Austen Allred is Consistently Deceptive

Lambda School is a coding bootcamp that only charges tuition if you get a job. Founder/CEO Austen Allred frequently takes to Twitter, defending his bootcamp against allegations of fraud, and rebutting critics with case after case of student success.

I was initially excited about Lambda School, but have slowly grown disillusioned over time. So when they released their 2019 H1 Outcomes Report, I was excited to finally access a ground truth and put an end to all the speculation.

Instead, I found a consistent pattern of deception.

In the rest of this piece, I’ll walkthrough a number of examples, in which Allred:

  • Claims a job placement rate of 86%, when the actual number is as low as 55%, and at least as bad at 70%
  • Misrepresents graduate salaries on Twitter, despite claiming a random sample
  • Calls regulatory approval a “significant endorsement”, despite a troubled history of bans
  • Lies about having been homeless

Some of these are blatant and explicit, some are more subtle. I’ve done my best to present the facts fairly, and leave the rest up to your judgement.

1. Allred Misrepresents Student Outcomes

In early 2019, Allred took to Twitter to share student outcomes, listing the following salaries:

  1. J: $80,000+
  2. S: $80k
  3. D: $110k base, ($130k total)
  4. C: $130k
  5. T: $90k
  6. L: $140k
  7. J: $85k
  8. L: $89k
  9. A: $85k
  10. R: $75k
  11. S: $70k

A year later, when the Outcomes Report was released, it cited a median salary of just $70,000. In stark contrast, Allred’s 11 Tweets report exactly 0 students making less than $70,000. Statistically, that’s like flipping a coin and getting 11 heads in a row (probability .00049).

This seems bad, but whatever, Allred is just highlighting a few heartwarming anecdotes right? Surely he doesn’t actually claim that this is a randomly selected sample?

Except he absolutely does:

To see just how poorly Allred’s claims line up against the official Outcomes Report, we can plot the histograms side by side:

Allred claims that his examples were randomly selected, but his own statements are contradicted by the official outcomes report.

2. Allred Repeatedly Misrepresents Job Placement Rates

Earlier this year, New York Magazine reported that Lambda school had marketed itself as having an 86% job placement rate, but then released an investor memo reporting a much lower rate of just 50%.

Allred took to podcasts, explaining in an interview with Jason Calacanis:

When we talk to investors, we talk in terms of enrolled students… of those students who were enrolled, X% were hired. Whereas when schools speak publicly, they speak in terms of graduated students. So obviously those two numbers are always going to be different.

He goes on to clarify:

That 86% was somewhat out of date… so we quickly put together what the real numbers would have been, which was 78%.

Okay, so that seems reasonable enough. Case closed?

But then the official Outcomes Report was released, and contradicted Allred’s own statements:

  • Of the 448 students in the cohort, only 318 graduated
  • Of those 318, only 284 graduated on time
  • Of 284 graduates, Lambda could only reach 255
  • Of those 255, only 201 had jobs
  • Of those 201, Lambda “did not have salary data… due to our data collection methods”, giving us data for 178 students

The job placement rate for enrolled students is 201 out of 448, or 45%. The job placement rate for graduated students is 201/318, or 63%.

It actually gets worse. The original Lambda School claim was:

86% of Lambda School graduates are hired within 6 months and make over $50k a year

But according to the outcomes report, 26 of the placed graduates are making under $50,000. The actual placement rate for graduates making over $50,000 is just 55%. That’s a far cry from the 86% they claim, and much closer to the 50% reported by New York Magazine.

To be clear about timing, the New York Magazine article was published February 19th 2020, the interview was on March 3rd, and the Outcomes Report was published March 28th 2020. So these should all be about the same cohort, or at least a similar set of students.

So where does the 78% come from? Following article, Allred published a note on LinkedIn with the following chart:

So 78% is what you get if you ignore students who graduated late, ignore students who have yet to graduate, ignore the “graduated and disengaged” students, and pretend everyone is making over $50,000.

To his credit, Allred does provide another table which includes disengaged sudents and reports a 70% placement rate. Not only is this a far cry from the 86% originally reported, it also includes the 15% of placed students making under $50,000.

Although it may seem fair to count late graduates in the H2 report, note that this is a misrepresentive sample. Students who graduate late will likely have worse results later on, and underperform students who graduated on time. If Lambda wanted to account for this, they could have included 2018 H2 late graduates in the 2019 H1 report, but they neglected to do so.

In March 2019, Allred wrote:

Regulators love us - they’re sick of for profit schools promising a lot and delivering little except debt. [emphasis mine]

December the same year, it was revealed that Lambda was actually operating illegally, with no approval from regulators.

Okay, so this looks bad, but it doesn’t mean Allred is lying. It’s entirely possible that he thought regulators loved Lambda in March, and wasn’t corrected until a $75,000 fine hit the following month.

When Lambda finally did get approval to operate in California, Allred wrote

Over the past year, Lambda School worked to advance an ambitious goal: become the first online school approved by California regulators to offer ISAs. We achieved a major victory when state regulators licensed us as a school in August, representing a significant endorsement for our all-online, career-focused education model. However, in order to secure this approval, we made the difficult decision to stop offering our ISA option to students in California.

To be clear, none of this is an outright lie, but it is a dishonest representation of the regulatory environment. To recap:

Then Lambda applies for approval, leading to this saga in which:

  • July 2019: Regulators deny the application, ordering Lambda to cease operations
  • Lambda continues operations anyway
  • December 2019: Lambda re-applies for approval, is told to cease operations
  • Lambda continues operations anyway
  • June 2020: Lambda submits another application, regulators say they cannot use ISAs
  • Lambda finally agrees to stop using ISAs in California
  • October 2020: Allred calls regulator approval a “major victory” and “significant endorsement”

As best I can surmise, those are the facts of this case. You can decide for yourself if you think Allred is acting with integrity.

Bonus: Allred Lies about Experiencing Homelessness

This has nothing to do with Lambda School, and is admitadely somewhat gratuitous. But it does point to continued dishonesty on the part of Allred, and is too blatant to ignore.

In 2017, Allred tweeted:

I was homeless, had no skills, no degree, just $300 and a laptop, but that’s all you need.

In a 2018 Hacker News comment, he wrote:

I’m also formerly homeless… I know how hard it is to focus on getting a job when you’re just trying to survive

An article includes a screenshot of an Allred’s reply to a tweet which reads:

I have been homeless, slept on those same streets [1]

The arc from homeless to multi-millionaire founder would be inspiring, except that it isn’t actually true.

In a 2013 Hacker News comment. Allred writes:

I lived in a Honda Civic this summer as I was getting a startup off the ground… and I had a half dozen people offer to let me stay at their place or crash on their couch rent-free.

…As a result, I wasn’t living in a car for lack of other options, but rather out of belief that I could create something by sheer will-power, and that I was going to do that come hell or high water. My homelessness was a matter of seeking something greater than myself, not being lost to poverty. [emphasis mine]

Similarly, in a now-deleted blog post titled Voluntary Homeless in Silicon Valley Allred writes:

Candidly, living in a car in Silicon Valley had much more appeal to me than a single bed and a shared bathroom… Much more than money, what fuels me is obsession with minimalism, reading way too much Thoreau, and trying to continually see life from a different angles…  It’s about questioning society at its fundamentals, and seeing what a life not tied down by a foundation really feels like. And so far I love it.

So again, Allred’s claims are… not technically a lie? I mean he did sleep out of a car, but he did it voluntarily. You’re free to make your own judgements, but when I hear “I have been homeless, slept on those same streets”, I do not think of someone with half a dozen offers of free housing. That isn’t poverty, it’s cosplay.

Conclusion: Why does any of this matter?

Am I just piling onto an already heavily criticized company? Am I guilty of being a critic rather than a creator?

I initially wrote about this purely using Lambda School as an example to illustrate a broader point about incentive alignment. But the more I read, the clearer it became that they were just consistently dishonest. Not outright fraudulent, but just really misleading about everything from student outcomes, to regulatory pressure, to the founder’s own history.

Still, why does any of this matter if Lambda is genuinely educating and helping students?

First of all, despite the outcomes report, we still have no idea what the median outcome actually is! They’re reporting data for 178 out of 448 enrolled students, which is just 40%. According to the report, the other 60% of enrolled students either:

  • Remain unemployed (54 students, 12% of cohort)
  • Graduated late or not at all (164 students, 37%, of cohort)
  • Became mysteriously unreachable, or went mysteriously uncounted (52 students, 12% of cohort)

And none of them are included in the salary calculation. So what’s the actual median outcome? We have no idea.

Second, if their outcomes are actually good, why do they have to constantly lie? As Vitalik once said:

If you have a good way of proving something, and a noisy way of proving something and, you choose the noisy way, that means chances are, it’s because you couldn’t do the good way in the first place.

If Lambda actually cares about transparency, they should just report:

  • How many students have ever enrolled
  • How many students have been placed in jobs earning over $50,000
  • Average and median time to placement

And then I’ll happilly shut up and accept that exagerated marketing is sometimes required to make good things happen. Until then, pointing out that their transparency report is not actualy transparent and their anecdotes not actually representative is fair game.

[1] Allred’s tweet is deleted, but the original is still up. There is another tweet replying to Allred, suggesting that he did have a reply before deleting it.

Coda:

It’s me, I’m the asshole.

EDIT 11/19/2020:

A few more things to mention:

  • Lambda Fellows launched today, a seemingly illegal unpaid internship. Because nothing screems “valuable skills” like giving away labor for free.
  • Lambda’s Outcomes Report is descirbed as “biannual”, but over 6 months since publication, there has been no news of a subsequent report for the 2019 H2 cohort.
  • One more example of questionable honesty: Allred claims on Hacker News that he canceled a cohort’s ISAs because it was “the right thing to do”, but a student from the cohort claims it took “months of work” and an greement not to sue.