Panopto's capture, replay technology suddenly in demand on campus
Eric Burns was an undergraduate researcher at Carnegie Mellon University when he started working on technology that would better capture, store and transmit video of professors teaching class.
“We were a research project long before we were a company,” said Burns, who 10 years later is the chief technology officer of Panopto Inc., a South Side-based company he helped found.
Panopto, spun out from CMU in 2007, quickly outgrew the laboratory as universities across the world have increasingly looked to create a better learning experience for their students on campus and reach new students online.
“Education customers are coming to us saying ‘We need this,'” said William Guttman, executive chairman of Panopto and former CMU professor of economics. “You can't have a college that doesn't have this capability.”
But while Burns, Guttman and fellow co-founder William Scherlis, a computer science professor at CMU, knew they had a good idea, getting the company off the ground as the financial world was melting down in 2008 and 2009 wasn't easy.
“By 2008, things turned really very scary,” said Burns, who had taken a job with Microsoft Corp. after leaving CMU, but quit the Redwood, Wash., software giant to start Panopto.
“Huge functionality had to be built very quickly with no money,” Burns said, recalling the early years of engineers living in the office, eating ramen noodles and just scraping by on meager salaries.
The company's fortunes began to change more recently as the rest of the economy has recovered.
The company this month surpassed the 500-customer mark, including 400 educational institutions.
“Since then it's all been up and to the right,” Burns said.
Panopto is profitable and doubled its workforce to 50 employees in the past year, Burns said. He expects Panopto to double its workforce again in the coming 12 months.
“We're growing entirely on revenue right now,” he said, “so it's a great place to be.”
The privately held company declined to disclose sales or profit figures.
But it has attracted interest from investors. Through two rounds of fundraising, Burns said, Panopto raised about $8 million in equity capital.
Companies developing education technology are gaining popularity among venture capitalists, according to the National Venture Capital Association. Investments in education technology companies have more than tripled over the past decade, going from $147.8 million in 2002 to $463.1 million in the first nine months this year, the association said.
Roger Novak, a venture capitalist from Maryland who specializes in ed-tech investing, said interest in the industry has grown with the wide adoption of mobile computing devices, availability of broadband networks and some notable investing successes, such as the 2011 acquisition of Blackboard Inc., based in Washington, D.C., for $1.6 billion.
Blackboard is one of the leading providers of online learning technology to colleges and universities around the country.
“There's really an opportunity to make an impact on education,” said Novak, founding partner of Novak Biddle Venture Partners. “People are saying, ‘It's a big sector and potentially ready for technology to make some big changes.'”
Universities are pursuing lecture-capture technology because on-campus students are demanding it as a study tool, and it enables schools to expand their student base online at a reduced cost, Novak said.
Panopto's technology, which faces competition from a few other companies such as Dulles, Va.-based Echo360, is popular with customers because it's very adaptable, Burns said. A variety of media, such as video and PowerPoint slides, are easily integrated. And everything, including the video, is keyword searchable.
“We think this is what really, at the end of the day, what students want,” he said.
It's also flexible, with universities using it to broadcast classes to online students or satellite facilities, or giving students a chance to review lectures before a test.
In the case of Caroline Bruzelius, professor of architectural history at Duke University in Durham, N.C., Panopto has allowed her to open up her classes to interaction with students by uploading fact-based lectures that students watch before the class.
“The class is all about the questions and discussion of the questions,” said Bruzelius, who said she's used it for three semesters. “Instead of a one-sided experience, I'm able to dedicate class time to discussion.”
Panopto is just scratching the surface of use in academic settings, Burns said. Among North America, the United Kingdom and continental Europe, there are about 12,000 universities, and Panopto is used in about 400.
But even bigger growth will be achieved as the company breaks into the corporate world, he said. It counts NYSE Euronext and Microsoft as clients.
“Enterprise represents, I think, a 10 times bigger market than education does,” he said.
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or email@example.com.