Building to $10 Million in EdTech: Panopto CTO Eric Burns (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

One of the issues we’ve discussed is the slow-growth nature of the EdTech industry. This interview explores the question in depth, and shows how Panopto is mitigating the issue through sector diversification.

Sramana Mitra: Eric, let’s start at the beginning of your story. Tell us where you were born and raised, and in what kind of circumstances.

Eric Burns: I was born in Nashville, Tennessee. My father, at that time, was in a seminary to be an Episcopal priest. He finished seminary and we moved to Knoxville, Tennessee when I was very young. My dad opened his parish there. My mom was a psychologist.

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1M/1M Premium Company Freshdesk Raises $31 Million From Tiger Global and Google Ventures

We just did a roundup of the CloudCRM space, covering Zendesk’s successful IPO and predicting that the space is heating up, and more acquisitions will follow. Our premium company Freshdesk is definitely a key target!

Today, Freshdesk announces its new round of funding of $31 million led by Tiger Global, with Google Ventures and their original investors, Accel Partners, following. This brings their net funding to $44 million. The latest round is priced at $250 million. The company currently has 23,000 customers.

As always, big funding news creates big media coverage. Here’s what they’ve got so far: NYT, TechCrunch, VentureBeat, Forbes, Wall Street Journal, and quite a few others. I cannot emphasize how important this company is to underscore and celebrate India’s quest to build global software companies.

Here’s our prior coverage of the company:

The Million Dollar Club: Freshdesk

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Building a Fat Startup: Apptio CEO Sunny Gupta (Part 7)

Sramana Mitra: As long as you are delivering and executing on what you said you were going to deliver on, there is no shortage of capital. In your case, you have delivered a product. You’ve had customers. Your pricing model is validated. Your business model is validated. You’re ramping up well. These kinds of deals generally do not face any shortage of capital.

Sunny Gupta: From my perspective, you’re absolutely right. Over-delivering based on what I’ve told them I’m going to deliver has opened up more opportunities. At some stage, we did move more into a hyper-aggressive growth. We’ve been very capital-efficient but there was capital at our disposal. Whether it’s ramping our sales capacity, investing in more product capabilities, or marketing capabilities, we’ve been fortunate from that perspective to ramp ahead of the curve.

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Building a Fat Startup: Apptio CEO Sunny Gupta (Part 6)

Sramana Mitra: You didn’t go after the Goldman kind of customers from where you picked up the idea. You actually went after the smaller customers to get a feel of the product.

Sunny Gupta: I wanted to get the product and security model validated. I was talking to the Goldmans of the world all along, but I was trying to get the first five customers who were willing to pay me a check. The buying process of large companies tends to be longer, as you know. The validation cycle tends to be longer. They need a richer feature set. >>>

Building a Fat Startup: Apptio CEO Sunny Gupta (Part 5)

Sramana Mitra: Your point is well-taken but you have to be able to afford it. You’re starting with a $7 million Series A. Not all entrepreneurs have the luxury of starting with a $7 million Series A.

Sunny Gupta: I understand. I have myself been there when I started, which was literally two years prior to that. I was running on angel money, but my fundraising experience was different. I had angels who had written me $200,000 checks. >>>

Building a Fat Startup: Apptio CEO Sunny Gupta (Part 4)

Sunny Gupta: Then came the fund raising. Greylock and Madrona were my prime investors. I started talking to them as I was validating the idea in the summer of 2007. I think their perspective was, “We have a lot of faith in you. Great teams can take a bad idea and make it into a great market and execution. Bad teams can take a great idea and screw that up.” They had a lot of conviction and faith in me but also had enough conviction in the idea. When it was time for fund raising, I ended up going back to these people and went through a partnering agenda. I could have funded the company on my own at that stage, but I decided to raise more money than less. We closed the first round Series A in a matter of weeks. That was a $7 million round. It was co-led by Greylock and Madrona. Mark Andreessen and Ben Horowitz were angel investors.

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Ownership Matters: How To Maximize Valuation

In an earlier Unicorn series article, I profiled Tableau Software, and how the company raised its Series A financing at a pre-money valuation of $20 million. In this piece, we look at RightNow. Series A valuation? $130 million. This piece is an excerpt from my book:Entrepreneur Journeys: Bootstrapping: Weapon Of Mass Reconstruction.

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Bootstrapping with a Paycheck: Axosoft CEO Hamid Shojaee (Part 7)

Sramana Mitra: Is there anything else that’s worth discussing in your story in terms of strategy and moves that led to big losses or wins?

Hamid Shojaee: From an entrepreneurial standpoint, I think that having that focus on a particular market segment is very important and then doing things for that market segment that creates value outside of the product offerings that you have is important because it helps establish credibility. >>>