Joe Liemandt  - Building Alpha School, and The Future of Education - [Invest Like the Best, EP.439]

23:59It seems like that's just true. My favorite analogy is the sciences, biology, chemistry, and physics, let's take those. They had their days of wandering in the wilderness, lost in the wilderness where doctors were still bloodletting and chemists were blowing themselves up. And there was an invention of an instrument, the microscope for biology and the telescope for physics and the analytical balance for chemistry that allowed more precise measurement. And that precise measurement is what allowed those sciences to really take off. And so learning science has sort of been that way. It's in this wilderness period for 40 years where we still have teachers in front of the classroom in just a bad model.

24:40Teachers are great. Teacher in front of the classroom is the problem. The model is the issue, but teachers are awesome. I want to be really clear. We should talk about how important the adults in a building are. But back to the learning science, AI allows you to do precise instruction to the student. And then second, measure the results. And if you take the AI out, your effect is dominated by the classroom. And you don't know, is the student motivated? Are they even trying? What's the prior knowledge of the student? Did the teacher actually instruct it correctly? the environmental variables dominate in the last 40 years with learning science.

25:18With ours, with an AI giving very precise instruction and being able to closed loop measure it, that closed loop is the magic to your point, which is we have a closed loop that no one else has. Our team comes up with an idea and says, okay, theoretically, let's take Dean Schwartz chapter K and put it in and we generate lessons. The students use them. How well does this improve teaching? They take a standardized test. We measure how long, how much time they spend. They take a standardized test. We have the results. Did it work? And keep that loop going. We're basically the only place that has that closed loop, which is why we're able to get these crazy awesome outcomes and other people aren't.

25:59You also told me the best way to learn is by analogy. And there's another analogy, which is I think quite cool, is to think about this program like an iPhone. Every year for a long time, they were releasing a new one and it's constantly getting better. And I want to understand some of the dimensions of that with the two-hour piece specifically before we get to the afternoon and motivators and everything else. I know you started, like I said before, with tools like iXL. You're starting with a standard set of curriculum that maps to the map tests and everything else. What has improved the most since you first started applying this idea of like, wait, not only is this core idea of the learning loop better, but each component part of it can probably get improved like the iPhone does year to year.

26:39Here's the magical part, and this gets into the time back of what we're going to be launching to bring this outside of alpha, is generating personalized lesson plans for kids, for them, is the magical unlock. Because it affects everything, which is back to motivation and point of analogies and learning. Let me go far extreme. I have a first grade boy who's like, I hate books. I don't want to read. And you're like, here's a book. Good luck. Good luck. Okay, just a second. What's your favorite movie? Oh, The Avengers. Who are the buddies on your soccer team? Okay, I am going to generate, right, a personalized choose-your-own-adventure story where you and your buddies are saving the world.

27:26It's going to be geared exactly to your lexile level, right? Your reading ability, which is back to learning science. You want to stay within 10 % of where they are so it's not too easy, not too hard. Zone of proximal development. And so you're sitting there. And now I have a lesson that you are going to engage in. And you're going to be reading it. And you're choosing your adventure of where you're going and you're engaging. And kids will spend, who quote, hate books, will spend an hour choosing it. And as they learn more, you can move up the lexile level and such. and you can build a personalized lesson just for them that's dynamic.

28:00You want to learn fractions? You can sit there and say, oh, you don't want to do math, but oh, you want to be a fashionista and a fashion designer. Okay, well, how are you going to do that? We're going to make this all in rulers and dress patterns and all those kinds of things. And all of a sudden, you're going to want to learn fractions. Or if you love baseball, I'm going to teach you statistics in the term of baseball. AI, and this is the generative part of AI that really matters, is all content, all educational content is obsolete. Every textbook, every lesson plan, every test, all of it is obsolete because Gen.AI is going to be able to deliver, generate a personalized lesson just for you.

28:43And it's gonna take into account what is your knowledge graph? What do you know and what do you not know? It's gonna take in the curriculum, okay, what am I trying to teach you? It's also gonna take into account your interest graph. What do you care about? And so all of a sudden, you can sit and say, what is my knowledge graph of what I know and what my interest graph is? Here's an example of an AI, a generated one where people were doing AP World and they were coming back from a Taylor Swift concert. And they're like, I'm having trouble with the start of World War I. And you're like, okay, we'll generate a lesson plan in terms of Taylor Swift.

29:16And all of a sudden, you know, when, I can't remember exactly, but when she was on the, getting the award and they came up and took it, and then there was all the controversy and there was a mediator. And literally, it just created a table of all the people who were involved, the Taylor Swift people, and then the World War I with Archduke, Franz Ferdinand, all that. And literally, the kid's like, okay, I'm gonna remember this forever. Or for AP World History, our kids, our high school kids generated this, where they go into Sumo, which is an AI music generator, and they literally, just like Hamilton, back to interest level and generating content.

29:48Every kid coming into high school these days, because we don't teach history that much anymore in standard school, And so if you transfer into alpha, your knowledge of history is basically whatever is in a Hamilton song. If it's there, they know it. And if they don't, they don't. Well, taking that theme even further, for every unit in AP history, the students generated a song to teach themselves the concepts. And they were all just singing the songs, going down, having a great time. And they made the material relevant to their interests, which massively aids engagement and retention. And so when you think about the biggest change is imagine getting personalized lessons geared for your interests.

30:31And those lessons, though, are all based in the concepts of learning science. Think of giving a kid an unending stream of questions and knowledge at 80 to 85 percent accuracy, which is sort of the zone of proximal development, which is you don't want to make it too hard. where half the time I'm failing because you're going to get disengagement. Talk to game developers. Yeah, they've learned about this. Yeah, you're just game developers. You use the same theory as game developers is how do I keep them engaged? And if it's getting too hard, let's make it a little easier. Oh, it's a scaffolding issue where it's a prior knowledge issue.

31:06I can do that. I can use analogies that they know. It's Taylor Swift or baseball or whatever their concepts are. And I just give you an unending stream of questions that you're engaged with that you really like. The amount that you are going to learn is 10 times more. than you would passively sitting in class disengaged. And so that's really what the magic is of being able to auto-generate content for each student based on their interest graph. Now, there is cognitive load stuff also of when you feel confused and overloaded, that's usually when you're overloading your working memory. That's also when careless mistakes come in.

31:43And you can sit there and say, make sure, because every student's different, You tailor the question based on how many slots they have, how many chunks do they have. So it's not too hard for them where you're not overloading it. A classic one on this one is fluency, which is fluency. You can solve harder math problems if you know your multiplication tables and division tables. And so for students who are struggling in advanced math, part of the problem is just go memorize your multiplication tables, which they all can do. And then all of a sudden, their higher level math scores get better. We have one student who was, this is sort of a unique and extreme example, and I hesitate to say it, but we had a student who was 740 on the math SAT.

32:26And in looking, they were making careless errors. Some of the problems were overloading work and memory. And for whatever reason, the student didn't have fluency of multiplication and division tables. So we literally sent her back to third grade math. We're the only school in the world who will take a 740 math SAT student. Back to third grade. Send back. And she got a 790. A 790. And it's that kind of thing where when you talk about the science of learning and just, I say it this way, the parent and the student in this case were not excited that their 740 math student is being given third grade problems.

33:01That can't be the issue. But it is. It is because you're overloading the working memory and she's just making careless mistakes. A quick selfish aside, when will this be available for me? I keep referencing we're going to come back to motivation. I'm motivated to learn lots of stuff. investors in general, motivated to learn lots of stuff. I'm often facing novel situations where I don't know the physics or the technicals or the this or the that. And I wish I could just input like, yeah, here's everything about me. Here's all my favorite stuff. Ask me anything you want to know. I'll tell you anything.

33:29Now teach me whatever. Teach me avionics. Teach me whatever. I'll take tests. I'll do whatever it takes. How long do you think we are from a normal adult that doesn't need motivating, just being able to input the thing they want to learn about and having a system like TimeBack teach it to us much faster. We're focused on K through 12. And so there needs to be somebody else who does that for the adults. But the next five or 10 years, everybody can have this. This is going to be a standard thing for everybody. One of back to a visionary, I was talking to some ministers of education of other countries.

34:01I was like, look, sometime in the next five years, I don't know exactly when, there's going to be a tablet that's less than$1 ,000 that is going to teach every kid on this plan everything they need to know in two hours a day. It's going to come. Our AI burn is like 10 ,000 bucks a kid right now, but it's going to be down. It's going to be for everybody. It's going to be on a tablet that everybody's going to have. That is coming. I believe that it's a reality that everybody should, if you're a parent, you should wake up and be super excited. AI is going to affect people in various ways. There's going to be winners and losers.

34:35I'm in Austin and we have the robo taxis and the Waybos and all this stuff. And I'm like, I would not want to be an Uber driver. This is just not good. It is not good for them. For kids, it is an unequivocal good. McKinsey's favorite line, and I completely agree with it, which is, this is the best time in history to be a five-year-old because we are going to transform their first 12 years because they are not going to sit in class. People do not like school. School experience for most people is not good and they don't learn. And we're going to completely be able to transform their dozen years and make it awesome as opposed to the chore that it is.

35:11How fast does the benefit diminish with age? Like best time to be a five-year-old, what about to be a 10-year-old or a 15-year-old? Will that cohort still enjoy these benefits? Back to catching up and how far. We'll take anybody into an alpha school academically if they're willing to put in the time. And when you talk about the time, you're like, wow, you're really far behind. So you can't do the two-hour learning. You got to do the three-hour. Okay. You need to take one hour of homework or an extra hour in the daytime in order to catch up. No, because it's on our dashboard. We literally have one for when people come in where parents can look and say, how many weeks it will take their kid to catch up if they do one hour of homework.

35:51You can take a kid years behind and you're like, well, you're 20 to 30 hours times you're two years behind, great. You're 40 to 60 hours behind. The number of hours just isn't that much. And you can just catch up very quickly. So anybody can take advantage of it. And I believe that it's getting the curriculum in, getting that closed loop and measuring it. Yeah. Let's talk about motivation now. We know that motivation is some huge percent of the problem. I think there's been interesting studies. The anonymous parent that wrote about whose kids in Alpha School talked about this idea that they tried to adopt themselves some of the programs that were underneath early versions of Alpha, and they really didn't have a lot of success.

36:31Like their kids didn't really want to do it. They kind of complained about doing it on the weekend. There wasn't the feedback mechanism critically to show the kids gamified where they are. But motivation, solving for motivation, both in giving feedback on their progress, but also in what happens in the afternoon has been a critical part, I think, of Alpha's success. So just talk me through the journey of learning about this and what you do. Motivation is 90 % of the solution. The ed tech is 10%. just hitting the ed tech and the software and all that stuff, even though I come from the software background.

37:00Ed tech has failed. We keep putting ed tech into schools and test scores keep going down. So it's failed. And the issue is ed tech is necessary, but not sufficient. It's 10 % of the solution. Educators will say you need two things to teach a kid. First and most important, a motivated student. And then second, you need to put them in lessons of the correct difficulty. And not too easy, not too hard. zone of proximal development. So EdTech does the second one really well. AI tutors, right? We can ask you what you know and what you don't know, take an assessment test, and then we're going to give you those questions.

37:33But are you going to engage? Do you have any interest in engaging? Or if I don't engage with the app, then I'm not going to learn anything. And so motivation is 90 % and Alpha is 100 % built on solving the motivation problem. There's two stories here on this was back to when I moved my kid over years ago, Brian, who was the co-founder with McKinsey of Alpha, I asked him, I was like, what's something that I don't believe about education that I need to know? He's like, kids must love school. The first commitment of Alpha is kids will love school. And I'm like, oh, school's sort of like spinach sometimes.

38:10It sort of sucks and all that stuff. He's like, you are wrong. Kids must love school. That couldn't be more true, which is if we're going to fix education, we have to wake up every day and realize, why don't we make these dozen years for kids? We spend plenty of money. We spend plenty of money. We spend a trillion dollars for K-12 in this country to make kids love school, put them in class for six hours, give them homework, make it a very terrible environment. We're not doing that, but we need to change it so they love school. And that's tied into how you have to solve the motivation. If you want them to learn, you have to do that.

38:41And just back to the ed tech, one last thing on the ed tech is ed tech has five or 10 % of kids who do well with it, right? And there's a whole paper out called the 5 % solution where the successes around ed tech are basically there's a set of kids who love academics for academic sake and learning more. They're self-motivated, high conscientiousness, often high IQ kids who do really well in the current existing system and you give them apps and they do it. That's not 90 % of the market. 90 % of the market is okay. How do we motivate kids? motivation is the core of the design. So let's start with the first part of this, which is, so my first week as principal three years ago, I'm now accountable to the kids must love school and love school so much that I want to go on vacation.

39:28I'm talking to some fifth graders. I'm like, guys, they're new to the school. I'm like, do you love school? Would you rather go to school on vacation? They're like, no. And I'm like, okay, well, what would make you love school? and they're like less school. And I'm like, okay, well, how much less? And they're like, no school. And I'm like, okay, well, that seems a little light as a principal to like have no school. And so basically we negotiated. I was like, look, how about this? If two hours a day, if you engaged in the apps, like, and you'd have to engage, you can't screw around, you can't be doing stuff.

40:03If you really engaged with the apps for two hours and then you had four hours of the most awesome stuff you love to do and workshops and team-based stuff that you really loved. Would you do that? And they're basically like, okay, I'm back with my team, my software team. I'm like, all right, guys, we have two hours. We have two hours and we have to teach these kids as much as we can. And look, all this learning science says it can be done and let's go figure this out and let's create a system where these kids are going to crush it academically in two hours because first you have to solve it in two hours and give them their time back.

40:39The code name of our product, it's actually going to be the product when you say, when does everybody get this? Next year, our goal is to get this out. My job is to get this to a billion kids. And so I need a software platform to do it. You can't do it with just the physical schools or just the alpha. But Time Back was the name of the product. Give kids their time back. and that is by far the number one motivator for kids. Actually, in that article you're talking about from that parent, motivation's complicated. There's lots of ways to motivate kids. Our guides, our adults in the building, our guides and coaches, they spend all their day figuring out how do we motivate kids?

41:14And sometimes it's the kindergartner wants a sticker or sometimes it's, oh, some of the students are competitive and they wanna be top of a stack rank, or say like that. Other ones, parents give them screen time or video game time, whatever the motivation is. Some is money, give them money. But by far the number one, if you take the biggest kids, your biggest one, your highest effect sizes, give kids their time back. And that drives the huge performance, which is if you took all my other motivations that we use and you said they have to sit in class for six hours and do homework, I don't know any of those other motivations would work versus you have to solve the first one, which is you need an engine that teaches kids 10 times faster so you can give them their time back.

42:02And then once you do that, these other motivations work as well. But time back is by far the most important motivation. And then with it, it totally works. Kids get it. You're like, well, do I want to spend two hours engaging the app to then do four hours of great stuff, right? Almost every kid's like, okay, that seems a lot better. So what is the great stuff? What happens in the second two-thirds of the day? Because the parents don't want the kids back. What's going on? So the afternoons are all the life skill workshops. And so think of, there's tons of stories around it, but these are project-based workshops where kids are doing stuff they love, but also teaching them life skills.

42:41And so think of a life skill that you want. Oh, I want my kid to be, I want entrepreneurial life skills. So our fifth graders last year, or two years ago, ran an Airbnb. and they loved it. And they had to learn P &Ls and gross margin and all these things. They had to learn business. And they were loving it. How do we set prices and decorating it? And this year, those same group were like, well, we want to launch a food truck. Austin has a big food truck scene. We want to launch a food truck. And I was talking to one of them. And I was like, why'd you pick? They pick breakfast food. Dippers, they call themselves.

43:12Why'd you pick breakfast food? They're like, do you understand the gross margin of breakfast foods? It's just enormous. And you're like, okay, this is awesome. And they have the food truck and they're on weekends, like they're going to car dealerships and have it open and they're making$1 ,000 and just think it's great. When you think of life skills, we're trying to teach, we have a whole life skill curriculum because common core curriculum is the standard academics, but parents have a standard of, okay, well, how do we teach teamwork and leadership? Today, teamwork and leadership is taught via sports in America.

43:45Most life skills in America are taught in afterschool sports. and if you actually survey parents, they're like, where did you learn your life skill? Grit, leadership, teamwork, all those kinds of ones. They're all like, oh, in sports. And that's why sports is such a big part of it. Now, you can teach those in school. You don't need to do it. And actually, school is a great place to teach leadership and teamwork and all these other life skills. And so our big one, it's leadership and teamwork. Second, storytelling and public speaking. And then talk about this one, which is if you actually go to the average 10-year-old and you're like, hey, do you want to do public speaking?

44:18The kids like it doesn't sound that fun. That's not exciting. How do you make it fun and exciting? So they love it. You're like, well, we have postgame press conference where you're the athlete. Everybody wants to be able to do their postgame press conference. So these kids all practice their public speaking. And then they go up to Austin FC, the stadium. Once they pass, they get to see the game and they get to go then sit and see the postgame press conference with their favorite star. And then we have a deal where then after the stars leave, a couple of the press stay and then the kids go up and get interrogated by them.

44:54And every kid's like, OK, I want to be able to do that. This is a life skill I want to teach public speaking. How do I frame it in a way where kids are going to love this and really engage with it? How do you have the teachers, the guides, the coaches do this more systematically? Like the software really tracks with me. It's very clear to me intuitively how it might scale because you can program it into the system. It seems less obvious how you could scale something like those examples. I have a friend, a dear friend, who I'm sure will enjoy this conversation, whose son is super interested as a young entrepreneur, as a young teenager, and he's building this little online business.

45:29And I'm sure if you told his son, you're going to get four extra hours a day to work on your business, he would bust his butt on the two hours to do anything to run his online sweatshirt shop. But the most amazing version of this I can imagine is that some amazing person that knows a lot about entrepreneurship and online selling and all this kind of stuff is helping that kid. That matching exercise, it just seems less scalable and less obvious how a system can get built that allows that afternoon to be as buttoned up as the morning. The answer to that is it depends on the age of the kid. So K through 8, you can build an afternoon and we have built an afternoon set of workshop and curriculum that's structured and standard and can be rolled out.

46:08It's not custom where they're doing individualized projects. But once you get to high school, we have what we call Alpha X Project, which is your four-year super passion project where you have all afternoon for four years to work on You Love. And that is very custom. Every kid's different. We have one student who's putting, she's trying to get a Broadway musical. It's the first all-teen produced, developed Broadway musical. And so she spent years building it out. She sourced all the people from TikTok and all the singers. She can fill a thousand people into a venue now. To your point, there's no guide or coach at Alpha who can help her.

46:48Our high school curriculum very much is how are you a self-driven learner who can use resources, including where AI really gives you superpowers, to be able to do these projects on your own? And that's the difference. K through eight, we have a life skills curriculum that the kids do that are designed and managed by the guides and coaches. And then high school is where they transition to where they take ownership themselves. And then they basically get feedback on how they're doing from the market, from the public. Are you selling stuff online? And they learn how to reach out and they DM people on Twitter and are like, one thing we found is super successful adults over invest in ambitious teens.

47:35And so all these kids are out getting help from adults in order to do it because you can't hire a teacher staff who can do all that. What about the stuff that goes to the K-8 bucket specifically? I could imagine if the carrot in the four hours was an amazing field day or something, that's different than like you need to learn to memorize some poem and give a public speech or something. The amount of actual motivation can range a lot and it's student dependent. What have you learned in the three years about the sorts of things that kids actually love doing that is the reward for doing their two hours in the morning?

48:08Okay. I'm going to say the most controversial thing I think of the talk right now, which is there's three things that if I could wave a magic wand and get every parent in America to believe, because they don't believe it today. If out of this podcast, this was the outcome, this would do more to change education than anything. The first thing is your kid must love school. We've talked about it. And they should want to go to school instead of going on vacation. If every parent believed that, that would be critical to changing it. The second is your kid can crush their academics in two hours a day.

48:41You cannot think and subject your kid to six hours a day plus homework. We need to stop that. Two hours a day. And then the third, this is the controversial one about this and that we've learned is the key to your child's happiness is high standards. And that is the controversial part, which is kids want to do awesome stuff. Kids think they're awesome. Kids are awesome. And parents are very worried naturally. They care about safety. They worry about their kids trying and failing. So the workshops that drive excitement, that drive kids loving it, what really engages it, it's not make the workshop easy.

49:27The kids want to go do hard things. They don't want to struggle and fail, but they want to struggle and fail on their road to success. Now they need to be supported by a caring adult. You need high support and high standards. When we talk about our guides, we should go into that. But fundamentally, kids love it. One of the things you'll see in the videos, Mackenzie's Instagram is basically all the videos of all these workshops. And all she does is just goes to school and films them and just films kids. And there's like half a million or a million people who love it because you're like, wow, this is what school should be like.

49:58We have kindergartners who climb a 40-foot rock wall. And when you hear that, and you're not the alpha advisor of it, you're like, oh, that is so bad. that's so whacked. That's too hard. But when you actually see the kids go through it, they love it. But it's hard. We mic up the kids as they're going up it. And you'll see somebody that's just like, okay, this is scary, but I have a growth mindset. I can do this. And then they achieve it. And it's all safe. And then they do it. And they come down and they're beaming. And they're like, oh, this was great. Our guides who create these workshops, we have a whole library of the ones we've developed.

50:35And we're always constantly, what are the ones that really work and what are the new ones we're trying. But last August, our second grade guide, Faith, she comes and she's like, okay, all the second graders can run a 5K in less than 35 minutes. And I was like, oh, well, this one, that seems too hard. That seems too hard. And God, the parents are really not going to like that if that doesn't work. She's like, I know it. She was an athlete at UT. She's like, they totally can. Let's do it. Let's do it. She's like, now, here's the key. We teach kindergarten, first grade, teach a lot of growth mindset.

51:10You should think you can do anything. And she's like, we got to start teaching them in second grade how to do anything, not just think it, but how to do it. And so she's like, we're going to teach them Atomic Habits, the book Atomic Habits, which is 1 % better, basically. Most adults don't learn that till after college when they read the book. But the concepts in that book, you can teach a second grader. Everybody gets it. She gets all the kids together and she's like, we're going to run a 5K. who thinks that's impossible? Every kid's like, okay, that's totally impossible. I can't do that. Miss Faye.

51:39And then she goes out to the track and she's like, I've signed you guys all this in August. I signed you up for the jingle 5k at the domain Christmas. We're going to run it. Here we go. She's like, but day one, we're just going to walk the track and all the kids walk the 5k. And she's like, okay, so we've established everybody's going to finish the race. And then the next time they go out, they run a quarter lap, walk the rest half lap, and they incrementally do it so that by December, these kids are able to run the 5K in 35 minutes. You look at the finish line and the parents of the kids are crying.

52:13So awesome. And back to the life skill that you taught. It's not just the heart. They love that it was difficult, but they sit there and they're just like, mom, dad, I know how to do anything now. And I have those skills that I'm developing. And as a parent, you're like, that's the life skill that you want your kid to know how to do. And the way to do it though, first off, right back to how the whole system has to work. You have to have a system where the kids love school, where it only takes two hours. So you have these afternoons to do this. And then you have to have those three beliefs, those three things, including high standards is the key to your kid's happiness.

52:51It's an amazing lesson. Can we talk about these guides? We've referred to them a lot. And I think everyone listening will imagine an amazing teacher that they've had or their kids had, Maybe they'll also imagine a terrible teacher that they've had or their kids had. It matters a lot. I can cite my favorite teacher looking back to third grade or whatever. What have you learned about who these people are, who they should be, what skills they should have, what role they should play? Like, blank sheet of paper, first principles approach here, I'm sure. Walk us through that part of that. So the first part, when you hear about AI tutors and all this stuff, that's just the complete wrong misconception, is when adults in the building are critical.

53:29People have this image of robot terminators. Don't send your school to a school with robot terminators. Terminology, we actually have a lot of discussion around the terminology. Should we call them teachers? But they don't do academic teaching. So if you are an adult in our buildings, you do not do academic teaching. And so that's why when we start, we're like, okay, we shouldn't call them teachers then because it gives the wrong impression. So guides and coaches. But then you're like, well, people think they're teachers and it's a new role for teachers. Anyway, we'll see. Figure it out. We'll figure it out.

54:00But fundamentally, it's what matters. Think about this is every adult has one or two teachers who transform their life. Every adult has that. Our guides are that for our students. Literally, we have a survey question that we ask every eight weeks, which is that exact question to kids, which is every adult had one or two teachers who transformed your life. Is your guide that for you? And that is the standard we hold our guides up. These adults, these guides, coaches, and teachers, their job is, and what they're accountable for, is to deliver the three commitments to the kids, that they love school, they learn 2X, and learn life skills.

54:36They're accountable for that. And they are seen by the kids as you are transforming my life. And so you think about who's good at that. The first part of it is, and this gets back to academics and the teacher in front of the classroom. Whoever is in your head, the reason they transform your life is not because they graded your seventh grade science quiz really well. It's because they met you and motivated you and understood you. And they probably held you to a high standard and convinced you that you could do a lot more. Back to the key to your happiness and success is high standards. High support, high standards.

55:14Great teachers are high support, high standards. Dr. Yeager has a book called 10 to 25, How to Motivate. It's a great book. And we work with him a lot on all this stuff. And that is every guide at Alpha lives that philosophy. That is what you're looking for. You are looking for individuals who can hold high standards, but also high support. And it's different at age. So if you go into a kindergarten, you're going to get charity or Mallory, and they're going to wrap your kid in love at kindergarten. That's what you want. But as you get up to middle school and high school, they're going to be able to sit there and bond with you over, okay, let's talk about the high standards.

55:55Look at all these great things that you can do. It's various things, but we hire, because you don't have to teach seventh grade science in our school, we actually hire ex-coaches, as an example, ex-coaches, athletes. We'll talk about, like, we have a sports academy, and we literally have ex-NBA coaches, ex-NFL players, ex-MLB players. and they're awesome at holding high standards and providing great motivation for the kids. When you don't have to do the academic side, you bring in all those other things and you focus 100 % on, I'm gonna hold high standards for the kids. I'm gonna be able to motivate them.

56:31We probably are the only school where we have a system where you can go in for every kid and see every motivation that's ever been tried by any guide at Alpha to motivate them, to see what do they really love? of how do you engage this kid? What are their interests? And so our guides spend time getting to know the kids. As an example, during the two-hour session, the kids do 25-minute Pomodoros during the math Pomodoro. What the guide will do is pull the kid out one-on-one. They're like, you're not gonna do the math stuff today. Come sit down and talk to me. And the guide's gonna be like, how was your weekend?

57:05What happened? Oh, did you win the softball game? Whatever happened and get to know not as engaged anymore, what's going on? They talk through all of that with them. And so they get to know the kids. And we talk about there's Mount Alpha that you're climbing up and your guide is there to help the students get up the mountain. People who love to do that are the ones you want to hire. I guess a little segue also on that on just overall is we pay our guides a lot more at Alpha than standard teachers. How much more? Like what percentage more? Our minimum pay for a teacher is$100 ,000. In the Austin market, that's basically double the pay.

57:44You're going to go get great talent, and you're going to get great talent not just in teachers. So we can go get people who are the best teachers in any teaching one, but you can also get people who aren't traditionally teachers. That's very much what we believe. The core of it really is students want these great teachers, and you don't have a class size problem. The economics of a school are based on, fundamentally, how much do you pay the teachers and what your class size is. We have some other economics like our AI and our workshop costs, but fundamentally that's driving the economics of schooling.

58:16And so the lower grades, we have low tooling, which is, you know, you're going to have five students per guide. But as you get older, what you actually find is students don't want that. By the time you get to middle school, they're like, Mr. LeMond, you know, I'm an adolescent. I don't need all these guides around. They want more freedom, but the ones they want, they want really high caliber, awesome people who are going to know them and motivate them and hold them to high standards. I want to talk about feedback loops. This is something that we've referenced many a time. It's a huge part of your success outside of Alpha and leading up to Alpha that's allowed you to fund it and be such a force behind it.

58:57in your life, you seem to have learned a tremendous amount about the power of well-enforced feedback loops. So maybe just give us the foundation of this belief. And then I want to talk about all the many ways in which you've been able to deploy these learnings into the Alpha School setting to give kids feedback, not just motivation, but show them their progress, show parents, show coaches and guides. Where did this deep belief in the power of iterative feedback come from in the first place. There's two parts to it, I guess, sort of the individual level and then the systemic level, which is part of the feedback loops that are really important.

59:34And the biggest yet to be proven part is we need to scale this. We need to scale this. We need to get this out to a billion kids. And so how are you going to measure success? And so I always look at myself as I'm a product person, but then, okay, how do you put in the systems that allow it to scale? And the key to the system's scaling is the feedback loop that you know what's going on. So when we open a campus, how do I know that the kids love school? How do I know that the parents are super excited? How do I know they're learning 2x in two hours? Are the guides awesome? Is my guide in New York City going to be as good as my guide in alpha?

1:00:11And so how are we going to be able to measure it all? The key on all these feedback loops is if you want to scale it, you have to measure it. And you have to provide that loop if we're going to be able to say we're going to keep this quality at standard at scale. And so there's sort of all that that we can talk about. And that's a big part of what AI enables. It enables a scaling at quality that I believe 10 years ago you couldn't have done. And then the second one around feedback loops is back to educating kids and just people is receiving feedback. is like one of our most important life skills to teach is if you are somebody who actively seeks feedback to get better, that is one of the most important life skills you can teach somebody.

1:01:04Receive feedback in our life skills stack. At kindergarten, our test to pass, all our life skills, we have a test that you have to pass because you have to be able to measure it. can you receive feedback without crying in kindergarten? By eighth grade, do you know that the key to you getting better is actively seeking critical feedback? And do you actively go seek it out in order to improve? The day that alpha parents get really happy is when their kid comes home and is like, mom, dad, I know I haven't been a good member of the family. How can I, how can I be better? And so that whole concept of seeking out in order to improve, that concept is critical to just human development and getting better.

1:01:47We call it watching game film. Great athletes are like, yeah, I'm going to go watch a game. How did I do? And how am I going to get it better? We actually do the same thing on the academics. We have game film where you're like, why did I screw up these questions on the test? And they literally will sit there and say, I missed this question because I didn't know the material or, oh, this was a careless mistake. so they can start to sit there and say, what is my problem? I don't know it. Or actually test-taking skills. And you help them do that. You show them the game tape of themselves learning.

1:02:15Exactly. Well, that's part of, like when we talk about our AI tutor, we believe the biggest user of AI in education. And how we use it is completely different than what everybody else thinks. There's this whole view that we are going to deploy chat GPT to everybody in America and things are going to get better because everybody needs to use AI. If you take away from alpha, you're like, oh, we should deploy chat GPT to everybody. Okay. Wrong takeaway. That is literally the worst thing you could do. Just to be very clear, you are not a principal to school if you think chat GPT is good. 90 % of the use of chat GPT is to cheat.

1:02:52Now, there are 10 % use cases of people who are like, I need a Socratic tutor where I'm super excited about it and I need to dive in deeper in that 5 % to 10%. Those kids are going to crush it with it and you should give it to those 5 % or 10%. But 90 % of the kids are like, how do I use this to cheat? They want their time back. Because they want their time back because they're just trying to get through it. We literally don't have chat functionality activated in our AI. It is not a chatbot. It's terrible. And that's not what people need. Back to where we use the AI is generating personalized lesson plans and personalized lessons themselves.

1:03:28That is a great use of AI. A second great use of AI is actually to watch the screen and coach the kids to give them the game film. And we can go from the remedial of, hey, kid, you're like literally scrolling through the article and looking at the questions and trying to search because you don't want to read the whole article. That's not really going to work well. Or, you know, when you miss a question, here's the video that can help explain it, the little explainer of what you got wrong, and you skip it. if you really want to get out of here in two hours you need to do it our biggest thing is our vision model which is actually part of the big expensive part because you're streaming the time thing it's it'll come down in cost but right now it's a lot we have a waste meter because once again if you are going to give the kids the time back they want the time back and they want to get better they want to become a more self-driven learner where they can move through this faster so we literally like you're wasting 50 of your time and the kids like whoa coach me up i don't want to waste 15 % on time.

1:04:26So I'm spending three hours when I get to spend two. And so giving them the coaching of how to learn better, how to learn faster and more effectively, that's a great use of AI. But that's not something that all the other platforms are working on. So just so I understand, like, I almost want to like imagine we have the engineers of the system here with us and we're now in a technical explainer. The thing is built, I'm interacting with it. There's different things I can do and not do. The entire process, me looking at it, the touches, the scrolls, everything is being monitored. And that is being fed through what kind of system?

1:05:01Like that sounds complicated. Like how does that system know it's the little thing at the end of the explainer that I'm skipping? Like help me understand the engineering of the thing. As a frame of reference, use Khan Academy since everybody understands it. And imagine a dynamically generated Khan lesson. The video is dynamically generated. The video can basically be about half as long as a con video because using the concepts of learning science and more active, passive is bad. So more active engagement, you can teach kids in less time. And it's based on their interests. And so you're doing that.

1:05:32And then the video stream itself is actually being fed to an AI model sitting there looking for anti-patterns. What are the things that kids do? because basically what are things that their kids do that slow them down that are learning anti-patterns and so it's looking for those and then when it has it's going to be like oh look that's waste and then it's going to update the waste meter or flag the kid and say stop doing it depending on the mode is and when you think about the technology behind it just think of back to that what's valuable data the same way having the data stream of all the tesla cars running around that you're then saying, okay, what are we doing?

1:06:13The data stream of, okay, here's what kids do when they're learning and what they shouldn't do and what to avoid. And then you move it to, so the first phase is go find all the anti-patterns. And then the second one is coach them up on it. Maybe it's a data stream, just a raw data stream that you have privileged generation of because the students are using the thing. Maybe talk about the team behind this. So like how many engineers are working on this? What kinds of people are they? Like, Where did they come from? Are these like the best engineers from your trilogy USW days? Like, who are these people?

1:06:43And then what is their process of turning the raw data stream into actionable lessons in the software? The software team, there's a couple different parts to it. So Incept is the core generation engine. And the name actually matters. This is important, especially with AI and education, which is Incept sort of has two definitions. One is the movie, you're putting a mind virus in a kid's head. That's what you're doing when you're educating a kid. You are putting these thoughts into kids' heads. There's a second definition, though, like from a thousand years ago, the original from Cambridge and Oxford, which was qualified to teach.

1:07:20And there was a subtle underpinning of you trust the person. Teachers are trusted because you're putting things into kids' heads. It's important to understand it's two parts. You're putting stuff into kids' head and you need to be trusted on what's going in. And there's going to be a lot of controversy, I believe. There is just an AI in general, but especially in education, of how we make sure these are trusted generators that are putting things in. You have TikTok as a untrusted generator that currently dominates. We should talk later about our standard of TikTok as our competition, which is we have to out-TikTok TikTok if we're going to take over getting the right thoughts into kids' heads.

1:07:57But anyway, so there's the Incept team. And the Incept team, you should think, is we use all the different LLMs. We have our stuff on top of it where we are generating content. And it's going to be taking in streams of, okay, what's the curriculum we're doing? What is the kid's knowledge graph? What is their interest graph? What is their cognitive load model? And then be able to generate the dynamic lesson. And so you should think this is going to be your standard AI-type team embedded with massive a set of learning scientists. So the difference between us and the standard just using a normal LLM to generate content is we have probably the biggest team, best team of learning scientists who are building this.

1:08:41And that's a critical aspect of it. That's why if you just have and why I believe all the LLMs that are out and all the educational ones, they're not embedded with learning science. They don't follow these principles. They don't embed mastery and all these other concepts. And that's why generally when you give them to kids, they just use them cheap. So you have that side. Then the second side is you're like, okay, I have this data stream. And now I'm basically, it's a video model. It's just a vision model. And you're just sitting there saying, how do I optimize this vision model to find what I need?

1:09:15But how it started is literally just humans. When you talk about human annotation, just watching videos. So three years ago, we would just sit there and have teams of people all night, you know, the kids would finish. And then all night, you would just sit and watch the videos and annotate them of, okay, that's what's going wrong here. This is what the kid's doing. All of this. It's like reinforcement learning. And it is. And it's just building out a video model, a reinforcement learning video model with human feedback. And the human feedback's not from the kids. It's from people watching it to say, I need to train this up on how kids learn and what is effective learning, what are the anti-patterns and what do we want to coach for?

1:09:56And so then you take that. And literally the first month back three years ago, August, we literally would just take the output of watching the videos. And then the guys would just tell the kids the next day. They're like, hey, look what you're doing. So now the AI handles almost all of it. We still have some humans where we're still fine tuning things. But fundamentally, that's what you're doing is you need a vision model where you are sitting there training it on how to have kids learn better, how to be more effective, where are the things. And back to the streams, you need this where you're generating content.

1:10:30You need this to see are they engaging with it. And then you need to be saying, am I really moving the standardized test scores? I mean, are the kids really learning this material? You need that whole closed loop to be able to say, OK, yes, we came up with this concept. We generated this material. Okay, look, yes, the kids are learning. And you can measure that. Can we talk about the third one as the kid sees it? This is really helpful. I'm glad we're going to a little bit more technical side of things. So we've got Incept, we've got the vision model, and then we've got the feedback mechanism or whatever at the end, the standardized testing.

1:11:01How does the kid feel that? Like in the anonymous parents post about the school, they talked about hitting your minimums and your weekly scores, your daily scores, things like this. The kids seem to have this gamified sense of their own progress. So what have you learned about presenting that well and using that last closing part of the loop? The kid's motivation. How do you drive kid's motivation? You know, at the end of it, you're giving them a measure of how much do you have to do a day and how much do you want to do a day? So you have a goal setting part where, okay, kids, you can set your goals.

1:11:32And this is what I want to achieve. Then from that, you're like, okay, the system can tell you, you need to do this much. Actually, last year, one of the changes we're making for the year coming up is we do, okay, you finished a lesson. And one of the problems is lessons are different lengths. You have a 25-minute Pomodoro and, okay, I have two 15-minute lessons. What's a Pomodoro? Pomodoro is a 25-minute segment that the kids do for each subject. So they're going to do math, science, language, reading. Actually, you can do whatever order. It's 25 minutes. You basically go into the app in the morning during the two-hour session.

1:12:07And you're like, okay, I'm going to spend 25 minutes in math. And then the system is going to give you the lessons. and you're gonna be like, okay, here's the lessons I'm gonna do and I'm gonna do them to mastery. So I'm gonna do them to the highest standard possible. And then I have rings that close that say - Like the watch. You did it. Yeah, it's just, literally, it's just like the watch and it's just like the Apple Watch where it's gonna be like, you did it at the high accuracy. If you're doing it with low accuracy, you're not learning. You're just guessing and you're screwing around. So you have to have 80 % accuracy.

1:12:35You did it to mastery. You didn't sort of the mass practiced up front. You locked it in. And I spent the time. I did spend the 25 minutes. And then your ring closes, boom, you get it. And the kids, back to gamification, they have to do their two-hour sessions to unlock their afternoon. And so all these privileges come around because you unlock things. And when you come into Alpha, actually your first day, and I'm transferring from standard school, you actually go into what we call standard school, where you literally sit at a desk. It's like you're in standard school. And it's like, okay, your job is to become a two-hour learner, where you learn the skills so that you can learn in two hours instead of six hours.

1:13:15The kids are like, I'm all into this. Let me do it. And so they're going to learn how to engage in the apps, how to use them correctly. If I sit and spin in my chair all day, I'm not going to be a two-hour learner. I'm going to be stuck. Then as you achieve, back to motivation models, as you show you can be a two-hour learner, oh, I hit all my rings this week. I basically finished my lessons. you graduate to be a two-hour learner, which then unlocks all these different privileges. Our guides have different ones at different levels. But think when you see the alpha pictures where the kids are in a beanbag with their computer, not sitting at a desk.

1:13:49They've unlocked those privileges where they're like, yeah, you know how to be a self-driven learner. You can do it however you want. The booths that we have, they're literally like the phone booths that you see in the Silicon Valley. We have those in our schools and they're famous in our middle and high school because kids voluntarily go in those where students learn, where do I learn best? My daughter's an example where we have a communal table where you can all just sit together. If you're two-hour learner, you can just sit at the table. Now, my daughter, she's a talker and she's like, I can't sit at the communal table because I won't get anything done because I'm just going to sit and talk to my friends.

1:14:25So she'll like say, I'm going to go to one of the booths so I can get it done. Kids, right, they learn this. All kids learn, I totally know how to become a learner. And if they have the motivation, i.e. you're giving them their time back, they all do. Those skills where you talk about, do kids have agency, right? And do they own their learning and are they self-driven? That's all part of the system where you create these two-hour learners, which are basically, you're creating self-driven learners, which when you think long-term, that's a critical life skill that you really want to have. And then how do you game it?

1:14:59What is the gamification? There is all different ones where guides will have ones where you have individualized goals, you have team goals. Our Brownsville campus, the biggest motivated for the youngest kids is the petting zoo. So if the whole level exceeds all their academics for a week and a session, they get a petting zoo. When you talk about motivation, okay, they don't want money. You get the bunny and the petting zoo. Those kids, they'd go do 10 hours of homework. Can you talk for the kids that do want money about alpha bucks? We have a whole economy based on alphas. Alphas are used where fundamentally you do these academics, then you can earn alphas.

1:15:39And then how can you spend those alphas? It's all age dependent. So it gets very different, which is very interesting. just talking about motivation and money. In general, there's a lot of motivations that parents love. Oh, the petting zoo, that sounds really cool. Or I get more privileges. I get more privileges and stuff. Those two. Money is obviously the controversial one that causes everybody to just go, oh my God. And that's a terrible one. I'm going to give a couple examples of it. Your kid can earn money for doing academics. Parents generally are like, okay, I don't like that. Now, your kid can earn money by doing academics so they can fund their passion project so that their afternoon workshop that they're trying to do.

1:16:19So when she's trying to do the Broadway musical and has to fly up, she's going to earn money that's going to allow her to do that. Parents are like, okay, that seems okay. Or since this audience, it's going to fund your financial literacy investment account. And we're going to take all the middle school kids. And if they crush their academics, we're going to fund an investment, a Robin Hood for kids or whatever, you know, whatever investment fund to teach them investing. Because the key, if you're going to teach a kid to invest is make sure it's real money in theirs. And it's something they earned, not given because your loss aversion, right?

1:16:52And all that. Oh, parents are like, oh, that's a great idea. We're going to have a 50 % penalty for early withdrawal. Parents like that too, actually. They're like, we're going to teach them to save. And so there's all these behaviors around money that are good. And so those are all examples that our system does with, you can earn the alpha bucks and have those. Or in the alphas, other ones, okay, they do good life skill workshops and they have a bigger picture. We'll do another one. This is what every parent should do. Because this is super controversial. Everybody hates it. And if you care about academics, this is the single best thing you can do to fix academics.

1:17:23So the number one issue in academics for kids, and let's start at middle school, is the reason they're struggling. And if you look at the curves and learning in America, they all start to flatten out in middle school. The median person in high school in America actually doesn't learn anything. Scary. In a MAPS test, which is a 300-point scale, the median American goes up one point in four years. One point on a 300-point scale. Not learning anything. It starts slowing down in middle school. And motivation engagement's an issue. The other is just, it's the ramification of having a time-based education system instead of a mastery-based education system.

1:18:03And Saul Kahn in Kahn Video, he has great videos around this, where he's just like, when you're pushing people up and they've only learned 70 or 80 % of the curriculum, you should think it's like Swiss cheese. It's like you're building a foundation with all these holes. And then eventually, as you get high enough, it just gets too much and it collapses and you can't learn anymore. And that's what happens when kids hit algebra. The problem's not the algebra, it's the prior knowledge. And so the number one thing we do is, okay, we need to go fill your holes. So let's talk about marketing and motivation, which is actually probably half my job.

1:18:36You know, his principle is if you go to a seventh grader and say, look, it's not your fault. However, you got here. You don't know this fifth grade material. They need you to go back. They are not into it at all. And the only person who's less into it than the student parents, they are like parents have been taught. My kid needs to be a grade level no matter what. And that's just the opposite of what the learning science says. The opposite of what a tutor does. When you hire a tutor for your school, all they're doing is saying, just give them a fifth grade lesson. And they don't call it a fifth grade lesson or whatever, but that's what you're doing.

1:19:11Correct. And everybody understands when you apply this concept to sports, every parent gets it. They all get it. They're like, yeah, master the basics. When it comes to academics, it's like, no, no, no. Do all the advanced alley-oops. How parents think about the world is just not right. And so you're like, how do you fix it? I got to deliver it. So I went to the seventh graders. I'm like, guys, all of you can get 100 % on the Texas Star, the Texas standardized test. No way, Mr. Weeba. No way. I'm like, back to Money Motor. I'm like, I'll give you a$100 bill for 100 on the Texas Star. 100 for 100.

1:19:42They're like, that's still impossible. I can't get one. I'm like, no, no, no. There's a catch. Any grade level. They're like, I can take a kindergarten Texas Star and you're going to give me$100? And I'm like, well, the Texas Star starts in third grade. And they're like, okay, I'll take a third grade test. And I'm like, great. And so they go take a third grade test of star. They get a hundred to give them a hundred off bill. They're like, can I do fourth grade? I'm like, absolutely. They do fourth grade, get a hundred dollar bill. They're like, okay, you're really going to let me do fifth grade?

1:20:10I'm like, absolutely. And so they take it and they get an 85, right? 75 or 85. And I'm like, do you want the AI tutor to generate the lessons so you can get a hundred? And they're like, let me see how many. And then they see it and they're like, I can do that in a week. And they're like, I'm in. and then they get 100 and then you do sixth grade. And for literally$400, we can do two really important things. We can hole fill, as we call it, which is we can go back and for whatever reason, wherever your kid is, you can go back and fill all those holes and put them on a foundation where they can keep learning.

1:20:47But second, you actually change how they think, which is I can get 100 on a Texas star. Every parent, like if you actually survey alpha parents, fewer than 10 % of them think kids can get 100 on a Texas star. And that's because in the time-based model, the GT kids, right? Only the super smart kids got 100. In a mastery-based model, everybody can. It's just a matter of effort. It's not about IQ. It's just about effort. And as soon as you break that link for a kid, it changes everything about education, where they sit there and they're like, I can totally do this. Oh my God. And so if you take the alpha stats, first of all, 90 plus percent of our kids who've been there at school a year are like, I can totally get 100 on a Texas star.

1:21:30And the reason is because they have during the year. Our building, our K-6 building down in Austin gets more hundreds on the Texas star than a school district of 100 ,000 kids. Because it's just a different mentality and a mastery-based thing. You don't advance until you know it. And you sit there and back to motivation and how do you get it right. If you make everything 100, everybody thinks it's too hard. So you say you can pass at 90, but 100 for 100. And everybody's like, okay, I'll do the extra work. It's only a couple of questions. If they get less than 100, the AI tutor is like, here's the ones you missed.

1:22:01Was it careless or did you not know it? And if you didn't know it, want me to give you the lesson. And so the kids can get to mastery. You put in this motivation, this very lightweight motivation. We spent 20 grand a kid in this country across alphas, 40 ,000 plus, but we spent plenty of money where for a hundred dollars or $400, we could literally change how everybody sees both their capability and how they see themselves. That's a part that just back to motivation that really matters is when money matters. Here, I'll give you one more example on money, which is that's a perfect example of using money in order to get people to change how they think about themselves.

1:22:41And a lot of kids have a view that they have these limits. That's high standards, high support. That's what guides are doing is they're breaking through it. And in academics, kids have these hangups of, look, I can't learn that much. I'm that kid. My daughter will probably kill me, but I'll use her on this one as an example. So when she got to middle school, she got to top 10 % and she's just like, you know, dad, her older sister is the academic one of the two. She's like, I'm not like my older sister. I'm top 10%. That's good enough. I'm not top 1%. I'm good. And I was like, the one thing I know about you that you care about more than anything is you love to shop.

1:23:21And so how about a thousand bucks? I bet you a thousand bucks that you can't get to top 1%. And she's like, oh, right. She's in middle school. And she like fills her Amazon cart with a thousand dollars of stuff. And she would just look at it in the morning and then go grind and just do her apps. And we had a lot of family discussions about this because my wife is like, okay, so first of all, you're paying for academics and you're setting this really high standard and all the stuff. And is this going to be good for her? And all these things. That's common. Back to parent, you don't want to set too high a standard.

1:23:57And is this motivation bad? Anyway, she got to top 1 % and she buys all her stuff. And she sits down actually with my wife and is like, mom, I know you didn't like us doing this. But she's like, you need to understand what it did to my view, which is I never thought I was smart as my older sister. I now realize I can do anything. And her internal change, right? Her internal view of I'm not capable. And then, oh my God, I can learn anything. And breaking that internal thing, when we talk about it now as a family, it's emotional. As a parent, you're like, that's what you want to do. You would do anything for that.

1:24:38do anything for that. And$1 ,000, whatever. You would do anything to have your kid think, I am limitless. I can do anything and I can see anything different. That breakthrough of a lot of raising kids and stuff is there's internal limits on what their belief is. And you want to put them in an environment where you're like, you're limitless. And I'm going to give you the high support and high standards that's going to let you see that. And a lot of the development stuff, when you talk about life skills and all of that, and our guides and why the humans are so important and all this stuff. That part of it is part of the culture of a school that you have to build.

1:25:15And it unlocks human potential. When we talk about education can unlock human potential, you're taking these limits that kids have or as they see themselves, and you're removing them. You're just blowing the doors off. And it's in all these different areas. And fundamentally, you're like, whatever motivation I need that's going to unlock my kid, a parent's willing to do. And so now we will tell kids when they get to middle school, if you want to be top 1 % when you transfer in and you're not there, we'll pay any kid at Alpha 1000 bucks to get to top 1%. So they then realize, I can do anything.

1:25:48There is no academic height. Our kids at our school all believe, I can go crush this academics if I just put the time in. And it's not an inherent, okay, I'm not smart enough or any of that. And that unlock, that's the part that this new two-hour learning and all this stuff is going to... I'm sure, listening to the story of your daughter, thank you for telling it, every single parent, myself included, is just going to picture their kids' faces in their mind and agree instantly that they would do anything for this moment of unlock, or several of them. Which demands, I think, a really important and exciting question, which is how the hell are we going to scale this system across the country?

1:26:27Like so many things, like a great product, it tends to get built in a small space where it's artisanal and you're trying stuff and you're figuring out the system. And then hopefully, like software, you can spread it and scale it across the country. What are the biggest barriers to that being possible? Let's talk on the technology side, because it's not ready yet. We have a whole team of people who wake up every day trying to make it ready to scale broadly. And the engine, the time-back engine, we still have hallucinations, right? It's AI. And, you know, in the alpha environment, an alpha environment is super safe.

1:27:00The kids love school. They're all stuff. High school kids, literally, it comes up with some whack job thing. And the kids take a screenshot and send it in. They're like, AI's acted up today and it's fine. You really sat into the wild and AI robot tutor is terrible. And so we got a burndown chart of how we think. And we do believe that next year, right, we hope to have betas between August and December of this year. This platform will be out. And the first part is I got to get the technology a little better. Once that's done, now you get into what are your channels of distribution. So obviously homeschools, the biggest thing is there's millions of parents who are like, okay, let me do this at home.

1:27:38And so the biggest thing, we have a test with 50 plus homeschoolers. The problem on all of this, on the technology, technology is 10 % of the solution. It's only 10. So my 10 % still doesn't work yet. It's got to. But then how are you solving the 90 % of motivation? So when you're in an alpha building or one of our schools, then all of a sudden you're like, yeah, we control it. We have the motivation. We do it all. You're at a homeschool. Is there any motivational model? So our tests, we're not getting two X in two hours with the homeschool kids. Now, literally every time we test it, we're putting, building in motivational models, putting in other things so that we can get there.

1:28:15So I believe next year we will have a homeschool version that somebody will be able to buy. The kid's gonna be able to sit down and deliver two X in two hours, for sure. The second part is schools, right? We're gonna have a platform that if a school wants to adopt this, then you can absolutely do it. Now, one of the hurdles, you got to rebuild your whole school from the ground up. You can't just sort of tack it on. This is a full rebuild. And so our school is really going to do that. Public schools, wow, they have a 10 times harder job than me. If I was a principal or a teacher or superintendent of public school, as a product guy, I'm like, you have the most impossible job in the world.

1:28:50My job is 10 times easier because I control everything. You have a really hard problem. I believe, though, we need to start getting lots of data, proving out lots of things, showing the FSK that this works with the hopes that in public school, you know, a decade from now, my vision on this is I'm going to spend the next 20 years of my life on this. And I'm going to need all 20 to get everything in public school spread for sure. The next phase, and this is one of my goals in being on the podcast is entrepreneurs need to build new schools. And this two-hour platform will cover the two hours for you.

1:29:27You crush the afternoon. And let's go start. Let's have... It's like a platform technology. Yeah. Build on top of it. And build on top of it. And so I'll give you an example of one of the ones that it's not funded yet, but the business plan is super awesome, which is Texas just passed school choice, billion dollars. And so this group is basically, they're building Texas Sports Academy. Their goal is to go to every school district in Texas and build a micro school, which is going to be a micro middle school for D1 athletes. They're going to be based on the time back platform. And then in the afternoon, it's going to be one of the local coaches that everybody in town reveres, who is going to have a school, middle school, for people who want to be D1 athletes.

1:30:11And they're going to spend the afternoon doing whatever awesome athletics, whether I'm seven on seven in football, or we're doing basketball or soccer, all these things where you can create these innovative educational models so that for a kid who's like, oh my God, I will go crush my, and their commitment. Don't get to do the fun thing unless they've done the time back. Yeah. Unless they do the time back. And because of that, and because of the learning science and the app, they're going to make a commitment that when you look at their thousand school, there's thousand school districts in Texas, 1200 or something.

1:30:42They're like, our thousand schools, our thousand micro schools. They're like, when you compare us, if you view us as an entire school district, we will be seen as the best school district in Texas academically. We will have by far the best academics. Tens of thousands of kids will be in these micro schools. And their hope is to launch a year from now when the Texas ESA vouchers come due. And you can sit and see for parents who are like, wow, that is an economic model I could get behind or an education model I can get behind where, oh my God, my kid's going to love school. He's going to crush the academics and he's going to can do is sports that he loves afternoon.

1:31:20And that's the middle school. There's a whole set of parents who can then go build that out and entrepreneurs who can do that. As we prove this out in scale, there's actually a lot of famous professional athletes who are like, I would love to start a school like that. And so I believe that's just a whole huge opportunity. There's another school that we've started, but it's one unit and we need entrepreneurs to scale it is GT school, gifted and talented school. And gifted and talented school, we define as, you love academics for academic sake. Like when you're motivated. The five or 10%. Yeah, it's the five or 10%.

1:31:52And my oldest daughter is actually like that. She loves it. In high school, she read calculus books for fun. There is a set of people who just love that. And that's where you're just uncapping. Those kids aren't learning 2x and 2r's. They're learning 3x, 4x, 5x. I mean, they're just crushing it because they love it. When we get all the guides together and we're like, okay, how do we juice love of school? How do we make kids raise it? The GT guides are like, more academics. We need a third power hour and all this stuff. And all the other guys are like, no, we don't want more academics, more life skills.

1:32:23Anyway, but GT, you can just imagine. A different program? No, there should be 500 GT schools around the country built on the Timeback platform where kids who love that can just unleash it. It's new, but it's super fun. Those kids are like, we're going to be the last human smarter than AI, right? And you literally just have this great group of kids who are just like, we love this stuff. And we just love academics for academic sake and math Olympia and robotics and writing novels and all that. So every kid right back to when you really focus on kids have to love school, you're like, okay, there needs to be different school types for different kids.

1:32:58This platform, this time back platform enables that because you can sit and say, look, the academics are done. The coach doesn't need to teach the seventh grade science, right? The platform does it. The app does it. What the coach does needs to motivate the kids and then do the afternoon workshops. In this case, they'll be athletic. If I think about scaling, there's lots of paths and they all need to be tried. There's the micro schools, there's entrepreneur starting schools, there's refitting that probably happens later in the adoption curve from maybe the public schools are the very last, you know, the classic like adoption curve.

1:33:30But the answer is we just need to go hard at all of these solutions where time back and the motivation, the creativity around sources of motivation are thoughtfully paired together. This is one of the tasks that is on my list to do is first part is, okay, I got to build this product that makes kids learn 10 times faster. Then the second is, okay, we have to have these schools that are sort of the exemplars prove the case because no one would believe it. And so Alpha obviously is the flagship high-end private school model. There's a third part that we have to show in order to really unleash stuff.

1:34:05And that's a business model, the business of education, because capitalism enters the chat. Capitalism enters the chat. We need to bring capitalism in here. And that's obviously a very controversial view. And my view is with time back, we have to show, here's a platform, but you can build great businesses on this. And you have to be able to build great businesses in order to attract great talent. It's a trillion-dollar market with no good products. The economics historically of education having to work, this completely changes it. I believe we're going to show, I mean, we're in the cash burn phase and we're burning hundreds of millions of dollars building all this stuff out.

1:34:45It's just like anything, which is, it's a huge market. And if you have an awesome product, the one element is, if I was talking to an entrepreneur where everybody's like, don't go into education, can't make any money. It's terrible. It's failed. All those things. Great products. Parents will absolutely pay for great products. Societies pay for great education. We spend a trillion dollars for a relatively bad product right now. As an entrepreneur, if you look at this, you build a great product. You actually can build great customer base, and it doesn't have to be a money-losing nonprofit that's supported 100 % on donations, which is the world today.

1:35:25You can't sustainably grow. Part of the problem on schooling today is everything has to be nonprofit, the organization is nonprofit, and so then you're just caught on scaling. There are good school system charter schools out there where their gating factor is, well, I'm waiting for someone to give me$40 million so I can build a campus. I have a 3 ,000-person wait list. Back to my economics, I need someone to donate$40 million versus, okay, well, let's build a really good business model that you can build a business model out of it so you can open up 500 of them because capitalism will provide capital to this space.

1:35:59Let's adopt the ultra-skeptic mindset for a second. And as the principal, I know you get to deal with this because you're dealing not only with parents that are at the school, but parents that are considering joining it. if you had to name a thing or two that you struggle with the most personally, not skeptics that you can answer easily, but skeptics that are hard to answer, what are the hardest to answer skeptical points of argument that you come across most often? Well, I mean, your best example right now is just, we haven't done this at scale. And so here's all these things, but it's in a limited group.

1:36:28Easy for you to say, you got all this money. No, literally, you have infinite money, selection effect size, all those kinds of things. Absolutely. Like, there's nothing in alpha today that would say there's a billion kids 10 years from now that's going to work. Now, I shouldn't say nothing. Holistically, the viewpoint is, well, there's seedlings of data here of trying to figure out, wow, look at some of these data points of what we can do and have been able to do and then figure out how would you scale it. But fundamentally, the best example is, okay, you're this really high-end private school, and you have all these adults, you have all this money around that.

1:37:06The bigger one is, the biggest issue, and this is my product side, is education is hard because you have to define the product. And your customer bases have very different needs. This is why when I talk about public school being impossible, parents do not agree on what the purpose of an education is. what a parent wants in education. Big bundle. It's a huge bundle. And they're diametrically opposed. They're diametrically opposed. We're having that in Austin on the public school side where we have three schools that have failed standardized tests. And so they're trying to be shut down. And the kids move to schools where superintendents like, okay, propose, we're going to shut them down and move the kids to schools where the kids do better academically.

1:37:50Parents are like, I don't care about, I don't care that the school academics is failing because my oldest daughter went to that school and the teacher, the seventh grade teacher there is so great. And I know her kids don't really learn math, but she transformed their life. And they're going to pick it and say, I don't want academics. Actually, stepping back, if you had to say back to this problem, one of the things that I did not realize going in is how few parents actually care about academics. Back to product market fit and pivoting and all that stuff as a product site. Three years ago, I would sit down in the parent meetings and I'd be like, look, If your kid's going to engage in the app, they're going to learn twice as much.

1:38:282x learning. And I'd just be like, 2x learning. And you'd sit there with the parent. You're like, look, Johnny's not watching the video. And if he just watched the video after he misses a question, he learned twice as much. And parents are like, why are you pressuring him to learn 2x? They don't want it. And it took me hundreds of parent meetings. I was slow on the listen to the customer side. Then we switched it to two-hour learning. And then you're like, same meeting, same parents, same Johnny. And you're like, look, I'm trying to get Johnny out here in two hours, but he won't watch the video.

1:38:58He can't do the workshops until he does. And the parents are like, Johnny, like, why don't you watch the video? Don't you want to do the cool things? And so back to product market fit, figuring out. Positioning matters. Positioning matters. And every parent wants stuff differently. When McKenzie puts her GT families and the sports academy families, you know, and she has a lunch with them, the parents and talking about it. Parents want different things for their kid. You know, the sports academy mom is just like, my kids come over from the sports academy and, you know, they're sweating so much.

1:39:24I literally just throw them in the shower fully clothed. GT parents are like, what is wrong with you? They're like, well, GT school was having a chess tournament at the end of the day. And when they came home, we just continued the tournament. Parents want different things. And so that's why I absolutely believe we need to bring entrepreneurship. It's a platform technology. There's not one size fits all. And we need entrepreneurs who are domain experts in the field. Do you want to do entrepreneurship? You want to build an investing high school, all of that stuff that I believe, you know, if you look our New York campus, I bet we'll have more financially oriented workshops in the afternoon than our Sanford.

1:40:00Francisco one, which is going to have more tech oriented. So anyway, the whole thing, I believe, we need to bring entrepreneurs in, we need to bring capitalism in here, and we need to create all the different parts of school choice so that parents can pick what they love. And there is this enabling technology when you talk about, do you have something that's 10 times better that can transform an industry? Kids learning 10 times faster and so that they can do it in two hours a day is that breakthrough product that can do it. And then back to your point, what's the skepticism? It's like, okay, well, you have to prove this.

1:40:35The product's not done. So we got to get it done. We got to scale. And whether it's us or anybody else, the tech behind this is totally doable. Then the second is for parents is, okay, now that I can think about it, what do I want my kids to do in the act? And I think the broader question on all this stuff is, I believe it's societal level. It's when I was talking to the education ministers, I was like, once there's this tablet and it's two hours a day. What is your education system? Because it's coming. How do we want our kids to spend their day? What does society want to say? This is where kids should spend their day because there's no point in having them in a classroom for six hours a day.

1:41:13That's gone. Back to my three things that I want to be parentably. I'm like, we need to make it where kids love school because they only need two hours. They can love school and then they can be in an environment of high standards and high support and do awesome things and learn life skills. That's the vision that I want. And it is hard to execute and all of those things, but that's... That's the next 20 years. No, that's my next 20 years is to do it. And I guess one last to anybody in the audience who's like, maybe I want to do this. I can tell you in the last three years, like just career-wise, obviously, I had a great career.

1:41:46We'll talk about it in a minute. You know, made plenty of money and all that stuff, but there's nothing that's more fun and exciting and rewarding than working on education. The last three years in the whole scheme of things is 10 times better. I mean, it's awesome. And so, you know, in recruiting entrepreneurs to the vision and mission and excitement, totally come aboard. We need to go build great businesses, but there's nothing that's more fun and rewarding. And back to the bigger picture, there's nothing more important for society. Can you tell us a little bit about Prodigy and the idea of using games to deliver this?

1:42:22Let's talk about motivational models. Prodigy, there's a game out there. People have talked about gamified learning forever. We very strongly believe in this. I'm investing a lot of money in this space because when you talk about scale, we have our physical buildings. And I got guides and I got an expensive footprint, expensive cost to serve to drive motivation. Now, this engine, if I get kids to go through it, is going to provide the learning. And so how do I get engagement? and the people who know how to engage kids more than anything is video game developers. They know how to engage kids. TikTok and video games.

1:43:00Back to the things. That is absolutely a scalable way. When I talk about this tablet, I absolutely believe that there will be video games on that tablet that are totally engaging to kids that they will go through and it will teach them everything they need to know. So you'll see when TimeBack launches, there'll be a section where we have a team of people who's like using AI, where they're using AI to build video games on top of the TimeBack engine that kids will sit and play. The easiest way to think about this is, well, let's take Fluence. Schools have stopped teaching multiplication and division tables, vocabulary lists.

1:43:40Memorization has sort of gone out of style, which is really, really bad. It's Really important that kids learn this. But people don't like the grind. The engagement's the hard part. So I just saw this last week where basically think of a game like Candy Crush, but it's teaching math fluency, math fact fluency. And it's super fun and engaging and it's a super high quality game. Kids are basically just going to play this game and learn all their fast math facts. And that fluency will do more to move up math capability than anything you can imagine. It's obviously highly scalable and you can get that out there, broad distribution.

1:44:17Now, if you take that example, though, and then just go large, you can imagine a great triple A team of the best video game designers. We've invested over$100 million in getting some of the best video game designers in the world. They're down in Austin and they are building a video game on top of the two-hour learning engine that they believe will rival any video game on the planet. And the difference was parents will be happy to let their kids play it. Or pay to play it. And they will pay to play it. And they won't have to pay their kids because the kids will love it. And get their kids to the top 10%.

1:44:55And I absolutely believe that is back to motivational models. Absolutely. When we talk about the software side, we talk right now it's all the physical building side. Back to the scale, the time back team is like, okay, I got to get the engine working. But then 2026 is, how do I take parts of the motivational model that's only been done physically in person and get it into the software? All of a sudden, you're like, okay, if these kids just voluntarily play a video game and they're going through it, you can imagine. Let me give you an example. I watched a test case where you're asking a kid and you're like, and I'm not a video game person, so maybe I'll get the wording on.

1:45:29if I had a training center that would give you extra health, so it would increase your chances, how long would you be willing to go to the training center? And the training center is just going to be math problems or some academic thing. And these kids are like, it's going to give me extra health. So like I can increase the win. And the more I do in the training center, the more health I get. And they're like, yeah. And the kid's like, I do 10 hours in that training session. I'm like, how long is these video games? And they're like, oh, you know, 10 or 20 minutes. This kid literally just is like, I would do 10 hours of academics.

1:45:59Now, remember, it's only 20 to 30 hours to do an entire grade level for one subject. There's all these kind of motivational stuff. And so there's a whole video game one that back to, I absolutely believe the next set of big video games are going to be built on a academic engine that's going to teach kids. The old ones aren't based on learning science and mastery standard, and they're not engaging enough so the kid won't grind through it. And you have to have that standard. You have to have both. You have to have a learning engine plus the world's best video game. So there's that whole thing. And I think there's going to be a ton of video game development.

1:46:33Back to getting entrepreneurs. It's too competitive. Yeah, the old video games, it's too competitive. Come do educational ones. Because let me tell you, financially, parents are willing to pay way more money. The ARPU on a video game that's getting a kid to top 10 % academics. Are you kidding me? There's 10 million moms in America who would pay 100 bucks a month for their kid to love academics and drive it up. The second part is back to engaging is there's another team who's basically trying to out TikTok TikTok, which is how do we create engaging videos, AI generated videos that teach these concepts that kids will scroll through by making it relevant back to the knowledge base of the kid.

1:47:13Every kid knows all the TikTok memes. And so how do I teach all these concepts to them in form of TikTok memes and get kids to engage that way? And so their goal, what they're trying to build, and these are farther out and I hesitate to talk about them. But if you sit in a Stanford lecture, you retain about one to five facts or ideas or concepts per hour. Our learning engines right now can do about 20 or so to 40. This team, this TikTok team, we're going to do 100 ideas, concepts, and facts. It's going to be a scrolling interface just like TikTok. And they're like, yes, we're going to be able to get all these ideas into kids' heads.

1:47:53Back to that incept concept that is doable. So as soon as the engine works, then you need the entrepreneurs building out the motivational side on top of it. And there's going to be software innovation. There's going to be the physical school innovation. There's even after school. So there's one where back to product market fit and deciding. So one of the schools that was opened was a video game school. Back to this, where you do your two-hour learning. It's a middle school only to catch kids up. So they're ready for high school. And then you do video games in the afternoon. And back to product marketing, you talk to it and they're like, wow, it really works.

1:48:30But there's parents are like, I'm not sending my kid to video game school. That's a hard push. But if you just pivoted a little bit and say, well, what if your kid came to you and said, mom, dad, I want afterschool tutoring. Parents are like, I'd love afterschool tutoring. And there's one that's going to be created, which is tutoring in tournaments. So after school, you're going to have tournament games, video game tournaments. So you do your one hour in the app, and then you get an hour of tournament gaming time. And we're actually working with some of the big streamers and video game players who are going to host these big events.

1:49:05And you sort of compare the problem today where parents have to go push their kid for Kumon and do all that. And the kids hate it. And it's all this point of confrontation. versus kids coming in. You can totally build an environment where they love it and they're like, yes, I'm going to go crank the app, especially because it's going to give me extra health in the video game that I'm going to go play and I'm going to play in this huge stream with all these other kids. You can build those solutions. It's so exciting for me. We've talked before about this, but this conversation really made it click for me how much time back is sort of like an enabling platform technology that if you get that three-part engine right in the software, which you're working on and is a tractable problem, A thousand flowers can bloom on top of it.

1:49:45That makes me wonder, like, we spent all this time talking about Alpha School. I would love to just hear a little bit about you and your background. There's not a lot about you in the world. Most of the press that exists about you is from the 90s. At one point, you were the youngest self-made Forbes 4100 member or whatever. And then you sort of went into the wilderness. I don't know, you disappeared. Tell us, like, your life story. I would just love to hear your personal background. And then we'll dip into a couple topic areas. Mine was, I grew up in a business-oriented environment. My dad worked for GE.

1:50:13I was learning what gross margin was and 12 years old and things like that. Back to my schooling, I didn't like school. I'd get in trouble. I was suspended and kicked out of high school. Didn't graduate college because I'm like, I can't sit here. I can't sit to these classes. Now, one of the things that's really important is academics is one piece of a very complex bundle. Stanford is an awesome school, even if you don't like the lectures. Because everything else around it. When I was at Stanford, it's like, oh, Steve Jobs is talking. One of my best friends, Julia Zielinski, she's like, oh, I'm going to go work at Next with Steve Jobs and learn all this stuff.

1:50:48And Bill Gates comes down or Scott McDealy. And you sit and you learn from all, whether it's your classmates or just the environment in general, all this awesomeness. It's important in education to understand it's a complex bundle, not just who does the best academically, even at a school like Stanford. My daughter's there and now as a freshman. And she's like, I am going to start skipping class. She hasn't had a teacher in 10 years. Yeah. Right? She hasn't had a teacher in 10 years. And she is like the one who loves academics. And she always would look down on me. You would skip classes, dad, because she's very much that rule follower.

1:51:20And then now that she's there, she's like, oh, wow. Like, math academy is a way better math app than my math lecture. And I'll just use that. But she loves Stanford. The school's a bundle. And I dropped out. And I started Trilogy. In the 90s, it was. We were. Trilogy started in 89. We started officially in 89. I would have been class of 90. if I'd stayed and graduated. We were the rocket ship in the 90s. What was Trilogy at its inception? So Trilogy was the core product we built, and this is going to get very boring for everybody, but it's an AI product, an expert system. One of the core products of an expert system back then was a configurator.

1:51:56If you go to a Dell website or a car website and you do a configuration, now imagine it for a phone switch or a Boeing airplane or medical equipment, mainframes. Things that are super complicated where you have millions and millions of common competitorics. And if you sell it wrong, you only find it out on the manufacturing floor and then it costs you millions of dollars to fix. And so basically what our system would do is called Sales Builder. It would basically take all the knowledge that was in engineering and manufacturing and put it, laptops were new back then in 1990, and it would put it on a laptop so you could sell things that would work and be eligible and would save companies millions of dollars a day.

1:52:37And so they'd give us millions and millions of dollars for all that stuff. And so that was our first product. We then built around, we had sales stuff. So we built other things around that suite. And then after 2000, we started buying companies, not just builds. So 90s were all organic builds. And then 2000 was, let's acquire software companies as well. And that's the ESW chapter. ESW, and that's continued through it. And it's a private company down in Austin. Generates lots of cash flow. That's why you can take a billion dollars and say, I'm going to go spend it on education. That is that history.

1:53:12So we've been doing it. And I guess, I don't know if I told this part already, which was three years ago, I went to my team who'd been with me for 25 years. And I was like, you've been telling me for 25 years that you could run this company better than me. Let's see. Good luck. I'm going to go be a principal. And by the way, I'm taking a billion dollars so I can figure out and get that going. So now I turned from boss to shareholder. Literally, I'm like the worst shareholder now in the world. I feel like if I was, I feel so sorry for it because I'm like, guys, I need all this capital. This expansion that McKinsey wants to do, it's going to take$300 million.

1:53:48So she has to raise money or we're going to have to give it to her. Generate more cash flow, guys. All these software companies, you got to figure out how to be more capital light, which to their credit, I will give them a call out. Bill Gurley, by the way, lives right next to our high school in the building right next to it. But he said on his last one, I'd really love to see a private equity firm that is taking advantage of the thousand dead unicorn. And that very much is what. That's what you do. That is what Trilogy and ESW, the team, is doing. There's all these SaaS companies who loaded on a ton of debt in a growth play and they're gone.

1:54:21And so basically their equities is zero and they're being handed back to the private credit guys. And the private credit guys are like, what do you want me to do with this? when I put the pressure on them of, I'm going to suck a ton of capital out of you guys and cash flow out of you guys. They're like, how do we become capital light? So they're actually, and they've signed a few of these deals already and we'll see if it really takes off. But they're going to all the private credit guys. I say, we'll handle this off. We'll say, we'll take this whole company, give us this company for a dollar and we'll split the cash flows.

1:54:50ESW and Trilogy is known as being like the best operators in the space. They can generate more cash than anybody else. Some of the big names are like, Like they've sold them a few companies basically for a dollar and they're going to split the cash flows and see how they go. But the point is there's$20 billion of those companies out there on the books. Good luck, guys. Crush that for me. If you think about the lessons from, especially from ESW, let's talk about Trilogy too. I'm always interested in software, how incredibly hard it is to build software that anyone cares about, pays for, and uses.

1:55:21And then how surprisingly efficiently they can be run once you've achieved product market fit. But so if you take like the Elon example that every time I talk to a software CEO in private, they'd be like, can you believe this guy cut 70 or 80 % of the jobs and things seem totally fine. There is just a massive efficiency gain in software systems that are at maturity or past product market fit. And that ESW fundamentally was about how do I take something that's working, but wildly inefficiently run and make it massively more efficient and therefore more cash flow generative. Is that like a fair summary?

1:55:52Growth is expensive. A way to do it is if you're trying to be a hyper growth company, your cost structure and your culture, it's just very expensive. When you say, okay, I don't need that kind of growth. That's why everything becomes that much cheaper. I guess there's two dimensions because the Elon example brings it. First, just though, just growth. Back to these deals. You're the private credit guy. The management team of that failed unicorn have been spending hundreds of millions of dollars to be worth billions and billions. And that's their culture and attitude. And if you go in and be like, dude, you're wasting some money here.

1:56:29They're like, what are you talking about? We have built a culture around all of this. And if I change it, I'll lose all the employees. When you go in, you have to be able to say, we don't care if they don't go like to Elon Musk, Elon's firing them. But you fundamentally have to be like, my team can run this company. back to Trillogy and ESW is just their capability is they're like, yeah, we can run this. That old team that wants growth, they should go on. Companies have life cycles and you're like, you guys are the growth team. You should go get your next growth. There's an AI startup that you could go raise a ton of money for and go do your growth playbook.

1:57:04But this particular company, wherever it is, it's not a growth plan anymore. And so you should run it not like a growth play. And so yes, Trillogy and ESW is very good at that and you can generate tons of cash flow. If you had to name like the three things that are most responsible for, okay, you get a new business at ESW, either for a dollar or for more than a dollar, a dollar sounds like a good deal. And then a year later, however long it takes, it's now way more profitable than it was before. What are typically like the one, two, or three things that you're doing to make that possible? The number one is growth versus installed base.

1:57:36In a growth company, you care about the new customers. That's all you care about. And in an installed base company, you care about your existing customers. And so literally, like, our team, when they buy a company, the first thing they do is they call all the customers every single one. You'll be shocked at these multimillion-dollar customers who are like, wow. It's the first time I've gotten a phone call from this company. because management... And it grows onto prospects. It's not. It's all in the prospects. And you're like, hey, customer success. The mantra of Trilogy in ESW is customer success.

1:58:08Hey, what do we have to do to make you successful? Why don't we set up quarterly calls where you tell us if we're making you successful and what are the joint metrics? And they're like, wow, this is the first time anybody said that. And when you do that, all of a sudden, you get retention. Retention of the installed base. And that's actually how you grow the installed base is they're going to sit there and tell you what they want and how to do it. And sometimes you can do it. Sometimes there's upsell opportunities and all of that as well, where you're like, great, I'm solving the customer's problem.

1:58:36And that is actually leading to more. But you have to sit there and you have to look at your installed base and be like, this is it. I don't get more. I don't get more. I really need to treat these guys really well. And I really need to understand what they want. And I need to figure out, hey, if I do add AI to this product, is there upsell there? Is there something that's really valuable? Or, oh my God, the prior guys have ignored you and it's a total nightmare and you're trying to cancel and it's hard to get off enterprise software. And so you're two years into your three-year transition plan.

1:59:05Can I reverse that? Can I provide something where, oh, all of a sudden I care about you, you're going to stop the migration off and get back on. And so that's 100 % of what the playbook is. And is the idea, is the objective function actual cash flows that can be pulled out of the business versus enterprise value? Is that the same as the switch from growth to install base? It's like, look, this thing is a melting ice cube would always be the term of art in this space. So just like keep it cold for longer, basically, and take the cash flows. And if the terminal value is zero, fine. I don't care.

1:59:36Yeah, you're correct. You're looking at your DCF. You're pulling the cash out. And if it goes to zero, there's built to last. There's a cycle in the company where it's built to dot. And you're just like, this product is done. And what you're just doing is managing that. And you're pulling the cash out to do it. And there is investment you make because that extends it. Software still is one where if you focus on the customer, I mean, just basics, that you can extend your area under the curve. Absolutely. And then you get some nice things like, oh, an AI uplift and things like that that allow you to do it.

2:00:09What was the transition like for you going from this extremely young, extremely successful person that's on the cover of magazines and stuff like this in the 90s to choosing a much more private, quieter existence? So that was all, that was done basically because I got married. So like in the 90s, crazy trilogy, super awesome, right? We're on all the covers. We're growth. No, 100 % growth. It's totally awesome. My last podcast was 20 years ago. Coincidentally, 20 years ago, I got married. And so I just decided I wanted a different path for the family and the kids and what it was. That was a different stage.

2:00:43So why I'm here is my youngest. She's a senior. She's like, okay, trying to give your kids as normal a world as you can. I just felt that being under the radar and more private was better. Now, as I look forward to my future, I'm like, I got 20 years and I need to be out there because we have to educate parents. The phase that I'm in very much is, we talk about two things. We talk about how schools, we educate kids. Time back, we educate kids. And our marketing department slogan is we educate parents. Because parents' view of education, it's 200 years of all this old stuff. They just think things that aren't true.

2:01:26It's not true anymore. Educating parents about what is possible. My new role is I have to go out and do that. What lessons did you learn from Trilogy University? I think it's so interesting that that used to exist back in the Trilogy days. And now here we are again. Tell us what that was and what you learned. Sure. Let's go back to the 90s. Trilogy built itself. So we started in Silicon Valley, dropped out of Stanford, literally living in the garage. We couldn't raise venture capital. It was different back then. We couldn't raise venture capital. We thought our ideas were terrible. And one of our co-founders was like, if I'm going to be poor and have no money and live in the garage, I'm going to do it in Austin, Texas, because it's way cheaper than Palo Alto.

2:02:03And so he moved to Austin. So we all followed him. He was our best engineer, developer guy, visionary behind the engine itself. And the problem with Austin, Texas in 1992, when we moved there, is there were very few software engineers. What we had to do was build basically the software group down there. And so what we did is we basically went to all the best schools in the country. And we hired 2 ,000 Ivy League grads, you know, Stanford, MIT, Princeton, wherever, and brought them to Austin. So that was our big thing. and back to the culture was we brought them in. It's an interesting thing about high standards.

2:02:44So these are the best kids in the country coming from the best schools. And we're like, if you come down to Austin, we're gonna put you in Trilogy University and it's gonna be the hardest 100 days you've ever done. You are gonna work 100 hour weeks. It's gonna be 8 a.m. to midnight and we are gonna build the most awesome products. And it's gonna be the hardest thing you did, but it's gonna be great. And that was why we were able to recruit everybody. was because of the high standards. Fascinating. Right? And it was actually interesting. You know, Microsoft at the time, our claim to fame was we got all the best students.

2:03:17At the time, I think Microsoft, sort of the peak of their power in 97, 98, 90 % of the students would go to Microsoft versus any competing company. Against Trilogy, it was like Microsoft only got 30 % and we won 70. And the reason was we made it harder. Kids want to do awesome stuff. Graduates want to do awesome stuff. And you don't want to give them a cush job or all this stuff. You want to put them on the hardest problems where they can work like crazy and do it. So that was Trillers University, which that ethos, we continue it today. There's a program that's in Austin that's running right now called Gauntlet AI, because they're trying to figure out about AI and training, where they're bringing down 100 people into Austin.

2:04:00So they basically scour the world, basically looking for the top 1 % or 2 % kids. And these are 20-somethings. and they're bringing them down to Austin. They're doing 100 days of 100-hour weeks to learn AI, to build apps with AI and retool your whole career to be like, what am I going to be in the future? And they have it set up where it's actually free for people to go through this. And then if you make it through and there's like a 50-plus percent washout rate, but they then get a$200 ,000 job because there are all these companies just lining up for being like, oh my God, these people just worked 100 hours a week.

2:04:38They're leading a J.I. Oh, I can't wait to hire them. It's a unique thing where when it started, people are like, no one's going to go sign up to do that. But if you actually talk to the gauntlet grads, they're like, this transformed my life. This is the best 10 week, 100 hour weeks I've ever done. If I was to watch you like a day in the life from your podcast 20 years ago, now through today with the focus on Trilogy and ESW, what was your life like? Were you just like a normal CEO running a software holding company, basically. Basically. You strike me as a person that's just relentlessly like pushing to make things better.

2:05:10Where would I find you most pushing in those days? What would be the parts that matter back then is, it's always back to capital, is you're trying to figure out is, the trade-off between how much do I have to pay for this company? And the more I pay, the better caliber asset I get versus, okay, what's the cashflow I can generate out of it? And then what are the things that generate the cash flow? And so first, you're like, okay, what are the innovations we can make about customer interaction and delivering customer success? And how do we innovate there? The second part is, okay, how do we take this code base and old code base?

2:05:44And how do we make the product better? And how do we make sure that we're being able to take these and revitalize them? And how do we do that? Third, how do you source the talent for this? You can't just take the Silicon Valley growth people. You're like, how do I go get people who care about this? And how do I find them? It's just looking at what are the parts of the company that drive your returns and fundamentally back to systems. You're like, you have to have these scalable systems. We've bought over 100 companies. So anything we're doing, you have to be able to say, okay, can I apply this to 100 companies?

2:06:16Where was the wastage in companies that you bought? We talked about the measuring and watching through the vision model wastage and learning. When you looked at people that worked in software companies, where were they wasting their time? I know you're just driving crazy amounts of efficiency. Where are you driving? Well, first, just the whole growth thing. Where if you're sitting there saying I have to grow, you're just there. And what's left, you're just fewer, better people. Culturally, it's sort of our same standard that we use with guides, teachers, which is everybody says it's student-teacher ratio.

2:06:45I would always take pay more to a teacher. Pay more. Get the best teacher with a fixed thing. and have a bigger class ratio, because that's what matters. Software is the same thing. I mean, your returns from having the best talent is always there. So interesting that you were like the software holdco guy long before that that was popular. Yeah, no, very much. There's obviously great ones. Constellations, obviously, a phenomenal one of what they do on their world. Vistas that moved down to Austin in the middle. And so I spent a lot of time with those guys talking about their model and how it's different.

2:07:22Software is a great business. It's a less great business, I think, going forward. Why? It's going to be dominated by AI. The dynamic that's going to change is the ability to swap out your long tail legacy is just way easier now. Software companies, especially systems of record and transaction stuff, you're counting on a decade-long tail. You can't pull it out. And that's been true forever. And I believe this is the bear case on SaaS is can AI enable companies to swap out the systems that never have been able to be swapped out before? In your world of melting ice cubes, does the ice cube melt faster?

2:08:04It's not freezing, it's heating it. Is AI just a sun burning this ice cube down? The question is just it's a matter of extreme. It is a true statement. AI allows you to replace legacy systems much easier than you could pre-AI. No one disagrees with that. It's just your rate of melt. If you had a fresh billion dollars with a new young version of yourself in a new LLC wrapper or something or C-Corp wrapper, and you wanted to invest it in software, how much worse do you think the returns that you would earn in the next 20 years would be from that, applying a similar playbook to what you've applied versus the last 20 years?

2:08:41How much worse is the future? It's two parts. And when we talk about SaaS versus AI driven, the SaaS stuff is going to be way worse. Pure transactional SaaS, I believe is just going to be dramatically worse than the big winners. The AI native ones, and it depends on whether you call AI part of SaaS, AI native companies, call them software companies or whatever. AI native companies are going to be worth more than any SaaS company ever has. They can just do so much more for the customer. Yeah. It's just your breath of what you get to do. You could change fundamentally how the business works. Take education.

2:09:14You literally are like, okay, kids can learn 10 times faster. It's a multi-trillion dollar industry globally. And there are no other software that's out there. No ed tech, nothing that's ever been built can have kids learn 10 times faster. And you're like, okay, I have to build a really good product and now kids can learn 10 times faster. I don't know what the value of that is. It's a lot. That product, Timeback as a product, there's zero doubt in my mind that Timeback as a product is the single best product I've ever built by far. It doesn't ship yet and all these things, my team would kill me.

2:09:49But the value that it will drive to the economy is just going to be huge. And I believe I've obviously just been focused on education, but it's got to be the same thing in every episode. So you would not be a buyer of the new Constellation spinoffs or something like this that are buying old system of record softwares at low-end rates. It's how you're running them. You need to understand the economics are generally worse than what they've been. You really have to worry about how long your tail is. But if you are focused that it's a melting ice cube, to Gurley's point of, there's a thousand of these.

2:10:20There's tons of stranded capital and stranded organizations and all this stuff where if you keep a growth team on something that's a melting ice cube, all you're doing is just incinerating everything. and maybe it's miserable for everybody. The growth team's unhappy because shrinking. The customers are unhappy because they're being ignored. The investors are unhappy because they're not getting any return. And so that's all just a mess and that needs to be cleaned up. If you were saying, I'm going to go in, I had a billion dollars and I'm going to go do that and I'm going to go clean that mess up.

2:10:48It can do really well. It is. And you can get great returns there. But the ones that are going to be like change the world's growth plays are going to be AI native by industry. For sure. Can you tell me what you've learned from Jim Abel? So Jim Abel, he was my head of HR. And he came from old school. He was from Bristol-Myers. I think I hired him. And this is in the early 2000s. Jim Abel was one of the most influential guys, you know, in my career for me. He was awesome. He still is awesome. On advice. It's ironic if I had to say, what was the best business advice I got? It came from Jim. And the reason was because, first of all, software businesses are HR.

2:11:31They are HR businesses. It's your biggest cost structure. It's your biggest leverage of getting return. It's all that matters. And he was an awesome HR guy. I was a terrible HR person. Still am. And he would just sit there and be like, let me explain why you're like the world's worst boss or manager or however, whatever category you wanted. He did more to help educate me and grow me than anybody. I could give you 20 stories. Give me one or two. Give me one. Okay, here's the first one I remember. So he comes in and we're doing our annual meeting. And I used to write a strategy doc and it'd be like 20 pages.

2:12:06Here's our children's strategy. Here we go. And we get an in, you know, there's 1 ,500 people in a big room and I'm going to get up and we're going to talk this strategy. And Jim was like, what are you doing? This is the dumbest thing ever. Here's what you got, Joe. You're allowed three lines, three words each. and you need to distill your strategy down to that because 20 page strategy documents, those are useless. And I remember sitting there and I was talking to somebody and I was just like, God, does Jim understand we hire all these guys from the Ivy League? Like everybody can read a 20 page strategy document and the slogans.

2:12:40I'd be embarrassed to get up and sloganeer my way through with a super high end. And he's like, Joe, smart person disease. You have smart person disease. You need to craft your message and make it simple and clear. I was like, whatever. And I ignored him. And then he went and he interviewed every single person in the company. And it took him basically months. And he came back and he pulled me into his office and showed me on the whiteboard. And he's like, this is what actually people think your strategy is. Because I just asked them all. And I'm like, wow, that's like literally the opposite of our strategy.

2:13:11He's like, yes, because in a 23 strategy document, there's always one line that someone can attach to and say, see, I'm aligned. Because you said something. And he's like, you need to go create your strategy where there's no escape, where your message is so simple. Everybody can sit there and they have to read it. And if they feel discomfort because they're not aligned, that's what you're looking for. That lesson. And feel it in the alpha school. Kids must love school. Three commitments. Yeah, yeah, yeah. Kids must love school. And he's always about the edge. He's like, and how are you going to measure that, Joe?

2:13:44And he's like, instead of vacation, Jim Abel would definitely pass that. There's no escape from that. If you're a guy, if you are going to be hired to be in charge, you sit there as a teacher and you're like, I need to make the kid love school. He has to crush the academics and do the life skills. There's no escape from that. And if you don't think that's possible, you won't take the job. Last week, a friend and I went through five. We were looking for new companies to be interested in investing in. And we went through 500 company websites blind. We didn't look at who their investors were. It's just companies that had gotten some funding.

2:14:18And we went through 500 websites. We didn't find a single one where it was totally clear and obvious what the damn product did for the customer. I think if everyone in the world did the three lines, three words each, the world would be a far better place. It absolutely would. He's doing it from corporate strategy. But then once you do it, you're like, okay, we'll just communicate this. No, it's just true everywhere. And if you communicate that out, he's an HR guy. His marketing insights, he came through like Pepsi. and he is a great consumer marketer as well, where he'd just sit there and be like, it needs to be a magnet.

2:14:51Good marketing needs to attract and repel. You need to go find who is your target audience. And if you're giving platitudes, then that's not repelling anybody. That's terrible marketing. That's terrible vision for a company. He'd look at most, you know, one of the five things. And he's like, if someone won't say the opposite, it shouldn't be on the list because then it's a platitude. So he's like, a controversial one when we were back then was integrity. Everybody has integrity on it because of course you want that. He's like, it's a waste word because no one's going to put on their core values.

2:15:23I want a company with no integrity. Nobody says that. Yes, you have to have it. I love that, the opposite being attracted. If it's not the opposite and you have to have, it's a magnet, attract and repel. And if there's not somebody else who will say the opposite, it's wasted. You're not getting the clear message across. Is there anyone in addition to Jim that taught you something as valuable that you remember from your business career? Jack Welch was a mentor of mine. My dad worked for him. And then my dad passed when I was 25. And Jack called me and was just like, I'm here any time of coaching or help I can give.

2:15:55I would fly up during the 90s. I'd fly up and spend the day with him at GE or wherever. He was awesome. his ability to motivate you back to limitless was phenomenal how did he do it like what did you take from him youngest member of the ford's 400 i'm on the cover of the magazine i'm freaking 20 something life is awesome i'm awesome right that whole attitude and i go up there and we talk literally at the end of the lunch he's like okay so joe you're like a good product manager is that how I should like think about you, like level seven or whatever it was. He would just sit there, first of all, brutally honest on the feedback.

2:16:36Let's talk about your strengths and weaknesses here, Joe. And you sort of suck at this. Not just sort of suck, you're terrible. But then taking that to make sure you understand where you are. I remember I flew back from that trip and I spent, I have so much to do. I have all these things I need to do. I got to get better on this dimension and my company has to get better here and I have to build better product. I need to learn more. He'd inspire you to just incredible greatness with the highest standards possible around it. I'll give you one more. Gene Medical had bought one of our products in 1997.

2:17:10I was up talking to him. He's like, yeah, Med doesn't like your product. And I was like, I don't know if you know, it just won e-commerce product of the year. In the year of e-commerce. And I said, Jack's like, Joe, I don't care if it comes from heaven above. If General Electric doesn't get a return on its investment, your product sucks, you suck, your company sucks. No. You go from, oh my God, I won product of the year to he's making a really good point about return. And literally that helped us create our customer success and how we could show return that we wouldn't just be a product company, but we could show value to the customers.

2:17:42And so that was what he definitely did. I love that. I'm curious about your motivation. We talked so much about other people's motivation. What is the through line of all your hard work? One of the things that comes up a lot when you ask people that know you, I think, decently well, they'll say some version of this. Joe's like nine-tenths, just a really nice, high-energy, normal guy. And then he's one-tenth business killer psycho. I'm curious about that 10 % of you, maybe for you to describe it if that resonates with you or not. And if so, where it comes from. Is it true, first of all, like, does that feel like a good description?

2:18:15I'm just a normal guy with this extreme. That's my daughters. They probably have a good view on that. There is an element of pushing the limit is where you get all the alpha. That's where you get all the benefit. It's at that extreme where the real truths come out. And I absolutely believe I'm always trying to figure out how do you take this? Where's the limit? Turn it to 11. Let's work 100 hours a week. You know how we're going to get all these kids? We're going to build craziest boot camp, Children's University, back to two-hour learning. My first day, I literally sat in front of the parents.

2:18:49It was first day of school, which was two weeks after I started. And I was like, we're not going to have any adult do academic teaching in this school. You know, there's like hundreds of parents who are just like, this dude's a whack job. I appreciate all of those who stayed to us. Some did rage quit, obviously, and totally understatably. But to me, I'm like, yeah, this is how we're going to make it work and it's going to be fine. And of course, there's not going to be teachers doing academic teaching because this can do it better. That's where you get the, okay, that seems like that 10 % of just pushing to it.

2:19:18And today, our two-hour learning engine and 2x in two hours. You're just going to go push on that. Well, there's no reason why not to because the kid's 100 facts and ideas an hour in their head with the TikTok interface. It's just whatever this is, well, let's just do more. And on the scale, when you say I'm the 10%, obviously, Elon Musk is always the thing. Like, you go to dinner with him and he's like 100x. I'm like, oh, I really suck. He's like, I don't understand why you don't have a thousand schools already. I don't know what's going on. I'm like, whoa, it's all these issues. It's all a continuum on where you sit.

2:19:51But yes, that part of it is designing the system and designing the ecosystem, whether it's a product or whatever. You're like, what are those things? What are the levers that if you really push them, that's what keeps going? So learning sort of happens at the limit would be like the encapsulation. Learning happens at the limit. it's learning and there's always the ideas and then actually how do you implement it and scale it it's the steve jobs thing of it's really easy to visionary a good product and there's 10 000 decisions you have to make to make them all work together there's 10 000 decisions we've made in the alpha system and a two-hour learning system in this ecosystem there's 10 000 decisions that you need to make and they reinforce each other.

2:20:39One of the things people often say about me is they're like, I want 85 % Joe, right? I want what Joe's doing, but I'm going to do the 85 % version of it. The answer is, and they find out, it doesn't work. If 85 % worked, I'd do that. It doesn't. I'm pushing it to where it needs to be for it to work. And if all of a sudden you back off those, it's going to fail for some reason. If you don't believe your school needs to have kids love school, they'll go instead of vacation. It's not going to work. And people are like, that standard is so ridiculous. Yes. That's the one that makes it work. Yeah. That is the one that makes it work.

2:21:17It's the spinal tap approach to product building. Exactly. When was the first time you experienced that? The spinal tap approach turned it to 11. I'm so curious about its roots in you. Like we liked that as a kid. Like what was the first time you remember pushing something to 11 to see what you can learn at the limit. In high school, this is a dysfunctional 11, I guess, which was, I was always about what's the minimum academic score I can get, but still hit goals. So like I would sit there and be like, well, if I get an 89.5, that'll round to 90, which gives me an A, which is the same as getting 99 or a hundred.

2:21:52And I literally would just do the work to get an 89.5 right at the limit. There's a time where I literally turned in a test where I didn't finish all the questions. Because I'm like, oh, it's enough now. I hit 89.5 and turned it in. The teacher's just, God, I hate you, Joe. Really? You can't just finish it? So I didn't like school side. I was trying to figure out how to game it. How many days could I skip school and not get expelled? When I really turned it on was when I dropped out and started Trilogy. So the story here is my parents were very unhappy that I dropped out of school. My dad was definitely more of the rule follower type.

2:22:26I was too much of the renegade. And my mom was very upset. There's that Forbes article where they're like, you're a moron. It's a famous title. This was a little over a year after I'd started Trilogy. I was with my dad. My dad was like, I know I didn't like you. I'm so excited that you started Trilogy because I was so worried that you were a lazy little shit. I was so worried about it. And it was just because you were in academics and you didn't care. And so you were always trying to shirk and do the minimum. He's like, we're working 100 hours a week. We're sleeping under the desks. We're just doing everything right.

2:23:01He saw that I found what I love. That was that unlock that you want to see. That feeling of limitless. That feeling of limitless and that I would just run through walls to do that. For him, that was the point. So that would be the first time when I really demonstrated that, at least to him, whatever that. I agree that I strongly believe every kid has a thirst for learning. It's just not always academic. And you're just trying to tap into that. For me, it became starting a business and learning everything about it. And I was one of the world's expert in configuration. I can't tell you why, but it was a means to an end.

2:23:38I wouldn't have just done, I'd sit in the Stanford CS library, you know, read back then you had to read papers and all that stuff. This is, it's very different, which is, is finding that unlock. And then once I did it, it brings the energy and excitement to it. What was the switch over from Trilogy to ESW? What was the first time that that new unlock happened? Yeah, there really wasn't. It was a continue. Like, to me, it's all trilogy. There was a name issue. There's like a corporate legal entity, but it's all the same trilogy. There really wasn't, which was we bought a couple companies and we're like, oh, we really are good operators.

2:24:10We're like, oh, we actually run these companies. Yeah, oh, wow, look at this. And we bought a company and we made, I don't know, 10 times our investment on it. You're like, oh, wow, this is like, yeah, this is really cool. It's so interesting. The limitless thing, maybe it's a nice place to start to wrap up, is that the same person I mentioned earlier, my friend, whose name is Graham Duncan, who had the teenager selling the sweatshirts that would be so motivated by it. An amazing kid. He has this notion of trying to get people into positive feedback loops. And it strikes me that that is what you are doing now with your time and your money and your attention.

2:24:43You know, I haven't quoted numbers, but it's an enormous amount of your own personal money that you're putting behind this. And it's pretty amazing for me as a dad, and I'm sure for everyone listening with kids, to think about your time and your energy and your money, that basically what you're doing is putting kids into positive feedback loops where they can feel that feeling of limitlessness, which for anyone that's felt that knows, you don't have to talk to them about it. They know that is the biggest unlock of their lives. And so I'm very thankful that you're doing what you're doing. I think it's one of the coolest projects happening in America that people are just starting to learn about.

2:25:15Hopefully now a lot more we'll learn about. I think you know my traditional closing question. What is the kindest thing that anyone's ever done for you? I've had so many. My wife runs a kindness campaign around all this stuff. And the kind world that we live in is just when you look at the kids at the school and you just sit there and say, when we look at maybe kind or grace that they're part of this. When I wake up every day, The kids who are in the schools, we are like forging new ground. This is a startup school. And there's all these kids who buy in and are like, we are part of it. And to a large extent, they're putting their faith in the adults.

2:25:58And that includes obviously me to be like, this seems really crazy. This seems very different. But I'm all in and I buy in. That's the part that for me, I'm just like, at the end of the day, it all comes back to the kids and their buy-in around this stuff and their willingness to be part of it is the thing when I think of gratitude and kindness, that's the core that makes this all happen. And that's where my appreciation goes. Immense amounts to all of them. There's a few of them who are watching this who are going to be like, it's time to receive feedback, Mr. LeMott. Here is my critical yet constructive feedback.

2:26:40Alex or Tatum or Ella is going to do that. And that's the part of this whole thing. And to your point, there's nothing more important for a society than to raise kids. We have an opportunity because of things that have been invented and where we are in the world to totally make it awesome for the kids. And there is nothing, not just more valuable, there is nothing more rewarding. And so if I can assemble the dads and the moms who wake up every day and are like, I want this change for the kids, we have the opportunity. We need to get all together and make this available to a billion kids around the world.

2:27:18And I'm in. I'm in for the next decade, two decades, 20 years. I'm putting in the first billion. Transforming this is going to require more than that. It's a trillion dollars a year. It's going to require more than that. But there's nothing more important than all of us to work on it. Joe, this is unbelievably fun for me. Thank you so much for breaking your 20-year streak with us here. Came for everyone to hear. Thanks so much for your time. Thank you. If you enjoyed this episode, visit joincolossus.com where you'll find every episode of this podcast complete with hand-edited transcripts. You can also subscribe to Colossus Review, our quarterly print, digital, and private audio publication featuring in-depth profiles of the founders, investors, and companies that we admire most.

2:27:59Learn more at joincolossus.com slash subscribe.