GGV Capital’s Hans Tung and Zara Zhang interview Eric Yuan, founder and CEO of Zoom, the leading video conferencing solution for enterprise. Zoom is used by a third of Fortune 500 companies and 90% of the top 200 universities in the US. Eric was recently named the Top CEO on Glassdoor, with an approval rating of 99%, and was the first person of color to win the award.
Eric grew up and went to college in China, arrived in Silicon Valley in 1997 and joined WebEx when it was still a small company. In 2007 WebEx was acquired by Cisco and Eric became Cisco’s Corporate VP of engineering in charge of collaboration software. Eric spent 14 years in total at WebEx and grew its engineering team from 10 to 800, and increased its revenue from zero to over $800 million. Eric holds 11 patents, plus 20 pending patents in the pipeline.
In this episode, Eric shared his story of being rejected a US visa for 8 times while in China, how to overcome the “bamboo ceiling” as a Chinese engineer in Silicon Valley, and what makes Zoom different from its competitors.
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ZARA ZHANG: Hey, everyone. Before we begin, I just wanted to remind you that we have created a WeChat group and a Slack channel for you, our listeners. This is a community of people brought together by their shared interest in tech in China. Through these groups, our listeners have made friends, recruited team members and found clients.
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HANS TUNG: Hi there. Welcome to the 996 podcast, brought to you by GGV Capital. On this show, we interview movers and shakers of China’s tech industry, as well as tech leaders who have a U.S.-China cross-border perspective.
My name is Hans Tung. I’m a managing partner at GGV Capital and I have been working at startups, and investing in them, in both the U.S. and China for the past 20 years.
ZARA ZHANG: My name is Zara Zhang. I’m an investment analyst at GGV Capital and a former journalist. Why is this show called 996? 996 is the work schedule that many Chinese founders have organically adopted. That is 9:00 a.m. to 9:00 p.m., six days a week.
HANS TUNG: To us, 996 captures the intensity, drive and speed of Chinese Internet companies, many of which are moving faster than even their American counterparts.
On the show today, we have Eric Yuan, the founder and CEO of Zoom, the leading videoconference solution for enterprise. Zoom is used by one-third of Fortune 500 companies and 90 percent of the top 200 universities in the U.S.. It is based in San Jose.
Eric grew up and went to college in China, but arrived in Silicon Valley in 1997 and joined WebEx when it was still a very small company. In 2007, WebEx was acquired by Cisco, and then Eric became Cisco’s corporate VP of engineering. He was in charge of collaboration software.
Eric spent 14 years in total at WebEx and grew his engineering team from only 10 to over 800 and increased his revenue from zero to over $800 million. Eric holds 11 patents, plus 20 pending patents in the pipeline.
ZARA ZHANG: We at GGV are also happy Zoom customers. There’s hardly a day when we are not using Zoom for some sort of investment meeting, because we’re such a global team and we invest in global entrepreneurs, so we literally cannot do our job without Zoom, so thanks Eric.
ERIC YUAN: Thank you for having me.
ZARA ZHANG: So you were recently named the top CEO on Glassdoor, with an approval rating of 99 percent. The average approval rate on Glassdoor is 69 percent. You were also the first person of color to lead that list.
I wonder, how do you think you did that, and how did you feel when this was announced? What tips do you have for other CEOs?
ERIC YUAN: I would say first of all, that’s not my award, actually. That is our team’s achievement, because it truly represents the culture that our team has built. A culture of reflecting our core principles of happiness and caring.
So essentially for me as a CEO, my number one priority is to make sure I have a good culture, really focus on employee happiness and really care about our employees. Ultimately, if our employees, if we are happy, our customers will be happy.
I think that if you want to say what kind of tips, I would say just one thing. On day one, focus on the culture and make sure that your employees are very happy. I think that’s pretty much what we are doing here.
HANS TUNG: A lot of people are trying to do that, but may not be as successful as you have been or your team have been in doing it. What are some concrete things you have done that you think is different or unique, that other companies could learn from?
ERIC YUAN: I think on day one, I think just for myself for the labs at Cisco, when I showed up in my small office back then, I already understood the importance of culture and values. That is why we already define it even on day one. I mean just to myself, our company culture is delivering happiness and our company’s value is care. It’s very easy, very catchy.
Care means you care about a community, you care about a customer, you care about a product, you care about teammates as well as care about yourself. So we have a very well-defined culture and values. So on day one, already have that.
And also, some other things along the way when we further grew the business, we really focused on hiring those employees who can fit very well into our culture. Normally we don’t only look at those employees with great experience, great education and background; we really focus on self-motivation and a self-learning mentality.
I think that’s really important. Quite often you want to hire maybe a head of a department, you want to hire some VP level from other companies, that is not our style. We want to hire those people who can grow themselves along with our company’s growth.
I think those two things are really helping us. And for sure, there are a lot of other things. Work hard, open communication, keep everything transparent, always share with the team.
Ultimately, number one, go here as a team. I mean, our executive team needs to build a trust between our employees and our executive team. If trust exists, I think everything else is sort of easier.
HANS TUNG: I see. So it sounds like when you first started, you had a group of cofounders?
ERIC YUAN: No just myself, I am a sole founder.
HANS TUNG: Then your initial team, were they all young people? Were they people who were ex-colleagues who shared your same cultural values, to start this with you?
ERIC YUAN: I would say that more of the young graduates. After I left Cisco, and one-and-a-half months later, all the engineers, they all worked with me for many years before.
HANS TUNG: Right, that is what I meant by cofounders.
ERIC YUAN: You are right. Founding engineer team.
HANS TUNG: Founding team is a better term.
ZARA ZHANG: Forty engineers from Cisco followed you.
ERIC YUAN: That’s right, yeah.
ZARA ZHANG: So you decided to come to the U.S. in the mid-1990s because of the Internet, which you knew was the future but hasn’t really taken off in China. Why were you so sure that you had to leave China and come to America to capture that wave?
ERIC YUAN: Actually, the first time I saw, I listened to Bill Gates’ speech in 1994, in Japan actually. I was traveling to Japan. The company I worked for, they sent me to Japan for four months. I lived there and it happened to be that Bill Gates also was there to give a speech.
HANS TUNG: It was around the information highway?
ERIC YUAN: Yes exactly, 1994 I think. And at that time, I really was, how do you say —
HANS TUNG: Inspired.
ERIC YUAN: I was inspired by this speech.
HANS TUNG: I remember that.
ERIC YUAN: And put it on the Netscape browser and said wow. Just with an app, an application browser, I can do so many things.
HANS TUNG: Yeah, a very different world.
ERIC YUAN: A very different world, that is so right. I imagined so many things could happen; especially I think wow, you can buy a book online. I have some background.
HANS TUNG: Yeah, Amazon started in 1994.
ERIC YUAN: Exactly. But how to do that? I have no idea how to charge the customers, how to deliver. There were a lot of questions. Back then in China in 1994, 1995 if you talk about the Internet, most people were “What are you talking about?” You show them your email address, they don’t understand that either.
However, Yahoo, Netscape, is so powerful and so popular here. Back then, I thought about coming here to take a look and then go back.
However, for whatever reason I did not get a visa in 1995 and I got rejected. However, back then, sort of looking back is to practice my perseverance, I think okay. If I did not get a visa, I will try again, try again.
HANS TUNG: How many times were you denied?
ERIC YUAN: I tried eight times.
HANS TUNG: Eight times.
ERIC YUAN: Failed, and the last attempt I was successful, but it took me more than one-and-a-half years. It is already 1997. When I came here and I realized, wow, this is the first wave of the Internet revolution. I don’t think I want to miss that. So that’s why I settled down here and I joined WebEx to start writing code. Because when I came here, I could not do anything else. WebEx was small, and I even did not speak the language, what should I do? I went back to writing code for several years.
ZARA ZHANG: I think a lot of people back then in China heard about the Internet revolution, but not everyone has to pack up and leave and join it. So it takes a lot of grit to do that.
ERIC YUAN: Actually, even if I came here, to be honest, at that time I thought about just to come here —
HANS TUNG: For a few years and then go back.
ERIC YUAN: For a few years and then go back. That is exactly my thought. However, when you start building up something from very small and a lot of emotional connection with the product, with WebEx, it was a great team, and along the way sort of the thought to go back is faded away, I think.
HANS TUNG: And I mean, there are many engineers from China that came here and have done pretty well in the Silicon Valley, but many of them don’t have the management experience or develop their leadership style. How did you do that while working as an engineer or engineering head at WebEx?
ERIC YUAN: I think one thing I like in Silicon Valley is the pretty open culture here and a lot of very successful people, they would like to help you. So in my career, I have so many mentors. Even many, many years ago I really wanted to learn. That’s why I also promoted self-learning here at Zoom as well, because I wanted to learn. Also that is why I have so many mentors. When I learn from each of them, I think they give me a lot of advice. What’s your career aspiration? What you should do next. I think I learned a lot from those very successful other entrepreneurs or leaders.
That’s why not only do I focus on the coding to become an engineer, but also I tried to practice some management skills. That’s why when I joined WebEx, I was one of the first of several founding engineers but I got promoted to engineer manager, senior engineer manager, director, senior director, all the way up to VP. After I joined Cisco, I also got promoted to corporate VP as well.
I think the number one reason was just self-motivation. I knew actually I wanted to do something, and that’s pretty much. The self-motivation I would say probably does play a big role here.
ZARA ZHANG: We sometimes hear of the term “bamboo ceiling” here in Silicon Valley, where it is hard for engineers from mainland China to move up the ranks at the tech companies, especially because of culture and language barriers. How did you overcome those?
ERIC YUAN: I do think the language barrier is a factor, seriously. I was born in Shandong province in China, and when I came here I even did not speak the language. I have a very heavy accent, as you know, right? So even if I speak in Mandarin I also have an accent. But actually, I really do not think that’s a reason.
The reason, a little bit the culture, you have got to learn a little bit. I will give one example. Quite often for many Chinese engineers, given their background and education, quite often you have a new project. They do not share with others, communicate with others.
They are driven by the mission, I just have this idea. I just started, I even did not finish. Why should I let my manager and let other people know that? This is sort of their understanding.
But here it is very different. You have got to make sure we have open, transparent communication. Even before you finish, you have got to communicate. I think you need to learn that. Those skills you can learn. But quite often they say. “Oh, there is a language barrier” so mainly I would say this is a bad excuse. I think you really need to think about why, figure out a root cause. I think Silicon Valley is a pretty open culture. If you work hard, you achieve a lot of things and then you communicate with others, you will be promoted.
HANS TUNG: Some people ask why, for example, the Indian engineers have risen faster in Silicon Valley, and many of the tech CEOs in Silicon Valley today are of India decent. They also speak with a heavy accent. But how come there are not as many Chinese engineers who have risen to that level the way you have?
ERIC YUAN: I think a commonality between Chinese-background engineers and engineers from India, they all work hard and also they all are very smart.
HANS TUNG: Yes.
ERIC YUAN: The biggest difference is those engineers from India, they have good communication skills. They keep everything transparent. Before I do anything, I have a great say like a PowerPoint to share with you, why I wanted to do that. And you know, it is very open communication skills, and I think that plays a very big role.
ZARA ZHANG: So the idea for Zoom first came to you when you were a freshman in college in China, right? Could you tell us that story?
ERIC YUAN: Yeah, that is a long story, but anyways. I was a freshman, my girlfriend was a sophomore. That was 1987, I think. She lives in another city. I was born in Mount Tai in the Shangdong Province. Between the city where she lived and the city where I lived was very far away. Every time I wanted to visit her, it would take more than 10 hours.
HANS TUNG: More than 10 hours?
ERIC YUAN: More than 10 hours.
HANS TUNG: One is the eastern side, one is the western side of Shangdong.
ERIC YUAN: No direct train either. I forgot, so probably at that time, you took the train and then probably in the middle of the night, you needed to change to another train. It was a very long journey. And also, I can only see her maybe twice a year, on the winter break or summer vacation.
Someday, I remember that actually. Someday if I can have a smart device and with just one click I can talk with you, can see you, that was my daydream, right? And every day I thought about that. But when I started Zoom, I started to connect the dots. It’s like wow, I thought about that before but the technology was not ready, but the idea was there.
HANS TUNG: Makes sense.
ZARA ZHANG: So you were on the founding team of Cisco WebEx, and you were there for 14 years. What made you realize that it was the right time to leave and start your own company?
ERIC YUAN: Actually, I thought about leaving WebEx, or Cisco WebEx, several times, because I would say Silicon Valley is a startup valley, and you better join a startup company or do something. So many great leaders really inspired me.
However, every time when I thought about leaving WebEx, there were a lot of emotional connections because you have to grow that piece. You work together with so many other teammates, it is really hard to leave. Quite often I am just, “okay, let’s stay for another year, another two years.”
And only until 2010, and back then I thought about leaving, however, I was still not fully ready. But one thing I realized back then, every day, every morning when I woke up, I was not happy, because when I visited a WebEx customer, every time I personally felt very embarrassed, because I did not see a single happy WebEx customer.
HANS TUNG: Why is that?
ERIC YUAN: Because when we built WebEx, we only focused on one use case. That use case was to have you share the PowerPoint or share the desktop, but it can’t be you and I in an audio conference. But 13 or 14 years later, there are some brand-new problems. Like every business, they have got to use multiple solutions. They want to enable conference room. They want to have video conferencing and have one unified solution. They wanted to have a cloud-based conference room solution. You wanted to make sure no matter where that team is coming from, we also can guarantee good voice over IP quality and video quality. WebEx was not designed for that.
HANS TUNG: For Internet?
ERIC YUAN: Yeah, exactly. This is a collaboration architecture. You’ve got to rewrite that. At Cisco, Cisco wasn’t ready to change its collaboration strategy. I had no choice but to leave to fix all those WebEx problems. That is when finally, I decided I’m going to leave. I cannot suffer from that anymore. So that’s the number one reason.
HANS TUNG: And when the 40 engineers followed you, how does Cisco react?
ERIC YUAN: First of all, I managed more than 800 people, so those 40 people is just a very small fraction, not any impact whatsoever. However, Cisco probably also saw, I have no choice, meaning I have no way to build a better solution.
HANS TUNG: It’s already Cisco.
ERIC YUAN: Yeah, exactly. So even if he’s a leader here, I think this market is not, they do not think there is a future. Otherwise, they all probably would have allowed me —
HANS TUNG: Allowed you to do what you wanted to do.
ERIC YUAN: Exactly. For the first several years, nobody paid attention to what we were doing.
ZARA ZHANG: So when you started Zoom, the videoconferencing market was already pretty crowded. There were a lot of other solutions like Skype, Google Hangouts, WebEx, FaceTime, et cetera. What made you think that you could still carve out a market? I think you’ve said before that the biggest differentiation for Zoom from the other solutions is that it just works, which I agree. So why does it work?
ERIC YUAN: You’re right. We’ve got to look at it from a customer, from an end user perspective, because I talk with many customers. Literally, I did not see a single happy customer who would tell me, “Hey, we really enjoying your solution.” So meaning all the solutions back then, I would say were terrible, no matter which solution. Because most of them were built for other purposes. None of them were built to embrace cloud-based video collaboration. So that’s where I saw the opportunity.
Our philosophy was that if we can build something to let a customer enjoy using that, I would say there’s a chance. That’s the reason. Because quite often, if you think the market is too crowded, if you don’t really understand the customer experience, you think that game is over, you don’t jump on that, I will say you are going to miss a big opportunity.
HANS TUNG: I just find it so easy to use, that you don’t have to download the software and remember a login and you just click the link and it just works. That makes it so much easier on multiple levels, to start using your product.
ERIC YUAN: Usability is really important. I think I’ve got to make it easier, and also the quality is very important.
HANS TUNG: Yes, of course.
ERIC YUAN: You are essentially right. It has got to work.
ZARA ZHANG: It works even when the service is not great with the Internet.
ERIC YUAN: You are right, that is why we have a very big team, focusing on optimizing our technology in a very low and unreliable network.
ZARA ZHANG: And it works in China.
ERIC YUAN: Yes, it has got to work.
HANS TUNG: We also notice that FaceTime audio works quite well, but obviously FaceTime video does not. How do you balance making sure that both audio and video can work well?
ERIC YUAN: So first of all, between video and audio, audio is still more important than video. Even if I can see you, but if your audio is choppy, nobody is going to use that. So essentially, we prioritize audio traffic over video traffic. Even in a very, very unreliable, very low bandwidth environment, and we focus on the audio.
Essentially we have an average, even at a data loss rate of like a 45 or 55 percent, we still can recover, we still can make sure your audio stream works. So a lot of what I would say is the very hard work is there.
ZARA ZHANG: Who were your first few customers, and how do you go about onboarding them?
ERIC YUAN: Oh, we were very lucky. Our first paid customer was Stanford, the Continuing Studies Group. Our solution was not ready yet and at that time I remember, that was November or December 2012. They were looking for a solution for their online learning, online teaching platform and were still in the alpha phase, and they tested all the solutions, and they still found Zoom quality was better. And before our solution was fully ready, they already became our paid customer and really boosted our confidence. That was our first customer.
ZARA ZHANG: I remember you also did a program at Stanford?
ERIC YUAN: Yeah, that is more like, I would like to take a break because I worked very hard in 2006 for my EMBA program and lived at Stanford, the campus for the whole summer. Yeah, just a break. I did learn a lot of things.
HANS TUNG: 2012 was an important year, because that was when the MOOCs the massive online education programs are starting to get rolled out, so it seems like you captured the right segment, a new segment.
ERIC YUAN: You’re very right. Actually back then, we were lucky to get the first several customers, all of them were from the education sector, some colleges. For now, if you look at the top 200 nationwide universities, 94 percent or maybe 96 percent now already became our customer. There is another benefit by focusing on higher ed, guess what? Four years later they all join our workforce, and it had a huge influence.
HANS TUNG: That was a very strategic move, yeah.
ERIC YUAN: It was a very strategic move.
ZARA ZHANG: Why did you decide to focus on the enterprise market instead of consumers?
ERIC YUAN: The consumer market, that has very definitely been small. Quite often, you have to have a free product, your monetization strategy is probably based on ads. Real-time communication and collaboration is really hard, so for you and I have very important business meetings, I do not think it makes sense to put ads.
However, there is a real demand from knowledge workers from those business customers that are looking for new solutions. That’s why I think from a business model perspective, I think the business sector is much better.
HANS TUNG: Will you ever have a consumer version, so the younger version of you can talk to his girlfriend?
ERIC YUAN: Seriously I think yeah, we are thinking about that now. Because when I was young, I suffered from that. I do not want anyone else to suffer from that anymore. Yes, in the future we might. But for now, that’s not our top priority. We have so many SMB customers, big enterprise customers, huge market opportunity ahead of us, so we better focus on the business customers first.
HANS TUNG: Right. How do you balance the needs of SMBs versus the bigger enterprise? Because big enterprise, as you know, always ask for more security, more customization, and so forth. So how do you balance that?
ERIC YUAN: That’s a good question, because we know down the road we needed a balance between SMB and enterprise. That is why on day one, we undertook a different strategy. So meaning if first of all, SMB customers on day one, we did add a lot of enterprise features already.
I would say for now, there’s no need to balance because the solution is all ready. All the security features, all the enterprise elements, all of those features are already added in. Otherwise, after you got the SMB customers, you sort of transition from SMB folks into enterprise, you need to do it —
HANS TUNG: It was hard?
ERIC YUAN: Very hard, but we knew that. That’s why I say, you know –.
HANS TUNG: From day one you were gearing towards the more enterprise solution.
ERIC YUAN: Exactly, very true, yes.
ZARA ZHANG: From where you sit, how do you see the future of work will evolve? Do you think teams will become more and more distributed, and do you think people who are actually using videoconferencing will increasingly replace in-person interactions?
ERIC YUAN: Absolutely. If you look at the trend, so first of all I think almost every company, they have more and more workers working remotely, you essentially become a virtual workplace. This is the number one thing.
If you have a virtual team, you still need to collaborate to get the work done, so you have got to have good communication tools. When it comes to communication tools, I would say only four. One is email, another one is chat, a third one is a voice call, the fourth one is video.
The email and the chat, I would say email, I do not think I use that. It is not for real time. Chat is okay for the very short conversation. It is very hard to imagine like five people to talk about something for one hour via chat, it would not work. And then voice is real time, however with voice the problem is the participants are always multitasking, and it also doesn’t work. The communication tool is really important.
Another thing, another change is if you look at today’s workforce in the United States, over one-third of our workforce are millennials. They’ve grown up along with video, along with their phone. if you give a phone number that lets them dial into an audio conference, they do not like that. Nobody wants to use that. They all turn on the video. Video communication, I think it’s going to become more mainstream.
Another trend is, looking at today’s workplace, they will have more and more conf rooms, less offices. If you visit Facebook, a great company, even the CEO Mark Zuckerberg, he does not have an office. It is very open space, and you need more and more the conf rooms.
That’s why, when you have more and more conf rooms, you’ve got to have a solution. You got to have a cloud-enabled video collaboration solution. That’s why I think video is going to play a very role to enable the modern workplace.
HANS TUNG: In addition to video, as you know, messaging has also become quite popular in the workplace with Slack in the U.S. or with DingTalk from Alibaba in China or WeChat, you see more people using that. How do you see your solution work with the various messaging platforms over time?
ERIC YUAN: Yes, the messaging platform is also very important. I would call that async collaboration, and quite often the customer already probably sees Slack or maybe Microsoft Teams with interoperability is very well. However, those are more like for the group conversations, meaning you don’t need a real-time response.
You still need to have video collaboration, because you want to call a meeting, you want to make a decision and especially if you want to talk with customers and partners or demonstrate your software, you still need to have video collaboration tools like Zoom.
Obviously, the combination between those two tools can really make a huge difference for the modern workplace.
ZARA ZHANG: So how often do you go to China these days? And do you pay attention to the tech developments there?
ERIC YUAN: First of all, I only travel, I mean the business travel, I only travel at most twice a year, and I did that for four years already. If I travel very often, so that means our product doesn’t work. And yeah, I did not travel back to China for three years now. By August it will be three years.
I wanted to travel there, but however —
HANS TUNG: A lot has changed in the last three years.
ERIC YUAN: Yeah, because there are so many customers here and we visit, talking to the customers, a lot of projects here. However, we are using video conferencing in Zoom and I did not see a huge problem because every day we open up our video call and I still can talk with them.
HANS TUNG: What’s the rough percentage of revenues for you outside of the US?
ERIC YUAN: North America, probably around 90 percent. The rest of the 10 percent, most are from —
HANS TUNG: Europe?
ERIC YUAN: Yeah, from the UK and Australia.
HANS TUNG: UK and Australia, English-speaking countries.
ERIC YUAN: Engish-speaking countries, but this year we are going to double down on —
HANS TUNG: French or German?
ERIC YUAN: Yes, France, Germany and Japan as well.
HANS TUNG: Japanese makes sense.
ERIC YUAN: Yeah, those three markets are growing very well, and we see that there is huge growth.
HANS TUNG: Any growth coming from Southeast Asia much? Are they developing markets?
ERIC YUAN: No market at all, because Southeast Asia, I would say it is still like a consumer-driven economy and B2B, I do not think they are taking off yet, but we will. We just do not know when, so that is why we focus on North America and the English-speaking countries, and Europe and the Japanese market.
HANS TUNG: How about India, especially with all the cross-border?
ERIC YUAN: India, we have many, many users from India because we have so many customers here, almost every company, they have a product office or a something.
HANS TUNG: In India or Philippines.
ERIC YUAN: Yeah, exactly. We have so many users from India.
HANS TUNG: Got it, makes sense.
ZARA ZHANG: Your LinkedIn profile says delivering happiness to our users. Your happiness is my happiness. I think not all CEOs see delivering happiness as their mission, and a lot of people would associate Zoom with efficiency or convenience, not necessarily happiness. What made you realize that happiness is the key to your company’s success?
ERIC YUAN: That is a great question. It just sort of boils down to my personal story, because when I started the company, I was already 41 years old, not very young anymore, already very late.
But however, also I learned a hard lesson, because I really wanted to understand, what’s the purpose of life? When I was young, whenever I had that question, I just don’t have an answer. Seriously, I do not quite understand. But along the way, I really understand that the purpose of life is to pursue happiness. It is about happiness. That’s really the very important thing.
I also learned how to pursue happiness, especially how to pursue a sustainable happiness. I learned in the former is, you’ve got to make others happy. If you make others happy, your happiness will be sustainable. So for me to build the company, also to apply that philosophy to the company world, the business world, if we can make a customer happy, our company will be happy. That happiness is also sustainable. That’s why this is our company philosophy. We do all we can, always communicating with our employees, do all we can to make sure our customers are happy, and then we’ll be fine.
HANS TUNG: Obviously you have been extremely successful in the U.S. with WebEx and then Cisco and Zoom is amazing. Do you ever wonder, given how fast China is growing, that you would do even greater things, had you chosen to go back to China? Because a lot of our listeners are young, promising, mainland Chinese Americans or mainland Chinese in the U.S. for a while, and they often ponder: should they stay? Or should they go back, given China’s growing so fast?
ERIC YUAN: Yeah, this is great question. Also, it is a tough question, very tough. The reason why is again, nothing is perfect and everybody has a dream. If you stay here, this is a great startup ecosystem, great culture. So many great leaders, entrepreneurs and you can learn so many things here, very diversified backgrounds and I would say lots of great innovations are coming from Silicon Valley. There are so many good things here.
Also back to China, you know the consumer-driven economy, over the past 20 years obviously it is a once in a life opportunity. You look at Alibaba or Tencent, even 15, 20 years ago.
HANS TUNG: Very small.
ERIC YUAN: Very, very small.
HANS TUNG: Very small.
ERIC YUAN: Today, $500 billion companies, huge influence to people’s lives. I think from that perspective, I think everybody would say yes, you have got to embrace that. It’s more like a 1995, 1996 if you want to look at it, the first wave of the Internet revolution, I was there. I got to embrace it here.
But that’s why it’s harder to see, and for the very young, I would say that right away, I would say if you really want to have a huge influence, especially if you focus on the consumer probably it makes sense. But however, if you just say hey, you want to just focus on technology, focus on true innovation, I would say here is okay.
But I also think down the road, more and more, the company, they are probably focused on both sides.
HANS TUNG: Yes absolutely.
ERIC YUAN: I would say, if you start a company here, you can have business there and vice versa. I do not think you have got to say, I have to —
HANS TUNG: You don’t have to choose anymore.
ERIC YUAN: Exactly. I really think that is the case.
HANS TUNG: That’s our thesis as well. I think increasingly it will be cross-border companies, almost from day one.
ERIC YUAN: Very true.
ZARA ZHANG: So we are going to move on to the last part of the interview which is a set of standard questions, rapid fire. The first one is who is the entrepreneur you admire the most and why?
ERIC YUAN: Entrepreneurs or leaders? So it is different. I think entrepreneur, I would say I really admire Mark Zuckerberg, and given he is very young and built a great business in Facebook and huge influence. Very positive, good influence to the world; and look at what he achieved, what he did.
HANS TUNG: And what more could be coming.
ERIC YUAN: Yeah, I think I really admire him.
HANS TUNG: How about leader?
ERIC YUAN: Leader I think, I really admire and I learn a lot from his leadership advice is the former CEO of Wal-Mart, H. Lee Scott Jr. I think his wisdom and advice truly shaped what I think about leadership, a lot of things.
I could give one example, like “whatever you said the first time will be misunderstood or ignored”. You know, a lot of things like that.
HANS TUNG: Words of wisdom.
ERIC YUAN: Ability to give constructive, honest feedback is a rare talent. So many leadership wisdom, I think that really shaped my leadership style. I think I really admire him.
ZARA ZHANG: What is something you read recently that touched you a lot or you recommend?
ERIC YUAN: I do like reading a book. We also have a book club here, by the way. Any employees, whenever they buy a book for myself or for their family member we always reimburse, because when you promote self-learning you’ve got to promote that as well. The book I’m reading recently and I have several books I read at the same time. One book, it took me for a while, I am still not finished.
Almost done, almost done, is Principles from Bridgewater Associates, the number one global asset management company. A wonderful leader, great entrepreneur. That book is also, but it took me a while. Almost done. The last several pages.
ZARA ZHANG: I think China is obsessed with that book now.
ERIC YUAN: It is a wonderful book. I highly recommend that.
HANS TUNG: What do you do for fun?
ERIC YUAN: I just enjoy spending all the time with the kids, and sometimes watching my son playing basketball, send my daughter to dance school. Every time when I spend time with the kids, I just enjoy it.
HANS TUNG: In the Valley, obviously work-life balance is very, very important but in China increasingly you see a lot of work-life integration. People try to simplify their whole life to fit into their work. Can someone truly be happy working like that, in your opinion?
ERIC YUAN: First of all, don’t think about or don’t try to pursue a formula to balance work life. As long as you go in that direction, you never can have an answer. Just think about, because if you have a passion, take Zoom for example. Every day, I just want to come to the office. I just wanted to work on something, because I think this is my life. I never think about, that is work. I enjoy doing that. If you always think of the balance between work and life, that means you still did not figure out a passion yet.
Answer to that question first. If you find the answer, I think that you never will go back to ask how to balance between work and life.
HANS TUNG: So it sounds like you like a work-life integration as well.
ERIC YUAN: Yes, as a true integration.
ZARA ZHANG: Thank you so much for your time.
ERIC YUAN: My pleasure. Thank you for having me.
HANS TUNG: Thank you, it was fun.
ERIC YUAN: I appreciate it.
HANS TUNG: Thanks for listening to this episode of 996. By the way, we also produce a weekly email newsletter in English also called 996 which has a roundup of the week’s most important happenings in tech in China. Subscribers have told us it is informative and fun to read. The newsletter also features original content and analysis from Zara and me. Subscribe at 996.GGVC.com.
ZARA ZHANG: GGV Capital is a multi-stage venture capital firm based in Silicon Valley, Shanghai and Beijing. We have been partnering with leading technology entrepreneurs for the past 18 years, from seed to pre-IPO, with $3.8 billion in capital under management across eight funds. GGV invests in globally-minded entrepreneurs in consumer Internet, ecommerce, frontier tech and enterprise.
GGV has invested in over 280 companies with 29 IPOs and 22 unicorns. Portfolio companies include Airbnb, Alibaba, Ctrip, Didi Chuxing, DOMO, HashiCorp, Hellobike, Houzz, Keep, Slack, Square, Toutiao, Wish, Xiaohongshu, YY and others. Find out more at GGVC.com.
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HANS TUNG: If you have any feedback on this podcast, or would like to recommend a guest, please email us at 996@GGVC.com.