If I recall correctly, the founder of Zoom came from Cisco. This all strikes me as someone technical seeing all the waste at their existing job and trying to make change happen. Cisco couldn't see the forest for the trees and never took them up on their ideas. The employee believed there was a large enough technology gap so they left and totally undercut them by delivering the same (or better) product for a fraction of the cost.
Ps. I swear this isn’t a Zoom ad. It’s like the cops - if I say it this has to be true?! That’s how this works, right?
I write software for IOS-XR, an in-house, service provider-oriented OS. More specifically, my team works on the ASR9K series of routers.
The video is on youtube (watch at 1.25X speed if you are like me)https://www.youtube.com/watch?v=8FiXQ0htcvE
I am curious, does that mean Zoom paid you guys for the losses incurred due to your original VC contract? If yes, that seems like an aggressive and maybe really loss making way to grow.
Another example that execution is still underrated. Everyone looks for the what do you (startup x) do that is so different and unique from the rest of the world to enable you to win. Feature-focused conversation.
Often the real answer is "simply" world class execution at scale, including business model, UX, GTM etc - as it remains the most difficult task.
Nice work, Zoom.
See this deck for a detailed view on SaaS metrics that shows the cashflow benefit of investing in quality growth.
If you read any of SEG's quarterly benchmarks, you'll see that a company like Zoom really does stand on its own. You can see that here: https://softwareequity.com/research/
$330m total revenues and $7m profit.
Rarely do we hear these days about a tech company IPO who’s profitable.
It's objectively impressive that they managed to "force" me to install software. Hats off... but I plan on ditching them as soon as a viable alternative appears.
I have no real point here, other than this: I wonder if my sentiment is general, and whether or not this might bite them later down the road? Probably not.
I suspect the desire to not install new software is the dominant market position (HN is clearly biased sample).
iPhone apps aren’t perfect but at least you know that they’ll uninstall cleanly and completely.
I spent 5 mins installing it once and it becomes transparent and reliable.
No kidding. I can't tell conferencing clients apart anymore. I have the following installed: GotoMeeting, WebEX, JoinMe, Zoom, Hangouts Meet, BlueJeans and every other week I'll get invited to a meeting hosted by yet another one (last week someone hosted a meeting with one called 'ringcentral'). They are all about the same, and I can't tell them apart anymore.
I called RingCentral to cancel the service (can’t cancel online) and was assured we wouldn’t be billed again. What do you know, we were indeed billed again. I called in to dispute this and was told they had no record of my previous call and my service was not canceled. They refused to refund the money. I hung up and called back 1 minute later. They changed my security questions so that nobody would be able to talk to me about my account. I ended up filing a chargeback.
Never buy RingCentral. What an awful company.
I strongly suspect it won't actually change anything, but so far I've been too chicken to actually try.
Zoom will go public at $3b+ after only raising $145m. That's a 20x+
Compare to Lyft. $25b valuation after $5b in capital. That's 5x.
Not a fair comparison.
It seems like a small company could get away with the free tier for a long time. My only question is, for that 40 minute time out on meetings, does that mean you can just rejoin after 40 minutes, or is that a lifetime limit on the account? Is the only thing stopping you from having a longer meeting really just the hassle of rejoining every 40 minutes?
Seriously, usually people are pretty good at fitting stuff into the allotted time, however long that may be. 40 mins actually seems like a pretty good limit too, enough to accommodate most meetings without compromise.
Like other commenters said, you can also start a new meeting after that 40 minutes is up. It's great for 1:1 video chats as well.
Screen sharing also beats slack and webex with quality, as well as the ability to only share a portion of your screen. I've been getting fed up with Slack's screen sharing because it always looks so compressed and terrible (even though screenhero was great.)
Congratulations to the Zoom team! I use Zoom at work and it's a fantastic product (maybe a little rough around the edges for UX IMHO but the video/audio is excellent). If it doesn't get acquired I would be looking out to acquire some stock :)
WOW. That's a lot of people
Also, what is their moat exactly?
We’ve been using Zoom for a year now and have had zero issues. None at all.
That sales team makes them (at the current multiples - see Mule, Qualtrix, GitHub, etc) into a $4B public or a $6-8B acquisition (my bet is that somebody of a big ones will snatch them before the IPO).
disclaimer: Used zoom couple times, use hangouts every day. google employee, opinions are my own.
Zoom is the exact opposite: You have to get the client but it client works with minimal resources, on many platforms (phone / laptop is seamless for me) scales perfectly with large meetings / screenshare and video at the same time, laggy mobile connections etc etc. Most importantly it ALWAYS works. I never have to futz with it ever (whether in terms of connections, or "your link doesn't work", "you have to invite me", "user is from a different organization than you" etc). Just get the meeting ID and connect. This is how technology should work in 2018.
Scheduling, calendars, easy phone dial ins, and way better mobile performance make it clutch. I'm a GSuite customer, but it's still better to pay Zoom.
Zoom is also focused on one thing. Hangouts/chats/meet/whatever Google wants call it /do with it is an afterthought. If Google wanted to make a real run at the market, they should buy Zoom immediately.
Unless Google rewrites or majorly reworks hangouts, it's not going to touch zoom. You do need to be worried about msft building something though, almost anything is better than hangouts right now.
I've the equivalent from google... horrible experience both times I've used it. UI is a mess. Quality of call was terrible.
As a g suite customer, I will stay far away from the google offerings.
Well, sorta. On Firefox, Hangouts refuses to function. On Safari, it requires a plugin.
meet.google.com seems to work fine in Firefox, oddly enough.
Can't wait to dig in deeper. But they show that execution and business strategy (like HIPAA compliance) are still important.
- Get a chat directly to you? It might show up on your phone. Or maybe not. There are plenty of times where I show up to work in the morning and notice that somebody's tried to get a hold of me the night before.
- Actually answer a message on your phone? Usually the chat history will show up on the Linux client. Eventually. Probably. (This is a wild improvement from last year where it was guaranteed to never show up at all, and there appeared to be no way to refresh chat history. I spent way too much time copy and pasting text from chats on my phone to some place where I could use it on desktop). Possibly worse, sometimes the chat history is just missing some lines with no indication of where.
- Even now, sometimes chat history just completely disappears on the desktop client. Restarting generally fixes this. It seems like whatever triggers the load for older chat when you scroll up in history sometimes just breaks entirely.
- Speaking of scrolling, have fun with that. It's always a fun surprise to see where the cursor ends up. I think maybe it's trying to target the last read message but it fails pretty badly, possibly from loading images and rerendering? All I know is that I scroll up a couple pages, wait a little while for all the text to stop jumping around, and then try to figure out where I am and scroll back to where I'd originally targeted.
- Answer a message on the desktop client and continue a conversation in chat on the desktop? Have fun having your phone buzz with notifications for maybe half the responses you receive.
- Have someone @me in a chat somewhere? I'll probably get that notification. Somebody does @all in another chat? Well, that takes priority, so I'll just kill the @all notification and never notice the one targeted for me. Admittedly this is partially a culture problem with people abusing @all in our chats.
- There a bunch of other functional things that are/were left out of the Linux client that I can at least understand as being lower priority (gif support, code formatting), but still make it clear that the Linux client is a second class citizen at best.
The whole experience has been bad enough that I get actively annoyed at seeing giant Zoom ads plastered all over 101, on buses, at T5 at JFK, etc. and think about what those cost compared to allocating some engineering time to fixing really basic bugs. Maybe it's a cheaper solution than the other options, I don't really know. But if the decision was up to me, Zoom would be basically last on my list if any significant portion of the company was using Linux.
All of those things sound great and important but there are many competitors who also do those and again, the switching costs for the user are low.
Meeting room support and scheduling integration don’t sound like they justify the massive valuation but I’m totally open to the possibility that I just don’t “get it”.
I know the same could be said for many public companies but that doesn’t change my feeling that they many of them are overvalued and overrated.
I think this is a good blog post describing the scale of the problem: https://danluu.com/sounds-easy/
I know it’s a hard problem but is it really that hard?
The gross margin figures (82% for 2019) are defined as "revenue - cost of revenue". And cost of revenue is:
> Cost of revenue primarily consists of costs related to hosting our video-first communications platform and providing general operating support services to our customers. These costs are comprised of co-located data center costs, third-party cloud hosting costs, integrated third-party public switched telephone network (PSTN) services, personnel-related expenses, amortization of capitalized software development costs and allocated overhead costs. Indirect overhead associated with corporate facilities and related depreciation is allocated to cost of revenue and operating expenses based on applicable headcount.
While I do like that they are profitable and have a plan for profit, unlike the other glitzier tech IPOs, it does seem like the return on capital is low. They have received $146m in funding to date (https://www.crunchbase.com/organization/zoom-video-communica...) after all, and in the end, $7.6m/year is not much to show for it. This is really a bet that in the long term, the costs in sales, marketing, R&D, and General Administration can be cut severely so that the revenue can be realized as mostly profit. Hard to know if that day will actually come.
Profitable + Net dollar expansion of 140% + Growing 118% YoY at over 100MM in revenue + 4%-ish penetration in the F500 so there's room to grow, this is an amazing set of numbers.
I'm hoping that Zoom can prove you can be profitable and still succeed in the public markets. That piqued my interest coming to this post. It sucks how many companies just stay unprofitable and private, or go public only for employees/founders/investors to dump shares and run.