The future of work has been accelerated by decades. Companies of all sizes have been forced to embrace a new normal that is remote, digital-first and asynchronous.
Rowan: Eric was born in China and moved to the United States in 1997. He applied to get an immigrant visa eight times unsuccessfully. The ninth time was the charm, which speaks volumes about his tenacity. He was an early engineer at WebEx, which was acquired by Cisco in 2011. Eric later left Cisco to start Zoom. At Zoom, he raised $146 million in venture capital funding. They IPO’d in April of 2019, and today Zoom has a market cap of $67.7 billion. Eric has been a real pioneer visionary in the collaboration space building the future of work. He is also one of the most humble and hardworking leaders that I know.
Eric, last week Zoom had what might have been the biggest beat-and-raise in the history of Wall Street – 169% growth YoY, $328M in Q1 revenue. A lot of that growth was driven by this abrupt transition to remote work with the COVID pandemic.
However, before we dig into what’s happening today, I want to take a step back to the beginning of Zoom. Tell us about the idea behind Zoom and the problem that you wanted to solve.
Eric: In 1997, I moved to Silicon Valley to pursue my American dream. I was so excited. I joined WebEx as one of the first founding engineers, and I was there for another 4.5 years after Cisco’s acquisition. In about 2010, I started to realize that our customers weren’t happy — what they really wanted was a mobile-first, video-centric solution. I wanted to help WebEx build this solution from the ground up, but Cisco wasn’t ready back then. So I left to build Zoom.
Rowan: And we’re so glad you did! This transition to working at home wouldn’t have been nearly as smooth or productive without a technology like Zoom.
Let’s talk about company culture. I read that your parents were geography engineers, and you said that your father taught you a lot about working hard and being humble. Are those the core values for Zoom employees?
Eric: The day before I moved to America, my father was very concerned about my future because I didn’t have a lot of money and I didn’t speak the language. He told me 2 things: you need to work as hard as you can, every day. And every day, be humble. I will always remember that. These are really my personal values.
Company culture and values are extremely valuable, and ideally you should define that from day one. Zoom started with mostly engineers, so I wanted to make sure our company values were simple and memorable. So, our company value is just one word: Care.
That means that every single day we care about the community, our customer, our company, our teammates, and our service.
Rowan: Incredible, that’s the shortest company value I’ve ever heard! Let’s talk about scale. You are very hands on as a leader, but at some point you’ve had to shift to delegating work to others. How have you done at balancing hands-on versus delegation, and short term versus long term?
Eric: I’ve learned a lot over the past 9 years, and it’s been a struggle to balance these. During my first years at Zoom, I was extremely hands on — maybe too hands on. Later, some of my mentors told me that it’s time to shift my focus to look at the bigger picture, our next steps, our growth strategy and risk factors. One mentor told me, “don’t do anything, just think”. It was really hard for me. I knew I needed to change, I just didn’t know when to make that change. Over the past two years, I have realized that I really cannot work on small things anymore.
Ideally, startup founders should think about one thing at the start of every year: is this the right time for me to transition from a very hands on CEO to more strategic?
Rowan: One of the keys to making that transition is who you hire, and who you’re comfortable to hand over those responsibilities to. What can you say about how to hire great leaders?
Eric: This was another lesson I had to learn. In the early days I always wanted to hire leaders with great potential and then to stretch them and groom them. My mentors told me I should be hiring overqualified leaders instead. Looking back, I realize I was wrong. When the pandemic hit, we weren’t ready. If I had had more of a balance of overqualified leaders and potential leaders, things would have been smoother.
Rowan: You’ve recently gone through an epic crisis in regards to security, and it played out in the media and on the world stage. You managed this very well. Since every entrepreneur is going to have to manage crisis at some point, can you tell us what you learned?
Eric: Zoom was originally built to support Enterprise customers to have business meetings, and the way we built and tested security features, as well as on-boarded new customers, was tailored to them. Overnight the user base changed, but our practices and processes remained the same. So my lesson here is when your user base changes you immediately need to look at your processes, product, and practice. You cannot assume that what you have in place will work for the new user base.
I also learned that if you have built a good culture, then you can thrive through a crisis. At Zoom, everyone worked super hard through this crisis. I did not get a single complaint from any employee. They told me: Eric, we are all behind you.
Rowan: You care for your employees and they in turn care for the company. And you yourself demonstrated humility. You publicly admitted the problem, announced you were going to fix it, and you put your head down and did it.
Zoom’s user base changed overnight and the number of use cases exploded to educators and doctors, kids, consumers, gyms, and even nightclubs. Even the Queen is using Zoom now! Does that change your strategy?
Eric: Yes, it does. There are so many new use cases now – even marriage is legal on Zoom in New York! – and we cannot support every single one as they each need different features and functionality. So our platform strategy is to give third party developers and startup companies a way to build applications on top of our platform.
Rowan: That makes sense. And if you pivot to become a platform company, there will be a lot of opportunity for entrepreneurs to build apps leveraging Zoom. What do you think could be some of those opportunities?
Eric: Look at the things Zoom is being used for now, like, for example, telemedicine. We don’t have this expertise. So, a healthcare startup with this domain expertise could leverage our SDK and API and embed it into their telemedicine application. The user doesn’t have to know it’s Zoom. You could do the same for fitness classes, teachers, etc. Each vertical use case can be a huge market on its own.
Rowan: So we can assume that the Zoom of the future is going to be a world with an App Store with lots of different ways to use video conferencing, from personal training to marriages, to the Queen giving an address?
Eric: Yes, exactly, that’s the vision.
Rowan: Let’s talk about the future of work. So many of your customers have pivoted to working from home. Do you think this is permanent?
Eric: From a productivity perspective, working from home works. However, the problem is mental resilience, anxiety, depression, loneliness. Those things are so critical, and if we continue to all work from home that will be a real issue. The new workplace will hopefully be a hybrid, where some people work from home, some from the office, and some people both.
Rowan: One thing that has emerged is Zoom fatigue — when you’re going from one Zoom meeting to the next all day. It can be really tiring. I’ve personally had to add more breaks between my meetings. How have you personally managed this?
Eric: I remember the pique back in April when I had 19 Zoom meetings in one day. The fatigue became a big problem! Ideally, we should improve the product to help with this — maybe have some AI that sends a message to others: ‘Eric has already had 5 zoom calls today, please let him take a break.’ If any startup companies have figured out a way to handle Zoom fatigue, I’m very interested.
Rowan: What about the serendipity aspect of being in the office – those chance encounters with people could be lost. Steve Jobs famously designed their Apple headquarters so that people would run into each other. How do you think about that for your own company?
Eric: Our vision is for Zoom to give a better experience than face to face, but we aren’t there yet. Our roadmap needs to include innovative, cutting-edge features to mimic the in-person meeting. Imagine a future where we wear AR glasses and we feel like we are in the same place.
Rowan: Let’s do a few rapid fire questions. I hear you’re a voracious reader. What books do you recommend for startup founders? And what are you reading right now?
Eric: For startup founders, if you only read one book, read “The Hard Thing About Hard Things” by Ben Horowitz or the Nike Cofounder Phil Knight’s book called “Shoe Dog”.
Right now I’m reading 2 books: “Becoming” by Michelle Obama. And Melinda Gates’ book “The Moment of Lift: How Empowering Women Changes the World”. They are both awesome.
Rowan: I also recommend “Zero to One” by Peter Thiel. And right now I’m reading “The Three Body Problem”, which is a really interesting science fiction trilogy by Liu Cixin.
Next rapid fire question: what apps are you bullish on?
Eric: Any apps that help with anxiety and depression. Maybe an app for how to mirror happiness, I’m not sure if this exists yet.
Rowan: The one that I use and love is Sam Harris’ Waking Up app. If anyone is looking for a great app on meditation, this one is fantastic.
If you could go back in time and meet 25 year old Eric, what would you tell yourself?
Eric: I would tell my younger self two things. Number 1 is to start a company as early as possible. I started Zoom at 41 and I am now 50. My energy levels aren’t as good as the younger version of myself. If I don’t sleep well one night, then my productivity is very low the next day.
Number 2 is to cultivate a sense of humor. Startups are a journey, and you have to make sure you have a sense of humor. It’s good for you, for your family, the company culture, team, and for crisis.
Rowan: I love that. One of my mentors and the Chairman of Microsoft, John Thompson, said to me, “Hire people that you’re going to like working with. And make sure they have interests outside of work, because it makes life that much more rich and enjoyable, and having that balance helps get through the hard times”. Great advice from another amazing leader.
This has been incredible, thank you, Eric. Let’s move to Q&A with the audience, led by Olivia O’Sullivan, Head of Corporate Engagement for Acceleprise.
Olivia: Thanks, Eric and Rowan! We have a question here about how remote work might suffer from the lack of the whiteboard and being able to crowd around and collaborate. How do you think that people can continue to have this creative spirit when we’re not together in the same office?
Rowan: Going back to what Eric said earlier, we need to create a better-than-being-there experience for the whiteboard. There are some companies taking a crack at it now, trying to fuse software and hardware to create that whiteboard moment. We need a big space for white-boarding, and we need it to be at the right price point. I think we’ll see something soon, and it could even become a requirement for every home office. It may not be a whiteboard, it could be a large flat panel TV that you can walk up to and draw on, integrated with cameras and Zoom.
Olivia: What do you think about appearance on video chat? Do people have insecurities? Are people set up correctly? Should there be video check ins before a meeting to create a specific look?
Eric: Right now people may be concerned with appearance and backgrounds, but give it more time and people will feel more natural about it. At some point it will become the default to have video on when you make any type of call. We’re just in a transition period.
Rowan: My suggestion is to turn off self view. It makes you self conscious and becomes what you focus on, what you look at. Oh, and you can always turn on “touch up my appearance”. That helps too 🙂
Olivia: This week there has been a lot of news around facial recognition and AI in video platforms. There are some really great startups like Arthur AI in New York that are thinking about that. Eric, do you see a path to having some type of behavioral analytics in the remote work video world?
Eric: Facial recognition and AI is very tricky. If you can pull it off it’s great and can create a feature rich experience. But it’s tricky, risky, and potentially dangerous, given privacy and security concerns. You have to be careful about these sensitive features.
Rowan: This is one we’re just at the front end of, and it’s related to the existing problem that as everything gets recorded and stored forever, it becomes difficult to be free and yourself. This also becomes an issue of privacy. There is certainly something about facial recognition that feels a bit dystopian, but at the same time, there are incredible opportunities with it that would be sad if we lost them.
Olivia: One last question here. Both of you have significant presence in the Bay Area. For the last few decades many entrepreneurs have moved to the Valley as a central place to build their company, raise venture capital and scale. Now that we’re moving to a distributed workforce, how do you think remote work will affect the Silicon Valley region, or other tech hubs like Toronto and New York?
Eric: With the move to more remote work, people might think about moving away from the city as it has a very high cost of living. However, it’s not good if everyone moves away because we still want people coming into the office. So we need to figure how to balance this new trend.
Rowan: There are pretty notable companies that have announced they are going totally remote. And a lot of companies are already doing a great job at this. However, it is highly dependent on the kind of work you’re doing. Software companies can take advantage of this trend. Hardware is much harder. The next wave of B2B SaaS companies are not going to come from Silicon Valley. That’s one of the premises of Acceleprise’s venture fund: how do we take what’s great about Silicon Valley and export it to all of these other cities. Now that we have a technology like Zoom, that becomes possible.
The future is bright and is going to allow us to have a way better, more diverse, more global workforce. And there will only be more opportunities for future entrepreneurs given the big changes happening!