I'm excited to share an interview with Austen Allred, the founder/ CEO of Lambda School, one of the most famous and innovative coding bootcamps.
Austen was kind enough to talk for an hour about how he learned to code, how Lambda School works, what's broken with the US college system and his own journey as an entrepreneur. It was a really fun interview and you can experience it via podcast, YouTube or just read the transcript below. There is almost 10,000 words of transcript so I'd watch or listen if I were you!
If you want to apply to Lambda School with this link I'll receive a finder's fee at no cost to you if you enroll.
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Pete: Welcome to No CS Degree. This is the show where I talk to developers that are self-taught or have been to coding boot camps. And I found out how they've become successful, but today's show is a little different because I am talking to Austin Allred who is the founder and CEO of Lambda School, one of the most famous coding bootcamps in the world.
And we're going to be finding out what makes Lambda School different, the whole deal with income share agreements, only paying for education once you've got hired as a software developer and Austin's career today. So it's a real treat, having something different and trying a different format for the show.
So, yeah. Welcome to the show Austen. How many people have gone through Lambda School as graduates?
Austen: I'm not sure of the number off the top of my head. I think we're coming up on about 2000 plus students who'd been hired.
Pete: Yeah, that's awesome. That's very cool.
Pete: So like a lot of people's lives to have improved and affected, through learning to code. Obviously I follow you on LinkedIn and a bunch of other places, and you're always sharing, success stories where people are like, you know, weren't in such a good place in the past, and now they've learned to code and now they've got like a great job, great benefits, et cetera.
Austen: Oh, man. I mean, honestly, I just, as you're saying that I looked at our offer boarding example, eight offers yesterday and nine the day before that. The volume is high. So the ones that I remember more, some of our earliest students where it was unsure if any of this was going to work.
Um, so there's a student who, uh, named Julian who had spent his life kind of working in factories. And now he's a software engineer at a store which builds software for factories. Um, so that was a fun one. Um, but I think, you know, the ones that resonate right with me the most are really the ones for whom it's, it's really personal.
Um, and I, you know, I have three kids, so I am very sensitive to when people are doing it for the sake of giving their kids a better life. One student in Austin probably the message that hit me the hardest I've ever gotten, because you know, when you have that many students getting hired, there is just an incredible number of stories and an immense amount of gratitude.
He just messaged me one day and was like, dude, I want you to know something. I was like, yeah, yeah, let me, let me know. He's like, I can finally get my daughter a bedroom. I was like, oh my gosh, that like that, I think of all the things that struck me. That's one that probably hit me the hardest.
I have a daughter and she has a bedroom. Um, yeah. Right. Like it's, it's real people. Um, it's not just data or stats. It's people at the end of the day, families and future generations.
Pete: Yeah, that's awesome. I mean, obviously that's going to make such a difference to that young girl's life. And I guess it's obviously something that probably most of us take for granted that we have certain comforts and they're going to miss stuff like that. And I guess as well, it's also nice because as nice as some things are, I imagine like buying a Tesla and stuff like that, having a more, a kind of profound impact on someone's life than say another kind of consumer product.
Austen: Yeah. I mean, we certainly have students who are moving from them, making $90K a year to $160k a year, and then it'll become $200k a year. Um, and that's, that's also real, um, and also meaningful, but yeah, definitely moving from a low income to a survivable income is where you feel it the most, as, you know, as a human, um, in moving from a Honda civic to a Tesla, like at the end of the day, it's a car, right.
And I say that. Someone who absolutely loves his Tesla, but moving from no car to being able to afford a car or from no insurance to insurance, um, is product perhaps more impactful on the individual level than getting a slightly nicer car?
Pete: Yeah. Yeah, absolutely. Um, I think as well as a side note, I follow you on Twitter and I'm pretty sure, there was some kind of day where you're like, I always said that once I reached X money that I treat myself to a Tesla. So, uh, it's, I'm glad you were able to get one.
Austen: The thing is when, you know, when I first, like I kind of internally set a goal to buy a Tesla, first of all, Teslas costs $120,000 minimum. And now you can buy a Tesla for like 30k. It's not, it's not that expensive of a car now.
Um, but yeah, I've been, I've been a hardcore Tesla fan boy. So that's my. That's my one, like luxury in life as a Tesla. And now it's honestly not that much more expensive than an average standard Tesla bringing the prices down and making my dreams, very reachable.
Pete: Okay. That's awesome. Um, so. Like, obviously there's a ton of bootcamps around the world.
I know that like, Lambda School has been a really strong proponent of the whole income share agreement where basically, you know, students sign an agreement for, they don't pay any tuition unlike in college. And you only pay for your education once you earn $50,000.
So is that the main thing that stands out for you about Lambda School being different or are there other things that make you a better choice than other bootcamps?
Austen: Yeah. So, you know, for a long time, when people talked about Lambda School a boot camp I said we're not a bootcamp. I actually started out trying to build something better than, and shorter than a CS degree.
Um, and of course getting back to the bootcamps, you're trying to do the same thing, but you know, when I taught myself to code, I'd be talking to folks from back home or asking like where they should go. I didn't feel like there was a place I could recommend in good conscience.
And primarily I think that the original business model of bootcamps was and is still broken. So if you're running a bootcamp, the number one question is how much can you charge? And once you get above, you know, usually 12k or 15k and I think the most, anybody has ever charged upfront. It's been like 18 K, maybe 20 K...
Like the market gets really small after that because people don't have $30,000, $40,000 to shell out for a bootcamp. Um, but then that limits what you can teach because if you take a student, you know, said take the average code school, that's $10,000, $12,000. If you're only collecting $12,000, you can really only teach maximum three months.
Um, and if you have a physical space, you have to turn that space over four times a year. So you're limited in duration. Um, and originally when we started Lambda School, all I knew was that I wanted it to be longer and more in depth and we've kind of shifted between. So there there's been a time when we've in six months time, we've been seven and a half months time.
We've been nine months and we kind of shifted more into the pre-course work, um, so that you can quit a job later and hit the ground running now. Um, so right now it's six months full time. Um, and then the Amazon backend program we're launching is nine months. Full-time. Um, but yeah, if you're looking at nine months, that's three bootcamps back to back to back effectively.
Um, and it's just really, really difficult to fit the right curriculum within 12 weeks. But in order to do that, you have to move away from an upfront tuition model or there aren't enough people to sustain the school. * Uh, so it allows you to Unlocks a few things that are obvious and a few things that are non-obvious the obvious things are that you don't have to have cash to a tenant.
You can have a computer and an internet connection in time. Um, and you can start, uh, the non-obvious things are that the school's incentives are aligned with your incentives. So the school will go out of business if students don't get hired, uh, that's not true. Schools where you're paying up front. Um, and everybody, I mean, believe me, everybody in Lambda School recognizes that fact in there, everybody at the school is very, very, very interested even personally, um, because their job is on the line and making sure that you get hired.
Um, and then the other non-obvious thing is it creates a little bit of flexibility in what you teach in the sense that you don't have to cram it all in 12 weeks anymore. So we can go longer. We can go in depth. Um, and with the Amazon program specifically, yeah. We built the curriculum with Amazon who is probably the biggest hirer of software engineers in the world.
Right. Um, and we're working together with them. So originally we started out like, Hey, you know, what do you want to see in an engineer? And we would survey a bunch of companies and we would get, you know, okay. You know, high level, they need to know these things. Um, bootcamps are missing this. So let's make sure we're including those things.
But this with Amazon was literally: here is exactly the curriculum we want. Here are the exact skill sets we want everybody to know. And if somebody meets these requirements, we'd love to interview and hire them. And Amazon's, you know, they're, they're standing behind that. Right? So it's a curriculum that we've built jointly with a company, which I think is unique and it took, you know, it takes a long time to get to a place like that.
Um, but I think over time when the school will more and more look like that, we're not, you know, it's not kind of implicit, it's explicit that this is exactly what companies want and we're building exactly that thing. And then of course, Amazon is not the only company that wants to hire back end engineers.
Um, so there's, you know, every, every company that we talk to is desperate for backend engineers, um, and that curriculum. And so we showed them the Amazon curriculum and say, is there anything you would change? And so far everyone was saying, oh, if you have that we're going to hire everybody. Um, so, so yeah, um, the ISA to recap, um, yeah, there is no upfront cost, so it makes it much more accessible, which leads the student body to be much more diverse and interesting.
The incentives are fully aligned and it gives me flexibility in length, um, because you're not, you know, you don't have that kind of $10,000 upper limit on what tuition can be. And then of course, if a student gets high paying jobs, then it's not a problem. That scary thing.
That's when you have to pay and either you don't have a cash or it doesn't work. Yeah. They just don't want to get caught in a sticky situation.
Pete: Yeah, no, that, that makes a lot of sense. And yeah, it's really good to hear more about the program, that you're developing with Amazon, in terms of the backend program.
Austen: We heard again and again from employers, “we want to go really, really in depth on the back end”. Um, and so we would, we would be taking students and we'd give them enough that they could learn the rest on the job, which is what most code schools do. Um, but everybody said, “look, we would hire everybody if they had this specific skillset.”
Um, and Amazon was the real emphasis for that. I think folks from Amazon have told me anecdotally that they would hire every CS grad and every bootcamp grad in the U S that met those criteria and still have open hands if they could. So they are, Amazon. You know, they're at a point where the breadth that Amazon covers is enormous, then the level of complexity of their backend infrastructure is outrageous.
And they're constrained at a certain point by how many people they have, by how many engineers they have. Um, and that's, you know, when you have a multi-trillion dollar company like Amazon, where their biggest problem is... It behooves you to figure out how to solve it. Yeah. Yeah. I realized as Lambda school, right. Um, that's a great place to be. If you can solve major problems for the biggest company in the world. Like cash will fall if you can.
Pete: Yeah, I have to say, like I realized as I was asking that it's like, well, there's a huge market demand for backend developers. That's probably why they made the course. But, um, yeah, it was great to get more info on it.
You mentioned like briefly at the start of the show you taught yourself to code and I'm pretty sure I believe you don't have any college degrees. So if I'm right in thinking of that, do you mind going over very this quickly?
Austen: Yeah, I mean, so I have probably done about every introduction to programming before.
And then I was like, great. I have done that. I know how to, you know, interpolate a string. I know how to call all these index methods on. I know how to use all these methods on arrays. Um, and I have no idea what to do. Um, and eventually the way I really learned to code was just like starting to build really crappy products and, and like, you know, you learned that knowing how to write a for loop is something that you need to know how to do, but most of the time you're programming. It's not like you're sitting there writing for loops all day. Right? You're really trying to piece together esoteric software that other people have written and just trying to like match it up and you have to understand what's happening under the hood.
Yeah, I really like I learned, you know, I got caught for years in that phase where like I knew how to, like, I knew how to write code, but I didn't know how to build it. And then eventually I was starting working at companies, and really in my mind, mostly learned on the job so I can solve all the code challenge, interview questions, but I didn't know how to build an app when I first started working. And you know, my, my rate reflected that - I think I started out making $800 a month.
Yeah, after that, you just pick it up as you go.
Pete: Really? That's awesome. No, that's really cool. I was just wondering as well, like I think I saw on your LinkedIn recently, if I can paraphrase what you said you were like, “I'm pretty sure we don't need more people being asked how to invert a binary tree in interviews.”
How do you think tech interviews could be better for developers and for companies so that they can find actually a good developer.
Austen: Yeah, I think there are kind of code challenges that are more relevant than inverting a binary tree and inverting a binary tree is like a purely intellectual exercise.
I mean, maybe it'll do it once in your career, but it doesn't solve for like, can this person build a project? Does this person understand writing code? It solves for them, can this person figure out this intellectual contortion and what it really ends up being is if you know the right people as a junior developer, somebody will say, “Hey, you have to know how to invert a binary tree, if you want a good job at these places.”
And so it really becomes almost for lack of a better way to describe it a class thing. Where it's, you know, they know the right people and they can take you under their weighing and say, “Hey, I know this is like totally irrelevant to being able to build stuff, but like figuring out how to do that...”
But I just think that's sub-optimal in a lot of ways. I mean, in an ideal world, I think the interview would be like, “Hey, let's work together for a little while. And we'll see if, you know, see what it's like to actually work with you”, but abstracting away from that, because that can be expensive.
Implement this feature or, you know, I know the interview process at Stripe, who's thought really deeply about this is, “Hey, here is a project you're working on implementing this feature. And there's a bug in it somewhere. We're not going to tell you where. So can you debug and figure out where the broken thing is?”
It's way more amorphous, but it's also very like that's actually what you do on the job. Right. You're trying to implement a feature and there's a bug and we're going to watch as you try to solve that. I think that's 10 times better. I think Patrick McKenzie, who is, uh, prevalent on Twitter, uh, use the analogy once too:
It's not that the data structure and algorithms challenges aren't coding. Like they are like, you know, you're, you're writing a code, but it's the equivalent of, um, deciding who the best basketball player is based on like a slam dunk contest. Right? Like you do, you do dump in basketball at the highest levels.
But like that, doesn't tell you who's a good basketball player. Right. So I love the Stripe, uh, way of interviewing. It takes a little more effort and energy. And at a minimum, if you're going to throw a code challenge at somebody, I would be like as relevant to what they're actually going to do as you can. And not like an intellectual exercise for the sake of seeing, if somebody can like do something that they'll never need to know how to.
Pete: Yeah, absolutely. I think it seems very much part of the broader problem in education, where you to teach to the test and people are actually like learning to pass an exam, not actually learning. Which is obviously not the desired outcome. Um, getting back to like, you know, Lambda School school and the whole student process.
If someone's interested, if they're listening to this podcast or on YouTube or whatever and they're interested in applying, what does the application process look like?
Austen: Yeah. So there are a few parts - you have to fill in some information, so we know who you are. There is a cognitive assessment test, so that just kind of tests how you think. Um, and then there is coursework and the pre-course work is kind of, uh, and you can test out of it if you're more advanced, but it makes sure that first of all, you're serious and you're able to learn some of the basics of programming, that's the big thing.
You know we only have six months. Um, and I can't even imagine trying to do it in three months. That seems, I actually literally don't know how you train someone to be a software engineer in three months to six months is intense. But in order to do it in six months, we need you to come in at this level, right?
That might take you a minute. So basically a cognitive assessment, uh, pre-course work. And then depending on which track you are applying for, um, there may be an interview, but it depends on the track. And then the data science track is a little bit. Um, where there are more math and statistics questions, than just code questions. If you know, nothing, you can still get to the point where you can start Lambda School. But you have to get to that point one way or another.
Pete: Yeah, that's that's cool. I mean, I think it's good as well. In my view it might be almost like unethical to have someone take a boot camp without them touching HTML or CSS, because they might find out it's not for them. And I think doing a pre-work or prep work. To say, okay, you have to see if this is for you or, you know, get through this initial hurdles it's good for both sides as well.
Austen: Yeah. And then after that, so the first month of full-time or the first two months of part-time, if you decide during any of that time, that it's hard and you leave like the ISA goes away. So we're not, we're not built to trick people into signing agreements. It's actually very, very forgiving. And even after that, you only start owning a fraction of the ISA and then it builds up over time.
You don't need to like, be afraid that you're getting locked into something. I know there are schools that have like, if you don't drop out in the first 48 hours, then you own the entirety of tuition, which is $15,000. That's a lot. We try to be as lenient as we can. But yeah, generally speaking, the pre-course work will tell you if you're into this, if it's interesting, if you want to keep going and if, you know, every once in a while, there's someone's like, yeah, you know, I spent six months on the pre-course work and I barely figured that out.
Pete: Yeah. Cool. So because Lambda School is like an online skill for learning code, what does a typical day work?
Austen: Yeah. So we use kind of a pedagogical framework called 'I do, we do, you do', or the I Y loop. So you start out every morning and you have a guided project and the instructor is going to basically build something while you watch. And then you will build something while your peers or the instructor watches, and then at the end of the day, you're building it on your own. And you'll submit your work each week and we'll critique it. But it's really like, you know, that loop again and again and again every day where it's like, okay, here's, here's the thing I'm going to build.
You watch them build it. Um, now you build another second iteration of that and you're going to have people watching over your shoulder, and then there's the real challenge where you're doing it on your own and you turn, you turn it over and we see how. Um, and whether you zoom in or zoom out, it's really that again and again and again.
Um, and then every fifth week is what we call build week, which is where basically the entire school shuts down and turns into a, a dev shop for lack of a better way to describe it. So you're giving, you know, you're in the front end section, the same way you would on the job. You know, here's your ticket here is, you know, the thing that the product manager decided you needed to do, uh, you need to build that and then submit a pull request and, and then you send your, you'd send us the link to the pull request. Um, so we do everything within real tools, uh, text editors and Git, and that's basically the way you turn stuff in at Lambda School.
And you're just submitting a link to the pull request that you created, which is how it actually works on the job. And one of the last months of Lambda School is what we call them labs, which is where, um, you're put on a team and we build products for non-profits. So you're actually going to take something into production. Sometimes it's from zero, sometimes it already exists and you're adding features. Um, but it's an actual live production environment. Um, and yeah, that's basically how it works.
Pete: Yeah, that's awesome. That's really cool. I think it's great that you're integrating gets, early in someone's career. So they don't, somebody gets a job and they're just like, ah, what's Git.
Austen: Uh, and then not just not just Git, but like working on a team using it and product management and sprints and tickets and JIRA or whatever JIRA competitor they want to pick. You show up on day one, knowing how to onboard yourself, pull a ticket, write code, submit it, do a code review, all that stuff. So you're actually, you're ready to ship on day one.
Pete: Awesome. That's really cool.
Are there still any companies or are there certain companies less willing to hire or more willing to hard people from Lambda School or bootcamps in general, or do you think it's kind of going away and most companies are kind of like open to people without CS degrees now?
Austen: Yeah, I think it's broadly going away. I mean, there are a couple of places where for weird reasons, there are legal requirements to have a degree, uh, mostly in like defense contractors. But everywhere else, I don't know of any company that hasn't hired a Lambda school grad that doesn't have a CS degree that's of any prominence really.
Um, there are, you know, the Googles of the world take more time to, to prepare for. So generally, if you really want to work at Google, you need to spend more time preparing for that interview than you would. Um, you know, comparing for some other companies. But yeah, we got a bunch of students at Google.
We have dozens at Amazon. You name a company they're Lambda grads they're without a CS degree. And about half of our grads have no degree whatsoever. And I think that may not have been true 10 years ago, but now we're basically at a place where it may be a little bit harder to get your foot in the door in some places, if you don't have a degree, but everybody will still take a look at you.
And if you can do the job well enough, certainly after like you have a year or two of experience, nobody ever asked me after my first job, if I had a degree and nobody really cared, it was, you know, how well can you do the job on how much experience do you have? So if you, if you're to compare apples to apples, right?
If there's an 18 year old, one of them goes to Lambda School. One of them decides to go get a CS degree. You know, you really should be comparing like where they both are at the end of four years. So the person who went to Lambda School at the end of 4 years, they have three years experience. Their ISA is entirely paid off.
They've probably made a couple hundred thousand dollars, versus... And, you know, three years of experience is a big deal versus a new grad with a bunch of debt and the CS degree you, so you have to actually take the four years into account. Oftentimes people say, well, where are you at the end of six months of a code school versus the end of four years of the CS degree.
I'm like that's three and a half years Delta and a lot of money Delta. So, you know, apples to apples. Our very first students are just barely hitting the point where they would be graduating if they had gone to college instead of going to school. And they're all, you know, well into the six figures, years of experience, senior engineers.
So that when you actually compare time to time, um, it's a very different discussion than like on the day a student graduates. Yeah, we still frankly do better than most schools on the date of student graduates. But again, once you factor in the other three years.
Pete: Yeah, definitely. I think, yeah, that is a fair comparison for sure.
Do you get like a lot of people that are saying like, “mom, dad, I'm 18. I'm not going to college. I'm going to go to Lambda School.”
Austen: That's quite a few. Yeah. So we have, we have, uh, if you're looking at like age, we have kind of a bell curve around 31 where people are kind of mid career switching and some, you know, they may be 24, they maybe 35.
But then there's another little bell curve around 18. Um, so we have, we have a lot of 18 year olds. So we have a non-trivial number of people who went to a couple of years of college and realized like, this is not what I was promising. Felt like I shouldn't be paying for, um, and a lot of, a lot of students actually, who went to schools to study CS, but the school CS program was weak.
And if you get below the top, maybe hundred universities in the US there are a lot of really, really bad computer science programs out there. Sometimes we see applicants in batches. We'll take 10 people at a time from a school in Chattanooga that just doesn't do a good job of teaching CS. There's a fair amount of that. It's not 90% of the students or anything, but there are a lot of 18 to 21 year olds.
Pete: Okay. Yeah. That's cool. I just know , so on nocsdegree.com I interview lots of people that are self-taught or have been to bootcamps. Like it's a lot of, I guess, career changers. I've had like one or two people that have been you know, 18, 19 or whatever, but I guess it's mostly people in their mid twenties to thirties, they've had a few jobs and they've just been like, nah, I want to get into coding. So, yeah. But it's definitely interesting.
Austen: The demographics are 80% who are switchers, 20% opting out of college loans.
Pete: Yeah. Cool. As we were talking about college, what, I mean, this is like a huge question, but what do you think is the future of college?
Given the fact that, you know, like I went to university, got a degree, had a lot of fun but couldn't find a job afterwards and I think a lot of people have had that experience.
Where do you see college? Like going in the future when you have institutions like Lambda School that are competing.
Austen: Yeah. So yeah, I don't have anything against a university education for the right person at the right time. Um, what really frustrates me is the notion that everybody needs to go to college or that college is like the only way to be a successful individual.
Uh, for me, I mean, I just had no interest. College was really expensive and I wasn't getting nearly as much out of it as I was self-learning frankly. Um, and I know that's a non-popular opinion. Um, but I mean the Wall Street Journal came out with a report today that if you look at, uh, I'm gonna try to remember the stats off the top of my head, but if you look at master's degree program, now about half of them graduate with more debt than their annual income.
So if you're making 120k a year, you have 140k in debt, that's like, that's outrageous. And it's something like a third of the students after two years have either have haven't touched any of their principal. Um, so there's, there's still just making interest only payments or already behind on payments.
I think Europe does a much better job of college generally, where first of all, you start when you're younger. Uh, second of all, it's three years, third of all, it's much cheaper. Um, and that's because the government limits how much a student can borrow from the government where we don't do that in the US so whatever, an 18 year old wants to pay in tuition load up on the debt, we'll figure it out.
And that's, that's the only reason we have people, you know, taking out $75,000 a year in loans for an undergrad degree. If you come from a rich family, sure do whatever. But if you're going to graduate with something that doesn't pay well and be $300,000 in debt, by the time you graduate college, it's immoral in my mind that nobody pulls you aside and says, “Hey, just so you know, you will never climb out of this.”
And the university is not incentivized to tell you, that the lender's not incentivized to tell you that like nobody along the way is holding the buck other than the student. So it's just a matter of what can we get the student to sign up for? And that's pretty messed up. So my short answer is. If I were waving a magic wand, I would limit what the government is backing and there are multiple different ways you can do that.
But I don't think the federal government should be giving you hundreds of thousands of dollars of loans to study something where everybody knows that you won't be able to pay that back. Like somebody has to stop pouring the drink at some point. Far fewer people should be required to go to college than currently are.
And we need to stop thinking about college as the, the four-year university, as the only path for a person who will be successful in the future because it's not true and it's not helping. So in my mind, far, fewer people should attend college than currently. I get why people do, but, um, I think it's actually a net unwise decision for many, many people.
Pete: Sure. I agree with a lot of what you said. I mean, I'm not from The States. So I don't have, obviously your level of knowledge yet how much the federal government spends, et cetera. But, I think in the past, I do remember that Lambda School had a presence in Europe.
Was the fact our college debt isn't as huge as in America, was that the reason why you pulled out of here?
Austen: Uh, no, that wasn't really the reason we pulled out. We, um, we pulled out because we were trying to do too much without enough infrastructure behind us.
So we really spent the last 18 months, um, getting. Like at the time Lambda school was like entirely people for lack of a better way to describe it. So any change we wanted to make the curriculum, we could make the change to the curriculum, but then it was heavily reliant on a lot of communication. We're constantly trying to figure out how to get the communication down.
And one of the big things that I learned over time is that you shouldn't have to communicate as much as we were doing. And if you have a really solid product and if you have solid infrastructure, you actually communicate less and outcomes are better. But we just didn't have that infrastructure in place.
So I'm sure, you know, in the near future we'll be going, um, you know, back into more places internationally. Um, but we really wanted to focus on doing a couple of things really, really well. And I'm building the infrastructure for a while before we started expanding like crazy. So we'll, be back in Europe and there, is there a marginally less demand for Lambda School in Europe Probably. Um, but we never had a problem enrolling as many students in our European classes.
Pete: Cool. Yeah, definitely. I think as well, I've noticed across lots of businesses where like, for instance, lots of UK businesses will start operations in Australia and New Zealand and America. And then they're just like, oh, wait, we're spread really thin. Let's just come back and concentrate on the market that, you know, we live in and we knew it really well.
Austen: So it's easy to underestimate even little cultural differences. And one of the big differences in Europe is the regulatory environment. A lot of the stuff we play with on the hiring side, doesn't work in the EU because it's, it's so much harder for an employer to hire and fire in Europe versus in the US. So that limits the amount of experimentation and creativity you can have.
Pete: Yeah, because I think you've got these things like the Lambda fellows where companies can kind of take people on, can you tell us a little bit about that?
Austen: Yeah. So, Lambda School fellows is a program where basically we, match you with an engineer or they pick from three to five engineers or data scientists, um, or designers, um, and basically Lambda School covers the first month of that student's salary while you try them out. Um, so we're really, really good at helping people onboard and really quickly and get to where they're shipping code really quickly.
And when employers understand that they come back again and again and again, and in our mind, that is such a better experience than a traditional interview loop for both the employer and the employee. Where I would much rather have you working in shipping production code, um, then, you know, going through constant interview loops and the company would rather be having somebody watching you ship production code, then going through interview loops as well.
But you know, the thing is there is somebody has to pay for it. So the way we've structured it is. Lambda School pays for your salary for that first month. And then if the company decides to hire you, they pay Lambda School that month of salary back. So we've, de-risked it on the employer side as well. And if not, then I'm the school eats it.
I mean, it's something that only makes sense if Lambda School is highly incentivized to make hiring work. Um, so I think it's one of the things that's really special from the ISA. If you'd already paid tuition, you know, why would we risk, you know, thousands of dollars to see if we can help you get hired? Um, so that's one of the times when it is said, because being aligned really matters.
Pete: Yeah. It seems to be like a kind of thing that runs through the whole of everything you do is this alignment of incentives, which is, yeah, it's really cool. I know it's obviously a lot different to how other lots of other companies work, not just like in this sector, but just in general.
So if we could carry on, so a bit about you as an entrepreneur...why dedicate your life to Lambda School and teaching coding?
Austen:Yeah, the short answer is I built what I really wish I would have had, um, when I was going through that.
I was always waiting for somebody to start Lambda school and I was certain that there would be somebody with a deep history in pedagogy and academia or deep understanding of, you know, finance or internet products that I was just waiting and waiting and waiting for somebody to do it.
Um, cause it felt so obvious. Obviously it's really difficult. It's incredibly difficult to make it work. Um, but I couldn't figure out why nobody was doing it. Um, so eventually I said, you know what, I'll just do it myself. And it felt like. At first, it felt like a guilty pleasure because it was like, ah, this is like the problem that has been nagging me for like 15 years.
And I actually get to do this now. Like it's great. And I have no credentials. Right. Um, I think I know as much about education and pedagogical theory as most people like anybody in academia now, like you reached the end of the research really quick. The most impactful research that's been done in education, it's called Bloom's Two Sigma problem.
And that was a study that was done in the eighties. And still, nobody has figured out how to implement the results of that, which are wild. Like we're talking, here's how you make the median student perform at the 98%. And it's very much there. Uh, it's expensive to do so we're just waiting for somebody in product.
And universities are not in the place where they can productize it. And public schools are certainly not in a place where they can productize it. It's really difficult to do within the walls of the classroom. So it's like it's been waiting in line there for 40 years now waiting for somebody to take advantage of.
And I'm starting to see schools do that. Um, But yeah, the execution of education generally is far behind the most basic research to the extent where more research and more experience doesn't help you much because nobody's gaining experience in the right ways. So eventually I said, you know what, I'll just start it myself.
And I'm sure there's going to be a lot I don't know. And I'm sure there's going to be a lot I'll have to learn. And I'll certainly have hired people around me who are experts at what they do. Um, but yeah, I think it's working out.
Pete: I know that you've got like a really strong, personal following. You've got like over a hundred thousand followers on, on Twitter and you got like a really strong personal brand from reputation.
Do you think like Lambda School would be as successful if you didn't have that, personal brand and you were just kind of like Joe Smith, very quiet 'I'm just going to start a coding school'.
Austen: Yeah. I don't know. Um, I mean the, the places where it really matters, um, you know, obviously, you know, it's nice that a lot of people who are considering attending Lambda school were telling their friends about the launch. Have heard about it through me. So that's helpful. Um, and obviously raising money is easier if everybody knows who you are.
Um, but the real thing that's actually been most useful is the speed at which we can interact. Um, and so when we first got into Y Combinator, I was like, okay, Twitter is a distraction. Now I only had, you know, maybe 30,000 followers at the time, which is still a lot, but relative to now, it's not.
Um, and so I was like, okay, I need to like, stay off Twitter, be heads down, focus on product, talking to users. And then I tweeted a couple of questions about halfway through. I see it was the first time I used Twitter in a month and a half, and it was a very intense month and a half. And the level of feedback I got instantly from thousands of different sources was like, oh my gosh, this is a tool.
And this is actually a really valuable tool. And then at the end of Y Combinator, when we had students graduating, “Hey, who wants to interview? You know, we have our first 10 students who are, are about to graduate and who wants to interview them?” and instantly a hundred companies.
So Twitter will not make you a successful founder but it is an advantage for me to iterate our speed, to gather information from the market, um, and really increase speed of learning more than anything. Like I can ask any question in the world and I will have people who are the best in the world at that thing, responding to me and offering to jump on a call.
So that's super valuable. Um, and then, you know, I have to credit Twitter with that, the network that they've built, I have, I have my qualms with Twitter for sure. And sometimes it's painful, but that it's, I think it's been an advantage, but not in the way that people assume people assume like it's just in, you know, creating the brand or helping people like hear about it.
Pete: That's nice. Really it's the speed of learning that it's the most useful from today? Okay. Yeah, I agree.
I think I believe, you can obviously feel free to correct me when you started off, you were kind of self-funded and then you went on the VC route.
Austen: Yeah, I mean, my view is not as spicy... on starting Lambda School, I was like actually very anti VC...past bad experience with a couple of bad VCs that I thought that they basically made it incredibly difficult to run the company. And then there's, there's a really long story where, um, you know, probably in retrospect, I'm like surely there was a way to not let that VC kill the company, but it would have been really difficult to not do so.
So I was anti-VC and I was like, I'm going to bootstrap this all the way. But then when we were in Y Combinator, we actually sat down and ran a model. So we actually built like a full financial plan. Well, we built two of them. One was, this is what I think will happen without VC. And the other one is, this is what I think will happen if we decide to raise a seed round, because we were profitable when we're in YC, not by a ton, but it's just two people.
And I was saying, I don't want to go to demo day. I don't want it to pitch anybody. YC was actually like, totally fine with that. Like, “Okay. Like let's, let's understand why, um, you know, it's probably the easiest fundraising you will ever do in your entire life. But like, that's cool if that's, if that's what's right for the company.”
Um, so that was their assignment. It's like “figure out what's right for the company by building, like, what does the world look like? If you decide to go down a VC backed path, what does it look like if you decide not to? Um, and then let's look at it and pick what's right for you.”
And as I did that, you know, especially given the fact that we are using ISA. The advantage of having a little bit of capital to invest before the cash was coming in. It was enormous and it compounded. Um, and now I'm surrounded by VCs who are incentive aligned with me and have the same long-term vision, which, which was not true, frankly, the first time I raised VC.
I think that the answer for should you raise VC is what is the business? What does the business look like in a world with, or without, um, you know, you can really, you're making assumptions, but you can create a decision tree for that. And what happens with what happens with that? Um, and then, you know, what are the incentives of the investors?
Um, and I do a little bit of investing now and that's something I understand way more now than I did when I started my first company. But if your objective is just raise as much money as you can from whoever will give it to you, you will run into places where your incentives are misaligned with investor incentive.
And depending on how you structured things, that can matter or it can not. So knowing how to do it wisely and having people watching over your shoulder and making sure that you are working with investors that you are actually aligned with is it's not easy to do and incredibly important. And I feel pretty good about the way we've raised thus far, we've turned down hundreds of millions of dollars of capital, because I felt like it wasn't the right move at the time.
And I felt like our interests were divergent with the interests of those particular investors. I am a strong, strong believer in the power of incentives. I think they matter way more than even the most incentive sensitive people give them credence. So yeah, that's, that's my 2 cents, um, which, you know, backing out from that, make sure it makes sense for you and make sure you're working with people around the same goals with you is how I summarize.
Pete: Yeah. That's really great to get your thoughts on that. Just to kind of wrap up, what is your favorite book?
Austen: My favorite book ever is Les Miserables My favorite non-fiction book, I go back and forth all the time. The ones that I've really enjoyed recently, a book called Winning by Tim S Grover, who was the trainer for Michael Jordan and Kobe Bryant. So my favorites of all time, the Wright brothers biography, Becoming Steve jobs...I think is way better than the official biography of Steve jobs.
And then one of my favorites is a little less well-known is called The New, New Thing. It's about like Silicon Valley and the 80s and just how crazy it was and what it looked like then. Um, so just some of my favorite non-fiction yeah.
Pete: They sound awesome, especially the last one. That sounds I'm sure it's like the wild west time back then. So I'll need to check that out.
Austen: Ooh, nothing that's like super interesting. I listen to Tim Ferris. I listen to Joe Rogan from time to time when I think the guest is interesting. Um, and clearly I'm just like sorting by like popular podcasts because I'm not deep enough in the weeds to know which ones are actually good.
Um, yeah, those are not very exciting. I've been really into a YouTube channel called Rick Shields golf. I don't even golf. I just think that that channel is fascinating. Um, so I'll go with those.
Austen: Um, it's gotta be Elon. I mean, he's got his quirks and he's a little bit wild, but that's kind of what it takes, I guess, to, but like just the, the stuff that Tesla and Space X have pulled off.
This is floating around in the internet somewhere, but before I started Lambda School, I put my entire net worth into Tesla when it was like trading at $180 a share before the split. So I've always been a big fan of what they're doing.
It's fricking incredible, like the, the speed at which they build things to watching rockets, land next to each other. Freaking incredible. Um, so we've got to go with Elon. I know that's probably super cliche, but who else is doing anything even vaguely comparable to that?
Pete: Yeah. Well, I should've known because, you know, he made your dream car, which we discussed at the start of the program. So it's like a basic question on my part.
Thanks a lot for being on the show. Where can people find out more about yourself online?
Austen: Yeah. Uh, I'm Austin on twitter @austen or lambdaschool.com or Lambda School on any social media site.
Pete: Awesome. Cool. Well, thanks again for being on the show. It's been a great pleasure.
Austen: Yeah. Thanks. Good to see you in person. Well, in person, good to meet you face to face, finally chatting back and forth every now and then for a long time.
Pete: Yeah, definitely. And I think my girlfriend is actually very keen to go to Utah sometime so maybe...
Austen: Yeah. That'd be awesome. You've got an open invitation. We should hang out.
Pete: Fantastic. Okay. Cheers. Now.
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