Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart, and home of over a thousand entrepreneurs who come here to teach you what they learned as they built their businesses with the hopes that you’ll learn, go out there, build your company, and then come back and do the same thing yourself.
And today, I’ve got a guy who did just that. He’s a Mixergy fan who learned how to code and then built a school that now teaches other people how to code, and gets them extraordinary results. I invited him here to teach how he did it.
Douglas Calhoun is the co-founder of HackReactor. It’s an immersive coding school that’s available right here in San Francisco, probably within walking distance of my office. And recently they decided they were going to do a small test to see if people can learn remotely.
This interview is sponsored by Scott Edward Walker of WalkerCorporateLaw.com. I will tell you later on why he is the entrepreneur you want. Excuse me, why he is the lawyer you want to talk to if you’re an entrepreneur.
But first, I’ve got to find out how this guy Doug built a business that’s so successful so quickly. Doug, welcome.
Doug: Oh, thanks for having me, Andrew.
Andrew: How old’s the company?
Doug: It’s about two years old now. We started in November of 2012.
Andrew: And revenues are where?
Doug: Well, we have about 420 graduates coming out of our program each year. Each pay about $18,000. So you can do the math on that. It comes out to a little under $8 million a year in revenue.
Andrew: Eight million dollars a year in under two years.
Doug: Mm-hmm.
Andrew: Where are your expenses?
Doug: All of our expenses go to creating the most productive and well- supported learning environment that we could possibly imagine. And we’re always finding ways to improve that. So a huge portion of our revenue goes towards hiring amazing teachers and amazing developers, and all of the technology we need, and the wonderful classroom space that we need to [??] maximally productive.
Andrew: So it goes to classrooms, it goes to teachers.
Doug: Mm-hmm.
Andrew: And how many teachers per class, let’s say?
Doug: We have about 50 staff on board at any given time.
Andrew: Okay.
Doug: And there’s some intricacies so that there’s support staff. There are folks who . . . we have what’s called the Hacker in Residence program. So certain students, after they graduate, are invited to sort of a TA role, or do various teaching or coding-related things around the classroom.
So it fluctuates around 50.
Andrew: And it’s profitable?
Doug: Yes.
Andrew: Unreal. Wow. Unbelievable. Two years, you’re able to get people together . . . actually, here’s the other thing. Anyone can get people to come and pay to learn how to code right now, because that’s where the hot jobs are.
Doug: Mm-hmm.
Andrew: Can you actually get someone who doesn’t code to code within a few months, and do it at such a level that they can actually get a job in the competitive market of San Francisco, or frankly, in the competitive market of tech anywhere?
Doug: Mm-hmm. Yeah. So, I mean, these folks who are coming into our classroom are not starting from zero. That’s a caveat there. We are giving them the resources that they need to get started on that journey on their own. It’s kind of learning the code might be similar in certain ways to learning a new language. You’ve got to learn the conjugation, and the punctuation, and sort of the verb tenses and order of various things like that.
And those are things that one could do sort of studying on their own, just sort of memorizing different forms of code. And then, you know, we come to a level where they’re going to benefit the most from having a really supportive, high-touch environment, where they have a lot of support from staff and other students.
At that point, we bring them in, and they spend about three months with us. And, yes, we’ve had great success finding them fantastic jobs. And not just as code monkeys, which is a big sort of . . . something that was sort of levied against us at certain points at the beginning, but actually having roles that they’re going on, and growing, and learning new skills, and being fantastically successful. Being CTOs starting their own businesses, etc.
Andrew: And it’s not just about coming up with this great idea and bringing people in. You guys are so clever at the way that you bring people in. The way that you initially recruited people. I was doing some sleuthing, like you know that I would . . .
Doug: Yeah.
Andrew: . . . to see where are you getting some traffic, how are you getting people to pay attention to you.
You’ve been using Yelp. You’ve been using message boards. We’ll get into all that in a bit.
Doug: Sure.
Andrew: But let me ask you this. Your four co-founders, we sent out, I think, a request to Tony, the CEO, Tony Phillips.
Doug: Yeah.
Andrew: And somehow you ended up doing the interview. What happened?
Doug: Well, I got to say, I think the world of Tony. He’s a fantastic CEO, and he has been amazing at being very proactive, engaged, problem-solving, buck stops here. And the other thing that he does is he’s constantly looking out for the best interests of his employees and cofounders.
So, you know, Tony got connected with you there, and he knew that I was a big Mixergy fan. I’ve been listening religiously since, you know, late 2010, I think. And he said to me, “Hey, I know this might mean a lot more to you. For me, it might just be another opportunity to get our name out there, etc. For you, it would be a big deal. Why don’t you take the interview?”
And, man, that really showed how keen he is and he understands the people around him, and their needs, and how to keep them movie and engaged and excited doing the business.
Andrew: It seems like 2010 was a big transition year for you. That was the year that you went to your boss and you said, what?
Doug: So I had been thinking about coding since I was in high school and college. I’d taken one or 2 course. I didn’t get quite engaged with it. I ended up going another direction for most of my 20s. Near the end of 2010 I was working at a software and service company called Survey Monkey. I was doing tech support. I was answering this and that.
I would see, on the other side of the glass partition, these developers. I had a time card. I had this schedule, and had to fill out forms and stuff. And they could just come and go when they wanted. They were fantastically well treated and well compensated. And they were doing really interesting work.
And I thought to myself, man, I really wish I could get involved in that. So I talked to my boss and I asked is there any type of dev ops or decision support type of thing, anything like that.
And he said, “Well it’s not really in the business interest.” Et cetera. Et cetera.
And I said, you know what, I understand. You have the business to look after. I saved up a little bit of money. I’m going to go off and I’m going to teach myself.
So I got a book on every single language I could think of, book on HTML, book on CSS, book on Python, book on PHP, book on MySQL Well, if I just read every single one of these books, then I’d know everything there is to know about coding.
Needless to say I didn’t get to where I was feeling comfortable and confident that I could really go out and represent myself well and ask people to bring me in a developer role and start contributing successfully to the company.
Andrew: What happened in 2010, on a personal level, that made you say, I’m going to start listening to Mixergy, I’m going to start asking for a different kind of job? What happened?
Doug: There’s been a big adventure, in that sense. I’m a bit of a striver, in certain ways, no matter how wonderful it goes. I was living in Portland Oregon, a lovely, lovely city, I had great friends. The job was easy. I had to shut up and answer the tickets. Pretty straightforward.
But I’ve always had this sense of stagnancy pushing me. It was something I’d always had in the back of my mind I’d always wanted to do. And I couldn’t stand thinking that Tech Support was going to be the last and best job that I’d ever have in my live.
Andrew: But there was nothing that happened to you, like a break up?
Doug: Oh, there’s always something happening to you.
Andrew: So what was it?
Doug: It was the combination of all of that. I had been in Portland about a year and a half at that point, and been there, done that, and kind of, looking for the next opportunity. I’ve always been what I call, soft of a pathologically hubris, even though I was making below $30,000 a year doing this role. And even then I was putting away a little bit of money all the time, and I had enough.
And I said if it all goes badly I’ll just get another dead-end job and try again.
Andrew: But did I hit it with the break up? That was one of the motivations.
Doug: [laughs] If there’s a breakup in there, I’m not sure. I’m not exactly introspection self-oriented. Maybe I’ll have to ask around.
Andrew: That’s one bit of research that I haven’t started doing.
Doug: That’d be impressive if you could dig that up.
Andrew: I don’t think I’ll go into that. But it interesting how big a role personal life plays in our business decisions. You then decided, when you said, “Go off,” do you mean, literally, leave work and go and focus? You do.
Doug: Yeah, I did a number of adventures at that point. I was traveling around the country. I bought a car for five hundred bucks in cash off of Craigslist. I said I’m going to go visit some friends of mine. I was traveling around the country, studying in my spare time. I ended up in Southeast Asia, for 3 months, visiting several countries out there. I was kind of opening myself to the possibilities in the universe in a certain way, and then hoping in there somewhere that I’d have a safe landing.
Andrew: And one of the gifts of the universe came to you in the form of a hacker news post.
Doug: Yeah. I was in Kuala Lumpur one night. And there was a Hacker News post that said I’m looking to teach some folks how to program and to get in touch. So I did. I talked to the fellow. And he said to come on down. And that night, at 4 a.m., when I got off the phone, he said, “Okay, you’re in. Let’s do this.” I bought a ticket from Bangkok back to San Francisco, where I’d never lived before. But that didn’t seem like a problem at the time. So I went to buy a plane ticket and see if this works for me.
And coming there to San Francisco going to tech meet-ups and being immersed in the culture, we started with six people. It ended up being about 20, 22 people just in a room together, kind of with a big plan of what we were going to study and how. But just really having that community around me of really smart, ambitious people with a common goal, working very hard.
Andrew: Was it formally a school that he was doing, or was it just him getting started, and thought he’d teach a few people at a time?
Doug: Yeah. So it was actually . . . it was a little unheard-of thing called Boot Camp, which was . . .
Andrew: This was Sharif Bishal.
Doug: Sharif Bishal, right.
Andrew: Now who’s a founder of Dev Boot Camp.
Doug: Mm-hmm. Yup. At that point, it was very uncertain what was going to happen. He had just rented . . . he had a short-term lease. And he gathered these people he found on Hacker News, and put them in a room together, and kind of had an idea of what, you know, would make us marketable to companies in the Bay Area. And away we went.
So I think he had envisioned it as sort of a nine-to-five job sort of program. But people were constantly there just after hours. I was there until 11:00 every night. I lived around the corner in a sort of cheap walk- up hotel with another guy, double-bunking in one of these places in a tenderloin, just staying up till 11:00 every night, seven days a week, just pushing, egging each other on.
Andrew: And it worked.
Doug: And it worked. And it worked.
Andrew: Do you feel any guilt that now you guys are essentially competitors?
Doug: Well, not . . . I don’t know if you saw the Wall Street Journal article today.
Andrew: What happened?
Doug: But they just got acquired by Kaplan, so . . .
Andrew: No, I didn’t. Wow. Okay.
Doug: I don’t feel bad for them at all. But, you know, we had our own ideas. I mean, so one of our co-founders, Marcus, who’s Tony’s brother — Tony and Marcus Phillips. Sean Drast is the other co-founder — he’d been teaching JavaScript. So this was a program based in Ruby. Marcus had been teaching in another language called JavaScript internally at Twitter. He was an early employee there.
And he had been running training programs for their employees, and seeing this huge demand. Like, even Twitter, even these name brands, were really struggling to get qualified developers. And the type of developers that . . .
You know, first of all, the traditional CS programs are very theoretical. They try to cover a lot of different things, and low-level things that aren’t immediately applicable to web development, and, in fact, have . . . you know, I talked to folks who did go through a CS degree. Maybe they took one or two courses that were immediately relevant to the type of roles that companies really are hugely in demand right now for building websites and web applications.
And also, they just weren’t turning out . . . even the CS graduates they were turning out, there just weren’t nearly enough of them. If you go to Code.org/Stats, I think there’s a graph that shows the folks who will be graduating from CS programs in traditional [??] . . .
Andrew: You’re saying that you don’t feel guilty because there’s just such a big need, and already some of the people who were co-founders of your business were teaching this internally.
Doug: Mm-hmm.
Andrew: Okay.
Doug: Yeah.
Andrew: So then you take the class. It worked. You actually know how to develop. What’s the next step that you take that leads you to building this business?
Doug: So I was working at a company called Daily Kos as a Ruby on Rails developer, continuing to learn on the job, realizing that I had so many holes in my knowledge still.
Andrew: Wait, how did you . . . this is after you learned to code, you went and you got that job?
Doug: Mm-hmm. Immediately after coming to San Francisco. I spent eight weeks working with Sharif and the crew there, and then took a job. Turned around and interviewed at a dozen companies, and got an offer, and said, “Okay, off we go.”
Andrew: Okay. I see the timeline now. Wow. So this really does work. That if you get into a program that’s fully immersive, and you actually commit to doing it, you are the tenderloin at 11:00. That’s commitment.
Doug: Yeah.
Andrew: Then, I see. Then you get the results. You ended up getting a job. Okay, great.
Doug: I think it’s really similar to the language-learning program. Like, Dartmouth University has a summer program where it’s immersive language. All day, every day, you live in a dorm, you eat in the cafeteria, take classes out on the sidewalk. You’re only allowed to speak Russian or Spanish or Chinese, or whatever language. No English allowed anywhere, at any time.
And people report making huge leaps and bounds. It’s a similar sort of thing going on here, where you’re just immersing yourself in this world, and really making multiples of progress of what you might do doing a couple hours after work every night.
Andrew: Okay. So you’re saying you were doing this job, and you ended up meeting your co-founders.
Doug: Mm-hmm. Yup. So I was going . . . I was working out in Berkeley, and I was actually taking the train . . . I think it was, like, an hour and a half commute to the Hait, which is on the far side of San Francisco. So [??] over in the East Bay. You’ve got to get on a train. You transfer to the blah blah blah blah.
Andrew: Mm-hmm.
Doug: So to stay up late and talk to them about their ideal vision of how we could teach people in the way that we imagined. And then, all of a sudden, everybody quit their job and said, “Let’s make this happen.” And so how could I say no to that?
Andrew: When you were thinking it through, how simple was the idea in your minds?
Doug: I mean, so . . . to me, and to us, I believe, there was a . . . you know, the critical components were this huge number of job opportunities in the Bay Area doing web development in companies that were just desperate for people with this skill set and offering outrageous salaries and 100K starting for entry level developers. And then there’s this group of people who’d been seen in the social network. There’s a (?) cool. Coding is in and having a lot of trouble putting together the resources on their own. I had actually at one point investigated going to get a second bachelor for computer science. They said, “No, it doesn’t work that way. Berkeley doesn’t take people for second bachelor’s degrees or wherever I was.
And so, you know, they’re just like you could get these people over here (?). You could get these people over here who desperately wanted to work in this industry and get them to the point where they could start contributing to these companies who desperately needed employees with this skill. The rest seemed pretty self-evident.
Andrew: I remember seeing how well Starter League and then, of course, got a partnership with 37signals now called Base Camp. And I thought this is an amazing business. Why isn’t anyone doing it here in San Francisco? Were they an influence on you?
Doug: I personally was aware that they existed. I believe I even contacted Bettmann (?) at one point and looked into going through their program. They were really taking people at a lower level starting sort of more basic and what I perceived they were getting you familiar, not to the level where you’d become a working developer.
And that to me and for a lot of people is really the key that makes spending $18,000 on a program like this worthwhile if you can turn around and get a starting salary for graduates of $105,000, 99% success rate, and eventually get hired. Then the investment is pretty substantial, especially over the next years of your career when you’re continuing a lot because as a developer you’re always learning new things, always encountering new problems, new twists or requirements and an old problem. So to go on and become more skilled.
Andrew: All right. I want to know where you guys got the guts to charge as much as you did and how you found that number. And how you got your first users and so on, how you build it up. But first I should tell people about Scott Edward Walker of Walker Corporate Law and as part of this sponsorship I’ll ask, “Do you four co-founders have a partnership or a co-founder agreement that allowed you to . . . What is your agreement like?
Doug: I’m not sure how much I can go into it.
Andrew: Okay. Do you have as much of a stake as the other three co- founders?
Doug: You know, I didn’t clear it with them. One of the things that we do as co-founders is we do a lot of collaboration and consensus around what we release.
Andrew: Okay.
Doug: And so I wouldn’t know.
Andrew: I see. Okay.
Doug: I wouldn’t do them justice by releasing that.
Andrew: Well then, I will say to anyone in the audience who needs to set this up right, even if it means in privacy, even if it means you don’t tell me which is perfectly fine, you need a lawyer who’s done it so many times, especially in the tech community who can set you up right with your co- founder and right for when it’s time to get funding and so on, when it’s time to raise money and sell your company and buy your company and partner up with Kaplan or sell to Kaplan or whatever else comes up.
And the lawyer I recommend who’s done this so many times that he can do it for you accurately and set you up well is Scott Edward Walker of Walker Corporate Law. And you know what? I’ve said for a long time that he is the guy that can set you up right, but frankly what he does actually well is help you with those bigger opportunities like raising money, like selling your company, like buying your company. Those big transactions need a lawyer with big experience, and in my experience Scott is the guy to talk to. Go to Scott Edward Walker. Here’s his website. It’s WalkerCorporateLaw.com, WalkerCorporateLaw.com.
All right. I see the idea. Actually I was going to ask you where you got your users first but the price.
Doug: Mm-hmm.
Andrew: Where did you guys come up with the price?
Doug: Well we did some back of the napkin and had to predict what the kind of high support experience that we wanted to provide, how much it would cost us, and also, of course, look around at our competitors and see what they were charging. And we came up with the conclusion that we should position ourselves as the premium player in the space.
Andrew: Charge more than others around here.
Doug: Charge the most, get the best students, and get them the best jobs, have that be a virtual cycle.
Andrew: So you were comparing to what was out there, but you were also doing back of the napkin math and you said, “All right. We need to rent space,” right?
Doug: Mm-hmm.
Andrew: Renting space, where was the school going to be?
Doug: So our first location was right above a 7/11 near the Embarcadero Bart Station so right downtown near the financial district.
Andrew: I’m right there. I get off that train every day Yes.
Doug: So we got, like, I think it was a six month lease on that, and then after three months, we outgrew our space. We had to . . .
Andrew: How many people fit in that space?
Doug: Fifteen students, barely.
Andrew: Fifteen students, barely. So my guess is you were probably paying maybe $1500 to $2500 a month on it.
Doug: I think it was . . . well, again, I don’t know about the . . . I’m feeling uncertain about releasing too much financial information.
Andrew: Okay.
Doug: It’s not . . .
Andrew: You know what? I would much rather you say no than then come back and say, “Andrew, I can’t believe I did that. Edit it out.” Because I’m not dealing with these edit requests.
Doug: Yeah.
Andrew: So I’d much rather you say, “Hey, Andrew, it’s a private company!” And it’s totally fine for me to ask you and keep pushing, and for you to say, “Hey, this is where my limit is, but I’m not going any further.”
All right, so you got that. For teachers, was it going to be anyone other than the four of you?
Doug: At first, we were paying folks who were working in the industry, really senior people, to come in and spend time after hours, or if they could negotiate a flexible schedule. And we were paying them a premium, yeah. Right away, we wanted the best folks that we could find to really . . .
Andrew: Full-time, or part-time?
Doug: These were part-time, at first. You know, just getting them interested in teaching there and getting them excited about what we were doing.
Andrew: Why didn’t you just have Marcus teach? Marcus is brilliant in his own right. He can teach.
Doug: Yeah. So, we did, and it was fantastic. He was also . . . had some commitments at Twitter that he needed to wrap up at the very beginning.
And also, one teacher, even for 15 students, is nowhere near enough. Because we do, you know, maybe an hour of lecture in the morning, maybe an hour in the afternoon, maybe another hour or even, you know, 15 or 20 minutes in the evening, whatever.
But the real . . . there’s so much learning that goes on while students are working. It’s all project-based work. And so they’re working on things, and they’re getting stuck at various points, and they’re having misunderstandings and questions. And so you really need a lot of people circulating around, ready to jump on questions, get people on stuff, keep them moving, so that they’re really making the most progress possible.
Andrew: Was it hard, by the way, to get Marcus to agree to come on board?
Doug: No, I think he was as excited about this as any of us, so . . .
Andrew: Okay. I mean, he was doing it internally at Twitter, right?
Doug: Yeah.
Andrew: So he had the experience, he had the credibility, he had the name, the brand name, of Twitter.
When you have multiple teachers teaching students, often you end up with different approaches, especially when you’re starting, and you don’t have a curriculum, and you don’t have experience where you can say, “No, we don’t teach that way. We only teach this way.”
Doug: Correct.
Andrew: How did you harmonize all these different approaches?
Doug: Yeah. So, I mean, well, Marcus was key here. I mean, he was our most senior instructor, and really the person who had the real vision for exactly what set of skills our students would need, and how they would be able to learn it most effectively.
So at first, it was . . . he was completely sort of directing that experience. And then, as we have grown, you know, he has been able to sort of set up [??] internally for everything. And he . . . there’s huge documents that are covering all aspects of how their classroom experience should be sort of . . .
Andrew: What do you mean? Give me an example of what’s in a [??] that helps you guys organize your system, your company?
Doug: I mean, everything. So we have a process called Show Runner that is a template. So we have classes that go . . . basically every seven weeks, we’re starting a new class. And they overlap half and half, so that at any given time, we have a group of folks in the second half of the program, a group of folks in the first half of the program. We have about 100, a little under 120 students in the building concurrently.
Now, you can imagine, you know, even if they were to all be following the same schedule, that would be a lot to organize. So we have documents that are, you know, Day 72, exactly what needs to happen, what lecture is first, where the slides are located, what students should be doing. I mean, we do a lot around collecting feedback after we do two-day sprints for each project. So, you know, collecting feedback, how that session should go, how to set expectations correctly. Everything is in there.
Andrew: What do you mean? How do you set expectations correctly?
Doug: So, you know, so . . . at the very beginning of the course, there was . . . we sit down with students and we say, “You may have read a lot of blog posts that may have been . . . ” Because we iterate so rapidly. We’re constantly getting feedback from our students and integrating it into the next cycle, and improving what we do and how we do it.
So, you know, we sit down at the very beginning, for example, and say, “Okay, you may have heard a lot of different things on blog posts about other students that you’ve read, or various articles that may be more or less accurate. And so let’s just talk about exactly what we are looking to provide you here, and what you can expect, and what is beyond the bounds of what we’re doing here.”
Andrew: What’s beyond the bounds, for example?
Doug: So, for example, we have a lot of very intelligent folks with all sorts of different backgrounds. Some of them have been working up to a decade. Actually someone who I just met with a couple of days ago, he’d been working for a decade doing different types of programming, doing database programming with Mac, some back end, and C and other sort of languages that we don’t touch. There may be things in the curriculum things he’d say, “Well I already know how database management systems work, so I want to skip ahead and I want to study GOOP, or some other language or some special field or topic, while the rest of the class is going along.
And to understand for them and us to come to an agreement early on how much support HackReactor can provide while they’re blazing their own path. And how maybe it’s unreasonable for us to find someone who’s an expert in that more esoteric field to meet with them and support them. So there’s varying things like that.
Andrew: I get that. Actually, correct me if I’m wrong, but it seems like you did get a head start on creating a curriculum, and managing it all because you’d partnered up with someone who’d been doing this for so long already that he could bring back his systems into this company.
Doug: I think that he definitely had a lot of experience doing this. I watched him build everything from scratch, in his own image. Of course, I can only speak for him so far. This was an opportunity to do it right, to remove all the layers from management, and restrictions on schedule of the students and all of that stuff. And he had a captive audience in one place with great expectations, ready to work really hard, and then build them the exact path that we thought that they would need to be learning the most, in the least amount of time to be really successful.
Andrew: All right. The concept makes sense. I see the need in the marketplace. I see everything except how you got your first few customers. What did you guys do to bring those guys over?
Doug: At first it was just beating the bush, or the grind, or whatever you want to call it. We already participated. We were all nerds in our own right, in various forms previous to this. So we knew the nerd watering holes, and the Reddit programming related boards, the Hacker News, Stack Overflow, various places where we knew our audience would be trying to work this stuff out on their own. We just went out and started to make ourselves available and helpful answering folks’ questions, trying to get them the resources they need to help them steer a course on their own.
And then we’d add, by the way, we’re also starting this project called HackReactor. Please do get in touch with us. We had an uninterested box. We’d have a, “Hey I’m interested, send me more information,” and the button would change a bit. And anybody who put their email address in, I would reach out to them personally, how can I help you? Just really that hype.
And then they’d start with a billion questions. “Who are you and what do you do? Here’s my situation.” And from there, just reeling them in.
Andrew: I tried to find those posts on Reddit to see what it was like when you guys were responding back in the early days. I couldn’t find them. What’s an example of what you did back then, on Reddit?
Doug: There might be a Learn Programming, sub Reddit. And there might be someone there who was saying, “I’m trying to build a web site for my mom’s silk business and I think I know HTML and CSS but my PHP isn’t working correctly.”
And we’d say, “Okay, that’s a great start. You might look at this template, which is mostly well done, and you can just edit a few things, and, by the way, we’re HackReactor and we’re teaching folks how to be web developers.
Andrew: What is your Reddit name? I can’t find you in there.
Doug: I’m . . . This is could be dangerous. I better not.
Andrew: Why? What’s the danger in it?
Doug: I don’t know what happened there. I don’t think it’s anything too scandalous.
Andrew: Oh, I see. You’re thinking, maybe you said something . . .
Doug: . . . a little bit off comment.
Andrew: But at the same time did you use your main account? You did.
Doug: Yeah.
Andrew: I see. You just don’t want out audience going in snooping.
Doug: It’s not that I don’t want that, I’m just worried about the outside chance that I made an off-color joke, or something like that. Not my style at all, but I think that you never know.
Andrew: Okay. That’s fine, by the way. I’m always surprised when people say something nasty in a comment on Mixergy. Are you really out of your mind? What’s the point? You get so little upside for saying something nasty, and potential downside because you know that the person is going to remember, or do a search for your name online.
Doug: Yeah:
Andrew: I get it if there’s an upside. I don’t if there’s a down side.
So how affective was it to get it to go on Reddit and try to get some users?
Doug: I’ll say it was effective enough. We started with a small trickle, and we . . . you know, we’re very high-touch. And basically, I would sort of introduce them, answer their questions, and say, “Why don’t . . . ” You know, “It sounds like you’re interested enough. Why don’t you book a session with Marcus or with Sean?”
And it would be billed as sort of an interview-ish type situation, but really, it would be an opportunity for us to show off our teaching skills, and really try to provide them a lot of value, and have them walk away going, “Wow, I learned more in the last hour, two hours that I just was on the Skype call with Marcus than I did in the last two months of trying to scout around on my own, and kind of getting lost and hitting roadblocks, etc.”
Andrew: I see that even in the beginning, at least the first version of this site, with this name, that I see on Internet Archive, it says, “We train developers from zero to employable over 12 weeks in San Francisco. Interested? Enter your email address.”
Doug: Mm-hmm. That’s it.
Andrew: And it says, “Talk to the founders.” That’s the big offer. That they get to talk to you. And in that call, it’s supposed to be you answering questions for them about the program, or is it also supposed to be screening them to see if they’re a good fit?
Doug: A little of both. And at first, we, of course, like any new business, we were really out there selling and trying to prove our value. As interest picked up and we had some success stories, and folks were able to see that we were legitimate and we were delivering on our promises, then it switched more and more to us seeing if they were a good fit in terms of what are your goals here, what are you trying to learn, what is the ideal outcome for you, what are you willing to invest in this process, you know, time- wise, and effort-wise, and emotionally, and financially.
And then also, how far have you come? So as we gained more and more momentum and more interest, we asked them to do more work upfront so that the time they spent in the classroom would be maximally productive, and we could really get them at the point where things start to become complex and the paths lead off into the woods, and it becomes harder to know even what you’re supposed to be studying, much less [??].
Andrew: Was it zero to employable, at the beginning, where you were taking people who really didn’t know any development?
Doug: There were varying levels of background. There were some folks who had some experience sort of in their own projects, or doing . . . you know, maybe . . . so for instance, they might have worked in real estate insurance company, and their boss said, “Hey, can you make the change on the website that says,” you know, “that there’s a new thing happening.” And they would kind of go in and hack around.
So most people . . . I mean, ideally, to be successful — well, definitely, to be successful — even in those early days, they really need . . . a key part of the equation is they really need to know that this is something that they really want to do, and that they’re really focused on.
So I think that someone just walking in off the street saying, “Oh, I saw ‘The Social Network.’ I want to be a developer,” is less realistic. And, “I’m willing to pay for and spend three months putting my life on hold.” Less realistic than someone who’s gotten a taste, and taken these first steps on their own, and kind of had everyone tell them, “Oh, you can teach yourself online,” and then realize how difficult that really is, and how many pitfalls and blind alleyways there are out there, and then really . . .
So to make this happen, I really do need to find a good structure environment with a lot of support and people who know what they’re doing.
Andrew: I’m on Cora right now, and I’m looking to see the name that you guys originally had changed.
Doug: Mm-hmm.
Andrew: And someone on Cora is asking, “Why did the name change?” I want to say it’s Catalyst, was the name.
Doug: Mm-hmm.
Andrew: And Kush Patel runs a competing school, right, here in San Francisco, responded with a link that’s now dead. And he’s referring people to Jonathan Ring’s response, which, I think, is wrong. Jonathan Ring’s response is, “They changed their name because Catalyst is a very popular name among companies and corporations for names of project initiatives and companies themselves. It was hurting them in search optimization and name recognition.”
But that is not why you guys changed your name, right?
Doug: That is correct. You are very well-researched. Yeah, so we got a sort of letter of dispute, so to speak, from another . . . I don’t think their name was fully “Catalyst.” I think it was something with the word “catalyst” in it. And they weren’t in a directly competitive sort of place, but they were, I think, a consultancy of some sort.
And we went to our lawyers and said, you know, we had done what we thought was a thorough trademark search, and etc., etc. And we went to our lawyers and said, “What’s up with this? I thought we were covered.”
And they said, “Well, you know, I think you guys would be okay, but there’s an off side chance, a small chance, that you would spend nine months or a year fighting back and forth, and racking up a lot of legal bills, and then they might still end up making you change your name. And so although at the time I think that was around two or so, two or three months in that it felt like I was going to be starting back at square one in terms of brand recognition, et cetera. Ultimately we made the strategic decision to go ahead and find something that was truly unique and that we’d know that we’d have problems with and just get rip the Band-Aid off cleanly.
Andrew: It doesn’t seem like it was a big issue. It might have hurt at the time, but from what I can see it doesn’t seem like it. Was it at the time?
Doug: It’s like any entrepreneur in the early stage of their company who’s quit their job and, you know, there’s a lot on the line to do this. It felt like the end of the world, like kind of like this is it. This is going to sink us, not that it did, but it did feel like a big deal at the time. And in retrospect I don’t know that it was even a road bump. Everybody kind of shrugged and said, “Okay, that’s it.” And we went on.
And again, it was that word of mouth that success stories of our graduates going out and blogging and leaving us reviews on Yelp and on Facebook and recording their experiences and talking about how successful the program was for them.
That was the real engine of our growth, not this word or that word attached to it.
Andrew: And you guys are so good at that, getting the word out. You really let the snowball build after the first group of people went through. Before you were just out there hunting one at a time through comments and message boards trying to bring people in.
Doug: Mm-hmm.
Andrew: Then you got good at asking people that were already in the program to help you evangelize or help you, at least, talk about what the program’s like by going on Yelp which . . . You guys do Yelp really well . . .
Doug: Mm-hmm.
Andrew: . . . by asking your students to blog about their experiences and their results, by quantifying the results of the students and talking about what their average pay is and how many get it. But the first class you must have been freaking out. You got a group of people who you sold individually, and now they’re expecting something. Did you have that freak out moment of what am I doing? I don’t know if I can give them what I promised.
Doug: I think that we felt very confident in the potential. I think that we worked extremely hard in the execution and I think to the degree that there’s no time. You have to remember that as soon as we booted up the first class and got the first class in the classroom we were already on the deadline to bring the next class in. I could do it seven weeks later.
So there really wasn’t time to think too hard about contingencies, what if this happens, what if that happens. It was, you know, battle stations all around and all hands on deck and just keep pumping. So, you know, it’s kind of a blur now, but I don’t remember having that worry at the time.
Andrew: Here’s what I read on a Cora comment. One of the best parts of the first group was that it felt like a cult. This comes from your co-founder.
Doug: Yeah.
Andrew: Which one? Sean [sp].
Doug: Yep.
Andrew: Sean said, “It felt like a cult. One of the cons of growing is that it no longer feels like a cult, that when HR was 17 students and a tiny box like room with the founders. A room that was so small we kept the bikes in the bathroom and the trash cans were on the roof outside the bathroom window. It was like a fiercely protected family. We still have a ton of that where someone from HR crashed on my couch during an urgent job search, but it’s going down. Was that intentional, that cult like atmosphere?
Doug: I think intentional and inevitable. I mean, we really were. So we were asking folks to commit to 9 a.m. to 8 p.m. structured in classroom time six days a week and the additional time we did our best to make a culture of anything we had left to give. You know, give it too because this is all in at this point.
Andrew: Anything that the student who has to give they keep doing it.
Doug: Yeah.
Andrew: We squeeze you for your energy and we squeeze you further until every bit of energy that you have is going into learning.
Doug: Yeah. You know how they say on cults they cut you off from the outside world and you shouldn’t talk to your family because they’re just going to hold you back and (?). And whatever it is you’re supposed to be there for us. It was the same way. The more time students spent engaged on task being productive moving forward, the further they would go and the better position they would be in coming out the other side on graduation and walking into companies across the city and across the country and across the world saying, “Here I am, pay me $100,000. So . . .
Andrew: Bill Shelton, was he one of the first students, do you know?
Doug: Yep. He was in one of our early classes, not the first one though.
Andrew: [??] Bill responding here on Cora. I’m wondering how much encouragement do you give your cult [??] out there and to respond on Cora and to participate and talk about their experience.
Doug: So at first that was a big deal for us. We really thought that we could shout into the void of the internet for as long as, you know, long and hard, but the real attraction would come and the [??] would really start moving. When we had really satisfied customers who said, “I came in, I was, you know, I was lost and alone. I came with these people and they treated me well and they delivered on everything they promised and more. Then I had a fantastic outcome coming out the other side, and that’s hard to argue with.
Andrew: But how formal is that? Do you encourage them? I know you guys have an alumni lounge as part of the things you guys do there? What is the process?
Doug: So, at first we were asking, we were saying, “Hey, share your experience, people want to know what this is like, the good and the bad. Go out there, and let the world know.” We encourage them to blog. We still encourage them to blog for other reasons now because we do think that [??] sort of reputation and also to help formalize those thoughts on various topics.
But I think we have a critical mass of information out there, generated by our students who are posting on Yelp and those other places, saying “it was everything that was promised to me”. I think the only thing that we ever offered in terms of incentive was, we said at the end of the course when they graduated, “if you write a review, good or bad, anywhere on the internet, we’ll give you one of these sweatshirts here”. That was it. Some of them did and some of them didn’t.
Andrew: So, here’s what I’m seeing. First of all, this opportunity to teach development, teach code is huge right now. We saw it done in Chicago in a past interview. We see it being done here in San Francisco by you guys really well. It’s an opportunity, I think that is way bigger than teaching anything that even [??] teaches. It’s just, it’s needed. There are companies starving for developers and there are people who are eager for work, but just don’t know how to go about learning to code. And as you said, getting a bachelor’s degree after you got a bachelor’s degree, schools aren’t allowing it. And frankly, from what I can see, on [??] comment people will laugh at you for even going after a computer science degree. It’s not the way it’s done apparently. Well, it’s not the best way to do it. So, the opportunity is there. You guys saw it, and you kept it light by starting out with office space that I’m going to estimate cost way less than 5,000 bucks a month. Great! I mean, it must have been really small now that I see that you guys couldn’t even fit the trash can in the freaking bathroom.
Doug: Right?
Andrew: So, you kept it light. You brought in a developer who understood how to teach by going to a friend and brother and asking him to partner up with you. So, you had the curriculum already understood with the experience of a person who did it. You went and promoted on sites like Reddit. You went and promoted on Hacker News and other sites like that. That’s how you brought people in. And then once they were in, you taught them, and then you encouraged them to go and spread the word to evangelize like a good cult should.
Doug: As long as by “you”, you mean “we”.
Andrew: Yes.
Doug: Because it really was a team effort. Because [??]
Andrew: I say “you’s”, as in “you’s people”.
Doug: Yeah, “you’s guys”. Yep.
Andrew: I do kind of feel like I missed something, but frankly, Doug, it feels like it’s such an early conversation with your company, that you can’t admit, you can’t be complete. There must be some things that I’m missing here about how you originally got your customers. …
Doug: I am, you know, not. I don’t think that there is, honestly. I mean, we really were…
Andrew: It is just that.
Doug: [??] beating the bush. We were going out there and we were connecting with as many people as we could find. And I think you would be astounded by the number of people who are out there trying to do this. I mean cause, you know, we [??]. And there’s a lot of resources on the web. There are people who know how to use the web, who do web development. And so they create tons and tons of resources that people can use. And it ends up, you know, the structure and the [??] aren’t there and the support isn’t there.
And there are a bunch of steps that you’re supposed to take, and step seven of twelve, you know you get, they’re there 702, try again. Who knows what that even means. I just, there was such a pent up demand there for someone who could deliver on saying, “You come and bring your enthusiasm. Bring your work ethic. And bring your pillow cause you’ll be sleeping on your desk from time to time.” And just delivering on that promise.
Andrew: I was hunting down to see if I could figure out where you guys are getting your traffic. It looks like you told April in the pre-interview that you did some ad buys, but are you still doing ad buys today?
Doug: Here and there. We have been, as we grow, so you know, it used to be four of us in the room, obviously. So now we have a marketing team. I believe 3 full time and 1 part time now. And there out there trying a lot of things, very metrics driven.
We figure we’re being driven in education in that we take a lot of feedback from our students and from the countries that hire our graduates, and out teachers, and everyone else. And we try to incorporate that in making our business better and making the experience more productive and rewarding for everybody in the same way that we and our marketing team have been approaching it. That is, trying everything, gathering the data, seeing what works, pump that up. This doesn’t work, let’s cut it.
Andrew: I see that. I see, at least, since March of 2014 you guys were buying ads in Google display network. Max gave me an account on what runs where so I can see that some of the ads, it looks like all the ads that I have access to say that you guys are promoting remote data.
Here’s what an ad says: HackReactor, we’ve gone global. Take the top quality program from home.
Here’ another one: Be an engineer, hire an engineer. Learn more. HackReactor, remote beta. We’ve gone global.
So now what you guys are trying to do is bring people in who aren’t going to be physically in San Francisco, and work remote. What’s the process for making sure that people who are remote get the same kind of immersive experience.
Doug: We had always been very strong on community and that high touch support being a huge part of what makes our students successful. So going online and doing a remote only program, we were a bit skeptical.
But throughout our experience there have always been people who can’t make it to San Francisco. They had family. Where they’re living, they can’t leave. San Francisco’s too expensive, and they don’t even want to work here after here afterwards. And so they decide not to live here.
And visa issues are a huge one. We’ve got people from all over the world who have been successful and unsuccessful being able to come here and study with us. So at one point we had a student who was away from France and he couldn’t get his visa together.
And he said couldn’t get his visa together. And he said, could you just hook me up to a web cam and let me participate that way. And we said, “Okay, let’s see if this works.”
One thing we realized is that it’s very hard to create community and have folks supporting each other and have us giving a lot of support to them, when we’re not there in the classroom, trying to have a lot of tools available, trying to experiment with what was going to give them a high quality experience without having them here.
Andrew: When you do it remotely, it feels like, even if he had a web came, it would just be another thing on his screen. It would just be another thing on his screen. There’s nothing to keep him from going to Hacker News or Reddit. There’s nothing to keep him producing like others or in the community like everyone else.
Doug: I think a big problem in the past was just throwing a bunch of content at people and saying, “Come back when you’re done and we’ll give you the next batch,” or saying, “We’ll set up an hour long session with one of our mentors after you go though this content, and we’ll talk about and understand.
I think what is going to make this successful is having a lot of structure having everybody watching the videos at the same time, involved in chat rooms where they’re sharing information. And then, pair programming, which is a big part of what we do in the classroom, which luckily, we’re able to replicate using tools over the internet, people sitting down and sharing a code window.
Andrew: You mean pair programming for the exercises within the class?
Doug: Yep, Yep. And having them keep each other on task.
Andrew: What are you guys going to charge for remote?
Doug: To be determined.
Andrew: To be determined? Will it be over ten thousand?
Doug: I don’t know. It might be. If we’re able to deliver on that same promise of that high quality education and getting people moving into professional roles when they graduate. Then I think it’s worth that. Yes.
Andrew: But it started with one student, this guy you talked about who watched remotely. This was your beta tester.
And we realized it was very hard to integrate that remote student into the classroom. And we realized that it was very hard to integrate that remote student into the classroom. And we realized we needed those remote students to have a cohesive social group, and self-supporting network of their own. And that’s why we grew it to five now. And we’re going to try with somewhere around 20 come mid-July.
Andrew: What’s the alumni lounge?
[laughs] We want to do more than just teach people to program and have them disappear. You’re spending eighty hours a week, a hundred hours a week in a room with them. It’s an emotional process. There’s a lot of bonding that goes on. And to seem them disappear, and go off and take jobs other places and have them lose their identity as a HackReactor. We actually have two environments. One is a place with a pool table. Biggest, most expensive television in the . . .
Andrew: Oh, this is a physical place.
Doug: Yeah, yeah. So now you have three full floors, each about fifty-five hundred square feet, in a park in a building right behind Palace Street Park in downtown San Francisco. And we just sectioned off, behind glass, a piece of that. And we just put in everything you’d want, rather in a mahogany style, place for people to come and be a part of the community, chat with each other and come up with business ideas. We also have a separate lounge which is a work space. So we have a working space for any of our alumni to come in and hack on their work in.
Andrew: I prefer non-alumni. Is there a place for them to come in to check you guys out?
Doug: So we do hold a meet-up group. If you google meet up HackReactor, I’m sure you’ll find that we have occasional events where we invite them in to be part of a guest lecture, or to lean some fundamentals of programming, et cetera. But we’re trying to keep that tight container around the classroom, so it’s few and far between, more so than you might expect.
Andrew: You mean the meet-ups are few and far between.
Doug: Yeah, maybe, maybe, on average, one a week, if that. Because this needs to be a super tight container, productive space for our students to really fly.
Andrew: What an amazing success story in such a short period of time. To have built something in such a short period of time and to see that Kaplan is buying into this space is even more validation that there’s value here, that there’s growth here. Wow.
So, do you own more than 10 percent of the business?
Doug: I’m sorry, Andrew, I’m not going to talk about it.
Andrew: You can’t do that. You’re going to come over to my office tomorrow for scotch. Can I ask you these questions after the 3rd cup, or is that going to be a breach of . . .
Doug: It will probably only take one.
Andrew: It will probably only take one. Okay. It might take me only one. Frankly, ever since my son was born, I haven’t really been really been drinking scotch so I wonder how, when we’ve had the first glass tomorrow, how it’s going to hit me. I might pass out after the first little sip.
Doug: Alright. Well we can do a mix or something.
Andrew: No, we can’t mix it. It’s got to be pure scotch.
Doug: You know more about scotch than I do, so I’ll follow your lead there.
Andrew: All right, I think the best way to tell people to connect with you is to check out HackReactor.com. But you already know that sometimes I ask my guests for an email address. And you said, ‘You know what, Andrew, if you ask it, I will give it.’ So what is your email address for anyone that wants to follow up with you?
Doug: Doug@HackReactor.com.
Happy to hear from you and answer any questions I can. I do a lot of email.
Andrew: What kind of questions would you want people to ask you? I’d be worried that they’re going to start hitting you up with questions about joining the program, or how do I code?
Doug: Well, those type of questions, I’ll probably thank them for reaching out and shunt them to our admissions teams or another dedicated group that we have for interfacing to potential students.
One thing that I’m very interested in is whether entrepreneurs should learn to code. I think there’s been a back and forth on that, whether they should just focus on the business stuff and things like that, or get their hands dirty with the programming. And I know a lot of people have done that.
And you I’d generally just like to hear, you have a fantastic audience, I’d love to hear what successes and frustrations that they’ve had.
Andrew: I think some people from the audience, unless we address it right now, are going to email you and say, “Can I franchise?” I think that you guys aren’t interested in franchising, though. Right? You don’t want someone to say, I’m going to do this in New York and pay you a royalty for the class, do you?
Doug: Probably, no. We have always kept it in-house and kept a really tight watch on quality and outcomes. If you go hackreactor.com you’ll see about the full five star review, ninety-nine percent of graduates getting jobs, $105,000 starting salary. Anything that would endanger those statistics, we’re probably going to shy away from pretty heavily.
Andrew: It’s great to hear how well you guys are doing. I love this freaking idea. If I wasn’t doing Mixergy, I’d want to do this idea. Frankly, when I first got to San Francisco, I met a guy who was a developer who was teaching. And I said, “You’re teaching to a small scale. What if we partner up.” I didn’t say it to him. I thought, what if I partner up with guy and I get the Mixergy community to be aware of this. It’s such a great opportunity to learn to code, here in San Francisco.
And I said, no, I’m going to stick to my knitting. There’s a mission and a passion that I have to really stay focused on. And all I have to do is be in awe from the outside, of the kind of success that you guys can pull off, both for yourself and for your students.
Doug: Andrew, you’re providing so much value for the entrepreneur community, I would hate to see you go.
Andrew: You know what, I believe that too. I keep focusing on how much more I want to do. But I think you’re right. I’m doing a lot. I’m on my own mission. And it makes a lot of sense. But when I see this, it’s freaking brilliant. It’s great.
Doug: Well, we’re having a lot of fun.
Andrew: Congratulations. Thank you for doing this interview. Thank you all for being a part of it. If you’ve got anything of value, frankly, before we even go and debate Doug about whether entrepreneurs should or should not do it, I’m telling you from experience, . . . How many interviews have I done? Over a thousand, right?
Doug: One thousand twenty-five.
Andrew: Right. I look out for the best interest for my audience, all the time. I’m telling you, the best, forget A/B testing, this is A/B/Z testing. The best way to connect with someone from an interview here, and anywhere here, and anywhere online is not to say, “Hey, I’m going to hit you up with a grocery list of questions,” which people do, and they bcc me on, and they think they’re so clever because their questions are better than anyone else’s. No, the best A/B tested, A, B, C, D, straight to Z, way to connect with a guest is to say, “Thank you for doing this interview. I got this out of it.” Then just take a step back.
Then if you want to connect with him later on, hit ‘Reply’ on that thank you message that you’re going to have with the person and say, hey, by the way I’m going to be in San Francisco. I heard I could come to your office to, whatever, to a meet up, for a meet up, if there’s a meet up. “Hey, by the way . . .” whatever it is. But that initial contract, if it’s a thank you, it goes a long way toward building a conversation and a relationship later on.
My advice, apparently Doug wants to debate. Go debate him if you want. But I’m telling you, the better way to do it is to say, “Thank you, Doug.” And I’m going to say it right now.
Thank you all for being a part of it. And Doug. Thank you for coming here and talking about how you built your business. Congratulations.
Doug: Thank you Andrew. It’s been my great pleasure.
Andrew: You bet. Thank you all.
