How Zoom Made Eric Yuan A Billionaire Overnight
How Zoom Made Eric Yuan A Billionaire Overnight
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00:00 COVID-19 has altered our lives in more ways than we can possibly imagine, but the most
00:04 significant is the way in which we professionally and instructively communicate with one another.
00:10 Even though video conferencing platforms have been around for quite a while now, except
00:14 for a very small fraction of people, most of us never did fully embrace the idea of
00:18 having formal discourse over the internet, at least not until the pandemic changed all
00:22 that.
00:23 So, with the whole world forced into a position where it had very little choice but to not
00:27 only welcome video conferencing with open arms, but even be dependent on it, why couldn't
00:32 tech giants like Microsoft, Google, or Cisco, with their respective video conferencing extensions
00:37 like Skype, Hangouts, and WebEx, leverage this situation?
00:41 Instead, how did a relatively unknown company beat all competition and become a household
00:45 name?
00:46 In today's video, we're going to talk about the CEO of Zoom, Eric Yuan, whose estimated
00:51 net worth, according to Forbes, is $13.1 billion, which is a 1,200% increase in a span of just
00:58 two years.
00:59 Though all this might make it seem like it was an overnight success, it was not at all
01:02 the case, and let's see how.
01:05 If you're new to the channel, make sure to click the subscribe button for more videos
01:08 like these and let us know in the comment section below if you knew about the 51-year-old
01:12 billionaire before today.
01:14 Eric Yuan's Early Life and Education
01:18 Yuan was born in Tai'an, China, to geological engineer parents.
01:22 At an early age, he used to collect scrap copper to earn some pocket change.
01:26 He did his bachelor's in applied mathematics at Shandong University of Science and Technology
01:31 and his master's in geology engineering at China's University of Mining and Technology.
01:36 It was while he was attending university that he first conceived the idea of Zoom.
01:40 Since his girlfriend, who he later married and has three children with, lived in a faraway
01:44 city, he had to travel 10 hours on a crowded train in order to meet her.
01:48 He hated those trips and wished there was a simpler way to reach her.
01:51 This lack of an easier alternative is what would later inspire him to dedicate his life
01:55 towards making the lives of others easier.
01:58 The Move to America
01:59 In 1995, while attending a four-month training program in Japan, Yuan listened to a keynote
02:05 speech given by Bill Gates.
02:07 That speech, which was about the tech boom, literally changed his life forever.
02:12 Realizing that the internet was the future, he decided to move to Silicon Valley as the
02:16 World Wide Web hadn't become popular in China yet.
02:19 But things didn't go as planned.
02:21 As his English wasn't that good, his visa application form kept getting rejected.
02:25 Only during his ninth attempt was he granted a visa.
02:28 In fact, he says he would've tried for even the 20th or 30th time if that's what it took
02:32 to pursue his dreams.
02:34 Yuan's First Job
02:37 Eric Yuan is the perfect embodiment of the American dream.
02:40 Coming to the United States with nothing but big dreams and later working extremely hard
02:44 to make those dreams come true, isn't that what the American dream is all about?
02:48 In 1997, as soon as he reached the USA, Yuan landed his first job straight away in spite
02:53 of not being fluent in English.
02:55 This was because he was very good at coding.
02:57 Consequently, he became one of the founding engineers at WebEx which was one of the first
03:01 companies to specialize in video conferencing.
03:04 The Cisco Takeover
03:07 WebEx started growing fast and soon became one of the major players in its field.
03:12 In 2007, it was acquired by Cisco for $3.2 billion and Eric Yuan was appointed as the
03:18 Vice President of Engineering with close to 800 engineers working under him.
03:22 Though the company kept growing steadily, Yuan soon realized that something was not
03:26 right.
03:27 As part of his duties, he had taken it upon himself to chat with clients personally in
03:31 order to get their feedback.
03:33 But to his dismay, he found that the clients were almost never happy.
03:37 Yuan recalls that one of the main reasons why WebEx was able to stay on top was because
03:41 there was so little competition.
03:42 And since they were on top and making good money, the higher ups didn't worry about
03:46 user satisfaction.
03:47 Yuan, on the other hand, decided to take responsibility.
03:51 He started collecting, consolidating, and working on the various problems faced by customers.
03:55 Soon he came up with a bunch of solutions.
03:58 He took all his findings to the persons in charge.
04:00 He proposed taking a more smartphone-friendly approach, among other things.
04:04 But as the money was pouring in anyway, the bureaucrats decided not to bother.
04:08 This left Eric Yuan with no other option than to find solutions to all those problems on
04:12 his own.
04:13 This is how he puts it, there was no way to fix the WebEx problem, the only way was to
04:18 be the new solution.
04:21 The Birth of Zoom
04:22 Initially, when he started his intention of leaving WebEx to his close circle, he was
04:27 mostly met with tales of caution.
04:29 Everyone, including his wife, wanted him to stay at his safe job as there was too much
04:33 competition and the market was too saturated.
04:36 But Yuan decided to follow his purpose anyway, concluding that he didn't want to feel regret
04:40 at a later age.
04:41 In 2011, when he eventually left WebEx, 40 of his fellow employees accompanied him.
04:46 Anyhow, he did not launch the Zoom software straight away.
04:49 It would take him two more years to unveil the application to the world.
04:53 Meanwhile, he and his team worked hard on doing the basics right and laying a solid
04:57 foundation.
04:58 Having studied the field closely for the past 15 years, he already possessed the technical
05:02 know-how to create a video conferencing software.
05:05 But he also knew that other companies wielded this advantage as well.
05:08 On the other hand, the key things he knew he had to do differently in his company were
05:12 as follows.
05:13 Establish core values and nurture a healthy culture.
05:16 The former is all about care and the latter is all about happiness.
05:19 He wanted to create a culture of happiness based on care.
05:22 As a CEO, he made it his task to make his employees happy.
05:26 He knew that if the engineers were happy, the customers would also be happy.
05:30 As for the name of the company, they didn't have one until two weeks before the actual
05:33 launch.
05:34 Poppy, Zippo, Zoom, and Hangtime are the four names that the employees in charge came up
05:40 with and Eric Yuan chose the one that sounded the best.
05:42 The rest, as they say, is history.
05:46 Zoom Conquers the World
05:47 Once launched, Zoom had an immediate advantage over its competitors because it had already
05:52 solved many of the problems that users worldwide were having, like video and audio not being
05:56 in sync, usage of large amounts of data, and the many difficulties faced by the client's
06:01 IT department while installation.
06:03 Within one year of its release, it had 10 million users.
06:06 All of this success was due to enormous hard work and an obsessive focus on the customer.
06:11 In fact, in those early years, he would even personally mail all the customers who had
06:14 canceled their service.
06:16 In 2019, Zoom launched its initial public offering, issuing 20 million shares at a price
06:21 of $36 per share.
06:23 On its initial trading day, the share prices went up 72%, making Yuan officially a billionaire.
06:29 Actually, a number of companies delay going public as long as possible in fear of losing
06:33 control over their enterprise.
06:35 This is especially the case with self-made founders who have invested a lot of effort
06:39 in creating a healthy culture.
06:40 Few examples are Phil Knight and Elon Musk.
06:43 However, Eric Yuan had no such quandary.
06:45 It was always been his dream to start a company that one day would go public.
06:49 The point to be noted here is that all these developments happened even before the global
06:53 pandemic by which time Eric Yuan had already become a billionaire and Zoom had got listed
06:58 in the Nasdaq.
07:00 The Pandemic and Beyond
07:02 As the novel coronavirus swept the world, the need for video conferencing started to
07:06 skyrocket.
07:07 And having made itself unconsciously ready for this moment of reckoning, Zoom sprang
07:10 into action.
07:11 Soon, from being a B2B company, it became a B2C company.
07:15 Initially, they had focused primarily on enterprise customers, most of which were universities.
07:20 But during the global pandemic, taking into consideration their corporate and social responsibility,
07:25 they provided Zoom free of cost to thousands of schools across 25 countries.
07:29 Meanwhile, they also left the door wide open for the general public.
07:33 Millions of people kept downloading the app.
07:35 One of the main reasons why they could deal with such an explosion of demand was their
07:38 scalable architecture.
07:40 Though they had data centers all over the world, if not for public clouds and Zoom's
07:44 ability to use them as extensions, they could not have dealt with the situation this effectively.
07:49 The company's market cap rose from $18 billion in 2019 to $79 billion as of October 2021,
07:55 while during the same time frame, Eric Yuan's net worth rose from $1 billion to $13 billion.
08:01 However, this hasn't been without its fair share of problems.
08:04 In particular, safety and privacy concerns have always plagued their Zoom.
08:08 They soon realized that, for them to sustain their top position, they had to go an extra
08:12 mile.
08:13 To make the case with Enterprise customers who had their own dedicated IT wing, during
08:17 the pandemic, Yuan and his team understood that they had to play the role of IT as well
08:21 in order to not develop a negative reputation.
08:24 At one point, looking into security concerns became so unavoidable that they had to put
08:28 all their new updates and features on hold for 90 days just so they could review their
08:32 whole infrastructure for possible loopholes.
08:35 In spite of these minor setbacks, Eric Yuan still has high hopes for his company.
08:39 He does not bother much about the skeptics who say that the heyday of Zoom will be over
08:43 when the pandemic ends or when they lose their company's competitive advantage.
08:46 Instead, he focuses on making Zoom even bigger.
08:49 His present goal is to convert Zoom from a killer app into a platform.
08:53 Will the skeptics' prophecies come true or will Eric Yuan take Zoom to greater heights?
08:57 We'll have to wait and see.
08:59 But whatever the case, it cannot be denied that Zoom has played a very crucial role in
09:04 making life a little easier for all of us all over the world during a time of disease,
09:08 isolation and grief.
09:11 This wraps up today's video.
09:12 What do you think of the CEO of Zoom whose purpose in life is pursuing happiness and
09:16 bringing happiness to others?
09:18 Share with us your thoughts in the comment section below.
09:20 And if you enjoyed today's content, check out this related video to see more.
09:25 Until next time!
09:25 [music]