For the low price of 17% of your paycheck


January 9, 2019

Lambda School, a startup that trains software engineers for free in exchange for some of their future income, raised $30m.
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Lambda raises $30m to ‘invest’ in students… in exchange for some of their income

Lambda School, an education startup that offers tuition-free data science and coding courses for a slice of future paychecks, raised $30m to expand its 6-month programs into high-demand industries like nursing and cybersecurity.

With student debt on the rise, ‘income sharing agreements’ (ISAs) that don’t require upfront loans are becoming a more popular way to finance education — but critics disagree about their benefits.

Treating students like investments instead of customers

Lambda students don’t pay a dime while they’re taking courses. Instead, they fork over 17% of their income for 2 years once they’ve landed jobs that pay at least $50k per year (up to a maximum of $30k). 

Other programs offer similar arrangements: Traditional universities like Purdue and startup boot camps like App Academy and General Assembly offer similar ISA programs.

Proponents claim that since ISA schools make money only when their students succeed, ISA programs are a better business model for higher education that should be copied at all colleges and universities. But not everyone agrees…

Good luck, theater majors

Critics argue that since for-profit ISAs rely on high-earning alumni to make money, they aren’t a great solution for general education since they don’t work for most types of jobs.

Take Lambda’s business model: It works well for students pursuing tech jobs (83% of Lambda alums earn $70k within 6 months of graduation). 

But the Lambda model doesn’t work in many other industries: In New York, for example, median salaries for therapists, nurses, and most teachers are under $50k — below Lambda’s threshold of profitability.

Higher education still has a lot to learn

ISAs like Lambda are joining other alternative education enterprises (such as MOOCs — massive open online courses — and specialized boot camps) in trying to build a cheaper model for higher education.

With investors pouring $9.5B into ed-tech startups, companies like Lambda will continue to grow in the short term.

But given the unstable market, it’s still unclear whether Lambda’s business model will succeed in the long term. But for the average college student, who graduates with $39k in debt and takes 10 years to pay it off, it sounds like a good deal in the meantime.

It’s all Greek to me..
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Amazon will use AI to deliver free samples of products it knows you want

Amazon has a new ad strategy that could throw a monstrous haymaker to the jaws of Facebook and Google’s online ad dominance. That is… if it connects.

Per Axios, the e-commerce giant is testing a program that partners with brands like Maybelline and Folgers to send free samples to potential buyers’ doorsteps through Amazon’s delivery service.

Makes sense. Alexa sees you when you sleep, she knows when you’re awake, and she knows what you shop for online.

This could be a game changer

While most of Amazon’s $5B in ad revenue comes through targeted ads online, the company believes combining the ol’ “Avon lady” approach with customer data will provide “a higher conversion than display ads.” 

Analysts also predict the samples will create opportunities for Amazon to sell more of its own packaged goods and products.

Convenience always wins

While some test subjects were perplexed after wakin’ up to Folgers in their cup (or rather, their mailbox), a recent survey of 1.5k individuals found that only 33% were wary of their data being shared with 3rd parties.

And with more than 100m Prime services subscribers, analysts believe this is a major breakthrough in its efforts to throw Google and Facebook from their ad-dominated hills.

   @ Me Anything
Wes Schlagenhauf, News Writer at The Hustle
@wesschlagenhauf

Having a hard time seeing how far Amazon can take this. Are they prepared to mine the cold abyss of our online shopping carts? Or are we all gonna end up with a lifetime supply of Folger’s coffee and skincare samples?
Show this thread
» Door-to-door Amazon

SoftBank slashes its majority stake in WeWork to a modest $2B

Weeks after SoftBank’s Vision Fund planned a towering $16B investment in WeWork, it will reportedly pare down what would’ve been a majority stake in the company to just $2B.

It’s fair to assume the investment firm got cold feet over its massive investment in a wildly unprofitable, $20B shared office space provider. But, as The Wall Street Journal points out, for the first time, market turbulence has exposed a crack in SoftBank’s financial armor as well.

The cash king isn’t as liquid as it anticipated

The original $16B plan would’ve been one of the largest investments ever in a private tech startup — a risky bet for SoftBank, which weathered a 36% drop in share price since its September peak (not to mention a disappointing IPO for its Japanese mobile unit).

That said, SoftBank’s confidence in the company formerly known as WeWork (now rebranded to We Company) has long been controversial among higher-ups and investors. Many felt WeWork’s valuation was lofty for a “tech” startup focused mainly on costly real estate. 

But let’s not get our Vision Funds in a bunch

Maybe WeWork’s valuation is… overhyped, and maybe SoftBank’s balance sheet ain’t as liquid and limber as once boasted, but $2B is still an ungodly sum of money.

It brings SoftBank’s total investment in the company to a solid $10B, and, as Axios points out, if the tech market was in trouble, not even an investor as trigger-happy as Masayoshi Son would drop that kind of dough.

» Good lawd that’s a lot of money

Overtired workers cost Japan $138B, and businesses are desperate to encourage naps

In a world full of night owls and overachievers, Japanese employees are the most sleep deprived of all, according to research reported by The Guardian.

This doesn’t just make Japanese employees cranky, it also makes them unproductive, allegedly costing the economy $138B per year. Now, to keep workers chipper, businesses are practically begging workers to hit the hay.

Sleeping on the job

On average, Japanese workers get 6 hours and 35 minutes of sleep per night (and executives even less), making Japan the most sleep deprived country in the world.

But, just because workers don’t sleep in bed doesn’t mean they don’t sleep elsewhere: Many Japanese proudly practice ‘inemuri’ — the act of ‘sleeping while present’ in meetings or presentations, sometimes while standing up.

So, since workers won’t go to bed on their own (92.6% of Japanese adults acknowledge they don’t get enough sleep), desperate employers are starting to mandate nap time. 

Rise of the ‘nap economy’

Many Japanese companies discourage overtime and insist their employees leave by 9 pm to ensure they get enough sleep.

Some companies are also building ‘strategic nap rooms,’ complete with aromatherapy machines and noise blockers, to reduce in-meeting naps.

Another Japanese company called Crazy created a sleep-monitoring app that rewards employees up to $580 per year for getting more than 6 hours of sleep per night (which, for the record, is still 1 hour less than recommended).

» It’s a siesta fiesta
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