Over the last couple of months, Covid-19 and subsequent lockdowns have led to a dramatic shift towards remote work tools. Zoom has been one of the biggest beneficiaries of this shift, with daily active users growing from 10M in Q4 2019 to a staggering 200M in Q1 2020. This has also led to a surge of investor and startup activity in the remote work space. As a result, I have received numerous questions about Zoom, from both investors and entrepreneurs. These questions largely boil down to “How strong are Zoom’s network effects?”. While this is an interesting topic to explore, it is the wrong question. The right questions are: “Does Zoom have network effects? And if not, what makes it defensible?”.
