TikTok Resilience and Gradient HVAC Innovation
TikTok recovers from a brief usage dip following ownership changes and privacy concerns, while competitor apps see temporary spikes. Meanwhile, Gradient launches Nexus software to integrate window heat pumps in multifamily housing, targeting legacy building upgrades.
TikTok's Resilience Amidst Operational and Privacy Headwinds
TikTok has largely recovered from a significant dip in U.S. daily active users following its ownership transition to American investors. Data from Similar Web indicates that usage dropped from a typical 92 million to between 86 and 88 million daily active users immediately after the change. This decline was not primarily driven by the ownership structure itself, but by a combination of user anxiety over updated privacy policies and a coincidental multi-day data center outage. The privacy policy update, which included disclosures regarding precise GPS location tracking and sensitive data collection under the California Consumer Privacy Act, triggered user backlash. Simultaneously, a winter storm-driven power outage caused functional glitches in search, likes, and the algorithm, leading users to suspect censorship. As these issues resolved, users returned, pushing daily active users back above 90 million. However, the platform is still below its peak of 100 million daily active users seen in late 2025, indicating a lingering softening in engagement.
Competitive Volatility in Short-Form Video
The temporary exodus from TikTok provided a brief window of growth for competitors such as UpScrolled and Skylight Social. UpScrolled peaked at 138,500 daily active users before dropping to 68,000, while Skylight Social reached 81,200 before settling at 56,300. Although Skylight Social reported 380,000 total sign-ups, the rapid decline in daily active users for both platforms suggests that the user base was largely opportunistic rather than loyal. This highlights the fragility of user retention in the short-form video sector, where trust and platform stability are paramount. The incident underscores that even market leaders are vulnerable to operational disruptions and perceived privacy risks, creating temporary opportunities for challengers to capture market share.
Gradient's Strategic Pivot in Smart HVAC
In the clean tech sector, Gradient is expanding its window heat pump business by introducing Nexus software. This innovation allows individual window units in multifamily buildings to be linked into a centralized system, offering a retrofit solution for older structures that lack modern HVAC infrastructure. By targeting legacy buildings, public housing, and university dorms, Gradient addresses a critical need for comfortable, energy-efficient climate control in properties that are too old for traditional central system upgrades. The software layer adds significant value by enabling smarter management and integration, moving beyond simple hardware sales to a service-oriented model. This strategy positions Gradient to capture a substantial share of the retrofit market, particularly in dense urban areas where space constraints limit traditional HVAC options.
Key insights
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User churn in major platforms is often driven by perceived privacy risks and operational instability rather than structural changes like ownership. The TikTok case shows that transparency in data collection and system reliability are critical for retaining users.
Impact: Companies must prioritize clear communication around data practices and robust infrastructure to prevent avoidable user loss during periods of change.
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Competitors in saturated markets can experience rapid, albeit temporary, growth when a dominant player faces operational or reputational issues. The spike in UpScrolled and Skylight Social users demonstrates the low barrier to switching in digital entertainment.
Impact: Challengers should monitor market leader vulnerabilities to capitalize on short-term opportunities, but must focus on long-term value to retain users.
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Operational outages can be misinterpreted as strategic shifts, such as censorship, leading to significant user distrust. The TikTok outage, caused by a winter storm, was perceived as content suppression, highlighting the need for proactive crisis communication.
Impact: Businesses must have clear communication protocols for technical failures to prevent misinformation from damaging brand trust.
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Retrofitting older buildings with modern HVAC solutions is a growing market opportunity, particularly for multifamily and public housing. Gradient's approach of using window units with integrated software addresses the specific needs of legacy infrastructure.
Impact: Companies in the energy sector can find significant growth in the retrofit market by offering scalable, non-invasive solutions for older properties.
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Software integration is key to differentiating hardware products in the smart building space. Gradient's Nexus software transforms standalone heat pumps into a connected system, adding value through centralized management and data insights.
Impact: Hardware manufacturers should invest in software layers to create ecosystem lock-in and enhance customer value beyond the physical product.
Action items
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Conduct a comprehensive audit of privacy policies to ensure clarity and transparency, especially regarding data collection and usage. Proactively communicate changes to users to mitigate backlash and maintain trust.
Impact: Reduces the risk of user churn due to privacy concerns and strengthens brand loyalty during periods of regulatory or operational change.
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Develop robust crisis communication plans for technical outages, including clear explanations of causes and timelines for resolution. Monitor social media for misinterpretations of technical issues and address them promptly.
Impact: Prevents operational failures from being misread as strategic shifts, preserving user trust and minimizing long-term reputational damage.
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Monitor market leader vulnerabilities and prepare marketing campaigns to capture users who may switch during periods of instability. Focus on highlighting reliability and user-centric features to convert opportunistic users into loyal customers.
Impact: Allows competitors to capitalize on short-term market disruptions and build a sustainable user base by offering a stable alternative.
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Identify opportunities in the retrofit market for older buildings by developing non-invasive, scalable HVAC solutions. Partner with public housing authorities and universities to pilot and scale these solutions in high-volume settings.
Impact: Opens a new revenue stream in the clean tech sector by addressing the specific needs of legacy infrastructure, which is a large and underserved market.
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Invest in software integration for hardware products to create a connected ecosystem. Develop features that allow for centralized management, data analytics, and remote monitoring to enhance customer value and stickiness.
Impact: Differentiates the product in a competitive market and creates recurring revenue opportunities through software services and data insights.
Quotes
“The decline, though brief, benefited competing video apps like UpScrolled and Skylight Social, which saw rapid user adoption as some looked for TikTok alternatives.”
“The startup is mostly targeting old buildings that need HVAC upgrades.”
“The startup shared with TechCrunch exclusive details about the new Nexus software and service.”