The story of Zoom founder Eric S. Yuan is an entrepreneurial fable that proves even the most crowded markets are never truly full.
Before launching his online conferencing and collaboration product, Zoom’s Yuan ran engineering for Cisco’s WebEx. He expanded the WebEx team from 10 engineers to 800 and grew revenues from $0 to over $800 million annually.
Yuan was the heart of WebEx from 1997 to 2011, but he wasn’t happy. The product wasn’t good enough. Yuan (and many customers) thought it was slow, multimedia streams were often shaky, and it lacked modern features for mobile.
For years, Yuan campaigned Cisco execs to let him rework WebEx and build video conferencing on the cloud, but the existing product was still earning serious cash.
His bosses saw no reason to risk a reboot. So, Yuan left in 2011 to build Zoom.
“Cisco made a mistake,” he recently told Forbes magazine. “Three years after I left, they realized what I said was right.”
Was he ever.
Zoom’s annual revenues currently hover around $331 million.
The product has over 50,000 corporate customers, including Uber, Walmart, Slack, Ticketmaster, and Nasdaq, plus countless individuals and small businesses.
And Zoom stock rose nearly 30% in the month after its mid-April IPO.
Yuan knew his new product would go head-to-head with Google (Hangouts), Microsoft (Skype), and Cisco, of course, but he was unfazed. He knew that innovation and excellence can knock out even the biggest competitors.
I’m consistently inspired by Yuan’s story.
I launched JotForm in 2006, based on the idea that everyone should be able to create simple forms that boost their productivity.
Just like Yuan, I thought there was a better way to work. And as we built a product that now serves 4.9 million people, some serious competition began to emerge.
In 2008, even Google stepped into the ring. Many of my friends and colleagues said we were done. After all, who could compete against Silicon Valley’s ultimate Goliath?
Honestly, I was devastated. I had quit my stable job to pursue this idea, and I wasn’t sure what I would do next.
But we kept plugging away, and a strange thing happened. We continued to grow. We kept innovating and improving the product, and our customers stuck with us. They even helped us to get better.
We stayed focused on one thing?—?forms?—?while many of competitors chased each new shiny object that popped up on the horizon.
Eventually, I learned an important lesson:
You don’t have to kill yourself trying to invent the next Facebook. You don’t have to disrupt an industry to succeed. You can still create significant value in categories most write off as finished.
I’ve learned that finding yourself in a well-defined market where tech giants step into the ring isn’t an excuse to quit the battle?—?I’m glad we never gave up.
Focusing on the customer, not the competition, brought us 1 million new users last year alone and we continue to grow +50K users every month?—?all without a single dime in outside funding. We are 100% bootstrapped.
Here are my key learnings from growing JotForm next to Google and other competitors who announce one investment round after another:
1. Technology doesn’t care if you’re comfortable
Every time a new technology moves beyond the fringes, you have an opportunity to improve your product?—?and if you don’t leverage the moment, someone else will.
Think about how Kodak failed to embrace digital photography (and filed for bankruptcy in 2012), or how Xerox remained fixated on copy machines, even as digital files were becoming commonplace. By the time these companies tried to play along, it was too late to catch up. Making something great is just the start. You have to keep making it better if you want to stay relevant.
A product company that doesn’t continually reinvent itself will kill the product.
At JotForm, we’re constantly probing into our weaknesses and reinventing our product. We don’t switch lanes, but we do believe in stretching ourselves as much as possible.
Innovation is essential for success?—?technology really doesn’t care if you’re comfortable.
2. New products have low visibility
Creating a new product is like driving at night. You can only see as far as your headlights.
But once more users come on board and the product begins to grow, the horizon opens up. You begin to discover what’s missing and you can reroute as necessary.
In a few days, we’ll release our new mobile app. We started working on it more than a year ago, after a user mentioned that she needed to fill in forms offline, then sync the data when she returned to the office.
Aswe started building and testing the app, we realized that we were missing some key form fields. We added functions that allow users to take a photo, draw on an image, use geolocation, record a voice, and scan QR and barcodes. We also added a kiosk mode that locks down all device functions other than the form, gave users the ability to assign and share forms, and more.
Users and customers will tell you what they want, what they like, and what they don’t want, but it takes time to implement this feedback.
Pushing for innovation gives you the lead time you need to stay ahead of the curve.
3. Complacency kills momentum
A team that keeps moving will not only achieve its goals, it will also discover fresh opportunities.
If your product is static and you’re simply fixing bugs as they pop up, you can’t imagine what’s possible. You’re not exploring. You’re not stretching the limits.
In 1983, James Dyson created the first bagless vacuum cleaner. The invention was a game-changer, so Dyson could have sat back, counted his money, and gradually updated the external parts to match color and design trends.
But he built a multi-billion-dollar company that has innovation in its DNA. Today, Dyson makes everything from hair dryers to lighting, and the organization is constantly setting new environmental and social targets.
4. Building a product also means building a team
A team that doesn’t reinvent its products can’t lead an industry. Employees won’t understand what’s happening across your market, and they won’t be challenged or engaged. Eventually, good people will leave your organization.
The best product teams are hungry to solve problems. It’s the fuel that drives their work and stirs their creativity.
Yet, even the biggest companies don’t have unlimited resources. That’s why it’s essential to keep your star players focused on just a few key products?—?and ideally, just one.
At JotForm, we can compete with big dogs like Google because we have a singular focus. All 140 of our employees are dedicated to one thing, while Google Forms is just a tiny drop in a massive corporate ocean.
How to bake innovation into your organization
Innovation demands intention. It’s so easy to get caught up in the day-to-day cycles of growing a business and keeping even a strong product running.
In many ways, I can see how the WebEx leaders were afraid to rock the boat. Hesitating to mess with a good thing is simply human nature.
Change, however, is inevitable. It’s essential to keep moving forward, or you’ll struggle to catch up.
Here are four ways to ensure you’re building a culture of innovation.
1. Establish long-term strategies
A strategy is a lighthouse that guides your decisions and priorities. Every year, I set a new strategy for the company. Sure, we still handle the day-to-day tasks of supporting customers and making small product improvements, but we also focus on a specific challenge. For example, in 2017 we reinvented our form builder. In 2018, we reinvented the forms themselves. And in 2019, we’re reinventing mobile forms with our new app.
2. Assign open-ended projects
While strategies offer guidance, they can also feel overwhelming. That’s where it helps to begin with a question. For example, we asked our teams, “how can we create a better mobile product?” That’s it.
We knew that it would work offline and include some existing desktop features, but that’s where the constraints ended.
As our teams tackled this one question, they gathered customer feedback, conducted user interviews, and most importantly, kept their minds open.
Tackling a major strategy means learning?—?and admitting when you’re lost. That’s when it helps to look at other markets and parallel industries. Examine unfamiliar products. Eventually, you’ll find your way again.
3. Don’t set deadlines
Our cultural obsession with productivity often creates unnecessary panic and stress. We worry that if we don’t set a release date, nothing will happen. In my experience, however, that’s just not true.
Once we assign product teams to tackle a big, open-ended project, we still have check-ins.
Our weekly Demo Days are a chance to see work-in-progress features and gather feedback from other teams. These sessions maintain our momentum. Yet, the teams still have time to go deep and innovate. They even have time to get bored, which is when the brain really starts to generate new possibilities.
We ensure the product has time to evolve without rushing it. Only when it looks beautiful, tests well, and operates seamlessly do we set a release date.
4. Provide real freedom
Innovation means allowing people to hack their way through the forest. Ultimately, you have to be in there, building and struggling, in order to make valuable discoveries.
And while objectives and optimizations have their place, no one creates the first iPhone or a bagless vacuum or a better conferencing product by nudging the needle just a little.
Freedom also nurtures creativity, so trust your teams. Give them the space, the tools, and the responsibility to collaborate and think provocatively.
Remember that success comes from constant, relentless innovation?—?even in a well-defined market.