Phase 2 for Boot Camps

Skills boot camps continue to grow and diversify despite wave of consolidation, while traditional higher education increasingly absorbs aspects of the short-term training model.

January 31, 2018
 
Students at the Flatiron School

Don’t count boot camps out just yet.

The last year or so was rough for the short-term skills training programs, with high-profile closures and some bad PR. But the nascent boot-camp industry is growing, as established players like General Assembly, Galvanize and the Flatiron School expand into new markets while also influencing traditional higher education.

For example, the online program management company 2U announced this month that it is paying $13 million to lease an online learning platform from the Flatiron School as part of a high-profile deal with WeWork, the co-working space giant.

Going forward, 2U plans to use Flatiron’s Learn.co for its online degree programs, which include many graduate school offerings from selective universities.

In an interview, Chip Paucek, 2U’s CEO and cofounder, raved about the potential of Flatiron’s online learning tools, describing the acquisition of Learn.co as being an important step in 2U’s evolution.

“We believe that this becomes the future of the learning platform,” Paucek said. “We’re going to offer all our courses through it.”

Beyond the 2U deal, boot camps are trendy in part because their compressed curricula and focus on job placement in high-demand fields are catnip for higher education reformers and policy makers who feel traditional colleges are failing to prepare graduates for jobs.

Yet boot camps typically cater to bachelor’s degree holders who can afford to spend about $12,000 on a 12-week coding program. And while many in the industry describe their role as being an add-on to a college education, not a replacement, boot camps could encroach on the turf of graduate schools, particularly if short-term credentials become more popular.

Meanwhile, some boot camps are trying to move beyond students who are relatively well-off college graduates, with partnership programs that receive public and private funding subsidies to train lower-income students to enter tech fields. General Assembly and some other boot camps also are trying to branch into disciplines other than computer programming, such as business training in product management or (closer to coding programs) in digital marketing and data science. But those moves appear to be limited in scope across the sector, at least so far.

The closures last year of Dev Bootcamp and the Iron Yard, however, led many observers to conclude that boot camps are just another overhyped flash in the pan, like the original iteration of MOOCs.

But despite those high-profile failures, the sector’s estimated growth topped 50 percent last year, according to Course Report, which studies the $260 million industry. Boot camps were on pace to graduate 23,000 developers in 2017.

“We are five years into this experiment. Some consolidation was bound to happen,” said Liz Eggleston, Course Report’s co-founder. “Demand for graduates of these programs is still high.”

Industry observers said the boot-camp space has gotten more competitive after its initial expansion, which in turn exposed unsustainable business models. And shrinking for-profit college companies had purchased stakes in Dev Bootcamp (owned by Kaplan) and the Iron Yard (partially owned by the Apollo Education Group).

At the same time, several traditional universities have launched their own versions of boot camps, with Northeastern University’s Level, which focuses on data analytics, being a notable example. A handful of colleges also have partnered with boot camps through a federal experiment the Obama administration began -- an approach GOP leaders in the U.S. House of Representatives want to expand to all of higher education. And some evidence suggests that four-year computer science programs, most of which are booming, are shifting to cover labor-market gaps boot camps have been helping to fill.

As a result of the more competitive environment, boot camps are trying to diversify their offerings, said Daniel Pianko, co-founder and managing director of University Ventures, an investment firm with holdings in the space.

“It’s forcing the boot camps to change their business models,” Pianko said, adding that “unlike the MOOCs, there’s revenue here.”

Growing Pains?

The Flatiron School’s busy few years gives a glimpse of how the sector is evolving despite some missteps.

WeWork, the growing work-space company, acquired Flatiron last October for an undisclosed sum. As a result, the New York City-based boot camp, which was founded in 2012, now offers its coding courses both online and at the company’s 207 locations in the U.S. and around the world. (Flatiron also has locations in New York City and Washington, D.C.)

“With WeWork, Flatiron gets a pipeline of people who are lifelong learners,” said Eggleston, who was speaking from a WeWork location.

In addition, online learning experts have praised Flatiron’s online learning platform.

Avi Flombaum, Flatiron’s co-founder and dean, said the company worked hard on its online and hybrid curricula. Flatiron focused on designing a platform that meets students’ high expectations about online social interaction. Heavy attention to self-reinforcing network mechanics is crucial in online environments and often lacking in programs offered by traditional colleges, said Flombaum, who dropped out of the University of Wisconsin at Madison during his sophomore year.

“I want to make the model better, because we’re not done,” he said. “I want to make it work for more people.”

Yet last fall Flatiron appeared to many observers to be headed down the well-worn path of low-quality for-profit institutions being shut down by regulators.

New York’s attorney general in October announced that Flatiron agreed to a $375,000 settlement for operating without a license and over allegations that the boot camp had made deceptive claims about its graduates’ job-placement rates and average salaries.

Flatiron hasn’t been alone in failing to get state licensing or in facing allegations about padded or unreliable job-placement claims. But the boot camp is among several that are clearing licensing hurdles while doing more self-policing on student results.

At the same time, some boot camps are getting access to federal money while also seeking to enroll some lower-income students who lack college degrees.

“The model is not that interesting unless it’s training people who otherwise would not be getting into tech,” said Eggleston.

The Noncollege Option

General Assembly, which has 20 campuses and is the largest skills boot camp, has been experimenting with programs aimed at less wealthy students while also seeking to gain eligibility for Post-9/11 GI Bill benefits in some states.

The company has partnered with Per Scholas, a Bronx-based nonprofit, to offer a no-cost web-development training program to unemployed or minimum-wage workers. Dubbed CodeBridge, the training program is funded by AT&T Aspire, Bank of New York Mellon and TechHire, a federal program the Obama administration created.

Likewise, General Assembly has teamed up with LaGuardia Community College, which is located in the New York borough of Queens, to offer Open Code, a TechHire-backed program in coding, to low-income young people. Udacity and the Software Guild also are partners in the experiment.

The company also is partnering with Opportunity@Work, a nonprofit organization, to offer a free 14-week training program in Washington to students who are underrepresented in the tech industry. Students who participate also will get a $2,000 monthly living stipend. In return for the subsidies, students must agree to pay a portion of their income after completing and getting a job.

Both the LaGuardia and Per Scholas programs are designed to prepare students to complete typical training tracks at General Assembly. For example, students enrolled in CodeBridge start with five weeks of the basics at Per Scholas before moving over to General Assembly for 12 weeks of immersive training in web development.

As of December, roughly 500 students have enrolled in General Assembly’s partnership programs, said Tom Ogletree, the company’s director of social impact. About 35 percent of those students do not hold a bachelor’s degree.

“Our training programs shouldn’t just be for college graduates who are career changers,” said Ogletree.

Veterans of the U.S. military also are an increasing focus at General Assembly, while still a very small part of its total enrollment.

Ogletree said that while General Assembly does not seek to compete directly with colleges, the company wants its training programs to be a “useful alternative” to the traditional college path for veterans.

In November, New York granted access to GI Bill benefits to General Assembly’s programs in the state. Washington, D.C., followed shortly thereafter, and the company is looking to get approval in other states.

At the federal level, the new Forever GI Bill that President Trump signed into law last fall includes $75 million for an experimental program that will allow noncollege providers, including boot camps, to access GI Bill funds to train veterans for careers in technology.

These small forays into training veterans and lower-income students without college degrees bring boot camps closer to competing with colleges. And as Congress mulls whether to allow federal Pell Grants to be used for short-term training, the sector could be poised to grow with federal money -- a prospect that both alarms and excites some boot camp leaders.

From Pianko’s perspective, the industry is at the center of much of the interest among policy makers and investors encouraging the growth of noncollege, nonaccredited providers.

“Boot camps are the tip of the spear,” said Pianko.

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