[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.