March 7, 2024 • 1hr 12min
Inside TikTok: Culture, strategy, monetization, and more | Ray Cao (Global Head of Monetization Product Strategy and Operations)
Lenny's Podcast: Product | Growth | Career
Key Takeaways
- TikTok's core cultural value is "context, not control" - giving employees full context and autonomy rather than micromanaging
- TikTok maintains an "always day one" startup mentality focused on constant growth and innovation
- Close collaboration between engineering, product, and sales teams is crucial to TikTok's success
- TikTok takes a global approach, deploying teams around the world to understand local markets
- For creators and brands, embracing TikTok's unique culture and being authentic is key to success on the platform
- Advertisers should test at least 10 different ad creatives per week on TikTok to optimize performance
- TikTok aims to be a full-funnel advertising solution, driving both awareness and conversions
Introduction
In this episode, Lenny interviews Ray Cao, Global Head of Monetization Product Strategy and Operations at TikTok. Ray provides an inside look at TikTok's culture, product development process, and advertising platform. With over 4 years at TikTok and previous experience at Google, Ray offers unique insights into how TikTok operates and what makes it successful.
Topics Discussed
Cultural Differences Between Google and TikTok (5:37)
Ray highlights three key differences in how TikTok operates compared to Google:
- Innovation approach: TikTok is very customer-centric, focusing on understanding market needs across users, creators, and advertisers
- Product development: TikTok takes a more experimental approach, constantly testing new features
- Global prioritization: As an Asia-born company, TikTok takes a truly global approach rather than being US-centric
Ray emphasizes the importance of understanding local cultures when expanding globally: "If you don't understand the culture, you won't be able to understand the behavior over there."
TikTok's Core Cultural Values (15:11)
Ray explains TikTok's key cultural principles:
- "Context, not control": Giving employees full context and autonomy rather than micromanaging
- "Always day one" mentality: Maintaining a startup mindset focused on constant growth and innovation
- Close collaboration: Engineering, product, and sales teams work closely together
On the "context, not control" philosophy, Ray states: "We're always encouraging people to think out of the box and think more and think themselves as a business owner rather than a piece of machine."
Hiring and Team Structure at TikTok (19:34)
Ray discusses what TikTok looks for when hiring:
- Curiosity: People who are naturally curious to learn new things
- Discipline: Ability to collaborate effectively and prioritize
- Adaptability: Comfort with TikTok's fast-paced, startup-like environment
He notes: "Join a startup and join a rocket ship is a lifestyle. It is not necessarily a job you're working on from 9-5."
Product Development and Innovation at TikTok (31:14)
Ray explains how TikTok structures its product organization for speed and innovation:
- Global teams: Product and engineering teams distributed globally to understand local markets
- Frequent reorganization: Teams are restructured as needed to align with market needs and growth goals
- Close collaboration: Product, engineering, and sales teams work closely together, including joint client meetings
On team structure, Ray notes: "We're not afraid to break out things...these are the things that very, I would say unconventional to a size of this company. But I do think that's necessary."
Building TikTok's Go-to-Market Team (35:38)
Ray shares lessons learned from scaling TikTok's go-to-market team:
- Focus on quality over quantity: Hiring too quickly led to compromising on talent quality
- Embrace "context, not control": Giving teams autonomy rather than micromanaging
- Stay close to customers: Ensure leaders remain connected to market realities
He emphasizes: "When you have the wrong people on the team, it's not necessarily going to make you move faster, it's going to actually slow you down."
Planning and OKRs at TikTok (44:40)
Ray discusses TikTok's approach to planning and goal-setting:
- Annual planning cycle with quarterly iterations
- Use of OKRs (Objectives and Key Results) for alignment
- Focus on cross-functional alignment of OKRs
- Flexibility to pivot quickly based on market needs
He notes there's room for improvement: "Definitely we have a lot of room to improve...we're totally not perfect for sure. But I do see there was a lot of momentum to leveraging the system better."
Tips for Success on TikTok as a Creator or Brand (49:12)
Ray offers advice for creators and brands looking to succeed on TikTok:
- Be authentic: Don't try to be perfect, showcase your genuine self
- Find your niche: Focus on what you're truly good at
- Embrace TikTok's culture: Understand user behaviors and trends on the platform
- Experiment: Try different content styles to see what resonates
He emphasizes: "You have to really be unfiltered...you don't really need to be perfect on this platform. I mean, that's the beauty of it. You can be yourself."
Advertising on TikTok (53:49)
Ray provides insights on how to succeed with advertising on TikTok:
- Embrace the platform: Create TikTok-specific content rather than repurposing ads from other platforms
- Test and learn: Experiment with different ad creatives and campaign structures
- Leverage trends: Connect ads to current trends on the platform
- Think full-funnel: TikTok can drive both awareness and conversions
On testing, Ray recommends: "I would say at least ten different ad creatives. It will be ideal per week and the more the better."
Getting Started with TikTok Ads (1:04:03)
Ray outlines steps for businesses to get started with TikTok advertising:
- Create a free business account and post organic content
- Experiment with paid ads to drive awareness
- Test different targeting and optimization strategies
- Leverage TikTok's creative tools like CapCut to produce content efficiently
- Consider working with TikTok-certified creative partners for more support
He advises giving it at least a month: "I think oftentimes we say a month minimum to run the ad, because I think it's actually a learning curve for advertisers to really get into understanding the behavior and the platform."
Common Mistakes with TikTok Advertising (1:08:42)
Ray highlights a key mistake to avoid when starting with TikTok ads:
- Trying to do very narrow targeting or remarketing immediately
- Instead, start with broader targeting to understand the platform
He explains: "A broader targeting approach is actually recommended at the very early stage...You can see the difference. And literally most of them, they'll see a very big difference over there on it."
Conclusion
This interview provides valuable insights into TikTok's unique culture, product development approach, and advertising platform. Key takeaways include the importance of giving employees autonomy, maintaining a startup mentality, and taking a truly global approach to expansion. For creators and advertisers, success on TikTok comes from embracing the platform's culture, being authentic, and constantly experimenting with content. As TikTok continues to grow as an advertising platform, it aims to provide full-funnel solutions for businesses while maintaining its core focus on user experience and content discovery.
