The Importance of the CEO and TeamIn his November 2012 email, Tai’s first key was Yuan and his team. Team is always important to VCs, but Tai particularly emphasized the product focus and skills of the Zoom team. He writes, “I think this is a high-quality team, high-quality product core to iterate around.” Eggen also focused on team—Yuan but also the talent he assembled—as keys to his team’s investment decision. “The fact that 30 WebEx engineers followed to pursue this vision was further validation,” Eggen writes. Investor Takeaway #1: For an early-stage company in a competitive segment, a good team is not good enough. “Without a great team, you have nothing,” says Tai.
The Importance of a Big MarketIn 2012, Tai specifically discussed market size by looking at the annual revenues of established, non-cloud-based competitors, writing, “The market is big enough to build a decent revenue stream. … Webex does $800M annually and Goto meeting is $600Mish and there are others revenue … like Skype. So I can see Zoom steadily growing to become a 10s then 100’s of business over time.” Tai was right. Zoom will surpass $300 million in revenues this year. Investor Takeaway #2: “A really big hit can only happen in a BIG revenue market,” says Tai.
Look for a Disruptive Technology Shift and Don’t (Always) Fear CompetitionYuan and Tai recognized the impending technology shift, which Tai describes in 2012: “The transition from ‘enterprise client’ to ‘cloud and mobile’ is enough to open an opportunity for a new leader to emerge.” So, even though the 2012 video-conferencing market featured large, established competitors (e.g., Cisco, Microsoft), this shift to cloud and mobile would disrupt the market, leading to a big opportunity for a new entrant, like Zoom. Investor Takeaway #3: “Don’t (always) be afraid of competition or a crowded segment,” says Tai. “A disruptive technology shift can enable a new leader.” Have Confidence and CONVICTION What is Tai’s most important lesson for both early-stage investors and entrepreneurs in their quest to build the next Zoom? “You have to have CONVICTION,” he writes in all caps. “In the early stages, there is little to go on, and sometimes the early data is negative. So confidence makes a huge difference in getting capital.” Whether investing, company-building, or kiteboarding, confidence and CONVICTION have clearly guided Tai well.
Philip Levinson (HKS ’12) is Vice President of Marketing at EdCast, the Softbank-funded SaaS company, and a Venture Advisor at FinSight Ventures. His previous two articles for the Harbus were “Meet Atomic: Silicon Valley’s Coolest VC That Is Not Actually a VC” (April 2019) and “How Blockchain Is Powering Up the Energy Industry” (December 2018). Follow him on Twitter @plevinson.
Philip Levinson (HKS ’12) is Vice President of Marketing at EdCast, the Softbank-funded SaaS company, and a Venture Advisor at FinSight Ventures. His previous two articles for the Harbus were “Meet Atomic: Silicon Valley’s Coolest VC That Is Not Actually a VC” (April 2019) and “How Blockchain Is Powering Up the Energy Industry” (December 2018). Follow him on Twitter @plevinson.
Philip Levinson (HKS ’12) is Vice President of Marketing at EdCast, the Softbank-funded SaaS company, and a Venture Advisor at FinSight Ventures. His previous two articles for the Harbus were “Meet Atomic: Silicon Valley’s Coolest VC That Is Not Actually a VC” (April 2019) and “How Blockchain Is Powering Up the Energy Industry” (December 2018). Follow him on Twitter @plevinson.
Philip Levinson (HKS ’12) is Vice President of Marketing at EdCast, the Softbank-funded SaaS company, and a Venture Advisor at FinSight Ventures. His previous two articles for the Harbus were “Meet Atomic: Silicon Valley’s Coolest VC That Is Not Actually a VC” (April 2019) and “How Blockchain Is Powering Up the Energy Industry” (December 2018). Follow him on Twitter @plevinson.
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