20VC: Lambda School Founder, Austen Allred on 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 is the Founder & CEO @ Lambda School, the startup that remotely trains people to become a web developer or data scientist and the students pay no tuition until they are hired. Just last month, Lambda's $74M Series C was announced led by Gigafund bringing their total funding to date to over $129M with prior investors including Stripe, Bedrock, GV, Gigafund and GGV to name a few. Prior to founding Lambda, Austen was Senior Manager for Growth @ LendUp and before that co-founded Grasswire. In Today’s Episode You Will Learn: 1.) How Austen made his way into startups having slept in a Honda Civic and how he went from homeless to rockstar founder @ Lambda? 2.) How does Austen evaluate his own attitude to risk? How does Austen think about downside protection today? How has this changed over time? How does Austen feel about founders taking secondaries? How does Austen think about his own relationship to money? 3.) Having raised his Series C last month, why did Austen choose the investors he did? How did the round progress? What made Gigafund different to alternate options? What makes the best board members in Austen's mind? What makes the worst? 4.) What have been the most challenging elements for Austen of scaling the team? How does complexity change with time in team scaling? Why did Austen bring in a COO? What did he look for in the role? How does Austen advise others on bringing in a COO? 5.) Why does Austen believe that post-COVID we will never go back to the valley as we knew it? Why does Austen believe the valley represents the biggest potential squandering of wealth in history? How does Austen evaluate the government intervention we have seen? As always you can follow Harry and The Twenty Minute VC on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  Welcome back to the 20 minute VC with me, Harry Stebbings, and I need your advice today. Do you think we should drop the the in the 20 minute VC? Is it really cleaner? Let me know what you think on Instagram at H Stebbings 1996 with two Bs, or on Twitter at Harry Stebbings. But to the show today, and I'll return to the hot seat for one of my favourites. Just last month, they announced their $74 million Series C led by GigaFund. And so with that, I'm thrilled to welcome back Austin Allred, founder and CEO at Lambda School, the startup that remotely trains people to become a web developer or data scientist. And the students pay no tuition until they are hired. To date, Austin has raised over $129 million from some of the best in the business, including Stripe, Bedrock, GV, GigaFund and GGV to name a few. And prior to founding Lambda, Austin was Senior Manager for Growth at LendUp,

• 0:45Harry Stebbings?

  and before that, co-founded Grasswire. I'd also want to say a huge thank you to Sean Maguire at Sequoia and Jeff Richards at GGV for some fantastic question suggestions today. I really do so appreciate those. But before we dive into the show today, I'm sure you've heard me talk about it before, but I love Carter. Carter simplifies how startups and investors manage equity, track cap tables and get valuations. Go to Carter.com/20vc to get 10% off. More than 800,000 employees and shareholders use Carter to manage hundreds of billions of dollars in equity. And Carter now offers fund administration, so you can see real time data in the Carter platform and work with Carter's team of experienced fund accountants. As I said, head over to Carter.com/20vc to get 10% off.

• 1:28Harry Stebbings?

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• 2:10Harry Stebbings?

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• 2:54Harry Stebbings?

  You can get in early on Tech C and other opportunities at ourcrowd.com/20vc. If you're interested in investing, the account is free. As I said, just go to ourcrowd.com/20vc. But now I'm very excited to hand over to Austin Allred, founder and CEO at Lambda School.

• 3:17Speaker 01

  You have now arrived at your destination.

• 3:20Harry Stebbings?

  Austin, my friend, it is such a joy to have you on the show for a second time. It's been a while and so much has changed since the last show. So thank you so much for joining me again today, Austin.

• 3:28Speaker 02

  Oh, man, it has been a while. A lot has happened, to say the least.

• 3:32Harry Stebbings?

  I mean, I think I've got some considerable gray hair since our last show, but I do want to kick off with a little bit of context. So for those that didn't hear the first show, a quick summary on like, how did you make your way into the world of startups? And then also, it's a very visible brand that you have today, but how did you come to found the game changer that is Lambda fundamentally?

• 3:47Speaker 02

  So I dropped out of college because I knew I wanted to be in tech and I didn't feel like I was getting it in college and I felt like college was too expensive, which is ironic now because it was like 2,000 a semester. I was like, this is so expensive. So, long story short is I bought a two-door Honda Civic and I drove out to Silicon Valley and I slept on the streets of Palo Alto for about three months. I worked out of a place called The Hacker Dojo and just had my little white MacBook, if you remember those plasticky things back in the day, and basically taught myself to code and taught myself marketing so that I could work at a Silicon Valley company in a Eventually start a company. As I was doing that, I was blogging about that journey and some founder in Utah read it and said, hey, I slept in a broom closet when I was first getting started. You're sleeping in your car. Like when you're in Utah sometime, let's grab lunch.

• 4:31Speaker 02

  So we grabbed lunch and he basically said, hey, I don't know what you're doing, but I want to fund your company. So I'm in. And that's kind of how I got started. That company ended up failing. That's another long story where we had a series A close. All the docs were done, had this big billionaire investor who was leading the round and he just called me like on December 23rd and said, hey, I'm not going to send a wire. And that was the end of that company. So went back to work for another company, wrote a book, started building a little bit of an audience and started Lambda from there.

• 4:58Harry Stebbings?

  Absolutely. Love it. Can I ask you a question that is off schedule, but when you look at that and sleeping in your car, to where you are now and to what you've built so far with Lambda, are you proud of yourself slightly? And I know nothing's ever done and there's always more work to do, but do you ever take the time to appreciate the journey?

• 5:12Speaker 02

  Oh yeah. I mean, my wife and I talk about this all the time and partially because she grew up in a family that was not very well off either. And then her dad started a company and ended up doing well kind of after she moved out. But when we first got married, we were actually engaged when I was living in the car, by the way. And we got married right after the founder was like, hey, I want to fund you. So that was another twist. We were living in like a super tiny apartment with our mattress on the floor. And that was basically it. It had like this little table that folded down from the wall and we didn't pay ourselves really anything. And so she was a teacher and we were living on a first year teacher's salary, which was like 18K or something like that. And we were totally happy because we were both doing what we loved and like I still to this day, if you gave me a room and a computer and I could just try to do what I do,

• 5:57Speaker 02

  I would be happy. Of course, we have a house now. We've got kids that we need to take care of. But I think one of the reasons that Lambda has been able to be successful, because when we started Lambda, we also went without a salary for a while, is that we're always content. So now everything is just a plus. I don't need to be rich. I don't need to be famous. I'm learning now I would prefer not to be famous in some aspects, but yeah, it's all a win. So now it's just how much can you shake things up?

• 6:19Harry Stebbings?

  Yeah, because I totally agree, but it's so easy in this industry to be pulled into the wanting more, wanting more growth, wanting more money, wanting a higher secondary value, wanting whatever. And it's just so all consuming. That kind of hunt for materialism and capitalism. Do you find you have to actively pull yourself back from that? And what works in terms of retaining that self?

• 6:38Speaker 02

  Yeah, so I take my personal finance, my personal wants and hold it separately from like the company wants. And the nice thing about private markets, the way they are right now is it's all paper money. Like whatever your last valuation was actually doesn't matter. And there are times when it does matter and money changes hands. And it's weird to me that it's like actual money changing hands. But think about it like points on a scoreboard. It's not so much that if you're a basketball player, you can't take those points and turn them into currency. But you still want to score the most points. You want to make the biggest difference. You want to do as well as you possibly can. And then in a weird way, it can flow through to personal finances. But for me, as I said, like you could pay me minimum wage to do what I do now and I would be perfectly happy. I probably wouldn't be very effective because it's hard.

• 7:20Speaker 02

  I think that's one of the things people underestimate about being poor or not is how your mindset can shift. But I would be perfectly happy.

• 7:26Harry Stebbings?

  How does your mindset shift?

• 7:28Speaker 02

  Oh, man, I could talk about this for a really long time. This is one of the reasons Lambda School has been so successful is because I understand that so deeply. But when you are poor or when your salary or your income is low, I mean, most people don't even have salaries. They have incomes or wages coming into Lambda. You have to think really, really hard about downside risk. Because any little thing that goes wrong totally flips you upside down. So one example is when I was living in my car, I was driving down the freeway from Redwood City to Mountain View. And the car just died. I mean, it was a $2,000 car. It wasn't super nice and it wasn't surprising that it died. But I hadn't planned for that when I decided to live in my car. So like, what do you do?

• 8:11Speaker 02

  So I died on the side of the freeway and then a police officer drove up and knocked on the window. It was like, hey, you can't park here. And I was like, well, yeah, clearly it's not my intention to park here either. I just need to figure it out. And he's like, no, you don't understand Barack Obama's caravan is coming through in like an hour and a half. And if you're not out of here, the Secret Service will impound your vehicle. And I was like, oh, that is different. So I got a tow truck and was talking to the tow truck driver about he saw my sleeping bag and stuff in the back of the car. And he was like, wait, what are you doing? And so I'd kind of explained it to him and the tow truck driver was like, hey, come stay at my place. Don't worry about this tow like you can take care of it later. I'm a believer in the American dream and like I want to help you be successful. And all I ask is that when you are rich and famous, like come give me a ride in whatever sweet car you drive.

• 8:55Speaker 02

  Cause that's what's gonna happen and I keep in touch with him to this day. Actually, we're still buddies and funnily enough, he works at Tesla now. And so every once in a while he'll ping me and say, hey, you need to buy the new roadster. And I'll say, I cannot afford that or come anywhere close to it. And he's like, all right, well, when you do have enough money, you have to buy the roadster and you have to take me to ride. And so that's our deal.

• 9:11Harry Stebbings?

  I absolutely love that. And what a relationship. Can I ask, given that perspective and sorry, the schedule completely flew out the window, but I love our chat. So fuck it. The question that I have is like, given that experience and given that past, in conjunction with the proliferation of capital that we have today, obviously with secondaries, like I've never seen them before in terms of size and scale. How do you feel about founder secondaries? Cause I don't actually mind them despite what a lot of investors think. Like I think it's brilliant to remove that downside risk mentality from a founder's perception. How do you feel about them and how do you think about them?

• 9:39Speaker 02

  So going back to thinking about upside versus downside, the reason Lambda School is so successful is because people who don't have a lot of money have to think way more about downside risk than people who do. So at Lambda School, we cover the downside risk for you. If it doesn't work out, you don't pay anything and that allows you not only from a cash balance perspective, but from a psychological perspective to just think about the upside. Instead of being in constant fear of the downside. And I think that is true for founders as well. I've talked to a lot of founders who've done secondary and transparently I have done basically zero secondary relative to where Lambda is at, which I don't know frankly, if that's ideal.

• 10:20Speaker 02

  But it actually aligns incentives because until then the founder is concerned about downside risk way, way more. And there are very practical, very real decisions that a founder makes around how fast do you grow? What do you do in this scenario that you make a different decision if you're thinking about potential downside versus if you're thinking about potential upside. And what VCs want is for you to be just thinking about and optimizing for the upside. So in other ways, Steve from GigaFund who led our most recent round. Has this mental model that he shared with me recently of you need to survive today and optimize for 10 years from now. A founder who has zero net worth, and this is something that I've battled with in myself, you can find yourself optimizing for a year from now

• 11:03Speaker 02

  and not thinking about 10 years from now because you're optimizing for today. So like all things, there can be too much and I don't love the stories of founders who take 3 million in secondary and shut down the company and drive a Ferrari. Like that feels really messed up to me, but the purpose of aligning incentives for secondary, I think makes sense in most scenarios. But yeah, I think it's very situational.

• 11:22Harry Stebbings?

  Yeah, no, listen, I agree and I love that in terms of surviving today and then optimizing for the 10 years now. And I'm really interested, you said there about Giga and I do want to touch on that and the fundraising, the 70 million series C or 74 million dollar series C. Sorry to be precise, but it's like in terms of the raise itself now, you've been through multiple different rounds with multiple different investors. So tell me, what are the biggest lessons that you've learned from raising from the wide variety of personalities that you have done? And how do you think about advising entrepreneurs on those lessons?

• 11:48Speaker 02

  Yeah, so Giga Fund was a little unique for us because I actually met Steve and Luke, who run Giga Fund pre Lambda School Series B. So I've known them for years and I got to know them really, really deeply, really early on in a way that you usually don't with most VCs. The tricky thing is when you add somebody to your board, it is a serious commitment from both sides that could last for a very, very long time. And a lot of time it's written into docs that like you can't just shift that around. It is a marriage. But you're kind of expected to do that after a couple of meetings and a pitch and hey, isn't this awesome? And you back channel a little bit and that's it. With Giga Fund, they operate a little bit differently, so I spend days with the Giga Fund guys. Luke, who's one of the founders of Giga Fund, used to have a house in San Francisco and I went over to his house one night at like 5pm.

• 12:33Speaker 02

  And I don't think we left until like 3 or 4am or something like that. It was something ridiculous. Just talking about our life, our history, how we think about the world. And I think for them, their fund is very unique in the way they do things and they want to make bets on a founder that will be around for 20 years. And they care less about where the company is today than some other funds do. And they care way, way, way more about where it will be in 20 years, which is really how you should be investing in. Ideal world, but that was a pretty unique experience, whereas other investors tend to be more momentum driven, more transactional. And I think they kind of have to be because of the way the fund structures are set up. So I think a lot about incentive alignment and knowing where incentives are misaligned. And GigaFund has a really special alignment for a founder like me.

• 13:18Speaker 02

  That's because I'm not, we've had chances to sell Lambda School. I could be sitting on a beach right now, but all I'd want to be doing is running Lambda, so why sell and sit on a beach?

• 13:26Harry Stebbings?

  Listen, I totally agree with you, and my time on a beach does sound, I mean, great some of the time. I slightly think you're insane in respect, but I respect it too. Question for you, it's like, I'm always thinking about like, what like, you know, I'm at the start of my career. I'm now on a number of different boards and I'm just obsessed with being the best board member that I can be. In your eyes, how would you advise me? How can I be the best board member to you that you deserve? What can I do?

• 13:48Speaker 02

  So I think the tricky thing for board members is that you've seen a hundred times the companies. And so it's really tempting to just pattern match and be like, hey, all these companies are doing X, you should do X as well. But what's really more healthy, I think, is like, if you can get into the company from first principles enough that you understand what their unique challenges are, then you can try to advise on those unique challenges. And one of the best things that an investor named John Danner, who is on our board, has always said to me is like, figure out exactly what your ask is and then come to us with exactly that ask and we will go crush it for you. But until then, you're just going to be getting random advice and it's probably stuff that you've thought about 10 times as much as the board. And to some extent, that's kind of on your fault, so it's on you.

• 14:31Speaker 02

  I think have the founder come to you with something very specific and then try to work on that for them.

• 14:36Harry Stebbings?

  I totally agree with you in terms of the specific element. Can I ask, in terms of like the cap table itself, we chatted a little bit before about some of the investors in Lambda School. And your early rounds, there are quite a few angels, especially when you look at how many on Twitter claim to be angels in Lambda, which is brilliant for them, obviously I'm very envious. But I guess my question to you is like, how do you think about advising founders on constructing their very early cap table? And how do you think about party rounds today?

• 14:57Speaker 02

  Yeah, I mean, our seed round was, I mean, it was post YC, so we had a couple of big checks. But then basically there were just a lot of people that if you sent me an email and said, hey, I'm in 25K, I was like, all right, great. So we did a syndicate through. Angel list, which is nice from cap table construction perspective because it's just one name on the cap table. I think that kind of thing is really smart and it's one of those things where it's kind of a pain. Like every time you raise a round, you have to go get more signatures than you would like. But I it is a little bit of a pain to get more signatures, but it's not the end of the world. And we also set up our docs in such a way that if X percent of the seed round has signed docs, then we're good. I think that's really important. So you don't have to chase down literally every single person.

• 15:38Speaker 02

  Like there are people that invested in the seed round and my investor updates bounce to their email address. And they have no idea what's going on in the company. They may have forgotten about it. One of my first investor updates about a year after our seed round, somebody replied back and said, wait, did I invest? It's like, yeah, you put in 25K. Like, oh, awesome. I forgot. So that's a very Silicon Valley thing to have happened. I don't think it's the end of the world. I don't think it's a bad thing.

• 15:59Harry Stebbings?

  I absolutely love that. And only in the valley could that happen. I do want to discuss a little bit internally because as we said, so much has changed since our last conversation. Scaling journey for you has been incredible and the team scaled a lot since too. And I guess a big thought for me is like, what have been the most challenging elements of scaling the team for you over the last 18 months?

• 16:16Speaker 02

  So it is much easier to get the right team together to do one thing. Like the complexity increases exponentially, not linearly. So we, for example, launched in the US and then I was like, awesome, we're doing really well in the US. I'm going to go do exactly that in Europe. I know exactly the playbook. I can hire just a couple of people and they can run that playbook. But we didn't set things up in the right way where now if we want to make a change in the US, now I have to make a change in two places. And so we had five different tracks running. We were on three different continents. We're spinning up in India as well. So we're starting on our fourth continent. So we're in the US, Europe, Africa, and we're starting in Asia as well. And we just kind of did it too fast. We built an infrastructure where if we made a change, we now had to make it four times.

• 17:00Speaker 02

  And we hadn't centralized the change making and the change management enough so that we could make a change once and it would flow out everywhere else, which is really where you need to be. I mean, there are different ways of doing it, I suppose, but we didn't have enough executive and managerial talent to make the changes in four places. Like that's kind of what Uber did. They said, you know what? We're not going to centralize. Everything, everybody's just gonna be on their own tech stack. Uber's basically running like two hundred tiny companies in every city. Or you can centralize it more, kind of à la Amazon and just have everything talk to each other via API. And then you can move faster and you can debate which method or where you wanna be on that spectrum. But I think we picked the wrong one. We went with the Uber model. And that educational model is so sensitive to changes and so sensitive to experience that you can't really get away with that.

• 17:45Speaker 02

  So we pulled back, we're focusing, we're fixing a few things in the, I mean, we'll always be fixing things in the model in the US. But when we go international again, we'll do it a little bit differently next time.

• 17:54Harry Stebbings?

  Can I ask, how do you think about decision making? And what I mean by that specifically is like reversible versus irreversible decision making. And really kind of getting comfortable making decisions within perfect data. What have been your lessons on doing that, having had, I guess, that experience, especially on the geographic expansion?

• 18:10Speaker 02

  Basically, every decision that we make is reversible, but it's reversible with pain. And the hard thing is it's jobs. So if we start a program, let's say we started a part-time program in Europe, there are students in that and they're gonna be in that for at least eighteen months. So we can pull back and know that, hey, eighteen months from now, we will make a change from there. But you have to run that play. Molly, our COO, has kind of created this, a little bit of a lexicon internally of plays. Like, if you're gonna run a play, you have to run the play through to its end. You can't stop halfway in the play most of the time. And you can stop and change and decide to run another play, but decisions that you make have consequences and you need to run the play out to the end. Which is different in a school than a software product, right? Like, in a software product, it doesn't matter, you just change everything and you don't have to think about it.

• 18:55Speaker 02

  We had to build change management in because our students were just getting whiplashed. And I was saying, well, yeah, it's different, but it's better. And students were saying, yeah, it's better, but it's not what I expected. And what's more important when you're in a learning state is expectations being met exactly, more so than it getting marginally better and whiplashing you. That's been one of our big learnings of moving from kind of software products to an educational experience, is the change management has to be different.

• 19:19Harry Stebbings?

  Can I ask, you mentioned Molly there, and I think CO is just a fascinating role to incorporate into a business. How did you think through that decision to add Molly in the COO?

• 19:27Speaker 02

  So, yeah, funnily enough, we hired Molly originally. As kind of a contract interim VP of People or Chief People Officer. And her job was basically find us a VP of People or Chief People Officer. And then that'll basically be it. She'd been a VP of Ops at Shands Zuckerberg Initiative. She was in operations at Facebook and worked on a few big projects there. And she's at Google and she was the COO of Quip, which sold the Salesforce. So I think in the early stages, she was ready to go be CEO somewhere. And that's what we all expected. And as we started working together, I think she realized that A, I have a different personality than some of the founders she's worked with in the past. So that was a little easier. She didn't have to fight the same way to make changes, the way she had in some of the

• 20:12Speaker 02

  companies she's worked at in the past. And we just really got along. So I basically went to her and different members of the team had been asking her over the kind of nine months she was with us, are you sure you don't just want to stay and work with us in a full-time role? And it's always, no, no, no, like I'm gonna go be CEO somewhere or start my own thing or something like that. And then I kind of went to her a while ago and said, all right, you need to help me figure out how to hire a COO. And she said, COO is one of those roles where there's not like a single COO. It's very much a custom mold to what the CEO is and what the founder is and finding someone whose strengths are the founder's weaknesses and vice versa, more so than it is just hire a COO off the shelf.

• 20:53Speaker 02

  And as we're doing all these exercises and we're getting to know me personally and there's a lot of introspection on what do I want to do? What do I want to hand off? What is working really great at the company because I'm involved and what is suffering at the company because I want to be involved, but I'm not as good at it? We basically realized that A, we love working together and B, all of her strengths are all of my weaknesses and vice versa, like in an almost scary extent. So we started talking a little bit more seriously and over time it just made sense. So she stayed on.

• 21:21Harry Stebbings?

  What's your biggest weakness, do you think, Austin? Mine is documentation and operations. I mean, I'm honestly, ask my business partner Fred, I'm truly world-class at being operationally terrible. What would you say your biggest weakness is?

• 21:34Speaker 02

  It's probably not too dissimilar from that in some ways. I tend to move really fast and do Things eighty percent of the way and jump from thing to thing at kind of lightning pace. I'm not very good at finishing things or making sure things are well documented. I'm not as good at thinking about the edge cases of what I want to do. I just think about the first kind of eighty percent. And Caleb, who's the president of the school, one of the reasons we got to where we are is because he was so good at thinking about all the details that sometimes it's literally my mind doesn't even register. And I'm happy to dive in and be opinionated on those details, but oftentimes I don't even think about them, the fact that they exist. As my wife will attest, and Molly is just thorough.

• 22:17Speaker 02

  She's thorough and thoughtful and she wants to be behind the scenes, making sure that everything is just running very, very smoothly. And that's where she wants to be. She doesn't want to be out in front in public and pushing. She wants to be organizing. Maybe she'll listen to this and be like, oh, you're putting words in my mouth. And I want to be out in front, just pushing the boundaries of what's possible. So it's a really symbiotic relationship.

• 22:40Harry Stebbings?

  I mean, it's interesting you said there about being out in front and pushing the boundaries. I think of Lambda as one of the kind of category creators in terms of being Twitter centric in many respects, in terms of the early growth and early brand. I'm really interested also, how do you think about your own personal brand?

• 22:53Speaker 02

  As some of the people around me will attest, I don't think about it very much at all. The funny thing is, everybody thinks about Lambda as this company that's grown in public and very Twitter centric. The honest truth is, when we got into Y C, I was like, okay, I need to like cut back on Twitter and just be heads down. But it was kind of fun to share what was happening. So it was just like an honest outgrowth of my personality that I thought it was fun to share stuff as things were going along. And then over time, it became like an integral part of the company and who we are. But that wasn't a strategic, you know, I didn't sit down with a marketing plan and say, okay, we are going to be building in public on Twitter. It was just what I wanted to do naturally. And at different times, I've been like, okay, we need to pull back and be more intentional.

• 23:38Speaker 02

  And it hasn't worked very well, mostly because I think it's just supernatural. Like, I don't think about what I'm going to tweet. There's no strategy behind it. It's all top of mind. It's all kind of random and it's real.

• 23:49Harry Stebbings?

  So that's been.

• 23:50Speaker 02

  Totally accidental.

• 23:51Harry Stebbings?

  I think the authenticity is kind of what makes it so special in a lot of respects. I do want to touch on one element though, before we move into the quickfire and it's you mentioned being in Y C there and the San Francisco stronghold. You've been public in terms of moving the family away and moving to Utah. I'm really interested because especially for me in the UK, I see this exodus on Twitter from the valley. Why did you make the decision to move and how do you think about the future of S F?

• 24:11Speaker 02

  I mean, for me, it was personal. My wife grew up in a small town and she is not very comfortable in big cities. But when Lambda was kind of getting off the ground and I was building a network and I was spending all day in the office. So we were originally living in the East Bay. I mean, our first office was actually out in Pleasanton, which if you know Bay Area geography is kind of definitely suburbby. And then as we started growing and I wanted an executive team to be all in person. We got an office downtown San Francisco, right by Bart, and I would be there 12 plus hours a day. So we moved to San Francisco mostly so that I could actually see the kids and to cut my commute from an hour to 15 minutes if you commute at the right time. But it was super hard on the family.

• 24:51Speaker 02

  You just put up with a lot of stuff in San Francisco that I would have been fine dealing with as a single guy. But I mean scary stuff with your kids or taking the kid to the park and you find needles all over the place. Or someone on the street running after your kids. We had an incident where there's a random guy on the street who was trying to like jab a lollipop into my daughter's mouth and stuff like that. And like, that was hard. So we moved back to the East Bay when things started to settle down a little bit at Lambda. But then my commute was, you know, I'd commute in at three or four A M, take about half an hour and I would come back at seven or eight. I wasn't seeing the family. And then when coronavirus hit, it was just like, okay, we're not going to be in the office for a while. We may as well go hang out with our family for a little bit. And then like so many other people, when our lease came up to renew, there was no reason to renew.

• 25:35Speaker 02

  And so we've just kind of stayed in Utah. So I don't know that I can predict perfectly what will happen. I don't think that San Francisco will fall apart. I mean, from a governmental status, I'm sure the budget is going to be a wreck for a while. There is a possibility San Francisco goes bankrupt. But what I think was really, really special about the Bay Area, you know, think about like Venice back during the Renaissance. It's just all the people who wanted to be involved in the. Renaissance or Florence. There's a place where everybody went to. And I think that's shifted now. I think because of coronavirus, there is now enough of an impetus that it won't be obvious that you should go to San Francisco or Palo Alto anymore. And because of that, I think it will change permanently. And I think more will move to the cloud.

• 26:17Speaker 02

  But I could be wrong. And we've always been pretty open that if it totally goes back, we may go back to the Bay Area. We're in a small town now in southern Utah that has an hour flight to SFO. So my commute to San Francisco would be about the same by plane as it would have been by public transport from the East Bay. So I don't know. But I definitely think we won't ever really go back to 2019 Silicon Valley. There's a part of me that's really sad about that.

• 26:40Harry Stebbings?

  Why are you sad about that, if you don't mind me asking?

• 26:42Speaker 02

  I actually kind of wish we could go back to 2010 Silicon Valley, actually. Because then it was getting expensive, but it was still like the romantic notion of a place where all of the people who want to build something to change the world go gather is really, really special. And I was really grateful to be a part of that. And I know that Lambda would not be what it is today if we were doing it all remotely. Just random lunches and dinners and meeting up with other founders and investors and people that I really admire was really, really unique. And I think Patrick Carlson has said something about the idea that in 50 years, we'll probably look back at the Bay Area as one of the greatest squanderings of potential wealth that the world has ever known. And I tend to agree. I think it could have been something absolutely incredible

• 27:26Speaker 02

  if it were governed better and we built more housing. I mean, the government, I think it's just a wreck. And we decided not to build more housing for a variety of reasons. But I think it kind of makes me sad for what could have been.

• 27:37Harry Stebbings?

  No, listen, I totally agree in terms of that what could have been mindset. God, I love our discussions. I'm so glad that I write these long schedules that we never adhere to. So I'm thrilled. That hard work goes to to good effort. I want to move into a quick fire round. So I say a short statement. You give me your immediate thoughts. You ready to rock and roll, Austin?

• 27:52Speaker 02

  Let's do it.

• 27:52Harry Stebbings?

  Okay, favorite book and why? What have I got to be reading quarantine?

• 27:55Speaker 02

  Oh, favorite book is Les Misérables, which I don't read very much fiction unless it's like sci fi-y. But Les Misérables is just the best book ever written, hands down.

• 28:03Harry Stebbings?

  What would you most like to change about the valley tech scene today?

• 28:06Speaker 02

  I wish you could still make it living in Silicon Valley without a big income. And I think you can't right now. And there are a lot of second order effects of that, which is sad.

• 28:16Harry Stebbings?

  If you were a cocktail, what cocktail would you be?

• 28:18Speaker 02

  Well, I've actually never drank alcohol in my life, so I'd probably be Coke Zero with lime.

• 28:24Harry Stebbings?

  Tell me, when you think about kind of the angel investor base you have, which angel's done the most to help the company and how so?

• 28:30Speaker 02

  John Danner. There are a lot of people who know a lot about education. There are a lot of people who have built billion dollar companies and taken technology companies public. I think John Danner and Reed Hastings are basically the only people who are both at the same time. So the ability to jump back and forth between education and technology is super rare and John has just been super, super helpful. So John Danner.

• 28:52Harry Stebbings?

  Final one. What are the next five years hold for you and for Lambda School? Paint that picture for me. All 20 years like Giga invested in with that mindset?

• 28:59Speaker 02

  One of my favorite conversations with Giga Fund is where we kind of sat down and they said, okay, so let's say 10 years from now, where will Lambda School be? I was like, oh, you know, I think we should be training, call it half a million students a year. And Luke, who's one of the partners at Giga Fund, said, wait, but if you guys are successful, half a million is way too small for where you'll be. And you're thinking too small and it should be at least a million. So that's one of my favorite lines ever. And we hold pretty sacred our 10 year goal at Lambda School of increasing our student incomes over the next 10 years. So by 2030, by 10 billion a year annually.

• 29:33Harry Stebbings?

  Listen, I love it. And you know, I'm one of your biggest fans. And so this has been so much fun, Stu Austin. Thank you so much for going with my incredibly wayward conversation, but I've absolutely loved having you on the show.

• 29:42Speaker 02

  I think it's my fault it went wayward. So apologize for that, but it was fun.

• 29:47Harry Stebbings?

  I mean, I always just so enjoy my conversations with Austin. And as you could tell that totally just went completely away from the schedule. I don't think I asked one question from it other than the intro question, but that's all thanks to Austin and his wayward answers. So I blame Austin for that. If you'd like to see more from Austin, you can find him on Twitter at Austin. Likewise, it'd be great to see you on Instagram behind the scenes at H Stebbings 1996 with two Bs. However, before we leave you today, I'm sure you've heard me talk about it before, but I love Carter. Carter simplifies how startups and investors manage equity, track cap tables and get valuations. Go to Carter.com/20vc to get 10% off. More than 800,000 employees and shareholders use Carter to manage hundreds of billions of dollars in equity. And Carter now offers fund administration. So you can

• 30:31Harry Stebbings?

  see real time data in the Carter platform. Work with Carter's team of experienced fund accountants. As I said, head over to Carter.com/20vc to get 10% off. And speaking of a transformational product like Carter there, 2020 has been a year full of unexpected changes. But one thing that's remained very constant, the most important part of a company is its people. In a world with distributed workforces, it's more important than ever to align, engage and develop employees. And that's where Lattice comes in. Lattice is rated the number one people management platform by real users to help companies develop engaged and high performing teams. And because Lattice is trusted now by over 2,000 companies like Reddit, Slack and Postmates, you can trust Lattice to build a high performing culture.

• 31:13Harry Stebbings?

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