On Monday, WeWork co-founder Adam Neumann announced in a blog post that his company had acquired the Flatiron School, a coding bootcamp and education platform that offers both remote and in-person courses.

The deal was private, and financial details were not disclosed.

The $20 bn communal workspace startup that has begun to defy definition plans to put their new acquisition to good use.

Both employees and WeWork members will now have access to Flatiron’s curriculum. The company also plans to enlarge Flatiron’s in-person course offerings at their numerous locations around the world.

“WeWork’s global community will be able to meet Flatiron graduates and explore new opportunities,” Neumann wrote. “By bringing our communities together we are creating a new way for even more people to make a life, not just a living.”

Wait, what?

The news comes, by and large, from out of left field. For one, the Flatiron School just settled for $375,000 with New York State for misrepresenting their graduates’ job success and operating without a license.

Flatiron’s reason for settling with the State of New York may be the tip of a regulatory iceberg. The coding boot camp was considered to have the some of the highest integrity among its peers. Cooked books and false reporting is practically a pandemic among boot camp advertising teams.

But on a bigger scale, nobody is currently translating their eLearning initiatives into in-person programs. Actually, the opposite is happening.

For-profit college campuses across the country are closing. MOOC providers and their successful for-profit analogs are growing like crazy.

Besides industry trends, the Flatiron School used to operate on a tuition model. In-person students pay an astonishing $15,000 for 15 weeks. Online students pay an even more astonishing $1,500 per month, which tops off at $12,000. Remote students have the option to complete the course faster and pay less.

The Flatiron School does not publish their enrollment numbers, but their 2017 reports (for both in-person and online courses) looked at fewer than 700 students.

Switching to WeWork, therefore, will include pivoting to a new business model and scaling by several powers of ten.

On top of all of this, there has been a lot of doubt for years about both the integrity of coding boot camps and their efficacy. Some have gone so far as to describe boot camps as “scams” with “a reputation among hiring managers for churning out developers who have the professional maturity of a teenager at a One Direction concert.”

Coding boot camps also don’t seem to be the smartest investment at the moment. Several have closed recently, such as Dev Bootcamp, previously owned by Kaplan Inc. along with The Iron Yard, which had been a distressed asset of the notorious Twinky flipper Apollo Global Management.

Again, the deal was private. We have a lot of questions.

Big money

WeWork is already massive. Their total office space around the world comprises over 10 million square feet. The company’s 150,000+ members can access social events, workshops, an annual summer retreat, an internal social network, and even get discounts on health care.

The company has recently launched WeLive, which offers furnished apartments for monthly rent, and Rise, a fitness space collective.

At the WeWork Services Store, members can use products and services from companies like Adobe, UpWork, and Lyft from their WeWork account.

Fast Company compared their latest acquisition to LinkedIn’s purchase of Lynda in 2015. “The idea was to make LinkedIn the one-stop shop for networking, job listings, and skilling up,” the authors write.

“[W]ith its acquisition of Flatiron School, WeWork hopes to become a physical manifestation of the same ideals: a physical space where people can work, live, snack, network, and learn.”

That seems like solid rationale, but at the same time, WeWork faces a lot of challenges in making that vision a reality.

The post WeWork’s Acquisition of the Flatiron School Makes No Sense appeared first on eLearningInside News.

For years, coding boot camps have drawn ire regarding their success rates. Many have inflated their job placement numbers or cooked their books using other recipes to misrepresent their success.

Earlier this month, the Flatiron School, a Manhattan coding boot camp, reached a settlement deal with the state Attorney General’s office.

Attorney General Eric Shcneiderman announced that the institution had agreed to pay $375,000 to the state for “improperly” marketing and advertising their job success rate and operating without a license.

As Edsurge and others reported, the news is ironic. The Flatiron School had, before the settlement, prided themselves in their accountability and unbiased reporting of their graduates’ success. They were the first coding boot camp to release a credible report back in 2014. In 2015, they collaborated with “Coder-in-Chief” former President Barack Obama to agree on a metric to assess their efficacy.

“With our 2017 online and NYC reports,” the company announced before the settlement, “we continue to be the only school to fully abide by these standards for transparency.”

Based on this history, it seems strange that New York State would target the Flatiron School. But here’s the thing that nobody is talking about: they also operated for years without a license.

Rules and regulations

“[F]or-profit coding schools must comply with state requirements, including obtaining a license before operating,” said Attorney General Schneiderman. For-profit education licenses in New York are distributed by the State Education Department (SED).

According to Shneiderman’s press release, “In order to obtain a SED license, a non-degree granting career school must meet a number of criteria, including using an approved curriculum and employing a licensed director and teachers. The school must also demonstrate financial viability.”

New York residents, at least, can rest assured that their elected officials are keeping half an eye on the online for-profit.

Coding boot camps and the state of the union

But there’s little indication that the same could be said for other states.

Regulation of the for-profit education industry has traditionally been carried out at the state level. The 10^th Amendment states that “powers not delegated to the United States by the Constitution … are reserved to the States.” The federal government did begin to regulate somewhat in the ‘60s under President Johnson, but compared to other industries, measures are significantly light.

The for-profit education industry has undergone turbulence lately with a downturn in traditional colleges like the University of Phoenix and the explosion of online non-accredited degree providers.

Some sources expect the global eLearning market to grow at a CAGR of 17.81% between 2017-2020 into a mutli-trillion dollar industry. It’s true, coding boot camps only make up a portion of the market, but many other entities provide a similar product.

Online educators like Udacity and Coursera are both valued at around $1 bn. Many MOOC providers and their analogues are also for-profit entities and need to obtain a license.

Despite this success in the industry, regulation is still left up to states.

Policy trends

The Obama administration made several efforts to protect students from dubious for-profit institutions. The U.S. Department of Education recently imposed sanctions on two chains—Corinthian Colleges and ITT Tech—both of which folded soon after.

But the former administration never switched their focus to entities like coding boot camps or other types of online educators.

The settlement with the Flatiron School marks the first stab in the attempt to oversee the operations of the multitudes of for-profit educators that have sprung up in recent years.

In terms of regulation on a national level, it isn’t hard to see which way the wind is blowing. The Trump administration has made their commitment to deregulation clear time and time again.

Education Secretary Betsy Devos has begun work to dismantle many Obama-era regulations. The examples are numerous. For one, Devos appointed Julian Schmoke Jr. to lead the watchdog team that checks for evidence of fraud in higher education. Schmoke is an industry insider and former dean of DeVry University, whose parent company reached a $100 m settlement with the government over allegations that the company overstated their own job success rates.

If regulation of the industry is left up to the states, then online for-profits should have little difficulty getting around them. They will be able to found their businesses in the state with the most lax regulations and reach anyone around the world.

Until the federal government steps in, nobody will be able to ensure education quality or successfully implement certain standards.

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