Weekly readings – 22nd February 2020

The Merits of Bottoms Up Investing

I admit that I was initially fond of Lambda, but there has been growing coverage of the challenges that the startup faces and of what the company really is about. Here is one of the most damning articles: THE HIGH COST OF A FREE CODING BOOTCAMP

The Ride-Hail Utopia That Got Stuck in Traffic

Student debt in the US reached $1.6 trillion, yet graduates are having the hardest time ever to find employment

Unemployment among Americans aged between 22 and 27 who recently earned a Bachelor’s degree or higher was 3.9% in December — about 0.3 percentage point above the rate for all workers.

Source: Bloomberg

What Can the Stock Market Tell Us About the T-Mobile/Sprint Merger?

In light of the Coronavirus, here is how WHO advises us to wear a mask

Masayoshi Son and SoftBank struck again, this time with Oyo. Given the magnitude of capital involved, it’s incredulous to read this kind of shocking articles.

There were missteps at Oyo from the start. The Japan hotel team, led by a transplant from India named Prasun Choudhary, figured they could get to as many as 75,000 rooms in the first year, which would put them ahead of the Apa Hotels chain in the No. 1 spot. But they took as their starting point an inflated addressable market of 1.6 million rooms based on numbers from the local tourism authority: They included campgrounds, bed-and-breakfasts and pay-by-the-hour love hotels, which weren’t part of Oyo’s business plan, according to people involved at the time.

Oyo Life, the apartment rentals business led by another Indian lieutenant called Kavikrut (who like many Indians goes by one name), set the goal of 1 million rooms in part because it was a stunning, round number that would exceed the capacity of the Japan market leader, the people said. That was the target that caught Son’s attention in March.

The unpredictable economics of pawn shops

An interesting report by PwC on the consumer preference in the streaming battle

An interesting read on a software startup that helps coffee farmers

How Saudi Arabia Infiltrated Twitter

a16z compiled a report on Top 100 Marketplace startups

What is the proper way to drink whisky?

How to write usefully

An amazing piece of innovation from F1 Mercedes team that is an immensely ominous sign for their rivals

Education poised for disruption

The traditional education system is broken, at least in the US. The thing that we expect to help us land a well-paying job is getting ridiculously expensive. According to Forbes, student debt in the US is $1.3 trillion, behind only mortgage debt.

If we pay so much for the education, is it worth the time and money? I recently graduated with an MBA and MIS. To be frank, the MBA degree at my university offers little in value, yet it costs $10,000 per semester. The MIS is much more helpful, especially given that I didn’t have much technical background. Nonetheless, some courses are repetitive, but since they are part of the degree, I had to waste my time on them. I am pretty sure I am not the exception in this.

A college degree used to represent the credibility a student had. The more famous the school that issued the degree, the more credibility. It is still true to this day. Besides that, going to school does offer certain values in several cases. Some people learn more effectively from listening to a professor. Team work at school prepares students for team work and communication in real life.

Technology today allows all of those to take place in the digital world. Online courses are usually cheaper than in-class sessions at universities. Sites such as Lynda, Udacity or Coursera let learners absorb skills and get certified by a fraction of the tuition fees. With MOOCs, which is used to refer to those websites, students can study at their own pace and become qualified for employment without breaking their bank. That’s improvement. If employers only worry about skills, then what is the reason for going to a traditional college?

MBA applications have fallen for years in the US. Some universities even abolished their MBA. It goes to show that having an MBA and the debt that comes with it is not appealing or beneficial to students any more.

Recently, I learned about another innovation in education: schools such as Lambda. Lambda offers live online classes that are structured in specific curriculums, mostly in IT. Introduction classes are free, while advanced classes are not. The cool thing about Lambda is that students are not required to pay upfront (only for US citizens, US permanent residents and EU citizens). Students only need to pay 17% of monthly salary for two years if they get a job that offers higher than $50,000 in salary after taking graduation. The cap payment is $30,000. If you don’t get that salary or you get fired, the payment stops.

It is an innovative approach to education. It is designed to specifically help students get a better-paying job without worrying about student loans. The freedom from thinking about paying installments after graduation is huge. In the current system, if you have a significant amount of debt, your freedom is much limited. Regardless of whether you have a job or not, you still have to make payment. Student debt is not written off in bankruptcy. Everything you do in life, you have to take into account the debt you have. If you don’t like the job, you still have to suck it up and keep on going.

With Lambda, you still have to pay installments, but the total is capped. More importantly, you have more freedom. If you somehow get fired or sick and can’t work, you don’t have to make payments.

I am not affiliated with Lambda in anyway. I am excited about what the school has to offer. I wish universities would take note of this trend and rethink their approach.