By Kevin Kopas, Co-founder and Chief Operating Officer at AspirEDU
To many people outside of academia, colleges have not appeared to be very much like traditional businesses. There is not a public focus on profit-and-loss statements, dividends are not paid out and shareholders do not publicly debate issues like mergers and acquisitions.
But with the rise of for-profit colleges (like University of Phoenix) and rapid increases in tuition at well-known schools all over the country, institutions of higher learning are realizing the importance of retaining customers - students - just like other companies do.
Unfortunately, our education industry is not nearly as advanced as the business world when it comes to data analytics and retention tactics related to our customers. A great illustration of that comes from the world of banking. Banks figured out that it was costly and inefficient to review all of the individual payment histories of its borrowers in order to determine their potential risk. Lenders adopted a mathematical model - the credit score - that gathers data, runs an algorithm and delivers a single number that has come to be accepted as a good predictor of payment reliability.
As the director of an online college, our CEO Kimberley Munzo, found herself in the same position as the pre-credit score banking world - she had to root through all of a student's performance records to try to predict his/her probability of future success. Working for a for-profit school, she is keenly aware of the financial downside of poor student retention. She needed to know which students were more and less likely to succeed. It was important to reach out and offer support to those struggling students. But due to the lack of analytics, Kim was forced to navigate using a rear view mirror, reacting only to events that had already occurred.
So over the years, Kim figured out which performance indicators were most important in predicting student success. She built a spreadsheet that was cumbersome to use but was very accurate in identifying the students most at risk for failing or dropping out of a course. This spreadsheet produced a single, numerical risk index score, very much like a credit score. It helped Kim turn the rear view mirror into a crystal ball and Kim's school's retention rate increased by over 10% once she began using it on a daily basis.
Then we heard about Startup Weekend EDU to be held in Orange County (Orlando), FL, focusing on helping entrepreneurs develop their business ideas in the world of education. Over 54 grueling hours in August of 2012, the ugly duckling spreadsheet turned into a beautiful swan of a software program. With the help of technical and operations experts, our company - AspirEdu - was born. That software program is Aspire Analytics, our first product. Out of 51 attendees and 25 ventures presented that weekend, we were one of the six newly created entities to receive a $2,500 grant to advance our ideas.
Over the next eight months, the support of Startup Weekend organizers Ron Ben-Zeev and Christine Ortiz from Startup Weekend led us to win an additional grant as the winner of Startup Orange County ($5,000). The continued mentorship by Startup Weekend, along with Jack Henkel and Cody Swain of Startup Orange County, contributed to AspirEdu being named "Best of Village" winner at the Everywhereelse.co Startup Conference ($25,000) and first prize in the Florida Atlantic University Business Plan Competition ($15,000 cash plus $40,000 of services). We are a finalist in the Milken-Penn Education Business Plan Competition to be held in Philadelphia in May; several prizes totaling $120,000 will be awarded. These wins have helped us to avoid having to give up a piece of our company in exchange for outside investments.
Most importantly, Aspire Analytics is now in production and we are actively selling it to colleges that have online programs. It has become apparent that no one else has invented a simple "credit score" for students, so we are excited about our future.