2025-07-30 Gary Sheng, Santiago Montoya & Blas Moros - Alpha Schools Assessment & Strategic Discussion

Participants: Gary Sheng, Santiago Montoya, Blas Moros Date: July 30, 2025 Context: Santiago and Blas seeking Gary's honest assessment of Alpha Schools/Joe Liemandt before considering involvement; Gary providing unfiltered insights about organizational dysfunction while discussing his transition to manufacturing/reindustrialization work with Dr. Lael Alexander Type: Video call (with brief in-person interaction with Abel, drone photographer, at end)

Executive Summary

Gary provided Santiago and Blas with an unfiltered, comprehensive critique of Alpha Schools and Joe Liemandt's leadership, describing the organization as potentially "the next FTX" due to systemic dysfunction, lack of real technical leadership, and problematic management culture. The conversation revealed Gary's strategic transition from Alpha Schools to manufacturing/reindustrialization work with Dr. Lael Alexander in Tulsa, while exploring potential collaborations with Santiago's investment philosophy and Blas's operational expertise from working with legendary operator Peter Coffman.

Key Themes

Alpha Schools Organizational Dysfunction

Gary's Stark Assessment: Gary positioned Alpha Schools as fundamentally flawed despite surface-level appeal:

"I just don't have it in me to like a lot of my, a lot of my, my best skill sets is evangelism, right? Like of many different kinds and just being a supportive person for something I believe in. And I just, it just not in me to, to, to evangelize something that, that I, that I think is like the next FTX."

Joe Liemandt's Management Style: Gary described Joe as a skilled salesperson lacking delegation abilities:

"Joe is really good at those conversations. Joe is really good at those, like, like sell you on something conversation... Joe is a PE guy, or at least he's someone that has hired PE guys, uh, and just like, you know, cashed out on those great hires over the course of, you know, 25 years, 30 years."

Structural Problems: Gary outlined systemic issues:

"He has like, he essentially has like several hundred direct reports. That's like my, that's essentially what it is... he'll hire like people randomly based on impulse or like, um, and they'll do have very conflicting roles or overlapping and there's, you know, ultimately everyone knows that's been around for any amount of time. That's like, there's one decision maker, um, who also doesn't like to get in the weeds of things."

Technical Leadership Vacuum: Gary highlighted the absence of real CTO function:

"There's no equivalent of a CTO in the organization, even though it's supposed to be like a, uh, a tech, like advanced tech K through 12... he has not been willing or hasn't found someone that he can delegate that pretty enormous responsibility to invent the future of education with software that's integrated into human systems."

Surveillance Culture and Trust Issues

Employee Monitoring: Gary revealed extensive surveillance requirements:

"You have to basically be willing to let, um, a piece of software surveil everything that you are doing. Right. And read, it'll read all your text messages. It'll, you know, everything... being judged because they're unable to design, um, team goals in a way where it's not just about being a hamster, the moving a mouse around, right. But actually results."

Recruiter Dysfunction: Gary shared concerning patterns:

"The recruiter is very, was very odd and basically lied about, um, either lied or just changed his mind. So super drastically about how much they liked my friends... this happens so many times in different circumstances with this organization."

Gary's Strategic Transition to Manufacturing

Partnership with Dr. Lael Alexander: Gary described his new focus:

"So we're by, we're by to do what to manufacture, um, multiple things, but I want my partner to focus his brain on modular housing as at least one of the things that we explore seriously... I'll basically be playing like a chief of staff type role."

Geographic Strategy: Gary outlined location considerations:

"So yeah, we're looking at Tulsa, um, I forget the name of the city in Mississippi, as well as, um, a small city in Alabama as like factory town locations."

Management Philosophy for Genius-Level Talent: Gary articulated his approach:

"I think right now where I'm at and well, even just like validating this intuition. So I think it's been an interesting realization that really smart people need management, like really smart people that should be in the CEO role, like in part because it wouldn't logically make sense to people, so, but like they need to be managed, but like by someone that has no ego about, like, they feel comfortable sharing their vulnerabilities and being seen."

Santiago's Manufacturing Connections

Rebuild Manufacturing: Santiago shared relevant portfolio company:

"So rebuild it's called rebuild manufacturing. They, their dream was like, let's bring manufacturing back to America. Um, so they went and bought a bunch of plants, um, and they are, um, they're like the Avengers of like lead manufacturing... And they did a bunch of manufacturing choices based reversing engineering, how to make the cheapest car possible."

Investment Alignment: Santiago expressed interest in supporting Gary's vision:

"Hey, Hey, Hey, Hey, Gary, quick, quick, quick question before I forget... what can I do to, or what can we do to help you with this new endeavor? Like what would be the most helpful thing?"

Blas Moros's Operational Background

Peter Coffman Connection: Santiago positioned Blas's unique experience:

"Peter Coffman was the guy who Charlie Munger claimed was the best operator in the world... Peter has all this kind of wisdom put together on like how the world works and stuff and how you run companies and how you run human systems."

Aerospace Manufacturing Experience: Blas described his background:

"I spent almost five years kind of like running off for an aerospace manufacturing, like privately held company in Glendale, California, was mainly kind of like chief of staff for the first two years... This empowered role of like, I think the difference between like a Peter and a Joe is like the org is actually set up to like receive feedback and be okay with that and like to punch holes in it."

Current AI Company: Blas outlined his recent work:

"The most recent one, sort of in the generative AI space, broadly kind of the problem we're trying to solve is all of these generative AI tools are still kind of like consumer focused and it hasn't really become a staple in consumers' lives... It's at a point now where it's like self-sustaining. Like it's without our salaries, like capital positive."

Educational Philosophy and Alternatives

Critique of Standardized Testing Paradigm: Gary challenged fundamental assumptions:

"It's worth it for you to think about whether this paradigm of, of drilling kids to get good standardized test scores was ever even like a worthy, like endeavor in the first place... China, you're not going to beat China at conform. I'm conforming to a standard. You're just not right."

Soul-Centered Education Vision: Gary articulated his educational philosophy:

"I think like any education that sort of, that, like, you know, if you're going to get personalized, go, go far enough, but, but that requires that just, it's so much harder, right. But that doesn't mean it's not worth worthwhile to try to do... this might be one of the only things that he [Elon] can't do, right. Which is like something that has soul as so fun, like just spiritual ontology, right, as so fundamental."

Alternative Schools: Gary recommended Acton Academy:

"In terms of like a soulful education system that has great results, even before integrating like an AI system, I've been informed of Acton Academy... it really is about the school leader, right? The school leader has to be like, for whatever reason, have been willing to not do a hedge fund job or whatever, whatever job, like, and like, it's very hard, right. To, to, to create, to create a human system."

Systems and Scaling Insights

Amazon's Team Stack System: Santiago recommended studying proven models:

"Working Backwards is the best book they have on their systems. And the way that they do the TableStack thing is by the smartest way... they're the best system to scale humans."

Tesla/SpaceX Approach: Santiago highlighted another model:

"Do you know anybody really high up at Tesla? ... they've allowed for some of this, like, gather amazing humans and then single thread them into the right problem. And it's like a very theory of constraints approach to stuff."

Austin Community and Networking

Walking Club Community: Gary described Austin's networking ecosystem:

"There's this guy that organizes a walking club every day and almost every day. And he's one of the top five to 10 real estate agents in Austin. But he's also just like the most, one of the most incredible community builders I've ever seen... even just today, there was like five people walking... the guy that was like creatively designed the world of Diablo was there. One of the guys that helped Mr. Beast grow rapidly early on, as well as Vans, like grew Vans, like from a legacy brand to like relevant again."

Geographic Advantages: Gary emphasized location importance:

"Where you live is, as Naval talks about, is just so freaking important, because it shapes the conversations that you have and the insights and the markets that you'll have the inkling to realize that you want to maybe explore."

Character Assessment and Spiritual Discernment

Courage and Honesty Requirements: Gary emphasized integrity in assessment:

"It's so interesting how a honest worldview has so much to do with courage, because if you, if you deny yourself the willingness to say, oh, this might be a 1D play, not 4D chess, but it might be 1D chess, right? But I think a lot of people that were hired that are pretty smart generally, they're generally very smart, but this is the first time they've worked with anyone that has a ton of money."

Spiritual Foundation: Gary connected spiritual grounding to practical discernment:

"I think why it's not that hard for me to be honest is because I just, first of all, I feel like the one person that I really need to be honest with would laugh at me and just be like, come on, Gary, I taught, I created you better, I created you better."

Strategic Insights

Organizational Dysfunction Patterns

• Charismatic leaders can mask structural problems through convincing conversations
• Lack of clear delegation and decision rights creates organizational chaos
• Surveillance culture indicates distrust and poor management systems
• PE-style leadership may not translate to innovative technology development

Manufacturing Renaissance Opportunities

• Geographic positioning in traditional industrial regions offers advantages
• Modular housing represents significant market opportunity
• Integration of AI with physical manufacturing could create step-function improvements
• Need for operational excellence to complement technical innovation

Talent Development and Community Building

• High-quality communities emerge around filters (like walking clubs) that attract certain types
• Network effects compound rapidly in concentrated geographic areas
• Combination of technical expertise with operational excellence creates competitive advantages
• Character assessment crucial for long-term partnership success

Educational Transformation Requirements

• Soul-centered approach differentiated from pure standardized testing optimization
• Local leadership quality determines school success more than curriculum
• Technology integration requires deep understanding of human development
• Alternative models exist and are achieving results outside mainstream systems

Collaboration Opportunities Identified

For Santiago's Investment Platform

• Manufacturing companies focused on American reindustrialization
• Talent pipeline for operational excellence roles
• Geographic arbitrage opportunities in industrial regions
• Long-term partnership models with technical innovators

For Blas's Operational Expertise

• Chief of staff or operational roles in high-growth technical companies
• Community building and network development
• Bridge between technical vision and operational execution
• System design for scaling human capital

For Gary's Manufacturing Vision

• Capital access through Santiago's network
• Operational excellence through Blas's experience
• Geographic expansion into multiple industrial regions
• Integration of AI systems with physical manufacturing

Next Steps Implied

• Blas to visit Austin community (August 14th event at Zach Levi's ranch mentioned)
• Santiago and Blas avoiding Alpha Schools engagement based on Gary's assessment
• Potential collaboration exploration between all three on manufacturing/community projects
• Continued networking through Austin's walking club and community infrastructure

Brief Interaction with Abel (Drone Photographer)

At the conclusion, Gary briefly met Abel Acuna, a drone photographer serving real estate investors, demonstrating Gary's continued networking and relationship building approach even in casual encounters.

Significance

This conversation represents Gary's definitive break from Alpha Schools advocacy, providing unvarnished assessment to prevent others from making similar mistakes. It demonstrates his transition to manufacturing-focused work while revealing potential for strategic partnerships combining Santiago's capital access, Blas's operational expertise, and Gary's network orchestration capabilities. The discussion exemplifies sophisticated analysis of organizational dysfunction, character assessment, and strategic positioning for America's reindustrialization.