Idea
A Lambda School for smart-contract developers
Shaan pitches a focused bootcamp that retrains existing JavaScript/backend engineers to write Ethereum smart contracts in Solidity in ~6 weeks, then places them into a market with an extreme shortage. Run it on placement fees instead of tuition.
“So there is an extreme shortage right now of smart contract developers, of developers who know how to write in this new programming language and write these types of contracts. But it's clearly a big part of the future, in my opinion. And so one idea here is to create basically a boot camp that takes an existing engineer and says, hey, cool. Oh, you write JavaScript or you're a backend engineer. You're one of like 10 million. Why don't you come over here where there's this high demand, high shortage of engineers that know how to do this thing? I could train you in 6 weeks to learn how to write like smart contracts and Solidity and then go to all the companies that are trying to hire this and basically do a Lambda School.”
Steal thisTake a high-demand niche skill, retrain abundant adjacent engineers in 6 weeks, and monetize via placement fees instead of tuition.
Idea
Two-person dev shop that prints $4M placing crypto engineers
Shaan frames the Solidity bootcamp as a non-venture lifestyle business: each placed smart-contract engineer earns a $20K-$25K fee, so a converted backend engineer could realistically build a $4M/year two-person company.
“The thing with the Lambda side, which is basically, I think every time you place one of these engineers, that's like a $20,000 to $25,000 fee that you get. And so it doesn't take much to be— I don't, I wouldn't do this as like a venture scale business. Not, not at all. This is basically, I'm a developer who you have to be the right mold. It's like, I've been tinkering with smart contracts for the last 2 years anyways. I've actually kind of like gotten up to speed myself. I'm a converted backend engineer who now does smart contracts. And I could go— I work at like a FAANG company today. I make $400,000, but like, wouldn't it be great to make like $4 million a year? And I think this is a way to make $4 million a year as like a two-person company, basically.”
Steal thisSkip venture scale: a placement-fee bootcamp in a hot niche can be a two-person, multi-million-dollar lifestyle business.
Fact
Live cohorts + a high entry bar fix course completion
Shaan explains why Lambda School hit 75%+ completion: because it only got paid when students got jobs, it filtered hard on the front end for serious students, then ran a live, peer-group format. The selective front-end filter plus live cohort drives finish rates most courses can't reach.
“And so because of the filter on the front end, plus the format being live and in a peer group, they had like 75% plus completion rates. And then, uh, I invested in this company Maven for the same reason because they were saying, hey, we're gonna make it easy for you to teach a cohort-based course.”
Steal thisMake your course live and cohort-based with a selective application to push completion rates from single digits toward 75%.
Framework
Cohort-based and selective courses beat the 6% completion curse
Self-serve courses finish at ~6-10%. Shaan's portfolio companies beat that: Maven's cohort-based courses with live weekly instruction, and Lambda School's ~80% completion by selectively admitting only the top 1% rather than maximizing seats sold.
“Lambda School had like an 80% completion rate when I invested way back in the day. And so I knew something is different about this company. I knew the standard is 6. I knew these guys had 80 plus and I was like, what'd you get different? He goes, well, it's live.”
Steal thisTo fix course completion, add live cohorts and accountability, and filter hard for committed students instead of maximizing seats.
Idea
A 'Lambda School for content creators' that only earns on placement
Shaan pitches applying the Dribbble portfolio model and the Lambda School outcome-based bootcamp to content/media creation — a program that trains social-media operators and only makes money when graduates get hired. He notes Lambda is set to be a billion-dollar-plus company.
“And so Lambda School was like, yo, college is not doing it. We need to make a 9-month bootcamp where we'll make you like from zero to ready to be hired. And we only make money if you get hired. So like we're fully aligned with you. If we can't get you a high-paying job as an engineer, then we failed. We don't make any money. It's on us. And Lambda School is gonna be like a billion-dollar-plus company. Now you could make potentially a Lambda School for whatever, content creation or media creation.”
Steal thisRun an ISA-style bootcamp for social-media managers that only earns when graduates are placed.
Idea
ISAs for creators: MrBeast funds and promotes you for a revenue cut
MrBeast floated doing income-share agreements with up-and-coming channels, taking 10-15% of their revenue in exchange for promotion and help, since the exposure (like Lambda School pairing training with job placement) matters more than the capital.
“I would love to do like an ISA, like I'll promote you and you keep doing your thing, I'll help you, but I'll take, you know, 10, 15% of your channel's revenue. This is like a pretty compelling idea 'cause I think I think more than the— you have to do it like an income share agreement where you're not just giving them capital, you have to help them get the exposure”
Steal thisPair capital with distribution: take a revenue cut of creators and use your own audience to kingmake them.
Fact
Lambda School's ISA: don't pay until you earn $50K+
Austen Allred explains Lambda School's income-share model: students pay nothing until they're earning over $50,000 a year after the program, aligning the school's incentives with the student's success.
“we train people to be software engineers and data scientists in live online classes, but we don't charge anything until you're making more than $50,000 a year after the program. So the idea is, if we can de-risk education for people, then you can kind of go for the education that you ought to. I mean, incentives are aligned between the school and the student. So we don't get paid unless— and we don't make money unless you're successful.”
Steal thisTie your price to the customer's outcome so you only get paid when they win.
Number
Lambda School takes 17% of salary, capped at $30K or 2 years
The ISA terms: Lambda School takes 17% of a graduate's salary only if they earn more than $50K, capped at $30,000 total or 24 monthly payments, whichever comes first.
$17
Share of graduate salary collected under the ISA · percent
“we get 17% of salary if and only if you're making more than $50K a year. And then once you've hit $30,000 or 24 payments, monthly payments, whatever comes first, it's done. So it's either 2 years or $30,000, whatever comes first. And if you don't get hired making more than that amount, then we never make anything.”
Number
Lambda enrolls 300-400 students a month, bigger than the UC system for CS
Three years after starting with 20 students, Lambda School enrolls 300-400 students a month and places more software engineers than all the UC schools combined.
$400
New students enrolled per month · students/month
“we started, what was it, 3 years ago with our first 20 students, and now we enroll 300 or 400 students a month. So we're talking in the realm of, we're like, that's a lot of software engineers actually. It's not the biggest university by any stretch, but we're placing more software engineers and We're— think about like the UC system, right? All the UC schools, um, we're about— we're a little bit bigger than that as far as software engineering goes.”
Framework
Incentive alignment, not the ISA, is the real moat
Shaan argues people miss the point fixating on the ISA mechanism; the real edge is that Lambda's business only works if students get high-paying jobs, so they train, filter, and place better than a traditional school that gets paid either way.
“it's not that you're nicer people than everybody, it's that the business model actually depends on you successfully getting people high-paying jobs, which is what they want too. And, uh, so like when everybody gets excited about Lambda School, they always talk about ISAs, which is like, you know, this mechanism— it's income share agreement. But that's kind of missing the point. It's more about the fact that you— your success is tied to the success of the student in a way that a normal university is not. And that's why your product is going to be better.”
Steal thisBuild a business model where your only path to profit is the customer's success.
Number
Lambda School raised just over $120M in 3 years
Founder Austen Allred, 30 at the time, says Lambda School has raised just over $120 million in its first three years of existence.
$120M
Total venture capital raised · USD
“Uh, just over $120 million.”
Fact
Financing the ISAs is the hidden core of the business
Austen explains that the most misunderstood part of Lambda is capital: equity investors want to build a tech company, not buy ISAs, so the school uses separate pools of capital to borrow against discounted expected student revenue.
“the financing mechanism is probably the most important and most misunderstood aspect of Lambda School because the cost it would— if we could raise half a billion dollars and then just sit there and wait for that $100 million to come in, we could do that., but that's not, that's not how it works, right? Like, so our, our equity investors do not want to put in a bunch of money to buy ISAs. They want to, they want to build a technology company. And so we have different pools of capital that are for basically borrowing against the ISAs.”
Story
Going fintech at LendUp is why Lambda School worked
Austen's first startup (a crowdsourced fact-checked newsroom) went to zero; he then took a job at LendUp to get close to the money, learning about risk, capital markets, IRR, and securitizations that later made Lambda's ISA model possible.
“So that was basically me moving from, hey, I'm like 10 steps away from money changing hands. I want to get as close to the money as I can. And so I kind of went down the fintechy route, which is a lot of why Lamb School worked. Because I was always thinking about risk and capital markets and, you know, how you can move money from one place to another and what the IRR needs to be to make that happen and how securitizations happen and stuff like that.”
Steal thisGet as close to where the money changes hands as you can; the financial mechanics become your edge.
Framework
The hard-to-do, high-pay job is what makes a training business powerful
Reacting to a 'Lambda School for mortgage officers' pitch, Austen argues the magic of Lambda is that becoming a software engineer is genuinely hard but well-paid; jobs you can't easily fail at don't create the same value or moat.
“the interesting thing about that is, like, you can't, like, fail at becoming a mortgage officer very easily, right? Like, the reason Lambda School is so difficult and so powerful is because you can— it's really hard to become a software engineer, but when you are, you get paid really well. And so, that's just a different end of the market.”
Steal thisTrain for skills that are hard to acquire but command high pay; difficulty is the moat.
Prediction
Pending
Austen puts Lambda School's odds of failure at 50%
Asked point-blank about the probability Lambda School goes to zero, Austen pegs the chance of failure at 50%, framing it as a high-variance bet that is either huge or nothing.
“50%.”
Take
Don't wait until you're rich — think of yourself as an investor on day one
Shaan's biggest angel-investing lesson: the excuse 'I don't have capital' is false. If you're resourceful and persuasive enough, you can access other people's capital, so start treating yourself as an investor immediately rather than waiting to be wealthy.
“the number one advice I would give to you is don't wait until you're rich to do it. Because at that point, you know, the financial returns, it will just be a part of a broader portfolio. It's not going to be that exciting. But if you really want to do this, start thinking of yourself as an investor from day one and find ways to access the capital.”
Steal thisDecide you're an investor before you have money, then go source capital from people who want deal flow.
Take
Don't wait until you're rich — think of yourself as an investor on day one
Shaan's biggest angel-investing lesson: the excuse 'I don't have capital' is false. If you're resourceful and persuasive enough, you can access other people's capital, so start treating yourself as an investor immediately rather than waiting to be wealthy.
“the number one advice I would give to you is don't wait until you're rich to do it. Because at that point, you know, the financial returns, it will just be a part of a broader portfolio. It's not going to be that exciting. But if you really want to do this, start thinking of yourself as an investor from day one and find ways to access the capital.”
Steal thisDecide you're an investor before you have money, then go source capital from people who want deal flow.
Take
Don't wait until you're rich — think of yourself as an investor on day one
Shaan's biggest angel-investing lesson: the excuse 'I don't have capital' is false. If you're resourceful and persuasive enough, you can access other people's capital, so start treating yourself as an investor immediately rather than waiting to be wealthy.
“the number one advice I would give to you is don't wait until you're rich to do it. Because at that point, you know, the financial returns, it will just be a part of a broader portfolio. It's not going to be that exciting. But if you really want to do this, start thinking of yourself as an investor from day one and find ways to access the capital.”
Steal thisDecide you're an investor before you have money, then go source capital from people who want deal flow.
Take
The best companies don't need you
Shaan's investing lesson via Lambda School's Austin: the best founders don't need advice or encouragement, the worst can't be saved anyway, and only some in the middle can be influenced. Investor 'value-add' is largely overblown marketing.
“It reminds me of what an investor told me, which is, "The best companies don't need us." That's the reality of the value-add services, is that the best companies rarely need your help. And the worst companies, you can't save anyways. And so, you know, there's some in the middle where you can help influence their trajectory, but this idea of investors really helping out or encouraging entrepreneurs or whatever else is sort of overblown.”
Fact
The Lambda School model is just an aligned debt vehicle
Shaan strips the hype from income-share agreements: they're a debt mechanism that works best when training cost is low, because it removes joining friction (it's free upfront) and aligns incentives—you only get paid if the student lands a high-paying job.
“any place where you have a low cost of training, this is a very good mechanism. It's just a debt mechanism. It gets a lot of hype, but really it's just a debt vehicle, and, but I think it's a good debt vehicle for this.”
Framework
What Time Is It in Silicon Valley: the hype clock
A blog post frames the startup hype cycle as a 12-hour clock: a thing is born at midnight, becomes the shiny toy by 3, 'this will change the world' by 6, then the narrative turns sour by 7 before rebirth. Lambda School is cited as the company then on the clock.
“by the time you get to 4 or 5, people start to, the narrative changes to like, hey, this is not just a toy, this could be something big. And by 6:00 PM, you know, you know, the, the clock hand has gone halfway around. By 6:00 PM it's like, this is gonna change the world.”
Steal thisWhen press turns on a company, ask what hour of the hype clock you're in instead of reacting to the narrative.
Tactic
Build your business on Twitter by amplifying small wins
Shaan credits Hoover as one of the first to build a company on Twitter that had nothing to do with Twitter—taking nuggets like 'Ashton Kutcher just signed up' and amplifying them into a daily drumbeat of good news that pulled people in. He notes Lambda School's Austin Allred doing the same by spotlighting other people's wins.
“I've joked around with, with friends that I feel like you were the first guy to build your business on Twitter that had nothing to do with Twitter. And today,— in this other company we invested in, Lambda School, the founder, Austin Allred, he's doing the same thing. He shares every victory on Twitter and people love it.”
Steal thisBuild a public drumbeat of wins on Twitter—especially other people's wins—to grow a product unrelated to Twitter.
Story
The mastermind portfolio Shaan didn't invest in
Shaan realized that the founders at his early SF mastermind dinners — Calm, Clearbit, Product Hunt, Zola Electric — would have been a phenomenal portfolio if he'd blindly written $10K checks to each. He'd done the relationship-building right but didn't yet think of himself as an investor.
“Clearbit was in that crew. Product Hunt, Zola Electric, which is the biggest solar company in Africa. Like, so that portfolio would have done amazing. And so, I looked back and I was like, man, I did the first part right, which is what you're saying. You know, I just spent time with interesting people and added value to them through sharing sharing ideas, insights, whatever, helping, being helpful. But then the lesson I learned was, why wasn't I investing? And to me, I kind of asked myself this and I thought, because I wasn't thinking of myself like an investor.”
Steal thisIf you already sit at the table with great founders, start thinking of yourself as an investor — don't count yourself out.