| Aug 11, 2023

Eric Yuan’s Zoom: Turning a Tech Startup Into a Global Phenomenon

He was denied a visa to enter the U.S. eight times; Cisco wouldn’t allow him to rebuild its web-conferencing services. Eric Yuan has always used adversity to his advantage.

Eric Yuan was living in Japan in 1994 when the then Microsoft CEO Bill Gates delivered a speech on the potential of the Internet that inspired the future founder and CEO of Zoom Video Communications to pursue a career in the tech industry. A year later, Gates published “The Road Ahead,” in which he predicted the rise of video-conferencing. At the time, only 14% of Americans accessed the Internet. 

It was a key moment in the inspiring journey of the China-born-and-raised Yuan. His humble beginnings played an instrumental role in shaping his innovative mindset and relentless determination, and ultimately, helped him build an empire in the video-conferencing industry. 

Growing up, Yuan had to take long train rides between home and school. Later as a college student, he could only visit his future wife twice a year because of the 10-hour commute between them. Combined with Gates’ vision of the future, these experiences helped shape Yuan’s ideal of creating more efficient ways of connecting with others remotely.

Education and Early Career

After earning a degree in applied mathematics from the Shandong University of Science and Technology, Yuan gained a master’s degree in Engineering from the China University of Mining and Technology. Yuan then briefly attended a training program in Japan where he witnessed the talk by Gates. 

It was at that point that Yuan decided to take a leap of faith and pursue his dreams in the United States. But it wasn’t an easy journey. He applied for a visa eight times before finally being granted permission to travel to California. Despite facing challenges such as cultural differences and language barriers, Yuan’s passion for innovation drove him to excel in the competitive technology landscape. 

In the U.S., Yuan joined the web conferencing startup Webex, where he gained notable experience as an engineer. The multinational technology conglomerate Cisco Systems bought Webex in 1997 and Yuan quickly rose through the ranks, eventually becoming vice president of engineering. At Cisco, Yuan played a pivotal role in developing the company’s web-conferencing and collaboration tools, which would later inspire his vision for Zoom Video Communications.


Birth of Zoom

But by 2010, Yuan had become dissatisfied with Webex’s video-conferencing services based on poor user feedback and Cisco’s refusal to allow him to rebuild the tech. The following year, he left Cisco and managed to raise $3 million in funding for his new software startup called SaasBee. This was when Skype and Google Hangouts, as well as Cisco, dominated the crowded videoconferencing landscape. 

Yuan had a vision to create a smartphone-friendly videoconferencing system and developed a user-centric platform that prioritized simplicity and ease of use. It allowed individuals and businesses to collaborate effectively, regardless of their location, with just a few clicks.

It was also essential that the platform delivered outstanding audio and video quality, with minimal latency, to provide a seamless conferencing experience. In May 2012, SaasBee was renamed Zoom.

To make the new platform as frictionless as possible, Eric and his team incorporated features such as screen-sharing, breakout rooms, and virtual backgrounds, allowing users to customize their experience. Zoom experienced tremendous growth after the launch, not only due to its innovative features but also because of its compatibility with various devices and operating systems.

Staggering Growth and the Pandemic

Zoom’s explosive growth can be traced back to its successful Initial Public Offering (IPO) in 2019. As a public company, Zoom gained significant attention in the tech industry and from venture capitalists, and its market cap started soaring. Before long, Yuan had become a billionaire.

The pandemic then accelerated Zoom’s growth as businesses, schools, and individuals turned to the platform for remote communication. The company’s revenue increased by a staggering 367% during the pandemic, making it a household name worldwide.

Zoom’s exponential growth showcased the power of a well-designed and reliable product, with millions of people relying on it for their daily communication needs. The company’s ability to scale quickly under the leadership of Yuan was a testament to his leadership. He was named one of Time’s 100 Most Influential People of 2020 for revolutionizing virtual communications and helping countless people stay connected during the pandemic. Time also named him Businessperson of the Year in 2020.

Challenges and Opportunities

Yuan’s extraordinary contribution came full circle when Gates acknowledged his pivotal role in providing a crucial tool for remote work and communication during the pandemic. However, as the world adjusts to the ‘next normal,’ Zoom is facing challenges and opportunities in its pursuit of continued success.

Google Meet, Microsoft Teams, and Slack are all pushing aggressively into the video-conferencing market and the company has faced fierce criticism for using private data to train AI models. In Zoom’s terms and conditions, issued in March, video calls, text messages, and meetings could all be used to facilitate machine learning. 

In response, Zoom’s chief product officer, Smita Hashim, said the company had updated its terms of service to require user consent before customer content could be used. She also illustrated the opt-in interface for clarity. Despite the controversy, Zoom is pushing ahead with Zoom IQ, its AI-powered ‘smart companion’ that summarizes chat threads, drafts content, and creates meeting agendas. 

Like other tech companies, Zoom also laid off staff this year. But it is a measure of Yuan’s leadership that he took personal accountability and even said he would reduce his salary by 98%. Amid the uncertainties, one thing is clear: Zoom has become an indispensable tool for many people worldwide and under Yuan’s agile leadership, the company appears well placed to meet any challenges.

Rachel Paxton
Rachel Paxton

Opinion Contributor, Strixus

Rachel has been a blogger, freelance writer, and successful online business owner for more than 25 years. She has a BA in Humanities and business from Washington State University. view profile


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