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Feb 26, 2018 · 25m · top-founders

947 Is He The New King of Education? 80k Student Customers and $24m in Revenue Says "Yes!"

Ryan Carson · 13m spoken Nathan Latka · 8m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Top Entrepreneurs podcast, Treehouse founder and CEO Ryan Carson reveals how his online coding platform scaled to 80,000 active students and $24 million in ARR while raising only $13 million in venture funding. Carson shares in-depth metrics on SaaS unit economics, enterprise apprenticeship partnerships, churn reduction, and key lessons from his previous startup ventures.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 37.6% of the talking time here. How this is scored →

Nathan as informed peer 5.0 Guest teaching 3.6 Guest disagreement 1.6 Nathan pushing back 3.2
05100:0010:0020:000:49–3:49 · Nathan as informed peer 4/10 Treehouse Mission and Gamified Coding Education Nathan inquires about Treehouse's model, assuming employers seek certificates. Ryan gently clarifies and educates him that enterprise clients care about closing skills gaps and building talent pipelines rather than certificates.3:50–9:25 · Nathan as informed peer 5/10 Carson's Early Startups, Failures, and Exits Nathan probes into Ryan's previous venture sales, multiples, and negotiation tactics. Ryan transparently shares his learning experiences and mistakes during early M&A deals in a collaborative tone.9:25–13:30 · Nathan as informed peer 6/10 Team Structure, Capital Efficiency, and Competitors Nathan digs into SaaS metrics, capital efficiency, churn handling, and unit economics. Ryan explains his focus on gross profit LTV and the unpausing model.13:30–19:33 · Nathan as informed peer 6/10 HostGator Website Hosting Sponsorship Break Nathan presses for specific CAC and LTV figures, but Ryan refuses to disclose them. Nathan demonstrates SaaS formula knowledge, breaking down payback periods and LTV-to-CAC mathematical implications.19:34–23:55 · Nathan as informed peer 4/10 Apprenticeships, Retention Moats, and Edtech Dynamics Ryan details Treehouse's apprenticeship model and long-term moat against bootcamp closures. Nathan pitches a viral PR stunt before wrapping up with the Famous Five questions.0:49–3:49 · Guest teaching 5/10 Treehouse Mission and Gamified Coding Education Nathan inquires about Treehouse's model, assuming employers seek certificates. Ryan gently clarifies and educates him that enterprise clients care about closing skills gaps and building talent pipelines rather than certificates.3:50–9:25 · Guest teaching 2/10 Carson's Early Startups, Failures, and Exits Nathan probes into Ryan's previous venture sales, multiples, and negotiation tactics. Ryan transparently shares his learning experiences and mistakes during early M&A deals in a collaborative tone.9:25–13:30 · Guest teaching 4/10 Team Structure, Capital Efficiency, and Competitors Nathan digs into SaaS metrics, capital efficiency, churn handling, and unit economics. Ryan explains his focus on gross profit LTV and the unpausing model.13:30–19:33 · Guest teaching 4/10 HostGator Website Hosting Sponsorship Break Nathan presses for specific CAC and LTV figures, but Ryan refuses to disclose them. Nathan demonstrates SaaS formula knowledge, breaking down payback periods and LTV-to-CAC mathematical implications.19:34–23:55 · Guest teaching 3/10 Apprenticeships, Retention Moats, and Edtech Dynamics Ryan details Treehouse's apprenticeship model and long-term moat against bootcamp closures. Nathan pitches a viral PR stunt before wrapping up with the Famous Five questions.0:49–3:49 · Guest disagreement 2/10 Treehouse Mission and Gamified Coding Education Nathan inquires about Treehouse's model, assuming employers seek certificates. Ryan gently clarifies and educates him that enterprise clients care about closing skills gaps and building talent pipelines rather than certificates.3:50–9:25 · Guest disagreement 1/10 Carson's Early Startups, Failures, and Exits Nathan probes into Ryan's previous venture sales, multiples, and negotiation tactics. Ryan transparently shares his learning experiences and mistakes during early M&A deals in a collaborative tone.9:25–13:30 · Guest disagreement 2/10 Team Structure, Capital Efficiency, and Competitors Nathan digs into SaaS metrics, capital efficiency, churn handling, and unit economics. Ryan explains his focus on gross profit LTV and the unpausing model.13:30–19:33 · Guest disagreement 2/10 HostGator Website Hosting Sponsorship Break Nathan presses for specific CAC and LTV figures, but Ryan refuses to disclose them. Nathan demonstrates SaaS formula knowledge, breaking down payback periods and LTV-to-CAC mathematical implications.19:34–23:55 · Guest disagreement 1/10 Apprenticeships, Retention Moats, and Edtech Dynamics Ryan details Treehouse's apprenticeship model and long-term moat against bootcamp closures. Nathan pitches a viral PR stunt before wrapping up with the Famous Five questions.0:49–3:49 · Nathan pushing back 2/10 Treehouse Mission and Gamified Coding Education Nathan inquires about Treehouse's model, assuming employers seek certificates. Ryan gently clarifies and educates him that enterprise clients care about closing skills gaps and building talent pipelines rather than certificates.3:50–9:25 · Nathan pushing back 3/10 Carson's Early Startups, Failures, and Exits Nathan probes into Ryan's previous venture sales, multiples, and negotiation tactics. Ryan transparently shares his learning experiences and mistakes during early M&A deals in a collaborative tone.9:25–13:30 · Nathan pushing back 4/10 Team Structure, Capital Efficiency, and Competitors Nathan digs into SaaS metrics, capital efficiency, churn handling, and unit economics. Ryan explains his focus on gross profit LTV and the unpausing model.13:30–19:33 · Nathan pushing back 5/10 HostGator Website Hosting Sponsorship Break Nathan presses for specific CAC and LTV figures, but Ryan refuses to disclose them. Nathan demonstrates SaaS formula knowledge, breaking down payback periods and LTV-to-CAC mathematical implications.19:34–23:55 · Nathan pushing back 2/10 Apprenticeships, Retention Moats, and Edtech Dynamics Ryan details Treehouse's apprenticeship model and long-term moat against bootcamp closures. Nathan pitches a viral PR stunt before wrapping up with the Famous Five questions.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 58.9% · guest 41.1%0:00 · Nathan 58.9% · guest 41.1%3:00 · Nathan 17.6% · guest 82.4%3:00 · Nathan 17.6% · guest 82.4%6:00 · Nathan 19.7% · guest 80.3%6:00 · Nathan 19.7% · guest 80.3%9:00 · Nathan 39.8% · guest 60.2%9:00 · Nathan 39.8% · guest 60.2%12:00 · Nathan 52.4% · guest 47.6%12:00 · Nathan 52.4% · guest 47.6%15:00 · Nathan 33.4% · guest 66.6%15:00 · Nathan 33.4% · guest 66.6%18:00 · Nathan 28.4% · guest 71.6%18:00 · Nathan 28.4% · guest 71.6%21:00 · Nathan 36.2% · guest 63.8%21:00 · Nathan 36.2% · guest 63.8%24:00 · Nathan 64.9% · guest 35.1%24:00 · Nathan 64.9% · guest 35.1%
Sharpest disagreement ▶ 16:14 Ryan refuses to share CAC and LTV figures

Ryan directly pushes back against Nathan's persistent probing on proprietary unit economics, stating firmly that he will not disclose exact numbers.

 Hardest push from Nathan ▶ 18:51 Nathan reverse-engineers Treehouse unit economics

After Ryan refuses to give exact figures, Nathan refuses to let the topic drop and explicitly calculates the implicit CAC and payback multiples.

 Biggest teaching moment ▶ 2:39 Ryan explains enterprise hiring vs certificates

Ryan corrects Nathan's assumption about consumer certificate value, explaining how Fortune 100 companies actually utilize Treehouse to build pipelines and bridge skills gaps.

 Nathan holds their own ▶ 15:22 Nathan breaks down gross margin adjusted LTV formula

Nathan walks through the technical SaaS math for calculating proper LTV adjusted for gross margins and churn duration.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Treehouse Mission and Gamified Coding Education 4522 Nathan inquires about Treehouse's model, assuming employers seek certificates. Ryan gently clarifies and educates him that enterprise clients care about closing skills gaps and building talent pipelines rather than certificates.
Carson's Early Startups, Failures, and Exits 5213 Nathan probes into Ryan's previous venture sales, multiples, and negotiation tactics. Ryan transparently shares his learning experiences and mistakes during early M&A deals in a collaborative tone.
Team Structure, Capital Efficiency, and Competitors 6424 Nathan digs into SaaS metrics, capital efficiency, churn handling, and unit economics. Ryan explains his focus on gross profit LTV and the unpausing model.
HostGator Website Hosting Sponsorship Break 6425 Nathan presses for specific CAC and LTV figures, but Ryan refuses to disclose them. Nathan demonstrates SaaS formula knowledge, breaking down payback periods and LTV-to-CAC mathematical implications.
Apprenticeships, Retention Moats, and Edtech Dynamics 4312 Ryan details Treehouse's apprenticeship model and long-term moat against bootcamp closures. Nathan pitches a viral PR stunt before wrapping up with the Famous Five questions.

Statements from this episode (15)

Assertion Not checkable as stated
Carson: Treehouse takes adults from zero to job-ready in about six months
“We teach adults how to go from zero to job ready, a hundred percent online in about six months.”
Ryan Carson Feb 26, 2018 ▶ 1:11
Disclosure
Carson details Treehouse subscription tiers at $25 and $199 per month
“So it starts at 25 bucks a month, a free seven day trial. If you love it, then upgrade to paid, and then we have a more expensive model if you are really wanting to push hard and go deeper, and that's called our tech degree, and that's a 199 bucks a month, and…”
Ryan Carson Feb 26, 2018 ▶ 2:05
Assertion Not checkable as stated
Treehouse sells to over 600 businesses including Fortune 100 clients
“So we sell to over 600 businesses have huge clients that are fortune 100.”
Ryan Carson Feb 26, 2018 ▶ 2:41
Insight
Carson: Enterprise buyers do not care about Treehouse certificates, only skills gaps
“And what's interesting is they don't care about any treehouse certificates or points or anything. They just want to close skills gaps.”
Ryan Carson Feb 26, 2018 ▶ 2:46
Assertion Not checkable as stated
Treehouse bootstrapped to ramen profitability in three weeks on under $100K
“So we bootstrapped it. So the idea was let's literally use cashflow from the events business. And we boot that business up with, I think it's like 50 to a hundred grand. We were ramen profitable within three, I think three weeks.”
Ryan Carson Feb 26, 2018 ▶ 7:10
Assertion Not checkable as stated
Carson sold his conference business at a 0.93x revenue multiple
“Yeah, we're only gonna, you're gonna get a .93 multiple in the revenue now, not a one because you have no choice. And it was like, you're right.”
Ryan Carson Feb 26, 2018 ▶ 7:57
Disclosure
Carson: Treehouse employs about 80 full-time people
“We're about 80 full-time people.”
Ryan Carson Feb 26, 2018 ▶ 9:37
Disclosure
Carson: Treehouse has raised only $13 million
“We've only raised thirteen million.”
Ryan Carson Feb 26, 2018 ▶ 9:59
Assertion Supported
Carson: Treehouse competitors have raised 10x more capital
“You know, our competitors have raised 10 X the amount we have.”
Ryan Carson Feb 26, 2018 ▶ 10:04
Assertion Not checkable as stated
Treehouse has over 80,000 enrolled students
“We have over 80,000 enrolled students right now.”
Ryan Carson Feb 26, 2018 ▶ 11:38
Insight
Carson: Software engineers must relearn everything every 18 months
“And so coding, coding, unfortunately or fortunately, you have to relearn everything, 18 months.”
Ryan Carson Feb 26, 2018 ▶ 12:03
Insight
Carson: Standard CAC to LTV is a vanity metric without gross profit
“We think people who focus on CAC to LTV is, it can be a vanity metric period because you're not actually focusing on, on gross profit LTV. So actually how much, Profit are you driving the LTV and what is the fully loaded CAC, which means you got to include you…”
Ryan Carson Feb 26, 2018 ▶ 15:01
Assertion Not checkable as stated
Treehouse achieves an LTV to CAC ratio north of 3:1
“Thankfully we're north of that.”
Ryan Carson Feb 26, 2018 ▶ 18:06
Assertion Supported
Carson: Iron Yard and Dev Bootcamp Failed While Flatiron Was Acquired
“So we just saw so iron yard went out of business. Deb bootcamp went out of business. Flatiron just got acquired.”
Ryan Carson Feb 26, 2018 ▶ 19:45
Assertion Partly supported
Carson claims the average developer stays at a startup for 10.8 months
“You know, the average stay for a developer at a startup is 10.8 months.”
Ryan Carson Feb 26, 2018 ▶ 22:05
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