Here’s How a Single Speech by Bill Gates Led Directly to the $16 Billion Zoom IPO

Zoom founder Eric Yuan traces his decision to found Zoom to a single speech Bill Gates made 26 years ago. Yuan was in the audience and he says it changed his life forever. His story is a lesson for every founder and would-be founder on when and how to take a big risk.

Have you ever heard a speech that changed your whole life? For Zoom founder Eric Yuan, the answer to that question is a definite yes. Yuan is the founder of Zoom Video Communications, the service that’s become such a market force that people routinely use the word “Zoom” when they mean videoconference, much the way they say “Q-tip” when they mean cotton swab. Zoom went public in 2019 in what may have been the world’s most perfectly timed IPO. Its valuation then was $16 billion; now, boosted by rapid adoption during the pandemic, it’s more than $113 billion. 

The company might never have existed at all, if it weren’t for a speech Bill Gates, then CEO of Microsoft gave in Japan in 1994. As it happened, Yuan, who was born in China, was living in Japan, attending a training program after completing a graduate degree at a Beijing university. He was in the audience when Gates talked about the future potential of the internet (those were the days when people signed up with AOL or Compuserve to get online via their telephone line). Gates might even have described videoconferencing, something he would predict in his book The Road Ahead, which was published the following year.

The future of the internet, and videoconferencing in particular were ideas that had already captured Yuan’s imagination. As a college student, he’d been frustrated that his then-girlfriend (now his wife) lived a 10-hour train ride away. Because of the distance, he could only visit her twice a year. During those train rides, he daydreamed about a day when he could use a device that would allow him to talk with her and see her, no matter where he was. Now, Gates’ speech convinced Yuan that the internet was the key to his future career.

He decided to move to Silicon Valley, but there were some obstacles. First of all, he couldn’t get a visa. He applied, and was rejected, over and over again for two years. (He finally got lucky on this ninth try.) Next, he didn’t speak much English. But he had coding skills and that was enough to land him a job at WebEx, a new videoconferencing startup where he was among the first employees. Ten years later,Cisco acquired WebEx and gave Yuan the title vice president of engineering. Four years after that, in 2011, Yuan noted the rising interest in smartphones and tablets, and proposed that Cisco create a mobile-friendly version of its videoconference platform. But his bosses were convinced that success lay in creating internal social networks for enterprises. In what could be the biggest missed opportunity in business history, they rejected Yuan’s idea.

Yuan later told CNBC.com that he was making “very high six figures,” at the time. But he’d wake up every morning not wanting to go to work because he’d been prevented from building the user-friendly, mobile-ready product he knew the world wanted. And so he quit to start Zoom. Walking away from that big salary might seem like a risky thing to do, and indeed, his wife wasn’t fully on board with the decision, Yuan said later. But, he says, being unhappy in his job made it a no-brainer. “The purpose of life is to pursue happiness, and I was not happy. Then what’s the risk?” he told CNBC.com.

By 2013, Yuan’s decision to leave Cisco wasn’t looking especially smart. The word from potential investors was nearly unanimous: With WebEx and Google Hangouts and Skype (owned by Microsoft), the market was already well covered. Entering an arena where Google and Microsoft already had popular products amounted to startup suicide. “Some of the smartest people I know wouldn’t take a meeting with Eric. He changed his screensaver to ‘It can’t be done’ and kept working,” recalled one VC whose company eventually bucked the trend and invested in Zoom.

We all know what happened next. Zoom quickly started gobbling up market share, thanks to its user-friendly design, free service that requires no membership or account, and ability to work smoothly on a wide variety of devices. By the time the pandemic hit this spring, Zoom’s usage had already surpassed WebEx’s. 

So the story has a happy ending, but it’s useful to remember how it began: With a single speech by an iconic founder, and a young man who was singularly determined to make his daydreams come true.