Bootcamps: are they sustainable?

What’s happening with bootcamps? Despite campus locations in six US cities with large IT job markets, Dev Bootcamp has recently announced it will be closing in December. And in the same month The Iron Yard said it too would be closing all 15 of its campuses. So is this going to start a trend? Are the for-profit models of bootcamps ultimately unsustainable? Has the rush to set up lucrative bootcamps been over-estimated, and there’s not enough of a market to fill them?

Perhaps the answers are a little more sober than the headlines would immediately suggest. Before we write the bootcamp obituary, let’s look at some of the possible reasons for this and consider whether, in response, bootcamps need to change their focus and operate more strategically.

Post mortem — what happened?

The first possibility is that simply too many bootcamps have opened up shop for the market to sustain. That doesn’t mean they are not doing what they are supposed to do — simply that the market has not yet calibrated supply versus demand. ‘Right now, the demand for software and web developers still outpaces supply, but even those responsible for the boom agree that if growth continues at the same rate as the last two years, there will be a market correction at some point in the future, writes Madeline Vuong in Geekwire. ‘Then, things will get Darwinian and some schools will survive, while others will close their doors.’

So are we likely to see consolidation of existing bootcamps, as some close down and others look to mergers and acquisition as their way of growing? ‘I don’t think bootcamps will go away,’ says Richard Wang, CEO of Coding Dojo, ‘but I think looking ahead into the future, there will be far fewer players in the space.’ What kind of numbers? ‘In the next three to five years, there’s going to be just five to eight brands left within the [US].’ A bold claim. But Dave Parker, CEO of CodeFellows, agrees that there will be ‘a shakeout over the next couple of years’ where schools will differentiate themselves.’ Sometimes that will be financial consolidation, but sometimes ‘through producing better student results in terms of training and subsequent job placement.’

It’s interesting to see the CEO of a bootcamp admitting, even if in a roundabout way, that sometimes the quality of existing bootcamps is uneven. Have Dev Bootcamp and The Iron Yard closed because they offer a good quality product that, in comparison to other providers, meant they have become unprofitable? To an extent, this argument has validity. ‘As with any new industry with a rapid influx of new players mimicking the original, it takes time for customers to differentiate quality programs from those looking to take their money,’ said Tarlin Ray, Dev Bootcamp’s President, sounding understandably bruised in the aftermath of the closure announcement.

We can look at this in two ways. The first would be to express surprise that some of the major players have been the ones to fall by the sword — suggesting that the problem is that cheaper, less reputable competitors have usurped the market. The second is simply to say that the model was not sustainable. In announcing its closure this coming December, after teaching-out a last cohort of students, Dev Bootcamp said its financial outlook has been a challenge from the beginning. ‘Since launching in 2012, we’ve been striving to find a viable business model that would enable us to further our vision of high-quality, immersive coding training that is broadly accessible to a diverse population, while also covering the critical day-to-day costs of running our campuses,’ says the written statement released after the announcement was made. ‘Ultimately, we have been unable to find a sustainable model that doesn’t compromise on one of those fronts.’

Perhaps this shouldn’t, in fact, ultimately surprise us. After all, what’s the main motivation for going to coding bootcamp? It’s to attempt, within a very short space of time, to learn enough in order to get a job. And the real motivator is financial. ‘The argument for these camps generally revolves around lower cost and time investment than going to a university for a computer science degree — a CS degree experience without any […] freshman comp requirement,’ wrote Erin Carson in TechRepublic in 2014, when bootcamps were still a relatively new phenomenon. So, if your reason for going to bootcamp is you want to save yourself money, perhaps it’s not surprising that some of the ones that offer the best quality are going to struggle financially.

A further consideration is to think about who has bought these two particular boot camps. Dev was bought by Kaplan, what we might call a traditional higher education conglomerate group. The Iron Yard was bought by the Apollo Education Group, which owns the University of Phoenix and other providers. Perhaps the reason both acquisitions went wrong is that there was a culture mismatch. Bootcamps are nimble, fast, creative and practical. Traditional suppliers run at a slower pace.

Or let’s think about this way — often in the corporate world, a strategic reason for an acquisition is to the buy the company for the talent it has. That talent then becomes your talent. Might that be what has happened here? The brand has been dropped, but the knowledge and connections have been successfully integrated.

It’s interesting to note that when the TechRepublic article was written in July 2014, Erin Carson was able to say breezily, ‘one point that’s not up for dispute, though, is there aren’t enough developers to meet the market’s demand.’

That seems like ancient history now.

In the next article we’ll consider — where should bootcamps go from here? Are there ways of ensuring that you can still offer high quality, whilst having a sustainable model?

Sources

Dev Bootcamp https://www.insidehighered.com/news/2017/07/14/dev-bootcamp-which-kaplan-bought-three-years-ago-closing

Iron Yard https://www.edsurge.com/news/2017-07-20-another-major-coding-bootcamp-iron-yard-announces-closure closure?utm_source=EdSurgeNext&utm_medium=email&utm_campaign=07–21–17&mkt_tok=eyJpIjoiTkRBd05XVm1OVFkzWkRKbCIsInQiOiJkSDc4YVRQZ0xiQXQ2S0QwR3J3MXlsdUhaWTFcL3JtTmdcL0dlTGNZU2wzMFBaUEVqWnN1RTFLODVcL2JjakpNdGg5Sm4xb3Z2R1VpU2VUaU1MaG5hbFFCd3NhVEJxeCtFVWlOaEMyQU5wb3BWUUt2SFF3dUgyU3VVR1Z2NHJvK3FvciJ9

Richard Wang and comments https://www.geekwire.com/2016/coding-schools-plan-expansions-betting-that-they-will-be-winners-when-the-market-shakes-out/

Erin Carson comments http://www.techrepublic.com/article/10-things-you-need-to-know-about-coding-camps/

Issie Lapowsky https://www.wired.com/2016/01/in-2016-the-coding-bootcamp-bubble-is-bound-to-burst/

Details on acquisitions https://www.edsurge.com/news/2017-07-20-another-major-coding-bootcamp-iron-yard-announces-closure and https://therivardreport.com/the-iron-yard-coding-boot-camp-closing-in-april/

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