Today we’re here with Eric Yuan, the founder and CEO of Zoom. Especially in the age of COVID-19 and remote work, hundreds of millions of people have used Zoom, the company delivering frictionless video communication. In many ways, he’s built a platform that shapes a generation. I’m thrilled to have Eric here today to share the story of this epic journey and how he’s built the company that so many people depend on to stay connected at work and in our personal lives.
Key takeaways from this episode include:
- How focusing on customers’ perspective helped drive Zoom’s pricing strategy: “In the early days of Zoom, quite often our sales team told me, ‘Eric, we’ve got to increase the price. We added more features,’” Eric said. “But I always told them no. Our philosophy is always to make sure you add more value, and at the same time keep the same price. Because down the road, the customer will realize, ‘Wow, I paid $14.99, and you keep adding more and more features, gaining more and more value, but you still keep the same price.’ With that, you can establish trust. That’s one. The second, the reason why I’m personally involved is because I wanted to build a culture. Everyone’s got to look at everything from a customer perspective. Always care about the customers. You’ve got to lead by example. When it comes to price, provide a greater product and more value, but don’t increase the price. At the same time, build the culture, be customer-focused.”
- The importance of making business principles and values tangible: “When I started the company, over the past several years, if you asked me what’s the most important thing, I’d always say the company culture and the company value. We do all we can to think about the greater culture, to make sure we have a greater value and hire those people who can fit well into your company culture and value. That’s our focus,” Eric said. “But this pandemic crisis truly taught me one more thing: That’s not good enough. I still remember the Bridgewater Associates founder and CEO Ray Dalio. He taught me, ‘Eric, there’s one thing missing for you. You’ve got to write down your company’s business principles.’ I know that’s very important, but I didn’t quite really get what he said. Until recently, I realized that’s a big mistake, that’s a huge mistake I made. We should have written down all those business principles. The reason why is when suddenly you have a crisis like this, a pandemic crisis, suddenly your metrics grow 30 times. There are a lot of areas that might’ve been broken. You have to delegate it to your team to fix all those issues, to embrace the growth. If you do not write down your business principle, guess what? Quite often, you are going to make a lot of mistakes here and there. But how can you make sure you follow your business principles? That’s the key. Now, actually, we are doubling up on that. We are going to have a full-time position to focus on writing our business principles on many fronts.”
- The key to Zoom’s success in a competitive product space: “If you look at any competitive landscape, there are three things: Your company, your competitors, and customers,” Eric said. “If you laser-focus on just your customers, your users, don’t look at what your competitors do. Then you can sleep well. Then you can make the right decisions. Then you can deliver better service, more innovations to serve your end users. Otherwise, you look at all those competitors’ names, you will think, ‘Oh wow, they might catch up tomorrow.’ The more you are thinking, the more you are going to look at what they are doing. Then you spend less time on serving your customers. Don’t look at any of your competitors. Double down, triple down, on your customers. That’s our secret sauce.”
