New revenue stream: join masterminds, accept their proof-of-confidence money and do what they say. Use hollywood accounting to always post a loss. Huzzah!

I think this is just called "making a VC-funded startup"

That's why there needs to be a "find likely candidates" step. And getting it right is part of the core of the business model.

That's why Y Combinator has an interview process. Why venture capitalists do due diligence. Why coding camps start with a test to see if you're worth educating. And so on.

The incentives for fraud are also why many variations on this model involve putting a visible investment into you, but without necessarily paying you directly.

I wouldn't use that as evidence. A more complicated arrangement fraught with perverse incentives is less attractive than a simple credit card payment. Not to mention many of these groups are oriented around achieving something other than primarily financial gain.

Any possible business arrangement has the potential for perverse incentives.

If an advisor is willing to accept the potential for perverse incentives on the part of the advisee, that's strong evidence that the advisor is confident about their advice.

If the advisor expects the advisee to accept the risk of perverse incentives on the part of the advisor, then caveat emptor.

There may be good reasons to structure the relationship that way. For example I expect to pay a lawyer, and usually I don't expect to receive financial gain out of the relationship. But conversely it becomes very important for me to establish that this lawyer seems like a good one before I pay too much.

But it all boils down to the same thing. I should be more inclined to trust offers to share in my future profits than offers have me pay now for an uncertain reward later.

Wouldn't that run into selection bias?

In otherwords, you can lead a horse to water, but you can't make them drink.

I ran an ISA company for a while and can say with pretty high confidence that there are many reasons why fee-for-success is not an effective way to monetize this type of content (Which I've written about before [0]).

I agree that a business, like YC, that has been around for a while, monetizes directly with a fee-for-success model, and has good reviews is very likely to be effective. But the inverse does not hold: a program using fee-for-service is not particularly good evidence that the program is ineffective.

[0] https://twitter.com/seanlinehan/status/1505923007096700939

You make good points, but I think we agree on the core.

There are challenges with a pay for performance model, but a business that successfully operates on one is sending very strong evidence that they are actually effective.

A fee for service program may or may not be good, but the burden of proof is now on the company that they are worth what you'll spend on them.

Be careful to note that while possibly true, this is not evidence - it is a theory. Evidence would be some data (or even anecdote) that supports this theory.

Oddly enough, less than 1 day later someone has launched what purports to be a YC for real estate investing: https://twitter.com/moseskagan/status/1643228164439814144

I have no knowledge of if the individual involved is credible but in broad strokes, I do love to see it. It's exactly what btilly said. If this guy is actually so good at teaching people to make money in real estate, he should want to fund people to use his advice, not the other way around. Apparently, he does.