Where does creating a network and country begin?

I was reading an interview by the musical.ly co-founder and now VP of TikTok Alex Zhu. Describing how creating a social network is like making a new country.

This is how he describes it:

Building an influencer community is very similar to building a new country (economy) from the ground up. In the early stage, building a community from scratch is a lot like discovering new land. Imagine you just discover new land. Let's call it America. Now you want to build an economy. You want to grow the population and you want people to migrate to your country.

Creating something out of nothing is no small feat. You need to answer questions like: How do you create jobs with nothing there? How do you get more people to migrate to your country?

Right now I'm rereading the biography of Lee Kuan Yew the founder of modern Singapore. And something the early chapters remind me of this discussion that Alex Zhu is having. LKY worried a lot about the question of creating an economy. How to create new jobs when you have a new country. While some of Singapore's worries do not translate well into creating a new social media app. Like the question of defence. Being worried about invasions by neighbours or coups. Are not too relevant when getting people to your social media platform. The closest analogy to that is Facebook creating a clone to attack your network. But they have a less than optimal hit rate.

It makes me wonder – Where is the line of creating a new social network vs a country begin?

I found the Alex Zhu example from Li Jin. A great thinker of the creator economy in her article she laid down details on how to improve the creator economy to have some type of middle class. Almost like an American dream for the internet age.

Making people feel they have a shot at success, is the two things being a country and social networks have in common.

But it’s a chicken and egg scenario. How to create a system of value with nothing there?

Alex Zhu gives the analogy between Europe and the new land America of the 1800s.

Let use an analogy: Musical.ly will be America in this analogy, and YouTube/Instagram will be Europe. How do you convince creators from other regions (social platforms) to move to America (Musical.ly)?

The problem with Europe (YouTube & Instagram) is that the social class is already well-established. The average citizen of Europe has almost zero opportunity to move upward in the social class. We saw an opportunity to leverage this. We will build for the average citizen in Europe.

I wrote about this before. YouTube and Instagram lack the dynamism that it once had.

Because of that is harder for newcomers to join the ranks. The algorithm of those platforms favours the incumbents. As they know they can draw in a large crowd. Compared to an untested newcomer. This does not mean newcomers never succeed in those systems. But it’s much harder.

TikTok is famous for allowing newcomers to join the service and allowing them to succeed. There are many stories of TikTokers that only have less than 10 videos going viral. This is much less likely with Instagram and YouTube.

Granted, the design of the service makes life easier. Dealing with 10-second videos makes it easier for the algorithm. To go through tons of examples compared to a 10-minute YouTube video. If you are interested in this then check out Eugene Wei Remains of the Day blog post.

Alex also had some more details about the matter:

In this new land, you have to build a centralized economy in the early days. This means that wealth distribution is accruing to a small percentage of people in your land. You make sure they successfully build an audience and wealth. This makes them role models for the country (and platform). You effectively create the American dream. People in Europe (Instagram) will start to realize that this "normal" person went to America (Musical.ly) and became super-rich. Maybe I can do the same? This will lead to a lot of people migrating to your country (platform).

Here Alex is explaining that you want to have a heavy hand in the creation of the platform. In country terms, the government will be the guiding factor in the economy. Examples are having state-owned companies and subsidies. The Asian tigers [insert link of book] did this in the early years of development. With a large state calling the shots of the national economy.  

In this passage, Alex explained how you want role models for your platform. So other people can see the rules and the culture of the platform. In country terms, this will promote some companies and industries over others. And Alex explains if you are doing right then people from other platforms or other countries will be willing to emigrate to the new platform. Due to the chance of success. Starting a flywheel of great talent entering the platform or country.

Therefore, once countries become successful it is hard for them to stop. Unless a major crisis happens and that is a maybe. Then the country will start to decline. In social media terms, this is the power of network effects. Were the flywheel starts spinning. And it’s hard to stop. Only after terrible mismanagement. Or an even better platform (the platform needs to be 10x better though). Then people will move away from the platform.

From reading the Lee Kuan Yew biography and this description of musical.ly and now TikTok. Is that anything great will be very hard in the early days or years. Lee Kwan Yew had to worry about creating a country that had jobs to avoid choric unemployment. Also, build an army so local neighbours don’t invade. Tiktok had to get enough users to start the flywheel. And make sure it does not get crushed by a big tech rival like Facebook.