And get a hall named after you to boot!!
Steven Ma of ThinkTank Learning is not your usual college consultancy CEO catering to Asia's aspiring Ivy League families. Sure, his San Francisco Bay Area-based practice provides tutoring for the SAT and the usual blend of guidance and motivation. However, he is willing to go the extra step and provide a money back guarantee of success. How does he do it and still maintain a viable business?
Like the former hedge fund manager that he is, through an algorithm, of course - a "secret sauce" formula based on the historical data that he has compiled from his clients over the years. In short, he crunches a candidate's GPA and other qualifications together with his/her targeted schools into his black box to arrive at a pricing proposal. For example, for a U.S.-born high school senior with a 3.8 GPA, an SAT score of 2,000, moderate leadership credentials, and 800 hours of extracurricular activities, ThinkTank predicts a 20.4% chance of admission to New York University and a 28.1% shot at the University of Southern California. Based on those odds, Ma might charge a guaranteed consultancy fee of $25,931 for NYU and $18,826 for USC.
For the particularly well-heeled and academically motivated client, Ma is also willing to tailor a more complex probability-weighted fee proposal that would look more familiar in Las Vegas, Macau or Wall Street than in the education sector. Consider the case of the wealthy Hong Kong CEO whose son dreamed of gaining acceptance from a good university. The problem is that Junior was not the brightest star in the far eastern sky. In fact, he was struggling with a C-ish average GPA and attended a small high school in Utah. With this client, Ma struck a deal as follows:
Client deposited US$700,000 as an ante, even before Junior began the application process
Client and Ma agreed that a 3.0 GPA and 1600 SAT score were Junior's threshold achievement levels
If Junior failed to get accepted into a Top-100 school, Ma got zilch.
If he got into a school ranked 81-100, Ma got $300,000.
For a 51-80 ranked school, Ma got $400,000.
For a top 50 school, Ma's payoff started at $600,000, and climbed by $10,000 for each higher ranking gained, up to $1.1 million for the #1 school in the US.
What margin Ma pockets from such hefty success fees when all is said and done is up for some speculation. However, this case can't help but call to mind the old adage about having more money than brains. In the enigmatic and hypercompetitive world of college admissions these days, it sure seems to help to have at least one of the two.
As with hedge fund trades, not all of Ma's bets have worked out as well as hoped. His experiences included having to refund $250,000 to the family of Chinese student who was rejected from seven Ivy League schools. As for Junior above, the story had a happy ending. He got into Syracuse (and is reported doing well there), ranked 62nd. Ma pocketed $400,000.