Five Lessons in Hyper-Scaling | Straight Talk

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When the pandemic locked the world down, demand for Zoom conferences grew 30-fold in four months. How do you successfully scale up at warp speed?

By Sunil Madan, Corporate CIO, Zoom Video Communications, Inc.

In December, Zoom was a promising business-to-business video conferencing company, growing at a nice pace. Ten million people participated in Zoom meetings every day. By April, as the coronavirus pandemic forced millions of people to live and work at home, usage had grown to 300 million a day. Our annual run rate had skyrocketed to 2 trillion meeting minutes. And Zoom had become a verb.

Becoming so integral to people’s lives that you turn into a verb is an achievement, but it’s also a big responsibility. In a sense, it meant that not only our product but our whole organization had to turn into a verb. Many things we had planned to do over the next two or three years we now had to do right away. For a while, we were adding servers every night—tens of thousands in a matter of weeks!

Part of our success was already baked in: we had designed the architecture and our partnerships in a way that made hyper-scaling possible. We had already thought about global readiness in terms of security, privacy, data residency, and compliance (which was a good thing, because most of those things are more easily handled in peacetime than “wartime”).

We had also built the platform so that if demand surged, the traffic would be spread out among multiple data centers with distributed availability and scalable security: we routed paid customer traffic through our data centers, and free traffic through Amazon Web Services or Oracle’s cloud. Now we have 19 co-located data centers worldwide, which means that, if you are an enterprise customer, you hit your nearest local data center first, and are then routed through private pipes to other data centers, which ensures that your video quality stays very high.

From B2B to B2B+B2C

Some structural adjustments had to be made to keep up with this new era. I personally had to work with vendors that were not prepared to handle the volumes we started feeding into their systems. Internally, we also had to determine which processes we could automate quickly, and began using more robotics process automation, such as Automation Anywhere.

We had to revise our standard operating procedures, create emergency response teams, and set up multiple war rooms where people had clear decision parameters. We started forming cross-functional virtual teams to develop new features without disrupting everything else, pulling people from existing teams to tackle different problems right away. Employees had to be reassigned too. For example, once everyone started working from home, we didn’t need receptionists anymore, so we put all the receptionists to work processing orders.

We also had to figure out how to collect money. Are you going to do a subscription service or do one-time charges? Does our billing structure scale? Having one order for a million dollars is one thing. Have a million orders for one dollar each is Another.

Adapting our culture was another challenge. We had already been a fast-growing B2B company but now we were also a fast-growing B2C company—and we had to find a way to meet both sets of customers’ demands at once, not to mention the needs of ‘prosumers’—all the small business people, therapists, and instructors who were suddenly making their living over Zoom.

As the use cases of Zoom expanded from business meetings to personal meetings—what you might call the consumerization of video-conferencing—as people around the world began celebrating weddings and graduations on Zoom, we had to quickly focus on improving our security and privacy to make it more foolproof. For example, we never thought our users would share meeting IDs or meeting links on social media without a password! In a business environment that simply isn’t done.

What we learned

If you ever have the good if scary luck of working at a company where demand suddenly takes off, you have to do a number of things right to keep the acceleration from ripping your company apart. Here are five insights we gained from our experience that I think would be relevant to other organizations with aspirations to scale big and fast – if not the entire business, then some aspect of it.

1. Think big – and do so in advance. To grow this quickly, you need to have already laid the groundwork. That means anticipating rapid growth, designing for scale – for 100x where you are now. You never know when you’ll need these capabilities, but when you do, you’ll need them very quickly. On a personal level as a business leader, you need to look for “tours of duty” within the company, so that if the business needs you to jump in and help in a different role or capacity, you’ll be ready.

2. Keep your customers happy. When demand is growing exponentially, it’s tempting to let customer satisfaction be a lower priority. But it’s a mistake. All this spring, our CEO kept hammering away at the idea that we had to stay focused on what customers needed. One thing they didn’t need was having to choose between a frictionless and secure platform and experience. Developers sometimes make a tradeoff between ease of use and safety. These days, particularly in a consumer environment, you need both.

3. Think long-term as well as short-term. Rapid scaling up is intense and it’s natural to focus on immediate concerns. But when hiring the people you need to help with current demands, look for those who not only can meet today’s needs but also those of tomorrow – people who have a “scaling 100x” mindset. Similarly, don’t overlook potential customers while focusing on current ones. We adopted a “freemium” model that gave individuals free personal use of Zoom, knowing that some of these consumers would in the future be buying – or demanding from their IT department – our enterprise version.

4. Look for talent in unlikely places. It’s always difficult to identify and hire top talent. This is never more true than you’re rapidly scaling up. With so many headcounts open, we realized that we weren’t going meet that need by hiring only in the San Francisco Bay Area. So, we quickly expanded our search. We opened facilities in Pittsburgh, we opened in Phoenix. We worked closely with Carnegie Mellon University and Penn State in Pennsylvania and with Arizona State through its president. Looking beyond the obvious talent pool gave us the talent we needed.

5. Do the right thing. Even when you are growing quickly—maybe especially if you are growing quickly—you need to make sure you are doing the right thing. For instance, we had a major debate within the company on whether to develop filters that would protect children using Zoom from inappropriate content. It created a lot of chaos internally. Our enterprise sales organization was concerned that it would signal to important enterprise clients that we were shifting our focus from businesses to consumers. We decided to go ahead with the filters because it was the right thing to do. Similarly, although we really didn’t have an immediate business case for giving schools free access to Zoom— infrastructure isn’t cheap, AWS isn’t cheap, and supporting the free services would hurt our margins—we knew it was the right thing to do.

Fortunately, as expensive as it was, I am confident that it will be the smart business choice, too, in the long run. My 18-year-old daughter is taking classes right now over Zoom at home. In four years, she will be out of university, and she will go to work somewhere. And guess what? She’s going to ask for Zoom because she loves Zoom. The same goes for my toughest customer of all, my 11-year-old daughter.

***

I’m proud of the work we have done in the past year, but it’s also been a humbling experience to see the many ways people have found to use Zoom. Seeing virtual happy hours, weddings, coffee breaks, pub quizzes, dance practices, yoga sessions, Broadway and TV shows, and so many other events over Zoom – well, the creativity and resilience people have shown during these tough times has been remarkable to watch. There have been many instances where our customers have come and told us that we are doing an “amazing job” keeping the world connected. But the truth is we haven’t been the only ones making Zoom amazing.

The Takeaways 

To scale successfully, maintain a sense of urgency about keeping your customers happy.

If you have a product that is both B2B and B2C, you need to provide a good experience for both sets of customers.

Always design for 100X. You never know when you might need it.