- Analytics company can help universities improve financial planning, predict students likely to drop out
- "Slow-growth," bootstrapped business model
- Company is a semi-finalist in Accelerate Michigan Innovation Competition
Ashley Kern, founder of GoldStrike Data: Started company while in school.
You never know what a good beer can lead to.
For Ashley Kern, it led to the first customer for Goldstrike Data LLC, her startup company based in the Jutila Center, a SmartZone incubator facility in Hancock, across the Portage waterway from Houghton.
The SmartZone is one of a network of 15 SmartZones in the state of Michigan, incorporated in 2002 to boost entrepreneurship and high-tech business acceleration in the Keweenaw Peninsula, a collaboration between the cities of Houghton and Hancock, Michigan Technological University in Houghton, Finlandia University in Hancock, the Keweenaw Economic Development Alliance and the Keweenaw Chamber of Commerce.
The fortuitous beer happened a year and a half ago at the Keweenaw Brewing Co. in Houghton, where Kern ran into John Lehman, Michigan Tech University's associate vice president for enrollment and university relations.
Lehman first met Kern before she enrolled at Tech, when she visited campus from Minnesota as one of 1,000 applicants for six prestigious full-ride scholarships called The Leading Scholar Award. Three went to Michigan residents and three to nonresidents. And he got to know her better after she won one of the out-of-state scholarships.
But as she worked toward her undergraduate degree at Tech in mathematics in 2015 and began her master's degree in data sciences — she finished this past spring — Lehman lost track of her until that night at the brewery.
Over a beer, she told him what she was up to, that though still in school she had launched a company to do statistical analysis to help companies and institutions solve financial problems.
"I thought about what she was doing and how she might be able to help me and called her a week later," said Lehman.
Each year, Tech has to predict how much money it will need to cover ongoing scholarships for students currently enrolled in the school.
The university has a $36 million annual budget for financial aid, but a number of variables play into what their actual aid need will be. How many students on scholarship will drop out? How many will have poor grades that cause them to lose their scholarships? How many will qualify for federal programs and no longer need to be on Tech's books?
Lehman wasn't satisfied with how his department was assessing needs and met with Kern over another beer to see if she wanted to take on the project and improve results.
"It's been fantastic what she's been able to do. We had about an 8 percent fluctuation up or down on what our aid needs would actually be. There was a lot of slop in the methodology. Ashley was able to dial it down to a plus or minus two and a half percent, which is a lot of savings for us with a minimal amount of effort," he said.
Lehman said he has had her work on several other projects since and is about to have her take on another project, helping Tech, which is self-insured for employee health insurance, cut down those costs.
"And I'm reaching out to other universities to see if they can use her, too," he said. "She's one of those people who looks at every problem and sees numbers. Like that character in 'The Matrix.'"
Kern's father, John, who used to teach at Tech, has his own consulting company and serves on her advisory board. His company, Kern's Statistical Services Inc. of Sauk Rapids, Minn., does statistical modeling to help environmental engineers working at superfund cleanup sites.
Not only does her financial modeling help Lehman and Tech plan for financial-aid budgeting, but it also identifies students at risk of dropping out, allowing Tech to make interventions to keep them in school.
Kern said she can give Lehman data two semesters out that tell him which students are at risk of quitting school without intervention to keep them enrolled. It's cheaper to keep the students you have than to recruit replacements.
Factors that go into the risk assessment include a student's age, how many credits she or he has, grade-point average and how much scholarship money each student has. Somewhat counterintuitively, the more scholarship money a student has, the more likely he or she is to drop out. Those who have invested their own money feel more invested in staying the course, apparently, than those spending others'.
Kern ranks students into various categories based on their metrics. The drop-out rates for various groups rank from 41.6 percent to 1.2 percent, so Lehman and his team know which groups to devote their energies to.
So far, Kern has bootstrapped her company — using her own money, money from project work for Tech and money she makes from consulting for her dad's firm. "It's a slow-growth model," she said.
She is a one-woman show for now, using what she describes as a network of subcontractors as needed for various Tech projects.
Though she has been on the business-plan-pitch circuit, for now, she isn't interested in angel or venture capital investing, preferring not to dilute equity.
"I worked really hard so I can stay up here after graduation and hopefully create more jobs and hire local talent, including some of my friends and classmates," she said.
Goldstrike Data was chosen as one of 36 semifinalists for the eighth annual Accelerate Michigan Innovation event to be held in Detroit on Nov. 16.