TikTok Co-Founder Quits ByteDance After Edtech Experiment Flop

One of TikTok’s original creators has left its Chinese parent company ByteDance Ltd. after Beijing’s year-long regulatory crackdown scuppered an expansion into gaming and education.

Louis Yang, a co-founder of Musical.ly -- the app acquired by ByteDance that morphed into TikTok -- quit his job at the Beijing-based firm last week, according to a person familiar with the matter. Yang was last in charge of ByteDance’s foray into educational gadgets, which was frustrated by Bejing’s clampdown on online tutoring services and apps last summer, said the person, asking not to be identified discussing private information.

Under his guidance, the company introduced its first hardware product in 2020, a desktop lamp with a built-in touchscreen and voice assistant to help children learn. Sales of the $100 gadget were sluggish and ByteDance has since shut down most of its online education business to comply with Beijing’s tighter regulations on the after-school tutoring industry, laying off hundreds of employees in the process.

ByteDance didn’t respond to a request for comment, while Yang didn’t respond to a LinkedIn message. Chinese tech blog Late Post first reported Yang’s departure.

Similar to fellow China tech leaders Alibaba Group Holding Ltd. and Tencent Holdings Ltd., ByteDance is streamlining operations to prioritize profitability ahead of aggressive expansion. Over the past year, the TikTok purveyor also offloaded a stock trading app and disbanded its venture investment arm. It shut down a game development studio acquired just three years ago, slashing more than a hundred jobs in a major setback to its ambitions of challenging Tencent in mobile gaming.

Yang co-created the lip-syncing app Musical.ly with his longtime friend Alex Zhu in 2014, quickly winning over teens in the US. ByteDance acquired Musical.ly for about $800 million in 2017 and merged it with its own short-video service TikTok, now the most downloaded app in the world. Zhu remains a key executive at ByteDance, after temporarily serving as TikTok’s head at one point.