The pandemic threw the value of remote working solutions into sharp relief. It also strengthened the earnings of innovative video messaging app Zoom, causing it to be one of the most popular video conferencing solutions in April 2020.
In the last week of March, 3.2 million people downloaded the Zoom app, far outstripping the growth of seasoned players such as Microsoft Teams and Google Meet.
Zoom had arrived on the world stage, and everyone was fascinated. The meteoric rise to fame was impressive. The CEO, Eric Yuan, had a compelling story, but it wasn’t long before security flaws began to show.
Zoom’s 2020 rollercoaster ride had started. “Zoombombing” attacks, where internet trolls hijack a call, may have derailed a lesser player. In our case, Zoom went on to become even stronger.
Despite the potential security concerns, Zoom’s growth carried on unimpeded. As it becomes clear that COVID-19 is here to stay, well-built video chat solutions such as Zoom are useful tools.
According to Eric Yuan, Zoom’s revenue grew by 355 per cent between August of 2019 and July of 2020. Analysts predict a further 454 per cent growth in turnover between August 2020 and July 2021.
Is that a realistic prediction? At first glance, it isn’t, but let’s not count the company out just yet. Instead, let’s analyse how they got to where they are, what we can learn, and if their growth is sustainable.
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How did it become so popular?
Yuan created Zoom as an alternative to lesser messaging apps available on the market. While these apps worked, Yuan felt that clients deserved better service. Thus, he created Zoom.
The app worked well, but convincing paid clients to come on board proved challenging. Here Yuan demonstrated his marketing genius. He reached out to organisations such as universities and offered the service for free. Many of which accepted.
Leading up to 2019, when Zoom issued its IPO, the company had a large client base. Users had the option to remain on the free plan. Many chose to upgrade because they’d seen the value of the service.
Therefore, lesson one is that a “try before you buy” offer might be crucial to a startup’s success.
By doing things this way, Zoom also built goodwill in the community. Consumer consciousness is shifting toward companies that display charitable tendencies. Microsoft and Google both followed Zoom’s example and provided more free features.
Lesson two is that it’s better to set the trends rather than follow them.
The academic community raised concerns about scalability initially. Yuan created built-in contingencies to ensure that the company could cope with an influx of users. When lockdowns started in China, Yuan realised that significant change was inevitable.
Entering the pandemic
At that stage, no one realised that we were dealing with a pandemic. Zoom’s early response, however, may well have turned into a disaster for the firm. The company’s network is highly scalable and can handle as much as 100 times its regular traffic.
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With data centres in several countries on different continents, it’s easier to deal with the effects of a nationwide lockdown.
Lesson three is to plan ahead and put those plans in place early.
In March, it became clear that the contingency measures weren’t quite adequate. Free users had problems connecting, and clients flooded the company’s support desk with requests. This problem was common with many service providers due to the high numbers of users logging on simultaneously.
The Facebook scandal
In March of 2020, the news that Zoom sent user data to Facebook leaked. It didn’t matter if the user had a Facebook account or not; Zoom sent it through.
Yuan stepped forward with an apology and an explanation. The program that linked the two allowed Zoom users to login using their Facebook credentials. He went on to say that the firm did not send any data that might identify you personally.
The metadata that Zoom sent included things such as the type of your device, your time zone, your screen time, and your language. Zoom has since removed the programme.
Lesson four is to own up to mistakes and take concrete steps toward repairing the damage.
Zoom bombing and data security concerns
Zoom bombing is a relatively new phenomenon and might be attributable to mischief rather than an attempt to steal data. With zoom bombing, hackers gain access to a meeting and typically share sexually explicit videos.
Yuan admits that he fails to see the logic in these attacks. The perpetrators have little, if anything, to gain from their actions. Yuan realised that it was short-sighted not to predict that people might abuse the technology.
In his defence, he developed the app for use by professionals. Businesses typically take better precautions when it comes to security.
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Yuan went on to say that Zoom had security features in place. Users can lock screens and request passwords to enter a meeting. He did admit that the company provided little information on how and why to use such features.
Since then, the company has changed its features to ensure better security.
Of more concern was Zoom’s early assertion that the tools were encrypted end-to-end. This claim was later proven untrue. Shortly after this revelation, Time published a piece in which it claimed that agents acting against the US’ interests were using Zoom to spy on other Zoom users.
The company’s share price sharply dropped by 20 per cent.
Lesson five is simple: don’t lie to your users and shareholders.
Yuan once again issued an apology and committed to shelving new feature development until the security measures were in order.
Are security concerns warranted?
Security concerns raised are warranted, but that’s true of any digital medium. To single Zoom out and label them unsafe is an interesting reaction. Particularly when you consider that Facebook has made far more “mistakes.”
Overall, Yuan seems to have the right attitude. He spoke about stripping cookies and tracking from the company’s website, increasing the reward for those who find bugs, requiring password protection for all meetings on the platform, and making the code available as open source software if necessary.
Paid clients using the service agree that the company is on the right track. Many didn’t fall prey to zoom bombers because they used the password protection features.
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Zoom is a workable, well-designed application that’s a victim of the hype. Designed as a B2B communication system, Zoom blossomed into an app used by almost everyone due to circumstances.
The brand has made mistakes along the way, but they’ve worked hard to rectify those. They’re willing to acknowledge errors and put forward solutions that show a dedication to customer service.
The result is a company journey that startups can learn from and a ride that is far from over. Is Zoom’s growth sustainable? It certainly seems so.
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