Yottaa, a startup CDN located in Akamai’s backyard, is growing rapidly. They are adding a ton of customers, and expanding their feature set. Now with the latest infusion of VC cash, they must plan on going in a new direction, in order to grow beyond the startup phase. That is difficult to do, in the highly competitive CDN market.
The first thing that strikes out at me is that it seems like Yottaa doesn’t have any executives with considerable CDN experience. Is it important for a startup CDN to have executives with a previous CDN background in the ranks? Absolutely, positively, yes!
There is a huge pool of CDN executive talent in the market today that could add tremendous value to Yottaa. It’s no coincidence that Cotendo, Akamai, EdgeCast, and Aryaka (even though they’re not a B2C CDN), have executives on staff with deep CDN experience. They can help take the CDN to the next level.
You really don’t want to learn along the way, because it will cost you customers. Experienced CDN executives challenge executive thought, keep things in check, and are more creative at crafting solutions that solve customer problems. Working in the CDN industry is unlike any other industry, especially in sales.
The learning curve for CDN sales is one year, at a minimum. Reps with three years experience, are veterans that understand all the tactics, strengths, and weaknesses of the competition. If a sales team lacks prior CDN experience, there is very little chance they’ll win consistently against the competition. It’s not like a CDN can hire reps from the likes of Rackspace, Oracle, or Salesforce, and expect them to knock the sales quotas out of the ballpark.
Growing Pains of a CDN Startup
All CDNs go through phases in their life cycles, with two being the most important. The startup phase is the most important. How many sales can you close as the new kid on the block? If you can’t, you really won’t go anywhere in life. If you can, then you move onto the next phase, the “sales growth stalls” phase. This is the phase when annual revenue, which was growing at a decent clip for a while, stops all of a sudden, for whatever reason.
How do you kickstart this phase and overcome it? This is the phase that Panther Express faced years ago and was never able to overcome. As a result, it ended up selling itself in an asset sale. Assigning an annual revenue figure to this phase is difficult, but I will give it a shot. The “sales growth stalls” phase usually happens when CDNs hit the $25M to $35M range. Growing pass this range is very difficult. It requires a broader set of skills at the executive ranks.
Yottaa might have reached this point already, or is getting close to it. It will be exciting to see how they respond. If they have already surpassed this range, then congrats, let’s see you how you do at the next phase, surpassing the $50M in annual revenue mark.