Treehouse

Treehouse was an online coding school founded in 2011 by Ryan Carson and Gillian Carson, originally launched as Think Vitamin Membership in 2010.⁶ Treehouse failed in 2023 after 12 years of operation, losing $30 million in raised capital due to competition from free resources.³

Timeline

Money raised

Treehouse raised $600k from angel investors in 2011.⁶ Treehouse raised $4.75 million in Series A funding from Social+Capital and Greylock Discovery Fund in 2012.⁶ Treehouse raised $7 million in Series B funding from Social+Capital and Kaplan in 2013.⁶ According to IdeaProof, Treehouse lost $30 million in raised capital.³

Investors named in the sources: Kevin Rose⁶, Reid Hoffman⁶, David Sze⁶, Josh Elman⁶, Chamath Palihapitiya⁶, Mark Suster⁶, Social+Capital⁶, Greylock Discovery Fund⁶, Kaplan⁶.

What happened

Treehouse was originally named Think Vitamin Membership and was founded in the UK by Ryan Carson and Gillian Carson in 2010.⁶ Think Vitamin Membership offered online training videos to learn web design and web development.⁶ The Ruby on Rails app was built by contractor Joel Moss and designed by Carsonified employee Mike Kus.⁶ The company was bootstrapped with cashflow from Carsonified and a small business loan.⁶ The first two teachers hired were Nick Pettit as a Web Design Teacher and Jim Hoskins as a Web Development Teacher.⁶

A small office was opened in Orlando, FL for filming and editing.⁶ Membership pricing was Diamond $99/mo, Gold $49/mo, and Silver $25/mo.⁶ In 2011, Think Vitamin Membership was rebranded to Treehouse at teamtreehouse.com.⁶ Treehouse raised $600k from angel investors including Kevin Rose, Reid Hoffman, David Sze, Josh Elman, Chamath Palihapitiya, and Mark Suster.⁶ Alan Johnson was hired as lead developer and later promoted to Co-Founder.⁶

In 2012, Treehouse raised $4.75 million from Social+Capital and Greylock Discovery Fund.⁶ Ryan and Gillian Carson moved to Portland, Oregon and opened a new office.⁶ The team was scaled to 34 full-time people.⁶ Treehouse flattened its org structure and moved managers into individual contributor roles.⁶ In 2014-2015, Treehouse became known for working a 4-day work week.⁶

Treehouse reinstated management layers and scaled to over 100 full-time employees.⁶ Alan Johnson and Ryan Carson sold 10% of the company to investors in a secondary sale.⁶ Alan Johnson departed the company.⁶ In 2016, Treehouse revenue began to decline.⁶ Ryan Carson and the Board of Directors decided to end the 4-day week policy to attempt to create more content and increase revenue.⁶

The team was reduced by 35%.⁶ In 2017-2018, revenue continued to decline and Treehouse launched a B2B business to try to increase revenue.⁶ In 2019, a layoff was actioned to control costs and give the company more runway.⁶ The apprenticeship program TalentPath was launched in 2019.⁶ In 2020, TalentPath was shut down due to the COVID-19 pandemic and revenue continued to decline.⁶

In 2021, an acquisition by a large EdTech company did not complete.⁶ Ryan Carson moved his family to Connecticut after the pandemic.⁶ The board made the difficult decision to reduce the team from 45 to 18 people, retaining 10 full-time employees and eight contractors.⁶ After the layoff, Treehouse received an unsolicited offer to be acquired by Xenon Partners.⁶ The sale of the company was completed in December 2021.⁶

According to IdeaProof, Treehouse failed in 2023 after 12 years of operation, losing $30 million in raised capital due to competition from free resources.³ Ryan Carson stated that he launched Treehouse because he deeply believed in democratizing access to computer science education so people could change their lives.⁶ Ryan Carson stated that he learned hard lessons about the importance of focusing on profitability and maintaining strategic clarity, and that he changed the company's priorities too many times and takes full responsibility for the outcome.⁶

Where the founders are now

Ryan Carson founded Treehouse in 2011 and was the CEO until it was acquired in 2021.⁶ Ryan Carson stated that he is committed to applying the lessons learned with humility, transparency, and a steadfast dedication to creating value for all stakeholders.⁶

Lessons, as others put them

"I learned hard lessons about the importance of focusing on profitability and maintaining strategic clarity. I changed the company's priorities too many times, and I take full responsibility for the outcome."Ryan Carson⁶

"Cash flow management and profitability are key to building a resilient organization."Ryan Carson⁶

"Trust is the foundation of any successful venture—trust with investors, employees, and customers."Ryan Carson⁶

Sources

3. Test Your Idea in 120s — Free AI Startup Validator | IdeaProof, IdeaProof.io, Nov 30, 20
6. Ryan Carson and the Complete History of Treehouse - Ryan Carson, ryancarson.com, Mar 4, 202

How this case file was put together

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