With the pandemic rendering the population mostly indoors and working from home becoming the norm, Zoom has been on acceleration ever since.
Zoom is a video services company providing freemium services in the Video chatting space. It provides video meeting and conferencing for both the individual provider and the business user.
The rise of Zoom has been meteoric. Founded by Eric Yuan, former employee of Webex – another video conferencing service – Zoom has left the services of Google and Microsoft in the dust. Today it boasts of almost 50% market share which is humongous!
So what is Zoom doing that the other companies cannot catch up? And what are the business lessons you can learn from the Zoom’s rise to apply in your own business?
Its a story mixed with a bit of luck, perseverance and focus on excellence!
First, Zoom is not a new service. It has been around the block since 2011.
Initially the product did not gain much traction. People used Webex – where incidentally the founder of Zoom worked, and there was not much room for Zoom.
In fact the story of Zoom starts with the dissatisfaction that the founder felt with Webex.
Eric Yuan was an employee of Webex when he realized that customers were not much happy with Webex but put up with it as other solutions were almost non-existent.
He left Webex and founded Zoom with 40 other employees who left the company at the same time. Amusingly it was the CEO of Webex who invested in Zoom at first!
Zoom had competition from the likes of Google hangout and Skype but it soon carved out a niche for itself with its superior product.
It was super easy to configure and set up a Zoom meeting. Some features that were paid at that time in other providers were made free by Zoom which was a major factor in making the product super popular.
Differentiation in the market was created by the super focus on the product itself. Google had many products beside hangout and Skype was focused on improving the audio experience. Zoom was all video.
The chatting experience offered by Zoom was unparalleled. When network was down the other providers struggled to offer a stable video. But Zoom would give you standard quality video far better than others even in case of bad network.
Zoom did not have a marketing team till 2015. When the team was formed, it was used to create the profile of the brand and not for hardcore marketing.
Word of mouth spread soon and Zoom started gaining valuable customer base.
The huge user base is due to the free features offered by Zoom which are good as a paid service. Plus the timings are offered in such a way that personal meetings and non-essential meetings can be completed within the designated time.
Even now many school classes are being run on free Zoom classes. This free – good as paid – feature is another major contributor to Zoom’s growth.
Another very important factor that contributed to the growth is good luck! The pandemic came and made most people to work from home. Demand for video services skyrocketed and as a reliable service Zoom was at the top!
More than luck or anything else, it is the focus on the product that Zoom made what it is today. The team has been constantly improving the product. In the initial days of Zoom, Eric would personally ask people the difficulties they faced using Zoom. If any problem was found it was fixed within a week!
Eric learned from the mistake of others. The problems faced by users of competitors are non-existent in Zoom.
it is all about the product, product and product! Any profit from the market are re-invested into the product. The engineering team works round the clock to add needed features or fix existing bugs. It just works where competitors struggle!
Zoom makes money from its freemium offerings – meetings, rooms, phones, event and webinars and united ( a bundled offering ).
At present Zoom is the market leader in video conferencing segment and is poised to remain so for many months to come.
So the lessons we can learn from Zoom are multifold –
Put emphasis on the product. High quality product sells itself
Learn from your competitors and fix the mistakes they are making.
Offer value before the sale.
Never rest on your laurels. Keep innovating and reinvesting in your product and dominate the market.