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Betfair COO, David Yu
On moving up the ladder, security battles and future tech challenges

By Andy McCue

Published: Monday 14 November 2005

The rise of UK-based online betting exchange Betfair is without doubt an astonishing one. Launched five years ago by Andrew Black and Edward Wray, Betfair received bets from just 27 people on its first offering - The Oaks horse race on 9 June 2000.

Now nearly 100,000 people per month use the exchange and Betfair processes some three million transactions per day - matching more than 12,000 bets per minute at peak times. Annual revenues have passed the £100m mark and there is continual speculation about a possible stock market flotation, which would make some of its 500 employees very rich.

The online nature of the betting exchange - which allows punters to set their own odds and bet against each other - and the high volume of transactions and payments mean that technology is central to the company's business and success.

The man in charge of that is an easy-going and affable American, COO David Yu, who earlier this year was promoted to the wider operating role from his previous position as CTO. He's ended up at Betfair after studying computer science at Berkeley and Stanford in California and stints as a technology consultant for KPMG and running the ecommerce operations of search engine Alta Vista.

Talking to Yu at Betfair's Hammersmith offices, there is a definite dot-com buzz about the place - helped in no small measure by the company's successful high-profile sponsorship of England's Ashes win over Australia in the cricket during the summer. Yu admits the company attracts a certain type of person.

He says: "When we interview people, you realise people are either a Betfair person or they are not. If somebody comes and asks me 'where's my office going to be', well they're just not a Betfair person. It's just not that kind of place. I sit in no-man's land without any walls."

He joined Betfair back in 2001 as part of the merger with fellow online betting exchange Flutter, who he was working for at the time. Back then there were only 50 people at the company with an IT department of about a dozen engineers.

Now COO Yu has added Betfair's call centres, telephone betting group, customer account management and payment systems to his technology responsibilities - although he stresses that strategic business development and product management remain the realm of the commercial director.

He jokes that he actually does far less now as COO than he did in his previous role and puts it down the people he has around him.

He says: "I think the secret of my success here has been hiring people who are smarter than me, who know their areas a lot better than I do and you hire them and they just get on with it, and it's really easy. All I do is walk around and try not to bother them."

In reality he says it is the "softer skills" that have been the biggest change he has noticed in his new role.

"It was harder than I thought," he says. "It's much harder to provide a great customer service than I would have ever realised. It's much more art than science in some of these other areas and not just about the facts but about how you are conveying them. It's the softer skills in dealing with other groups."

But Yu also says it can often be a mistake to push good IT people automatically into senior management positions: "Actually by promoting them into a management position you have two negatives - you have a less skilled manager and you've lost a great engineer," he says.

While the rapid growth of Betfair obviously has its benefits for the company and staff, it also poses some major technology challenges. Current peak volumes can be several hundreds of bets per second and there could be up to 3,000 different betting markets on any given day.

But Yu is already looking way ahead to see where Betfair's IT systems need to be in a few years' time to cope with the predicted growth of the company. Internally this is called the "100x" project and will include planning how to rearchitect certain components of Betfair's systems to support 100 times the volume of transactions handled today.

Yu says: "That sounds really ambitious and like a big number but at the current growth rates we're going to hit that in a few years' time so we better start thinking about it now. We are strategically going in and looking at different bottlenecks in the system and we either look to rearchitect them or replace them with different technology or what not."

Security is also a big issue for a company like Betfair. It was targeted, along with other online bookmakers, by criminal gangs using denial of service attacks as a blackmail tool to try and extort money.

Betfair refused to pay up and worked with other betting firms to report the threats to specialist police at the UK's National Hi-Tech Crime Unit. Yu says he is happy with how Betfair handled the situation but warns that it is an ongoing battle.

He says: "I think that's really an arms race and I think it's here to stay. It's how quickly you can keep up with the guys who are trying to attack you.

"Unfortunately I think the people who are doing this are very, very smart and they have a lot to gain. It would be foolish and far too arrogant to believe we're going to outsmart them."

Yu believes attacks will become more application-centric and that people will become smarter at writing robots or agents that mimic user behaviour without being detected.

He adds: "The best we can do is stay on guard. We'll continue to invest heavily in it because the security and confidence of our customers is extremely important."

But he does think internet service providers could do much more to help businesses combat these kinds of denial of service attacks.

He says: "If an ISP is finding that a lot of their customers' machines have been compromised, then they can certainly provide more information say to the police."

There's a lot to keep Yu busy for the foreseeable future although he says he now has more free time than he did when he was CTO: "Up until a year ago Betfair for me was probably a seven-day-a-week job.

"I probably on average spent six days a week in the office but over the last year it's been a lot better and I have a lot of weekends to myself."

As for the future, Yu is not looking beyond Betfair: "I think I'll probably be working here for quite a while. People wouldn't work this hard if they didn't really enjoy it. Nobody forces me to work. It's because I really enjoy it. People feel like they are a part of something."

And, although he won't admit it, you can bet he will have one eye on those share options as talk continues about a possible flotation of the company.