Your quote in the articles says -- "We saw lots of people in the City University of New York system who graduated as computer science majors but weren't going into the tech industry" --- You can't graduate as a CS major without writing any code...So this quote has nothing to do with the people actually in your program?
That quote was part of a longer conversation, it was asking why we saw the need for this. The idea of even students studying CS not having access and opportunities point out the opportunity to open this up to other people in these communities
I know a former CS PhD student at a top 5 program who never coded before going into industry oddly enough - it's probably possible to focus more on the abstract side, although extremely rare.
Twitter had something like $300M revenues[0] at it's IPO and, based on the opening share price, was valued at $14B[1]. That's 46x.
Still seems crazy high, but seemingly not out of line with other recent tech valuation multipliers. There are some other insights in these comments that seek to better explain the valuation.
Generally you can only recognize revenue when you are at risk for it. If you are not taking a risk by holding inventory (or guaranteeing a price before selling a service) then you are an agent, not a principal. You can only recognize the revenue that you are at risk for, the rest is "pass-through." This is addressed in the FASB ASC 605-45 (https://thegaappost.com/sec/605-revenue/605-45-principal-age...).
An example:
1) An advertising agency buys media for a client to place ads in, but their contract with the media company says they will only pay for the media if they are paid by their client. In this case they can only recognize their commissions and fees as revenue, not the cost of the media itself.
2) An ad network buys media for a client but has to pay the media company for it whether or not the advertiser pays them. They can generally recognize the cost of the media as revenue, along with their commissions and fees.
AirBnb does not take risk on the portion of the customers' payments that go to the host: if AirBnb is not paid then the host is not paid, so this part of the payment is not recognized as revenue.
I think it still is a proper P&L perspective to label this revenue. Similarities in other markets:
- a payment processor doesn't label all money flowing through the system as revenue, just their cut of it.
- a marketplace like Etsy has gross merchandise sales that tracks how much has been bought on their platform, and revenue just accounts for what they took in
Perhaps its a good way to validate the idea / test the market? I wouldn't pay a $1 myself, but if they can get 1,000 people to pay $60, more power to them.
Putting up a high friction point seems like a unintuitive way to validate the idea.
I'm taking the founders at their word--they need the money to launch their product. It just seems like they could do it for less--however I don't have much detail so I'd like to understand the money breakdown.
