The pandemic COVID-19 is destroying the traditional service sector and creating new market shares for the online services. Zoom, a conference app that founded by Chinese entrepreneur Eric Yuan, enjoys its unexpected boom on stock market. There are indeed winners in losing era.
Rejected for Eights Time and Be Accepted Once
30 years ago, after hearing Microsoft co-founder Bill Gates giving a speech about Internet, the young Eric Yuan decided he wanted to become part of the dot-com boom.
Then the Chinese entrepreneur hit a snag. The U.S. government denied his visa application, for eight times. After two years of rejection, Eric finally made it to the U.S. and is now the major shareholder of video conference services firm Zoom Video Communications Inc., which raised $751 million in a Nasdaq initial public offering in 2019.
Before starting Zoom in 2011, Yuan was an early employee at WebEx Communications, an online conferencing firm, and then worked at Cisco Systems Inc. after it acquired the company for $3.2 billion (AU$5.46 billion) in early 2007.
Yuan came up with the idea for Zoom — which counts Uber Technologies Inc. and Wells Fargo & Co. as customers — after repeatedly traveling 10 hours to see his girlfriend while they were college students. “Someday, if I can have a smart device and with just one click I can talk with you, can see you, that was my daydream, right?” Yuan said in an interview with U.S. venture capital firm GGV Capital. “And every day I thought about that.”—edited from Bloomberg
Empowering the W-F-Hs
Zoom is based in San Jose, California, and is a cloud platform for video, phone, content sharing, and chat runs across mobile devices, desktops, telephones, and room systems.
Align with the spirit of Zoom app, Eric locked up his business on 5 March and has worked from his home in nearby Saratoga, a prosperous town on the edge of Silicon Valley. His staff have also been locked down in their homes since 5 March.
Businesses across the world and education authorities shut down due to the coronavirus pandemic have reached out to Zoom, file-sharing service Dropbox, e-signatures business DocuSign and emergency communications business Everbridge, as they look to work-from-home. Cloud computing providers Google, Amazon and Microsoft are also in higher demand.
In the first nine days of March, downloads for video conferencing services Zoom, Teams and WebEx were 183%, 103% and 64% above average, respectively, compared with the previous nine months, according to analysts RBC, The Telegraph reported.
“If I was 25, maybe I would be very excited,” Yuan says of his new-found wealth. “But those things don’t have any impact on me. Money is not going to bring me happiness.”
Zoom has emerged as one of the leading tools to keep businesses up and running and students learning. Seven days ago, 343,000 people globally downloaded the Zoom app, 60,000 in the US, mobile intelligence firm Apptopia stated, which compared to 90,000 people worldwide and 27,000 in the US just two months ago.
Zoom reported on 4 March fourth quarter total revenue of US$188.3 million, up 78% year-over-year and full fiscal year total revenue of US$622.7 million, up 88% year-over-year.
“We strive to empower our customers to accomplish more with our video-first unified communications platform … Our execution also drove 61% growth in the number of customers with more than 10 employees and 86% growth in the number of customers contributing more than US$100K of TTM revenue,” said Yuan.
Zoom’s shares have skyrocketed since it went public in April 2019, making Yuan a billionaire. Shares launched at US$62, hit $114.32 on 6 Marchand are US$111.10 on 17 March – a 79% rise.
Yuan is working on new features for Zoom from better face lighting to a lecture tool for professors. “I feel like overnight, this is one of the catalysts where in every country, everybody’s realized they needed to have a tool like Zoom to connect their people,” Yuan told Forbes. “I think from that perspective, we feel very proud. We’ve seen that what we are doing here, we can contribute a bit to the world.”
A Forever-Changed Landscape
“Coronavirus has completely changed how people think about where or how you should work.” Yuan believes the concept of working-from-home will become part of everyday life.
“Millennials grew up realising that they can get the job done without having to go to the office,” Yuan said. “Give it maybe 10 years and the millennials become the leaders and then it will become very common. Coronavirus is just a catalyst. Sooner or later this is going to be normal because the world does not belong to us anymore, it belongs to the younger generation.”—edited from theceomagazine.com
“Empathy, humanity and support for each other is more important than revenue, than growth,” Yuan said when asked about converting the increased free user traffic into paid customers.
Zoom and other productivity companies have seen their stocks spike amid a downturn for the larger market due to the outbreak of COVID-19. Zoom stock is up more than 42 percent since late January, when news of the virus’ spread started to impact the market. Slack is up 16 percent. The S&P 500, an index of the 500 largest U.S. stocks, is down about 9 percent in that time period.
On Zoom’s earnings call, Yuan pointed to several companies — InVision, Zapier, or Gitlab — that have had success without a single physical office. Zoom, which has told HQ employees to work from home for now amid the outbreak, could have worked without offices as well, Yuan said — a sign of his faith in remote work.
“I’ve mentioned this to some of my friends,” Yuan said. “If I started over with the company, I’m not going to have a single physical office. A lot of people asked me ‘are you crazy?’ They realize that’s reality now.”—-edited from geekwire.com
Eric and Zoom are indeed lucky ones in a struggling business ecosystem under coronavirus. As he states, it is possible that a decent amount of ‘enforced WFH’ employees/employer will stay at home, work from home even in post-Covid-19 times. 16 years ago, people start to see Jack Ma’s Alibaba after the SARS; will Eric Yuan be the next person to reform maybe not the shoppers, but the professionals’ world?
Edited by Joreal Qian