Coding Startup Treehouse Trims Staff to ‘Cross the Chasm to Profitability’


Coding Startup Treehouse Trims Staff to ‘Cross the Chasm to Profitability’

By Tony Wan     Aug 22, 2016

Coding Startup Treehouse Trims Staff to ‘Cross the Chasm to Profitability’

Just as plants are pruned to support longer, healthier lives, Treehouse, an online coding education startup, is trimming down.

Today, the Portland, Ore.-based company laid off 22 of its 104 employees, amounting to 21 percent of its team.

The company offers online courses in business, design and web and mobile programming. Subscriptions for individuals cost $25 per month or $250 per year. More than 600,000 students have enrolled over time, according to Treehouse Founder and Chief Executive Officer, Ryan Carson. Hundreds of business organizations also subscribe to Treehouse to help train their employees, he adds.

The company has raised more than $12 million in venture capital. It last raised $7 million in a Series B round led by Kaplan Ventures. Other Treehouse investors include Social Capital and Greylock Partners.

“Every venture-funded company has to cross the chasm to profitability, and we decided the time was now,” Carson wrote in an email to EdSurge. After today’s layoff, he expects the company to be “very close to profitable [as year-over-year] revenue growth for the last six years has been climbing.”

Also going away are the company’s enviable working hours. Carson says he’s rolling back the company’s 32-hour work week, where he and his employees took Fridays off.

“I’ve really tried to engineer a sustainable life,” he told The Washington Post in a story about Treehouse’ work schedule. Unfortunately, it seems the company struggled to sustain itself on those hours.

Founded in 2011, Treehouse was among the early wave of startups that offered online, browser-based programming lessons. A couple of its competitors founded that same year have enjoyed varying degrees of success. Codecademy continues down the venture capital path, having successfully raised $30 million in July 2016. Code School was acquired by Pluralsight for $36 million in January 2015. Another coding startup, LearnStreet, started in 2012 and shut down two years later.

“With more competition and an ambitious vision, we have decided to make big changes that will allow us to deliver on our vision,” Carson says. “We are building a long-term school to serve our students and business partners.”

This year the company launched its Techdegree program for $199 a month, aiming to help students land entry-level programming jobs after six to 12 months.

“I care about every single one of our people so this has been a very very tough decision,” Carson wrote on his Medium blog. He assures his users there will be no changes to Treehouse’s offerings.

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