[potions]

Lambda School seems questionable for a few reasons I was already aware of as a semi-habitual hirer of bootcampers: trying to scale too fast & degrading the product, possibly disaligned incentives if ISAs are sold off immediately, etc. If I weren't aware of these issues, this tweet/thread would not have taught me about them.

However -- "Naturally they're partnered with Amazon"...to get people jobs as programmers at Amazon(who are evil I guess?? The unspoken assumption?) does not seem like a problem.

It is difficult for me to imagine thinking an entry-level FAANG(even Amazon dot com, the lowliest FAANG where few HN posters would deign to work) programming job is not a golden ticket 99th percentile outcome for any bootcamper.

The twootist subsequently implies Austen is out of touch for thinking there are towns where an Amazon FC job @$15/hr + healthcare is a "holy shit amazing" job. This is true tons of places. It's double minimum wage! Affordable healthcare!

If Amazon FC isn't a good job, and Amazon Programmer isn't a good job, what is? Are there bootcamps putting people directly into Netflix, Stripe, Jane Street, etc?

[sellyme]

> an Amazon FC job @$15/hr + healthcare is a "holy shit amazing" job. This is true tons of places. It's double minimum wage! Affordable healthcare!

I don't disbelieve you, but the fact that this "holy shit amazing" job in a highly-skilled and in-demand field pays less than I was earning at McDonald's when I was 14 makes me extremely concerned about what Americans have been convinced is normal.

[beckman466]

> the fact that this "holy shit amazing" job in a highly-skilled and in-demand field pays less than I was earning at McDonald's when I was 14 makes me extremely concerned about what Americans have been convinced is normal.

“Amazon Can Only Claim Their Jobs Are Decent Because American Work Has Gotten So Miserable

Amazon maims its workers and drives wages down, yet the company still attracts job applicants and claims to provide “good jobs.” Those claims were strong enough to play a role in the defeat of a union effort in Bessemer, Alabama — but that says less about Amazon than it does about the miserable state of the labor market.“

Source: https://www.jacobinmag.com/2021/04/amazon-bessemer-alabama-u...

[Tarsul]

thanks for that link. "More than 53 million people— 44 percent of all workers ages 18–64 in the United States— earn low hourly wages", which is defined as earning 2/3 of the median male worker. The median hourly wage for those 53 million people is $10.22. One might argue about semantics but these stats are devastating nonetheless.

[etripe]

A quick search tells me that the median is 35k per year, the mean time off is 10 days and there are 13 national holidays.

So that would put it at roughly $15 * 48 hours * 48 weeks. For 35k. I agree, that's devastating.

[dghlsakjg]

I don't know if you are in the US:

US national holidays mean nothing in the context of employment. The US does not require private employers to close, pay extra, or provide paid time off for those holidays.

[etripe]

Nope, I'm not. Fair enough: 46.6 hours per week at 50 weeks then, not 48 hours at 48 weeks.

[zests]

What a weird stat. I've never seen anyone take a fraction of a median like that. I can't think of any reason to create such a strange figure besides being dishonest.

[barry-cotter]

Forty four percent of the workforce earns less than two thirds of the median male wage is devastating? There are hundreds of millions of people who live on less than $2 a day. The US has the highest average household consumption in the world by a very large margin. If you think US living standards are inadequate the rest of the world is much, much worse.

[Tarsul]

if the US starts to orient itself after third world countries, then you're correct: It's really going good. It's all relative. I thought the US would rather compare itself to Europe, Japan, etc. but okay.

[finiteseries]

To be clear, when using something like household consumption expenditure, Japan and the subset of European countries that match up end up looking quite “poor” and have been for some time, with the gap IIRC increasing.

That e.g. personal health costs are included in there obviously, uh, muddies things.

[luxuryballs]

There’s nothing to believe, he’s saying that when you live in an area with $8/hr jobs getting a $15/hr one is a boon. Thus it’s clearly not a reference to the area you lived in?

[barry-cotter]

FC is fulfillment centre, as in warehouse worker. Amazon programmers get paid better than that. Even in Ireland SDE1s make €82,000 a year, very roughly €40 an hour. In the US it is no doubt much higher.

https://www.levels.fyi/Salaries/Software-Engineer/Dublin-Ire...

[908B64B197]

Amazon's secret recipe for FCs is that they managed to remove almost all onboarding costs. Training literally takes an hour. So they don't care about turnover; all they need is to keep attracting enough folks that they can run at full capacity.

I guess the 15$/h figure is the equilibrium point for that. It's probably a little bit below the costs to completely automate these jobs.

[smegma2]

I find it surprising that they sell their ISAs (it seems to be true based on a quick look at this https://www.theverge.com/2020/2/12/21135134/lambda-school-st...). Doesn't this look bad to prospective students? It implies that they don't think that they'll pay off. Is there a good faith explanation for this?

[ec109685]

I think the charitable explanation is that they needed the funds now versus after the student gets their job.

[Jasper_]

So they're incentivized to inflate their graduation rates to sell off the ISAs to investors who don't know better, since they need the cash now. Investors are left with a bill of goods: ISAs that will never pay out. Add in some securitization and tranches and baby, you've got a 2008 financial crisis goin'!

[omarhaneef]

At this particular point in time, I suggest this is a vote of confidence.

This is a new asset class, investors are going to dig deep and understand it. They will certainly have access to more data and analysis than the average student.

However, if the government were to start to guarantee the loans and the volume hit an impossible level, and people got used to minimal defaults for 20 years then that would lay the groundwork for the type of disaster you suggest.

(I am not affiliated with labda or any of its investors)

[austenallred]

The cash to train students needs to come from somewhere. So in Lambda School's case that's either VCs or some other investors.

Instead of running the entire school on venture capital, which wouldn't make sense (VCs need a huge return per dollar), we use an advance from investors based on the future value of an ISA to offset the cost.

If we work with investors to say that an ISA will be worth $x, we can borrow $x minus interest the same way you would be able to for any other asset.

Of course, that amount needs to be repaid. So it's still completely risk-aligned.

[maxerickson]

The cash to train students needs to come from somewhere. So in Lambda School's case that's either VCs or some other investors.

This makes sense for liquidity, but ultimately the ISAs are what has to provide the funding (or it's not a viable business).

As the investment terms improve, the portion of the ISA payout spent on training has to go down.

You are correct that the ISAs need to pay out to be an interesting investment, but if you are pricing the ISA to what the investment market will pay instead of what the training costs, it's not exactly a better deal for the students.

[austenallred]

You’re forgetting the student in all of this. At the end of the day the decision maker is the student who decides if it’s a good deal.

The financing is all cashflow management behind the scenes that doesn’t really matter.

[maxerickson]

Sure, they can decide if the think the deal is worth it to them or not, but they probably aren't the one with the most information about the training spend and value of the ISA.

[austenallred]

It doesn’t really matter. As a purchaser of x it doesn’t matter to me what it costs to make x so long as I know clearly what x is.

A Stanford grad doesn’t know what the marginal cost of their enrollment is.

[Jasper_]

Doesn't that incentivize you to graduate as many students as possible, even poor quality ones, so that you can recoup the costs of as many past ISAs as possible and sell them off quickly?

Otherwise, how does a student that doesn't land a job and whose ISA will never repay fit into this model?

[austenallred]

If every student were free yes, but that would incur further “debt.”

Also every student is quite expensive. We gain nothing and lose a lot by enrolling students who don’t get hired.

[smegma2]

Wow, thanks for the answer Austen! Very cool to see that you're around to answer questions.

[ibeckermayer]

You seem to be implying that you’re borrowing against the ISAs whereas the article claims you’re selling them.

[austenallred]

It’s only a “sale” in the sense that it’s sold to a special purpose vehicle that we own 100% of.

The article is wrong in many different ways, this is only one of them.

[Grustaf]

In theory they need to provide value in the long-term if they want to be able to continue selling ISAs.

[vasco]

Supposedly they want to be teachers and not risk managers, though the whole thing smells fishy.

[exdsq]

I would love to meet a bootcamp grad with no programming experience that got into Jane Street. They would have to be truly exceptional, given the onus they put on CS fundamentals (for example they sponsor OPLSS).

[908B64B197]

Few things I can't figure out from a tweet.

1 - Is Lambda going to train engineers already hired at Amazon and is just going to provide an onboarding bootcamp for new hires? Doesn't sound like a bad idea considering Amazon's scale and the amount of internal tooling they must have.

2 - Is Lambda going to supply bootcamp-grads programmers to Amazon?

3 - What do they mean by "Back-End"? Is it Software Engineering roles or back-end customer service/SRE they are training them for?

[chris11]

I'm not sure. From Lambda's website it looks like they are just releasing a program co-developed by Amazon. It's modeled off of an internal training program Amazon has. I didn't see any statements about interviewing or working at Amazon. I think Lambda would brag about a program that was designed to get students jobs at Amazon. I don't think there's any guarantee of a job or interview.

https://lambdaschool.com/the-commons/lambda-school-launches-... https://lambdaschool.com/courses/backend-development

[908B64B197]

> they are just releasing a program co-developed by Amazon

Ahh, so getting devs familiar with Amazon's product offerings.

[austenallred]

It’s 2. Amazon needs to hire more backend developers. Though students aren’t guaranteed a job at Amazon, and can work any number of places with that skill set.