How 3 Grads Scored Funding From Zuckerberg
This summer, I visited Y Combinator to interview its head honcho Paul Graham for Inc.'s September issue. Among the founders I met that day was one trio that particularly caught my attention, a group of recent Yale graduates with a grand plan to improve the country's education system by collecting student feedback. They had customers, they had revenue, and they were solving a real, systemic problem. In other words, I thought, they were the antithesis of today's Silicon Valley stereotype.
So when I heard last week that their company, Panorama Education, had raised $4 million, including an investment from Mark Zuckerberg's fund Startup:Education, I wasn't surprised. Aaron Feuer, Xan Tanner, and David Carel are, these days, a rather unique model of what entrepreneurship should be.
For starters, they didn't start a company for the sake of starting a company. Instead, this idea is one Feuer had been obsessing about since he was president of the California Association of Student Councils when he was a senior in high school. He was instrumental in getting a statewide bill passed to bring student surveys to schools in California, but the costs and logistical challenges associated with deploying surveys prevented the cash-strapped schools from actually putting the bill into action.
It wasn't until he was a junior at Yale, having learned to code, and wet his feet in politics as an intern for the Senate and U.S. House Foreign Affairs Committee, that Feuer decided technology could be the solution to this big problem he'd long tried to tackle. He recruited Carel, a close friend who volunteered with Feuer in New Haven public schools, as well as Tanner, a classmate who left a lasting impression on Feuer when they first met. "He introduced himself as religious studies major who does large-scale data analysis and helps basketball players improve with data," Feuer remembers.
Together, they developed Panorama, which enables schools across the country to conduct low-cost surveys of students. The key differentiator is, unlike ScanTron surveys, which require special paper and machine readers, Panorama's technology can read surveys printed on regular paper. The software also gleans insights from the survey results, rather than simply reporting the answers back to the schools and forcing them to derive meaning from them. Panorama works with schools to develop surveys based on their respective goals, whether it's reducing school bullying or improving the quality of the teaching, itself.
It's a service for which some schools are willing to shell out a good chunk of change. By the time Feuer, Tanner, and Carel graduated in May, they were already generating $500,000 in revenue from 1,100 schools. Now, with 4,000 schools on contract, Feuer says, they're making "significantly more."
What Made Zuck Take Notice
While the revenue potential hasn't gone unnoticed by investors, Feuer says it was the promise of Panorama's social impact, not its financial return, that first caught Zuckerberg's eye. Knowing the Facebook founder had a vested interest in education, Graham introduced the Panorama guys to Zuckerberg after he gave a speech at a Y Combinator dinner. Their conversation, Feuer says, was unlike any the team had with traditional investors. Zuckerberg approached it not as an investor, but as another likeminded person, passionate about fixing education, Feuer says. As a result, the team ditched its usual spiel.
"He got very little of the investor pitch. We talked about why we mattered. That's not a pitch we usually give to investors. It's the pitch we give to schools. The revenue wasn't the most important piece of the pitch. It was about if we were successful, how would we make a difference in the world?" Feuer says. "It's a more authentic, genuine conversation when no one's thinking about investing."
It wasn't until months later, after Panorama's funding round was fully subscribed that Zuckerberg decided to invest, and the founders happily made room for such an influential investor and mentor. According to Feuer, Zuckerberg gave the team invaluable advice about hiring.
"When you're a start-up founder, there's a strong temptation to hire immediately, because you need people who will make your life easier the next day," he says. "Mark taught us patience is important, and that if you pick a high bar, it's probably not too high."
Now, Feuer says, he and the team plan to put Zuckerberg's advice (and investment) to good use, hiring 20 new employees over the next year and a half. Half of those hires will be engineers, the other half, outreach employees, who will help expand Panorama's client base. The company will also begin building products that collect student feedback using methodologies other than surveys.
"It's easy to think feedback is just the answer to a survey question, but feedback is when a student decides to skip a class or when a parent attends back-to-school night," Feuer says. "We're building out products for the future that go beyond the survey."
As for what those precisely those products might be, Feuer says, stay tuned.