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I suspect they set out with noble intentions and then realised it is a conversion-funnel game where they absorb the cost up front with the hope of recouping cos

I suspect they set out with noble intentions and then realised it is a conversion-funnel game where they absorb the cost up front with the hope of recouping cost and profit later on. If 100% students passing through landed a job then the unit economics would work provided hard costs are low enough. Business might even be successful at 30% post Lambda School employment. However, as they scale that number will fall because the type of student they recruit might change and the pandemic also having a short term effect. As % post employment falls revenues fall and more students are needed to increase absolute revs. This could also go hand in hand with cost-cutting, of which there is evidence. All in all, an experiment in business model is taking place.

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gexla 6y ago
> All in all, an experiment in business model is taking place Which is all businesses at that scale I think. You're not reinventing the wheel offering plumbing services in your local village. I guess we have to think about how these experiments might play out and the risks involved as we participate in them. How will food delivery services change my community? What's the risk that an investment in personal education with this newly launched service won't pay off? What am I giving up by opening a free account with Facebook? There's a strong likelihood that any of these experiments will blow up. Just as there's a strong likelihood that a direct investment in any of these companies won't pay off (especially as an early investor, which is at the point where we're likely using these services.) Maybe people shouldn't be so quick to jump in early, and more accepting of the mistake once they find out they placed a bad bet.
- dougSF70 6y ago
  Agreed, early stage start ups are experiments in business models: "is there a market for x, can I charge $y for it and accept z as payment". In edtech start ups most folks forget who the customer is e.g Altschool, a software company that used students as Guinea pigs.
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gexla 6y ago

> All in all, an experiment in business model is taking place Which is all businesses at that scale I think. You're not reinventing the wheel offering plumbing services in your local village. I guess we have to think about how these experiments might play out and the risks involved as we participate in them. How will food delivery services change my community? What's the risk that an investment in personal education with this newly launched service won't pay off? What am I giving up by opening a free account with Facebook? There's a strong likelihood that any of these experiments will blow up. Just as there's a strong likelihood that a direct investment in any of these companies won't pay off (especially as an early investor, which is at the point where we're likely using these services.) Maybe people shouldn't be so quick to jump in early, and more accepting of the mistake once they find out they placed a bad bet.

dougSF70 6y ago
Agreed, early stage start ups are experiments in business models: "is there a market for x, can I charge $y for it and accept z as payment". In edtech start ups most folks forget who the customer is e.g Altschool, a software company that used students as Guinea pigs.

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