Index Ventures

5 Reasons Why I Fell in Love with Codecademy

June 19 2012

I have worked in and around technology since 1993 with some of the world’s most amazing developers in Boston, Seattle and Tallinn. But I am a literature major who never learnt to code beyond some very basic BASIC on my BBC Micro in 1983.

So what could possibly have compelled us to try to persuade Zach and Ryan to let Index lead the latest round of investment in Codecademy?

1. Three Critical Languages
   
   If we learn languages to help us better understand and engage with the world around us, I believe that there are three critical languages which every ambitious 21st century parent and educator will want their kids to learn: English, Mandarin and code.

   Codecademy offers anyone an incredibly easy and free way to learn how to code. The fact that since August 2011, millions of people from over 100 countries are already learning to code shows incredible pent up demand.

   Every society is suffering from a chronic shortage of software developers, so learning to code creates economic opportunity. Software developers are also typically paid nearly 3x the average wage. Some young entrepreneurs have followed the “Hacker Way” all the way to amazing riches and rewards but learning simple elements of code is not just about making money its about engaging with the modern world. This is something I want for my kids – in fact I wanted this for myself.

2. Learning by Doing
   
   In sector after sector we have watched the transition from analog to digital radically alter the costs of production and distribution, changing the shape and economics of industries.

   Clearly education is on the Internet’s roadmap for disruption. Education is a massive industry but what really excites me about Codecademy is that it takes the consumption of education beyond the point of just being digital and makes it incredibly interactive and socially engaging.

   There is no question you can learn by watching, listening or reading but there is nothing like learning by doing. Within seconds of using Codecademy you get instant feedback and have your accomplishments available to measure your progress and share with your friends.

3. Profound International DNA
   
   We love international businesses at Index. While 10 years ago we still very much lived with an American web, nowadays the very best companies understand in their bones what they clearly are seeing in their business – the web is now fully international and you ignore the rest of the world at your peril.

   This was a lesson I really internalized at Skype. Obviously we had an amazingly international product, but central to our DNA was an amazingly international culture – I think there were nearly 30 nationalities among the first 50 employees.

   This diversity is an amazing strength if you are trying to build a global business. I knew that Codecademy service was being used in 100+ countries but within 5 minutes of talking to Zach I heard about him flying to Jordan to make one of his first hires. I knew international DNA ran deep.

4. Amazing network effects model
   
   The number of students already learning how to code on Codecademy is fantastic but the fact that there are already over 20,000 teachers creating courses is amazing.

   Course creation is little more than a 3 month old phenomena for Codecademy, but the scale that it points to is exhilarating. There are already high schools, colleges, cities, publishers and even companies are using the platform to make courses, to teach students, citizens and employees. You can call it crowdsourcing, user-generated content, wikis – whatever you like, it adds up to an incredibly efficient model.

   In a world where the cost of entry is low and deep-pockets can buy distribution, today’s very best businesses have the potential to go beyond great product innovations – they have the ability to create network effects with increasing value for all participants. These themes of pervasiveness and community engagement are lessons we have tried to deeply absorb at Index, starting with our hands-on exposure to the browser wars in the 90s and then developed with our investments in open source, marketplaces and now Stack Exchanges.

   We have seen this theme mutating and taking different shapes but when we see it, we love it and the entire partnership gets excited and behind it.

5. Young people are making the future
   
   This is obvious and has always been the case – in fact it’s been true for hundreds of years in the arts, sciences, sport and sometimes even in politics. Now it is true in business and I suspect will become increasingly so.

   Three of the last four founders I have invested in are under 23. They have skills I don’t have, they have insights I don’t have but not because they are young and I am old, it is just because they are incredibly smart.

   Zach & Ryan are incredibly smart – anyone who has met them can tell you that, in fact all the people at Codecademy are incredibly smart. But there aren’t even 20 of them yet, so what’s the big deal?

   Well, the big deal is that if they are able to make it easier for everyone who wants to learn & teach code to do so in the next 10 years, then young people are just going to be able to consume the digital world at scale, they will be able to shape it – and that will really make for an interesting future :)