The Origins & the Age of WebEx
Eric Yuan, the founder, and CEO of Zoom migrated from China to the USA in the late 80s. He had a vision of creating a portable, easy-to-use video conferencing tool. As an engineer, he landed a job in a company called WebEx where he became a key player in developing video conferencing software. WebEx would go on to become the first option for video calls in the market and later be acquired by Cisco for $3.2 Billion in 2007.
Yuan would climb up the ranks to become VP of Engineering and under his guidance, WebEx grew to more than 750 Engineers and annual revenue of $800 Million. But, WebEx wasn’t perfect. It had connectivity issues, audio and video quality issues, and installation issues. It survived as there was no competition in the market at that time.
Yuan had to deal with a lot of resistance from the upper ranks for changes suggested by him to eliminate the issues. Eventually, he left WebEx along with 40 engineers with a vision to create a video-first solution with customers in focus.
Other companies like Skype had created audio-first and then adjusted to a video that proved to be costly.
The creation & rise of Zoom
In 2011, Yuan raised $3 Million and within 2 years he had created the first iteration of Zoom. With very happy beta testers, it launched in January 2013. It was an instant hit. By May, Zoom claimed to have reached 1 million participants. By 2014, it claimed to have 10 million participants.
But why was it so good? Because it provided a lot for very little. With HD video with low data usage, instant detection of devices, compatibility with almost all the major browsers, and easy installation, Zoom solved the problems that WebEx ignored.
Zoom had features available for free which Skype charged for at the time like group video calls. Microsoft would eventually learn from their mistakes and make them free for Skype.
In January 2017, Sequoia knocked on the door of Zoom with $100 Million in series D funding which took the company’s value to $1 Billion and making it a unicorn.
With solid profits and growth year after year, in April 2019, Zoom went public. Shares jumped 72% from the original $36. That day, Zoom was valued at $16 Billion.
The Right
All these years of working came in handy at just the right time. People needed a tool that was ready for the job and, among all, there was one that stood out.
Zoom did a lot of things right beforehand. So, when the pandemic hit and WFH took off, it was the only complete package that people could find among the competition like Microsoft, Google, and WebEx.
The Wrong
It wasn’t all honey and roses though. Zoom has its share of security issues.
In 2018, a security vulnerability was raised as it was found that users were prone to message processing. While, 2019 saw Apple create an update to remove the Zoom server from its devices, after it was found that the server-rendered Mac computers vulnerable, even after uninstalling it.
Zoom always created patches and upped its security.
The On-going Saga
Zoom is a great example of how the company did 3 essential things right: Solve a big problem that impacts the life of many people and focus on customers.
This helped Zoom to compete and beat big-name competition like Microsoft’s Skype, Google’s Meet (previously Hangouts), and Cisco’s WebEx.
Will Zoom remain the king of the video conferencing hill or will it become victim of its own success? Only time will tell as we watch it from our homes locked down.
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