First 1000 - 🏫 Lambda School
Hello Folks 👋, There are so many things that are wrong with traditional educational institutions right now, but the most prominent is that what I am buying and what they’re selling are completely disconnected. Leo from Consumer Startups and I (virtually) sat down with Austen this past week to talk about the early days, how the company came about, and, of course, how Lambda School got their very first users! Let’s jump right in Austen Allred was homeless for 3 months when he was fundraising for his first company Grasswire, a media platform that lets everyone create collaborative news reports by voting on and fact-checking social media content in real-time. Austen was so broke that he couldn’t afford to rent a place in Silicon Valley to meet with investors. To still have a chance to raise money for the startup, he decided to take a road trip for 3 months in California and sleep in his car.
Launching Secret SauceUnfortunately, the startup did not work out despite having some early traction. But this pales in comparison to what came next: his daughter got extremely sick and had to be hospitalized for some extended period of time. To pay the bill, he started working for a fintech startup Lendup as a member of the growth team. Even with the job at a high-growth startup, the medical bill far outpaced his salary and he would soon find himself in the red for the tune of $25,000. Austen tried to pay off the debt as quickly as he could but it was still too slow due to the abysmally high cost of living in San Francisco. Austen and Vin were both into marketing and had created content in the marketing space over the years and amassed a sizable following. The book they ended up co-authoring was named Secret Sauce.
Learnings from Secret SauceThe book’s massive success was clutch. It helped Austen pay off the debt and save some money for his next venture (Lambda School). Austen shared some key insights from this experience selling Secret Sauce:
Austen started brainstorming ways to improve people’s life circumstances while developing a system that can get people to learn and apply those learnings in real life. Lambda School’s MVPA Haskell courseLambda School started off as a Teachable Haskell Functional Programming Course. Considering that the first learning from the book Secret Sauce was that people purchase outcomes and not content, teaching programming seemed like the highest leverage opportunity to tackle. Haskell presented an interesting opportunity because 1) Grasswire, Austen's previous startup, was written in Haskell 2) the market was small enough that there just wasn't enough coverage of the language. The very first Lambda School Haskell programming course was a set of recorded lectures that cost $69. To acquire customers for the course, Austen ran the same playbook that he did for Secret Sauce, leveraging a Kickstarter campaign to bootstrap the initial audience (which he expanded over time by giving away free lectures). The Haskell course ended up making over $10k. An outcome that did not commensurate with the effort they put into building and promoting the course. The market for Haskell was just too small to sustain the business. Second Lambda School iterationJavascript BootcampThe actual market hiding in plain sight was Javascript. This time, instead of running a Teachable course, Austen switched to the boot camp model. The Lambda School, the JS boot camp, differentiated itself from other coding boot camps by focusing on tight-knit cohorts with a much higher standard of admission than other boot camps. The plan in the early days was to run a quarterly 10 student cohort while charging $9k-10k per student. To drum up interest for the 12-week full-time course, Austen ran a slack community of aspiring programmers, created a free online mini-boot camp, and put up the free boot camp lessons on YouTube. Over the years, Austen became somewhat of a master at generating leads, getting over 8k prospective students into the online mini-version of Lambda school. He managed to convince 10 people from this 8k lead list to join the 12-week immersive Full-stack computer programming academy (i.e Lambda School). Third Lambda School iterationNew Business ModelThe model was working, creating free content upfront adding value to potential members and converting a small percentage of people who were motivated enough to up-level their careers to join the 3-month $10k course. Something interesting happened in the second cohort: a student dropped out in the nick of time. Because Lambda School was a full-time in-person 3 months commitment, it wasn't like people could just drop everything they have and join an open slot tomorrow. So Austen tried something a little crazy. He announced the open slot to the 8k people mailing list with the twist that the person taking the spot would not have to pay Lambda School anything. They would only pay Lambda School full tuition after they got hired. The company was in a relatively good financial position that it could cover the cost of this one person upfront. Result: 200 people applied for the single spot! Fourth Lambda School iterationLambda School as we know it todayThis was "the aha moment" for Lambda School: shouldering the risk of the outcome of their boot camp was inherently more valuable to their students than a high-touch boot camp with an extremely low admission rate. The next iteration for Lambda School was to switch to a 6-month model and increase the pricing to $20k, but this time, the students did not have to pay anything upfront. They would pay only if they got placed after completing Lambda School in a software development job (a percentage of their earnings go to Lambda School until they recoup the $20k tuition). This new model got Lambda School into Y Combinator (YC). One of the pivotal moments during YC was when Geoff Ralston asked Austen why they were not running more parallel cohorts. Since YC lasted only for 3 months, Lambda School, with its new model, would not have any graduates until 3 months after demo day. One way to demonstrate the magnitude of the opportunity would be spinning up another cohort. At first, Austen was hesitant, fundraising was not certain, and depleting whatever money they had in the bank on recruiting instructors would not do right by enrolled students. Geoff personally offered to front Austen $250k if he did not manage to fundraise, and a month later, Lambda School would run its second study-now-pay-later cohort. Lambda School ended up raising over $4m after demo day and soon thereafter started expanding into more programs. Their unique study-now-pay-later model, which places a heavy premium on student outcomes, translates into a different operating model compared to more traditional coding schools. Lambda School: What actually happens there?The excerpts below are based on our interview with our friend Justin, who is currently completing Lambda School’s Web Development program. 1. Why Lambda School
2. Structure of the program
3. Overall experience
Big shout out to Justin for chatting with us. Quick plug - Justin just started his job hunt process - hit him up on Twitter if you are interested in hiring an ambitious young developer with a marketing background. Future of Lambda SchoolTraditional education is clearly broken. Every year, students take on tens of thousands in debt with the hope that the education will pay off with a job on the other side. Lambda School wants to disrupt the system by up-leveling a new set of talent and helping them access lucrative, in-demand careers in technology. Doing so is no easy feat
Despite the challenges, there is no doubt that Lambda School is changing many lives. This is just one anecdote from last week. Thanks Austen for sharing your story! I asked subscribers what they tell their friends about first 1000. Here is one of my favorites:
|
Key phrases
Older messages
📖 Matter
Wednesday, October 20, 2021
The reading app taking the world by a storm!
Turbo Boosts
Tuesday, October 12, 2021
A guest post on Lenny's Newsletter
❤️ Apps
Monday, October 4, 2021
Hi Folks , Welcome back First 1000. Today, I am doing a special edition about dating apps. Every year or two there is a new dating app being born on the app store, and hundreds of millions of dollars
Monday, September 27, 2021
How Twitter got its first 1000 users
💻 Atlassian (Jira)
Sunday, September 12, 2021
A deep dive on how $1B of capital and a perfectly crafted M&A engine created $40-50B of market cap for Atlassian!
You Might Also Like
12 hours to go! 🐣
Friday, April 19, 2024
Catch the super early bird rates before they expire! View this email in your browser. 1200 x 380 (Desktop & Tablet) (8) Hey there, There are just 12 hours to go before Summit Summit ticket prices
Why I Switched My Blog to Ghost (and Why You Might Love It Too)
Friday, April 19, 2024
Tired of slow, clunky blogging platforms? I was too! Find out how Ghost changed my blogging life (and my company!), and why it might be the upgrade you need. Salehin Khan Salehin Khan Why I Switched My
Latvia's startup financing gets creative
Friday, April 19, 2024
We visit Riga to explore Latvia's tech scene, layoffs at Stability AI and why climate tech's latest phase will be built on debt. View in browser Notion flagship logo final Good morning there,
How Meta is paving the way for synthetic social networks
Friday, April 19, 2024
Five ways of thinking about Llama 3, its latest large language model Platformer Platformer How Meta is paving the way for synthetic social networks By Casey Newton • 18 Apr 2024 View in browser View in
SaaSHub Weekly - Apr 18
Thursday, April 18, 2024
SaaSHub Weekly - Apr 18 Featured and useful products Ant Design logo Ant Design An enterprise-class UI design language and React implementation with a set of high-quality React components, one of best
[SaaS Club] Scaling a SaaS Community Platform to $19M ARR
Thursday, April 18, 2024
Hey Reader Let's connect on LinkedIn! Follow me to stay in touch! Here's a quick round up of what's been going on at SaaS Club: 🎧 Podcast Circle: Scaling a Community Platform to $19 Million
The Most Profitable Software Company in Q1 2024
Thursday, April 18, 2024
Tomasz Tunguz Venture Capitalist If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. The Most Profitable Software Company in Q1 2024 image Ethereum
Clippa and PrivacyBox
Thursday, April 18, 2024
A browser extension for PrivacySandbox control with passive income BetaList BetaList Daily Clippa Create short clip videos for social media in a few clicks PrivacyBox A browser extension for
I think I figured it out
Thursday, April 18, 2024
Read this in 1 min, 2 sec I was scrolling through our YouTube channel last night... And something finally clicked. Why are all these founders we interviewed successful? What do they know that others
stealth startups in industrials
Thursday, April 18, 2024
intel on hidden gems within the market inside Hi there, Never miss an outlier. Check out this list of target companies in industrials. These startups are hidden gems within the space. See them here The