
Launch HN: Pathrise (YC W18) – Career accelerator for students, free until hired - kevintxwu
Hi HN,<p>I&#x27;m Kevin, co-founder of Pathrise (<a href="https:&#x2F;&#x2F;www.pathrise.com" rel="nofollow">https:&#x2F;&#x2F;www.pathrise.com</a>). Pathrise is an online replacement for career services that helps students get better jobs and make more money. If and only if they get hired during our program, students pay us back a tuition fee of 7% of their income for 1 year.<p>For more context, you can read about us here: <a href="https:&#x2F;&#x2F;venturebeat.com&#x2F;2018&#x2F;03&#x2F;09&#x2F;pathrise-wants-to-be-the-y-combinator-for-tech-students&#x2F;" rel="nofollow">https:&#x2F;&#x2F;venturebeat.com&#x2F;2018&#x2F;03&#x2F;09&#x2F;pathrise-wants-to-be-the-...</a>.<p>The problem: universities aren&#x27;t directly incentivized to get students good jobs since they make all their money in upfront tuition. As a result, college career services centers aren&#x27;t results-driven and can&#x27;t properly support their students. Most students are essentially left to figure things out on their own, and they think to themselves, career services are useless. The easiest way to verify this is to ask your average student how many times they&#x27;ve visited their career services center in the last year.<p>In reality, career services (that actually work) are probably one of the highest value things a student can receive. You can take any step of the job search (e.g. online applications), train students on one technique (e.g. lead gen and cold emailing), and produce significant and measurable returns (e.g. we&#x27;ve measured that this technique in particular can 4X response rate from under 5% to over 20%). Pathrise does this with every step of the job-hunting process, from training students from a 2&#x2F;6 to a 5&#x2F;6 in technical interviewing scores based on real company rubrics to helping students get a 10%+ higher salary through negotiation.<p>In this sense, we&#x27;re kind of like YC for students instead of startups. Founders give 7% equity to YC because they know YC will increase their company&#x27;s prospects by more than 7%. Students give us 7% of their first year&#x27;s income, and our program is designed to increase their job prospects by more than 7%. They know we&#x27;ll do everything in our power to provide them that value because we have aligned incentives - we only make money if they do.<p>What this ends up looking like is an online accelerator for students that takes place in 12 monthly batches a year, followed by an average of 3-4 months of support until a student is placed. Instead of focusing on a technical education (like our friends at Lambda School), Pathrise is entirely about optimizing your job search. This involves services like resume review, prospecting, referrals, interview preparation, and negotiation advice. Again, unlike career services today, we track every data point so we can hold ourselves accountable to actually produce significant and measurable value for our students.<p>Thanks for reading! I&#x27;d be happy to answer any of your questions and would greatly appreciate your feedback.
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robocat
> because we have aligned incentives [with our students] - we only make money
> if they do.

If you sign up all students and do nothing further, you still get your 7%.
That is not aligned.

To align incentives you would have to align the students payments with how
much you improved their outcomes - much harder to do of course.

I think your model has the same risks as real estate commissions where the
selling agent is highly motivated to sell quickly and they have little
motivation to get a higher price.

~~~
kevintxwu
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.

~~~
treis
Committing a specific amount of time gives you an incentive to better screen
your applicants. It still doesn't give you an incentive to find them the
highest offer. Let's say that someone could get 110k with a significant effort
by your company and 100k without you.

You guys doing very little gets you 7k.

You guys putting forth significant effort gets you 7.7k.

That's not much difference and it makes a lot more sense for you to put that
extra effort into finding another customer to get another 7k.

~~~
kevintxwu
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.

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apcragg
I would advise them to not cold-email students about 'Engineering fellowships'
which upon further inspection are just resumed workshops and interview prep.
If you want students to take your company and service seriously, don't send
out disingenuous emails about 'impressive backgrounds'. It makes your company
look like one of those pay-to-join academic honor societies whose emails
everybody[1] ignores.

[1] Obvious not everybody or there wouldn't be a business.

~~~
kevintxwu
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.

~~~
apcragg
I replied to the original email you sent me with some thoughts. I want to note
here that I like the idea of Pathrise but was just a bit put off by the
initial email.

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marclave
Cool idea, my university has a stellar co-op program for Engineering and
Computer Science students, and other universities in Canada do as well
(Waterloo, UBC, etc.) and I am curious as to what differs you from
universities that have these co-op programs because co-op is mandatory at UVic
and Waterloo and has helped fund my way alongside many other engineering
students ways through their degree.

Also 7% of first year salary seems steep, 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.

~~~
lev99
> Also 7% of first year salary seems steep

The real long term benefit is if using the service results in a better entry
level position. A person starting a career developing on Win32 will have a
significantly different career than someone starting a career in React Native.
If Pathrise leads to an increase in job offers (quantity of offers) and an
increase in the type of job offers (diversity of projects types) than they can
be worth the 7% even if the initial pay is equal because it will give the
recent grad more options in choosing their path.

There is a lack of job hunting skills among recent CS and CE students, and
there is a potential customer base. If I were looking to invest in Pathrise I
would specifically be interested in how they plan on targeting students that
have tried and failed in the job market and filtering which students failed
because of a lack of job hunting skills and which failed because of a lack of
technical skills. Graduates they have tried and failed in the job market are
the ones that should see the most benefit from this service.

~~~
Techonomicon
Recuiters will take around this 7% amount, so it doesn't seem absurd through
that lens.

~~~
erispoe
Recruiters do it on top of your salary, not as part of your salary, and the
pain is felt by the company, not the employee.

~~~
kevintxwu
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.

------
geofftrojans
Love the idea and I definitely see the problem and need. If you are able to
answer, I have a few questions:

1) You say that you will track every data point to hold yourselves
accountable. What metrics do you intend on tracking to prove the value of your
service to potential customers?

2) Do you screen the customers prior to accepting them into your program? If
so, what kind of characteristics are you looking for in an applicant?

3) What experience/skills/connections, etc does the company bring to the table
for the customers?

~~~
kevintxwu
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.

~~~
geofftrojans
Awesome, thanks!

You said you are measuring gain from negotiation as one of your metrics. Will
you be teaching the customers about negotiation techniques or actually
negotiating on their behalf?

~~~
kevintxwu
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.

------
evancharles
I once visited a career office at a community college that I wanted to hire
out of. What I saw was crushing - a small office run by a _student volunteer_
with nothing but a few binders of reading materials.

I'm excited for private companies like this to help students who want to put
in the work.

~~~
prawn
During high school, I strongly remember what seemed like the entirety of
career advice provided just before we selected the key subjects that would
dictate which university/college courses we could apply for. There was a bland
jobs guide book. We laughed at "crane chaser" and "cheese maker". Then we all
stumbled forwards with no idea what we were doing.

Austen Allred had a tweet recently about how dangerous it is to get career
advice purely from your parents. My parents are fantastically supportive, but
I've ended up in a tech/software industry that they would've been oblivious to
during their lives/careers. I could've definitely received far better and
stronger advice during pivotal years. I made a misguided university choice,
quit after six months, then stuffed around for a few years before starting the
business that I still run 20 years later.

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protonimitate
May be a silly question but I didn't see it in your FAQ -

Is this only open to currently enrolled students?

Would be very interested in applying as a self-teaching job seeker.

~~~
kevintxwu
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.

~~~
protonimitate
Thanks for the response. Glad to hear it's open.

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theodorewiles
You should tier this by industry or career goal more closely. For example,
many students want to do high-profile consulting or banking gigs after
undergrad. These have relatively similar starting salaries so you don’t need
to worry about adverse incentives as mentioned below. Basically get the
student to say “I will give you 7% of my salary if I get a job at McKinsey
Bain or BCG”. That will be a lot of value for many students (7% is probably
low pricing frankly). You’ll probably need to do more work on screening and
the addressable market is probably much smaller. But the value prop for that
market I think is way big vs. just “I want any job thanks”. Those interviews
and prep are trainable and there is a pretty robust set of providers there
already. Could also add investment banks, larger tech cos, etc. just get
specific on goals.

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zapita
This reminds me of Holberton school
([https://holbertonschool.com](https://holbertonschool.com)) which has the
same "free until hired" business model. I'm very interested to see how both of
these pan out.

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tabeth
Very cool!

Some questions:

1\. How do you know the student's income?

2\. How do you know if they're hired or not?

3\. What if a student is hired and then is laid off?

4\. What if a student is hired and promoted within the first year? Do they
give you 7% of the income per their original job or 7% of total income
received?

~~~
kevintxwu
1\. In the contract, students agree to something called a Tax Information
Authorization ([https://www.irs.gov/forms-pubs/about-form-8821-tax-
informati...](https://www.irs.gov/forms-pubs/about-form-8821-tax-information-
authorization)) 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.

~~~
tabeth
1\. In the contract, students agree to something called a Tax Information
Authorization ([https://www.irs.gov/forms-pubs/about-form-8821-tax-
informati...](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.

\---

Thanks for the prompt reply! I didn't know such an agreement per (1) existed.
In the unlikely event a student refused to pay you, how would you collect? Sue
them?

~~~
kevintxwu
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.

~~~
tabeth
> 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.

Care to share the third party?

~~~
kevintxwu
Here ya go: [https://leif.org/](https://leif.org/)

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radix07
I really like this concept for college tuition or for funding people who
haven't already gotten a degree. However if just focusing on soon-to-be/recent
graduates, I don't get why a student would be motivated enough to use your
service with a non-trivial fee over going to a university provided one that
they have already essentially paid for.

Even going to a state college, the schools are still quite driven to have very
high job placement statistics, and the career services offered were quite
helpful if you took the effort to go.

~~~
kevintxwu
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.

------
erispoe
You say you're able to achieve 12k over the industry average, and take 7% of
the first year salary. It's hard to assess how much of that 12k is due to
selection, and how much is due to your work. In other word, what value you
actually deliver.

Let's say the industry average is 120k (in California). If you deliver 12k
extra, and take 7% of the total, you're actually taking more than 9k out of
this extra 12k.

~~~
kevintxwu
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.

------
bojackstorkman
I am curious as to how narrow your scope of industries/requirements will be in
the future.

I have a friend with a BA in Photography and a MA in Collaborative Design. She
is very talented and intelligent, but has trouble explaining exactly what it
is that she excels at. (I've known her for years and I still only get the gist
of it. Think creative work mixed with formalized systems thinking.)

Is this a possible customer down the line?

~~~
kevintxwu
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.

~~~
bojackstorkman
Thanks! I'll pass that along.

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miranda_rights
Can you clarify the percentages for internships? Equivalent annual salary as
in, if a student is making $20/hr at a 3-month internship, then their
equivalent annual salary would be $20/hr * 40 hr/ week * 52 weeks = $41600,
and your payment would be $2912? Or is it just 7% of what they earned over the
summer ($9600, and payment would be $672?)

~~~
kevintxwu
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.

------
BillTheBiker
Point of clarity: are all of your services rendered remotely? No need to move
to a big city (until a job requires it, at least)?

~~~
kevintxwu
Yup, everything is online.

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srinitude
What you guys are doing is really awesome! Definitely in the same spirit of
Holberton School, a two-year coding program I'm currently attending that's an
alternative to a traditional CS degree. Tuition is also deferred

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jasonsmash
Whats the difference between Launch HN and Show HN?

~~~
exolymph
Launch HN is for YC companies, although AFAIK it's just convention that keeps
other people from using that phrasing.

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eruci
Nice. Get students to keep paying tuition even after they leave the Uni.

~~~
kevintxwu
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.

