Interview with Dr. Yao-Hui Huang, CEO of The Hatchery

One of the key reasons why Northern California is a hotbed of technology innovation and investment is that there is a culture of collaboration, even between groups that could be seen as competitors. In contrast, New York’s approach is far more “cutthroat,” meaning that organizations often work against each other out of habit. The Hatchery is breaking this mold by fostering an environment in which innovation can thrive. As a result, we have forged a real bond with entrepreneurs and investors who trust us as an impartial forum for them to meet and build the connections they need to grow.

We are here today with Dr. Yao-Hui Huang, owner of the Hatchery, a firm which helps companies take that first step on become successful.  Yao, thank you so much for joining us today.  Can you give some background on yourself?

I started my interactive agency, Gigapixel Creative six years ago coming out of the dot com crash.  It was about this time a lot of new businesses were rising from the ashes of the previous years.  As an agency, my job was to help take the idea of an entrepreneur from a concept to a working website.  I’m not shy about giving advice, and I found myself giving a lot of it.  Much of what I said was repetitive; finding that  many issues and needs entrepreneurs faced were effectively the same

Being aware of what else was out there in the industry, and my own experiences, I decided to streamline my efforts by inviting companies to present in forums.  Here, their peers and interested investors would tear them apart (in a nice way) so they could put themselves back together stronger and healthier.  The audience also learned valuable lessons, and the Hatchery was born.

You have an innovative process called the Gauntlet.  Can you describe it to us?

Sure.  The Gauntlet grew out of the early presentations.  As it became more wide-known, I had more and more calls to participate.  I could have kept it at that, but I decided to take it one step further by making it invitation only for the companies and the guests.  My value added is that I only accept three companies per pitch, but I and my consultants work with those companies to make them rock hard in front of investors.   I then invite, again by invitation only, qualified investors and industry experts to participate and watch.  For example, if your business could benefit in talking to Jet-Blue, I make sure they have a rep in the room.

You have another event called the Are You Serious, can you describe how that’s different?

Are You Serious is sort of like open auditions.  Anyone can pitch to a panel of serial entrepreneurs and investors.  However, it is open to all entrepreneurs so there may not be various sectors.  The goal here is to offer an opportunity to practice pitching and to help identify weaknesses in companies, and fill those holes.  An analogy I like to use is Are You Serious is like The Gong Show or Open Mic Night and The Gauntlet is like American idol.  One for audition the other with a filter.

What was your biggest challenge early on?

We started altruistically so changing that to a revenue model was a redirection.  Building the community of investors and contacts took time, as one of our main value added services are introductions and assistance.  It also took time to spread the word about ourselves.

What’s the best thing about running the Hatchery?

The people I get to meet, the companies I get to see at the very early stages.  It’s also about the community we’re building.  I’m hoping to build a great community of entrepreneurial minded people.  It’s my way of giving back.

What’s the biggest mistake you see a lot of companies making?

I think a lot of companies focus too much on the problem they are solving, rather than figuring out if there is a market for the solution.  When we incubate our own companies, our approach is to uncover the exit and interested and qualified clients first before pursuing an idea.  It is a very specific kind of market research.  Think and research before we build.  If you have your network built before you’re ready to sell, your down time is going to be much reduced, as is your risk. 

You’ve seen a lot of pitches. In your view, what’s the formula for success?

Easy, it’s the team.  It’s absolutely critical to have expertise in the field you are entering.  People are giving you a lot of money; they have to believe you’re capable and credible to execute what you’re preaching.  It’s also critical to show how you make your revenue.  What will make money and WHO will it come from.  Finally, having a healthy rolodex for business development and sales is a huge plus.

There’s always a lot of discussion about business plans and their value.  What are your thoughts on the subject?

Business plans are not a holy grail, they won’t make your business succeed or get funding.  That takes a lot of hard work and good people and good connections.  What it does do is act as a communication vehicle both to your partners, employees and especially to your investors.  It’s a game plan and a road map of your company.  It’s also a living document.  As situations change, business plans should change with them.   Anyone who still has the same business plan as two years ago before the financial crisis just isn’t doing their investors and themselves justice.

What’s the weirdest most out there ideas you’ve seen come through the Hatchery?

We’ve had a social networking platform for sex.  That got a few giggles during the presentation. We also had a company which would advertise anywhere, like on your forehead or the back of your cell phone.

Any event you would like to mention coming up soon?

We have the hatch Match 2009 event happening at Columbia University during Internet Week.  Sign up at http://hatchmatch2009.eventbrite.com

Do you have any role models either personally or with the Hatchery?

I admire IdeaLabs and what Bill Gross has accomplished with innovation.

Is there anyone you would like to thank?

I would like to thank everyone who extended themselves to help me through each step of challenge, who offered introductions, who offered help, and support.  Without the great friends, advisors, and open friendly supporters, I would not be able to accomplish any of the above.

Yao-Hui Huang is a highly entrepreneurial executive with extensive experience in business, marketing, technology and the creative arts. Her sensibilities have allowed her to understand the needs of technology and Internet innovators who are trying to break through the clutter. For the last six years she has served as CEO of GigaPixel Creative, a New York-based strategic design and development agency that has won more than 25 awards.  She founded The Hatchery in 2007.

Yao supports children in third-world countries working with Give Children a Choice, a not-for profit organization that builds preschools, expands healthcare and immunization. She is also a frequent lecturer within the Asian community, building confidence in Asian women, helping them to attain corporate leadership roles and/or start their own businesses.