@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
/thread
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
/thread
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”
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
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
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
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
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”
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
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?
en.wikipedia.org/wiki/FaceTime#…
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?
en.wikipedia.org/wiki/FaceTime#…
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
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
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
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”
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
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”
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
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
en.wikipedia.org/wiki/The_Innov…
Players like Cisco and MSFT didn’t go after Zoom bc they had bigger fish to fry -- classic innovator's dilemma
en.wikipedia.org/wiki/The_Innov…
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... $$$
Let’s just say, I think it worked out OK... $$$
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
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
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
DM or comment here if you want to chat about these
