Eric Yuan Explains 6 Tactics He Used to Build Zoom Into a USD 20Bn Business

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Original source: entrepreneur.com 

Eric Yuan Explains 6 Tactics He Used to Build Zoom Into a USD 20Bn Business

 The founder and CEO discusses how risk taking and passion fueled Zoom’s multi-billion-dollar growth.

Anyone familiar with video communications giant Zoom’s growth story knows that its successful IPO was no fluke. Since Eric Yuan started the company in 2011, it has amassed over 2,000 employees, generates over $120 million in quarterly revenue, is at a market cap of over $20 billion, and yes, it is profitable, too.

To get behind the scenes of Zoom’s rise to prominence in a crowded space, I interviewed Yuan, who started the company as a sole founder and endured the ups and downs of Zoom’s business from day one. He shared with me the six principles that were pivotal to him building and scaling Zoom.

1. Have deep domain expertise

Though Yuan started Zoom from scratch, he was no stranger to video communications. Being a founding engineer and VP of Engineering at Webex, he gained deep domain expertise over the course of over 10 years before he started Zoom.  

He explained, “During the time of Webex growing from $0 to greater than $700M, the company was sold to Cisco. The Webex team lost the passion and drive to further grow the business because many Webex veterans left and Cisco’s integration with Webex was not successful.” From the experience, he learned that “You have to keep working hard to deliver happiness to customers and you have to control your own destiny.”

Having the experience growing Webex from the ground up, Yuan knew the ins and outs of the video communications business. This gave him a huge edge when he founded Zoom, allowing him to jump a lot of the learning curve common to early-stage startups.

2. Take risks

By 2011, Yuan had become one of the centerpieces of the Webex business after Cisco bought them out. At this point, he managed over 800 employees and had a cushy salary. Naturally, his wife wanted to know if he was sure about quitting to start something of his own. 

Eric might not have been sure about how Zoom would turn out, but what he did know was that his time at Webex was up. He told me, “Every day I’d talk to my customers at Webex and they’d tell me how unhappy they were with our service. This was a terrible way to spend my days, it weighed heavily on my heart.” It made his next move that much clearer: “I wanted to spend my days delivering happiness, and I knew I had to take charge of my own destiny to do that.” 

The video communications market was already getting crowded around 2011, and he told me many of his friends advised against starting a company in the space. Even so, he took a leap of faith and quit.

It worked out big time. Eric humbly told me: “This risk ended positively as most of the solutions in the market weren’t working well for customers, so it didn’t matter how many vendors there were.” A pretty big understatement for Zoom, now a $20 billion market cap public company as of June 2019.

3. Run lean

Though Yuan had the know-how to run a successful video communications company and had taken a risk to start Zoom in an already crowded market, he couldn’t have grown Zoom at the pace he did without running lean

For starters, Yuan was a solo founder, and he saw this to be a huge advantage, especially in the early days. He told me: “Being a solo founder allows you to move quickly — when you’re going up against massive, entrenched competitors, you need to maximize speed and agility. Having just one person at the top allows for faster decision making.” 

Besides, he had already done this once before at Webex. He didn’t need to split early-stage equity with a partner when he could lay the framework himself. 

Aside from running Zoom on his own at first, Yuan had a knack for managing money. In the early days, Zoom was known for its modest office space. Yuan told me: “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.” A lot of early-stage companies can take a page from Zoom’s playbook.

What’s inspiring though is that Zoom’s lean philosophy hasn’t deviated much from day one. In Yuan’s words, “From the start and to this day, I want to maximize our investors’ value. Every dollar I raised from the investors represents their trust, so I should live up to their expectations.” It is this principle that allowed Yuan to scale Zoom to the extent it is today.

4. Prioritize customers 

Another reason for Zoom’s hyper-growth in the last couple of years is Yuan’s extreme care for his customers. Many startup founders focus on marketing to get the word out about their companies — campaigns, social media, etc. Yuan, on the other hand, believes, “Keeping our existing users happy is our number one growth strategy. If our existing customers are happy, they expose our platform to new users, both by meeting with them and by telling them about their experiences with Zoom.”

5. Ensure work-life balance

Yuan has been vocal about making it to all of his kids’ basketball games and gymnastics meets. Naturally, I wanted to ask Yuan about how he does it. How is it possible that someone who n a multi-billion-dollar company can make it to every one of his kids’ commitments?  

He told me, “I don’t travel for work very often, maybe one to two times a year. If a customer or someone else wants to meet with me in person, I say, ‘Let’s Zoom first. If that’s not good enough then we’ll meet.’ 99 times out of 100, a face-to-face on Zoom is all that is needed.” With the time saved from doing a Zoom call instead of traveling, Yuan is able to make time for his kids.

In his words, “If I’m home instead of traveling, then it’s simply a matter of blocking out my schedule for my kids and making it clear that these windows are not negotiable.” Now that’s impressive.

But Yuan did remind me that he didn’t really think of work-life balance in the way that I intended to ask him: “I believe that when you care deeply about what you’re doing, there is no need for the traditional ‘work-life balance.’ I think about it as doing what I care about as opposed to working.”

That’s what I like about Yuan so much — he’s living life enjoying everything he does. Regardless of revenue, that in itself defines success.

6. Be deeply passionate 

But where Yuan truly stands out as a founder and CEO is his extreme passion. Oftentimes, you can find Yuan on Twitter tweeting back and forth with his customers — ordinary people like you and me. He told me, “We have awesome, passionate customer success and social media teams, but when I see a customer who needs help or is unhappy, I take that personally.”

That’s a defining characteristic about Yuan: his passion isn’t derived from the money he makes, but rather the customers he makes happy. His passion is apparent in his interaction with customers, as he often offers to contribute directly to the Zoom codebase to fix customers’ issues. 

In Yuan’s words, “I care about these people and their experience with Zoom, so it feels very natural to me to want to jump in and see if I can help.” He’s passionate about his customers, who he is confident will bring happiness back to him in the long term.

The way Yuan sees it, “What better way to have a real-time pulse on how your business is doing, what features or integrations you should be building and so forth than to be listening to your customers all day?” Yuan’s passion for improving Zoom’s product is deeply correlated with his passion for helping his customers.

Passion. That’s why Yuan, as CEO of a huge public company, never gives up and has been able to reach the level of success he has today.ge

 

After reading the article:

1. How did Eric acquire experience in the video communications industry?

a. He worked for Cisco for over 10 years. 
b. He founded Zoom and learned the ins and outs of this business. 
c. He jumped a lot of the learning curve.
d. He was a co-founder of Webex.

2. Why did Eric decide to leave Cisco and start Zoom? 

a. He was unhappy with his salary at Cisco and he had to manage a big team. 
b. He saw a big opportunity as customers were generally unhappy with the services provided by existing players. 
c. His customers and friends gave him the suggestion to found a new and better company. 
d. He knew for sure that Zoom would be a big success. 

3. Why was it important to manage money well?

a. Because then he could have money to spend in a nice office and furnishings.
b. Because he wanted to have a lot of money to spend in campaigns, social media, etc. 
c. Because by doing so, he would have money for opportunities that can really grow the business. 
d. Because this is what all startups do. They manage money very well. 

4. How does Yuan demonstrate his passion to the business? 

a. He is a workaholic and doesn’t have a work-life balance as everyone else.
 
b. He interacts with customers and does everything he can to make them happy. 
c. He is passionate about the customers because they make him a lot of money.  
d. He hires the best team and leave everything to them so he can have time for his kids.

Check the answers at the end of the page.

Join the Discussion

Which videoconference platform does your company use? Have you ever tried Zoom? Do you have a favorite videoconference platform (Skype, Google Hangouts, Microsoft Teams, etc.)?

37 respostas para “6 Tactics to Build Zoom Into a USD 20bn Business”

  1. My company uses Gotomeeting. It is a great platform, however there is not so many tools as Zoom. I am used to use Skype, that is why I think it is my favorite videoconference platform.

    By the way, great class!!! I learned a lot with it.

  2. Great!
    All of my answers are correct.
    I have used as Zoom as other plplataforms, but I prefer Zoom. It works really well.

    This text is really interesting since we learn about a person who owns a company we make use of.

  3. In the last company I worked, Microsoft Teams were used.
    I have been tried Zoom, and I really appreciate, more than the last one used by the company I worked, and also Skype.
    For personal uses, I like Wahtsapp, For business, Zoom, certainly.

    1. Hello Augusto!! Nice, I also prefer Zoom, hehehe.

      PS: I have been trying Zoom (not TRIED) and I really appreciate it (missing “it”).

    1. Hello Diego, great job.
      Absolutely! We should never give up our dreams!!

      PS: The article shows (not “show”) / how to take charge (missing “how”).

  4. Very nice this article. Zoom is a good plataform and your importance is increasing day after day. I preffer Zoom than Google Hangouts.

  5. 1 – d
    2 – b
    3 – a
    4 – b

    I am a liberal professional, in business administration, on micro and small enterprises. I work with humam development too.

    I will use zoom for personal and professional coaching.

    People says that zoom is the better videoconference platform.

  6. Yan´s personality is inspiring. I did not know about Zoom´s history, so it was an interesting reading. Furthermore, I matched 4/4 in the quizz ! Great !

  7. This is an ispiring article! Eric Yuan cares about his costumers and gives prioriy for his children… that’s a real leader all we need! Wonderful! Passion for his costumers, passion for his family and passion to being an extraordinary entrepreneur.

    I got all the questions right! Uhuhuh

  8. Wouuu……. One more excellent article as usual.

    The time for procrastination is up. It was no fluke that this article was written. Let’s stand our skills out.

  9. I loved this article. It is really inspiring.
    When you have a purpose of life you can go far away.
    I learned a lot. New words and phrasal verbs.
    Thanks

  10. The last company that I worked normally used Skype for videoconferences, but after the pandemic with the growth of Zoom, the started using it. Much better!

  11. I’m from São Paulo, I never give up learning English, also my mind entreched in the same part in my learning curve.
    Now I run my learning.
    Regards.

  12. Answers for the homework questions:
    1) D
    2) B
    3) C
    4) B

    Thank you for this class, it’s impressive, and I’m learning new stuff and remembering some words that I’ve already know.

  13. Thank you for this class, it’s impressive, and I’m learning new stuff and remembering some words that I’ve already know.

  14. In my work daily use skype, zoom is used for meetings with more people.
    Both platforms are very interesting for meetings, but I don’t have a favorite.

    Answers: 1d /2b /3c /4b

  15. I’ve got the opportunity to work using Zoom, of course I needed to understand deeply ins and outs Zoom’s functionality. Zoom stands out when comparing to other video call platforms, but nowadays I work using Google Meet, in the past I used Google Hangouts too, both Google Platforms were cushy to use it, not difficult at all. In my opinion, I would choose Google Meet, it works out easily, even using it on my cell phone.

    1. It’s interesting to hear your opinion, Pedro.

      I think that after the pandemic hit, many players in this market have worked hard to improve their platforms as well.

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