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Hi, everybody and welcome to the David Novak Leadership Podcast, the only podcast that brings you conversations with today’s most successful leaders that you just won’t hear anywhere else. I’m Ashley Butler, your co-host today, and I’m here with my dad David Novak, the Co-Founder and Former Chairman and CEO of Yum! Brands, the parent company of Taco Bell, Pizza Hut and KFC. He is the New York Times bestselling author of Taking People with You and a frequent guest host on CNBC Squawk Box. He founded David Novak Leadership to help leaders like you become the best leader you can be. So dad, who are we going to learn from today?
David Novak 0:40
Well, Ashley, it’s always fascinating to me when you can get inside of the head of a founder of a great business, hear how the company got started, and learn the keys to its success. That’s why I’m so excited to be talking to Eric Yuan, the Founder and CEO of Zoom. Now Zoom is the leader in remote conferencing services. In March of 2019, Eric and his team had the celebration of a lifetime when they rang the bell at NASDAQ and launched one of the most successful and largest IPOs of the year. And as you can imagine, given the Coronavirus outbreak, the usage of Zoom is now in more schools and more companies than ever before, and there’s no doubt in my mind that having these remote meetings online is changing the way that we learn how to work and learn forever. I had this conversation with Eric before the outbreak, but I think you’re gonna agree it’s one of a kind. You’ll hear from Eric what it was like growing up in China and then immigrating to the United States. You’ll learn how he learned his trade inside big companies, and then took on and beat the giants in his industry. And believe it or not, you’re going to hear why he thinks happiness and care – two very soft values – really represent the most important business driver for his company. And you know what, you’re gonna learn how he and his team drive innovation by focusing on what Eric calls pain points. I think you’ll also appreciate his unique advice for anyone who’s frustrated with not feeling heard in their job. Bottom line, Eric has one heck of a story to share. Eric, thanks for joining us on this Zoom call. And I want you to know that David Novak Leadership uses zoom for all our sales and conference calls.
Eric Yuan 2:33
David, thank you so much for having me. I really appreciate you for supporting Zoom. Thank you.
David Novak 2:39
Yeah, Eric, I want to get to your personal story in a minute. But first, tell us about what Zoom offers customers, and what it was like to recently go public.
Eric Yuan 2:48
Yeah, so Zoom offers next generation, modern collaboration services and centers around video collaboration experiences. We built a new solution from the ground up to make the video collaboration experience frictionless. So we just became a public company, you know, last month, and essentially just more like a high school graduation ceremony. We’re very excited. I think very little has changed since then.
David Novak 3:13
Yeah, I remember when Yum! Brands became public in 1997. Ringing that bell and being there with your team was really special. I’m sure you guys had to have a good time.
Eric Yuan 3:22
Yeah, yeah, we did. And we enjoyed being a partner with NASDAQ and also for every entrepreneur, it’s sort of like a dream coming true to be a NASDAQ public company.
David Novak 3:34
Well, Eric, now I want to go way back. I know you grew up in China. Tell us about your upbringing.
Eric Yuan 3:40
Yes. So I came here in 1997, and just to get my H1 working visa and directly came to the Silicon Valley. And I grew I was born in Shandong province in China and grew up there, and went to Beijing for my master degree. And I saw the huge opportunity for internet, because in 1994 when I traveled to Japan, Bill Gates was also there. And he shared, you know, the internet. And as I at that time realized, wow, internet was going to change everything, and I would like to come here to the Silicon Valley, to embrace the first wave of internet revolution.
David Novak 4:22
What can you tell us about what it’s like growing up in China versus what you see here in the United States?
Eric Yuan 4:27
I think, yeah, I have three kids here. And one thing very interesting is the way I see them learn, you know, back then when I was kid it was very different. And of course, my three kids here I know in the class, you know, they always have all kinds of questions. Your teachers try to make the class very interactive. And back then when I was a kid, I think, you know, I just sat that there to listen, you know, it’s really hard to have a dialogue, right? Because the way to learn is different for now, maybe the same, I do not know that. That’s one thing. Another thing is, I think, you know, back then it’s kind of just everyday just study, study, right and I did not have a lot of extra, you know, activities except that I did spend a lot of time playing soccer. But here you know, the kids – my kid – have all kinds of activities, right? They really pursue their own dreams, right? Rather than just to go to college. Right? I think also another thing is very similar is kids, they all work hard, right? I think, you know, back to my classmates or myself, we all worked hard. I look at my three kids, they also tend to work very hard too.
David Novak 5:41
Yeah. That’s great. You know, when you were a kid, were there any early signs that you would end up an entrepreneur?
Eric Yuan 5:47
Yeah, I think why was in elementary school, and, you know, back then, you know, every family is, I do not think they have a lot of money, right? When I tried to buy something, I never wanted to, you know, to ask for money from my parents, but always wanted to figure out a way how to earn money. So and, you know, I never thought about that, you know, to become an entrepreneur in the future. But I do think I wanted to, you know, make some money when I was a kid.
David Novak 6:18
That’s a good trait of an entrepreneur – making money is always a good idea! You know, I understand you applied for a US visa nine times before you were accepted. What did you learn from that experience?
Eric Yuan 6:31
I think one thing I learned is the culture difference. You know, the first time I almost got a visa to come here, and before the visa officer gave me a green stamp to give me the, you know, the visa, he asked about a business card. You know, on my business card, my title is Computer Consultant. I had just graduated, essentially, that’s more like a, you know, technical title, because I traveled together with the president of the company, and the visa officer mentioned, “Oh, you are not honest, because you are not a full-time employee. You are the consultant.” I think, “What? I am a full-time employee.” But you know, just more like a culture, you know, the misunderstanding. When I came here, I realized, yes, a consultant is just a consultant and normally not a full-time employee. But you know, back in China it is different. But anyway, so I got declined, you know, the first time. There’s a bigger lesson. When I came here, I realized even if I was not born here, I’ve got to spend the time to learn the culture here, and to really understand, right, otherwise, you know, those kind of things could happen again and again. So I think it was a big lesson, but it’s good for me.
David Novak 7:48
What was your first job when you came the United States, Eric?
Eric Yuan 7:51
Just to write code, and I joined WebEx. And then in 97, I was one of the first of several engineers, and I went back to write code for several years. And that’s why if you are still using WebEx, the code of I wrote in 1998 is still running there today.
David Novak 8:11
You know, you rose quickly in the ranks of WebEx and you became the VP of Engineering in charge of collaboration software. What were the unique skills that you had that helped you become a functional leader?
Eric Yuan 8:22
I don’t think I had any unique skills. I think there are two things. My father told me that if I came to Silicon Valley, he told me that, hey, this is different. The culture, different place, different country. And I just want to tell you two things: work hard, stay humble. And it was those two things, probably the one thing I learned, you know, spending time on learning American culture, right, to really understand, because I was not born here, how to make sure I understand that how to learn from my colleagues. sometimes I watched the TV, you know, or looked at the history book, to spend time on culture, work hard, stay humble, those three things are very important for me to grow.
David Novak 9:05
You know, you had so much success at WebEx, and then the company was acquired by Cisco, as I understand it. What was it like being swallowed up by a big company like Cisco?
Eric Yuan 9:15
Yeah, Cisco is a great company, and however, you know, when we sold WebEx to Cisco, you know, WebEx was focusing on software as a service, you know, SMB driven by and large, right? And Cisco’s enterprise hardware. And, you know, from a product perspective, I think, you know, there was no synergy back then. And the software services, software, hardware, and it’s very different. And it did take some time, you know, for Cisco, and WebEx, you know, to sit down to really understand what they can do together. And however, you know, I cannot wait. And before I left, I didn’t see a single happy WebEx customer. I really wanted to build a new solution to bring it happiness back to web as customers. I think that, you know, collaboration and network hardware it is really hard to have synergy.
David Novak 10:06
Yeah. So what was the decision point, the pivot point where you decided to break out and start your own company seven years ago?
Eric Yuan 10:15
Yeah, seriously, the year before I left, I was not thinking about leaving Cisco or Cisco WebEx, because, you know, I felt like I’m a part of creating this problem, because, you know, I also, you know, built WebEx through the code, given that I did not see any happy customers, you know, I should figure out a way to fix that, and I was trying to reboot WebEx. But back then, you know, Cisco’s collaboration strategy was about social networking, essentially, you know, the strategy is to build an enterprise on Facebook. I have a different opinion. But it’s really hard for me to convince other peers, you know, to rebuild WebEx, you know. One year later I decided to leave, otherwise, I was not a happy there. And that’s the reason why I left in 2011.
David Novak 11:09
Well, you entered a very crowded category with all kinds of competition, you know, with everything from WebEx, your former employer, to Skype, Google, you know you’ve got all kinds of competition. What made you think you could succeed?
Eric Yuan 11:26
I think that you are right on. And even my friends told me that, “Hey, Eric, you know, the market is so crowded, you know, why do you want to build a new solution?” And given that, you know, so many other players there, the way I look at how the market works that I did spend lots of time talking with customers. I knew for sure that there was no single, happy customer that was so happy about their existing solutions. Now, given that a customer, they are not happy, you know, my philosophy was that if I can build a solution that is better than any other competitors, that it can bring happiness to customers, I think it’s very likely for us to build a business that can survive. And I really didn’t look at it from you know, competitive landscape perspective. Otherwise, probably I even do not dare to start a company.
David Novak 12:19
Yeah. Well, you know, when you go out on your own, you have to raise capital. Was that a hard thing for you to do?
Eric Yuan 12:25
It was very hard. That’s why I wanted to raise the money from my friends. I did not think any institutional VCs would like to invest in me. I think looking back, it’s very fair. If I were to work for VC, I also do not want to invest. Right. It’s so crowded, why you think you can pull it off? Right. So however, and I, you know, as I mentioned earlier, I know customers aren’t happy, that’s why I just raised the money from all of my friends in Silicon Valley.
David Novak 12:53
Well, I’m sure you have some very happy friends now.
Eric Yuan 12:56
Hopefully, at least I tried to make them happy.
David Novak 13:00
yeah, you did. Well, when you started your company up, what were the biggest leadership challenges you faced with the startup?
Eric Yuan 13:06
I think on the way hand, you’re very excited to start a company in Silicon Valley, right? Silicon Valley is the startup valley, right? As long as you join a startup company, or you started a company, you’re very excited. However, on the other hand, you know, you really wanted to have something as quickly as possible, right? How to balance that right? And, you know, I think patience is really important. I think, looking back, that’s probably the most challenging thing because every night, I was so eager to get something out, right, to let a customer try but at the same time, your solution is not ready, and how to balance that. How to be patient. That’s very challenging.
David Novak 13:49
You know, you’re obviously a huge success and you’re getting all these accolades now, but did you have any early mistakes that really taught you some real valuable lessons?
Eric Yuan 13:58
Yeah, I think there’s so many lessons learned, I think, when I started a company. First of all is, you know, for sure the patience, right? The second thing also realize that you’ve got to make sure not only think of a one year two year, but you’ve got to think about it in the long run, so what do you, do you really want to achieve? Right? So what if your product is ready, you know, what’s the next step? You’ve got to lay out the plan. You know, for the next several years, not only just focus on the product, you know, you can do the product? How to monetize that, right? How to get the first 10 customers, how to build a, you know, the bench team, how to build a scalable marketing system? I this is very important. I think, you know, I think when I started a company, I was just focusing on the product side. I think that’s one thing I learned along the way, I think before I started a company, I think very early on. And I sometimes, you know, when I was very young, I always had a question about what’s the purpose of life? Right? And I haven’t, I had no idea, you know, how to answer to that question. So, and I stopped until probably, you know, after 35 years old, I think I got an answer, you know, I think I should try all I can do to have an answer about that question. Without that probably a lot of things can be changed, but later I realized the purpose of life is to make others happy, and the way you be happy is to pursue a sustainable happiness.
David Novak 15:35
You know, that’s fantastic. And, you know, how did you go about building your team at Zoom?
Eric Yuan 15:40
I think two things, you know, first of all, we’d like to build a team from the ground up. We never have one to see, it could have a marketing team or sales team or support team, we want to, you know, hire the doers first. And as you know, we hire a leader to manage that, to make it scalable. Also, we would like to hire those employees with self-motivation, and self-learning mentality, because everybody’s different. You know, I think we don’t want to hire those employees who want to just leverage their experience, to come here, I think wants to, you know, be very hands on, willing to learn, you know, our brand. Plus, we wanted them to motivate themselves. Otherwise, you know, every day is so busy, you know, if you need your manager to motivate you, I think that not scalable, especially, you know, in the startup world. So, you know, that’s our approach.
David Novak 16:35
You know, Eric, you’re obviously a company that is very successful, and you have to make your customers happy, which is what you say your focus is. How do you personally stay in touch with your customer base?
Eric Yuan 16:45
I think, you know, first of all, go to the start of a competent culture, that delivers happiness, right? Meaning we do all we can to make sure our customers are happy, I’ve got to lead by example. I look at my calendar, so every day I know how much time I’m spending on customers, or how much time I spend it on something else, right? We never have a request from our sales team, and try to talk with the customer or prospect, or maybe the customer that asked you to meet about something that is wrong. And it’s always a part of that. So meaning whenever you have other activities, and when it comes to a conflict, you know, how to make a decision, how to prioritize that. When I think of customer related meetings, or task, I always have the highest priority. If I do that my direct reports will do that, too.
David Novak 17:36
So you really think it’s important for the leader to cast a shadow across the organization?
Eric Yuan 17:41
Yes, absolutely. Yeah.
David Novak 17:43
You know, you bring people together with technology. what do you think is the importance today of being face to face?
Eric Yuan 17:52
I think, you know, especially for startup companies, speed is everything. If you have a trust, then you can, you know, speed might be okay. I think, you know, face to face meeting or the meeting via Zoom platform, ultimately, I think it can help you build trust. Take this meeting, for example, I can see you, David, you also can see me, the only problem is that I cannot shake hands with you, right. I think with eye contact, I think we really can have a intimate experience, and it can help us build a trust. I think in the future–for now, for sure, face-to-face meetings, will assist you better than video collaboration, videoconferencing experience like Zoom. But in the future, I truly believe that videoconferencing like Zoom can deliver a much better experience than face-to-face meetings.
David Novak 18:40
You know, it’s interesting. Because of this face to face interaction, you know, I feel like we immediately hit on a chemistry that you would otherwise not have, you know, which is really great. You know, you have the opportunity to create your own culture, and how important is your culture to your success, you think? And what are you trying to drive deep in your company?
Eric Yuan 19:05
Absolutely. I think looking back, that’s probably the number one important thing. And the problem is we were very lucky to focus on company culture on day one, because when I showed up in my office, on day one, I did ask this question, “So what kind of a company do I want to work for in the next 10 to 20 years?” You know, I wanted to be happy, when I come to the office. When I wake up every day, I wanted to go to office. That’s why to have a happiness culture at Zoom is really important. And we work very hard to try to maintain that culture. Again, it’s not that easy–we have almost 2,000 employees now. So at any time, this culture can be broken, if we do not focus on that. So if we can, you know, focusing on that culture, make sure every employee is happy, I think that together, we can make a customer happy, I think we have a chance to survive. Otherwise, very soon, we’re gonna have a harder time.
David Novak 20:02
You know, one of your core values is Care, you know, C-A-R-E. You know, explain why that’s such a high priority.
Eric Yuan 20:11
I think, first of all, the reason why we have this Delivering happiness culture is that boils down to our company value, that we care. So meaning care about the community, care about the customer, care about our company, care about the teammates, and care about ourselves, I think it’s very important right, so when you try to recruit new employees, you want to find those employees who can fit well your culture, who can share, you know, the same values, right? And also, at same time, you cannot make the value, you know, too complex. Quite often you ask employees, “What’s your company’s value?” If they do not have an answer, you know, also something is wrong, right? And this was what I learned. I want to make it very simple, very catchy, just one word – Care. So and yeah, that’s pretty much how we started,
David Novak 21:01
What role does recognition play in your company?
Eric Yuan 21:03
I think it’s very important. And because every employee works so hard, right, even if we wanted them to motivate themselves, but you also need to recognize those who are outstanding employees, you know, because when you have the all-hands meeting, or whenever we got very good feedback from customers, you know, we have a Zoomy Award every quarter. And we also, you know, for any employees who are delivering an outstanding job, you know, at your all-hands meeting in the email, we’ve got to recognize them is very important, right? So even if they’re motivating themselves, for us, you know, as a management team, you’ve got to always care about employees. Look at it from their perspective, and sometimes our employee did a great job, you know, we sent a letter, you know, to their family, right, to really express our heartfelt thanks, right, and we’re also bringing, you know, employees and really appreciate their families’ support. I think that to recognize the employees’ great job is very, very important.
David Novak 22:06
As you know the vast majority of today’s workforce is Millennial. And you know, when you think of Silicon Valley, you think of this highly transit group of people who are moving from one job to another job. How do you attract and retain the best talent?
Eric Yuan 22:20
Yeah, these are good questions. Today, you look at the workforce today in the United States, over one third are millennials. It completely changed the way for us to work, for us to collaborate, for us to get the job done. Right. So you know, millennials, they needed the flexibility, you cannot force them, “Hey, you come to office to work,” you cannot give them the tools they do not like. That’s another reason why many companies deployed Zoom, because millennials really like video. They want to use the best tools, right? And if, if you try to tell all those employees, millennials, to use other tools, they might buy Zoom by themselves. Again, you know, they love flexibility, and they want the best breed of tools. I think those two things have a huge, very positive impact to every company’s culture.
Midroll 23:16
Hey, listeners, let’s take a break and talk about you. Do you want to be a more effective leader? If you want to grow and make a bigger impact as a leader, you have to check out our new Purposeful Recognition course. It’s a masterclass-style course taught by David Novak, where he teaches you and your teams how to use recognition as a result striving business skill. It’s fun, it’s short, and it’s just $99. And I can tell you that if you’re interested in moving from Me to We, it’s the best way to get started doing it. So I encourage you turn your intentions to be a better leader into action, and go to davidnovakleadership.com and sign up today. You won’t regret it. Now back to the podcast.
David Novak 23:59
You know, all the great companies that I’ve studied, they have a noble cause or purpose for their business that they use to galvanize and motivate their teams. And you know, you seem to have broken it down by the concept of Happiness and Caring. Have you always been a person who could simplify the complex?
Eric Yuan 24:16
You are so right. I have an engineering background. For anything so complex, I do not think that it will fly, right? That’s why on day one, I told our team, myself as well, “Let’s make sure every day even before we have a process, let us think about how to simplify the process.” I really wanted to avoid a situation where you establish so many processes, that a down-the-road employee is not happy, and then you think, “Okay let’s spend time to simplify that.” I think that’s too late. Every day, you’ve got to think about how to simplify your process like in terms of the approval process. Now, why do we need a two people to send it? Isn’t one enough, right? So we want to make sure everything is very simplified. Simplify our product offering, price offering, simplify our internal process. If we make these things too complex, you are not looking to bring happiness to the employees and to the customers, I think to simplify everything is always our philosophy.
David Novak 25:15
You know, technology is always changing, and you know that better than most for sure. How do you and your team stay on top of it all?
Eric Yuan 25:23
First of all, you know, we gotta understand what are our strengths, right? What kind of tools should we build internally, right? What kind of tools can we leverage, you know, from others. We subscribe to more than 100 different tools to help us simplify the process. We are using Salesforce.org, and all those good tools, right, in a work day as well. And I think, you know, if you deploy the best tools, I think your employee will be happy. And it’s a process will be, you know, very simple, right? I think, you know, we said we can, you know, save the time to focus on the most important thing, you know, our own product,
David Novak 26:01
Right, you know, you left a big company, Cisco, because of your frustration with not being heard. What advice would you give someone working in a company who doesn’t feel like they can break through with their ideas?
Eric Yuan 26:14
Leave. And a start or join a startup company. That’s it.
David Novak 26:19
I feel like that would be, you know, but not everyone has what it takes to be an entrepreneur. So what advice do you give to people when they think about going on their own?
Eric Yuan 26:29
Actually looking back, to be honest with you, and when I was thinking about leaving, you know, my wife, she has a different opinion: “Hey, you have a great job at Cisco, and the company pays you very well. It’s a good company, why do you want to leave?” I think, however, after we left, we just realized, wow, that’s kind of a different world. We did not realize how happy we were, right? And, you know, every morning when I woke up, I really wanted to go to office. I’m very excited. And over the weekend, I think, “Wow, it’s still Sunday or Saturday. Why not Monday, right?” It’s very exciting, you want to go the office to work, that excitement, can really change everything. I think, just don’t hesitate. Just do it. and after you join a startup company or start your own company, you will realize, wow, this is something very different. When you get older, you’re not going to regret it.
David Novak 27:21
Now, you’re building this really big company now and you’re having great success. How do you keep your entrepreneurial spirit going in a company that’s getting bigger every day?
Eric Yuan 27:30
The good news is we’re still a small company, only 2,000 employees. I think it boils down to, you know, stay with our company culture and value. And don’t think about you’re too big, right? We’re still very small, right? Be humble, keep working hard. And also really spend time with the costumers, and try to be the first to build a better solution to solve the customers. And as long as you do that, I think you should be okay. I do not think you know, you’re going to be different.
David Novak 28:02
You know, I understand now you’re looking at, you know, ways to really extend your business. Zoom phones, Zoom rooms, you know, talk about how you see your business in the future.
Eric Yuan 28:14
Yeah, we believe video is the future of communication. Video is the new voice. When we built the platform, the first application built upon our platform was video collaboration, video conferencing, and along the way you know, customers told us they really like our voiceover IP quality. You know, what, if adding a phone number support, then they do not need to have another solution for the PBX? You know, we listen to our customers carefully. That’s why we decided to introduce another solution, which was the Zoom phone system. And the costumers also told us they really like Zoom’s solution. However, you know, they do not have a good solution for their Conference Room Systems. That’s why many years ago, we introduced the Zoom rooms, essentially, that’s a cloud software commodity hardware, you know, collaboration-centric conference room solution. I think, you know, before we build any new solution, we always listen to our customers and understand the pain point. And then we try to be the first vendor to come up with a solution to serve our customers, you know, down the road that we are going to introduce more and more services, you know, cause we really stick close with our customers to focus on customers’ pain points.
David Novak 29:27
Yeah, talk about that pain point.
Eric Yuan 29:29
Yeah. So quite often, before you scale your business, you will realize, wow, there’s so many feature requests from customers, SME customers, or large enterprise customers, how to prioritize those features, it’s very hard, very difficult. And the reason why is, you know, very often customers, they would like to share with you a solution, in our case it is very different. We really want to take a step back, really wanted to talk with the customer, “Please tell us, what’s your problem? What’s the pain point? Why is that?” You know, we will not spend too much time on just talking about the solutions, because quite often, the solution given to us may not work for other customers, right? So that’s why we really want to understand the pain point or problem, and then try to understand the root cause. And then we are going to come up with a solution to sell to maybe more customers. If you do that, even if there’s so many feature requests, guess what, probably the same problem, right? We can come up with a better solution. If you only focus on the solution the customer suggested for you, I think that is really hard. You know, otherwise, you know, you need to deal with all kinds of solutions every day. you know, one company gives a solution, another company gives another solution – that is really hard to scale your business.
David Novak 30:41
You know, when I think of entrepreneurs, I think of people working night and day and totally absorbed in the excitement of their work. Are you one of those guys that’s, you know, 24/7? And how do you balance that with your family?
Eric Yuan 30:56
I think first of all, I never think about how to balance work and life. Because as long as I think about how to balance that, I think I am in to the wrong direction. And of course, there’s no answer to balancing work and life, right, you know, why should I have to spend time on that? So, you know, I really like enjoy working, you know, at Zoom, I think life is work, work is life, right? And over the weekend, in the evening, I always focus on the emails or targeting our employees or the meetings. And the same time I tell my family, you know, is very important. I want to show them, you know, how to work. But however, whenever there’s a conflict between the work and the life, see my son might have a graduation ceremony or have a basketball game. I told them family is the number one important thing if there’s a conflict. If there’s no conflict, then work is life and life is work.
David Novak 31:47
You know, you came here, obviously, as an immigrant from China. What did that experience teach you as it relates to your perspective on diversity?
Eric Yuan 31:55
I think first of all I really like Silicon Valley, right? In terms of embracing diversity, I think Silicon Valley sets up a good example for the whole world. Right? You look at all those immigrants here, you know, we’re successful, so many companies, right, you know, like my great friend, Jay, you know, is another great example, right? There’s so many great examples. They are all very successful. The reason why is because of Silicon Valley culture. I think the immigrants, they tend to work harder. Because when you come here, I came here at 27. You know, I really know one thing, you know how to work, stay humble, keep working hard. Right? That’s it. I think because of that, I think that you have maybe a higher chance to make more progress. I think that’s why I think to embrace diversity, and it’s very important, you know, like our company as well. You know, look at our management team, look at our teams, I think that for you to make the best decision, if you have a team with a different background, you always can make the best decision. I think that’s another reason why Silicon Valley is so successful.
David Novak 32:59
You know, with all of the press that you read today about the tariff and the China-U.S. relations, you know, what would you say from your vantage point would be the biggest misperception that Americans have about China?
Eric Yuan 33:14
I think first of all, I am too busy on the business side, I really didn’t get a deep dive on this topic. If I do. If I retire, somebody probably I will spend more time. The reason why I feel like is there is something of a trust issue. Similar to the company as well, right? If there’s a trust, everything can be done easily. If there’s no trust, no matter what you do, right, the other side with think that something’s wrong. I think, first of all, how to build a trust between those two countries, between the two cultures, right, between the, you know, I think the two different system that’s really important, you know. Ultimately, the highest thing, the root cause, is trust, right? How do we fix that problem, you know, or other things on the surface may not be the root cause of how to build a trust, I still do not know how to do that. But if I have time in the future someday, if I retire, I will spend some time on that, you know, I have many, many friends, I spent a lot of time learning culture here. I was born in China, I think how to help to make a world a better place. Unfortunately, I do not have bandwidth today. Otherwise, I really want to, you know, spend my time on that, how to build the trust between the two systems?
David Novak 34:25
Yeah, our country needs you someday. Right now, you’re building a great company. You know, we have a lot of aspiring leaders that are listening to this podcast right now. What would be your three best bits of advice you’d give aspiring leaders?
Eric Yuan 34:38
I think one thing I learned, and I’d like to repeat what he said that, you know, I think in terms of leadership, I think I learned one thing from the former CEO of Walmart, H. Lee Scott. I do not know him, but in the Cisco offside leadership meeting, we invited him to give us a speech about leadership. I think that several things are really important for us, you know, like communication. You know, the first thing what you decide, and it might be, you know, misunderstood or ignored, right? This is something you’ve got to communicate more, right? This is very important. Another thing is to give constructive and honest feedback is a rare talent, right? How to give others feedback, right? This is very, very important. I think that with those leadership skills, I learned a lot. I think that truly happen to me, you know, to grow into a better leader, I would love to share that with others as well.
David Novak 35:33
You know, as you look for Eric, what do you see is your unfinished business?
Eric Yuan 35:38
I think every day we try to, you know, innovate more and listen to the customer, and the care about the customer. And seriously, we think about for me, I think about how to survive, you know, what if there’s a failure, right? I don’t want to be failed, right? That’s why I keep working very hard, and also drive our team working harder as well. And we really do not want to fail, right? And how to do that is just look at everything from a customer perspective. If you do that everything should be okay. We really do not think about some other very ambitious goals. A lot of other things seriously was thinking about how to survive. That’s it.
David Novak 36:14
You know, we talked a little bit about recognition earlier, you know, what would be the biggest recognition moment that you’ve personally had?
Eric Yuan 36:23
I think one thing at a several moments at one moment is, you know, last month the company went public. And we get our, you know, executive team members there, and some of our customers there, and some early employees and live broadcast to be announced as a public company, at that time I realized, wow, you know hard work is very well paid off. And I think this is one of the best moments in my life.
David Novak 36:49
Well, Eric, I’m really looking forward to our listeners hearing this podcast. I want to thank you so much for taking time to be with us. And I want to wish you continued success in your great business that you’re building.
Eric Yuan 37:01
My pleasure. Thank you, David. I appreciate you for your invitation.
Ashley 37:06
I really enjoyed this conversation with Eric. I liked how he created a company culture based on the values of happiness and caring. One key insight that was helpful to me was Eric’s focus on finding solutions for the customers’ pain point. Eric said there’s an endless supply of new feature requests in the technology business, and there’s no possible way to keep up with the ball. The key is stepping back and really understanding the problem the customers trying to solve. By understanding the pain point you get to the root cause and can come up with a better solution that works for everyone. How about you? Are you continually chasing after a variety of possible solutions? Or do you take the time to take a step back and really understand the problem? Eric always looked at his business from a customer’s perspective and focuses on solving their pain points. If you can do that first, or better than your competitors, you have a winning strategy. In this season of the David Novak Leadership Podcast, we’ll have a quarterly Q&A where my dad will answer your most pressing leadership questions. You can submit your questions by following David Novak and commenting on his Twitter, Instagram or Facebook pages. You can subscribe to this podcast and our bi-weekly newsletter at davidnovakleadership.com. As always, we appreciate you taking the time to rate and review us on iTunes, Stitcher and Spotify. Thanks for listening.
[/cs_text][cs_element_content_area_modal _id=”10″ ][x_gap size=”10px”][cs_element_content_area_modal _id=”12″ ][cs_text]Eric Yuan is the Founder and Chief Executive Officer of Zoom, a video collaboration platform company that is committed to delivering happiness through frictionless video communication. Eric took Zoom public in April of 2019, leading his company to one of the most successful IPOs of the year. Prior to founding Zoom, Eric was corporate vice president of engineering at Cisco, where he was responsible for Cisco’s collaboration software development. As one of the founding engineers and vice president of engineering at Webex, Eric was the heart and soul of the Webex product from 1997 to 2011.
In 2017 Eric was added to the Business Insider list of the 52 Most Powerful People in Enterprise Tech. In 2018, he was named the #1 CEO of a large US company by Glassdoor and EY Entrepreneur of the Year in Northern California (software category). Eric is a named inventor on 11 issued and 20 pending patents in real time collaboration.[/cs_text][cs_text style=”margin-top:-20px;”][bctt tweet=”“On day one I asked myself, ‘What kind of a company do I want to work for in
the next 10 to 20 years?’ And I wanted to be happy when I come to the office. That’s why happiness culture at Zoom is really important.””][/cs_text][/cs_element_column][/cs_element_row][/cs_element_section][cs_element_section _id=”15″ ][cs_element_row _id=”16″ ][cs_element_column _id=”17″ ][cs_text style=”margin-top:-20px;”][bctt tweet=”“If we focus on culture… together we can make the customer happy, and then we have a chance to survive. Or If we focus on culture, making sure every employee is happy, I think that together we can make the customer happy.””]
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Have you ever experienced a failure? What did you learn?
If your colleague disagreed with you, how would you respond?
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Ashley 0:01
Hi, everybody and welcome to the David Novak Leadership Podcast, the only podcast that brings you conversations with today’s most successful leaders that you just won’t hear anywhere else. I’m Ashley Butler, your co-host today, and I’m here with my dad David Novak, the Co-Founder and Former Chairman and CEO of Yum! Brands, the parent company of Taco Bell, Pizza Hut and KFC. He is the New York Times bestselling author of Taking People with You and a frequent guest host on CNBC Squawk Box. He founded David Novak Leadership to help leaders like you become the best leader you can be. So dad, who are we going to learn from today?
David Novak 0:40
Well, Ashley, it’s always fascinating to me when you can get inside of the head of a founder of a great business, hear how the company got started, and learn the keys to its success. That’s why I’m so excited to be talking to Eric Yuan, the Founder and CEO of Zoom. Now Zoom is the leader in remote conferencing services. In March of 2019, Eric and his team had the celebration of a lifetime when they rang the bell at NASDAQ and launched one of the most successful and largest IPOs of the year. And as you can imagine, given the Coronavirus outbreak, the usage of Zoom is now in more schools and more companies than ever before, and there’s no doubt in my mind that having these remote meetings online is changing the way that we learn how to work and learn forever. I had this conversation with Eric before the outbreak, but I think you’re gonna agree it’s one of a kind. You’ll hear from Eric what it was like growing up in China and then immigrating to the United States. You’ll learn how he learned his trade inside big companies, and then took on and beat the giants in his industry. And believe it or not, you’re going to hear why he thinks happiness and care – two very soft values – really represent the most important business driver for his company. And you know what, you’re gonna learn how he and his team drive innovation by focusing on what Eric calls pain points. I think you’ll also appreciate his unique advice for anyone who’s frustrated with not feeling heard in their job. Bottom line, Eric has one heck of a story to share. Eric, thanks for joining us on this Zoom call. And I want you to know that David Novak Leadership uses zoom for all our sales and conference calls.
Eric Yuan 2:33
David, thank you so much for having me. I really appreciate you for supporting Zoom. Thank you.
David Novak 2:39
Yeah, Eric, I want to get to your personal story in a minute. But first, tell us about what Zoom offers customers, and what it was like to recently go public.
Eric Yuan 2:48
Yeah, so Zoom offers next generation, modern collaboration services and centers around video collaboration experiences. We built a new solution from the ground up to make the video collaboration experience frictionless. So we just became a public company, you know, last month, and essentially just more like a high school graduation ceremony. We’re very excited. I think very little has changed since then.
David Novak 3:13
Yeah, I remember when Yum! Brands became public in 1997. Ringing that bell and being there with your team was really special. I’m sure you guys had to have a good time.
Eric Yuan 3:22
Yeah, yeah, we did. And we enjoyed being a partner with NASDAQ and also for every entrepreneur, it’s sort of like a dream coming true to be a NASDAQ public company.
David Novak 3:34
Well, Eric, now I want to go way back. I know you grew up in China. Tell us about your upbringing.
Eric Yuan 3:40
Yes. So I came here in 1997, and just to get my H1 working visa and directly came to the Silicon Valley. And I grew I was born in Shandong province in China and grew up there, and went to Beijing for my master degree. And I saw the huge opportunity for internet, because in 1994 when I traveled to Japan, Bill Gates was also there. And he shared, you know, the internet. And as I at that time realized, wow, internet was going to change everything, and I would like to come here to the Silicon Valley, to embrace the first wave of internet revolution.
David Novak 4:22
What can you tell us about what it’s like growing up in China versus what you see here in the United States?
Eric Yuan 4:27
I think, yeah, I have three kids here. And one thing very interesting is the way I see them learn, you know, back then when I was kid it was very different. And of course, my three kids here I know in the class, you know, they always have all kinds of questions. Your teachers try to make the class very interactive. And back then when I was a kid, I think, you know, I just sat that there to listen, you know, it’s really hard to have a dialogue, right? Because the way to learn is different for now, maybe the same, I do not know that. That’s one thing. Another thing is, I think, you know, back then it’s kind of just everyday just study, study, right and I did not have a lot of extra, you know, activities except that I did spend a lot of time playing soccer. But here you know, the kids – my kid – have all kinds of activities, right? They really pursue their own dreams, right? Rather than just to go to college. Right? I think also another thing is very similar is kids, they all work hard, right? I think, you know, back to my classmates or myself, we all worked hard. I look at my three kids, they also tend to work very hard too.
David Novak 5:41
Yeah. That’s great. You know, when you were a kid, were there any early signs that you would end up an entrepreneur?
Eric Yuan 5:47
Yeah, I think why was in elementary school, and, you know, back then, you know, every family is, I do not think they have a lot of money, right? When I tried to buy something, I never wanted to, you know, to ask for money from my parents, but always wanted to figure out a way how to earn money. So and, you know, I never thought about that, you know, to become an entrepreneur in the future. But I do think I wanted to, you know, make some money when I was a kid.
David Novak 6:18
That’s a good trait of an entrepreneur – making money is always a good idea! You know, I understand you applied for a US visa nine times before you were accepted. What did you learn from that experience?
Eric Yuan 6:31
I think one thing I learned is the culture difference. You know, the first time I almost got a visa to come here, and before the visa officer gave me a green stamp to give me the, you know, the visa, he asked about a business card. You know, on my business card, my title is Computer Consultant. I had just graduated, essentially, that’s more like a, you know, technical title, because I traveled together with the president of the company, and the visa officer mentioned, “Oh, you are not honest, because you are not a full-time employee. You are the consultant.” I think, “What? I am a full-time employee.” But you know, just more like a culture, you know, the misunderstanding. When I came here, I realized, yes, a consultant is just a consultant and normally not a full-time employee. But you know, back in China it is different. But anyway, so I got declined, you know, the first time. There’s a bigger lesson. When I came here, I realized even if I was not born here, I’ve got to spend the time to learn the culture here, and to really understand, right, otherwise, you know, those kind of things could happen again and again. So I think it was a big lesson, but it’s good for me.
David Novak 7:48
What was your first job when you came the United States, Eric?
Eric Yuan 7:51
Just to write code, and I joined WebEx. And then in 97, I was one of the first of several engineers, and I went back to write code for several years. And that’s why if you are still using WebEx, the code of I wrote in 1998 is still running there today.
David Novak 8:11
You know, you rose quickly in the ranks of WebEx and you became the VP of Engineering in charge of collaboration software. What were the unique skills that you had that helped you become a functional leader?
Eric Yuan 8:22
I don’t think I had any unique skills. I think there are two things. My father told me that if I came to Silicon Valley, he told me that, hey, this is different. The culture, different place, different country. And I just want to tell you two things: work hard, stay humble. And it was those two things, probably the one thing I learned, you know, spending time on learning American culture, right, to really understand, because I was not born here, how to make sure I understand that how to learn from my colleagues. sometimes I watched the TV, you know, or looked at the history book, to spend time on culture, work hard, stay humble, those three things are very important for me to grow.
David Novak 9:05
You know, you had so much success at WebEx, and then the company was acquired by Cisco, as I understand it. What was it like being swallowed up by a big company like Cisco?
Eric Yuan 9:15
Yeah, Cisco is a great company, and however, you know, when we sold WebEx to Cisco, you know, WebEx was focusing on software as a service, you know, SMB driven by and large, right? And Cisco’s enterprise hardware. And, you know, from a product perspective, I think, you know, there was no synergy back then. And the software services, software, hardware, and it’s very different. And it did take some time, you know, for Cisco, and WebEx, you know, to sit down to really understand what they can do together. And however, you know, I cannot wait. And before I left, I didn’t see a single happy WebEx customer. I really wanted to build a new solution to bring it happiness back to web as customers. I think that, you know, collaboration and network hardware it is really hard to have synergy.
David Novak 10:06
Yeah. So what was the decision point, the pivot point where you decided to break out and start your own company seven years ago?
Eric Yuan 10:15
Yeah, seriously, the year before I left, I was not thinking about leaving Cisco or Cisco WebEx, because, you know, I felt like I’m a part of creating this problem, because, you know, I also, you know, built WebEx through the code, given that I did not see any happy customers, you know, I should figure out a way to fix that, and I was trying to reboot WebEx. But back then, you know, Cisco’s collaboration strategy was about social networking, essentially, you know, the strategy is to build an enterprise on Facebook. I have a different opinion. But it’s really hard for me to convince other peers, you know, to rebuild WebEx, you know. One year later I decided to leave, otherwise, I was not a happy there. And that’s the reason why I left in 2011.
David Novak 11:09
Well, you entered a very crowded category with all kinds of competition, you know, with everything from WebEx, your former employer, to Skype, Google, you know you’ve got all kinds of competition. What made you think you could succeed?
Eric Yuan 11:26
I think that you are right on. And even my friends told me that, “Hey, Eric, you know, the market is so crowded, you know, why do you want to build a new solution?” And given that, you know, so many other players there, the way I look at how the market works that I did spend lots of time talking with customers. I knew for sure that there was no single, happy customer that was so happy about their existing solutions. Now, given that a customer, they are not happy, you know, my philosophy was that if I can build a solution that is better than any other competitors, that it can bring happiness to customers, I think it’s very likely for us to build a business that can survive. And I really didn’t look at it from you know, competitive landscape perspective. Otherwise, probably I even do not dare to start a company.
David Novak 12:19
Yeah. Well, you know, when you go out on your own, you have to raise capital. Was that a hard thing for you to do?
Eric Yuan 12:25
It was very hard. That’s why I wanted to raise the money from my friends. I did not think any institutional VCs would like to invest in me. I think looking back, it’s very fair. If I were to work for VC, I also do not want to invest. Right. It’s so crowded, why you think you can pull it off? Right. So however, and I, you know, as I mentioned earlier, I know customers aren’t happy, that’s why I just raised the money from all of my friends in Silicon Valley.
David Novak 12:53
Well, I’m sure you have some very happy friends now.
Eric Yuan 12:56
Hopefully, at least I tried to make them happy.
David Novak 13:00
yeah, you did. Well, when you started your company up, what were the biggest leadership challenges you faced with the startup?
Eric Yuan 13:06
I think on the way hand, you’re very excited to start a company in Silicon Valley, right? Silicon Valley is the startup valley, right? As long as you join a startup company, or you started a company, you’re very excited. However, on the other hand, you know, you really wanted to have something as quickly as possible, right? How to balance that right? And, you know, I think patience is really important. I think, looking back, that’s probably the most challenging thing because every night, I was so eager to get something out, right, to let a customer try but at the same time, your solution is not ready, and how to balance that. How to be patient. That’s very challenging.
David Novak 13:49
You know, you’re obviously a huge success and you’re getting all these accolades now, but did you have any early mistakes that really taught you some real valuable lessons?
Eric Yuan 13:58
Yeah, I think there’s so many lessons learned, I think, when I started a company. First of all is, you know, for sure the patience, right? The second thing also realize that you’ve got to make sure not only think of a one year two year, but you’ve got to think about it in the long run, so what do you, do you really want to achieve? Right? So what if your product is ready, you know, what’s the next step? You’ve got to lay out the plan. You know, for the next several years, not only just focus on the product, you know, you can do the product? How to monetize that, right? How to get the first 10 customers, how to build a, you know, the bench team, how to build a scalable marketing system? I this is very important. I think, you know, I think when I started a company, I was just focusing on the product side. I think that’s one thing I learned along the way, I think before I started a company, I think very early on. And I sometimes, you know, when I was very young, I always had a question about what’s the purpose of life? Right? And I haven’t, I had no idea, you know, how to answer to that question. So, and I stopped until probably, you know, after 35 years old, I think I got an answer, you know, I think I should try all I can do to have an answer about that question. Without that probably a lot of things can be changed, but later I realized the purpose of life is to make others happy, and the way you be happy is to pursue a sustainable happiness.
David Novak 15:35
You know, that’s fantastic. And, you know, how did you go about building your team at Zoom?
Eric Yuan 15:40
I think two things, you know, first of all, we’d like to build a team from the ground up. We never have one to see, it could have a marketing team or sales team or support team, we want to, you know, hire the doers first. And as you know, we hire a leader to manage that, to make it scalable. Also, we would like to hire those employees with self-motivation, and self-learning mentality, because everybody’s different. You know, I think we don’t want to hire those employees who want to just leverage their experience, to come here, I think wants to, you know, be very hands on, willing to learn, you know, our brand. Plus, we wanted them to motivate themselves. Otherwise, you know, every day is so busy, you know, if you need your manager to motivate you, I think that not scalable, especially, you know, in the startup world. So, you know, that’s our approach.
David Novak 16:35
You know, Eric, you’re obviously a company that is very successful, and you have to make your customers happy, which is what you say your focus is. How do you personally stay in touch with your customer base?
Eric Yuan 16:45
I think, you know, first of all, go to the start of a competent culture, that delivers happiness, right? Meaning we do all we can to make sure our customers are happy, I’ve got to lead by example. I look at my calendar, so every day I know how much time I’m spending on customers, or how much time I spend it on something else, right? We never have a request from our sales team, and try to talk with the customer or prospect, or maybe the customer that asked you to meet about something that is wrong. And it’s always a part of that. So meaning whenever you have other activities, and when it comes to a conflict, you know, how to make a decision, how to prioritize that. When I think of customer related meetings, or task, I always have the highest priority. If I do that my direct reports will do that, too.
David Novak 17:36
So you really think it’s important for the leader to cast a shadow across the organization?
Eric Yuan 17:41
Yes, absolutely. Yeah.
David Novak 17:43
You know, you bring people together with technology. what do you think is the importance today of being face to face?
Eric Yuan 17:52
I think, you know, especially for startup companies, speed is everything. If you have a trust, then you can, you know, speed might be okay. I think, you know, face to face meeting or the meeting via Zoom platform, ultimately, I think it can help you build trust. Take this meeting, for example, I can see you, David, you also can see me, the only problem is that I cannot shake hands with you, right. I think with eye contact, I think we really can have a intimate experience, and it can help us build a trust. I think in the future–for now, for sure, face-to-face meetings, will assist you better than video collaboration, videoconferencing experience like Zoom. But in the future, I truly believe that videoconferencing like Zoom can deliver a much better experience than face-to-face meetings.
David Novak 18:40
You know, it’s interesting. Because of this face to face interaction, you know, I feel like we immediately hit on a chemistry that you would otherwise not have, you know, which is really great. You know, you have the opportunity to create your own culture, and how important is your culture to your success, you think? And what are you trying to drive deep in your company?
Eric Yuan 19:05
Absolutely. I think looking back, that’s probably the number one important thing. And the problem is we were very lucky to focus on company culture on day one, because when I showed up in my office, on day one, I did ask this question, “So what kind of a company do I want to work for in the next 10 to 20 years?” You know, I wanted to be happy, when I come to the office. When I wake up every day, I wanted to go to office. That’s why to have a happiness culture at Zoom is really important. And we work very hard to try to maintain that culture. Again, it’s not that easy–we have almost 2,000 employees now. So at any time, this culture can be broken, if we do not focus on that. So if we can, you know, focusing on that culture, make sure every employee is happy, I think that together, we can make a customer happy, I think we have a chance to survive. Otherwise, very soon, we’re gonna have a harder time.
David Novak 20:02
You know, one of your core values is Care, you know, C-A-R-E. You know, explain why that’s such a high priority.
Eric Yuan 20:11
I think, first of all, the reason why we have this Delivering happiness culture is that boils down to our company value, that we care. So meaning care about the community, care about the customer, care about our company, care about the teammates, and care about ourselves, I think it’s very important right, so when you try to recruit new employees, you want to find those employees who can fit well your culture, who can share, you know, the same values, right? And also, at same time, you cannot make the value, you know, too complex. Quite often you ask employees, “What’s your company’s value?” If they do not have an answer, you know, also something is wrong, right? And this was what I learned. I want to make it very simple, very catchy, just one word – Care. So and yeah, that’s pretty much how we started,
David Novak 21:01
What role does recognition play in your company?
Eric Yuan 21:03
I think it’s very important. And because every employee works so hard, right, even if we wanted them to motivate themselves, but you also need to recognize those who are outstanding employees, you know, because when you have the all-hands meeting, or whenever we got very good feedback from customers, you know, we have a Zoomy Award every quarter. And we also, you know, for any employees who are delivering an outstanding job, you know, at your all-hands meeting in the email, we’ve got to recognize them is very important, right? So even if they’re motivating themselves, for us, you know, as a management team, you’ve got to always care about employees. Look at it from their perspective, and sometimes our employee did a great job, you know, we sent a letter, you know, to their family, right, to really express our heartfelt thanks, right, and we’re also bringing, you know, employees and really appreciate their families’ support. I think that to recognize the employees’ great job is very, very important.
David Novak 22:06
As you know the vast majority of today’s workforce is Millennial. And you know, when you think of Silicon Valley, you think of this highly transit group of people who are moving from one job to another job. How do you attract and retain the best talent?
Eric Yuan 22:20
Yeah, these are good questions. Today, you look at the workforce today in the United States, over one third are millennials. It completely changed the way for us to work, for us to collaborate, for us to get the job done. Right. So you know, millennials, they needed the flexibility, you cannot force them, “Hey, you come to office to work,” you cannot give them the tools they do not like. That’s another reason why many companies deployed Zoom, because millennials really like video. They want to use the best tools, right? And if, if you try to tell all those employees, millennials, to use other tools, they might buy Zoom by themselves. Again, you know, they love flexibility, and they want the best breed of tools. I think those two things have a huge, very positive impact to every company’s culture.
Midroll 23:16
Hey, listeners, let’s take a break and talk about you. Do you want to be a more effective leader? If you want to grow and make a bigger impact as a leader, you have to check out our new Purposeful Recognition course. It’s a masterclass-style course taught by David Novak, where he teaches you and your teams how to use recognition as a result striving business skill. It’s fun, it’s short, and it’s just $99. And I can tell you that if you’re interested in moving from Me to We, it’s the best way to get started doing it. So I encourage you turn your intentions to be a better leader into action, and go to davidnovakleadership.com and sign up today. You won’t regret it. Now back to the podcast.
David Novak 23:59
You know, all the great companies that I’ve studied, they have a noble cause or purpose for their business that they use to galvanize and motivate their teams. And you know, you seem to have broken it down by the concept of Happiness and Caring. Have you always been a person who could simplify the complex?
Eric Yuan 24:16
You are so right. I have an engineering background. For anything so complex, I do not think that it will fly, right? That’s why on day one, I told our team, myself as well, “Let’s make sure every day even before we have a process, let us think about how to simplify the process.” I really wanted to avoid a situation where you establish so many processes, that a down-the-road employee is not happy, and then you think, “Okay let’s spend time to simplify that.” I think that’s too late. Every day, you’ve got to think about how to simplify your process like in terms of the approval process. Now, why do we need a two people to send it? Isn’t one enough, right? So we want to make sure everything is very simplified. Simplify our product offering, price offering, simplify our internal process. If we make these things too complex, you are not looking to bring happiness to the employees and to the customers, I think to simplify everything is always our philosophy.
David Novak 25:15
You know, technology is always changing, and you know that better than most for sure. How do you and your team stay on top of it all?
Eric Yuan 25:23
First of all, you know, we gotta understand what are our strengths, right? What kind of tools should we build internally, right? What kind of tools can we leverage, you know, from others. We subscribe to more than 100 different tools to help us simplify the process. We are using Salesforce.org, and all those good tools, right, in a work day as well. And I think, you know, if you deploy the best tools, I think your employee will be happy. And it’s a process will be, you know, very simple, right? I think, you know, we said we can, you know, save the time to focus on the most important thing, you know, our own product,
David Novak 26:01
Right, you know, you left a big company, Cisco, because of your frustration with not being heard. What advice would you give someone working in a company who doesn’t feel like they can break through with their ideas?
Eric Yuan 26:14
Leave. And a start or join a startup company. That’s it.
David Novak 26:19
I feel like that would be, you know, but not everyone has what it takes to be an entrepreneur. So what advice do you give to people when they think about going on their own?
Eric Yuan 26:29
Actually looking back, to be honest with you, and when I was thinking about leaving, you know, my wife, she has a different opinion: “Hey, you have a great job at Cisco, and the company pays you very well. It’s a good company, why do you want to leave?” I think, however, after we left, we just realized, wow, that’s kind of a different world. We did not realize how happy we were, right? And, you know, every morning when I woke up, I really wanted to go to office. I’m very excited. And over the weekend, I think, “Wow, it’s still Sunday or Saturday. Why not Monday, right?” It’s very exciting, you want to go the office to work, that excitement, can really change everything. I think, just don’t hesitate. Just do it. and after you join a startup company or start your own company, you will realize, wow, this is something very different. When you get older, you’re not going to regret it.
David Novak 27:21
Now, you’re building this really big company now and you’re having great success. How do you keep your entrepreneurial spirit going in a company that’s getting bigger every day?
Eric Yuan 27:30
The good news is we’re still a small company, only 2,000 employees. I think it boils down to, you know, stay with our company culture and value. And don’t think about you’re too big, right? We’re still very small, right? Be humble, keep working hard. And also really spend time with the costumers, and try to be the first to build a better solution to solve the customers. And as long as you do that, I think you should be okay. I do not think you know, you’re going to be different.
David Novak 28:02
You know, I understand now you’re looking at, you know, ways to really extend your business. Zoom phones, Zoom rooms, you know, talk about how you see your business in the future.
Eric Yuan 28:14
Yeah, we believe video is the future of communication. Video is the new voice. When we built the platform, the first application built upon our platform was video collaboration, video conferencing, and along the way you know, customers told us they really like our voiceover IP quality. You know, what, if adding a phone number support, then they do not need to have another solution for the PBX? You know, we listen to our customers carefully. That’s why we decided to introduce another solution, which was the Zoom phone system. And the costumers also told us they really like Zoom’s solution. However, you know, they do not have a good solution for their Conference Room Systems. That’s why many years ago, we introduced the Zoom rooms, essentially, that’s a cloud software commodity hardware, you know, collaboration-centric conference room solution. I think, you know, before we build any new solution, we always listen to our customers and understand the pain point. And then we try to be the first vendor to come up with a solution to serve our customers, you know, down the road that we are going to introduce more and more services, you know, cause we really stick close with our customers to focus on customers’ pain points.
David Novak 29:27
Yeah, talk about that pain point.
Eric Yuan 29:29
Yeah. So quite often, before you scale your business, you will realize, wow, there’s so many feature requests from customers, SME customers, or large enterprise customers, how to prioritize those features, it’s very hard, very difficult. And the reason why is, you know, very often customers, they would like to share with you a solution, in our case it is very different. We really want to take a step back, really wanted to talk with the customer, “Please tell us, what’s your problem? What’s the pain point? Why is that?” You know, we will not spend too much time on just talking about the solutions, because quite often, the solution given to us may not work for other customers, right? So that’s why we really want to understand the pain point or problem, and then try to understand the root cause. And then we are going to come up with a solution to sell to maybe more customers. If you do that, even if there’s so many feature requests, guess what, probably the same problem, right? We can come up with a better solution. If you only focus on the solution the customer suggested for you, I think that is really hard. You know, otherwise, you know, you need to deal with all kinds of solutions every day. you know, one company gives a solution, another company gives another solution – that is really hard to scale your business.
David Novak 30:41
You know, when I think of entrepreneurs, I think of people working night and day and totally absorbed in the excitement of their work. Are you one of those guys that’s, you know, 24/7? And how do you balance that with your family?
Eric Yuan 30:56
I think first of all, I never think about how to balance work and life. Because as long as I think about how to balance that, I think I am in to the wrong direction. And of course, there’s no answer to balancing work and life, right, you know, why should I have to spend time on that? So, you know, I really like enjoy working, you know, at Zoom, I think life is work, work is life, right? And over the weekend, in the evening, I always focus on the emails or targeting our employees or the meetings. And the same time I tell my family, you know, is very important. I want to show them, you know, how to work. But however, whenever there’s a conflict between the work and the life, see my son might have a graduation ceremony or have a basketball game. I told them family is the number one important thing if there’s a conflict. If there’s no conflict, then work is life and life is work.
David Novak 31:47
You know, you came here, obviously, as an immigrant from China. What did that experience teach you as it relates to your perspective on diversity?
Eric Yuan 31:55
I think first of all I really like Silicon Valley, right? In terms of embracing diversity, I think Silicon Valley sets up a good example for the whole world. Right? You look at all those immigrants here, you know, we’re successful, so many companies, right, you know, like my great friend, Jay, you know, is another great example, right? There’s so many great examples. They are all very successful. The reason why is because of Silicon Valley culture. I think the immigrants, they tend to work harder. Because when you come here, I came here at 27. You know, I really know one thing, you know how to work, stay humble, keep working hard. Right? That’s it. I think because of that, I think that you have maybe a higher chance to make more progress. I think that’s why I think to embrace diversity, and it’s very important, you know, like our company as well. You know, look at our management team, look at our teams, I think that for you to make the best decision, if you have a team with a different background, you always can make the best decision. I think that’s another reason why Silicon Valley is so successful.
David Novak 32:59
You know, with all of the press that you read today about the tariff and the China-U.S. relations, you know, what would you say from your vantage point would be the biggest misperception that Americans have about China?
Eric Yuan 33:14
I think first of all, I am too busy on the business side, I really didn’t get a deep dive on this topic. If I do. If I retire, somebody probably I will spend more time. The reason why I feel like is there is something of a trust issue. Similar to the company as well, right? If there’s a trust, everything can be done easily. If there’s no trust, no matter what you do, right, the other side with think that something’s wrong. I think, first of all, how to build a trust between those two countries, between the two cultures, right, between the, you know, I think the two different system that’s really important, you know. Ultimately, the highest thing, the root cause, is trust, right? How do we fix that problem, you know, or other things on the surface may not be the root cause of how to build a trust, I still do not know how to do that. But if I have time in the future someday, if I retire, I will spend some time on that, you know, I have many, many friends, I spent a lot of time learning culture here. I was born in China, I think how to help to make a world a better place. Unfortunately, I do not have bandwidth today. Otherwise, I really want to, you know, spend my time on that, how to build the trust between the two systems?
David Novak 34:25
Yeah, our country needs you someday. Right now, you’re building a great company. You know, we have a lot of aspiring leaders that are listening to this podcast right now. What would be your three best bits of advice you’d give aspiring leaders?
Eric Yuan 34:38
I think one thing I learned, and I’d like to repeat what he said that, you know, I think in terms of leadership, I think I learned one thing from the former CEO of Walmart, H. Lee Scott. I do not know him, but in the Cisco offside leadership meeting, we invited him to give us a speech about leadership. I think that several things are really important for us, you know, like communication. You know, the first thing what you decide, and it might be, you know, misunderstood or ignored, right? This is something you’ve got to communicate more, right? This is very important. Another thing is to give constructive and honest feedback is a rare talent, right? How to give others feedback, right? This is very, very important. I think that with those leadership skills, I learned a lot. I think that truly happen to me, you know, to grow into a better leader, I would love to share that with others as well.
David Novak 35:33
You know, as you look for Eric, what do you see is your unfinished business?
Eric Yuan 35:38
I think every day we try to, you know, innovate more and listen to the customer, and the care about the customer. And seriously, we think about for me, I think about how to survive, you know, what if there’s a failure, right? I don’t want to be failed, right? That’s why I keep working very hard, and also drive our team working harder as well. And we really do not want to fail, right? And how to do that is just look at everything from a customer perspective. If you do that everything should be okay. We really do not think about some other very ambitious goals. A lot of other things seriously was thinking about how to survive. That’s it.
David Novak 36:14
You know, we talked a little bit about recognition earlier, you know, what would be the biggest recognition moment that you’ve personally had?
Eric Yuan 36:23
I think one thing at a several moments at one moment is, you know, last month the company went public. And we get our, you know, executive team members there, and some of our customers there, and some early employees and live broadcast to be announced as a public company, at that time I realized, wow, you know hard work is very well paid off. And I think this is one of the best moments in my life.
David Novak 36:49
Well, Eric, I’m really looking forward to our listeners hearing this podcast. I want to thank you so much for taking time to be with us. And I want to wish you continued success in your great business that you’re building.
Eric Yuan 37:01
My pleasure. Thank you, David. I appreciate you for your invitation.
Ashley 37:06
I really enjoyed this conversation with Eric. I liked how he created a company culture based on the values of happiness and caring. One key insight that was helpful to me was Eric’s focus on finding solutions for the customers’ pain point. Eric said there’s an endless supply of new feature requests in the technology business, and there’s no possible way to keep up with the ball. The key is stepping back and really understanding the problem the customers trying to solve. By understanding the pain point you get to the root cause and can come up with a better solution that works for everyone. How about you? Are you continually chasing after a variety of possible solutions? Or do you take the time to take a step back and really understand the problem? Eric always looked at his business from a customer’s perspective and focuses on solving their pain points. If you can do that first, or better than your competitors, you have a winning strategy. In this season of the David Novak Leadership Podcast, we’ll have a quarterly Q&A where my dad will answer your most pressing leadership questions. You can submit your questions by following David Novak and commenting on his Twitter, Instagram or Facebook pages. You can subscribe to this podcast and our bi-weekly newsletter at davidnovakleadership.com. As always, we appreciate you taking the time to rate and review us on iTunes, Stitcher and Spotify. Thanks for listening.
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Eric Yuan is the Founder and Chief Executive Officer of Zoom, a video collaboration platform company that is committed to delivering happiness through frictionless video communication. Eric took Zoom public in April of 2019, leading his company to one of the most successful IPOs of the year. Prior to founding Zoom, Eric was corporate vice president of engineering at Cisco, where he was responsible for Cisco’s collaboration software development. As one of the founding engineers and vice president of engineering at Webex, Eric was the heart and soul of the Webex product from 1997 to 2011.
In 2017 Eric was added to the Business Insider list of the 52 Most Powerful People in Enterprise Tech. In 2018, he was named the #1 CEO of a large US company by Glassdoor and EY Entrepreneur of the Year in Northern California (software category). Eric is a named inventor on 11 issued and 20 pending patents in real time collaboration.
“On day one I asked myself, 'What kind of a company do I want to work for in
the next 10 to 20 years?' And I wanted to be happy when I come to the office. That's why happiness culture at Zoom is really important.” Click To Tweet
“If we focus on culture… together we can make the customer happy, and then we have a chance to survive. Or If we focus on culture, making sure every employee is happy, I think that together we can make the customer… Click To Tweet
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From Podcast Action Journal
Becky recalls a significant failure in her career. She was working with someone she respected to launch a new product. Becky thought they should do it in a specific way, but her colleague didn’t agree. Becky relented, and later a competitor launched the product her way with great success. Becky knew she was right but second-guessed herself. Despite the failure, she is grateful that it happened when she was young. She learned that the next time she needed to fight harder.
Have you ever experienced a failure? What did you learn?
If your colleague disagreed with you, how would you respond?
Becky has the following thoughts on recognition:
Feedback is a gift, something we have lost in Corporate America. Becky says, “If I am not giving you feedback, then I am not investing in you. If I’m not getting feedback, people aren’t invested in me.”
What is the best piece of constructive feedback you’ve ever received?
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