Zoom is a video communication platform whose mission is to “make video communications frictionless.” Leveraging on the viral growth from its freemium model, Zoom then uses its direct sales force to identify opportunities and channel those as B2B and enterprise accounts, thus enabling Zoom to monetize the brands’ growth generated by its freemium. In 2022 Zoom generated over $4 billion in revenue and $1.37 billion in net profits.
Zoom culture in a nutshell
How does Zoom interpret its “delivering happiness” seemingly empty motto?
Zoom Mission Statement
Our mission is to make video communications frictionless
Indeed, this aspect is critical. Zoom has been able to grow so quickly thanks to its freemium model where it managed to attract a large number of users and convert them into paying customers. Zoom has been able also to distinguish itself for its ease of use and setup, which helped it trigger viral growth.
Understanding its mission is critical to understand what Zoom prioritizes in developing its products, not only from the engineering standpoint but also from the sales and marketing standpoint. Thus, the word “frictionless” isn’t just a concept, but a mindset that pervades the whole organization.
Zoom Vision Statement
Our vision is to empower people to accomplish more through video communications
Video communication is at the core of what Zoom does. However, its vision is to “empower people.” As a new form of working is on the rise (especially remote working) people need more and more ways to communicate via video. Zoom surfed that way to build a successful company very quickly.
We care for our community, our customers, our company, our teammates and ourselves
Understanding the values of the organization helps us understand who are the key partners in the Zoom business model.
This is also shown in the way Zoom communicates its product:
We provide a video-first communications platform that delivers happiness and fundamentally changes how people interact.
And its ambition of what the product can achieve:
We believe that rich and reliable communications lead to interactions that build greater empathy and trust. We strive to live up to the trust our customers place in us by delivering a communications solution that “just works.” Our goal is to make Zoom meetings better than in-person meetings.
As you might notice Zoom’s audacious goal is to make “Zoom meetings better than in-person meetings.”
This kind of focus leads product development and helps Zoom employees focus on a single, audacious goal.
The challenge is that of allowing organizations to still build a culture even though it is primarily made of employees working remotely. Therefore, more than just a product, Zoom promotes a movement or a way of thinking.
Today, Zoom has reached an incredible scale.
What makes Zoom different?
While many other digital businesses are launching their video chat applications, some of the factors that helped Zoom gain traction werE:
- Both Free and Premium, Reliable, high-quality communications
- Easy to use
- Easy to deploy and manage
Zoom Competitive Strengths
- Video-first cloud architecture
- A recognized market leader
- Viral demand
- A multipronged go-to-market strategy where the company leverages on its freemium to build a continuous flow of paying customers
How does Zoom make money?
Zoom primarily makes money via its Meetings platform. Around that Zoom has developed a suite of products and features “designed to give users a frictionless communications experience.“
Users are comprised of two categories:
- Hosts who organize video meetings
- And the individual attendees who participate in those video meetings
Zoom products (source: Zoom 10K, 2020)
Zoom enjoys thousands of customers of all sizes across industry verticals and geographies.
As the company scaled its revenues it also scaled its sales and marketing expenses in an attempt to enable its sales force to convert the continuous streams of accounts using Zoom for free as paying customers.
Yet, over the years Zoom increased its profitability.
And also its efficiency!
This is critical, as it shows that as the company scales its operations, it’s still able to maintain a certain degree of efficiency.
The multipronged go-to-market strategy
The good experience is channeled by sales efforts to identify customers opportunities, such to transform a non-paying user into an enterprise customer.
For instance, as pointed out by Zoom in its 2019, 10K “back in 2019, 55% of the 344 customers that contributed more than $100,000 of revenue started with at least one free host prior to subscribing.”
Therefore, the sales model combines the viral demand generation from the free Zoom Meeting plan with direct sales looking for potential customer opportunities.
The Zoom direct sales force includes:
- field sales
- inside sales
Those are organized by customer employee count and vertical.
Zoom’s Freeterprise model unveiled
I like to call the Zoom model a freeterprise, as the company has been able to scale its revenues, by leveraging on a free product (usually working pretty well in the B2C space) yet to acquire B2B/Enterprise customers.
Thus, the freeterprise works as a powerful way to transform free professional single accounts into enterprise accounts.
Yet, on the other hand, the highly specialized salesperson (usually field sales) builds a strong relationship to bring the whole enterprise account on board!
Of course, this leads the organization to skew its resources toward building an army of qualified salespeople to handle the volume of leads generated by the free offering (in 2019, Zoom spent 54% of its revenues primarily on salespeople headcounts).
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