Thread by @mindgomes

Inspired by others onhere. Looking into sketchy “formation narrative” stories.

Zoom seems like a good place to start.
“When Zoom was young” haha
vator.tv/news/2020-03-2…

Don’t corporations have their researchers sign “non-compete” agreements so that if they do leave they can’t use knowledge developed on the current employer’s dime against that employer?
“Saasbee is founded while Yuan is still working at Cisco's WebEx video conferencing business”

“WebEx was not keeping up with what customers were demanding.”

“Yuan leaves Cisco in June 2011, bringing 40 of the company's engineers with him.”

40 engineers? Non had signed “non-compete” contracts either?
That’s a pretty hefty payroll to bankroll as well. Engineers a risk-averse as a group and bourgeois; they like to be paid on-time.

“First funding, at two months from founding: In June 2011, Saasbee raises $3 million in seed funding from TSVC, WebEX founder Subrah Iyar, Matt Ocko, Dan Scheinman and Bill Tai.” crunchbase.com/funding_round/…

Eugene Zhang: “Throughout the years, many have asked us why we bet on the nascent team that became the extraordinary (Zoom) video-conferencing unicorn.” medium.com/tsvc/how-to-sp…

“Indeed, what in hindsight turned out to be such a clear winner — Zoom was 2019’s strongest IPO even before Covid struck — was not so obvious in July of 2011, when we signed the check for $250k.”

“Let’s first introduce my side of the table. Back then, TSVC was itself a newcomer in the investment community, having just raised our inaugural fund (officially named TEEC Angel Fund).”

“Our investment committee was a small but mighty team of four partners: Eugene Zhang, Chun Xia, James He, and Michael Jin.”

“One day in the summer of 2011, on the 4th floor of a Santa Clara office building, I ran into a familiar face. I had met Eric Yuan through HYSTA, an organization for Chinese tech professionals working in the US. He was the 41-year old vice president of engineering at Cisco/Webex”

(HYSTA) Hua Yuan Science and Technology Association. “HYSTA was established in 1999 by a group of Chinese entrepreneurs in Silicon Valley. They created HYSTA with the hope to share their experiences and knowledge with young Chinese professionals entering the business world.”

en.wikipedia.org/wiki/Hua_Yuan_…

“HYSTA is partnered with the Shanghai Association for the International Exchange of Personnel, an organization that is part of the China Association for the International Exchange of Personnel, +

“…which is under the auspices of the State Administration of Foreign Experts Affairs (now the Ministry of Science and Technology).”
“SAFEA founded in 1956 and abolished in March 2018, when its functions were absorbed by the Ministry of Science and Technology (MOST).”

(Back to Zhang’s Medium post): “Apparently, frustrated by the lack of innovation at the then-industry leader in web conferencing, he had quit his (very lucrative) job and started his own venture, Saasbee.”

“Did (Yuan) have funding?
Not a drop. Would TSVC be interested in investing?”

Who quits a “very lucrative” career job and forms a start-up with 40 engineers and zero funding pre-startup??

Plus, Cisco/WebEx didn’t sue Yuan?

“Saasbee was going to build ‘Skype 2.0’ and be the ‘poor man’s telepresence’”.

“Saasbee’s pitch sized the overall ‘web collaboration’ market at $34 billion. This was ambitious…”

“(In June 2020, Zoom’s market cap reached $58 billion.)”

It pays to have ambition.

“James (He) agreed that there was something there: seeing the urgency with which Eric (Yuan) worked, one got a sense that his vision simply could not wait until tomorrow.”👍👌

“Saasbee was turned away by almost all the early-stage VC firms it engaged and TSVC ended up as the sole institutional investor in its seed round.”

“During the investment committee meeting, my partners and I found ourselves in an intense debate. Saasbee was entering a crowded market dominated by big brands. They had no product and no customer, only a potentially powerful idea that had not yet sprouted feet.”

“Saasbee, on the other hand, chose to focus on building on a deep, high quality tech stack. They projected 9 months to reach beta.”

🤔🧐
“We were also familiar with Cisco‘s habit of acquiring startups that had spun off from its own internal teams. This gave me confidence of having at least one viable, albeit conservative, exit strategy.”

“10 months after we wrote the check, Saasbee changed its name to Zoom, de-emphasized its consumer focus, and launched its first product.”

“(Zoom) found an early advocate in Wall Street Journal tech columnist Walt Mossberg, who endorsed Zoom’s service after comparing it to offerings by established players like Skype and Google.” +

“Now, there is a new, independent, service called Zoom.us, launched on Tuesday, that offers free, high-definition, group video calls for up to 15 people simultaneously (Skype maxes out at 10).”
online.wsj.com/article/SB1000…

“Cisco Webex scrambled to catch up with the idea that slipped through their fingers.”

Oopsies

Back to the Vator article:

“CISCO acquired WEBEX for $3.2B in 2009, and another startup company doing cloud-based video conferencing, BlueJeans, had already raised tens of millions of dollars. It was not clear whether there is still room for another player like Zoom.”

The question here is why Cisco would spend a few billion on WebEx and then not develop it to its full-potential?
Further, it let one of its engineers leave and take 40 other engineers with it to develop a better WebEx (later becoming “Zoom”).

medium.com/thrive-global/…

“‘In 2007 WebEx was acquired by Cisco and I became Cisco’s Corporate VP of engineering, in charge of collaboration software. I often met with customers, and in my conversations with them learned they weren’t happy with the current collaboration solutions, including WebEx.’”

“‘I firmly believed I could develop a platform that would make customers happy, so in June of 2011, I decided it was time to make the video communications solution I imagined during my college train trips a reality.’”

“‘More than 40 fellow engineers followed me in my new venture. We launched the Zoom platform in 2012. Now, a little more than five years later, we’ve hosted over 20 billion annualized meeting minutes (up from 6.9B last year) +

“‘and our customer base includes 1/3 of the Fortune 500 and 90 percent of the top 200 U.S. universities.’”

Is Zoom a good espionage platform?

“Zoom gives organizations and individuals a faster way to communicate relative to audio-only, chat, and email meetings, and it’s not restricted by geography, 👉so employees have more flexibility to work from home.👈 “ (interview Oct.,2017)

“‘In fact, Zoom is being used today by developers to write code together, by physicians to diagnose patients, by educators to conduct classes, lawyers to mediate or interview witnesses, and by actors to conduct virtual rehearsals.’”

How did we exist pre-Zoom?

“‘in education (Zoom) allows students who couldn’t otherwise make it to class to ‘be there’ via Zoom.’”

(back to the Vator article):

“The name ‘Zoom’ comes from Jim Scheinman, Founding Managing Partner at Maven Ventures and cousin of Dan Scheinman. He bases it on a book he is reading to his kids called ‘Zoom City.’”

“Until recently, very few knew just how powerful a company Eric and his team were building, and what an amazing and indispensable product they had brought into our lives.” medium.com/@jimscheinman/…

“From looking at Zoom’s meteoric rise compared to other companies, they’re in a class of their own. Every metric they disclose is best-in-class — revenue growth, sales efficiency, profitability, net dollar expansion, massive growth in $100K+ revenue / enterprise deals.”