How should digital start-ups pursue growth?

When Douyin launched in 2016, it had no customer base of its own.

The Chinese counterpart to TikTok started out as a ‘complementor’ whose products or services enhanced those of another company.

It relied on tech giants like WeChat and Weibo – platforms that are comparable to Facebook and Instagram in Europe – to distribute its short-form videos. And it faced a congested marketplace, with at least 40 short-form video competitors operating in China.

By 2018, that dynamic had shifted dramatically. In just two years the company had grown from a modest base of 750,000 users to 208 million, challenging its former partners for dominance.

Today it boasts 750 million users and continues to generate more revenue than TikTok for parent company ByteDance, which owns both firms.

So how did it achieve this meteoric rise?

How Douyin became a social media giant

Our research with colleagues from the University of Miami Herbert Business School and Wenzhou-Kean University revealed that it wasn’t just luck. It was a calculated and bold strategy that was timed to perfection.

Yet it was an extremely uncertain journey, punctuated by a paradox that we call the ‘complementor’s dilemma’.

At its core, the question is simple but profound. Should a complementor pursue growth, and in doing so risk the support of the very platforms it depends on for that growth?

Or should it temper its ambitions to remain in their good graces, but forever remain in the shadows?

This was the tension that Douyin had to navigate as it transformed itself from a peripheral player to a key company in the tech ecosystem.

And it was a tension that we sought to unpack as we studied Douyin’s growth between 2016 and 2018. In doing so, we developed insights for other digital domains such as AI.

Douyin's strategies for success

During that time, Douyin navigated the complementor’s dilemma multiple times, managing its dependency on Weibo and WeChat while pursuing its own ambitions. As a result, the social media platform’s meteoric rise was anything but linear.

Through an episodic analysis of the data, we detected four distinct strategies:

Resisting temptation: Douyin benefited from an initial wave of popularity, generated by the success of a viral video by a Chinese comedy star.

This created the temptation for Douyin to introduce its own community features, but it held back to avoid alienating partners. As a result, its trajectory mirrored that of its competitors.  

Strategic collaborations: Douyin collaborated with WeChat, whose own short-form video app was faltering, while weathering resistance it faced from Weibo.

This selective coupling allowed it to capture value in promising niches, without triggering outright retaliation from those larger players.

Calculated confrontation: By 2017, with a growing user base, Douyin picked its moment and introduced community features, signalling its intent to compete head-on with its larger competitors.

Ecosystem expansion: Douyin cemented its status as a focal actor by adding e-commerce through a relationship with the online shopping platform Taobao.

This final strategy marked a tipping point for Douyin. It was now a sovereign ecosystem, a self-reliant network that no longer had to rely the technical resources or user bases of larger competitors in order to succeed.

Douyin had moved from a tight coupling strategy, through a progressive decoupling, to eventually building its own momentum. This ensured that the broader environment remained favourable, despite the inevitable pushback from its larger rivals.

These strategies involved sophisticated manoeuvres in user scoping and product interfacing, from mimicking the features used by incumbents to reshaping technical connections across the ecosystem.

The result has been transformative for Douyin. However, it is very hard trick to pull off.

Digital ecosystems thrive on a dilemma of cooperation and competition. Platforms collaborate to grow the pie, yet compete fiercely to capture value.

With that in mind, Douyin’s story offers three critical lessons for emerging digital and AI start-ups hoping to navigate ecosystem politics:

1 Collaborate with powerful platforms

Douyin’s early growth shows how powerful collaboration can be when scaling under uncertainty.

Rather than building its own user network from scratch, Douyin deliberately leveraged Weibo and WeChat’s application programming interfaces (APIs), which allow different software apps to talk to each other and share data and functions through defined rules.

This allowed users to circulate short videos instantly across existing networks, dramatically accelerating adoption.

For managers, the lesson is to be pragmatic. When speed matters, it can be rational to build on dominant platforms.

The key is to treat these collaborations as a temporary growth lever, not a permanent dependency.

2 Read the ecosystem

Douyin’s growth was not just about breaking free from powerful platforms. It was about choosing where to lean in and where to push back.

As the ecosystem evolved, Douyin continued to rely on one dominant player while increasingly competing with another.

At the same time, it began to build on smaller players – creators, advertisers, and niche partners – whose success became tightly coupled to Douyin’s own.

The managerial lesson is that ecosystem is rarely all-or-nothing. Leaders should continuously track how power and value creation shift across their partners and rivals.

Growth often comes from stacking advantages; leveraging a dominant platform when that dependence remains tolerable, competing where differentiation is strongest, and amplifying smaller players who are willing to grow with you.

Digital strategy is all about know when and where each move makes sense.

3 Be prepared to compete with partners

Douyin’s trajectory also illustrates the uncomfortable reality of platform growth: successful complementors can end up competing with the very firms that helped them scale.

As Douyin strengthened its own social features and advertising capabilities, it increasingly encroached on WeChat and Weibo’s core domains.

Douyin is a unique case where this growth actually happened. In reality, complementors often fail to grow because the dominant players they rely on will not allow it.

Managers should therefore ask an early, difficult question: Are we willing and able to compete with our partners if success requires it?

Strategic planning should include scenarios where cooperation turns into rivalry, including defensive moves such as access restrictions.

Growth through ecosystems is powerful, but it demands readiness for eventual confrontation.

Overcoming the complementor's dilemma

For every Douyin, there are hundreds of complementors that fail because conditions are out of their control. A sudden shift in technology, a change in user behaviour, or a strategic move by a dominant platform can render the best made plans obsolete.

That explains why platform ecosystems rarely democratise power, instead consolidating it among a handful of giants.

What Douyin has achieved is remarkable and its transformation provides a blueprint for the next wave of platforms in AI, fintech, and the metaverse.

This blueprint is not just about scaling, it is about navigating the ecosystem’s politics.

Success requires more than innovation and ambition; it demands forward-thinking, diplomacy, and the courage to embrace risk.

As digital platforms become the beating heart of the global economy, the complementor’s dilemma will become ever more salient.

Those who master it will not just survive. Like Douyin, they will redefine the rules of the game.

• This article is based on the study 'The Complementor’s Dilemma: Navigating Growth Ambitions and the Dependency on Focal Actors in Platform Ecosystems', published in the journal Management Information Systems Quarterly: https://aisel.aisnet.org/misq/vol49/iss3/14/

Further reading:

How can digital platforms beat their rivals

Why imitating innovation can be a successful strategy

How can SMEs out-innovate bigger companies?

Joe Nandhakumar is Professor of Information Systems and part of the Gillmore Centre for Financial Technology. He teaches Digital Business Services on the WBS Master's portfolio.

Jochem Hummel is Associate Professor of Information Systems Management and teaches Digital Transformation on the MBA programme plus Digital Business Strategy on the MSc Management of Information Systems & Digital Innovation. He also lectures on Managing Strategy in the Digital Era on the Undergraduate programme.

Discover more about Strategy and Digital Innovation. Receive our Core Insights newsletter via email or LinkedIn.