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Comment by kevintxwu | Hacker News Reader

Percentages in and of themselves are progressive pricing! If we believe we can get the student a 100k+ job, we'll definitely be incentivized to help them get there instead of telling them to settle for a 50k job.

The progressive^2 pricing model is interesting though. It's a little legally complex unfortunately so we have to look into it, but I also like the aspect of the idea where the less you make as a student, the more a lower percentage could help you live more comfortably.

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Right, but your revenues are also dependent on the cost or time it takes you to do. Let’s say it costs you $1000 of time to get someone a $100K job and $1500 of time to get them a $120K job. You are going to encourage them to take the $100K job to maximize your company’s revenues.

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.

"Potentially a real effect" meaning almost the definition of a principal-agent problem and a well-known problem in real estate. If you want to prevent it from happening (and I'm not saying that you do) you will have to try very hard, not just assume that it will happen.

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.

Hmm, so would a flat tax rate actually be progressive? ;)

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

This is a loaded question since a flat tax is a proportional tax (assuming we are excluding deductions/credits etc.)

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