#117 Austen Allred - Lambda School's Founder Brings His Best Ideas

**Sam Parr** (0:00)
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Yeah, so Austen Allred's here. He's the founder of Lambda School, which I've just been shamelessly pimping on the podcast for like a year, so you probably already know about that.
He's an interesting dude, and I don't know which Austen we're gonna get. There was controversial Twitter, Austen, that was around for, I don't know, like a year, and then like cleaned it up a little bit, tightened it up as the company was growing. So I don't know, are we gonna get tightened up, Austen, or are we gonna get Lucy Goosie?

**Austen Allred** (1:18)
Wait, you can request.

**Sam Parr** (1:20)
Oh, for Lucy Goosie, for sure.

**Austen Allred** (1:22)
My comms team isn't listening right now, so we're good.

**Sam Parr** (1:25)
Right. Dude, I'm in it for the clicks and the listens, so the more controversial and interesting things you say, the better.

**Shaan Puri** (1:33)
So can you give, Shaan and Austen, can you get background? What is, his business is called Lambda School. What is that?

**Austen Allred** (1:40)
Yeah, so we train people to be software engineers and data scientists in live online classes, but we don't charge anything until you're making more than $50,000 a year after the program. So the idea is if we can de-risk education for people, then you can kind of go for the education that you ought to. I mean, incentives are aligned between the school and the student, so we don't get paid unless we don't make money, unless you're successful.
And that's kind of how we think it should be.

**Shaan Puri** (2:07)
So like a free school and you get a percentage of the revenue that the student, the percentage of the salary that student makes to a certain point, and that's how you get paid back.

**Austen Allred** (2:17)
Yep, that's right. So basically we get 17% of salary if and only if you're making more than $50,000 a year. And then once you've hit $30,000 or 24 payments, monthly payments, whatever comes first, it's done. So it's either two years or $30,000, whatever comes first.
And if you don't get hired making more than that amount, then we never make anything.

**Sam Parr** (2:38)
And give people a sense of the sort of scale of... Because it's been pretty wildly successful so far and kind of just getting started, but give people a sense of how Lambda School has grown over the last few years.

**Austen Allred** (2:50)
Yeah, I mean, we started, what was it, three years ago with our first 20 students.
And now, we enroll 300 or 400 students a month. So we're talking in the realm of... That's a lot of software engineers, actually. It's not the biggest university by any stretch, but we're placing more software engineers. Think about the UC system, right? All the UC schools, we're a little bit bigger than that as far as software engineering goes.

**Sam Parr** (3:26)
Then all the UC schools combined?

**Austen Allred** (3:28)
Correct.

**Sam Parr** (3:30)
That's kind of awesome.

**Shaan Puri** (3:33)
So the math is, if you're adding 300 a month, that's 3,600 a year, if it just stays the same.
You can earn $36,000. I think you said $36,000 off of that. So that means you're adding $130 million of revenue or a potential lifetime revenue a year.

**Sam Parr** (3:52)
Sam is just flexing that mental math right now.

**Austen Allred** (3:56)
I wish it were that simple.

**Shaan Puri** (3:59)
Okay.

**Austen Allred** (3:59)
But yeah, I mean, so let's say our average student gets hired making $70K, right? So that student will pay back just less than $25K, but we'll round it to $25K for sake of simplicity. So if we're getting 4,000 students a year hired, then that's 100 million a year kind of over time run rate. But you have to finance those ISAs. So we basically borrow against them and we pay a lot for that.
And then every student that either drops out or doesn't get hired, we don't get paid for.