What Makes The Top 10% Of Founders Different? - Michael Seibel.

What Makes The Top 10% Of Founders Different? - Michael Seibel.

TikTok and the Sorting Hat — Remains of the Day.

In the world of entrepreneurship, there is a clear distinction between the top 10% of founders and the rest. These successful founders possess certain qualities and strategies that set them apart from the rest. Michael Seibel, a prominent figure in the startup world, sheds light on some of these differentiating factors.

One of the key attributes of the top 10% of founders is their ability to execute and their formidability. These founders never get stuck with execution. They have the drive and determination to push through challenges and obstacles. They don't let setbacks discourage them. This internal motivation is what keeps them going even when things go wrong.

Clear communication is another crucial aspect that sets these founders apart. They have the ability to explain what their business does in just one or two sentences. This concise and effective communication helps them attract investors, customers, and partners. It allows them to convey their value proposition and differentiate themselves from competitors.

Now, let's shift our focus to TikTok, the popular short-video social media platform. TikTok has experienced tremendous success, and one of the reasons for its growth is its unique algorithm. Bytedance, the parent company of TikTok, introduced an updated For You Page feed algorithm, which is the most important piece of technology they introduced to the platform.

This algorithm acts as a rapid and efficient market maker, connecting videos with the audiences they're destined to delight. What's interesting is that TikTok's algorithm doesn't rely on an explicit follower graph like other social networks. Instead, it sorts its users into dozens and dozens of subcultures. This allows users to discover content that aligns with their interests, creating a highly engaging and personalized experience.

The algorithm's effectiveness lies in its ability to overcome what can be thought of as a cultural firewall. Bytedance, being a Chinese company, faced challenges entering the American market due to cultural differences. However, their machine learning algorithm proved to be significantly responsive and accurate, allowing them to pierce the veil of cultural ignorance. It enabled TikTok to resonate with users across different cultures and markets.

To jumpstart TikTok's growth, Bytedance did two crucial things. First, they invested heavily in user acquisition in the U.S., despite rumors that the retention rate of these new users was subpar. This massive marketing spend helped them bring in new people and subcultures into the app. Second, they integrated TikTok with Bytedance's back-end algorithm, which doubled the time spent in the app. This integration allowed users to find each other quickly and branch off into their own spaces.

TikTok's success can be attributed to its positioning as an entertainment network rather than a pure social network. Unlike platforms like Facebook, where users primarily interact with people they know, TikTok focuses on providing entertainment based on users' interests. It functions as an interest network, where users consume content that aligns with their preferences.

The traditional approach of using a social graph to build out an interest-based network has its limitations. Social graphs have negative network effects that kick in at scale. For example, on Twitter, you may follow someone for specific interests, but you may not be interested in everything they share. TikTok, on the other hand, bypasses these negative network effects by primarily relying on an interest graph. Its algorithm efficiently assembles an interest graph based on user consumption, leading to a more personalized experience.

In conclusion, the top 10% of founders differentiate themselves through their execution, clear communication, and internal motivation. TikTok's success can be attributed to its algorithm, which connects users with content that aligns with their interests. The platform's positioning as an entertainment network and its reliance on an interest graph have allowed it to overcome cultural barriers and achieve massive market share.

To apply these insights to your own entrepreneurial journey, here are three actionable pieces of advice:

• 1. Embrace execution and formidability: Don't get stuck with execution. Stay determined and motivated even when faced with challenges. Push through setbacks and keep moving forward.

• 2. Master clear communication: Learn to explain your business in one or two sentences. Develop a concise and effective value proposition that sets you apart from competitors.

• 3. Leverage technology and algorithms: Embrace the power of machine learning algorithms to overcome barriers and connect with your target audience. Focus on personalization and providing a highly engaging experience.

By incorporating these strategies, you can increase your chances of success as a founder and take your business to new heights. Remember, it's not just about having a great idea, but also about executing it effectively and connecting with your audience on a deeper level.