Call Summary: Partnership Structure and Commission Model Discussion

Overview

Follow-up call to formalize partnership structure between Gary and Prenda for Texas church microschool expansion. Kelly proposed commission-based contract with Gary receiving ongoing residual payments per live microschool per year, with potential for small stipend. Both agreed on 3-4 month pilot aligned with Texas marketing push (January-April). Gary proposed operating through Christian Micro School Alliance as independent sponsored organization with Prenda as default platform.

Key Topics Discussed

Gary's Proposed Collaboration Model

Christian Micro School Alliance Vision:

• Gary created website from perspective of 2030 showing 2,400 students (Kelly loved this approach)
• Independent organization sponsored by Prenda as mutually beneficial partnership
• Gary as "top of funnel guy" handholding pastors, church leaders, and excited parents
• Creating canonical guides for church microschools with Prenda as default option
• Framed as smarter strategy than being on internal Prenda sales team: "Even if all I cared about was Prenda's success, this is probably a smart strategy"

Why Prenda as Default:

• Prenda has lead over competitors like Primer
• Primer's website explicitly refuses religious affiliations: "I'm like, I get it, but that's not the force I would pick to win this race"
• Prenda has track record of happy church-run schools

Kelly's Proposed Contract Structure

Commission Model Options:

• High in funnel: Small payment per qualified lead
• Middle: Payment per stage of conversion
• Low in funnel: More dollars per live microschool
• Residual: Payment "per year for each year these schools stick around"

Gary's Preference - Residual Model:

"I like that a lot. I like being incentivized to not only sign on a school but keep them on board. That would create skin in the game for me to help them design a good school that stays forever."

Stipend Discussion:

• Gary requested ~$3,000/month to cover travel costs (visiting multiple Texas cities)
• Kelly noted this adds risk: "That's where it's a little trickier. Obviously the rest is no risk for me."
• Proposed safeguard: pilot period to check pipeline before committing to stipend
• Gary ultimately offered to go fully commission-based: "Would it make sense for me to just not have a stipend and go fully on commission?"

Pilot Timeline

January-April Texas Push:

• Prenda driving significant marketing dollars into Texas during this window
• Halfway checkpoint to evaluate progress
• By April: end of season as families decide for next school year
• Kelly: "Let's make a bet on those four months"

Decision Point:

• Kelly challenged Gary to verify calling: "This is a moment to check and see in your heart - is that what I really want to be doing? Because it's going to pull you in this direction for a longer amount of time."
• Gary: "By April 1 we'll have a lot better idea of whether, even if I think it's my calling, I'm good at it or not."

Texas Accreditation Update

Odyssey Status:

• "Not final final, but it's closer. Very close. Things should hopefully work."
• Good Plan B: Colleen Dippol (parent advocate, Houston-based) just launched new microschool accreditation agency
• Simpler and faster than existing options, though Kelly noted "still too slow and too expensive for what I'm looking for"

Prenda's Path to Profitability

Financial Outlook:

• "Feeling pretty confident" about profitability by August 2025
• Growth target: 50-60% for the year
• Current investor confidence: "Right now, 40%" - just need more data from January-February
• Texas could exceed targets: "If Texas is a big success, we could actually blow through our targets"

Team Mindset:

• Team "still a little scarred" from post-COVID misses
• Sandbagging on projections
• Kelly: "I don't even care about Venture anymore because we're going for profitability"

Spiritual Framing of the Work

Gary's War Framing:

"Education is basically tied for first as the most important territory the devil has claimed. And I see this as a spiritual war... People ask me if I'm in the military - it's not because of my body - it's because I'm ready to go to war. I've been waiting for the right cause to go all out."

"Christ followers have compartmentalized society in such a profound, pathetic way... There's strategy in how much I say about that outside of a one-on-one conversation."

Kelly's Secularization Philosophy:

• Acknowledged not mentioning faith explicitly in his book
• "I think differently in my company and differently publicly than I do privately and with my friends and on Sundays"
• Admitted struggling with whether this is hypocrisy
• Sees Prenda's principle of subsidiarity (local control/choice) as manifesting divine principle

"Some people would say we've secularized religious ideas. And that's true to an extent. But I look at it as a way we can bring more people in and bridge it and help bring truth to the world."

Vision for Student Potential

Kelly on Unlocking Human Potential:

"These kids are walking around... when you watch a kid at school, they're using a very small percentage of what they're actually capable of. If you were to systematically encourage actual risk taking and learning, in the most pure sense of growth and expansion of the soul and mind... and multiply that by the number of people in the world, it's kind of crazy. It's humbling and mind blowing."

Gary on Divine Encouragement:

"You can light up when you say God wants you to be great. God created you for something so special, so unique, just one of one on the earth. For a kid to hear that from not just their mom or dad, but an external adult - that's a whole different thing."

Future Engineering Possibility

Gary's Long-term Interest:

• Mentioned possibility of joining as engineer one day
• Kelly: "I'm super open to that... As we hit profitability and keep growing, my intention is fully to plow money back into this thing. I'm going to need help with all of that."

Current Prenda Team:

• Kelly doing product personally
• Contracting with former employee for design (couple hours/week)
• Two developers
• "Pretty scrappy right now"

Key Quotes

Kelly on Gary's 2030 Website:

"I love it that you wrote this website from the perspective of 2030. That's brilliant."

Kelly on Event Sponsorship:

"We pay for the event." (Agreeing to sponsor events Gary organizes)

Kelly on Alignment:

"We're very aligned... It's fun to see the work of God in all of it."

Gary on LDS Education Philosophy:

"Some of my favorite education thinkers are from LDS... 'We're supposed to educate for eternity.' That's a thought I freaking love."

Action Items / Takeaways

1. Kelly to work with head of finance - Develop commission structure proposal with numbers
2. Gary to receive proposal via email - Review and potentially refine terms
3. Pilot period: January-April 2025 - Aligned with Texas marketing push
4. Commission structure preferred - Residual per microschool per year, with potential stipend
5. Events separately sponsored - Prenda pays for any events Gary organizes
6. Gary operating as individual contractor initially - No business entity required yet
7. Christian Micro School Alliance as vehicle - Independent organization with Prenda sponsorship

Strategic Implications

For Gary:

• Commission-based structure maximizes long-term upside
• Residual model creates incentive for quality school design
• Independence preserved while aligned with Prenda's success
• Potential path to engineering role if desired

For Prenda:

• Low-risk pilot with high potential upside
• Texas market expansion without full-time employee cost
• Church network access through Gary's connections
• Alignment with values-based education movement