Letter #212: Eric Yuan (2019)
Founder & CEO of Zoom | 2019 S-1 Shareholder Letter
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Eric Yuan is the Founder and CEO of Zoom, which he founded in 2011. However, the genesis for the idea came back in 1987, when he was a first year university student taking 10 hour train rides to visit his girlfriend (now wife) wishing for an easier way to visit her.
He completed college, got a master’s degree, and entered the workforce. His company sent him to Japan for a four month training program in 1994, where he heard Bill Gates give a speech about the internet. Inspired by the power and potential of the internet, Eric thought about building an online bookstore (as a child, he loved reading and buying books). However, he couldn’t figure out a way to conveniently accept payments, and resolved to go to the United States to see how they were using the internet.
While he resolved to go to the US, he had anything but a smooth journey. He spoke very little English, and was rejected for a visa eight times. To make matters worse, he had to wait three months in between each application. But after two years, on his ninth attempt, Eric received an H-1B visa to come to the US and work for a startup company called WebEx. While his English was still poor, it didn’t matter—he just needed to code (and he could communicate with Min, who was a cofounder and the CTO of WebEx, in Chinese).
Eric became one of the founding engineers, helping grow the engineering team from 10 to 800+ worldwide and the company from $0 of revenue to $800mn+. WebEx was ultimately acquired by Cisco for $3.2bn in 2007, and Eric stayed on and became a Corporate Vice President of Engineering, where he led the company’s collaboration software. He spent many of his days speaking with customers—and recognizing the importance of mobile, he pitched a new smartphone-friendly video conferencing system to his managers. However, management wasn’t interested in cannibalizing a cash cow, so Eric left and founded Saasbee (now known as Zoom) to build that product.
Eric was joined by 40 of his engineers but struggled to raise capital, as the video-conferencing market was highly saturated. On the hardware side, Polycom was a global leader, and Cisco had just acquired Tandberg to consolidate market share. On the software side, Skype was a dominant platform, WebEx was doing well as a part of Cisco, Apple had launched Facetime, and Google was laying the groundwork for Hangouts.
Eight years after its founding (and 31 years after Eric first had the idea for a videoconference tool), Zoom went public on the Nasdaq. Today, it has a market cap of ~$20bn.
Today’s letter is the IPO letter Eric wrote for Zoom’s S-1. In this letter, he focuses on highlighting Zoom’s culture and philosophy from multiple angles, and shares his excitement for the future.
I hope you enjoy this letter as much as I did! There are hints of Jeff Bezos, Tony Hsieh, Andy Grove, although of course, it is overwhelmingly Eric Yuan.
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Letter
Thank you for reading our prospectus and considering an investment in Zoom. As the founder and CEO of Zoom, it is my privilege to share with you what we’re all about.
Life is about the pursuit of happiness. The greatest, most sustainable happiness comes from making others happy. Delivering happiness is what we do at Zoom.
Ten years ago, I was an engineering leader at a major technology company. I would visit customers, and they would tell me how unhappy they were with the technology in the videoconferencing market. This made me unhappy. There had to be something better – something designed for modern video communications, something that would deliver happiness. I knew that we would have to start from scratch to do it right.
This experience underlies the Zoom happiness philosophy. Our focus is to keep both our customers and our employees happy. The sum of their joy is greater than its parts. Our customers and our employees make each other happy. We live this philosophy every day. We take care of our customers and employees. We built a video-first communications platform that is scalable, user friendly and reliable. We respond to our customers’ emails (quickly), talk with them face-to-face on Zoom, really listen to them and build the features and products they ask for (also quickly).
Happiness delivers results. In 2018, our average customer Net Promoter Score was over 70, demonstrating that our high-quality, easy-to-use platform is making customers happy. We have consistently earned high scores across customer review sites, including Gartner Peer Insights, TrustRadius and G2 Crowd. And let’s not forget our employees. Zoom has received multiple awards from Glassdoor based on high ratings and reviews from our employees.
We deliver much more than what people expect from video communications. Our team comes to work every day because our platform transforms the way people work together. For example, a medical care team discusses the plan to transition a pediatric patient off his feeding tube, the world’s largest brewery explores opportunities for using blockchain to pay its farmers, a state park brings students on an underwater exploration in Lake Tahoe – all face-to-face on Zoom. We are proud that our platform helps users around the world build trust, strengthen relationships, move faster and get meaningful things done.
It’s been over seven years since I founded Zoom, but this is just the beginning. There are a lot of people and companies that benefit from Zoom, but there are still plenty that haven’t yet explored the possibilities that Zoom can bring to their organizations. I want to give them video communications that make them happy. Video is the future of communications. If our customers are happy, the sky’s the limit. We must stay humble and paranoid about our customers’ and employees’ happiness.
We have a lot left to do. If you join us in this journey, you will become an integral part of this work and our family. Caring is our company’s core value. We care deeply for our community, our customers, our team and our company. And today, we want to add you to that list.
And now, back to work, and back to making people happy,
Eric S. Yuan
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Wrap-up
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