How Alex Zhu Built Musical.ly: From EdTech Failure to a Global Teen Movement (TikTok)

In the early 2010s, Alex Zhu was a futurist working at SAP, researching how education would be transformed by technology. By 2013, he had a vision—a billion-dollar idea, he believed—that combined the pedagogical depth of Coursera with the rapid-fire delivery of Twitter. It would be an educational mobile app with short-form, bite-sized videos, lowering the barriers to both content creation and consumption. But it failed. Hard.

Instead of letting the failure bury him, Zhu dissected it. That failure—rooted in trying to change human nature instead of meeting it where it already was—led directly to one of the most explosive social apps of the decade: Musical.ly.

From SAP (Enterprise Software) to Shanghai to Snapchat-Sized Success

Alex Zhu’s journey began at SAP, where he built enterprise tools and researched educational futures. But the work lacked the creative thrill he craved. In 2013, he left SAP with a vision to merge Coursera and Twitter into a mobile-first education platform. The product failed. He learned the hard way that education content wasn't compatible with human nature’s desire for instant gratification.

The failure forced a pivot. Zhu’s team shifted to entertainment, adopting three key lessons:

• Content had to be lightweight—viewed and created in seconds, not minutes or hours.

• Human nature favored entertainment over education on mobile, where users on public transit or in line at a café were far more likely to watch videos or message friends than engage with structured learning.

• Teenagers, particularly in the U.S., were ideal early adopters due to their creativity, time, and influence—especially since many were already using YouTube in schools and knew how to film and edit videos naturally.

Gaming the App Store: The Search Hack That Kickstarted Growth

Launching a social product with no users is daunting. Zhu’s team leveraged a loophole: App Store search weighted app titles more than keywords. So they stuffed the name with search-friendly phrases like “Make awesome music videos for Instagram, for Facebook Messenger.” That trick brought in organic installs.

Early on, Musical.ly emphasized utility—video creation tools rather than social interaction. Like Instagram’s early filters, the draw was in features, not community. Before there was a critical mass of users, it was the effects and editing capabilities that got people through the door. Community came later.

Designing for American Teens—From Shanghai

Despite being based in Shanghai, the team never lost touch with U.S. teen users. Their strategy:

• Many young Chinese professionals had studied or worked in the U.S. at companies like Facebook and Google before returning to China, bringing back deep familiarity with American culture and the social norms of Silicon Valley product development.

• Chinese users themselves were highly engaged with U.S. pop culture. Zhu noted that topics like U.S. presidential debates often trended more on Chinese social media than domestic political events.

• They ran participatory design via WeChat, involving hundreds of U.S. teenage users in daily conversation—not just about product features, but also about teen slang, personal tastes, and cultural behavior.

Mockups and wireframes were shared early, before any coding began. These conversations helped Zhu and his team internalize what American teens valued and how they expressed themselves, ensuring Musical.ly wasn’t just another foreign-made app, but one that felt native to its audience.

Community Design as Economic Policy

Zhu describes community-building like nation-building. The strategy borrowed from economic theory:

• At first, create a “centralized economy,” rewarding a small elite of users with visibility and engagement to draw others in. Musical.ly concentrated attention on top performers like Baby Ariel, who amassed over 5 million followers, and became a success story that motivated others.

• These early “rich” users became aspirational figures for newcomers—the American Dream in app form.

• Once the platform had traction, they shifted to decentralize visibility and reward the middle class of creators—ensuring long-term engagement and satisfaction for everyday users.

Rather than managing influencers like celebrities, Zhu treated them like citizens in a growing digital nation. Growth came from providing opportunity and reward to both stars and the rising middle class of creators.

The Chinese Innovation Advantage: From Red Envelopes to Virtual Gifts

China’s mobile ecosystem wasn’t just big—it was innovative in ways the U.S. wasn’t yet. Zhu highlighted two key trends:

• WeChat’s Red Envelope Campaign: During Spring Festival, WeChat gamified cash gifting, driving massive bank account integrations. It became a cultural moment, not just a product feature, and changed how people transacted digitally.

• Virtual Gifting via Live Streaming: Platforms like YY and Inke, Chinese live-streaming platforms, monetized through real-time gifting. YY was the first to make this model scale, letting users send digital gifts of real monetary value. U.S. platforms like YouNow later adopted the concept, proving its versatility.

Musical.ly drew from both ecosystems—American content culture and Chinese commercial innovation—and brought them together in a product that felt globally fluent.

Ads vs. Influence: Designing Monetization Without Killing the Fun

Zhu didn’t shy away from monetization. He saw ads as a natural part of any scaled consumer product—efficient, minimally invasive, and data-driven. But his bigger focus was on creators.

Musical.ly’s value lay in social influence. The platform generated new influencers like Jacob Sartorius and attracted existing ones to expand their reach. Monetization wasn’t just about revenue for the company—it was about platform health. Zhu emphasized that creators ultimately need to earn. Just like YouTube’s Partner Program fueled creator loyalty, Musical.ly needed to support financial reward through features like virtual gifting.

• Ads were scalable, seamless, and user-friendly—definitely part of the long game.

• Virtual Gifts and Creator Monetization were vital for short-term creator loyalty and engagement.

He wanted to ensure creators were paid, not for the company’s sake, but to sustain the ecosystem.

Working With, Not Against, the Music Industry

Rather than viewing record labels as adversaries, Zhu positioned Musical.ly as a promotional tool. The app didn’t stream full songs; it used short clips as raw material for creativity. That avoided licensing conflicts and turned music into meme fuel.

• Campaigns like Jason Derulo’s led to over 1 million user-generated videos in four days—before the track even reached iTunes. These videos spilled onto other platforms like Instagram and Facebook, supercharging exposure.

• 13-year-old creator Jacob Sartorius released his debut single on Musical.ly, and it climbed to #7 on the iTunes charts.

• Musical.ly also began experimenting with branded campaigns, extending their creator-based model to brands and artists alike.

The platform didn’t cannibalize music industry revenue—it expanded it.

The Lip Sync Pivot: From General Video Tool to Habit-Forming Use Case

The Musical.ly that took off in 2015 wasn’t drastically different from the one that struggled months earlier. The real difference came in how it was positioned. Initially, 50% of uploaded videos came from users importing clips from their camera roll and adding music. But that didn’t create habit—it wasn’t something users did daily.

Then the team noticed a pattern: every Thursday evening, there was a spike in downloads. They traced this to the TV show Lip Sync Battle. After watching the show, people searched “lip sync” in the App Store—and found Musical.ly.

That insight led to a strategic repositioning. The onboarding flow was rebuilt to showcase lip sync content immediately. Human-curated videos topped the feed for new users, ensuring that their first impression was strong. Push notifications encouraged first-time users to post immediately. These small, intentional tweaks radically improved retention and gave the app a clear identity.

Hustle, Empathy, and Fake Accounts

Growth didn’t just come from strategy. Zhu personally created fake user accounts to comment on posts, engage users, and learn what motivated them. He also implemented a feedback feature called “My Ideas,” where users submitted:

• Top 3 things they loved

• Top 3 things they hated

Every day, they received hundreds of these emails. Zhu didn’t rely on dashboards or abstract data—he watched user content directly and engaged in one-on-one conversations. These insights fueled product changes far more effectively than metrics alone.

Musical.ly wasn’t just a well-built app—it was a high-empathy, high-velocity system designed by people who listened obsessively. Zhu and his team didn’t rely on instinct alone. They embedded themselves in teen culture, watched behavior closely, and responded faster than anyone else. By the time Musical.ly merged into TikTok, it had already become something rare: a social platform that understood its users as well as they understood themselves.

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