Octane: Coach Wei - CEO and Co-Founder, Yottaa

Tuesday Oct 12, 2010 by Keith Cline - Founder, VentureFizz

Our guest on Octane this week is Coach Wei!  Coach is serial entrepreneur, who has been very busy building his latest startup called Yottaa, which is a cloud computing startup focused on website performance.  He recently raised $4M in venture capital funding for Yottaa.  He is also the founder and Chairman of Nexaweb Technologies in Burlington. 

As part of this interview, Coach touches upon a variety of topics such as his latest startup, why it is a great time to be an entrepreneur, and his ideas around emerging technologies where opportunities exist for entrepreneurs.

VF:  Can you provide an overview as to your background and professional history?

CW:  I am an engineer by training. I used to code in 7-8 languages - none of them is as hard as the English language though : )

My career started at EMC Corporation as an engineer developing software to manage storage networks. We built V1.0 of EMC ControlCenter, one of the most successful software products in the industry (very proud!). It was a great learning process for me at EMC. In 2000, I left EMC to start a software company called “Nexaweb”. Over the last 8-9 years, I have been very busy at Nexaweb as it grew from ground zero to profitability. In 2009, I started Yottaa with my co-founder Bob Buffone (Bob is actually my Chief Architect at Nexaweb), an exciting venture breaking new ground in cloud computing. 

VF:  What does your latest startup Yottaa do?

CW:  Yottaa makes web sites faster. Yottaa is a cloud service company – we are initially focused on web performance. Yottaa products help site owners analyze, monitor and optimize web performance.

VF:  How did you come up with the idea behind Yottaa?

CW:  In some way, I have been obsessed with user experience, starting as far back as in graduate school. My first company, Nexaweb, aims to bring a richer user experience to business applications, such as Rich Internet Application (RIA) and Ajax. Yottaa is about a faster and speedier experience. We are working towards a vision of “Instantaneous Internet”.

More specifically, over the last many years, I have been involved with many situations dealing with web performance. Web application performance depends on hundreds of factors, ranging from server side issues, network issues, protocol concerns, page composition to browser performance, etc. Many of these factors are outside of a web site owner’s control. To provide a good performance to end users, a web site owner needs to continuously assess the current performance, track the impact of changes over time, do performance benchmarks, and perform optimizations. To effectively carry out these activities, a significant amount of technical resources as well as substantial hardware and software investments are required. Large organizations may be able to do so. But small to median sized businesses are left out of luck.

So we saw the need for an integrated platform that makes it very easy and cost effective for customers to handle these challenges. Yottaa is the one place that answers all performance questions and auto-magically fixes performance problems. There is no software to install and there is no hardware to purchase. The value proposition is simple and clear for web site owners, especially small to median sized businesses: All you need to do is to sign up on yottaa.com, and your site will automatically become faster.

VF:  You recently raised venture capital funding from General Catalyst, Stata Venture Partners, and CambridgeWest Ventures.  How is the fund raising climate out there?

CW:  Fund raising climate is fantastic for entrepreneurs! The early stage investment industry is going through a major transformation. There are a few interesting changes:

  1. There are many more funding sources now beyond the traditional VC funding. Examples include accelerator/mentorship programs, super angels and micro-cap VC firms.  In Boston, TechStars, HackerAngels, Founder Collective, NextView Ventures… just to name a few. None of them was available just a couple of years ago.
  2. The emergence of super angels and micro-cap VC firms brings structural changes to the early stage investment industry. These groups typically invest a smaller amount (a few hundred thousand to a million dollars) into a startup and typically come in at an earlier stage than a typical VC round. So the bar to raise seed financing is lower and much more flexible. Super angels and Micro-cap VC firms are the reasons that so many early stage companies get funded and become successful. A good example Micro-cap VC firm in the Boston area is NextView Ventures, founded by David Beisel, Rob Go and Lee Hower. 
  3. The emergence of mentorship programs. TechStars is a good example. TechStars combines seed investment, a mentorship program, and a 3-month bootcamp. It is the best path to transform a student or an engineer into an entrepreneur, with the bonus of building a real community and connections.  I just wish TechStars existed when I was starting out ten years ago!
  4. The emergence of younger and more tech savvy “investors”. In Boston area, folks like Roy Rodenstein, Dharmesh Shah and Sim Simeonov are super smart and visionary. They can spot an opportunity long before others. We are lucky to have them.

So it is great to be an entrepreneur right now!

That being said, raising financing is never an easy task. You have to make sure that you have a solid business case, and work hard to get financing done. If you are Brett Favre, NFL teams sought you out to play for them.  For the rest of us, you have to fight hard to get on the roster. 

VF:  What advice would you give first time entrepreneurs trying to raise capital?

CW:  I developed lots of opinions over the last ten years. Most of them are fairly useless. A few helpful ones are:

  • If you haven’t, try to participate in a mentorship program such as TechStars.
  • Establish an advisory board. Find and reach out to entrepreneurs who have been there and done that before, talk to them about your startup and get their feedback. If you feel there is a connection, ask them to be on your advisory board. Don’t be offended or discouraged if some of them didn’t get back to you or said “no”. Be respectful for their time. A good advisory board can make a huge difference in an early stage startup.
  • Be a networking maniac! When I was starting Nexaweb, I didn’t know anybody. But I was out networking every night for 6 months (That means a lot of beer)!
  • Learn and connect with angels, super angels, micro-cap and VC firms.
  • Don’t fool yourself on your capital needs. Building a substantial business takes a substantial amount of capital. Make sure you raise a meaningful amount of money so that you can get to a meaningful milestone.

VF:  How different is it building a company today versus when you started Nexaweb in 2000?

CW:  Well, the biggest difference is that I’m older now and actually need 7 hours sleep per day : )

There is amazing similarity – both periods are major economic downturns. Fortunately high tech industry is not the criminal in the current downturn. The environment for entrepreneurship is better now and the climate for startup is better now:

  1. The emergence and wide acceptance of “customer development”, “agile development” and “lean startup” methodology are extremely helpful to entrepreneurs. I highly recommend them. None of them existed ten years ago. At that time, I was trying really hard to learn and apply the “waterfall” development methodology and “enterprise software business model”.
  2. Early stage investing has shifted and is getting better. The lack of super angels, micro-cap and tech savvy young investors during early 2000s made a VC round as the viable option. It is so much better now.
  3. Cloud computing is a major game changer. During 2000 to 2002, the only thing related to “cloud” was Marc Andreessen’s “LoudCloud” (which shifted into OpsWare and sold to HP). LoudCloud itself was at the brink of collapsing. Today, cloud computing opens the door to so many innovations. Startups should think hard on how to leverage the cloud. I am actually working on something for the community with General Catalyst and Sim Simeonov’s FastIgnite called “Cloud Innovation Summit”. Stay tuned.

VF:  For any company, the team is very critical...especially the first 10-15 hires.  How are you going about building out the initial team at Yottaa?

CW:  This is a tough one. I have made mistakes and will definitely continue to make mistakes going forward.

Nevertheless, I follow four criteria in evaluating candidates, in the order of priority: 1. Integrity; 2. Motivation; 3. Intelligence; 4. Domain expertise.

Needless to say that “integrity” is the most important factor. You need to believe that you can trust this person and have the confidence to have this person cover your back for you in a battle field.  “Motivation” is the 2nd most important factor to me (Sometimes I phrase it as “passion”). Someone highly motivated or someone with passion for the job has a much higher likelihood to perform well. I place “intelligence” above “domain expertise”. There are many studies on what qualities of successful CEOs have in common. The conclusion is actually none except for “intelligence”.  Some are introverts and some of extraverts.  Their backgrounds vary. The only consistent common trait of them is that they are all highly intelligent.

At Yottaa, we are still building our team. We are currently about 25 people now (mostly technical).  Right now, I am actually looking for a VP or Director of Marketing as well as a Sales and Biz Dev Leader. Please feel free to get in touch with me if you have recommendations.

VF:  If you weren't focused on building Yottaa, what are some other underserved markets or emerging technologies where you could build a business?

CW:  I was going to say buying an underdeveloped island, but Hawaii is already taken. So beyond the Hawaii idea, what I would be interested in working on include:

  • Digital life solutions or services: services for consumers in the context of connected home entertainment and mobility (iPhone, iPad, Android) are fascinating and have huge potential.
  • Marketing software and services. This is a significant space that is still wide open. Companies like HubSpot and Performable have been doing very well and will become huge successes (I have HubSpot envy, @bhalligan). But there are still many underserved needs in this space. There are plenty of opportunities for successful startups here.
  • Consumerization of enterprise offerings. I am not sure whether the word “Consumerization” exists. What I mean is to take a consumer web application approach to enterprise technology. I think there are many enterprise product categories can be disrupted and transformed using such an approach. 

If you happen to be working in these areas, feel free to get in touch with me as I have spent some time thinking about them over the last few years. Given that I have Yottaa and the Hawaii idea to get me fully occupied, I’d be happy to share with you my thoughts on them.

< back to all blog entries

Categories: