How Thomas Bachem Saved CODE University from Collapse

About this episode

"That was really a wild ride for us." This is how CODE founder Thomas Bachem describes the past year, during which he had to save his university from insolvency. A story about financial turbulence, difficult decisions, and the fight for survival of an innovative educational institution.

CODE University: An Ambitious Educational Experiment

The CODE University of Applied Sciences in Berlin is anything but an ordinary university. It offers English-language bachelor's programs in Product Management, Interaction Design, and Software Engineering, financing itself through tuition fees and corporate partnerships. Particularly innovative is the Income Share Agreements model: students can study for free and later pay back a percentage of their salary to the university.

However, this very innovative concept posed significant financial challenges for CODE. The question Bachem repeatedly had to ask himself: Is a university even a viable business case?

The Fight for Survival

CODE's financing was a balancing act for a long time. The mix of tuition fees, corporate partnerships, and Income Share Agreements led to complex cash flow problems. Bachem had to learn that running an educational institution means simultaneously maintaining the "service" for students while making the numbers work.

The situation became so dramatic that it even landed Bachem in the hospital. The stress and burden of preventing an entire institution from collapsing took its toll. "There were hopeless situations," Bachem admits, but he found ways to deal with them.

Rescue Through Strong Partners

The turning point came through an impressive group of supporters: the so-called Trustees, consisting of trivago founder Rolf Schrömgens, Flix founder Daniel Krauss, newstore founder Stephan Schambach, Project-A founder Florian Heinemann, and Dr. Becker founder Petra Becker. These experienced entrepreneurs secured CODE's financing, enabling the university's survival.

For this rescue, however, Bachem had to pay a high price: he gave up a large portion of his company shares. A painful but necessary decision to keep CODE's vision alive.

The Co-CEO Model as a Solution

One of the strategic decisions Bachem made was introducing a Co-CEO model. The division of responsibilities between "Foreign Minister" and "Interior Minister" proved sensible: while one CEO focuses on external relationships, fundraising, and partnerships, the other handles internal processes, operations, and daily challenges.

The COO's role is often underestimated, as Bachem emphasizes. Especially in complex organizations like a university, it's crucial to have someone who can fully concentrate on operational processes.

Lessons Learned: Setting Priorities in Crisis

During the restructuring phase, Bachem had to make difficult decisions: Which departments are truly essential at a university, and where can you "cut back" to save costs? These questions forced him to fundamentally rethink CODE's business model.

It became clear that an educational institution brings special challenges. Unlike a tech startup, you can't simply cut features – the quality of education must not suffer, even when finances are tight.

The Path Forward

Now CODE seems to have overcome the crisis both financially and organizationally. Bachem has defined clear milestones for the coming years and established a functioning system for onboarding and meaningful discourse within the organization.

The story of CODE University shows that innovative educational models offer great opportunities but also carry considerable risks. Thomas Bachem's "wild ride" is a case study on how to keep a vision alive even in existential crises – and what price you have to pay for it.