Capcut: There's More Than Meets The Eyes 👀

Click the social icons to share with a buddy

Author

Finlay Williams
September 10, 2024

2 minute wacky businesses, you can tell your buddies about 🧠

I’m sure everyone has heard of Capcut by now. Maybe you’ve even used it to spice up a TikTok or two. But what you might not know is that CapCut pulls in $100M+ in annual revenue, and is the brainchild of ByteDance (yep, TikTok’s parent company). While everyone’s busy obsessing over 15-second dance clips, ByteDance has quietly turned CapCut, into a billion-dollar growth engine for two core reasons


Data Loops and Exclusive Access to Trends 🧐

ByteDance isn’t just thinking “build a cool app.” They’re thinking ecosystem - cross-pollination between platforms. CapCut feeds TikTok. TikTok feeds ByteDance’s ad revenue.

The strategy boils down to two key things that most companies ignore:

  1. Don’t just build an app - build a growth engine.

  2. Leverage data as the secret sauce.

CapCut gives ByteDance insane insights into video trends, editing styles, and what’s driving engagement. They’ve essentially built a real-time content lab. Every time someone uses CapCut to create, ByteDance learns. This data flows back into TikTok's algorithm, making it smarter and stickier. CapCut is the honey, and user data is the goldmine.

What are the nuggets? 💎

đŸ•ș Origin Story: CapCut, a Bytedance brainchild, was originally launched as Jianying in China, where it exploded, proving its concept before going global in 2020. Bytedance realised they needed two things, a way for creators to rapidly create new content effortlessly, and a stream of data to understand trends in real time. Bing bang boom, Capcut was born. 

đŸ•ș Growth: Only 2 years after launch Capcut hit 200 million active users and it's only been growing, with a staggering 5.6 billion posts on TikTok tagged "capcut." By March 2023, it was the second-most downloaded app in the U.S., behind the Chinese Amazon competitor Temu. 

đŸ•ș Pivotal Moment: Once established, TikTok made it seamless to switch from the editor to Capcut. Creating this all-mighty networking effect. Free users of Capcut create/post videos with a watermark, next time another user goes to edit a video, they see a link to quickly use the same editor (Capcut). As more people use the app, the more its library of templates, filters, and effects grows. This user-generated content feeds the machine, making the app more appealing for new users.

đŸ•ș Big play: By helping creators pump out better, more engaging videos, CapCut is indirectly boosting TikTok’s ad revenue. Capcut’s uncontested ability to understand trends in real-time means users ad content is as relevant as possible. We all know creatives are at the heart of a great campaign, and the better ads perform, the more advertisers spend. 

đŸ•ș What’s the bigger picture? ByteDance doesn’t just own CapCut and TikTok. They own everything in between, from the AI algorithms that recommend content, to the ad platforms that serve businesses. CapCut is just one piece of the puzzle, but it fits into a vertically integrated empire where ByteDance controls every stage of content creation, distribution, and monetisation. This is a playbook tech giants have tried (looking at you, Facebook and Instagram), but ByteDance is one of the few pulling it off at scale.

Recommendation 🌟

Have you ever wanted to start a newsletter? Checkout Beehiiv.

Beehiiv has allowed me to build this small business in a matter of months, they have awesome tools and make it super simple to start a profitable, scaleable business.

Check them out here and get a 30-day trial + 20% off for 3 months (+ you’ll be supporting this newsletter 😎)

Back to the good stuff


Laying Out The Figures đŸ’”

Subscribe to keep reading

This content is free, but you must be subscribed to Unconventional Empires to continue reading.

Already a subscriber?Sign In.Not now

Reply

or to participate.