How Codecademy Moved from Bankruptcy to Building a $50m+ Revenue Business.

Zach Sims is the co-founder and CEO of Codecademy; a leading platform for coding education, with over 50 million learners to date.

Zach Sims
How He Started

With software eating the world and very few ways to learn to create it, to Sims it was a very huge opportunity, so by 2011, he built Codecademy in YC, having gotten started, they posted it to Hacker News as a Hail Mary before the Demo Day and that got them about 200,000 signups in just 3 days.

They were everywhere, the press loved it, they were on every 30 Under 30 list, won awards, and more. As a founder, all of this felt great to them until they had to raise to stay alive.

All the press clippings didn’t add up to enough $$ money to demonstrate that they’d built something people would pay for.

With a few months of cash left in 2015, they scrambled to build Codecademy Pro, their first paid product, with new courses and new features for learners.

Going from the center of attention to the brink of bankruptcy was a rude awakening for them.

They struggled, but hit $1m ARR in 6 months to raise a successful Series C to keep the company alive. 

Learning a Big Lesson

On the way, they learned an important lesson: hype doesn’t pay the bills.

From then on, they pledged to do things differently this time they focused not on vanity metrics, but on real metrics.

They stopped tracking press mentions and started tracking how quickly they could get to cash flow positive. It felt impossible, but they made it happen 18 months later.

For the past 5 years, they’ve built Codecademy to be a generational and sustainable company.

They’ve built a $50m+ revenue business, controlling their own destiny, all while avoiding the hype they’d built the first four years of the business.

This time, they raised money not on hype, but on substance, with a business growing nearly 2x/year scale, with a growing market and a product that helps millions of learners access economic opportunities.

But they know the truth: fundraising doesn’t mean much. Here’s what does:
In Sims Word:

“Building a sustainable company: raising money doesn’t make you sustainable.

Understanding how to make more than you spend does.

Ignoring the hype: I find this one hard myself. Every day, one of your competitors is in the news or goes viral on Twitter.

Don’t pay attention. Your Twitter followers don’t pay the bills.

If someone really wants something you’ve built, they’ll pay you for it”.

According to Sims,

“Most startups die of self-inflicted wounds, not because of their competitors. Keep your head down and focus less on competitors and more on product market fit. 

Hire the right people and remember that the user is your customer, and your investors and journalists aren’t.

We’ve learned these lessons @Codecademy, but have tons more to learn. One of the hardest things in startups is to be persistent, but it’s easier when what you’re building makes the lives of tens of millions of learners better”.

Now, Sims’ product affects millions of people.

Codecademy helps equip people with the skills they need to find a job in the 21st century, and it’s helping bridge the employment and education gap that Sims wanted to fix all along.

Read Also: How I Started Off as a Graphics Designer to Getting Endorsed by the UK Government

Learn more about Codecademy on their website.

Follow on Twitter: @Codecademy

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