Building Fat Startups: Delphix CEO Jedidiah Yueh (Part 2)

Sramana Mitra: Carry on. Lead us through the next phase of your journey.

Jedidiah Yueh: In some ways, since I’m an accidental entrepreneur or even a reluctant technologist, that was a bit of an advantage. I had lots of ideas and I had friends that had lots of ideas, but I wasn’t interested in starting a company unless it was really compelling. At the point that I had the vision for the product for my first company Avamar, I knew that it was really compelling. That was when I decided to start the company. The thing I love most about America and the entrepreneurial spirit of America is that you can be a nobody with no background in technology, but if you have a great idea, people will invest in you and you can begin building a company. One of the funny things that happened is I pitched the idea to a number of VCs in Southern California. I was rejected by all of them.

Over that process, I learned a lot. I was really determined to understand why they rejected me. By learning all the issues with the pitch and the idea, I was able to harden the idea and make it much stronger. By the time I reached audiences in the top 10 VCs in Silicon Valley, we were able to secure term sheets from three of them.

Sramana Mitra: Why do you think you succeeded in securing term sheets from these high-profile VCs? What did you do right?

Jedidiah Yueh: Everything comes back to product vision. If you have a compelling vision of a product that can be very transformative in a market, everything else gets easier for you even if you don’t have the right background or you don’t have the right skillsets and connections. A really compelling product vision makes everything easier.

Sramana Mitra: I’m going to push back on that statement. I was an entrepreneur in 1990 when the market was high and people were kind of anything goes. I was a young entrepreneur. I did all sorts of things. I did three startups between 1995 and 2000 as a young punk. Technology and the Silicon Valley scene goes in cycles.

Jedidiah Yueh: We weren’t raising money in 1999. That’s just when I got started. We raised money after the dot-com bubble had already burst. There was a lot of skepticism in 2000. VCs asked me the things that I used to work on which includes writing fiction. They’d be like, “We don’t want to invest in somebody who’s an English major who writes fiction. That’s a terrible thing for you to have in your background.” It was highly judgmental. In the end, they came around because the product idea was really sound.

Sramana Mitra: What have you accomplished between starting in 1999 and going out to raise money in 2000? Did you make some progress with which you went to VCs?

Jedidiah Yueh: We hired a couple of engineers who started building a prototype. We raisee a little bit of money from angels to begin hiring the team. We didn’t have a working prototype at that time.

Sramana Mitra: How much money did you raise from angels and how much money did you raise from VCs?

Jedidiah Yueh: I have to guess the amount.

Sramana Mitra: A ballpark would do.

Jedidiah Yueh: I think we raised a couple of hundred thousand from angels and then around $5 million from VCs in our first round.

This segment is part 2 in the series : Building Fat Startups: Delphix CEO Jedidiah Yueh
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