Eric Yuan | How Zoom Made Video the Pandemic Star

Hi everyone. Welcome to Grey Matter, the podcast from Greylock, where we share stories from company builders and business leaders. I'm Heather Mack, head of Editorial at Greylock. On today's episode, Greylock General partner Sarah Gua talks with Eric Yon, the CEO and founder of Zoom. The company was founded a decade ago and had a hit public market debut in 2019, but it achieved truly worldwide star status in 2020 when the COVID pandemic and sudden shift of virtual everything made Zoom an indispensable tool for work, school, healthcare, entertainment, and everything in between. In this interview, Eric outlines how Zoom was able to meet the surge in demand because of the foundation the company was built upon, an obsession with customers and their needs. He also shares a history of Zoom's ambitious beginning in a crowded field of competitors, and he lays out his vision for the future. This interview is part of Greylock's Iconversations speaker series. You can find a transcript of this interview and all other Greylock content on our website greylock.com blog and you can subscribe to Grey Matter on SoundCloud, Spotify, YouTube, or wherever you get your podcasts.

Hi everyone, welcome back to Iconversations. I'm Sarah Gua, a General partner at Greylock. I'm incredibly honored to welcome Eric Yun, the founder and CEO of Zoom, a now legendary company and technology that needs no introduction. While millions of users have used the platform for years, the past 18 months of unforeseen circumstances have spread and intensified the use of Zoom to the point where this is even called the Zoom generation. As the pandemic shifted work, education, entertainment and pretty much everything else online, Zoom has grown exponentially. By April of 2020, the company was handling 300 million daily meeting participants representing 30x growth from December of 2019. We joke internally at Greylock that when we do comparison charts to benchmark our companies, the curve of Zoom always goes off the page. We have to ignore it. This great rethinking of how we interact with one another is here to stay. And as we gradually reenter our physical, Zoom will continue to play a critical role in our lives. Zoom wasn't even close to the first video conferencing platform. It didn't raise as much venture money as many Series B or Series C companies today, and it faces the field of massive, deep pocketed competitors. But its journey from unlikely upstart to becoming the recognized best solution and a durable iconic company serves as an incredible business lesson to entrepreneurs whose missions place them in crowded fields. Zoom is the legend. I'm thrilled is true the generous, grounded and customer centric founder. The best, easiest to use product that actually works in the innovative business model. Zoom is the story to me of the good guys winning. Eric knows all about being a challenger and being the challenge. He began his career in 1995 at WebEx as one of the first 20 employees and in 2007 WebEx was acquired by Cisco, effectively making Eric a VP of Engineering at the incumbent. The desire to make a better product drove Eric to return to the startup world and he started Zoom in 2011. Today, Zoom is an $80 billion public company that serves a third of the world's knowledge workforce. Let's talk about all the ways in which Zoom and Eric personally has been able to compete and win, to rise to the occasion of the challenges of the last few years and how they continue to innovate today. Eric, thank you so much for being here. I am grateful for our friendship and for you gifting your time to our founders when you're quite busy keeping the world economy running.

Yes, Sarah, thank you so much for having me. You are such a great friend. I always enjoy talking with you anytime. Thank you.

I'd love to start at the beginning. Tell us a little bit about your background.

You know, I was born in China. Being a kid I was always fascinated by the, you know, high tech stories here in Silicon Valley like HP or Apple. I really like the technology and really, you know, you know, was dreaming about, hey, someday maybe I should go to Seneca Valley. I think early 1996, I was skiing China and and I knew one of the co founders of WebEx because I traveled in Japan. 1995 technology show, Microsoft co founder and CEO Bill Gates, he was there, gave a keynote speech talking about the Internet. I was so impressed and I think I need to figure out a way to go to Silicon Valley as quickly as possible to embrace the first wave of Internet revolution. WebEx sponsored my H1 working visa and came here in 1997 to be a senior software engineer and wrote the code for WebEx for many years and then promoted it to senior manager, Director and all the way to the Vice president of engineering at WebEx. Yeah, I was stuck on the real time collaboration technology since 1997. First of all, I feel like I was so lucky and joined WebEx. WebEx was early pioneer for the data collaboration. Not about a video, but again still about the real time collaboration. I did not know and that technology until I joined WebEx for several years and I realized, wow, this is something I really, really have a passion just.

In terms of the technology itself. You have now been working in real time collaboration for a long time. Why have you stuck to it?

When I was in college, my girlfriend, she lived in a different city and it was really hard, really, really hard to see her, probably at most twice a year. At that time I was daydreaming about, hey, maybe somebody in the future I can have a smart device, just one click, literally. You can talk with her, see her. So, you know, for the people to speak negative, no matter where they are, I think it's very important. And I think that kind of a product for sure will become mainstream. That's why every day while work for Zoom and try to make the product better, I feel like, wow, I'm very, very excited every day.

I remember some years back when I cold called you at Zoom, you were nice enough to have lunch with me. And I remember you said something that, like, seemed quite weird at the time, honestly, but has come to be true. And I asked you something along the lines of, why are you doing this? And I was struck by how personal the answer was because it wasn't, you know, anything about the secular trends, which are, of course true. It was like, Sarah, I just, I don't like that we have to go travel, drive around, meeting people. I hate getting in the car for an hour to get to somebody across the bay. But, you know, I miss my people. And I thought that was really great. So WebEx, as you said, was a pioneer, is a really small company. You just started as an engineer. What was it like building the product? What was the customer reaction? What was the competitive environment like?

I can tell you it's not that easy because, you know, the market was so crowded back then and almost everyone told me that, you know, you better focus on something else. There's no way for you to put it off. Right? The world does not need to have another product like that. And the good news, I did spend a lot of time on talking with the customers. I knew back then none of those products would make a customer happy. And then I realized if I can build something better than any other solutions to truly deliver happiness to those users, at least I have a chance to survive. I remember back then, every day the theme I was thinking just how to survive. You know, always think about maybe our product better than I can survive. I always conveyed that message to our engineer team as well. If we want to survive, let's make sure our product must be better than any other solutions.

So did anyone at WebEx in the early days believe it would become as.

Big as it did back then, actually, you know, I was part of the early WebEx team, right? I wrote a lot of code, but at that time, company was already sold to Cisco. Cisco was a great company. And every day I did not see a lot of hybrid customers. And of course I know the webex architecture was data collaboration, you know, usability not there yet. I try to convince others and to build a new solution from the ground up. And many others told me that I was crazy in the world, probably does not need to have a new solution like that. The future of collaboration is really about enterprise social networking, something like a Facebook for enterprise. So then finally I see, I would say, yeah, I'm going to leave to pursue my own dream to build a new solution. Some very good engineers, the data follow me and follow me to realize that.

A dream was there a particular turning point that made you decide to strike out on your own. How many years were you at Cisco post acquisition?

I think for the first two or three years after acquisition, I was pretty happy there. And until like say 2009 or 2010 timeframe, every morning, I can tell you, not like today when I woke up, I'm so excited. I wanted to work. And back then, you know, I was corporate vice president, you know, managed almost 1,000 people. And every day when I showed up in office, I feel like I better do not go to office. The reason why I was not happy, you know, the influence to others, I can see that, right? So that's why every morning when I woke up back then, I really struggled. Should I go to office? Should I stay at home? At that time, you cannot work from home, right? And Also I think 2010 and when I was 40 years old, I remember that in February, one day when I woke up, I still remember that morning. I said, yeah, I'm already 40 years old. I lived in Silicon Valley. I call that a startup valley. If tomorrow, if I'm going to retire, do I regret anything? The number one thing I immediately thought about was, wow, I did not start a company then I feel a little bit of sense of urgency. I had to start something, otherwise I'm going to regret that day. Actually, I sort of accelerated my dream to leave and to build a new company.

You clearly led a lot of people before, but it was your first time being a CEO and being your founder. What was your philosophy on team building? A lot of great engineers followed you. But what do you look for in people overall?

I think normally you look at a team building, right? There are two ways. One is you hire a very Experienced the senior leader and count on, you know, this leader, he or she can build a team. You know, that's one option. Another way is you build a team from the ground up. You build a team first and then you hire a leader to make the team more scalable. We tend to always like to have a team first and then we hire leaders. And when it comes to hiring, you know, a team or team building or leaders, we always look at self learning and self motivation. Those two things are extremely critical to us because every startup company is different and you have to learn new things. And plus we are all adults. Everybody has so many problems. If I needed to spend time to motivate our team, I really do not have biologists want to make sure everyone is self motivated. Another thing is very important. We like to hire those people with gratitude attitude. Right? Meaning you got to be grateful because otherwise, even if you are making a very good progress, if you are not humble enough, you become arrogant, you do not feel grateful anymore. And I do not think you can make any more progress. That's why self learning, self motivation and gratitude are extremely important when it comes to hiring leaders or team building at Zoom.

So tactically that makes sense to me. Smart people are not going to tell you that they're. You may be able to tell that they're arrogant very quickly. Right. But they're not going to tell you that they're not motivated or that they're not learners. Everybody likes to think they're motivated learners. Right. How do you assess that? What do you ask people or what do you, what do you try to learn about them?

That's great question. You know, if I interview someone, you know, I tended to ask a question about, hey, please share with me a story. When you had a downtime, you know, when you are facing a challenge, how did you come out of that challenge? Right. You did it by yourself. Last year when we were facing all kinds of challenges, I think our team, they were all self motivated. You do not need to push them to do this, to do that. They know what to do. They all work very hard proactively. I think that's a self motivation and.

Recognizing or giving credit to others who have helped you and seeking that help.

Exactly.

Okay. One of the things that people are going to be most fascinated by is the sort of core innovations in Zoom were not just technology but also business model. Right. And this predates me slightly at Greylock, but I remember looking back with awe at the Zoom series a deck from 2012. It's all of like seven slides by the way. But because Zoom was built in the cloud and employed a freemium model and back in 2012, this is like not obvious, right? This is risky innovation. And you had, you know, community marketing and product led model in your mind when those were, those were not terms that people knew, right. In sort of the individual viral adoption that connected to an inside and enterprise and channel sales model. What made you convinced that this was the right strategy for Zoom?

I think you are so right. First of all, I think I also made a mistake as well. When I started. You know, when I started, always thought about, hey, just to focus on the product, right? If a product works, everything else will follow by itself. I think I was completely wrong. And so after the product was ready, I realized, even if your product is ready, how do you get those first the user get the first adopters to try your product. So then at that time we thought about, wow, we have to be creative about the business model as well. You cannot make your business model very complex. Right. That's the reason why we introduced the freemium model. Right. So good news, Zoom does have a network effect. So how to make sure facilitated end users to easily go to your website for free and they can use that forever. Maybe some eliminated some features you can expose your product to end user. Make sure simplify the business model. Then later on I realized the business model is also very, very important. Even if you think your product is better because you have to simplify your business model, make sure everyone know how to try out your product, how to share your product experience with others. That's why here at Zoom, simplicity is everything. Product development, business model, the pricing or packaging, internal system, everything is really about simplicity.

So just thinking again about the early days of Zoom, you did get to tens of thousands of active users and callers by the series A. What was your confidence level at that time? In a few years, were you ever daunted by the competition? Did you have the same ethos of like, we're just trying to survive here like you did at Webex?

Yes, I think it's in particular for the first several years, every day theaters, I just thought about one thing, how to survive. Because I think all those friends, you know, they are right. The market was extremely crowded. And you know, at that time we knew we can build a better product, but we just had no idea, you know, how to thrive. That's why, you know, everyday thing about it. We are very, you know, kind of paranoid and we do not hire a lot of people. And it's just everyday thing about how to save money and how to make a product better. And until I think a serious C, I think we reached a certain million, and finally I feel like, wow, we have a lot of money in the bank now, so. But, you know, those money, not, you know, seriously not money, is really about the trust from all those investors. Right? That's why I say we have to work even harder to survive. You know, even today, I still think about, you know, how to survive. You know, we got to be paranoid, right? I think, yeah, we never thought about Zoom can become a big, very successful company. I always thought about, hey, we're not a far away to be not a good company anymore, right? That's why I think you have company culture. Always look at the customer. For me, always look at employees. Don't become arrogant and be paranoid.

I don't think I've ever had a conversation with you that was about business or technology where at some point you do not say happy customers, right? So you talk about it a lot. It's a very consistent drumbeat, and it sounds so simple. You know, at the surface level, you'd assume every company cares about happy customers. Can you just describe, like, why you talk about it so often and why you think it's any different than any other company?

First of all, when adcompos software as a service, right, you offer the service to customers. If your service is not good, customers have flexibility, they can cancel your service. You know, go to other solutions. In particular, for our market, there's so many other solutions out of there, it's very easy to switch to other solutions. Right. That's the reason why we have to look at everything from customer perspective and do all we can make sure product is better, price is better. You know, when it comes to interaction between customers and our support team, we have to let a customer know we truly care about them. Otherwise, it can switch to other solutions. Right? That's why you know how to build your trust, how to make sure the happy customer, if a customer, they feel happy, even if it's very easy to switch to other competitors, guess what? They will not, because the trust is already there. They know Zoom is a great company to care about them. That's why happy customer can really help us even if we are competing in this very clouded market.

I believe that people at Zoom care about me as a user and happy customers overall more than many other competitors. How do you get that to happen? Like, how do you convince everybody in your organization to think that way?

You know, first of all, you need to make sure it's part of the company culture and value at Zoom. Our company value, just one word, Care, meaning care for the community, customer company team is as well as yourselves, right? You know, make sure, you know, you set up the company culture and value to embrace the customer happiness. Another thing is really lead by example. In early days, I can tell you, and it's just online subscribers, just at that time, the $10 a month, when I saw the cancellation, just $10 a month, I personally wrote an email to them. Seriously. And quite often I got an email response back. They say, ah, I do not like Zoom. You are not a company CEO. Why you think you are the company CEO? You send me this email and they thought I'm just a marketing person. I said, no, I'm a real CEO and let's have a Zoom call. You know, by doing that, we did have a lot of very loyal, you know, customers. You know, if you set up an example, right, lead by example, have a greater culture and focus on that, I think that's the way, that's the way to go.

So thinking just more about the culture at Zoom, you're in the business of making virtual connection possible and there's lots of circumstances where that's the best or only possible solution. But you talked about like the importance of, you know, deciding to go into the office at Cisco or not when you were not positive, right? And you were as much an in office guy with an office culture before the pandemic. Like why and how has your thinking evolved on that now?

I think prior to pandemic crisis, you know, we all worked, you know, in the office environment and we enjoy the social interaction. I see each other sometimes. I give our employees a big hug when they close the big deal. But now I cannot do that. You know, first of all, Zoom does not have those cool features like as remote hug, remote hand seeking. And that's when you know the problem. Another problem is, you know, if you are stuck at home for such a long time, I also realize that mental health, you know, anxiety, depression are real problem. You know, seriously are real problem. Because we are human being, right? We need a social interaction. However, if you also let employee go back to office five days a week, also don't know, work easy. Because nowadays we realize there's no productivity loss. Sometimes we do enjoy working at home. That's why we have to shift our thought from employer oriented the working policy to employee centric working policy. Flexibility is the key for employee happiness.

So let's switch gears a little bit and just talk more about the pandemic and all the changes it brought in March of 2020, it must have felt like being hit by a truck or like a tsunami. Zoom went from an enterprise to a consumer product overnight. I also remember that you at some point told me you're like, I think I got friends who became consumer founders. I think that would be interesting too. So you got to do that too. But all of that, that change could have broken many companies. And it's credible to me that you just kept Zoom at least up and running and thriving. What was that like for the business? Give me the play by play. How did you deliver against that surge in demand?

It just feel like yesterday. You are so right. I think prior to pandemic crisis, right, we were already a fast growing company, right? At a peak day, around the 10 minute daily meeting participant December time frame 2019 and back to the March or April year 2020. Guess what? The daily meeting participant all the way jumped to more than 300 million daily meeting participants. More than 30 times more traffic. And how to survive? It's really hard, really, really hard. Because we had to add a capacity data center in India, Japan, Europe, here and around the clock. And I personally had way more sleepless nights than any time in my career. And our team members as well. And especially Zoom was built for enterprise customers. Suddenly over the night, we had so many consumers. Even for our product user interface, we had to change. Not to mention we needed to figure out a way how to tell those first time consumers we have so many security features, tell them how to enable and enable. Then we realized we had to change our product philosophy. Meaning not only do we offer a service, but also we should play a role of it for consumers. Because consumers, they do not have a cio, they do not have IT team. So we hire a lot of people and also change the product philosophy. And even by doing that, still you are facing all kinds of challenges. Like the pr, the crisis, very negative pr, a lot of things. And the good news, actually I always told our team, myself included, let's move forward. Think about what we can do to leverage this time frame to truly help the world. Let's see. Let's fast forward 20 years. When we look back, we do not want to regret. We know that Zoom is a great company, we have a great culture to really care about the customers. All the challenges are just shorter. By doing that, I think we survived because we have great intentions. We really want to help the world. So that's why we were facing all kinds of challenges. The good news, we survived one thing.

That I imagine is true now, that happens with many of the great entrepreneurs we work with is they get to a certain point in success and then they're like, oh, look, there are more things we can do, right? Like, there are more things that we can add to the world and there are more problems than I thought there were. How have your ambitions changed for Zoom or your thinking on use cases changed since a couple hundred million more people started using it?

You are so right. I think when we started, I can tell you one of the key reasons. Probably a lot of investors or even friends, they did not invest Zoom because we were too ambitious. We wanted to build more services, right? At least I remember in my first PowerPoint slide that, and later on I realized you have to focus, focus on one thing, get that done extremely well. And that's the first thing along the way. For sure, there are so many new opportunities. But however, how to balance the focus and embrace new opportunities? It's not that easy. But however, the philosophy here at Zoom is we always want to listen to our customers. Like several years ago, we introduced another service because of our customer feedback. Internally, we do have lots of new ideas, new services, but if you do not focus on the customer experience, if you really do not solicit a feedback from customers, it's very easy for you to lose the focus. When you lose the focus, I think very soon your product may not be the best. I still think I made a mistake. I was too conservative. Always wanted to focus on just one product. Sometimes I got to be a little bit more aggressive. However, how to balance that between aggressiveness and also the focus or concentrating on one service, it's not that easy. But every day we got to spend time on that. Also talking with our customers.

How do you do what you just described? Like talking to your customers at scale, right? Like 300 million people. I know you don't sleep very much, but you also can't. You can't Zoom call all of them.

I think almost every day. I know. No exceptions. I did, you know, at least one or two, you know, sometimes three or four meetings. Zoom calls with our customers. You know, used to be I talk with a lot of customers. Now probably I only spend time on talking to those big enterprise, big customers. Occasionally I received escalations from those individual users. Individual users sometimes send me a feedback why they do not like this feature. They share some feedback. I always reply back or maybe forward to our team and sometimes our system when they talk with the prospect, Prospect if they shared something, why they like Zoom, why they do not like this feature, that feature. And our team, they did take that seriously. They shared a feedback with our product team. Essentially, if you have a customer care culture and everyone will think about it from a customer perspective. Also you needed by example, if we.

Just think about the pandemic, the escalations, the data center build, the pr, all of it and its impact on business. Let's shift actually to talk about what it was like for you because we have a lot of business leaders on the phone here. What was it like personally and how did you handle it?

I think first of all, I'm very optimistic, right? So meaning into this world, right? You know, as long as you work hard, be patient, I think you, you know, you, you probably can achieve something. But however, the journey is not that easy, not as straightforward. Because in today's world, no matter what you do, they are full of naysayers, right? But you got to focus on your own dream. Don't be extracted by other cities, right?

So the pandemic is not over, right? It may never be over in the sense that we once thought it might have been. You are leading a large organization. You have to make decisions with, you know, very limited information about the future. Has this changed how you make decisions with like more uncertainty? Does it change the cadence of your decisioning? Like how do you teach your team or work with your team to make those decisions?

Yeah, that's great question. I used to making lots of decisions at Zoom and especially when we were, when we were a small company. But over the past two or three years, especially after the company became a public company, I realized it's not scalable. And of course being a CEO, you got to make less decisions, but you need to make sure every decision got to be very light, essentially how to set up the direction. Even if I can make a lot of smaller decision, Right? But what if the most important decision, I did not spend enough time, I might drive the team to the wrong direction. That would be a huge mistake. That's why I tend to make less decisions now and delegate to our team because I trust our team, you know, give them a full authority, right? Let them make a decision, let them learn from those mistakes and you know, otherwise, you know, really not scalable. And that's what I learned. Every day I, you know, during my daily self reflection, I will ask myself, do I really need to make those so many decisions? Why not let our team make that decision? Right? So I tend to make a much less decision now, but I also make sure for the key decisions very right. Especially for the company direction or strategy.

That's interesting. The pace of decisions that need to be made has actually increased and the uncertainty around them. And your view is like, I actually should be making fewer of those. Right. Despite what's changed in the environment.

I was very hands on CEO when we started and I like to make all those decisions because I was in this industry for a long time. I just realized it's not right. You know, how to grow your team, how to make sure you spend more time, much more time on those strategic decisions. That's even more important.

I remember years ago, like we were talking about other communication modes. We were talking about VR and you're like, yeah, we definitely, you know, Skunk Works project here somewhere around that. What interests you? Like if you look out in terms of real time collaboration and anything else in the area of zoom, if you look out five or ten years, do you think should happen or Zoom should make happen?

I think you look at it next five to 10 years, I'm very optimistic. The reason why is I think it comes to video communication like a Zoom experience. I think we just started. You look at AI technology, AR and VR technology and the smart sensor technologies, all those technologies, you know, the cool devices can truly help to make the zoom experiences better than face to face meeting. You know, like recently we acquired a company to support a live language translation and imagine in the future. We supported remote hark and you get a cup of coffee. I can enjoy the smell remotely. You know, all those cool technologies will help and to support the future remote work. And we are not there yet. You know, that's the reason why I think we're working very, very hard. And I think that's the world we are going to live in the future. And you really do not need to gather together. You really do not need to speak the same language. After the meeting, the machine can automatically generate the meeting notes. Very accurate meeting notes. Share with others. I think look at all those features, technologies. I think we are very excited.

We just started Zoom has made recording and then going back to conversations and sharing conversations much more possible. Like how do you think about asynchronous video and are you seeing that change the way people work?

I think we need a post, we need a real time video. Also we need an async video as well. I think, you know, however, you know, we'll have to focus right, you know, in the ideal world and you can offer, you know, one service, right? You know, from any user perspective, you know, very well integrated service for Async video. Like, we do not need to have real time call. I can record a video and send it to you. Right? You can put it back anytime. Right. And also with the notes, you know, there even for real time video, and sometimes, you know, you missed a very important meeting, but someone can send you a recorded video session, you know, with notes, with action items, and, you know, you also can play back. I think that's the future.

Some things I definitely want real time, though, including that remote hug feature. You said you're someday going to think about getting to us. I think one that just might be of interest to everybody here because you're thinking through it yourself as a company, and everybody here is figuring out, like, what the future looks like in terms of, like, a hybrid work environment. How does Zoom think about that?

I think hybrid work will become mainstream for sure. And because, you know, you look at it from employee perspective, right. You know, we did a survey, I'm talking to many other CEOs as well, and, you know, almost everyone, you know, told me that, yes, after they did a survey, employee likes the flexibility. That's why they wanted to embrace the hybrid work. Having said that, how to make sure our technology, all the new features are designed and built to embrace the hybrid work? That's very important. Nowadays we look at almost every feature. We always ask ourselves a question, will this feature help hybrid work now? You know, like our conference room, we introduced the Somatic Gallery feature. We also supported the virtual receptionist. You know, almost every feature. We want to make sure, like our chat feature, you know, give a new view, make sure, you know, who. Who is sitting next to you, you can see them. I think, you know, that's very important, right? We have to, you know, shift towards embracing every, you know, feature to support the hybrid work, because that's the future.

Okay, a couple of personal quick takes. What's your favorite recent example of how somebody's using Zoom that you love, you know, yourself or a user or customer?

I think there's so many new use cases since the pandemic crisis. I think my favorite use case still is, you know, Zoom Wedding. You know, Zoom marriage, you know, was legal in New York. And every time I thought about this, I was so excited. You know, how sweet it is, right, to get married over Zoom.

So what is a piece of content that you like, a book, movie, podcast, art you saw that you enjoyed over the pandemic?

During the pandemic crisis, I tended to buy, you know, way more books, but I did not have finished reading all of them. I think the one book I really like is, you know, Marc Benioff's book and I so happen to have here and a true blizzard and it's awesome book. I highly recommend that.

This is not his most recent book, but it's the one about the growth of Salesforce.

Yeah, yeah. True blazer. Yeah. For Mark Benioff.

Yeah. Any advice for our entrepreneurs? If you could only give them one piece of advice.

Be patient. That's very important. Yeah. Don't think about success over the night. Like a lot of people mentioned, ah, Zoom, you know, now you became a consumer brand, suddenly you're a success. Successful. They did not realize Zoom already 10 years company and our team, myself included, I was working so hard, day and night, around the clock since 1997. 24 years hard work on real time collaboration. Literally I'm stuck on this industry just to work on one thing for 24 years, right? And you have to be patient. Don't think about any success over the night and be patient and become an expert and achieve your dream someday you will get there, right? And good luck will come. As long as you are patient.

24 years is even. It's a lot more than 10,000 hours of work. Actually.

Seriously, over the past 24 years since I lived in Silicon Valley, I really do not go on any long vacation every day. Think about the real time collaboration, customer product. By doing that for 24 years, for sure they will have some good luck.

So from an inclusion and diversity perspective, how is Zoom thinking about addressing the proximity bias, like the inequality for people not in the room for meetings that are hybrid?

That's a great question. When I look at a Silicon Valley look at why Silicon Valley is worldwide innovation center. Because Silicon Valley has a very inclusive culture, right? No matter where you are, no matter what's your background, we come together, right? That's where innovation, you know, coming from. So you know, back to, you know, the Zoom technology, right? Or back to you know, how to support a hybrid work. I said no matter where we are, right? No matter where the participants are, you know how to make sure technology can help every participant. They are very equal, right? In the Zoom setup, right? Not like the traditional way, right. If I'm sitting in the common room, other people draw remotely. They cannot share their voices, right. I think how to like, that's why Smart Gallery feature can help. You know, everyone is equal. No matter, you know, your title, your background, that's where the innovation comes from.

You obviously had a commitment to having the best product and then an innovative business model that came after that. But Then you describe, like trying to make a smaller number of really important decisions correctly. Can you talk about a decision that you made maybe in the middle years of Zoom? Because we have many, many, you know, companies that are, let's say between 20 and 200 million of ARR of like, we've got something working, but we don't know yet what we can make of it. Can you talk about a decision that really mattered for Zoom that you made?

I think early days, I remember, let's say back to the business model or the pricing. And I made two examples. One is really about the female or free trial. At that time a lot of people told me that hey, the female may not work, right? It's very costly, right? You have to support in a free trial. Just give end user one month free trial. You know, I would say that that's not right. And I was a little bit stubborn. I would say, no, let's just support a female and Give end user 40 minutes. And back then a lot of people told me that, you know, have to, you know, reduce down to the 20 minutes. I would say, you know, 20 minutes is not enough. We have to give more to the free users. That's why another thing is the pricing. And actually, you know, back then, you know, our price, you know, $10 later on based on the customer feedback is $14, right? Actually, we can charge, we could charge the customer more, but we did not do that. The reason why we want to build a long term trust, right? You know, more similar to the restaurant business. You have a best product, best price, best service, and you will have a lot of customers to visit your restaurant. That's a philosophy.

Arguably, Cisco WebEx had all of this talent and they missed out on Creating zoom within WebEx. Like you said, you tried, right? How do you prevent that from happening at Zoom? How do you create a culture that continues to embrace innovation at scale?

Yeah. So, yeah, first of all, don't get me wrong, Cisco is this great company. I did learn a lot over there. I would say it's. It really boils down to one thing and the company culture, and it's the product driven culture or sales driven culture or customer driven culture that's very, very important. If every day, from all levels, from CEO to the engineers, every day you spend time on talking with your customers, you will get a sense if the customer like your product or not. Sometimes if a customer already told you, sending a very clear signal, the product really sucks, you come to fix, then you think, oh, customer, you are wrong. This is a way for us to build a product, you have to use our product like this. Then you become arrogant by doing that. Everyone, they are going to ignore customer comments, ignore customer feedback, then you are going to lag behind, Then you are going to lose the market. So as long as you lead by example, have a greater culture, really look at everything from a customer perspective, I think you'll be okay. I live in Silicon Valley. Very, very, very happy. There's so many new technologies, new startup companies. I think, you know, life is short. Right. Think about, especially for young entrepreneurs. And that's a mistake I made when I was young. I wasted so much time on a lot of other things.

Poker.

A lot of other things. To understand the purpose of life is extremely important, especially for young entrepreneurs. Right. And what's the purpose of life? You know, in my view, the purpose of life is to pursue happiness. Right. The sustainable happiness comes from making others happy. Right. How to make sure being a CEO, making your employee happy as a business, make your customer happy. Right? Make your friends, you know, make your, you know, the family members happy. I think your life will be happier. I think that's very important. That's the one thing I wish I knew when I was younger.

Well, I'm sure there are some in this audience that will be inspired by you in the way that you were inspired by Bill Gates at that trade conference. And I think Japan, and I hope so, but we're at the end of our time. Eric, thanks so much for being here. We're very grateful for your time and for Zoom, without which, you know, the past year and a half would just be unrecognizable. And thank you to our audience, founders, operators, practitioners, friends of Greylock. You're the reason we host this event. We hope you all learned a lot today. I did. Thank you again, Eric, for your time and for everyone for joining us.

Thank you, Sara.

That concludes this episode of Gray Matter. If you enjoyed this interview and want to hear more like it, Please subscribe at SoundCloud, Spotify, YouTube, or wherever you get your podcasts. You can also find all Gray Matter content on our website, greylock.com blog and you can follow us on Twitter at greylockvc. I'm Heather Mack, and thanks for listening.