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Welcome to the Video-First Economy

The cloud created a new era in tech. Now, history is repeating itself with video.

Signature of Santi Subotovsky

Rarely has the nature of our interactions changed so profoundly and so quickly. Suddenly, nearly all of our personal and professional relationships are being built and nurtured online—predominantly through video. Following the pandemic, our new normal will look vastly different, as many of the new routines we’ve adopted solidify into long-term behaviors that far outlast the crisis. 

Video is providing a lifeline to companies, schools, and health institutions during the pandemic, as well as their employees, customers, students, and patients. After getting over the initial shock of sheltering in place, many employees have found that they love working from home and are more productive than ever thanks to workplace collaboration tools like Zoom and Slack. Their employers, too, are realizing that remote work keeps productivity high and provides an opportunity to reach talented professionals wherever they live. Meanwhile, SMBs that used to deliver services in-person are now operating over video, giving rise to Video First Services. No longer geographically constrained, these SMBs can scale whatever service they provide, be it tutoring, painting night, or yoga classes. Universities and K-12 schools, too, are being pushed headfirst into online education. Meanwhile, telemedicine, long dangled before us as a perk of the future, is finally coming to fruition to the masses. In short, we’ve entered a video-first economy.

As investors, we’ve seen this kind of seismic shift before when legacy on-premise systems migrated to the cloud. In fact, that shift actually inspired the creation of our firm. The cloud led to the democratization of software and services for SMBs and a renaissance of innovation that has improved countless lives and led to the creation of numerous iconic companies. There’s a difference, though, between now and then: Salesforce led the shift to the cloud to empower salespeople. In contrast, video conferencing providers like Zoom have led this shift to video to empower the world. And, as before, with transformational change comes enormous opportunity. 

Previous shifts provide insight into what's next 

In the early days of the cloud, Salesforce showed the world how cloud computing could provide on-demand access to software to anyone with Internet access. As early investors in Salesforce, we saw that the emerging cloud would be strengthened by both a developer and an entrepreneurial ecosystems built around it. In 2008, we co-hosted a competition with Salesforce to help nurture an emerging ecosystem, investing $1 million in the winning company. That company, ServiceMax, went on to become a leader in its space and was sold to GE for $915 million. That same year we also invested in Veeva, another early adopter of the Salesforce ecosystem. Today Veeva is a publicly-traded company worth over $35 billion. Incredible companies built their businesses on top of Salesforce, SteelBrick, nCino, and FinancialForce, all great companies.

History is repeating itself—but with video at the core

Now, with Zoom, we’re recognizing that history is repeating itself. Just as Salesforce heralded a shift to the cloud, Zoom is heralding a shift to video. Iconic companies are going to be built in the emerging video-first economy. That’s why we co-hosted another competition, the Zoom Marketplace App Competition, along with our peer investors at Sequoia Capital, Horizons Ventures, and Maven Ventures, in order to once again nurture the next big developer ecosystem.

So many great companies are about to be created—just like they were during the shift to the cloud—and as with any market shift, first movers gain the advantage. Here are areas we think are particularly ripe for innovation in a video-first economy:

  • Integrated workflows: Companies can’t conduct all of their business on video alone. They need functional support with marketing, contact management, and payments, among other services, in order to create seamless customer experiences. At the Zoom Marketplace Competition, we heard from a number of startups streamlining the video-based delivery of services for SMBs by offering listings, bookings, payments and community. We are just approaching the tip of the opportunity iceberg, as the world continues to operate in this new normal. Countless other use cases and verticals will benefit from focused video-first integrated platforms.
  • Online learning: The pandemic has shown us that despite the investment to-date, online learning is far from ready for prime time. Opportunities abound at the K-12, higher education, vocational, and corporate training levels to make online learning more seamless, engaging, and customized to instructor and student needs. Today, most educators are forced to cobble together multiple systems for live and pre-recorded instruction, to incorporate features like surveys and highlighting that enhance engagement, to communicate among classmates and between classmates and instructors, to assign and collect classwork, to record feedback and outcomes and to communicate with outside stakeholders like parents and administrators. It’s no wonder that so many educators—and parents—are exhausted by the sudden transition to online learning! 

  • Telemedicine: After decades of discussion, telemedicine is finally coming to fruition as both consumers and health care providers are suddenly prioritizing the ability to manage health remotely. Even after the pandemic, many of us will want to stick with telemedicine for non-emergency needs for its convenience and cost savings. In addition, telemedicine will continue to be invaluable for people who live far away from high-quality or specialized care or who are otherwise limited by mobility.

  • Work from anywhere collaboration tools: The sudden shift to working from home has forced professionals to rely on consumer devices, applications, and services for enterprise use. And this shift is here to stay; Facebook, Twitter, Square, and Spotify are only a few of the companies that have announced their intent to make working from home and hybrid work from anywhere models acceptable long-term policies. There’s a clear opportunity for entrepreneurs to create new tools or enhance existing ones with video embedded in order to limit context shifting and ultimately creating a more seamless user experience. Bringing context into the myriad of collaboration tools we use on a daily basis will create a more effective and also more enjoyable experience.

Despite and perhaps because of the unpleasantness unfolding around us, it’s an exciting time for innovative teams to build technologies that help us not only make the most of our new normal but even thrive throughout it. These video-first innovations will far outlive the pandemic and will help shape the decade to come. We can’t wait to meet the new generation of entrepreneurs building the video-first economy.

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