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Zooming to the heart of IPO success

Heather Craft

CEO, North America

“I like to greet the sun each morning and walk among the stars at night.”  

So sang Lionel Ritchie on the Commodores track Zoom. But now there’s an even zoomier Zoom than this 1970s pop classic.  

Eric Yuan, founder and chief executive officer of Zoom Video Communications Inc., must have felt like he walked among the stars all the time following his company’s stellar stock market debutZoom, which has made video conferencing far less of a pain than it used to be, has also made going public seem a breeze. 

Zoom continues to soar. Just this week Eric Yuan, founder and CEO of Zoom sat down with Jim Cramer for his “Executive Decision” segment as the video communications provider shares were up 14.9% Monday on another strong quarterly report.   

So what can we learn from this as Forbes hailed the Zoom IPO as standout deal of last year, under the gushing headline What can entrepreneurs learn from the mega success? 

To adapt that question slightly, what are the communications lessons from Zoom’s mega success? How come everything has gone so right in a year when many other stock market newcomers have endured a rocky ride?  

First off, you can’t ignore the underlying health of its financials. As CNBC archly put it in the lead up to listingZoom has the unusual distinction of being profitable” while also growing at over 100% a year.  

That’s right, profitable. Something many tech companies assuredly are not when they come to market asking investors to make a big gamble on future business viability. Uber, let’s not forget, reported a $1 billion loss when revealing its first quarterly earnings as a public company at the end of May.  

Zoom, by contrast, has gone from strength to strength. When it published its first post-IPO earnings report early June it beat revenue estimates, sending its stock soaring 18.4% in a single day to turn Zoom into a $24 billion company 

But if Zoom’s figures and product offering are strong, so too is its corporate storytelling strategy. What Zoom did exceptionally well was retain a high degree of control over its narrative. 

Of course, respected financial journalists and analysts will write what they want to write. Or else there’d be no point to them.     

Zoom’s exemplary approach has been to stay true to its culture while setting out a clear and simple, but compelling story. And in articulating that story, it’s clear that there has been a significant amount of thought and time put into exactly when and where Zoom would tell that story.  

This exclusive Forbes daily cover story is an excellent case in point. The reporter was given access to Zoom founder Yuan, who in turn provided plenty of context-setting, as well as background on Zoom’s history, technology and strategy. The outcome was a piece charting Zoom’s rise and current challenges. Adept media relations meant key messages shone through: “What matters at Zoom is the product, not the perks.”  

Even passages where the reporter sought to convey Yuan’s personality did so in a way that was incredibly on-message. For example, an anecdote about Yuan watching his high school senior eldest son play in a basketball tournament in Los Angeles celebrated both Yuan’s work ethic (he was videoconferencing while there) and one of Zoom’s unique features, the virtual background that can be changed to disguise where users really are. “I set the background as the Santa Barbara beach, and they all thought I’m there. After the meeting, I swipe,” revealing a sweaty high-school gym. “And they all say, ‘What?’ ” 

Based on the coverage from day-one following the Zoom IPO, it’s clear that seeding a few top tier media outlets with a detailed version of the Zoom story gave others looking to write about Yuan and Zoom some near-definite sources to plunder for information. Consequently, when these writers came to publish their own ‘take’ on the story it seldom deviated far from the original gold standard, ensuring the kind of consistent narrative investors love.  

Zoom has zoomed for a number of reasons. And how it’s told its story has played a vital part.