Zoom - Why They're Successful

[Music] online video communication no matter how many times I see it I always feel like I'm living in the future when I was younger every movie or TV show trying to depict the future it would have flying cars and video communication throughout my lifetime I've been able to watch the technology get better in the industry grow there are so many providers of it now almost every company that you would expect to have their own service has their own service Google Apple Microsoft Cisco Facebook that is some tough competition not to mention all the others that aren't attached to a larger company notably zoom in one of the most competitive industries out there they've been able to not only break into it but actually rise toward the top in almost any article I could find that ranks these services zoom is always included and often high up on the list so I'm gonna take a look at what makes them special how this relatively new startup company has risen to become a leader in their industry the first reason I have for their success is that growing market think of it this way as long as there's new customers out there people are businesses using video communications for the first time you don't have to wrestle them away from a competitor you just have to attract them in the first place which is much easier there's plenty of fish swimming around in the ocean they just need to be effective in baiting them in they entered this market at a great time it was right when the demand for these services was accelerating and everyone was starting to respond to it the company was founded in April of 2011 oddly enough initially called SAS be good call in ditching that name in my opinion and thankfully they soon changed it to zoom communications and then ultimately to zoom video communications but look at that timing it was less than a year after Apple launched their FaceTime app in less than one month before Microsoft announced that they were willing to pay eight point five billion dollars for Skype it has been growing consistently over that last decade specifically during this whole social distancing thing in 2020 people need to stay away from each other but they still need to communicate so this is the perfect answer I'm guessing that many people watching this for use dirt even heard of zoom during that time much like what happened before the market grew and they were able to capture part of it look at this their number of customers that have ten or more employees has more than tripled during the three-month period ending April 30th 2020 as a result that their revenue saw a massive jump along with their income probably the most noticeable effect would be their stock price as of June 2020 it has grown from $68 to well over 200 it is very unclear whether or not it will stay at those heights or fall back down to earth but the point is that over the last decades specifically in 2020 the market has grown and that's been good for zoom my second reason for their success is simply having a good leader his name is Eric yuan zoom comes from his vision he was the one who founded the company and he's been the CEO ever since I would say he was maybe the perfect person to start this type of business he's originally from China that's where he went to college to study math and computer science he claims that he got the start of the idea for zoom when he was in college in the 1980s to visit his girlfriend who is now his wife he was forced to take a ten hour train ride understandably he hated it and spent some of that time thinking that there must be a better way to do this the thoughts stayed in the back of his mind for a while then in the 1990s the Internet was emerging and many people including Eric you wann believed that it had some major potential he attended the speech from Bill Gates that got him all amped up and he decided that he needed to come to America Silicon Valley and become part of it a famous example of his determination is when he applied for an American visa at first he was denied this happened nine times over the next year and a half before it was finally granted and he just kept applying and did not accept no for an answer which i think is a good quality for a leader despite not really speaking English his skills were strong enough to land a job as a software developer at a very small company at the time called WebEx he was one of their first dozen employees but they soon became known for their communication services the company grew so large that in 2007 they were acquired by Cisco for over three billion dollars that happened Eric yuan became their vice president of engineering where he was in charge of the 800 person department that dealt with this communication software it sounds like he was living out his dream here but the issue was he didn't like their service I don't know the technical details behind it but if he had a slow connection or too many people were on there it wouldn't work right and he just thought that it could be so much better their customers were complaining and I don't know if WebEx or Cisco cared as much as they should have because their attention always seemed to be elsewhere I think Eric felt ignored and finally he said that he had enough in a very risky career move he quit his high-paying executive position to start his own competing company when he was forming it he thought back to those train rides and thought back to the complaints that he was hearing from the WebEx customers and he set out to form a service with the customer in mind that's my next reason zoom has always been very customer oriented it is known for being simple to use having all the desired features set up in an intuitive way they just put out a good product for years now Eric had heard people complain about messed up videos and bad connections so zoom develop something that can operate at a forty percent connection loss he knew exactly what was wrong with all of the existing services and set out to make something that would improve upon those issues from the beginning it was famously made for video communications not developed from some older existing software that was intended for just text or voice like so many of the others are so it's optimized for that purpose and of course they offered 24/7 customer service even Eric you want himself would be involved in it in the early days when it was still manageable he would personally email every customer who cancelled the service I'd be interested to hear if your experience differs but zoom generally has some of the best customer satisfaction ratings out there it makes people want to keep using it and gives the company a positive image when you compare that to all of the complaints that people have had about Skype or whatever else Microsoft has been offering it starts to make sense why so many people have been gravitating toward zoom my next reason behind their success is they've made it easily accessible to their customers if you want to use their product it does not take much if anyone emails you an invite you can attend a meeting without even creating an account and even if you do create an account so you can better use the service it's free if you want to attract thousands or millions of people to your business I can't think of anything more effective than giving away your product for free and that free service is not that bad hosts up to a hundred participants unlimited meetings though you do have that 40-minute time limit but hey if you need longer meetings or more people you can look at their paid services which is where they start making money they charge fifteen or twenty dollars a month per host depending on the plan which I would say is pretty competitive and that is in addition to all of these other services that they offer that are trying to meet people's needs and they have been targeting larger and larger companies in 2019 they had three hundred and forty four customers that paid them over a hundred thousand dollars which is considerably higher than the years before it those customers now make up thirty percent of all their revenue my final reason behind their success is that they've always secured enough money to continue running the business this may not sound like that big of a deal but for a startup company entering such a competitive market it can be hard to find investors but zoom was able to find them partially for the reasons that I already mentioned it was a solid well liked product that was ran by someone like Eric you won in the very beginning to get things off the ground a good portion of their funding actually came from former WebEx executives that had worked with Eric and had faith in him notably dan Scheinman who personally contributed two hundred and fifty thousand dollars and once they got started they kept going back for more rounds of funding a higher amounts each time they were essentially selling off ownership of the company so they could have enough money to keep building and I should make it clear that there were no profits coming in for a while but investors kept buying it based on the long term plan and perceived future potential in January of 2017 for that series of funding they were given a billion dollar valuation that is not usual it's commonly called a unicorn when they reach that milestone without any public offerings but then as the thing is in 2019 they did have a public offering I don't know how many people were aware of it because it was on April 18th which happened to be the same day as the IPO for Pinterest but it did really well it was priced at $38 per share valuing the company at 9.2 billion and then after one day of trading it was up to 62 dollars per share which was a value of 16 billion and I would like to point out that the stock market valuation has since increased to over 60 billion pretty much anyone who has ever invested in zoom at any point before this stage has made a very good return on their investment and that includes Eric yuan he owns something like 22% of the company which now makes him one of the richest people in the world giving him a net worth of ten billion dollars here's the way that I like to look at it Eric yuan has a long history of hating travels stemming at least as far back as those train rides in China in the 1980s when he quit his job at WebEx to start his own company he said that he promised his wife that he would limit himself to two business trips a year that is not much for the CEO of a billion-dollar company but amazingly his mostly stuck to that promise he may be one of the most frequent loyal zoom users there is I just think it's cool that he disliked traveling so much that he dedicated his life to creating something that would help him avoid it I admire how he turned all of these negatives into a positive if his girlfriend in China had lived closer Dorf WebEx had designed a better product I don't think zoom would exist today so those are my reasons behind their success Eric you wann identified a growing market and applied his passion and experience into creating a customer oriented highly accessible service because of that they've been able to attract investors and steadily grow into a multi-billion dollar industry leader and then on top of that in 2020 when the demand reached unexpectedly high levels they were in a position to take advantage of it let me know in the comments what do you think of zoom as a product in your experience has it lived up to those high reviews or is there another service that you think is better of course it depends on what you're using it for but for any purpose how do you rank it among the others also do you agree with my reasons behind their success or is there something I'm failing to mention this company has been growing fast and with so much going on it can be easy to overlook something and what do you see for zoom in the future if they've been permanently bumped up to this level or are they going to crash or level off somewhere in the middle so any thoughts you have about zoom whether it's the product or the company leave them in the comments I'd like to hear what you have to say thank you for watching [Music]

Channel: Company Man

Views: 367,051

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Id: s_AjEjiiA9w

Length: 11min 38sec (698 seconds)

Published: Wed Jun 17 2020