ByteDance Hires Disney’s Kevin Mayer: Analysis

Matthew Brennan Uncategorized

Above: A breakdown I compiled from various sources of Bytedance CEO Zhang Yiming’s direct reports, now including Kevin Mayer.

How would you describe (Bytedance CEO Zhang) Yiming’s hiring process?

“He’s very persistent, aggressive and persistent!”

Was the reply (source) of Liu Zhen, former head of strategy for Uber China and current Bytedance VP reflecting on how Zhang Yiming convinced her to join Bytedance in 2015.

As the big news broke yesterday of Bytedance’s hire of Disney executive Kevin Mayer (official press release) I thought it worth putting together an article providing context and backstory to the development.

Recent re-organization

In March CEO Zhang Yiming sent a letter (Chinese) to employees announcing a major company restructuring which surprised many in China as it seemed Zhang was giving up the reins of Chinese operations. The CEO let the whole company know he was shifting his focus to build the global business, already spending nearly two-thirds of his time outside China and promising to “improve the global management team of ByteDance”.

Also in that letter was another ambitious promise – to have 100,000 global employees by the end of the year, with the majority of new staff being hired outside China – an aggressive hiring spree.

Above: a chart I put together and tweeted at the time

To put this into context with some of the global staff headcount of their peers (end 2019).

  • Facebook: 44,942
  • Google: 118,899
  • Alibaba: 116,519
  • Tencent: 56,310 (mid 2018)

Mayer’s team

Zhang has a reputation for taking a persistent and hands-on approach to hiring. During the company’s founding period with just 10’s of staff in 2012 he is said to have personally conducted over 500 interviews including for receptionist positions. He has been personally involved in headhunting a team of international top-level talent to work alongside new hire Mayer. Below I’ve identified some of the key players already in place:

Above: Some of Mayer’s new team

Vanessa Pappas, currently GM of TikTok US, North America & Australia NZ, based in Los Angeles, previously Global Head of Creative Insights at Youtube for over 7 years.

Erich Andersen, VP and Global General Counsel, based in New York, previously VP and Chief IP counsel at Microsoft where he spent 25 years.

Roland Cloutier, Global Chief Security Officer for TikTok based in New York, a security industry veteran and ex US Air Force Combat Security Specialist

Nikhil Gandhi, Head of India (TikTok’s largest market), based in Mumbai. Nikhil spent 9 years as a VP at Walt Disney in India.

TikTok’s two biggest offices today are LA and London with London shaping up to be the new European Head Offices (source).

Former Musical.ly co-founder Alex Zhu, was also mentioned in yesterday’s press release:

“Alex Zhu, the current President of TikTok, will transition to ByteDance VP of Product & Strategy, where he will focus on his primary passion overseeing strategy and product design.”

Returning Zhu to a more product-focused role makes sense. Even during his years at Musical.ly, of the two co-founders, it was Louis Yang who held the more COO like position overseeing the Shanghai team. Zhu may end up playing a similar role to “product guru” Kelly Zhang with Bytedance China, time will tell if he’s capable enough.

Regardless, given the current anti-China climate particularly in the US, Bytedance can’t really afford to have a Chinese national represent TikTok anymore.

Above: screen capture from Bytedance’s official site

Go to the official English Bytedance website today and under leadership, the company emphasizes their American board members. Chinese star VC investor Neil Shen who led the company’s series C round and has topped the Midas global VC ranking for multiple years running is downplayed to 4th place. Key executives Zhang Lidong and Kelly Zhang are not even mentioned. Also worth noting is switching the website language you’ll find none of the board members are featured on the Chinese version of the site.

What is Mayer actually COO of?

The thing that stuck out most to me about the announcement was Mayer’s position: COO. Is an American new hire now in charge of Bytedance’s China operations? Sure not, later on the press released clarified:

“Kelly Zhang and Lidong Zhang will continue to lead the China business as CEO and Chairman of ByteDance China, respectively, reporting to Yiming Zhang, as ByteDance’s global CEO. They manage a range of products, including Douyin, Toutiao, and Xigua, in addition to their duties leading the business and operational teams in China.”

To summarize, China is reporting directly to the CEO bypassing Mayer. That’s significant because today China is where virtually all of Bytedance’s revenue is coming from.

Above: Bytedance revenue estimates

It’s estimated that TikTok accounted for approximately just 1% of Bytedance’s revenue last year with internal sales targets set in January putting that as rising to 4% in 2020. Although I should note those targets were set pre- coronavirus.

Having said that, this picture is expected to change rapidly. Back in Dec 2017 the company announced (source) that they expect to earn half their revenues from overseas (non-China) within five years, a hugely ambitious statement at the time given that it was not clear that TikTok would dominate globally in the same way it had already done in China.

Looking back on this announcement with hindsight I sense Bytedance must have felt they already had made the important breakthroughs they needed by then having acquired Musical.ly a month previously and with TikTok breaking its first major international market also in November, ranking no. 1 in Japan, a traditionally tough country for Chinese apps.

Final thought

Overall the thought that’s stuck in my mind since learning of Kevin Mayer’s hire is a sketch juxtaposing two alternative worldviews regarding the relationship between China and the outside world held by Chinese internet companies.

The sketch is by Zhang Yiming’s close friend and former entrepreneurial partner, Wang Xing who himself runs one of China’s largest internet companies, Meituan Dianping. The left side represents the traditional more closed way that Chinese internet companies view the world i.e. that the Chinese internet and the rest of the world are separate universes and that China being the biggest market is worthy of as much perhaps more attention than the rest of the world combined. In areas such as ecommerce, for example, such a worldview is justified (see chart below from McKinsey).

Souce: China digital consumer trends in 2019 – McKinsey

But to me at least the ambitious hire of Mayer, the company’s globalization friendly advertisement revenue model, the global 100k staff target, and the language used by the founder and company all point to Bytedance’s worldview being the new way for Chinese internet companies to view the world.

Regardless of what happens with CFIUS reviews, Bytedance demonstrated yesterday they really are “all in” on the concept of being a truly global internet giant, one that just happens to come from China.

I’ll be producing more work on Bytedance in the future. If you’d like to keep informed on that please join the mailing list on the side bar and catch me on Twitter @mbrennanchina.