TikTok is like Chinese Food: It’s Different in China
When I was in high school, my school band went to China for a concert tour. I got the privilege of playing the Tuba (first chair) for two weeks in Beijing, Xian and Shanghai. But every night when we went out to eat, I was shocked to discover that the food was nothing like the Chinese food I was accustomed to back home. There was no General Tso’s, no sesame chicken, not even a fortune cookie. One night I asked a waiter for some duck sauce and nearly got punched in the face. Much of the food was a blended mix of stir-fried meats and veggies; not quite like the “comfort-style” Chinese cuisine served in America.
The same goes for TikTok. American TikTok can mainly be categorized as meaningless dribble. It’s purely an endless montage of narcissists dancing poorly for likes and follows. There are the occasional comedic sketches with professional-level production value but the vast majority of the clips are of no-talent hacks taking selfie videos on their iPhones. But I’m not here to judge. We’re all human and it is wildly entertaining but no one got any smarter using TikTok. Well, except for the Chinese.
TikTok for Chinese users is quite different. To begin with, it’s not even called TikTok. Douyin is the Chinese version of the app provided by Bejing-based parent company, Bytedance. Douyin is designed to protect the growing minds of its young Chinese users. Users under the age of 14 are required to register in “teenage mode” which limits the time spent on the app to 40 minutes per day and restricts usage time between 6am and 10pm. No such restrictions are placed on the American TikTok equivalent.
The content is also drastically different. Douyin users are exposed to educational videos which promote science, history and social cohesion. It’s quite possible for Douyin users to learn about something other than how to griddy. This seems to be impacting career aspirations for Chinese children as the most popular career ambition in China is astronaut. In America, it’s influencer.
All of this social media use seems to be harming adolescents, especially in America. American TikTok comes with a “For You” component, which leverages AI to generate content based on user activity. This feature is made to be addictive and young users often find themselves scrolling through senseless content for hours. According to Statista, the average child spent 113 minutes per day on TikTok in 2022. These two hours of daily TikTok time are likely contributing to the increased levels of anxiety and depression that are plaguing adolescents.
As such, lawmakers are beginning to mobilize. In recent months, both Democrats and Republicans alike have pursued legislation to ban TikTok nationwide. The RESTRICT Act, introduced in the Senate last month, would authorize the Secretary of Commerce to restrict digital products from foreign adversaries, such as China, Russia and North Korea. TikTok would be targeted under the Act as there have been recent reports that the Chinese government is using the platform to surveil Americans and promote propaganda. Therefore, it seems like lawmakers are more focused on addressing national security concerns rather than the mental health of adolescent users.
Whether or not you believe that China is intentionally polluting the minds of the American youth through TikTok is a conversation better to be had with your in-laws over Thanksgiving dinner. What I am here to posit is potential investment opportunities given this information and the fact that it seems like an outright Tiktok ban could be in the pipeline.
In short, even if Tiktok isn’t banned, we cannot continue on this path. According to the Child Mind Institute, adolescents who frequent Tiktok and other social media platforms are becoming increasingly depressed, are more prone to cyberbullying, have lower self-esteem and diminished communication skills. Something’s got to give here. Eventually, we will need to reverse course and break the spell that social media has on our youngest generation. Or maybe we employ damage control…
American teenagers have spent their entire lives on social media so it is unlikely that we are going to prevent usage outright. But maybe we can mitigate against its most damaging effects. Education technology (EdTech for short) may be able to fill the void. In short, Edtech constitutes all technologies that revolutionize traditional learning. Examples include EdTech robots, virtual reality and gamified lessons to improve student engagement. The industry exploded during the pandemic as traditional in-classroom learning was unavailable to large segments of the population.
Venture Capital seems to believe that Edtech wasn’t just a trend of the pandemic. In 2022, global Edtech companies received $10.6B of venture funding across over 1,400 rounds, which followed a record $20.8B of investment in 2021. As of March 2023, there are 30 global EdTech unicorns, valued at over $89B in aggregate.
Smart money is heading toward EdTech that engages young users through either gamification or social elements. Hopefully such platforms can take market share and viewing hours away from the more traditional (and brain scourging) social media apps. If teenagers are going to spend countless hours on their phones every day, maybe they can spend their time on a platform that is less damaging.
Here are a few EdTech companies that are interesting:
Paper
Highlights:
$389.6M Total Funding
Latest Round: Series D, $270M
Post-Money Valuation: $1.77B
Paper is an EdTech platform that provides personalized tutoring. The company matches users with certified educators who can provide contextualized feedback to help students achieve learning goals across a wide variety of subjects. What I particularly like is its emphasis on game-based learning. Paper employs a variety of educational games throughout the learning process that reaffirm lessons in an interactive medium.
BYJU’s
Highlights:
$6.36B Total Funding
Latest Round: Late Stage VC, $700M
Post-Money Valuation: $22B
BYJU’S is a global leader in EdTech, providing an intersection of educational content, media and technology. Users take part in a series of “learning journeys” that are both personalized and highly engaging. BYJU’s is not just meant for kids as it offers products targeted toward working professionals looking to upgrade their skills.
Brainly
Highlights:
$152.6M Total Funding
Latest Round: Series D, $81M
Post-Money Valuation: $646M
Brainly is similar to Paper and BYJU’s in that it offers an e-learning platform to engage students outside of the classroom. However, out of the three companies listed, it may have best chance of pulling viewing eyes from TikTok and other social media platforms. That is because of its social networking feature, which allows students to study together, interact and make friends while on the platform.
Between the crippling affects that social media is having on our youth and the traction toward legislation, there is certainly a white space opportunity for an EdTech company to gain market share by creating a product that is less damaging to young people. Investors should scour the emerging space for companies that can masterfully engage users through social mediums or gamification as these have the highest likelihood of catching on with adolescents. As for parents dealing with a social media-addicted child, the best remedy is to take away the phone. If that’s not an option, maybe direct their viewing time toward an app that’s less damaging to their mental health; or pray they become the next big TikTok sensation.
- Brian Doyle
Sources:
“2022 EdTech VC Funding totals $10.6B, down 49% from $20.8B in 2021.” Holon IQ. 3 Jan, 2023. https://www.holoniq.com/notes/2022-edtech-vc-funding-totals-10-6b-down-from-20-8b-in-2021
Ceci, L. “Average daily time spent by children in the United States on leading social media apps in 2022.” Statista. 16 Feb, 2023. https://www.statista.com/statistics/1301888/us-time-spent-by-children-on-social-media-apps/
Ehmke, Rachel. “How Social Media Affects Teenagers.” Child Mind Institue. 13 Mar, 2023. https://childmind.org/article/how-using-social-media-affects-teenagers/
Petrillo, Sophia. “What Makes TikTok So Addictive?” An Analysis of the Mechanisms Underlying the World’s Latest Social Media Craze.” Brown Undergraduate Journal of Public Health. 13 Dec, 2021. https://sites.brown.edu/publichealthjournal/2021/12/13/tiktok/
Schlott, Rikki. “China is hurting our kids with TikTok but protecting its own youth with Douyin.” New York Post. 25 Feb, 2023. https://nypost.com/2023/02/25/china-is-hurting-us-kids-with-tiktok-but-protecting-its-own/
