Thread by @josegocampo

. Skin in the Game .

A Lambda School 🧵

This past few days we have seen some articles portraying a school which is failing, where students are unhappy and everyone is leaving

Is that the truth? Is the school failing? Are students getting hired? Is the model wrong?

As a student with 7 months in the Part Time program (11 to go), and already at a good enough level with CSS, JavaScript and React to be able to get a job at a tech company as a Front End developer, I have to say that it does, thought it might not be for everyone, that is for sure

Lambda's model is the following:

"We teach you for 9 months full-time (18 if part-time) you pay nothing upfront. You only start paying if you get a job in tech over $50.000 a year with the knowledge you acquired here. You pay for 2 years max, and with a cap of $30.000 usd"

That model is very expensive to maintain. You need to build a curriculum, hire Instructors at a competitive price with the industry standards (all Lambda School Instructors are professional programmers with vast experience, all I've had are amazing at what they do).

They bet on making a profit when students actually get hired, so you need a team which is dedicated to training students in interviewing, resume and portfolio building, a Student Success Branch, a Careers Branch, a Branch that talks to companies and is making sure they get hired

You need people in support, people managing the Slack channels, Section Leads for each student cohort (classes of around 100 students), Team Leads for micro managing smaller student groups in which cohorts are divided, paying for infrastructure, paying software for all students

The amount of risk supported by Lambda each year (burn rate) is in the 10s of Millions of dollars per year. And they only get their money back if they get the students hired.

Remember, each student that gets hired with a job making over $50.000 per year, pays $30.000 back total

A student entering in January 2020, if he completes every section of the program successfully without having to redo any part, will graduate in September, if we assume at least 3 months to get hired after graduation, that is almost a year of seeing 0 return.

Even then, the total return will materialize in 2 more years, remember, students pay 2 years max and a $30k cap, that amount is payed monthly, so it will be, at least, 3 years in average, since a student enters till he will completely payback the ISA to Lambda

There has been a lot of critics lately saying Austen has publicized the company as having 86% of its graduates hired and it is really 50% according to this report or to this people (which they wont reveal).

I dont know if the number is 50% or 86%, or something in between

If it actually was 50% I think that would be still pretty amazing. If it is anywhere from 66%+ I think that is out of this world, and still really really risky for Lambda in any case.

Remember, Lambda will, at least, have to wait for 3 years to fully get paid on the ISA from the successful students, if the runway of the company is $10M dollars, that means they need at least $30M just to support the costs of running the school to that point

Ok, a bit less, because some students would be paying some amount during those 3 years, but you get the point, as they expand costs also get higher, so bare with me on that figure

How can you support such an enormous burden while also attempting to running a successful business?

There are 2 ways:

You either get a TON of funding,

or,

You start negotiating with the ISAs you have from your Students

I think the best model is a mixture of both, but that is not what really matters at this point, what matters is you need funding yes or yes

If we assume that the numbers of students getting hired is between both alleged figures, 50% and 86%, lets say 1/3 to look at an easy to play with number kind of in between.

If that is the case, every $30.000 ISA, will only get realized 66% of the time, expected value of ~$20k

That is without counting that some % of the students actually getting hired will change jobs, leave the field, refuse to pay, or others. I would assume problems are gonna happen with some % of them, so lets say real ISA value is around $18k

Picture starting to not look so good for Lambda, but again, they have Skin in the Game, they only win if students win, and that is the most important part of this equation, if students are not getting hired, it is not a total loss, they have learned real skills, they have gained

experience in the field, and can continue learning on their own -worst case scenario if the School were to fail- jobs are over abundant.

Lambda on the other side, if students are not getting hired, they are losing tens of millions per year

So, the way I see it, there are absolutely big risks involved on both sides, but the School's risk is equivalent, or even higher - I believe, hard to completely calculate - than that of the student.

There is an alignment of incentives, skin in the game from both parts

That is what makes the model so attractive, they are not like other schools, bootcamps or universities, which say, here is the curriculum, pay upfront or you wont have a chance to enter, we provide you with the training and then its completely up to you.

That model sounds really comfortable, and some people dont want their comfort to be touched, and its starting to show

Lambda School is not comfortable, it is risky, it is incredibly hard, but you are not alone in your risk, the School is there 2, and it is as risky as rewarding,

It is funny when people attack students saying: They are Lambda School's zealots, they have their brain washed and cant see it, they have Stockholm syndrome.

Guess why so many people still go to Venice (Italy) each year, even thought it gets crowded, because its freaking amazing

Students know the value of what they are being provided, they appreciate the School taking the risk with them, they appreciate the Instructors every day interacting with them, they appreciate the support answering their questions, their TLs staying extra hours

Granted, there was a big screw up in the UX section (UX is a very small part of the students of Lambda, still not excusable) which caused a lot of unhappy students, it was resolved as quickly as possible by Lambda's staff.

There are a lot of things which could be better..

and that still dont work just fine, but they iterate over and over, consult us over and over, listen to us over and over.

And if you are able to look at the big picture, you know they are also learning and committing to a big risk as the students are.

Students dont care if Lambda is selling their ISAs to Edly or some other company, why should they? We recognize its incredibly hard to fund and that it wont really affect quality.

Edly and Lambda are also taking risks, calculating ISA's EVs and trading on that

That is fine, what we care about is for them to keep being in business because the School is amazing, incredibly hard, but amazing, and students are getting hired, peoples lives are being changed, and that is in big big part thanks to this model

Having said that, Lambda is not for everyone. Students do have problems with the program, students do get left behind, some students even graduate and they dont get hired at the end (that I consider is a real failure from the school, but they are not a big %)

But you will never be able to have a system where 100% of the people enter and finish and 100% of the people that finish get hired. That is impossible due to very case specific factors.

The thing is, those students that fail because of them, or because of Lambda, are lost $$$

An economic loss and time loss, which results in a very expensive investment by the school not being realized

So, Lambda will do anything they can to improve students experience, to support them, to help them pass and ultimately get them hired, without sacrificing quality..

... that is why some students get left behind sometimes.

If you dont pass the Sprint Challenge which is due each week for full time or every 2 weeks for part time, and covers all the material in that unit, you wont be able to move ahead in the program

There are no grades, but to pass you have to be able to complete at least the MVP of that units Project.

Sometimes it is really frigging hard, I went from 0 lines of code to Advanced React + State Management with Redux in 6 months, but it comes with a price,

It is physically and mentally grueling, that is the risk that the student has to support if he wants to make it to a good enough level to be able to get hired a tech company as a professional developer in 9/18 months, and some people just cant handle it.

Lambda does provide support, they have a partnership with Modern Health to give free therapy sessions for their students, + Instructors, SLs, TLs are always there for to root for you and other students tend to be a big part of your support net too.

IT IS VERY HARD

But that is what it takes to turn your life around in ~1 year.

If you are not willing to put in that work or to endure the hard parts then dont join, maybe Lambda should be more transparent in that front.

Still, the overall experience has been excellent, the program is very well planned. The syllabus is great and to the people that have been saying that some classes are directly taken from Udemy, LOL, I have completed courses in Udemy and this is a lot more complete,

+ you have Instructors teaching you live, you have Projects which are constantly getting reviewed, Build Weeks in which you build real Apps with teams from different sections of the School

"A lot of the people that graduate would have done it anyways on their own"

Yeah, very likely, I am one of those, but It would have taken me 3x the time, I wouldn't have had the accountability, the order, the guidance, the optimization, the teams, the contacts with others...

...which are in the same boat. So overall it is 100% worth it

"$30.000 is a lot to pay for a coding school"

Well, that includes the huge risk Lambda is assuming, and its not just the school and the materials, its all the structure, its the help finding a job, plus you have CS

Which is one of the hardest parts of the curriculum and it is really helpful with the overall understanding of everything, which most coding schools or bootcamps dont have.

Plus you get to do it from home!

I dont see any graduates hired complaining

https://twitter.com/elisamartinv/status/1230510191873056768?s=20

Every 2 weeks when I get the survey for that period I answer that I would recommend Lambda to a friend 9/10.

Students keep getting hired in dozens each week, everything in the school is functioning well, Lambda keeps growing, while the haters can keep writing hit pieces and..

..retweeting them. I understand some of the publicity from the School has been quite aggressive, thats the growth strategy they've chosen to go with, and it will bring some haters, that is ok, just wanted to share the version from inside the school, dont buy everything you read

I appreciate Lambda (and I know Im obviously biased) because they are taking a huge risk here with us, and the risk is paying of

I dont know what people expect, this is not a charity, its a business, and it is a successful one while taking 20 times more risks than other schools

it is sad thought, to see so much hate, so many people rooting for this to fail, I guess its affecting a lot of other business and they want to stay comfortable, but the paradigm has already shifted, if you dont have skin in the game you will be out.

✌️

*Edit* (thanks @Jack)

My 2nd tweet doesnt make sense. I meant to say that it does work. My initial first tweet had the question does it work and I then edited it, lol.