Grubstakers - [Patreon Unlock] Episode 150: Eric S. Yuan (Zoom CEO)

Episode Date: April 11, 2020

Re release so people have better access to the episode. We use Google Hangouts to explain the rise of Eric Yuan and Zoom video conferencing -- all from the quarantine underground. Eric wants you to socially distance yourselves from his personal history and source of wealth, but we've got the details: burning down his neighbor's chicken coup, secretly recording your conference calls, not adhering to buffet protocol, and more

It's the kind of thing that makes the average citizen puke. I look at this system and say, yeah, you know, what's going on? I don't know anything about this man except I've read bad stuff about him. And I don't like, you know, I don't like what I read about him. We are more than just one coin. We create the world around this coin. Cop. Invention. Cop. Cop. All right.

In 5, 4, 3, 2, the evil has gone. Welcome everyone to grub stakers uh i'm steve jeffries and as always i'm joined by my co-hosts andy palmer yogi paywall uh sean p mccarthy we uh we're coming to you from the underground, from quarantine, ground zero, patient zero. We are all self-quarantined in our respective apartments for the recording of this episode right now. Yeah. We are not on Zoom, but we're all remote. And perhaps it's fitting that we're not on Zoom because today we're covering billionaire Eric Yuan, founder and CEO of Zoom.

We're on Google Hangouts because it's the devil you know. We already know that they're collecting all of our facial recognition or all of our facial expressions and every word we say. And we've already gotten them, so they're probably not going to be too interested in what we're saying now i do like that by using uh google hangouts for our zoom episode we are actually proving why eric yuan is a billionaire because our google hangouts is cutting in and out and lagging and we can't hear each other and we're like why is this guy a billionaire with his seamless video conferencing tech while we're using the past that he's supplanted and we can't even we can't even make our backgrounds an aquarium with little fish swimming around but we can record for free for longer than 40 minutes. I just checked my computer and I have Zoom installed.

I don't even remember putting it on this computer. I don't remember when it got here. It just was on there. And now I'm afraid. Well, I think it is something where we talk for a second about what life is like for us in New York City under this quarantine. But I do think a good rule for life is whenever something bad happens, such as, you know, coronavirus taking over New York City and all these other cities throughout the world, whatever something bad happens, it's a worthwhile question to ask who benefits.

Who benefits? And one person who benefits is, of course, Eric Yuan, the billionaire owner of Zoom teleconferencing uh they've got if you if you uh twitter the guy you'll see he's got all of the twitter results the majority are about these kind of public relations forbes articles a recent one by alex conrad about how he's uh donating his software to for free to all these different schools so that they can learn for free over teleconferencing. And all the stories are like reporting on this. All the Twitter users are just saying, oh, this is so good. This is so great. And it's like, this guy is data mining children and this is just how

it gets laundered. So, you know, we'll talk today a bit about what exactly he's been doing with his software. But we did kind of just want to start with what our respective lives are because we don't talk about ourselves that much on this podcast. Yeah, yeah. So how is everyone holding up? How have your lives changed since, I don't know, probably Mondays when things really started kicking into high gear? I've had cabin fever for 15 years and this is no change to

my schedule i sleep when i sleep i wake when i wake i eat when i eat all that has changed is when people cough uh i look at them funny yeah that's that's more or less i'm in the same boat like since uh getting fired i i've basically been living the way that everyone else is adjusting to. So it's this very bizarre feeling of the world suddenly adjusting to my life instead of, I don't know, I guess the other way around. You were merely raised in the coronavirus. I was born into the lifestyle. You merely adopted the social distancing. I was born in it.

It's actually almost, it's a bit of a relief that like, it's just in its own way that like, suddenly I'm not alone in just sitting at my apartment, you know, farting around, trying to figure out what to do. Like, now everyone's in that boat. I was going to say, it is quite convenient for Yogi that continuing the lifestyle he's pursued for the last 10 years now makes him heroic and selfless and a first responder. A lot of people think staying indoors is cool now, but back in my day, people thought you were a weirdo. Right, like Yogi's not like those assholes going on spring break or going to the beach and getting crowded. No, he's just waking up at two and playing xbox like uh like a soldier in world war ii this

is our generation's world war ii and i think we're ready for it i think the four of us are capable of this lifestyle do you guys see that video of all those dipshits in florida who are like yeah i mean my uh it's spring break you know I wasn't going to cancel but all the bars are closing early yeah they're still partying yeah in voting oh yes

yeah oh man the death count is increasing exponentially every it looked like it was four days, but in Italy, it's closer to about two and a half. And I think the US, it spiked a lot today. And Tom Perez, he's sending out orders to states saying that if they postpone their primaries they're going to lose delegates and with each successive week the death count is going to have uh probably quadrupled if not um another oople that i can't think of and like each time that happens he's gonna look like a bigger and bigger asshole in in Florida, it was people like 65 plus that were way overrepresented, even for them in the voting.

I mean, yeah, it's horrible. And I hope Tom Perez doesn't get away with it because basically what the Democratic Party did was, I mean, they literally sued the state of Ohio for stopping the election, which was a heroic thing the governor there did, no matter the rest of his politics. But, you know, the Democratic Party sued Ohio to try and get these people to vote to give Joe Biden his mandate. And now, as soon as all the votes are counted, now they're tweeting about, oh, you know, all the remaining states should switch to vote by mail. And, you know, Bernie Sanders is killing people if he doesn't drop out, if he doesn't prevent these elections from going forward. And it's just really horrifying. I've really never been so disgusted with the Democratic Party as what they did yesterday with the elections. They should have just said, we will postpone this until we have vote by mail set up. But instead, they got a bunch of people killed, their own voters.

Well, plus the Bernie Sanders staying in the race thing is just absolute bullshit. And they know it because down ballot primaries are still going to continue if he stays in the race. Plus, it's not in his hands whether or not the elections get postponed. He's the one who's saying, hey, this is dangerous. It's a personal choice going out to vote. And he's the one who's saying, hey, this is dangerous. You know, it's a personal choice going out to vote. And he's the one telling people to take precautions, whereas Joe Biden's like, hey, go for it. I mean, not Joe Just, you know, don't, if someone's coughing, keep three feet away from them and you'll be, it's okay. It's fine. Yes, the characters from the movie Weekend at Bernie's are using Joe Biden's body to tell you to go vote.

Did you guys see the video where he finished his speech and then he spaced out and so Jill walked over to him and was like, OK, honey. And he's like, oh, bye. Oh, God. Yeah. My time is up. Yeah. I don't know.

As bad as the Biden and Democratic Party looked this week, I don't think anyone had a worse look than Vanessa Hudgens. My girl fucked up on instagram live like an idiot coronavirus kills careers as well have you guys seen this video of her no uh it yeah it's the most i've seen of her on screen apparently she was in high school musical it's so good i'm going to include it right now. Yeah, till July sounds like a bunch of bullshit. I'm sorry. But, like, it's a virus. I get it.

Like, I respect it. But at the same time, like, even if everybody gets it, like, yeah, people are going to die. It's just terrible. But, like, inevitable? I don't know. Maybe I shouldn't be doing this right now you guys won't hear it but the audience will andy and i are court andy and i are quarantined together which kind of defeats the purpose maybe a little bit i mean yeah yeah we're eventually like if one of us starts coughing we're gonna um i've got a plan to uh double up on the xlr cables

and just put a chair in the middle of the apartment and then we just uh we just yeah there's like a dmz yeah well we'll manage territorial disputes somehow yeah we're doing one of these episodes and then you just hear some coughing and then you hear a gunshot. Well, so I guess we're switching to a three-person episode today. But we should just mention, by the way, as of the recording of this, March 18, 2020, there have been 139 U.S. deaths from coronavirus. Over 150, actually. 150 now, geez. Yeah. So, yeah, these are increasing exponentially. And something I just wanted to point out is if you're familiar

with the Trump Twitter account, Bill Mitchell, you know, a big kind of boomer Trump guy. So every day he's been posting these. Why are we shutting down the entire economy over something that's killed you know x people but every day his number keeps increasing exponentially so i'm just kind of curious how high up there he'll get because he started with you know it's killed less than 100 people and then like the next day he's up to like 150 people or whatever the number is won't it be like a hundred thousand in like 30 days or something those are the predictions i have a um i did i've made a spreadsheet because uh what the fuck else am i gonna do and don't say work on the website um and it uh yeah it looks like by the end of the month we will probably

i mean this is with a projection for doubling every four days, but I ran the numbers on Italy and it looks like their numbers are more in line with doubling every 2.6 days. So this is a conservative estimate is that we'll be at a thousand by the end of the month. And by the end of April will probably be, I mean, it's hard to say how accurate this will be with increased quarantine measures but with the numbers doubling every four days by the end of april we'll have uh 200 000 total deaths is that factoring in spring break no this isn't factoring in anything this is just straight up uh it's not factoring in voting or spring break in florida component for like cancun god it's like a perfect storm in florida right now i just made the connection between all those fucking kids and the election like yeah they're

gonna they're gonna get wiped out um florida is just gonna be the death of us yeah yeah florida is a black hole of terror that only swallows what anything is willing to put into it hopes dreams nightmares it'll take it all well i have a hat that there's uh the only relative i had in florida was my grandmother who was a smoker and she managed to uh beat coronavirus to the punch so lucky yeah i don't have to worry about that there should be like a corona ad that's on a beach and then it's like it's like it usually goes but then off screen someone coughs and that's the end of it there was actually i got an ad on twitter uh it must have been three weeks ago, where it said, coming to a shore near you, and it was Corona Seltzer. It was just as the first cases were appearing in the United States. Maybe it was two weeks ago. This stuff's happening so fucking fast. But it was the worst timed ad campaign that they could have managed.

I'm just imagining that entire marketing team walking into the sea. If they had any honor, they would. Have you guys picked up any new hobbies yet? Are you improving yourselves? Are your lives slightly better in terms of your intellectual pursuits? I'm actually cleaning my apartment. I just now cleaned the sawdust off of my at-home weights that I bought on a lark three years ago. And the sawdust was from when I built my couch about a year and a half ago.

So I'm like, all right, you know what? I'm going gonna get jacked during the during the play that's my goal yeah yeah cleaning the sawdust off your weights is almost lifting your weights i mean he saw them he found them i had to pick them up to clean the dust off that's true that is one rep so you're you're on you're well on your way it's it it was six six reps uh four 10 pound reps and two 25 pound reps i do think like when the the hysteria of right now passes there are going to be a lot of like the coronavirus diet type of bits like it's going to be, you know,

I think that estimates currently have it at about 12 to 18 months on this whole thing playing out and how it's going to happen. But I suspect within now and two years from now, there's going to be some bullshit like, lose weight on the coronavirus fucking thing because this country is so desensitized

to terror in this fashion like you can see somebody get like robbed or punched in front of you you're like oh my god that's terrible but when you hear about global type of pandemic or terror it's harder to visualize mentally so you just kind of go like i mean i guess a fucking thousand people are dead i don't you know i don't know what's going on like it's it's too easy to forget that behind these numbers are real people well i think it's going to start hitting home really fast and what i've been thinking about a lot uh these last couple days is um on national geographic they have uh they had these documentaries that are uh natural disasters. I don't think there's any narration. It's just told from people's home videos

of the natural disasters. And so there's the tsunami in Indonesia. And I think they also have the tsunami in Japan. And then they also have Hurricane Katrina. And the Hurricane Katrina one starts with these just like bros hanging out in their house. And they're like, all right, man, hurricane's coming. We got a fridge full of beer.

Check it out. And I'm pretty sure that's where we are right now. We're just like, hey, man, I just learned to knit. Can you believe that? And then, you know, in about about a month it's going to be bodies in the streets and it's gonna be like a holy shit right this is the stage of titanic where we're dancing in the lower decks but we're yet to see the water that's slowly going to come up and drown jack yeah yeah exactly but then later later it's going to be like children of men shit.

Yeah. Well, like, that's the thing is like, I mean, on the humor aspect, like, first of all, like, I could see this, I think it will be significantly worse and more traumatizing than 9-11. Like, once everybody has somebody they know who died of this shit, like, that's going to really solidify it in their minds and because like look i'm hoping that we do the best we can for mitigation but the other thing is the best we can for mitigation according to like one study is shut almost every non-essential service down for 18 months which will create a worse than great depression level depression unless the government gets its shit together and starts sending out checks which i'm not hopeful about the u.s federal government

getting its shit together anytime soon so this is gonna be a fucking nightmare one way or another i mean yeah i mean looking at these numbers in a month and a half it's gonna be a 9-11 every day like that's what we're looking at right now wow terrifying terrifying and chilling sean why are you hard yeah do you guys also see that uh one of the biden reps uh made a statement where he's like america keeps voting we voted through the civil war we voted through the Civil War. We voted through the Spanish flu. It was like, of all the options to pick, it's the one where voting unequivocally made it worse. That was literally the official Biden Twitter account.

Yeah. Oh, my God. The Spanish flu. They brought that up. Yeah. You know that really smart thing we did voting during the spanish flu which killed more americans than world war one the thing that was over where we had a hundred years to learn the lesson oh man a hundred years of scientific advancement uh epidemiology

just yeah fuck it. Go vote. Andy, a hundred years ago, we didn't have Zoom technology to teleconference our thoughts and feelings and terror to one another in the comfort of our own homes in our smelly underwears. Mine aren't smelly. I did my laundry today. But I guess, should we talk about a man who is doing well with this quarantine, better than the four of us, better than almost anybody in the world, really? You know, Zoom Technologies has, you know, kind of been treading water stock-wise, but you compare that to the total wipeout everywhere else in the market, he's actually doing quite well. And a lot of analysts are recommending him as a buy stock so he's gonna probably make

money on this thing yeah yeah i like that um there's actually a there's so zoom the actual zoom stock is its stock ticker is uh zm there's another company that's completely unrelated that has the ticker z o o m and people have been mistakenly buying it. So this company was like, I think it filed for bankruptcy like two years ago or something. Otherwise, it's just like completely unrelated to Zoom. It's just suddenly also experiencing some success.

Yeah, I meant to mention that three out of four of us are recording this on a zoom recorder which is also completely unrelated it's just that tech people have run out of words i blame mazda for their zoom zoom campaign you do wonder like uh how many other zoom companies are getting accidental accidental infusions of cash from people in their robhood apps who just don't know any better. Like, all right, we're going to make it through the quarter because we chose the right name, apparently. Good.

Yeah, so let's look at this guy's backstory so eric yuan um just to start chronologically um i thought i actually found it humorous that um i you there are these basic facts about his life that you cannot find at least in english media such as his birth year so all you can find really is that he was born in either 1969 or 1970, which would make him aged 49 or 50 and in Shandong province, China. And he was the son of two mining engineers, um, whose names are never given,

at least in English sources. Uh, and this is from Forbes. He has like a funny little story about one of his first sort of like business dealings when he was a kid. And Forbes writes, Yuan's first entrepreneurial act. For Yuan's first entrepreneurial act, he burned down his neighbor's cottage. The son of mining engineers in China's eastern Shandong province, in fourth grade, Yuan started collecting construction scraps to recycle the copper for cash. And when this young hustler discovered the facility needed only the metal, he tried to burn away the extra material in a chicken shack behind his neighbor's house to his horror firefighters had to come and put

out the blaze yon says with typical understatement my parents were really upset yeah his his like uh paper route story seems to be equivalent to stripping copper wire to buy crack yeah like right out of the the walls of his neighbor's house apparently what a fucking mook i just wanted to back up a little bit and talk for a second about his parents being quote-unquote mining engineers because again you know there's very little detail of these people but i did find this from the china labor bulletin uh people should know you know mining in any country is a very dangerous job it is a dangerous job in the united states but it's certainly more so in china so just according to the China Labor Bulletin, just under 6,000 Chinese miners died in mining accidents in 2005. And then this is like well after his parents were working.

You know, he was born in 69 or 70. So this is, you know, after four decades of labor conditions improving in Chinese mines. And just according to the Chinese labor bulletin, since 2005, the number of worker deaths and serious injuries in Chinese mines has decreased, but this is not because of any increase in safety standards. It's just the fact that all these Chinese mines are closing. And, you know, something we can't really, we talk about fairly regularly is that in China, there is no independent trade unions. There are no independent trade unions. There's one Communist Party trade union, which is loyal to the government.

And, you know, it's not going to help workers if they're being fucked over by management. That's because the government is run by workers. Yes. I'm just going to quote one paragraph from the China Labor Bulletin just about mining conditions in China well after his parents were doing the job. Quote, government officials, the China Labor Bulletin advocates giving workers independent trade unions in China, unsurprisingly, whereas they say, quote, government officials, however, plan to continue emphasizing coal mine inspections and mine consolidations as a means of improving safety. However, inspections and fines rarely lead to an improvement in work safety.

Government interventions are commonly seen by mine owners as an additional cost of doing business and do not inspire any meaningful change in the work safety culture at the mine. And this roughly translates to government inspectors will show up sometimes and you just give them a bribe and they'll go away or you just have you know fake little potemkin uh safety rituals for the inspectors so you know it is just something to think about where it's like this guy got his startup capital from his parents being the people who uh sent workers to their deaths to uh harvest whatever it is out of the earth, whether it's probably coal. And to be fair, now he wants to make sure that workers can be sent to death in the comfort of their own home. Yes.

If only those miners had Zoom, they could have been saved. They could have telecommuted to their mining jobs. So multiple sources said his parents were mining engineers. So I don't know if that means that they were in the operations of a mine or they were more sort of professional class. The story about him stealing copper from neighbors leads me to to believe that i don't know maybe he did have like a humble upbringing who knows i think that with masayoshi-san there was a story of him having to struggle and beg his neighbors for chickens for scraps of food to eat so oftentimes with billionaires uh from asian countries there's this you know folklore about them having these

humble roots i'm not saying that er Eric Yuan did not have meager beginnings, but I'm saying that a man that was able to apply for the U.S. visa for over two years and not be forced to give up is a guy that might have a back end that could support that network for him. That's true. And even if he did have a humble upbringing, which is entirely possible, there were changes in China around the 70s and 80s. Like China neoliberalized like a lot of the world.

And there are a lot of people who came from humble upbringings and then made a shit ton of money. It's not really a question of, did they have an easy childhood? So much as like, did in their process of becoming rich, they leave everyone else behind and kind of, you know, take the opportunity to wildly profit while everyone else in their country was still left in poverty. Yeah. And also just to pick up on what Yogi said about the visa, another part of Eric Yuan's kind of origin story is he talks about applying for the U.S. visa eight times. Like he got denied for the visa seven times, and then he ends up in California in a tech job on his eighth try to get the visa. And again, it should just be noted, we don't know for sure how humble his origins were, but generally the people who have the money to apply for visas

have a bit more money, and it's not uncommon for bribery to be involved in terms of securing a visa from China to get to America. So I'm going to assume that relative to his neighbors, his parents were well-to-do enough to send him to college and to get his visa through. So jumping back slightly from the visa story, he went on to study. He got his bachelor's from Shandong university of science and technology um he earned a bachelor's and a master's in applied mathematics and computer science and he got married during while he was a master's student um to again someone whose name i can't find i don't know if you found it no i tried looking up as. I could not find her information at all.

The only information I could find was, and I'm jumping ahead a little bit here, but the reason he created Zoom was he had to take a long train ride to his wife during college, and he would have trouble talking to her. So that was the seeds of the idea. They always have to have a story

when it comes, every Silicon billionaire has to have a story for like, oh, I was waiting for a car, but it took too long, so I decided to destroy all labor law with Uber or something. Yeah, I've heard him,

I've heard Eric tell this story in some interviews where he says that he was in college dating his girlfriend now his wife and then he was taking these 10 hour train rides to see her and then he'll say in interviews this is where i got the idea for zoom but this is like what 90 uh early 90s this is like basic era internet it just i mean it seems totally like something he made up instead of just saying yeah i was working for a video chat company and i got the idea to improve their video chat software

you know yeah like that's that's that's the thing too is like it yeah video chat didn't exist he could have called her on the phone and it's not like he's going to get laid over video conferencing once he finishes up his master's degree and also marries his girlfriend at some point during that that degree um he's able to eventually land a job with um some of the founding engineers of a company called webex inc and i actually use WebEx for my job. It's another, it's like a shittier version of, of zoom. Oh really?

Yeah. And like, this is, uh, even though he, uh, apparently worked, uh,

day and night to get web, WebEx, uh, revenue, um, up to about like 800 million. He worked as a consultant and would hear people basically shitting on WebEx and said like, man, I think I could do this better.

But I also don't have enough money yet. Yeah, so his story about this is that he spent all this time trying to get WebEx to work on the cloud, and apparently no one there listened to him, and so he decided to push off on his own and make his own cloud-based video conferencing software. And then, of course, WebEx. Excuse me. And then now the line is that WebEx is trying to make themselves more like Zoom and they're sad that they ignored him and lost him or whatever. And so there might be some truth to that uh that ultimately

his suggestions were ignored i think webex is run through cisco yep oh yeah uh we we jumped ahead a little bit but um webex eventually would get bought by cisco systems and that's that's basically where yuan gets a lot of his seed capital and like the the business relationships that he would need to go on and fund like the initial rounds of um of like seed capital for zoom yeah just to to give the timeline for people keeping track from the Alex Conrad Forbes article, he moves to the U.S. to California in 1997. He joins Webex. Webex, as part of the dot-com boom, goes public in 2000. And then in 2007, it's bought by Cisco for $3.2 billion.

And then soon, Cisco makes Eric Yuan their lead engineer. They set him up to lead WebEx's engineering group, Cisco does, after they buy WebEx. Right. And there's a middle point here where there's a Goldman Sachs connection. If you go on WebEx's Wikipedia page, it talks about how there was a securities fraud investigation initiated by the SEC and by various state attorney general offices. Goldman Sachs faced charges of issuing unfair research, including coverage of WebEx and IPO violations for the period 1999 to 2001. Oh, yeah, that's actually part of something we've talked about a lot. The initial dot dot com pump and dump, which you can of course look up. Elliot Spitzer was Attorney General of New York.

He sued the big banks as part of this for essentially pushing their own book where Goldman Sachs and all the others would have these researchers on TV being like, hey, buy WebEx. You know, it's going to kill it this quarter without disclosing that they have a business relationship with WebEx, you know, without caring about the fundamentals at all. They were just pumping and dumping to retail investors. Right. It goes on to say that WebEx management allegedly dictated to Goldman Sachs analysts what the research should and should not include. WebEx maintains the management's information was correct. Well, of course, WebEx does. But I mean, Goldman Sachs is a part of the tech bubble and uh their you know consequent reign for the next two decades that happened after this right and of course that continues to the present

day where you'll have goldman sachs and these others who are the same ones ipoing you know uber or whatever else where they just kind of dump it on the retail public and then it loses a ton of value and they don't care because they've already cashed their uh underwriting fees and they've probably gotten out of the stock pretty early so you know they're the it's the same thing they were doing with the dot-com bubble is what they're doing today with all these uh unicorn companies that have no way to make money by the way you're looking for a good time uh look up lift stock and then just keep zooming out on the time i mean it is like we don't really know what eric yuan did with with his stock but you have to imagine you know this thing ipos at 2000 right before the bottom falls out so if he's smart he sold it off and made a ton of money on just a

totally fake valuation of webex and you also have to think that with all these billionaires, the connections made via, I mean, specifically Goldman Sachs, but just the industry itself is often what fuels the investment period for the seed money for their next companies. And he mentions when it comes to starting Zoom that some people were like, no, that's not going to work. But then others were like, oh, invest in that. And it's like, you know, if you know multimillionaires,

eventually you'll raise the money you need to make a product that you know how to design. Yeah. So he said that in when he first left WebEx and begin getting together the Zoom team, like before it went live, like he said over half his time was spent collecting 250 000 checks from friends from webex or like people who former webex employees knew and like you know in uh basically convincing them this that this had merit and it was also you could pay about 30 engineers uh some of them from China, to work on this idea. He said, quote, to create better technology for video communications and then figure out what app to build on.

And later on, one of the early investors for Zoom was the former WebExx ceo subra er and it gave him who gave him three million dollars for the startup so it just shows like his he has like i mean when he was at webex he was managing a department of 800 employees so like he has a ton of connections from that that time one of his early investors was actually Li... That's right. Li Ka-ching. Yeah, I did have something on that. Li Ka-ching is...

We did an episode on the Hong Kong protests, which also talks about Li Ka-ching. Yes. Of course, he's a a hong kong tycoon who made his billions primarily by just being like one of the few people who owns ports in hong kong one of the few people who owns you know most of the grocery stores there it's just like impossible to live in hong kong without putting money in his pocket and something we didn't discuss on the episode that i did want to just mention here is I found this article by Charles R. Smith of World Net Daily,

and it talks about Li Ka-shing's connection to not only the Hong Kong triads, but the Bill Clinton administration, the Chinese government, and Goldman Sachs. Whoa, triads? I'll see you later. But yeah, just from that alex conrad uh forbes article we've been quoting from uh one of the earliest investors after the initial ones was li ka shing's horizons ventures put about it put about 6.5 million u.s dollars into zoom so you know it's it's relevant like, some of Zoom's earliest capital

came from essentially Chinese triad-linked money. Yep. Yeah, so I'll just quote a little bit here. Basically, Li Ka-shing met with, in 1997, William M. DeLay was Bill Clinton's Commerce Secretary at the time. In 1997 was William M. DeLay. He later became Barack Obama's Chief of Staff. In 1997, he attends in Hong Kong a luncheon with Li Ka-shing hosted by Goldman Sachs. This was a talk between

Li Ka-shing, William M. DeLay, and several quote-unquote influential business people. And this was held on Goldman Sachs' boat called the Monkey's Uncle during a 1997 Hong Kong trade trip. Wait, what was that again? The boat is called Monkey's Uncle. Oh. I was hoping it was Maltese Uncle. Because that's a very powerful visual. But so, you know, just to kind of go through this for a second here, these are documents that were released

by the Commerce Department. It shows that William DeLay and Li Ka-shing, they meet on board this boat, Monkey's Uncle. Again, hosted by Goldman Sachs. They meet on board with some of the leading Beijing-owned businesses, including two directly associated with the Chinese army, as well as some other quote-unquote influential business people. The guest list for this lunch cruise, among them are figures such as... I'll bet they're influential. Among the figures on this cruise are Raymond Kwok,

Robert Kwok, and Canning Folk. You can pronounce them yourselves in your own time. But basically, these newly... I'm just quoting from the report here newly released documents show that alleged organized crime triad gangsters were included on this 1997 voyage of monkey's uncle according to official u.s commerce materials secretary delay sailed on a paradise cruise from hong kong with the who's who of triad mob families according to a recent biography of lika shang he has a partnership with two leading members of the who of triad mob families. According to a recent biography of Li Ka-shing, he has a partnership with two leading members

of the Asian triad organized crime families, Robert Kwok and Henry Fok. And Li Ka-shing formed China International Trust Investment Company with them. And this company has also worked with an investment firm that is a front for a arms manufacturer owned by the Chinese army. And the Falk family, again, Robert, or Caning Falk, the Falk family is, the leader of this family is a member of the 14K Hong Kong Triad. And so basically, you know.

That was that Ben Stiller movie, right? Yes. hong kong triad and so basically that's that ben stiller movie right yes uh and uh robert quok kwok who is also on this boat leads the quok family business and is allegedly involved in the heroin smuggling business inside burma and commerce secretaryay apparently met him in 1997. And oddly enough, Peter Kwok, again related to this heroin smuggler, was a business partner of Senator of California Dianne Feinstein's husband, Robert Blum. to you is that goldman sachs the bill clinton administration and uh the zoom investor we're all on a boat here with the hong kong triads discussing business in east asia and this guy later went on to be barack obama's chief of staff fucking cartoon names monkey's uncle quack ka-ching michael m delay i mean what the like you know this entire idea that the elite are somehow more capable and more intelligent than us the fucking boat's name is monkey's uncle what what what and that's not like a translation is it that it's literally just monkey's uncle that's

uncle man i'm fucking i i do just like that there's like somebody at goldman sachs it was like look we named the boat monkey's uncle We have to have triad leaders on board. You can't have that name and not invite the Hong Kong triads to lunch on your boat. It's a boat that grants you a wish. But when each wish is fulfilled, an uncle is involved. But yeah, I mean, so and it is just something where you can listen to our lika shing episode if you want to hear a bit more about him but uh anybody who's like seriously involved in controlling the ports which lika shing does control the ports in hong kong he apparently owns a port in i believe

the bahamas as well but anybody who like owns the ports at least has a tertiary adjacent relationship with organized crime because you know this is how heroin and people and everything else come into various countries you got to go through the ports and that's where the zoom startup capital the 6.5 million came from that made your uh your uh much smoother video teleconferencing uh technology yeah was it worth it technology. Yeah, was it worth it? Your kids might be able to learn, but they're in a world where there's more plentiful heroin.

Okay, so it's two heroin dealers, but they're doing a teleconferencing drug deal in the interest of coronavirus. So one of them's like on the Zoom call, like, you got the stuff? Yeah, I got the stuff. You got the money? And they're just like holding up the suitcase and the drugs and showing it to each other one of them like the background is just like an apartment and then the other guy's like you got the stuff and the first guy's like uh yeah and then suddenly like kilos of heroin appear behind him they use they use vinmo or something one of them's

one of them's a fat he's like fbi and he changes screen to like seven cop cars rolling in as a bit of background one of the um part of the reason that Zoom took off is that one of the things that admittedly Eric Yon identified as an issue was the difficulty in setting up different video conferencing programs, at least on an executive level or on a level that you would use for business and not just like, you know, chatting with your podcast hosts. And one of the things that he really identified was just the difficulty in getting something that is device agnostic, which means it doesn't need to have like all these special setup protocols for different kinds of devices, different kinds of phones, Mac, Linux, Windows, those kinds of things. And so part of the appeal of Zoom is that it largely is device agnostic in that way. Once you install it, you just need to click a link and that starts up a zoom chat and the way that he did that is it's said that it works on the cloud um and part of that is at least on max what that does is it means that max have a server um that is installed by Zoom that is a local server on your computer so that when you start up

a Zoom call, it runs it through that server. And apparently, having a dedicated server on your computer is a huge security vulnerability when it's connected to the larger internet. And so one incident that occurred is that in setting up this server, Zoom was trying to bypass a, let's see, they were trying to bypass, um, this thing that happens where if you started up, there will be a, on a Mac, there will be a dialogue box asking you if you want to open zoom. This was like installed into Safari. And so in order to circumvent that, uh, uh zoom built a backdoor into max that was consistent with malware uh so that it would just start up automatically and in an unprecedented move apple had to issue a patch that would uh that actually canceled out the kind of malware backdoor uh made Zoom. It was just like they intentionally hacked the backdoor of Macs in order to just make their product appear a little more seamless.

And one of the other aspects of this bug is that when the server is created in your computer, at least in Macs, most of the stuff detailing this is about it happening on Mac computers. And so I don't know if it happens on Windows or Linux computers, it might. But once the server is installed on your computer, if you uninstall Zoom, the server will remain,

which is itself also a major security flaw. And apparently a lot of the people who discovered the security flaw, they had to go public about it because Zoom had a bug bounty disclosure program, which is pretty common for a lot of software companies, where if you find a bug, what you do is you can go to that company and say, Hey, I found a bug. Um, I'll tell you about it. And then they'll be like, okay, cool. And we'll software company. Uh, let me take that again. Um, so zoom has this, uh, private bug bounty program and the, it's pretty common amongst software companies where uh they'll say hey if you find a bug in our programs uh you let us know so that we can fix it and so that it's

not you know just uh out amongst hackers uh and then we'll pay you a chunk of change for your service. And a bunch of people had to publicly disclose these bugs about Zoom because apparently Zoom had an NDA that people would have to sign for their bug bounty program, so that even after Zoom publicly acknowledged the bugs, the people who found them could not discuss it in the event that say zoom didn't actually patch it up just they just announced that they patched it up and they they after this came out of course zoom said oh we're changing the program now it's going

to be a public bug bounty program um which is obviously you know a case if it's easy to apologize then ask for permission which is also the case with the uh backdoor and the um the server that you can't uninstall is that it's it was just a thing where you know they wanted it to um they wanted it to look really flashy so that uh one of the things that Eric Yuan, when he was showing it to a bunch of companies to try to make it the industry standard, is he would say, hey, here's how you install Zoom, and then I'll give you my pitch over Zoom. And so if you remove the number of steps to install Zoom, and it looks really easy to install, then you're going to secure install then you know you're

going to secure that deal or you're more likely to secure that deal and people are going to ditch webex or whatever they've been using before that and so um it it worked but in the process it it made it easier for um uh people to be able to uh hack, hack into computers. Like it's, it's possible for people to hijack screen controls, um, through zoom, which bypass, uh, screen control permissions during, um, screen sharing. And, uh, people can also hack into other individuals, chat messages and, uh, do what's called spoofing where they send a chat message under someone else's name and so it the in order to basically make his pitch to a bunch of dumb business people they they really just like compromised a bunch of security protocols built into computers i was watching a

video on like how to use zoom and people in the comments were like i'm here because like my school or my office because of corona is going to be using zoom and one thing that made it clear to me was that that the story of him asking his consumers hey what sucks about this seems to be the number one priority in a software like zoom because most often video conferencing apps or software is like you know on the bottom of the priorities of the company making it like you know facetime was not i you know apple's first priority and neither was uh i mean microsoft eventually bought skype but but so every other company that's done it in the past has looked at it like it's a thing that we're going to do eighth. And Zoom basically has made a – Zoom has done a better job of informing their customers how to use the product and making it so that it seems more seamless.

But I do think that, like, all the other ones aren't nearly as shitty. They just don't give a fuck about the infrastructure behind them yeah there's also uh zoom has some uh nifty tools for your boss uh one of which is a attention tracking uh and this is from input magazine and zoom has an indicator that points out when a participant doesn't have the app in focus for more than 30 seconds. For example, like you're in a conference and then you click the app into the background. So maybe you're still listening to it, but you're also getting some work done on your computer. If that happens, Zoom will tell your boss.

Yeah. Let's see. The Electronic electronic privacy information center filed a complaint to the federal trade commission about this issue on july 11th 2019 and uh they said that this constitutes unfair and deceptive practices in violation of the ftc act and uh oh and they also noted that um some of these services were intentionally designed to bypass browser security in order to remotely enable a user's knowledge without their knowledge. Let me take that again. The service was also intentionally designed to bypass browser security in order to remotely enable a user's camera without their knowledge or consent. Oh. Yeah.

I like that your video conferencing software is snitching on you to your boss. Just the worst brown noser in the office is my video conferencing software. Yeah. Why does it have to be brown? Yeah, it should be noted also that um sales force you know like the the huge company invested in zoom prior to the ipo like the staffing company oh staffing company yeah yeah like the staffing hr um like uh enterprise management company so and then i mean webex webex is used by i mean the fact that he came from webex uh it's not surprising that he would also

love building all these features for bosses to monitor your your whereabouts in the office yeah by the way also uh if you use slack uh check in on what plan your office has because if they're on the top premium plan your boss can read all your messages what yep yeah just a just a a little note for all the slack users out there i had to uh double check that because during some issues at my old job, we made sure to switch to Google chat. At Blurn. At Blurn. Well, that's the thing, you know, and we'll spend a second on this here because, you know, Zoom is at least by their own terms of service, kind of a privacy nightmare. So there is a similar thing. i found a mashable.com article which talks about you know this chat reading theoretically zoom can also dump your

your chat logs to your boss uh like there's nothing that says they can't do that even like if you're in a conference on zoom and dming another employee on text message uh zoom can theoretically just dump that to them and i I'll just read from this Mashable article real quick. Zoom offers paid subscribers the ability to record meetings to the cloud. A recorded meeting, as you might imagine, comes with added privacy risks. For example, an executive not even on that Zoom meeting could later listen back or even keyword search a written transcript of that call at a later date. What's more, recorded meetings also store typed chat messages and allow the meeting host to quote-unquote receive a text file,

a txt file, with the transcript of in-meeting chat messages. Notably, Zoom's support page knows that quote, for webinars, the saved chat will only include messages from the host and panelists to all participants. What that suggests but doesn't clarify is that for non-webinar slash standard meetings, your person-to-person chat messages would later be sent to your boss after a call recorded to the cloud. So again, if you're on a Zoom chat for your work, be careful what you type in the box, because even if you're chatting with another employee, they're probably snitching you out to your boss there. Also, when it comes to Zoom's privacy policy, they kind of talk about whether they may collect personal data from or about you when you use or otherwise interact with their products,

which is very vague wording. They also stated when asked if they uh sell your personal data they replied depends what you mean by sell uh and they eventually conceded that they do sell your personal data to quote improve your advertising experience which is kind of weird for a company that isn't connected to uh an advertising company or it's not it's not like google where you know you don't pay them and so uh they there's like the implicit agreement that there's going to be ads there which is in itself sleazy but like zoom does not even state that they do advertisements. They just kind of, unless they're pressed on it,

which is also interesting to take into account since it's used by children now. That's right. But yeah, that's what we mentioned at the start of the podcast. There's a new Forbes article by Alex Conrad about how Eric Yuan is such a hero because he's giving the software away for free to K-12 schools so that they can keep learning during coronavirus by, you know, teleconferencing their lessons. Which is like, okay, one, this is a great PR move for him that gets him all this great publicity. But two, yeah, he can sell their data and collect their data, both of the students and the teachers. Like this is a money making opportunity and nobody's talking about that. There's going to be a burst of ads for things titled Big Chungus.

Just in case you weren't worried enough about Zoom, I guess for our leftist viewers, I don't know about any other dsa listeners but in my chapter we use zoom for probably 80 of our video conferencing and uh i mean as you just heard like uh it's recorded i mean in in theory they have pretty much all of that possibly recorded somewhere. Yeah. And they can draw upon that for advertising or who knows what. Yeah, I mean, if things get more fash, you know they're going to start dipping into that when they need to start eliminating leftist threats. And of course, that's not just a Zoom problem. Google, you know, we're using hangouts now.

They do it. Yeah. I'm sure Skype does it too. So there's, unfortunately there's not like, I mean, there's not really a safe alternative. Yeah.

For, you know, like a socialist organizing. America, what a country. That shit keeps me up at night. Sometimes thinking about how many hours of sensitive planning they can, in theory, some Zoom engineer

could just take from us. Yeah. It's going to be fun getting tortured. Right. Get ready for the surreal experience of an FBI agent playing your Zoom conference call back to you. You go in for a job interview, and then you're giving your three weaknesses, whatever. And then he interrupts you with a Zoom call from your DSA working group.

The Grubstakers crew gets brought in by the FCC and the NSA and the FBI and Google. And they're like, you know what? You've done 16 episodes teleconferencing and we need to tell you guys, you guys got to cut it with the drops, okay? We're tired. Honestly, we like the content, but these drops, too much. We just can't. And Yogi, that brain donkey laugh,

you got to cut that out. I just, you know, I'm trying to listen to this podcast to learn about billionaires, but you really got to, and we're all like Shaq, we're being waterboarded. Right, I was going to say,

we were like, you really had to waterboard us for three days to tell us that? I mean, you could have just left an iTunes review. We might have listened. Now it's standard operating procedure. They're going to lock us in a room with the lights on all night just blasting, suck it to me, suck it to me, suck it to me. Our eyes wide open.

Drops are not good. Drops are bad. Drops are not good. Drops are bad. Does Zoom have end-to-end encryption as an option? I don't know. Andy?

I don't know Andy I don't know what's going on on your end you guys alright we're just trying to plug in the battery to my laptop but every single

outlet is being used by something well yeah what can I unplug I like how Sean and I were doing our grub stakers torture bit

while you guys were figuring out how to figure out this laptop problem because I saw you guys struggling and I'm to figure out this laptop problem like i because i saw you guys struggling i'm like maybe i can like squeeze my way through this but i was like we should probably just pause for a moment but um sean so we got his i think the irony is we're unplugging the shredder to to juice steven's computer

nice one one thing that's interesting about uh uh zoom well yeah they when they started they uh hired 30 engineers and most of them were in china because uh simply they didn't have to pay them as much and i guess uh there's the added advantage that because eric on uh because you know mandarin is his native language uh he doesn't have to go through a translator to yell at his engineers. But another funny thing that happened is, like, you know, we talk about monopolies. Zoom had an outage in January, which they blamed on Amazon Web Services because they had been using them at a back end. And I just should add that if that happens to our website, whenever that comes out, we will be using the same excuse. Right. And just to pick up on that

engineers in China thing, you know, we talked about it earlier, his first 30 engineers that he used his startup capital to hire, you know, many of them were, at least some of them were in China. Today, according to Forbes, Zoom employs over 500 engineers in China. They also have engineers in Malaysia. Small irony, as of September 2019, Zoom is banned in China. So these 500 engineers are working on a product they cannot use. But it is something to just highlight this again. In China, there are no independent trade unions. You can get an engineer for probably a little more than half, a little less than half of what you would have to pay to work in California. And clearly Eric Yuan is rich enough that he has connections with the government. And these engineers are probably doing the typical Jack Ma 12-hour days for very meager wages and, you know, a boot in the neck if they complain or try to improve their living conditions at all. A lot of people don't know this, but Malaysia is Spanish for bad Asia. The more you know. Asian malware. The FBI waterboards Yogi an extra day just for that joke.

Like, we get three days. Yogi gets four days. But yeah, as Andy indicated earlier, on Zoom's official website, the frequently asked questions, if you ask, does Zoom sell personal data? The first sentence of the answer is, depends what you mean by sell, unquote. So we should just kind of really drive that in there, that when you see that, the answer is yes, they do sell personal data. But I just wanted to highlight the Reddit board rprivacy. Somebody there asked about using Zoom, and one of the users there just pulled up their privacy policy. You can find it at zoom.us slash privacy. And if you go through it, it's just quote unquote collection of your personal data. We may collect either as controller or processor the following categories of personal data about you when you use or otherwise interact with our service. And it's, you know, a long, long list, but I just wanted to pull a few things out of there. Whiteboards, whiteboard content, snapshots, background images. This means that

if you put up a whiteboard on your Zoom meeting, they'll take a picture of it. They can sell it. They can do whatever they want with it. You you can go through all that meetings, meeting title, invitation content, participants, who's in your meeting. They can track that. They can keep that information. They can sell that. Meeting link, date, time, duration, activity recorded, joining and leaving, yada, yada, yada yada yada so the point here is like and again this is like a very long very disturbing thing that perhaps you know we'll we'll link to on our website if you want to just go through all the different things they keep but the point here is when we hear that this guy is you know giving this

away for free to school children that should disturb us that should not give us a wow this is so you know philanthropic of this guy to give his software away for free during coronavirus because he's making money on this. And, you know, it's kind of horrifying to think just what kind of data mining he's doing on our nation's school children now. It's long and disturbing how Eric Yoon's wife describes him eating butt. Of course, another irony is my my old job you know when people left or got fired they would just threaten to sue left and right over proprietary information or you know with a very broad definition of what uh releasing proprietary information was at the same time absolutely everything on zoom uh going into you know zoom

servers uh possibly getting sold you know they don't give a shit it's it's it was just um you know threats to keep people from saying bad things about uh blurn um and i i should mention before we run out of time, I have an anonymous source hooked me up with the information that apparently Eric Yuan, he likes to touch all the food at the company buffet, like just grab stuff with his hands, you know, not use little tonsils. And apparently he said something to the effect of quote unquote i pay for all the food here i can do what i please which is not an exact quote but it's just kind of an odd thing i guess andy was saying michael bloomberg did something similar with pizza yeah yeah there's i mean i guess this is just a billionaire thing is if you uh you can find video of mike bloomberg

at one of his campaign uh places just walking over to a table with pizza ripping off part of the pizza uh putting most of the slice back in the box then eating his little chunk and licking all his fingers in the most disgusting way you can imagine the fact that he does not have coronavirus baffles me every single day he's probably in bermuda right now if you get rich enough you just think you own every buffet yeah um and it should also just be mentioned you know zoom like basically every company in the valley use is quote-unquote. So like all these companies, you know, Microsoft, Zoom, whoever, they have these contractors who are basically second class employees. So you have the regular employees and then you have the contractors that you can kind of hire and fire

at will. And, you know, Zoom uses contractors for janitors, cooks, but also admins. Some of the IT guys are contractors, you know, event staff, AV, catering. So they use all these contractors. And the rumor going around, and we'll see if it plays out this way, is that because of, you know, the coronavirus recession, all these contractors are going to get fired with no pay. And so it is something where this kind of PR story that he's giving himself all this good PR, it does give him cover to just throw all his contractors out on their ass with, you know, no severance and just say, get the fuck out of here because you are second class employees. And this is how the Valley deals with unionization. This is how we enforce precarity on all of you. So, you know, it's a fucked up economy we live in in the United States. Fortunately, it's almost over. Yeah, we get to try a new one when the military takes over in November.

And I guess last thing I wanted to highlight, just going back to kind of like the beginning, Forbes puts his net worth at about $5 billion as of March 2020. We'll see how that holds up, you know, with all the volatility on the trading. But as of the IPO, Zoom had its initial public offering April 2019. As of the IPO, Eric Yuan owns about 22% of Zoom. So this guy owns a fifth of an extremely profitable company that's going to do very well during the coronavirus scare forcing everybody into teleconferencing. So he could get significantly richer in the time ahead, and we'll see what happens with that. But remember, he's harvesting your data, so be careful.

And with that, this has been Grubstakers. I'm Yogi Paywall. I'm Andy Palmer. I'm Steve Jeffries. I'm Sean P. McCarthy. I want to thank the Ain't Shit Show podcast for helping me out with some of the research today. You can find them at soundcloud.com slash ain't shit show, A-I-N-T, shit show.

And just thank you for helping me understand some of these things in the Valley. And thank you for listening and stay safe, wash your hands, stay indoors. And I also want to thank real quick Fritz Disease Splainer Gallington on Twitter, who made the, in retrospect, pretty obvious, but didn't occur to us, suggestion to look into billionaires who are profiting off of this. And so we're going to try to focus on those guys going forward to the extent that we can find them. And yeah. So thank you and and yeah bye oh yeah and stay tuned for more coughing in future episodes yeah account three everyone will go off on

that well we'll also reveal our berry and honey honey Sherman shit on the next patreon episode it's been too long guys we should finally fucking drop that stuff. Oh, yeah. I didn't even know about that. One, two, three. Bye.

Bye. Okay, everyone stop your recording. Okay. Yeah, zoom, zoom, zoom. Yeah, zoom, zoom, zoom. Yeah, zoom, zoom, zoom. Come fly far away. Where the earth winds gently start to blow. Your world is awake. Feel the bright sun warming up your soul. Come shine there with me. Gotta make, gotta make it mine today.

I am finally free. Gonna make, gonna make them stop and say. Zoom, zoom, zoom. Yeah. Zoom, zoom, zoom. Zoom, zoom, zoom, zoom. I've been saying.