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

Episode Date: November 5, 2025

Most billionaires disappear after they make their money. Joe Liemandt did exactly that — vanishing for 20 years after building Trilogy into a software empire. Now he's back with a radical mission: transform education for a billion kids using AI. In this episode, the reclusive tech mogul breaks his silence to reveal why he's betting another billion dollars that everything we know about school is wrong. Thanks to GoDaddy for sponsoring this video! Head to ⁠godaddy.com/codiesanchez⁠ to get started with GoDaddy Airo® today. From fifth graders negotiating food truck gross margins to middle schoolers getting paid $1,000 to hit the top 1% academically, Joe's Alpha School is flipping education on its head. Kids learn twice as much in just two hours a day, then spend afternoons launching Broadway musicals, building apps, or training for D1 sports. The results? 96% of students love school more than vacation, and every single class tests in the top 1% nationally. We dive deep into why Joe believes the 100-year-old classroom model is dead, how AI tutors can teach kids 10x faster, and why paying students to learn might be the most controversial — and effective — motivator yet. If you've ever wondered what happens when a data-driven billionaire decides to rebuild education from scratch, or if you're tired of watching kids hate school while the world leaves them behind, this conversation will change how you think about learning forever. ___________ 00:00:00 Introduction 00:01:24 The Forbes List and Raising Kids Without the Billionaire Label 00:02:39 Why Money Matters: Teaching Financial Literacy from Kindergarten 00:06:45 The MBA Myth: Why Business School Won't Make You an Entrepreneur 00:08:01 Alpha School Revolution: Where Kids Learn 2X in 2 Hours 00:08:43 Breaking the 100-Year-Old Education System 00:18:33 The Three Girls Who Proved Math Isn't Gender-Specific 00:20:05 Paying Kids $1,000 to Reach Top 1% 00:26:59 From Broke to Billionaire: The Trilogy Story 00:28:08 The Entrepreneur's Blind Belief That Changes Reality 00:30:58 From Consumer to Creator: Breaking Kids' TikTok Addiction 00:34:01 High Standards Are the Key to Happiness 00:40:02 The Food Truck That Teaches Gross Margins 00:47:05 Motivation Engineering: Time Back as Currency 00:52:49 From Tech Bro to Principal: Joe's Personal Transformation 00:58:58 The Billion Dollar Mission to Transform Global Education 01:08:51 Making Millionaires in High School 01:10:32 AI in Education: The Good, Bad, and Terrifying ___________ MORE FROM BIGDEAL 🎥 YouTube: https://www.youtube.com/@podcastbigdeal 📸 Instagram: https://www.instagram.com/bigdeal.podcast 📽️ TikTok: https://www.tiktok.com/@big.deal.pod MORE FROM CODIE SANCHEZ 🎥 YouTube: https://www.youtube.com/@codiesanchezct 📸 Instagram: https://www.instagram.com/codiesanchez 📽️ TikTok: https://www.tiktok.com/@realcodiesanchez OTHER THINGS WE DO 🌐 Our community: https://contrarianthinking.typeform.com/to/WBztXXID 📰 Free newsletter: https://contrarianthinking.biz/3XWLlZp 📚 Biz buying course: https://contrarianthinking.biz/3NhjGgN 🏠 Resibrands: https://resibrands.com/ 💰 CT Capital: https://contrarianthinking.biz/4eRyGOk 🏦 Main St Hold Co: https://contrarianthinking.biz/3YfGa8u Learn more about your ad choices. Visit megaphone.fm/adchoices

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free of charge. BetMGM operates pursuant to an operating agreement with Eye Gaming Ontario. When you look at education today, do you think we can actually re-educate the entire, let's even just say the U.S. using the technology have? 100%. What about for people who are really scared to have AI teach their kid? You should be terrified. They are being brainwashed by TikTok today. AI could be good or bad.

And we need to have a huge effort to make sure that we use it for good. Founder of Trilogy Software and ESW Capital. Joe is now the principal of Alpha School. Today we're here with Joe Lamont. I saw a tweet from you. Three girls in my Alpha High Group were described by their parents as not math science girls. They've been focused on other pursuits. But their math SAT scores, 790, 790, 790.

People read that and say, that's crazy. In our school, that's normal. If we spent 10 years and educate kids the way we've been educating for 100 years, those kids are going to go into an AI world and have no skills that matter. AI gives these kids superpower. You all believe if we educate kids like this, they will be more successful, and thus we will have all. these beneficial repercussions. What does the data say? We are the best performing academic school.

Country, every single class we have is top one person. No school can say that. Here's why, here's what you should actually do with your opinion. So you've been described in so many news articles as private, reclusive, mysterious, and a billionaire. But now you're back in the spotlight, in this room, on camera. Why? I believe two things. I guess back, I was big in the 90s and then in 2005, I got married and shut everything down. My last podcast, sort of prior to this, was in 2005. And so I was quiet for 20 years. My youngest is now a senior in high school and she's going to be leaving. And so my next 20 years is all about transforming education and I think we can transform it for a billion kids. And to do that, I have to get out there and explain why it can be awesome

for kids around the world. Like the co-founder, of Alpha McKinsey, she says, this is the best time in history to be a five-year-old. And we totally believe that. And we need to go out and build that and make that happen. Was there just no point to be in public beforehand? Like too much hate on the internet? Not fun. You just like working with computers? Well, too, and I'm definitely naturally an introvert. And if I have a choice of just sitting inside, I definitely would do that. The other was just for a family. I didn't want my family to grow up in that environment. And I wanted to make it as normal as I could for my kids.

It's not quite normal, but not being in the press all the time makes it a lot easier. The other thing I got that happened in 2005, I got Forbes to take me off the list. So I was on the list in all the 90s, the rich list, and I got them to take me off. How? Well, there was a dot-com turn down. And so they were all like, oh, and if I don't give them data, right, then all of a sudden, they're like, oh, okay, you must have lost all your money. I'm like, yeah, totally.

And so then they found out later and put me back on it. And I had to sit down with my two daughters. And I'm like, kids, I hate to tell you this, but I've been lying to you. We actually have more money that we think. It's going to go out next week and you're going to see that we have more money because I had basically been trying to have them grow up in a world where it wasn't surrounded by, you know, billionaire kind of stuff. Yeah, smart. I was just with another friend of mine, Jenny, who was also.

you know, a billy. But she was saying last night, she was like, we purposefully never put out how much we were worth, which I think for young people, they're like, why not? Where are the Rare's? Where's the planes? But I think that's also, like often an indicator of perhaps not everything's very great

if you're having to demonstrate that as your indication of wealth. So do you think for young people, or if somebody's listening to this, should you try to look poor? Is it a negative signal to actually focus on projecting well? You know, when I look at kids' motivation, you know, and students' motivation, right, we're all, our schools are about what motivates students. And parents like it or not, one of, you know, what motivates kids? Kids want to be influencers. They want to be famous, right? They want to be athletes. They want to be

star athletes, right? They also want to be rich, right? Those are all dimensions that drive kids' motivation. And, you know, you have one where when you get wealth, you're often like, oh, honey or, you know, son, that's not really that good. And it's hard, right, for the kid to be like, no, I want to go prove myself. I want to go do this. And so I believe it's just an intrinsic motivation in a lot of kids and that you need to teach them the right way, right? There's all these great character building and life skills you can teach under that to get the habits you're looking for. In our schools, we start teaching about money in kindergarten. So we have a whole financial literacy program that starts in kindergarten all the way up through 12th grade to teach

all the good habits that people need to have. Yeah. Well, I think it's good you're talking about it again because what I found is once people get money, then to your point, they're like, oh, well, that's not important for us to talk about it anymore because it seems gouch. And so then, you know, but then how are you supposed to get it if all the people who have it will never tell you the real path to it? Correct. And so I think it's actually pretty liberating now that some people in the internet are saying, hey, okay, this is what it took. This is what it looks like if you have this much. It's hard to even conceptualize some of it. And so I think it's good. Yeah. No, I would, I think teaching how to make money and capitalism, I believe there's a view of, you know, if you, on, you know, if you're

in the TikTok world, right, there is a view that socialism is much better than capitalism. And we don't teach why capitalism is good and it's a force of good. Right. And it can be very productive. It can be bad. But you can also teach kids. This is how it can be additive to society. And that's not out there. And I believe it should be for sure. What do you think are some of the ways you can teach kids or how do you teach kids about money or to get money? We want to teach kids how to earn money, right, how to save money, how to spend money effectively, how to invest and how to donate, right? And it's all of those things.

And for kids, right, it needs to be real money. It's why kids often got allowances and things like this, which is you're having to teach them how to be responsible about it, that, yes, you have to earn this. And when it's your money, you're going to spend it differently than if it's not your money, right? And you are going to learn how to invest. So like in, you know, in our middle school for when they earn money, they can run and, you know, basically Robin Hood for kids, right? They can invest.

And, you know, there's just so many great lessons. One of the things we allow the kids to do after they've earned it, they can invest in anything they want. And some seventh graders yolo that money on some crazy thing and lose it all. Right? And their parents are like, wait, what's going on? Why did you let them lose it? And the answer is the best time to have that happen to you is when you're in seventh grade. not when you're 27, right?

Or if you're going to have debt and a credit card, right, the time to learn it, we let the kids borrow, you know, around it. And then they have to pay it back with interest. And our kids know what 25% credit card debt is, you know, when they're in fifth grade, because they're having to earn back, you know, whatever they borrowed to buy. And so all these life skills that you want to teach are totally teachable and actually need to be taught. Right? If you ask most parents, you're like, what are the life skills I really want my kid to know?

Financial literacy, entrepreneurship, right? They want that as a course. And in standard school, historically, you haven't been able to sort of in our new model. You can absolutely spend plenty of time teaching kids these skills. That's so smart. Yeah. I mean, we always say the best business school is being in business. Like, I find business school to be kind of a funny misnomer.

I think it's maybe okay for the network. But actually, I think a better network would probably be building things with other builders. 100. I couldn't agree more. What do you think? Should people go to MBAs? No. That's an easy one for me. It is a great two-year period to build up a set of great relationships. But no, there's nothing on the business knowledge that you're going to come out of there that is a fraction of what you would get from building your own thing for that two years. Like just not even close.

And putting the 100K on the line for a startup instead of just getting debt that you can't ever. escape for business. No, it's just, and back to the skills. These skills are all of how to start a business, you have to do it. So we're, our, you know, in our high school, we have a set of students who want to create a new curriculum for next year. And the curriculum they want to start is how to make a million dollars in high school, right? And they want to, because all our afternoons are they get to work on their passion project for four years. They're like, we can totally teach kids, right, how to be able to, what are the skills to build a business, starting, in high school, right? And that is really effective. And it's not going to be a traditional MBA curriculum.

You know, people have said lots of things about alpha school and, hey, billionaires are teaching our kids and how can we do this with AI? And it's completely free form. And oh, my God, you give them debit cards. But then if you pause for a second and you think about what school is like for us, you know, at least I'll say for me, you know, really hard wooden chairs with tiny little desks that you have to sit in for eight hours a day where you have to ask to use bodily functions and be taught from somebody that's never actually done the thing that they're teaching you about. It's actually, it's wild. And so, you know, if we were taught, you go to school, you get grade, grades, you go to college,

you get a good job, then you make money, and that's how you get rich and happy. What do you think the real process is? Well, I think the way to think about it or the way we think about it is, you know, if you focus on K through 12, you know, it's been a hundred years. we educate everybody in the planet the same way, right? It's put them in a classroom, six hours a day, teacher in front of the classroom. And that was actually 100 years ago

the best way to educate the population, right? And it is the most equal thing on earth. You can be in the poor school district in any country in the world. There's a teacher in front of a classroom. The building's not very nice. We can go to a really expensive private school and there's a teacher in front of the classroom

in a nice building. But it's the same mechanism. And, you know, sort of where Alpha came from was if you stepped back and said, okay, AI is coming, the world's going to be different in 10 years. And you have a kindergartner. And you're like, am I preparing them, you know, for a dozen years from now, right? What would that be? And you rethought this from the ground up. How would it be different? And so that's what we did is we just sat there. And the first thing back to the experience, the first thing that we said was, if you're going to send kids in this for a decade plus, they must love school. Right? That is just, just a design goal, right? I'm a product guy, right? And so I just look at this as a product manager where I'm like,

how would you design a product? And so the first thing you'd say is they should love school. And we literally measure it on, we ask kids every eight weeks, do you love school? You have like an NPS score? Absolutely. 90 plus percent, 96 percent in the last one, said they love school. We actually had to ask a new question because it got so high. It was sort of useless to ask that is we say, do you love school more than vacation? right and 40 to 60 percent of our kids each eight weeks depends on the workshops and where they're

really cool or what their vacation choice is but we sit and our we want to strive to build an environment that if we're going to send your kid there for a decade decade plus like they should love it more than vacation right you know my highlight i've been principal for three years was a few months ago uh in the spring two thirds of the high school students sent me a note and said can we keep the school open this summer, we don't want summer break. Right? And I did not like school. And what I went through was not that I got in trouble for skipping school all the time in high school. Yeah, you dropped out of Stanford too. And I dropped out of college for the same reason. And, you know, so I, but that is crazy. But that is what our design goal should be, right? If you're going to

rebuild school and your kids, right, it should be that. And so don't people even push back on that, on that, like, I know my parents are like, you're not supposed to like it. You're supposed to go. you're supposed to listen. It teaches you discipline. So do you get pushback? Like, should we actually love school? So I didn't start Alf. It started a decade ago plus and Brian and McKinsey started it. And there's a long story on getting my own kids in it. But when I sat down with Brian, you know, when my kids went in a decade ago, I said, what are the things I don't know as a parent that I'm wrong about, you know, about education? And he's like, the first thing is kids must love school. And I was like, you know, it's spinach. It's spinach. And he's like, you are so wrong, Joe, and you will figure that out. And I can now tell you now that I'm principal, if you want to build a great school, they do have to love it.

And if you ask back to learning grit and hard work, one of the life skills we learn is grit and hard work. Right. And our kids, you know, all our eighth graders three weeks ago finished a tough mutter, right? And crossed the finish line at the same time. It was a teamwork, grit, combo life skill workshop, right? And so kids will do hard things, right? But you want to do it in a framework where they love it. Yeah.

And hard doesn't always mean monotonous either. Those are two totally different things. They're exactly the opposite. If you want a kid to love school, it can't be monotonous. It is literally the opposite. And so that design goal of, you know, you have to learn, you have to build a school that kids love. That is what unlocks kids potential, right?

is they're doing it because they love it. The kids don't come in in the summer because they're working on some monotonous. It's that they believe they're changing the world, right? The reason that that team who's working on it is they're working on a project where they're building an app and their goal is to teach 100 million teens the key to their happiness is contributing to their community. Right?

And they're building that app and they're like, we are going to change the world with this app. It's going to be the greatest. They have all these influencers who are helping them. Mine was like, get an A-minus and no more. because what would be the point of that. Right. And so this whole point, right, of exactly, I was the same way of, you know,

what's the minimum academics I could do to still get through the system? Yeah. This is you want to engage kids on their passion, right? Starting in middle school, we start passion projects. Well, let's back up, though, because I think people could listen to that and they might think, well, that sounds really nice and they won't know your background and that you're incredibly data-driven and the success that you guys have had. So, like, it's not just you're like, that sounds good.

I'm Joe. I'm a touchy-feely hippie guy. That's not you. You're the opposite of that. In fact, like, many times I think people had said, or you had said, I would be the last person to be building this kind of company. So, like, what does the data say? You have a particular way we're going to talk about on this podcast that you all believe, if we educate kids like this, they will be more successful, and thus we will have all these beneficial repercussions. But your success has been pretty wild. So tell us, like, why we should listen to you on this. First of all, we use on the academics side, there's multiple parts, but one element is, are they actually learning academics in our schools? And we are the best performing academic school in the country. On any, every single class we have is top 1%. And so in every grade, every subject, no school can say that. And here's why, though.

Here's what you should actually do if you're a parent. We have known for 40 years that kids could learn two, five, ten times faster. there's a whole field called learning science that has been studied for decades papers came out when I was in high school right about how we could radically transform education and allow kids to learn 10 times faster but they all started with this will not work with the standard teacher in front of a classroom model and so there was no way to solve it right because economically you couldn't give everybody an individualized tutor you couldn't go master you couldn't implement some of these learning science concepts. And, you know, one of the things that has changed, right, and our second, when we talk

about if we're going to redo education for the next decade, our second principle is kids need to learn 10 times faster, right? We need to allow them to learn 10 times faster because sitting in class for six hours a day and homework is not going to prepare them for the world that's coming. And so that was part of why I got involved three years ago was I had to go build a learning engine that teaches kids 10 times faster. And, you know, all these learning science, papers, every parent can go read them and understand it's possible. We took AI, Gen AI, combined with learning science, to build this engine. So if you come to our schools, you sit down at this learning science-based AI tutor. That's not like Chachy-B-T. It's different that you have to experience it

to understand it. But it's going to teach the kids 10 times faster. So in two hours a day, they sit down for two hours. They learn more than twice as much as if they sat in class. And so they're learning so fast, it doesn't matter where they come in. They can come in, you know, top 25%, bottom 25%. They are going to get to top 1% the longer they're in the system, right? Because they just keep learning twice as fast as anybody else and doing it in only two hours a day. On the academic side, kids can crush it. Like if I could wave a magic wand to fix things, if parents could understand a couple things. One, your kids should love school. There's, you, You can't say you should have a crappy 12 years.

No employer would say, come work for me. And it's going to suck for 12 years. Like when we talk about love of school, it's just so obvious in every other part of our life, we would be like, that's ridiculous. And yet, you know, what employer, like, it's going to be terrible. But that same parent who's running a company with, you know, thousands of employees, when they look at kids, they're like, yeah, you should toil a decade. You know, it's terrible.

You should hate it. Right. It's good for you. And that's why all these kids are unhappy, right? And that's why they're not engaging. That's why middle school and all these mental health issues, it's because we've designed a system that pours the crap out of them. We hope they hate it.

And then we're like, let's put stress on them. And you do all that stuff. You're like, God, that doesn't work out that well, right? I mean, it really is insane, like the system that we've designed. And so going back, you're like, yes, you should love it. So parents need to understand that. That's critical. And who at the end of the day wants to look at their kid and be like,

I want you to hate this. The second is, though, you can create. crush your academics in two hours a day. That's it. That's all you need. So all of us who went through, because all we know, six hours a day at homework, you want to do better, you have to, you know, all this crazy amount of time, that's not required. Two hours a day, you'll crush it. And what's, how many students have you taken through this? So over the last three years, you have a lot of data to back this idea. No, so we publish our data so you can go to the website and it'll download, right? Map, we are huge believers in standardized testing. You know, and lots of

parents don't like standardized testing. When they come to alpha, they actually love it because they don't believe me that the kids are learning in two hours. And so all these parents were like, no, I don't like standardized testing. I'm like, great, just trust me. Don't worry they're learning. They're like, oh, okay, wait, wait. And then until they get the standardized test back that shows their kids crushing it, they are very skeptical. Yeah, I saw a tweet from you on it. And the tweet was, three girls in my alpha high group were described by their parents as not math science girls. That has happened to me too. They've been focused on other pursuits,

launching a Broadway musical, competing for Miss Teen USA, building millions of TikTok followers, and became nationally recognized as a teen dating expert. But their math SAT scores, 790, 790, 790, which is wild.

People read that and say, that's crazy. In our school, that's normal, which is, you know, there's a view, there's a meme in the world, you know, And in our middle school, a lot of girls come in and they're like, I'm not math science.

It's just, it's a TikTok meme out there. And so they all say it. And one of the exercises we make them do is we're like, oh, really? Well, go find the learning science paper that's been written because there's 10,000 of them written, that shows that middle school girls can't learn math science. Right. And there's obviously none. They all can. And so that's where you get into the motivational part.

A lot of what you're trying to do with kids, right, when you're raising them, is what are the limits they have. in their head, right? What do they think they can't do? And how do I break through those? Right. And that is the part, like, that is what our guides do, right? We have guides and coaches whose entire job is to sit there and say, instill a growth mindset. Kids, you can do anything. And how do I motivate you to put in the effort to show yourself to do it? Right. And so if you want the most controversial thing we do about paying kids and all these kind of things. So we will take any middle schooler, girls or boys,

and we will pay them a thousand dollars if they get to top 1% because lots of kids come in and say, I'm not top 1%. Right? I can't do that. Only GT kids can do it. Everybody else. I couldn't be a 790 SAT.

And we're like, well, $1,000. And we show them because of how these AI tutor works. It's not about IQ. you, it's literally about effort. Wow. And we show them if you, if with this tutor put it in the right way in the, in the system, they all can do it. And it literally will calculate for them.

It's this many hours of time for you to get to top 1%. And they're just like, okay, well, that's many hours. Okay, I'm willing to put in the work. And then when they hit 1%, it changes how they see themselves, right? A lot of what you're trying to do when you're breaking through these blocks is they're like, I'm this kind of person. I'm not a mass science girl. And you're like, no, that's just not a true statement.

And then when they get top 1% in science, they're like, oh, I guess I am. And then once kids, you have to pay the 1,000 ones to sort of get the breakthrough. But once they hit it, none of those girls needed any incentive to stay. That's actually not true. There's one of them needed some more incentive

to get to 790. And we'll talk about that. But they didn't need any incentive to get to 790, right? Because they saw themselves as, oh, I am a top 1% math science girl now, even though I'm still trying out from his teen USA and all of those. The Broadway musical is another one,

because we can talk about that, another controversial part, is for her, she is trying to, first all teen produced Broadway musical, right? She sourced all the singers off TikTok, right? They had a million streams like the first weekend. She needed to go to New York to meet a producer, right?

I think she's run three or four shows off Broadway already. but she needed to get to that producer meeting. And I was like, well, and she wasn't at 790 math. And I was like, you can totally do it. And there was an incentive and it would pay for her to fly up to New York to meet the producer. And she's like, okay, I'll go do that work, right? And then fly up and get it done. And so we will, you know, back to earning.

You're like, maybe you didn't want to do it. And there was a little extra work to get that 790. But you earned money that then you could spend on your passion project, right, that you could do. And when parents hear that story, okay, do you want to have a framework, right, to earn and save and spend, if your kid's earning money on some of the academics that's breaking through some of, you know, their inherent limitations, and it's being spent on learning how to invest or investing in their business or passion project they're doing, generally parents are like, okay, that's really a great idea.

Like I heard the headline of Alpha and I was like, this is stupid and I don't like it. And then sort of when they dive down, they're like, okay, wow, that's great. I wish my kid would go through that. Yeah, well, I think the headline is actually pretty fantastic. It's like where students learn 2X and 2 hours, test in the 99th percentile, and then give students the rest of their childhood back. That is good. You got some, that's a good marketing slogan.

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Instead of months of grinding, you can go from idea to launch ready business in minutes. No more waiting, no more guessing, just a real online presence that you can grow with day one. Suddenly, the thing that was just a tiny idea in a notebook is online, polished, and ready to scale. So if you're ready to take your idea to life, head to goaddy.com backslash Cody Sanchez and try GoDaddy Arrow today. What about for like the rest of us? So people who are listening who don't have kids who would have loved to go through this, but maybe feel like they've hit their levels. They can't get further. This sounds great for these malleable brains, but for them it's not possible. Are they just out of luck? Can you learn how to change your brain and become a top one percenter past high school? Yes, you can. It's not the market we're focused on. But all these learning science concepts, you know, there are some elements at it. age, but fundamentally, you can apply them for your entire life. And, you know, K through 12, and take higher ed. If you take higher ed, higher ed and down education market is a global $7 trillion market. And so we're focused on the K through 12 for now. But there's a huge opportunity in

education to take all these same concepts for adults. What's the tam of the larger side? I mean, near infinite in this world. Here's the issue you have just glow, right? When you look at the world today, right, AI is going to change everything. There's going to be massive rescilling that needs to occur, right? And we're focused on, okay, how do we prepare the world for the, you know, from kindergarten up, right? And then, but there's a whole other set of, okay, all these jobs are going to be obsolete, right? And how are we going to retrain all those adults? And I believe that's a huge market and that somebody needs to go in there. And I believe entrepreneurs need to go in. We can't just count on the old educational system.

that we all have been doing for 100 years. We need new entrepreneurs to go in and take these concepts and say, how are we going to reskill all the people who need it? You're on obviously the very cutting edge of AI, and you have been forever from, I don't know if you would have called, you know, some of what you were doing back at Trilogy and ESW. Did you call it, did you say you were AI focused?

Well, it technically was AI. So the AI, my AI world was in high school, I wrote a paper on AI. And one of the segments back then, this is in the 80s, this is in the 80s. So this would have been like 1985 was neural nets was a new aerial. And I was like they're decades away. Back then what AI was was like expert systems and ontologies. And so I went to Stanford and I was literally in class with Professor Feigenbaum, who's the father of expert systems, which was AI.

Now the problem was AI was in its downturn phase. It had boomed sort of early 80s. There was a bunch of failed AI companies so you could never call it AI. So when we started our company, when I dropped out of Stanford and started the company, we didn't call it AI at all because of the negative connotations, but it was the first AI product to sell a billion dollars.

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

And you'd been three months away from product for two years. and you know you did the thing of working 20 hour days and sleeping under your desks but the part that's interesting is how people were talking about how your former classmates they were going to work for Steve Jobs and Bill Gates and how some of the other friends of yours began kind of telling you like what the hell are you doing what are you doing like you're a smart guy you dropped out of Samford you're going to build this thing you've been two two three months away for two years this is going to fail stop being even maybe what you're going to your dad said to you when he graduated Stanford. Gregory, was your dad? It was my dad when I dropped out. I didn't graduate, so yes. Ah, yeah. And did he call you a moron for dropping on to Stanford?

It was a big title in a magazine, like Forbes, I think, that the title was, you're a moron because that was his quote. Does that still feel weird or is it not register for you anymore? Well, no, but back to that is, I believe, you know, back to, and we were talking about the MBAs before, here's my difference of an MBA and an entrepreneur, right? entrepreneurs believe they're going to change the world no matter what everybody else thinks.

Right? That they just sit there. And I remember back to one of the, you know, we were building this engine, this, you know, configuration engine. And we're in it. And we were just like, we're totally going to do it. And of course, we know how to do it. And we'll get there. It just needs more time every three months. Right. We kept doing that. And I remember the parent of one of the founders, right, of the co-founders is just like this you're and he he had dropped out and so the parents like mad at me because the kids dropping out and doing this futile task and it was all dumb and stupid and my dad's calling me a moron all those kind of things and I was like no no no you don't understand

bell labs had a hundred PhDs working on this and they failed right I mean isn't that awesome and to me I was like because we're going to solve it and nobody else has been in to figure this out. They're like, this is not awesome. Literally, they're like that literally is an example that convinces me you're never going to succeed, right? And it's just, it's that blind belief that you are right. And that is what entrepreneurs do. You know, back to the MBA, I used to give talks at Harvard Business School and stuff back in the 90s. And I would just sit there. I say, here's your problem as an MBA. You're going to look at the spreadsheet and you're going to say that cell doesn't work. So the spreadsheet doesn't foot, right? It doesn't work. So I'm not going to do this idea, right? Because you're just looking at it and analyzing it. I'm like, an entrepreneur looks at that cell and says, I will change that cell. I will make that work, right? And that's sort of the difference between the two. If you're going to be a builder and an entrepreneur, you're going to go change reality. Like when we started back, you know, three years ago when I became principal, I'm like, I have to build an engine that teaches kids 10 times faster. Right. And I'm like, no, we got the learning science, this gen.

AI, it's totally going to be doable. Right. And yes, you can do that. But if you analyzed it, it wasn't obvious. I think today people still don't really believe it. But that is what you do. You go out there and you say, I'm going to go build a school that people love, that, you know, all those crazy things that you read about, entrepreneurs go make that a reality. And that's what's awesome. And I believe just, you know, are they made or formed? You know, we believe in our high school that you can teach kids this skill. And if they're following their passions, and they all have ideas where they think they can, you know, dent, put a dent in the universe. And we just need to help them do that and give them the skills to do that.

Why do you think your brain worked that way? Why was your neural network wired to the fact that you looked at something almost impossible and thought, yeah, we're going to do that. I think humans naturally are like that. And I believe the standard school system sort of beats that out of them. And, you know, if you talk, so starting in middle school, a lot of people come into our schools. We had a few hundred people join. You know, we have schools now all over the country, and they joined, you know, in the last 10 weeks ago when school started.

You know, and they come into middle school, and they're consumers, what we call consumers, right? They scroll TikTok. They play Fortnite all day, right? They've been caught in that dopamine, evil screen time hook. And we run everybody through an exercise where we say, what are your values, right? Go do a values exercise. Do a Japanese Ikega, if you know what those are.

What do you love? What does the world need, right? What do you get paid for? And do a vision board if you think, as a way to think about it. These kids' vision board is not, I want to scroll TikTok all day or be a consumer. They want to go change the world. They believe they can, right? They want to.

They just don't have the skills. And then after they create all this vision board of who they want to be, it's always awesome. Kids want to be awesome. They want to do great things. And then we make them do a 168-hour project where they track every hour of the week. and you are what you do. And that's when they have this realization, you know, this middle school girl comes up

and she's like, I guess I'm going to be the world's best TikTok scroller. Right. But the disappointment in her voice when she was like, I just did my vision board of who I want to be. And I realize, right, I've been caught in this consumer mindset and I'm trapped.

And that is what our job in middle and high school is to teach kids the skills to go be a builder, to go be a creator, because they all want to do that. It's not that this generation, right? It's like, oh, there's no ambition. They don't want to. They want to.

Our school system just doesn't give them the skills to make that transition. So have you found that you can take your brain back from being hijacked by this attention economy we're in? 100%. So I'll, another example. This one came, this was probably a month ago where a student came up to me, where this was one of somebody who worked super hard. This is the other part about hard work. 10 weeks he came up to me he's like 10 weeks ago if you had said sign a contract i'll pay you a hundred dollars an hour for the rest of your life and you will just play video games that's it

until you die he's like i would have signed i would have sold my soul and signed that contract right this is and just that was it he was caught and he was sort of happy it's like literally he was signing up to live in the matrix right and he was totally willing to do it and he's and he's like today and he was presenting to the other high school kids at alpha and he's like today i don't even have time to play video games right because he is building right and so you absolutely all these kids but what they need to work on if you put them in school for six hours a day in homework you you've made an environment where they're like okay my escape is to scroll ticot and play video games because i'm not building i'm not engaged i'm not doing hard things like the third thing that

i need parents to really believe that a lot of parents don't believe you got to love school right you got to learn you know crush academics in two hours a day the third is the key to your child's happiness is high standards and high standards are when they engage they want to engage in hard things they don't they want to go build an app that's 100 million kids are going to use that's going to right they want to go build that and that's hard and they know it's hard right but they will right and that's why they'll come in and put the effort in right if you think about athletics i don't know if you have athletic backthroat. But athletics, the athletic ethos in America, we actually believe all these things. We just don't believe when you apply to academics. It just, we think it the opposite. So Westlake,

right? Parents in Austin are like, I want my kid on the Westlake football team because they're going to be state champions. It's going to be the hardest thing my son ever does, right? They're going to work. They do go in the summer for practice, right? They do, they're in the weight room at night, right? They are doing the hardest thing they've ever done to be on the Westlake football team, right? But they'll remember it the rest of their life. But if you said that same thing, right, and said, that's academics, right, or what the school day should be like, they're like, no, no, no, definitely not. I'm not going to have my kid do that. It's only an after-school athletics where we believe that. It's so good. I mean, I hope you guys expand past Stephen high schoolers at some point. At your point that somebody

listening right now hears this. And somebody who has built billion-dollar businesses is getting so fired up about changing people's mentality in education. And what I'll say is like, it's the same thing I see with a lot of employees in our companies. There's actually some sort of disease or virus where we want to get by. We kind of want to get by. We do have the vision board maybe of a really cool life. But this idea of hard things as the key to loving life is something that we subscribe to. here our first line at Contrary and Think it's Creed is those who say it's impossible should get out of the way of those of us who are doing it. And so we believe that deeply. But people don't last here very long if they don't believe that. And I like kind of proactively will say to the team, if you ever say, like, we can't do that or that's not my job. Like you're fired. And like you're welcome too because hopefully it snaps you out of it and you go somewhere else. Do you find this brought like not even in the kids, but in the talent, in the, in the guides that you're hiring, in the employees in your companies. Like, am I jaded?

And that I'm saying there does appear to be there's like these two worlds, one world where there's builders in Austin like our mutual friend Brendan and, you know, Dino, who I think you know from Seronic, too. And they're just animals. And there's this one's, and then there's this other side where there's so many people that I just want to shake them and be like, you have so much potential. What the fuck's going on? You're in your own way.

That world I completely agree with. But, and we believe every kid, right, can be a creator. The reason the issue is they haven't found what their passion is. So when they come here and they're not engaged, it's because this isn't the hook, right? We talk about every kid has a passion for learning. It's just not always academics. So back to my story of my dad, you know, I was a shirker in school. I was the slacker who I wasn't trying to do impossible things, right?

I'm the one who was disengaged all the way through school, right? And then I drop out. My dad's like, you're a moron. But then there's a follow on to that, which is 18 months later. He sits down with me. And he's like, I'm so glad you dropped out. Right. I'm so glad you dropped out because we've been working 100 hour weeks, living under the desk, right?

And he's like, you know, you have found what you love. And he's like, you know, before this, I was worried that you were a lazy little shit. Right? And parents terrified of having that, right? And that's in school, that's what I was. Right. But then once I found what I wanted, right, and you just take off. And we look at every student that we have.

That's our job is to find what is it that lights them up, right? And that's what school, why you have to say kids must love school more than vacation? Because you know you found it. Anything else, it's a parent pushing their values on the kid, not what the kid wants to do. And so instead, you're like, oh, you want to build video games. We're going to let you build video games. You want to, right, sports.

So we are starting, right, a sports academy where if you love sports, right, you get to start sports in the afternoon, right? And you still have to do the rigor of the academics in the morning and the two hours, right? But those kids are going to be the best academic performing athletes in this country. But they're also going to engage in what, you know, be a D1 bound middle schooler or D1 aspirational middle schooler. And it's always. tying things in to what the kids' passions are that unlock it. Like one of our life skills that we teach

in the afternoon, teamwork and leadership, entrepreneurship and financial literacy, socialization and relationship building, storytelling, public speaking, and grit and hard work. Those are the things when we say, you know, in the AI world, you know, those are the life skills that kids really need. And so take public speaking. Okay, you go to a 10-year-old and you're like, public speaking. They're going to be like, okay, right? They're not going to engage. You're like, what's wrong with you? Why don't you? It's such a valuable life skill. Oh my God. Look what you can do. You know, and the parents are lecturing and it's, it's terrible. You say, wait, postgame press conference, right? You want to be able to go crush your post game press conference. So at our sports academy, literally, we don't call public speaking. We actually

teach them how to do a post game press conference. And they're like, and they become really good, right? They become great public speakers on that, right? Because that is their hook that engages them. If you talk about, oh, you have to learn all this math and financial literacy, like, roll your eyes. You're like, we're negotiating your Nike contract, right? And all of a sudden, all the skills they need to learn, right? Let's take on the entrepreneurship side, gross margin, okay, what could be more boring to a fifth grader? Our fifth graders launch a food truck, right?

And my, you know, this was a day, this was last year, I go up to them and I'm like, why did you launch, why did you pick breakfast food, you know, as your product for your food truck? And they're like, have you seen the gross margins on breakfast food? And I was just like, okay, this is so awesome, right? And they couldn't have been more excited about the business. Nothing hotter than gross margins. Right? And they're just sitting there and they are loving and they're talking about and they're thrilled and they're having to learn teamwork. How old is this kid? So these are fifth and sixth graders. So two years ago. You're like 15? No, 12. Yeah, you're like 11, 12 years old. I don't have kids. Does it show? No, sorry.

No, yeah. So yeah. So you're, excuse me. So yes, here's 11 year olds who are out there. And back to teamwork, right? And so they would go to like car dealerships and set up the food truck, right? It's all breakfast food. You know, they'd make $1,000.

But they were dealing with real world business things where one of the kids, the kid who's on the grill, doesn't show up. And they're like, oh my gosh. how are we going to be able to do this and all these kind of things? So all these kind of things you can do in the afternoon where you ignite kids' passion, right? That's the key. And I believe as we look, these skills that we talk about where you do the values chart in your 168 hours, kids will use that for the rest of their life. Those are the life skills because they will somewhere in their career, me three years ago, right?

I'm like, oh, I guess I'm doing a big pivot from software to education. I'm going to go be a principal, right? and how do I go get the skills and engage in it and all those? And so I think the skills we're teaching today are what adults will need going forward for sure. Okay. When I sell my business, I want the best tax and investment advice. I want to help my kids, and I want to give back to the community.

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No one can prevent all cybercrime or identity theft. Conditions apply. Yeah, because it seems like you need both or you can use either as a lever and maybe explain it to me differently. But yes, kids need to love school or you need to love what you're doing. But isn't it also that like you need to learn to love the game or like you find what you love inside of it because it also seems like you have like yeah pure whatever you call that um intrinsic love for X activity and then you have like extrinsic love for an incentive such as

dollars or outcome or reputation or whatever and so do you need to play both of those so absolutely which is you like you like what you're good at yeah and so one of the things like why people in athletics why they hold kids back is there going to be a little bigger right and then they're going to be better and then because they're better they like it because they're getting accolades and then they get more playtime and you get that positive cycle loop just like a Pavlov's dog

and you just start getting into it and you people want to do things are great at yeah you know in middle school these girls would have said no I'm never going to do that but now they're like yeah I can totally do that and they want to stay because we showed them they can be good at it right people don't want to do things they're bad at so if you're bad at something right

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

The tough mutter won. There were a set, there was some new, you know, three of these middle school girls, right? So they're, you know, 12 year olds. And, you know, I asked them, they were new to the school.

And it was the week before the end of the session. And I was like, you know, hey, break's coming up. Are you really excited? And they're like, no. And inside, because they don't want to go on break. And I was like, inside I was happy.

Right. I did cheer because they wanted to keep going to school. and not go on break. And I said, well, if you could wave a magic wand and fix anything about the school, what would you do? They're like, we wouldn't have to run the adult course for the tough mudder.

Right? They're like, that's so hard, right? But their guide who's motivating and showing them they can do it, I was like, go talk to some of the high schoolers who did it, right? And all the high schoolers have a picture of, you know, all their whole team,

right, their whole classmate, they're all covered in mud, right? And they're all, you know, commodity. Right. But they're all there as a team. and it's a team picture and they all still have it on their wall, right? Because they did something that I didn't think they could do, right? And that kind of thing, you have to bootstrap these kids.

That's what school is, right? You're bootstrapping them to show them they can be capable here. And so a lot of these things, and when you talk about getting people into the right roles and what they should do, it is this Japanese ikigai of you're trying to figure out what are you good at and what do you love. And sometimes you're like, I really love this, but I'm not good at it. And on some things, you could bootstrap them into it, right? Like, okay, let's get you good enough so you can do it. And then once you hit that, right, then all of a sudden you're like, oh, I'm capable. So does intelligence have a big predictor on success? That's a good question. So in K through 12 today, the best students, there's actually two, it's all coded on two things, IQ and Big Five conscientiousness. School today in a time-based

system with a teacher in front of a classroom, you basically need to be high IQ and a conscient grind it, right? You have to be a natural grinder. And our view is I have to get this out to a billion kids, right? So I can't have those two limitations. So on the product side, we're like, how do we break those two things? So back to learning science, a mastery based individualized, personalized lesson plan solves the IQ issue to an extent, which is we can't make everybody, you know, I'm going to do quantum computing and figure it out. But for sure in, you know, K through eight, the K through eight curriculum, you know, if you take 95% of America, they could all be top 1%. That there's just nothing intellectually challenging enough if done with a mastery based education with an individual tutor that they couldn't get to top 1%.

Right. I'm never going to be a nuclear physicist at Stanford. Right. I just, I don't have that IQ. Right. So there are some upper bounds where it really matters. But for fundamentally, of just teaching our kids, that's not true. But in a time-based educational system, is because you know when you're in sixth grade and there's a hole where you miss some knowledge you basically need more IQ to make to bridge the gaps but if you have an individualized tutor it's going to go fill those gaps for you the second on big five conscientiousness you know if you're a natural grinder you're all set right we use our motivation model to compensate which is how do I motivate this kid to grind, right, and get through it and do the hard work. And so in our, and motivations, lots of different things. Is there a formula for motivation? So we spend, you know, when we look at educating a kid, there's two parts to educate a kid. The first is, and 90% of it is having a

motivated student. And so we spend, our schools are designed, 90% of my design work and our emphasis is on motivating. 10%, which is the second thing you need is, you need to put them in lessons of the correct difficulty, right, which AI tutors do great, right? They'll figure out what you know and don't know and say, look, I know your age grade is sixth grade, but you need fourth grade bath. And I'm just going to give you fourth grade math, fill it up. But now I have to get you to want to do the fourth grade math. 90% that's motivation. So the number one motivator, like we have a huge motivation framework on our schools. The number one motivator and the name of our product is time back. Give kids their time back. There is nothing more than money, more than anything, time back is the biggest

motivator. And, you know, and so that, that's why we're two hours. If you want six hours a day and homework, right, if you take the Westlake honors track, right, you can't pay those kids enough to be happy. But if you go to those same kids like in our high school and say, it's two hours a day. If you want like 1550 plus, the SAT, it's three hours in high school. But that's it. And then you get all your afternoons for four years to work on your passion project. That motivates students, right? If you go to our sports academy and you're like, okay, I'm going to give you the whole afternoon, right, to play basketball, but you have to engage in the app for two hours. The kids are like, that's a fair trade. And just as a product manager, the story, my first week as principal, you know,

McKinsey and Brian would start it, they're like, okay, well, let you be principal, but you've got to live up to the commitments, they have to love school. And so I go to the fifth grade is my first week. And I'm like, you guys love school? And they're like, they're brand new. They're like, no. like, okay, what would make you love school? They're like, less school. And I'm like, how much less? They're like, none. You know, and I'm like, okay, that seems a little light, you know.

And we literally negotiated it, right? I was like, so two hours a day. If I had, would you engage in these apps? If I gave you an app for two hours a day, if then four hours a day was awesome, fun stuff you loved. And they're like, okay, that seems fair, right? That's a fair trade. And so that's literally how we got the two hours. It was like your first user group.

No, people were like, how do we get two hours? And they want some sophisticated analysis. this, I was like, okay, we got two hours and these kids say it's okay. Then I went to my learning science team and I said, can we, you know, fill their brain with all the awesome knowledge they need in two hours? And they're like, absolutely. We totally can do it. And so that was sort of the beginning of it and why, and that's why it was codenamed time back, but we actually made it, the real name is give kids their time back. Then once you give kids their time back, there's tons of other motivations, right? So our teachers, right, when we call them guides and coaches,

is they don't teach seventh grade science because the AI tutor does that better. Right? So instead, they are hired for motivational and emotional support. And their job is to say, how do I motivate this kid to greatness? How do I get them to do hard things?

Right? And what are the things? And sometimes, you know, in kindergarten, it's like, here's a sticker. Right? And the kid's like, oh my God, it's a sticker. Right? Couldn't be happier, right?

Eighth graders are a little harder. Stickers don't work as well, right? But you're like, oh, time on your passion project. project, right? Oh, you want to do a Broadway music. Wait, you want to write a book. Oh, wait, you want to go become an equestrian, right? And we'll let you out in the afternoon off time to go do that, right? Whatever the motivation is that we'll get them. Uh, you have a whole range. Everything from time, there is money. Financials and incentive privileges, right? So like mobile squad. Yeah, and the Broadway privileges is also, um, just freedoms in the school, right? If you crush all your academics and hit some

goals, you get mobile squad, you know, at the end of the session and mobile squad gets to go on some trip somewhere, right? Or you get the privilege of learning in a beanbag, right? Like the younger kids where you're like, okay, you know how to learn on your own. You become a self-driven learner. You don't require a teacher or an adult to, you know, babysit you. You learn on your own. You have the freedom. Like our middle schoolers get to go to the second floor where there's, you know, less less restriction and less rules and they can sit in a beanbag and sit on their computer and learn or do whatever. So there's all these different things around motivation that allows kids to learn. Oh, off-campus lunch, right? Everybody. Younger kids, the number one motivator to the younger kids is

lunch with their guide, right? They love their guides, right? How we measure our guides and teachers, at the younger, like a kindergarten, you're like, do you love your guide? As you get older, the question we ask kids is every adult had one or two teachers who transformed their lives. Is your guide that for you? Oh. Right? These are, and that is the standard. And that's what our guides do is their job is to say, right, I'm going to help you achieve

your goals, right? Your dreams. That's what I do all day because I don't have to sit in front of the class lecturing or grade quizzes or whatever. I get to connect with the kids, right? And people talk about, okay, this is like AI is going to change the role and teachers are going to change in our world, right? But teachers did not become teachers to grade seventh grade science quizzes. They became teachers to transform kids' lives. And in our world, and why everybody wants

to be an alpha guide, we had 80,000 people apply for our jobs. They want to be an alpha guide because they get to spend their entire day connecting with kids and helping them transform their lives into who they want to be. Do you, did you, you seem to have pretty high EQ? Would your wife disagree? Yeah, my kids would too. Both my daughters. I have two daughters. Well, I found in tech, it's not always a huge correlation between the two.

But now you, like, are you the same person you were when you were building trilogy in these other companies now? No. If 90s Joe, right? Yeah. And I, versus family man Joe, right? It's totally different. Right.

And it was, I could not have, I could not be the principal if I did not spend 20 years like raising my daughters and being a family, I'm getting married. What were you like back then? Then I would have, I was absolutely your consummate tech, 90s tech bro guy. What does that mean? You were just intense and focused? Intense and focus and relationship and the EQ part, like a zero. Like, I just, what are you talking about?

Just if it was a pure mathematical equation, well, obviously, logically, this is the answer, do this, right? And it was very much there. And this concept that relationship building, right, and building out your network, right, is so valuable, right? I mean, socialization relationship buildings, one of our key life skills we teach the kids. I had zero of that, right, back in the 90s. And I'm like, why would you do that? I'm just going to build a better product or whatever.

And the human component was, you know, so far down on the list. And so, and versus today where, right, when we think of the skills we need to equip our kids for for the future, those are the skills that matter. Right. So a guy who's built multi-billion dollar software companies who was really happy doing this. I'm a little bit happier doing this too. I need to get over it. I'm working on it. But now you think that relationship building and human connection is more important?

I'll give you an example. And it's my own daughter as an example. My oldest daughter is an introvert like me, naturally introvert. And great students. So she got 1,600 SAT. She's a math English double major at Stanford, right? Slager. And she's one of these, I love academic.

She was the opposite of me on this. She loved academics for academics sake. You know, in high school, she like read calculus books for fun. You know, when she got to Stanford, she's like, wow, these STEM boys can't write. So she created a writing program called equation-based writing. Because she's like, because in freshman English, you have to grade. She's like, God, these are so bad. Let me help them out.

So she's like loves academics. But in high school, back her guide, I was like, look, what really matters for her is relationship building. Because she'll naturally just spend all her day doing academics. But in our school, we're like, the afternoons have to be about life skills development. So she started her own substack, right? And writing online because she loved to write. But to promote it, right, she's like, okay, I have to go on Twitter and like build an audience. Place is dark.

And I mean, her guide would sit there and it took her guide six months of motivating her and convincing her and working her through till she'd send her first DM, right? And she finally sent a DM to Seheel Blue, right? I'm buddies with him. Right? And Seheel was like, had written something that she's like, oh, this is so applicable to high school kids and literally wrote the article, right? What's your daughter's name?

Or do not say it publicly? On Substact, she's Austin Scholar. I think I have engaged with her on Twitter or met her. You may have. She has now 20,000. Put it together. So she has 20,000 moms, basically, who listen to her about what it's like to have a, you know, no teachers for 10 years and go to Stanford. And what is, her thing is university needs to change too.

So she, you know, her and the alpha kids. So does she not get invited back to Stanford then? No, no. Both not? Or is Stanford open to it? She's thriving at Stanford. But what's interesting is a school, you know, schools are. bundles of things, of which academics is only a piece, right?

True. And so she hates her 100 series lecture classes. She's like, okay, my math class is a complete waste of time because the apps I use, right, are way better. I learn way faster. She's like, but everything else at Stanford, her dormates, her classmates, right? She's in a sorority, right? Her after school activities, the environment of Stanford, she's thriving, even though she's like,

okay, this math class for an hour is a total waste of time. And everybody knows that. Right back to these same things. Harvard has published a article that says AI tutors are better than Harvard teachers. Right. So it's not like we don't know this. It's just, you know, how are we going to change as this goes forward? But back to the relationship building, you know, and all that, the key life skills she needed, she didn't need more academic.

She didn't need physics 2AP, you know, in high school. She needed to spend her time supported by this guide, right? Because one of the other things you get to adolescents, you don't have kids yet, is they stop listening to their parents. Right, the middle and high school, right? It's just, it is. Their job is to, right, get accepted by society. So they start caring about their peers more than their parents, right? Which is always a transition for a parent to realize that.

Right. And so like when she was applying, you know, it was Chloe, she trusted, right? Who was a guide who is like Chloe when she said, look, relationship building is important. It's like, okay. But it was really hard for it. And she needed that coaching, right, and support. It's high standards, but high support. It's not just drop them in the deep end.

It's coach her through it. And then eventually she got it and now she has this great network. Fascinating. But it's, and so those kind of skills, you know, if you have a relationship person, you're also to my, the arts theater girls, right? You're like, okay, guys, you're going to do math, right? You are going to do math. We're going to show you, you have all these skills.

And if you're the, you know, the academic, we're in teacher relationship building or entrepreneurship or whatever else over there. If you are the EQ girl already, right? We have girls who have millions of TikTok followers. And we're like, yeah, you're going to get $790 math. Right? You're going to be, we're about, one of our kids is about to do something that in science that like nobody in American history and science has ever done this in high school.

Right. And so, and if you had asked as a middle schooler, would they do it? The answer was no. When you look at education today and where we're at, like, do you think we can actually re-educate the entire, let's even just say the U.S. using the technology you have? 100%. How long will it take? Well, this is why I want to be, what I want to communicate. My goal in this is we need entrepreneurs and builders to come in. If we keep on the status quo, not going to happen, right? It's a hundred-year-old system. It's not changing. And what happens if we don't change?

Oh, it's really bad. Like, like paint a picture. As somebody who deeply understands AI and education. Well, the skills you're going to need, like back to just, if we graduate, if we spent 10 years and educate kids the way we've been educating for 100 years, those kids are going to go into an AI world and have no skills that matter. right and people are going to say why would it i just wasted their whole childhood right and i made it miserable and they hate it things and they don't have the skills that need right like when we look at the world right if you're an uber driver in austin right robotaxies right waymos all this stuff that's not a good place to be as an adult there's massive transition on the adult and some but entrepreneurs need to go fix that but i'm focused on the k through 12 which is there is no better time to be a five-year-old because AI gives kids kids

superpowers, right? If you look at, they can learn 10 times faster in the mornings, right? Not give them chat, CPT, that's really bad. They'll all use a cheat, right? Chatbots are cheat bots if you're a parent. If you're wondering, if your kids using chat on academics, 90% of the time they're cheating. But in the afternoons, when they're doing life skills workshops and launching a food truck, right? 11-year-olds don't know how to launch a food truck. And there's not a teacher who can teach them, but AI is going to help them figure out how to do it. You can't, high schoolers can't launch Broadway musicals, right, except AI gives these kids superpowers. And we need to show them, right? It unlocks their potential, right? And they love it and it's exciting and, right?

We can totally transform all that. And so that, if you're a parent, you're just like, this could be the best 12 years of your kid's life, right? And we need to go change it. And now to change it, though, we need way more entrepreneurs than just me. Because it can't be cheap, too. Like, go on Alpha school, what does it cost? So Alpha school is expensive. So our tuition is $40,000 to $75,000. And so when we, back to design goal, though, when I designed it, I was like, pretend price is no object. What can you do? Now, we are building a whole other set of schools, right, at half the price, at $20,000. We spend in America $20,000 a kid to educate them. So that's sort of my price target. We're launching, right, and we've launched 10 of them so far, we hope to open hundreds

next year of these Texas sports academies, there are $15,000 tuition. Middle school, right, they're microschools. There are 25 kids, middle school D1-bound athletes. Think 25 really good basketball players, right, in middle school who do academics in the morning, you know, basketball in the afternoon. And so think of hundreds of these schools around Texas. At 15,000, which the voucher program just was announced, which is like 12 grand. So parent pay will be like $300, $400 a month.

right so dramatically more accessible than alpha and so we're building a whole set of schools like this i need lots of entrepreneurs to go build this right we need a school for gifted and talented kids right those kind of things sports arts theater music because if you don't you could have a world in which you basically have massive discrepancy those who are taught at alpha school use AI you know are unlocked and everybody else correct oh you absolutely like i have my job on this whole thing is, you know, Alpha is the first product we're building. It is the high end one. Just branding-wise, you have to own the high-end in education, right?

You want to start at the high-end. You want to be the Ivy League, right? Yeah, you don't want to be the discount degree. Correct. Parents don't know about education, so brand really matters. They trust brand. And so you have to go establish the brand, which we've done, right? We're the most talked about school in the world by 10x, right?

And so that's what Alpha is doing, but now we're bringing it down. And so we're building the software platform where it will be available. And to solve the U.S., I have to get to 20,000. But to get to a billion kids, I got to get it down to 1,000, right? I have to get it down to where, you know, in five years, everybody on the planet, billion kids have to be able to access a tablet that's less than $1,000, that will teach them everything they need to know in two hours, right? And so that's what our design goal is, is getting it down so that everybody can have it.

because we have to because in this world of AI, we have to prepare the kids differently than we have the last hundred years. Does that don't you? Are you like, we're going to do that? Oh, we're totally going to do it. That's a, that's a, the learning science. I mean, it's a lot of work, obviously, right?

There's a ton of work, you know, back to the billionaire side. Like, I put in a billion dollars as to kickstart this. Just to Alpha. Yeah. Well, the software platform and stuff. So we're doing in the Sports Academy. So I'm funding a set of different things. But to change education, so education's a seven,

trillion dollar market. Like a billion's a drop in the bucket, right? Texas alone spends a hundred billion dollars a year on education, right? So societies and parents spend a lot of money on education. Like if you do surveys of parents, they will spend up to 10% of their income on educating their kid. So it is actually a really good market. Societies generally spend 5% of GNP. So it is this great market. It's just we've always had the same system for 100 years. And now what's different is okay, can we go get entrepreneurs and builders to come in and build these awesome products, right, that will transform what the 12 years is like? We, you know, it's interesting you say that because we have an education business.

It's called contrarian thinking and we teach people two things. One, we teach them how to buy businesses. Like normal, my theory was, you know, I was in private equity, I did acquisitions, and I thought this is not that different. Like what the P.E. guys do at the highest level, leveraged buyouts, is not that different materially from what you do with an SBA loan or with seller financing of a very small business. You've bought a shit ton of businesses. And so it's not easy. It's actually hard and awful and really difficult in many ways, but it's not rocket science. It's actually not

that complex. It's like, you know, simple but not easy. And so we created an education company where we are attempting to teach. We've taught about 10,000 people how to do it. And if the average, you know, the average American doesn't even own a business. And so it's really hard to get good data on how many people will ever acquire a business. But we think it's like less than 0.01%. Like most people will never acquire a business. It's very weird. So if we're able to take, right now we're about 37% of our people who come through our program acquire a business. And it's really important you don't just acquire any business because there's a lot of risk. But what's fascinating to me is when we started teaching people how to do this.

the immediate response from many people. And it seems to be like a pervasive. I can't really figure out why is like, one, if you could do it, why wouldn't you just buy all the businesses yourself, Cody? Why would you teach other people to do it? Two, education is somehow seen as, and there's a lot of bad actors, so maybe why, but it's seen as like lowbrow, scammy, couldn't work, not good, taking advantage of people. And then it's also seen as like maybe not sophisticated. Like, oh, if you were really going to build something real, you would build trilogy. You wouldn't build an educational-based system. If you do, do, if you can't do teach.

Why is that? It's so pervasive. Correct. Why? That is, so if we want to get controversial, so I believe part of my role is to bring capitalism to education. And it is seen that capitalism is evil for profit and capitalism are evil in education, just straight out.

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

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

And so, but there's a view, probably so, there were bad actors and lots of for-profit scams. We just need to go get the good entrepreneurs who can use capitalism for good, right? Like one of the things we do is it's why we publishize all our academic results, that we are like, guys, don't trust us. You shouldn't trust us. Look at our results. Yeah.

Right. And, but unlocking human capital. Well, that's what, and the results mean SAT scores, right? In this case, academics or the life skills. It's the three commitments. Parents are like, oh my God, my kid really does love school. Right. And they're like, you actually as a parent, when it happens, you're like, okay, this is great. Then the second part is, okay, they're crushing their academics. And then that third life skills, when they're launching the food truck, you're like, okay, this is actually what my kid needs to do or they're building relationships or whatever that life skills. You show the case studies. No, they watch the tough mud.

they're like, okay, this was better than my school. So they look at that product. You just need a product focus. And like for yours, here's how I would design the product, right, in a for-profit world. So we have a set of high schoolers who are like, okay, we're going to build a program to be a millionaire in high school. How do you make a million dollars in high school? Right. And so they're talking about pricing. And so one of their proposals is we're going to charge $150,000 a year tuition, money back guarantee if you don't make a million dollars. So it'll take $600,000 of tuition over four years. But if you make a million dollars, it pays for it.

Right. And it's a money-back guarantee. So if they don't deliver back to your point of your scammy, you're like, it's free for the person. Right. And it's that kind of product design that no nonprofit would do that. But a entrepreneur who's saying, oh, wow, that's the kind of thing that we should go build, where you have this closed loop where you're, unlocking their potential and then people are willing to pay that. People would make that trade.

They're like, wow, if you teach me how to make a million dollars, right, while I'm in high school, and it's going to be fun. I'm going to love it. It's going to be all these great things. And we have to make sure of how we're teaching them. We're not teaching them how to do it, scam. Our final character, right, character, community, classmates, and culture, right? That's one of the huge elements of school. And at the end of the day, character is the one parents really care about. Are you teaching these kids to be good kids? We can teach. We can teach kids to build ethically awesome businesses, right? They're building apps. They could build crappy apps. They're building an app to teach 100 million kids to contribute to their community. Right. So we can

teach all these great values to kids as part of school. That's one of the jobs. And we can teach them ethical business at the same time. Okay. Last question. What about for people who are really scared to have AI teach their kid? Yeah. That's a great question. You should be terrified. So today, your kid, 20% of kids, right? I think Brendan uses this stat that he, they would calculate 20% of your kid's life is influenced by AI. They are being brainwashed by TikTok today, right? This is that or Fortnite, whatever the is out there.

It is and it's getting worse. And what you put into kids' heads really matters. And so part of one of the things is you have to figure out who are the, trusted people putting in it. It's why I say chat bots are cheat bots and they're terrible. Like if we could ban like those chatbots being in school, that would be great. You know, and so part of what our job back to branding and stuff, you have to build a trusted relationship with parents that what you're putting into the kid's head is good.

Right. Now, what I can do with AI, right, is actually build one where the parents can validate and trust it. right so we know what it is right but if you have it just you know wild west free form and you're not doing it like what is your kid doing online right that is something it can be very bad and people should be worried AI could be good or bad right and we need to have a huge effort to make sure that we use it for good you know we have to build we have a project where we are building the TikTok that is engaging as TikTok but it's going to put all the cool stuff into your kids' head, not the bad TikTok stuff.

We need it. Although, you know, people talk pretty badly about TikTok these days, and I'm a big Elon fan. But I have found that, like, TikTok algorithm is actually pretty easy to change and manipulate. And so, you know, on my TikTok, there's a few things I like. I like those. I get rid of the others.

I don't really see any nonsense. I don't see brain rot. I don't see any of that. I do think these days on X, it's harder. There's so much negativity, and I think it might be more sophisticated, but, you know, I think optimists, they sound to Pollyanna, but they make all the money, and pessimists sound smart and then make nothing. Yeah. Well, and to this on online, we believe teaching kids healthy online habits matter,

and you're talking about you're curating a TikTok feed that's healthy for you, right? You can also curate a bad one. Yeah. And if you don't teach kids how to do it right, they'll. end up with a bad one. Yeah. And we, I actually believe, because we have kids on X doing the same thing, you can curate a great feed on X. Yeah, I'm working on it. Domain expertise and all, heavily using mute words and all that stuff where, you know, your block list and mute word list has to be really long. Twitter has a lot of experts where if you want to learn about learning

science, yeah, if you want to learn about learning science, you can build a filtered list on X where you can become an expert in how to learn 10 times faster. Yeah. So it's all these things. They can be good or bad, right? And you have to figure out how to actively curate your presence. And also back to tracking. Having kids track where they spend their week, this 168 hours, helps them, right, of, I don't just want to be a consumer.

I want to become a creator. And that's what as parents we should all care about. Is there some resource you love or something that you have from Alpha, an article you've written that we can mention and say, and if you want that, click here. And then we can drive people direct to you. my daughter will love me if I do this Austin Scholar it's she's got you know

200 she writes every week she's got 200 you know articles out it literally is from you know 10 years of not having you know a teacher in this new world what it's like to go to college in it all and it's it's academics

plus you know the social emotional learning side that would be we'll put that in that's the single best source that's the single best source That's a good dad right there. A proud dad. Joe, this is so cool to hear about. You have my brain spinning about ideas here.

And I just want to thank you for building something that is not, you know, one of my CEOs used to say to me back in the day when I first started getting online. He said, you know what? Here we get rich quietly. And I get that because it was his thing he had built. He had built this incredible business. He had every right to do it. But I thought, I don't know.

I don't think it's a zero-sum game. And so I started getting on the internet for that reason. And I think people like you sharing this and creating an area for education is like the only way we fix so much of what I see on the internet every day. I couldn't agree more. And if I can convince some of your listeners, right, some of your audience to come over to education, this there is nothing. So back to my whole career, I obviously had a good career pre being a principal. The last three years have been the best years of my life. And I'm going to do this 20 years.

I'm more excited about the next 20 than my last 20, and I need to go get other builders and entrepreneurs to come over here and see how awesome it is, right? And so if you're like that, send me an email, DM me, and let's get you building to solve education. Because at the end of the day, there is nothing more important for a society than how it raises its young.

That is the single societal issue that really matters, and so come work on that. Thanks, Joe. Thank you very much. productivity cycle is broken. People feel it in their paychecks, their communities, their futures. What does this mean for individuals, communities, and businesses across the country? Join business leaders, policymakers, and influencers for CGs' national series on the Canadian standard of living, productivity and innovation. Learn what's driving Canada's productivity decline

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