With coronavirus restrictions forcing millions of Americans to adjust to life working from home, teleconferencing software company Zoom Video Communications has suddenly become a household name.
As of March 22, the company’s tally of daily users had spiked by
nearly 380% from a year earlier, and that’s after the company had already added more than
2.2 million new monthly users in the first two months of 2020 (which is more than Zoom added in all of 2019, bringing the company’s total to more than 15 million), as more and more people working remotely around the world are in need of software to connect them with colleagues and clients on a daily basis.
Eric Yuan is Zoom’s 50-year-old founder and CEO.
Yuan spent over two years struggling with visa issues — he was rejected eight times in total, finally receiving a U.S. visa on his ninth try — before finally coming to the U.S. in 1997 at the age of 27. He didn’t speak English, but he knew how to write computer code, and he landed an engineering job with the videoconferencing software company WebEx.
WebEx sold to Cisco
for $3.2 billion a decade later (the platform is now known as Cisco Webex). Yuan became the tech giant’s vice president of engineering, earning compensation in the “very high six-figures.” But he was unhappy.
“Every day, when I woke up, I was not very happy. I even did not want to go to the office to work,” Yuan tells
CNBC Make It.
Though his first couple of years at Cisco had been “great,” he started noticing that, when he’d talk to Cisco Webex’s customers about the
video-conferencing product he’d helped build, he “did not see a single happy customer.” In Yuan’s opinion, the product didn’t evolve quickly enough, making it a chore for customers to use. (In fact, Yuan told CNBC earlier this year that Cisco was
still using the same buggy code he wrote for WebEx roughly two decades ago.)
(Sri Srinivasan, senior vice president and general manager of Cisco’s team collaboration group, says the company has “redesigned Webex from the ground up” since Yuan’s tenure and points out that Webex clients include roughly 95% of the companies in the Fortune 500, and more than 130 million people use Webex every month.)
Asa longtime software engineer with
multiple patents related to real-time collaboration technology under his belt, Yuan felt that the evolution of smartphones and tablets created new opportunities for making mobile videoconferencing more accessible than ever.
But by 2011, Yuan realized that, if he wanted to make a product the way he wanted to do it, he’d have to leave the comfort of his high-paying executive job to strike out on his own. He left Cisco and began developing his own videoconferencing software platform while looking for the funding he’d need to build a product and launch a new company.
“On the one hand that’s indeed a big risk, to go from a very well-paid and vice president position [at Cisco]. Why would you want to leave?” Yuan tells CNBC Make It. “However, on the flip side, I was not happy. So, mentally, that’s not a big risk. The purpose of life is to pursue happiness, and I was not happy. Then what’s the risk?”
The gamble paid off, and then some.
In the nine years since Yuan founded Zoom, the company has grown to now employ nearly 2,000 people, while almost doubling its revenue in 2019 to more than $620 million. Zoom launched its
initial public offering in April 2019 in what became one of the year’s most successful public debuts. Thanks to the sudden influx of users amid the corona virus pandemic, the company’s stock has more than doubled since the start of 2020, giving Zoom a market valuation of roughly $42 billion. (Some Wall Street analysts
argued last year that Zoom’s stock is overvalued compared to the company’s revenue.)
Meanwhile, Yuan has
a 22% stake in his company that’s now worth over $9 billion.
When Yuan founded San Jose-based Zoom, the videoconferencing market was fairly crowded, dominated by tech giants like Cisco, Google and Skype (which sold to Microsoft for
$8.5 billion in 2011). That made it difficult for Yuan to convince venture capital firms to back his new venture, but he was able to win the support of friends and angel investors like Dan Scheinman, a fellow former Cisco executive who believed in Yuan’s new project enough to
cut him a $250,000 check. (He’s now a Zoom board member whose stake in the company was worth nearly $176.5 million after
Zoom’s IPO, in April).
My personal opinion. Although Zoom has become quite popular on the social space. For the business sector by far there are other tried/tested and true options that work just as well if not better than “the new kid on the block” Zoom. The story above tells the tale well, with a few obvious bias comments. Would you speak well of your biggest competitor and you’re trying to sell your own wares? Probably not.
There are plenty of organizations I know of that continue to use Web-Ex (including many legal, financial and health organizations) and are more than happy with the platform (ease of use, safety, security, reliability, platform mobility, etc.). I have had the pleasure of using it on many occasions with little if any difficulty whatsoever. Whereas Zoom has been bit a challenge to say the least from day one.
Truth be told when you actually look at the two platforms Web-Ex The program is easier to use/install and it works on virtually every platform with little if any issues whatsoever. So basically Mr.Yuan just built a better “mouse trap”. Is Web-Ex as popular? Well on the institutional front is holds it own. With consumers it never really was the largest player on the stage. Besides everybody enjoys something “new”.
Hype is always built around the “new”, the latest and greatest. Ultimately, what Mr.Yuan did was take a tried and tested product and improved it by at least 20%. That and enough hype can make you millions.
So that’s the “how can my business benefit from this information” nugget of gold. LEARN HOW TO BUILD A BETTER MOUSE TRAP. The data is all around you. Find what interests you. Dig into the details and do it better. Studies have show that just a 20% improvement over the original product or service can make you millions (without being too redundant) . It’s been done time and time again. if you need help in deciding what to “clone” or how to “make it 20% better” we have a short, but comprehensive course called. “The 20% Rule Of Epic Success” which is available for immediate download. Drop us a line at info@epicsuccesstoday.com for details.
