Judah Guber writes about his new company:
What we have done with Ultrinsic is created a system of incentives for students to allow them to invest in their ability to achieve a certain grade and when they achieve that grade we reward them with a cash incentive on top of receiving their original investment. This helps remove one of the large barriers students have to studying and staying motivated over the course of long semesters of college by giving them rewards on a much more immediate basis.
We have been doing a pilot program in 2 schools, NYU and Penn, for the past year or so, and are currently in the process of a major roll out of our services to 37 schools all across the country. This is due to our popularity and inquiries from students in tons of schools all around the country regarding getting Ultrinsic’s services in their school. In the Fall 2010 semester, Ultrinsic will be revolutionizing student motivation on a grand scale . This is the dream of many economists: to change the cost benefit analysis of people to cause them to improve themselves and to even allow them to put them in control of this change.
Our system is forever sustainable because we earn a profit on motivating students to improve their performance, there will always be a motivation to sustain this program. Another very important aspect to our market, the college student, is that it’s one thing that’s never going to go out of style.
Guber asked if I wanted to interview him, which I did by email. Here are my questions and his responses:
AG: How will your system make money?
Judah Guber: Ultrinsic makes money by the discrepancy of the contributions and payouts between the students who achieve their target grade and those who don’t. However, another very important aspect to our business model is our offering of our many ancillary services to students once we reach critical mass from the college market, which should not be too far off based on our current roll-out schedule.
AG: Are you worried about anyone gaming the system, for example an instructor could give all A’s and then collect some of the $? (As you are probably aware, we give a lot of A’s in college classes as it is.) Or, to take a more mild example, students going on to your site for the courses that they particularly expect to do well in?
Judah Guber: To answer your question honestly, we have some concerns, as anyone who creates a product this innovative probably does, when they are ready to launch it on any kind of large scale into the marketplace. We plan to limit the size of the incentives a student can acquire at least initially so, that no student can game us out of too much money while we are adjusting our system into the college market. If it does happen, that someone games the system one semester, we could easily course correct and customize those odds for that eventuality. We will also increase the cap of money that could be won based on the level of the user’s involvement, like how long they have been an UItrinsic user. Lastly, by analyzing the students performance in other classes that they have already taken we can predict how the student will do in a current class. We have algorithms that take into account a number of different statistics like academic history, how well they do in certain subjects, as well as others as we gather more and more information.So, as someone like you probably knows better than most, the more data that’s collected the more accurate these odds will become.
AG: You write that your system is “the dream of many economists: to change the cost benefit analysis of people to cause them to improve themselves and to even allow them to put them in control of this change.” I assume that the ultimately benefit for a student to get good grades is far larger, on average, than the amount that they would win from going on your site. Thus, perhaps it would be more accurate to say that you’re trying to change students’ immediate cost-benefit calculations by taking a long-term benefit and moving it closer into view?
Judah Guber: Yes, you are absolutely right that the program changes students’ immediate cost-benefit calculations by causing them to take a long-term benefit and moving the benefit closer into view. However, the student is the one who is in control of this change because they can decide what kind of incentives they want and how much they want. Ultrinsic is just the provider of this program. We do have a very strong belief in education so, ideally we would want to give someone as much motivation as possible to do as well as possible on their grades. Since schools and education first came into our society many things have changed in our daily lives, save for a lot of aspects of education and the grading systems we have. Much of our lives are adaptations to our new needs, like the Internet allowed us to further our love for immediacy when it comes to having all information at our fingertips at the drop of a dime. We see Ultrinsic as the service that helps the education system evolve much like everything has.