The 50 richest families in America are betting on this trend

i'm gonna read you the most alpha sentence possible here kinder must climb a forty foot rock wall and pass a receive critical feedback without crying test right this is the best time in history to be a five year old you go i feel like i could rude where i know i could be what i want to from at all in it like a days off on a road less travel never i'm gonna flatter you for a second so the easiest one is i wish there was alpha school near me so i can send my kids to it i actually have a kindergarten so that would be perfect but you have this really amazing story it's kind of the story that me and sam liked to tell him this podcast because it sounds like a movie here you've got this sort of secretive billionaire right this guy who in his twenties drops out of college figures things out you're on the cover of forbes magazine when you're twenty seven years old and you built multiple huge companies multi billion dollar companies and then you disappear for like twenty years nobody hears about you you you stay out of the public limelight you're not out there like us talking on podcasts and saying how great you are and then you take a billion dollars of your own money and you use it to try to reinvent education now you're back yeah so in two thousand five i got married which was also the first year of podcasting i did a podcast actually stanford that was my last one and then i went sign for twenty years and then now my youngest daughter is about to go to college and so now i'm back on the road right i'm back in the limelight and i hopefully ba we'll be doing it for the next twenty years to fix education why don't we start at the the start there so you have this idea for trilogy and your drop out of college actually in high school i wrote a paper about ai and so lillian high writing paper on ai one at the paragraph said neural nets are decades away i then went to stanford and i was a class with the father of expert systems at ai of professor f pump so my buddy's died you know we're like we can't sit in spanish class anymore so we dropped out you know back then it was rare and so the parents are not excited my god famous said you're moron and then we built trilogy and our claim to fame in the nineties it was the first ai product to sell a billion dollars did you have the idea when you dropped out or you drop out and say let's come with a whiteboard let's come up with an the idea no then we we had the idea which was you could build this product called the config which was expert systems had a a range of things that they could solve configure it was one of the domains that they've been trying to solve late seventies basically and you know by the late eighties i was like oh we can totally do this i tried to figure out what trilogy g did because at one point you guys owned so many different products i think you owned a bunch of different companies and i was trying to figure out and i was like is it sort of like if an airline needs to like buy parts to build an airplane your you built software that would help them decide how many bits and pieces for each like how many seats they need therefore what they should order from the manufacturer was that right the first product we had that started the company was a config just think of a config on like you know a car website or dell computer where you're configuring your computer now just imagine it if it's a million times more complicated which is a room sized phone switch or a boeing airplane or you know back then main computers you know big manufacturing systems that the problem back then is reps would be out in the field selling these complicated products and then what would happen is they get to the manufacturing ring line in the manufacturing line then build them it was an un build configuration and so being able to take that knowledge of how what is a correct configuration put it in your thousands of sales reps hands so they would sell accurate configurations would say millions of dollar a day to the fortune five hundred so we just found all the fortune five hundred manufacturing companies and said we can take what all this huge problems costing you just eight billion dollars put it in this sales builder which your sales reps would be able to build correct configurations and then you'd pay us millions of millions of dollars for it and so that was our first product and that what launched the company and that was the first one that you know drove the billion dollars revenue and you're at the time you're only what twenty twenty one years old you're saying like so simple we just went to the fortune one hundred knocked on the door they handed us the millions be bop yeah baby busy how how easy it gonna be so what what was it actually when you were doing that i mean were you just like really savvy early on or were you making dumb mistakes but figuring it out can you take us back yeah well there's there is you know for if you want the long form there's that there's a two thousand five podcast where i was presenting to stanford about lie if you're doing what we're doing it's the dumbest thing you could do but you gotta try it anyway which is no the fortune five hundred does not wanna buy from a kid dropping out of college right and we lived painfully it took three and a half years but the flip side to it if you ever build a product that the fourth five hundred wants and it saves them you know hundreds of millions of dollars they will buy it from me is there have no other choice we went into multiple sales cycles where you know they'd go in and at the end of it they'd be like oh we're gonna go higher back then anderson consulting or we're gonna call you know one of these are oracle to to solve this problem and when those companies couldn't solve it they would come back to us we were the most expensive software you could buy in the nineties because we also had super high pricing because we're like they're not gonna buy from us unless they have to and we know it's worth hundreds of millions dollars right we are the lost choice on the list and the way they are like okay we gotta deal with these guys then you're like great i'm gonna charge you lots of money because you'll no other choice well that's not that's that a very young kid mentality every time that i've read about you you've had this confidence that i love and it seems like even what you're describing is a very confident move for a very young person to make and back to there's some backdrop that that helps on that is jack welch she was ceo of ge my dad was a strategic planner and so i grew up in that g culture and i remember telling about the dad i was like god that's just tv like the only cool thing you guys made and he's like oh let's talk about the gross margin of at scared versus the t come commodity tv and so i was learning all of that from you know a young age and so that helped when i was ready to start my business that i understood roi and you know that i was going to be self value and all of those things but then i took that and said i'm gonna be the best product manager and i'm gonna put the two together and i actually think day with alpha that's a lot of what i'm doing it's just taking the product management part and the go to market is this part and saying if you took those two things how would you change education could you put some things in perspective so i used to live in a austin and a bunch of my best friends are austin nights and at one point i don't know if you know the sean i think at one point trilogy was the largest or a top three largest employer of folks in austin and like your growth was like astronomical i mean i think that you're doing hundreds of millions in revenue and only like five or six years in can you sort of brag for a moment how big and how fast did you can yeah well so once we had it took us you know we dropped out they took three and a half years to actually build the product and convince anybody to buy it but then as soon as they started to buy silicon graphics bought he packard bought at at and t idea right it's just we started to roll through the biggest companies with you know massively you know high pricing on this show we have spent hours talking to some of the best investors alive well lucky for you the team at hubspot they have pulled out the principles that matter most and turned it into a very simple easy to read wealth guide it's thirty five principles from the top investors we're talking guys who have been on the pod like howard marx man p bra morgan household cathy wood and a ton others so these are all their frameworks their mental models their rules basically how to play the long game and how to avoid ruin you can get it in the link below you know we were in austin where they didn't have lots of software engineering back then and so he hired two thousand ivy league graduate you know mit and stanford and brought him to austin so our claim to fame the nineties was if you asked microsoft you know bill gates who's the only company who out recruits us out of college right they were at their repeat so microsoft would win ninety extended of college graduates back then and we against them one seventy percent bill gates literally flew down to austin to figure out why you were getting the best graduates and this is also how intense you know he was is we're a dinner and he's literally going through every single person that we had made an offer to you know here's fred here and you're offering them back then you know forty eight thousand dollars you know and we've sort of reversed engineered how you guys you know we think he's like a thirty eight thousand dollar guy you know why what was his technical capability that you you really like i mean it was create the level of detail if he went through right because he it was it was a fight for talent and if you're getting talent you gotta get the best people what was your response to bill gates during that dinner no yeah wait what he say well let's it bill here's here's how you're doing it well and what did you say was he's like i call he's like after leading he's like i'm gonna call every single candidate who has a trilogy offer a microsoft offer and i'm personally gonna call off and i'm like i need the candidates more than you do bill and i you this is just all just escalate i'll just escalate i'll bring them on a trip and we'll we'll do a a weak ski trip and i'll ask them how was the last time you'll ever talk to bill gates you know how was that call because he's never gonna time fuck to you again because he's got there's of thousands of boys and so but they did for the period in nineties right a would have you know whether it was balm gates or mike maple the other third in the office of the president those three would call all our candidates and we would just continue to fight and it was escalate right it's just we needed them more than they did this is one thing i wanted to learn from you because you know when we're talking to me right now you seem like a friendly nice guy know you seem like a normal normal dude but you you definitely have a gear that that most people don't have can you talk about that that extra gear which is some version of bold or intense yeah you set out you have a goal and you just do whatever it takes to achieve the goal and there's no amount of work you wouldn't do to hit the goal just like this i have to win the recruiting war i'd i have to win i if i don't beat microsoft and get the best talent my company doomed and so whatever it would take right and i think that's true you know for everything that you wanna do you just have to have back to that gear i had been lucky enough that i do find what i love work on so i love build the stuff in the nineties right and it was awesome and so i was loving every minute of it and you know if i look at what i'm doing with education right now i have the best job in the world so i'm working seven by twenty four you know on education and there's nothing that we won't go do to figure out how to go fix this and get this dual people and i think just back entrepreneurs they have that gear right gates has like here you know today is the world's best out it's elon right you know when you go to dinner with him you're just like oh i suck like he is so much better right that his level of intensity and working on the most important problem and being able to focus on it is just a critical skill and if you want story i guess going back to the early days so my dad had terminal cancer but he said you know look you know i i basically have eighteen months how about i sit on your board and help you you know figure it out your a young bug who doesn't know what do it but it was obvious that i had you know caught the tiger by the tail and and you know and there was a meeting where this massive deliverable we had to hit fa packard it was one of our first one in hp you know yay nay was everything and he's like is your entire company focused on this and you we have we have the board meeting i'm like absolutely courts we do totally focused on and he's like so you're engineering team like if if if i ask him you know what percent of their time do they focus on kilo packard versus all the other companies and i'm like a hundred percent on v packard they everybody understands we are not gonna miss this and he's like real okay stops the board meeting goes out and says good bill reed who ran our development he's like bring him in here you've got a lot of customers bill you know working on this stuff what percent of this team is working on on k packard and bill's like well since you come from traditional work you know traditional world i would generally say two hundred percent because we're working eighty hours a week every single person's working eighty hours a week on through a packard and that leaves us an extra twenty hours a week to work on you know the other customers right and that's the kind of thing where you know when you're talking about the intensity and focus right and your team trying to deliver on it right it's just it's you know and i was like oh like god great they're you you're like hey dad hey cb kiss a g man on the lips because it's gonna happen for the first time out i quickly like that was right and that is exactly the when you talk about intensity when you're trying to solve this right i heard a story though it's not just in intense city i heard a story i don't know if if i heard it through a friend of a friend or online that you would take people you were recruiting like like at the end of your your university cohort i forget what you called it and you would take them to the casino and you would give them some money to gamble and if they and you wanted to teach them they wouldn't wanna gamble a lot of money and you're like well you're not a good fit we need the people who are gonna gamble more well so actually so this you can go look there was a cover story in the wall street journal on this because it was actually their money and you know we get all these kids down and they're like i wanna be an entrepreneur i'm risk taking that's who i am i'm like great so at the end of our trilogy university a hundred days you know if if enough of the teams that hit their goals we would take everybody to vegas and then we would get everybody around a ro let wheel right and we'd say you have to bet one month salary on the number right and so everybody would have to put one month salary down and you know there's a lot of people who are like well i'm not i wanna bet one month salary up it and we're like first of all that's not a huge risk if you're gonna to be asking a venture capitalist something to give you millions of dollars so and you're literally not willing to take any risk at all and so we would we that every year or in the wall street future wrote this big story about it i actually got a lot of flat from parents after they read the story they're like what are you doing did we just got out of college but yeah back to just you know pushing people you know if you want here's another intensity we actually trilogy university you know there's harvard business you know case studies on it and and you can read about it but we literally had a swap program with dana navy seals literally the navy seals are like okay you know we're gonna send a couple of our seals over to your program and you send a couple your trilogy kids to california get to go part to be part of ours it was sort of versus the mental and you know it was that level that we were considered by the seals the only thing on the standard and rigor that would equal them on the physical side and kids you know back to recruiting kids when they would like oh my god yeah know i get to go do they don't last a week you know in you know really a few days before they yeah is it is it easier is it easier to make a meat head good at programming or a nerd good at like swimming goals are actually super smart right they filter right so they were coming in as super capable now they never been in an environment where you're having to make it was the kind of thing of a different environment of decisions and things like that and and then their other one but it was you know it's those kind of things when you talk about intensity and doing things that are non traditional we're i'm all about that right it sounds like on the recruiting side you also did something counterintuitive right instead of making it easy because when i moved to silicon valley it was all about ease google will do your laundry they'll cut your hair they'll walk your dog they'll they'll give you free food you want some more free things that i meant went to a vending machine and it gave me a macbook it was unbelievable but you were like you realize that actually young ambitious people wanted something hard not easy can talk that a little bit that's a huge insight which is this is the hardest hundred days of their life and that was what allowed us to recruit it against microsoft for all these other companies i was actually at the board of directors of of fortune tech company and we had taken some of their me ease who wanted to go to trilogy instead of their company they're like how are they going does this little company you know instead of us yeah i'm like well during the internship you can be it easy right and so they're just oh i'm not doing anything significant and when they come down to trilogy it's gonna be the hardest thing they ever did they're gonna work on something significant and kids wanna do awesome things right and mapping it now to our education we've talked about the kindergarten climbing forty foot rock wall it's the same thing him want to go do hard things now they need to be ported through it you can't take a kinder ga say good art right you need to sit there and you have to have high standards and high support you need both parts but you know we have these you know with alpha tests where you do all these easy workshops you know and then you have to test to pass it you gotta to climb in the forty foot o'clock wall you know our second graders gotta to run a five k our eighth graders have to do a tough mud or they also go all have to cross finish line the same time you know we have all these tests but the ones that drive back to the most excitement i mean they all are hard are the ones where the kids can beat their parents like there is nothing that motivates a student more at a kid more than them being able to go head to head with their parent and winnie like fair not where the parent tanked fit like they love that kids love that one of our our claims on the you know is kids love school more than vacation right i can't build a school that kids love more than vacation if i have low standards it is the reason they're excited is because you're going against their friends doing hard things i actually think sean this insight that you guys just came up with is actually quite brilliant and you did a really good job of tying it into alpha but like of making things hard and that actually attracts a certain type of person but what's interesting is like if you're a kid it's exciting to climb a forty foot wall it's exciting to beat your mom and dad when i think of like a configure software that's not like that exciting like that you know it versus microsoft if you're making like well microsoft is not terribly exciting either but if you're like apple you're making like the ipod you're like you know we're it's like this consumer product that i could hand you how cool is that or i we just talked to the guy who founded mtv and he was recruiting these people and it was music it was entertainment that's cool configuring software that's not that cool but yet you said we're making this awesome stuff can you dive deeper into what makes something awesome because that i actually think that that one trigger of like making school awesome making trilogy software awesome like other than making it hard what is necessary for something to be awesome yeah sure so you're never gonna convince anybody that configuration is sexy right versus all the other options however the ai algorithms that under lot configuration at the time where some of the most complicated computer science problems you can solve and so when you're sitting there and you're looking oh i'm gonna go to an about box for microsoft word as choice a or you're gonna go work with the smartest people tack clean this challenge that no one's been it's solved before right it is a technically impossible challenge and the best computer scientist like you know in nineteen eighty five writes stanford mit they're number one computer scientist all came down graduates all came to alpha right and that is because we were working on the hardest problems it's the same thing you know people always ask you know when you know and on on companies why do people do startups offs like why do they go to down to spacex eggs why do you do it it's like because i'm with other people who are super smart who are working hard and we're all trying to do something that's really really hard the navy seals why you enjoy abc right it is the cam commodity it is the you know it's everybody together that starts in kindergarten it starts and kids love this stuff right and it goes up to they're getting out of college and then late career like the people who are joining us you know who are you know my generation of my age these are people who are like okay i'm gonna go spend the next decade trying to fix education and it's gonna be a nightmare it's gonna be super hard right but they wanna get in and do it because the alternative is oh i'm gonna tire and like golf all day and you know the challenge and the excitement is what motivates people you said something earlier about high standards and high support i wanna talk about high standards for a second alright let's take a quick break and i got a question for you when a buyer asks ai for a solution like yours does your business come up most companies have no idea and by the time they found out they've already lost the deal to another company that did hubspot has ae o which helps you show up in the moments when drag buyers are looking for a company like yours before the first click before they fill in the form that is the moment hubspot ae is built for check out hubspot dot com the agent customer platform for growing businesses i was at of tony robbins about a decade ago and somebody was you know all these people come to tony robbins some people who are at the edge of their craft at the top one percent performers they're there to get that edge and there's some people who are you know on the edge you know broken and and you know they're looking for a fix and he said if there's three words that would solve every problem you have in this room it would be raise your standards and he basically said you know your life will be what you tolerate and he goes on he gives a bunch of examples david pro was telling us that he said that you know joe once sent me as a holiday gift two bottles of wine and it's the note on it said here's two hundred point bottles of wine to remind you something like that to remind you of what one hundred point looks like a a reminder about standards can you talk about what that means because it's easy to say it's really hard to do you can't get higher than a hundred points right on a on a a wine ranking and it's the same thing on a test like our kids alpha get hundreds on their tests if you go to your average parent and say your kid can't get a hundred on the texas star ninety five plus percent of parent so i know they can't they can't do it and you know we have a we have were building with a few hundred people in austin who get more hundreds on the texas xr than a school district of a hundred thousand and all you have to do is just show kids they can right now you also have to support them and show them how to do it right but the back to the motivation of what what should the standards be right and the standards that should be are we should get a hundred you should know everything right you should be great at your craft right whatever it is and who wants to be number two and all of those motivations right that drives right human potential human nature and when you're building a business or with a school it's the same thing do you instill that in your team though is it just about being a a sort of steve jobs asshole where your nothing's ever good enough no it's it's it's the exact opposite which is most parents are one or the other they are either high standards low support just throw your kid in and figure it out good luck right and that's what's gonna cause grit is you're just gonna keep struggling okay that's a that's a normal way to do it because they'll try a little for a little bit but then they'll decide too hard and bail right and you get tons of dis engagement with that path you can do the other one i'm high support low standards which is oh i don't ever want stress right but i'm gonna be there supporting the whole time and redo it and that's irr little because you never learn how to do hard challenges you never learn resiliency and grit right you never get self confidence because you never tried something hard that you struggled to and so you have to give the scaffolding and show people how they get there what does that look like a within a company yeah let me give you the school one and then i'll give you the company well which is i go to the seventh grade as my first year i'm like all of you guys could get a hundred on the type of star i know like mister want that's impossible now can't get a hundred i'm like no enough i'll give you a hundred dollar bill hundred for a hundred right and it's still impossible can't right i i i i don't know how to do it and i was like no no here's the catch any grade left and they're like you're gonna let me take a kindergarten garden test and give me a hundred bucks vertex texas you know a hundred a star and like well they start in the third grade and for the kid's like done doesn't takes the third grade test it's a hundred they're like the i do fourth grade and you're like absolutely give you fourth grade and and then they'd be fifth grade and they only get an eighty two because they didn't know all that they hadn't done their school cannot not given the mastery right through it and this is where you have to give scaffold do you want the ai tutor to to look the ones who miss and give you those lessons that will get you to a hundred and the kid looks at it and it's like a that's like can take me a week work sure for another hundred bucks i'll do it and then they do fifth grade and then sixth grade and by the time they get to seventh what you wanted you changed their mindset but when you're getting a hundreds all the grade levels you're like well obviously i could do fifth grade i obviously you can get it to sixth grade it's just a matter of work and then it's just a matter of work to do it in seventh grade and so you've taken a kid who thinks it's impossible and you give it a scaffold it right to work through less motivation because motivation matters right and you give them scaffolding and motivation to do it so if you're building a company it's gonna be the same thing go build a billion dollar products k that's who's hard right you're like what is the scaffolding you're giving your team where you're making it where they understand okay i know how to get and that's the part you think about high standards if you as a company give high standard with no support they don't how to get there they'll try for a while and then they'll dis age lots of companies are trying to move their companies to be ai first right we wanna be an ai first company and they're basically like here here's you know quad code good luck right and what is the scaffolding you're gonna be able to do to get your people to that standard are you able to sit there enroll model this is what excellence is this is what we mean by excellence and then once you show them here's how you if you don't have the skills how you can repeat it and so that's the part when you look about you know this is hr at least am i getting the people in who have the skills to do it and then can you give them the training and the motivation model where they want to you are very good at understanding how to get people to do what you want them to do did you learn how to do this because you wanted to build an awesome company and you're like gotta figure out how to motivate people and how to make them productive or were you always into human psychology and business was a good example of just making it work oh no i was not good with human psychology and i i did wanna build the company and how i got there is what one of the most important hires i ever made is guy jim abel who was my head hr who would coach me through a lot of this where i i started very much as high standards low support he was the one who's was like look here's the part here's what you have to do if you wanna bring your team with you here is the organization you have to build if you're gonna bring once i had you know two thousand employees and i'm like oh my god you know what do i do he was the key insight on that side and then you know on the school side now there's this they're the professor doctor yea who's written a great book that every parent should read which is called ten to twenty five the science of motivating your kid from age trent to twenty five he's the one who actually developed our our child development side and how our our adults our guides work which is he mentor mindset high standards high support and he's done a ton of studies that actually show literally with wording changes where you can take a a student and just say look i'm about to give you feedback that's could be hard but it's only because i know you can go crush this right and because i know you can do it back to the growth the tony robbins park right the growth mindset and it's i'm giving it to you because i know you can do it and so here's what you'll need to go do and you can then give them the coaching back to that book ten to twenty five is a every parent should read it and it actually is our model where people say how does alpha work it only has three hundred and five reviews on it's not that popular it looks like the books once you get to middle school at alpha you have to read ten to twenty five there's another book self driven child that we do not allow kindergarten mom's greed because it talks about your kid being independent and a kindergarten is the last thing you wanna worry about but once you get to middle school right that's where kids you have to you know they're moving independence and so those are the two books that drive our our model talk about simplicity because as you're explaining things i feel like you're taking you know big ideas and you're compressing them in a in a great way that makes it easy to sort of you know g you're giving us good frame i used to do big you know twenty page strategy documents you know here's our big strategy documents and you know when jim joined he'd like read this document and he's like joe this is useless and but like it's really not it's like really good strategy what are you talking about things are super awesome like what do are you talk about what's robert dude awesome and literally i'm like and then he's like when you think you know he's like joe look you have a couple thousand people now your strategy document has to come down into three lines three words each and i'm like not gonna make a strategy to give this complex tech company slogan like we're not gonna use slogan the urine to get there i was i literally went awkward to what are founders so i was like god when we hired a gym i it was really smart but why would he like to try to dumb this gap and i i remember thinking about it right and so he kept coaching me on it and i'm like guys he's said like stanford at harvard garage was they can free to toward snap strategy dock and he's like no the next we're in company meeting and you're gonna get up and you know slogan what what are your key phrases i just was like i'm not gonna do it so he interviewed everybody in the company literally backed to intensity he was like met with every single person in the company and then put on the board after was it took him over a month and he's like joe this is what your company thinks your strategy gs i'm like wow that's like the opposite of what we're doing and he's like exactly he's the problem with the twenty page badger you're talking is every single employee takes the one sentence that they can attach to and say see on the aligned right i'm the aligned and when they're really not and then that's you just lose right you diffuse all your focus and so he tried to reverse engineer yeah just three lines of three words in each i was like okay they're definitely not that but here i'll go now i i i understood it and then you know we created it and that now for everything we do right so so what is it for alpha what are your three lines so our three lines for alpha far for every student right every parent understands we make three commitments to every kid the first is you will love school we used to just take a survey you love school the ninety six percent and so it's too easy so we added one eighteen months ago where we say would you rather go to school or go on vacation and four weeks ago when we surveyed all our kids forty six percent of our students said i would rather go to school than go on vacation right so great high standard high bar are delivering love of school the second is you will learn twice as much in two hours a day as if you sat in class for six and in so that's our learning engine does you learn on faster and so we don't make you do a whole day and learn ten as much we're like no we're gonna shrink it down you'll learn twice as much so no matter where you start on a percentile level we'll get you the top one percent if you're in the system long enough right if you give me time explain twice as fast i get to go beat the top i can couldn't get a hundred on the texas stars in and catch up even if i start in the bottom twenty five right you can move up and the third is we use the rest of that teach all the valuable life skills that kids are gonna need to thrive in this new world right and that's you know leadership and teamwork entrepreneurship and financial literacy storytelling and public speaking relationship build socialization grit and hard work and so that those are the the skills but those are the three things so if you're coming to alpha why are you coming right it's putting together a very simple clear product message that everybody understands and the wording the part that jim was really great about when you do this when he's like it's not slogan hearing which is if you can't say the opposite of it right then it's not on the list like so when we were doing the core values of trilogy in the nineties i was like well we obviously have to have integrity on the list and he's like go was there ever a company in the world he's like i'm gonna be the non integrity company he's like those are wasted words those are non this words because they mean nothing he's like i want edge right they have to have edge and so like well school is a great one there's lots of people who don't think good should love school to like well where they gonna learn grit and all these things that love school is i remember when i put my kids at to alpha ten years ago mckinsey and brian where actually the ones who started it and i was like brian what is the thing i don't understand about education you know that and he's like well first kids must love school and i'm like yeah sort of like spit you know i didn't like school and you just sort of suck it up and this was part of the game and he's like you're totally wrong and that is completely true right the my number one people wanna you know talk about how they can use time back our software and the number question i asked asked of every head of school now is are you willing to rebuild your school so kids love it more than vacation and if the answer is no i will not like use the software this do it it's because you it's not gonna work can i ask you a question that sounds really stupid but i think you'll have a really good answer why does the kid need to learn two times faster that it's not good i get it a lot everybody's like why two x there's a couple different dimensions as so as fuck about it the first is you know kids spend six hours a day plus homework today right they spend six hours a day plus homework on school and so the answer is if i can build a product the technology that lets kids learn in half time shouldn't we do that to the point of the name of our product is time back which is we wanna give kids their time back and in right now we suck up twelve years of kids lives sitting in class and doing homework and in the old world for you know for a hundred years there was no other alternative right and now because of learning science and and generative dot ai you can literally built an engine that teach teaches kids ten times faster so you're like okay let's do it why wouldn't we and you know back to obvious simplicity product positioning there's a question of whether it works but once you believe it works ready to get their results the show it works who wants to have their kid be in the six hour learning instead of the two hour alert because then your kid can do other stuff right the rest of the day how big is this gonna be because i'm i'm completely alpha pill not from this conversation but my kids are both in i've volunteer and their schools maybe once to try a month it's a great place but it's very much like a bundle of day care a little bit of education a lot of learning social stuff that's great but in terms of just like the learning and the life skills i don't think it's anywhere near what's possible and when i heard about alpha and specifically this the five k story it blew me away i i was supposed to like the ai part and instead i love the part where i was like cool after they do the two hours they this thing where like i don't know second graders or something it's like who your thinks they can run a five k nobody raises their hand so they don't believe themselves they could do it hey parents who thinks that if if they're kid to run a five k right now they could like dude their whatever first grader or second whatever it was and nobody raises their hand and over the course of whatever some amount of time month or two or whatever it was they were like well great can we walk a quarter of it right now and then they walked a quarter and then they were like yeah that was can we walk half can we jog a quarter and they basically did what anybody would do and they sort of train their way up and the kids all did and they they were able to it i just thought man that's a kind of an incredible experience i want my kids to have that type of like growth and and and opportunity so i think this is gonna be big but you think about this all the time and you've already built companies that know our multi billion dollar company so how big is alpha school gonna be eight five percent of alpha parents say i thought my kid do something in the last ten weeks that i thought was impossible for their age this is for the folks out there who have a business that does at least three million dollars a year in revenue because around this point that's when you're able to look up after being heads down for years building your company and you realize two things one you've done something great but just do a long way from your final destination and two you look around and you realize i am all alone i out run my peers which means you're now making ten million dollar decisions alone by yourself and that is when mediocrity can creep in my company hampton we solve this problem by getting a room of vetted peers of other entrepreneurs who are gonna hold you accountable call you out on your nonsense and help show you the way because the fact is is that there's only a tiny number of people in your town who know what you're going through and who have been there and they're hard to find and if you can find them it's hard to have this explicit time this explicit place where you sit down where the rules are clear that we are here to help each other and to be one another's board of directors the biggest risk is not failing you have a company and it's working you're gonna be fine but the biggest risk is waking up ten years from now and saying shit i barely grew in business and in life and for people like you who are ambitious wasted potential and regret is what we want to help you to avoid we have made so many of these groups and we have a thousand plus members and i know this stuff actually works whether you work with hampton or you get your own group on your own but having a group like this of group of people you meet within in real life once a month it can change your life it change mind and i know it will change yours so check it out join hampton dot com we as parents because of the old system and learning two x or ten times or learning these running five k's climbing forty foot rock launching businesses you know broadway musicals our expectations of what kids do is much lower than what their capability is right the greatest on untapped resource on on planet earth is human potential and we now have the first chance right in a hundred years to rein envision it and what we're showing at alpha is these kids can do ten times for than we expect i believe how big this is gonna get is you know my view is was twenty years and get this to a billion kids right and it is gonna utterly transform education you know for everybody that when you think about ai is gonna transform the world right there is nothing that is going to have there's no part of the world that ai is gonna have a big impact than education it is the un unregulated win right this is the best time in history to be a five year old because the twelve years ahead of you are gonna be great and so there's lots of work to do right to do that but i believe that once you realize what's possible and why we get all the what we're showing with alpha once you show this as possible there isn't a parent who doesn't say i don't want this for my kid you were silent for the last twenty years but you've been quietly building that why weren't you talking then and you're talking now is it just because you need to influence parents to give this shot so there's two parts one is two thousand five off the year i got married which was last time i talked and so you know and building the family being in the limelight harder right it's easier if you're just quiet and second it didn't help the business so in the nineties it really helped the business didn't help the business after two thousand five and then now for this it absolutely does right the biggest impediment to change in education is the parents right because all we know right we're fish in the water all we know is the education system we went through and our parents and our grandparents and so there's just massive resistance to change right there's disbelief right our marketing department you know they're slogan is we educate the parents right because nobody believes this like you you listen to one of my podcast the number one feedback is i don't believe kids can learn ten times faster i don't believe these kids really love school more than vacation right and so back to being out there and and and getting the message out i i consider it critical in education historically hasn't had done to do a billion students do you need like ten million alpha schools or something how how are you gonna do that saw you doing the math sean sean right when you said that i saw some type and i do exactly who's was doing out his calculator so there i mean there's a hundred thousand schools in the us you know and back to a billion now there's gonna be different ways to get there one is just physical schools right and so i am learning how to scale physical schools right this is gonna be you know across the nation just to give you scale if you want on the business side of this you know private school market in the us is about a hundred billion dollars so it's a huge market where even if i don't get to public school we will but even if i don't get to public school a hundred billion dollar market that gives me a great it's why alpha started it's why we're high private school is because it's you right the anchor right in the credibility and the revenue right that then funds everything out it's your tesla roadster yeah yeah test the roadster is a great one so there there's that hundred billion dollar market and that's us k twelve how long does that take to make a profit and are are you just using your money yeah so i put in a billion dollars from my my software company as the the first payment but back to this getting to a billion kid is gonna take tens of billions of dollars so fixing education a multi trillion dollar industry right it's the second largest industry besides health care globally and there's nothing there right it's there's no there's no private market players really and so you know there is definitely the opportunity to build spacex for education and so and the capital requirements are high you want all these campuses now we're busy innovating on the business model to show that you can build a profitable a business so that capitalism can provide the capital needed to to scale education right historically everything in education spend nonprofit and the problem with nonprofit is profits are non scalable which is the better your product the faster your donations go away right there's plenty of really good charter schools who have three thousand person waitlist lists and if fast head of their school wanna open another one they're like i'm waiting on a forty million dollar donation you know to build a new campus i don't have that problem because i have a thousand families in new york city at the info session right who as soon as i want capital to build a new campus right every i i'm fun to it right now but everybody's is gonna copy to to give me capital to to build the business second you know and and thinking about alpha alpha is the high end private you should think stanford of k twelve there'll be a couple hundred locations thousand kid you know k twelve locations five but it's five percent of the market you know we have other physical schools around austin that we're inc committing to to figure out where we get product market fit we have a gifted school they're trying to find the hundred thousand smartest kids who you know would you say what would make you love school they're like more academics right one in twenty kids when you ask them that is like more academics they want a third power hour in the app they want math olympia right they want all that we have a sports academy right this is like forty percent of the market maybe fifty percent of the market which is when you say what would you love to do kids who like sports so like texas sports academy you know our baseball team just one national championship be i g if you know right our basketball team is for one you know our academics are ten times better than mh gs we're rolling out a a set of other sport that you'll see for for august where these teams will be the best in the country but also the best sort of you know alpha per academics but also sports and so we're working on you know i don't know what you've heard of founder school yet that we're building for high school and so we're building all these different school types but those are you should think physical schools and my view of the market is in twenty years ai is gonna change oral in lot ways but in twenty years parents are gonna drop their kids off at a building ninety percent of parents you have homeschool little stuff but it's a niche ninety percent parents are gonna drop their kid get off of a building and in that building are other kids and adults right that's one of this can you know there's real about terminator so it's not right kids need adults to develop them right and now if we do our job right what occurs during six hours is totally different right we totally transform it in the last hundred years but that's the market and we have to bring the physical school now how do i get to a billion kids you know that's it's gonna take twenty years is not enough to to build that many schools so we're working on other products one just the time back software itself where if i can go get people who want build schools or transform their schools and they realized this isn't an ed tech right ed tech failed the second is we're doing stuff outside of school so to give you give you one one example we have some of the world's best video game developers right building and they're spending two years building a video game on this these concepts right and it will be free to learn you know been free to play free to learn for five hundred million kids and it'll start shipping later this year why like why why do this like you you're incredibly wealthy and then also like you're you're kind of a shark not a bad way you're a ty you're a titan of industry you're like a a take over the world type a guy why school this is a great question which is you know before i did this and put my billion dollars and i talked to a dozen billionaires should all bent over at all spent special over billion dollars on education and to a person every single person said dumped to and they're like it's the lowest roi you can get any fill and philanthropic the thing it doesn't affect it there's just no you just can't impact it right it's it's just this impossible problem and like every dumb entrepreneur or good entrepreneur right i'm like i'll be different you know and for me it was one where you know the i just had this experience which was you know back to the life story so i i doing the ai have my software company right big we're making tons of money piles of cash flow right plenty of money but twelve years ago in austin mckinsey and brian started to school alpha and the mckinsey like i'm on over to alpha and i'm like i'm not going to your weird school that is a weird jan school and you know it took her two years to convince me and the the only way she did was at the were nay at the end of may the gabriel gets out and alpha was still in she grants my two daughters to spend a week you know before they went to summer king and they went spend a week and they came home after the week they're like dad i don't wanna go to summer camp we wanna go back to alpha and that was my insight that was ten years ago and then i sat and just talked to mckinsey you know well because i'm like this is great for austin great for our families too bad it doesn't scale this stuff just doesn't scale and then four years ago when chen ai came out i was like off neural nets right for my high school they're finally here and i was like this will enable alpha to scale to a billion kids because back to fixing education first off you need tons of capital you need somebody who can sit and say i need a billion dollars on the most well funded principal in history right nov gonna fund ed tech at all the ed text stuff failed right it's never worked right every all the billionaires are like done with the plants beyond it and so i sort of just woke up and i'm like i actually do have the skills right i think to go try this and now i can tell you four years later and i'm four years into it it was the best decision ever like my job and today is so much better than my trilogy job like not even close i went four years ago i went to my team i'm like for twenty five years you guys have been telling me how much better you are than me and you know the you guys are great i'm like so good luck is the company better now now that you have a new ceo i think well two part well yeah it's i went instead guys and i'm gonna be your worst shareholder you've ever thought about which is you know i'm like i'm just gonna pull every dividend that i can out because i need to fund education so we're an acquisition company and i return you from being capital intense i buying companies and turning around to being capital light but somehow still making all those ish work because i'm gonna be sucking all the capital for education and on the face of it everybody everybody's is like okay that seems like an a impossible problem the team actually has done a fabulous job better than i had ever thought of of how to do be super capital efficient the downturn in saas really helps them because there's lots of companies now if you wanna just know their business what's happened is we're considered one of the best operators the fast right we know how to generate cash flow out of this is better than anybody and so they're boeing to all the saas companies that have died that are now owned by the private credit right the blacks stones of the black rocks or you know where you're hearing about you know why the market cap in sas is down ninety percent and they go to them and they say look you have two choices you either can put another hundred two hundred million into this saas company that's gone bankrupt and reboot it or you could just sell it to us for a dollar and we'll split the cash flows and you know four years ago when they did this pitch or was like yeah i'm not doing that because i'm gonna give another hundred million dollars to this big you know the private equity firms they have a lot of companies in their portfolios that they're just turning over to the credit cards and those guys built four years ago at faith and hope you know the last twelve months is completely changed they're like oh my god ai is here guys are go last at all the last thing i wanna do is write a big check in hopes they can reboot for ai and they're like looks like just getting the cash flow is the best thing we can do and so now i haven't seen the last pipeline laugh around and they saw twenty billion dollars of pipeline companies that were they were looking at about splitting the cash flows buying for a dollar so they did a great job how did you get into buying companies in the first place so you you start trilogy you're an entrepreneur you got a product you're selling it you're doing that game what why did you what what triggered you to start saying let's go acquire other companies in what was the moment two parts after the dot com meltdown fifty percent of our cast customers went out of business then you know two thousand in the dot com turn down there two parts that happened the the configuration market our original market we had tapped out right we dominated it was full and then during the downturn we saw that we're just better operators than the other people we were able to go through it make prop all these other software companies were not making that transition they were dying right and they were available for a dollar right you could buy all these companies for nothing so we just we we just literally i was like okay well let's buy a couple and see if we can turn around and did and we make tons of money i'm like okay let's just do this so we bought hundreds of companies since then but it was nothing this strategy was just like oh wow the companies are really cheap why we buy i i heard that you studied warren buffett intensely my journey on this is i had been investing since you know high school and it's stanford like i was in the fund we ran part of stanford endowment you know and i came out of it during the nineties in the boom i'm all like oh i'm so great remember ninety eight like reading an interview with warren buffett i remember we thinking man that guy's an idiot then after two thousand one i like oh maybe i'm in the idiot maybe i don't know i'm doing it right and my returns weren't good right it's really good on the way up but after the bus keep life my you life today were terrible and so i was like i should probably listen to him and so i literally just read everything so there was not book or anything back to my standard of be an expert being an expert if you're gonna be an entrepreneur you have to be the best of world in whatever your field is and so my standard well here's what i need to do i need to know everything about warren buffett so that if i'm watching him being interviewed i can pause it and answer the question the way he would because i know what he thinks right i'm so the way he thinks and so i literally that's what i do is we do the same thing with our alpha high students where we're like an expert as one of our our our pillars and then when he'd say something that i didn't you know i'm like oh i'm surprised right i would then have to go back and research and figure out why didn't understand it i love talking to people like you who like we have da shah he's the founder of hubspot and he's like i'm just because and he is at the story where he's like i'm the best ping pong player there is because like one time someone wanted to play ping pong with them and he got beaten and he's like oh i wanna be the best because he's competitive some people it's a board game where they just love winning the board game what's what's your thing if i'm gonna do it what really is just why why not be the best it's just well why would you do the other right is your other alternative well what about you though this is actually interesting are you using a like what what learning techniques have you learned all along the way that you yourself are using to learn sure so our our framework about how to be expert is you know you you dive in right our students do this second thing i do same thing our students do which is you spend one hour a day reading and then summarizing right their work so we've created a a structure called a brain list which is we think a lot about is what is the role of humans and what is the role of ai you know going forward like if you're a kid mom you're like are you preparing my kid for the ai you know ai age coming we think a lot about that right of how what is the role that humans are gonna play as ai keep getting smarter and so we have a concept in a in learning science there's this concept of depth of knowledge right which is sort of the hierarchy of of of knowledge which is d k one is facts right do you know facts d two is can summarize them right do you have summaries of the facts d three is if you look at all those facts and summaries can you have insults and then d four is really creating new knowledge right oh i have insights that no one else has because it's and l m's are very good at helping you do d one two and three right and and reasoning around that and then the part that the humans still do really well is the okay for creating new knowledge and so what we do every day is we spend that time reading the current experts that are helping fill your d k one and d two right in this brain lift and then you are having d k three i'm having insights on it kids can learn ten times faster is an inside right based on the learning science facts right you can you can just derive that d four is insights that are so counter to what you know what it what do you think that no one else believes so this would be the equivalent of if i asked an l help me design a school it's gonna put a teacher in front of a classroom and if i say wait i wanna design a school that doesn't have teachers doing academic teaching the l are gonna reject and say that's unethical and so ai is not able to help me if i load the brain basically is context on top of the ll where it has the one facts the doj two summers is do through inbox all on research papers all this stuff and they wait read all this take this into context now does not help me design the school it's like oh yeah actually based on this i totally see how alpha can work and then it actually can help me right that is the skill we think is critical we start teaching it high school but is it summarized you you spend an out you you personally are spending an hour a day and then you're literally just summarizing what you're saying and then you write out like here's my insights and my new ideas based off of what i've just read for this last hour yeah i will love i'll change my brain lift so for me and how i actual analyze it is i basically have a twitter of a custom timeline of of content and authors right or experts like uncle science right i'm gonna go read it and see if there's anything new in there or i'm gonna summarize the article and put it in the brain lift and then if it causes me to have new insights i'm gonna you know i try to have one d k three insight you know a day as my standard it doesn't happen all the time but that's what i'm trying for you know d four our ones are these are the big ones right and then you're you you have that knowledge and if you work that way right of having expertise right any field that you wanna be an expert in right and ai help you do this you know if my you know back in the nineties i did the same thing which is i would sit in stanford math cs library you know in nineteen eighty nine you know when i'm dropping out and i would read every paper written about config right of how they tried why they'd failed you know back then it took forever you'd have to send you know to the you have to into germany da had really good configuration stuff right and they'd have to send you the paper over you know and you'd get it a week later now literally on an l right you can learn this stuff really quickly dude how are we gonna how are we gonna convince people to buy shit they don't need or do stuff that they shouldn't do if everyone's a super baby and really smart right the but like there's like what's what's the world look like when everyone's skin what's the world look like when everyone has access to ai what's the world look like when a billion people are smarter than they are now by a significant amount well i actually believe you know back to this whole thing is i believe the human knowledge graph i know there's this dystopian view that ai is gonna cause everybody to be dumb and if we do it the wrong way and just to be clear if you take job chatbot on un unmanaged chrome and deploy to kids in k through twelve those things are not learning chatbot are cheap bots it's terrible i understand why people wanna ban ai and and do all that stuff now there's also a good way to do it right and there's in our way you know very different way and i believe we should be teaching all the kids good way because they can learn ten times faster we have a student who's gonna be published in nature she will be the first ex school student as a lead researcher published in nature and that used to be i hd from stanford right and we are pulling that capability down to a seventeen year old girl and there's ten people at alpha right behind her who are like oh she can do it i could do it and that concept of like unlocking human potential we haven't even you know scratched the surface of what they what you can do you know if you talk to our sports academy you know as an example because of the two hours a day in the morning and the you know you get skills training in afternoon you know our our our our board's academy you guys are like we're gonna be in every field we're gonna be the number team in the country within a year of deciding that's gonna be our sport but but how are you gonna do that with sports how are you gonna make someone seven feet tall you know what i mean like to be good to basketball you're you're on on all things right there's human limitations right i can't even with my learn intent tent there's knowledge there's the iq right and i can't be a nuclear physicist i just don't have the cycles right actually in cognitive load theory i don't have the working memory right as you get older you get slower like my brain my neurons fire at about half the speed of my daughter my eighteen year old daughter now the difference is i have knowledge graph right in my brain that i uploaded you know the last you know fifty plus years that allows me to take shortcuts because i know the answer i don't have to think through so in a list of ten things she has to go through each one i can read the ten things and be like oh seven's is the answer so i can still get to it you have to load knowledge in your brain even as your brain goes down as you get older or even if you don't have the fastest brain to start with so i can't make people seven feet tall they're not gonna win you know in the nba but whatever the boundary of your human potential is we can get you down got it right we can get you to the boundary and what the the surprising part is your expectation of what your boundary is or what your kid's boundary is is wrong that's where when you talk about the excitement in the energy and why i get up every day to do this is i literally surrounded by kids who just doing magical stuff and you we have to get it out to everybody right there's nothing more important to society than raising the next generation every parent right that's your job every society that's the most important job there is nothing more important we haven't had an answer for a hundred years where we to change it we now do and it needs not just to be me right i have to go get all the best people in the world to work on this problem because it's more important than all the other ones i can see why you out recruited bill gates i'm in but do yeah well come on boy i'm gonna show you i'm gonna back to your audience right of people who wanna start businesses i haven't done it yet because i'm still working on exactly the business model and the go to markets to prove it but i'm gonna show this is the single best market if you're an entrepreneur to enter it's a multi trillion dollar market with no competitors dude is the catholic church gonna be like is he gonna get like the pope knocking gonna on your door and like hey joe what are you doing they no we are working back to this that's school so there are catholic schools that i'm working with who are like how do we adopt to our learning because it's it's just obvious but no matter what you want you know the catholic church has a different afternoon they want right everybody has their afternoon but everybody gets okay well why do we're wasting the kids timing in class let's let's get that two hour learning thing working so that we can then build the afternoon that we think our kids will thrive in sean is your is your cut full or what oh my gosh this is amazing i loved it i love the stories i love the insights i love what you're doing we're big fans we've been talking about alpha for a while so it's fun to have you here thanks for coming on thanks a lot appreciate it you're the man we appreciate you that's it that's the pod i feel like i could rule the world i know i could be what i want to from at all in and like a days off on a road travel never look hey let's take i wanna tell you about a podcast that you could check out it is called the science of scaling by mark robe he was the founding ceo of hubspot and he's a guest lecturer at harvard business school the guy smart and he sits down every week with different sales leaders from cool companies like cla and van and open ai and he's asking about their strategies their tactics and how they're growing their companies as you know head of sales or chief revenue officer if you're looking at to scale company if you're a cro or a head of sales just looking to level up in your career i think a podcast like this could be great for you listen to the science of scaling wherever you get your podcast