Fast Crimes at Lambda School

🌈 Abstract

The article is a detailed examination of the rise and fall of Lambda School, an educational startup that promised to teach coding skills and place students in high-paying tech jobs. It explores the company's use of Income Share Agreements (ISAs), its deceptive marketing practices, and the consequences faced by its founder, Austen Allred.

🙋 Q&A

[01] The Rise and Promise of Lambda School

1. What was the key selling point of Lambda School? Lambda School's key selling point was its use of Income Share Agreements (ISAs), which allowed students to pay tuition only after they found a job paying a certain amount. This was marketed as a way to make education more accessible and align the school's incentives with student success.

2. How did Lambda School position itself compared to traditional colleges? Lambda School positioned itself as a faster and more practical alternative to a 4-year college degree, claiming to teach the essential programming skills without the non-technical coursework.

3. What were some of the early signs that Lambda School's model was flawed? Early on, there were red flags that Lambda School's model was unsustainable, such as the company's history of failed ISA experiments at other schools, the inexperienced founding team, and the school's inability to deliver on its ambitious job placement claims.

[02] The Unraveling of Lambda School

1. What were the key issues with Lambda School's educational program? The article highlights several issues with Lambda School's program, including chaotic curriculum changes, lack of qualified instructors, and poor student outcomes that were covered up by cherry-picking success stories.

2. How did Lambda School try to address its financial troubles? As Lambda School struggled financially, it made drastic cuts to the program, including eliminating paid teaching assistants. This further degraded the educational experience for students.

3. What legal and regulatory issues did Lambda School face? Lambda School operated illegally in California for years without proper licensing and approvals. It also faced lawsuits and settlements with regulators over deceptive practices and violations of consumer protection laws.

[03] The Downfall of Austen Allred

1. How did Austen Allred's personal behavior contribute to Lambda School's demise? Austen Allred's tendency to exaggerate, lie, and deflect criticism on social media further damaged the company's reputation and credibility. His narcissistic behavior and lack of accountability alienated both students and the broader tech community.

2. What were the consequences faced by Austen Allred and Lambda School? Austen Allred was personally fined $100,000 by the Consumer Financial Protection Bureau, and Lambda School was banned from engaging in student lending. The company was also forced to settle numerous lawsuits brought by former students.

3. What is the current status of Austen Allred and Lambda School (now Bloom Institute of Technology)? Despite the company's downfall, Austen Allred continues to promote a new venture capital fund and claims that Lambda School (now Bloom Institute of Technology) is still operating, though its future remains uncertain.