The experience of the Yadiz startup working with one of the country’s large educational institutions
Small teams always face many obstacles when they enter large companies. In this article I try to share one of my personal experiences of a startup entering a very large organization and how we interacted with its different parts.
Yadiz is a combination of yad plus easy, meaning easy learning. Yadiz is an education startup that at first had the mission of selling flashcards, with the user starting to learn them through a learning algorithm written in the app. A bit further on, once the product was out of MVP, we thought a bit bigger and decided to turn Yadiz into a C2C and B2C education marketplace. Any person or organization could create their flashcards and sell them on Yadiz.
About a year after we started, and almost six months after we launched the app, the head of one of the country’s large educational institutions was present at an event. At that time we had added audio and video playback to the app and flashcards, and we were able to give a relatively compelling presentation.
They liked our work and it was agreed that we would be connected to one of their advisors to see how we could collaborate. I will try to tell the events in the order they happened and not lead with later discoveries, so you can identify with the situation exactly as we did.
About a week after the event, I got in touch with Mr. X. The first meeting was very warm and also very brief. Very orderly and precise: we agreed to have the next meeting exactly seven days later. In that week we prepared a proposal and brought the suggestions we had in mind. In the second and third meetings, Mr. X introduced us to their company’s technical manager, and there we realized we were not going to work with the institution itself, but with one of the companies that served the institution. In fact that institution’s system was not set up so that you connected to it directly. You had to work with an intermediary until maybe you grew enough that others would come to you to get connected to the institution. An important point raised in that meeting was that Mr. X said their company would not sign a contract with our company; they would contract with a person, and their reason was that they did not want to get involved in company issues and might later have a problem with our accelerator, which was also a shareholder in our company.
That was the first challenge. First, the accelerator would not accept it. Second, the intellectual property of Yadiz belonged to our company, and if we started providing services to Mr. X’s company under a personal contract, we would probably have a problem later over the app’s IP. Because we would effectively become Mr. X’s employees, and that might cause problems later. This put the rest of the collaboration in doubt right at the start. I tried to stay in the middle. I drafted the contract so that he would be comfortable that the accelerator would not interfere. In fact the accelerator did not have a seat on the company’s board, so it had no voting rights. By raising this and through many in-person and phone meetings I tried to get this agreement signed.
We were able to sign the contract after about a hundred and ten days. The contract amount was nothing like what I had thought; maybe a tenth of what I had in mind. But the brand factor meant we did not have much leverage or power in the negotiation. We wanted to work with the institution because it was a very strong advertising and content arm, but for them Yadiz was only an extra product in their product window, and losing us did not matter much to the people at the top. So we agreed to sign the contract even with a low initial amount. The basis for starting collaboration was producing a white-label Yadiz for them so they could present their own content on their own app (whose intellectual property belonged to us) to their audience.
The second challenge was content. Producing a new app with different colors, name, and logo would take the technical team a week. We were supposed to present their paper flashcards on the new app. So where was the problem? The problem was that in the app environment we could not enter anything other than text and images—and by anything else I mean math formulas, colored text, and bold text. That was the biggest content-production challenge for me. The only favor they did me was giving me the PDF and DOCX files of their flashcards, and we had to figure out the rest. Some subjects such as religious studies and literature and so on were only text, and you could copy from the Word file and add it to the app. The real problem was specialized subjects such as math and physics, which were full of formulas, images, and so on that could not be entered as text. After several days of trial and error, I decided to crop the questions in Photoshop at a specific aspect ratio. Never mind how grinding that work was and what changes we had to make to the files.
The app had to be available for students by Nowruz 1397. A good number of flashcards were ready, and in the first days of the new year it was advertised on all of their marketing channels and their main website.
I thought it was over. I thought my work was done and from then on the institution itself would make it explode. After a while I realized Mr. X was holding me accountable: why don’t you give advertising ideas? Why are you slacking? Let’s have a meeting so we can sell…! That was when it became clearer to me. Their philosophy was: you are using my brand, so you spend, you sell, you give me my share, and you take yours.
Remember I said at the beginning that Mr. X had his own company? His company also had financial dealings with that institution, and in fact our team’s app had entered the competition among the institution’s products as a product of Mr. X’s company, not as a product of our startup. These issues became clearer to me little by little; sometimes in internal meetings (meaning between me and Mr. X) and also in meetings we had with other members of the institution, I was treated as Mr. X’s employee, and that was very strange and upsetting for me.
It became more and more clear that my startup and I had no independent identity there, and everything and every success was going to end up in Mr. X’s and his company’s name. The peak of this showed up at the 1397 Tehran Book Fair, where a group was supposed to promote all of the institution’s apps, and in a coordination meeting one of the members told me that my job, for example, was to promote such-and-such apps. I looked at Mr. X in complete shock—what was going on? Meaning that if I had not even made these objections, I would have become responsible for marketing that institution’s apps, and our app would have sat gathering dust in the window. Because everyone in that meeting was trying to show their own app more to the public. At the book fair I had to wear the institution members’ uniform, which was very annoying and far from professional norms, because I was not anyone’s employee. I was the owner of my own startup.
At the book fair I was talking with the person directly responsible for sales in one of the institution’s departments, and they officially told me that your app means a loss for my business. Our app was in conflict with their financial interests, because more sales of it meant fewer sales of their products and, in the end, a smaller share for them. To make this easier, Mr. X had promised them a percentage of sales so they would not throw up obstacles. Because as I understood it, our app had many enemies there.
So far I have tried to summarize what happened up to the midpoint of the white-label Yadiz path in that educational institution. The second, much harder part of events started in the summer of 1397, which I will talk about in the second part of this note.