One of the hardest things about the need to self-isolate is slowing down the descent into madness. Staying home, talking to the same people every single day is more than just boring; at times, it is infuriating. It feels as if the creative juices that once circulated through my brain are now exiting my body as tears as I spend my days on Facebook, looking at memes about other people doing the exact same thing.
However, despite the mental desolation that we are experiencing, there are companies that are actually thriving in this situation. Kraft Dinner has increased production to satisfy a paranoid population, apparently preparing for a possible reality in which they can only eat macaroni and cheese for the rest of their days. As social distancing regulations become harsher and provinces begin to declare states of emergency, Amazon is reaping the rewards of shoppers who simply have nothing better to do while stuck at home. Of all these companies, the biggest beneficiary in terms of profitability and exposure is quite clearly Zoom Video.
The once-small Silicon Valley startup became a social media phenomenon overnight as the “zoomers” prepared for school to begin once again.
When schools began closing down, alternatives to implement remote teaching were needed, especially at universities where tuition fees had already been paid. The chosen answer for institutions across the world was Zoom Video. While Zoom was already well known in business environments, to students it was a relatively new platform that had a funny name. And so the memes were born, and the once-small Silicon Valley startup became a social media phenomenon overnight as the “zoomers” prepared for school to begin once again.
The platform itself is extremely similar to other video-sharing platforms like Skype, Google Hangouts, and Facebook Messenger. What makes it different is that it was primarily designed to be a business software, making conference calls more intuitive to join and easier to set up as well. With a simple link, any user can create a meeting and share it with team members to start the call. As lower-level employees began taking advantage of the free trial, Zoom Video was evangelized to upper-level management in many companies; now, schools are implementing it as a method for teachers to resume their remaining classes.
While many people assume that Zoom is only now finding success because of the pandemic, this is definitely not the case. Founded by CEO Eric Yuan in 2016, the company reported revenue growth of almost 100% every year up until 2019, when it first went public. Even before Coronavirus, Zoom Video was considered one of the best IPOs of 2019, not necessarily because of its financial valuation, but because of the sheer profitability it was reporting compared to its peers. It reported 10 million daily users, and revenue was continuing to grow as well.
All this being said, Zoom was still just a small startup paving its way amongst the competition. If anything, the pandemic has served as a catalyst for the company’s potential growth, as its daily users have skyrocketed to 200 million in just the past month. Zoom Video is now the number 1 app on the Apple App Store, ranking ahead of apps like Google, Facebook and Tiktok. When it comes to investing, despite the harsh decline of the market, Zoom stock is reporting 130% gains on NASDAQ at the moment, with an estimated market cap of $42 billion. Yuan’s net worth is now 5.5 billion, which makes him one of the most wealthy self-made newcomers on the Forbes Billionaires list.
Zoom Video continues to find success as it rises to the top, but that does not mean it has not had issues. “Zoombombers”, the hackers who forcefully enter and interrupt meetings, have been causing problems by then flooding them with profane images and pornography. The public has also expressed concern over the fact that Zoom had been sending data to China without user consent, as well as leaking certain user information to Facebook. The CEO immediately came out with a blog post apologizing for all of these issues, and promised to devote the company’s resources to fixing these problems before anything else.
The biggest hurdle that Zoom now faces, much like other video-sharing platforms, is how to monetize its operations.
The biggest hurdle that Zoom now faces, much like other video-sharing platforms, is how to monetize its operations. While exposure and usage have both seen incredible increases, the next step is to convert the newfound user base into sustainable revenue going forward, since much of the growth has come from users taking advantage of free trials. With the times being as uncertain and tumultuous as they are, it is impossible to predict how any company will do coming out of Coronavirus. However, Zoom is currently at the centre of attention, and it will be interesting to see how it continues to develop in response to the rapidly changing landscape.