At SharpestMinds, we think incentives matter. Which is why we launched our mentorship platform with Income Share Agreements (ISAs) as our revenue model.
Mentors on SharpestMinds mentors charge nothing upfront. They only make money if their mentee lands a job—with a share of their salary for their first year. SharpestMinds takes a small share as well. Now everybody in this arrangement (mentee, mentor, and SharpestMinds) all want the same thing—a well paying job for the mentee.
In spring 2020—with the pandemic disrupting everything—we added support for pay-as-you-go (PAYG) mentorships. We had seen demand for this payment model since we launched. And, with an onset of hiring freezes, layoffs, and furloughs, the additional revenue stream was alluring.
As of this week, however, we are sunsetting PAYG mentorships and doubling down on income share agreements.
We've always believed in the power of aligning incentives and of long-term thinking. Ideally, every SharpestMinds mentorship blossoms into a meaningful, lasting, professional relationship. And we've seen some awesome stories of this happening! Every time we hear that a mentee and mentor are still in contact well after their mentorship is officially "over", we can't help but break into warm smiles.
Unfortunately, the pay-as-you-go model doesn't encourage this very well. While there are always exceptions, we've found that PAYG mentorships tend to be more short-term and transactional. It's important to us that our revenue model be aligned with people we are trying to help. ISAs are a great tool for encouraging the right kind of help, whereas PAYG agreements aren't.
It's encouraging that our growing community of mentors and mentees agree. PAYG was largely a solution for mentees that already had a job. But the majority of our users preferred ISAs—even when the mentee did have a job.
We recognize that ISAs are not perfect though. They are still relatively novel, complex, and rigid (especially in the context of peer-to-peer mentorships where time—not money—is the offer). We want more people to benefit from the power of mentorship plus aligned incentives. That means making ISAs more accessible. This is a hard problem, but one we are keen on solving.
Over the past few months, we've made some major updates to improve our ISA offering for mentors and mentees. We've partnered with Blair to help service our growing number of ISAs. We've also made ISA mentorships more flexible with a customizable Activation Date—giving mentors and mentees more control over when their ISA becomes active.
As far as we know, SharpestMinds is the world's first peer-to-peer ISA marketplace, and the first to reach profitability on ISA revenue alone (without selling any ISAs to investors). And we're just getting started—there's still a lot to learn and a lot to build—but we're excited to continue to forge long-term professional relationships with the power of incentive-aligned mentorship.