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.

Transcendance and Material Gain in Queen's Gambit

(Spoilers for Queen’s Gambit, Pan’s Labyrinth, Monsier Lazhar and Seven Samurai.)

Queen’s Gambit errs in the same way as every other American show: Characters develop spiritually, but only for the sake of material gain.

It’s a narrative analogous to the real-world misappropriation of self-care-as-productivity-hack. You mediate not to find inner peace, but to leverage that peace into productive output.

Similarly, the final episode takes us through Harmon’s recovery from alcoholism and reconnection with old friends. But these successes are not considered intrinsically valuable. They exist only for the sake of delivering a final victory against the Soviets.

In the penultimate episode, she is largely sober, crushing every player before her. Then, in a moment of weakness, she goes out drinking, wakes up hungover, and loses horrendously to Borgov.

In the final episode, she recovers from her alcoholism, flushes her pills down the toilet, reconnects with friends, and crushes Borgov in the final match.

Stated otherwise: it is only through appeal to material gain that her sobriety is considered valuable.

To be clear, this narrative is not inevitable. As far as I know, no other national cinema insists on it so consistently.

Consider the French Monsieur Lazhar where a teacher forms a genuine bond with his students, but then gets fired anyway. Or the Japanese Seven Samurai where elite warriors learn to understand the lives of peasants, but then mostly die anyway.

Or consider the Mexican Pan’s Labyrinth which actually inverts the trope by having Ofelia die in the material world, but then rule as a Princess in the underworld. This is an actual spiritual narrative, one that places inner lives first, and the material world second.

Instead, we get the American version where not even friendship can be an end unto itself.

Appendix: Against the Umbrella of Substance Abuse

Nearly every review I’ve read conflates Harmon’s use of alcohol and Librium under the umbrella of “substance abuse” or “addiction”. That’s an easy reading, but it’s totally undermined by the text itself.

Alcohol, specifically, is responsible for her loss to Borgov in Paris, her subsequent slump, and her mother’s death from hepatitis.

In contrast, Librium never causes Harmon to lose a game. The only time it becomes problematic is when she’s forced off of it and goes into withdrawal.

Reviewers’ inability to distinguish between the two, points at a disturbing whitewashing of the show, and an unwillingness to accept the validity of drug-induced mysticism

Harmon’s childhood genius and accompanying hallucinations were the result of Librium, and was the vast majority of her career. When she quits drinking in the final episode, she doesn’t quit taking pills, instead bringing them with her to Moscow.

She does flush them down the toilet before the final match, but then acquires more. Whether or not she takes them is left ambiguous, but there are ample clues:

  • Harmon says she can’t visualize the board without Librium
  • Before the final match, she tells Townes that she’s asked the front desk for pills
  • The next morning, Townes wakes her late in the afternoon, saying “Lady, you were out!”

And then in the final match, Harmon goes on to hallucinate pieces on the ceiling, which only happens under the influence of Librium.

There is no evidence either, that Librium has a negative effect on her mother, or any of the other students at the orphanage.

I’m not making any kind of moral judgement on drug use, nor suggest that anyone in real life should take prescription drugs.

But within the show, the message is clear. Medication helps Beth win, and has no discernible negative side effects.

The Epistemic Pain of Prop 22

Prop 22 is a California ballot proposition that would exempt app-based drivers from Assembly Bill 5. If it fails, Uber and associates will likely have to reclassify their drivers as employees.

This is the most difficult post I’ve written. Not because it’s deeply personal or technically complex, but because every point has an equally valid counterpoint, and I’m no longer sure what I believe.

I wish this was simple cognitive dissonance. In that case, you’re confused in the moment, but driven to find resolution. Do you love your pets but still eat meat? No problem, just convince yourself that dogs matter more than chickens.

In contrast, epistemic pain only drives you further into nuance. The more you seek to understand, the deeper you fall into the abyss. Every statement is qualified by context, each conclusion bracketed by caveats. Each new insight gives way to more questions, fractally expanding into an unkillable hydra. Instead of a frontier of knowledge, you’re faced with a coastline of infinite perimeter.

That’s epistemic pain. [1]


You might object that Prop 22 is simple. Price floors are socially inefficient and lead to job loss. Uber drivers are overwhelmingly in favor of remaining independent contractors. And besides, why should the government interfere with two consenting adults exchanging capital for labor?

Even if we don’t engage with the object-level arguments, every smart person seems to endorse Prop 22. Scott Alexander is voting yes, Yudkowsky is mocking the opposition, Mike Solana’s Substack (endorsed by Patrick Collison and Ben Thompson) says “A YES vote on 22 will save literally hundreds of thousands of jobs.” Tyler Cowen has consistently (1, 2, 3) expressed support for Uber, including an argument against drivers-as-employees.

So it seems simple enough. Liberals are trying to regulate every industry to death. Prop 22 is our last defense, and a necessary measure to save jobs and bolster the economy. Easy choice right?

Oh you sweet summer child.

1. The Price Floor Question

First of all, price floor efficiencies only occur under a precise set of conditions. The model doesn’t account for failures of collective bargaining, and is frequently disputed by empirical evidence.

SlateStarCodex summarizes the studies for and against minimum wage:

…take the minimum wage question (please). We all know about the Krueger and Card study in New Jersey that found no evidence that high minimum wages hurt the economy. We probably also know the counterclaims that it was completely debunked as despicable dishonest statistical malpractice. Maybe some of us know Card and Krueger wrote a pretty convincing rebuttal of those claims. Or that a bunch of large and methodologically advanced studies have come out since then, some finding no effect like Dube, others finding strong effects like Rubinstein and Wither. These are just examples; there are at least dozens and probably hundreds of studies on both sides.

Okay, so surely we just need to look at all available evidence? SSC goes on to provide this chart from a comprehensive meta-analysis:

So does minimum wage cause unemployment? Yes? No? Maybe?

Obviously it depends on the extent of the price floor. A minimum wage of $100/hour would probably have some detrimental effects. But $15/hour? It’s unclear.

We can sanity check SSC’s armchair analysis by asking economists directly. Chicago Booth’s Initiative on Global Markets regularly conducts expert surveys, including a relevant one on minimum wage:

Okay, so 26% agree or strongly agree that a higher minimum wage could cause unemployment, and 24% disagree. Weight by confidence, it’s 34 to 29. So there’s a very slight skew against minimum wage, but the biggest group is uncertain.

(Maybe it’s the nature of economists to vacillate on every issue? I don’t think so. The 4 latest IGM surveys on Auction Theory, Economic Recovery, Tax Proposals and Foreign Competition show much stronger consensus.)

Note that Prop 22 isn’t actually about minimum wage. A shift from drivers-as-contractors to drivers-as-employees wouldn’t just be a raise, it would impose a minimum number of hours worked. Are there adjustments we can make to better apply our model?

Again, there are infinite possible adjustments, but here’s a key one: Uber et al. are nearly as monopsony. There are a few app-based employers, but as demonstrated in their coordinated support for this bill, they’re sufficiently capable of collaboration. In the Econ 101 world, monopsonies produce deadweight loss, meaning that they’re socially inefficient. Intuitively, it makes sense that an imbalance of bargaining power would lead to unfair negotiations.

But that’s just one caveat. Probably the more important adjustment is in the shift from flexible employment to mandated full-time employment, which isn’t clearly captured in the simple models or data presented here.

So yes, my arguments are insufficient, but we’re already much more sophisticated than everyone tweeting “PRICE FLOOR” and calling it a day.

2. Expertise as Authority, Expertise as Bias

The second tension is between bias and authority.

Uber’s own analysis finds a strong need for Prop 22. Without it, they’ll lose 76% of their drivers (158 thousand), 23-59% of their trips, and be forced to increase prices 25-111%.

Should we believe them?

The paradox is that Uber is both incredibly biased, and also the only firm with the requisite data and understanding to conduct a thorough analysis. Maybe the ideal situation is that they share data with an impartial third party, but even then the choice of third party won’t be random.

Along those lines, Uber commissioned a third party administered survey showing that 72% of drivers support Prop 22. But then another third party site (not funded by Uber) administered its own survey, and found that 60% of CA drivers were in favor of Prop 22. What happened to the other 12%?

The Uber-funded survey is light on methodological details. It wouldn’t have been hard to find a non-representative set of drivers that disproportionately support Prop 22. But of course, there’s no guarantee that the non-Uber-funded survey has a representative sample either!

How about a third source? The subreddit for uber drivers has a number of top posts this month about Prop 22, all of which are against it (1, 2, 3, 4, 5).

So what’s the actual rate of drive approval? 72%? 60%? 0%? For that matter, how seriously should we actually take driver opinions, given that they’re a captive audience to any propaganda their apps choose to throw at them (1, 2, 3)

3. Heuristics For and Against Underdogs

Cash contributions to Prop 22 are currently at $20 million against, and $203 million for. That’s the highest total of any ballot proposition in California ever. The against donors are mostly labor unions, the for donors are Uber, DoorDash, Lyft, Instacart and Postmates (which was acquired by Uber earlier this year).

At first glance, this seems suspicious right? The 2020 presidential candidates raised $1.57 billion and $1.51 billion, for a pretty even ratio of around 25:24. In contrast, Prop 22 spending is at 10:1! Maybe suspicious isn’t the right term, but it certainly doesn’t feel very democratic.

On the other hand, doesn’t this demonstrate that Uber et al. are getting more value out of Prop 22 than their opponents stand to lose? Isn’t this a genuine expression of their willingness to pay?

I worry that the discrepancy is mostly a result of coordination costs. An Uber driver opposed to Prop 22 knows their small donation has a tiny chance of influencing the outcome, so it’s better to just sit back, hold on to their money, and hope for the best. [2] The companies in favor of Prop 22 don’t have these problems. They still have to coordinate, but only with a couple other entities, all of which have legal teams.

There’s also the issue of time horizons. The Diff has an applicable anecdote:

Containerization reduced the amount of labor needed by ports, but longshoremen could shut down ports if they worried about job security, so the process was slow. However, since corporations are immortal and workers are not, port operators and shipping companies could engage in time arbitrage, paying high wages to current union members without replacing their jobs when they retired.

Similarly, we might worry that drivers and unions are only willing to pay what they think they’ll stand to win back in this generation. In contrast, companies are really good at not discounting the future, and Uber is the world champion of time arbitrage. They will always be willing to lose money today to make more money in the future. The kind of company willing to burn $1 billion a year to compete in China has no problem taking a $50 million hit to operate in California.

So once again, I have no idea how to interpret this. Is it a gross violation of democratic principles? A fair and genuine expression of willingness to pay? Should we start modeling elections as auctions?

4. Varieties of Accelerationist Argument

If Marx were alive today, he would probably not say “we need to strike down Prop 22 to ensure workers’ rights.”

More likely, it would be something like “Yes, let the conditions worsen, let the class consciousness grow! Only then will we transcend late capitalism and emerge free to engage in an infinite revolution by the masses!”

I’m exaggerating, but not by that much, here’s the actual quote, in which Marx comes out against economic regulation and in favor of free trade:

But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade.

I’m sympathetic to this line of thinking. The basic logic makes sense. But it’s also just such a dangerous path to tread. If you accept accelerationist thinking, you can find yourself endorsing any number of arbitrarily evil views. Should we let the government murder people? Perpetuate the war on drugs? Incarcerate dissidents without a trial? Sure! So long as it “pushes the antagonism of the proletariat and the bourgeoisie to the extreme point”, it’s fine by Marx.

A better version of this argument comes from SlateStarCodex, writing again about minimum wage:

This strikes me as the strongest argument for the minimum wage and other job-killing labor regulations: that they are turning otherwise-miserably-employed people into unemployed welfare recipients. “Too many people are unemployed and receiving welfare” seems more like a problem society will actually try to solve than “too many people are miserably employed”, and maybe the solution will actually do us some good.

That’s still a flavor of accelerationism, but with the caveat that it works not through antagonism, but through incentive alignment. The purpose of allowing and even endorsing short-term harms isn’t to drive class divides, but to force an internalization of costs by the appropriate parties.


In conclusion, politics is impossible and I have no idea what to believe anymore.

We started out debating the intricacies of labor market elasticities. This is a perfectly fine economics question. Except that there isn’t a generic answer, and in this particular case, the only qualified expert with access to good data is the would-be subject of regulation!

We can’t appeal to drivers themselves because results vary drastically, are all skewed, and also influenced by a perpetual barrage of in-app propaganda.

Campaign contributions are shady, but on the other hand, they’re a fair expression of willingness to pay, and on the third hand, modulated by coordination costs and discrepancies in time horizons.

And we can’t even appeal to the basic goodness of one side or the other since there is a perfectly valid argument for letting things go to shit in the short term.

In the long term, everything is a messy choice over which local maximum you want to be stuck in, and how long you’re willing to go through a valley of pain to get there.

If I was an authoritarian Tzar, I would kill Uber and improve public transit. In my utopia, we’re all riding bikes and taking the subway.

But in the messy coordination-problem-governed world that we actually live in, I don’t know how we get there.

One good objection might be: San Francisco has had decades to build good public transit, and never did. Uber wouldn’t exist unless it was necessary.

That’s fine, except that as bad as things are, they can always get worse. Another controversial ballot measure wants to impose a new tax so that Caltrain can continue operations. BART, the other major Bay Area system, notes that it “is facing about $600 million in budget deficit when combining this current fiscal year and next fiscal year.” SFMTA is also bleeding money, expects to lose $568 million over the next 4 years, and may end service for 40 (out of 68 total) lines.

Voting down Prop 22 won’t fix any of this. Nothing will fix any of these problems, not even the short term stimulus bills the agencies are asking for.

After hours pouring over these issues, I have a pretty good sense of where we’re at now. And after years of being an armchair urbanist, I have a pretty good sense of where I’d like to go. But the path between those two points isn’t a straight line, it’s not even close.

The tools we have available for analyzing these questions (economics, political science, social theory), and the tools we have for resolving them (assembly bills, ballot propositions, stimulus packages) are just woefully insufficient.

There is work on complex systems, and ideas on overcoming local maxima, and even project management skills designed for tackling wicked problems, but none of that tells us how to vote.

And so I’m in epistemic pain, a neurotic investigation into an infinite fractal frontier. And as much as it sucks, it doesn’t even compare to the work required to push towards actual solutions.


[1] Yes, “epistemic pain” is a made up term, which means I’m now at the stage of inventing new language to describe the phenomenology of my intellectual journey. This is what peak neuroticism looks like.

[2] In economic language, a free rider.