The American-Dream-as-a-Service

There may be a limit to software demand but we are far from reaching it. So far the demand appears to be practically infinite. The more software we have, the more we want and the more we are willing to pay for it. (By "we" I mean the total worldwide software market, not just consumers.)

I think this is a great idea, if it can work out financially for the lender.

That is the real question -- the lender is taking on all the underwriting and credit analysis risk that the student will not get a job in their field of study, at which point the loan is discharged. There is a reason why banks have historically not done this, and it has nothing to do with them being unimaginative, but rather that the credit analysis is too difficult for them to do at anything like a reasonable rate of interest that people are willing to pay.

I don't care whether you call it equity or another type of liability, it still must be repaid and the books must balance, and I am skeptical that this is going to happen, nor do I think that the lenders are aware of the pit of liability they are wading into.

Here are some scenarios:

1. Moral hazard.

Lots of people sign up who simply lack the talent to do well in tech or decide they are bored with it. There is no cost to them, they can walk away from the obligation by quitting the program or by graduating and then looking for a job outside their field. How do you deal with that?

2. Difficulties of innovative credit analysis in the current environment.

As you are talking about education, it is a politically sensitive topic because if you find yourself charging different rates to people based on race/gender ex post (even though you do not take race/gender into account anywhere in your credit analysis) you are still opening yourself up to massive liability and charges of sexisam/racism. So major financial institutions are very heavily regulated as to their credit analysis inputs and algorithms and do not attempt to compete by being more efficient at credit analysis, as there is already a platoon of people ready to scream discrimination if any algorithm results in different outcomes for different groups. Thus no one gets creative the with algorithms.

What this means is that this start up cannot compete on credit analysis by trying to find a better algorithm. That means there isn't a lot of innovation possible in the credit analysis space right now. This means you will not be able to defend yourself against the moral hazard risk outlined in #1 above except by charging high interest.

3. Market weakness.

If students graduate in a recession, you will receive a lot less income than banks do on mortgages because there is no collateral or cost to defer. In a boom you will receive a lot more. You are taking on alot more volatility, and therefore must charge more.

4. Accusations of Usury/slavery.

Because of the above, the interest charged will need to be high and so you will get a lot people complaining about unfairness that they borrowed 10,000 but are repaying 100,000 to these sharks that are leeching off their income, and how fair is to have to repay so much. In the current climate, it is very important to seem fair. People will accuse of you taking advantage of them.

So while I do want them to succeed, I'm not sure if they can succeed in the current environment.

In that sense it can be a vicious cycle. Though for the higher salaries I find the lists of requirements sometimes staggering.

Oh definitely! Doing high pressure practice in preparation for my last round of interviews definitely helped, and that round resulted in multiple FAANG offers.

VC interviews also seem very high pressure! I've met folks making funding decisions, but never been in the hot seat with them. It does seem closer to the "walk me through your portfolio/a project" interview than a whiteboard interview. Although obviously the stakes can be much higher.

> I suggest practicing over and over again

Anxiety isn't related to experience (or actual competence). When it's on the level mentioned, what works is CBT (if you're lucky). That may include practice, but it will certainly not be the only element.