The business logic behind the market value of ZOOM 129 1 100 million dollars.
Author | Miao Zhengqing
The fanaticism continues.
On September 1 day, the share price of ZOOM, a video conferencing service provider, soared by 47%, surpassing IBM with a market value of 129 1 billion dollars, becoming one of the top 20 technology companies with the highest market value in the United States.
Jacky, the founder and CEO of ZOOM, ranks among the top 70 richest people in the world with his stock worth over $20 billion.
The confidence of the capital market in ZOOM is rooted in the transcripts handed over by ZOOM. In the second quarter, ZOOM's revenue increased by 355% year-on-year, and 865,438+0% of the revenue increase came from new subscribers.
In the past year, how to get new users has become a worry for both Wall Street and Silicon Valley. This has even become a question that both To B and To C companies have to ask.
FAANG member Netflix was punished because its share price plummeted by 65,438+00%, only because the growth rate of new users was expected to slow down. However, China Stock Exchange and To B Player Audio Network succeeded in IPO on Nasdaq due to the "excessive increase of users" caused by the epidemic.
ZOOM has become a new "art of war book" that both Wall Street and Silicon Valley are studying, because the ability to acquire new users is exactly what ZOOM is good at.
Since 2020, ZOOM's most important target customer group "enterprise customers with more than 10" has increased by 295,000, an increase of 293% over the whole year of 20 19. It is interesting that Jacky led ZOOM entered the blue ocean from 20 1 1 year. In the video conference market at that time, Microsoft's Skype, Citrix's GoToMeeting and WebEx merged into Cisco's products and became the mainstream of the market.
How to quickly acquire corporate users on the highly competitive track? This has become a problem that Jacky and Zom need to think about.
"ZOOM made a product To B with the thinking of to C." Bao Dewen, an analyst and SAAS market researcher, told Creation that ZOOM hinted at a potential trend: the boundary between the B-end and C-end markets was gradually blurred.
The birth of ZOOM is related to a love.
1987, Zheng Yuan, admitted to Shandong Institute of Mining and Technology, has just one need: how to keep in touch with his girlfriend in different places. At that time, they were separated from each other and could only meet by 10 hour train. Just when he needed anxiety, Zheng Yuan had an idea: using some technology to realize audio and video synchronization. This is actually Jacky's underlying logic: design products based on demand, and technology only serves demand.
"In Silicon Valley, there are too many talented engineers, but most of them are just developing products they like, not products that users really need." As early as the WebEx era, engineer Qin Jie had an affair with Jacky. In his eyes, Jacky belongs to another kind of Silicon Valley: at the conference table of WebEx, when a group of engineers discuss technology, Jacky will also point out in a gentle tone that "this design doesn't seem to meet the needs of users".
Even the user's demand has become the fuse for Jacky to leave Cisco in the future.
20 1 1 Jacky, vice president of Cisco engineering, found that the conference call system provided by Cisco could not meet the needs of users. This system based on the old WebEx technology can no longer meet the needs of users for 20 1 1 year in terms of stability and convenience. After negotiations with Cisco executives failed, Jacky decided to start a business and develop a brand-new system.
The demand-oriented gene was finally implanted in ZOOM. Compared with peers in Silicon Valley, as an a To B enterprise, ZOOM adopts different models in product development and promotion, and takes the employee needs of B-end enterprise users as important information.
Annie is an employee of an entrepreneurial biological company in the United States. The first time she used ZOOM was because of an email. At that time, she recommended her company's biological products to an engineer at ZOOM. After a pleasant exchange, the other party sent an email "Recommend zoom products". Annie was a little surprised. The corporate meeting software she used before was directly recommended by the software company to the purchasing director of the client company. It is rare to recommend products directly to the grassroots employees of the target company like ZOOM.
A person who works for ZOOM recalled that in the early stage of product promotion, the strategy formulated by ZOOM's sales department can be described as "from small to large, from bottom to top, from dispersion to aggregation". In the KPI assessment of ZOOM sales staff, the number of purchasing department heads or company executives is not the most important indicator. On the contrary, it takes "how many grass-roots employees in the target company are connected" very seriously.
At that time, ZOOM's promotion concept even encouraged sales staff to guide employees of customer companies to use ZOOM for private scenes. "We don't want these grassroots employees to sell their products to the top of the company, so as to realize the company's procurement. ZOOM's goal is to let these people really use the product and get an experience. "
Subotovsky, the general partner of Emergence Capital, was one of the first investors to invest in ZOOM. When in contact with Jacky, Jacky did not show PPT to Subotovsky. In the meeting room, Jacky put ZOOM products directly in front of investors such as Subotovsky and allowed them to use them. After the experience, Subotovsky decided to participate in the investment. "What people want is the tools they like." Subotovsky said.
Analyst Baldwin summed up ZOOM's model as two basic points: the quality of the product itself is excellent+it can meet the needs of users. "Under this premise, ZOOM's products are promoted to groups through individuals. This is different from the traditional To B company model, and it is not a model of downward distribution after unified procurement. "
A medium-sized venture capital company in China started to use ZOOM on 20 19. At first, it was used by several employees with overseas study background when they collaborated at home at night. Later, ZOOM's products were given to department leaders by Amway. After more than two months, ZOOM became the unified conference call software adopted by this company. This is actually the most common situation in the process of ZOOM's rise: first win over C-end users, and then gradually influence B-end.
Hao Cheng, the founding partner of Roy Capital, is one of the users of ZOOM. He found that the logic of ZOOM's success is that To B's enterprises "spread and spread marketing information like viruses through viral marketing".
Hans Zhang, a deep user of ZOOM, is the CEO of a 9-person startup. He first discovered that ZOOM was still communicating with investors. At that time, he was in Beijing and his investors were far away in Singapore. At the suggestion of the other party, Hans Zhang tried to use ZOOM.
"I was very nervous at the time, worried that the software was complicated and delayed the chat." What surprised Hans Zhang was the minimalist design of ZOOM. It took him three minutes to download the software and join the meeting, and there was no accident in the next 32 minutes of communication. After this experience, Hans Zhang promoted ZOOM to his own company and recommended it to several other entrepreneurial friends.
Social fission is not the only way to play ZOOM, and ZOOM is also good at leveraging well-known brands. Derek Pando, head of ZOOM's international and partner marketing department, revealed that in addition to users' personal promotion of ZOOM through social networks, the company itself also attaches great importance to cooperation with brands. ZOOM has been put into use in F 1 Budapest Grand Prix Formula Competition in Hungary, and fans can see the real-time updated race situation through ZOOM.
"This is actually a simple logic, much like many consumer electronics products and even consumer goods companies, expanding their influence through brand exposure and gaining new customers through personal social fission." Zhu Min, a market researcher, believes that the biggest feature of ZOOM is that it will eventually become a company-level customer at the B end after gaining traffic at the C end. "Besides product quality, this is the biggest success secret of ZOOM."
In terms of customer acquisition, the free value-added model is also one of ZOOM's strategies. ZOOM products are divided into two systems, one-on-one free mode and 40-minute free group meeting mode. One-to-one free mode further promotes C-side individuals to become experience users of ZOOM products. The 40-minute free mode group meeting is also designed based on the user's actual application scenario. In a public interview, Jacky revealed that the 40-minute free mode was the "best time" discovered by the team through actual investigation as early as the WebEx period. The research from ZOOM shows that the 40-minute free mode is the easiest to realize the conversion of paying users.
"This is essentially a free value-added model." Baldwin compared the sound networks of successful IPOs in 2020. Similar to Jacky, Zhao Bin, founder and CEO of Sound Network, also originated from WebEx, and Sound Network and ZOOM are also To B companies. Interestingly, both Zhao Bin and Jacky chose the free value-added model.
"Wang Sheng provides 10000 minutes of free use time for each account, and then charges." Zhao Bin thinks that 10000 minutes is enough for users to experience the advantages of the sound network and decide whether to continue using it. Similar to ZOOM, the most important thing in the marketing process of Sound Network is not the purchasing director of the client company, but the engineer who actually uses the API of Sound Network.
Brown is also a user of sound network API and ZOOM products. As an engineer, he often needs to use ZOOM to communicate and cooperate with branch engineers in Canada and other places. He thinks that ZOOM and Harmony Network are different from traditional To B companies such as Cisco and Oracle Bone Inscriptions. In the traditional mode, grass-roots employees can't try to use these To B products in advance unless the company's top management decides to buy and introduce them. The products of Sound Network and ZOOM are first used by grassroots employees. These products even have the characteristics of To C. "An individual developer can also use the API of Sound Network, and family members can also use ZOOM to communicate."
However, Hao Cheng believes that not all To B products can be developed in a To C way. In his view, ZOOM's products are "versatile enough, standardized enough, independent enough and very young". Most To B products do not have these features of ZOOM. If you blindly imitate the zoom or sound network mode, you may not be acclimatized.
ZOOM is not always smooth sailing.
At the beginning of April, 2020, Jacky personally stepped off the YouTube platform for live broadcast with the theme of "Apologizing". What makes Jacky fidgety is the security risks brought by ZOOM.
Zoom bombing (refers to the phenomenon that someone suddenly breaks into the conference video and leaves an indescribable behavior or speech) began to ferment on the Internet in the first quarter of 2020. This caused ZOOM's share price to plummet 15%.
In addition to safety hazards, the track where ZOOM is located can be described as crowded. In April 2020, Facebook launched a similar product, Messenger Rooms. Google's Hangouts Meet is "cloud-based", which can realize video and audio teleconference of 100 people on the web page without installing software.
The missing scene has always been the place where ZOOM was questioned.
"Zooming is a tool after all, lacking its own scene." Take Google as an example. Starting from 20 19, Google began to integrate Gmail and Hangouts Meet. This is part of Google's scenario strategy, and users can experience multiple functions of the product in one scenario. Take India, Gmail's largest single market, as an example. When working through Gmail, Gmail users in India can instantly realize in-depth audio and video communication through Hangouts Meet. Compared with single software, the advantages of this scenario service are convenience and system integration.
This is also the problem that ZOOM faced at the beginning of 20 1 1. When Jacky started ZOOM, his friends questioned that the company bought Cisco products not only for conference calls, but also for enterprise routers and security products.
"As a tool, ZOOM is at a natural disadvantage in the face of competition between platform companies and giant companies, unless the product competitiveness maintains a continuous advantage." An analyst who did not want to be named said that the soaring performance of ZOOM could not be separated from the "non-contact economy" brought by the epidemic. In the non-contact economy, ZOOM avoids the problem of "lack of scenes". However, it is difficult to judge whether ZOOM can maintain such a high growth rate after the epidemic.
At least in emerging markets, ZOOM's good fortune didn't last. In May 2020, ZOOM gradually stopped registering individual users in China. In August, ZOOM changed its development model in China to OEM business model (under the new model, ZOOM chose three agents to cooperate in China).
"As ZOOM gradually becomes a company with a market value of nearly one trillion yuan, the challenges ZOOM faces are different from before." Baldwin said that ZOOM has embarked on the road that Facebook has traveled. With the increase of its volume, the macro-environment and its market policy will have a decisive impact on the company's development.
However, Jacky seems to be dealing with the potential crisis in its own way. For example, in emerging markets, ZOOM is fully exploring the Indian market. By May 2020, India has become the largest single market for ZOOM outside the United States.
In order to solve the problem of missing scenes, ZOOM also began to customize services. With the rapid development of online education market brought by the epidemic, ZOOM has launched customized software for many online education manufacturers. ZOOM can not only adjust the software functions according to the characteristics of the company, but also embed the functions of ZOOM into the products of some enterprises. "In the future, in the market of To B, people will pay more attention to customization, and every enterprise wants to get accurate services for its own needs. From this perspective, both B-side and C-side are entering the era of personalization. " Baldwin said.
In order to get rid of the "security risks" and lock the chain of ZOOM lifeline, ZOOM is also struggling. According to the latest news, ZOOM announced the activation of dual authentication function, which is regarded as ZOOM's measure to improve the security of user accounts. After all, in ZOOM's customer acquisition mode based on social fission, when a user chooses to leave ZOOM, it will also affect his friends' evaluation of ZOOM.
As Jacky himself said, "ZOOM needs to develop cautiously."