How Yellowdig CEO Shaunak Roy grew Yellowdig to $6.2M revenue and 830 customers in 2024.

hey folks my guest today is shawnik roy he's the founder and ceo of yellowdig a community driven active learning platform adopted by over 130 colleges and universities k-12 schools and corporate training clients their mission is to transform every classroom into an active and experimental learning community shania takes to the top yep all right so so who's paying for this is it the universities directly or is it the students we have both so in some cases the universities pay for it but a lot of the cases students will directly pay either through the bookstore or they will pay through a credit card how do you manage i mean those are very different sales motions schools are hard to sell students you know it's easy to sell but they churn way more that's right so we make it easy for our clients to adopt that technology so if you imagine you know our most of our clients are high education institutions um and they have long sales cycles so we make it easy for any professor who wants to use our technology they can either go to the institution and say if they want to buy a license so we in that case would sell a enterprise license directly to the school and we have many clients like that but otherwise if the professor themselves just want to try it they can go to the bookstore like a box of nobles and look for yellow day we are in we are a bonsai noble's partner so we are pretty much in all over the country so just the way you will buy a textbook you'll buy yellow um and you can add it into the learning management system and use it in the classroom um so in that case you know the bookstore would kind of directly kind of charge the students through the you know systems that are already in place so if you look at all your revenue from last year what percent was direct to consumer versus through the school director consumer is a new uh business model for us we launched it in the beginning of 2020 so that's a segment which is growing for us right now we expect that to grow rapidly in this year uh but right now i would say it's about twenty percent of our revenue okay so twenty percent is the teacher watching into barnes and noble or the student walking to barnes noble the other 80 percent is direct to the university that's right okay interesting um so let's talk about that what does the average university pay you per month or per year to use yellowdig so our pricing is uh by the course so the way the product is used is uh a faculty or a group of faculties would decide to use the other day as their teaching any subject area so the decision is at a course level so essentially the pricing is also at a course level so for one student to take use yellow again one course is 12.95 cents um and that's how for the student or for the university um it would be either the student or the university it could you know payment could come from anywhere but that's the price don't you imagine if a university is signing up it's probably for 5 000 students you're not going to charge them the full full rate are you [Music] uh we do give good discounts so we have volume discounts in place depending on as they scale with us we give them a variety of discounts so that it certifies them to kind of you know broaden the usage so like if i'm gonna i mean what is your biggest university how many seats do they pay for so you know we i mean biggest university i would say arizona state is a big client of us they were one of our first you know users of the platform um and we have an enterprise license with arizona so that's a very unique model you know for sponsoring your clients um so usage of of course grown over the years you know in the university of arizona but uh but for us for uh you know we have over 130 universities now so depending on every school has sometimes you know one school has three different licensing models sometimes like department of arts and sciences actually bought the student license so the students are directly playing but maybe for another business school they have an enterprise license where they are paying for the entire school uh to us i see got it so what i guess let's let's just talk about the 80 revenue that comes from these 830 universities what is the i guess how many paid seats across all 830 universities maybe that's the right question so right last year we had about 200 000 uh students who used our platform in a variety of ways so some of them were part of enterprise license some of them were direct student pay so that's how that's a total pool um and in terms of our uh pricing of course you know if the university has adopted us that pricing is lower than a school that is using us in a couple of courses or programs oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 percent of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderprep.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview well that's why i'm asking so ignore the total pool of 200 000. you're saying 80 of that's about 160 000 is coming directly through an enterprise deal with the school philadelphia speaking okay got it so if i take 160 000 seats divided by what 830 that means the average number of seats is about 200 per university um yeah that's uh that sounds reasonable okay so if i if a university is listening right now and they reach out to you and sign up what are you gonna charge them per seat for 200 if a 200 seat deal so for us 200 seats the first question is are those 200 students in the same class so sometimes we start with an intro level class where you know they have a 200 to 500 students in the same course so in that case it would be 12.95 per student per course that's how they will get started if it's across five courses um so then you know let's say you know a student you know who's going to use yellow for the entire program and they're taking let's say five courses for that program in that case they have to pay yellow deck five times that's how you know how that's how it's designed um so yeah so if they're starting small like 200 seats uh you know that would be our out of the box essentially consumer price but then if they scale with us you know depending on how big the school is what type of a commitment they want to make you know we have contracts ranging from one year to five years so depending on the size and length of contracts we would probably give them some incentives to you know adopt us at scale don't name the customer because this is a more sensitive question but what is your largest customer pay you per year right now uh our largest customer i think you know over 300 000 a year per year okay and that is what 10 000 seats a thousand seats um i don't have the number but they are pretty big yeah okay interesting give me more of the back story here when did you launch this i launched yellow light back in 2015 but we went through a pivot in 2019 so the first generation of the product...