TechSmith Takes Long Road to the Top in Screen Capture and Recording Software

9/30/10

“Why not have a high-tech company in Michigan?”

This is the question Bill Hamilton asks of those incredulous of the possibilities of success of a software company based in Okemos, MI. Hamilton, an Ann Arbor native, started TechSmith in 1988, and the company, best known for its screen-capture software, has weathered the challenges of a startup from the rust belt state.

“We see a lot of positives being here in Michigan,” Hamilton said in an interview last week. “The one problem we have is more of a psychological problem than a real one. And that is when we go to recruit people from outside of Michigan, the press is so bad on Michigan right now, so we get people who have a lot of pause.”

Working in a state known more for blight than innovation hasn’t seemed to hold TechSmith back. Hamilton expects the company will end the year with about $41 million in sales.

TechSmith first introduced its flagship product, Snagit, in 1991. And since then, the technology—which allows users to take a shot of their PC screen, save the snapshot, manipulate it, and share it with others—has taken off. But it hasn’t always been steady success for Hamilton and the company. TechSmith has faced challenges common to many startups. The company developed a variety of products, some commercially successful, some not, before finding a viable business model.

Hamilton and a business partner co-founded TechSmith in February 1988, knowing they wanted to develop and sell software products, but they had to start by focusing most of their time on consulting, instead of developing software. “Mostly what we did was help people get PCs to talk to many computers and mainframes,” he said. “We did that for some time. It was partly to put food on the table, but it was also partly to understand what people were looking for.”

After the founders consulted for a few years on the side, they were able to develop their first product—a gateway for local area networks to connect to databases—and were selling it with some success. But an unfortunate partnership stalled the company’s trajectory, at least temporarily. “I made a bad business decision and got into a business relationship with a company that turned out we didn’t have a level of compatibility that we thought,” Hamilton said.

As part of the “divorce,” as Hamilton calls it, TechSmith gave the other company the technology for local network interfaces and was forced to start from scratch, about seven years after the … Next Page »

Jillian Berman is an intern for Xconomy Detroit. Follow @

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