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Comment by vaneck | Hacker News Reader

With the risk of sounding naive or out of place - am I the only one surprised at this idea raising $2.5m? Not that the site isn't cool and well done, but I can't figure out how developing and hosting a site like this, say for the next five years, may cost something in that range.

What would they possibly need that kind of money for?

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Check out how much Khan Academy raised :

http://en.wikipedia.org/wiki/Khan_Academy#History

Education is the next big thing. Recent public classes in databases, machine learning and AI from Stanford is proof enough that even the most traditional learning ops are looking at the Khan meme very seriously.

If anything , these guys have raised frugally and probably will be a big hit in approximately 24 months from now.

You can't find millions of post that teach you the basics of math, physics, etc.

But you can find millions of posts that teach you programming, from way down to the high mountains of programming.

The difference, though, is that the money that Khan Academy has raised is donations. They're not investors who are seeking a (financial) return on their capital. Education is a tough space for startups trying to make money: http://avichal.wordpress.com/2011/10/07/why-education-startu...

Salman had options to go either way, he chose it to be structured differently due to philosophical reasons. There are other folks who are doing pretty well:

http://www.vccircle.com/500/news/niit-sells-element-k-corp-t...

People people and more people.

The greatest cost of any startup is going to be hiring and paying good people (and in Code Academy's case, perhaps teachers / education experts as well).

They are also probably raising more in order to weather out any possible drying up of VC in the future.

We're hiring a team to make Codecademy even better (faster).

hiring smart engineers.

Their problem is more likely going to be great content not technology, don't you think?

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