Knowing the founder’s history, I feel like every article about them is somehow making them more money or being more successful. Perhaps not the business, but maybe the ability to keep raising money.
I can’t understand how you’d need 130 million to operate over 5 years. Someone is losing at the end of the day and it is probably the investors.
Like if you raised 74 million in 2020 and lay off half your staff a year later, then lay off half your staff again another year later, what in the world are you spending money on? Legal fees?
One of the most interesting things, to me, is that Customer Acquisition Cost is ... not bad at all! Most places that sell online are spending much more than that per customer. Different issues at play here with uncertainty around getting a job and a timeline, but for a company trying to grow, spending < 25% of your revenue on acquisition is exciting.
At the time, the hook was “You pay nothing unless you get a job,” and then lying about how many people get jobs. Since then, the central thesis of the company has been shown to not work, so it pivoted into loans at 12.5% interest. They are trying very hard to market the loan approach like they’re ISAs.
I’d bet that if these lawsuits (or regulators) forced them to cut the dishonest marketing, their acquisition costs will increase.
> Most places that sell online are spending much more than that per customer
In percentages yes, as you note. But in raw numbers, that’s insane!
Ad placements (simplified) can be geared towards CPA or ROAS - the former would be towards getting conversions, the latter towards ensuring a return on said conversions. Neither directly implies that you should be spending a massive % of your revenue for it.
They executed badly on, what was perhaps, the easiest part of this whole project - creating an airtight six month bootcamp curriculum. This just involved paying a bunch of professors (with good teaching record) and industry professional to sit down for a few months and figure it out.
Instead, they launched way too early and produced, by all accounts, mismanaged courses, with constantly changing content.
If they can't get that right, would you really expect them to get the other stuff right?
The model they use is similar to other bootcamps. You pay people who are already well known for teaching the technology to develop a base curriculum and then you "hire" people from the first cohort to replace them and then continue that cycle with each new cohort.
It's like a ponzi scheme/MLM in a sense because the cohorts who learn the material don't really know "why" they are teaching it. It's like having professors teach theory and then TAs taking over while the professors move on with life. Is that the right way to do education? To learn from someone who is one cohort ahead of you? Then they pad resumes and LinkedIn endorsements with everyone in the cohorts, not actual professional work.
I saw this happen at places like DevMountain (Utah) where I think the cofounders picked it up. It made for very confused students who couldn't get answers to basic questions about iOS controls. I saw a lot of this type of activity in the Utah tech scene. I don't know how to feel about it.
Well, the business model, without any controversy, requires a lot of upfront investment. You essentially provide training (hence the educators, materials etc..) for 'free' and recoup the investment later when the coding camp graduates get jobs and make income.
I can’t understand how you’d need 130 million to operate over 5 years. Someone is losing at the end of the day and it is probably the investors.
Like if you raised 74 million in 2020 and lay off half your staff a year later, then lay off half your staff again another year later, what in the world are you spending money on? Legal fees?