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Malicious startup idea: a company whose business model is driving rent-seeking real estate speculators into financial ruin. The company would buy residential r

Malicious startup idea: a company whose business model is driving rent-seeking real estate speculators into financial ruin. The company would buy residential real estate in a low cost of living area, followed by setting up offices there and paying its employees a high salary to do absolutely nothing. When rent-seekers inevitably drive up housing prices to as high as wages will tolerate, the company sells its real estate holdings in that location and moves somewhere else.

itchyouch 8y ago
I'd imagine that something like this would need to be done on enormous scale to make such a dent. How many engineers would a company need to hire? 1000? 5000? 100,000?
jpollock 8y ago
A better startup idea would be some way for people in a neighborhood to act collectively to improve the local school. How can someone who isn't a parent improve the quality of their local school? A point is worth _a lot_ around here. I know buyers are thinking to themselves: "I can either send my children to private school, or I can buy this house and send them to public school. Either I spend $35k/yr per child in fees, or I can spend $80k/yr and buy in a good district." At that point the $80k is a good buy - they're thinking they can get it back. I look at my school (poorly scored school) and ask "how can I convince them to send that private school funding money my way?" Typically I would vote up property taxes but I don't have that lever in California.
- thatfrenchguy 8y ago
  Or maybe we should collectively wonder whether we're tracking the good metrics and whether GreatSchools is really tracking something useful. Not to mention they're funded by the CEO of Walmart :-/
- slg 8y ago
  I think you just invented local government.
  - jpollock 8y ago
    I'm not allowed to participate in government. :)
- njarboe 8y ago
  Extra money does not help school quality much. School quality, I think (someone on the internet who lives with a teacher), is determined: first the qualities of the students at the school, second the quality of the student's parents, third the quality of the teachers and school admin, fourth the quality of the school's infrastructure and equipment. You can greatly influence the last with money and the third somewhat with higher salaries, but not so much the first or the second. Say you took any poorly scored school and decided to create two schools from the student body. Same funding per child. Children whose parents come to a signup night for the new school get to go to the new school. The rest stay in the old school. The academic results from these two schools will be very different, just by this simple sorting. Money and better teachers help, but so far applying them from the outside doesn't seem to move the needle much.
  - lifeisstillgood 8y ago
    That's a horrible thought experiment. and probably correct So how about this as a hypothesis- spend the money on improving parental engagement. Weekly training events, much better planned homework (xeroxd sheets handed out is not the same as a guided syllabus for the parents to follow) You can do a lot just by engaging those parents
    - dhruvrrp 8y ago
      > You can do a lot just by engaging those parents But what if those parents don't want to be engaged with. A lot of children who would be "left behind" in the old school would have been from a worse social-economic background which would mean the parents just won't have time for the school events. Or they might just not care about the kids.
      - deletemenow 8y ago
        What if the state took away kids from parents who can't be bothered to raise them and they get put into state run boarding homes that are jrotc style? Would people be for or against this?
      - 8y ago
pjc50 8y ago
I was wondering if you could skip the middle bit and just do it as a straight up fraud by pretending that the place had business, then I remembered how Florida happened.
pvarangot 8y ago
You seriously think VC is not doing that to hedge high risk investments in companies that pay high salaries?
sytelus 8y ago
Non-malicious startup idea: What if you bought houses in bad school area, created a great private/charter school in that area and sold your houses at much higher price? From OP's calculation, a great school may cause at least $200K price increase per house and depending on capacity of the school you need to build, I think this can turn out to be pretty good business.
- xyzzyz 8y ago
  > What if you bought houses in bad school area, created a great private/charter school in that area and sold your houses at much higher price? It's not easy to create a good school. Certainly, simply throwing money at the problem doesn't work, as shown by an example of US public schools. The most certain way to achieve it is to heavily preselect the attending children, but that presupposes the existence of such quality base in the area around the school. The problem is that if it does, then their parents are usually already rich themselves, and so the house prices are already high.
  - yesenadam 8y ago
    Are these assumptions, that throwing money at the problem characterizes US public school, and that quality children usually have rich parents, anything like justified?
    - PeterisP 8y ago
      Regarding the second part, yes, the fact that academic achievement is highly influenced by socioeconomic status is well supported by research; a big part of the whole correlation is that higher socioeconomic status means better schools, but there's still a strong effect within the same school. There's a bunch of studies that try to estimate the nature/nurture split, but in any case higher socioeconomic status correlates positively with pretty much everything schooling-wise.
      - yesenadam 8y ago
        Sure, but all that is another thing. I was questioning a particular assumption: quality children usually have rich parents Maybe that wasn't what was meant, but that was what was said.
emmelaich 8y ago
> "rent-seeking real estate speculators" A rent-seeking speculator? Not sure how you're using that phrase but I don't think rent-seeking applies here.
TomK32 8y ago
If that business is a school with formerly really bad grades then you might have an even better plan.

itchyouch 8y ago

I'd imagine that something like this would need to be done on enormous scale to make such a dent. How many engineers would a company need to hire? 1000? 5000? 100,000?

jpollock 8y ago

A better startup idea would be some way for people in a neighborhood to act collectively to improve the local school. How can someone who isn't a parent improve the quality of their local school? A point is worth _a lot_ around here. I know buyers are thinking to themselves: "I can either send my children to private school, or I can buy this house and send them to public school. Either I spend $35k/yr per child in fees, or I can spend $80k/yr and buy in a good district." At that point the $80k is a good buy - they're thinking they can get it back. I look at my school (poorly scored school) and ask "how can I convince them to send that private school funding money my way?" Typically I would vote up property taxes but I don't have that lever in California.

thatfrenchguy 8y ago
Or maybe we should collectively wonder whether we're tracking the good metrics and whether GreatSchools is really tracking something useful. Not to mention they're funded by the CEO of Walmart :-/
slg 8y ago
I think you just invented local government.
- jpollock 8y ago
  I'm not allowed to participate in government. :)
njarboe 8y ago
Extra money does not help school quality much. School quality, I think (someone on the internet who lives with a teacher), is determined: first the qualities of the students at the school, second the quality of the student's parents, third the quality of the teachers and school admin, fourth the quality of the school's infrastructure and equipment. You can greatly influence the last with money and the third somewhat with higher salaries, but not so much the first or the second. Say you took any poorly scored school and decided to create two schools from the student body. Same funding per child. Children whose parents come to a signup night for the new school get to go to the new school. The rest stay in the old school. The academic results from these two schools will be very different, just by this simple sorting. Money and better teachers help, but so far applying them from the outside doesn't seem to move the needle much.
- lifeisstillgood 8y ago
  That's a horrible thought experiment. and probably correct So how about this as a hypothesis- spend the money on improving parental engagement. Weekly training events, much better planned homework (xeroxd sheets handed out is not the same as a guided syllabus for the parents to follow) You can do a lot just by engaging those parents
  - dhruvrrp 8y ago
    > You can do a lot just by engaging those parents But what if those parents don't want to be engaged with. A lot of children who would be "left behind" in the old school would have been from a worse social-economic background which would mean the parents just won't have time for the school events. Or they might just not care about the kids.
    - deletemenow 8y ago
      What if the state took away kids from parents who can't be bothered to raise them and they get put into state run boarding homes that are jrotc style? Would people be for or against this?
    - 8y ago

pjc50 8y ago

I was wondering if you could skip the middle bit and just do it as a straight up fraud by pretending that the place had business, then I remembered how Florida happened.

pvarangot 8y ago

You seriously think VC is not doing that to hedge high risk investments in companies that pay high salaries?

sytelus 8y ago

Non-malicious startup idea: What if you bought houses in bad school area, created a great private/charter school in that area and sold your houses at much higher price? From OP's calculation, a great school may cause at least $200K price increase per house and depending on capacity of the school you need to build, I think this can turn out to be pretty good business.

xyzzyz 8y ago
> What if you bought houses in bad school area, created a great private/charter school in that area and sold your houses at much higher price? It's not easy to create a good school. Certainly, simply throwing money at the problem doesn't work, as shown by an example of US public schools. The most certain way to achieve it is to heavily preselect the attending children, but that presupposes the existence of such quality base in the area around the school. The problem is that if it does, then their parents are usually already rich themselves, and so the house prices are already high.
- yesenadam 8y ago
  Are these assumptions, that throwing money at the problem characterizes US public school, and that quality children usually have rich parents, anything like justified?
  - PeterisP 8y ago
    Regarding the second part, yes, the fact that academic achievement is highly influenced by socioeconomic status is well supported by research; a big part of the whole correlation is that higher socioeconomic status means better schools, but there's still a strong effect within the same school. There's a bunch of studies that try to estimate the nature/nurture split, but in any case higher socioeconomic status correlates positively with pretty much everything schooling-wise.
    - yesenadam 8y ago
      Sure, but all that is another thing. I was questioning a particular assumption: quality children usually have rich parents Maybe that wasn't what was meant, but that was what was said.

emmelaich 8y ago

> "rent-seeking real estate speculators" A rent-seeking speculator? Not sure how you're using that phrase but I don't think rent-seeking applies here.

TomK32 8y ago

If that business is a school with formerly really bad grades then you might have an even better plan.