The rise and rise of coding schools – a tale of #entrepreneur opportunity

Over the last 5 years, nearly 100 coding schools – both offline and online have sprung up in various locations around the world. Most of the students that attend coding schools are from one of 3 backgrounds:

1. They have been involved with technology – as a marketing manager or a designer or a customer service rep, and see the opportunities in their company and others to get a higher paying job by doing development

2. They are from a completely different career – pizza delivery, real estate, stay-at-home-mom, and want to get into coding and technology.

3. School students with majors outside computer science who realize that the jobs in their field of study are no longer paying well and are moving to studying coding.

A typical coding school in the US charges about $8000 (average) and promises 16-20 weeks of intense bootcamp style practice and work to get you placed at a job in a company that needs “junior developers”. Starting salaries are usually $50K to about $75K.

Who are the ideal companies that hire these hacker school graduates?

It used to be startups were the prime target, but increasingly folks like Facebook and larger companies as well who are looking for junior developers are making up a good part of the hiring – 30% vs. smaller startups – 50% and rest go to non technology companies requiring developers.

Right now we are in one of the biggest booms of technology startups so coding schools are able to guarantee 80% placements or above. When the tide turns (which I cannot predict) then I suspect that the winner-take-all approach returns, which means coding schools will take in fewer candidates since the demand for developers will become lesser.

The coding schools themselves are a great case study in entrepreneurs solving entrepreneurs problems. Which is the microcosm of an industry with its own “microclimate”.

The first few coding schools started to solve the “hiring” problem of many startups who were unable to hire good talent and were instead competing with the larger companies to hire the best. Then folks like General Assembly, Coding Dojo and others started. At about the same time, folks like Udemy, Code Academy also did to help new entrants to learn how to code.

Unlike offline schools, the online academy’s were seeing a significant drop-off in students – most folks were just not completing their courses (90% drop offs were typical).

Now, however having been to 10 coworking spaces which all have a coding school attached to them, I can see the natural fit for these spaces to want a school in their facility.

Over the last 5 years, the number of graduates from coding schools has gone from 500 per year to over 20,000 annually. As far as I can see the demand for developers will not slow down for the next 5 years. Even if there is a slow down in the startups hiring coders, the larger companies will pick up the experienced coders from failed startups, and that means new (maybe fewer) startups will end up having to hire from a hacker school.

So what type of a person actually is a good “coding school candidate”?

I think the only thing coding schools are looking for are motivated individuals who have some sort of inclination towards programming. That’s it.

Everything else is secondary.

In attending a coding school last week and speaking to the students, I found that most were excited about learning the trade, but were solely focused on getting a job, not necessarily learning programming for passion.

So, that means when the economy for “other areas” picks up I suspect many will go back to a higher paying job which they are passionate about, leaving more room for newer candidates who want to join the programming revolution.

Which is why for the next 5 years as well, I can see a constant growth curve for most coding schools and I suspect they would be a good investment as a franchise or a business if you are so inclined.

What ingredients do you need to run a successful school – a good pool of potential companies “looking to hire local junior developers”, a set of part time developers “who are passionate about teaching the craft of programming” and a large pool of talented candidates from other fields willing to learn programming and raise their salaries from their current jobs.

3 thoughts on “The rise and rise of coding schools – a tale of #entrepreneur opportunity”

  1. Good article Mukund. I’m curious. How did you identify the 3 most common backgrounds from students? We’ve (rmotr.com) had a different experience and I’m wondering how this market is starting to get segmented.

    Totally unrelated topic. I tried to sign in using twitter to leave this comment. Did you see the privileges it’s asking for? Nonsense.

    1. Santiago, this was based on my discussions with about 7 of the coding schools in the US – Seattle, Provo, Salt Lake City, Denver and Boulder. What’s your segmentation? Is it mostly existing developers looking to retool their skills?

      1. Ahh, cool. It’s really useful for me to know that, thank you. I’ll try to keep my answer short, shoot me a DM if you want more info:

        We have some groups clearly defined (just by “chance”, we never tried to define them, the groups just arose naturally).

        One increasing group is related to finance and data analysis. People that’s doing some job with a lot of Excel (we’ve got a lot of Excel experts) and they know they can do it better, faster, easier learning to code (on top of that we teach Python, which is great for data analysis).

        Other type are enthusiasts in some niches: gamers (trying to develop their own games), hardware enthusiasts (trying to build things with Arduino or Raspberry Pi), among others.

        Both groups tend to be really passionate about what they do and have some great out-of-the-box (or out-of-the-field) thought process. Pretty interesting.

        There’s of course people trying to move into development (webdev mostly). We have also people doing Computer Science university careers and they want to do something more “practical” and close to the industry.

        Thanks again 🙂

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