Eric Yuan / Photo Credit: Zoom
Zoom CEO Eric S. Yuan has had one of the most unique journeys for a tech entrepreneur. Yuan emigrated from China in 1997 at the age of 27 after his visa was rejected eight times and he spoke in broken English. When he arrived, Yuan quickly jumped into writing code for WebEx and learned English from his colleagues.
With grit and determination, Yuan built a company that many people told him would fail and took it public last week. And now Yuan is worth nearly $3 billion as he owns 20% of the company’s shares.
Yuan spent ten years building WebEx as the VP of Engineering between 1997 and 2007. Then Cisco acquired WebEx for about $3.2 billion in 2007 and Yuan kept a similar role at Cisco for four years. Then in June 2011, Yuan took a big gamble and decided to launch the Zoom video conferencing service despite the existence of many rivals backed by the largest technology companies.
Emergence partner Santi Subotovsky told Forbes that the venture firm’s partners were stunned when Yuan showed up for the pitch meeting and insisted that they all download the Zoom app and set up a live video conference of the presentation. Yuan knew that one of the biggest problems with existing rivals is the lack of simplicity. And Yuan told CNBC that the buggy code that he wrote for WebEx two decades ago is actually still running the platform now.
There are thousands of companies that utilize Zoom’s software and about 344 of those companies spend more than $100,000 per year on the video conferencing and collaboration services. Some of the companies that use Zoom include Capital One, Samsung, and Walmart.
Investors have been confident about Zoom’s growth as the valuation is nearly 50 times its sales. Zoom’s revenue grew 118% in 2018 and the company is profitable. Zoom’s stock jumped 72% on the first trading day last week and it valued the company at $15.9 billion. And Zoom raised $356.8 million from the IPO.
In April 2011, Yuan invited angel investor Dan Scheinman for a demo of his idea. Scheinman also left Cisco around that time and knew that Yuan had a strong background in videoconference software development plus the two of them had become friends while at the company. And Scheinman ended up giving Yuan a $250,000 investment check — which is now worth more than $175 million.
And Dan Scheinman also connected Yuan to his cousin Jim Scheinman — who is the founding partner of Maven Ventures. Jim became an investor, an adviser, and helped Yuan come up with the name Zoom.
Zoom quickly grew as many users signed up for the free product and there was rapid adoption of its subscription plans for businesses of all sizes. Four years after the company launched, there were about 65,000 companies signed up for Zoom.
While building Zoom, Yuan was also able to maintain an impressive work-life balance. Yuan’s oldest son finished his senior season as a high school basketball player and he broke the conference’s single-season record for the number of three-pointers made, according to CNBC. And Yuan was there to see every game and attended most practices as well.
To make this happen, Yuan traveled a lot less than other CEOs. Yuan conducted most meetings with clients using Zoom so he could also demo the product and get feedback. According to Forbes, he made eight total work trips in five years including the trip to New York for the IPO.
In an interview with Medium, Yuan said that he originally envisioned the idea for Zoom while a freshman in college.
“I first envisioned Zoom when I was a freshman in college in China and regularly took a ten-hour train ride to visit my girlfriend (who is now my wife). I detested those rides and used to imagine other ways I could visit my girlfriend without traveling — those daydreams eventually became the basis for Zoom,” said Yuan in the interview.
He believed that one day there would be a device that would connect him to his future wife in one click.