Zoom: A Brief History of the Company that Redefined Video Conferencing

Z‍oom is an American success story – but chronic security problems.

An American success story – but chronic security problems

The story of Zoom, a high-tech video conference company, is a classic story of an immigrant chasing the American Dream – and building an ambitious, wildly successful, but imperfect company.

Zoom’s Origins & Growth

Eric Yuan, the man who would become Zoom’s founder, was born and raised in China. While earning a bachelor’s degree in mathematics and master’s in engineering, he used to take a train ten hours to visit his girlfriend.

The Idea for Zoom

Out of Yuan’s romantic hardship came the idea for Zoom. “I used to think it would be fantastic,” Yuan recalled, “if in the future there was a device where I could just click a button and see her and talk to her.”

Yuan’s dream led him into the world of video conferencing, and his next dream was to move to American with his girlfriend – now his wife. It took nine attempts, but Yuan finally got his US visa in 1997.

Yuan Background

He worked at WebEx, then came to Cisco as part of their $3.2 billion acquisition of WebEx in 2007. WebEx was popular because of little competition - but it faced constant customer complaints of connectivity problems, installation so hard it frustrated IT professionals, and frequent inopportune crashes.

Yuan rose to corporate VP of engineers, where he got a nearful of these complaints. Yuan felt embarrassed and pushed for changes for several years, but was rebuffed.

WebEx versus Zoom
Yuan Left Cisco to Launch Zoom

Cisco, Yuan says, was trying to be too much like Facebook.

“I did not see a single happy WebEx customer,” Yuan recalls, “and had an obligation to fix that problem. Cisco is a great company but was unwilling to change its collaboration strategy back then. I had no choice but to leave to fix the problem.”

“If I don’t try,” he told his wife, “I am going to regret it later.”

Zoom Opens Office in San Jose with 40 Engineers

In shades of the “Traitorous Eight” legend of how Robert Noyce left the brilliant but inflexible William Shockley to found Intel in 1968, Yuan left Cisco to found Zoom in 2011– and brought 40 engineers with him. They set up headquarters in San Jose, in the heart of Silicon Valley.

According to Forbes, Zoom set out to build “video-conferencing tools that didn’t reinvent the wheel, just made it a lot less painful to turn.”

Investment from Sequoia Capital

Zoom took a video-first mentality, unlike the audio-first approach of their other main competitor, Skype. Launched in 2013, Zoom had successful funding rounds in 2014-17.

Sequoia Capital came to them, along with Emergence and Horizon Ventures. By January 2017, Zoom had a D funding worth $100 million and a $1 billion.

Sequoia Capital Wins Big with Zoom's IPO
Zoom Culture Flourishes

“Our culture is focused on delivering happiness to each other, happiness to our customers,” Yuan says. In 2018, Glassdoor ranked him Top CEO. Zoom went public in 2019, when its IPO rose 72% the first day. “We are going to focus on execution,” Yuan told CNBC with ash rug, “and price is out of our control.”

Zoom, according to most of its users, provides real value at a low cost: HD video conferencing for two to 1000 people, mobility, and web meetings, all for $9.99 per month. It requires relatively low data and is simple to use - with instant detection for Mac or PC.

Yuan has insisted on a 150 milliseconds maximum delay to minimize frustration.Zoom has partnered with Tesla, LinkedIn, Atlassian and Slack, among others. Zoom integrates with CRM like Zendesk, Salesforce and others like IBM Watson and Microsoft Office.

“Money is not going to bring me happiness,” Yuan said in 2019. “Millennials grew up realizing that they can get the job done without having to go to the office. Give it maybe ten years and the millennials will become the leaders and it will become very common.”

Is Zoom just another tech unicorn in a booming economy?

“If the economy turns down,guess what?” Yuan asked. “Nobody’s going to travel anymore. Everybody’s going to use Zoom. It’s probably good for us.”

Yuan’s words proved prescient – except instead of taking ten years, it took ten months. During 2020 the coronavirus pandemic, millions of people were forced to work from home and turned to Zoom.

The company’s price doubled in early 2020 despite sharing a now-crowded marketplace with Microsoft Teams and Skype, Slack, Yammer,Go-to-Meetings, Facetime, Google Hangouts, and more. Due to its low data requirements, Zoom worked better than most in the suddenly slow, saturated Internet.

Yuan practices what he preaches. He rarely takes business trips, instead using Zoom. But Zoom has also had its share of problems.

Zoom problems

Problems with Zoom fall in to two main categories:

Security issues

In a number of high-profile instances, like UK Prime Minister Boris Johnson, uninvited guests have crashed meetings – Zoom-bombing. In some cases they have phished for sensitive business information. Apple temporarily removed Zoom because of security issues.

Zoom fatigue

Despite Yuan’s focus on minimizing delays, many report a disconcerting experience and feeling after multiple Zoom calls. Looming heads, staring eyes, a silent audience, and that short delay disrupt normal human communication.

Many people find they prefer the good old-fashioned telephone after all.

Zoom to the Future?

A key question remains: Can Zoom convert all these temporary work from home users into paying customers?

“Imagine a world where there’s no distance barriers, no language barriers, no cultural barriers to communicate,” Yuan says. “That will be the time where I will announce my retirement.”

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Switch4Teams is a UK-based, award-winning Unified Communications provider with over 20 years of experience.

Our voice over IP (VoIP) internet-based telephony, Microsoft Teams Direct Routing and UC cloud communication solutions are currently used by 1,000’s of SMEs and partners across the UK.

Contact us by email at info@switch4teams.com or call +44.0113.328.1330

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