Zoom’s founder turns to AI in hopes of regaining pandemic highs

Innovation

CEO Eric Yuan is launching smart Zoom Docs, a beefier chatbot and office booking tools for Zoom’s next act in a hybrid, AI-powered world.

Zoom founder and CEO Eric Yuan has a message for businesses sceptical about using Zoom for more than its video meetings: “Be open-minded.”

Yuan certainly is. After years of only meeting customers virtually, over his own product, he’s back rubbing shoulders with them – travelling in the flesh. “A lot of events aren’t virtual anymore,” Yuan told Forbes. “I have to evolve myself.”

So, too, must Zoom. A software savior of the early pandemic in 2020, when Yuan became the face of remote work – and education – with a soaring stock and privacy concerns to go with it – Zoom is now trying to navigate a new moment. Software tools debuted in the months after its massive influx of users, which intended to make Zoom a go-to for online events and games, haven’t panned out quite as hoped. From an all-time high of $568 that October, giving it a market capitalization of about $160 billion, Zoom’s stock has levelled out over the past year at about $70, or a market cap just over $20 billion.

Now, Yuan is looking to navigate Zoom’s future in a different direction: life as a “communication and collaboration” platform.

Every morning when Zoom’s CEO wakes up, he logs onto Zoom’s tool competing with Slack or Microsoft Teams, called Zoom Chat. He emails and preps for meetings in Zoom’s software. And he spins up new summary documents or action plans using Zoom’s new collaboration tool, Zoom Docs. “The goal is that when a customer starts using Zoom in the morning, they can stay in the Zoom client,” he says. “Switching back to other applications quite often is a pain.”

If such arguments sound familiar, it’s for good reason. Seemingly every enterprise software business of a certain age and scale — from Box and Dropbox to Slack and many others — looks to graduate to being the center of gravity for a customer’s workflow over time. Better to be the hub that other tools connect into, not the point solution that’s easier to rip out.

Zoom’s headliner new product in that effort is Zoom Docs, which the company said it will make generally available in 2024. Users can generate a new Zoom Doc from within a video meeting or chat and populate it with relevant content and action items using Zoom’s artificial intelligence copilot, Zoom AI Companion. The documents can be tagged and assigned to coworkers, as well as linked to each other and mapped as a tree of wiki-style pages, Zoom announced on Tuesday.

“We needed to eat our own dog food.”

Eric Yuan

Another AI-powered new feature, a generative whiteboard, allows teams to auto-populate and organize a project visually from such a meeting. Last month, Zoom announced various AI features including the ability to generate highlights and meeting summaries, catch-up on meetings in progress and draft emails and summaries of chat threads. It plans to add context capabilities for its AI Companion in the future to remember a user’s past queries and surface relevant information from any of the person’s past meetings, chat logs or work in other connected apps.

Zoom’s also recognized that customers increasingly prefer hybrid work, Yuan said. Zoom itself made for easy punchlines when it announced a return to the office twice a week in August. “We needed to eat our own dog food,” Yuan said. That was only part of the story. New employees hired during the pandemic were also not getting the in-person sense of community and career development they needed, he conceded.

By offering new office management tools for everything from visitor check-in to booking desks and offices, Zoom will compete with a crowded number of software solutions like Envoy, which raised $111 million in January 2022. Zoom Docs appears to overlap with use cases of other work software tools such as Coda, Notion, Google’s G Suite and Microsoft’s 365 offerings, and even project management players like Asana and Monday.com. Everyone’s adding AI companions or copilots, too, with Microsoft off to the biggest head start and others like Salesforce racing behind.

Even in the face of wider competition, such product expansion makes sense for Zoom, said RBC Capital Markets analyst Rishi Jaluria. “Zoom’s goal is to get people to use Zoom in a bigger way, so it’s not a tool that you click as a link and then use and exit,” he said. Power uses of rival tools won’t be likely to switch over, Jaluria predicted; but others may find it convenient to have more of their productivity tools in one place. “There’s definitely room for Zoom to get in there. Ultimately, this is something that can help their stickiness with existing customers.”

Yuan, who started Zoom 12 years ago after serving as an engineering leader at Cisco’s WebEx rival, knows he’s not reinventing the wheel. With its AI tools, Yuan argued that Zoom will stand out because of a “federated” approach that means it works with a number of third-party models and its own interchangeably, whichever is cheapest for the task. Yuan said he believed customers ultimately want choice. “We cannot force anyone to standardize on one platform,” he said. “The way I look at this is to give a customer flexibility. That’s the most important thing.”

As an added bonus to this approach, Zoom doesn’t charge extra for its AI features. (Microsoft’s AI Copilot came at an announced cost of $30 per user per month; Salesforce’s clocked in at $50 per monthly user.) “The differentiation will be the cost and quality,” Yuan said.

To win on quality, Zoom will need to avoid unforced errors like a recent AI privacy scare. Years after Zoom struggled with privacy scandals during the height of the pandemic, the company again botched its customer privacy policy with an update that appeared to suggest that Zoom would use customer data to train its own AI models. It was later updated after an outcry. (Yuan said the policy was never to collect such data, with Zoom training models off a mix of public data, its own data and third-party data it purchased.)

As for how Zoom’s founder stays motivated and rallies the troops despite a year trailing the S&P 500 index and tech company peers whose stocks have rebounded closer to Covid highs, Yuan said Zoom was embracing a new season much like his beloved Golden State Warriors.

“We had the world during Covid, and now we start over to make Zoom better. We want to be proud when we retire in the future,” he added.

This article was first published on forbes.com and all figures are in USD.

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