Why ByteDance Will Develop a Better LinkedIn type Product by 2026
ByteDance will continue to scale and pivot in 2022. The result might be surprising.
This is not a difficult conclusion to arrive at, for ByteDance to take on LinkedIn is low-hanging fruit. Here's why in a nutshell:
When Slack was acquired by Salesforce for nearly $28 Billion and Microsoft Teams became the dominant WFM tool of the pandemic we thought it was a done deal. But not so fast, ByteDance has a product that’s similar called Lark.
This actually suggests that ByteDance will eventually create the professional network that disrupts Microsoft’s LinkedIn, a dated professional network that recently shut down LinkedIn China completely. Recently LinkedIn decided to make its Indian users be able to create profiles entirely in Hindi.
Microsoft has never had to directly compete against ByteDance, but that time is quickly approaching. ByteDance is winning in consumer-apps, disrupting even Alibaba in digital advertising and E-commerce, it’s only a matter of time before it goes into enterprise software more directly relevant to Microsoft’s territory.
TikTok owner ByteDance plans to accelerate the overseas commercialization of its workplace communication app Lark in the coming year, Chinese local media outlet LatePost reported Wednesday.
China understands very well ByteDance is its golden ticket to bring its technology global, just as Huawei once was. It will do everything in its power to scale ByteDance products, not just TikTok.
Lark and a ByteDance Version of LinkedIn are Coming
ByteDance aims to achieve a global revenue of RMB 6 billion ($940 million) in the next five years. Lark, known as Feishu in the Chinese market, is ByteDance’s bet on the enterprise-facing services sector, which has been boosted as remote work apps gain traction globally due to the Covid-19 pandemic.
ByteDance needed to let go of a lot of staff in 2021 in the Ed-tech and gaming sectors due to more aggressive Chinese regulation. ByteDance can easily pivot into other areas as its shown with E-commerce and advertising growth in the last 18-months.
Indeed listed Lark as one of its six business units, or strategic focuses, in a November reshuffle. I predict ByteDance will start its LinkedIn competitor before 2025.
ByteDance plans to seek new growth points for the business in the overseas market as Feishu, Lark’s Chinese sister app, faces growth bottlenecks in the domestic market, according to the report. ByteDance has done fairly well with the Douyin-TikTok bifurcation, that’s an understatement.
What if Lark becomes the Microsoft Teams for the developing world? The app already operates in countries such as the US, Singapore and India, and plans further expansion in African countries, starting with global companies with China operations.
ByteDance has disrupted Meta to some extent in its ability to create and scale consumer-apps with the best AI and recommendation engine. Feishu recorded 4.5 million daily active users in November, up from 3 million in March. But the figure still fell far short of its goal of reaching 10 million daily active users in the first half of this year, LatePost reported.
As ByteDance cannibalizes part of Alibaba and Tencent’s dominance in China, its real competitors will be abroad. In comparison, Alibaba-backed DingTalk said (in Chinese) in October that it has 500 million individual users and 19 million enterprise clients.
Tencent’s WeCom had more than 130 million daily active users and 5.5 million enterprise clients by the end of 2020. Just as in E-commerce, China can have several more companies and apps of scale than the pesky duopolies the U.S. stages as its leaders and digital transformation moats.
ByteDance first developed Feishu as an internal tool in 2016, began marketing the platform as a business in 2019, and launched the international version Lark in April 2019. ByteDance will find its product excellence can scale in the enterprise domain.
ByteDance has built a whole line of enterprise collaboration apps including video conferencing app Feishu Meeting and Feishu Jisuban, a lightweight version of the original app.
You can check out Lark’s landing page here.
ByteDance’s Six Business Units
ByteDance now groups its apps and operations under six new “business units”. Beijing and ByteDance understand what they need to do for New China’s neo-surveillance capitalism to become dominant in the next twenty years.
TikTok: This unit will manage the video-sharing app and any business spawned by it, such as the firm’s e-commerce operations outside China.
2. Douyin: The eponymous app is the Chinese version of TikTok and is now officially the name of a standalone business unit overseeing ByteDance’s lucrative ad-powered content businesses in China. Xigua, which features longer videos, and Toutiao, the firm’s popular news aggregator, will be folded under the unit.
3. Dali Education: Dali was created in 2020 as ByteDance’s foray into the online learning sector. It now oversees the firm’s vocational learning, education hardware (like a lamp that allows busy parents to remotely keep their kids’ company during homework time), and campus learning initiatives.
4. Lark: Lark, a workplace collaboration software, is ByteDance’s ambition to put Slack and G Suite in one and part of the company’s B2B bet.
5. BytePlus: This is essentially the infrastructure piece of ByteDance’s B2B endeavor. The unit sells AI and data tools to enterprise clients.
6. Nuverse: It’s ByteDance’s game development and publishing unit, which also manages titles intended for overseas markets. Gaming companies in China are increasingly seeking growth abroad amid regulatory uncertainties.
You will notice China literally banned the global version of Steam recently. Beijing is literally picking the winners. Though LinkedIn has turned into a decent B2B Ads cash cow for Microsoft, LinkedIn does a mediocre job of innovating new products and features on its platform, and thus ByteDance if it decided to create a competing product could instantly create more traction among young global professionals.
ByteDance will eventually compete in the same areas as Microsoft and want a significant chunk of that B2B Ad spend LinkedIn owns today. You have to assume ByteDance (in 2022) is highly likely to already be working on a LinkedIn type app and platform.
If ByteDance manages to disrupt LinkedIn, China can leverage that by starting to recruit more talent to its own companies and global firms that will gradually replace the dominance of Silicon Valley consolidation firms that has taken place.
The incentives for ByteDance to create a professional networking platform are therefore extremely high in the 2022 to 2024 period.
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