Beyond Consulting

31: From Consulting to EdTech Founder & CEO

In this episode of Beyond Consulting, sponsored by ECA Partners, we welcome Shaunak Roy, a former management consultant and Founder and CEO of Yellowdig. Shaunak joins us to discuss what it takes to lead an EdTech startup from idea to execution.

 

The Beyond Consulting Podcast is hosted by Ken Kanara and co-hosted by Steven Haug. Ken leads this week’s episode.

 

 

Ken Kanara: I’m Ken Kanara and this is Beyond Consulting, the only podcast focused on your life, health, and wealth after consulting. This week we welcome Shaunak Roy to the studio. Shaunak is the founder and CEO of Yellowdig. Shaunak, thanks so much for taking the time to join us.

 

Shaunak Roy: Ken, it’s good to be here.

 

Ken Kanara: Thanks for coming. I know we’ve known each other for quite a while, but I thought, for the listeners that aren’t so familiar with you, if you could start by giving a quick recap of your career and how you got here.

 

Shaunak Roy: I have had a long and interesting career to becoming a startup founder, which I am running Yellowdig today. Ken, we worked together at Booz. It was probably ten or 15 years back?

 

Ken Kanara: Yes, I think so.

 

Shaunak Roy: It’s been awhile, so as a quick recap, I grew up in India. I did my undergrad in mechanical engineering from IIT Bombay, then worked in India for a few years, then decided to come to the US, like many people do from India, especially with the technical background. I pursued a masters in engineering systems from MIT. After MIT, I joined Booz Allen Hamilton, which became Booz & Co. During that time, essentially, I was doing strategy consulting for a variety of companies in the US and also a few abroad. Right about 2009 I moved to KPMG from Booz because there was an interesting opportunity that opened up in KPMG. I spent a couple of years there and moved into FMC Corporation, which is where I moved from New York to Philadelphia. FMC is a Fortune 500 chemical company with a variety of businesses. I was head of biz dev for one of their business units. I did that role for about three to four years and finally, I had enough courage to actually jump ship and start my own company, which was always my dream in the back of my mind. 2015 is when I decided to leave my glorified life of consulting corporate and became a startup founder. I started a company called Yellowdig in education technology, that has been running for the last seven years now.

 

Ken Kanara: Excellent…so, consulting to corporate strategy to diving in head first and having no assurances of any stable foundation…sounds like an interesting career path.

 

Shaunak Roy: Yeah, that’s to say the least. Not too many people take that route, but I do believe that a lot of people should take that route if they desire to be an entrepreneur.

 

Ken Kanara: I’m curious to get into why, but first let’s start with Yellowdig. You mentioned it’s an EdTech company. Tell us more about it.

 

Shaunak Roy: Education. We all have been to schools, colleges, universities. Even if, with a company, we often go through training programs. That has been primarily brick and mortar. It has been in-person. People go to schools, meet their faculties, go through the whole experience, and get a degree or whatnot. But it’s going through a big disruption right now, especially with COVID. As you can imagine, many courses and programs are increasingly online or hybrid, which is a mix of online and in-person. But the digital infrastructure for these online courses and programs, especially the hybrid courses and programs, where you can take the course from anywhere, from anytime, is not there. A lot of these colleges or universities are starting to venture into this online or tech forward era in learning and development. Yellowdig basically plays into that space. We have a SaaS platform, a software as a service platform, that we license to colleges and universities that creates that connected learning experience for the students, which is often missing, especially for online and hybrid programs. We work with over 150 colleges and universities, primarily in the US, but we do have clients now in some other international markets.

 

Ken Kanara: Help me understand a little bit more what that means. Could you walk me through an example?

 

Shaunak Roy: The example is, let’s say you get accepted into a university. It doesn’t matter which university it is, the experience today is that you get accepted, you wait for a few months, you show up on campus and once you show up on campus, you pretty much have to decide what courses you have to take. You probably talk to a few people, maybe you’re assigned a mentor or advisor and then you start taking courses, right? The way you go through that experience is pretty much a physical experience, so you have to find the people, or you have to be lucky enough to meet the people, who can help you to be successful in that environment. That was okay for probably, 100 years, because that was how education was designed in the US.

But fast forward to today, a lot of these colleges or universities are offering online and hybrid programs where students are increasingly relying on their online offering to actually get their courses started. You can pretty much take some entry level course from one university, transfer the credits to another school and then go there and then find your way, but the digital infrastructure…what Yellowdig does is that it creates that digital space. Imagine having a Facebook Live forum for your college. It’s not as simple as Facebook, where you can go and find the people you need to find and actually meet people and get to know your peer group. You can get to know your instructors, alumni–who might be able to help you find a job start–to build those relationships in an online environment, which is protected. It is not open like Facebook. It’s offered by the school, and the school designed this experience so that students can, even before they step onto the campus, even if, let’s say they are doing it in-person, they can start building those relationships way before. They can start to discuss, ask questions, find out which courses they want to take, get to know people they want to do projects with. When they’re on campus, again, they can maintain their digital connectivity or the experience and build around their physical experience. The digital experience, or the digital campus, becomes another value proposition for them to really get more value out of it, because most students live online. We’re always on their phones, why are we not talking to our peer group, who potentially, can be a lot more valuable down the path.

Yellowdig creates that environment. We have a software which the universities use to customize it and create that environment so that students can build those relationships at every aspect of their life. Even before they come to campus. When they come to campus, they can create clubs and they also can get to know their peer group in the courses. We also power the courses using our platform so that it doesn’t become just a knowledge transfer, but actually an opportunity for the students to get to know one another, discuss topics that they care about, and basically learn more and better.

This environment is missing today. Yellowdig is one of, I would say, one of the first companies to create this environment and now we are working with some of the top universities in this country to make that happen. I believe we are just at the start of this revolution because ten years down the line I think the online environment is going to be as important as the physical campuses that students go to.

 

Ken Kanara: How did you think of this or come up with the idea?

 

Shaunak Roy: Like any business, we started small. We didn’t want to go and say that we are going to create the digital campus because that’s a big problem for us to solve. Instead, we started with courses. The first idea that we had is that, as online courses were starting to be growing, starting in 2015-2016, there was a lack of connectivity between the students because just sitting in a classroom and only meeting them once or twice a week is not enough, so we created that platform, which essentially helps them to connect with their peer group and professors 24/7. It really makes learning a lot more engaging. That was the first product we launched on the market in 2015 and then in 2019, when we realized that the opportunity was bigger than just building those communities in those courses. We launched our next generation platform in 2019 and that’s the vision that I explained to you, which engages the students across the lifecycle, not in their courses.

 

Ken Kanara: Are you seeing enhanced outcomes, and if so, how are you measuring them?

 

Shaunak Roy: Yes, that’s a big deal in education. We can be on Facebook and spend hours without any benefit and nobody will question it…

 

Ken Kanara: Sure.

 

Shaunak Roy:…but in education people do ask, like, “Hey, did you really improve your grades?” So there are three big outcomes that we look at. One outcome is around deeper learning. Education, by definition, is an area where you want to learn more, so if you are more connected with your peer group, it leads to much more engaged learning environments where you’re not just a receiver of information but you’re actually proactively discussing questions or discussing topics, which happens on our platform. Deeper learning isn’t something we measure, there are various ways we measure that outcome, but we have shown that it improves grades for the students, for example, when you use our platform versus not using it.

The second is pure efficiency gain, which is faculty often spend a lot of time to actually interact with students. If you know about faculty office hours, you’re going to get to see somebody once a week. You have to sit in those offices and you have to schedule around…it’s a very messy business and everybody loses time.

 

Ken Kanara: …and students have to wait outside, wait in line…

 

Shaunak Roy: Exactly, or nobody will show up, with faculty sitting there and nobody comes. That happens all the time. Nobody likes it, essentially. On our platform, faculty office hours are basically asynchronous. You can talk to your faculty whenever you want and they will get a response whenever they have time. It’s a very efficient way, so we save time for faculties, and through various other ways, we save time. The final is persistence, which is, a lot of these institutions suffer from students that are essentially dropping out. You sign up for the program,  you spend a year and then you decided to move on because you found something else. That is a big problem.

 

Ken Kanara: Oh, interesting. I wasn’t aware of that.

 

Shaunak Roy: Oh it is a huge problem in the US. 1/3 of the undergrads who get into colleges and universities in the US do not graduate, even after six years.

 

Ken Kanara: Oh, wow! I had no idea.

 

Shaunak Roy: Imagine that you’re spending a couple of trillion dollars in higher education in the US and 1/3 of that is basically wasted. All of the students who are not finishing the programs, if you don’t finish, you essentially don’t get any value out of the degree or whatever you’re pursuing. It’s a huge problem and there is a lot of research that has shown that if you have more connectivity–people like to be connected with others. If you have more relationships with your peer group, your faculty, and your administrators, you’re much more likely to stick around and complete whatever you have started. We see huge improvements in persistence when they start using our platform.

 

Ken Kanara: That’s interesting because one, I wouldn’t have thought that the dropout rate was that high, and then two, I would have assumed that the reason was purely based on academic performance and not other drivers like you’ve just outlined.

 

Shaunak Roy: There’s a whole list of drivers. Academics is only one portion of it. There are many other reasons people drop out. It can be as simple as, sometimes people drop out because they just get demotivated. The economy sometimes…students are going through the program and they feel that they are not going to get a job, for whatever reason, and they just say, “You know what, I’m not going to pursue this, maybe I’ll just take something else.” It happens and I think that’s why having a much more cohesive learning experience is very important for those metrics to improve.

 

Ken Kanara: That’s incredible. Okay, ow let’s talk a little about what it means to be a startup CEO. You quit your well-paying corporate strategy job and said, “I’m going to start a company.” How did you do it and tell us your founding story.

Shaunak Roy: Well, you have to be a little bit of an explorer to be able to jump off a very cushioned or cushy job and start on the ground floor, essentially, but the TLDR for me is that it’s actually a fascinating experience. I would probably make the case that a lot of people could be very happy starting a company and growing that company, and could probably make as much or more money running their own companies, as opposed to being on whatever route they’re on.

The primary reason a lot of people do not choose the path is because there is a lot of uncertainty for the first two or three years. When you start a company, the first 18-24 months is the most uncertain because there are so many variables at play. A) is that, of course, the idea that you have. You do not know whether that idea is going to work. B) is that, even if the idea works, will you have the right team or the right funding around you to be able to execute on it. It’s a big question. The third question, of course, is yourself as a founder. I think consulting is one of the best professions to pick up a lot of skills around starting a company, but it’s still not enough. There are other skills that are needed to be successful, at least in the initial phases of building a company.

With that, I think a lot of people hesitate to jump in, but I feel that if you can survive through the first year or two or three, which I would call it, primarily a learning experience…if you can survive that and actually create something of value, after that it becomes a much more of an iterative experience in terms of finding the right skills, the right team or the right situations to grow the company.

The other thing I’ll say is that when we think about starting a company, we think about Facebook, Google, all these companies. We all know the odds are very, very low. As somebody starting a company, of course, we would want that to be well-defined company. If that happens, that’s great. That’s amazing, but of course, everybody knows it’s a very small chance of that happening. There is a huge middle range that sometimes people don’t think enough about, which is if you have enough success, maybe it’ll be good for you, overall. Better than just “having a job.” It doesn’t have to be that extreme outcome for you to be happy or successful. There is a wider range that is possible. Really being cognizant up front about it, which I would say that I have learned over the years and I’ve seen examples of that that made be more comfortable pursuing this path for the last seven years. I’m doing it more and I expect to do it for a long time. It is something which is important. Having that mindset is important so that it’s clear that, “Okay, this is what I’m going for and if I can figure out a way to survive for the first couple of years…” then it gets a lot easier. Worst case scenario, if it doesn’t work you can always get a job back.

Entrepreneurship is one of the best experiences, especially on the digital side of things, which is disrupting so many industries. You can get a job back and I think that experience is going to be quite valuable, especially in the corporate setting.

 

Ken Kanara: You mentioned consulting being a good platform and training ground and you also mentioned it not fulfilling everything when it comes to starting your own business. Where does it fall short?

Shaunak Roy: Consulting… first, the good thing is that I think it’s a tremendous opportunity to build problem solving skills. As a consultant I’ve always felt that I’ve been thrown into problems every three weeks, four weeks, six weeks, and I literally have to figure out how to solve it. You’re thrown into so many environments that you start to build a set of pattern recognition abilities so that it doesn’t matter what problem comes in the future. I felt that I could at least structure the problem, think about in a way so that I can create a solution for it, whatever the problem may be. Sales, marketing, operations, or whatever area,

I think that’s a tremendous skill because lot of corporate jobs do not provide that. If you get into a corporate role where you’re building expertise in one area, you may be the expert in supply chain management, but you’ve never solved problems at are first principle level, which I think a lot of strategy consulting roles, especially, provide that.

Where it fell short for me…personally I would say that where I felt I was lacking is that it doesn’t have the scalability factor. At the end of the day in consulting you’re selling your time. If I solve a problem that truly I feel is a great problem, I solve it, I give the solution to the client and then I probably move on to another project with a different problem. I never had the chance to see that, “Okay, now if this is a really smart solution, can I really make an impact?”

 

Ken Kanara: Sure.

 

Shaunak Roy: …make an impact and actually have a bigger impact and get a portion of the value that I created, which is, essentially, starting a company. You’re going to solve a problem, then you scale it, and if there’s a right solution, you get value out of it. I feel that consulting lacks that piece. Unless you are a consultant where you’re actually working with the client to scale up that solution and you actually see the benefits of that upside, which is possible, I’m guessing in some models, but I wasn’t in that environment. That was personally missing for me, so I always wanted to do something where I think I can scale it up. That was personally, the reason I felt that I wanted to start a company.

 

Ken Kanara: You’ve certainly achieved that. Let’s dig into what it means to be a startup CEO. You’ve had the business now for seven years. You’ve cleared that scary 18 to 24 month hurdle, what does your day look now and what are your responsibilities?

 

Shaunak Roy: It’s a good question. I would say I can explain it in three phases. A startup goes through a few phases of development. The first couple of years is the first phase, the second phase is after the few years when you start to scale, and the third phase is when you really want to scale the business so it takes sometimes between two to five years, depending on which industry you’re in and how the business is growing.

The first couple of years as you’re starting a company, the primary responsibility is to find some sort of a product market fit. Essentially the question is what you are providing to the marketplace–it could be a product, a service, or a combination–is there a buyer for it that they’re going to pay for it and see value. From that point of view, my responsibility at that time was more in terms of building the minimum viable product, putting it out there, proactively getting feedback on that product, trying to find customers whichever way possible, so finding customers and retaining those customers. They’re two different things.

That was my primary responsibility. It was almost like running solo to a large extent. I did have a very small team at the time, but of course, at that early stage, it’s hard to afford a bigger team because without that product market fit, it’s hard to raise capital, it’s hard to hire people and also it’s hard to generate enough cash to do the things so it was more of a solo venture for the first couple of years I would say that’s the hardest phase as an entrepreneur in our case.

What happened is we found a product market fit and then we grew the product to a reasonable-sized revenue and then we run into challenges. We realized that that product wasn’t serving the market and then we had to rebuild the product. That was a journey we went through as a company and that hiccup often happens, by the way. A lot of companies go through a few iterations of the product to find the opportunity that scales so that was the first phase.

The second phase for me was finding seed capital and finding key team members who we’re going to support building it. At that phase, my thing was to find investors who were willing to invest in the company as well as team members who were going to join. Both are interesting problems in different ways. We can dive into it, like what does it take to actually do that.

Right now we are in the scaling phase of the company. In this phase, there are three pillars that I focus on. The first pillar is a strategy. Do we have the right strategy in terms of growing the business? The second is people. Do we have the right people as we start to scale the business. Are we hiring the right people to be able to take it to the next level? And finally, the third pillar is execution. Are we executing to be able to grow? And different things happen. We’re going through COVID right now and we are in a recessionary environment, so things change. As a founder you have to be able to figure out ways to survive in every environment and grow in every environment, so I think that’s what keeps me awake at night.

 

Ken Kanara: Excellent. You mentioned the second pillar, which is finding interested investors as well as key team members. As someone that runs and owns a business how do you think about that?

 

Shaunak Roy: They are different types of investors you can go after. Investors in the early stage can be friends and family, small angel investors who are, essentially, wealthy people who probably have sold a company and they want to invest in a new entrepreneur. Then you have institutional funds which are traditional VC’s who are investing in the next growth company. You also have debt funds, where you can raise a debt capital, like some sort of a loan that you have to pay back eventually.

There are different types of capital available and it depends on the company you’re building.  so if you’re building the next Facebook or next Google, you would typically want to go to the top-tier institutional funds and try to sell your idea and see if they would be interested. If you’re building a company where you need a little bit of capital and you don’t think it might be a Google, but it’s going to be a pretty large company, then you have a different set of investors that you can go to who are going to write you a check and get you going. The third option is bootstrapping, which is also quite popular. Bootstrapping is where you may raise a little bit of capital to get going, but you quickly try to raise enough revenue from your customers and that gives you the initial momentum to build a company. In that stage you keep all your equity in the company and in the other stages you have to negotiate because you’re basically selling equity in the business. There are pros and cons in each approach.

 

Ken Kanara: I think that’s such an important point, to think about the type of company that you want to build, because I think there’s allure, let’s call it, of the new Silicon Valley with all these founders. We’ve got the We Work guy and it’s like, “Okay, let’s raise as much money as we can.” We’ve got the Elizabeth Holmes of the world and it’s… to me that’s not building a company, that’s really good PR. I think it’s important that you mentioned that, just because you think about, upfront, the type of business that you want to build.

What about people? You mentioned in that phase two that you really started to hone it on finding the right, key team members.

 

Shaunak Roy: Team members is probably the next biggest challenge and I’ll talk more about that, but I want to make one more point about trying to think about what kind of company you’re building. The primary message that a lot of people get when they’re starting a company is from these popular tech crunch of the world where you hear about these big startups being funded and they raised $100 million or whatever number…Series A’s are not that big these days sometimes. But that becomes a benchmark so then you start to think about, “Okay, I need to be able to have a big enough idea that I can raise that capital and I’m going to be off to the races,” and that’s the PR side of things as you’re starting a company.

The other motivation is that you want to do good for yourself and your investors. You want to build big enough of a company so that everybody can make a lot of money, if that’s the goal. Typically that’s a goal when you start a company. What I really want to encourage people to think about is what is your personal goal in starting a company and what are your odds of reaching that goal is quite important.  The personal goal is, “Okay, you want to be financially independent. You want to be running a thing that you really enjoy doing and you truly believe in that business. You’re passionate about the topic, which is great and the reason you want to stick around. The odds of success are, if you can build a company which has a good number of customers buying your product and paying you healthy margins and you think there is a big enough market for you to build a reasonable business could be ten, twenty, thirty million dollar,  fifty million dollar business, a hundred million dollar business…the odds are much higher to that as opposed to building a five hundred billion dollar Facebook. There are probably 1,000 of these as opposed to one of that, and there’s a huge amount of luck involved, too, as you can imagine with those kind of odds.

 

Ken Kanara: Luck, timing, winner-take-all type of markets…

 

Shaunak Roy: And your path to get to that point is also much more likely because if you set up yourself with something which is an extreme outcome, and you raise money on those expectations, and as you start to build it and you can’t hit those goals, you will either be out of business or you’ll be pushed out of business. That happens all the time when companies get sold out or carved out because the investors you bring in and the expectation you set early on has an implication down the road. So really thinking about what your goals are, being realistic about what those are, hitting a goal which is meaningful and measurable, and then, of course, as you are on this journey and if you find an opportunity which is way, way on the left field and really big, go for it. There’s no reason not to go for it, but setting that goal up front is going to put you on a path, I think, that is going to be a lot more enjoyable and you’re probably going to control your destiny much more than going for the big swing. I think the Elizabeth Holmes and all those scenarios, I think all those situations happen not because they were bad people, that’s my belief that they were not bad people, but they were put into situations that they set certain expectations and raised money on certain unreasonable goals that they just fell into this vicious cycle, which companies can fall into and it’s not a good outcome for anybody.

 

Ken Kanara: That’s great advice. What was your personal goal up front?

 

Shaunak Roy: My goal was, and this was an interesting conversation I had with my ex-manager when I first quit my job. His question was, “Are you sure? Are you sure that you want to leave your job which pays you a good wage to live a good life? Are you sure that you want to take this now?” I told him two things. I said that I wanted to be an entrepreneur and if I don’t do it now, I was 35 at that time, I would never do it because I felt that maybe it would be too late for me. That was one reason I really wanted to pursue that. The other thing that I said was that I do not know whether my company is going to be successful, but at least it’ll give me enough learning so that I can become an entrepreneur or somebody independent down the lane. I said it’s a 15 year goal for me. In that goal I may start one or two or three companies but I want to be on that journey because I see myself as that as opposed to this. I almost took a big picture decision at that time and looked at a variety of ideas and I think I got my calling into this idea that I’m working on right now, but I didn’t start with an idea. I didn’t start with, “Oh I want to build…”

I really just thought of it as a life decision in terms of where I wanted to see myself in ten to fifteen years.

 

Ken Kanara: That’s interesting. It’s particularly interesting that you picked it up from a longer term perspective. Even though, yes, the first six, twelve, eighteen months are definitely the hardest if you’re going to start something, you picked it up from, “Okay, I’m 35…between now and 50 I want to be in business for myself.” That’s pretty cool. We are going to turn the discussion a little to key team members because I want to get back to that point. I think that’s such a critical part of your role as CEO. You’re only as good as your team and I feel like you were going to share some of your insights there.

 

Shaunak Roy: Yes. Hiring the initial team is probably the hardest thing because a company’s long-term success depends on the initial small team that you can put together because it sets the direction in a certain way. I would say, to be honest, we went through a few turns. The first set of team members that I hired stayed with me for a couple of years and I hired a second group of people who have actually been with me for the last four or five years. One of the key lessons is do not settle, because when you’re starting a company early on, you only have so much insight about what you need as the CEO of the company. You may hire somebody and they may or may not work out. If it doesn’t work out, if you’re not fully confident that it’s going to work out, don’t settle. Try to find somebody else who can replace you. I’s painful always, but it’s better than trying to work with the people that you have because I think that is something that I’ve learned is it’s important to have a high expectation right from the beginning, even though you have limited things to actually offer in the beginning. I think that’s one thing I’ve seen.

The other thing I’ve seen is that people who tend to do really well in startups and also in the growth phase are people who are also deeply invested or vested into the problem that you’re solving. For example, when you’re hiring a technical leader for your product, let’s say you are a business guy who started the company, but you need somebody, a CTO to build the product, the key thing to look for is, of course, technical competence. Somebody who has done it may not be in a big company. Look for smaller company experience because that helps more and you know that’s more transferable.

 

Ken Kanara: Absolutely.

 

Shaunak Roy: …but also to what extent they are actually vested into the problem that you’re solving because that keeps people around when times get tough, and it will get tough. That dimension is the person market or problem fit is something that we look for, especially as we are hiring more people. On the competence side, I would say that the biggest thing to look for is has somebody done exactly what you’re asking them to do? If you’re hiring a CTO and they have been in a big company, and they were VP of some big application in IBM versus somebody else who actually built a product that they shipped and got the user feedback on and was able to iterate around the product, that is much more valuable, even though they come with no name background, they may not have a fancy degree or whatnot. That is what is more important. We always look for people, look at the portfolio, look at how they code, check their code bases and things they have done as opposed to what they put on their resumes.

 

Ken Kanara: I think that makes a lot of sense. I also think there is significant value, especially from folks that have experience, especially in small company environments, because usually, at least with most startups that I know, you could be very well-funded but it’s still very scrappy. You don’t have a 400-person research team every time you have a question that you need an answer to. There’s just so much, I think, that goes into building a startup like yours that it’s about that scrappy environment.

 

Shaunak Roy: Yes.

 

Ken Kanara: Excellent. I think that makes a lot of sense in terms of the team and the capital structures. Thanks for walking us through your day-to-day. We hear a lot about founders and CEOs of tech companies and everything like that. From what I’m hearing, it seems like it’s very strategic, mission-driven, but about a lot of things, like the product and getting it into the hands of customers, retaining the customers… I’m curious about one more thing.

In education, in EdTech, it’s not the easiest selling environment, right? Probably the best analogy is about government and that there’s a lot of bureaucracy usually in academia. How do you think about sales and marketing in order to be successful in the long term?

 

Shaunak Roy: Yes. Education, healthcare, government, these are the hardest sectors to sell into. There are a lot of regulations in this space. A lot of the buyers are not very tech savvy because they haven’t used technology. The total spent on technology in education is less than 2% of the trillions of dollars that is being spent. Only 2% goes to any sort of digital spending. 98% is still brick and mortar spending right now. It’s crazy right now, honestly. That has to shift. I think that’s the opportunity, by the way.

 

Ken Kanara: Yes.

 

Shaunak Roy: One percent movement in that number is billions and billions of dollars. The other good thing about education, which is also true for healthcare, and government to an extent, is the LTV. The lifetime value of the contracts are very high, even though it’s harder to get into a school or university. Once you prove your product–that it works and they like it and they believe in it, they tend to stay a customer for a long time, like ten, fifteen, twenty years. It’s harder to build, but it’s a very stable revenue source, which is why a lot of these traditional learning management system companies, like Blackboard, Canvas and others, have been in business for  twenty plus years. A lot of them have not really invested as much in innovation lately but they still will be there because these are well-baked into these systems and it’s very hard to make changes, especially in these traditional platforms, once you get into one of the clients and get embedded into their products.

Having said that, our strategy right from day one, and we knew that it’s a harder space to break into, is to essentially create success stories. We heavily focused on product to make sure that the product really works well and better than other options they have, and efficacy, which is working with the schools to show the impact of the product so that they can self-report, self-publish and do webinars and presenting conferences about our product.

The strategy that we have is essentially a snowball strategy, which we started with one school, then we had two, then we had three, and then we are almost rolling it out to more and more schools where they themselves adopt and talk about the product. That’s the strategy we have, which is, I think, what will help us to push the product out to as many schools without spending a huge amount of resources in sales and marketing. We do have a sales team. We do have a marketing team, but we don’t usually put a lot of resources behind it. What we put our resources mostly behind is our product and our client success. I like to say that our client success is our biggest sales team because if they’re successful then the sales team can go and take those stories and share how we’re making an impact.

 

Ken Kanara: For our listeners that don’t necessarily understand what client success or customer success means, could you elaborate from an EdTech perspective?

 

Shaunak Roy: Yes, so in EdTech, or any other tech company, once you have a product in the hands of your customer then there are two pieces. One is that you hope the customer will use your product right and actually see the value. There’s a hope strategy, or you can actually be much more intentional about it. You do the training, you do the onboarding and you make sure that you check in with them once or twice a month and make sure they’re fine.

That’s one of the big pieces I’ve seen a lot of the companies fail at because they have a great product, but they do not have a great client success. It’s almost like handling your customers to make sure they’re successful. That’s an area where most successful companies could have a very big competitive advantage. As much as the product. We have a team there who makes sure that we have a training module that each of our customers go through. Before they start using the product, they get certified on the product. When they start using it we actually get the data in the back end and we proactively reach out to them if we see something. For example, if somebody’s not using the product properly or there’s some issues, we proactively reach out to them and try to help them out. We also have support team, which, if anybody reaches out to us we get back to them within a certain SLA. That’s very important in education because it’s a very reference- driven industry where people would want to talk about the products they like and they would promote it, versus purely sales. Some industries are very sales-driven, but this is not so much sales-driven, even though sales is important, like anything else, but references matter more.

 

Ken Kanara: I’m so glad you walked through that. In general, the importance of customer success or client success, whatever you want to call it, and these roles tend to vary by the level of technical nature of the software product, but one thing that I have observed as a buyer…we signed up, I’m not going to use the name of the software company, but we signed up for a software and it actually didn’t work well for our business. Now, it’s not that the product itself didn’t work, but they really invested heavily in customer success, in such that I walked away from the experience extremely satisfied and happy and more than happy to refer them. It just wasn’t a good fit for our business. The customer success team was there with us on the whole journey and I felt like they were just as vested in making sure that we had successful outcomes as them. It made for a good experience overall. I think the fact that you guys are investing there makes a ton of sense. Also, I would imagine and I’m curious to hear your thoughts about this,  but education is a small world. I would imagine that people talk.

 

Shaunak Roy: Yes, they do talk a lot. One bad experience in one school, let’s say a few faculty had a bad experience, especially early in the relationship building, can completely kill that account because word does spread pretty fast. People are on social media. They’re on Twitter so if they have bad experience they’ll tweet about it and that might kill the deal for us.

 

Ken Kanara: Well excellent. Thanks for walking us through that. I’ve always been curious, specifically about selling in the education space because I know it’s not a small feat. Very good.

Shaunak, the last thing we would love to wrap up with two things. One is your advice for anybody in consulting that wants to pursue a path into entrepreneurship and then two, any book recommendations that you might have that have had an impact on your life.

 

Shaunak Roy: Yes. On the consulting piece, I would say that as human beings we tend to overestimate risks and underestimate the upside, especially as consultants. We get paid sometimes to find all the issues.

 

Ken Kanara: “Here’s the 10 reasons we’re going to suck.”

 

Shaunak Roy: Yes, right. Don’t use that mindset to start a company because often if you are consulting, if you already are in the big firm, you’ve already proven yourself to be quite competent to handle a variety of things and challenging situations. There’s a lot of good that can be applied to entrepreneurship even though there are a few things to learn, but I think it can be pretty well applied. Taking the plunge is not as bad having a little bit of backup for a couple of years to make sure that you can live through those couple of years, even if there is no income coming through, which might be the case. If you have that figured out, I think it is definitely not a bad path to take.

 

Regarding book recommendations, there is one book…

 

Ken Kanara: Your background is full of books, so I’m sure you have a ton of suggestions.

 

Shaunak Roy: Well, unfortunately that’s a wallpaper, but I did read a couple of books. There’s one book that comes to my mind which I would suggest if somebody were building a company. It might be applied to somebody who’s running an organization, as well. It’s by somebody called Frank Slootman. He is the CEO of Snowflake, which, as you know, is the fastest growing startup and was the biggest IPO that happened a couple of years back. It is just a massive success in Silicon Valley. He wrote a book about, essentially, running an efficient organization, especially as you’re scaling a company. How to make decisions, how to manage people, how to hire, how to fire, the entire thing. The name of the book is Amp It Up.

 

Ken Kanara: Amp It Up by Frank Slootman.

 

Shaunak Roy: It’s definitely my recommendation if you are thinking about starting a company.

 

Ken Kanara: Okay, excellent. We will add that to the Beyond Consulting library. Lastly, if our listeners want to learn more about Yellowdig or learn more about you, where should they look?

 

Shaunak Roy: Our website is yellowdig.co. There are plenty of examples and case studies there. If you want to learn more about us you can contact us through the website and if you want to connect with me, the best place would be LinkedIn. Just search my name Shaunak Roy on LinkedIn. You’ll find me, so send me a message.

 

Ken Kanara: Then you’ve got that six million person TikTok account, right?

 

Shaunak Roy: Yes, it’s in the works. So that’s yellowdig.co, or you can look up Shaunak Roy on LinkedIn.

For those of you listening for the first time, please make sure to subscribe either on Spotify, Apple or Amazon. If you’re interested in transcripts or past episodes, you can always check out beyondconsulting.info. Lastly, if you want to get in touch with anybody at ECA, it’s going to be eca-partners.com. You can look us up. All of our emails are there on the website. Shaunak, thanks so much for joining.

 

Shaunak Roy: Thank you so much.

 

Ken Kanara: For everyone else, I look forward to speaking with you next week.

 

 

Connect with Shaunak on LinkedIn and visit yellowdig.co for more information.

 

 

 

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