Donating My Time to Grow a VC-Funded Company: Why I Quit Mentoring at Plato
tl;dr Nonprofit/pro bono organizations I suggest for offering mentoring/seeking mentorship: Mentoring Club (experienced mentors, EU focus), Coding Coach (aimed at software engineers), Mentors in Tech (mentorship for community college students in the US wanting to break into tech), Meet a Mentor (UK focused) and some other ways to mentor.
Let me pitch a business model to you: Cameo, but for tech professionals, customers pay a high monthly fee and the "providers" work completely for free. I know, I know, you're saying I'm crazy. But just hang in with me.
Mentoring is something that most people in tech would greatly benefit from. So how about we allow them to be mentored by the best: CTOs, VP of Engineerings, senior managers, and managers, all from well-known companies. People would pay a lot to access these mentors!
You're asking how we'll make money? Here's the best part. Cameo pays "providers" 75% of the revenue, and they're nowhere profitable. We can do better. We won't pay pay these experienced people anything. We'll just use FOMO, alluring to giving back to the community, and dangle exposure in front of people. Oh, and customers will assume they pay for the time of these in-demand-otherwise-inaccessible people, so they won't complain about our high prices. That's it.
Welcome to the business model of Plato: a service where you pay $300+/month to get connected with people who volunteer their time for free. Plato is probably the best-known mentoring service in Silicon Valley, and a VC-funded company. I was a mentor at Plato for more than 6 months. This was until I asked Plato to donate my take rate to a charity, and they told me there is no "take rate" nor any charity component.
Their business model is ingenious: a marketplace with a 100% take rate. They are one of the very few two-sided marketplace who managed to pull off: all money goes to the middleman, and none to the suppliers creating the value of the marketplace. The other notable example is Elsevier or Springer in the academic publishing space who charge high fees to access to papers whose authors and reviewers they pay nothing. For comparison, Uber has a take rate of 15-25%; Cameo sits with 25%, and YouTube at 45%.
How did I get myself to become - and promote - such a business model, and contributing my time to grow a for-profit company? FOMO and Plato's marketing both played their role.
An Elite Club
Plato has done a fantastic job of using status and FOMO to attract future mentors. I read of someone being a Plato mentor on LinkedIn, and looked up what this entails.
You can't just become a Plato mentor: you have to apply to become one. Before doing so, you need to read through Plato's model, where they make it clear this is an elite club. Executives from Google, Slack, Lyft, Box, Netflix and others are part of this network:
"Wow" - I was thinking to myself - "what an elite club! The cofounder of Box is also part of it, as is the VP of Engineering at Lyft."
By becoming a mentor, Plato tells you that you will:
What they don't tell you is how by becoming a mentor you will contribute to the bottom line of exactly one organization: Plato, the for-profit company.
Still, the allure of Plato is that they only ask for 30 minutes of your time - though they do so every week. This seems like a reasonable commitment for most people, and I was no different.
So I signed up, had a mandatory introductory call with a customer success manager, and I was off to mentoring sessions.
Fun at First, a Chore Later
The first few months on Plato were pretty good. I had calls with many people: senior engineers looking to make it to staff, managers becoming managers of managers, and a few engineering directors bouncing off ideas. It felt like my time was well spent.
It was somewhat annoying how you cannot control who will "book you" when on the platform: someone just shows up. I've had people not show up multiple times, which was irking, as I would have expected this not to happen, given that mentees were paying for the service. Still, you have access to support, and the experience was smooth.
However, after a few months, the mentor session every week became feeling like a chore. I had people reaching out on other channels asking for mentoring, and I told them I don't have the bandwidth - as I don't do many of these calls.
After a while, I had to ask myself. Why am I doing this chore? Who does my work directly benefit?
And the answer was obvious if you looked deeper: it mostly benefits Plato. The mentee also benefits from these sessions - but they are buying a service they expect. I had benefitted, especially early on, but that benefit became more and more marginal.
As I got to this point, I started to ask mentees if they knew the business model of Plato.
Mentees All Assuming They Pay for The Time of the Mentors
For my next few calls, I asked mentees how they think Plato works. Most replied that they - or their company - pays for Plato, Plato takes a cut, and mentors get paid most the proceedings for their time.
When I told them mentors are volunteering their time, all of them were surprised. "You work for free, while I'm paying for the service?" - they would ask? "Yeah" - I'd tell them - "were you not aware of this?"
One mentee who shared how he signed up after seeing me being associated with Plato said: "I subscribed to Plato for six months because I watched your videos . My mentors are very helpful and I can’t imagine that the huge sum I paid for the service does not go to them or charity."
Plato deliberately hides the fact that they are a network of unpaid volunteers. There is no place for customers to find out that the money charged ends up at Plato, and support the operational costs - and profits - of this for-profit organization.
Plato also does not offer discounts for people paying out of pocket. Another person messaged me, sharing how her company stopped paying for Plato, but she wanted to continue to keep working with her mentors. She was on a budget and asked if there was a way she could get a discount. Plato said no: and this person ended up paying out of pocket, assuming this was the only way to keep in touch with mentors, thinking her money went to them. She was horrified to learn Plato took all the fees and she could have just connected directly with the volunteer mentors.
When I Volunteer My Time, I Want to Support a Good Cause
At this point, I started to feel uneasy about Plato. What was I doing as a mentor on this platform?
I was granting legitimacy for a service that does not even share its business model and how the core of its value-add - the mentors - come via volunteer work.
I am not against volunteering my time and have done it countless times, but I want to support a good cause when I do. So I reached out to Plato and told them I'd stop being a mentor unless they agree to donate my take rate - the amount of money they would budget for my time - for a good cause, such as a charity.
Unfortunately, Plato confirmed that this approach is currently not an option. I can't, with good conscience, continue to support a shady business model where the main entity benefitting from my time is a for-profit company. So I've left Plato as a mentor.
I've been a @PlatoHQ mentor for months. While the experience is good, I'm suspending mentoring until Plato changes their business model to allow mentors to donate their take rate to a charity.— Gergely Orosz (@GergelyOrosz) April 6, 2021
Today, mentees pay $300/month, mentors work for free, and Plato takes all the revenue.
An Ingenious Business Model - But Will it Scale?
I personally do not approve of business models that are based on exploiting people or hiding key information. In Plato's case: they do not tell their paying customers how mentees volunteer for free, and all proceeds stay with them. Still, it seems the model works and Plato seems to be thriving.
However, Plato has a problem: and this is that they're venture funded and need to grow both in users, as well as in revenue. The company is a pivot from a YC-company that raised $2M in seed funding. What this means is Plato needs to target a path of high-growth, and profitability in the millions, or tens of millions. This means they need to keep convincing mentors to volunteer their time, so Plato can grow, and eventually turn a profit.
However, I suspect that Plato will have trouble retaining mentors. Since sharing my reasons of leaving Plato, I have received several messages from former mentors. Here are a few of them:
"Plato has a serious lack of diversity. Now I know why: underrepresented folks are already busy and do a lot of unpaid labor already." - a former Plato mentee
"Saw your post about Plato and agree. I've been thinking the same thing to be honest but I thought I was honestly maybe crazy and maybe this is how it is now in SF. I also assumed maybe potentially some mentors were getting paid (folks in demand) so Plato had some business model where they weren't taking 100% being a facilitator." - another Plato mentor
"Honestly, if you're an engineering leader, you're better off off choosing an underrepresented person and meeting with them weekly or biweekly if you want to mentor." - a former Plato mentor
Leaving Plato was easy enough: as I was mentoring for free, I'm continuing my permanent mentor sessions off Plato. Nothing changes for me: Plato might see a bit less revenue, though, and I am now making it clear that I do not support this kind of shady business model.
If you're looking for mentorship or offering to mentor: I cannot recommend Plato until they make their business model transparent, instead of operating in a gray zone where customers keep assuming that some of what they pay goes directly or indirectly to mentors.
However, I do recommend several other organizations which have transparent business models. Mentoring Club is like Plato, but free and run by volunteers. There are several other volunteer-run organizatons and marketplaces that match you with mentors whom you directly pay (and the marketplace takes a small cut).
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