The archive · Education & Work · Strategic decision · 2019
Microverse bets a teacher-free, income-share school can train devs worldwide
Microverse, 'a Lambda school for emerging countries,' opened Jan 2019 with peer cohorts and 15%-of-salary tuition; 50,000 had applied by its YC S19 pitch.
Microverse
What the business is
An online software-engineering school for students in emerging countries: no employed teachers, peer-to-peer learning cohorts, and income-share agreements under which graduates pay 15% of salary once they land a job (duration unspecified at launch).
How it started
Microverse launched in January 2019 and pitched at Y Combinator's S19 Demo Day on 2019-08-20, describing itself as 'a Lambda school for software developers in emerging countries.' The founders said the school employs no teachers — students learn through a peer-to-peer model — and makes money with an income-share agreement in which students pay 15% of their salary after getting a job, without specifying for how long. They reported 50,000 applications since launch, said 100% of the first cohort graduated with a job and was already paying back, and claimed average revenue of about $6,000 per student with ~90% margins because there are no teachers to pay.
What happened
TechCrunch's day-2 roundup gave Microverse one of the fullest profiles of the batch when it posted on 2019-08-20; the article drew 161 points and 158 comments on Hacker News the next day. The profile records no funding round or later operating data.
No ending yet — it is still running.
Background
Microverse launched in January 2019 as an online school for software developers in emerging countries, calling itself 'a Lambda school for software developers in emerging countries.' Its distinctive model had no employed teachers: students learned in peer-to-peer cohorts, and the company was paid through income-share agreements in which graduates handed over 15% of their salary after landing a job, for an unspecified period.
At its YC S19 Demo Day pitch on 2019-08-20, the founders reported 50,000 applications since the January launch, said 100% of the first cohort graduated with a job and was already paying back, and claimed average revenue of about $6,000 per student with ~90% margins — the margin claim rested on having no teachers to pay.
TechCrunch profiled the company in its day-2 roundup of the 82 Demo Day startups on 2019-08-20, and the article drew 161 points and 158 comments on Hacker News on 2019-08-21. The bet under test: that peer learning plus an income-share agreement could turn motivated students anywhere in the world into employable remote developers, at a price emerging-market students could afford.
What has to be true
- The no-teacher structure inverted education economics: with no faculty payroll, the founders claimed ~90% margins and could charge nothing upfront.
- The income-share agreement made the school's interest identical to the student's — no job, no payment — which is the strongest possible claim of confidence in its own training.
- It picked a market others were ignoring: emerging-country students who could not afford US bootcamps but could access remote developer jobs, evidenced by 50,000 applications in seven months.
- The whole model rested on placement: students paid only when hired, so the school had to deliver employable engineers or collect nothing.
What can be applied
When revenue only arrives after a student is hired, admissions and curriculum must be wired to employer demand; removing teachers cuts cost, but placement is the whole business.
Aftermath
As of 2019-08-21 Microverse was live with its income-share model, fresh off its YC S19 Demo Day pitch. The TechCrunch profile records 50,000 applications since January, a first cohort that was fully placed and repaying, and founder-claimed ~90% margins; it contains no funding, enrollment or graduate-outcome data beyond that, so later events are outside this case.
Sources
- Here are the 82 startups from day 2 of Y Combinator's S19 Demo Days
- Startups from Y Combinator's S19 Demo Day 2
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