I did some back-of-the-envelope numbers on the one I came into contact with previously (also keep in mind this was 6 years ago now too!):

20-30x students per cohort who paid ~$20K upfront for a 12 week program. 20% signing fee (based on 1st year comp) from employer on placement.

We definitely were not paying top of market as some of these students ended up at Uber and Facebook. That said the all in 1st year cost between base + signing bonus + equity wasn't much short of $200K. So:

30 * $20K + 28 * $200K * 20% = $1.72M/cohort

As for outgoings, all of the mentors were volunteers. As were most of the instructors. The content is mostly a one-time sunk cost to produce and is redelivered across cohorts. The largest overhead would have been a building lease. The biggest constraint on growth is how large you can make a cohort or how many cohorts you run (either multiple per year, or opening new locations).

Really felt like a bit of a racket that had found what was almost an arbitrage: between the inability of Bay Area companies to find local talent, the huge costs and risk associated trying to relocate people via H1B, and the desire for people to re-skill at any cost because tech jobs/salaries were distorting everything else in their city.

Sure it's not a $1B outcome. It's a pretty profitable and repeatable business, and especially given the limited downside risk (mostly carried by the students, who've already paid).

I've had a look at the books at a few different types of training style companies and the economics are always grim. It's one of those businesses where to the outsider, it's impossible to believe they're not spinning off unbelievable amounts of cash but they are always pretty marginal.

As additional evidence for this, the number of 1B+ exits in this space can be counted on one hand. General Assembly, for example, was acquired for ~$400M and it was one of the largest players. There was a player from Utah whose name eludes me now that had a, I think, ~$2B exit but that might be the only one.

> There was a player from Utah whose name eludes me now that had a, I think, ~$2B exit but that might be the only one.

Are you thinking of Instructure? They're based in Salt Lake City, and Marketwatch gives their current market cap as $1.86B

Yeah, I'm pretty sure that was the one, thanks!

if you think 28 out of 30 enrollee's in every cohort getting 200k as their first gig is a repeatable business, you are delusional.

Why don't you think schools can scale? You need instructional material and the equivalent of professors/lecturers and TAs. Instructional material scales really well; that's what textbooks and MOOCs are. Professors scale well; otherwise 100 plus lectures wouldn't work at all. They obviously do. Intro classes in the huge majority of US universities are in the 100-600 range. I wouldn't be surprised if there are bigger. So the only possible limiting factor that might not scale is TAs. You can render this irrelevant by having high enough standards for entry, like GA Tech's OMSCS, or you can work on scaling it.

There are definitely people who can do a challenging Master's degree with minimal help and feedback, just books, marked essay assignments and a final written exam. This is a model that's as old as the University of London. TAs and structure will increase the proportion of those who start who actually finish.

What about running a school obviously doesn't scale?

> So the only possible limiting factor that might not scale is TAs. You can render this irrelevant by having high enough standards for entry, like GA Tech's OMSCS, or you can work on scaling it.

They said bootcamps don't scale, not that education or schools as a whole doesn't scale. And your solution of raising the entry requirements so only people who can teach themselves can attend is proving their point. Someone who can teach themself isn't going to pay to go to a bootcamp, but people who want to switch careers and can't figure it out without help, will.

Bootcamps are a kind of school. If we agree that schools can scale why should bootcamps specifically not be able to scale?

I mentioned two solutions, raising entry standards and providing greater support. There are people who can teach themselves. There are very few people who can teach themselves as fast and as well in a self-directed environment as they can learn with a real curriculum and some feedback on their work. If you are confident you can teach yourself in two years or reach the same level of employability after nine months of Lambda School the latter looks pretty good even at $30K once you get a job paying over $50K.

It is dubious to me that 40+ lectures work well (especially with first year students).

I didn't say they work well. But they definitely work. And you can take an existing crappy partial solution like video lectures, and add support structures until you have something that in aggregate works as well as a university course. Plain vanilla MOOCs work well for a small minority, about 10% now, when no one cares at all about them. If you can't quadruple that by actually trying I'd be very surprised.

IMHO we should aim at better than 40%, and I doubt that can be done without actual presence ?

Why do you believe that the folks running bootcamps are "tech people" themselves? If they weren't, would the profit notice make sense?

Well they must at least be aware of the tech scene and how it works, since they're working closely with it.

But they’re not. They’re salesmen selling a product to uneducated people.

There’s no requirement they be part of the “tech scene” ... whatever that is.

> “tech scene” ... whatever that is

The companies they're trying to get people hired into.

wouldn't be surprised if there's typically a "finance" guy making profit driven/marketing decisions pulling emotional strings on a the (willingly) naive "entrepreneur" partner