Eric Yuan built Zoom into a massive company but missed expanding into adjacent markets. The TAM trap happens when founders focus too long on one product before diversifying. Successful founders plan a second product early, and sometimes exiting sooner preserves the option to scale later.
Chapters
When I think about Zoom, I can't think of like a better technical founder running a leader than Zoom. I can't figure out someone I respect more on every level as a human, as an engineer, as a leader than Eric. Why in 4 years— this is a mean question and I don't deserve to even ask it because he's so good, but why didn't they capture more TAM? Why didn't they find a way to add 4 billion of note takers when there's a trillion note takers? Why didn't they? And I don't know the answer. It's not because you're not one of the smartest people in the industry. Thinking about this for a decade, but there was no great second act yet. There's no great second act. And, um, I, I do worry going back to here. I worry. Well, I worry, and this is why I tell founders to take their exits and then say no because they can go bigger, but, but by default, take it.
So many things in that to unpack. I mean, one is the multi-product thing. I think one of the big takeaways we've had is the need to be thinking about that second product much earlier than you would've thought. You don't want to wait till you hit— and what's the TAM? What was the word expression, Jason? I loved it. It was good, but I'm forgetting what did we call it? Was it TAM trap? The TAM trap. TAM trap. No way till you hit the TAM trap. I mean, we were thinking actually we were comparing two of our portfolio companies and it's invidious to name them, but we would say one of them has compounded really well because it's continually added a new product that for the first year or two is, you know, a couple of million dollars, but layered it in, and now many hundreds of millions. So I think watching that time trap is key.
