The Rise of TikTokers: Future-Proofing an Emerging Social Media Business in the Wake of Regulatory Threat

In July 2019, 15-year-old Charli D’Amelio posted a dance video on the relatively new social media platform TikTok and became a TikTok sensation, soon becoming the first person to reach 50 million followers on the app and earning her a spot in the Guinness World Records. TikTok’s meteoric rise, however, was at risk of being short-lived. In 2020, the US government was concerned about the app’s rapid expansion and threatened to ban it in the United States. Even if the ban announced by the US government failed to materialize, the D’Amelios and numerous other up-and-coming celebrity TikTokers had to contend with many other issues that threatened to compromise their growing social media influencer business. There was growing public concern about TikTok’s lack of content moderation policy, which resulted in the routine posting of questionable content on the platform. The company was also slow in developing a monetization scheme to incentivize, remunerate, and retain its most influential creators. How could the D’Amelios best “future-proof” their fast-growing but fickle business against potential risk?

This case and teaching note have been developed specifically for non-market strategy or advanced corporate strategy courses at the graduate and post-graduate levels. It would also be appropriate for use in business economics and public policy courses, which also often discuss non-market strategy. Because it addresses a central notion in entrepreneurship (the legitimacy of new ventures) and features a nascent entrepreneurial venture, the case may also be of interest to instructors teaching courses in entrepreneurship at both the graduate and undergraduate levels. After working through the case and assignment questions, students will be able to<ul><li>identify environmental issues affecting the viability of an entrepreneurial movement and evaluate their relative salience;</li><li>develop a repertoire of strategies and tactics for legitimating an entrepreneurial movement and future-proofing a social-media business; and</li><li>understand the benefits of collective action for protecting the long-term interests of the entrepreneurial actors who are behind the movement and the conditions necessary for collective action to occur.</li></ul>

• legitimacy
• social media
• entrepreneurship
• regulation