A Brief History of Coding Bootcamps

Coding bootcamps have EXPLODED over the last few years. Here is a quick look at how they cropped up, and where things are going from here.

The problem

Tech companies have an extremely hard time finding software engineers. When I was running my own software startup, we found it almost impossible to find developers to come work for us. It was easier to convince investors to give money to us than it was to convince developers to take money from us in the form of a salary. Software is eating the world, and as a result there is a growing and seemingly insatiable appetite for technical talent. At the same time the number of new Computer Science graduates and H1B Visas issued are not keeping up. Furthermore the educational system focuses heavily on theory, and does not teach the practical skills that industry is demanding.

Enter The Coding Bootcamp

It started at the end of 2011 with one person posting an offer to teach 6 people to code on Hacker News. Then a forward thinking company offered a 5 month free developer training program with a job guarantee for those who made it through. In the ensuing three years new coding bootcamps have been popping up all over the country and the world. Today coding bootcamp represent a $60+ million/yr industry producing 6,000 software developers per year and growing.

The Experience

Once you get accepted into a coding bootcamp, it's an intense expierence. You start out with 50-150 hours of 'prework'. Then you drop everything - quit your job, take a semester off - and possibly even move across the country or around the world to attend the class in person. The classes are extremely intense and last 3-6 months. People put between 40 and 80 hours in per week, depending on the program. Most of the programs teach Ruby on Rails, but there are some programs that teach iOS, Python, and even .Net! The students who attend these programs are highly motiviated, put in a tremendous amount of effort, and are surrounded by helpful instructors. After the class is over, almost everyone gets a job within a few months.

The Value Proposition

The lure of coding bootcamps is obvious. You can obtain more employable skills in 3 months than you do in a 4 year CS degree. The curriculum iterates after each session and responds to market conditions very quickly, unlike CS programs which are slow to change. Coding bootcamps generally charge between $12,000 and $18,000. Most make you pay upfront, while App Academy has a creative financing mechanism that instead takes 18% of your first year’s salary. Dev Bootcamp placed 88% of their first graudates in jobs with an average salary of 79k. Hack Reactor boasts that they place 99% of their graduates in jobs making $105k. Not only do these jobs pay well, but they are generally emotionally rewarding, intellectually stimulating, and often involve solving interesting problems.

The Economics of the Coding Bootcamp Industry

Dev Bootcamp is probably the largest coding bootcamp - with about 450 students/yr and around $5.5 million just in tuition revenue[1]. This doesn’t including the revenue generated from recruiting fees - which could run up to 20% of the first years salary of their students (although it’s unclear how many students schools collect these fees off of). In terms of a business model - the overhead costs are very high. At 40 staff members (the majority of whom are senior software developers) there is potentially very little, if any, profit left over[2]. On the other end of the spectrum, Jeff Casimir’s latest coding bootcamp, The Turing School, is a non-profit.

Scaling

The goal of many startups is to grow and coding bootcamps are no different. Dev Bootcamp grew first by increasing class size, then moving to a rolling cohort model, and finally expanding to new cities. Although my back of the envelope calculations don’t show much profit, this ‘up and to the right’ growth eventually lead to an acquisition by Kaplan. The Flatiron School by contrast has kept class size roughly the same, but added a scholarship class[3] and an iOS class. Recently they have gotten very creative at opening up new revenue channels with their consulting shop and after school program. This kind of expansion has allowed them to raise $5.5 million in venture capital .

The Future

Here are some of the things I see unfolding over the next few years as the coding bootcamp industry matures.

1. Industry Consolidation

The past three years have been a scramble out of the gates. The industry has now been defined, a few players have been scaling, and serious investment has occured. Although we may still see more and more schools pop up, eventually I suspect a few strong brands to emerge. This is a pattern that has occured in many industrys as they've 'grown up'. Part of why Devbootcamp was acquired and Flatiron was able to raise money is becauase their investors think their respective school has a shot at 'winning' this industry. High revenue can makeup for a low profit margin - just look at Amazon or Walmart - and the winner(s) of the coding bootcamp space will have very high revenues.

2. Software Eats Software Education

Block offeres an on-demand flexible bootcamp expierence over 12-36 weeks. Hack Reactor is experimenting with remote learning. Treehouse and Thinkful are filling in the low end of the spectrum. At what point will these cheaper online resources become a superior and more effective method of learning how to code than the in person classes? Watch this space.

3. Continued Education for Junior and Mid-level Developers

Coding bootcamps are making a real dent at closing the gap between the high demand and limited supply of software engineers - at least on the junior end. However, there is still a vast need for expierenced, senior tech talent. Many companies don't do a great job of developing their junior talent. As a result, people like me are left more or less on their own to learn the skills needed to become a senior developer. There is a huge opportunity here to provide continued, highly structured, education to junior developers as they make their way through their first few jobs. The partnership between Pivotal Labs and gSchool is moving in the right direction - but much, much more is needed here.

1. http://en.wikipedia.org/wiki/Dev_Bootcamp says DBC has 450 students as of August 18, 2014. 450 students * $12,200 tuition/student = $5,490,000 revenue.

2. For example 40 staff * $137,250 employer cost per staff (salary, taxes, benefits) would equal the $5,490,000 in revenue from tuition. While $137,250/employee seems high, remember these are top notch people, mainly software engineers in expensive cities.

3. Thanks to a grant from the NYC Department of Small Business Services