Zoom Startup Story: How COVID Boomed the in Demand Video Platform?

Zoom Startup Story: History, Pandemic Success, and Plans

By Srishti Mudgal Apr 23 2021 10:19PM 2053 Read
Zoom Startup Story: History, Pandemic Success, and Plans

These are odd days, and chances are you've used a video call to chat with relatives, colleagues, and friends. And most definitely, you must have heard about or used zoom.

But have you ever wondered about the success behind zoom? In the era of Skype and Google hangouts and Microsoft teams, what made zoom so successful? Before hopping onto the reasons behind its success, let me introduce you to the 21st century's biggest video calling and conference app.

What Is Zoom?

Zoom is a cloud-based video messaging platform that lets you set up interactive video and audio conferencing, webinars, live chats, screen-sharing and other collaboration features.

Attending a Zoom meeting does not require an account, and the app is compatible with Mac, Windows, Linux, iOS, and Android, making it accessible to almost everyone.

The Origin of Zoom

Meet the CEO of Zoom, Mr Eric Yuan, who in the late '80s emigrated from China to America to work in tech. He had a vision that one day, technology would have easy-to-use video calls.

He got a job as an engineer at a company called WebEx Communications. Yuan was a key player in the creation of their video conferencing applications from the beginning. WebEx was one of the first video conferencing options on the market, and it appeared destined for success at first.

Yuan stepped up his efforts to upgrade the program while also ascending the corporate ladder, eventually achieving the position of VP of Engineering. WebEx expanded to over 750 engineers and over $800 million in annual sales under his leadership.

WebEx was one of the first videoconferencing, comprehensive resources and consequently, was a big success at the time.

But it wasn't perfect: connectivity was spotty, audio and video lags were common, and IT departments struggled with the implementation process.

Since there was little competition in the industry, WebEx was able to thrive. The situation, however, will not stay the same for long.

Yuan was well aware of WebEx's flaws. In reality, he proposed improvements, but the higher-ups refused to accept them. He eventually left after coping with a lot of opposition. His time in WebEx, on the other hand, taught him some important lessons.

This is what Mr Yuan said in an interview - "Before I left Cisco, I spent a lot of time talking with WebEx customers. And whenever I talked with a WebEx customer after the meeting was over, I felt very embarrassed because I did not see a single happy customer. And I tried to understand, why is that? And I summarized all the problems all those WebEx customers shared with me. You know, finally, I realized all those problems are brand new problems."

Customers had to be satisfied, which gave Yuan a north. As a result, he set out to solve all of these new problems by developing video conferencing tools.

Isn't that a little crazy?

Others, too, believed in his concept. Yuan remembers leaving with close to 40 engineers to achieve this aim in an interview with Forbes.

Investors had faith in it as well. He raised $3 million in 2011 to fund his project, and within two years, he had developed the first Zoom version, and it is here that we must highlight a key aspect of his plan. He designed Zoom with a video-first mindset in mind.

Other firms, such as Skype, had produced audio first and then adjusted to video, which was time-consuming and expensive.

Zoom's Beta testers were extremely pleased with the software, and it was released in January 2013 after a few minor tweaks. It was a huge success right from the start. Zoom reported having hit 1 million participants by May.

With the launch, they were able to secure funding, this time for $10 million and a value of about $25 million. By late 2013, the company raised another $6 million, more than doubling the company's value. Zoom had ten million users by 2014

So, this was the history of zoom, but if you are still wondering about the secret recipe of its success, don't worry; we got it covered for you. Just keep reading.

Zoom's Secret Recipe

It was great because it gave you a lot for a small amount of money.

CNET and other tech publications praised its 3-in-1 bundle, which included HD video conferencing, accessibility, and online meetings for $9.99, which was less expensive than other products that only offered one or two of these services.

Zoom worked with browsers like Firefox, Chrome, and Safari to the best of their ability.

It also identified devices immediately, eliminating the need for Mac or PC models, and its data use was low enough that it performed well even over slow or poor connections.

Plus, Zoom had free features, including community video calls that other rivals like Skype paid for at the time. Microsoft will ultimately learn from its errors and make Skype accessible.

Zoom did not focus solely on the users. Remember how difficult WebEx was for IT departments?

Zoom, on the other hand, was not. Cloud meetings meant that disruptive installations were less common, and the process was simple when needed.

To be profitable, that is. However, only a few companies can do this, and, as we previously said, Zoom seemed unstoppable. All was running on all cylinders, and people were raving about the app and the customer service.

CEO Yuan will also respond to angry customer tweets.

From 2014 to 2016, investment rose along with the company's valuation until Zoom secured $100 million in their Series D funding in January 2017, and the company was valued at $1 billion.

As a result, Zoom had become a unicorn, a business estimated at $1 billion. But it's a very different one. Zoom, unlike most unicorns, was profitable year after year.

With a $1 billion valuation in 2017 and solid growth for the next two years, it was time to go public. When it went public in April 2019, shares rose 72% from their initial price of $36. Zoom was worth $16 BN at the time.


Zoom's popularity occurred before the pandemic. It had done a lot of things correctly in the past. So it's no wonder that when people were sent home, and WFH took off, Zoom was a big success.

But it was always there. What is the reason for this?

And it seemed that something had already been taken. There were also Microsoft, Google, WebEx, and GoToMeeting, to name a few. However, none of them offered a complete solution.

Zoom couldn't have anticipated the pandemic, to be sure. No one will do it. Since this scenario caught the whole world off guard, searches for webinars, video conferencing software, and VPNs spiked in a matter of days, if not hours.

So, all of those years spent working on making video calls simply paid off at the perfect moment. People wanted a tool that was up to the task, and there was one that stood out from the rest: Zoom.


No one can predict what will happen, particularly at this time. Experts, on the other hand, have identified some potential areas of risk for the company. One is the company's stock. Even if use has increased, the stock's value is unpredictable.

Because of the same surge in use, it traded at a 37-fold higher valuation in late March than what the company had predicted for 2021. Zoom, on the other hand, remains a tempting offer in the market, as businesses will undoubtedly look to cut costs and improve employee productivity. For them, the key would be to convert all of those new free users into paying, loyal customers.

With all its pros and cons, Zoom has managed to thrive in the business and hopefully would continue to do so.

Srishti Mudgal
Srishti Mudgal View More Posts

I am a psychology student with my heart set on writing and creating content. I am only a fresher in this field and eager to learn more about it. I am just another carbon fellow with huge dreams

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