Happier homeworking with Zoom … how Eric Yuan developed the world’s fastest growing web conferencing business … which has doubled its value in the last 3 months
March 29, 2020
It’s a difficult time. All around us, the chilling news updates on our screens and social media are relentless as the COVID-19 pandemic multiplies across continents. The human tragedy, concern for our loved ones, frustration at politicians, admiration for health workers, disbelief at those still socialising, adaptation to new routines under lockdown, affects us all. As a society there is a huge concern for each other, whilst as business leaders we also know we have to keep our business going too.
Sitting in our homes we click onto a succession of conference calls, seeking to work through the chaos. In the suburbs of Santa Clara, California, 50 year old Eric Yuan joins his latest call. The palm trees swaying behind him make for a surreal setting. He could have chosen a day on a Hawaiian beach, or even the spectacular Mount Tai in China’s Shangdong Province, near to where he grew up. That’s one of the many benefits of his web conferencing service, Zoom, now the world’s fastest growing, where you can easily choose any background you want. No more embarrassing peeks into your home to distract your colleagues or clients.
It has been a crazy time for the Chinese American since Zoom’s $15.9bn IPO last year. As the world’s stock markets have tumbled by 25-35%, Zoom has doubled in value since January, making Zoom now worth $35bn. Yuan stills own 20%, but the new billionaire is one of the most frugal people you will meet, remembering as a teenager in China how he hunted through rubbish dumps in search of scraps of metal to sell in order to fund his education.
As a teenager he was captivated by the success of Bill Gates, and studied mathematics and computer science at Shangdong University. Drawn to the US by the dotcom boom of 1997, and despite not speaking English, plus 9 attempts to gain a visa, he landed a job writing code for online conferencing service Webex. After the business was sold to Cisco, he became VP of engineering. However he could see that mobile and cloud technologies were rapidly emerging, and could transform the user experience, yet his Cisco bosses did not share his passion.
He left in 2011 to start his own company from the ground up – a simpler, more intuitive, app-based experience to meet the rapidly evolving world of remote and collaborative working. Initially calling is Saasbe, he turned to former colleagues to help him fund a team of 30 engineers back in China work on his new idea. Even his former Webex CEO threw in $3 million. He worked tirelessly for two years on the new app, a lightweight web client that would work on any device, even with slow or patchy internet connection. He also added more human features, like the choice of virtual backgrounds.
Zoom launched in 2013, initially targeted the corporate market, and creating networking solutions like Zoom Rooms with partners such as Logitech. Within a year he had 40 million subscribers, including 65,000 organisations. In 2017 the business reached “unicorn” status with subsequent rounds of funding, now with around 2000 employees (a third still based in China), and also started exploring new areas such as virtual reality. Yuan uses a “freemium” business model based on subscriptions, with the first 40 minutes free of any call with up to 100 participants, although the platform caters for anything to 1000 people.
In 2018 Yuan was ranked the #1 CEO in USA based on Glassdoor’s ranking which is based on employee votes. He was also chosen as EY’s Entrepreneur of the Year.
Since January this year, Yuan has seen huge growth in Zoom, becoming indispensable to the world’s schools, businesses and governments as COVID-19 shut down the physical world. Yuan offered free access to all schools, resulting in around 1million app downloads every day. He’s been surprised too be the innovative social applications that have emerged – from virtual fitness programs, virtual music concerts, and virtual drinks parties.
Remote working, though, is nothing unusual for Yuan. He typically only makes two business a trips a year, aware of the inefficiencies and environmental impacts of travel, when you can simply click onto Zoom. Yet he is a big fan of human engagement, defining Zoom’s mission as “delivering happiness” and even measures performance on user happiness, as an equal to financial results.