drop out of college
future of education with Austen Allred (Lambda School) and Allyson Dias (Thiel Fellowship)
My name is David and I’m a partner at Open Water Accelerator. This week’s newsletter explores the future of education with exclusive interviews from Austin Allred, co-founder of Lambda School, and Allyson Dias, Program Director of the Thiel Fellowship.
As always, we included job opportunities in tech and finance as well as a seed stage deal.
building Lambda School with Austin Allred 🔨
This week we sat down with Austen Allred, co-founder of Lambda School, to get his thoughts on the future of education. Lambda School is a remote coding bootcamp that lasts between 9 and 18 months. Unlike a traditional university, students only pay after they have been hired. Lambda School graduates have gone on to be hired by Fortune 100 Companies and the world’s fastest growing startups.
This interview was edited for clarity.
What did you learn from starting your first company?
From starting my first company, I learned how important product market fit is. It's 10 times easier to adjust the product to make it exactly what people want than it is to try to sell something that people halfway want.
That was my big takeaway from startup one to startup two: make sure that you have exactly what people want. The next important aspect that I think new founders tend to neglect is the importance of distribution. The hardest battle you'll fight is actually not product or hiring. It's getting a large enough base of people who care enough about what you're doing to pay attention.
While starting your first company, you lived out of your Honda Civic in San Fransisco. How did you gain the courage to start your second company after that experience? What made you want to quit your job and build again?
After the first company, I was pretty burned out. I just wanted stability. We never really had any major revenue at that company. There was the seed of some interesting stuff and we raised money, about half a million dollars, but we were never really at escape velocity. I wanted to know what it felt like to work at what I considered to be a real company. I went to Silicon Valley and I worked with a company that was well-funded and backed by YC. They were off to the races, and I learned a lot there.
Frankly, my biggest lesson was that it was a hundred times easier to sell something people want than it was to try to sell a subpar company. The Paul Graham-ism of “make something people want” is completely true.
How did you get your first hundred students at Lambda School?
For the first hundred students we taught free classes. That was another lesson I learned from a company that I went to. I actually recommend that if you can, you should work at a company before you start one.
We've found it's really easy to give things away. Anytime I'm looking for a user acquisition strategy, my first thought usually is: what can you give away? What can you give value for? Then you just have to let the word spread that you're giving value for nothing. We started out by teaching free classes and posting to Facebook groups and Reddit. We got thousands of people signed up. In the classes we tried to convert participants into full time students and charged each student $10,000. A few people joined and that was enough to get us off the ground.
From the employer side, it started out by equipping students to be great. Students brought in the first employers and when they would get hired, we would then reach out to those employers and try to deepen those relationships. That's part of the strategy to this day. Just let the network grow.
What's the biggest risk you've taken so far building these two companies?
I think the biggest risk with Lambda School was the zero money down, no tuition upfront model. No one had ever really done that before. There are a variety of reasons that's risky. Will students actually repay? Will that bring in students who are dedicated enough? The filter in the past has just been someone who writes a check, so we had to design a new method of admissions and create a new payment infrastructure. We felt the need to try the no upfront tuition model, and it turns out that that was a pretty good bet.
How do you fund the tuition of Lambda School students?
When we started out, it was all funded by Lambda School. As we got bigger, it didn't make sense to fund every student's tuition with equity dollars from our investors. Currently we use a model where we fund half the tuition and an investor funds the other half. The investor has a preferred return so they get their money back first.
This model has worked out well. We still put in our own equity dollars, so we have skin in the game, and the investors know they’ll get their money back first.
Considering the likelihood of this fall semester being held remotely, what do you think the future of education is?
I think we’ll see education being unbundled. In other words, you used to enroll in a university and it would do everything. Now, I think you're going to have many smaller, separate experiences. This could take many different forms. For example, it could be something like a master class to learn from celebrities, or Lambda School to get a job. I also think there may be a new model for liberal arts as well.
The educational experience is going to get pulled apart. Instead of one college education experience, you're going to have a dozen different things. I'm biased here, but that's my assumption.
What is the biggest mistake you made growing Lambda School?
Our biggest mistake was trying to do too much too fast. We expanded into Africa and Europe and we had all sorts of curriculums, UX and iOS and Android. It didn't allow us to make the product really great because we were focused on too many things at once. After a while, we had to slow down and take it one step at a time. I wish, in retrospect, that we had just focused from the beginning on making Lambda School absolutely incredible as opposed to trying to do more.
What do you think the future of software is?
I think what we'll see software becoming more and more accessible over time, in terms of people who are able to build it and things we are able to do with it. One of the things that I really hope comes true is that we learn how to do more with atoms as opposed to just bytes. I hope that software leaves the world of what we think of right now is software and enters more of the so-called physical world. But we'll see.
future of education with Allyson Dias, Program Director of the Thiel Fellowship
Group Photo of 2013 Thiel Fellows
Higher education is not a good fit for everyone. Allred is looking to build the vocational school of the future. Allyson Dias, Program Director of the Thiel Fellowship, is helping passionate students drop out of college to pursue their ideas. This week we interviewed Dias and got her thoughts on the future of education.
What is the Thiel Fellowship?
The Thiel Foundation, started in 2011, is Peter Thiel’s philanthropic vehicle and his answer to the notion that there might be an education bubble. Student debt is in the trillions, yet many young people think that higher education is the only path to a high-paying job. We at the fellowship give grants of $100,000 to students 22 and younger to drop out of school and work on a company or project.
What do you look for in Thiel Fellows?
We're looking for ambitious, self-motivated, self-starting young people. The candidates that we choose see a problem in the world and want to create the solution to that problem; they’re working towards building the future.
Fellows can look very different. We have some fellows that have started nonprofits. We have crypto fellows like Vitalik Buterin, who started Ethereum. We have a lot of computer science and software fellows, as well as hardware fellows. Additionally, we have science fellows like Laura Deming, who is another well-known fellow that has been working on longevity since she was a young girl.
What attracted you to the Fellowship's mission?
In 2012, I read an article in The New Yorker called “No Death, No Taxes” that profiled Peter Thiel. At the end of the article, he describes starting the fellowship to pay college students $100,000 to drop out of school and work on what they cared about most. I remember thinking that this was the best idea.
I saw a lot of flaws in my own education. I went to university in the US for one year and was very dissatisfied. It didn't feel like I was learning or getting closer to figuring out what I wanted to do in the world.
So, I dropped out and I re-enrolled at a university in Europe. It was really wonderful to travel, but I saw a lot of the same flaws in my education. Everyone was still on the same hamster wheel. The focus was still on rote learning and memorization, and I wasn’t any closer to figuring out what I wanted to do.
All of the graduates were being funneled into investment banking or consulting. I didn't know what I wanted to do, but I knew that I didn't want to do either of those two. Ultimately, I dropped out of a master's program because I didn’t want to go down that path.
When I heard about the fellowship, I thought it was such a great idea. Of course you should be paying great young people to be working on what they're working on! I think this kind of a program could be even applicable across different industries. I imagine the model itself of this $100,000 grant would do really well for artists, musicians and the places where a lot of creativity comes from: the youth.
Another thing I love about it is that young people have been somewhat disenfranchised in our society, and to give them this opportunity to create and to build is so significant. It’s amazing to tell young people that you believe in them instead of saying, “oh, you're too young. You don't get it. You won't understand.” To me, being open to creativity coming from any source is very exciting.
What do you think the future of higher education is?
I think right now is a pivotal moment with COVID-19 and universities deciding whether or not to hold in person classes. We're seeing students questioning if it's worth paying $50,000 a year in tuition for online classes taught via zoom. I think that the current situation is accelerating the decline of the university. I'm not sure what the future of higher education will look like but I imagine that the tipping point will involve student debt.
One of the best things about the university is the access to resources. Students get the knowledge capital of professors and other students. The university’s resources undeniably add value, but we’ve been seeing tuition rates skyrocket over the last 30 years, outpacing inflation. This access will still be desirable to people, but I don’t think it will necessarily continue in its traditional format.
I'm curious what direction this could take. For example, maybe there'll be different models of higher education that are two years or one year, and the program ends up being more project based or culminates in some sort of contribution that's directly relevant. This is something that you don't really see in degree programs right now. Instead, you see this kind of fake structure with tests and a thesis and a GPA that isn’t directly relevant to applying your knowledge in the real world.
I also wonder if there'll be some sort of education component brought in within private companies. It might be worth it for bigger companies, like Google or Facebook or even Netflix, to have their own version of an education model. If they could teach or train for three to six months and start building out their talent pipelines, that could reduce costs for their hiring. I think this is a possibility as well.
Overall I think part of the problem with universities is that we've siloed this age range of 18 to 22 year olds away from the rest of society. In the future I’d like to see more of an integration with society, the way that it used to be in the past with practices like apprenticeships.
This could take the form of vocational school. Society needs electricians and plumbers, and people with those skillsets make good money without needing a college degree. This could also work for Computer Science. Even with computer science, engineers learn a lot from working at a startup or a company. Oftentimes, they learn more from work experience than they do from their degree.
For our readers that are currently unhappy in college and thinking of leaving, do you have any advice?
I think it's important for young people to think about what's right for them, what they care most about and how they’d like to see the world. You don't have to be a tech founder to do that as well.
One of the things that I think is wonderful about universities is this access to so many topics and subjects. When I talk to people that are in school and not happy, one of the first things I recommend is to go take a class that you've always wanted to take. Go take a pottery class, go take a music class, just try something new. Because the barrier to entry is so low in university, exposure to many different things is so accessible and I think that's part of the learning and part of the experience.
our take on future of education 📣
In the future, AI will dominate almost everything; the one thing that it will not dominate is self expression. Over the next twenty years, we predict the value of a liberal arts education will increase while the value of STEM degrees decrease.
Allred is building a vocational school for highly skilled workers. Lambda school graduates learn current technology (unlike Universities who are still teaching Java) and have a career center that advocates for their students and helps them get hired. With Lambda School, the incentives are nicely aligned between student and school.
For many students, Lambda School is a better fit than an Undergraduate CS degree. Lambda School students graduate have a similar (if not better) understanding of CS, spend fewer years getting a degree, and have significantly less debt.
As Allred’s team launches more specialized degrees, an undergraduate degree in CS will began to look ridiculous. In. theory, even if a student desires to pursue a masters or PhD in Computer Science, they could enter a masters program after attending Lambda School.
We predict the value of a liberal arts degree will rise over the next twenty years. A liberal arts degree focuses on the clear expression of ideas. Unlike a CS education which can be condensed into an online bootcamp, the value of the liberal arts education is seen in small in-person seminars where students and professors exchange ideas. We would like to see universities invest in their English, Philosophy, and other liberal arts programs. Unlike STEM programs, the liberal arts experience can not easily be replicated outside of the university setting and the soft skills cultivated will not be made obsolete by AI.
leaving shore⛵: Melodia is raising their seed round
Each week we feature a startup raising their seed or pre-seed round. This week we met with Melodia.
Melodia is a smart music streaming platform, offering a simpler way to play and explore music. It offers one personalized music station that adapts to your unique taste and mood. With its state-of-the-art machine learning and AI algorithms, Melodia learns from your listening patterns to dynamically curate the best music flow.
Melodia’s motto is “simplicity in design, intelligence in action.” We believe it could be the next Pandora.
Sound interesting? If you invest in seed stage companies, reply and we’ll introduce you to the founders.
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Next week’s issue will feature an interview with Shak Lakhani (co-founder of Avro Life Science), Josh Clemente (founder of Levels), some more remote jobs and a pre-seed deal.