Austen Allred is on a mission to help people level up their skills and incomes, and his startup is helping thousands of them find new roles in tech fields, online.
On the Dealmakers Show, Allred talked about reading a life-changing blog post, embracing uncertainty, empowering remote work and the next generation of tech workers, edtech, and outcome-based pricing and business models. Plus, raising $100M, and balancing a cash flow positive business versus a growth-only mindset.
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The Life-Changing Blog Post
Austen Allred was born in Utah. Growing up Mormon meant a very family-centric household, where he was taught hard work, to provide for himself, and to embrace starting businesses and side hustles. Which has resulted in most of his family becoming founders of some kind or another.
As a guy in the Mormon church, when you turn 19, you offer to serve on a mission. You are not told where you will be sent in the world until you receive your letter to head off. Allred ended up being destined for a small town in Ukraine that he had never heard of.
After a couple of months of fast-paced missionary training, he headed off into a completely new environment.
It was a small mining town that had seen its industry collapse, and people weren’t getting paid. It made him very grateful for the middle-class upbringing he had. Then he had to learn the language, spend all day out talking to people and getting to know them, and had to get comfortable with being different.
Returning to the US to go back to school, Austen says that he found he had learned to think more independently, and was much more comfortable in taking risks and living in uncertainty.
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Starting The EdTech Business
In fact, he ended up going from college dropout to starting a huge edtech business of his own.
He knew that he wanted to start a business, but hadn’t yet learned to code. It was then he came across his inspiration through a blog post online. He read the story of a guy who had moved out to Silicon Valley and lived out of his Honda Civic while trying to break into the scene there.
Allred says that he just happened to have the same kind of car. He realized that you just need to get in the middle of things and figure it out as you go. So, not having enough money for even one month of rent in Palo Alto, he drove out to California. He slept in his car, showered at the YMCA, and after receiving some help from strangers along the way, he ended up with a job as a growth engineer at a Silicon Valley startup.
Helping Others Find A Better Path
Austen quickly found he was making six figures out in San Francisco. In contrast, when he would visit home, the average income there was just $35,000 a year.
The default path for people was either going to work for $15 an hour or, if you could manage and stomach it, taking on $100,000 in student loans to go to college.
He wanted others to experience the change he had. Realizing that if people just learned to code, they could land great tech jobs from home, and not necessarily have to go to the extremes he did on his journey.
However, at the time, online education really wasn’t a thing, and the few options there were, were still very expensive.
Austen ended up writing a book about growth engineering, which people started buying up. Then he and a friend decided to create a course to teach people a programming language. This side hustle money ended up pulling in more than half their annual salaries from their jobs.
Still, they saw a gap between people getting all of this information, and actually implementing it in their own lives. So, they thought, what if they could walk people through their journey, by teaching them skills hands-on, and helping them at least get part-time jobs in tech? It soon brought in enough income that he could quit his day job and created Bloomtech.
Outcome-Based Pricing & Business Models
While they were making some good money, they realized that many more people loved it, but just didn’t have the money to pay for what they were offering. They tried out several models and talked to Wall Street bankers about financing options.
They tested having people pay some money upfront, and more after. They tried payment options and income share agreements.
Ultimately, they decided they would provide their training free upfront, and students wouldn’t have to pay unless they landed a job paying at least $50,000 a year. Results and outcome, or value-based pricing and business model, which has proven incredibly attractive and profitable.
Last year Bloomtech graduated 1,000 students who landed tech roles. They have placed workers with just about every tech company, and have partnerships with companies like Amazon to place their students. Their graduates are seeing their incomes rise by tens of thousands of dollars.
So far, they have already raised $100M in capital for the journey from going through Y Combinator through a Series C round of funding.
Storytelling is everything which is something that Austen Allred was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here), where the most critical slides are highlighted.
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They’ve also taken a different approach to building a business than the average VC-backed Silicon Valley tech startup. Instead of just blindly focusing on growth at all costs, and being happy losing millions in the process, they’ve been working to balance cash flow and demand better returns on their investments in growth.
Listen in to the full podcast episode to find out more, including:
- Balancing a growing and cash flow-positive business
- How Bloomtech works
- Austen Allred’s top advice when starting a business of your own