
September 18, 2020
How To Assess Your Relationship To Risk and Money, Why San Francisco Is A Case Study For The Greatest Squandering of Wealth in History & Why Complexity Increases Exponentially with Scale | Austen Allred on 20VC with Harry Stebbings
Check out the 20VC podcast Podcast Page & Episode Notes
Key Takeaways
- The reason Lambda School is so successful is that they cover the downside for their students: Students don’t have to pay anything until they get a job
- “If it doesn’t work out, you don’t pay anything” – Austen Allred
- When you raise a round of capital, chances are you’re also letting that investor join your board
- “It is a marriage” – Austen Allred
- Hiring a Chief Operating Officer requires customization, you can’t just hire one off the shelf. You want the COO’s strengths to be the founder’s weaknesses and vice versa.
- “It’s a really symbiotic relationship” – Austen Allred
- Silicon Valley was like Florence during the Renaissance except for tech
- Austen believes that because so many people are moving out of San Francisco, you no longer have to go there to network and build a great company. The next tech city will be in the cloud.
- “I definitely think we won’t ever really go back to 2019 Silicon Valley” – Austen Allred
Intro
- Austen Allred (@Austen) is the co-founder and CEO of Lambda School
- Host: Harry Stebbings (@HarryStebbings)
Books Mentioned
- Austen’s favorite book is Les Miserables by Victor Hugo
- “Les Miserables is just the best book ever written” – Austen Allred
Austen’s Life Path
- Austen dropped out of college because he knew he wanted to be in tech and he felt tuition was too expensive
- Austen bought a car, drove to Silicon Valley, and spent two months living in his car
- He spent that time teaching himself how to code and eventually got a job
- Austen bought a car, drove to Silicon Valley, and spent two months living in his car
- Austen later set out to start his own company and was blogging about everything he was learning and going through
- A founder from Utah read it his blog and agree to fund him
- Unfortunately, that company failed because the main investor decided to pull out of the funding round
- A founder from Utah read it his blog and agree to fund him
- The second company Austen started was Lambda School
Lambda’s Success
- The reason Lambda School is so successful is that they cover the downside for their students: Students don’t have to pay anything until they get a job
- “If it doesn’t work out, you don’t pay anything” – Austen Allred
- It lets potential customers relax about the psychological and monetary downside and instead allows them to focus on the upside (getting a high paying tech job)
- “If it doesn’t work out, you don’t pay anything” – Austen Allred
Raising Capital & Not Selling
- When you raise a round of capital, chances are you’re also letting that investor join your board
- “It is a marriage” – Austen Allred
- To be a good board member, look at problems from first-principle thinking and don’t try to pattern match from other companies
- “It is a marriage” – Austen Allred
- There are also investors that just want to put in money and be hands-off. Some Lambda School investors don’t even read the company updates from Austen.
- Austen has had chances to sell Lambda School but he doesn’t see that happening anytime soon:
- “We’ve had chances to sell Lambda School. I could be sitting on a beach right now, but all I want to be doing is run Lambda.” – Austen Allred
Scaling Your company
- When building a company, complexity scales exponentially:
- If you make a change in your US offices, you then need to go make that same change in your intentional offices
- Likewise, if you find a problem in one office, chances are it’s also in other ones as well
- You can either centralize or decentralize your company, both strategies can work:
- “Uber’s basically running like 200 tiny companies in every city. Or you can centralize it more, a la Amazon, and just have everything talk to each other via API.” – Austen Allred
Hiring A COO
- Hiring a Chief Operating Officer requires customization, you can’t just hire one off the shelf. You want the COO’s strengths to be the founder’s weaknesses and vice versa.
- Austen recently hired Molly Graham as the COO of Lambda School
- “It’s a really symbiotic relationship” – Austen Allred
- In her former roles, Molly was the Vice President of Operations at the Chan Zuckerberg Initiative (CZI) and the Chief Operating Officer at Quip
- “It’s a really symbiotic relationship” – Austen Allred
- Austen recently hired Molly Graham as the COO of Lambda School
Thoughts on Silicon Valley
- Before COVID, Austen always worked with his executive team in person at the company’s office
- However, since the pandemic, everyone’s been working from home in all different areas
- Silicon Valley was like Florence during the Renaissance except for tech
- Austen believes that because so many people are moving out of San Francisco, you no longer have to go there to network and build a great company. The next tech city will be in the cloud.
- “I definitely think we won’t ever really go back to 2019 Silicon Valley” – Austen Allred
- However, since the pandemic, everyone’s been working from home in all different areas
Additional Notes
- Austen’s favorite book is Les Miserables by Victor Hugo
- “Les Miserables is just the best book ever written” – Austen Allred
- Austen doesn’t drink alcohol
- In 10 years, Austen sees Lambda School training 500k to 1 million students a year and increasing their student incomes by a $10 billion a year