This video is sponsored by Skillshare. Mr Ponton, I believe you have a filter
turned on in the video settings. You might want to, uh.. Weâre trying to- Can you hear me Judge? Thatâs, Iâm here live, thatâs not- Iâm not a cat. Zoom is one of the largest tech companies
in the world â dominating competition from tech giants like Microsoft and
Google â and worth an estimated $139 billion. And while the company grew rapidly amid COVID-19,
itâs far from being an overnight success. In fact, it took the dreams of a love-struck
teen to leaving a six-figure salary and then nearly a decade for Zoom to finally take off. Before we get into the story, we would like to
quickly thank our sponsor, Skillshare: an online learning platform with thousands of inspiring
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get a one month free trial of Skillshare. On February 20, 1970, Eric Yuan was born
in Tai'an, China, to a middle-class family. From an early age, Eric set out on
a path different from his parents, who were both mining engineers. In fourth grade, he started a business
where he would collect construction scraps and recycle them for cash. When he discovered that a facility only needed
metal, he decided to burn the extra scraps in a chicken shack behind his neighborâs house. Soon after, the shack caught on fire and
firefighters were called over to put it out. âMy parents were really upset,â Eric recalled. From then on, Eric pursued
a more conventional path. After high school, he moved to Qingdao and
studied applied mathematics at the prestigious Shandong University of Science and Technology. During Ericâs first year of
college, he was miserable. His girlfriend, Sherry, lived in another city, and
he had to take 10-hour train rides to visit her. The experience often involved switching trains,
being squeezed up against other passengers, not being able to sleep from the discomfort
and an unpleasant smell, and having to stand when there were no more seats available. Because of the distance, Eric could only see
Sherry twice a year and often daydreamed about finding a different way to spend time with her. âI thought it would be fantastic if in the
future there was a device where I could just click a button and see and talk to her.â After graduating with an undergraduate
degree in applied mathematics, Eric pursued a masterâs degree in engineering from
China University of Mining and Technology. When he completed the program, he moved
to Beijing for work and was sent to Japan for a four-month training program. While in Japan, Eric had the opportunity to
hear Microsoft co-founder, Bill Gates, deliver an inspiring speech about the internet. At the time, most people in China
hadnât even heard about the internet. Realizing that it would change the world and would
likely take five to 10 years to take off in China, Eric decided to try and find work in the U.S. When Eric returned to China, he applied for a U.S. visa. During the process, a customs official asked
him for an English version of his business card. While Eric handed over a card that listed him
as a consultant, the official misunderstood his title as being a part-time contractor
and accused Eric of lying on his application. Eric was devastated. Over the next two years, he applied eight
more times and was rejected each time. In spite of all the rejections, Eric
refused to give up on his dream of joining the internet revolution in the U.S. During his ninth attempt to apply for a U.S. visa, he told himself, âIâll do all I can until
they tell me that I can never come back anymore. Otherwise, Iâm not going to stop.â Fortunately for Eric, his persistence paid off. After his ninth attempt,
he was finally given a U.S. visa. While Eric still didnât know how to speak
English, he managed to land a job as a software engineer in Silicon Valley. A Chinese businessman that he knew named
Min Zhu had just launched an online conferencing startup called Webex and was
recruiting engineers from all over the world. At the time, the company was hatching
up a bold plan to go up against the richest man in the world. The same man that inspired
Eric to move to the U.S. The co-founder of Microsoft, Bill Gates. Min and his co-founder, Subrah Iyar, were
building a product called Webex Meeting Center, a software that would allow
multiple users to join a virtual meeting. Before they could launch, Microsoft came out
with a similar service called NetMeeting. While it was free, users found it difficult
to use and the connection unstable. It was also only available on Windows computers. To compete with NetMeeting, Min and Subrah
strived to make Webex Meeting Center easier to use, work on Windows, Mac, and Solaris
computers, and have a more reliable connection. But unlike Microsoft, Min and Subrah would
charge customers for additional features. Venture capitalists doubted that Min
and Subrah could succeed â leading to financial troubles for the company. âIt was hard to raise a lot of venture capital
money when you would walk into a room and say, âSo there is a piece of software that Microsoft puts
on every computer for free, and we are essentially going to go into that market and compete with
them with an on-demand service,â Subrah recalled. To keep WebEx running, Min and Subrah had
to hire out half of its engineering team to consulting projects to bring in revenue. Meanwhile, Eric worked around the clock to
build WebEx Meeting Center and managed to learn how to speak English from his colleagues. But in spite of his efforts, he found himself
being repeatedly overlooked by others. "I saw a tremendous amount of unconscious
bias against Eric because he didn't look the part, he didn't sound the part,"
explained David Knight, a Webex employee. "We put so much stock in how people communicate. We ascribe their eloquence
to be their intelligence." Since Eric couldnât control how
others viewed him, he decided to focus on what he could manage: his work. "I learned two things from my father:
keep working hard, stay humble, and someday you'll be OK," Eric recalled. Eventually, everyone at Webex knew of
Eric because of his work ethic, humble manner, and intense curiosity about
all aspects of the startupâs business. And over time, Eric was promoted to
engineer manager, senior engineer manager, director, and then senior director. Two years later, Webex finally
launched Webex Meeting Center and offered a free and a paid version. The free version was supported by
advertisements and allowed up to six users to join a virtual meeting. Users could text chat and share their desktop
screens to show a website, presentation, document, or software application. They could also dial into a telephone
conference call, but each user would be charged 12 cents per minute. The paid tier offered the same features
but gave companies a white label version that allowed them to set up their own
branding for $99 a month per user. In addition, Webex managed to solve the
issue that competitors faced with unreliable connections by developing the MediaTone
Network: the first private global network designed to preserve high-speed connections
for sending data, audio, and video. By the end of its first year of launching,
Webex enabled audio and video-conferencing. And within the following year, notable
tech magazines ranked Webex Meeting Center as an Editorâs Choice and highlighted
that when compared to competitors, it was the most expensive but easiest to use. Webexâs revenue then jumped from $2.5
million to $25 million within a year. Later, the rate of business travel
in America dropped due to the tragic events at the World Trade Centre, the
recession from the dot-com bubble burst, the SARS epidemic, and the war in Iraq. Companies that would typically fly out
their employees for meetings turned to services that enabled virtual meetings. While Webex managed to scale and meet the
increasing demand, the company decided to go public in hopes of raising enough money to
ensure it can continue to operate smoothly. Within a month, Webexâs stock price
jumped from $14 to $58 per share. Unbeknownst to Eric, Webexâs success would
lead to him being repeatedly overlooked yet again â igniting a fire within him to take
on the worldâs biggest tech companies alone. After Webexâs IPO, the company overtook
Microsoft and dominated the market â leading to attractive acquisition offers. At the time,Webex owned 65% of the
market while Microsoft owned 19%. IBM approached Webex, but Webex turned them down
to accept Ciscoâs offer for $3.2 billion in cash. Cisco hoped to diversify its core business
of building switches and routers that control Internet data traffic and expand into the
small and mid-sized business market, which was the majority of Webexâs customers. After the announcement was made, some
WebEx employees took their earnings from the acquisition and split. Eric decided to stay. By then, he was Webexâs VP of engineering,
had contributed to revenue growth from $0 to $380 million, and was even more
devoted to the companyâs products. Cisco recognized his loyalty and talent and
made him their corporate VP of engineering. Still, Eric found himself being
repeatedly overlooked yet again. âAlmost immediately, Cisco started to
dismiss everything that we did," explained Matt Sheppard, a former Webex employee. "Eric was dismissed, along with
the other leadership at WebEx, as being kind of second rate." While it was obvious that Webex was now
a cog in one of the worldâs largest tech companies, Eric decided to yet again
focus on what he could manage: his work. At first, Eric set a goal of helping
to grow Webexâs revenue to $1 billion. But after a few years, he
reconsidered the possibilities. Whenever he was given the opportunity to
meet with customers, he discovered they no longer enjoyed using Webex Meeting Center
or other video-conferencing services. They complained about problems that Webex
had not encountered before the mobile evolution: time-consuming installation
processes, mobile connectivity issues, video and audio lag, and a lack of modern
features, such as mobile screen-sharing. Each time users logged onto a conference,
the system would slow down since it had to identify which version of the product
to run on â iPhone, Android, PC, or Mac. If there were several people on the
line, the connection would strain and lead to choppy audio and video. Eric realized that the only way to address
these problems was to build something from scratch since the core code of Webex
Meeting Center was written 12 years ago. While it would ensure Ciscoâs
video-conferencing services adapted to the mobile evolution, Cisco failed to see the
opportunities and offered Eric zero support. They were more concerned about
building their own social network â an enterprise version of Facebook. Eric was deeply disappointed and felt
like he was letting his customers down. âEvery day, when I woke up, I was not happy. I didnât even want to go to the office to work.â After a year of pleading with his bosses to
let him rebuild Webex to no avail, Eric told his wife, Sherry, that he wanted to leave
Cisco and build something better on his own. Something that could have allowed him to talk
with and see her more than twice a year when they were dating all those years ago in college. Sherry was skeptical, but Eric managed to
convince her after admitting that while he knew it would be a long and difficult
journey, if he didnât try, heâll regret it. âI was already 41-years-old at that time. I told her there's no other time. Soon, I may not have enough energy.â With Sherryâs support, Eric felt more
ready than ever to pursue his plans. But two months after telling his family, he found
himself dealing with more than he anticipated. His beloved father suddenly passed away. In spite of the devastating news, Eric
decided to continue to pursue his plans with his fatherâs advice in mind: keep working
hard, stay humble, and someday you'll be OK. After walking away from his six-figure
salary at Cisco, he picked up the phone and cold called venture capitalists to pitch
his idea of launching a user-friendly and mobile-ready video-conferencing service. VCs told Eric his idea was terrible. The video-conferencing market was already crowded. Webex was still leading in market share, Microsoft
had just bought Skype, Google had just launched Hangouts for free, and Apple just launched
FaceTime that was built-in to their devices. There were also multiple startups trying
to enter the market, such as BlueJeans. Though, some investors did
think Ericâs idea was viable. They just didnât believe an engineer
could succeed in selling a product. Still, Eric remained undeterred and changed
his computer screensaver to âIt canât be doneâ to motivate himself to keep trying. After countless rejections, Eric decided
to try and raise money from people he knew instead of cold calling VCs. It was a decision that he was initially
hesitant to make since part of him feared that he would let them down. Fortunately, some of Ericâs friends were
very supportive and offered to invest. One even arranged for him to meet with
a former Cisco executive who had just become an angel investor: Dan Scheinman. At the time, most VC firms were competing against
each other to invest in young graduates who came from a small list of universities and companies. Being an angel investor who was investing
with his own money, Dan knew he couldnât outbid these firms and decided to invest in
underserved niches in the market instead. And while he didn't know what Eric was
planning to build, he was open to hearing his idea and agreed to meet in-person. âOn my drive to meet him, I did
the fastest reference check ever. I was hearing things like, âHeâs the greatest
person I've ever worked for, the greatest technical business mind ever.â By the
time I got there, I was already convinced. I just wanted to be involved. So I actually wrote out a
check and I handed it to him. And he said, âFor both of our sakes,
let me show you the presentation.â When Dan learned why and how Eric planned
on building a user-friendly and mobile-ready video-conferencing service, he was even more
convinced and introduced Eric to his cousin who was a venture capitalist: Jim Scheinman. Afterward, Eric managed to
raise a total of $3 million. The capital came from Dan, Jim, Webex
co-founder Subrah Iyar, venture capitalists Matt Ocko, Bill Tai, Amino Capital and
TSVC â as well as a group of friends. While it was a huge step forward, Eric now
felt the pressure of not letting several people down â especially his friends. âI sent them all an email. I said, first of all, I will do all that I can to
work as hard as I can to give you a 10X return. I told my friends, if the company
doesn't do well, I will return the money and make sure you will all be okay.â From a rundown office in Santa Clara,
California, Eric started working away alongside 40 engineers that worked with him at Webex
and then hired more engineers in China. After one year, Eric finally launched his company,
under the name Zoom, and released its first product: a free HD video-conferencing software
that allowed up to 15 participants to join a call â more than any other existing service. Users could login with their Facebook
or Google accounts and invite others to join a call through sharing a link. Invitees could then join with a
single click since downloading the app and signing up werenât required. The product worked on Windows, Mac, and
Apple devices like iPads and iPhones. It also worked over wired and Wi-Fi connections,
and cellular 3G and 4G networks â even when the connection was weak or unstable. On the day of Zoomâs release, Wall Street
Journal columnist, Walter Mossberg, compared Zoom to Skype and Google Hangouts
and noted its video and audio quality was much better and didnât stutter or freeze. Other reviewers noted that what really set
Zoom apart was how well it worked on mobile. At the time, video-conferencing companies
like Polycom were more focused on building hardware solutions â as opposed to software
solutions like Zoom â since they believed better hardware meant better image and audio quality. Plus, the health care and education sectors
recognized its value and were driving the demand. As a result, mobile remained a vulnerability
for many video-conferencing companies. Three months after Zoomâs release, Eric managed
to sign up Zoomâs first major customer: Stanford Universityâs continuing adult education program. The university was then competing with
popular online courses like Coursera and wanted to quickly establish itself
with its own distance learning option. While the deal gave Eric confidence in
what he and his team had built, he would personally email every customer who canceled
their service and ask for their feedback. One customer didnât believe it was Eric and
accused him of sending an auto-generated email impersonating the CEO and barked
that Zoom was a dishonest company. Eric quickly replied that he did write the email,
but the customer still refused to believe him. Eric then offered to meet them
on Zoom to prove he wasnât lying. The customer never took Eric up
on his offer but stopped accusing Zoom of being a dishonest company. One year later, Zoom was made available on
Android and added subscription plans that had no restrictions on meeting durations: business
or enterprise for $9.99 per month per host and education for 99¢ per month per host. In addition, Zoom rolled out new features,
including allowing up to 100 participants to join a call, global toll-free phone
dialing, MP4 recording and playback, and mobile screen-screen sharing. Zoom became the first company in the world
to offer mobile-screen sharing through the cloud for smartphones and tablets. TechCrunch writer, Darrell Etherington, was so
impressed with Zoom that he wrote the company had the potential to disrupt the online meeting space. Competitors felt the same. Former GoToMeeting employee, Jim Mercer,
admitted that when he and a colleague tried Zoom, they were taken back by being able to
join a call with more than a dozen people. âWhat is this voodoo?â âHow are they
doing it?â they asked themselves. In spite of the rave reviews, Zoom was only
downloaded an estimated 60,000 times and had less than 20,000 active users since its first release. Meanwhile, the company started to run out of
money from hiring a large team of engineers. Eric tried to raise more money from VCs,
but neither of them were interested. Sixty thousand downloads in total was
considered nothing, since apps that became a hit in those days were getting
downloaded around 100,000 times a day. Eric was left with no choice but to ask his early
investors if theyâd consider investing again. Fortunately some agreed, including Bill Tai. Bill then approached other VCs, including Yahoo
co-founder, Jerry Yang, and Qualcomm Ventures. All of them turned him down. âThe market is crowded and this company has
nothing going on,â they explained to Bill. Still, Bill remained persistent and managed
to convince Jerry and Qualcomm to reconsider. Zoom then raised a total of $6 million
and later an additional $6.5 million from Horizon Ventures and existing investors. Soon after, Zoom started getting viral
adoption through its freemium plan, which only restricted meetings to 40 minutes. By the end of the year, Zoomâs number of
meeting participants reached 1 million. And while it was a major milestone,
Eric knew there was no slowing down. âI have three kids and I love them, but I could
not spend enough time with them ⌠I told my wife I was going to have to work even harder, but
promised I would only travel twice a year at most because the technology would be better.â One year later, Zoomâs number of meeting
participants reached 10 million and then increased to 40 million the year after. Zoomâs continued growth was largely from
word of mouth since it allocated most of its resources towards development. But within that same year, Zoom realized it
was time to scale sales and marketing and raise more money to support its efforts. Fortunately, the company managed to
raise a total of $45.5 million from Dr. Patrick Soon-Shiong, Emergence
Capital, and existing investors. Two years later, Sequoia, one of the top venture
capital firms in the world, approached Eric. They were looking to invest in
a video-conferencing product but couldnât find one that customers loved. That changed when the firmâs portfolio
clients kept raving about Zoom. Eric wasnât looking to raise more money
but accepted Sequoiaâs offer of $100 million â which valued Zoom at $1 billion
and placed the company in the unicorn club. By then, Zoomâs revenue was $60.8 million and
skyrocketed to $151.5 million the year after. Eric then felt prepared to take Zoom public
but faced a major problem: having to warn investors that the companyâs link to China
could be seen as a security and privacy risk. Fortunately, Zoomâs IPO surpassed
expectations and was marked as one of the yearâs most successful debuts â even above
splashier tech companies like Lyft and Uber. Overnight, Eric became a billionaire
and the pressure of letting down his family, friends, and investors lifted. But soon after, Eric discovered that he
would have to make even more sacrifices. Otherwise, millions of livelihoods were at stake. In the early days of Zoomâs growth, Eric
told his wife, Sherry, that he would have to work even harder but promised he
would only travel twice a year at most. Several years later, he would have never
imagined that he would deliver on that promise for reasons beyond Zoomâs technology. When COVID-19 spread around the world and
forced people to stay home, millions needed a new way to stay in touch with friends
and family, and schools, universities, and workplaces had to shift online. Many ended up using Zoom since it was
free, easy-to-use, worked smoothly on a wide variety of devices, and required
no membership or account to join a call. Soon after, the then nine-year-old platform
quickly grew and became the most downloaded app globally across the App Store and
Google Play, breaking a record of 200 million daily participants â a 20-fold
increase compared to the year before. Along with catch-ups, classes, and
meetings, people were using Zoom to host parties, romantic dates, and even weddings. Meanwhile, Eric found himself further away
from spending time with family and even more consumed with Zoom since it was no longer
just a video-conferencing company , it was suddenly an infrastructure company servicing
a broader group of institutions and people. And as a result, a growing number of
problems arose involving privacy, security, online moderating, and service capacity. When Zoom took off, security researchers and
privacy advocates discovered bugs in the software that would let attackers put malware on a
computer or hijack the webcam and microphone. They also discovered that Zoomâs privacy
policy let the company share data from video and text chats with ad-tracking companies. On top of those problems, bored trolls and
hackers were taking over public Zoom meetings and displaying graphic content or shouting racist
comments â a move that was possible since public Zoom meetings didnât require passwords to join. Meanwhile, Zoom began to experience
service outages from surging usage. Eric wasted no time in tackling these
problems, sacrificing sleep and reminding himself not to let the world down. He and his team were quick to amend Zoomâs
privacy policy, patch bugs, enable default meeting passwords, add more data centers,
and increase cloud storage capacity. And while the process resulted in the
most stressful weeks of Ericâs life, he called it a blessing in disguise
and remained positive â even when U.S. House Speaker, Nancy Pelosi, wrongly
described Zoom as a âChinese entityâ in the context of security and privacy risks. "If the world misunderstands us, then
I don't blame others, it's our problem. We are a very proud American company. The company is a public Nasdaq
company, headquartered in San Jose. I'm a Chinese American. I truly believe as long as you do the right
thing, sooner or later they will know it. Just be patient." In spite of the scrutiny and misunderstandings,
Zoom became the âKleenexâ of video-calling and remains known as the easiest, most affordable
and advanced service of its kind â now allowing up to 1000 participants to join a call. And while Zoomâs competitors are also
growing at impressive rates, Wall Street Analysts highlighted that the company still
has advantages above Microsoft and Google. They also predicted that it will remain
relevant in a post-pandemic world as more companies replace meeting rooms with software. Today, Eric, one of a handful of Chinese
Americans to lead a major Silicon Valley company, is one of the wealthiest men in the world. And Zoom is worth an estimated $139 billion. Eric admits that while he knew leaving Cisco to
build Zoom was a huge risk and he wasnât sure if he could pull it off, he understood that in
Silicon Valley, everything starts with some risk. âIf you donât take some risk, thereâs no reward. You canât get a better product
if you just think about it. You have to start somewhere.â As for the future of Zoom, Eric recently revealed
heâs looking to add features and tools that allows users to experience sensations from others â such
as smell and touch â and instantly translate calls and automatically generate a meeting summary. This is the story of how a love-struck teen
came up with a billion-dollar idea and risked everything to pursue it when he was 41-years-old. For more inspiring stories and advice
from today's most successful leaders, don't forget to subscribe to our channel!
skype dropped the ball so much that zoom was able to make billions. lmao microsoft failed so hard.
They should make a movie out of this. It would be an awesome chick flick and add in some AMAF sex scenes.
Look what you've done. Now they're gonna accuse you of being a Chinese spy
Pretty interesting watch. Walks you through his early life, career, then digs more into his Zoom venture (fund raising, operational, and scale / growing pains).
The most boring narration of all time. Felt like he was speaking at 0.125 speed...
this guy is too good for the US
139 billion market cap for video conferencing software O_O
I thought he was already head of WebEX at Cisco or something before he started Zoom.