How the Founder of a Failed Education Startup Created the Hottest New Social Network for Teens

Like many young entrepreneurs in the tech field, Alex Zhu, the founder and CEO of Musical.ly, was looking for that one big idea that could change the world. He settled on an education app—it was a popular idea; he secured investors, built a team and launched a product. And it was a total failure. Turns out education, like healthcare, is very complicated, and in general people just don’t use their phones for educational purposes. Sure, there’s educational entertainment or apps that help you learn a new language, and we can Google anything and have an answer immediately. But those are all different than just opening an app simply to learn something. So Zhu, who is about as thoughtful a leader as you are going to find in the tech world, went back to the drawing board. What do people mostly use their phones for? It's communication and entertainment, and Musical.ly was born out of that realization, said Zhu during a packed South by Southwest panel on Wednesday. The app lets users create what are essentially short karaoke videos using 15 seconds of popular songs or quotes from movies, which are then shared with friends and the larger Musical.ly community. It’s not a revolutionary idea and isn’t much different from what Dubsmash was already doing in that mobile space. So, how did Muscal.ly go from a good but not revolutionary idea to 55 million monthly active users and 15 million videos produced every day? Teens! [kickout id="1"] The early adopters you need According to Zhu, if you want to start a social network from scratch, teens have to be early adopters. Teens have an entrepreneurial spirit that allows them to try new things and, most importantly, they cross-promote. Videos or content made on one platform end up getting reposted to all their other platforms. This lets creators maximize exposure while allowing content from a new platform to seep into the established networks. Utility first, then social network The other key ingredient to starting a successful social network from scratch is to actually not focus on the network at all to begin with. Zhu uses the example of Instagram for how a network can grow. In the beginning, Instagram was just a camera utility, a good one, that people used to take photos that would then end up on Twitter or Facebook. But over time, as more and more users downloaded the app and posted photos, the community grew organically, and eventually Instagram had it’s own social network with a huge user base and influencer economy. Community is the key to growth Alex Zhu has a great analogy for how to achieve growth in a social network. He likened creating a community from scratch to creating a country from scratch. Take America as an example: How was the New World able to convince people from Europe to move across the ocean? The answer was social class. In established communities, whether a country or a social network, it can be hard to move up. Twitter and Snapchat already have their influencers and celebrities, and although it’s not impossible to break into that level of the community, it’s not easy. Musical.ly was a new land with new opportunities, and just like a new country, the app distributed wealth (views) in a centralized manner that allowed new celebrities and role models to emerge quickly. The other social classes from the other communities then see the opportunity and flock to the new platform for their own chance at glory. An introverted perspective But how does a new social network in this day and age sustain growth while also defending its territory from the established communities? It’s an old joke now that Snapchat has become just a beta tester for Facebook, but Zhu said he isn’t worried about that. He said you can copy the features, but you can’t copy the community, adding, “The people make users stay, not the utility.” Zhu said that what your competition is doing doesn’t matter much, but understanding your users and your own strengths and weaknesses as a company is the key to success. [kickout id="2"] What’s next As Muscial.ly grows, Zhu understands that it will eventually be moving to a decentralized economy by following in other networks’ footsteps and installing a content algorithm and API to give brands better data and access. But he’s in no hurry to get there. Building out the community and its influencers and growing his companion livestreaming app, Live.ly, are the immediate goals. And despite the current debate about sustained user growth and ad revenue on Twitter and Snapchat, Zhu and his investors are confident that as long as they have a community, traffic, and good content, there will be plenty of revenue opportunities. The app has already completed successful campaigns with Coca-Cola and MTV, and more brand partnerships are in the works. As long as mainstream celebrities like Stephen Curry and Ariana Grande continue to use the platform, its throngs of tweens aren’t going anywhere, and brands, especially those looking to reach Gen Z, need to be paying attention.