Eric Yuan, the founder of Zoom Video Communications, the video-conferencing app now used for everything from ministerial meetings to yoga classes, rocketed into the Forbes annual list of billionaires this month, with a net value of $5.8bn, says The Times. “When lockdowns were enforced Zoom entered the lexicon of every quarantined person on the planet” and its shares have reflected this surge in brand recognition, more than doubling since “coronapanic went global”.
The rise of zoombombing
It has been a “wild ride” since Zoom’s blockbuster initial public offering last year valued it higher than better-known consumer companies such as Lyft and Pinterest, which floated at the same time, says the Financial Times. Yet now, rising security and privacy concerns threaten to jeopardise its ascent: Zoom’s metamorphosis from an also-ran video app, mainly used by business, has been accompanied by a rise in the practice of “zoombombing” – gatecrashing private Zoom conferences. The problem has become so pervasive that the FBI is now investigating and Zoom faces several class-action lawsuits. Yuan keeps apologising and has promised a fix. No wonder that, as Politico reports, Zoom has taken the precautionary step of upping its “lobbying presence” in Washington.
Yuan, now 50, conceived of Zoom back in his student youth when he had to travel ten hours by train to visit his girlfriend (now wife) and thought there must be “better ways to keep in touch”, says The Times. He was born in 1970, in China’s Shandong province, and has always described himself as “an engineer”. It ran in the family, says Forbes: both his parents were mining engineers. Following a degree in applied maths and a masters in computer engineering, he spent four years working in Japan. An early inspiration was Bill Gates – it was hearing him talk that inspired Yuan to move to Silicon Valley.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
He arrived in the US in 1997 aged 27 and started coding software for the web-conferencing firm WebEx, says The Times. When that was bought a decade later by Cisco, Yuan tried in vain to persuade the big cheeses there that “the smartphone age required a simpler, more intuitive form of business video-conferencing, built from the ground up”, notes the FT. The decisive break came in 2011 when he decided to go it alone. At first “there were few financial backers lining up to take a punt” – they thought the video-conferencing market was already crowded – but Yuan borrowed funds from friends and family. His timing was perfect. “The smartphone created a huge economy, the cloud created a huge economy,” he says. “It happened… at the right time.”
Latest Videos FromMoneyWeek
Looking forward to a hug
Yuan’s connections have made expansion in China a natural extension of Zoom’s operations: nearly a third of its staff are based there and much of its research and development is sourced there, says the FT. “But what once may have seemed a... strength for a start-up has risked becoming a liability.” Zoom’s “China link” could be a weak spot in Western markets that are increasingly suspicious of China’s ambitions. For now, Yuan, a popular boss who lives by the motto “hard work and stay humble”, is taking life simply. Asked what he’ll do first once this is over, he says: “Give my employees a hug”. But Zoom’s really wild ride may be just beginning.
