Creating the Next Generation of US Employees. My Investment in Treehouse

Posted on Oct 19, 2011 | 57 comments


[updates to post below] I’ve just completed an investment in Ryan Carson’s new company, TreeHouse. It meets everyone of my criteria so I thought I’d elaborate.

1. I’m investing heavily in Internet video.
Why? Americans watch 5.3 hours of television / day – many age groups are even more. We read less than an hour / day. I know readers of this post aren’t in that demo but that’s what the data says.

So I invested in Maker Studios, which is now the 3rd largest producer of Internet video on the web. Full stop.  If you want a sense of their content, an example is their “Epic Rap Battles of History” channel including Stephen Hawkins vs. Einstein, Napoleon Bonaparte vs. Napoleon Dynamite and my favorite Mr. T vs. Mr. Rogers [this last one NSFW]. I will talk much more about Internet TV in a future post.

TreeHouse is also a video company. But its objective is to teach the world web design or to program computers.

2. I’m investing in businesses that reinvent education.
And while Maker Studios is pure entertainment, TreeHouse is pure education. The goal for today’s business is to educate broad groups of people in the existing workforce to improve their skills, broaden their knowledge and get ahead. On this business alone Ryan became profitable on a pretty substantive run rate with no outside investment.

But Ryan’s vision is much

broader, which is what perked up my ears.

Ryan wants to reinvent education. He isn’t setting out to do it over night but with the ambition to make a difference in the world Ryan falls into the rare category of entrepreneur looking to tackle something truly monumental.

I’ve talked before about problems I see with the US education system in both my post about Peter Thiel’s 20-under-20 initiative and also my review of Waiting for Superman. I’ve also talked about my favorite social entrepreneur, Charles Best, making a difference with Donor’s Choose – a program to increase donations to US public schools specifically allocated to supplies or projects you want to fund. No less than Oprah Winfrey endorsed it and Stephen Colbert & Fred Wilson are both on the board.

One of the biggest problems I see with our university system is that we’re graduating too many people from 4-year universities who have the wrong skills and come out owning large sums of money. I call them “indentured servants” because they come out of college already having an anchor around their necks.

[Update: I wrote this post last night. I'm at a hotel in San Fran. In the morning I see at my door the US Today with the headlines story "Student loan debt surpasses $1 trillion. 1 trillion DOLLARS!! In fact, the amount of debt taken out last year was $100 billion (the largest even, even adjusted for inflation) and up 2x from just 10 years ago.

Key quote from the article,

"The credit risk falls on young people who will start adult life deeper in debt, a burden that could place a drag on the economy in the future"

Exactly. People who done have money and who don't have available credit don't spend money. Another quote,

"Students who borrow too much end up delaying life-cycle events such as buying a car, buying a home, getting married and having children." says Mark Kantrowitz of FinAid.org

Also, unsurprisingly, default rates from 2007-2009 went up from 6.7-8.8% with tax payers often taking on the major credit risks. The default rate in Arizona is at 16%]

I’m a huge proponent of a university education (in fact, I’m on the alumni board for my alma mater, UCSD), but I don’t think it’s for everybody, I don’t think every degree is practical and I don’t think we’re graduating enough software developers and designers.

We have nearly 10% unemployment in this country and nearly 18% structural unemployment. Yet nearly every major tech company or major company hiring tech people have open recs.

Programming should be the middle class job of the next 20 years. No, not all of these people will get jobs at hot starts like Facebook, Google or Twitter. But getting well paying job in technology and importantly distributed all across this country is important to the future competition of the US in the world and important to helping solve our economic problems.

Ryan’s long-term goal is to help large populations of people train themselves at young ages with world-class online teachers. Some of these people will excel and decide to go straight into the workforce at 18. They will save tens of thousands of dollars in fees and start earning at a younger age. Again, not for everybody. But it maps to the trade school paradigm that exists in Germany (which isn’t perfect either).

3. Ryan has a great track record
When I lived in the UK and was thinking about starting my second company we were weighing out which features should be in our new company. One feature we were debating was the ability to send really large files. One of the most graceful ones on the market was called DropSend and was built by … Ryan Carson. So I’ve tracked him from the sidelines for 7 years. He then of course launched the FOWA (future of web apps) conference, which was very successful. He sold both companies.

4. Ryan establishes a very strong sense of culture and purposes at the businesses he creates. 
I think anybody would be lucky to become part of Ryan’s new team. He has great vision, leadership and execution. He believes in working hard but has one of the best work/life priorities of any entrepreneur I’ve met. Certainly better than I ever had. And he makes it work. You’ll have to ask him about his work policies. They’re very innovative.

I’m just getting to know Ryan better but I’d say he maps pretty closely to my personal checklist.

5. He’s surrounded himself with great people
In addition to having a great team he’s attracted world-class investors including Chamath Palihapitiya (The Social+Capital Partnership), Greylock & Kevin Rose.

I plan to use Treehouse myself. Right now they’re in transition from their previous video product (Think Vitamin) to their new offering. But you can get on the pre-release list here. Full product out shortly.

And I’ve offered to actually teach some classes in recruiting for tech professionals. We’ll see if Ryan takes me up on that. It’s one of our major objectives at TreeHouse. Video training without an increased job on the other end for those looking for a career change is a lost opportunity.

  • http://www.cindyalvarez.com cindyalvarez

    I was a psychology major, and that background has been tremendously useful in my work in software product management and interaction design.  

    But the REASON I’ve been able to infuse that perspective and compassion into the parts of the tech world that I touch, is that I had the opportunity to get a pragmatic education in building websites, maintaining systems, and writing bad code.   I was lucky — I was in college at the right place/right time — so it was easy to pick this stuff up.  

    But for most people, I think we need a concerted effort in making education answer the question “and what are you going to DO with it?”  Be a poet, be a psych major, by all means, but find a way to share that thinking BEYOND other poets and psych majors.  Otherwise America and humanity remain poorer.

  • http://www.facebook.com/people/Matt-Sharper/100000807088310 Matt Sharper

    why can’t you wait to dump lynda?

  • http://www.facebook.com/people/Matt-Sharper/100000807088310 Matt Sharper

    so video training isnt for you… whats your point?

  • http://www.facebook.com/people/Matt-Sharper/100000807088310 Matt Sharper

    “They haven’t got what I want.”

    you never said what you want? lol

  • http://www.facebook.com/people/Matt-Sharper/100000807088310 Matt Sharper

    “that’s great, but educators need to be at the center of education revolutions”

    why?

  • http://www.john-dugan.com John Dugan

    @facebook-100000807088310:disqus Lynda is a passive/lean-back approach to learning. While I love how broad their offering is, there is nothing too revolutionary about their form of teaching. It is very similar a college lecture where the instructor gives you notes/project files and talks to you. The interactivity of Treehouse is what I am excited for. Furthermore, my interests lie in the area of front-end development. The courses relating to this on Linda are mediocre. Although I have learned from them, in the area of front-end development I rely more on sources like CSS-Tricks, Nettuts, appendTo and others. Judging from the Think Vitamin blog and podcast, as well as Ryan himself, I am confident that Treehouse will do a fantastic job on the subjects that I am interested in.

  • http://teamtreehouse.com Ryan Carson

    Thanks John! :)