The 50 richest families in America are betting on this trend

Transcript

I'm going to read you the most alpha sentence possible here. Kindergarteners must climb a 40-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. Explained. [SPEAKER_02] There we go. [SPEAKER_00] Well, I'm going to flatter you for a second. [SPEAKER_01] So the easiest one is I wish there was an alpha school near me so I could send my kids to it. I actually have a kindergartner, so that would be perfect. But you have this really amazing story. It's the story that me and Sam like to tell on this podcast because it sounds like a movie. Here you've got this secretive billionaire, right? This guy who in his 20s drops out of college, figures things out. You're on the cover of Forbes magazine when you're 27 years old. And you built multiple huge companies, multi-billion dollar companies. And then you disappear for 20 years. Nobody hears about 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. [SPEAKER_01] Yeah. [SPEAKER_00] So in 2005, I got married, which was also the first year of podcasting. I did a podcast actually at Stanford. That was my last one. And then I went and signed it for 20 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 at BALFA will be doing it for the next 20 years to fix education. Why don't we start at the start there? So you have this idea for Trilogy and you drop out of college. Actually, in high school, I wrote a paper about AI. [SPEAKER_00] And so really in high school, I was writing a paper on AI. One of the paragraphs said, neural maps are decades away. I then went to Stanford and I was in class with the father of expert systems at AI, Professor Feigupon. So my buddies and I were like, we can't sit in Spanish class anymore. So we dropped out. Back then it was rare. And so the parents are not excited. My God famously said, you're a moron. And then we built Trilogy and our claim to fame actually in the 90s, 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 up with a whiteboard. Let's come up with the idea. [SPEAKER_00] No, no, no. We had the idea, which was you could build this product called a configurator, which was expert systems had a range of things that they could solve. Configuration was one of the domains that they've been trying to solve in the late 70s. And by the late 80s, I was like, oh, we can totally do this. [SPEAKER_02] I tried to figure out what Trilogy 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 it out. And I was like, is it if an airline needs to buy parts to build an airplane, you built software that would help them decide how many bits and pieces for each, how many seats they need, therefore what they should order from the manufacturer. Was that right? [SPEAKER_00] The first product we had that started the company was a configurator. Just think of a configurator on 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 back then mainframe computers, big manufacturing systems. The problem back then is reps would be out in the field selling these complicated products. And then what would happen is they'd get to the manufacturing line, and the manufacturing line didn't build that. It was an unbuildable 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 save millions of dollars a day to the Fortune 500. So we just found all the Fortune 500 manufacturing companies and said, we can take what all this huge problem was costing you just $8 zillion, put it in this sales builder, which your sales reps would be able to build correct configurations, and then you'd pay us millions and millions of dollars for it. And so that was our first product. And that's what launched the company, and that was the first one that drove the billion dollars revenue. And you're, at the time, you're only, what, 20, 21 years old. You're saying it's simple. We just went to the Fortune 100, knocked on the door, they handed us the millions of dollars. Beep, bop, boom. Yeah, but how easy could it be? [SPEAKER_02] So what was it actually like when you were doing that? I mean, were you just really savvy early on? Were you making dumb mistakes but figuring it out? Can you take us back? [SPEAKER_00] Yeah, well, there is, if you want the long form, there's a 2005 podcast where I was presenting to Stanford about why if you're doing what we're doing, it's the dumbest thing you could do, but you got to try it anyway. Which is, no, the Fortune 500 does not want to 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 Fortune 500 wants, and it saves them hundreds of millions of dollars, they will buy it from you because they have no other choice. We went into multiple sales cycles where they'd go in and at the end of it, they'd be like, oh, we're going to go hire back then Anderson Consulting, [SPEAKER_00] But you got to try it anyway. Which is, the Fortune 500 does not want to 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 Fortune 500 wants, and it saves them hundreds of millions of dollars, they will buy it from you because they have no other choice. We went into multiple sales cycles where they'd go in and at the end of it, they'd be like, oh, we're going to go hire back then Anderson Consulting, or we're going to call one of these Oracle 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 90s because we also had super high pricing because we're like, they're not going to buy from us unless they have to. And we know it's worth hundreds of millions of dollars, right? We are their last choice on the list. And when they are like, okay, we got to deal with these guys, then you're like, great, I'm going to charge you lots of money because you have no other choice. Well, that's not a very young kid mentality. [SPEAKER_02] 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 background that helps on that is [SPEAKER_00] Jack Welch, who was CEO of GE. My dad was a strategic planner. And so I grew up in that GE culture. And I remember telling my dad, I was like, [SPEAKER_02] God, that's just TV, they're the only cool thing you guys make. [SPEAKER_02] And he's like, oh, let's talk about the gross margin of a CAT scanner versus a commodity TV. [SPEAKER_00] And so I was learning all of that from a young age. And so that helped when I was ready to start my business that I understood ROI and that I was going to be self-value and all of those things. But then I took that and said, I'm going to be the best product manager. And I'm going to put the two together. And I actually think today with Alpha, that's a lot of what I'm doing. It's just taking the product management part and the go-to-market business part and saying, if you took those two things, how would you change education? [SPEAKER_02] Can you put some things in perspective? So I used to live in Austin and a bunch of my best friends are Austinites. And at one point, I don't know if you know this, Sean, I think at one point Trilogy was the largest or a top three largest employer of folks in Austin. And your growth was astronomical. I mean, I think that you're doing hundreds of millions in revenue and only five or six years in. Can you brag for a moment? How big and how fast did you get? [SPEAKER_00] Well, so once we had, it took us, we dropped out. It 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 it, Hewlett Packard bought it, AT&T, IBM, right? We started to roll through the biggest companies with massively high pricing. [SPEAKER_02] 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 35 principles from the top investors. We're talking guys who have been on the pod like Howard Marks, Manish Pabrai, Morgan Housel, Kathy Wood, and a ton others. So these are all their frameworks, their mental models, their rules, 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 we hired 2,000 Ivy League graduates, MIT and Stanford and brought them to Austin. So our claim to fame in the 90s was, if you ask Microsoft, Bill Gates, who's the only company who out recruits us out of college, right? They were at their peak. So Microsoft would win 90% of college graduates back then. And we, against them, won 70%. Bill Gates literally flew down to Austin to figure out why we were getting the best graduates. And this is also how intense he was, is we're at dinner and he's literally going through every single person that we had made an offer to. There's Fred here and you're offering him back then, $48,000, and we've reverse engineered how you guys operate. We think he's a $38,000 guy. Why, what was his technical capability that you really liked? I mean, it was crazy the level of detail he went through. Because it was a fight for talent. And if you're getting talent, you got to get the best people. [SPEAKER_02] What was your response to Bill Gates during that dinner? [SPEAKER_01] Well, no, it was just, what do you say? [SPEAKER_01] Well, listen, Bill, here's how you do it. Well, what did you say? Well, what it was, he's like, I will call. He's like, after leaving, he's like, I'm going to call every single candidate who has a Trilogy offer and a Microsoft offer. And I'm personally going to call them. And I'm like, I need the candidates more than you do, Bill. And I, you just, I'll just escalate. I'll just escalate. I'll bring them on a trip and we'll do a week 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? He's like, after leaving, he's like, "I'm going to call every single candidate who has a trilogy offer and a Microsoft offer. And I'm personally going to call them. And I'm like, I need the candidates more than you do, Bill. And I, you just, I'll just escalate. I'll just escalate. I'll bring them on a trip and we'll do a week ski trip. And I'll ask them, how was the last time you'll ever talk to Bill Gates? How was that call? Because he's never going to have time to talk to you again because he's got thousands of employees. And so, but they did for a period of the nineties, right? A would have, whether it was a Barmer 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 escalating, right? It's just, we needed them more than they did. This is one thing I wanted to learn from you. [SPEAKER_01] Because you know, when we're talking to you right now, you seem like a friendly, nice guy, you seem like a normal dude, but you definitely have a gear that most people don't have. Can you talk about that, that extra gear, which is some version of boldness or intensity? [SPEAKER_00] 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 award. I have to win. I have to be, if I don't beat Microsoft and get the best talent, my company's doomed. And so whatever it would take, right? And I think that's true. You know, for everything that you want to do, you just have to have, and back to that gear, I had been lucky enough that I do find what I love to 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 24 on education. And there's nothing that we won't go do to figure out how to go fix this and get this to a billion people. And I think just back to entrepreneurs, they have that gear, right? And Bill Gates has that gear. You know, today is the world's best ad. It's Elon, right? You know, when you go to dinner with him, you're just like, oh, I suck. 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 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, I basically have 18 months. How about I sit on your board and help you figure it out. You're a young punk who doesn't know what he's doing. But it was obvious that I had caught the tiger by the tail. And, you know, there was a meeting where this massive deliverable we had to hit for Hewlett-Packard. It was one of our first one and HP's yay or nay was everything. And he's like, is your entire company focused on this? And, you know, we have the board for you. I'm like, absolutely. Of course we do. Totally focused on it. And he's like, so your engineering team, if I asked him, you know, what percent of their time do they focus on Hewlett-Packard versus all the other companies? And I'm like, a hundred percent on Hewlett-Packard. They, everybody understands. We are not going to miss this. And he's like, really? Okay. Stops the board meeting, goes out and says, get Bill Reed, who ran our development. He's like, bring him in here. You've got a lot of customers, Bill, working on this stuff. What percent of this team is working on Hewlett-Packard? And Bill's like, well, since you come from traditional work, you know, traditional world, I would generally say 200% because we're working 80 hours a week. Every single person's working 80 hours a week on Hewlett-Packard. And that leaves us an extra 20 hours a week to work on the other customers, right? And that's the kind of thing where, you know, when you're talking about intensity and focus, right, and your team trying to deliver on it, right, it's just, you know, and I was like, oh, thank God, great. You know, you're like— [SPEAKER_02] Hey, dad, have you ever seen me kiss a grown man on the lips? Because it's going to happen for the first time ever. 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. [SPEAKER_02] It's not just intensity. It's, oh, thank God, great. You're like, [SPEAKER_02] Hey, dad, have you ever seen me kiss a grown man on the lips? Because it's going to happen for the first time ever. 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. [SPEAKER_02] It's not just intensity. I heard a story. I don't know if I heard it through a friend of a friend or online, that you would take people you were recruiting at the end of 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 want to gamble a lot of money. And you're like, well, you're not a good fit. We need the people who are going to gamble more, right? 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 we get all these kids down and they're like, I want to 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, if enough of the teams that hit their goals, we would take everybody to Vegas and then we would get everybody around a roulette wheel. Right. And we'd say, you have to bet one month's salary on the number. Right. And so everybody would have to put one month's salary down. And there's a lot of people who are like, well, I'm not, I don't want to bet one month's salary on it. And we're like, first of all, that's not a huge risk. So you're going to be asking a venture capitalist someday to give you millions of dollars. And you're literally not willing to take any risk at all. And so we would, we've done that every year. And the Wall Street Journal wrote this big story about it. I actually got a lot of flack from parents after they read this story. They're like, what are you doing? We just got out of college, but yeah, it's back to just pushing people. If you want, here's another intensity. We actually Trilogy University, there's Harvard Business case studies on it and you can read about it, but we literally had a swap program with the Navy SEALs. Literally the Navy SEALs are like, okay, we're going to send a couple of our SEALs over to your program. And you send a couple of your Trilogy kids to California to be part of ours. It was physical versus the mental. And 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, back to recruiting kids when they would, oh my God, I get to go do, oh, they'd only last a week, or really a few days before they. [SPEAKER_02] Is it easier to make a meathead good at programming or a nerd good at swimming? The SEALs are actually super smart, right? They filter, right? So they were coming in as super capable. Now they'd 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 than their other one. But it was those kinds of things. When you talk about intensity and doing things that are non-traditional, I'm all about that, right? [SPEAKER_01] 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 give you free food. Do you want some more free things? I went to a vending machine and it gave me a MacBook. It was unbelievable. But you were like, you realized that actually young, ambitious people wanted something hard, not easy. Can you talk about 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 them against Microsoft or all these other companies. I was actually at the board of directors of a Fortune 10 company, [SPEAKER_01] Do you want some more free things? I went to a vending machine and it gave me a MacBook. It was unbelievable. But you realized that actually young, ambitious people wanted something hard, not easy. Can you talk about that a little bit? That's a huge insight. [SPEAKER_00] Which is, this is the hardest hundred days of their life. And that was what allowed us to recruit them against Microsoft or all these other companies. I was actually at the board of directors of a Fortune 10 company, and we had taken some of their mechies who wanted to go to Trilogy instead of their company. They're like, how are they going to this little company instead of us? Yeah. I'm like, well, during the internship, you made it easy, right? And so they're just, oh, I'm not doing anything significant. And when they come down to Trilogy, it's going to be the hardest thing they ever did. They're going to work on something significant. And kids want to do awesome things, right? And mapping it now to our education, when we talk about the kindergartners climbing 40 foot rock wall, it's the same thing. Kids want to go do hard things. Now, they need to be supported through it. You can't take a kindergartner, say, good luck, right? You need to sit there, and you have to have high standards and high support. You need both parts. But we have these alpha tests, where you do all these crazy workshops, and then you have to test to pass it. You got to climb the 40 foot rock wall. Our second graders got to run a 5k. Our eighth graders have to do a tough mudder, or they also all have to cross the finish line at the same time. We have all these tests, but the ones that drive back to the most excitement, they all are hard, are the ones where the kids can beat their parents. There is nothing that motivates a student more and a kid more than them being able to go head to head with their parent and winning. Fair, not where the parent tanked it. They love that. Kids love that. One of our claims 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 they're going with their friends doing hard things. [SPEAKER_02] 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 making things hard. And that actually attracts a certain type of person. But what's interesting is if you're a kid, it's exciting to climb a 40 foot wall. It's exciting to beat your mom and dad. When I think of configuring software, that's not exciting. Versus Microsoft, if you're making the iPod, you know, we're making this consumer product that I can hand to you. How cool is that? Or 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 I actually think that trigger of making school awesome, making trilogy software awesome, other than making it hard, what is necessary for something to be awesome? [SPEAKER_00] Sure. So you're never going to convince anybody that configuration is sexy, right, versus all the other options. However, the AI algorithms that underline configuration at the time were some of the most complicated computer science problems you can solve. And so when you're sitting there and you're looking at, oh, I'm going to go do an about box for Microsoft word as choice A, or you're going to go work with the smartest people tackling this challenge that no one's solved before, right. It is a technically impossible challenge. And the best computer scientists, in 1985, Rice, Stanford, MIT, their number one computer scientists all came down for graduates, all came to alpha, right. And that is because we were working on the hardest problems. It's the same thing. People always ask, when on companies, why do people do startups? Why do they go down to SpaceX? Why do you do it? And it's because I'm with other people who are super smart. Their number one computer scientists all came down for graduates, all came to alpha. Right. And that is because we were working on the hardest problems. It's the same thing. People always ask when, on companies, why do people do startups? Why do they go down to SpaceX? Why do you do it? And it's 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 are you joining Navy SEALs? Right. It is the camaraderie. It is everybody together. That starts in kindergarten. It starts in kids love this stuff. Right. And it goes up to they're getting out of college and then late career. The people who are joining us, my generation of my age, these are people who are saying, okay, I'm going to go spend the next decade trying to fix education. And it's going to be a nightmare. It's going to be super hard. Right. But they want to get in and do it because the alternative is, oh, I'm going to retire and play golf all day. And the challenge and the excitement is what motivates people. [SPEAKER_01] You said something earlier about high standards and high support. I want to talk about high standards for a second. I was at a Tony Robbins event a decade ago and somebody was, all these people come to Tony Robbins, some people who are at the edge of their craft, the top 1% performers, they're there to get that edge. And there's some people who are on the edge, broken, and 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, your life will be what you tolerate. And he goes on, he gives a bunch of examples. David Perel was telling us, he said that Joe once sent me as a holiday gift, two bottles of wine. And the note on it said, here's 200 point bottles of wine to remind you of what 100 point looks like, 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 100 points, right? On a wine ranking. And it's the same thing on a test. Our kids at alpha get hundreds on their tests. If you go to your average parent and say, your kid can get a hundred on the Texas STAR, 95 plus percent of parents are saying, no, they can't. They can't do it. And we have a building with a few hundred people in Austin who get more hundreds on the Texas STAR 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 back to the motivation of 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 human potential, human nature. And when you're building a business or with a school, it's the same thing. [SPEAKER_01] How do you instill that in your team though? Is it just about being a Steve Jobs asshole where you're, nothing's ever good enough? No, it's the exact opposite. 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 going to cause grit is you're just going to keep struggling. Okay. That's a couple of ways to do it because they'll try a little bit, but then they'll decide it's too hard and bail. Right. And you get tons of disengagement 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 going to be there supporting the whole time and redo it. And that's terrible 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 through. Right. And you get tons of disengagement 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 going to be there supporting the whole time and redo it. And that's terrible 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 through. And so you have to give the scaffolding and show people how they get there. What does that look like within a company? Yeah. [SPEAKER_00] Let me give you the school one. And then I'll give you the company one, which is I go to the seventh grade is my first year. I'm like, all of you guys can get a hundred on the tech star. And they're like, I'm assuming that's impossible. No way. Can't get a hundred. I'm like, no, no, no, I'll give you a hundred dollar bill. A hundred for a hundred. Right. And it's still impossible. It can't just, right. I don't know how to do it. And I was like, no, no, no, here's the catch any grade level. And they're like, [SPEAKER_01] you're going to let me take a kindergarten test and give me a hundred bucks for a Texas, you know, a hundred on a star. [SPEAKER_00] I'm like, well, they start in the third grade. And so the kid's like done goes and takes a third grade test. It's a hundred. They're like, can I do fourth grade? And you're like, absolutely. I do fourth grade. And then they do fifth grade and they only get an 82 because they didn't know all that. They hadn't done their school. They're not given the mastery right through it. And this is where you have to give the scaffolding. Do you want the AI tutor to look the ones you miss and give you those lessons that will get you to a hundred? And the kid looks at it and is like, ah, [SPEAKER_01] that's going to take me a week of work. [SPEAKER_00] Sure. For another a 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've done is you've changed their mindset. That when you're getting a hundreds, all the grade levels, you're like, well, obviously I can do fifth grade and I obviously 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 scaffolding, right? To work through plus motivation because motivation matters, right? And you give them scaffolding and motivation to do it. So if you're building a company, it's going to be the same thing. Go build a billion dollar products. Okay. That seems 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 it. And that's the part when you think about high standards, if you, as a company, give high standard with no support, they don't want to get there. They'll try for a while and then they'll disengage. Lots of companies are trying to move their companies to be AI first, right? We want to be an AI first company. And they're basically like, here, here's, you know, cloud code, good luck, right? And what is the scaffolding you're going to be able to do to get your people to that standard? Are you able to sit there and role 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. Am I getting the people in who have the skills to do it? And then can I 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, I got to 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. [SPEAKER_00] So no, I was not good with human psychology. And I did want to build the company. And how I got there is one of the most important hires I ever made is this guy, Jim Abel, who was my head of HR, who would coach me through a lot of this, where I started very much as high standards, low support. He was the one who was like, look, here's the part, here's what you have to do if you want to bring your team with you. Here is the organization you have to build. If you're going to bring, once I had, you know, 2000 employees and I'm like, Jim Abel, who was my head of HR, who would coach me through a lot of this, where I started very much as high standards, low support. He was the one who was like, look, here's the part, here's what you have to do if you want to bring your team with you. Here is the organization you have to build. If you're going to bring, once I had 2000 employees and I'm like, oh my God, what do I do? He was the key insight on that side. And then on the school side, now there's this, there's a professor, Dr. Yeager, who's written a great book that every parent should read, which is called 10 to 25, the science of motivating your kid from age 10 to 25. He's the one who actually developed our child development side and how our adults, our guides work, which is the 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 student and just say, look, I'm about to give you feedback that's going to be hard, but it's only because I know you can go crush this, right? Because I know you can do it back to the growth, the Tony Robbins part, 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. 10 to 25 is every parent should read it. And it actually is our model where people say, how does alpha work? [SPEAKER_02] It only has 305 reviews on. It's not that popular. It looks like the books. Once you get to middle school at alpha, you have to read 10 to 25. There's another book, self-driven child that we do not allow kindergarten moms to read because it talks about your kid being independent. And kindergarten is the last thing you want to worry about. But once you get to middle school, right, that's where kids you have to, they're moving independence. And so those are the two books that drive our model. [SPEAKER_01] Talk about simplicity. Because as you're explaining things, I feel like you're taking big ideas and you're compressing them in a great way that makes it easy to grok giving us good frameworks. I used to do big 20 page strategy documents. You know, here's our big strategy documents. And when Jim joined, he'd read this document. He's like, Joe, this is useless. And I'd be like, it's really not. It's really good strategy. What are you talking about? Things are super awesome. What are you talking about? What's wrong with you? 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 to three lines, three words each. And I'm like, not going to make a strategy of this complex tech company slogan. We're not going to use sloganeering to get there. I literally went to one of my co-founders. I was like, God, when we hired Jim, I thought he was really smart, but why would he try to dumb this down? And I remember thinking about it, right. And so he kept coaching me on it. I'm like, guys, these are Stanford and Harvard graduates. They can read a 28 step strategy doc. And he's like, no, the next we're going to have a company meeting and you're going to get up. And slogan, what are your key phrases? I just was like, I'm not going to do it. So he interviewed everybody in the company, literally back to intensity. He was met with every single person in the company. And then put on the board after it took him over a month. And he was like, Joe, this is what your company thinks your strategy is. I'm like, wow, that's the opposite of what we're doing. And he's like, exactly. He's like, the problem with the 20 page strategy document is every single employee takes the one sentence that they can attach to and say, see I'm aligned, right? I'm aligned. And when they're really not, and then that's, you just lose, right? You diffuse all your focus. Wow, that's the opposite of what we're doing. And he's like, exactly. He's like, the problem with the 20 page strategy document is every single employee takes the one sentence that they can attach to and say, see, I'm aligned, right? I'm 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. He had his three lines of three words for each. And I was like, okay, they're definitely not that, but here I'll go. Now I understood. And then we created it and that now for everything we do, right? So what is it for Alpha? What are your three lines? So our three lines for Alpha are 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. Do you love school? But 96%. And so it's too easy. So we added one 18 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, 46% of our students said, I would rather go to school than go on vacation. Right? So great high standard, high bar of deliberate 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 hours and did homework. So that's what our learning engine does. You learn 10 times faster. And so we don't make you do a whole day and learn 10 times as much. We're like, no, we're going to shrink it down. You'll learn twice as much. So no matter where you start on a percentile level, we'll get you to top 1% if you're in the system long enough. Right? If you give me time, we're learning twice as fast. I get to go beat the top. I can get 100 on the Texas STARS and catch up. Even if I start in the bottom 25%, right? You can move up. And the third is we use the rest of the day to teach all the valuable life skills that kids are going to need to thrive in this new world. Right? And that's leadership and teamwork, entrepreneurship and financial literacy, storytelling and public speaking, relationship building, socialization, grit and hard work. And so those are 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 sloganeering, which is if you can't say the opposite of it, right? Then it's not on the list. [SPEAKER_00] 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. [SPEAKER_00] And he's like, Joe, is there ever a company in the world who's like, I'm going to be the non-integrity company? [SPEAKER_00] He's like, those are wasted words. Those are nonsense words because they mean nothing. [SPEAKER_00] He's like, I want edge, right? They have to have edge. [SPEAKER_00] And so love school is a great one. There's lots of people who don't think kids should love school. They're like, well, where are they going to learn grit? And all these things that love school is antithesis. [SPEAKER_00] I remember when I put my kids into Alpha 10 years ago, McKenzie and Brian were actually the ones who started it. [SPEAKER_00] And I was like, I am, what is the thing I don't understand about education? [SPEAKER_00] You know, he's like, well, first kids must love school. [SPEAKER_00] And I'm like, yeah, it's spit. You know, I didn't like school and you just suck it up. And that's just part of the game. [SPEAKER_00] And he's like, you're totally wrong. And that is completely true. Right. My number one, people want to talk about how they can use Timebacker software. And the number one question I ask 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 let you use the software. Just hold it. Because it's not going to work. [SPEAKER_02] Can I ask you a question that sounds really stupid, but I think you'll have a really good answer. Why does a kid need to learn two times faster? It's not stupid. I get it a lot. Everybody's like, why two X? There's a couple different dimensions. And so let's talk about it. The first is, So kids love it more than vacation. And if the answer is no, I will not let you use the software. Just hold it. Because it's not going to work. Can I ask you a question that sounds really stupid, [SPEAKER_02] but I think you'll have a really good answer. [SPEAKER_02] Why does a kid need to learn two times faster? [SPEAKER_02] It's not stupid. I get it a lot. Everybody's like, why two X? There's a couple different dimensions. And so let's talk about it. The first is, 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, a technology that lets kids learn in half time, shouldn't we do that? To the point of the name of our product is timeback, which is we want to give kids their timeback. And right now we suck up 12 years of kids' lives sitting in class and doing homework. And in the old world for a hundred years, there was no other alternative, right? And now because of learning science and generative AI, you can literally build an engine that teaches kids 10 times faster. So you're like, well, okay, let's do it. Why wouldn't we? [SPEAKER_00] And back to obvious simplicity product positioning, there's a question of whether it works. [SPEAKER_00] But once you believe it works, right? [SPEAKER_00] And you get the results that show it works, who wants to have their kid be in the six hour learning instead of the two hour learning? [SPEAKER_00] Because then your kid can do other stuff, right? The rest of the day. How big is this going to be? [SPEAKER_01] Because I'm completely alpha pilled, not from this conversation, but my kids are both in elementary. [SPEAKER_01] I volunteer in their schools maybe once or twice a month. [SPEAKER_01] It's a great place, but it's very much like a bundle of daycare, a little bit of education, a lot of learning social stuff. [SPEAKER_01] That's great. [SPEAKER_01] But in terms of just the learning and the life skills, I don't think it's anywhere near what's possible. [SPEAKER_01] And when I heard about alpha and specifically this, the 5k story, it blew me away. [SPEAKER_01] I was supposed to like the AI part. [SPEAKER_01] And instead, I love the part where it was like, cool. [SPEAKER_01] After they do the two hours, they had this thing where it was like, I don't know, second graders or something. [SPEAKER_01] It's like, who here thinks they can run a 5k? [SPEAKER_01] Nobody raises their hand. [SPEAKER_01] So they don't believe themselves they could do it. [SPEAKER_01] Hey, parents, who thinks that if their kid had to run a 5k right now, they could, dude, they're whatever, first grade or second grade, whatever it was. [SPEAKER_01] And nobody raises their hand. [SPEAKER_01] And over the course of whatever, some amount of time, a month or two, whatever it was, they were like, well, great. [SPEAKER_01] Can we walk a quarter of it right now? [SPEAKER_01] And then they walked a quarter. [SPEAKER_01] And then they were like, yeah, that was, can we walk half? [SPEAKER_01] Can we jog a quarter? [SPEAKER_01] And they basically did what anybody would do. [SPEAKER_01] And they trained their way up and the kids all did it. [SPEAKER_01] And they were able to do it. [SPEAKER_01] And I just thought, man, that's an incredible experience. [SPEAKER_01] I want my kids to have that type of growth and an opportunity. [SPEAKER_01] So I think this is going to be big, but you think about this all the time. [SPEAKER_01] And you've already built companies that are multi-billion dollar companies. [SPEAKER_01] So how big is alpha school going to be? Eighty-five percent of alpha parents say I saw my kid do something in the last 10 weeks that I thought was impossible for their age. We as parents, because of the old system and learning to X or 10 times or learning these life skills, running five Ks, climbing 40 foot rock walls, launching businesses, Broadway musicals, our expectations of what kids do is much lower than what their capability is, right. The greatest untapped resource on planet Earth is human potential. And we now have the first chance in a hundred years to re-envision it. And what we're showing at alpha is these kids can do 10 times more than we expect. I believe how big this is going to get is, my view is in 20 years and get this to a billion kids, right. And it is going to utterly transform education, for everybody. When you think about AI is going to transform the world, right, there is nothing that AI is going to have a bigger impact on than education. [SPEAKER_00] It is the unmitigated win, right. [SPEAKER_00] This is the best time in history to be a five-year-old because the 12 years ahead of you are going to be great. [SPEAKER_00] And so there's lots of work to do, right. [SPEAKER_00] Right. [SPEAKER_00] And it is going to utterly transform education for everybody that when you think about AI is going to transform the world. [SPEAKER_00] Right. [SPEAKER_00] There is nothing that is going to have, there's no part of the world that AI is going to have a bigger impact than education. [SPEAKER_00] It is the unmitigated win, right. [SPEAKER_00] This is the best time in history to be a five-year-old because the 12 years ahead of you are going to be great. [SPEAKER_00] 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. So once you show this is possible, there isn't a parent who doesn't say, I don't want this for my kid. [SPEAKER_02] You were silent for the last 20 years, but you've been quietly building that. [SPEAKER_02] Why weren't you talking then? [SPEAKER_02] And you're talking now. [SPEAKER_02] Is it just because you need to influence parents to give this a shot? So there's two parts. One is 2005 is also the year I got married, which was last time I talked. And so in building the family, being in the limelight's 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 2005. 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. [SPEAKER_00] Our marketing department, their slogan is we educate the parents, right. [SPEAKER_00] Because nobody believes this. [SPEAKER_00] You listen to one of my podcasts. The number one feedback is, well, I don't believe kids can learn 10 times faster. I don't believe these kids really love school more than vacation. Right. And so back to being out there and getting the message out. I consider it critical in education historically hasn't had that. To do a billion students. [SPEAKER_01] You need like 10 million alpha schools or something. [SPEAKER_01] How are you going to do that? [SPEAKER_02] I saw you doing the math, Sean, right. [SPEAKER_02] When he said that, I saw him type it. [SPEAKER_02] I do exactly. [SPEAKER_02] He was doing on his calculator. If there's a hundred thousand schools in the U.S., you know, and back to a billion. Now there's going to 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 going to 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 U.S. 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, I have a hundred billion dollar market that gives me a great beach. And that's why alpha started. It's why we're hiding private school is because it's you. Right. [SPEAKER_00] The anchor, right. [SPEAKER_00] And the credibility and the revenue, right. [SPEAKER_00] That then funds everything else. [SPEAKER_00] It's your Tesla roadster. [SPEAKER_00] Yeah. [SPEAKER_00] Yeah. [SPEAKER_00] Tesla roadster is a great one. [SPEAKER_00] So there, there's that hundred billion dollar market and that's us K 12. [SPEAKER_02] How long does that take to make a profit? [SPEAKER_02] And are you just using your money? [SPEAKER_02] Yeah. So I put in a billion dollars for my software company as the first payment, but back to this, getting to a billion kids is going to take tens of billions of dollars. So fixing education, it's a multi-trillion dollar industry, right? It's the second largest industry besides healthcare 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 business, a business so that capitalism can provide the capital needed to scale education, right? Historically, everything in education has been nonprofit. And the problem with nonprofits is nonprofits are non-scalable, which is the better your product, the faster your donations go away, right? Right. There's plenty of really good charter schools who have 3000 person wait lists. And if you ask their head of their school, well, why don't you open another one? And they're like, I'm waiting on a $40 million donation, you know, to build a new campus. Right? Historically, everything in education has been nonprofit. And the problem with nonprofits is nonprofits are non-scalable, which is the better your product, the faster your donations go away, right? Right. There's plenty of really good charter schools who have 3000 person wait lists. And if you ask their head of their school, why don't you open another one? And they're like, I'm waiting on a $40 million donation 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? Everyone's going to be happy to give me capital to build the business. Second, thinking about Alpha. Alpha is the high end private school. You should think Stanford of K through 12. There'll be a couple hundred locations, thousand kids K12 locations, but it's 5% of the market. We have other physical schools around Austin that we're incubating to figure out where we get product market fit. We have a gifted school. They're trying to find a hundred thousand smartest kids who, when you say what would make you love school, they're like more academics, right? One in 20 kids. When you ask them that, they want a third power hour in the app. They want Math Olympiad, right? They want all that. We have a sports academy, right? This is like 40% of the market, maybe 50% of the market, which is when you say, what would you love to do? Kids are like sports. So Texas Sports Academy, our baseball team just won national championship, be IMG, if you know, right. Our basketball team is four and one, our academics are 10 times better than IMG's. We're rolling out a set of other sports that you'll see for August where these teams will be the best in the country, but also the best academics, alpha premier academics, but also sports. And we're working on founder school yet that we're building for high school. And we're building all these different school types, but those are physical schools. And my view of the market is in 20 years, AI is going to change the world in a lot of ways, but in 20 years, parents are going to drop their kids off at a building. 90% of parents, you have homeschoolers and stuff, but it's a niche. 90% of parents are going to drop their kids off at a building. And in that building are other kids and adults, right? That's one of the misconceptions. There's robot terminators, 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? That it's going to take 20 years is not enough to build that many schools. So we're working on other products. One, the software itself, where if I can go get people who want to build schools or transform their schools and they realize this isn't ed tech, right? Ed tech failed. The second is we're doing stuff outside of school. So to give you 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 these concepts. Right. And it will be free to learn. Think free to play free to learn for 500 million kids. And it'll start shipping later this year. [SPEAKER_02] Why? Why do this? You're incredibly wealthy. And you're a shark, not in a bad way. You're a tycoon. You're a Titan of industry. You're a take over the world type of guy. Why school? This is a great question. Before I did this and put my billion dollars in, I talked to a dozen billionaires who had all spent over a billion dollars on education. And to a person, every single person said, don't do it. And they're like, it's the lowest ROI you can get. And then you fill in throughout the thing. It doesn't affect it. There's just no... [SPEAKER_02] Why school? [SPEAKER_02] This is a great question. Before I did this and put my billion dollars in, I talked to a dozen billionaires who'd all spent over a billion dollars on education. And to a person, every single person said, don't do it. And they're like, it's the lowest ROI you can get. And then you fill in throughout the thing. It doesn't affect it. There's just no, you just can't impact it. It's just this impossible problem. And like every entrepreneur, I'm like, I'll be different. And for me, I just had this experience. I was doing the AI, I have my software company. We're making tons of money, piles of cashflow, plenty of money. But 12 years ago in Austin, McKinsey and Brian started the school Alpha. And McKinsey's like, come on over to Alpha. And I'm like, I'm not going to your weird school. That is a weird janky school. And it took her two years to convince me. And the only way she did was at the end of May, say Gabriel gets out and Alpha was still in session. She convinced my two daughters to spend a week before they went to summer camp and they wouldn't spend a week. And they came home after the week. They're like, dad, I don't want to go to summer camp. We want to go back to Alpha. And that was my insight. That was 10 years ago. And then I sat and just talked to McKinsey, well, her kids, I'm like, this is great for us. Great for our families. Too bad. It doesn't scale. The stuff just doesn't scale. And then four years ago, when Gen AI came out, I was like, neural nets, right from 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. I'm the most well-funded principal in history. No, he's going to fund ed tech and all the ed tech stuff's failed. It's never worked. Every, all the billionaires are done with the philanthropy on it. And so I just woke up and I'm like, I actually do have the skills, I think, to go try this. And now I can tell you four years later, I'm four years into it. It was the best decision ever. My job today is so much better than my Trilogy job. Not even close. I went four years ago, I went to my team. I'm like, for 25 years, you guys have been telling me how much better you are than me. And you guys are great. I'm like, so good luck. Is the company better now that you have a new CEO? [SPEAKER_02] Well, two part. Yeah, it's actually, I went and said, guys, and I'm going to be your worst shareholder you've ever thought about. I'm like, I'm just going to pull every dividend that I can out because I need to fund education. So you're an acquisition company and I have to turn you from being capital intense, buying companies and turning around to be capital light, but somehow still making all those acquisitions work because I'm going to be sucking all the capital for education. And on the face of it, everybody's like, okay, that seems like an impossible problem. The team actually has done a fabulous job better than I had ever thought of how to be super capital efficient. The downturn in SaaS really helps them because there's lots of companies now. If you want to just know their business, what's happened is we're considered one of the best operators of SaaS. We know how to generate cashflow out of businesses better than anybody. And so they're bowing to all the SaaS companies that have died, that are now owned by the private credit, the Blackstones and the BlackRocks, where you're hearing about why the market cap in SaaS is down 90%. And they go to them and they say, look, you have two choices. You either can put another hundred, 200 million into this SaaS company that's gone bankrupt and reboot it, We know how to generate cashflow out of businesses better than anybody. And so they're bowing to all the SAS companies that have died, that are now owned by the private credit, right? The Blackstones and the Black Rocks, where you're hearing about why the market cap in SAS is down 90%. And they go to them and they say, look, you have two choices. You either can put another hundred, 200 million into this SAS company that's gone bankrupt and reboot it, or you can just sell it to us for a dollar and we'll split the cashflow. Four years ago when they did this pitch, everybody's like, yeah, I'm not doing that because I'm going to give another hundred million dollars to this. The private equity firms, they have a lot of companies in their portfolios that they're just turning over to the credit guys. And those guys built four years ago at faith and hope. The last 12 months have completely changed. They're like, Oh my God, AI is here. Guys aren't going to last at all. The last thing I want to do is write a big check in hopes they can reboot for AI. And they're like, looks like just getting the cashflow is the best thing we can do. And so now I haven't seen the last pipeline round, but I saw $20 billion of pipeline companies that were looking at about splitting the cash flows and buying for a dollar. So they did a great job. [SPEAKER_01] How did you get into buying companies in the first place? So you start Trilogy, you're an entrepreneur, you got a product, you're selling it, you're doing that game. What triggered you to start saying, let's go acquire other companies? And what was the moment? Two parts. After the dot-com meltdown, 50% of our customers went out of business. In 2000 in the dot-com turndown, there were two parts that happened. 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 profits. All these other software companies were not making that transition. They were dying. And they were available for a dollar, right? If you could buy all these companies for nothing. So we just literally, it was like, okay, well let's buy a couple and see if we can turn them around. And we did and we made tons of money. I'm like, okay, let's just do this. So we bought hundreds of companies since then, but it was nothing. The strategy was just like, oh wow, some companies are really cheap. I want to buy some. [SPEAKER_01] I heard that you studied Warren Buffett intensely. My journey on this is I had been investing since high school and at Stanford, like I was in the fund. We ran part of the Stanford endowment, and I came out of it during the nineties and the boom. I'm all like, oh, I'm so great. I remember 98, reading an interview with Warren Buffett. I remember thinking, man, that guy's an idiot. Then after 2001, I was like, oh, maybe I'm the idiot. Maybe I don't know what I'm doing. Right. And my returns weren't good. Right. It's really good on the way up. But after the bust, my life to date were terrible. And so I was like, I should probably listen to him. And so I literally just read everything. Back to my standard of being an expert. If you're going to be an entrepreneur, you have to be the best in the world in whatever your field is. And so my standard was, 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 into the way he thinks. And so I literally, that's what I do. We do the same thing with our alpha high students where we're like, being an expert is one of our pillars. And then when he'd say something that I didn't, that I'm like, oh, I'm surprised. Right. I would then have to go back and research and figure out why I didn't understand it. [SPEAKER_02] I love talking to people like you who we have Dharmesh Shah. He's the founder of HubSpot. And he's like, I'm just, because he has got the story where he's like, I'm the best ping pong player there is. Because one time someone wanted to play ping pong with him and he got beat and he's like, I'm surprised. Right. I would then have to go back and research and figure out why I didn't understand it. I love talking to people like you. [SPEAKER_02] We have Dharmesh Shah. He's the founder of HubSpot. And he has got the story where he's like, I'm the best ping pong player there is. Because one time someone wanted to play ping pong with him and he got beat and he's like, oh, I want to be the best because he's competitive. Some people, it's a board game where they just love winning the board game. What's your thing? If I'm going to do it, it is just why, why not be the best? It's just, well, why would you do the other? Right. Is your other alternative? [SPEAKER_02] What about you though? This is actually interesting. Are you using alpha? What learning techniques have you learned all along the way that you yourself are using to learn? So our framework about how to be an expert is you dive in, right? Our students do the same thing. I do the same thing our students do, which is you spend one hour a day reading and then summarizing their work. So we've created a structure called a brain lift, which is we think a lot about what is the role of humans and what is the role of AI going forward? Like if you're a kid or a mom, you're like, are you preparing my kid for the AI age coming? We think a lot about that, right? Of how, what is the role that humans are going to play as AIs keep getting smarter? And so we have a concept in learning science, there's this concept of depth of knowledge, right? Which is the hierarchy of knowledge, which is DOK one is a fact, right? Do you know facts? DOK two is, can you summarize them, right? Do you have summaries of the facts? DOK three is, if you look at all those facts and summaries, can you have insights? And then DOK four is really creating new knowledge, right? Oh, I have insights that no one else has because of this. And LLMs are very good at helping you do DOK one, two, and three, right? And reasoning around that. And then the part that the humans still do really well is DOK four, creating new knowledge. And so what we do every day is we spend the time reading the current experts that are helping fill your DOK one and DOK two, right? In this brain lift. And then you are having DOK three. I'm having insights on it. Kids can learn 10 times faster is an insight, right? Based on the learning science facts, right? You can just derive that. DOK four is insights that are so counter to what you think that no one else believes? So this would be the equivalent of if I asked an LLM, help me design a school, it's going to put a teacher in front of a classroom. And if I say, wait, I want to design a school that doesn't have teachers doing academic teaching, the LLMs are going to reject it and say, that's unethical. And so AI is not able to help me. If I load my brain lift as context on top of the LLM, where it has the DOK one facts, the DOK two summaries, the DOK three insights, all on research papers, all this stuff. And if they wait, read all this, take this into context. Now does that help me design a 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 in high school. But is it summarized in you? [SPEAKER_02] You spend an hour, you are personally spending an hour a day and then you're literally just summarizing what you're saying. And then do 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 load, I'll change my brain lift. So for me, how I actualize it is I basically have a Twitter of a custom timeline of content and authors, right? Or experts like on green science, right? I'm going to go read it and see if there's anything new in there, or I'm going to summarize the article and put it in the brain lift. And then if it causes me to have new insights, I'm going to, I try to have one DOK three insight a day as my standard. Doesn't happen all the time. So for me, how I actualize it is I have a Twitter custom timeline of content and authors, right? Or experts like on green science, right? I'm going to go read it and see if there's anything new in there, or I'm going to summarize the article and put it in the brain lift. And then if it causes me to have new insights, I try to have one DOK three insight a day as my standard. It doesn't happen all the time, but that's what I'm trying for. DOK four are the big ones, right? And then you have that knowledge. And if you work that way, right, having expertise in any field that you want to be an expert in, right? AIs help you do this. Back in the nineties, I did the same thing, which is I would sit in Stanford's math CS library in 1989 when I'm dropping out and I would read every paper written about configurators, right? How they tried, why they'd fail. Back then it took forever. You'd have to send to Germany. Daimler had really good configuration stuff, right? And they'd have to send you the paper over and you'd get it a week later. Now, literally on an LLM, right? You can learn this stuff really quickly. [SPEAKER_02] How are we going to convince people to buy stuff they don't need or do stuff that they shouldn't do if everyone's super smart, right? What's the world look like when everyone's smarter? 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? I actually believe, back to this whole thing is I believe the human knowledge graph. I know there's this dystopian view that AI is going to cause everybody to be dumb. And if we do it the wrong way, just to be clear, if you take chat box on unmanaged Chromebook and deploy them to kids in K through 12, those things are not learning. Chatbots are cheap bots. It's terrible. I understand why people want to ban AI and do all that stuff. Now there's also a good way to do it. A very different way. And I believe we should be teaching all the kids the good way because they can learn 10 times faster. We have a student who's going to be published in Nature. She will be the first high school student as a lead researcher published in Nature. And that used to be at a PhD from Stanford, right? And we are pulling that capability down to a 17-year-old girl. And there's 10 people at Alpha right behind her who are like, "She can do it, I can do it." And that concept of unlocking human potential—we haven't even scratched the surface of what you can do. If you talk to our sports academy, as an example, because of the two hours a day in the morning and the skills training in the afternoon, our sports academy guys are like, we're going to be in every field. We're going to be the number one team in the country within a year of deciding that's going to be our sport. [SPEAKER_02] But how are you going to do that with sports? How are you going to make someone seven feet tall, you know, to be good at basketball? You have limits on all things, right? There's human limitations, right? I can't, even with learning 10 times faster, 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. My brain, my neurons fire at about half the speed of my 18-year-old daughter. Now, the difference is I have a knowledge graph in my brain that I uploaded over the last 50 plus years that allows me to take shortcuts. Cause I know the answer. I don't have to think through. So in a list of 10 things, she has to go through each one. You get slower. My brain, my neurons fire at about half the speed of my 18-year-old daughter. Now, the difference is I have a knowledge graph in my brain that I've built over the last 50 plus years that allows me to take shortcuts because I know the answer. I don't have to think through it. So in a list of 10 things, she has to go through each one. I can read the 10 things and be like, oh, seven's the answer. So I can still get to it, but you have to load knowledge into your brain, even as your brain slows 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 going to win the NBA, but whatever the boundary of your human potential is, we can get you there. Got it, right. We can get you to the boundary. And the surprising part is your expectation of what your boundary is or what your kid's boundary is. It's wrong. That's where, when you talk about the excitement, the energy and why I get up every day to do this is I'm literally surrounded by kids doing magical stuff. And we have to get it out to everybody, right? There is nothing more important to society than raising the next generation. Every parent, that's your job. Every society, that's the most important job. There is nothing more important. And we haven't had an answer for a hundred years or a way 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. [SPEAKER_01] I can see why you out-recruited Bill Gates. I'm in. Where do I sign up? Well, come on aboard. I'm going to show you, I'm going back to your audience of people who want to 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 going to show this is the single best market if you're an entrepreneur to enter. It's a multi-trillion dollar market with no competitors. [SPEAKER_02] Is the Catholic church going to be like, is he going to get the Pope knocking on your door and like, hey Joe, what are you doing? No, we are working back to school. So there are Catholic schools that I'm working with who are like, how do we adopt two-hour learning? Because it's just so obvious that no matter what you want, the Catholic church has a different afternoon they want, right? Everybody has their afternoon they want, but everybody gets, okay, well, why are we wasting the kids' time in class? 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. [SPEAKER_02] Sean, is your cup full or what? [SPEAKER_02] Oh my gosh, yeah. [SPEAKER_01] 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. [SPEAKER_02] Appreciate it. You're the man. We appreciate you. That's it. That's the pod. you know, traditional world, I would generally say 200% because we're working 80 hours a week. Every single person's working 80 hours a week on Hewlett-Packard. And that leaves us an extra 20 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 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, thank God, great. You know, you're like, hey, dad, have you ever seen me kiss a grown man on the lips? Because it's going to happen for the first time ever. 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 intensity. I heard a story. I don't know if I heard it through a friend of a friend or online that you would take people you were recruiting, like a, like a, 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 want to gamble a lot of money. And you're like, well, you're not a good fit. We need the people who are going to gamble more. right? 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 want to 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 roulette wheel. Right. And we'd say, you have to bet one month's salary on the number. Right. And so everybody would have to put one month's salary down. And, you know, there's a lot of people who are like, well, I'm not, I don't want to bet one month's salary of it. And we're like, first of all, that's not a huge risk. So you're going to be asking a venture capitalist someday to give you millions of dollars. And you're literally not willing to take any risk at all. And so we would, we've done that every year. And the wall street charter wrote this big story about it. I actually got a lot of flack from parents after they read this story. They're like, what are you doing? We just got out of college, but yeah, it's 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 you can read about it, but we literally had a swap program with the Navy SEALs. Literally the Navy SEALs are like, okay, you know, we're going to send a couple of our SEALs over to your program. And you send a couple of your trilogy kids to California to go part, to be part of ours. It was sort of physical 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, you know, I get to go do, oh, they'd only last a week, you know, or really a few days before they. Yeah. Is it, is it easier? Is it easier to make a meathead good at programming or a nerd good at like swimming? The SEALs are actually super smart, right? They filter, right? So they were coming in as super capable. Now they'd 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 than, than their other one. But it was, you know, it was those kinds 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. Do you want some more free things? I mean, went to a vending machine and it gave me a MacBook. It was unbelievable. But you were like, you realized that actually young, ambitious people wanted something hard, not easy. Can you talk about 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 them against Microsoft or all these other companies. I was actually at the board of directors of a Fortune 10 company, and we had taken some of their mechies who wanted to go to Trilogy instead of their company. They're like, how are they going to this little company, you know, instead of us? Yeah. I'm like, well, during the internship, you made it easy. Right? And so they're just, oh, I'm not doing anything significant. And when they come down to Trilogy, it's going to be the hardest thing they ever did. They're going to work on something significant. And kids want to do awesome things. Right? And mapping it now to our education, when we talk about the kindergartners climbing 40 foot rock wall, it's the same thing. Kids want to go do hard things. Now, they need to be supported through it. You can't take a kindergartner, say, good luck. 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, alpha tests, where you do all these crazy workshops, you know, and then you have to test to pass it. You got to climb the 40 foot rock wall. You know, our second graders got to run a 5k. Our eighth graders have to do a tough mudder, or they also all have to cross the finish line at 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 and a kid more than them being able to go head to head with their parent and winning. Like, fair, not where the parent tanked it. Like, they love that. Kids love that. One of our claims on the, you know, is kids love school more than vacation. Right? Like, 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 they're going with their friends doing hard things. I actually think, Sean, this insight that you guys just came up with is actually quite brilliant. Yeah. 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 40 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, versus Microsoft, if you're making like, well, Microsoft's 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 can hand to you. How cool is that? Or 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 going to convince anybody that configuration is sexy, right? Versus all the other options. However, the AI algorithms that underline configuration at the time were some of the most complicated computer science problems you can solve. And so when you're sitting there and you're looking at, oh, I'm going to go do an about box for Microsoft word as choice A, or you're going to go work with the smartest people tackling this challenge that no one's been solved before. Right. It is a technically impossible challenge. And the best computer scientists, like, you know, in 1985, Rice, Stanford, MIT, their number one computer scientists all came down for 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, on companies, why do people do startups? Like, why do they go to down to SpaceX? Why do you do it? And it's like, cause 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 are you joining Navy SEALs? Right. It is the camaraderie. It is the, you know, everybody together. That starts in kindergarten. It starts in 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 going to go spend the next decade trying to fix education. And it's going to be a nightmare. It's going to be super hard. Right. But they want to get in and do it because the alternative is, oh, I'm going to fire and play 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 want to talk about high standards for a second. Um, I was at a Tony Robbins event 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, that the top 1% 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 Perel was telling us, 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 200 point bottles of wine to remind you, something like that, to remind you of what 100 point looks like, 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 100 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 get a hundred on the Texas star, 95 plus percent of parents are like, no, they can't. They can't do it. And, you know, we have a, we have a building with a few hundred people in Austin who get more hundreds on the Texas star 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. How do you instill that in your team though? Is it just about being a sort of Steve jobs asshole where you're, nothing's ever good enough? No, 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 going to cause grit is you're just going to keep struggling. Okay. That's a, that's a couple of way to do it because they'll try a little for a little bit, but then they'll decide it's too hard and bail. Right. And you get tons of disengagement 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 going to be there supporting the whole time and redo it. And that's terrible 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 through. And so you have to give the scaffolding and show people how they get there. What does that look like within a company? Yeah. Let me give you the school one. And then I'll give you the company one, which is I go to the seventh grade is my first year. I'm like, all of you guys can get a hundred on the tech star. And they're like, I'm assuming that's impossible. No way. Can't get a hundred. I'm like, no, no, no, I'll give you a hundred dollar bill. A hundred for a hundred. Right. And it's still impossible. It can't just, right. I don't know how to do it. And I was like, no, no, no, here's the catch any grade level. And they're like, you're going to let me take a kindergarten test and give me a hundred bucks for a Texas, you know, a hundred on a star. I'm like, well, they start in the third grade. And so the kid's like done goes and takes a third grade test. It's a hundred. They're like, can I do fourth grade? And you're like, absolutely. I do fourth grade. And then they do fifth grade and they only get an 82 because they didn't know all that. They hadn't done their school. They're not given the mastery right through it. And this is where you have to give the scaffolding. Do you want the AI tutor to look the ones you miss and give you those lessons that will get you to a hundred? And the kid looks at it and is like, ah, that's like going to take me a week of work. Sure. For another a 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've done is you've changed their mindset. That when you're getting a hundreds, all the grade levels, you're like, well, obviously I can do fifth grade and I obviously 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 scaffolding, right? To work through plus motivation because motivation matters, right? And you give them scaffolding and motivation to do it. So if you're building a company, it's going to be the same thing. Go build a billion dollar products. Okay. That seems 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 it. And that's the part when you think about high standards, if you, as a company, give high standard with no support, they don't want to get there. They'll try for a while and then they'll disengage. Lots of companies are trying to move their companies to be AI first, right? We want to be an AI first company. And they're basically like, here, here's, you know, cloud code, good luck, right? And what is the scaffolding you're going to be able to do to get your people to that standard? Are you able to sit there and role 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. Am I getting the people in who have the skills to do it? And then can I 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, I got to 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. So no, I was not good with human psychology. And I did want to build the company. And how I got there is one of the most important hires I ever made is this guy, Jim Abel, who was my head of HR, who would coach me through a lot of this, where I started very much as high standards, low support. He was the one who was like, look, here's the part, here's what you have to do if you want to bring your team with you. Here is the organization you have to build. If you're going to bring, once I had, you know, 2000 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, there's a professor, Dr. Yeager, who's written a great book that every parent should read, which is called 10 to 25, the science of motivating your kid from age 10 to 25. 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 student and just say, look, I'm about to give you feedback. That's going to be hard, but it's only because I know you can go crush this, right? Because I know you can do it back to the growth, the Tony Robbins part, 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. 10 to 25 is a, every parent should read it. And it actually is our model where people say, how does alpha work? It only has a 305 reviews on. It's not that popular. It looks like the books. Once you get to middle school at alpha, you have to read a 10 to 25. There's another book, self-driven child that we do not allow kindergarten moms to read because it talks about your kid being independent. And a kindergarten is the last thing you want to 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. Cause 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, grok giving us good frameworks. I used to do big, you know, 20 page strategy documents. You know, here's our big strategy documents. And, you know, when Jim joined, he'd like read this document. He's like, Joe, this is useless. And I'd be like, it's really not. It's like really good strategy. What are you talking about? Things are super awesome. Like, what are you talking about? What's wrong with you? 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 to three lines, three words each. And I'm like, not going to make a strategy of this complex tech company. Slogan. Like we're not going to use sloganeering to get there. I was, I literally went to one of my co-founders. I was like, God, when we hired Jim, I thought he was really smart, but why would he like try to dumb this down? And I, I remember thinking about it. Right. And so he kept coaching me on it. I'm like, guys, these are like Stanford and Harvard graduates. They can read a 28 step strategy doc. And he's like, no, the next, we're going to have a company meeting and you're going to get up. And, you know, slogan, what are your key phrases? I just was like, I'm not going to do it. So he interviewed everybody in the company, literally back to intensity. He was like, met with every single person in the company. And then put on the board after it took him over a month. And he was like, Joe, this is what your company thinks your strategy is. I'm like, wow, that's like the opposite of what we're doing. And he's like, exactly. He's like, the problem with the 20 page strategy document is every single employee takes the one sentence that they can attach to and say, see on aligned, right? I'm aligned. And when they're really not, and then that's, you just lose, right? You diffuse all your focus. And so, uh, he tried to reverse engineer. He had his three lines of three words for each. And I was like, okay, they're definitely not that, but here I'll go. Now I, I understood. And then, you know, we created it and that now for everything we do, right? So what is it for alpha? What are your three lines? So our three lines for alpha are 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. Do you love school? But 96%. And so it's too easy. So we added one 18 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, 46% of our students said, I would rather go to school than go on vacation. Right? So great high standard, high bar or deliberate 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 didn't homework. So that's our learning engine does. You learn 10 times faster. And so we don't make you do a whole day and learn 10 times as much. We're like, no, we're going to shrink it down. You'll learn twice as much. So no matter where you start on a percentile level, we'll get you to top 1% if you're in the system long enough. Right? If you give me time, we're learning twice as fast. I get to go beat the top. I can get 100 on the Texas stars and catch up. Even if I start in the bottom 25%, right? You can move up. And the third is, we use the rest of the day to teach all the valuable life skills that kids are going to 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 building, socialization, grit and hard work. And so that those are 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 sloganeering, 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, Joe, is there ever a company in the world? Who's like, I'm going to be the non integrity company. He's like, those are wasted words. Those are nonsense words. Cause 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 kids should love school. They're like, well, where are they going to learn grit? And all these things that love school is antithesis. I remember when I put my kids into alpha 10 years ago, McKenzie and Brian were actually the ones who started it. And I was like, I am, what is the thing I don't understand about education? You know, that he's like, well, first kids must love school. And I'm like, yeah, it's sort of like spit. You know, I didn't like school and you just sort of suck it up. And that's just part of the game. And he's like, you're totally wrong. And that is completely true. Right. My number one, people want to, you know, talk about how they can use timebacker software. And the number one question I ask, ask 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 let you use the software. Just hold it. Because it's not going to work. Can I ask you a question that sounds really stupid, but I think you'll have a really good answer. Why does a kid need to learn two times faster? It's not stupid. I get it a lot. Everybody's like, why two X? There's a couple different dimensions. And so let's talk 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, a technology that lets kids learn in half time, shouldn't we do that? To the point of the name of our product is timeback, which is we want to give kids their timeback. And right now we suck up 12 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 generative AI, you can literally build an engine that teaches kids 10 times faster. So you're like, well, 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, right? And you get the results that show it works, who wants to have their kid be in the six hour learning instead of the two hour learning? Because then your kid can do other stuff, right? The rest of the day. How big is this going to be? Because I'm, I'm completely alpha pilled, not from this conversation, but my kids are both in elementary. I volunteer in their schools, maybe once or twice a month. It's a great place, but it's very much like a bundle of daycare, 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 5k story, it blew me away. I was supposed to like the AI part. And instead, I love the part where it was like, cool. After they do the two hours, they had this thing where it was like, I don't know, second graders or something. It's like, who here thinks they can run a 5k? Nobody raises their hand. So they don't believe themselves. They could do it. Hey, parents, who thinks that if their kid had to run a 5k right now, they could like, dude, they're whatever. First grade or second grade, whatever it was. And nobody raises their hand. And over the course of whatever, some amount of time, month or two, 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 trained their way up and the kids all did it. And they were able to do it. And 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 an opportunity. So I think this is going to be big, but you think about this all the time. And you've already built companies that, you know, are multi-billion dollar companies. So how big is alpha school going to be? Eight, five percent of alpha parents say, I saw my kid do something in the last 10 weeks that I thought was impossible for their age. We as parents, because of the old system and learning to X or 10 times or learning these life skills, running five K's climbing 40 foot rock walls, launching businesses, you know, Broadway musicals, our expectations of what kids do is much lower than what their capability is. Right. The greatest untapped resource on, on planet Earth is human potential. And we now have the first chance, right. In a hundred years to re-envision it. And what we're showing at alpha is these kids can do 10 times more than we expect. I believe how big this is going to get is, you know, my view is I'm 20 years and get this to a billion kids. Right. And it is going to utterly transform education, you know, for everybody that when you think about AI is going to transform the world. Right. There is nothing that is going to have, there's no part of the world that AI is going to have a bigger impact than education. It is the unmitigated win, right. This is the best time in history to be a five-year-old because the 12 years ahead of you are going to 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. So once you show this is possible, there isn't a parent who doesn't say, I don't want this for my kid. You were silent for the last 20 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 a shot? So there's two parts. One is 2005 is also the year I got married, which was last time I talked. And so, you know, in building the family, being in the limelight's 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 2005. 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, their slogan is we educate the parents, right. Because nobody believes this. Like you, you listen to one of my podcasts. The number one feedback is, well, I don't believe kids can learn 10 times faster. I don't believe these kids really love school more than vacation. Right. And so back to being out there and, and, uh, getting the message out. I, I consider it critical in education historically hasn't had that. To do a billion students. You need like 10 million alpha schools or something. How are you going to do that? I saw you doing the math, Sean, right. When he said that, I saw him type it. I do exactly. He was doing on his calculator. So, I mean, if there's a hundred thousand schools in the U S, um, you know, and back to a billion. Now there's going to 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 going to 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 U S 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, I have a hundred billion dollar market that gives me a great beach. And that's why alpha started. It's why we're hiding private school is because it's you. Right. The anchor, right. And the credibility and the revenue, right. That then funds everything else. It's your Tesla roadster. Yeah. Yeah. Tesla roadster is a great one. So there, there's that hundred billion dollar market and that's us K 12. How long does that take to make a profit? And are you just using your money? Yeah. So I put in a billion dollars for my, my software company as the, the first payment, but back to this, getting to a billion kids is going to take tens of billions of dollars. So fixing education, it's a multi-trillion dollar industry, right? It's the second largest industry besides healthcare 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 business, a business so that capitalism can provide the capital needed to, to scale education, right? Historically, everything in education has been nonprofit. And the problem with nonprofits is nonprofits are non-scalable, which is the better your product, the faster your donations go away, right? Right. There's plenty of really good charter schools who have 3000 person wait lists. And if you ask their head of their school, well, why don't you open another one? And they're like, I'm waiting on a $40 million donation, you know, to build a new campus. I don't have that problem. Cause 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 funding it right now, but everybody's going to be happy to, to give me capital to, to build the business. Second, you know, and, and thinking about alpha alpha is the high end private school. You should think Stanford of K through 12. There'll be a couple hundred locations, thousand kid, you know, K 12, um, locations, but it's 5% of the, the market. You know, we have other physical schools around Austin that we're incubating to, to figure out where we get product market fit. We have a gifted school. They're trying to find a hundred thousand smartest kids who, you know, when you say what would make you love school, they're like more academics, right? One in 20 kids. When you ask them, that is like more academics. They want a third power hour in the app. They want math Olympiad, right? They want all that. We have a sports Academy, right? This is like 40% of the market, maybe 50% of the market, which is when you say, what would you love to do? Kids are like sports. So like Texas sports Academy, you know, our baseball team just won national championship, be IMG, if you know, right. Our basketball team is for one, you know, our academics are 10 times better than IMGs. We're rolling out a set of other sports that you'll see for, for August where these teams will be the best in the country, but also the best academics, sort of, you know, alpha premier academics, but also sports. And so we're working on, you know, I don't know if 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 20 years, AI is going to change the world in a lot of ways, but in 20 years, parents are going to drop their kids off at a building. 90% of parents, you have homeschoolers and stuff, but it's a niche. 90% of parents are going to drop their kids off at a building. And in that building are other kids and adults, right? That's one of the miscom, you know, there's rope up terminators, 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 it's going to take 20 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 to build schools or transform their schools and they realize this isn't 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, think free to play free to learn for 500 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 in a bad way. You're a tycoon. You're a Titan of industry. You're like a, a take over the world type of guy. Why school? This is a great question, which is, you know, before I did this and put my billion dollars in, I talked to a dozen billionaires who'd all spent over, had all spent over a billion dollars on education. And to a person, every single person said, don't do it. And they're like, it's the lowest ROI you can get. And then you fill in throughout 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, 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, I'm back to the life story. So I was, I was doing the AI, I have my software company, right? Big. We're making tons of money. Piles of cashflow, right? Plenty of money. But 12 years ago in Austin, McKinsey and Brian started the school alpha. And McKinsey's like, come on over to alpha. And I'm like, I'm not going to your weird school. That is a weird janky school. And you know, it took her two years to convince me. And the only way she did was at the, you were in May, at the end of May, say Gabriel gets out and alpha was still in session. She convinced my two daughters to spend a week, you know, before they went to summer camp and they wouldn't spend a week. And they came home after the week. They're like, dad, I don't want to go to summer camp. We want to go back to alpha. And that was my insight. That was 10 years ago. And then I sat and just talked to McKinsey, you know, well, her kids, I'm like, this is great for off. Great for our families. Too bad. It doesn't scale. The stuff just doesn't scale. And then four years ago, when Gen AI came out, I was like, ah, neural nets, right from 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. I'm the most well-funded principal in history, right? No, he's going to fund ed tech and all the ed tech stuff's failed, right? It's never worked, right? Every, all the billionaires are like done with the philanthropy on it. And so I sort of just woke up and I'm like, I actually do have the skills, I think, to go try this. And now I can tell you four years later, I'm four years into it. It was the best decision ever. Like my job 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 25 years, you guys have been telling me how much better you are than me. And you know, you guys are great. I'm like, so good luck. Is the company better now? Now that you have a new CEO? Well, two part. Well, yeah, it's actually, I went and said, guys, and I'm going to be your worst shareholder you've ever thought about, which is, you know, I'm like, I'm just going to pull every dividend that I can out because I need to fund education. So you're an acquisition company and I have to turn you from being capital intense. I buying companies and turning around to be in capital light, but somehow still making all those acquisition work because I'm going to be sucking all the capital for education. And on the face of it, everybody's like, okay, that seems like an 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 SAS really helps them because there's lots of, companies now, if you want to just know their business, what's happened is we're considered one of the best operators of SAS, right? We know how to generate cashflow out of businesses better than anybody. And so they're bowing to all the SAS companies that have died, that are now owned by the private credit, right? The Blackstones and the Black Rocks or, you know, where you're hearing about, you know, why the market cap in SAS is down 90%. And they go to them and they say, look, you have two choices. You either can put another hundred, 200 million into this SAS company that's gone bankrupt and reboot it, or you can just sell it to us for a dollar and we'll split the cashflow. And, you know, four years ago when they did this pitch, everybody's like, yeah, I'm not doing that because I'm going to 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 guys. And those guys built four years ago at faith and hope, you know, the last 12 months have completely changed. They're like, Oh my God, AI is here. Guys aren't going to last at all. The last thing I want to do is write a big check in hopes they can reboot for AI. And they're like, looks like just getting the cashflow is the best thing we can do. And so now I haven't seen the last pipeline laugh around, but I saw $20 billion of pipeline companies that were, they were looking at about splitting the cash flows and buying for a dollar. So they did a great job. How did you get into buying companies in the first place? So 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 triggered you to start saying, let's go acquire other companies? And what was the moment? Two parts. After the dot-com meltdown, 50% of our customers went out of business. And it's been, you know, in 2000 in the dot-com turndown, there was 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 profits. All these other software companies were not making that transition. They were dying. Right. And, uh, they were available for a dollar, right? If you could buy all these companies for nothing. So we just, we just literally, it was like, okay, well let's buy a couple and see if we can turn them around. And we did and we made tons of money. I'm like, okay, let's just do this. So we bought hundreds of companies since then, but it was nothing. The strategy was just like, oh wow, some companies are really cheap. I don't want to buy some. I heard that you studied Warren Buffett intensely. My journey on this is I had been investing since, you know, high school and at Stanford, like I was in the fund. We ran part of the Stanford endowment, you know, and I came out of it during the nineties and the boo. I'm all like, oh, I'm so great. I remember 98, like reading an interview with Warren Buffett. I remember me thinking, man, that guy's an idiot. Then after 2001, I was like, oh, maybe I'm the idiot. Maybe I don't know what I'm doing. Right. And my returns weren't good. Right. It's really good on the way up. But after the bus, you know, my life to date were terrible. And so I was like, I should probably listen to him. And so I literally just read everything. So there was not a book or anything. Back to my standard of being an expert, being an expert. If you're going to be an entrepreneur, you have to be the best 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 into 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, being an expert is one of our pillars. And then when he'd say something that I didn't, you know, that I'm like, oh, I'm surprised. Right. I would then have to go back and research and figure out why I didn't understand it. I love talking to people like you who like, we have Dharmesh Shah. He's the founder of HubSpot. And he's like, I'm just, because he has got 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 him and he got beat and he's like, oh, I want to 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 going to do it, it 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 alpha? 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 an expert is, you know, you, you dive in, right? Our students do the same thing. I do the 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 structure called a brain lift, 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 or a 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 going to play as AIs keep getting smarter? And so we have a concept in, in learning science, there's this concept of depth of knowledge, right? Which is sort of the hierarchy of, of, of knowledge, which is DOK one is a fact, right? Do you know facts? DOK two is, can you summarize them, right? Do you have summaries of the facts? DOK three is, if you look at all those facts and summaries, can you have insights? And then DOK four is really creating new knowledge, right? Oh, I have insights that no one else has because of this. And LLMs are very good at helping you do DOK one, two, and three, right? And, and reasoning around that. And then the part that the humans still do really well is DOK four, creating new knowledge. And so what we do every day is we spend the time reading the current experts that are helping fill your DOK one and DOK two, right? In this brain lift. And then you are having DOK three. I'm having insights on it. Kids can learn 10 times faster is an insight, right? Based on the learning science facts, right? You can, you can just derive that. DOK four is insights that are so counter to what, you know, what, what do you think that no one else believes? So this would be the equivalent of if I asked an LLM, help me design a school, it's going to put a teacher in front of a classroom. And if I say, wait, I want to design a school that doesn't have teachers doing academic teaching, the LLMs are going to reject it and say, that's unethical. And so AI is not able to help me. If I load my brain lift, basically as context on top of the LLM, where it has the DOK one facts, the DOK two summaries, the DOK three insights, all on research papers, all this stuff. And if they wait, read all this, take this into context. Now does that help me design a 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 in high school. But is it summarized in you, you spend an hour, you are, you personally are spending an hour a day and then you're literally just summarizing what you're saying. And then do 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 load, I'll change my brain lift. So for me, how I actualize it is I basically have, a Twitter of a custom timeline of content and authors, right? Or experts like on green science, right? I'm going to go read it and see if there's anything new in there, or I'm going to summarize the article and put it in the brain lift. And then if it causes me to have new insights, I'm going to, you know, I try to have one DOK three insight, you know, a day as my standard doesn't happen all the time, but that's what I'm trying for. You know, DOK four are 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 want to be an expert in, right? And AIs help you do this, you know, it's, you know, back in the nineties, I did the same thing, which is I would sit in Stanford's math CS library, you know, in 1989, you know, when I'm dropping out and I would read every paper written about configurators, right? Of how they tried, why they'd fail. You know, back then it took forever. You'd have to send, you know, to the, you'd have to, you'd have to, to Germany, Daimler 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 LLM, right? You can learn this stuff really quickly. Dude, how are we going to, how are we going to 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, like there's like, what's, what's the world look like when everyone's skinnier? 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 going to cause everybody to be dumb. And if we do it the wrong way, just to be clear, if you take chop chat box on unmanaged Chromebook and deploy them to kids in K through 12, those things are not learning. Chatbots are cheap bots. It's terrible. I understand why people want to ban AI and, and do all that stuff. Now there's also a good way to do it. There's in our way, you know, a very different way. And I believe we should be teaching all the kids good way because they can learn 10 times faster. We have a student who's going to be published in nature. She will be the first school student as a lead researcher published in nature. And that used to be at a HD from Stanford. Right. And we are pulling that capability down to a 17 year old girl. And there's 10 people at alpha right behind her who are like, Oh, she can do it. I can 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 the afternoon, you know, our, our, our, our sports Academy guys are like, we're going to be in every field. We're going to be the number one team in the country within a year of deciding that's going to be our sport. Wait, but how are you going to do that with sports? How are you going to make someone seven feet tall? You know what I mean? Like to be good at basketball. You have on all things, right? There's human limitations, right? I can't, even with my learn 10, 10, 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 18 year old daughter. Now, the difference is I have a knowledge graph, right? In my brain that I uploaded, you know, the last, you know, 50 plus years that allows me to take shortcuts. Cause I know the answer. I don't have to think through. So in a list of 10 things, she has to go through each one. I can read the 10 things and be like, oh, seven's the answer. So I can still get to it, but you have to load knowledge into your brain, even as your brain slows 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 going to win, you know, the NBA, but whatever the boundary of your human potential is, we can get you there. Got it. Right. We can get you to the boundary. And what the surprising part is your expectation of what your boundary is or what your kid's boundary is. It's wrong. That's where, when you talk about the excitement, the energy and why I get up every day to do this is I literally am surrounded by kids. We're just doing magical stuff. And you, we have to get it out to everybody, right? There is 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. And we haven't had an answer for a hundred years or a way 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. Well, where do I sign up? Yeah. Well, come on aboard. I'm going to show you, I'm going to go back to your audience, right? Of people who want to 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 going to 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 going to be like, is he going to get like the Pope knocking on your door and like, Hey Joe, what are you doing? No, we are working back to this, back to school. So there are Catholic schools that I'm working with who are like, how do we adopt two hour learning? Because it's, it's just so obvious that no matter what you want, you know, the Catholic church has a different afternoon they want, right? Everybody has their afternoon they want, but everybody gets, okay, well, why do we're wasting the kids time 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 cup full or what? Oh my gosh. Yeah, this is amazing. Uh, I loved it. I love the stories. I love the insights. I love what you're doing. Uh, 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. That's it. That's it. That's it. That's it. That's it. That's it.