The partners in US-based venture capital fund, Redpoint Ventures, are not TikTok’s main target audience. Until recently, Redpoint’s senior executives and founders, mostly men in their forties and fifties, regarded the social network as one more app that, at most, had captivated their children. Redpoint, however, has realized that innovation is the name of the game when harnessing the next generation of young entrepreneurs. Which is why it opened a TikTok account in January. Since then, in about six months, it has gained more than a million views, over 10,700 followers and more than 230,000 likes.
Redpoint’s use of TikTok is part of a global trend that has also reached into Israel. Venture capital funds, start-ups, and the high-tech sector as a whole, understand that the social network is not just a sharing platform for kids, but an accessible tool for creating new communities, and for recruiting entrepreneurs, and portfolio companies. Now, in light of its success around the world, Globes has learned that TikTok is considering working with the Israeli tech industry as well, and is launching a program to help marketers use the social network to advance their needs.
Training programs for Israeli startups
In Israel, TikTok has two main audiences at its disposal. The first are local tech companies, a huge market of thousands of companies, including about a hundred unicorns, where the social network hopes to become another marketing channel, along with Facebook, Instagram, and LinkedIn. The second audience is the Israeli venture capital industry, where TikTok has identified a need among investment managers to get closer to entrepreneurs by expanding their presence in a place where they, in any case, already live: the social networks.
TikTok is currently launching the TikTok For Startups program in Israel, designed to help managers and marketers use the social network in a way that best suits their needs. The company examined, over a long period of time, Israeli companies’ operations, and mapped out the weak spots, such as getting familiar with the new platform, navigating language and design trends, and allotting the resources needed to operate a TikTok account.
The program is designed to bridge the gaps and overcome the barriers that make it difficult for startups to reach new audiences. It therefore closely monitors platform use and content creation, provides media value to start activity, and performance evaluations. TikTok promises that this support will continue even after the program is over. In addition, a direct channel to TikTok - called TikTok For Business - will be open to the participating startups, where they will receive close supervision and guidance.
In recent days, a call was issued to Israeli B2C startups, and TikTok aims to have several dozen companies completing the program by the end of the year. As part of the initiative, TikTok is interested in collaborating with venture capital funds in Israel, and has offered to bring their portfolio companies on board. According to TikTok executives, contacts have already been initiated with many funds; these understand the power inherent in the social network, and wish to harness that power for the benefit of their portfolio companies.
In Israel, the first examples of startups making use of TikTok to appeal to new audiences can already be seen. Equitybee is an Israeli startup that provides financing planning services to tech employees who are leaving their jobs, and wish to purchase the options available to them. After using TikTok, the company managed to lower their marketing costs and improve their campaigns.
Equitybee is not the only startup using TikTok. Cybersecurity product developer Guard.io also posts videos on TikTok presenting various company workers: an employee entering the office in the morning with a cup of coffee in one hand and a computer in the other, the employee in charge of ordering lunch, and more.
"The future lies in understanding the language of the young generation"
Among the global venture capital funds already active on TikTok are Index Ventures, Arra, Seb, and Redpoint Ventures. The popular videos on these VC funds’ TikTok accounts receive tens of thousands of views. Among other things, the videos depict various situations that can occur in the industry, and their purpose is to attract viewer attention. For example, in one Redpoint video, an employee is shown on a video call with his boss, with the accompanying title: "How to Tell Your Boss You're Quitting". In another video, an employee tells his boss he’s concerned about going back to the office, post-Covid-19 lockdown, but parties at the same time.
According to TikTok data, #vctok - referring to venture capital sector videos on TikTok - is constantly growing. For example, the hashtag #investor garnered over 1.2 billion views and #entrepreneur had over 22 billion views. Through TikTok, fund managers are able to find new talent, locate investments, and bring new audiences to their portfolio companies.
Daniel Cohen, a general partner at Viola Ventures, which is active on social media, explains that collaborating with TikTok is important, certainly if the younger generation is there. "We especially believe in the potential of storytelling through short videos, and the future lies in understanding the language of the young generation on this platform, in order to find the next generation of high-tech," he says.
Merav Meluban, VP Marketing at Viola Ventures, also sees working with TikTok as a potential way of reaching new entrepreneurs. "If, in the past, funds mainly solicited IDF technology unit graduates, today you can find quite a few entrepreneurs who are marketing and sales people," she says. "That’s why I think they are also more active on networks like TikTok. It has the potential to build brand awareness within our portfolio start-up companies as well. We also believe that the younger generation of partners will lead it."
People in high-tech understand TikTok’s advantage
Venture capital funds are not the only ones using the TikTok to reach new audiences. Many others in high-tech view TikTok as having huge potential to help various technology companies succeed. Companies like Playtika, Monday.com, Fiverr, and Wix already have accounts on the growing social network.
For example, Wix has about 32,000 followers on its TikTok account, and over 625,500 likes. The company posts tips for website and content creators dealing with a variety of topics: online user trust, the benefits of apps for business, and more. In this way, the company attracts as many relevant visitors and employees as possible.
Idan Segal, head of Organic Growth and Brand Development at Wix, discusses using the popular social network. "TikTok makes brands act like influencers," Segal said. "Some people think they need to bring in video production teams, that cost more, and will be expensive. As I see it, it's the other way around, TikTok lowers our production costs. For it to be authentic and real, you don’t need the most professional editing."
Segal adds: "TikTok's algorithm turns creators into overnight stars because it detects trends. It forces us to be dynamic. The videos are more authentic, personal, and short. We’re changing our perceptions on the go."
Despite TikTok’s benefits, activity on the social network is not beyond reproach. A recent BuzzFeed News investigation reported that US users’ data was accessed from China. Will this hurt TikTok's entry into the tech market? Time will tell.
Published by Globes, Israel business news - en.globes.co.il - on July 5, 2022.
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