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Prosperity amidst Chaos – the “Zoom” way

Yash Nahata by Yash Nahata
April 17, 2020 - Updated on May 7, 2020
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Why bother to travel vast distances or take the pain to live in an overcrowded neighborhood when you can chill on a virtual beach instead? E.g., Modern lash like climate change, overpriced housing, overpriced hotel/apartments and environmental concerns could be a reason why we should all be doing most of our communications on screen. 

Eric Yuan, the founder and chief executive of Zoom Video Communications, is as diligent as any Silicon Valley founder when it comes to promoting the world-changing nature of his company’s service. He also inculcates as he promotes, traveling only twice a year on business. 

“If you start a company, timing is very important. It happened to me at the right time”. Mr. Yuan has been congruent with his belief in the power of video communications to be adapted in the business world. 

Founding Stones

The late 1990s had a tech boom, and the first job he had was by Webex, an online conferencing service. A decade later, the business was sold to Cisco Systems, and he went on to become a Vice President at the networking equipment company. The conclusive break came in 2011 when he was unsuccessful in convincing his bosses that the smartphone age required a more straightforward, more intuitive form of business video conferencing, built from the ground up. Call it an opportunity or a hard time to start afresh. 

Along with Cisco, there were other major players such as Microsoft and Google, who were keen on imprinting video in their service offerings for the business world. 

Barriers to Entry

‘There were a few financial backers who thought that the market is so crowded, and the game is over, they were ready to take the responsibility off’, he said. He started using personal connections for cash to get started. It emerged that the early days of the smartphone boom were just the moment for a fresh start. 

The “Timing” Factor

“Timing is everything,” said Mr. Yuan. Ten years before if he had started the company, he wouldn’t have gotten much traction. There was a huge economy created by the smartphone. It happened to him just at the right time. The result: his Personal stake in Zoom is currently valued at nearly $6 Billion. 

The “Persistence” Factor

Born in Shandong province in eastern China, Mr. Yuan had studied Mathematics and Computer Science and was an ardent follower of the principles of Bill Gates. It took him Nine applications before he was allowed a visa to move to the US- Persistence is clearly a trait. 

The Chinese origin and the Chinese Virus and the Chinese Chaos

Due to his connections and history, China was naturally a good option for his company’s foreign operations. Much of the R&D takes place in China, and about a third of Zoom’s workers are based out of China itself. But this strength had a risk of becoming a liability. At the time of its IPO, Zoom had to notify the investors that the China connection could be a security and privacy risk. Concerns of Trade War also a threat to the company.

During the COVID-19 pandemic, when Zoom was at all-time-high popularity, the US Senate become the first major organization to tell its members not to use Zoom, due to concerns about data security. 

Zoom is battling over negligent privacy practices and rising harassment on the platform that has led to the sinking of its stocks. The company’s shares have fallen more than 25% from the highs during the first week of April 2020.

On 8 April 2020. Zoom’s CEO Eric Yuan was compelled to publicly apologize for concerns related to “Zoombombing”, “Lack of Encryption”, and “Personal Information Leaks.” Zoombombing is discussed later in the article. Lack of Encryption, in simple terms, means that the meetings happening on Zoom could be accessed by the company/employees. It was, in fact, proved by a Citizen Lab report that Zoom used Chinese Servers for the meetings that weren’t even happening in China.

Zoom has two servers and a 700 strong Research and Development arm in China. Previously, it had also mentioned that users’ meeting data would stay in the country from where it originated, but it miserably failed to do so. Zoom claimed that over the past month due to an unexpected rise in traffic and to cope with it, they “mistakenly” routed user data through China. 

The FBI had warned in March 2020 regarding “Zoombombing.” Zoombombing means that an uninvited person joins a Zoom meeting. This is usually done in an attempt to gain a few cheap laughs at the expense of the participants. Zoombombers often hurl racial slurs or profanity or share pornography and other offensive imagery.

Company’s spokesperson said ‘Zoom is working tirelessly to ensure that schools, universities and other businesses around the world can stay operational and connected during this pandemic, we take user security, privacy and trust very seriously. 

Google’s spokesperson Jose Castaneda recently confirmed that their security team had informed all the employees who use Zoom, that it would NO longer support Zoom on corporate computers as it cannot cope with the security standards for the apps used by their employees. 

More countries started to follow

The Government of more than 30 countries issued a warning to its citizens against using ZOOM, the latest country being India. On 16th April 2020, The Cyber Coordination Centre (CyCord), under the Ministry of Home Affairs of India (MHA) has released a detailed advisory on the use of the Zoom video-calling app. The advisory clarified that the Zoom platform should not be used by government officials for official purposes as it is not safe.

Handling Crises

Zoom has tried to manage the tide of criticism received lately. The company confirmed that it had hired Alex Stamos, the security chief of Facebook, as its outside security consultant. Zoom is very aggressively promoting its campaign “Ask Eric Anything,” a live webinar in which Mr. Eric Yuan answers to the peoples’ questions and concerns about the Service.

Since the Pandemic, Zoom is being challenged every now and then. Whatever challenges or allegations are thrown at Zoom, Mr. Yuan always preaches a simple principle noted by his father “Work Hard and Stay Humble”. Just like Silicon Valley is open to people from different backgrounds, he tried to build Zoom with the ‘open and transparent’ culture.

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Tags: Eric YuanSilicon ValleyVideo ConferencingZoom
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Yash Nahata

Yash Nahata

Yash is an ardent learner with a fondness of exploring tirelessly. A philomath in identity who enjoys finance and its analytics. You will always find him in a quest to get answers and know new things or having a quick well informed chat with someone. He holds Masters in International Business from University of Warwick.

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Aditya Srinivas
Aditya Srinivas
5 years ago

Hi Yash.

Although the story is inspiring, there are serious security flaws in Zoom. You have covered it nicely. I run a mid-sized consulting firm in Bangalore and I can say with confidence that Zoom has very weak encryption. We never used Zoom since I was skeptical about it even before it got the limelight. I even encourage fellow readers to use alternatives such as Webex, Teams, etc.

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Yash Nahata
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Yash Nahata
5 years ago

thank you Aditya Srinivas

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