Creating Wealth For Others

My main motivation for starting Lambda School – which is somewhere between a university computer science degree and a coding bootcamp – is the creation of wealth for other people, particularly those who are starting from a low-income base, lower than many people who live in San Francisco could even recognise.

In a sense we take bets on people, which is ironic because I come from a conservative background. Within my family and the people I grew up with, even being in debt was generally frowned upon. Risk aversion was so ingrained in my psyche from a young age, it’s amazing that I became an entrepreneur.

Education is one of the few things that’s much easier to buy than it is to benefit from. We’re always trying to figure out what it takes to make sure that those people who are paying for an education are benefiting from what they’re buying.

On the other hand, my working life started at a lending company where I saw how much of a difference just a little bit of money can make to a person and how to think about lending, repayment, and the right kinds of risk to take. Obviously Lambda School isn’t lending money directly, but we operate with a lender’s discipline.

When we invest in a person’s education, we get to see the difference it can make. We see people’s lives shift when their work goes from being worth not very much to being worth a lot, and the impact that has on their quality of life.

Numbers tell the story. Our average income differential for a student at Lambda School from before they started to after they graduate is more than $50,000. We’re seeing a lot of people move from $30,000 per year in income to $85,000 per year.

That creates a totally different lifestyle, different expectations, different everything for the individual and their families. People who were working in a warehouse, perhaps making $50 a day, start making $50 per hour. Lambda’s stories are of dramatic swings in income, but that’s just the beginning.

Education is one of the few things that’s much easier to buy than it is to benefit from. We’re always trying to figure out what it takes to make sure that those people who are paying for an education are benefiting from what they’re buying. Our goal isn’t to get a person their first technology job so they can pay back Lambda and be on their way; it’s to create a platform for their future development and a lifelong alumni network.

Starting with virtually nothing, people can enroll in Lambda School and build the skills they need to secure employment that will pay them millions of dollars over the course of their life. One of the things that struck me during the time I spent living in Eastern Ukraine and seeing how hard it can be to break out of poverty there, is just how possible it is to create wealth in the United States.

Numbers tell the story. Our average income differential for a student at Lambda School from before they started to after they graduate is more than $50,000. We’re seeing a lot of people move from $30,000 per year in income to $85,000 per year.

We didn’t need anybody’s permission to start this venture and there’s nothing holding us back – you can create something out of virtually nothing with just a little time and effort, and perhaps a bit of money to get you started.

To meet our goal of helping others become highly valued in the market, we focus on three things:

First, we offer a really high-quality education – 95% of our people are focused directly on our educational product, making sure that students have great outcomes; ie. they get hired, and they’re capable and prepared engineers.

Second, we charge no upfront cost, which for a lot of our students is a requirement for them being able to learn. Having $20,000 of debt hanging over your head is a really difficult mental state to learn in and, for some people, it makes it impossible.

Third, for our hiring partners we provide students that are able to contribute and start coding from day one.

Beyond that we have plans to provide a living stipend so people can enroll, put in the work, and everything else will be taken care of. That’s a really difficult ambition, especially from a financial perspective, but we look at a business accelerator like Y-Combinator which has invested in hundreds of companies for solid returns. We want to create a model where we can invest in thousands of people and have a positive return.

At Lambda School I put into practice the philosophy that helping people and making money are one in the same thing. We don’t decouple our ambition to do a good thing from the requirement to make it profitable and sustainable. By helping people change the course of their lives, we do both.

Austen Allred is the CEO of Lambda School.