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.

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.

Yup, everything is online.

That's a good point that the word fellowship is potentially misleading.

Although...I do want to clarify we actually offer advice on project development, the interview prep goes to a reasonable technical depth, and you are connected with other engineers at top companies. So in many ways, it is still a fellowship.

We struggle a little with how to describe ourselves because we're not quite just career coaching but calling ourselves an accelerator is too nebulous.

We try our best not to be intrusive - if you don't mind, could you actually email me on the things you disliked the most about our cold email? We definitely want to make the changes we can to be more well-mannered here. I'm at kevin@pathrise.com.

If anybody else has any questions as well, feel free to use the contact information above.

We actually use LinkedIn and other sources to evaluate a student's background if we send out a cold invitation. You are right that we have no way of knowing your academic performance.

So if I understand correctly, you're asking: "if I already have 16 months of experience, isn't 7% a bit steep to help me find a job?"

The way we see it, no matter your experience level, especially if you still haven't actually been at a real full-time position yet, it's probably true that you can make your job prospects at least 7%+ better.

I would definitely say plenty of students we work with are fine and plenty capable on their own, but job seeking is rarely a binary of you're either fine or you're not. It's a spectrum from underemployed to dream job.

We try to get students the job that's the best possible fit for them, which is at least 7%+ better of a fit than they would've found alone.

TL;DR - It's not steep in the case that you believe we can provide you more in return in value.

The goal is to make them more money than they would pay in the first place (and it compounds in later years), but I understand how you feel.

Yea, we definitely have to be sensitive about offering financing options directly to students.

One of the ways we handle this now is we actually ask the students to consult their family before signing anything. We also allow the students to still drop out of the program at no liability within the first two weeks.

The problem with upfront payment is that we are no longer held accountable by aligned incentives. The most predatory thing about student loans is that you still owe the same amount of money regardless of your outcome. I think our income share agreement is designed to be much safer since in almost every case where you pay anything you are also capable of paying it.

For students in exceptional situations, we'll even waive their dues or retro-actively offer financial aid since we didn't design the program to be a future burden. The way we see it, helping out a student in need in any way pays back tenfold in terms of reputation later.

Here ya go: https://leif.org/

If they have side income, we currently write them some custom terms to exclude it so it's only for the actual job.

Though an income share agreement is not a loan. It will still affect a student's credit adversely if they default on it.

We're actually transferring the management of the income share agreements to a third party company that's built a software platform for this that directly uses ACH.

So with that combination, hopefully we never have to sue anybody ever about anything! Seems like a terrible experience.

I think that you have some good points here that we've actually debated internally quite a bit. First, I would say the program is designed so that we commit a specific amount of time and resources per student, so we're motivated to work on their behalf to recover that investment that we make for free.

As for the risk of trying to sell quickly rather than looking for quality, I think the most effective way we can tackle it is by also measuring the student's satisfaction with their final offer.

One of the most important things to protect a student here as well is they don't have to accept any offer they're not happy with. They can reject an offer to look for more and we don't have any say to stop them.

Whenever we do run into a situation like this where our advice may be affected by a conflict of interest, we also do our best to inform the student first. Something like, "Pathrise will make money if you accept this offer, so please take what I say with a grain of salt, but..." and then we'll just have an honest conversation about what they're looking for and if the offer is a fit.

To make sure I answer your question well...I'm not quite sure I understand this sentence, could you clarify for me?

considering co-op costs are around 8k at my university (don't know about others off the top of my head). Which are covered pretty easily with mandatory 16 months of work experience.

Do you mean a co-op costs you 8k or that you are paid 8k, and is the 16 months of work experience referring to the co-ops or to the full-time job search afterward?

Both! We oftentimes tell students what to say and how to say it behind the scenes, but they will always do the actual communication themselves.

1. In the contract, students agree to something called a Tax Information Authorization (https://www.irs.gov/forms-pubs/about-form-8821-tax-informati...) to allow us to view their tax information to verify payments if necessary. This is fairly standard practice for income share agreements.

2. Same answer as question 1. Also, just to add to this, most students are pretty honest since we're likely to be friends at the end of the program anyways.

3. They normally pay through a share of their monthly income. If they are laid off, and therefore don't make any income that month, they don't pay us anything. However, the payment is then deferred until they can pay again, for a maximum of 2 years, after which everything left is absolved. The goal is to never have anyone have to pay money they don't have.

4. 7% of the total income received. They still pay through a share of their monthly income.

It's open to recent grads as well!

Edit: Sorry I totally misunderstood the question. Yes, it is available to self-teaching job seekers!

We say students for simplicity because the program is designed for your early career and university/new grad recruiting.

1) Some of the metrics we are currently already tracking:

Response and follow up rates from cold emails

Response and follow up rates from referrals to hiring partners

Technical interview score over time (measured by internal rubrics we design to be very close to what is actually used at companies)

Success rate per interview over time (hard to see trends for an individual, but kind of starting to see trends for a batch)

The classic feedback form, 1 to 5 in how much did you learn after every session

Average gain from negotiation compared to the base offer and to industry standards

Pretty basic stuff for now, but still able to prove value. For example, like I mentioned we're seeing a response rate from under 5% to over 20% after applying cold emailing techniques. This is theoretically already a 4x difference in the number of opportunities you receive. Another example is average raise as a result of negotiation through the program can be thought of as literally money we get you.

2) Yes. We mainly look for a fundamental conceptual understanding of your field (since we don't do technical training besides interview prep) and a high level of motivation.

Surprisingly, we haven't found the need to look for anything else. This lets us ignore something that might increase implicit bias like trying to evaluate culture fit. We can focus on finding each individual candidate the company that's the right culture fit for them instead of the other way around.

3) We have about 10 hiring partners right now as well as an advisor and alumni network we use to make referrals on behalf of students to top companies like Facebook, Google, etc.

In terms of experience: my co-founder and I are unique in that while we have past founding experience and have worked at top companies like Facebook, Salesforce, and Yelp, but we are also young enough that we are not decades separated from the problem of figuring out your early career.

There aren't many people working on career services that understand both sides of the table when it comes to what it feels like to be a university student looking for a job and what it feels like to be a hiring manager evaluating a university student. This would describe us though.

We like to think we understand what a student is going through and how to help them better than anyone else because of this.