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How Zoom won 2020 — and how 2020 changed Zoom forever

Zoom never imagined being the company the pandemic forced it to become. Now it has to grapple with what's next.

Zoom app on Facebook's Portal smart display

Zoom got so big in 2020 that even competitors like Facebook have embraced it.

Photo: Facebook

Zoom never wanted any of this. Coming into 2020, the company was in great shape: It was growing quickly, making money and becoming an essential tool for tech-forward businesses everywhere. It's not that nobody at Zoom had ever imagined being a home for happy hours, book clubs, yoga classes, elementary schools and doctor visits. It's just that Zoom had decided, fairly definitively, it never really wanted to be any of those things.

At the beginning of 2020, just before the pandemic upended the world and the rest of the year, Zoom Chief Product Officer Oded Gal told me that Zoom had no plans to become a consumer application. "We are still a business application," he said, "and we don't see ourselves moving away from that." There were some prosumers using Zoom outside of the 9-to-5, he said, and he certainly understood that there were compelling uses for consumer videochat. But he and Zoom were happy to leave those uses to FaceTime and Skype. "We don't want to be a consumer product," he said.

Trying to be both a consumer and business tool, CEO Eric Yuan told me around the same time, would actually be a mistake. One that he learned the hard way. "We were too ambitious" in the early days of Zoom, he said, "with business and consumer. We realized that's not realistic, because there's feature conflict." A consumer app would build fun filters and lenses; those features would just be in the way for business users. So Yuan and Zoom decided, firmly, to stay focused on businesses.

And yet here we are. 2020 was a banner year for videochat no matter who it came from, and it seemed like every app and device on the planet now has its own way to video chat. But the company clearly saw both an opportunity to grow during trying times, and an obligation to try and help where it could. "The pandemic expanded Zoom's reach from a business platform to a central part of daily life as people worldwide transitioned to working remotely, distance learning, and virtual gatherings," Zoom CMO Janine Pelosi said. And that changed the way Zoom thinks about practically everything.

Few companies have benefited more from the pandemic than Zoom. Its stock is up roughly 6x since the beginning of the year. Its revenue was up 367% in the most recent quarter, compared to the same quarter in 2019. It's an even more essential tool to even more businesses, with 485% more customers with more than 10 employees than it had a year ago. Maybe most impressively, Zoom continues to sit at the top of app store charts everywhere. Zoom has entered the rarified territory of Google and Band-Aid and Kleenex: It has become so mainstream that it now essentially defines the category. Videochats are Zooms, Zooms are videochats.

The Zoom Effect is permeating through the tech industry and through culture. Webcams were the year's hottest gadgets, and even camera manufacturers like Canon and GoPro rushed to build software to turn their products into top-notch models. Lots of people got plastic surgery just to look a little better on their Zoom calls. (Zoom's "touch up appearance" setting evidently doesn't go far enough for some people.) Devices like the Facebook Portal and the Google Home added support for Zoom, even though it competes with those companies' own products, because if you don't have Zoom you don't have anything. Zoom became an ongoing SNL punchline … and for a while, the only way the show got made at all.

Zoom is now officially and forever both a business and a consumer product. Which feels appropriate, really, given the way the pandemic has blurred the lines between work and life for everyone. "Nine months ago, if Zoom wasn't working, that was IT's problem," said Phil Libin, the CEO of video app Mmhmm. "And now it's not. It's your problem. That's a big change." That change forced Zoom to rethink the way its product worked: It stopped developing new features for months, opting instead to focus on increasing its security. "We now have a much broader set of users who are utilizing our product in a myriad of unexpected ways, presenting us with challenges we did not anticipate when the platform was conceived," Yuan wrote in a post announcing the 90-day security sprint. Even now, Yuan told CNN that his workdays are dedicated entirely to security and privacy.

Zoombombing, for instance, hadn't been an issue when Zoom was just for internal meetings, but suddenly Zoom's ease of use was a liability. The company also had to rethink the way it collected and stored user data, and even how it taught users to use the product. It's one thing to sell to IT departments, and quite another to get an influx of users who just found you on the App Store. That has changed Zoom in lots of little ways, too; it's now making a habit of lifting the 40-minute limit for free users around major holidays, and offering decidedly sillier virtual backgrounds than you might find in your average business meeting.

The pandemic didn't catch Zoom totally off-guard, though. The company had been betting for years that remote work would become more the norm, and was already thinking about deeper ways to help people interact from afar. The team has been investigating features like real-time translation and automatic note-taking for a while. Yuan thinks a lot about augmented reality: how to make a virtual handshake feel like a real one, how to make it easier for people to make eye contact through a webcam, how to make it so that everyone on your call can smell the coffee you're drinking. (Seriously.)

Zoom's big plan, at least before the pandemic, was to take over other parts of business communication. Zoom Phone was a growing project, replacing one desk phone at a time. And Zoom was working on things like text chat, too. "We think about the ability to upgrade the modalities," Gal said. "It's kind of a food chain: You can start with chat, then you can upgrade to voice calls and then you can upgrade to a video."

Zoom's still working on all that, but its ambitions have also gotten decidedly bigger. Now, rather than taking on Slack and Teams, Zoom is working on becoming the internet's next great platform. Zoom Apps let developers build their own Zoom integrations, and On Zoom turns Zoom into a full-fledged events platform. Zoom has features designed specifically for health care, others specifically for education. It is reportedly building email and calendar services, to more completely compete with Microsoft and Google, according to The Information. If video is indeed becoming more like an operating system than an app, Zoom might be Windows.

Being the center of modern life has its downsides, though. Zoom's connections to China, both within the company and inside the product, have raised concerns as high as Congress. Its security issues sparked an FTC investigation. And, of course, the video boom is turning into a crowded industry full of deep-pocketed players happy to give their stuff away for free just to take a bite out of Zoom.

But there's no question that 2020 has put Zoom at the epicenter of the technology industry, whether you're a user or a cloud-services company competing for the hottest contract of them all. The pandemic was the story of 2020, and no company describes life in a pandemic better than Zoom. Same goes for life in 2021 and beyond: The new normal is going to be a little different, for everyone and for Zoom. And like the rest of us, it's still learning exactly how that's going to work.

Protocol | Workplace

In Silicon Valley, it’s February 2020 all over again

"We'll reopen when it's right, but right now the world is changing too much."

Tech companies are handling the delta variant in differing ways.

Photo: alvarez/Getty Images

It's still 2021, right? Because frankly, it's starting to feel like March 2020 all over again.

Google, Apple, Uber and Lyft have now all told employees they won't have to come back to the office before October as COVID-19 case counts continue to tick back up. Facebook, Google and Uber are now requiring workers to get vaccinated before coming to the office, and Twitter — also requiring vaccines — went so far as to shut down its reopened offices on Wednesday, and put future office reopenings on hold.

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Allison Levitsky
Allison Levitsky is a reporter at Protocol covering workplace issues in tech. She previously covered big tech companies and the tech workforce for the Silicon Valley Business Journal. Allison grew up in the Bay Area and graduated from UC Berkeley.

After a year and a half of living and working through a pandemic, it's no surprise that employees are sending out stress signals at record rates. According to a 2021 study by Indeed, 52% of employees today say they feel burnt out. Over half of employees report working longer hours, and a quarter say they're unable to unplug from work.

The continued swell of reported burnout is a concerning trend for employers everywhere. Not only does it harm mental health and well-being, but it can also impact absenteeism, employee retention and — between the drain on morale and high turnover — your company culture.

Crisis management is one thing, but how do you permanently lower the temperature so your teams can recover sustainably? Companies around the world are now taking larger steps to curb burnout, with industry leaders like LinkedIn, Hootsuite and Bumble shutting down their offices for a full week to allow all employees extra time off. The CEO of Okta, worried about burnout, asked all employees to email him their vacation plans in 2021.

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Stella Garber
Stella Garber is Trello's Head of Marketing. Stella has led Marketing at Trello for the last seven years from early stage startup all the way through its acquisition by Atlassian in 2017 and beyond. Stella was an early champion of remote work, having led remote teams for the last decade plus.
Protocol | China

Livestreaming ecommerce next battleground for China’s nationalists

Vendors for Nike and even Chinese brands were harassed for not donating enough to Henan.

Nationalists were trolling in the comment sections of livestream sessions selling products by Li-Ning, Adidas and other brands.

Collage: Weibo, Bilibili

The No. 1 rule of sales: Don't praise your competitor's product. Rule No. 2: When you are put to a loyalty test by nationalist trolls, forget the first rule.

While China continues to respond to the catastrophic flooding that has killed 99 and displaced 1.4 million people in the central province of Henan, a large group of trolls was busy doing something else: harassing ordinary sportswear sellers on China's livestream ecommerce platforms. Why? Because they determined that the brands being sold had donated too little, or too late, to the people impacted by floods.

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Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.
Power

The video game industry is bracing for its Netflix and Spotify moment

Subscription gaming promises to upend gaming. The jury's out on whether that's a good thing.

It's not clear what might fall through the cracks if most of the biggest game studios transition away from selling individual games and instead embrace a mix of free-to-play and subscription bundling.

Image: Christopher T. Fong/Protocol

Subscription services are coming for the game industry, and the shift could shake up the largest and most lucrative entertainment sector in the world. These services started as small, closed offerings typically available on only a handful of hardware platforms. Now, they're expanding to mobile phones and smart TVs, and promising to radically change the economics of how games are funded, developed and distributed.

Of the biggest companies in gaming today, Amazon, Apple, Electronic Arts, Google, Microsoft, Nintendo, Nvidia, Sony and Ubisoft all operate some form of game subscription. Far and away the most ambitious of them is Microsoft's Xbox Game Pass, featuring more than 100 games for $9.99 a month and including even brand-new titles the day they release. As of January, Game Pass had more than 18 million subscribers, and Microsoft's aggressive investment in a subscription future has become a catalyst for an industrywide reckoning on the likelihood and viability of such a model becoming standard.

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Nick Statt
Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.
Protocol | Policy

Lina Khan wants to hear from you

The new FTC chair is trying to get herself, and the sometimes timid tech-regulating agency she oversees, up to speed while she still can.

Lina Khan is trying to push the FTC to corral tech companies

Photo: Graeme Jennings/AFP via Getty Images

"When you're in D.C., it's very easy to lose connection with the very real issues that people are facing," said Lina Khan, the FTC's new chair.

Khan made her debut as chair before the press on Wednesday, showing up to a media event carrying an old maroon book from the agency's library and calling herself a "huge nerd" on FTC history. She launched into explaining how much she enjoys the open commission meetings she's pioneered since taking over in June. That's especially true of the marathon public comment sessions that have wrapped up each of the two meetings so far.

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Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

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