Summary List Placement
We all are spending a lot of time in meetings on Zoom or another online conferencing platform. They’re great — until they aren’t. Fortunately, Zoom and its ilk are extensible platforms, which means that third-party companies can add functionality.
Is Zoom a big enough platform to support an entire app ecosystem? Sure, say investors, analysts, and startup company execs. But within limits.
“Zoom already has a large user base with more than 300 million participants,” said Eleftheria Kouri, research analyst at tech market advisory firm ABI Research. That makes it a big enough platform on which to build, and from which Zoom will benefit. “The integration with third party apps is expected to not only retain existing users and accelerate user base expansion, but also unlock opportunities for new use cases beyond collaboration/productivity,” she said.
Software vendors need a big-enough platform to build on, but not such a big ecosystem that a tiny vendor has a hard time getting noticed. Many native OS/2 or BeOS applications were wonderful — and some were outstanding — but there weren’t enough users for medium-scale software publishers to survive. In contrast, from the start, Microsoft Excel supported dozens of extensions, ranging from professionally-designed templates to automatic currency converters to improve marketing analytics.
Zoom’s product and distribution network has plenty of room for growth, said Sara Deshpande, partner at Maven Ventures, a seed fund that was an early Zoom investor. “By comparison, when Apple launched the App store with 500 apps in 2008, only about 10 million people had an iPhone in their hands,” she pointed out.
Those opportunities are exciting developers. “The world is going through the biggest rewrite that I’ve ever seen,” said Phil Libin, co-founder and CEO of mmhmm. “It feels as big as the mainstreaming of the internet was in the late 90s and early 2000s. A multi-trillion dollar disruption.”
Plenty of software companies are tying their success to Zoom — and getting investors. So far, the average funding level ranges between $2-4 million for each startup, estimated Kouri. “For example, Macro raised US $4.3 million and leverages Zoom’s [software developer kit] to add depth and analysis at Zoom meetings.”
Maven Ventures regularly meets with new startups. “We’ve funded eight companies focused on a wide range of areas like communication, collaboration, mental health, fintech, and more,” said Deshpande.
Zoom gets good marks for software vendor support
One positive is that Zoom has made it easy to work with the company, both technically (via its developer tools and APIs) and in business terms (such as listing them on Zoom’s official app marketplace).
“Their APIs and SDKs are straightforward, they provide helpful documentation and a forum for developers, and the process to go live in their marketplace was not difficult,” said Dave Schatz, cofounder at Circles for Zoom. “The biggest challenge for someone considering developing on Zoom is deciding the best entry point for their app and what type of app they want to build.”
That’s not to say that there isn’t room for improvement. As the platform evolves, Zoom will need to invest in tools and programs to support third parties. For example, according to Bizly CEO Ron Shah, Zoom will have to offer developers analytics data to unlock the next chapter of opportunity.
“For example, if Zoom provided audience engagement analytics, such as how long each participant spoke during a call, participant dial-in locations, how long screens were shared, speaker tone, attendee engagement statistics, et cetera, the company would create unparalleled defensibility as a platform and empower hundreds of new startups.”
It’s smart to bet on Zoom — and all its competitors
Zoom certainly wasn’t the first online conference service, though it swiftly became the default option. “Zoom’s name recognition is monstrous,” said Art Schoeller, VP principal analyst at Forrester. “It’s disrupting the others. But they’re not going away.”
As a result, startups have to contemplate how many of their eggs to put in this particular basket. Should they build to a single vendor? “In some cases, if the product in question has a strong dependency on features only found in a particular meeting solution, there may be no alternative,” said Brian Doherty, Senior Director Analyst at Gartner. “Building to a single meeting solution requires the least investment in product design, UX design, and R&D, but also ties the rise and fall of your company to that provider.”
One advantage to software companies sticking with Zoom-only (at least for now) is that Zoom is an independent player. The main alternatives, Microsoft Teams and Google Meet, have much broader business portfolios, said Spencer Greene, Managing Director of TSVC, a Zoom investor. “One of the worries that Zoom takes away or mitigates is the worry about competing with the platform itself. By which I mean, your new startup is much more likely to overlap with Microsoft or Google than it is with Zoom, either now or in future.”
Still, said Kouri, there is a risk for companies that plan to build software only for the Zoom platform — particularly if Zoom makes changes with its API or SDK policy. “We have seen similar API policy changes in the past from other companies like Twitter and Facebook,” she added.
The software companies agree. “This is not a moment for Prezi to be a walled garden,” said Jim Szafranski, CEO of the online presentation startup. “The best creativity tools work seamlessly in all the communication tools.”
“We’re building for all of them — and also none of them — to make sure we have the best reach and the fewest points of failure,” added Libin. Right now, though, Zoom has the most advanced SDKs and APIs, he said, which makes it cheaper and faster to develop for that platform. “This is changing quickly, and I don’t expect that there will be massive differences between the platforms down the road.”
Dancing with elephants
While the market is wide open for Zoom add-ins right now, not every startup will survive.
To be successful, a startup has to provide a compelling offering with a strong value proposition that is intrinsically tied to meeting solutions, said Doherty. “They would also have to have confidence that what they’re building is not in their chosen meeting solution provider’s short or medium term roadmap.”
The vendor alliance and dependency is important. Schoeller compares the situation to a mouse dancing with an elephant. The elephant might stomp on the mouse. But if it climbs on board, the elephant can take the mouse much farther than it can go on its own.
Schoeller divides the Zoom add-ins into three buckets:
- Connecting large platforms. The Zoom connection may be a horizontal integration (e.g. Salesforce) or vertical (e.g. Epic in electronic medical records) for a specific use case. These are two elephants standing next to one other — which doesn’t apply to the startups.
- Serving a discrete market. The add-in may be for a vertical industry, such as tools for educators or enterprise room scheduling. These add-ins are not in danger of being stomped on, said Schoeller, as Zoom (or other platforms) don’t see them as markets Zoom needs to own.
- Tuck-ins. These add some sort of missing functionality in the existing product.
The problem for startups is that many tuck-ins eventually become product features. (A historical example: initially grammar checkers were independent add-ins for early word processors.) For instance, Schoeller said, the tuck-in of recording/transcribing is tending towards becoming a feature. That makes companies like Otter an acquisition prospect — or the elephant will, perhaps, stomp on them.
That’s a positive for Zoom. The startups create more use cases. “The most successful can be acquired by Zoom to be fully embedded into its platform,” said Gary Barton, Principal Analyst — Enterprise Technology and Services, at GlobalData. “This is more important for Zoom as it is more limited in its R&D capabilities/budget than competitors such as Microsoft and Cisco.”
But multiple startups often offer similar functionality. If one becomes the standard for that function (which happens after being acquired by Zoom), the market is squeezed for the others.
The best path for Zoom is likely to be in partnership and integrations with a wider range of SaaS providers — something that it is already doing, said Barton. “Working with major verticals apps in areas such as medicine, professional services, education, and retail will likely offer most value to startups.”
Still, it’s early days — with plenty of innovation yet to come.
“What’s most exciting is the stuff that will emerge over the next several years that is beyond our current imagination,” said Greene. “I guarantee there will be several world-changing businesses that will surprise us all.”
A short list of Zoom add-ins:
Avoma transcribes meetings to searchable text and does natural language analysis.
Bizly helps organizations plan and run engaging, impactful, and effective meetings of any size.
Circles for Zoom turns each participant into a circle on the screen to get Zoom out of the way, so they can take notes, multi-task, and get their desktop back.
Class replicates the feel of school classrooms in a virtual setting, allowing educators to take attendance, hand out assignments, give quizzes, grade work, or talk one-on-one.
Docket is a meeting-focused workspace for collaborative agenda creation, decision documentation, and action item tracking.
Event Farm is a toolset of event engagement applications designed to promote brands and engage targeted audiences at in-person, virtual, and hybrid events.
Frame Therapy connects people with therapists through interactive, therapist-led digital workshops, or via one-on-one matches, with tools for licensed therapists to build and manage their practices.
Fireflies lets you search through a call recording, mark important moments, and transcribe or record meetings.
Glimpse is a social app for back-to-back, one-on-one video chats in a digital room. Among its use cases are speed-dating and hackathons.
Grain allows you to create short video highlight clips of Zoom recordings, transcribe calls, and take time-stamped notes.
Luma helps users customize virtual events using an all-in-one event concierge.
Macro is a customizable meeting interface built on top of Zoom, reimagined for collaboration and inclusive conversations.
Mmhmm adds interactive features to Zoom. For example, you can stay on screen while you talk over your slides, and use a laser to point to slide elements.
Miro enables Zoom users to capture ideas that come up during meetings.
Pledge brings frictionless fundraising functionality to virtual events.
Prezi Video brings visual content onto the video screen like a newscaster or weather-person.
Stream aims to make it easier for people to host events, particularly paid ones, on Zoom.