The recent growth of the video conferencing app is not only a result of the pandemic
From the rubble of the business disaster that has been the pandemic, a company has emerged stronger than ever — Zoom.
The video conferencing platform has become a household name in recent months. Its massive growth has been regarded as one of the luckiest ‘overnight success’ stories, benefitting from what was the crux of countless companies. However, in attributing the boom of Zoom solely to the pandemic we’re missing out on a valuable business lesson.
The video conferencing market has become increasingly sizable and saturated over the last few years — so why is it that Zoom specifically experienced such growth? What was it that caused them to rise above the others? When you’re competing with the likes of Microsoft and Google, coming out on top is not a mere accident.
Zoom’s success was no mistake. Although their growth undeniably skyrocketed as a result of the pandemic — their launchpad was built by a competitive advantage that has been developed during the 9 years of the company’s existence.
The advantage that Zoom was able to create is one that all businesses can learn from and use in order to set themselves apart from their competitors — allowing them to seize market opportunities just as Zoom has.
Zoom was a success prior to the lockdowns. Founded in 2011 by Eric Yuan, Zoom initially raised $3 million in funding to develop the platform. Launching in 2013, it acquired another $10 million and a valuation of $25 million. By the end of 2013, it had gained an additional $6 million in funds — doubling the company’s value. In January 2017, the company reached unicorn status, receiving $100 million in their Series D funding, valuing them at $1 billion.
They went public in April 2019 with an IPO of $36 per share, valuing $9.2 billion overall. By the end of the day, stocks had gone up 72% to $62 per share and by its third day on the market had become most valuable of all tech companies to go public that year.
Clearly, with a history like that, they’ve been doing things right for a long time. So what is it that made investors so excited about Zoom?
Zoom stood out from the crowd because of its different approach to online conference calls — they went with a ‘video-first’ strategy. Whilst other platforms used audio as their main selling point, Zoom was the first to focus on the visual side of things.
Before Zoom, group video calls for expensive. They were the first platform to offer them for free. Eventually, competitors also caught on and began to offer their services free of charge too, however, Zoom had already established themselves and a loyal customer base by that time.
As well as that, they offered comparatively higher-quality video calls. In an interview, CPO Oded Gal explained that one of the key factors for their success is their 150-millisecond latency rule — the maximum amount of lag for a conversation to feel unnatural. By aiming to avoid this, Zoom can provide a more natural conversation experience to its customers.
Their strategy also involved visual features such as mobile phone screen sharing — in fact, the platform on a whole was more mobile-friendly than others. Features that were usually limited to computer use were also offered on their mobile app.
Basically, people invested in Zoom because they provided a better product — they had product advantage. Their strategy differentiated them from their competitors which gave them the opportunity to establish themselves as the more innovative and forward-thinking option for video conferences. What made them unique, simultaneously made them better.
Eric Yuan discovered an opportunity in an already growing market and used that to unexplored opportunity to accelerate his growth. He had that genius startup idea that is destined for success — the idea that all entrepreneurs strive to have.
Having a genius idea that puts you at advantage, however, is not what is to be taken away from Zoom’s success. Of course, having a great idea will lead to a more successful business but how do you stumble upon that great idea?
The idea actually came from a problem that Yuan was made aware of during his time working at WebEx — Cisco’s video conference platform. As the Corporate V.P. of Engineering there, he often engaged with customers to discuss the company’s product. During these discussions, users would often complain about issues like lagging video, unstable connections, difficult setup and more. Basically, Yuan gathered that the product WebEx was offering wasn’t very good.
To fix these issues, Yuan requested to rebuild WebEx — stating whilst working there, “Someday someone is going to build something on the cloud, and it’s going to kill me.” However, his requests were always denied.
So, he took it upon himself to find provide a solution to the problems no one seemed to want to fix. Leaving behind his a successful career and lucrative job he started to develop Zoom.
That being said, this wasn’t a spur of the moment decision — According to an interview Yuan gave he had been sitting on the concept of Zoom since he was in college. He had a long-distance relationship at the time and would imagine how fantastic it would be if there was a device that gave him the ability to see her and talk to her with the click a button. Thus, he developed his vision for an accessible video call app.
Yuan didn’t just come up with Zoom because he wasn’t allowed to fix WebEx — Zoom was an idea that was already there but was improved on overtime. By identifying the weaknesses of his future competitors, he was able to build on his idea so that it had the advantage. He found potential in other peoples’ problems.
Applying this story to a broader business perspective — a product can only be as good as the problem it addresses. It was through a problem that Yuan experienced personally that he came up with Zoom. However, it was from the problems of many others that he realised how to execute his idea successfully.
With the number of new startups growing and more people turning to entrepreneurship, it's becoming increasingly difficult to enter a market that isn’t already brimming with competitors.
Merely solving a problem isn’t enough to be successful anymore. Chances are there’s already a solution out there. Unless you have an idea that is entirely unique — you need to be able to differentiate yourself in order to gain an advantage.
Zoom did this by finding problems within solutions. Their success has been long in the making as they’ve continuously built on the weaknesses of others to become the preferred option.
Regardless of what industry you’re in or interested in entering, there’s a problem in it — a specific one. Solve that specific problem and gain a competitive advantage like Zoom. Because once you have the advantage, you have the key to success.
FAQs
What is the key success factor of Zoom? ›
In an interview, CPO Oded Gal explained that one of the key factors for their success is their 150-millisecond latency rule — the maximum amount of lag for a conversation to feel unnatural. By aiming to avoid this, Zoom can provide a more natural conversation experience to its customers.
Did Zoom have a competitive advantage? ›The cherry on the top was its Freemium model (Basic Model as shown in the figure above) that combined three features with a meeting limit of 40 minutes and 100 participants. So, Eric created a competitive advantage by offering a good quality product with aggressive pricing and Freemium model.
What makes Zoom better than competitors? ›Zoom also has the best video resolution of any video conferencing platform, though there are limitations. You get high-definition resolution with the free version and up to 1080p with paid accounts. The quality of the meeting is also related to the quality of your internet connection.
What business level strategy does Zoom use? ›There appear to be 3 core strategies that Zoom has embraced and absolutely nailed: Customer-Driven Design, Freemium Model and Radical Transparency. Through a combination of these methods, Zoom has capitalized on opportunity and grown into the behemoth that we know it as today.
What are the 3 key success factors? ›- Strategic focus. This key success factor relates to an organization's leadership and strategy. ...
- People. This refers to the human resources in an organization. ...
- Operations. An organization's operations refer to the normal functioning of its business processes. ...
- Finances.
- Strategy (Strategic Focus, Leadership, Management, Planning)
- People (Personnel, Staff, Learning, Development)
- Operations (Processes, Work)
- Marketing (Customer Relations, Sales, Responsiveness)
- Finances (Assets, Facilities, Equipment)
Weaknesses. Ineffective encryption: According to experts, the ability of end-to-end encryption provided to the users by Zoom does not work in reality. It became an opportunity for the other competitors. They introduced better products that addressed this issue.
What sets Zoom apart from its competitors? ›- Built-in tools for audio and video collaboration.
- Instant messaging.
- Mobile dial-in.
- Screen sharing.
- Meeting recording and transcripts.
Zoom is much higher quality than Hangouts by a long shot." It's easy to see why this stuff — better call quality, the ability to record meetings, and being able to share high-quality video over that call — help to set Zoom apart from the competition.
Why is Zoom the best collaboration tool? ›Zoom One Collaboration Tools
Zoom Meetings brings teams together with face-to-face video interactions, screen sharing, chat, captioning, and more. Its smart and inclusive video conferencing features give you the confidence to look and sound your best and make everyone feel included.
What is zooms strategy? ›
Zoom's marketing strategy in 2022 involves a freemium model where the core features are free for everyone but only for 40 minutes if you want to meet more than 1 to 100 people. This offers a taste of greatness but also leaves you wanting more.
Why do customers choose Zoom? ›Zoom is easy to set up, use, and manage
It's one click to start or join any meeting, and Zoom provides easy collaboration and participant controls.
The primary engine for this growth is Zoom Phone, which passed the four-million seat mark. This is up from the three million seat number it posted the prior quarter. On the call, the company cited two customers with over 125,000 phone seats , which dispels the myth that Zoom Phone is only for small businesses.
WHO IS Zoom biggest competitor? ›- Webex Meetings. (14,413)4.2 out of 5.
- RingCentral MVP. (650)3.9 out of 5.
- GlobalMeet Collaboration. (589)4.2 out of 5.
- 3CX. (401)4.4 out of 5.
- Fuze. (121)3.5 out of 5.
- Google Workspace. (40,259)4.6 out of 5.
- GoTo Meeting. (13,192)4.2 out of 5.
- BlueJeans Meetings. (4,998)4.3 out of 5.
Zoom Video Communications is one such company. Originally launched in 2013 by a former Cisco engineer and executive named Eric Yuan, Zoom has enjoyed an almost unprecedented level of growth over the last two years, thanks in large part to the still-ongoing COVID-19 pandemic.
What are the 5 keys to success? ›...
Confidence
- attempting hard work independently.
- sharing a new idea with the class.
- taking a risk.
The five critical success factors are strategic focus, people, operations, marketing, and finances.
What are the 7 keys to success? ›These are 7 qualities that we must have to achieve our goals. Commitment An open mind Persistence Flexibility Faith Thankfulness Passion Author has described these 7 qualities with examples of people around him who have applied these to their lives. It makes these principles more practical and acceptable.
What are the 2 types of success? ›#1: Inner Success. This includes a positive mindset, high-self respect, internal peace and a strong spiritual connection. #2: Physical Success. Your health is your wealth.
What is the key factor of success? ›Key success factors
Examples would include agility, reliability, diversity and emotional connection with clients. Key success factors are one of three elements a company's management team must articulate as part of its strategic planning process, with the others being its strategic goals and its strategic scope.
What is the biggest problem with Zoom? ›
"Sharing Personal Data with the third-party provider while using these tools may fall within the extremely broad definition of the 'sale' of Personal Data under certain state laws because those companies might use Personal Data for their own business purposes, as well as Zoom's purposes."
What problems is Zoom solving and how is that benefiting you? ›Screen sharing and remote control
We start with a phone call, and if that's not enough, we click on that camera, hop on screen share, and request remote control from the other person. It's so easy. It's not just a communications tool, it's a help desk tool.”
The pros and cons of Zoom revolve around its ability to streamline enterprise communication and deliver the same, consistent experience for all use cases. Its ease of use, high-quality video, and crisp audio are its strong points. However, Zoom could be demanding for some computer builds.
Why was Zoom more successful than Skype? ›Zoom offers far more robust business features than Skype and is the hands-down winner in the Zoom vs. Skype showdown. With Zoom, you can hold meetings with up to 1,000 people, while Skype limits you to 100 participants.
What is the advantage of using Zoom? ›As well as being seen and heard, Zoom Meetings also provide live chat, content sharing, interactive whiteboarding and many other features to make meetings more productive. Whilst many will argue that there is no substitute for face-to-face meetings, Zoom Meetings can do things traditional meetings cannot.
What is the advantage of Zoom? ›- HD video and audio.
- Built-in collaboration features.
- End-to-end encryption for all meetings.
- Recording and transcripts.
- Streamlined calendaring.
- Temptation to multitask. ...
- The physical environment. ...
- Sameness. ...
- Stand up.
- Start with a bang.
- Keep it visual.
- Make it fun.
- Make it interactive.
Zoom offers free users up to 40 minutes, while Google Meet's free plan allows up to one hour for group meetings. Breakout rooms and meeting recordings are available on all Zoom plans but only on paid plans with Google Meet.
What are the best features of Zoom? ›- Virtual Meetings. Connect virtually from anywhere with Zoom Meetings.
- Team Chat. Collaborate together with Zoom Chat.
- VoIP Phone System. Call the world with Zoom Phone.
- Online Whiteboard. Create and brainstorm with Zoom Whiteboard.
- Conversational Intelligence. ...
- Email and Calendar.
- Zoom Video Conferencing Do's & Don'ts. ...
- DO control screen sharing. ...
- DO leave 'Enable join before host' unchecked. ...
- DON'T use your personal Zoom Meeting ID. ...
- DON'T publish the meeting invite information where anyone can see or find it. ...
- DO mute participants on entry.
WHY IS Zoom more popular than teams? ›
Zoom is better for external meetings; Teams is better for internal meetings. It's beyond easy for external participants to join a Zoom meeting from anywhere on any device—all you need is a link. This makes it a great option if you host a lot of meetings, large or small, with people outside your organization.
Who are the target customers of Zoom? ›Business, enterprises, and companies have always been Zoom's primary target audience. The Zoom platform was initially built mainly for enterprise customers – ranging from large financial service corporations, universities, government agencies, healthcare, and IT companies.
What is an advantage of Zoom over teams? ›Another advantage Zoom has over Teams is that Teams will only display nine participants on a call simultaneously. Zoom can fit as many as your screen will allow. Zoom will also touch up your appearance and adjust your lighting.
What are the key pillars of Zoom? ›- Our mission. Make communications frictionless and secure.
- Our vision. Communications empowering people to accomplish more.
- Our value. Care. Community, Customers, Company, Teammates, Selves.
- Our culture. Delivering happiness.
A catalyst for Zoom's international expansion is their growing channel partnerships with leading resellers, service providers, master agents and ISVs. As Zoom continues to partner up with leaders around the world, channel sales should grow within the revenue mix and drive faster international growth.
Why does Zoom use so much power? ›Zoom enables high-quality meetings because it's not strictly browser-based. It uses your computer's resources to handle a lot of the audio and video processing. The downside is that this can cause high CPU and memory usage, particularly with entry-level computers and those that don't have a dedicated graphics card.
What does China use instead of Zoom? ›VooV (known as Tencent Meeting in China) is essentially a Chinese copy of Zoom and has very similar core features. However, they currently have no meeting duration restrictions even on the free account – so it's a great free Zoom alternative!
Why is Zoom not quitting? ›If it does not respond, force-quit it: - Windows: press ctrl-alt-del, select “Task Manager”, select “Zoom”, click “End Task” - Mac: press cmd-option-esc, select “Zoom” from the “Force-Quit” program, click “Force Quit”
Who owns the most Zoom stock? ›| Stockholder | Stake | Shares owned |
|---|---|---|
| The Vanguard Group, Inc. | 6.77% | 16,619,864 |
| ARK Investment Management LLC | 4.32% | 10,615,891 |
| BlackRock Fund Advisors | 3.90% | 9,580,215 |
| Baillie Gifford & Co. | 3.43% | 8,420,463 |
On Monday March 23, Zoom was downloaded 2.13 million times worldwide, up from 2.04 million the day before, according to app tracking firm Apptopia.
Is Zoom still profitable? ›
...
Zoom annual net income 2018 to 2021 ($mm)
| Year | Profit ($mm) |
|---|---|
| 2018 | 7 |
| 2019 | 21 |
| 2020 | 671 |
| 2021 | 1060 |
Zoom Video's stock-based compensation has amounted to 23.4% of its revenue so far this fiscal year. Its enterprise business is still doing quite well with 20% revenue growth last quarter.
What are the 5 key success factors? ›The five critical success factors are strategic focus, people, operations, marketing, and finances. How to find success factors? The first step in finding and identifying success factors is understanding the overall objective of a project and the processes required to achieve it.
What is the key of Zoom? ›The host key is a 6-digit PIN used to claim host controls a meeting. You can edit or view your host key in your profile. This host key is applied to meetings you schedule.
Which are the key success factors? ›Key success factors
Examples would include agility, reliability, diversity and emotional connection with clients. Key success factors are one of three elements a company's management team must articulate as part of its strategic planning process, with the others being its strategic goals and its strategic scope.
- Define your personal goals and purpose early. ...
- Focus on strengths rather than fixing weaknesses. ...
- Create some short-term milestones on the path to your dream. ...
- Be honest with yourself about practicing what you preach. ...
- Don't stop believing, learning, and growing as a person.
- Exploit before you explore. ...
- Diversify your business portfolio. ...
- Remember your mistakes. ...
- Be conservative about change.
- Virtual Meetings. Connect virtually from anywhere with Zoom Meetings.
- Team Chat. Collaborate together with Zoom Chat.
- VoIP Phone System. Call the world with Zoom Phone.
- Online Whiteboard. Create and brainstorm with Zoom Whiteboard.
- Conversational Intelligence. ...
- Email and Calendar.
Zoom is a video conferencing platform that can be used through a computer desktop or mobile app, and allows users to connect online for video conference meetings, webinars and live chat. During the Covid19 crisis, Zoom has seen a surge in popularity, with millions of people using it to stay in touch with others.
Where is the Zoom secret key? ›- Click Sign In.
- On the Sign In screen, enter your Zoom registered Email Address and Password. ...
- On the Zoom's API License and Terms of Use screen, click Agree.
- In the top menu, click Develop > Build App.
- On the Zoom's API License and Terms of Use screen, click Agree.
What is the unique selling proposition of Zoom? ›
Zoom offers three primary value propositions: accessibility, performance, and brand/status. The company's solution creates accessibility by providing a wide variety of options. It offers video conferencing, group messaging, simple online meetings, and a software-defined conference room feature.
What is Zoom and its benefits? ›During the global COVID-19 pandemic, Zoom became the generic term for video meetings. As well as enabling friends and family to keep in touch, it also allowed business workers to virtually interact with colleagues when in person meetings were simply not possible.
How does Zoom keep their employees happy? ›Customer wellness
Zoom's apps include 'Wellness Coach' which offers employees desk-friendly workouts, stretching practices, mindfulness tools to help productivity and meditations that can be used as part of a meeting.