The Covid-19 virus outbreak has caused many businesses to take a hard hit, especially in sectors such as food, retail, aviation and tourism.
Although some businesses have suffered, there are also others that have thrived during this global pandemic.
One such business that have benefited from this Covid-19 crisis is American communications technology firm Zoom, which is best known for its video conferencing solution.
Following the virus outbreak, many companies have had to implement work-from-home measures. People who work remotely are in need of a software to help them connect with colleagues and clients on a daily basis, causing Zoom’s popularity to skyrocket.
In the first two months of this year, it saw over 2.2 million new monthly users. Then as of March 2020, the company’s daily users had spiked by nearly 380 per cent from the previous year.
Since the start of 2020, the company’s stock has also more than doubled, giving Zoom a market valuation of roughly US$42 billion.
In the same vein, the net worth of Zoom’s founder has increased by 77 per cent to US$7.8 billion in just two months.
According to Bloomberg Billionaires Index, he is currently the top 200 richest in the world. Before 2020, he wasn’t even on the list.
Meet The Man Behind Zoom
The founder and CEO of Zoom is China-born Eric Yuan.
When Yuan was in his early 20s, he was inspired by a speech from then-Microsoft CEO Bill Gates about the future of the Internet. The speech was delivered in Japan in 1994, at a time when Internet is not yet as ubiquitous as it is today.
Gate’s words sparked something in him. When he was a college freshman in China, he and his girlfriend (now wife) lived in different cities and he often had to take a 10-hour train ride just to see her.
It made him think of ways to see his girlfriend without traveling the long distance, and he believed that mobile devices will soon have the power to enable that. Videoconferencing soon became his dream.
Motivated by the speech, Yuan packed his bags and left China to move to the United States and be a part of the Silicon Valley tech boom.
That was the plan, but it wasn’t easy getting there (literally) — his visa got rejected eight times over the course of two years.
He finally came to the U.S. in 1997 at the age of 27. He couldn’t speak any English, but his coding skills landed him an engineering job with videoconferencing software firm WebEx.
A decade later, WebEx was sold to Cisco for US$3.2 billion and the platform is now known as Cisco Webex.
Yuan worked his way up to be the company’s vice president of engineering, earning a “very high six-figures”, but there was something bugging him.
Every day, when I woke up, I was not very happy. I even did not want to go to the office to work.– Eric Yuan in an interview with CNBC Make It
According to Yuan, Webex wasn’t innovative enough so customers were unsatisfied with how difficult it is to use. In fact, Yuan said that Cisco was still using the same buggy code he wrote for WebEx 20 years ago.
Refuting this statement, Cisco pointed out that it has since revamped Webex “from the ground up” after Yuan’s departure.
Regardless, one thing’s clear for Yuan: he wasn’t happy with his job and wanted to strike out on his own — but his wife wasn’t too keen on the idea.
“I told her, ‘I know it’s a long journey and very hard, but if I don’t try it, I’ll regret it,’” Yuan told Forbes.
Leaving A “Very High Six-Figures” To Start His Own Firm
Yuan left Cisco in 2011 and began developing his own videoconferencing software platform. More than 40 fellow engineers followed him in his new venture.
He had a strong following, but he first needed funding to build a product and start his own company.
At the time, the videoconferencing market was fairly crowded, dominated by tech giants like Cisco, Google and Skype. This made it difficult for Yuan to convince venture capital firms to back his startup (it was called Saasbee then), but he managed to win the support of friends and angel investors.
It’s extremely crowded, but the potential is huge. If our product is better than any others, we can survive.– Eric Yuan in an interview with Forbes
Dan Scheinman, who is a fellow former Cisco executive, wrote him a US$250,000 cheque so he could pay 30 engineers to come up with a better technology for video communications.
Along with the financial backing of WebEx founder Subrah Iyar (now a Zoom advisor) and venture capital firm TSVC, Yuan eventually raised US$3 million in seed funding.
With this funding injection, Yuan and team worked hard at developing a beta version of a video conferencing software for two years, which they tested with tech company clients in Silicon Valley.
In 2013, Zoom launched its first official product. It was built in the cloud and priced using a “freemium” model that lets anyone host a meeting of 40 minutes or less for free.
It quickly became popular with business clients. Over 3,500 businesses used Zoom within the first five months of launch and in the next two years, that number grew to about 65,000 companies.
According to the 50-year-old CEO, much of Zoom’s early growth was organic, relying purely on word of mouth promotion.
“We didn’t even have a marketing team until 2015,” he told CNBC.
Timing is everything. Ten years before, if I started a company, it wouldn’t get traction.
The smartphone created a huge economy, the cloud created a huge economy. That’s why if you start a company, timing is very important. It happened to me in the right time.– Eric Yuan in an interview with Financial Times
Lessons From The Recent Security Scandal
In the early days of Zoom, Yuan used to spend money where it was needed and curtailed spending on plush office interiors and furnishings.
If I were to spend investor money on nice furnishings and so forth, particularly early on, I might not have it for opportunities that can really grow our business.– Eric Yuan in an interview with Entrepreneur
Besides being prudent, Yuan was also very hands-on. He dual-hatted as a customer service officer and personally contacted customers who wanted to unsubscribe over e-mail so he could learn first-hand of their issues.
He acknowledges that Zoom is not a perfect product, so he strives to continually improve on it based on user feedback.
Recently, Zoom also faced backlash for privacy and security issues — from “Zoom bombing”, where uninvited people hijack a meeting, to a serious flaw that reportedly allow hackers to take over a victim’s webcam and microphone.
In response, Yuan has announced a series of measures to help make Zoom more secure, including bringing in outside experts, expanding the company’s “bug-bounty program” (in which tech companies offer cash rewards to ethical hackers who find issues with the company’s security system), and holding weekly conferences to update people on the company’s progress.
In an interview with TIME, Yuan was candid about the company’s issues in handling the sudden demand. He argues that Zoom was always meant as an enterprise product — meaning a service for businesses, not personal users — and thus wasn’t designed with personal privacy top of mind.
This is why he’s now reevaluating the company’s priorities to strike a “balance” between the two groups of consumers.
In a separate interview with CNBC, he said this incident has taught him a lesson about how important it is, as a tech leader, to quickly gather the facts and take action in any situation involving a potential security vulnerability.
“Any security issues, you have to be very hands on to really understand what’s the exact problem, and then take quick action,” he added.
Zooming To Success
In April 2019, Zoom launched its initial public offering (IPO), which valued the company at US$9.2 billion at the time, minting Yuan a new billionaire.
He owned 22 per cent of the shares, bringing his net worth to US$1.9 billion.
It was one of the most successful IPOs of the year as the company was worth more than both Lyft and Pinterest, which were also going public then. According to Forbes, Zoom’s share price rose 72 per cent on its first day of trading alone.
Zoom was among a growing crop of tech companies going public in 2019, but with a twist: it’s profitable. Today, it has over 30,000 corporate clients including big names like Samsung, Uber and Walmart.
Speaking to The Associated Press, Yuan said that the current crisis highlights how remote working is the way of the future.
Though Zoom has already seen a rapid rise in the videoconferencing market, it continues to face tough competition from larger rivals.
Undaunted, Yuan believes there’s still plenty of room for the company to grow. In fact, he thinks Zoom can one day reach over a billion individual users.
There are over 1 billion [office] workers worldwide. Our goal is to connect all those 1 billion knowledge workers with the Zoom platform. So, given where we are now … I would think we literally just started.– Eric Yuan in an interview with CNBC Make It
Featured Image Credit: Bloomberg via Getty Images