The Real World

Zoom: The Other Exponential Growth Story of 2020

First, my own anecdotal point of view:

Sometime last year I recall seeing a group on my campus handing out flyers for some (new?) video conferencing app called Zoom. I’d never heard of it! I looked at the brochure, decided that the features sure sounded a lot like what I was already getting for free from Skype, and threw it away. That week I had several work and personal video calls, all of which I did on Skype. Skype was the verb of choice: “Want to Skype this weekend?” “Hey let’s Skype next week to push the project!” etc.

In the last few weeks, I started to almost universally hear “Skype” being replaced by “Zoom”: e.g. “Want to Zoom this weekend?” The lecture I’m supposed to teach for the Spring semester is being moved online (for obvious reasons), and the administration told me that the whole campus will use Zoom; my impression is that many universities around the world are doing the same. Several of my usual Skype work meetings have migrated to Zoom too.

I signed up, of course, and so did all my friends.

But what’s going on?

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It’s not just my corner of the world; interest in Zoom has skyrocketed over a span of just a month. From Google Trends:

In the United States
Worldwide

It’s a nearly 100-fold increase in a span of about a month. I included Skype and Google Duo for comparison; both have seen some gains in interest but at a level far lower than Zoom.

To put this in context, here’s the spike in interest in COVID-19 over the same period, and also interest in “cats”:

Worldwide. Note that dogs (not represented here) are roughly twice as popular as cats. 🙂

Zoom is about 10-20 times less interesting than COVID-19, which is reasonable, but it’s now about as popular a search as “cat”. Given that cat memes are always popular I take this also as evidence that something special is going on.

Another measure: Zoom stocks are up 10-fold over the last month (via MarketWatch):

I would like to compare to Skype directly, but it’s not possible because Skype is owned by Microsoft and doesn’t have its own tradable stocks. The closest thing would be Microsoft stock, which is way down over the same period (link):

This plummet seems unlikely to be related directly to Skype, as Microsoft is a huge company with its hands in many pies; probably it’s just hurting because everyone is hurting. (Well, Zoom’s not hurting!)

One more comparison for good measure: Here are the trends in stocks from Slack, a communications company marketed towards remote workers:

You might have expected Slack also to zoom to greater heights (pun intended) as millions of workers are sent to work from home, but they instead took the big hit that so many others did and bounced back to normal. Commendable, but I’m sure they wish they were Zoom right now.

I’m far from the first to notice this very sudden change; many articles have already been written. In the last three weeks: “Zoom Became the Most Important App in the Business World Overnight” (Inc.com); “How Zoom became so popular during social distancing” (CNBC); “All your friends are using Zoom, the video-chat app that is suddenly dominating competition from Google and Microsoft” (Business Insider); among others. A related article from Drift.com gives us another, more direct metric to judge the growth of Zoom (numbers of users per day):

In December 2019, Zoom reportedly had 10 million users / day. Now, fast-forward to March 2020: Zoom reported 200 million users / day. Once more: 100 million / year is about 300,000 / day in 2015, to 10,000,000 /day in 2019 and 200,000,000 / day in 2020. They’re growing (*gasp*)… exponentially!

Linear Scale, exponential fit
Log Scale, same fit

To be clear, this is a bad exponential fit, but the data I’m using is not good and Zoom hasn’t released any more detailed recent numbers. But if you believe it even a little, this looks like the exponential nature of Zoom’s growth is many years in the making, and not unique to the last month of quarantine. Slack, on the other hand, displays a clear trend of linear growth.

Again, what’s going on?

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I don’t know the answer. Let me recount some half-baked theories, along with some reasons to doubt them; in the end I think each holds part of the puzzle. Finally I’ll try to aggregate all of it into my own story of what might be going on.

Theory 0 (the Null Hypothesis): Nothing special is happening in the past month

I hope I’ve provided pretty convincing evidence that there’s something especially weird happening with Zoom since the beginning of March. But let’s give the devil his due: I already told you that Zoom’s growth may have been exponential for years preceding 2020, whereas related companies seem to be stuck at linear. Here’s more of that, via Diginomica:

Sorry for the bad quality; it’s a screenshot of a low-quality image apparently copied from a Zoom Q4 video presentation. The vertical axis says “Number of Customers” and Zoom is the green line.

Roughly speaking: Zoom exponential, everybody else linear. (Maybe RingCentral (the orange line) is looking a bit exponential too, not sure.) But the timescale here is from 2016! Whatever’s blowing up with Zoom, maybe it’s long-term and we are just at the exciting side of it.

But no, dammit, something weird is happening! It would be an extraordinary coincidence if Zoom happened to overtake Skype in a big way in the same month as a global pandemic. I have big doubts. So let’s press on.

Theory 1.0: It’s all about COVID-19!

Here’s the plausible, simple theory to explain the timing: the thing that’s special about this moment in history is that half the world’s population is in quarantine due to a global pandemic (duh!). While they’re stuck in their homes, many more people need to use video chat and many more companies need to use video conferencing. Bing bang boom, a big boon for Zoom. Right?

The timing is so unique that this must be part of the explanation. But if this were the whole story, I’d expect to see similar upticks in other video conferencing platforms. My eye is especially on Skype, which has dominated the field for more than a decade; in fact I’d expect it to dominate even more than before in quarantine-land, as new users flock to whatever application is already being used by all their friends. But:

You can see the little Skype / Duo upticks at the end, but they’re dwarfed by what Zoom is doing. Why didn’t we all run to Skype for our video chat needs? Why is Zoom winning this race by so much?

Let’s add some epicycles.

Theory 1.1: COVID-19 happened, and Zoom’s just new and exciting!

So we have all these new users, freshly quarantined, and they need a way to make video calls. Naturally, they look in the app store, find Zoom, and that’s the end of the story!

On some level, this must be true too; there’s good evidence that much of the uptick in Zoom interest is from new users (rather than just increased use of existing users) in the last month of so. From Business Insider (note that the article was written on March 24, 2020):

The most clear evidence that Zoom is doing well is its position atop both the iPhone and Android top-downloaded apps charts. 

It’s so popular on mobile that it’s 2nd only to TikTok as the world’s most downloaded app across the last week. During that period, Zoom added “close to 20 million new mobile users,” according to data provided by mobile data analytics firm Sensor Tower.

And many of those downloads were first time users: “Globally, first-time installs of Zoom’s mobile app increased 213% last week compared to the preceding week of March 9, and 728% compared to the week of March 2,” Sensor Tower’s Head of Mobile Insights Randy Nelson told Business Insider.

“Zoom’s mobile app was installed about 3.7 times more than Skype’s and 8.6 times more than Google Hangouts,” he said. 

The comparison to TikTok strengthens the argument: TikTok is for sure just the latest exciting thing in a long stream of exciting things that changes month to month. Maybe Zoom just happened to strike right when it could take full advantage of the worldwide quarantine.

But also…

Except, no, not even close. Zoom has been around since 2011 and has been publicly traded for nearly a year. It was in the App Store next to Skype for all those years, with Skype dominating sales, and suddenly we all go into quarantine and everyone decides it’s time to download Zoom. I mean, they had a pretty big software update in Dec 2019, but who reads about those kinds of things? I don’t think Theory 1.1 is plausible.

Theory 1.2: COVID-19 happened, and Zoom’s just better!

My experience with Zoom has been extremely positive. After years of using Skype and feeling like it was fine, switching to Zoom has been legitimately a happy experience. The user interface is very intuitive, it’s easy to invite friends / colleagues to join a chat, and the connection is extremely stable (feels better than Skype). Zoom has some other features that have been pointed out as possible explanations. Their platform allows 100-person video calls (free up to 40 mins), whereas Skype can only do 50; this is very useful for online classes, now the dominant schooling method all over the world.

Maybe the average person didn’t have any idea which video conferencing app was best. But if they blindly opened the App Store, they are at least as likely to see Google Duo or Skype (which had the most downloads by far of the three). To test this I tried searching in my own app store on my Android phone, using several search terms that seemed like what people might look for.

What the heck is “JusTalk” and why aren’t we using it?

Zoom was more likely to come up for “video conferencing” but was not even in the top 8 for any others; that sounds to me like a search my workplace would make but not that my mom would make. (It’s possible that my phone filters my app store searches somehow but this was the best I could do; try it yourself and let me know what results you get!)

For Zoom to be successful, somebody was looking for Zoom specifically. But my model of the average person is not one that suggests this kind of optimization; people download what their friends are all downloading. And the average person who did not search for “video conferencing” probably did not find Zoom by searching the app store either.

Theory 2.0: My theory is just a story

I can aggregate all the info above into a plausible-sounding story, which may not be true but it helps me sleep at night.

Zoom was already a very successful company, displaying exponential growth over the past few years. Then COVID-19 hit, and everybody went into quarantine. There was a new need for video calling/conferencing: from universities that had to move classes online; from businesses that had to keep their work-from-home employees connected; and from individuals wanting to keep up with friends and family.

The universities tended to choose Zoom for the simple reason that the platform could support 100+ participants where Skype / etc. could not. Businesses, with strong financial incentive to optimize, did some research and found all the stability and ease-of-use benefits of Zoom. So as the institutions started to switch, their employees and students had to download Zoom too. Now Zoom is the new, exciting thing, the app that all your friends have (because they downloaded it for work or school). So a little later, when a new person entered the market, they asked their newly-Zooming friends what to use, and the choice was made for them.

Therefore, in the past month Zoom’s user base has grown exponentially with a much higher rate than before, beating out the competitors in a big way.

The End.

One thought on “Zoom: The Other Exponential Growth Story of 2020

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