StarZero All shows Try the podcast clipper →

May 4, 2018 · 21m · top-founders

1014 Zoom CEO on Killing His Old WebEx Baby With $150m+ in ARR

Eric Yuan · 10m spoken Nathan Latka · 7m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Top Entrepreneurs, Zoom founder and CEO Eric Yuan sits down with host Nathan Latka to discuss his journey from engineering WebEx to founding Zoom, breaking down the company's freemium SaaS monetization, capital efficiency, and customer-first growth strategy that propelled annual recurring revenue past $150 million.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 42.9% of the talking time here. How this is scored →

Nathan as informed peer 5.4 Guest teaching 3.3 Guest disagreement 2.9 Nathan pushing back 4.3
05100:0010:0020:000:49–3:58 · Nathan as informed peer 5/10 Introducing Zoom CEO and WebEx Engineering Veteran Eric Yuan Nathan probes into Eric's history at Cisco and WebEx, asserting that Cisco made a massive mistake and suggesting Eric is just running the classic startup-to-corporate acquisition playbook. Eric rejects the acquisition premise, explaining he is focused on building an enduring company rather than flipping it.3:58–6:00 · Nathan as informed peer 5/10 Zoom SaaS Monetization Structure and Company Inception Nathan breaks down Zoom's SaaS tiers and freemium economics. Eric provides straightforward breakdowns of Pro, SMB, and Enterprise cohorts in a cooperative tone.6:02–9:26 · Nathan as informed peer 7/10 Raising Venture Capital and Scaling Global Operations Nathan aggressively performs back-of-the-envelope math using Zoom's 850,000 domains and entry price to force Eric to acknowledge a revenue run rate over $12M monthly. Eric admits the math is accurate while politely declining to disclose exact internal figures.9:26–12:44 · Nathan as informed peer 6/10 Prioritizing Customer Happiness Over Aggressive Growth Metrics Nathan tries to pin down explicit YoY percentage targets and billion-dollar milestones, but Eric repeatedly counters that Zoom intentionally ignores growth targets to focus exclusively on NPS and customer happiness. Nathan acknowledges Eric's approach while joking that it makes him look like a ruthless capitalist.12:47–15:07 · Nathan as informed peer 4/10 Mid-Roll Sponsorship Announcement for SignEasy Platform Following a mid-roll ad read, Nathan inquires about paid acquisition channels and CAC payback periods across customer cohorts, which Eric answers directly.15:07–18:15 · Nathan as informed peer 6/10 Designing Frictionless Onboarding and Analyzing Churn Metrics Nathan asks about driving user stickiness in the first hour, but Eric strongly rejects the concept of lock-in stickiness. Nathan interrupts to clarify and refocus his question on product onboarding and time-to-value.18:15–20:57 · Nathan as informed peer 5/10 The Famous Five Questions and Core Life Advice The interview concludes with the standard 'Famous Five' rapid-fire questions, followed by Nathan delivering a comprehensive summary monologue of Zoom's metrics and founding story.0:49–3:58 · Guest teaching 4/10 Introducing Zoom CEO and WebEx Engineering Veteran Eric Yuan Nathan probes into Eric's history at Cisco and WebEx, asserting that Cisco made a massive mistake and suggesting Eric is just running the classic startup-to-corporate acquisition playbook. Eric rejects the acquisition premise, explaining he is focused on building an enduring company rather than flipping it.3:58–6:00 · Guest teaching 3/10 Zoom SaaS Monetization Structure and Company Inception Nathan breaks down Zoom's SaaS tiers and freemium economics. Eric provides straightforward breakdowns of Pro, SMB, and Enterprise cohorts in a cooperative tone.6:02–9:26 · Guest teaching 2/10 Raising Venture Capital and Scaling Global Operations Nathan aggressively performs back-of-the-envelope math using Zoom's 850,000 domains and entry price to force Eric to acknowledge a revenue run rate over $12M monthly. Eric admits the math is accurate while politely declining to disclose exact internal figures.9:26–12:44 · Guest teaching 6/10 Prioritizing Customer Happiness Over Aggressive Growth Metrics Nathan tries to pin down explicit YoY percentage targets and billion-dollar milestones, but Eric repeatedly counters that Zoom intentionally ignores growth targets to focus exclusively on NPS and customer happiness. Nathan acknowledges Eric's approach while joking that it makes him look like a ruthless capitalist.12:47–15:07 · Guest teaching 2/10 Mid-Roll Sponsorship Announcement for SignEasy Platform Following a mid-roll ad read, Nathan inquires about paid acquisition channels and CAC payback periods across customer cohorts, which Eric answers directly.15:07–18:15 · Guest teaching 5/10 Designing Frictionless Onboarding and Analyzing Churn Metrics Nathan asks about driving user stickiness in the first hour, but Eric strongly rejects the concept of lock-in stickiness. Nathan interrupts to clarify and refocus his question on product onboarding and time-to-value.18:15–20:57 · Guest teaching 1/10 The Famous Five Questions and Core Life Advice The interview concludes with the standard 'Famous Five' rapid-fire questions, followed by Nathan delivering a comprehensive summary monologue of Zoom's metrics and founding story.0:49–3:58 · Guest disagreement 4/10 Introducing Zoom CEO and WebEx Engineering Veteran Eric Yuan Nathan probes into Eric's history at Cisco and WebEx, asserting that Cisco made a massive mistake and suggesting Eric is just running the classic startup-to-corporate acquisition playbook. Eric rejects the acquisition premise, explaining he is focused on building an enduring company rather than flipping it.3:58–6:00 · Guest disagreement 1/10 Zoom SaaS Monetization Structure and Company Inception Nathan breaks down Zoom's SaaS tiers and freemium economics. Eric provides straightforward breakdowns of Pro, SMB, and Enterprise cohorts in a cooperative tone.6:02–9:26 · Guest disagreement 2/10 Raising Venture Capital and Scaling Global Operations Nathan aggressively performs back-of-the-envelope math using Zoom's 850,000 domains and entry price to force Eric to acknowledge a revenue run rate over $12M monthly. Eric admits the math is accurate while politely declining to disclose exact internal figures.9:26–12:44 · Guest disagreement 5/10 Prioritizing Customer Happiness Over Aggressive Growth Metrics Nathan tries to pin down explicit YoY percentage targets and billion-dollar milestones, but Eric repeatedly counters that Zoom intentionally ignores growth targets to focus exclusively on NPS and customer happiness. Nathan acknowledges Eric's approach while joking that it makes him look like a ruthless capitalist.12:47–15:07 · Guest disagreement 1/10 Mid-Roll Sponsorship Announcement for SignEasy Platform Following a mid-roll ad read, Nathan inquires about paid acquisition channels and CAC payback periods across customer cohorts, which Eric answers directly.15:07–18:15 · Guest disagreement 6/10 Designing Frictionless Onboarding and Analyzing Churn Metrics Nathan asks about driving user stickiness in the first hour, but Eric strongly rejects the concept of lock-in stickiness. Nathan interrupts to clarify and refocus his question on product onboarding and time-to-value.18:15–20:57 · Guest disagreement 1/10 The Famous Five Questions and Core Life Advice The interview concludes with the standard 'Famous Five' rapid-fire questions, followed by Nathan delivering a comprehensive summary monologue of Zoom's metrics and founding story.0:49–3:58 · Nathan pushing back 5/10 Introducing Zoom CEO and WebEx Engineering Veteran Eric Yuan Nathan probes into Eric's history at Cisco and WebEx, asserting that Cisco made a massive mistake and suggesting Eric is just running the classic startup-to-corporate acquisition playbook. Eric rejects the acquisition premise, explaining he is focused on building an enduring company rather than flipping it.3:58–6:00 · Nathan pushing back 2/10 Zoom SaaS Monetization Structure and Company Inception Nathan breaks down Zoom's SaaS tiers and freemium economics. Eric provides straightforward breakdowns of Pro, SMB, and Enterprise cohorts in a cooperative tone.6:02–9:26 · Nathan pushing back 6/10 Raising Venture Capital and Scaling Global Operations Nathan aggressively performs back-of-the-envelope math using Zoom's 850,000 domains and entry price to force Eric to acknowledge a revenue run rate over $12M monthly. Eric admits the math is accurate while politely declining to disclose exact internal figures.9:26–12:44 · Nathan pushing back 5/10 Prioritizing Customer Happiness Over Aggressive Growth Metrics Nathan tries to pin down explicit YoY percentage targets and billion-dollar milestones, but Eric repeatedly counters that Zoom intentionally ignores growth targets to focus exclusively on NPS and customer happiness. Nathan acknowledges Eric's approach while joking that it makes him look like a ruthless capitalist.12:47–15:07 · Nathan pushing back 3/10 Mid-Roll Sponsorship Announcement for SignEasy Platform Following a mid-roll ad read, Nathan inquires about paid acquisition channels and CAC payback periods across customer cohorts, which Eric answers directly.15:07–18:15 · Nathan pushing back 7/10 Designing Frictionless Onboarding and Analyzing Churn Metrics Nathan asks about driving user stickiness in the first hour, but Eric strongly rejects the concept of lock-in stickiness. Nathan interrupts to clarify and refocus his question on product onboarding and time-to-value.18:15–20:57 · Nathan pushing back 2/10 The Famous Five Questions and Core Life Advice The interview concludes with the standard 'Famous Five' rapid-fire questions, followed by Nathan delivering a comprehensive summary monologue of Zoom's metrics and founding story.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 61% · guest 39%0:00 · Nathan 61% · guest 39%3:00 · Nathan 21.5% · guest 78.5%3:00 · Nathan 21.5% · guest 78.5%6:00 · Nathan 35.8% · guest 64.2%6:00 · Nathan 35.8% · guest 64.2%9:00 · Nathan 41.5% · guest 58.5%9:00 · Nathan 41.5% · guest 58.5%12:00 · Nathan 47.2% · guest 52.8%12:00 · Nathan 47.2% · guest 52.8%15:00 · Nathan 30.9% · guest 69.1%15:00 · Nathan 30.9% · guest 69.1%18:00 · Nathan 64.9% · guest 35.1%18:00 · Nathan 64.9% · guest 35.1%21:00 · Nathan 0% · guest 0%21:00 · Nathan 0% · guest 0%
Sharpest disagreement ▶ 15:13 Eric rejects conventional SaaS product lock-in

Eric firmly dismisses Nathan's premise about manufacturing stickiness, arguing that trapping users is the wrong approach and that switching away should be effortless.

 Hardest push from Nathan ▶ 15:50 Nathan halts deflection to reframe onboarding question

Nathan directly cuts in when Eric rejects his premise, forcefully clarifying that he is asking about technical time-to-value rather than artificial customer lock-in.

 Biggest teaching moment ▶ 11:22 Eric redefines sustainable growth philosophy

Eric educates Nathan on why setting top-down revenue and growth percentage goals is unsustainable compared to focusing entirely on Net Promoter Score and user satisfaction.

 Nathan holds their own ▶ 8:44 Nathan mathematically corners Eric on revenue figures

Nathan uses Eric's previously cited domain counts and baseline pricing tiers to deduce and confirm that Zoom is operating at well over $150M in annual run-rate.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Zoom CEO and WebEx Engineering Veteran Eric Yuan 5445 Nathan probes into Eric's history at Cisco and WebEx, asserting that Cisco made a massive mistake and suggesting Eric is just running the classic startup-to-corporate acquisition playbook. Eric rejects the acquisition premise, explaining he is focused on building an enduring company rather than flipping it.
Zoom SaaS Monetization Structure and Company Inception 5312 Nathan breaks down Zoom's SaaS tiers and freemium economics. Eric provides straightforward breakdowns of Pro, SMB, and Enterprise cohorts in a cooperative tone.
Raising Venture Capital and Scaling Global Operations 7226 Nathan aggressively performs back-of-the-envelope math using Zoom's 850,000 domains and entry price to force Eric to acknowledge a revenue run rate over $12M monthly. Eric admits the math is accurate while politely declining to disclose exact internal figures.
Prioritizing Customer Happiness Over Aggressive Growth Metrics 6655 Nathan tries to pin down explicit YoY percentage targets and billion-dollar milestones, but Eric repeatedly counters that Zoom intentionally ignores growth targets to focus exclusively on NPS and customer happiness. Nathan acknowledges Eric's approach while joking that it makes him look like a ruthless capitalist.
Mid-Roll Sponsorship Announcement for SignEasy Platform 4213 Following a mid-roll ad read, Nathan inquires about paid acquisition channels and CAC payback periods across customer cohorts, which Eric answers directly.
Designing Frictionless Onboarding and Analyzing Churn Metrics 6567 Nathan asks about driving user stickiness in the first hour, but Eric strongly rejects the concept of lock-in stickiness. Nathan interrupts to clarify and refocus his question on product onboarding and time-to-value.
The Famous Five Questions and Core Life Advice 5112 The interview concludes with the standard 'Famous Five' rapid-fire questions, followed by Nathan delivering a comprehensive summary monologue of Zoom's metrics and founding story.

Statements from this episode (12)

Disclosure
Yuan: Zoom will not sell, contrasting with WebEx's early acquisition
“No, no, no. We don't want to sell the company. And by the way, you know, I was not a CEO, right? So WebEx, you know, the two co-founders and You know, they are already a public company. They wanted to sell the company back in, you know, in our case, you know, …”
Eric Yuan May 4, 2018 ▶ 3:16
Assertion Supported
Top WebEx engineers left Cisco to join Zoom shortly after launch
“I left at Cisco end of June of 2011, and that's how I started Zoom, and one month later, some top Webex engineers, they quit and followed me to start, to join Zoom.”
Eric Yuan May 4, 2018 ▶ 5:19
Assertion Not checkable as stated
Cisco doubted Zoom's vision, believing enterprise collaboration belonged in social networking
“At that time, they saw it is, you know, they focused on the social networking. At that time, they saw the overall, the collaboration strategy should be around the social networking. I have a different opinion, and they probably thought, I do not understand the…”
Eric Yuan May 4, 2018 ▶ 5:39
Disclosure
Yuan: Zoom has not touched its Series C or D capital
“The C round and D round of money is still in the bank. We even did not touch that yet because we already generated, generated enough cash, you know, to help us to invest more into the backend operation or marketing side.”
Eric Yuan May 4, 2018 ▶ 7:05
Assertion Not checkable as stated
Zoom serves over 850,000 unique business domains including Uber and Tesla
“We have a little bit over 800 or 50,000 unique business domains, you know, like Uber, like a Tesla, you know, like a Zendesk, Okta, you know.”
Eric Yuan May 4, 2018 ▶ 7:59
Assertion Not publicly verifiable
Yuan: Zoom has achieved over 100% year-over-year growth for several years
“I think a minimum is 100%, you know, over the past several years, right? You know, and we got to the growth, you know, faster, right? I think that that's kind of a minimum is 100% over the past several years.”
Eric Yuan May 4, 2018 ▶ 10:24
Opinion
Eric Yuan estimates the video conferencing total addressable market at $20 billion
“Oh, in terms of TAM, I think it's huge. That's a, you know, a 20, twenty billion dollar market, so.”
Eric Yuan May 4, 2018 ▶ 11:56
Disclosure
Eric Yuan: Zoom's ultimate goal is connecting one billion users
“I, again, our goal is to connect a billion users to use Zoom.”
Eric Yuan May 4, 2018 ▶ 12:08
Disclosure
Yuan: Most Zoom Customer Acquisition Is Driven by Organic Growth
“For most of the customer acquisition are done by organic growth. A lot of incoming these, you know, happy customer refer to another customer. And you know, there's a snowball, you know, effect.”
Eric Yuan May 4, 2018 ▶ 13:50
Disclosure
Zoom recovers its paid SMB customer acquisition costs within one quarter
“Online S&P is very, very fast. Within the, within one quarter, you already get the money back.”
Eric Yuan May 4, 2018 ▶ 14:22
Insight
Yuan: Designing SaaS for artificial customer lock-in is the wrong approach
“We never wanted to make our services sticky. The reason why I think that is wrong direction, because the reason why you want to make it sticky, you always say, hey, this customer don't switch to others. I think that's wrong approach.”
Eric Yuan May 4, 2018 ▶ 15:17
Assertion Not checkable as stated
Zoom's online customer cohort monthly churn is roughly 2% to 3%
“Online cohort, I would say industry average. It's about, you know, the two to three percent, right?”
Eric Yuan May 4, 2018 ▶ 17:51
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more