#102 Billionaire’s Advice to Young People | Joe Liemandt

24:37I wish my kid would go through that. Yeah, well, I think the headline's actually pretty fantastic. It's like where students learn 2x in two hours, test in the 99th percentile, and then give students the rest of their childhood back. That is good. That's a good marketing slogan. And the best part is always when your slogans are true. Buying a business or launching your own venture can feel impossible if you're stuck figuring out the website, logo, email, marketing, all at once. But here's the good news. GoDaddy Arrow is here to help. So just a few prompts, it builds a professional website, a logo, an email, even social content all tailored to your business.

25:12It's like having a whole launch team in your laptop. Instead of months of grinding, you can go from idea to launch ready business in minutes. No more waiting, no more guessing, just a real online presence that you can grow with day one. Suddenly, the thing that was just a tiny idea in a notebook is online, polished, and ready to scale. So if you're ready to take your idea to life, Head to GoDaddy.com backslash Cody Sanchez and try GoDaddy Arrow today. What about for like the rest of us? So people who are listening who don't have kids, who would have loved to go through this, but maybe feel like they've hit their levels.

25:46They can't get further. This sounds great for these malleable brains, but for them, it's not possible. Are they just out of luck? Like, can you learn how to change your brain and become a top one percenter past high school? Yes, you can. It's not the market we're focused on, but all these learning science concepts, you know, there are some elements at age, but fundamentally you can apply them for your entire life. And, you know, K through 12 or, and take higher ed. If you take higher ed, higher ed and down education market is a global$7 trillion market. And so we're focused on the K through 12 for now.

26:24But there is a huge opportunity in education to take all these same concepts for adults. What's the TAM of the larger side? I mean, near infinite in this world. Here's the issue you have, just, right? When you look at the world today, right, AI is going to change everything. There's going to be massive reskilling that needs to occur, right? And we're focused on, okay, how do we prepare the world for the, you know, from kindergarten up, right? And then, but there's a whole nother set of, okay, all these jobs are going to be obsoleted, right? and how are we going to retrain all those adults? And I believe that's a huge market and that somebody needs to go in there.

27:02And I believe entrepreneurs need to go in. We can't just count on the old educational system that we all have been doing for a hundred years. We need new entrepreneurs to go in and take these concepts and say, how are we going to reskill all the people who need it? You're on obviously the very cutting edge of AI and you have been forever from, I don't know if you would have called, you know, some of what you were doing back at Trilogy and ESW. Did you call it, did you say you were AI focused? Well, it technically was AI. So the AI, my AI world was in high school, I wrote a paper on AI. And one of the segments back then, this is in the 80s.

27:37Yeah. This is in the 80s. So this would have been like 1985 was neural nets was a new aerial. And I was like, they're decades away. Back then what AI was, was like expert systems and ontologies. And so I went to Stanford and I was literally in class with Professor Feigenbaum, who's the father of expert systems, which was AI. Now, the problem was AI was in its downturn phase. It had boomed sort of early 80s. There was a bunch of failed AI companies, so you could never call it AI. So when we started our company, when I dropped out of Stanford and started the company, we didn't call it AI at all because of the negative connotations.

28:17connotations, but it was the first AI product to sell a billion dollars. And so that was sort of our claim to fame in the 90s of what built Trilogy, the software company, was AI. We just didn't call it that because we didn't want the connotations. That's fascinating. And now, obviously, the company's huge, and you've bought all these companies, and you're sort of a behemoth in tech. But God, I was reading some old stories on you, and I'm sure sometimes it's even hard to like reimagine, but I love this one line about how like by the fall of 1991, you guys are like, at this point, I think still in your garage, sort of like a couple guys, five guys, no money.

28:54And you'd been three months away from product for two years. And you know, you did the thing of working 20 hour days and sleeping under your desks. But the part that's interesting is how people were talking about how your former classmates, they were going to work for Steve Jobs and Bill Gates and how some of the other friends of yours began kind of telling you, like, what the hell are you doing? What are you doing? Like, you're a smart guy. You dropped out of Stanford. You're going to build this thing. You've been three months away for two years. This is going to fail. Stop being even maybe what your dad said to you when you graduated Stanford.

29:30Gregory was your dad? It was my dad when I dropped out. I didn't graduate, so yes. Ah, yeah. And did he call you a moron for dropping out of Stanford? It was a big title in a magazine, like Forbes, I think, that they're like, the title was you're a moron because that was his quote. Does that still feel weird? Or is it not register for you anymore? Well, no, but back to that is I believe, you know, back to, and we were talking about the MBAs before. Here's my difference of an MBA and an entrepreneur, right? Entrepreneurs believe they're gonna change the world no matter what everybody else thinks, right?

30:03That they just sit there. And I remember back to one of the, you know, we were building this engine, this, you know, configuration engine. And we're in it. And we were just like, we're totally going to do it. And of course we know how to do it and we'll get there. It just needs more time every three months. Right. We kept, kept doing that. And I remember the parent of one of the founders, right. Of the co-founders is just like this year. And he had dropped out. And so the parents like mad at me because the kid's dropping out and doing this futile task. And it was all dumb and stupid. And my dad's calling me a moron, all those kinds of things.

30:35And I was like, no, no, no, you don't understand. Bell Labs had a hundred PhDs working on this and they failed, right? I mean, isn't that awesome? And to me, I was like, cause we're going to solve it and nobody else has been able to figure this out. This is not awesome. Literally. They're like, that literally is an example that convinces me you're never going to succeed. Right. And it's just, it's that blind belief that you are right. Right. And that is what entrepreneurs do. You know, back to the MBA, I used to give talks at Harvard Business School and stuff back in the 90s. And I would just sit there and say, here's your problem as an MBA.

31:13You're going to look at the spreadsheet and you're going to say that cell doesn't work. So the spreadsheet doesn't foot, right? It doesn't work. So I'm not going to do this idea, right? Because you're just looking at it and analyzing it. I'm like an entrepreneur looks at that cell and says, I will change that cell. I will make that work, right? And that's sort of the difference between the two. if you're going to be a builder and an entrepreneur, you're going to go change reality. Like when we started back, you know, three years ago when I became principal, I'm like, I have to build an engine that teaches kids 10 times faster, right?

31:44And I'm like, no, we got the learning science, this gen AI, it's totally going to be doable, right? And yes, you can do that. But if you analyzed it, it wasn't obvious. I think today people still don't really believe it, but that is what you do. You go out there and you say, I'm going to go build a school that people love that, you know, all those crazy things that you read about entrepreneurs go make that a reality. And that's, what's awesome. And I believe just, you know, are they made or formed, you know, um, you know, we, we believe in our high school that you can teach kids this skill. And if they're following their passion, they all have ideas where they think they can, you know, dent, put a dent in the universe.

32:21And we just need to help them do that and give them the skills to do that. Why do you think your brain worked that way? Why was your neural network wired to the fact that you looked at something almost impossible and thought, yeah, we're going to do that? I think humans naturally are like that. And I believe the standard school system sort of beats that out of them. And, you know, if you talk, so starting in middle school, a lot of people come into our schools, right? We had a few hundred people join, you know, we have schools now all over the country and they joined, you know, in the last 10 weeks ago when school started, you know and they come into middle school and they're consumers what we call consumers right they scroll tiktok they play fortnight all day right they've been caught in that dopamine evil screen time hook and we run everybody through an exercise where we say what are your values right go do a values exercise do a japanese ikigai if you know what those are what do you love what are you good at what does the world need right what do you get paid for and do a vision board if you as a way to think about it.

33:22These kids' vision board is not, I want to scroll TikTok all day or be a consumer. They want to go change the world. They believe they can, right? They want to, they just don't have the skills. And then after they create all this vision board of who they want to be, it's always awesome. Kids want to be awesome. They want to do great things. And then we make them do 168 hour project where they track every hour of the week. And you are what you do. And that's when they have this realization, you know, this middle school girl comes up and she's like, I guess I'm going to be the world's best TikTok scroller.

33:56Right. But the disappointment in her voice when she was like, I just did my vision board of who I want to be. And I realize, right, I've been caught in this consumer mindset and I'm trapped. And that is what our job in middle and high school is to teach kids the skills to go be a builder, to go be a creator, because they all want to do that. It's not that this generation, right? It's like, oh, there's no ambition. They don't want to. They want to. Our school system just doesn't give them the skills to make that transition. So have you found that you can take your brain back from being hijacked by this attention economy we're in?

34:32100%. So another example, this one came, this was probably a month ago where a student came up to me, where this was one of somebody who worked super hard. This is the other part about hard work. uh 10 weeks he came up to me he's like 10 weeks ago if you had said sign a contract i'll pay you a hundred dollars an hour for the rest of your life and you will just play video games that's it for until you die he's like i would have signed i would have sold my soul and signed that contract right this is and just that was it he was caught and he was sort of happy it's like literally he was signing up to live in the matrix.

35:11Right. And he was totally willing to do it. And he's, and he's like today, and he was presenting to the other high school kids, uh, at alpha. And he's like today, I don't even have time to play video games. Right. Because he is building. Right. And so you absolutely all these kids, but what they need to work on, if you put them in school for six hours a day and homework, you you've made an environment where they're like, okay, my escape is to scroll TikTok and play video games. Cause I'm not building, I'm not engaged. I'm not doing hard things. Like the third thing that I need parents to really believe that a lot of parents don't believe, you got to love school, right?

35:44You got to learn, you know, crush academics in two hours a day. The third is the key to your child's happiness is high standards. And high standards are when they engage, they want to engage in hard things. They don't, they want to go build an app that's a hundred million kids are going to use. That's going to, right. They want to go build that And that's hard and they know it's hard, right? But they will, right? And that's why they'll come in and put the effort in, right? If you think about athletics, I don't know if you have an athletic background, but athletics, the athletic ethos in America, we actually believe all these things.

36:18We just don't believe when you apply to academics, it just, we think it the opposite. So Westlake, right? Parents in Austin are like, I want my kid on the Westlake football team because they're gonna be state champions. It's gonna be the hardest thing my son ever does, right? They're going to work. They do go in the summer for practice. They're in the weight room at night. They are doing the hardest thing they've ever done to be on the Westlake football team. But they'll remember it the rest of their life. But if you said that same thing and said, that's academics, or what the school day should be like, they're like, no, no, no, definitely not.

36:52I'm not going to have my kid do that. It's only in after-school athletics where we believe that. It's so good. I mean, I hope you guys expand past even high schoolers at some point. to your point that somebody listening right now hears this and somebody who has built billion dollar businesses is getting so fired up about changing people's mentality in education. And what I'll say is like, it's the same thing I see with a lot of employees in our companies. There's actually some sort of disease or virus where we want to get by. We kind of want to get by. We do have the vision board maybe of a really cool life, but this idea of hard things as the key to loving life is something that we subscribe to.

37:33Here, our first line at Contrarian Thinkings Creed is those who say it's impossible should get out of the way of those of us who are doing it. And so we believe that deeply, but people don't last here very long if they don't believe that. And I like kind of proactively will say to the team, if you ever say like, we can't do that, or that's not my job, like you're fired. And like, you're welcome too, because hopefully it snaps you out of it and you go somewhere else. do you find this brought like not even in the kids but in the talent in the guides that you're hiring in the employees in your companies like am I jaded in that I'm saying there does appear to be there's like these two worlds one world where there's builders in Austin like our mutual friend Brendan and you know Dino who I think you know from Saronic too and they're just animals and there's this one and then there's this other side where there's so many people that I just want to shake them and be like you have so much potential what the fuck's going on you're in your own way That world I completely agree with, but, and we believe every kid, right, can be a creator.

38:35The reason, the issue is they haven't found what their passion is. So when they come here and they're not engaged, it's because this isn't the hook, right? We talk about every kid has a passion for learning. It's just not always academics. So back to my story of my dad, you know, I was a shirker in school. I was the slacker who I wasn't trying to do impossible things, right? I'm the one who was disengaged all the way through school, right? And then I drop out. My dad's like, you're a moron. But then there's a follow-on to that, which is 18 months later, he sits down with me and he's like, I'm so glad you dropped out, right?

39:13I'm so glad you dropped out because we'd been working 100-hour weeks living under the desk, right? And he's like, you know, you have found what you love. and he's like, you know, before this, I was worried that you were a lazy little shit, right? And a parent's terrified of having that, right? And that's in school, that's what I was, right? But then once I found what I wanted, right? And you just take off and we look at every student that we have, that's our job is to find what is it that lights them up, right? And that's what school, why you have to say kids must love school more than vacation because you know, you found it.

39:50Anything else, it's a parent pushing their values on the kid, not what the kid wants to do. And so instead, you're like, oh, you want to be, you want to build video games? We're going to let you build video games. You want to, right, sports? Like, so we are starting, right, a sports academy where if you love sports, right, you get to start sports in the afternoon, right? And you still have to do the rigor of the academics in the morning in the two hours, right? But those kids are going to be the best academic performing athletes in this country. but they're also going to engage in what, you know, be a D1 bound middle schooler or D1 aspirational middle schooler.

40:26And it's always tying things in to what the kids' passions are that unlock it. Like one of our life skills that we teach in the afternoon, teamwork and leadership, entrepreneurship and financial literacy, socialization and relationship building, storytelling, public speaking, and grit and hard work, right? Those are the things when we say, you know, in the AI world, you know, those are the life skills that kids really need. And so take public speaking. Okay. You go to a 10 year old and you're like public speaking, they're going to be like, okay, right. They're not going to engage. You're like, what's wrong with you?

40:59Why don't you, it's such a valuable life skill. Oh my God, look what you can do. You know, and the parents are lecturing and it's, it's terrible. You say, wait, post-game press conference, right? You want to be able to go crush your post-game press conference. So at our sports academy, literally, we don't call public speaking. We actually teach them how to do a post-game press conference. And they're like – and they become really good, right? They become great public speakers on that, right? Because that is their hook that engages them. If you talk about, oh, you have to learn all this math and financial literacy, like roll your eyes.

41:33You're like, we're negotiating your Nike contract, right? And all of a sudden, all the skills they need to learn, right? let's take on the entrepreneurship side gross margin okay what could be more boring to a fifth grader our fifth graders launch a food truck right and my you know this was a day this was last year i go up to him and i'm like why did you launch why did you pick breakfast food you know as your product for your food truck and they're like have you seen the gross margins on breakfast food. And I was just like, okay, this is so awesome. Right. And they couldn't have been more excited about the business.

42:13Nothing hotter than gross margins. Right. And they are just sitting there and they are loving it. And they're talking about it and they're thrilled and they're having to learn teamwork. How old is this kid? So these are fifth and sixth graders. So two years ago. You're like 15? No, you're like 12. Yeah. You're like 11, 12 years old. I don't have kids. Does it show? No, sorry. No. Yeah. So yeah. So you're, excuse me. So yes, here's 11 year olds who are out there and back to teamwork, right? And so they would go to like car dealerships and set up the food truck, right? It's all breakfast food. You know, they'd make a thousand dollars, but they were dealing with real world business things where one of the kids, the kid who's on the grill doesn't show up.

42:48And they're like, oh my gosh, how are we gonna be able to do this? And all these kinds of things. So all these kinds of things you can do in the afternoon where you ignite kids' passion, right? That's the key. And I believe as we look, these skills that we talk about where you do the values chart in your 168 hours. Kids will use that for the rest of their life. Those are the life skills because they will somewhere in their career. Me, three years ago, right? I'm like, oh, I guess I'm doing a big pivot from software to education. I'm gonna go be a principal, right? And how do I go get the skills and engage in it and all those?

43:20And so I think the skills we're teaching today are what adults will need going forward for sure. Fourth of July savings are happening now at the Home Depot with select appliances starting at$398. Plus get free delivery on appliance purchases of$398 or more, no membership required. Upgrade your kitchen with a modern and sleek GE profile refrigerator featuring hands-free autofill for the perfect pour every time. And make laundry day easier with two-in-one washer-dryer combo innovation that completes laundry in about 90 minutes. Shop top brand appliances now at the Home Depot. Offer valid June 17th and July at the U.S.

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44:24Yeah, because it seems like you need both or you can use either as a lever and maybe explain it to me differently. But yes, kids need to love school or you need to love what you're doing. But isn't it also that like you need to learn to love the game or like you find what you love inside of it? Because it also seems like you have like, yeah, pure, whatever you call that, intrinsic love for X activity. And then you have like extrinsic love for an incentive such as dollars or outcome or reputation or whatever. And so do you need to play both of those? So absolutely, which is you like what you're good at.

45:04Yeah. And so one of the things like why people in athletics, why they hold kids back is they're going to be a little bigger, right? And then they're going to be better. And then because they're better, they like it because they're getting accolades. And then they get more playtime. And you get that positive cycle loop. Just like a Pavlov's dog. Yeah, and you just start getting into it. And people want to do things they're great at. Yeah. You know, in middle school, these girls would have said, no, I'm never going to do that. But now they're like, yeah, I can totally do that. And they want to stay because we showed them they can be good at it, right?

45:34People don't want to do things they're bad at. So if you're bad at something, right, it's how do you bootstrap them to get better, right? And that's why the old academic system doesn't work is once you get behind or you are labeled bad, right? If you're a C student in third grade, there's like a 90 % chance you'll be a C student for the rest of your life, right? It just – and that's not – there's no inherent brain chemistry around that. That's just a systems issue, right, the way we design school. But we can take those same C students and make them top 1 % and show them, no, you could actually be really good at this.

46:06And we think that's true for all the life skills as well, right? The Tough Mudder one. There were some new, you know, three of these middle school girls, right? So they're, you know, 12-year-olds. And, you know, I asked them. They were new to the school. And it was the week before the end of the session. And I was like, you know, hey, break's coming up. Are you really excited? And they're like, no. And inside, because they didn't want to go on break. and I was like inside I was happy right I did cheer because they wanted to keep going to school and not go on break and I said well if you could wave a magic wand and fix anything about the school what would you do they're like you wouldn't we wouldn't have to run the adult course for the Tough Mudder right they're like that's so hard right but their guide who's motivating and showing them they can do it I was like go talk to some of the high schoolers who did it right and all the high schoolers have a picture of you know all their whole team right their whole classmate They're all covered in mud, right?

47:05And they're all, you know. I've done it. It's miserable. Right. But they're all there as a team and it's a team picture and they all still have it on their wall, right? Because they did something they didn't think they could do, right? And that kind of thing. You have to bootstrap these kids. That's what school is, right? You're bootstrapping them to show them they can be capable here. And so a lot of these things, when you talk about getting people into the right roles and what they should do, it is this Japanese ikigai of you're trying to figure out what are you good at and what do you love and sometimes you're like I really love this but I'm not good at it and on some things you can bootstrap them into it right like okay let's get you good enough so you can do it and then once you hit that right then all of a sudden you're like oh I'm capable so does intelligence have a big predictor on success?

47:54That's a good question. So in K through 12 today, the best students, there's actually two, it's all coded on two things, IQ and big five conscientiousness. School today in a time-based system with a teacher in front of a classroom, you basically need to be high IQ and a conscient grinder, right? You have to be a natural grinder. And our view is I have to get this out to a billion kids, right? So I can't have those two limitations. So on the product side, we're like, how do we break those two things? So back to learning science, a mastery-based individualized personalized lesson plan solves the IQ issue to an extent, which is we can't make everybody, you know, I'm going to do quantum computing and figure it out.

48:36But for sure in, you know, K through eight, the K through eight curriculum, you know, if you take 95 % of America, they could all be top 1%. That there's just nothing intellectual intellectually challenging enough, if done with a mastery-based education, with an individualized tutor, that they couldn't get to top 1%, right? I'm never going to be a nuclear physicist at Stanford, right? I just, I don't have that IQ, right? So there are some upper bounds where it really matters, but for fundamentally of just teaching our kids, that's not true. But in a time-based educational system, it is because, you know, when you're in sixth grade and there's a hole where you miss some knowledge, you basically need more IQ to make, to bridge the gaps.

49:15But if you have an individualized tutor, it's going to go fill those gaps for you. The second on big five conscientiousness, you know, if you're a natural grinder, you're all set, right? We use our motivation model to compensate, which is how do I motivate this kid to grind, right? And get through it and do the hard work. And so in our, and motivations, lots of different things. Is there a formula for motivation? So we spend, you know, when we look at educating a kid, there's two parts to educating a kid. The first is, and 90 % of it is having a motivated student. And so we spend, our schools are designed, 90 % of my design work and our emphasis is on motivating.

49:5510%, which is the second thing you need is, you need to put them in lessons of the correct difficulty, right, which AI tutors do great, right? They'll figure out what you know and don't know and say, look, I know your age grade is sixth grade, but you need fourth grade math. And I'm just gonna give you fourth grade math, fill it up. But now I have to get you to wanna do the fourth grade math. 90%, that's motivation. So the number one motivator, like we have a huge motivation framework on our schools. The number one motivator and the name of our product is Time Back. Give kids their time back. There is nothing, more than money, more than anything, Time Back is the biggest motivator.

50:29And, you know, and so that's why we're two hours. If you want six hours a day in homework, right, if you take the Westlake Honors track, right, you can't pay those kids enough to be happy. But if you go to those same kids, like in our high school and say, it's two hours a day. If you want like 1550 plus at the SAT, it's three hours in high school. But that's it. And then you get all your afternoons for four years to work on your passion project. That motivates students, right? If you go to our sports academy and you're like, okay, I'm going to give you the whole afternoon, right, to play basketball.

51:04But you have to engage in the app for two hours. the kids are like that's a fair trade and just as a product manager the story my first week as principal you know mckenzie and brian had started they're like okay we'll let you be principal but you got to live up to the commitments they have to love school and so i go to the fifth graders my first week and i'm like you guys love school and they're like they're brand new they're like no like okay what would make you love school they're like less school and i'm like how much less they're like none you know and i'm like okay that seems a little light you know and and we literally negotiated it, right?

51:37I was like, so two hours a day, if I had, would you engage in these apps? If I give you an app for two hours a day, if then four hours a day was awesome, fun stuff you loved. And they're like, okay, that seems fair, right? That's a fair trade. And so that's literally how we got two hours. No, people were like, how do we get two hours? And they want some sophisticated analysis. I was like, okay, we got two hours and these kids say it's okay. Then I went to my learning science team and I said, can we, you know, fill their brain with all the awesome knowledge they need in two hours. And they're like, absolutely, we totally can do it.

52:06And so that was sort of the beginning of it and why, and that's why it was codenamed time back, but we actually made it the real name is give kids their time back. Then once you give kids their time back, there's tons of other motivations, right? So our teachers, right? When you, we call them guides and coaches, they don't teach seventh grade science because the AI tutor does that better, right? So instead they are hired for motivational and emotional support and their job is to say, how do I motivate this kid to greatness? How do I get them to do hard things, right? And what are the things? And sometimes, you know, in kindergarten, it's like, here's a sticker, right?

52:42And the kid's like, oh my God, it's a sticker, right? I couldn't be happier, right? Eighth graders a little harder, stickers don't work as well, right? But you're like, oh, the time on your passion project, right? Oh, you wanna do a Broadway music. Wait, you wanna write a book. Oh, wait, you wanna go become an equestrian, right? And we'll let you out in the afternoon off time to go do that. Right. Whatever the motivation is that will get them, you have a whole range. Everything from time, there is money, financials and incentive, privileges. Right. So like mobile squad. Yeah. And the Broadway privileges is also just freedoms in the school.

53:17Right. If you crush all your academics and hit some goals, you get mobile squad, you know, at the end of the session and mobile squad gets to go on some trip somewhere. Right. Or you get the privilege of learning in a beanbag, right? Like the younger kids where you're like, okay, you know how to learn on your own. You become a self-driven learner. You don't require a teacher or an adult to babysit you. You learn on your own. You have the freedom. Like our middle schoolers get to go to the second floor where there's less restriction and less rules. And they can sit in a beanbag and sit on their computer and learn or do whatever.

53:52So there's all these different things around motivation that allows kids to learn. you know, off-campus lunch, right? Everybody, younger kids, the number one motivator to the younger kids is lunch with their guide, right? They love their guides, right? How we measure our guides and teachers at the younger, like a kindergarten, you're like, do you love your guide? As you get older, the question we ask kids is every adult had one or two teachers who transformed their lives. Is your guide that for you? Right? These are, and that is the standard. And that's what our guides do is their job is to say, right, I'm going to help you achieve your goals, right, your dreams.

54:32That's what I do all day because I don't have to sit in front of the class lecturing or grade quizzes or whatever. I get to connect with the kids, right? And people talk about, okay, this is like AI is going to change the role and teachers are going to change in our world, right? But teachers did not become teachers to grade seventh grade science quizzes. They became teachers to transform kids' lives. And in our world and why everybody wants to be an alpha guide, we had 80 ,000 people apply for our jobs. They want to be an alpha guide because they get to spend their entire day connecting with kids and helping them transform their lives into who they want to be.

55:08Do you – you seem to have pretty high EQ. Would your wife disagree? Yeah. My kids would too. Both my daughters. I have two daughters. Well, I found in tech it's not always a huge correlation between the two. But now you, like, are you the same person you were when you were building Trilogy and these other companies now? No. 90s Joe, right? Yeah. Versus family man Joe, right? It's totally different, right? And it was, I could not be the principal if I did not spend 20 years, like, raising my daughters and being a family man, getting married. What were you like back then? Then I would have, I was absolutely your consummate 90s tech bro guy.

55:51What does that mean? You're just intense and focused? Intense and focused and relationship and the EQ part, like a zero. Like I just, what are you talking about? Just if it was a pure mathematical equation, well, obviously, logically, this is the answer. Do this, right? And it was very much there. And this concept that relationship building, right, and building out your network, right, is so valuable, right? I mean, right, socialization, relationship building is one of our key life skills we teach the kids. I had zero of that, right, back in the 90s. And I'm like, why would you do that? I'm just going to build a better product or whatever.

56:31And the human component was, you know, so far down on the list. Yeah. And so, and versus today where, right, when we think of the skills we need to equip our kids for for the future, those are the skills that matter, right? So a guy who's built multi-billion dollar software companies who was really happy doing this. I'm a little bit happier doing this too. I need to get over it. I'm working on it. But now you think that relationship building and human connection is more important? I'll give you an example. And it's my own daughter as an example. My oldest daughter is an introvert like me, naturally introvert and great student.

57:11So she got 1600 SAT. She's a math English double major at Stanford, right? So she's one of these, I love, she was the opposite of me on this. She loved academics for academic sake. You know, in high school, she like read calculus books for fun. You know, when she got to Stanford, she's like, wow, these STEM boys can't write. So she created a writing program called equation based writing. Cause she's like, cause in freshman English, you have to grade. She's like, God, he's so bad. Let me help him out. So she's like, loves academics. but in high school back her guide I was like look what really matters for her is relationship building because she'll naturally just spend all her day doing academics but in our school we're like the afternoons have to be about the life skills development so she started her own sub stack right and writing online because she loved to write but to promote it right she's like okay I have to go on Twitter and like build an audience.

58:04Place is dark. And I mean, her guide would sit there and it took her guide six months of motivating her and convincing her and working her through till she'd send her first DM. Right. And she finally sent a DM to Seheel Blue. Right. Buddies with him. Right. Cause, and Seheel was like, had written something that she's like, oh, this is so applicable to high school kids and literally wrote the article. Right. Wait, what's your daughter's name? Or do not say that publicly. On Substack, she's Austin Scholar. I think I have engaged with her on Twitter or met her. You may have. She has now 20 ,000. And didn't put it together.

58:39So she has 20 ,000 moms, basically, who listen to her about what it's like to have no teachers for 10 years and go to Stanford. Her thing is university needs to change, too. So does she not get invited back to Stanford then? No, no, no. Are you both not? Or is Stanford open to it? She's thriving at Stanford. But what's interesting is a school, you know, schools are bundles of things of which academics is only a piece. Right. And so she hates her hundred series lecture classes. She's like, OK, my math class is a complete waste of time because the apps I use. Right. Are way better. I learn way faster.

59:15She's like, but everything else at Stanford, her dorm mates, her classmates. Right. She's in a sorority. Right. Her after school activities. The environment of Stanford. She's thriving. even though she's like, okay, this math class for an hour is a total waste of time. And everybody knows that, right? Back to these same things. Harvard has published an article that says AI tutors are better than Harvard teachers, right? So it's not like we don't know this. It's just, you know, how are we going to change as this goes forward? But back to the relationship building, you know, and all that, this key life skill she needed, she didn't need more academics.

59:52She didn't need physics to AP, you know, in high school. She needed to spend her time supported by this guide, right? Because one of the other things you get to adolescence, you don't have kids yet, is they stop listening to their parents, right? The middle and high school, right? It's just, it is, their job is to, right, get accepted by society. So they start caring about their peers more than their parents, right? Which is always a transition for a parent to realize that, right? And so like when she was applying, you know, it was Chloe she trusted, right who was a guide who is like chloe when she said look relationship building is important okay it's like okay but it was really hard for her and she needed that coaching right and support it's it's high standards but high support it's not just drop them in the deep end it's coach her through it and then eventually she got it and now she has this great network right but it's and so those kind of skills you know if you have a relationship person you're also to my the arts theater girls, right?

1:00:51You're like, okay, guys, you're going to do math, right? You are going to do math. We're going to show you, you have all these skills. And if you're the, you're the academic, we're in teacher relationship building or entrepreneurship or whatever else over there. If you are the EQ girl already, right? We have girls who have millions of TikTok followers and we're like, yeah, you're going to get 790 math, right? You're going to be, we're about, one of our kids is about to do something that in science that like nobody in American history and science has ever done this in high school, right? And so, and if you had asked as a middle schooler, would they do it?

1:01:21The answer was no. When you look at education today and where we're at, like, do you think we can actually re-educate the entire, let's even just say the US using the technology we have? 100%. How long will it take? Well, this is why I want to be, what I want to communicate, my goal in this is we need entrepreneurs and builders to come in. If we keep down the status quo, not going to happen. Right? It's a hundred-year-old system. It's not changing. And what happens if we don't change? Oh, it's really bad. Like paint a picture. As somebody who deeply understands AI and education, what happens? Well, the skills you're going to need.

1:02:00Like back to just if we graduate, if we spend 10 years and educate kids the way we've been educating for 100 years, those kids are going to go into an AI world and have no skills that matter. Right? And people are going to say, I just wasted their whole childhood. And I made it miserable and they hate it. And they don't have the skills that need. Like when we look at the world, if you're an Uber driver in Austin, robo taxis, Waymos, all this stuff, that's not a good place to be as an adult. There's massive transition on the adult. And entrepreneurs need to go fix that. But I'm focused on the K through 12, which is there is no better time to be a five-year-old because AI gives kids superpowers.

1:02:42Right. If you look at, they can learn 10 times faster in the mornings, right? Not give them chat CPT. That's really bad. They'll all use a cheat, right? Chatbots are cheatbots. If you're a parent, if you're wondering if your kid's using chat on academics, 90 % of the time they're cheating. But in the afternoons, when they're doing life skills workshops and launching a food truck, right? 11 year olds don't know how to launch a food truck. And there's not a teacher who can teach them, but AI is going to help them figure out how to do it. You can't, high schoolers can't launch Broadway musicals, right?

1:03:13Except AI gives these kids superpowers and we need to show them, right? It unlocks their potential, right? And they love it and it's exciting and right? We can totally transform all that. And so that, if you're a parent, you're just like, this could be the best 12 years of your kid's life, right? And we need to go change it. And now to change it though, we need way more entrepreneurs than just me. because it can't be cheap too. Like going to Alpha School, what does it cost? So Alpha School is expensive. So our tuition is$40 ,000 to$75 ,000. And so when we, back to design goal though, when I designed it, I was like, pretend price is no object.

1:03:51What can you do? Now we are building a whole nother set of schools, right? At half the price, at$20 ,000. We spend in America$20 ,000 a kid to educate them. So that's sort of my price target. We're launching, right? And we've launched 10 of them so far. We hope to open hundreds next year of these Texas sports academies, they're$15 ,000 tuition. Middle school, right? They're micro schools. There are 25 kids, middle school D1 bound athletes. Think 25 really good basketball players, right? In middle school who do academics in the morning, you know, basketball in the afternoon. And so think of hundreds of these schools around Texas.

1:04:28At 15 ,000, which the voucher program just was announced, which is like 12 grand. So parent pay will be like$300,$400 a month. right so dramatically more accessible than alpha and so we're building a whole set of schools like this i need lots of entrepreneurs to go build this right we need a school for gifted and talented kids right those kind of things sports arts theater music because if you don't you could have a world in which you basically have massive discrepancy those who are taught at alpha school use ai you know are unlocked and everybody else correct oh you absolutely like i have my job on this whole thing is, you know, Alpha is the first product we're building.

1:05:09It is the high-end one. Just branding wise, you have to own the high-end in education, right? You can't, you want to start at the high, you want to be the Ivy League, right? Yeah, you don't want to be the discount degree. Parents don't know about education. So brand really matters. They trust brand. And so you have to go establish the brand, which we've done, right? We're the most talked about school in the world by 10x, right? And so that's what Alpha is doing, but now we're bringing it down. And so we're building the software platform where it will be available. And, you know, to solve the U.S., I have to get to 20 ,000.

1:05:40But to get to a billion kids, I got to get it down to a thousand, right? I have to get it down to where, you know, in five years, everybody on the planet, billion kids have to be able to access a tablet that's less than a thousand dollars that will teach them everything they need to know in two hours, right? And so that's what our design goal is getting it down so that everybody can have it. Because we have to, because in this world of AI, we have to prepare the kids differently than we have the last hundred years. Does that daunt you? Or are you like, we're going to do that? Oh, we're totally going to do it.

1:06:11That's a, the learning science, that's, I mean, it's a lot of work, obviously, right? There's a ton of work, you know, back to the billionaire side. Like I've put in a billion dollars as to kickstart this. Just to Alpha, right? Well, the software platform and stuff. So we're doing, and the Sports Academy. So I'm funding a set of different things. But to change education, education is a$7 trillion market, like a billion is a drop in the bucket, right? Texas alone spends$100 billion a year on education, right? So societies and parents spend a lot of money on education. Like if you do surveys of parents, they will spend up to 10 % of their income on educating their kid.

1:06:51So it is actually a really good market. Societies generally spend 5 % of GNP. So it is this great market. It's just we've always had the same system for 100 years. And now what's different is, okay, can we go get entrepreneurs and builders to come in and build these awesome products, right, that will transform what the 12 years is like? We – you know, it's interesting you say that because we have an education business. It's called Contrarian Thinking, and we teach people two things. One, we teach them how to buy businesses. Like normal, my theory was, you know, I was in private equity, I did acquisitions, and I thought, this is not that different.

1:07:28Like what the PE guys do at the highest level, leveraged buyouts, is not that different materially from what you do with an SBA loan or with seller financing of a very small business. You've bought a shit ton of businesses. And so it's not easy. It's actually hard and awful and really difficult in many ways, but it's not rocket science. It's actually not that complex. It's like, you know, simple but not easy. And so we created an education company where we are attempting to teach. We've taught about 10 ,000 people how to do it. And if the average, you know, the average American doesn't even own a business.

1:08:02And so it's really hard to get good data on how many people will ever acquire a business. But we think it's like less than 0.01%. Like most people will never acquire a business. It's very weird. So if we're able to take right now, we're about 37 % of our people who come through our program, acquire a business. And it's really important you don't just acquire any business because there's a lot of risk. But what's fascinating to me is when we started teaching people how to do this, the immediate response from many people, and it seems to be like a pervasive, I can't really figure out why, is like, one, if you could do it, why wouldn't you just buy all the businesses yourself, Cody?

1:08:40Why would you teach other people to do it? Two, education is somehow seen as, and there's a lot of bad actors, so maybe why, but it's seen as like lowbrow, scammy, couldn't work, not good, taking advantage of people. And then it's also seen as like, maybe not sophisticated. Like, oh, if you were really going to build something real, you would build trilogy. You wouldn't build an educational-based system. If you do do, if you can't do, teach. Why is that? It's so pervasive. Correct. Why? That is – so if we want to get controversial. So I believe part of my role is to bring capitalism to education.

1:09:19And it is seen that capitalism is evil. For profit and capitalism are evil in education. Just straight out. Know that nonprofit is the only way to do it. And fundamentally I believe that's part of the problem, which is nonprofit. I gave a talk at Masters of Scale, which is how to scale big ideas. And education doesn't scale. in, you know, and the reason is nonprofit means non-scalable. Like if I have a set of donations, right, and I build the world's best product, the better the product, the faster my money goes away. And now I'm done, right? There's plenty of charter schools who have 3 ,000 person wait lists.

1:09:57And I go ask the head of the school, I'm like, well, why don't you open another campus? And they're like, I'm waiting on a$40 million donation. Versus I had a thousand people at an info session in New York City who are going to pay tuition to this for-profit. I will have no problem raising capital to open a new building because of its for-profit. Capitalism scales, right? This billion dollars that I threw in, that's not enough to fix education. We have to show what's going on, right? We have to show there's great businesses here. And so, but there's a view, appropriately so, there were bad actors and lots of for-profit scams.

1:10:34We just need to go get the good entrepreneurs who can use capitalism for good, right? Like one of the things we do is it's why we publishize all our academic results that we are like, guys, don't trust us. You shouldn't trust us. Look at our results, right? And, uh, but unlocking human capital. Well, that's what, and the results mean SAT scores, right? In this case, academics or the life skills. It's the three commitments. Kid, parents are like, oh my god my kid really does love school right and they're like that's you actually as a parent when it happens you're like okay this is great then the second part is okay they're crushing their academics and then that third life skills when they're launching the food truck you're like okay this is actually what my kid needs to do or they're building relationships or whatever that life skills no they watch the the tough mother they're like okay this was better than my school so they look at that product you just need a product focus and like for yours here's how i would design the product right in a for-profit world so we have a set of high schoolers who are like, okay, we're going to build a program to be a millionaire in high school.

1:11:35How do you make a million dollars in high school? Right? And so they're talking about pricing. And so one of their proposals is we're going to charge$150 ,000 a year tuition, money back guarantee, if you don't make a million dollars. So it'll take$600 ,000 of tuition over four years. But if you make a million dollars, it pays for it. Right? And it's a money back guarantee. so if they don't deliver back to your point of your scammy, you're like, it's free for the person, right? And it's that kind of product design that no nonprofit would do that. But a entrepreneur who's saying, oh, wow, that's the kind of thing that we should go build where you have this closed loop where you're unlocking their potential and then people are willing to pay that.

1:12:23People would make that trade. They're like, wow, if you teach me how to make a million dollars, right, while I'm in high school, and it's going to be fun. I'm going to love it. It's going to be all these great things. And we have to make sure of how we're teaching them. We're not teaching them how to do a scam. Our final character, right? Character, community, classmates, and culture, right? That's one of the huge elements of school. And at the end of the day, character is the one parents really care about. Are you teaching these kids to be good kids? We can teach kids to build ethically awesome businesses, right?

1:12:52They're building apps. They could build crappy apps. They're building an app to teach 100 million kids to contribute to their community. Right? So we can teach all these great values to kids as part of school. That's one of the jobs. And we can teach them ethical business at the same time. Okay, last question. What about for people who are really scared to have AI teach their kid? Yeah. That's a great question. You should be terrified. So today, your kid, 20 % of kids, right? I think Brendan uses this stat that he calculated. 20 % of your kid's life is influenced by AI. they are being brainwashed by tiktok today right in all this is that or fortnite whatever the is out there it is and it's getting worse um and what you put into kids heads really matters and so part of one of the things is you have to figure out who are the trusted people putting in it's why i say chatbots are cheatbots and they're terrible like if we could ban like those chatbots being in school, that would be great.

1:13:56You know, and so part of what our job back to branding and stuff, you have to build a trusted relationship with parents that what you're putting into the kid's head is good, right? Now, what I can do with AI, right, is actually build one where the parents can validate and trust it, right? So we know what it is, right? But if you have it just, you know, Wild West free form and you're not doing it, like what is your kid doing online? Right. That is something, it can be very bad and people should be worried. AI could be good or bad. Right. And we need to have a huge effort to make sure that we use it for good.

1:14:35You know, we have to build, we have a project where we are building the TikTok that is engaging as TikTok, but it's going to put all the cool stuff into your kid's head, not the bad TikTok stuff. We need it. Although, you know, people talk pretty badly about TikTok these days, and I'm a big Elon fan, but I have found that like TikTok algorithm is actually pretty easy to change and manipulate. And so, you know, on my TikTok, there's a few things I like. I like those. I get rid of the others. I don't really see any nonsense. I don't see brain rot. I don't see any of that. I do think these days on X, it's harder.

1:15:11There's so much negativity. And I think it might be more sophisticated, but, you know, I think I think optimists, they sound too Pollyanna, but they make all the money. And pessimists sound smart and then make nothing. Yeah. Well, and to this on online, we believe teaching kids healthy online habits matter. And you're talking about, you're curating a TikTok feed that's healthy for you, right? You can also curate a bad one. And if you don't teach kids how to do it right, they'll end up with a bad one. And I actually believe, because we have kids on X doing the same thing, you can curate a great feed on X of domain expertise and heavily using mute words and all that stuff where, you know, your block list and mute word list has to be really long.

1:15:59Twitter has a lot of experts where if you want to learn about learning science, yeah, if you want to learn about learning science, you can build a filtered list on X where you can become an expert in how to learn 10 times faster. So it's all these things, they can be good or bad, right? And you have to figure out how to actively curate your presence. And also back to tracking. Having kids track where they spend their week, this 168 hours, helps them, right, of I don't just want to be a consumer. I want to become a creator. And that's what, as parents, we should all care about. Is there some resource you love or something that you have from Alpha, an article you've written that we can mention and say, if you want that, click here, and then we can drive people direct to you?

1:16:42My daughter will love me if I do this. It's Austin Scholar. She's got 200. She writes every week. She's got 200 articles out. It literally is from 10 years of not having a teacher in this new world, what it's like to go to college in it. And it's academics plus the social emotional learning side. I love it. We'll link that. That would be – we'll put that in. Also, you're a good dad. That's the single best source. That's the single best source. That's a good dad right there. A proud dad. Joe, this is so cool to hear about. You have my brain spinning about ideas here. And I just want to thank you for building something that is not, you know, one of my CEOs used to say to me back in the day, when I first started getting online, he said, you know what, here we get rich quietly.

1:17:29And it was, and I get that, because it was his thing he had built, he had built this incredible business that he had every right to do it. But I thought, I don't know, I don't think it's a zero some game. And so I started getting on the internet for that reason. And I think people like you sharing this and creating an area for education is like the only way we fix so much of what I see on the internet every day. I couldn't agree more. And if I can convince some of your listeners, right, some of your audience to come over to education, this, there is nothing. So back to my whole career, I obviously had a good career pre being a principal.

1:18:04The last three years have been the best years of my life and I'm going to do this 20 years. I'm more excited about the next 20 than my last 20. And I need to go get other builders and entrepreneurs to come over here and see how awesome it is. Right. And so if you're like that, send me an email, DM me, and let's get you building to solve education. Because at the end of the day, there is nothing more important for a society than how it raises its young. That is the single societal issue that really matters. And so come work on that. Thanks, Joe. Thank you very much.

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