Happiness: Does Zoom CEO’s simple operating principle really work?

In 2007, Cisco purchased WebEx’s video conferencing service for $3.2 billion. For most of us in the enterprise technology community, this kind of outcome sounds like a very-best-case scenario. What startup wouldn’t view a multi-billion dollar exit as a resounding success?

Eric Yuan (WebEx employee #10 and current CEO of Zoom.us) measures success differently than most. Speaking to TechCrunch’s Connie Loizos onstage at our 1to100 conference (over a decade after the buyout), Eric still described his frustrations with WebEx’s M&A as if it had just happened yesterday: “[If] you look at [the acquisition] from a shareholder perspective, that was a pretty good deal. However, if you look at it from an employee perspective, from any user or customer perspective, I do not see it as a good deal."

Because even with 14 years of hard work on [the product], I did not see a single happy customer. Every day, I was not happy. My engineers, they were not happy. Every day, it just felt like, ‘Oh my God, what happened?!?’”

Eric left WebEx to found Zoom in 2011, freeing him to think (and talk) about success using more than just traditional business metrics. From the stage, he repeatedly emphasized the importance of “caring” and “making customers happy.” He frequently mentioned the importance of “trust” and “culture.” And when asked about a recent investor in Zoom, he said that he was excited to work with them because he knew he could “make a lifetime friend forever.”

Although those last few sentences might read like platitudes, evidence suggests that Eric actually means and operates on every word. Zoom’s roughly 1,300 employees love working at the company; Glassdoor ratings have held at 4.9 stars (or higher) for the life of the company. In a relatively crowded market, Zoom is handily outperforming other video collaboration platforms.

And in June, Glassdoor ranked Eric the #1 CEO of 2018 with an unprecedented 99% employee approval rating (beating out Linkedin’s Jeff Weiner, DocuSign’s Daniel Springer and Salesforce’s Marc Benioff).

So how do Eric’s operating principles of “happiness” and “care” play out in the day-to-day of the company? Read on for a few takeaways — or watch a video of the full conversation (also at the bottom of this post).

Fuel a customer-first culture with employee happiness

Drawing on his experience at WebEx, Eric believes that the success of Zoom depends on one core tenet — creating a culture that makes customers feel like they’re taken care of. While this may not sound like rocket science, Eric has bet all of his chips on this seemingly simple idea. “We [have to] compete against any other competitors in terms of the product and company user experience. So that’s why the culture is really important. We want to make sure all employees, every day, they are very happy. Any time when they interacting with the customers, the customer can feel that. They think, ‘Wow, it’s very different [at] Zoom. They do not just want to sell something to us — they really care about us.’”

When asked about competing with Amazon (a company with considerably more financial firepower that recently launched a video-based collaboration tool), Eric doubled down on Zoom’s customer-centric culture.

“I admire Amazon a lot, probably one of the best companies in the world … But I do not think they know how to build their service to deliver happiness to workers or enterprise customers. I do not think they have that DNA. So that’s why we never worry about Amazon.”

Hire based on trust and potential — not previous big company success

When Eric left WebEx, 45 engineers followed him. As soon as Zoom began to scale, hiring was based on trust. “Our philosophy [was] to focus on internal referrals. ’Cause I trust you, so your friend I also trust. Even today 65% of the newly hired employees are from internal referrals.”

When it comes to growth, scaling, and experience, Eric’s attitudes fly in the face of much of Silicon Valley’s conventional thinking. “We hire for potential. We never want to hire anyone from a bigger company. Big caliber, no. We want to hire the senior manager or direct manager so they can grow themselves along with the company [as it] grows. I think because we follow that philosophy… that’s why so far, [it’s been] so great.”

“I tell every hiring manager, focus on two things — self-motivation and self-learning. As long as they have those two things, everything else is easy.”

Prioritize existing customers before worrying about winning new ones

Zoom’s successful video communication platform has positioned the company to lead the charge into the future with new ideas and features. When asked how Zoom prioritizes what to tackle next, Eric’s answer was simple and straightforward: let the the relationships you already have with customers guide your product roadmap decisions. “The level of happiness to the existing customer is more important than pursuing the new customers. Our philosophy is always focusing on the existing customers … We have educated our product manager, all the engineers, the support teams just as well. We don’t want to make a commitment to the new prospect … Spend time, focus on the existing customer. Any feature request [from them] always has higher priority than features requested by the new prospect.”

Success equals a product that delivers happiness

When asked what he’s most proud of with Zoom, Eric didn’t discuss attention from investors, recent awards or aiming for a (lucrative) exit strategy. Instead, he told a human-centered story: “One of our employees, his mom in hospital is very bad situation. Unfortunately his father is also in the hospital … a different hospital. They were using Zoom to talk to each other...I think wow, I’m building something to deliver the happiness to those people. It just feels great. Every day there’s so many use cases or experiences like that.”

Watch the whole conversation below for more insights.

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