My Authors
Read all threads
@Zoom_us crossed $75B in market cap this week

People often talk about how Zoom won the market bc of it’s simple pricing and high quality, easy to use product

What’s often missing from the discussion is advancements in the underlying tech that enabled this

1. If you’re a Zoom user, you probably think “I press a button and HD voice/video just works”

And if it’s a call between 5 people “everyone presses a button and it just works”

It’s that simple, right? Well, as Steve Jobs once said “simple can be harder than complex”
2. So how did people do this before Zoom? Quick history lesson…

In the ‘90s, most people communicated at work using audio conferencing

The big innovation at the time was *web* conferencing like WebEx and GoToMeeting that let you share audio AND share your screen
3. If you could share your audio and screen, why not use video?

In the 2000s, better video compression, high-speed internet, and more powerful CPUs made video collab possible

Polycom, Cisco, LifeSize sold room-based video conferencing solutions

But these had a few issues
4. 1/ They were expensive

You needed MCUs (aka hardware that required custom chips) deployed across your data centers

You needed TVs, cameras, microphones, video endpoints for conference rooms

If you were a big co with 100+ conference rooms, this could cost $MMs
5. 2/ Who you could communicate with was limited

Cisco devices could talk to Cisco devices, Polycoms to Polycoms, etc.

If you wanted to talk to someone outside of your network, IT had to open ports on your company’s firewalls
6. 3/ Using the tech was a total headache

Employees needed to make reservations with IT team for every mtg

Employee: "Hey, I need to do a five-person video call Wednesday at 11 AM"

IT: “Actually, David, you can’t do that because we don’t have enough capacity on our infra”
7. The net result was that even if IT did the work, employees rarely used video conferencing and defaulted back to audio

In 2009, there were supposedly 200M video minutes used v. 1B+ audio conferencing minutes
8. At the same time, people were using Skype to make personal video calls

Apple had just launched the iPhone 4 and FaceTime was taking off

If you could do easy video calls in your personal life, why couldn’t you do it at work?…
9. Startups saw an opp to build cheaper, easier video conferencing that was

1/ Software-based - video encoding/decoding didn’t rely on expens hardware

2/ Cloud-based - you didn’t need to install hardware in your data center

While this may sound obvious, it was novel 10 yrs ago
10. Early on, BlueJeans led the pack in this wave of next-gen video conferencing startups

Yet despite dozens of startups entering the market, there was only one other co that really survived -- Zoom
11. Why did so few cos survive? Because real-time video tech is hard

It’s easy to do audio. It’s easy to do video.

But to keep them in sync, while continuing to add 1,2,3...N meeting participants is hard
12. You have network issues, laptop issue, users w/ old cameras, bad wifi, they're commuting in cars, driving in tunnels

Sometimes it’s better to stream P2P, other times via servers, there are edge cases (lots of them) that need optimizing

And yet users expect it to “just work”
13. But what enabled specifically Zoom to “just work”?

Unlike most companies at the time, Zoom chose to build their own version of H.264 SVC (scalable video coding) and invested heavily in intelligently routing video
14. If you’re in a low bandwidth area, this enables audio and video to step down to match available bandwidth… it “just works”

If you’re connecting from your laptop or mobile phone or a conference room, it automatically adjusts to the device…. again, it “just works”
15. This “just works” product experience was magical

You could quickly set up a call, join it, add people, share your screen

And this, combined with Zoom’s simple pricing (free for 40 min or $10/mo) led people to download the product and use it religiously
16. So while Bluejeans went after large enterprises, Zoom chipped away at SMBs w/ its magic product experience and product-led growth

Players like Cisco and MSFT didn’t go after Zoom bc they had bigger fish to fry -- classic innovator's dilemma…
17. One blog covering Zoom’s launch even called them “neither consumer enough nor enterprise enough – and that tends to be the Death Valley for video companies.”

Let’s just say, I think it worked out OK... $$$
18. Zoom won the market bc of it’s simple pricing and high quality, easy to use product

But this was enabled by advancements that Zoom drove in the underlying video tech
19. So the next time you click the “join” button and it “just works”, I hope you'll remember that video conferencing tech has come a long way and sometimes “simple can be harder than complex”

And that @ericsyuan and his team did one hell of a job executing
Also, FWIW I skip over a lot of the nitty gritty details of Zoom’s tech and the historical market dynamics (they're fascinating)

DM or comment here if you want to chat about these
Missing some Tweet in this thread? You can try to force a refresh.

Keep Current with Natalie Sandman

Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

Twitter may remove this content at anytime, convert it as a PDF, save and print for later use!

Try unrolling a thread yourself!

how to unroll video

1) Follow Thread Reader App on Twitter so you can easily mention us!

2) Go to a Twitter thread (series of Tweets by the same owner) and mention us with a keyword "unroll" @threadreaderapp unroll

You can practice here first or read more on our help page!

Follow Us on Twitter!

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3.00/month or $30.00/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!