I'm also going to hold off on my comments for now and add later. I have a a view of: bootcamp operations, loan provider operations, job market, economics.
My answer would be a novel or feature length documentary so even if I was going to share now I wouldn't have the time or space to write out with proper sources.
I do stand by my statement that the only programs that can survive this year are:
1. giant corporations with a lot of funding that streamline backoffice and make up for losses in other areas
2. tiny programs that are founder run with like 5 staff and 15 students at a time.
u/ericswc wrote (the comment Michael replied to):
The unit economics of most of the players never worked. Pretty much every VC backed camp was in the red before the downturn, and it just exacerbated the issues.
Consider tuition of $15,000 per student.
Enroll 20 students.
$300,000 in revenue.
Less student acquisition cost (ma
u/michaelnovatireplied·
This looks pretty accurate to me, might want to factor in that if a bootcamp uses a loan provider they probably see 50 to 90% of that "upfront tuition" in the bank actually upfront, and the rest at graduation or after the loan starts getting repaid.
Small programs can get by if they have almost no marketing cost (word of mouth and leader's organic reach), but if you grew during the boom times and have a staff of directors... easier said than done to remove all of those people and get your hands dirty again. A lot of people would rather close up shop and do something else if they are going to have to start over again anyways. But some do and I'm sure those programs will survive.
The other anti-pattern I'm seeing is programs in trouble are throwing out AI recklessly for marketing and to lure people in, rather than having any idea what to teach. BloomTech is going all in on their AI and figure it out as they go, but they don't even offer a full stack program anymore and went ALL IN. AI changes every day and you need EXTRA CASH TO INVEST IN IT - cash programs don't have. You can't just have a recent alumni building out your AI program...
u/jcasimir wrote (the comment Michael replied to):
I think you've got all the key factors.
If you were to look back to around 2018, there were actually some similar trends. Programs might not have been ceasing operations in the same way, but it was a downturn. In the 2014-2018 area you would see reasonably successful programs ge
u/michaelnovatireplied·
This is my partner's argument - but her views on education + investors/VCs.
1. The nature of VC is that you have to have a path to 10X, 100X growth to justify venture capital as opposed to other forms of loans or funding.
2. You can only get to that scale through code. We commonly see two failure paths. First, bootcamps have used their funding to scale their HUMANs and it's destined to hit a wall. Second, programs that go all in on code are using the code as a means to an end and are not TECH COMPANIES, but 'schools using tech' and the code isn't intrinsically valuable - think programs using Canvas vs programs building their own platform.
So really VC investing in bootcamps hasn't worked. VCs need to invest in TECH COMPANIES.
Next problem. Let's say you are a tech company and raise funding to give this a shot. Tech companies need a deep bench of tech and product talent to product a good product, not hopes and dreams. What top engineer is attracted to an industry where no company has proven out scale before? It's a big risk and you have to have something else going for you to attract that talent. Mission? Seeding the team with top talent that brings their friends? Compensating people highly? Nothing easy here.
u/ericswc wrote (the comment Michael replied to):
Good points. I exited the space when ISA and other loans were just going mainstream so I didn’t consider that revenue cut…
u/michaelnovatireplied·
I'm just talking regular loans! Like Ascent, Meritize, etc...
u/ericswc wrote (the comment Michael replied to):
I know that some camps were collateralizing ISA’s as well. Not sure what that cost them but yes point taken normal loan providers have fees too!
u/michaelnovatireplied·
Yeah if the ISA was modeled as a loan "Income Share Loan", then it's modeled similarly. Essentially a loan with a variable interest rate and interest rate cap, that can be paused if you don't have income in a given month.
This is the shift that happened after Lambda School got crushed by regulators and the loan providers followed what regulators wanted.
u/babypho wrote (the comment Michael replied to):
For my company, their rationalization is if they were already spending six figures for an employee, might as well spend 10-15% more to get someone with 2-3 years of experience rather than spending a year+ rolling the dice and training someone with 3 months of bootcamp experience.
u/michaelnovatireplied·
Your company is not alone, that's the common sentiment.
If the companies were doing better then they can afford to take a more junior, cheaper, high potential candidate, and basically waste their salary ramping them up for a year before they contribute.
In the "year of efficiency" (which is now permanent) there ain't room for that.
u/dpickett wrote (the comment Michael replied to):
Bootcamp founder here and this is the heart of it. The market has shifted from an employee favorable market to an employer favorable market. There's more talent available and less opportunity for that talent.
The change in supply and demand diminished the urgency in finding new
u/michaelnovatireplied·
Hi Dan, we're seeing some bootcamps close, some pause, some pivot, and some being delusional about the market.
I appreciate you sharing so openly about Launch Academy's position.
u/thinkPhilosophy wrote (the comment Michael replied to):
Given the attrition of the coding bootcamp industry, what should someone who loves to teach people how to code do?
u/michaelnovatireplied·
Maybe be a mentor at a program that's working or at a community college or old-school school.
Or get a job at a big tech company where you can teach - either full time (which is rare), or the ability to teach courses or mentor others within the company (a lot more common)