Extra Crunch offers members the opportunity to tune into conference calls led and moderated by the TechCrunch writers you read every day. This week, TechCrunch’s Kate Clark sat down with Eric Yuan, the founder and CEO of video communications startup Zoom, to go behind the curtain on the company’s recent IPO process and its path to the public markets.
Since hitting the trading desks just a few weeks ago, Zoom stock is up over 30%. But the Zoom’s path to becoming a Silicon Valley and Wall Street darling was anything but easy. Eric tells Kate how the company’s early focus on profitability, which is now helping drive the stock’s strong performance out of the gate, actually made it difficult to get VC money early on, and the company’s consistent focus on user experience led to organic growth across different customer bases.
Eric: I experienced the year 2000 dot com crash and the 2008 financial crisis, and it almost wiped out the company. I only got seed money from my friends, and also one or two VCs like AME Cloud Ventures and Qualcomm Ventures.
nd all other institutional VCs had no interest to invest in us. I was very paranoid and always thought “wow, we are not going to survive next week because we cannot raise the capital. And on the way, I thought we have to look into our own destiny. We wanted to be cash flow positive. We wanted to be profitable.
nd so by doing that, people thought I wasn’t as wise, because we’d probably be sacrificing growth, right? And a lot of other companies, they did very well and were not profitable because they focused on growth. And in the future they could be very, very profitable.
Eric and Kate also dive deeper into Zoom’s founding and Eric’s initial decision to leave WebEx to work on a better video communication solution. Eric also offers his take on what the future of video conferencing may look like in the next five to 10 years and gives advice to founders looking to build the next great company.
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Kate Clark: Well thanks for joining us Eric.
Eric Yuan: No problem, no problem.
Kate: Super excited to chat about Zoom’s historic IPO. Before we jump into questions, I’m just going to review some of the key events leading up to the IPO, just to give some context to any of the listeners on the call.