Pathrise

What made you want to create Pathrise, and where did the idea come from?

Pathrise was started by my close friend Derrick and me. We met at university while we were directing a nonprofit that gave other students mentorship and real world experience for software engineering and design. It was basically Pathrise in nonprofit form! After Derrick and I went on with our separate careers for a few years (he went to Facebook and I founded a different company in the education industry), we got back to working together again. Together, we had more than a decade of combined experience in building products for education and university students, which is what led us to start Pathrise.

Cofounders Derrick Mar (left) and Kevin Wu (right)

We started off by working with a few students, but after working with the first few, we realized we were onto something more. We had originally thought that the job search problem was solved, and that mentorship for it would be relatively straightforward. After seeing how much we could impact our students’ job searches by applying a tactical and practical mindset to them, we saw how lacking the job search as a funnel optimization problem was.

As we began further developing our core program and taking on more students, we then realized that Pathrise was, in particular, impactful for students that felt marginalized in some way, whether they were students from underrepresented communities in tech, immigrants, parents returning to the workforce, or more. For these types of people, Pathrise was not only a new and systematic way of optimizing value in their job search, but also a way to make up for decades of environmental advantages and privilege that they missed out on. At that point, the idea for Pathrise was fully realized.

How would you explain Pathrise’s business model? What is a job accelerator? 

Pathrise’s business model is simple. We help you get the best possible job. You only pay us once you get hired, start work, and start receiving your paycheck. This relationship is defined through something called an Income Share Agreement (or ISA for short). The ISA for Pathrise is 9% of your first year’s salary, only if you get hired through Pathrise. ISAs, which have been recently popularized, act as the perfect structure to create aligned incentives between a job seeker’s agent like Pathrise and the job seeker.

Today, the term career accelerator is a bit nebulous, but I would define it as follows: A career accelerator is a training and/or mentorship program to help you advance in your career. It’s different from something like a coding bootcamp because rather than focusing on only technical education, it is focused on your overall career outcomes, like where you land your next job.

How scalable is it?

Pathrise is very scalable! There are 3 main reasons why: (i) we’re an online program, (ii) our technology platform, and (iii) we’ve accounted and designed Pathrise around 1-on-1 sessions from the get go. Because we’re online, we can scale regardless of geography. Because we use a central technology platform, maintaining data, managing relationships between job seekers and their coaches/mentors, and otherwise operating the program remains efficient even at a higher scale.

Finally, it seems counter-intuitive that building our program around 1-on-1 sessions would make it more scalable, but the reality is that the majority of training, mentorship, or educational programs are reliant on 1-on-1 time. However, most of them just don’t account and plan for it explicitly. One of the reasons classes or programs that don’t scale eventually break is because the ratio of instructors to students becomes larger and larger, and less unaccounted for one-on-one time can naturally happen. This isn’t a problem in Pathrise because we are already accounting for a significant amount of 1-on-1 time per job seeker in how we’ve built our margins, hiring processes, and systems- meaning that we will be able to sustainably maintain the exact same mentor to mentee ratio throughout the growth of the program.

How is Pathrise different from a traditional job coach?

Today, career services and the complexity of the job search are severely underestimated. The job search is a funnel management problem that is not analyzed or optimized very well, especially when compared to how developed other funnel management problems like growth, sales, and recruitment are. If you compare the way the head of growth at Airbnb thinks about marketing to the way career services at any university approaches the job search, you find a large disparity in rigor, analysis, and thoughtfulness. Pathrise approaches career services and coaching as methodologically as top companies approach growth, sales, and recruiting. We work with job seekers using real data and tactics to actually meaningfully impact their success.

The Pathrise Team

Traditional career coaching has hardly changed in the past few decades. Pathrise is career coaching, modernized. We have helped hundreds of people find the best possible job and we constantly evolve our core program with our data-backed learnings. Not only do job-seekers receive 1-on-1 support, but they also participate in group sessions, technical sessions, mock interviews, negotiation guidance, and whatever else they need to optimize their job search. Pathrise provides data-backed information, personalized support, and 1-on-1 guidance.

From an applicant’s perspective, what would their experience with Pathrise look like?

Job-seekers in Pathrise are partnered with an industry mentor from their field and a career coach. They participate in weekly group and 1-on-1 sessions to work on their resume, online profiles, applications, reverse recruiting, cold emails, mail merges, technical and behavioral interview preparation, negotiation, and anything else they need to land the best possible job. The entire program is online and they can be in contact with their mentors and coaches whenever they need it, receiving support all the way until they land a great job (up to 1 year).

How did you get applicants to use the platform? How did you position Pathrise’s services to them?

One of our biggest selling points is our results. Since the income share is 9% of your first year’s salary, we position Pathrise’s goal as getting you, at a minimum, 10%+ improvement to your job search, thereby making it so you gain 10% or more by sharing 9%. Historically, we get a 5-20% increase in salary through negotiation alone, 2x increase in interview scores, 3x increase in success rate on applications. If you put all of this together, not only do we meet the minimum of at least a 10%+ improvement, but we far exceed it for each individual phase of the job search. Because we’re often doubling metrics across the board for job seekers who use Pathrise, this makes Pathrise a no-brainer from a rational perspective as a program that pays for itself. 

Career coaching up until now has had questionable ROI because it hasn’t been data-driven, but Pathrise turns that around in our positioning to make ROI our most obvious and strongest selling point.

Were there any unique marketing strategies that Pathrise employed? 

We use a lot of marketing strategies, some of which are similar to the strategies we teach in the program to help people stand out in their job search. For example, we find good matches for Pathrise and send them cold emails to let them know that we can help them make the most out of their job search.

Recently, we have also been reaching out to university newspapers to collaborate on stories with data-backed tips for the students at the school to use in their job search. We want to share our learnings with as many people as possible. We have free online resources for job-seekers and 200+ insider interview guides that were #2 on Product Hunt.

How do you develop your curriculum? How did you attract advisors to help with the ‘coaching’ process?

We started off by pooling the existing expertise from the founding team- whether it was my experience as a YC founder and product manager at Yelp, Derrick’s experience as a top 1% engineer at Facebook, Rachelle’s experience as the first technical recruiter at GitHub and a university recruiter at Google, or any other knowledge from the decades of experience represented across the team. Because our early hires worked at top companies like Airbnb, Microsoft, Facebook, and Google, we were able to put together a strong base of curriculum fast. 

Since then, our curriculum has constantly been evolving based on what works, what doesn’t, and the ever-changing job search. We track several core metrics like callback rate, interview frequency, interview success rate, negotiation lift, and other metrics in order to form and test hypotheses about new tactics or adjustments to existing tactics that will further improve a job seeker’s outcome. On top of that, every new hire to the team not only contributes their existing knowledge (ranging from those who have a decade of experience in career services or to those previously working in the industry at a top technology company), but also is assigned to do a research project where they survey or interview recruiters and hiring managers in the industry in order to add to our curriculum as part of their on-boarding process.

What has been the biggest hurdle that you had to clear while starting Pathrise? What lessons have you learned from it?

Cash flow limitations. Income share agreements are absolutely essential to our business model and mission. Without deferring payment, we can’t be the accessible program that allows for personal growth and upward mobility that we want to be. However, when you put it all together, a job seeker who joins Pathrise can take 4 – 5 months to get placed, 2 – 3 months to start work, and 6 months to finish the payments in their income share agreement. This means even if a job seeker will eventually convert to revenue, that process can take 12 – 14 months.

As a result, for the first year of Pathrise, we had to operate on very little revenue, yet still bootstrap a strong team and after that, tell a convincing story to investors to fundraise to grow further. We still need to consider and balance our enrollment to make sure that we account for our unique cash flow limitations, but even looking back, there’s no way that we would’ve done anything different. It’s absolutely essential that Pathrise be designed this way for us to be able to accomplish our mission.

That being said, I think what I’ve been able to learn in managing these financial nuances is just a lot more practical knowledge about financing options, budgeting, and modeling. As your business grows from just the founders to the first team of half a dozen or so, and then again from that to twenty or more, the importance and complexity of modeling your revenue and expenses also grows.

Where do you see Pathrise in a couple years from now? 

The job search market is similar to professional sports, the entertainment industry, and real estate in that it makes sense for agents to exist, a third party that handles the complexity of the search for a contract and negotiation of the contract itself. The job seeker benefits because they will get more value in return than what they would share with the agent. The agent benefits because they can specialize in a specific set of skills. The employer benefits because talented job seekers won’t shoot themselves in the foot when it comes to parts of the process unrelated to their work at the end of the day.

However, the job search does not have an agent that acts on behalf of the job seeker. Recruiters do not fulfill that role as they are not incentivized with the interest of the job seeker in mind (it would be like assuming the front office of a sports team prioritizes individual athletes over the team). Before Pathrise, an agent entity that acts on behalf of the job seeker has never existed.

Because Pathrise is starting to fill that role, we think we will cause a shift in attitude towards career coaching. Even though we already have an overflow in demand, we think the market still underestimates the value of our service because the job search has never had an effective job seeker agent entity before. This means that once we’ve overcome initial skepticism towards the value of effective career services and income share agreements, then we will experience another influx in demand. Not only that, but we will transition from being playing a behind-the-scenes coaching role for job seekers into establishing brand value for them (e.g. like how YC companies receive brand value).

What is something that not many people know about Pathrise?

Something that not many people can see from the outside is the depth of the relationships that mentors and mentees build. We have many job seekers who use Pathrise who return even after they finish the program to visit the office. Every other week or so, I am lucky enough to have a mentee visit me for lunch or a quick chat, and many of the other coaches and mentors on the team have similar life-long friendships with the job seekers they had the opportunity to work with. It really is a lot of fun running a business where the crux of it is learning about and investing in individuals.

And lastly, what advice do you have for other aspiring entrepreneurs?

One piece of advice is to keep in mind just how deadly it is to move slowly. Certainly launching and iterating fast is a common somewhat cliche piece of advice, but you don’t learn what it truly means until you try to start something or join a startup.

In your average job, your goal is to optimize a piece or contribute a small improvement of an overall product. If you’re an engineer at Google, you’re adding one feature to a monolithic codebase that has had thousands of features added to it over the course of more than a decade. In this scenario, you want to move slower- you want to make sure that the thing that you added doesn’t break anything that was already there. Processes have already been put in place that you follow.

When you’re an entrepreneur, the exact same processes that worked so well in your past 9-to-5 hold you back when you’re starting something new. The exact same bars that you had to pass before getting “approval” are now misleading. For example, you can’t wait until you’re convinced you’ve created the perfect business plan that will lead you to your first million users before launching a product- you have to launch it the first moment that you think even a dozen or so users might try out what you’ve built. If you’re not looking for the fastest, most minimal way to start interacting with real users, then you’re unlikely to succeed.

To learn more about Pathrise, visit them here. To see our interview with Loungebuddy click here. If you’re interested in the most recent business secrets, check out our Business Knowledge page. If you want to stay up to date with the most recent BWS news, follow us on Instagram and Twitter!