One of the many echo chambers my Twitter account seems to be a part of is the Lambda School echo chamber. I see multiple retweets every week from people I follow about the impact the company is having on its students and, by extension, their families and in some cases entire communities.
Lambda School is a 30 week, immersive program that gives students the tools and training needed to launch a new career from the comfort of their own home. Today, they focus on areas like software development, data science, and UX design and provide their student with:
- Live classes from anywhere
- World-class instructional staff
- No cost until the student has completed the program and is employed
Pretty straightforward and at first glance, it is easy to bucket the company as another coding bootcamp with an income share agreement attached.
But the company’s community, scope of content, level of instruction, and reputation among employers, coupled with their unique business model that allows them to scale their impact to traditionally underserved groups in an aligned fashion have combined to create a virtuous cycle that has helped them attract strong backers and drive real outcomes that (based on my limited knowledge of competitive offerings) seem quite impressive.
While it is clear that more professions could benefit from having a Lambda School-esque company (or Lambda School itself) helping to build up the next generation of talent, I started thinking about other non-job skill pursuits in life that have a material impact on long term financial outcomes and could benefit from “Lambda School for X”.
Essentially, the goal would be to target areas can you help a large number of people build new skills and behaviors that are economically valuable by bundling community, content, and personalized instruction over an extended period of time and layer on a business model that allows you to impact people across the economic spectrum by generating revenue in a way that is aligned with the student’s success.
The first place my mind went is an area I spend a lot of time thinking about — Personal Wellness.
There are a number of studies that indicate the impact more exercise, better sleep, proper nutrition, and better mental health have on an individual’s long term earning potential and my anecdotal experience suggests that I am contributing most towards my own long term economic impact when I am healthiest and most active. I’d assume this is the case for most people.
From one such report from IZA World of Labor:
From the findings presented, the evidence for positive labor market effects of sports and exercise is very strong, especially for earnings. Earnings effects range from about 4% to 17%. There is also strong evidence that the positive effects of sports and exercise on human capital begin with children and adolescents, as measured by their cognitive and non-cognitive skills. These additional skills reap returns later in life.
This is just for fitness and physical activity. If you were able to sample individuals “performing” well through proactive behavioral alterations across a broader set of pursuits that fall under personal wellness (relationships, nutrition, mental health, etc.) I’d imagine the impact on long-term earnings would be even greater. Certainly not $50k income increase after 30 weeks like with Lambda School but potentially impactful nonetheless.
There are a ton of challenges to making this a reality…one of which is the reason I put “performing” inside quotations in the paragraph above. It is hard enough to determine what success looks like for an individual’s wellness journey and tying that to potential success in a work environment is even more challenging.
The bearing of one’s ability to run a fast 5k on their ability to make a sale or write marketing copy is nowhere near as straight as the line a potential employer can draw between a person’s ability to create an iOS app during a program like Lambda School and the likelihood that they will be able to do the same at a company.
This is also an issue as it relates to the perception individual equity/revenue share agreements have amongst the general population. It is easier to get over that perception if you can clearly point to a large salary increase 6 months down the line through the acquisition of a skill that is well understood (both by the public and by employers) to be highly valuable, like software development.
On top of all of this, direct health data would be a total no-go (as it should be) for any decisions made on one’s employment by potential or current employers.
Significant challenges, certainly. But not total roadblocks, especially when considering the massive impact gap that exists for wellness-driven consumers and data suggesting that closing that impact gap could have six or seven figure impact on long-term earnings for a huge segment of the population.
As with any “this for that” company idea, copying another model wholesale is likely less impactful than starting from the ground truth principles that have enabled that model’s success and reasoning to a place that will allow you to be most impactful to your target user given the constraints you face.
In the case of Lambda School, the core edge they now possess is the Brand they have built as a result of the virtuous cycle I mentioned above. That virtuous cycle starts with outstanding instructors creating compelling content and matches that with motivated individuals that can use that content and the community formed around it to level up meaningfully. This attracts employers, which in turn attracts more compelling candidates and keeps the flywheel spinning.
The idea of brand association as a major influencing factor of long term success is well understood — Harvard and Stanford in education, Google and YCombinator in technology, GE at the height of the Jack Welch era.
If “brand is the distribution of likely outcomes that you can expect from a person”, being associated with Lambda School suggests that the odds of individual’s ability to contribute positively to a technology company is higher than if they had gone to a competing institution.
This then suggests that creating the optimal distribution of outcomes for the “Lambda School for Personal Wellness” would entail the following elements:
- A data driven, empirical story around the influence of improved wellness on earnings (to attract students) and on workplace impact (to attract employers)
- Instructor-driven content and digital tools focused on education and community that combine an intensive and personalized program (similar to Lambda School’s 30 week courses) with an ongoing, possibly life-long, program that ensures “brand maintenance”
- A business model that aligns you with not only consumers who can already afford gym memberships, digital subscriptions, and Whole Foods trips but with the mass market of consumers that have never been given the tools and frameworks to meaningfully incorporate wellness into their lives.
One interesting concept that could be a step in the right direction is the idea of a personal board of directors.
Applying the personal board of directors construct to the proposed model I’ve discussed, each student could find themselves interacting in a highly personalized program with multiple coaches empowered with more effective tools to engage the students at scale and over time across multiple disciplines (again, areas like fitness, mental health, nutrition, learning frameworks, relationships, etc.).
As relationships build, coaches and other community members (who would have hopefully leveraged the program to find personal and professional success) would join an individual’s personal board of directors and gain a formal share of future earnings with some kind of vesting or performance-based caveats baked in.
This community of empowered, intentional, and long-term oriented individuals that go on to make demonstrable impacts on the places they work and the communities they serve would become the core asset upon which the flywheel would spin, attracting all of the other pieces at an accelerating rate.
I’ll admit that it seems far less of a slam dunk business model and sellable ROI to students, instructors, and employers than what Lambda School has done…and this whole post is the result of a couple days of brainstorming 🙂
The reality, however, is that we face a massive impact gap between the types of tools, information, and technologies that exist and the number of people able to harness them to to improve their health and wellness in ways that drive long term improvement in the lives of them and those around them.
While closing that impact gap may come with uncomfortable criticisms rooted in perception of things like income share agreements (which are often rightly criticized) and a leap of faith to move away from well-understood business models that have been so effective for so many companies in the wellness market, the amount of value waiting to be unlocked is massive.
Get in Touch!
As an investor focused on companies that elevate human well-being performance, experience, and opportunity, I’d love to work with more companies closing the health and wellness impact gap…whether it looks like the model described above or not. If you’re building a company in the space, you can get in touch with me via email (brett [at] technexus.com) or on Twitter.