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With Zuckerberg Millions, Startup Leaves Town
by Thomas MacMillan | Oct 22, 2013 7:32 am
Posted to: Business/ Economic Development, Schools
A year after he and friends started a high-tech school-survey company as Yale undergrads, Aaron Feuer picked up $4 million and an hour of personal advice from another dorm-room dot-com success—Facebook founder Mark Zuckerberg.
Feuer’s (pictured) company, Panorama, Monday announced raising $4 million in seed funding from a group led by Zuckerberg’s Startup:Education fund and Silicon Valley’s SoftTech VC. Other investors include Yale, Google Ventures, and Ashton Kucher’s A-Grade Investments.
New Haven won’t reap the benefits of that new investment. Like some other New Haven-bred entrepreneurs, Feuer found himself leaving the city that nurtured his company’s start once he obtained money to grow. He said he needed to go somewhere with more engineers.
Zuckerberg, the hoodie-wearing billionaire who invented Facebook in his Harvard dorm room, created Startup:Education in 2010 as a foundation dedicated to improving education. Zuckerberg’s funding of Panorama is his first public investment in a startup, according to multiple media reports.
Zuckerberg couldn’t be reached for comment.
With friends, Feuer started Panorama last year as an undergraduate at Yale. They invented a cloud-based platform for administering school surveys and presenting the results interactively. The New Haven school system started using Panorama’s services a year ago for its “school climate” surveys.
Since then, the company has taken off. Panorama is in 4,000 schools in 250 school districts in 26 states, according to Feuer. That’s up from 700 schools in six states less than a year ago.
Feuer spoke by telephone from Cambridge, where he now lives. Half of Panorama’s seven staff members live in Cambridge. The rest are in New Haven.
Feuer and his co-founders graduated from Yale in May and spent the summer at Y-Combinator in Silicon Valley, a startup incubator in the heart of the nation’s tech industry. They picked up the experience and the connections they needed to start raising money for the company.
“We’ve been profitable from day one,” Feuer said. That’s unusual for a startup, and it’s allowed Panorama to focus less on profit and more on “impact,” he said.
As Feuer describes it, Panorama is a company with a mission that goes beyond simply making money. He said he’s interested in not just coming up with a new product and then looking for people who will buy it, but also working with schools to discover what they need to function better, and creating a product that will help them.
In other words, he doesn’t want Panorama to be just a hammer. “When you’re a hammer everything looks like a nail,” he said. “Let’s try to figure out what is the best way to help these school districts.”
The new investment in Panorama reflects that ethos. “A lot of the money is done as a philanthropic investment,” Feuer said. That means, again, that the investment might not create a big return, but it will have a big “impact.”
“We wound up with folks who believe in the mission,” Feuer said. “Ashton Kutcher invested. The guy who invented GMail invested.”
And, of course, Zuckerberg invested. Feuer said he and his co-founders had a chance to meet with Zuckerberg for “an hour-long consulting session with one of the most brilliant entrepreneurs of our generation.”
“We met with him for an hour a couple of Fridays ago,” Feuer said. “He’s a super nice guy. Humble, kind, down to earth.”
Feuer said they asked Zuckerberg about how to build a great team, how to build a company culture, how to stay “mission driven.” And, as a 22-year-old CEO, Feuer wanted to know: “How do you actually build a company coming out of your dorm room?”
“In previous years, you would hire a more experienced CEO to run the company,” Feuer said. He wanted to know how to build a company on one’s own.
“[Zuckerberg] said, ‘Look, make sure your company establishes really clear values,’” Feuer said. “The values are the things you’re going to want to break in the short-term” but if you stay true to them, they’re what “will help you accomplish what really matters in the long term.”
“The other piece he suggested is when you’re thinking about hiring people” don’t look for people who would make good underlings, Feuer recalled. “Hire people who you would be happy being your boss. Always surround yourself with people who are smarter than you and who impress you.”
With the new influx of money, Panorama will be looking for those smart impressive people, in New Haven. But not just in New Haven.
After spending the summer in Silicon Valley, Feuer and his co-founders headed back east. “We ended up in Cambridge because we love the Northeast.”
Feuer said he’s a big fan of New Haven, especially after experiencing the fantasy-land of Silicon Valley. “New Haven is such a real place,” he said. But he couldn’t keep the company here. Why? “The pace of hiring is hard to sustain in New Haven.”
Feuer said Panorama will expand rapidly in the coming months. So he’ll need software engineers. “If we hire 10 folks at the New Haven office, that would be great. But I imagine it will be hard to find that many engineers in New Haven.
“Engineers are hard to come by in New Haven, both because they are few and because New Haven has so many start-ups, Feuer said. “Supply is too low and demand is too high.”
“That’s why we have to have two locations: to find the best possible folks,” Feuer said.
Panorama’s trajectory follows that of Hadapt, another Yale-startup that took off like a rocket—and flew to Cambridge once it obtained significant financial backing. Hadapt founder Daniel Abadi developed a new way for companies to analyze huge amounts of data, then found investors wouldn’t fund his company if it stayed in New Haven.
Peter Salovey, Yale’s new president, has promised to address the problem of Yale startup flight.
New Haven has had some success stories in harnessing the job growth of new-economy companies started here: Higher One, a financial-services company, started here and built a new headquarters on Winchester Avenue when it took off nationally. And pharmaceutical company named Alexion, which left for Cheshire after incubating at Science Park, is returning to New Haven in a 13-story new headquarters at 100 College St.
Tags: Aaron Feuer, Mark Zuckerberg, Panorama
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Here’s what the software engineer job pays, according to their website.
“For Class of 2014: $100,000 starting annual salary, $15,000 signing bonus, $100K in equity”
Good luck, Panorama!
New Haven residents are clamoring for increased tax base and more jobs, and at the same time screaming their heads off about gentrification and dead-set against anything that would make Yale more like Cambridge.
You can’t have a better city without better companies in it. Squeezing Yale for every cent only gets you so far.
CCNE needs to wake up and prioritize retaining companies like this, not strong-arming the city and Yale to get a few more union jobs per year.
If this company had stayed, it could have been massive, and even in a tech-focused company they need maintenance and service people.
More and more of these chicks will leave the nest and never look back. Higher One is an exception, not the rule.
Wake up, New Haven.
Too bad. There are actually a ton of engineers in southern Connecticut. I know a lot of them. From Stamford to New Haven, there is untapped talent. And many would love to work in New Haven, with its lower cost of living and lower traffic (compared to Stamford/Norwalk).
I think it’s a better climate than some think, and we need to illuminate that so that these companies don’t leave.
Dwightblock: CCNE’s Marks, Jessica Holmes and others have stood en masse to block construction of new housing, like Star Supply.
This same group has also voted against accepting millions in free Federal & State money to fix our public transportation system & invest in city buses, even though public testimony was overwhelmingly in favor of such work.
Many insiders say that CCNE/Local 34 simply wanted to hold these investments as some kind of “power play” card to hold over Yale’s head.
If these types of backwards DTC/CCNE politics don’t kill the job market (and make our city even less affordable for low income people, by limiting housing & transportation), then nothing will.
posted by: Josh Levinson on October 22, 2013 9:42am
I fail to see how this is New Haven’s fault. It sounds like the VC’s simply decided they wouldn’t fund the project unless they moved to Cambridge. The same things happen in Silicon Valley all the time, which is strange given how globalization has made location significantly less relevant.
No idea why venture capitalists are so hard-up on making sure these startups relocate.
If nothing else, this is just another example of a lack of any real community commitment from the Great Ivy—for those lucky privileged ones, New Haven is but a mud puddle to avoid.
@Bill Saunders I disagree. Look at the Yale Entrepreuneural Insitute (YEI)‘s recent partnership with Connecticut Innovations to create the YEI Innovation Fund.
Yale is committed to building a startup ecosystem in New Haven. This is one that got away. It’s a process.
posted by: newhavengill on October 22, 2013 12:45pm
Congratulations to Aaron and the Panorama folks. I’m disappointed you’re leaving New Haven for Cambridge but I hope you find great success.
Re: Start Up Flight. I’m encouraged that so many great ideas and products are coming out of Yale and the greater New Haven community. The New Haven tech community has come a long way the past few years and it continues to grow.
Yale needs a computer science program to start being competitive enough for start-ups to stay here.
I work in this industry and am mystified by the claims that Connecticut lacks CS/IT engineering talent. I’m expanding the area to the state because at least along the shoreline, there is good rail transit in addition to the highways for commuting options (getting the north-south rail line working better is a critical improvement for this reason). There has been a soft job marker for several years with many layoffs in high tech and large corporations (including pharmas and financials). It’s one thing to like the Cambridge area or to state they have a higher density of the talent because they have a higher density of schools, but in my experience there is plenty of industry talent in this state.
Wasn’t Science Park suppose to nurture companies like Panorama?
Congratulations to Panorama! This is great news for New Haven and Yale to have produced a company with this early success—the origin of a startup is always an important part of the story.
It’s true that as a small City, New Haven could use more engineers to match the great ideas being launched daily, but actually there is a drought of coders and developers everywhere. The large companies are opening offices and trolling the halls of MIT all the time, and there are still not enough…every startup in Cambridge/Boston is also looking for great talent and mining other places across the world.
As it was described in the articles venture capital move teams to certain ‘hubs’ in order to get the best talent available, and often to be closer to their day to day operations (where there offices are), because they are investing money in them that they want to make sure the teams have the best chance at doing well. While at the EDC, we worked to connect more venture capital companies to the activities in New Haven, so that as appropriate in growth cycles and certain markets, VCs might consider New Haven as a great opportunity for its relatively low cost of rent/housing and great quality of life.
Most importantly, our best ambassadors of New Haven are the talented people who travel regularly, or leave the City, and speak enthusiastically about New Haven’s opportunity. Like Ben Berkowitz (thanks Ben!) who regularly speaks about New Haven at conferences all over the world, it’s great to hear that Feuer is a fan, and I hope he always feels as welcome back in the City as I do.
All that said, it certainly is important to develop a deeper bench of talent locally, and make the opportunity for work in New Haven more visible to the coding/developing talent pool (however, competing with the big companies is hard for all startups everywhere).
“but actually there is a drought of coders and developers everywhere. The large companies are opening offices and trolling the halls of MIT all the time, and there are still not enough…”
This falsehood is being promoted by the industry as a part of an effort to increase the number of H1B visas, which are only supposed to be to fill positions that cannot be filled with domestic resources. If you set impossibly high standards, you can claim there are not enough new/recent graduates (preferred because they cost less) and experienced workers - but the ugly fact is that there are thousands of displaced American CS/IT workers available for these jobs.
Josh Levinson: Not ALL NH’s fault, but the city’s perception and constant demands of its most vocal residents weigh on the location decision. If Yale wants to expand, it’s a “land grab.” If a developer wants to build, there’s always the extortion know as “community benefits.” If Higher One succeeds, the demand is to “hand out jobs because I have X number of children to feed… who need a job” without regard to education & qualifications. If a streetcar is proposed, it should be voted down to punish Yale. If Yale graduates from all parts of the US and the far corners of the globe wish to stay and make NH better, they’re denounced as “outsiders,” “Elitists,” “carpetbaggers” and the like. Every physical improvement is condemned as “gentrification” and “povertication” is assumed to be the norm… but would be OK if everybody just got some of Yale’s money.
Josh Levinson, you are correct. When Venture Capital firms fund an early stage growth company like Panorama it’s often contingent on a move to an area they view as more favorable for attracting talent, cutting partnerships/ deals, and ultimately getting a better return on their investment - for the VCs it’s all about the odds, and since most of their investments won’t work out, they need to do everything in their power to increaase their chances, We saw this with such promising NH startups as Hadapt and PaperG. I don’t think the situation is anyone’s “fault” per se, but I do believe there are some things we can do about it and New Haven is missing a fantastic opportunity. Many VCs are Yale Alums - YEI and other groups need to make sure the Y alum network are aware of how robust the startup environment has been in New Haven (very different from the 80s when it was only biotech). The City needs to do its part by working with Yale on this issue. Downtown housing and safe streets are key as well. My impression is that groups like The Grove are doing a great job here. People like been Berkowitz have been leaders here, curious to hear his view. Not to make this post political, but it is election season - keeping startups in New Haven, working with the Grove and Yale has been a key theme of the Elicker campaign.
A100 is a program run at the Grove by Independent Software to prepare aspiring, local, technical talent to work for startups. Check it out here:
Wow. Give anonymous and company enough time and they’ll
1. commit every fallacy in the logic book.
2. Blame the Yale unions for the weather.
3. exhaust their supply of lies and distortions.
We’re still waiting for number 3 of course. My money is on it never happening, but we;re closing fast on 1 and 2.
the article explicitly says that the company moved because there aren’t enough engineers here. How in the name of Sam Hill is THAT the fault of the Yale Unions or the Board of Aldermen elected two years ago?
The only thing that the unions have done that could in any way affect the supply of engineers in New Haven is to negotiate the most generous tuition reimbursement benefit package in the country for Yale employees, so that maybe some of them can get engineering degrees through their employment.
More importantly, this story is a big, fat yawn. Same as it EVER WAS.
CCNE wrote a report a decade ago documenting that the biotech incubation model was failing as an engine of long term mass employment growth because the minute they become viable, companies leave. The report predicted this event with dead-eye accuracy.
The Yale unions and CCNE did nothing to sabotage that model—the DeStefano Administration and Yale have had a free hand to turn it into a long term engine of growth. They have failed utterly.
The idea that pressing existing large, geographically anchored employers to raise their economic standards and hire more city residents is somehow responsible for the two-decade failure of the incubation strategy is a textbook example of a false opposition.
the two have nothing to do with one another, and frankly, are complementary strategies. If yale paid its service, maintenance, clerical and technical workers minimum wage, the city would be far less livable than it is now.
This is so absurd that it will take another comment to finish [continued]
Let’s just review the extraordinary self-contradictions of the NHI Justinians:
1. When the Board approved the 100 College Street project—expressly designed to cater to post-incubation biotech tenants—they were villified by the Justinians for destroying the city’s livability. But now, somehow, the anti-business nature of the Board and the Yale unions are to blame for a start up leaving the city.
2. When the owners of 360 State Street said that the property tax deal they negotiated with the City would cost them so much that investment was unviable, and the President of the Board negotiated a compromise to reduce that liability, the unions were responsible both for the original deal [unfair to business!] and the subsequent compromise [giveaway!]. Now, though, its the Board’s insistence on too-high taxes that is driving business away from the city.
3. Anonymous tells us that unnamed “insiders” say that Star Supply was held up as some leverage against Yale. For what? The contract was long done, and how in the world does Yale care enough about that parcel for it to mean anything and, for that matter what leverage does a dead project give anyone? More importantly, wait! the Board of Aldermen gave away the streets to Yale! Killing projects that Yale wants—too mean to Yale! Giving streets to Yale—too nice to Yale! I dare you anonymous—try to get more incoherent. I don’t think it’s possible.
4. And for heaven’s sake, give the Ice Cream Trolley a rest. There was no free money. There was only the chance at maybe, possibly some day some federal and state money, which would be used to tear up Church Street for a decade. Because, you know, we all enjoyed it being torn up for the past five years so much, and we all need to support the poor, downtrodden shoreline commuters, and East Rock and Downtown residents.
If you wanted to fund a regional transportation plan, you should have proposed one, not tacked on some half-assed language to the Ice Cream Trolley.
“The New Haven school system started using Panorama’s services a year ago for its “school climate” surveys.”
And as a result, the district notes that “We changed survey scoring methodology for 2012-13”.
Takeaway: we can’t reliably compare school climate data from the first few years of this program.
Well, looks like the district will be *forced* to rely more on standardized tests as they select which schools to close (“turn around”) and turn into charters.
As I’ve come to read the New Haven Independent more and more, I’ve noticed that the comments of “anonymous” tend to be always angry, critical yet do not propose any solution or not any solution she/he is involved in (maybe she/he is not involved in any solution). Never heard a solution or a positive quip, just anger. Maybe I’ve missed something?
If this person (I am assuming only one uses the handle) why does “anonymous” live here. There must be some better place where they would agree with everything or, at the very least, take part in something.