Zoom company story: How Eric Yuan defeated Skype

this video was brought to you by it's like a platform for startups and small businesses to create professional investor decks and sales presentations get one 3-month by signing up and sliding calm /youtube these are strange times and if you are in your house which you should be chances are you've used some sort of video call with family friends or even to school and most likely it's been zoom the videoconference software has taken the world by storm but in the presence of giants like Microsoft and Skype and teams and Google with its hangouts why is everybody using zoom to find the answer we must go back a few years and yes spoiler alert this is forensics so not all of it is glitter and glamour all right so let's talk about one of the most popular apps right now zoom and how it became successful the origins if you search google for the keywords zoom and successful you might be surprised to see articles preysing the software that date back as far as well when it launched back in 2013 the reason for this praise is mostly due to this man meets zooms CEO Eric yan in the late 80s he migrated from China to the US to work in tech he had the vision that one day technology would allow portable easy to use video calls and this became his obsession as an engineer he landed a job in a company called WebEx communications from the start yuan became a key player in developing their video conference software WebEx became one of the first options for video calls in the market and at first it seemed geared for success so much so that Cisco acquired WebEx for 3.2 billion dollars in 2007 yuan doubled down on his efforts to improve the software at the same time climbing up the ranks reaching the rank of VP of engineering under his guidance WebEx grew to more than 750 engineers and had annual revenues of more than 800 million dollars Linux wasn't only one of the first but also the most complete video conferencing tools so it was a hit at the time but it wasn't perfect connectivity was unstable audio and video would lag and the installation process was frustrating for IT departments remember this WebEx managed to survive because there was very little competition in the market but things wouldn't remain the same for long yuan was aware of web-accessible upper ranks didn't go along with them and after dealing with a lot of resistance he ended up leaving the company but his time in WebEx taught him very valuable lessons check out what he said in an interview before I left Cisco I spent a lot of time talking with WebEx customers and every time when I talked to the WebEx customer after the meeting was over I felt very very embarrassed because I did not see a single happy customer and I try to understand why is that and I summarized all the problems all those web excuse to MERS they shared with me this gave you on a North customers had to be happy so he took all these new problems and aimed to create a videoconference software to solve them was this a bit crazy at that stage well others believed in his idea in an interview with Forbes yuan recalls that close to 40 engineers left with him to pursue that goal investors believed in it too in 2011 he raised three million dollars to start his idea and within two years he had created the first zoom iteration and here we have to highlight a key element in his strategy he created zoom with a video first mentality other companies like Skype had created audio first and then adjusted the video which proved to be costly with zoom beta testers were very happy with the product and after fine-tuning some issues it finally launched in January 2013 from the start zoom was massively successful by may soon claim they had reached 1 million participants with the launch they clinched another round of funding this time for 10 million dollars with a valuation of around 25 million dollars and by late 2013 another round of funding secured them 6 million dollars more and doubled the company's valuation by 2014 zoom had claimed 10 million users but why was this so good zooms recipe for success zoom was great because it provided a lot in exchange for very little tech magazines like scene it highlighted its three in one package HD video conferencing mobility and web meetings all for $9.99 which was cheaper than other options which only provided one or two of these services zoom was as compatible as it possibly could with browsers like Firefox Chrome and Safari it also detected devices instantly so there was no need to have versions for Mac or PC and it's data use was low enough that it worked well even in slow or weak connections plus zoom had free features that other competitors like Skype charged for at the time like group video calls Microsoft would eventually learn from their mistakes and make them free on skype but zoom didn't tend only to the users remember how WebEx was particularly hard for IT departments well zoom wasn't cloud meetings meant intrusive installations weren't as frequent and when they were needed the process was pretty easy then there was this number a hundred and fifty milliseconds that's all it takes for a conversation to feel unnatural so chief product officer Odette gal has stated that they worked hard for their entire platform to ensure that those 150 milliseconds are never surpassed but in the end all of this is a reflection of what mattered to young people he has insisted that eye contact is essential for success and for happiness so the company has worked hard to make this happen as easily as possible it seemed like there was no stopping them is that a unicorn what do most if not all tech companies want well to be profitable but very very few companies are able to get there and we've said zoom seemed unstoppable all cylinders were firing and people loved the app and the customer service CEO yuan would even reply to tweets from unhappy customers this is a quote from a former Cisco customer who ended up switching to zoom zoom understands what the customer wants and it's technology and customer service satisfy them better than competitors do so investments came easy from 2014 to 2016 funding increased and so did the company's valuation until January 2017 in their series defunding zoom received 100 million dollars and finally reached a 1 billion dollar valuation and oddly enough yuan has said that they weren't even looking for funding Sequoia one of the main investors just knocked on their door who wouldn't like that Sequoia so this means that zoom was now a unicorn a company valued at 1 billion dollars or more but a very different one at that contrary to most unicorns zoom was making profits year after year so with the 1 billion dollar valuation in 2017 solid growth in the next two years it was time for the company to go public in April 2019 when it went public shares went up 72 percent from the original $36 value that day zoom was valued at 16 billion dollars not bad at all success in turbulent times have you noticed one thing about this episode zooms success happened before 2020 it did a lot right beforehand so it should come as no surprise that zoom was a hit when people were sent to work from home but it still was a surprise why because it seemed as though everything was already taken besides zoom there was Microsoft Google WebEx GoToMeeting just to name a few but none of them provided a complete package like zoom does zoom even gave users free 40-minute meetings for up to 100 people and it works in slow saturated internet and of course zoom couldn't have predicted what happened in 2020 no one could since the entire world was taken by surprise by the situation searches for webinars video conferencing tools and VPN spiked in a matter of days if not hours so all these years working on making video calls easy came in handy at the right time people needed a tool that was ready for the job and amidst all of them there was one that stood out is the future bright this is company forensics right you know the type of companies that we talk about in this show no one knows what will happen especially right now but experts have highlighted some possible areas of risk for the company and one is its Stark even if use has spiked its share value is still volatile in late March stock traded at a value 36 times higher than what the company had estimated for 2021 because of this very same spike in use but at the same time since companies will definitely look to cut costs and increase employee efficiency zoom continues to be a tempting offer in the market the key for them will leader turn all those sudden free users into paying loyal customers and it's not like zoom is free of conflict as this crisis has evolved reports have surged that the app is facing security issues not a good thing when many people are diving right into zoom to have conferences including Prime Minister Boris Johnson the bad news well this isn't new security issues have surfaced in the past in 2018 a security vulnerability was released and it was found that users were prone to message processing zoom worked on the issue but it didn't stop there 2019 so Apple create an update to remove the zooom server from its devices after it was found that the server rendered mac computers vulnerable even after uninstalling it again zoom created patches and updates security and again it didn't stop there in the midst of the most recent crisis reports have come up with phishing scams impersonating zoom clout meetings to retrieve information zoom is a great example of a company that did three things right it worked hard at solving a big problem they aimed for a problem that affected many people and all the while focused on the customer but zoom might just be a victim of its own success we don't know yet does that mean that you're watching the first real-time episode of forensics as it evolves no I really don't think so I think zoom is going to keep growing like crazy what I also think is that you might like a new slide paint t-shirt which you can get by being one of the first ten people to leave a comment in this video if you are on lockdown you can also spend that time watching the stories we've published at over twenty failed companies that we've broken down in this company forensic series including we work Toys R Us and forever 21 we'll start doing t-shirt giveaways in the next few videos so you want to hit that subscribe button to be the first one to watch see you next week

Channel: Slidebean

Views: 571,265

Rating: 4.8816881 out of 5

Keywords: Zoom Company Story: How Eric Yuan defeated Skype, Zoom Company, zoom story, Eric Yuan, zoom stock price, zoom company history, video conferencing, zoom video communications, video conferencing apps, eric yuan zoom, eric yuan zoom story, Caya slidebean, Slidebean, company forensics, startup forensics, Slidebean CEO, startups, startup company, zoom vs skype, zoom vs google hangouts, zoom vs google meet, zoom vs uberconference, startup entrepreneurs, business news

Id: p9YUjzmiiSk

Length: 11min 5sec (665 seconds)

Published: Thu Apr 09 2020

Reddit Comments

[u/RankBattles]

This is amazing, it's so good I'm surprised you needed to post the video in Reddit , jokes 🤪. I see no flaws , it's well edited and well informed about zoom as this is something I came across a year ago. Is one person editing the videos?

[u/Savage-Legends]

Nice vid. Check out mine https://www.youtube.com/channel/UCWr3cgOGd0srCQ4Lr8X2tPg