How to Build an App Like TikTok: Business Model, Cost Estimation, Features

Successful companies survive the crisis. Leading companies turn crisis into triumph.

During a global lockdown and COVID-caused crisis in 2020, numerous businesses suffered huge losses. Bankruptcy, default, unemployment, and financial difficulties shook multiple world-known brands. But it did not harm TikTok.

This social media video app demonstrated unbelievable results and record growth. And today, we are going to shed light on the hottest questions:

• How to build an app like TikTok?
• And why exactly do you need to do this right now?

Let's start to build a viable MVP and accelerate your success.

TikTok social video app: a glance at its story

In 2016, the app was just another software solution on the Chinese market. Now, only four years later, TikTok brought its founders, the ByteDance company, $5.6 billion during the first three months of 2020. And we've found a lot more fascinating facts:

• During the first quarter of 2020, when the COVID-crisis was just about to start, TikTok set a world record in a number of downloads;
• It's the fastest-growing app worldwide, leaving behind all the influential names like Youtube, Instagram, and Facebook;
• In July 2020, TikTok downloads reached 12 million. And it's the most downloaded app on App Store;
• It's the biggest platform for Generation Z;
• Only in the US, its revenue is expected to reach over 500 million by the end of 2020.

The list may continue with even more mind-blowing statistics. However, after analyzing all of the facts, we come to the one conclusion: TikTok is the most successful social video app of our age.

It was initially launched by a Chinese tech company called ByteDance. After the app won local users' attention, it became evident that further success depends on the international market expansion. First of all, the founders focused on the US market. After the successful merge with Musical.ly social media service, TikTok became viral.

As Internet users found themselves locked down in their homes in spring 2020, there was no other choice than to follow digital trends and spend their free time online. Here, TikTok came in handy: funny 15-seconds videos turned to challenges and hobbies. Time spent on the app grew exponentially. However, drawbacks appeared.

What's wrong with TikTok?

There are two crucial sections for you to get acquainted with: TikTok troubles and user concerns and TikTok closures in various countries. Here, we'll provide you with an introduction to both topics.

User concerns

App users worldwide start paying more and more attention to danger hidden behind funny TikTok videos:

• Addiction and FOMO

Statistics say that the average user spends almost 500 minutes per month on TikTok, but kids and teenagers devote more than 80 minutes per day! Fear of missing out stimulated with viral content and never-ending feed makes users devote a considerable part of their life to this app. It's shocking, it's dangerous: keeping in mind that most of TikTok's users are children and teenagers, this fact became a severe concern for the adult audience.

"Watching too many (videos) in a row can feel like you're about to have a brain freeze. They're incredibly addictive.", says The Atlantic

• Cyberbullying

The volume of critics and harassment related to skin color, race, body shape, etc. is massive. Thus, the content generated on the TikTok platform negatively impacts mental health, leads to depressions and even teen suicides.

• Misinformation

From political propaganda to conspiracy theories, from fake news to pandemic-related misinformation. Talking about such a massive platform as TikTok, there must be a fly in the ointment: in millions of entertaining, funny, engaging videos, all the bad things like violence, misinformation, and danger hide.

• Data leaks

Another issue to keep in mind is that TikTok collects minors' data illegally. Combine it with the fact of numerous data leaks on the social video platform and get the multiple legal suits against TikTok as a result. During some of them, the platform lost millions of dollars. During others, the platform was banned.

Bans and censorship: what's the future of TikTok in different countries

The noise around the TikTok social video app is reaching a new level. Since most of its data centres are based in China, the concerns rise, and more and more countries consider banning the app.

Although Zhang Yiming, TitkTok's CEO, tries to assure governments that the app is safe, the investigations say that ByteBrand shares users' personal data with the Chinese government without asking for permission.

• The Indian government has taken the radical actions and banned more than 50 apps, including TikTok;
• Japan plans to submit the proposal to restrict the TikTok usage by September;
• US President Donald Trump and the national government say that the TikTok app is the national security threat and declares banning it soon.

TikTok is about to open the first European data center in Ireland. However, numerous countries have no intention of waiting for that. There is the possibility it won't ever happen: Microsoft wants to acquire TikTok, and according to Trump's latest decision, the deadline is September 15th. If TikTok becomes a part of the American corporation, it may have a chance to survive. But can we say that acquisition means survival?

What does it mean for you?

Let's have a quick look back. When TikTok just started to conquer the US market, there was an app called Vine. This was an American social networking video-sharing platform with high ambitions and great potential. However, in 2017, right before TikTok was launched, Vine's decline started. Although the app's co-founder claimed to begin working on an upgraded product called Byte, it was only launched in 2020.

These three years, the gap between Vine faded and Byte rolled out, was a prosperous time for a TikTok social video app. 2017 was the right year to expand the US market: Vine's success demonstrated a warmed-up audience for a similar product, and Vine's decline let all the interested users (as well as millions more) install the TikTok app.

Now, in 2020, we can see TikTok's losing a battle. Numerous issues, users' concerns, and legal suits, bans in different countries, and rising distrust – all these factors create the pre-conditions for TikTok to shut down.

History repeats. While an established trendsetter dies, a new one may arise. And it may be your social media app like TikTok.

How to build an app like TikTok?

The best time to start your business is now. So find out how to create an app like TikTok with maximum efficiency and minimum costs.

Increase your awareness

First and foremost, get acquainted with similar applications. Apps like TikTok may show you how to spotlight a social video app and compete with similar companies. They may inspire you with fresh ideas as well as provide examples of mistakes to avoid. Here, we've collected several apps like TikTok to take a look at:

• Dubsmash
• 200 million users

The app with German roots showed up on the American market in 2016. As well as the TikTok app, it allows sharing video content, adding audio to the clips, putting quotes on their files, editing and modifying them, etc.

In 2019, a major data breach shook Dubsmash as more than 162 million accounts were compromised. It was one of the biggest hacks of the year.

• Likee
• 115+ million users

Likee, a.k.a. LIKE, passed a major rebranding and redesign procedure in 2019. This Singapore-based startup is powered with high-quality video shooting and editing functionality, dynamic stickers, and other features powered with AR effects.

The international community blames Likee for enabling access to inappropriate content. The team works on parental control features to save its reputation.

• Funimate
• 40+ million

"Be a video star!" says the app's landing page. Rather minimalistic and intuitive design attracts users from first sight. The app allows to sweeten users' videos with more than 100 visual effects, add music, stickers, emojis, etc. With in-app purchases, users get access to Funimate brand products like T-shirts.

Users under 13 are not allowed to enter the app.

Take a look at these apps and investigate your local market: are there any apps your target audience currently uses? Try them yourself and explore the users' reviews. Reveal potential issues and make sure to avoid them in your app.

Mimic the TikTok's business model

Last month, TikTok made more than $5 million of revenue. Even though the app is engaged in numerous disturbing situations and legal suits, the monthly income still amazes. Thus, starting the engine on your highway to success, find out why TikTok is so viable and decide on your own app's monetization model.

There are two cornerstones of TikTok's revenue:

• Advertising

Powerful AI-powered algorithms study the user's preferences and behavior to show relevant, exciting ads. TikTok revolutionized the advertising industry: instead of boring texts appearing randomly on the user's screen, now video advertising becomes a trend. It's engaging, catchy, and what's the most important - it's useful for businesses.

Advertising on TikTok is not just a source of revenue. It's also a magic pillow that attracts brands and businesses to join the platform.

Also, shoppable ads leading directly to eCommerce websites are in beta on TikTok. It means that the company goes even further with ads model development.

• TikTok coins

That's how the in-app purchases are implemented in the TikTok app. 

TikTok users can send virtual gifts to each other. To send the gift, a user needs to pay for it with TikTok coins. The price for the coins, as well as the range of virtual gifts, varies. It's an actionable monetization method and a drop of gamification in a platform. A person that receives the gift can convert it to so-called diamonds and then monetize it while TikTok charges a 50% commission.

The sale of this virtual currency let TikTok raise more than $75 million during 2016-2019.

Still, a significant part of TikTok's revenue came from investors and venture capital firms. In the sections below, we explain how to make a TikTok clone and attract investments.

MVP vs. full-featured app: choose wisely

While your potential competitors are busy with some other tasks, businesses, and ideas, don't miss a chance to cross the starting point even before they'll notice a new opportunity. It is crucial to fill the potential gap with your own app like TikTok. Starting earlier, you deal with two critical goals:

• You attract the target audience;
• You get a real chance to prove the investors that your app can succeed, just like TikTok did.

A short, several weeks delay may simply abolish your success. Don't let it happen.

Fortunately, there's a way to roll-out a TikTok-like app as fast as possible. Focus on MVP development instead of contributing months and years to a fully functional product. 

MVP is the minimum viable product, the initial version of a solution you plan to build containing basic features only. It pursues two main goals:

• Find out what real users think of your app and prove its viability;
• Attract investors' attention and start raising funds for further business growth.

MVP requires basic financial investments only; thus, it is a perfect choice for entrepreneurs who start with bootstrapping. In a table below, we show you the approximate comparison of MVP and a complete product.

Prioritize the key features

MVP development requires to leave all the unnecessary details behind and focus on essentials. Follow the example of the TikTok app development and create the list of must-have features for your application:

Later, as your app becomes a mature software product, you'll get an opportunity to invest a part of an income in advanced functionality like live video streaming, in app-chats, content analytics, geolocation functionality, and any other feature your users demand.

Define your strength and focus narrowly

Once you are acquainted with similar apps, think about your competitive advantage.

• How your app differs from similar apps?
• Why users prefer it over other products?
• Are there any unique features the users will appreciate?

Highlight the reasons to opt for your app even before you launch it. Warm up the audience and announce the feature that will make their digital life more entertaining!

Here, another tried and tested tip is to focus narrowly. Even if you haven't come up with an idea of unique functionality, you can still attract potential users if you only focus on a defined group. Let it be students from a local university, campers who enjoy hiking in your area, shopping-addicted people from your city, etc. The point is to build your product specifically for these people, encourage them to generate unique content, and later, grow the user base exponentially.

Web or mobile: choose both

Your business needs a website; your business needs an app. 

You can announce the upcoming app release on a website, start an exciting blog, share your company's story, put links to your app on app stores, or even allow viewing content from a website.

At the same time, you need to prioritize the mobile-first approach, just like TikTok did. A mobile application is the interaction channel between users and your product. It includes the functionality we've highlighted in a section above and allows users to generate video content. Building a mobile app, make sure it demonstrates fantastic performance and responsiveness on all the most popular mobile OS.

There are numerous ways how to organize a process and what technologies to choose. Here, we'll provide you with the basic, the most convenient set of tools, techniques, and methodologies:

Development tools

Here, you have several options: build a website and switch to native mobile development for iOS and Android platforms or choose a cross-platform approach to reuse the same codebase for a website and mobile app.

Opting for a hybrid or a cross-platform development method is a profitable option for MVP development. According to this, you may use the same codebase elements for both mobile and web products. It cuts development time and costs greatly, as well as allows delivering high-quality, user-oriented apps.

In this case, the following tech stack will be useful:

• React.js framework for website interface development;
• Node.js framework for server-side development;
• React Native framework for cross-platform mobile development.

Depending on your app's requirements, choose between the abundance of databases. MongoDB may be of the best options.

You can replace React with Angular or Vue and try PHP and Laravel for back-end development. The choice is vast, so on this step, discuss the option with your development team, analyze potential expenses on hosting and estimate development time to make the optimal choice.

Development process

Use Agile software development methodology and Scrum framework to make the process as straightforward and flexible as possible. This approach is a perfect fit for a startup: thanks to two-weeks iterations, you can make decisions and implement changes on the go.

Software testing

While software engineers deliver high-quality code, there should be someone to make sure that functionality meets the project's requirements precisely. Software quality assurance engineers, or software testers, take care of that.

Working on MVP, manual QA would be enough. Later, as the app will grow, you may need to implement automation QA processes in your flow.

Communication and project management

Trello and Jira allow organizing the TikTok app development flow in the best way. These are the most popular tools for task management. Fueled with effective communication using Slack or similar online channels, they help to optimize the process, avoid delays, and minimize possible miscommunication.

Acquire the first users and promote your app

Earlier, we've mentioned that your website may serve as a teaser of the upcoming app. To reach the highest promotion metrics, follow several tips:

• Launch your marketing campaign on the most popular social networks: it will help to find potentially interested users and spread the word about your app rapidly;
• Target defined location with online ads: pay-per-click online advertising requires investments but brings initial traffic to your website;
• Find specific communities and inform them about the upcoming launch: depending on your app's focus, research areas, websites, and online communities where your target audience may spend time.

Get ready to measure the results. Keep an eye on the website's traffic, roll out your app, and watch how the number of downloads increases. Then, start a dialogue with your users. Ask them about the channels that lead them to your website, ask about their opinions concerning this product, and recommendations on how to improve it. 

Proceed with fundraising

TikTok's founders, ByteDance company, is supported by investors and venture capital firms like SoftBank Group, K3 Ventures, TCV, etc. The company raised over $7 billion from investors.

For you, there are several ways to raise funds for apps like TikTok.

• Ask for support from friends, family or local communities;
• Start a crowdfunding campaign;
• Get acquainted with angel investors;
• Apply for an incubator program;
• Share a piece of your equity and build cooperation with a venture capital firm etc.

It's up to you which method to choose. The combination of several ones may be the most profitable. Make sure to prepare a detailed presentation of what you have and what goals you'd like to achieve with your app like TikTok. Emphasize your strength, demonstrate that you have a plan on overcoming challenges, and show your app's financial potential. 

Wrapping it up

Now, let's summarize what you've just found out:

• TikTok is extremely popular and successful; however, it loses its positions and users' trust, struggles with numerous legal suits and closes in multiple countries;
• Knowing for sure that millions of users worldwide love TikTok, it's time to start working on a similar position which will shortly replace TikTok;
• TikTok gets most of its revenue from advertising, however, on the initial stage of your growth you need to pay particular attention to fundraising;
• MVP is a chance to attract investors' attention with minimum costs;
• Creating a simple, high-quality, and potentially profitable app, you get an opportunity to occupy a stable position in the market and repeat TikTok's success.

Now, it's time to act.

For a successful launch, you need a strong engineering team. These people will devote their time, skills, efforts, and expertise in your TikTok app development and growth. Looking for an engineering partner may be a struggle, but once you find it, it's just a matter of a few months when your app starts bringing you revenue.