Eric Yuan, the Chinese businessman who became a billionaire thanks to the pandemic
At 18, during a 10-hour train ride to visit his girlfriend, he came up with the idea of creating a tool to connect people from anywhere. 32 years later, he had become a billionaire when his idea connected the world in the midst of a crisis caused by a virus … How did he do it?
The main figure of this story is Eric Yuan, a Chinese-American mathematician and businessman who was born in 1970 in the city of Tai’an, Shandong province.
Yuan started showing an interest in entrepreneurship from a very young age since as a child he was already looking for a way to make money on his own.
In 1988, he earned his bachelor’s and master’s degrees in applied mathematics and computer science at Shandong University of Science and Technology, and it was during his student years that he came up with the idea of creating the company that would make him a billionaire.
Identifying a business opportunity
Young Yuan’s girlfriend lived more than 10 hours by train from Shandong, so seeing her was quite complicated and his budget only allowed him to visit her about twice a year. During one of those trips, he thought about how useful it would be to have software that can connect people from different places easily, quickly and efficiently.
In 1994, he travelled and worked temporarily in Japan; There he attended a talk by Bill Gates about the Internet boom. This inspired him to move to the United States to work and make his idea a reality in Silicon Valley, as Asia had not yet taken off and the San Francisco Valley tech empire was booming. However, achieving this dream would not be that easy, as his American visa was rejected eight times, but this did not stop Yuan, who persevered and was patient until his visa application was accepted in 1997 when he was 27 years old. The only advice Yuan received from his father before leaving China was: “Work hard, and be humble.”
Once in San Francisco, he started working at Webex, a technology company that developed and sold web conferencing and video conferencing applications. He spent ten years there as a programmer engineer and spent the whole night writing computer codes until the company was bought in 2007 by Cisco Systems. During this change, Yuan became vice president of engineering for the company.
Four years later, in 2011, Yuan devised and programmed a prototype of a smartphone-compatible video conferencing system and presented it to Cisco executives, but the idea was rejected by the company under the pretext that there were already other applications that provided the same service, like Skype and Hangouts.
Frustrated at not being able to materialize his idea, he decided to resign from Cisco in June of that same year to start a company of his own, which he would call Zoom Video Communications, despite the fact that even his own wife doubted the success of the project.
“I said to my wife: It will be a very long and hard journey, but I will regret it if I don’t try.” – Eric Yuan
From the idea to the start of a company
With a clear idea and a lot of determination, he launched the project, but the path would not be easy. Many investors rejected it because they considered that the market was already saturated.
However, he continued to insist until he formed the base team to work on the prototype of his platform. Thus, in May 2012 he launched the first private beta version of Zoom, in which he personally contacted each user who unsubscribed to learn about the weaknesses of the platform and improve them.
The secret of Zoom’s success is that it is easy to use, quick to understand and free in its most basic version. The application allows virtual meetings with up to 100 participants for a maximum of 40 minutes at no cost.
“I don’t travel much for work; maybe once or twice a year. If a customer or anyone else wants to meet me, I say, ‘Let’s zoom first. If it’s not enough, then we should meet.’ However 99 out of 100 times, a face-to-face Zoom is all it takes” – The entrepreneur said in an interview.
On April 19, 2019, Zoom went public and Eric Yuan had managed to become a millionaire after fighting for more than eight years for the idea of making the world of business video meetings easier. The company entered with a value of $ 9,200 million dollars and ended that day valued at more than $ 15,900 million dollars.
However, not even Eric Yuan sensed what was about to happen in the world at that moment. Because the expansion of a Chinese origin virus called SARS-CoV-2, also known as COVID-19 or Coronavirus, would cause all nations to take preventive measures against the spread of the virus that was being fatal in much of Europe and Asia.
A great opportunity in the midst of the crisis
Faced with the need for preventive isolation, video calls became the most effective option for companies, universities, schools and all kinds of organizations to continue operating. It was there that Zoom would take the lead over other platforms since the application is lightweight, has the capacity for long meetings, allows a large number of participants and, best of all, is free.
When governments began to order the quarantine of the population, Zoom moved from offices to the cell phones of families separated by confinement worldwide. The company went from having 10 million meetings a day in late 2019, to over 200 million a day in March 2020.
Before the coronavirus expansion, the company’s shares were worth $ 70. On March 23, 2020, they were worth $ 160 dollars, that is, the total capitalization of more than $ 44 billion dollars, which ended up making Eric Yuan a billionaire, with a personal fortune of more than $ 7 billion dollars, what that included him in the ranking of the 500 richest people in the world according to Forbes Magazine.
But when everything seemed to be going well for Zoom and its founder, a strong controversy erupted after it was revealed that the application had flaws in privacy and security issues, also receiving accusations of data leaks to Facebook and China. In addition, the company would raise doubts about the encryption of the conversations and images published by users.
The said scandal forced Yuan himself to appear before the media and announce the pause in his service to solve the problems.
“Zoom was not designed to suddenly be used by everyone for socializing, teaching, or working from home.”– Eric Yuan
Today, the platform’s problems have been solved and his company continues to post extensive growth on the stock market. For his part, Yuan is 50 years old and exercises his duties as CEO of Zoom, where he hopes to continue improving his service to meet the high demand and establish himself as the leading video conferencing platform on the market. In addition, it has begun to support educational institutions in countries such as Japan, Italy and the United States so that they do not have any kind of limit when it comes to using their platform completely free.
Thus we conclude the story of Eric Yuan, a determined, committed and persevering businessman, who worked hand in hand with his clients to build an efficient platform that knew how to take advantage of an opportunity in the midst of a crisis to become a multimillion-dollar company. In his own words:
“You have to keep working hard to make your customers happy, and you have to be in control of your own destiny. What better way to know how your business is working and what you could be doing to improve it, than to be listening to your customers all day? ”
For Yuan, today more than ever it is time to apply the advice of his parents – ” work hard and always be humble ” – to succeed in that challenge.