A few months back The New York Times wrote about a waiter who became a data scientist, upping his earnings from $20,000 to well over $100,000. There are other examples in the story too, such as the barista who became a coding instructor, and the English major who became an appmaker. The transformations were courtesy coding bootcamps or immersion programs. These are institutions such as Hackreactor or General Assembly which offer short 8-12 week long in person courses, though there are schools such as Galvanize with a 24-week program, in programming languages such as Ruby, Python or frameworks for developing apps.
Driven by a shortage of programmers engendered by huge demand courtesy the online tech boom, the bootcamp has become the metaphorical equivalent of the ladder in the snakes & ladders boardgame. One that can dramatically up your earnings, and change your trajectory. Bootcamps are a peculiarly U.S. construct, though there are schools in Europe (London, Lisbon, Madrid), Canada (Vancouver, Toronto) and Asia (Hong Kong, Singapore). As per the NYT story, the number of bootcamp grads this year is doubling to nearly 16,000. This is about a third of the Computer Science majors this year from U.S. Engineering colleges.
In this post, I plan to take a look at what is behind the success of the bootcamp or immersion model. I will also explore what lessons its success holds for other sectors, and for the Indian market.
Behind the bootcamp sector’s success
The bootcamp sector’s success may be best understood by comparing its payback ratio with that of an MBA. Let us take a school such as the aforementioned Galvanize. The 24-week program costs $21K and results in an average salary of $77K on placement. The simple payback period (without taking interest into account) is just under 4 months. In comparison, the Harvard MBA costs $200,000K (let us ignore opportunity cost, though its impact would be greater here) and the average salary upon placement is $140-150K (unable to get the exact amount but this is the range). This is a simple payback period of 1y 4m, 3x the payback period of the bootcamp.
Clearly on a return on investment basis, the bootcamp is in a league of its own.
The bootcamp sector’s emergence and continuing relevance, rests on a trifecta of factors – the gap between (1) what is taught in a CS program and how little of it is used in a startup, especially in front-end development, (2) huge demand for coding talent on the back of an unprecedented tech boom, and (3) the extent of hiring from smaller / startup firms.
It is this trifecta that leads to the perfect storm for the emergence of bootcamp academies. Historically, most of the hiring in the tech sector was by larger firms and for work on the back-end, where subjects learnt by these recruits in their CS courses would have helped. Additionally in such a scenario, the training was inhouse, e.g., see Facebook, which has a 6-week inhouse training program (called BootCamp) for their new engineering recruits. Or in India where the big 5 ITES companies (Infy, TCS etc) typically have a semester long training program for new recruits (typically during the 8th semester).
But as the need for people working on front-end tools has risen, which is typically not taught formally in Engineering programs, and hiring momentum has moved to smaller firms, which cannot invest in inhouse training programs, the case for bootcamps providing trained front-end developers has become stronger and stronger.
Thus for a bootcamp, the opportunity exists when there is large-enough gap between what is taught in a formal degree course and the skills required in startups in fast-growing sectors. This explains why we don’t see similiar bootcamps in other sectors such as finance. Not enough startups. Wall Street majors are only too happy to invest in inhouse training programs. Goldman has its Goldman Sachs University; Point72, a hedge fund has its Point72 Academy, structured as a B-School within the hedge fund etc. There are bootcamp academies such as Training The Street, Wall Street Prep, AMT Training etc but they are structured as B2B providers selling into B-Schools as a value-add, or as part of the inhouse training programs for larger firms, but rarely selling to individuals.
I suppose if FinTech via the blockchain takes off, and we see a lot of startups you could see a Training The Street + say a Flatiron school combine to offer FinTech Bootcamps!
Are there other sectors in U.S. where this could work?
Bootcamps are an interesting way to solve employability challenges. They have signalling (either in terms of self-selecting yourself for a program, or given that some of the leading ones such as HackReactor are highly selective taking 1 out of 30 applicants), skilling via hands on training (though not as much soft skills perhaps) and access to opportunities, making it two-and-a-half out of the five constituent bundles that higher education offers.
If we look at sectors that fit the trifecta of factors shared above, then we also have
- Design – and it is not surprising that some of the coding bootcamps such as GA, Metis do offer UX / UI design programs. There are also design only bootcamps such as Designation, Shillington School, Huge etc
- Data Analytics – General Assembly, Metis offer Data Analytics programs. Northeastern University in Boston has a program called Level as well.
Other bootcamps I could find out (though the demand for talent is on a much lower footing here) include
- Publishing – Columbia has run a 6-week program in Publishing for a long time. This is perhaps the oldest bootcamp in existence (since 1949).
- Illustration – See Baltimore Academy of Illustration which is attempting to disrupt Art Schools such as MICA, Pratt Institute, SCAD etc.
- Animation – See School of Motion.
Are there any obvious or even non-obvious sectors where this could work?
I am surprised there is no bootcamp that has emerged in the Journalism sector. This is possibly due to a combination of reduced hiring from print players (who used to pay better) along with low pay from the online players who are hiring, and perhaps existence of well-established graduate courses such as the Columbia School of Journalism. Still I think there is potential for a 8-12 week Digital Journalism program that can compete with the likes of a Columbia or a Medill.
Law could be a big opportunity for bootcamps, though it can’t be a 8-12 week bootcamp. It would have to be longer, say a 30-week program, leading to a paralegal job. You would then have to study on your own (or there could be weekend refresher courses) to pass the bar exam to become a full-blown lawyer.
Law wouldn’t be an easy market to crack though. It would require a considerable degree of effort, and the universities which do make a lot of money from the law programs will protest. But certainly a case could be made that for a lot of the work that lawyers do such as simple filing and contracts, you do not need a 3-year degree.
How would bootcamps evolve in the future in the U.S. market?
Presently bootcamps are very attractively priced for the consumer, given that it is still a newish product. Gradually we should see an uptick in prices, and a rising payback period. This could also coincide with a gradual slowdown in the tech sector or reduction in hiring for front-end skills by startups.
If so, then what should bootcamps such as Galvanize or General Assembly do? There aren’t that many high volume sectors such as Tech that move the needle. Law is probably one, but there is a lot of challenge there. Perhaps the most obvious one seems to be the MBA. It is a large market, and offers bootcamps scope for much higher prices. It is also ripe for disruption. The 2-yr MBA, is just too long and too expensive to sustain for too long. The impact of the bootcamps would be felt really by Tier 2 institutions who do not have the brand cachet of a Harvard or Kellogg to fall back on.
What about India?
One reason why coding bootcamps may not be as successful in India is the availability of engineers in general. Unless the startup scene gets red hot and leads to a general shortage of engineers, I don’t see a raison d’etre for coding bootcamps in India.
We also have quasi-bootcamp variations such as TimesPro (A Times Group Venture), though it is not strictly immersion; it is a 6-month program that gets you banking jobs. For this 6-month program, a students pays ~$1,400 or Rs 85,000. A program of similiar length (Galvanize) costs $21K (though it is not in the same sector; a U.S. banking course might be cheaper).
The opportunity in a market like India is likely to be in less-heralded sectors, which typically didn’t exist a few years back. One possible sector: culinary arts / restaurant services. Presently the kind of education that you get from a Hotel Management & Catering Technology is not suited to the kind of smaller & innovative restaurants (stand-alones) that have launched in recent years in India. There was a recent article in Mint about the difficulty these restaurants are having in recruiting the right kind of talent.
As with all vocational education opportunities in India (and bootcamps are be part of this sector), the challenge is really getting consumers to pay a decent enough fee to cover the costs. And this is really a challenge, given that there is a upper bound on how much you can charge. This is set by the salary that a student gets. Amongst the sectors vocational education caters to, Banking is the best paying at about 4 lacs or $6,500 / year. No other sector comes anywhere close to this kind of pay or number of hires. And that is really the existential challenge that bootcamps in India face.