Valuetainment - July 09, 2020


Episode 488： Zoom - The Future Of Pandemic Proof Companies

Topics
zoom pandemic proof businesses
Hosted by
Patrick Bet-David
Mentioned
Zoom Eric Wan Powell Warren Buffett Bill Gates Value Tim Ferraris Snapchat Brady
Episode 487： The Best Time To Specialize Or To Generalize Episode 489： China’s Unrestricted Warfare Could Lead to Collapse in One Year

Episode Stats


Length

12 minutes

Words per minute

175.49

Word count

2,171

Sentence count

199

Harmful content

Misogyny

3

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Zoom went from $0 to $40.70Billion in less than a decade. How did this happen? Did the guy who started it know what he was doing? Or did he just get lucky? Today we re going to talk about how one company that got started on April 21st, 2011, and all of a sudden, is worth more than the top 7 airlines combined.

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Topics generated with Qwen2.5-3B-Instruct.
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.000 I'm Patrick, made to be your host of Value Tim, and today we're going to talk about Zoom.
00:00:24.900 How this founder built a company less than a decade ago, and all of a sudden it went from being a small company to worth more than the top seven airlines combined.
00:00:35.100 Zoom is worth $40.70 billion.
00:00:37.160 The top seven airlines, Southwest, Delta, United, IAG, Lufthansa, American Airlines, Air France, are worth $46.21 billion.
00:00:45.500 One company that got started April 21st of 2011, nine years ago, in nine years, this company went from $0 to $48.70 billion.
00:00:57.020 Now watch this number here.
00:00:58.460 Here's an interesting stat.
00:01:00.100 December of 2019, 10 million people a day used Zoom.
00:01:04.460 10 million people a day used Zoom.
00:01:06.600 Four months later, it's 200 million a day.
00:01:08.740 That's March.
00:01:09.320 April was 300 million people a day used Zoom.
00:01:14.920 That means in December, just six months ago, they can only reach the city of New York.
00:01:20.380 That's it.
00:01:20.920 Only New York City knows about this one product.
00:01:23.680 Fast forward six months later, all of America uses Zoom.
00:01:28.180 If we were to put things into perspective, that's insanity.
00:01:31.100 But we've got to look at some other data here.
00:01:33.220 How did this company become who they are today?
00:01:36.080 Did the guy who started it know what he was doing?
00:01:38.280 Did he get lucky?
00:01:39.620 The founder's name is Eric Wan.
00:01:41.980 Okay?
00:01:42.780 He's today worth $7.8 billion.
00:01:45.660 Mario, if you can Zoom in here, 7.8.
00:01:47.480 He owns 22% of Zoom.
00:01:50.280 Here's the most interesting part to read about him.
00:01:53.800 Eric Wan worked in Japan for four years after graduation, inspired by Bill Gates, who worked
00:01:57.940 in Japan in 1994.
00:01:59.360 He moved to Silicon Valley in 1997, joined the tech boom.
00:02:02.440 At the time, Wan spoke very little English, applied nine times to be granted a visa from the
00:02:07.420 United States, upon arriving in this country, joined WebEx, which is a company that doesn't
00:02:12.440 do well right now.
00:02:13.420 They, I don't know how many webinars I did with them that absolutely crashed in March.
00:02:19.340 And I said, we were on the calls with their executive who said, we can't use you anymore
00:02:22.960 because so many times it crashed.
00:02:25.720 Now watch what happens.
00:02:26.960 He joins WebEx, a video conferencing startup.
00:02:29.380 The company acquired by Cisco Systems in 2007, which I think for like $3.2 billion.
00:02:33.820 At the time when she became the vice president of engineering, in 2011, Wan pitched a new
00:02:38.560 smartphone-friendly video conferencing system to Cisco management.
00:02:42.960 The idea was rejected.
00:02:45.060 Wan left Cisco to start Zoom.
00:02:48.140 Zoom is a publicly traded company and now Wan is a billionaire, thanks to WebEx.
00:02:55.040 Now, what's the moral of the story here?
00:02:56.620 Here's what the moral of the story is.
00:02:57.760 A couple things about Zoom, then we're going to look at airlines.
00:03:00.280 Number one, luck, you've heard a quote, luck is where preparation meets opportunity, right?
00:03:05.480 You always hear this stuff, well, luck is where preparation meets opportunity.
00:03:08.940 So often, opportunity comes up where people can get lucky and have the biggest change in
00:03:14.960 their lives, but they're not ready for it.
00:03:17.240 You know, Brady was ready for Bledsoe.
00:03:19.820 Young was ready when Montana got hurt.
00:03:22.260 Eric Wan was ready when the pandemic came in.
00:03:25.100 Boom! 0.99
00:03:25.400 They went from 10 million users a day to 300 million users a day.
00:03:29.540 Now, watch the airline industry.
00:03:31.080 Let's look at some data here.
00:03:32.700 Here's the airline industry.
00:03:34.960 According to TSA, if you want to come up, they can see the website.
00:03:38.280 According to TSA, okay, on March 1st, okay, we had 2.28 million people traveling every day.
00:03:45.880 March of 2019, it was 2.3 million people traveling.
00:03:49.080 So, not a big difference.
00:03:50.640 It's a drop off of 20,000 people, right?
00:03:52.520 If we go higher, you notice we went from 2.2 to 1.7 to 1.6 to 1.485 to 9.53.
00:04:01.400 We cracked a million, less than a million on March 17th.
00:04:04.660 So, now people are traveling less.
00:04:06.200 People are scared.
00:04:07.280 1.99.
00:04:08.540 We're going lower, lower, lower.
00:04:09.820 1.18.
00:04:10.600 We're going lower, lower.
00:04:11.540 1.94.
00:04:12.320 We're going lower, lower.
00:04:13.320 87,000 people traveling a day.
00:04:16.520 The airline industry went from 2.2, 2.3 million people traveling on a daily basis all the way
00:04:24.100 down to 87.
00:04:25.180 Watch this.
00:04:26.120 The 87,000 people that traveled in a day, look what it was a year prior to that.
00:04:30.460 2.208 million, okay?
00:04:32.400 2.208 million people traveling.
00:04:36.040 And then you come up and you notice we went from that 84, 87 number to now, as of yesterday,
00:04:42.300 230,000 people traveled, which is good, but it's not yet back to the million or 500,000
00:04:48.020 or 1.5 million or 2 million.
00:04:49.580 We are still 2.2 million travelers behind last year.
00:04:55.260 So now, when you see numbers like this, where it went from 10 to 1, from 2 million to 200,000,
00:05:02.540 that's a drop-off of 90%.
00:05:05.520 That's a massive drop-off.
00:05:06.800 Watch what happens with the stock prices of these companies.
00:05:09.980 Let's take a look at this.
00:05:11.340 American Airlines, the last six months, it was hovering around $27, you know, just a couple
00:05:18.420 months ago, right before March 20, around $29 to $30.
00:05:21.060 It went all the way down to, right now, you can buy a share of American Airlines for what?
00:05:24.860 9.994.
00:05:26.300 $9.94 today, you can buy it, right?
00:05:29.420 Market cap dropped all the way down to $4.21 billion.
00:05:33.000 Let's go to the next one.
00:05:33.840 Stay here.
00:05:35.100 Southwest was $29.9, 20, no, actually $56 a share just a couple months ago, if you want
00:05:41.920 to buy a share, 55, 58, to now you can buy it for $29.15.
00:05:46.380 So it's not that big of a drop-off, right?
00:05:48.200 Watch this, United went from, same thing, around $88, $87, $85, $79, down to $25.
00:05:55.680 You can buy a share right now for $26, give or take, of United.
00:05:59.300 And then take a look at Delta.
00:06:00.540 Delta was around $60, if you look at where they were at three months ago.
00:06:04.440 They are right now hovering around $23.
00:06:06.740 So now, you look at that data, right?
00:06:08.660 Here's what you think about.
00:06:09.880 I say to myself, at least, I say, so let me get this straight.
00:06:13.240 They were having 2.2 million people traveling per day to now only 200,000 people traveling
00:06:19.020 per day, but the stock prices have only dropped 50%, and Warren Buffett, who owned shares on
00:06:25.260 four of them, 10% minimum, he sold all four of them.
00:06:30.200 Why?
00:06:31.000 Is he thinking it's going to go lower?
00:06:32.520 Then it's because if we do basic math, you know how some companies, let's just say you
00:06:36.320 run a business, and you have a restaurant, they shut you down, you can't have people
00:06:41.100 coming in, you're taking a big hit.
00:06:43.120 You can pivot.
00:06:44.300 How do you pivot?
00:06:45.340 You deliver more.
00:06:46.500 You bring food to people, right?
00:06:48.080 Maybe you do different kind of services.
00:06:50.180 You can still pivot and have some kind of money coming in.
00:06:53.280 How do airlines pivot?
00:06:55.920 What do they do?
00:06:56.640 Do airlines say, I got 50 planes sitting right here, why don't you come and rent one of them
00:07:01.360 for 40 grand and put a party in there?
00:07:03.400 I can't.
00:07:04.040 How do airlines pivot, okay?
00:07:06.780 You know, we got these people that like to take pictures and post it on Instagram.
00:07:11.220 Why don't you come and take a picture saying, I'm running this airline, look at me, I'm
00:07:14.460 by myself for $6,000.
00:07:16.520 No one's doing that today.
00:07:18.260 No one cares about that stuff.
00:07:19.640 How do airlines pivot?
00:07:20.820 Actually, think about that.
00:07:22.240 How do airlines pivot?
00:07:23.660 Uber just announced they're letting go of another 4,000 people.
00:07:26.180 How are they going to pivot if there's not a lot of transportation taking place?
00:07:29.320 Here's the moral of the story.
00:07:30.400 The airline industry right now is a bit overvalued right now based on some of the data that you're
00:07:37.360 seeing.
00:07:37.640 Now, don't get me wrong.
00:07:38.340 The market's going to recover once we go back to traveling.
00:07:40.840 I don't know if we're going to go back to 2.2 million people traveling every day anytime
00:07:45.140 soon.
00:07:45.440 I don't even think it's going to happen that quickly in the next 30, 60, 90 days.
00:07:48.420 I think it may take a little longer than that.
00:07:50.140 But we're eventually going to go there.
00:07:51.620 They still have taken a hit.
00:07:53.280 Government keeps bailing them out.
00:07:54.540 It's fake money.
00:07:55.640 If the government doesn't bail out these guys and give them money, you better believe this
00:08:00.480 wouldn't be down 50%.
00:08:01.760 This would be down 90%.
00:08:03.860 That means the real price without a bailout of Delta, instead of $60, it should be $6 today,
00:08:10.140 not $23.
00:08:11.500 That means an American Airlines that was at $30 pre-pandemic, $28 pre-pandemic, it should
00:08:18.400 really be $3 today.
00:08:20.080 It's not worth $3 because of the bailout, not because what its value is today.
00:08:24.580 They were bailed out.
00:08:25.500 This should be a $3 stock.
00:08:27.660 So that's the true value.
00:08:29.020 But the bailout has made it look better than what it really is.
00:08:32.080 And Powell making the rates constantly go lower and figuring out every way to bail everybody
00:08:36.020 out.
00:08:36.280 We understand what they're doing.
00:08:37.220 They're playing the whole socialism on capitalism and companies and taking care of these guys,
00:08:41.060 which it is what it is.
00:08:42.160 I'm not a fan of it, but they're doing what they're doing.
00:08:43.960 Here's the moral of the story.
00:08:45.120 The moral of the story is the following.
00:08:46.860 No matter what business you're running, people keep asking me, Powell, what should I be doing?
00:08:50.000 Look at Zoom.
00:08:50.540 Oh my gosh, Zoom is killing it.
00:08:52.340 Hotels are not killing it.
00:08:54.060 Hotels are getting crushed.
00:08:55.180 Airlines are not killing it.
00:08:56.040 They're getting crushed.
00:08:56.980 Uber's not killing it.
00:08:57.860 They're getting crushed, right?
00:08:59.360 Whatever business you're doing, you have to assume your business model is set up in a
00:09:04.760 way where you are pandemic proof.
00:09:07.940 What do I mean by pandemic proof?
00:09:09.580 Now watch this.
00:09:10.820 We've had pandemics in the past before.
00:09:12.500 When the AIDS crisis took place, nobody shut down the government.
00:09:15.940 Everybody was just more careful having sex with somebody that they just met for the first
00:09:19.880 time.
00:09:20.180 AIDS didn't stop people from going to work.
00:09:22.860 We haven't done this in eight years, but there's a couple things that's changed in the last
00:09:27.120 few years.
00:09:27.720 And here's what it is.
00:09:28.540 Let me explain it to you.
00:09:30.040 We are learning in the last two months the power of media and the power of politicians.
00:09:35.500 Why?
00:09:36.080 Media manipulates and puts panic into us.
00:09:38.820 What do they do?
00:09:39.580 They control.
00:09:40.820 Politicians enforce their power.
00:09:42.860 They can tell you, California can say, if you go outside, somebody you know that's working,
00:09:48.980 snitch on them, we'll tell them off and we'll go arrest and pay a $1,000 fine.
00:09:52.140 The lady in Salem, they find her a couple thousand dollars and they threaten to find her $75,000 0.81
00:09:56.920 who runs a salon.
00:09:58.640 Or the lady here in Dallas who's not an essential business and somebody determines if you're 1.00
00:10:02.620 an essential business or not.
00:10:03.880 The reality is assume, assume if this were to happen again and you're not an essential
00:10:09.580 business, how are you going to survive during another time when the media can dictate what
00:10:14.060 to do and politicians can dictate what to do.
00:10:17.240 And so if there's ever been a time where this word's more powerful, freedom, it's today.
00:10:22.920 And the way you get this freedom to choose how you live is by you and your family getting
00:10:28.360 your millions.
00:10:29.080 Not the millions for the Lambos and the Ferraris and the Rolls and the watches and the homes.
00:10:33.880 And the $6,000 suits and the $80,000 watches and the $2,000 shoes.
00:10:38.200 I'm not talking that kind of millionaire.
00:10:40.040 I'm talking about free to choose type of millionaire.
00:10:44.660 Freedom is what I'm talking about.
00:10:47.380 Not all this other stuff.
00:10:49.040 So if you're not sitting around with your board, with your leadership team, with your
00:10:52.500 wife, with your husband, with your friends, with your peers, with your siblings, and you're
00:10:56.280 not figuring out a way to be pandemic proof, you may also very soon be looking at stats
00:11:02.680 like this where your customers may go from $2.2 million a day to $84,000 just because of
00:11:10.620 the media's control and politicians' control to enforce laws that you have no control over.
00:11:16.780 You don't vote for it.
00:11:17.900 They told you you better do it or else.
00:11:20.580 You also go make your own money so they can't tell you what to do because you get to be free
00:11:25.400 to choose what you want to do.
00:11:27.660 Thanks, everybody, for listening.
00:11:29.300 And by the way, if you haven't already subscribed to Valuetainment on iTunes, please do so.
00:11:33.860 Give us a five-star.
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00:11:36.760 And if you have any questions for me that you may have, you can always find me on Snapchat,
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00:11:49.460 With that being said, have a great day today.
00:11:51.280 Take care, everybody.
00:11:52.020 Bye-bye.
00:11:52.280 Bye-bye.