A New Weekly Newsletter From Me

I’ve started publishing new weekly Substack called Alternative Assets.

There’s a million blogs about stocks, real estate and venture capital. This new is about the wide world of options that don’t get talked about as much – with a focus on digital propertieswebsites and micro-businesses.

There’s a world of opportunity out there that doesn’t get discussed as much. I’m a dozen issues in and love exploring this world. Check it out if you’re interested!

Alternative Assets by Stefan von Imhof

The “just kidding” test: A creative product hack.

One of the great challenges in product management is how to validate an idea quickly without building a damn thing.

Sure, you can show users mockups, prototypes, or even a paper napkin. But that falls flat when it comes to actual behavior, because the difference between what people say they will do and what they will actually do in a given situation can be quite large.

You need to find creative ways to test how people will actually, truly react to a feature. There is one fool-proof way to do this, which I call the “just kidding” test.

I started my product management career at Citrix as an APM. I was tasked with increasing new bookings for GoToMyPC – the decade-old “cash cow” product which, despite it’s decidedly aged name & feel, had over 200,000 users and brought in a cool $80 million per year.

Working on this product had its pros & cons. The main con was that nobody paid much attention to what we did. But on the flipside, since nobody expected much of us anyways, we had more opportunity to experiment with new ideas. If they worked, everyone loved you for bringing in more revenue! If they didn’t work, well, nobody really expected much to work anyways.

I’d created some effective retention & upsell programs, which were working quite well. But what I really wanted to start was a referral program. At the time, GoToMyPC had the highest retention & NPS score of all Citrix products. So I figured, let’s try to capitalize on that love & loyalty by incentivizing our customers to share with their friends. Everyone liked the idea, but we had zero development budget for it. Zero

So I did some research and found a new company called Extole, a company that activated rewards programs through social media. We partnered with them, and as part of the deal,they agreed to build not only the back-end logic, but also the front-end landing pages.

I had the ability to email users directly, so I created a quick email test program to gauge the viability of the idea.

After some very brief validation chats with a few existing customers, I decided to test three different approaches. Each group received an email asking them to refer their friends to GoToMyPC for one of three rewards.

In exchange for referring a friend…

  1.  The first group would get a free month of GoToMyPC
  2.  The second group would get free 500 minutes of connection time
  3.  The third group would get free day passes
I put very little effort into the design. This was before Canva, mind you.

The interesting thing here is that we didn’t actually have the ability to fulfill these options on the backend!

I needed to be able test these ideas without actually building them. The best we could do was manually give people a free month of service. That’s it. This was the only lever I had.

This would be fine for the Free Month group. But what about the other groups?

Here’s the rub: I decided that if someone referred a friend from the Free Minutes or Day Pass group, they’d be brought to a landing page that said the following:

Hello. Thanks for your interest in our new referral program!

We’re still working through some of the program details – but in the meantime we’re going to give you something even better.

Instead of a single day pass, we’re actually going to give you GoToMyPC free for the next 3 months.

“Thanks for referring! Oh, you wanted a day pass? Sorry, here’s a free month instead.”

Was this bait-and-switch? Technically, yes.

But given the “switch” was much better than their original offer, the COGS in software is close to zero, and we’d learn a ton from this test, we as a team were collectively okay with it. Learning quickly without building is the name of the game here; and that’s exactly what this would allow us to do.

So how did my just kidding test work?

After getting executive buy-in (a bit tricky at a large conservative company), I set the test live. I sent out an email to a few thousand customers, and went to bed that night feeling good about things, eagerly anticipating the morning’s results….

…But when I woke up the next morning, I was surprised to see there were no takers on the offer.

Huh, that’s strange, I thought. But it wasn’t unheard of. Maybe the program needed some time to ramp? Who knows. I double-checked everything was working properly, tweaked the subject line a bit, and then sent to another few thousand customers.

To my dismay, the next morning there were still no conversions. None. Okay, I thought, this isn’t good. Either something’s broken, or this idea is just plain not working.

I then upped the reach of the email for a few more days. But by the end of the week, after thousands of emails sent & hundreds of clicks, we had just one single conversion.

Ugh. The program was bombing, hard.

I was pretty devastated. How could this be? We all liked the idea, and email tracking showed that “click interest” was there. People were opening the email and clicking the links. But why weren’t they referring their friends? 

Not knowing what else to do, I picked up the phone. I started calling those who clicked on the email, but didn’t convert. I knew I needed to get into their heads and find out what was going on. I planned on calling about 20 customers – just quick 20-minute chats to understand their psychology. But I only ended up making it through about a dozen calls, because by that time a clear pattern had already emerged… 

The reason that GoToMyPC customers weren’t referring their friends was simple. These weren’t 17-year olds sharing cat videos on YouTube, they were 40-55 year-old accountants who don’t know the first thing about Twitter! They barely had Facebook accounts, and had never before heard the word ‘Reddit.’

In a nutshell, the reason they weren’t using social media with their friends was because they didn’t have a big network of friends using social media! This was a classic mistake of not fully empathizing with your audience; or rather, building for the audience you want vs the audience you have. In hindsight it was so obvious, it’s incredible none of us saw it coming. 

But here’s the kicker. Through the discussions, it was clear something else was happening as well… They may not have wanted to refer friends, but they really seemed to like the idea of day-passes…

In fact it turned out that a good number of our customers only needed GoToMyPC a few days a month anyways, and were really interested in that type of packaging. I believe one customer’s exact words were:

I’d buy those day passes you were advertising. Can you just sell me those instead?”

Upon realizing this, I immediately shifted the nature of the interviews & tests to validate the day pass idea. I wanted to make sure the day pass option was a better idea than free minutes, or a weeklong pass, etc.

After some final validation, as you may have guessed, we determined that the referral program was not going to work, but that the GoToMyPC Day Pass was indeed a viable idea.

So there you have it. This is how in a matter of weeks, I started out with one hypothesis, and ended up with an epiphany of an entirely new pricing model; forming and validating it all without spending any money, or even writing a single line of code.

No costly developers, no engineering time, just an idea validated in the leanest, cleanest way possible.

It’s messy and it’s awkward, but it’s sort of what product management is all about.

Australia is beating the curve. But it’s unclear why.

What a difference a week makes for The Lucky Country.

Back on March 25th, Australia had 2,400 cases, growing at the standard 20-25% per day. Our trajectory looked similar to most countries; doubling cases every 4 days, and quickly heading for a public health disaster.

Although we were seeing some very early signs of slowed growth, according to most models we were still on track to exceed 10,000 cases by April 4th, with over 1,000 new cases each day.

Fast-forward to today, and the story is much different. Our curve is getting absolutely demolished. New cases have fallen off a cliff. We are at under 5,400 total cases, and growth has slowed to a single-digit trickle. We are in great shape compared to most of the infected world, and no longer at risk of hitting ICU capacity.

But here’s the thing: Nobody knows exactly why.

It doesn’t actually make sense. Our exponential curve just suddenly shattered – far earlier than anyone expected (especially us nerds who’ve been following & tracking this thing like crazy.)

Most models expected cases to start dropping 10-14 days after political measures were put in place. But in reality, after March 25th everything just started sinking like a stone. This was only 5 days after we closed the borders, and two days after Australia went into lockdown!

In fact our graph has improved to such a degree that yesterday Scott Morrison announced Australia is moving into a new “suppression phase,” which doesn’t mean much, but signals our politicians recognize a fundamental shift has occurred.

To be fair, there’s plenty we have done right in this battle. From the beginning, our rate of testing has been amongst the highest in the world, and positive cases have remained steady at 2.1%

via Anthony Macali

But we’ve also made a lot of mistakes. The biggest being: 1) Not closing our borders as quickly as we could have, 2) Allowing the Ruby Princess cruise ship to dock in Sydney, and 3) Bondi beachgoers ignoring the beach ban at the height of the disaster

The borders thing especially bothers me. From the very beginning, anyone who was paying attention could see that the vast majority of new infections in Australia were from people who had recently been in the US. (And this was at a time when America was officially reporting just a few hundred cases!)

We now know that a whopping 67% of Australia’s cases came from overseas. The Age has finally come out and said what needed to be said:

In short, about 2000 of the first 5000 cases in Australia came from the big three Petri dishes of Europe, the US and international cruise ships.

[America] never made the banned list…even as the evidence mounted in early March that the Americans were tracking for catastrophe. The US was only swept up by default, when Australia closed its borders to all foreign visitors on 20 March – six weeks after the initial ban on visitors from China. Even then, another week would pass before all Australians returning from overseas were placed under a mandatory 14-day quarantine.

It is not so much a double standard as an unavoidable diplomatic reality. Australia, like most Western countries, continues to tap dance around the fragile ego of Donald Trump.

The Morrison government would have known that treating the US on the basis of hard evidence, as a risk equivalent to China or Iran, would likely have enraged a President who thought the coronavirus was a media beat-up.

New Zealand recognized this trend, and acted early. Jacinda Arden (who should probably be made Prime Minister of the World) pulled up the drawbridge quicker than nearly every other country on earth. If Australia had the courage to give Trump the middle finger, we’d be in even better shape today.

Anyways, while it feels like we’re moving past the early innings of the fight, I’d caution anyone to think we have this fully under control. Singapore, whose response so far deserves a gold medal, just announced they are going back into partial lockdown, indicating countries around the world will likely live with periods of on & off lockdown for months until the vaccine is created.

But compared to many other countries, we can’t complain too much. Someday we’ll better understand exactly why some areas of the world fared better or worse than others. There are some interesting theories out there, some of which have merit and others which are probably conspiracy theory bullshit. Here’s one that’s especially interesting to me. I don’t know where on the bullshit spectrum it falls, but it’s interesting.

Who knows. Maybe we are just lucky after all. 🇦🇺

K̶e̶e̶p̶ ̶C̶a̶l̶m̶ ̶a̶n̶d̶ ̶C̶a̶r̶r̶y̶ ̶O̶n̶ Get Real.

It’s been nearly 10 months since I’ve moved to Australia.

One of the most admirable things I’ve come to love about Australian culture is the “Keep Calm and Carry On” mentality. While admittedly more of a British phrase, the carefree attitude is prevalent throughout the Lucky Country as well. “Yeah nah mate…no need to get your knickers in a twist hey. She’ll be ‘right!”

This was most noticeable with last year’s bushfires. It seemed like my friends back in the US were freaking out about the fires far more than Australians were.. I was so impressed with the calm, managed, and confident way Aussies handled what were the largest fires in the country’s history.

In most cases, this a great thing. Australia is a high-functioning society, and keeping a cool head & not getting into a tizzy over things you can’t control is usually exactly how you want a society to run.

…Except right now.

The nature of a viral pandemic is such that overreacting early is literally the only way to prevent a problem before it becomes a problem. The time to start paying attention is last month. The time to start wigging out is yesterday.

I believe that 29 years without a recession has caused Australia to fundamentally miscalculate tail risk. We’ve had it good for so long that it has lulled society into a false sense of security.

Don’t get me wrong – there is plenty that Australia is doing well in handling this so far. The healthcare system is obviously excellent. Inbound flights are now under somewhat greater control, and travellers are required to isolate for 14 days. Worldwide testing data is hard to come by, but it looks like Australia ranks roughly 3rd in the world for tests performed per million people. Sporting events & mass gatherings have been cancelled, and many people are working from home.

Australia coronavirus tests performed per million people

But we haven’t yet seen the city-wide lockdowns required in order to keep this thing under wraps. Pubs & restaurants are still open. So are most schools & aged care facilities. And people still fundamentally do not grasp how big this is going to get. There are still people out at pubs, restaurants & markets, like very little has happened. Sure, it’s not Spring Break in south Florida, or St Patty’s Day in New York, but it’s not good.

I’ve created a model to approximate the effect COVID-19 is going to have on Australian society. I’m not a data scientist, and it’s not perfect. But numbers don’t lie. This is going to hit us harder than I think many Aussies are ready for.

The biggest downside to “Keep calm and carry on” is that you neglect the very role you should be playing in fighting it.

We’re off to a decent start. Critically, we have solid institutional strength and the warm weather on our side. But the next few weeks are everything. We still have time to flatten the curve and slow the spread.

At the end of the day a pandemic is just a function of math & time. Now’s not the time to keep calm or carry on. Now’s the time to get real.

Quick observations after six months in Melbourne

Just a few observations after 6 months of living here, before this all becomes business as usual and I stop thinking twice about it.

  • Everyone has a NO JUNK MAIL sign on their mailbox – and it actually works. There’s no Direct Marketing Association lobby, and no “do not mail” list. The mailman just honors the sign & nobody gets junk mail. Fascinating.
  • I typed mailman above, but I should have typed “postie”, as Aussies have a habit of shortening words & adding “-ie” or “-o” to the end. Postie, Tradie (construction worker), Chippie (someone works at a fish & chips shop) Bottle-o (liquor store), Servo (petrol station), Smoke-o (tobacco/vape shop).
  • Another reason to call a mailman a “postie” is that half of them are women. It’s striking how many women work in job categories that in the US would be 90%+ men. This is most noticeable with police officers. You forget what a male-dominated profession it is in the US – and for no good reason. Here it feels closer to 50/50.
  • Officers here are all friendly. You can ask for directions or make small talk like any other normal human being. There’s a public awareness campaign When You Need Us But Not The Sirens that encourages people to call local police without clogging 000 (911). When there is trouble, they calmly, ask questions first and act second. They don’t approach with military force guns drawn. (What a concept!) Of course there are exceptions, but even those are in comparison to America’s militarized police state.
  • The friendliness hits you unexpectedly sometimes. Example: I was in a lift minding my own business, staring at the floor like a normal person. It was late in the evening and there was one other guy in there with me. Neither of us so much as looked at each other during the ride to the top. I loathe elevator small-talk, and could care less about the presence of anyone else on the ride. When the elevator stopped at his floor, he got out, he looked me in the eye, and in the most oddly sincere way possible, said “Have a good night man!” It’s not a huge deal or anything, but I almost didn’t know how to react, and immediately felt like an asshole.
  • Another story: One weekend morning, I was in suburban rail station, waiting for a train downtown. After a few minutes a train arrived, but it was on the other side of the tracks. The train stopped, and the conductor suddenly opened his window and yelled to me,

“The outbound train doesn’t stop here on the weekends.”
“Oh okay, I’m going to the city.”
“Yeah nah…not on that side you’re not. Come over to this side mate, I’ll wait for you if you run.”
I could not believe he was willing to hold up an entire packed train to wait for me.

  • There’s something special about a city with a good tram network. The effect Melbourne’s trams have on the character, fluidity, and overall pleasantness cannot be overstated. I get goosebumps thinking about what LA could have been today if not for the GM streetcar conspiracy.
  • There’s no Whole Foods or equivalent down here. But it’s okay, because there are more smallish “in-between” type food shops in most neighborhoods. Small produce shops, butchers, fish mongers, etc. Sure, it’d be great if all of these were in the same place, but the quality is top-notch, and if you can support 3 smaller businesses instead of the Amazon beast, all the better.
  • Speaking of Amazon, it’s so funny to see their recent social awareness campaigns. The campaign is clever, using a play on the Aussie phrase “Easy as” (A precursor to “Easy AF” that became so popular) But the ads are literally like “For all your shopping needs, think Amazon. Yes that’s right folks, that web-site again is Amazon.com.au. Now don’t you forget it!”
  • Aussies love beer, but the beer isn’t nearly as good as it is in the US. It’s gotten better but yeah…nah. Still not there guys. Same with burgers. Australia still doesn’t have enough variety or do enough experimentation. And the flavors just plain aren’t as exciting. There’s like ~8 things left that America does better than anywhere else, but beer and burgers are among them.
  • That said, nearly every other food is considerably better. Nothing new here, but it bears repeating. The bar is so incredibly high & shifts every class two steps upward. The bad joints are still pretty good, the good places are excellent, and the excellent places are incredible. Oh, and the coffee is out of this world.
  • When you see prices at a restaurant, they always look high at first. But it’s easy to forget prices always include tax, and of course there’s no tipping. So when you get your bill, it’s always lower than you expect. It doesn’t sound all that important, but after a while you realize how much easier it is to shop & spend money when the price you see is always the price you pay.
  • Prices of consumer goods have definitely gone down. When I lived here 15 years ago I couldn’t believe how expensive so many everyday household items were. It’s a lot better now, though every now & then you see a price on something that absolutely blows your mind. Like this $370 trash can.
  • That said, paying for everything a dream. Contactless tap payments are so obviously the future, err- present. I recently read a few articles on why this is essentially non-existent in the US, and from what I can tell it comes down to back in 2015, the banks didn’t want to spend an extra 0.35 cents per card.
  • Finally, I expected my taxes to be high, but they’re basically the same! I think if you moved from say Texas or Florida or a state with no income tax, you’d probably end up paying more in taxes. But coming from California it’s essentially the same. Which is truly incredible given how much more you get back from the system. 🇦🇺

New country, new job, new life.

After 15 fantastic years in Santa Barbara, we’ve officially moved to Melbourne, Australia!
I started a new job as Head of Product at Flippa.com – a company I’ve been following for years and have a special affinity for.

We’ve been planning to do this for quite a while, and are really excited to finally make it happen. But despite thinking & talking about it for ages, it has still been a very challenging thing to actually do.

Santa Barbara is an extremely tough community to leave, and we will miss it tremendously. Over the years I’ve written about my undying love for Santa Barbara – a city which punches so far above its weight in so many areas that it’s almost unfair. It has treated us both very well, and we’ve formed so many bonds & friendships over the years. We are keeping our house in Santa Barbara, and keeping Santa Barbara in our hearts.

But Australia has been calling, and it’s time to answer.

So why Australia?
This one’s easy. My wife is from Australia (specifically, Adelaide), and pound for pound it’s probably the greatest country in the world. Anyone who knows me knows I’ve been head over heels for the country ever since I first lived there. I love the culture, I love the people, I love almost everything about it. But over the past few years this love has really started to bubble up to the surface.

The thing about Australia is that when you’re not there it doesn’t exist. If you live in America (or nearly anywhere else for that matter), Australia feels far away and you don’t think about it too much. It rarely makes hugely significant international news. It doesn’t start wars, its leaders are generally decent & agreeable, its people are happy and life is good.

And that’s just the problem. Despite one growing up there and both of us having lived there, it was starting to feel too much like a fading, distant memory. It’s as if we were watching Australia develop through a pair of binoculars, and the focus was getting harder and harder to dial in each year. We felt the need to rediscover a country & part of the world which we had once had a strong connection to – and still do – but that was at risk of somewhat slipping away. We didn’t want to let that happen.

Why Melbourne?
This was a tougher decision. If you work in the IT sector, Australia is basically a two-city country: Sydney & Melbourne. Brisbane, Perth & Adelaide are all great cities, but they just plain don’t have enough opportunity – at least for our careers.

As anyone who’s visited knows, Sydney is absolutely gorgeous. Yes, it’s expensive as hell, but its lifestyle makes the cost worth it. Fantastic weather, stunning beaches baked right into the city, and what is probably the world’s single greatest harbor. But it’s got its problems too. Traffic is rough & the public transportation system isn’t fantastic; it’s kind of a pain in the ass to get around. It’s got just a wee bit of a “holier-than-thou” attitude (at least by Australian standards) and can be surprisingly frenetic & un-laid back as far as Aussie cities go. And the cost of living, my god… It’s no joke. If you’ve already got a great setup in Manly Beach or Double Bay – fantastic! But if you’re establishing a new life in the city and don’t have serious cash, it’d be difficult to get started.

Melbourne, on the other hand, just works. While it won’t win a beauty contest against Sydney, it is indeed very pretty, and routinely ranks in the top 5 most liveable cities in the world (nearly every city in AU/NZ is in the top 20).

Tremendously diverse and with an incredible food/coffee culture, Melbourne is the fastest-growing city in Australia, and will surpass Sydney in population within the next decade. This is not a city that’s afraid to build. Skyscrapers litter the CBD and close-in suburbs. There are interesting projects & buildings going up all the time. (For better or worse, this is nearly the exact opposite of Santa Barbara.) The transport network is solid – even far-reaching suburbs are pretty accessible. It feels like burgeoning Asian megacity downtown, surrounded by fantastic walkable inner suburbs and a leafy, relatable suburban ring.

Why Flippa?
A few years ago, partly in preparation for this move, I began freelancing along with a team of developers I knew from Romania. We had a lot of fun and worked on some cool projects, but I knew I didn’t want to do it forever. While freelancing with a client in Australia, through a connection, I got (re) introduced to Flippa.

Flippa is a marketplace to buy & sell businesses. Founded by the team behind 99 Designs and hired.com, Flippa has been around since 2009, and has brokered hundreds of millions of dollars’ worth of digital businesses, domains, and websites. I sold an Ecommerce business myself on Flippa back in 2012.

I love what these folks have been cooking up lately. There are 28 million small businesses in the US alone, nearly all of which use traditional business brokers when they want to sell. There is so much potential to get these business onto our platform and in front of our huge network of buyers. It’s gonna be a fun ride.

– – –

I’m really excited about this life change. When you get a different vantage point, it changes your perspective on things – almost always for the better. There’s few things I enjoy more than comparing & contrasting countries, and I plan on writing about my experiences.

I don’t know what else this move will uncover, but I know we want to broaden our horizons. On top of being closer to my wife’s family, we just flat out love traveling the world, and are excited to have a new “home base” from which to explore. It isn’t quite exploration for the sake of exploration, but it will allow us to see things we should have been able to see a long time ago, and haven’t really been able to until now. Cheers to new adventures to come.

If you haven’t heard of Lambda School, it’s time to start paying attention.

If you’re active on Twitter, by now you’ve probably heard of Lambda School — the online school where you owe nothing until you get a job.

If not, it’s probably time to start paying attention.

Lambda is bringing a much-needed change to the world of higher education & financial aid. Instead of paying for classes upfront, Lambda students don’t pay a dime until they get a job paying at least $50,000/year. Once they get hired, Lambda takes 17% of their earnings, until a payment cap of $30,000 is hit. If a student is unable to find a job with a salary above $50k per year, they are not required to pay anything.

Courses, which are all fully online & last about 7–8 months, range from computer science, to data science to UX and more. Lambda is putting their money where their mouth is; backing student success in a way that is, frankly, refreshing as hell. Lambda is taking all the risk in this equation: They pony up all costs upfront, and are even doing some fun experiments with housing stipends — trying to help address another one of the “financial elephants” in America’s room.

It’s now become common knowledge that student debt is a huge problem and is getting worse. As with so much else, not much has been proposed in Congress to help. Some are trying, but it’s unlikely that anything significant will happen in the near-term. The time to act was yesterday.Meanwhile, student loans just hit $1.46 trillion; double what it was at the end of the last recession. 27% of loans end up in default, private colleges are closing. Even Natty Light* is giving away a cool million to help grads payoff their loans.

It’s a mess.
If my personal history within the education industry has taught me anything it’s that there is an ungodly amount of room for improvement. At TrustedAid, one of my current projects and one I hold in high esteem, we show high school students how much their financial aid package would be, before they even apply. In a nutshell, we help underprivileged kids get the full college grants they deserve. We also include a guided FAFSA walkthrough so they know the right boxes to tick in order to get it. Think of it like TurboTax meets Financial Aid.

At lynda.com (acquired by LinkedIn and now called LinkedIn Learning) we prided ourselves on perpetual self-improvement through high quality, affordable training videos. To this day, the company helps people land new jobs in brand new industries where they had no prior experience. From Netflix to Lynda remains one of my all-time favorite public micro-experiments, and did not get the visibility I thought it should.

But while liberating murky aid data and closing the skills gap are two of the secondary problems with America’s higher education system, the fundamental problem remains: The value of a college degree is yielding diminishing returns. Getting a degree is more expensive than ever, while the overall value of a bachelor’s degree is worth less than it was 10 years ago.

And yet, the RONI, or “return onnon-investment” means going to college is still a no-brainer for most. Over her lifetime, the typical college graduate earns $570,000 more than a person with only a high school diploma. Saying no to college can have a tremendous cost. No wonder young people feel stuck.

Last week, amidst their Series B funding announcement, Lambda was profiled in the New York Times. The article was generally fair & balanced — unlike much of the criticism received on Twitter.

The type of financing agreement that Lambda has initiated is called an ISA, or Income-Sharing Agreement. While considered novel in America, ISA’s have been in use in other countries for decades. The most famous successful example of this, or at least what should be the most famous example, is Australia.

Australia’s higher education finance system, which has been around since the 80s, is known as HECS-HELP (Higher Education Contribution Scheme — Higher Education Loan Plan), or just HECS for short.

Anyone who knows me knows I’m a huge fan of Australia. For years I have been advocating that America would be wise to follow Australia’s lead in areas such as education, gun control, maternity leave, vacation time, retirement, coffee, avocado toast…the list goes on. So my opinion is a bit biased.

But HECS is, by all accounts, a fantastic system. When I lived in Australia and first heard about HECS, the simplicity blew my mind. It immediately became clear to me that some Frankenstein version of HECS would someday become the future in America. Although the system has been written about in the past (this Quartz piece is a great example) it seems only now to be getting the true recognition it deserves. From income-driven repayments automatically deducted from your paycheck, to regulating how much universities can charge (nearly all universities are public; Australia has only a handful of private universities), to the negligible 1.5% interest rate capped to inflation — something even Britain’s system cannot claim — Australia has what is arguably the best public higher education finance system in the world.

Because it’s clearly a superior, I assumed some change would be instituted at the federal level. But as we know where government is broken, private enterprise shall creep in. And Lambda has done so in a big way.

So Lambda didn’t invent ISA’s. But so what?

What they are doing is needed to help reduce US student debt, and focusing on student outcomes is a wonderful thing.

Lambda is attacking the student loan crisis on not one, but two fundamental levels:By flipping the financial incentives upside-down, they are paving the way for superior education financing systems to take hold.By investing so heavily in student outcomes, they are ensuring their own incentives are completely aligned. Lambda only succeeds if its customers succeed. That’s what a good business model is all about.

Together, Lambda represents a new way of thinking about higher education. A whole new protocol for how things could, and arguably should work in the US.

But while the ISA is currently the big draw, it’s not the financing portion that is going to make Lambda successful in the long run. There’s ultimately no moat with ISAs — anyone can do it, in fact others have already started.

What’s going to make Lambda successful well into the future is the fact that they are unashamedly, relentlessly dedicated to student success. The enthusiasm & zeal they bring when sharing mastery-based progression methodologies and student success stories — some of which are truly incredible — is something to admire.

Universities have been paying lip service to post-graduation student success for years. While Lambda is incentivized to help students succeed at all costs, Universities are often incentivized by little more than to keep their US News Ranking as high as possible, or to funnel tuition money towards the madness of their costly sports programs. Sure, there are plenty of colleges & universities that can boast graduate success numbers which rival Lambda’s — and at scale. But many others seem to have taken their untouchable, pedestaled position in society for granted. People are starting to wake up.

It must be stated that Lambda students work hard. Classes are taught by experts, and given the condensed 8-month timeframe are understandably intense. Students build real products & prototypes, participate in hackathons, and defend what they have built to their peers.In the wake of last week’s hubbub, criticism about Lambda has continued to float in.These include accusations of the model not being as scalable to non-CS related tracks, and even of “creaming,” or extracting the best students either from the state sector into the private sector.

Zeynep Tufekci brings up a very good point here about scalability. The model is likely not scalable to all traditional college majors without some significant adjustments. You’d essentially need the graduates with well-paying degrees to subsidize those with degrees in art history or French literature. Much like, well, like a good public system does. This would directly compete with Lambda’s profit motive, meaning they are likely to keep a tight focus on STEM and its various offshoots for the time being. (And this is to say nothing of the hugely important philosophical discussion around what a world full of pure STEM heads would look like to begin with)

As Lambda continues to expand into new verticals, they would be wise to take these types of questions seriously. Education is a touchy, personal subject for many. But in the meantime, their success stories are very real. CEO Austen Allred routinely tweets stories of regular people tripling or even quadrupling their income in under a year.

And remember: because the classes are fully remote, students from all over the US (and even now the UK) can attend. As the saying goes, talent is equally distributed, but opportunity is not. Frankly, there aren’t many opportunities for someone living in rural Iowa to earn a decent wage. Lambda changes that. They aren’t creaming the best students from top high schools across the country, they’re seeking out & finding diamonds in the rough. The second-order effects that these people’s wages have on their communities could be tremendous, and this flies directly in the face of the new geography of jobs. Wage arbitrage might be difficult for people to pull off, but it also just might help save the American middle-class.

Talent is equally distributed, but opportunity is not. — Leila Janah

All of these success stories make you wonder, gee, why can’t America just have something this at the federal level?

In an ideal situation, yeah, it would be nice if we had a system like Australia’s. I believe that America’s entire higher education system should function like a giant ISA; one where the high income learning tracks subsidize the ones which are less lucrative, but equally as important to society.

But a system like this seems like it’s decades away at best. The US government’s sluggishness & failure to act in a timely manner is Lambda’s gain. Timing is everything in business. Lambda is in the right place at the right time, they know it, and their execution thus far has been stellar.

In the meantime we should be happy they are so committed to keeping themselves accountable, and are moving the conversation forward. Universities and government have collaborated to get us into this mess. Now it’s time for everyone to start paying attention.If you have any doubts, just follow Austen on Twitter. He’s extremely provocative and a bit brash sometimes, and you won’t agree with everything he tweets. Heck, he even admits as much in his bio! But follow him and Lambda on their journey to remake education. Follow their student success stories, understand how aligned incentives bring out the best outcomes for everyone, and judge for yourself.

They may not be perfect, and they may not be for everyone. But they are undoubtedly changing the world for the better.

It’s inspiring to watch.

Note: In an earlier version of this story, I incorrectly stated it was was Natty Ice which was giving away a million dollars to help offset student debt. In fact, it was Natty Light. I sincerely regret this error.

Backyard redesign

Before & after: For this project I initially wanted to tear down & replace our old backyard fence.

My friend Kevin had the brilliant idea of building a new fence just smack on top of the old one. It worked like a charm.

Here’s how it looked before:

We figured it would be far easier to use the existing posts, and put the new planks on horizontally.

After constructing & staining the pine fence, I planted some cordylines & a ficus. While digging those holes I cut right into an irrigation line and had to do some pipe surgery.

To finish it off I laid down weed block, plopped in the edging, and filled it up with mulch (The city of Santa Barbara gives residents all the free mulch they can use.)

I wanted to put in some flagstones to go underneath the fire pit, but eh, who has time for that.

Life choices and technical debt.

Every decision you make costs more than you expect it to.

For those who aren’t familiar with the term, “technical debt” refers to the concept of extra work needed to fix things that weren’t properly coded or planned in the first place. It is a major problem among engineers and product managers, because at some point the built-up legacy code needs to be re-factored and re-built from scratch, which takes a massive amount of time and resources.

Sometimes technical debt arises from poor decisions years ago, other times it arises naturally. Sometimes you see it coming from miles away, other times it sneaks up on you. And having small, manageable amounts of technical debt is very common, necessary, and more than fine.

The problem arises when the debt is continually not repaid. When it becomes unmanageable. When that happens, every minute you spend on “not-quite-right” code counts as interest on that debt, which makes the total price you pay even higher.

I’ve begun thinking about this concept lately as it applies to real-life.
We don’t think about it much, but every life decision we make, big and small, accumulates some level of technical debt that has to be “repaid.”

Sure, there are some obvious life decisions that come to mind, such as buying a home, getting married, or having kids. It’s no secret that these enormous choices we make have a tremendously large effect on our lives later on.

But the truth is, the little bits of debt that we take on can have just as large of an effect, and we often don’t realize it.

Let’s say you discover a cool new social site. You check it out, decide to join, and create an account. You find yourself going to the site each morning before you go to work, and a bit when you come home. Before you know it, you’re spending a half-hour each day. The amount of time you are spending on the site was a hidden cost, that only becomes clear over time.

The same concept applies to everything we do, and every choice we make.From where you live, how far you commute & how much you exercise, to the websites you “need” to go to each day, the big fish tank you buy that needs cleaning, or your 15 perpetually open tabs on your browser, awaiting to be read.

All of this is debt we repay in one way or another, be it through work, our health, our attention, or our time. Even if you have automated systems in place to manage it all, it sneaks up on you. It adds up, both physically and mentally.

Lots of little things don’t mean much on their own, until you have too much debt to manage. And once your debt load exceeds your ability to manage it all, you’ve taken on too much. This is what causes garages & basements overflowing with crap, lack of time & energy, and of course, stress. When that happens, it’s time for a reset. Time to re-factor the code.

So as you go through your day, think about the hidden costs of each choice you make. This definitely helps avoid the consequences of taking on too much debt.