2016 PelotonU Recap

PelotonU Friends,

Thank you for supporting our work building new pathways to college graduation. Below you’ll find a 2016 recap that includes our core metrics, financials, and major milestones.

In short, this is the year we hit our stride.

  • We doubled enrollment and are now open on nights and weekends
  • We took our first step to reshaping higher ed by contracting with IDEA Public Schools to teach them to launch a program similar to our own
  • We built a strategy to reach self-sustaining revenue, and raised $275,ooo of our $300,000 venture philanthropy round to fund our growth

We’re onto something that will change how working adults go to college around the country. We believe that in two years, PelotonU will be financially sustainable from student revenue. In five, we’ll be coaching over a dozen organizations as they begin serving the 45 million Americans with some college and no degree. In a decade, we’ll be a national model that changes how working adults earn their degree.

Bernard Bull, a leading voice in higher education innovation, wrote:

“Look for this model to expand over the next few years. I can see a day in the future when we see PelotonU-like services available in most major cities.” (Source)

That’s where we’re headed, and your support makes it possible. For more stories and a glimpse of our culture, watch our What a Thing videos. Thank you for investing in our students — the rest of the updates are below.

1. THE NUMBERS

Persistence: 80% of students who began college with PelotonU are still enrolled or have graduated

Compared to a 16% completion rate for Central Texas part-time students

Pace: 90% of students are on-track to earn their BA on-time

Compared to only 28% of Bachelor’s students in Texas who graduate on-time

Completion: 12 students have reached their intended milestone with PelotonU

8 in 2016: 1 Bachelor’s degree, 7 Milestones (AA or 60 credit)

Students Served: 71 students have started college with PelotonU

46 students enrolled in 2016

2016 Financials

$138,700 of our revenue (38% of 2016 total) was from our Q4 venture philanthropy round. We have $134,800 in pledges to our round for 2017

Salaries cover our four employees, and include a $6,000 payment to Sarah for running our IDEA consulting in her spare time, and a $2,700 investment in financial aid training for Samantha

Scholarships supported 24 students in 2016

Cash on Hand (1/1/17): $130,000

Monthly expenses before revenue: -$23,000

2. ANALYSIS

Student Success

First Bachelor’s: In early December, Connor was our first student to earn his Bachelor’s degree. He majored in Business Management at WGU and graduated after submitting a 32-page capstone paper, thus completing three years of school in half the time. Best of all, he earned a promotion to marketing manager at his company as a result of what he learned in college.

New Hire: After 55 applications and six in person interviews (run by our students), we hired Holly, our new Assistant Director of College Completion. She’s a graduate of Harvard’s School of Education and former director of literacy for a statewide school system. At PelotonU, she will advise 50 students weekly and help improve our support for students as we grow.

Access: We continued expanding availability for working adults by staying open late during the week, opening on Saturdays, and simplifying the enrollment process for future cohorts.

Recruitment

Improving Funnel: We tripled leads over the year prior, adding 211 inquires up from 68 in 2015. New enrollments doubled from 18 to 45. We also now track all admissions, outcome, and demographic data in Salesforce, and have integrated our forms to simplify lead tracking.

January Enrollment: We planned for 20 students to start academic orientation, and instead saw 12 begin last month. This cohort was scheduled to align with the slow season for the City of Austin as we launched in three new departments. This roll out was pushed to Q2.

Financials

Venture Philanthropy: 21 supporters have pledged $273,500, at an average gift of $13,675.

Earned Revenue: We added a student fee in 2016, which grew earned revenue to 6% of our income in 2016. We anticipate earned revenue will comprise 20% of 2017 income, and over half in 2018.

Advocate’s Club: 23 members joined our new monthly giving program, providing $12,575 in scholarships during 2016

2017 Budget: We spent $270,000 last year and our board approved a $390,000 budget for this year. Of the $120,000 increase, $80k is new hires and health insurance (a first at PelotonU), and the remainder is split between recruitment and expanded access (South location, longer hours, more scholarships).

We’ve also built in quarterly check-points to scale back spending if enrollment or fundraising are below our targets.

Other

Consulting: We’re in the second month of our consulting contract with IDEA Charter Schools. Esther, a Stanford grad and former RGV Focus project member, will launch the PelotonU model this summer in McAllen.

3. Q1 Strategy

Finish the Raise

We have $30,000 remaining and will finish the raise in Q1. Our fundraising momentum is a game changer and offers breathing room we’ve never had to focus on recruitment and student support. As we’ve moved from financial modeling to budgeting, we’re learning it will take a bit more than $300k to get to break even.

That means I will continue fundraising one day per week, but most of my time will go to building new referral partnerships with local employers.

Focus on Recruitment

We will revamp admissions to remove barriers to prospective students. This includes moving the assessment to after they start the program, staying open until 9pm during the week, and moving scholarship decisions to before students begin the program.

I will focus on leads from key referral sources (employers, nonprofits, students, friends of PelotonU) and find 70 new leads for the May cohort.

Sam will prioritize funnel optimization, focusing on supporting applicants through starting academic orientation. Our historical application to orientation conversion is 42%. We’re targeting 60% for the May cohort.

4. ASK FOR HELP

We’ve gotten this far because of your support. Fellow educators continue to say we’re on the leading edge of a change in higher education — both in our model and the working students we serve. As a small team, we continue to need your support to serve more students in Central Texas.

There’s three key ways you can help.

  1. We’re raising the final $30k to close our round (details). Do you know someone I could chat with to ask if they’d like to contribute?
  2. Our best source of students is local companies who want to provide a college pathway for their staff. Do you know employers with staff who would benefit from a college degree?
  3. Do you know anyone who is working and wants to go back to college? Our next cohort starts in May, you can nominate them here.

We’re grateful for your investment in our students as we prove a new pathway to college graduation for working adults. If there’s questions I can answer or information we can include in future updates, please let me know.