3 ms·

This honestly sounds like a pretty cool idea, but I’m a little concerned about something you say: > Most of the content is open source. Some of it’s from place

by dmhn 8y ago

This honestly sounds like a pretty cool idea, but I’m a little concerned about something you say: > Most of the content is open source. Some of it’s from places like Freecodecamp, which is available for free. If you have money, you don’t need us. If you are not offering much value in terms of the educational content (since it’s freely availabe), then aren’t you essentially just loaning people money. They get money now, and they promise to pay you back a higher amount in a while. Wouldn’t it be simpler and cheaper for someone to just get a 2k loan on their own and study the freely available content on their own?

fastball 8y ago
The difference being that presumably Modern Labor doesn't require you to pay back the loan if you're not making >$40k after their patronage. Where as, if you take out a normal loan and don't net a good coding job after your little educational hiatus, you're in a worse financial position than you before (except now you know how to code, yay).
asd33313131 8y ago
Getting a credit limit of 10k is tougher than 2k but you're right, there are other ways to finance learning. We think there are a couple reasons why more people might like our model: 1) the income share agreement means that they aren't stuck with payments when they can't afford to make them. We find that many students are averse to traditional debt like this, rational or not. 2) we give structure to the learning in a way being on your own in the wild is hard to replicate. Having a defined set of things to do and being paid to accomplish them in the right order, we think and may be wrong, that at scale, this will lead to more people finishing the required steps to learn material. edit: grammar
ianmobbs 8y ago
Yeah. For a $10,000 loan, assuming a $100k salary when you're done, you're looking at a $1,250 monthly payment/a whopping 139% interest rate[0] [0] https://www.calculator.net/interest-rate-calculator.html?cloanamount=10000&cloanterm=2&cmonthlypay=1250&x=0&y=0 https://www.calculator.net/interest-rate-calculator.html?clo...).
- asd33313131 8y ago
  The one difference here is the risk component of equity financing versus debt financing -- with debt, you have to pay no matter what, with equity, you pay only if there is money left over. I think in the future, as the cost of capital comes down, the percentages of income will come down a lot.

by dmhn 8y ago

fastball 8y ago

The difference being that presumably Modern Labor doesn't require you to pay back the loan if you're not making >$40k after their patronage. Where as, if you take out a normal loan and don't net a good coding job after your little educational hiatus, you're in a worse financial position than you before (except now you know how to code, yay).

asd33313131 8y ago

Getting a credit limit of 10k is tougher than 2k but you're right, there are other ways to finance learning. We think there are a couple reasons why more people might like our model: 1) the income share agreement means that they aren't stuck with payments when they can't afford to make them. We find that many students are averse to traditional debt like this, rational or not. 2) we give structure to the learning in a way being on your own in the wild is hard to replicate. Having a defined set of things to do and being paid to accomplish them in the right order, we think and may be wrong, that at scale, this will lead to more people finishing the required steps to learn material. edit: grammar

ianmobbs 8y ago

Yeah. For a $10,000 loan, assuming a $100k salary when you're done, you're looking at a $1,250 monthly payment/a whopping 139% interest rate[0] [0] https://www.calculator.net/interest-rate-calculator.html?cloanamount=10000&cloanterm=2&cmonthlypay=1250&x=0&y=0 https://www.calculator.net/interest-rate-calculator.html?clo...).

asd33313131 8y ago
The one difference here is the risk component of equity financing versus debt financing -- with debt, you have to pay no matter what, with equity, you pay only if there is money left over. I think in the future, as the cost of capital comes down, the percentages of income will come down a lot.