kevintxwu

this is awesome going to save me a lot of time…

It's so helpful to see this all written down - nothing quite like this out there at all

You're right - my language was too dismissive. The general idea of what I said above is still valid though.

Another point: the cost per student does not increase linearly with time. Instead, advising becomes significantly more efficient after we've already taught the student our core insights. This means we're much more willing to spend additional time on students the more time we've already spent.

In contrast, houses can't "learn" how to sell themselves like a student can, so real estate agent costs are linear with time spent.

I said this a little earlier in the thread, but I would definitely say plenty of students we work with already have some of the skills needed to market themselves and they'll do fine on their own, but job seeking is rarely a binary of you're either fine or you're not.

Outcomes from job seeking fall on a spectrum from underemployed to dream job and our goal is to help get you an outcome that's at least 7% better than what you would've got on your own.

It's the $2912 one. Unfortunately, we can't offer the same services without basing it off of equivalent annual salary.

For the students that look for internships with us, the service is a reduction in short-term capital gain for career trajectory.

Right, but as a result, they don't care as much if an individual candidate gets placed - they're more so looking to fill a specific position.

Recruiters solve the problem of hiring whereas we solve the problem of job seeking.

You would need to consider more than just the first year. In reality, the difference it makes in terms of your career as a whole is significantly higher than that initial 12k because it compounds.

Starting off with an additional 12k in your salary means you'll get an additional 12k next year and every year thereafter, if not more.

Also, though we really need to do more work to figure out how to measure this effectively, the quality of the position goes beyond the salary itself.

Yea, you're right. I would say it's in part the disparity between the scale of the fixed cost and the amount of qualification that is predatory.

As in, if it was a loan for only $1000, it's certainly more ok to do less qualification. Versus if you were saddling a student with a loan of $40,000, you should probably be very careful.

Good point. It would certainly not be progressive in a political sense haha

Yup! Although we're not there yet, we believe the program is generalizable to every young professional who wants to work in the US, since the core insights themselves are not industry-specific.

Ideally the further we expand the more we're capable of supporting interdisciplinary job seekers like your friend. There's potentially something here where the more industries we cover, the more we know about everything in between those industries, and the more effective guidance we can provide to candidates who are stuck in between.

Hmmmm, this is a really interesting line of logic.

With this logic, I think you can look at the income share agreement more as us taking on the risk rather than aligned incentives.

The problem with some potentially good career coaching services out there is that charging students thousands of dollars upfront without actually having placed them yet just feels unfair.

On the other hand, with income sharing, students know we have a similar risk of getting nothing out of the experience as they do, which motivates us to make their experience as impactful as possible.

Even if we continue at an extremely high rate of placements, let's say 95%+, for the other 5% of students where the worst case happens, the income share agreement model is much better than upfront payment because the cost of these invested advising hours and resources is on us rather than on the student.

Outside of that, I think from a purely revenue perspective you're basically right that the incentive to invest a lot of time for a little salary is not incentivized.

Part of the reason why we are still incentivized to put effort into our students (especially if we can track measurable results) is that those results will ultimately lead to much better user acquisition anyways, especially since we expect natural referrals for Pathrise to be one of our main sources of growth moving forward.

I do have to admit though, that though this is a very real incentive core to our business, it isn't an incentive that's actually integrated into the revenue model itself.

This is potentially a real effect, but in this case, the exact unit economics will determine exactly how much it matters.

Thanks to a focus on software and automation where we can afford it without hurting the experience, it's been good enough so far where we haven't noticed this affecting our decision making yet.

By aligned incentives, we mean aligned incentives that are integrated into the business model.

Any business has a good reason to treat their customers well because that results in future business, but you wouldn't necessarily call something like a restaurant an aligned incentives business.

We've seen from our perspective that the lack of aligned incentives in the business model itself leads to ineffective solutions. A good portion of our students come to us after already having gone to their career services centers and realizing they want more help.

To be clear, I still think career services centers and the counselors that help run them are doing good work. However, one counselor using intuition and anecdotal evidence to advise hundreds of students just doesn't work very well.