May 13, 2020

Chaos is not dangerous until it begins to look orderly. — The Zurich Axioms, "ON PATTERNS"

Here we are, May 2020. COVID lockdown in full effect—and hardly a day goes by without the video chat app Zoom. My friends are using it to host happy hours, my postpartum class switched to using it after forced suspension of in-person meetings. The Economist joked this session of Parliament might rightfully be called "The Zoom Parliament".

What surprises me most is how nobody seemed to see it coming. I gave it some thought, and realized it's a case of collective blindness: Zoom's rise seems to have defied a lot of the orthodoxy of Silicon Valley product strategy. Had the chaos of new product adoption started to look orderly?

Misperceiving orderliness seems like an occupational hazard for students of strategy. It's easy to see the appeal of studying strategy: in a big, chaotic world, who wouldn't want to go to work, make a few decisions that follow "the rules", then sleep soundly at night? If only it was that simple.


  • Huge funding rounds, "get big fast", and "first-mover advantage"? Zoom was founded in 2011, launched in 2013, and grew steadily over the past seven years.
  • Blue oceans? Competition is for suckers? Zoom launched into the reddest of red oceans—videoconferencing—competing from day 1 against competitors such as Google (Hangouts, Duo), Microsoft (Skype, Teams), Apple (FaceTime), and facebook (Portal).
  • Network effects? Skype, and facebook, had millions/billions of users. Zoom had zero.
  • New billing relationship?: Customers afraid to pull out their credit cards? Somehow doesn't seem to be a problem for Zoom.
  • Compete with Google/Apple/Microsoft?: No problem, Zoom competes and seems to be winning, despite fighting much larger, better-staffed, and entrenched competitors.
  • Hard to get users to install an app?: Doesn't seem to have been a problem.
  • You have to be in San Francisco/hire Silicon Valley devs? Zoom's CEO: "Our product development team is largely based in China, where personnel costs are less expensive than in many other jurisdictions". I guess not?

One thing that's clear: these Chinese CEOs are sure thinking long-term. We are in the US are fighting over the next quarter, they're planning the next decade.

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