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Platform dreamer: Zoom founder
Eric Yuan
at the 2019 IPO
Photo: Kena Betancur/Getty Images
Eric Yuan
(52)
is familiar with rapid ascents and equally abrupt falls.
look like few.
When the corona epidemic spread in the western world in spring 2020 and forced millions of workers and students into lockdown, the company Zoom, founded by Yuang, was one of the biggest winners.
Zoom became synonymous with video conferencing, becoming one of the most recognizable brands in the world out of nowhere.
At times, more than 300 million people used the company's software from San José, California, every day.
Sales and price exploded.
Zoom was even worth more on the stock exchange than the American oil giant Exxon.
But after the pandemic came the crash.
"Zoom fatigue" became a household word.
In view of the return of analogue life, the pace of growth could not be maintained.
The share price is now bobbing back to pre-crisis levels.
And Zoom has also recently fallen short of expectations in terms of profit and sales.
In the past quarter, operating profit halved by more than 50 percent to $121.7 million.
Sales increased by just 8 percent compared to the previous year.
Customer growth slowed to 3 percent.
Now founder and CEO Yuan, who has become a five-fold billionaire with his company, is trying to restart.
Zoom still has more than 200,000 customers - and is profitable.
However, Yuan is now concentrating again on the clientele he had in mind when he was founded in 2011: companies.
And he no longer just wants to be a video conferencing provider, but also wants to equip companies for the new hybrid working world as a platform with external service providers.
One wants to provide the "operating system for the working day"
, assists his chief financial officer
Kelly Steckelberg (53).
It's a kind of escape forward - into a business that powerful rivals have also discovered for themselves.
When Eric Yuan, a former software engineer at Zoom competitor Cisco Webex, founded the company in 2011 - initially under the name Saasbee - he wanted to develop a user-friendly and also reliable video conferencing solution.
The native Chinese, who only came to the USA at the age of 27, started small.
In the first version of his software, only 25 people could participate at the same time.
But the offer hit the company.
Just two years after its founding, Zoom already had 1,000 business customers with a valuation of six million dollars.
Two years later, when Yahoo founder
Jerry Yang
(53) and Qualcomm Ventures, among others, added 30 million in financing, there were already 65,000 companies.
In April 2019, Zoom - now profitable and valued at more than $9 billion - went public.
When Corona struck, Yuan had "a working product" that could scale, says
Wayne Kurtzman
, collaboration software expert at tech analysis house IDC.
As of October 2020, Zoom was worth nearly $159 billion -- more than 250 times sales.
But the boom had come at a price.
"Zoom bombing" and problems with data security increased, the US supervisory authority FTC became active.
In 2021, after the initiation of a public security check, the planned billion-dollar takeover of the US cloud provider Five9 finally failed.
Yuan took countermeasures - and temporarily stopped all new developments to solve the security problems.
"When the pandemic caught us, we weren't ready yet," Yuan says in retrospect.
Today he compares Zoom's surge in popularity with the rise of a high school basketball player to the NBA.
Now he wants to get back to the roots of the company.
To the business customers, who currently account for more than half of the customers at 54 percent.
And who are significantly more profitable for the company than private customers.
But because almost every potential corporate customer has video conferencing software - according to IDC, most have four different ones - Yuan has come up with a new growth story.
Zoom no longer wants to be just a software provider, but to offer its customers a platform that combines a whole smorgasbord of services: from telephony to planning and controlling hybrid meetings or support for the sales team to translation services.
"We're not just the meetings company that everyone knows us as," summarized Zoom CFO Kelly Steckelberg recently.
In order to offer customers added value, the Americans bought an AI start-up from Karlsruhe in 2021, through which Zoom has been offering simultaneous translations and translated transcripts of conferences in currently 13 languages since the end of the year.
A further 17 languages are to be added by the end of the year.
"Hybrid working presents many companies with major challenges," says
Abe Smith
, who is responsible for international business at Zoom.
For this purpose, Zoom offers hybrid whiteboards, intelligent conference control or features such as Smart Gallery, which also assigns individual digital participant boxes to users on site.
"In this way, the participants at home can see every conference participant in the same way, whether in the home office or in the conference room," says Smith, explaining the feature.
Zoom also relies on artificial intelligence beyond translations - for example with Zoom IQ. The software enables companies to evaluate sales talks downstream: conversation conduct, content, emotions, everything should be able to be analyzed on the basis of video and voice recordings.
Data protectionists, however, are waiting to roll out the technology.
Zoom does not deliver everything from its own hand, but integrates a wide variety of partners and service providers as a platform, from Microsoft to Google, Salesforce to SAP.
According to Zoom, 2000 products have been integrated in this way.
From analysis service providers to hardware providers.
In order to meet the data protection requirements of German companies, the Americans, together with Deutsche Telekom, have developed an offer in which all data is processed and stored in Germany and only a pseudonymised e-mail address is sent to the USA to register for the meeting , as it is called.
"They try to keep their finger on the pulse," says IDC expert Kurtzman.
"And so far they're doing a good job."
However, Zoom now has powerful competition.
According to IDC data, Microsoft and Google have recently pushed Zoom into third place in the collaboration tools.
And Microsoft Teams is also delivered to customers free of charge as part of the Office package.
Zoom manager Smith is nevertheless convinced that there is enough space in the market for several providers - despite the economic challenges that the world is currently moving into.
"No single provider can solve everything in an ecosystem," he says.
"And the employees, especially the young ones, want more flexibility today, they want the best tools."
CEO Yuan believes that he can play in the top league in the long run.
His recipe: "Work even harder and keep developing."
That, he is convinced, is exactly what "we're doing".
However, it may take even longer to achieve his dream of a $10 billion company.
