A brilliant business strategy of Duolingo.
I am a university student pursuing engineering at a reputed university. As an engineering student and an international English speaker, we all need to learn this language to communicate with others easily. Last week, I discovered a new course to help improve my English speaking, but I couldn’t finish it. I remember buying a paid course before and not finishing that either. The reason? My procrastination and laziness. Then I found the excellent app called Duolingo.
Duolingo is an amazing app that can be your best tutor, offering courses in over 40 languages. Duolingo was founded in 2012 in the USA by a computer science professor named Luis von Ahn and his student. Luis was born in Guatemala and later moved to the USA. When he tried to get a scholarship to study in the USA, he faced a problem similar to mine: he had to attend offline classes daily to learn English for IELTS or TOEFL. These offline classes were not only inconvenient but also very expensive.
The Founder’s Vision for Duolingo:
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- He observed that learning a new language is harder than learning coding, physics, or chemistry.
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- He identified a huge market in this sector with his unique vision.
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- He realized the growing demand for English language proficiency.
When Luis moved to the USA and began teaching, he and his students created an app to teach English and other languages for free worldwide.
Business Model:
Duolingo started with a simple question: “What if education could be free and high-quality for everyone?”
Duolingo is a free, high-quality language learning app that operates on a “freemium” model. While most of the content is free, users can choose to pay for additional features. This affordability makes it accessible for learners around the world.
Duolingo is a funded company that raised its first investment in 2015, receiving $35 million from Google Capital. Over time, they raised significant amounts of funding, and the company’s valuation today stands at around $8 billion, with nearly 73 million active users.
The Hook Model:
Duolingo follows the “Hook Model” to retain its users, consisting of four steps:
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- Trigger: Duolingo sends reminders to users to complete their lessons. For instance, if you practice at 10 AM today, Duolingo will send a message at the same time tomorrow. This daily push helps users stay consistent.
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- Action: Unlike traditional classes that require at least an hour, Duolingo allows you to choose lesson durations. The minimum lesson time is 3 minutes, making it convenient for busy users.
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- Reward: Completing lessons earns users rewards like stars and rankings, motivating them to stay on the leaderboard and finish more lessons.
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- Investment: Duolingo’s unique selling point (USP) is accommodating users who lack time. They offer flexible lesson schedules, encouraging even busy learners to engage regularly.
Growth and Revenue:
Since its launch in 2011, Duolingo’s growth has been remarkable. The platform boasts over 600 million registered users worldwide. With 75 million active users, it has achieved 22 million daily active users.
In January 2023, Duolingo recorded 26.7 million app downloads, with 17 million downloads in just one month. Duolingo has acquired 80% of its users organically.
Revenue has also skyrocketed:
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- In 2020: $161 million (130% year-over-year growth).
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- In 2021: $294 million (55% growth over the prior year).
In July 2021, Duolingo went public, launching 3.7 million shares at $102 each, raising $550 million and achieving a valuation of over $3.5 billion.
- In 2021: $294 million (55% growth over the prior year).
Competition and USP:
Duolingo’s USP lies in its short, flexible lessons, daily engagement, and reward system. Unlike many competitors, it focuses on retaining old users while attracting new ones. Its retention rate in October 2023 was 68%, higher than popular games like Roblox (64%).
The app’s approach is unique because it provides honest feedback to users, highlighting their strengths and areas of improvement.
Now, Duolingo has become a significant competitor to TOEFL and IELTS. Many students now prefer Duolingo to improve their English proficiency and achieve their study-abroad dreams cost-effectively.
Conclusion:
Duolingo offers an exceptional user experience, allowing learners to tailor their lessons to their goals and abilities. It’s not only cost-effective but also provides insightful education, making it one of the best language-learning platforms in the world.
