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Shared-service platform: The catalyst for ByteDance’s rise to unicorn status

This SSP system in place has enabled ByteDance to concentrate on five long-term strategies

Relatively unknown compared to its flagship product TikTok, the parent company ByteDance has remained as the world’s most valuable startup beating Uber. The Harvard Business Review noted that in 2021, the company had onboarded 1.9 billion users across 150 nations around the globe.

TikTok alone had been downloaded more than three billion times with only Facebook and similar Meta apps having more downloads. By 2018, the company was valued at more than $75 billion.

But ByteDance’s success predates the launch of TikTok and can be attributed to its lean, agile yet efficient business model. The first product of ByteDance, which was a hit incidentally, was a short form news aggregator called Toutiao, which is a Chinese word for headlines. And since then it has gone on to create one successful product after another including Douyin, the predecessor to TikTok in the short video app category.

But what has been the recipe of success for the Chinese unicorn?

Its shared-service platform (SSP) seems to be one of the prime reasons. Experts writing for the Harvard Business Review notes that many of the company’s functions across products are performed centrally and not through product-specific teams. These functions include non-technical roles such as HR and legal functions. Depending on a need-to-deploy basis, these teams of highly specialized professionals are assigned to projects cutting across their product offerings. Not only with human resources, even their cloud infrastructure and other technical architecture too are deployed across the products of the parent company.

The authors explain that while there are dedicated product and customer focussed roles specific to apps, they are constantly aided by a larger group of professionals who work across the ByteDance platforms. This setup is not only used to better an existing product or a feature but also to create a new product from scratch. Even algorithms of the search engines are also designed by the product engineers aligned with the recommendation of SSP engineers. This does not stop here. User-growth teams, which garner more eyeballs, content teams, which form partnerships to acquire new content; analytics teams, which help build deeper users preferences; and sales teams, which drive monetization are all part of the SSP.

This SSP system in place has enabled ByteDance to concentrate on five long-term strategies. The authors note that they are broad exploration, rapid iteration, selective focus, maximum-capability cross-pollination, and productizing platforms.

Other than the reliance on the SSP system of functioning, the other big factor in ByteDance’s success is thought to be the flat hierarchy system. The company has an open bi-monthly target of key result achievement for every employee which is accessible to every other employee including that of the CEO. Since these objective and key results are linked to the performance of teams and not individuals alone, it helps in collective efficiency.

The authors note even though this SSP way of functioning has reaped the company rich dividends in its first decade, and will be a key factor in its next growth trajectory, it is also exploring other strategy avenues.

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