese diplomats and it's like this whole what aboutism. What about Google? What about Facebook? They're also collecting these things. Look at what they did with all these things. And they're right in the sense that like if you prevented all internet companies from collecting some of this data that probably no one should really have, then you would also scoop that up from, you know, you would also prevent the Chinese companies from doing that. So if you speak to folks like Sam Sachs, from the New America or some of those kind of think tank folks, that's what a lot of them suggest doing, is saying if we had actual cybersecurity rules and laws on the books, then

it would also prevent Chinese companies. And the best way to look at that is like, the only real laws we have are protecting children, you know, the Kappa laws around Children's Privacy Act. And TikTok, before they got YouTube, was the biggest children's Privacy Act fine that they had given out. And it's not because they were a Chinese company, but just because they were a company that was violating the law. Yeah, they were thrilled to have young users on. And I think as you pointed on in the podcast,

they don't even or didn't even ask for age beforehand. And they got pressed on it. And they're like, we don't, we trust the parents. Right. Which is this ridiculous sort of. All the parents know what their teenagers are doing. Of course they do. Right.

Right. So it is. Okay. So you think that the best way to handle this is just laws across the board preventing any type of this data collection. It sounds interesting. I don't know, you know, I guess, you know, can you trust them? That, you know, it always comes down to that question. And are our regulatory bodies able to actually enforce any of the laws we have? Because look at the track record right now. It seems like that answer to that one's a very clear no. So do you think that's sufficient? Do you think it's be able to operate in the United States, what would be your solution as opposed to what these folks are? And I know you're a reporter, so you can only go so far. But I'd like to hear your perspective because you've been pretty deep in this. Yeah. I mean, I think you've got to start somewhere. You know, rules are obviously can be broken. But if you don't have any rules to begin with, then, you know, everybody can kind of claim ignorance. So I do believe that having actual rules on the books for what data people can collect. You know, that way, Apple,

and Google Play, like, they still hold a lot of power and they still often follow the rules. And so, you know, they could be the ones enforcing that as well if there was actual, you know, laws preventing these companies from doing that. I mean, it's not to say that, like, intelligence shouldn't be looking into it. I think for too long TikTok was, you know, dismissed as this silly thing because they're like, oh, what do I care if they're collecting data on American teenagers who are singing songs in their bedrooms, you know? They didn't realize, I didn't, they weren't aware of like the actual gravity of the stuff that people are are collecting.

Yeah, the laundry list that you cited is, you know, now that we're sitting on it for a moment, it's actually somewhat shocking that any of this stuff is actually allowed. Yeah. And one of my favorite interviews from the Foundering podcast was this economist, Claudia Bancati, who talks about at the time that military TikTok became such a thing. And all these like, you know, 21 year old guys were doing push up contests. like in the middle of like, you know, Afghanistan or Iraq and like you could just figure out exactly where these people were because no one was taking it seriously. And so I think that's a problem that like we kind of, and I think that that is shrouded a little bit in not taking Chinese tech seriously for too long that they just didn't, they just dismissed it. You know, we're the tech giants. We're the tech overboards in America and like what are the Chinese building. You know what I mean? And we talk about data.

So, okay, I think we've established there's some concerning data collection that's going on there. And we don't really know what's going to happen once that data is collected. To me, something even more concerning is the way that TikTok can shape culture. And, well, actually, we're going to go into that. But first, is TikTok a Chinese company? Because I know that you mentioned that it is. And then you got chewed out by their representatives. It might be Hong Kong, a Hong Kong company, what is, because I want to talk about China's influence on U.S. culture as we go on to the next part of this discussion.

But I also want to hear your perspective. Like, is it accurate to be calling it a Chinese company? Yeah. I mean, I think TikTok can say left and right and all over that they are a global company with global headquarters and global employees. But at the end of the day, they are a Chinese company. Hands down. You know, you have a Chinese CEO. You know, you have a, John Giaming, his whole future, his life, his family. They're all based in Beijing. And John Yaming is. John Yaming, well, was the CEO, just stepped down. Now chairman of the board, I think is his current title. But was, you know, he founded the company, built the company. By all, you know, tense of purposes, kind of still.

runs the company, even though not by name. And also, you know, one kind of tidbit that kind of brings it home to you is during new hired weeks like orientation, they, one of the things that they show a lot of the TikTok employees is this like plug-in that allows you to translate Chinese into English in a way that does it better than Google Translate. It's like built by TikTok. It's like a special TikTok plug-in that everybody has because so much of the stuff, new employee handbooks and all this stuff, like, is still written in Chinese. And so one of the things that you'll talk to any new employees about is like, oh, yeah, that plug-in, that translation thing that, like, you have to hit all the time to figure out what everybody's talking about.

So, you know, I think the PR people can say whatever they want. That's their job. But, you know. As a Chinese. So they say it's global company, but the truth is based in Hong Kong. No, I mean, actually based in the mainland. They are technically Cayman Islands registered company. Their biggest presence is in Beijing, and then they have different, you know, their U.S.

biggest U.S. operations are in Los Angeles. Right. And they're a subsidiary of this other, the bigger company called Bight Dance, which is very clearly China-based. Correct. So this is kind of what I want to get to, as we're moving. through this discussion. The data collection, obviously an issue. You're talking about operation based in Beijing and that there's a big China presence. I've read what the law, the national security law that they have out there, enables the Chinese government to do with companies that

are based in China. So that's the data concern. Now the other concern, and I think this is probably even a bigger concern, is how can it shape our culture? Because, yeah, let me just, set this up quickly. There was one really fascinating anecdote that you had in the podcast where the Black Lives Matter protests were starting to be censored or there were phrases that were censored on the platform. Then they apologized and sort of, you know, they tweak their algorithm to really turn up that style of content. The next thing you know, Gen Z is participating in these protests and sort of unseen numbers for that generation. They also very famously kind of ruined a Trump rally by having this trend that had everybody sign up and reserve tickets.

And the Trump campaign was like, we're going to be triple sold out. And turns out it was an empty arena filled with TikTok claim tickets. So let's just, you talk a little bit about, yeah, how they shape culture. And if an app that's based in China can can literally put its, you know, pull a lever and end up having. having, you know, stoking big protests from Gen Z, what else can it do in our culture? So I'm curious what you think about that. Yeah. Before I answer your question, I want to say, what I was talking about being based in China,

I was mostly talking about bite dance. I mean, TikTok is a subsidiary. You know, a lot of the, so TikTok doesn't operate in China. It actually doesn't operate in Hong Kong either. Okay. But it's, so they walled that off. There's a separate app called Doyeng that operates in China. So TikTok, the app, only operates outside of China.

Most of their employees are outside of China. But at the end of the day, they roll up. They're owned by Biden's. Exactly. So just to get that out of the way. And then from a cultural perspective, yeah, I mean, as you know, and you've talked about so much on your podcast, like algorithms are these black boxes that nobody really knows how they work.

But you can see when something takes over on TikTok. And that, you know, that becomes noticed quite quickly. And the cultural ramifications of like, hey, if I want to turn up Black Lives Matter, I can. If I want to turn down Hong Kong protests, which is something, you know, we discovered during our reporting, I can. Wait, wait, say more about the Hong Kong protests. So during the podcast, and actually beforehand, I was based in Hong Kong at the time. and there was this just flood of content around Hong Kong protests on Twitter and Facebook and telegram and all of these things. And then you flip open TikTok and there's nothing. There's

just like videos of people like by the Hong Kong skyline and eating dumplings and, you know, things like that. And so, you know, I worked with one of these researchers to kind of test it out. And he was like, yeah, there's definitely not. It's taking hours to post things. you know, they kind of keep it in purgatory for a number of hours. TikTok itself, so they weren't censoring it, that people just weren't posting about Hong Kong. You don't, I don't, I think it's hard to prove a negative. But it's just really, like, noticeable in the sense that if it's everywhere else but not on TikTok. And why not, you know?

Yeah. And so what do you think about the fact that this app, again, it's controlling, it's not controlling culture, but it's driving culture. They were, you know, its predecessor, Vine would be the thing that spark trends and memes. And I would say TikTok is even more powerful. And it does seem like maybe this is a stretch for me to say, but it does seem like the Chinese government is not shy to use the power of that app. to turn things up and turn things down when it comes to protest and social unrest.

And, you know, whether that's because it's for its own political memes or maybe it's not the Chinese government, maybe it's, you know, the company working in conjunction with them. But what are the implications of the fact that such a culture driver is, you know, subject to Chinese law? And as, I worry about this more than the data to be quite honest. What do you think about it? Yeah, I think there are two sides of the same coin. It is a power that TikTok has and that if they don't use it wisely, the same way we've

seen what happens with Facebook when it comes to elections and whatnot, you know, it's certainly something that matters a lot. And people totally downplayed it. They're like, oh, it's just TikTok, whatever, you know? Yeah, and the thing with Facebook is like, Facebook didn't want that stuff. That happened. Its platform was manipulated, whereas here, maybe it's TikTok. doing it, clearly it is with the Black Lives Matter protest, TikTok doing it on its own.

Yeah, and you speak, we spoke to a number of people who were there in the early days of TikTok when they were really strict on these rules of not having any politics on that. So if you talk about politics of any kind, any kind of controversy, they would take you, they would basically shadow ban your, you know, make it so that people wouldn't see your videos or, you know, just say you're violating terms of service. And they've changed that over the years. And now it is being used a lot. It was used a lot to get out the vote around the Trump.

Yeah. I tuned in on election night watching a lot of these live streams. And it's really quite scary to think about, like, you know, to have these 10, 15, 16-year-olds watching this. And it's like the same thing as news to them. Like, they don't really. really differentiate what's in the New York Times and what's on TikTok and, you know, that's dangerous. So what was your experience living like, living in Hong Kong like? And you're, you know, I mean, as a reporter out there, you were looking at what the Chinese government was doing,

you know, pretty close up. So, like, do you, do you trust them with this power? TikTok? Well, the Chinese government and the power they have over Biden's. Like, do you, I wonder where you think this this ends up going no not at all i mean as we saw uh like just recently and this this stuff came out after the podcast um ended but you know the bite dance put up put out this put a hold on their IPO um because because of these concerns because of these concerns but also because the chinese regulators started really put coming down hard on a lot of the chinese tech companies. And so, you know, if you're going to basically put your IPO and hold because the government wants you to, what else are you going to do because the government wants you to?

You know, it's just like kind of a slippery slope. And there's no, there's no clarity around any of it. And it does seem like the Chinese government is, we've talked about this on the show in the past, but it does seem like the Chinese government is moving more toward an authoritarian stance and less freedom. I mean, you were in Hong Kong. I'm kind of curious what your experience was like, but they obviously have just gone through this moment where this national security law was put into place

and a lot of the freedoms they had are now gone. And some of their pro-democracy papers are, had to fold because of it. Yeah, and covering the protests was quite eye-opening because a lot of the young people who were in the protest grew up in a place where it was different. It was not like China.

They could post about basically whatever they wanted to post about online, and they were very active and very internet-friendly. And then you suddenly have to worry about what you say and what you do and you're in jail, you know, in your 20s. And like, it's a heck of a progression. It's a big difference for somebody in a generation, you know. So that, so by dance, so pulled TikTok out of it. of Hong Kong altogether to just not even deal with that, basically.

They're like, we don't even want to play a part in any of it. Right. Yeah. And now, this is sort of the reality here where TikTok keeps making its incursion and more and more downloads, three billion, as you mentioned, at the top here. And we don't really know what's behind it. And it doesn't get talked about too often. And when Trump did bring it up, obviously, he had his reasons.

But it became this big political war. but it is something that's going to persist. So, all right, when we come back from the break, I want to talk a little bit about the TikTok versus Facebook battle. I know you mentioned that TikTok is more like a YouTube, but it seems like the one that's most afraid is Facebook. Let's talk about that right after the break. We'll be back here in just a minute on the big technology podcast.

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about them. So, search for The Hustle Daily Show and your favorite podcast app, like the one you're using right now. And we're back on the big technology podcast with Shelley Banjo. She's the bureau chief of Bloomberg in New York. And the host of Foundering, which tells the inside story of TikTok. It's a great, great series. I recommend you go listen to it. But stick around with us for the second half here and then make your way over there. So let's talk a little bit about this TikTok versus Facebook battle.

I've seen TikTok just occupy more and more of people's time, of the mind share. It's where the energy is in social media right now. It used to be on Facebook. It used to be on Instagram. Now it's entirely TikTok. So I look at that, and then I'm also seeing the movement against Facebook in Washington, and I've been scratching my head and asking myself, is Facebook really a monopoly? So what do you think about that?

Yeah, with the founding podcast, we did not set out to make Facebook a large part of it. And as we were reporting and talking to people and uncovering things, we just kept coming across, like Facebook and Mark Zuckerberg. So it starts the very beginning, one of John Gimmings, the CEO, the former CEO of Bight Dance, founder of Bight Dance, coming to California for the first time, hosting this kind of lecture at a conference, being like, this is the future of news and kind of laying out his whole playbook in Menlo Park to everybody. And like nobody taking him seriously and nobody paying much attention. And then meanwhile, musically, the app that, that Bightan spot

that was flipped into TikTok, actually had talks with Facebook to acquire them. Yeah, they almost sold. Yeah, so what we know is TikTok could have been something totally different. And, you know, Mark Zuckerberg, for a time, as you know, tried to woo the Chinese government, tried to be like, hey, we could coexist in China, you know. The guy almost allowed Xi to name his kid. Exactly. Like there was this huge love affair until he realized like it's just not going to work. We're not going to, we're never going to do this or at least not now. He sees the rise of TikTok and fight dance and seeing just how many people are going over there, how kids don't want to use Facebook anymore and how he's going to miss out on this generation, tries to build apps to copy it, doesn't succeed. And then completely turns against China, starts. giving testimony to Congress saying, you know, we're not a monopoly. We're your last hope for

competing with China and competing against TikTok. And, you know, literally going to Congress people and saying, we are the ones you should be worried about. Look over here, people at TikTok. They're the ones you should be worried. I know it's a convenient talking point, but he kind of has a point there. Yeah. I mean, it was whoever advised him on this or maybe he came to this realization himself, I think is quite genius, right? Because you want to deflect your attention away from how big Facebook is and say, like, oh, well, where are your real hope against fighting off China? Meanwhile, we're going to copy you completely, launch reels and try to just completely rip you up. But it does seem that TikTok is, so this is the thing what I'm trying to get at,

which is that TikTok is in a different category. We'd like put it in the YouTube category. And according to the FTC, which is suing Facebook for trying to amend its suit or has sued Facebook for this monopoly in personal social networking, you know, maybe it's in a different category. But I really view this stuff as a zero-sum game where the time that you were spending on Facebook, you're now spending on TikTok. Obviously, Facebook feels the same way. So I'm curious, like, is this, you know, I guess we have, there's two questions of how the Facebook party will come to an end because it will at a certain point, right? is it going to be government regulation or is it going to be competition? And it seems like TikTok is proving the case that competition is going to be a fairly effective challenge. And maybe there is no real need for a government breakup there. I'm curious what

you think about it. Right. I mean, it proves that the competition does work, but that that competition has to be global. And so there's lots of different ways. I mean, there was no U.S. company necessarily, I mean, Facebook bought all the U.S. companies that could have proven, you know, real competitive. I guess other than Snapchat. And they tried. And they tried. Right. I mean, they tried to buy TikTok too and it didn't work out.

I remember going to the Facebook offices and there was a Snapchat lens of like it was a contract and there was like a Snapchat ghost crying sort of like kind of mocking Zuckerberg for like trying to acquire them. And it turned out that Evan Spiegel was right to turn that down because you went from a $3 billion offer to $20 something billion company. Sorry, go ahead. And no, and same with TikTok, right? Had they just become a part of Facebook? They would have just been a feature on Instagram the way Reels is versus, you know, mega, you know, however you want to monetize, however you want to like value what TikTok has become, 50 billion, 100 billion, depending on who you talk to, you know, clearly was right in the sense that, you know, they didn't need Facebook to grow and could go on without them. But, yeah, I mean, I think that Mark Zuckerberg does have a point in the sense that Chinese tech companies should be taken seriously and they produce some real competition, but that doesn't really absolve Facebook for their, you know, monopolistic practices. Yeah, yeah, of course.

Yeah, we'll see what happens with Facebook. But it is, it is, it's interesting to watch, you know, this. company that has been anti-competitive in some ways, I don't know, I would, I would argue that Facebook has been one of the least anti-competitive in terms of the big tech companies. You look at Apple and Google, their app stores, they have, Amazon, what it's doing as suppliers. Facebook still doesn't even have its own operating system. So, you know, they're basically zeroed in on the acquisitions of Instagram and WhatsApp. And even still doing all that, Facebook is so vulnerable to a TikTok.

And I do think that it's scaring the crap out of them out there in Menlo Park or wherever virtual zooms they are that originate in those servers. Because I don't know if you saw this, but Instagram is doing these experiments where they're experiment. I think Adam O'Sary, their head of Instagram was talking about how they're going to start experimenting with full screen, more full screen video. And what does that remind me of? You know, TikTok. They have reels already. And they're starting to experiment with putting stuff you don't follow that the algorithm selects. into your feed versus using the follow signal primarily, which again is like TikTok, you can

you'll see stuff from people you follow here and there. But by and large, the algorithm is going to select what it thinks you wants and put its priority over the signals that you give the app. And that's what Instagram is moving to as well. And Facebook is, you know, potentially going to, if they go through and actually roll this stuff out, you know, potentially sacrificing one of the, it's crown jewel. Like Facebook isn't Facebook anymore. It's Instagram. And they're like thinking about about betting the crown jewels future to try to copy TikTok, that means that to me means that there's like, you know, red alert inside Facebook headquarters. What do you think about that? Yeah, I think you're 100% right that they probably regret not taking TikTok seriously earlier

and has have realized that you can just grow a lot faster when you don't bet things off of your friend graph. Like your friends have a, you know, have a certain stopping point, whereas TikTok never has a stopping point, you know? Yeah. It's so interesting because it is, you know, betting your friends, so it's the people you know, and this is one of those instances where in technology, we clearly have the algorithms have surpassed the capabilities of humans to find what they want. Right. Yeah. Or like, you don't care as much about that anymore. You know, you want to be, you want to be entertained on the internet, not necessarily. necessarily keep in touch with people. You know, Facebook may have outgrown its use case from that

perspective, you know, a little bit. There's only so many people a human being can keep in touch with, you know. Or wants to keep in touch with. Right. Exactly. Yeah, I would much rather speak with my, you know, my group chats than the thousand people I've added on Facebook and 200 of which I have no idea how I ever met them. Well, Facebook has a solution for you there too. WhatsApp. Yeah, exactly. Well, they're, they've definitely covered their base as well. Although Signal, I think, is a really interesting challenge, which is being pushed forward by one of the WhatsApp founders. One of the interesting things is, so you mentioned that people want entertainment. It's interesting to note that Adam Osseri Instagram had was talking

about how Instagram isn't a photo sharing app. It's an entertainment app, which sort of mirrors what you're saying here. And I think one of the real brilliant things, that TikTok did, which you highlight in the show, is its strategy with influencers. So there used to be this theory that you build, you build it, they will come. Social media is a high margin business that's propelled by user-generated content, and the users will make stuff for free because they are interested in exposure and cloud and the platforms will benefit. And then what we saw was there was this rise of this influencer class,

and these companies didn't really know what to do with them. Should they pay them? Should they not pay them? Should they answer their phone calls? I remember before the Snapchat IPO, the influencers were like, Snapchat won't return our calls. We're going elsewhere. And I think Snapchat took a real hit from that.

But brilliantly, I think TikTok learned from that and worked to cuddle and pay the influencers. I think you mentioned in the podcast that they even were paying some salaries. So could you elaborate on that a little bit and how important courting influencers has been to their business? Yeah, I think the influencers and the creators and the focus on them was such a huge differentiator for TikTok from the very beginning. Even going back to the musically days, the founder of Musically Alex Jew would take these folks out to dinner, take them and their parents out to dinner because a lot of them were, you know, nine, ten years old at the time, get to know their birthday, send them swag. there was a lot of, a lot of attention and artist management the way that, you know, some people might just treat, you know, a Kardashian or Donald Trump or like someone like that who, you know, Instagram will do that for someone like really big. But musically and TikTok, we're doing that

for hundreds of people and develop this entire kind of part of their company whose whole job it was to know when so-and-so's, you know, birthday was and send them, you know, a box of cookies or something like that. And, you know, the amount that these kids, many of them kids, but not so much anymore, felt connected to the company, willing to do anything for the company that they asked them to do, to me, like really came across in a big way and also came through at the end because during the Trump ban, it was the influencers that, you know, were willing to sign on to a lawsuit. And it was that lawsuit that actually was the one that stopped the Trump ban. It was these three kids who made their career on TikTok, got into contact with a

TikTok, a lawyer that TikTok suggested that TikTok put them in touch with. And they were like, yeah, I'll sue the U.S. government on your behalf because I love TikTok so much. And my whole, life is geared toward that. And you don't see that with Facebook or Snapchat or Instagram at all. It is really this undeniable truth right now about social media, which is that it all comes down to the people creating the content for the platforms. It's never going to be propelled by user-generated content, whatever that was supposed to mean. There's going to be a handful of stars that will basically push a network forward or go somewhere else and help propel that one. And I think it's interesting to watch all these platforms suddenly realize that.

And I think TikTok probably did the best job. But Facebook right now has a billion dollars they're going to put towards creators, which is quite fascinating, a real about face. And there used to be some money that would go to media companies like Facebook paid BuzzFeed when I was there. I don't know if they paid Bloomberg, but they basically sprayed the money around. And now they're like, oh, wait a second. It's the individual creator, not the media company that we should be working with. And that's why it's, I mean, I just wrote about this in a big technology newsletter, but it's a great time to be talent because you're going to be recorded by these companies.

But these people work hard. I mean, it is not, you know, a free for raw. When you talk to these kids, they are spending 10, 12 hours a day putting out content. And also, like, their whole life is like an A, B task. Like, do I look better in this dress or like, do I look better in this dress? One of the creators that I became close to during the TikTok podcast, you know, she's a high schooler, was getting ready for prom, basically put out like eight different dress, prom dress announcements to figure out like, which one did her TikTok followers like the best? You know, like this, this ticks over your life and you're working hard and you're making a lot of money for it. And so everyone kind of wins in the end.

But you can see that it might not be sustainable for everyone forever. Yeah, it messes with your head. And it also addicts you to the analytics. And people start to judge their self-worth based off of subscriber numbers, watch numbers, like numbers. And that's a problem. Yeah. Occupational hazard. You know, you see Addison Ray, who's one of the top stars of TikTok, you know, at the fight in Vegas next to Donald Trump.

Trump and you're like, okay, TikTok create, like literally created this human being, you know, as a star. And we'll keep doing it as long as everyone's making money. And so far seems to be the case. Yeah, I mean, what people, I don't think realize is like two of the things that really made TikTok are such Chinese concepts. Like paying people to do stuff was like so such a Chinese thing. like, of course we're going to pay people to work, you know, whereas in America, it's like, oh, well, like, these influencers should want to be on our platform and, you know, like, to fascinating.

Their can do spirit, you know, like, and, and the other thing is what we were talking about earlier with a social graph. Like, it's a very American thing to, like, want to connect everybody by each other. But in China, like, you don't want to be connected with anyone because you don't want to even suggest to the Chinese government that you're going to organize or create some sort of, you know, organizational structure to, like, rise up against authority. And so TikTok's whole algorithm was built out of necessity, not necessarily out of some grand scheme of thinking, like, oh, this will allow us to grow bigger. And so, you know, now it's funny that, like,

Facebook is copying them. So it's like, it's, it's interesting how all those things kind of come around full circle. Yeah. Well, can you stick with us for one last segment? All right, Why don't we take a quick break and then do like a quick rapid fire segment at the end about a few things that I found really interesting. I'll just have you riff on them. All right. We'll be back right after this. And we're back here for one final segment on the big technology podcast. We're here with Shelley Banjo, your chief of Bloomberg's New York Bureau and the host Foundering.

You can find it on your podcast app of choice. Just type in Foundering. Okay. So quick rapid fire round. Yeah. So you mentioned in your podcast TikTok's issues with child safety. Yeah, child safety, the most disturbing episode of the six-part episode, especially if you have children, I'm sorry. But it's worth listening to.

Especially if you have kids, you should listen to that one. Yes, it will strike terror into your heart to not let your children download it, especially young children who are under 13 and shouldn't be allowed to use it anyway. but yeah I mean for a long time like many other apps they turned they turned a blind eye to what was happening and it's continuing to happen and so TikTok is doing lots of things to ameliorate it and make it a better place um but at the end of the day like my personal opinion I think parents need to do a better job of um of you know keeping tabs on what kids are doing because a lot of parents are like oh they're fine I trust them it's like no I'm sorry, you can't trust an eight-year-old.

Like, you just can't. Can you tell the story of, it's somewhat disturbing, but I feel like it's worth relaying. There was a kid who had people sending him messages, and next thing you know, he's, like, dancing in his underwear, and that video ended up getting copied and, you know, sent out to thousands of people. Yeah, so we speak to a woman who tells us about a family member of hers, who's eight years old at the time, who downloaded TikTok because actually his teacher suggested him to. to kind of stay in touch with his friends and make fun videos,

suddenly started getting contacted by, you know, a lot of older men who are asking him, oh, can you make this video? Can you, here's a video I made. Can you copy this video? Here's a link to this. Can you copy that? And, you know, long story short, ends up making videos of him, eight-year-old dancing in his underwear that, you know,

maybe only four or five friends of his saw. But then people downloaded, reposted, and, you know, went out to thousands of people. There's, it's really hard to get that stuff off the internet. And as an eight-year-old, he just had no idea because he doesn't understand that those videos could go all around the internet and follow you forever. And you can be blackmailed for those things. And a lot of kids can end up in a lot of trouble for it. Yeah. It's extremely disturbing. I guess it's a commentary on just the nature of some of the, you know, there's going to be a lot of good people out there, but there's a lot of bad people out there. And they all seem to use the internet. So yeah. Yeah. Sorry, go ahead. No, just that TikTok seems like such more of a safer place. I know. It feels like it's so wholesome.

Exactly. You hear these stories and you're just like, God. Well, maybe wholesome isn't the right word to use for it in the beginning. But yeah. You can know, I mean, Facebook in the beginning also was supposed to be this, like, cool thing where you can stay connected. And the next thing, you know, it wasn't exactly that. So there, then there's no perfect platform and bad actors will always find a way to abuse them and do bad things. Okay. So, you know, I think this is sort of well known, but I think it's worth going over. Can you talk a little bit about the 996 culture inside bite dance?

And is that something that translates over to TikTok's U.S. employees? Yeah. So 9.96 is the Chinese term that you're working 9 a.m. to 9 p.m. 6 days a week. When you talk to a lot of folks, they're like, oh, it's a 24-hour work culture. Right. When I was living in Hong Kong and traveling to mainland China, you know, very often, you'd go visit these tech headquarters. And BightDance is not so different from big tech companies like Tensan or Xiaomi or Huawei, the lights are on all night. People are working around the clock. There is no

such thing as work-life balance. And I think it can sometimes be worse for the U.S. employees in the sense that they have to be awake to have meetings with their Chinese colleagues as well. So they have like these early morning or late night meetings because so many of the decisions are made in China that you'll talk to a lot of them. And they're like, yeah, it's like this 24-hour cycle because like when the Chinese bosses wake up, then it becomes. you know, even more. So it's a lot. It's a big kind of a workhorse type company culture where you're constantly working. You have meetings that you're required to be in in Saturdays. And, you know, I think they've imported a lot of that over to the U.S. Yeah, it sounds kind of miserable. Why do you

think people go along with that? Well, the growth is unbelievable. Like, you know, where else are you grow? And it's fun, you know, it's a fun place to work for a lot of people. in the sense that you can see the growth and also the stars and celebrity and the culture and kind of depending on where you work, you know, it can be exciting, especially for young people. We have this really sad interview with this woman who worked there who was like, I just would look out my window and see this tree and the seasons would change and it went from like spring to summer to fall. And I hate making, I don't want to make fun of her, but it's just like, it's this poetic almost, you know, sadness. It's beautifully sad.

Exactly. Yeah, wild. Okay. Last question for you, do you use TikTok? Yeah. So I don't use it from, I don't post. I don't make my own TikToks. I have, I have made my own TikToks.

My favorite thing to do on TikTok is to tune the app, like to take a social experiment question and like try to see if you can finagle the app to do what you want. So when I was doing research into like kids, this didn't make it into the podcast, but when I was doing research into like kids and cutting, like cutting themselves, you can kind of like train the app to like show you those things or like during the election to tune the app to be like all Trump, like basically all Trump TikTok. How would you tune it? You would like like and comment and watch the video on a couple of loops. Yeah. And you would just spend more, you just go down the rabbit hole for a couple of hours and then. And you could kind of see where, and it just shows you, like, the different corners of the app.

Yeah. And, you know, and that's the lives that a lot of people lead. Because you talk to anyone who downloads TikTok, I guarantee you, after saying this, you will hear this from people. They will say to you, almost verbatim, yeah, I didn't really get it at first because it was showing me all these pictures of girls dancing and bikinis. And, but then after like a week, I became obsessed with it, you know, because that's about, how long it takes for it to learn, you know, who you are and what you like. Yeah, there was one point in the pandemic where, I mean, I had it on my phone and I was like, all right, I need something new. I think I like probably watched all of Netflix and I hiked all

the trails in San Francisco and was like, all right, time for something new. Let's get into this TikTok and see what it's all about. And it addicted me hard. And I would find myself spending like two hours on it and just not wanting it to end because every video the algorithm is just so good at finding you a stream of videos that you're going to find really compelling it was it was basically the best it'll be like the best two hours watching video that you could ever possibly have what's your corner of tic-tac of choice well so this is the second half of the story I gave up I said I can't have this in my life and just deleted the app yeah so yeah well the thing is now you can't really escape it because it's on Instagram with Reels and YouTube shorts and, you know, it's

infinite scrolls. So I end up finding myself just diving back in and being like, oh, we're here again. I thought I took it off my phone. But it's highly addictive. And I'm sure my productivity for those few months that I was on it was just like totally off a cliff. But were you like into the cooking videos or music or like the tricks? I like to. So I liked a lot of the pranks, I'll be honest, like the guys who would run up to people and yell in their ears or, um, right. It's like a pandemic and everything around you is horrible. And then you're like, oh, this is funny. Yeah, this is hilarious. Yeah. And, um, and yet, I definitely, I mean, my YouTube is is completely surfing videos. And so I tried to stay away,

but eventually I just ended up like, you know, getting into the surfing TikTok. And that's, you can, I'm on it on Instagram, not with Reels, but you just can't. Like, if you're into surfing, you just are like, I can't turn away because it's, you know, amazing wave and you learn something different from the form. And then you see an epic wipeout and you laugh and you watch it again. And then you go to the next one. And it's very hard to get out of that stream. Right. Which is why I understand why this thing is growing the way it is. The experience is amazing once you stop thinking about what it's doing to your life. Yeah, I would never bet against TikTok. Yeah. Okay, well, that was a great thought to leave it on the podcast is Foundering. You can find it on your podcast app of choice. I recommend

listening to it if there's a couple episodes that piqued your interest. Go into that, it ends with the battle that Trump has with the app and brings us to our common day and some of the questions we got at the beginning. Shelly Banjo, thank you for joining the show. Thank you so much. It was so much fun. Great having you. It's a long time coming and I'm glad we got a chance to do it. Thank you to Nate Gwattany, our editor, Red Circle, for hosting and selling the ads and all of you for listening. We'll be back next Wednesday with a new edition of the Big Technology podcast. Until then, wishing you all the best. We'll see you next week.