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Peter Relan: Founder of YouWeb Incubator

Updated: Sep 6, 2023

YouWeb Incubator’s success is inextricably linked to Peter Relan’s mentorship and support. His methodology has been proven time and again since YouWeb’s inception in 2006. Peter has spent the last 30 years anticipating society’s needs and building solutions with the latest technology. As a serial entrepreneur himself has tried and failed many times, struggled to overcome obstacles, and successfully scaled breakthrough technologies. Keep reading to learn more about the behind-the-scenes tech mogul who has helped shape the world as we know it today.

[1983-1998] Creating the Web

In the late 1980s, the World Wide Web– a system for sharing information across the internet– was still just a concept that Tim Burners-Lee was working to create. Fax machines were the fastest way to send text-based messages, Rick Astley’s debut single was a hit simply for being a bop, and a young Peter Relan was just starting his career.

After completing his B.S. in Computer Engineering at UCLA in 1983, Peter started working as a research engineer at Systems Development Corporation (SDC). Here, he worked with Dr. Carl Sunshine, one of the co-founders of Transmission Control Protocol/ Internet Protocol (TCP/IP). TCP/IP is a suite of communication protocols used to interconnect network devices– hence the term “internet”.

Peter’s focus at the time was on helping develop a Network Management Language (NML) for software to be written in. As computer networks started to grow and become more complex, manually monitoring, analyzing and controlling the communications within the network was becoming impossible. Therefore, network administrators were relying more frequently on computer-based tools, or software applications, built by programmers to help them. The SQL language in which these applications were written allowed the network administrator to interface with them but it was not useful for programming them to help manage networks. During his time at SDC, Peter spent his time researching internet protocols and in 1988, he co-authored a seminal paper in ACM Sigcomm on Network Management Language (NML), an extension of SQL. NML allowed the programmer to use higher-level commands, reducing development costs, providing temporal control and accommodating conformance to multiple sets of network management standards.

In 1988, Peter moved on to work at Hewlett-Packard as an architect on HP Openview, a suite of network and systems management products. Today, HP Openview has been rebranded to HP Business Technology Optimization (HP BTO) and is a multi-billion dollar enterprise. Peter’s experience at HP fueled a desire to understand the business of technology so in 1990, he started graduate school at Stanford University as an HP Resident Fellow in Management Sciences & Engineering. While there, Peter attended and became enamored by a class taught by Andy Grove, the former CEO of Intel. It was then that he decided to focus on strategic innovations such as multimedia servers and streaming of video from (now called) cloud data centers.

In 1994, Peter was recruited by Oracle to their Media Server division, Larry Ellision's pet project which was touted to be the “first software platform capable of online delivery of multimedia information and entertainment at general public consumer‐level prices.” Most software at the time was single user and sharing software resources racked up costs quickly for the consumer. Oracle’s Media Server was gearing up to be a framework that allowed computers that were networked together to share data quickly and affordably. Over the years, Peter helped pivot the division to internet based video streaming servers, and ultimately to Oracle's three tier computing architecture based on Java application servers and web based applications. He also climbed in rank to become the VP of the Internet Server product division to help build the Application Server product line for Oracle.

[1998-2000] Webvan: If at first you don’t succeed…

In 1998, Peter was recruited away from Oracle by Benchmark and Sequoia Capital to become the founding CTO of Webvan. Founded in 1996 by Louis Borders (who also founded Borders bookstores), Webvan was a pioneering company that developed an online grocery delivery model that delivered fresh groceries to customer’s homes using highly automated systems. Sound familiar? It should. It’s the same basic business model used by Instacart and Amazon Fresh, both of which are valued at tens of billions of dollars today. In the late 1990s, investors were excited about the possibilities the internet held and were pouring funds into dot com startups like Webvan. In fact, Webvan raised $800 million from VC funds and an additional $375 million from its initial IPO. And having been founded several years before Instacart, Webvan had all the makings of the first online grocery delivery giant.

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Despite this, Webvan is infamous for its failure and is still used as an example in business schools to this day as a cautionary tale. Peter lays out Webvan’s mistakes in this TechCrunch article and the lessons other food delivery services have been able to take away. He writes that if Webvan had been more clever about marketing their service as a luxury, built upon existing grocery infrastructure instead of trying to build their own warehouses and software from scratch, and made sure they had a solid MVP before trying to expand into other locations, the chances of Webvan’s success would have been much higher.

In the end, Webvan could not survive the dot com bubble crash and had to file for bankruptcy after less than 3 years in operation. The distribution center software engine and warehouse machinery was sold to Kaiser Permanente which could be repurposed to distribute medications and pharmaceutical supplies. Many of Webvan’s executives went on to work at Amazon to develop AmazonFresh, which launched in 2007. Peter himself has written extensively about the business model and unit economics of online grocery delivery and has continued his interest in the space. He is currently an advisor and investor in a profitable online premium grocery delivery company in India.

[2001-2006] Business Signatures Corp.

Although Webvan hadn’t worked out quite the way he planned, Peter was just getting started. Entrepreneurship is all about resilience and being able to pivot to new ideas when your first plan fails. So Peter, who was still keeping up with the latest internet trends found a new calling: cybersecurity.

As the internet grew in popularity, people were starting to shift many of their daily activities online. This included banking, managing money, and making transactions. Financial institutions were having a tough time keeping online activities safe and secure for their customers. Many security measures were expensive, difficult to implement and not very user friendly. Plus, although consumers wanted the convenience of online banking, they did not want to pay additional security fees to keep their information and money safe.

Peter quickly saw this gap in cybersecurity as not only a new business opportunity but a chance to build a much needed solution to a problem that was affecting millions of people. In September 2001 Peter teamed up with his ex-Oracle colleagues to co-found Business Signatures Corp. Together, the team developed a software called Zero Touch Fraud Detection™, which helped financial institutions recognize a customer’s normal behavior patterns while they were on the online platform and detect fraudulent activity. The software was based on a unique stream querying technology that was “non-invasive, highly reliable and real time”.

Peter’s forward-thinking business strategy paid off soon enough. In October 2005, the Federal Financial Institutions Examination Council (FFIEC) released a set of guidelines that stated that banks and credit unions needed to improve online banking safety and consumer security by the end of 2006. The new guidelines gave a major boost to software security companies as financial institutions rushed to assess and mitigate any risks they had in their online platforms.

As a result, Business Signatures Corp. was acquired for $50 million by Entrust, a company that provides digital security and credential insurance. In a press release, Peter said, “The powerful combination of Entrust IdentityGuard authentication platform with Business Signatures’ Zero Touch Fraud Detection solution will give financial institutions both a quick fix to help meet FFIEC guidelines, as well as a path to the holy grail of easy-to-use consumer authentication. It’s really a beautiful marriage that provides the least invasive experience both for the end user and the IT security folks who have to implement this platform.”

[2001-2006] Founding YouWeb

By this time, Peter had gained a fair bit of experience in startups, scaling up tech, and seeing companies through acquisition. Around the same time as Entrust’s acquisition of Business Signatures Corp., Peter was also working with and advising a new fledgling startup team. The company, called Threatmetrix, had been started in 2005 by David Jones and Reed Taussig and was also focused on developing cybersecurity software but for detecting fraud and botnets.

Peter began to realize that many startup founders needed the same kind of long term advice and hands-on mentoring he was giving to the founders of Threatmetrix. Other incubator and accelerator programs provided a some funding and an environment in which to make potentially useful connections, but offered little in the way of one-on-one guidance. So in 2006, Peter created YouWeb Incubator to provide small select groups of promising entrepreneurs with individualized mentorship and funding.

Threatmetrix became Peter’s first official foray into venture capitalism and mentorship through YouWeb. Peter served on the board of directors and helped get the company funded by recruiting investors. Over the years, Threatmetrix grew steadily, building software to detect fraud for online banking, social media, online gaming and e-commerce sites. Finally in 2018, the company was acquired by LexisNexis for $1 billion.

By that time, Threatmetrix was just one in a long line of successful companies incubated by YouWeb. Peter has continued to stay on the lookout for major inflection points in society and build technologies that play into those changes. In 2007, just one year after YouWeb was founded, Steve Jobs introduced Apple’s iPhone to the world. This opened a new world of mobile and social apps which led to the theme for YouWeb’s first cohort. Companies from this cohort included Crowdstar (mobile game developer-acquired for $45.5 million), Openfeint (the first software development kit for gaming- acquired for $104 million) and AGAWI (the first platform for cloud-based game streaming), just to name a few.

A few years later, Peter started to look beyond the world of mobile games. The popularity of on-demand services, IoT and bluetooth capabilities were on the rise. In 2013, Peter launched the Studio 9+ accelerator program, which sought to support entrepreneurs interested in building wearable technology, platforms-as-a-service (PaaS), big data, and more. Unlike other accelerator programs which typically lasted up to 3 months maximum, Studio9+ was built to provide entrepreneurs with at least 9 months of incubation. This long term access to funding and mentorship gave startups a better chance of success. In fact the gaming chat platform, Discord, which is estimated to be worth $15 billion today, came out of this cohort.

Around 2015, another major technological inflection point came in the rise of artificial intelligence and the growing worry about online security. Peter’s investment focus shifted accordingly, backing companies like Got It AI (uses AI to develop virtual chat agents), Ideaflow (a human-AI hybrid web platform for data analysis) and TrustLab (fraud protection for social media).

All of which finally brings us to the present day. With the climate crisis looming over humanity, Peter is determined to do his part to help. In 2020, YouWeb started investing in its fourth cohort of entrepreneurs in the field of climate tech, particularly in carbon capture, utilization, and storage (CCUS). YouWeb IV is not just incubating individual entrepreneurs this time around, it is also investing in climate tech startups like CarbonBuilt, Heirloom, Gradient, Lime, and Equatic. YouWeb IV is still actively recruiting entrepreneurs and making investments in promising new climate technologies. If interested, drop us a message on YouWeb’s contact page.

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