Small Business

The Google darling that wants to shake up education


When learning app start-up Duolingo started building an online course for a fictional language spoken by a "Star Trek" species known as Klingons, company Chief Executive Luis von Ahn never asked why.

Pittsburgh-based Duolingo is a next generation language company that courts and infuses user feedback into its business model. So beyond traditional offerings like Spanish and Mandarin, the start-up didn't miss a beat when users demanded app-based lessons in the language spoken by Klingons.

... this could be the future of how we teach things.
Luis von Ahn
Duolingo co-founder and CEO Luis von Ahn.

Sound silly? Duolingo and other new language companies are growing businesses, attracting ever more investor attention and funding. Duolingo last week announced a $45 million funding round led by Google Capital. Duolingo is also the most downloaded educational app on Apple's App Store and Google's Play.

For Duolingo co-founder and CEO von Ahn, Google's commitment is an endorsement for education through mobile platforms. The app essentially is a digital response to a growing global market for learning languages on demand

Duolingo's app features around 100 million users. And many users had requested to learn about the warrior Klingon race's speech and culture.

Von Ahn is not flying into space anytime soon. But he did effectively use Duolingo to learn conversational Portuguese before traveling to Brazil.

"This [process] is very native to mobile phones. It's very active," von Ahn said. "What it means is a vote of confidence that this could be the future of how we teach things."

A new approach

Google has bet on Guatemalan-born von Ahn before. The tech giant bought two of his businesses while he was still in his 20s.

Von Ahn, now 35, is also a computer science professor on leave from Carnegie Mellon University, where interdisciplinary work is encouraged. Hard-wired to solve problems from many angles, Von Ahn has crafted business models that incorporate computer systems, crowdsourcing, and how humans learn and acquire knowledge. Duolingo has created its more than 40 courses online using input from volunteer speakers.

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The app combines individualized, online lessons with video game-like rewards and immediate feedback with data gathered about users during sessions. For example, if users accumulate enough experience points or correct answer streaks, users pocket tokens toward language certificates and other bonuses.

Forget the old days of listening to language lessons through cassette tapes or even static podcast downloads.

Mobile platforms broadly represent a "sea change" for language education, says Jaime Carbonell, director of the Language Technologies Institute at Carnegie Mellon and co-founder of social language app WeSpeke.

Demand for language learning software development—a more than $600 million industry last year—is expected to grow through 2019 as globalization and immigration drive a need to speak multiple languages, according to a report from market research firm IBIS World.


But for all the growth, there are potential speed bumps.

While the crowded language landscape includes schools, human tutors and various software platforms, many users often want to pay "little or nothing," said Carbonell of Carnegie Mellon.

Duolingo, launched in 2013, requires no subscription fees or in-app purchases, and for now features no ads.

Von Ahn readily acknowledges that "we need to make revenue." The company has started charging $20 for English certification tests. And charging for those exams and certifications—that tout language proficiency—is no accident. Such certification is a coveted among professionals, hoping to gain a leg up in multinational industries.

Plus, about 75 percent of Duolingo users are from outside the U.S. Von Ahn sees a "huge demand" for certification outside America.

Meanwhile, as the industry grows more splintered, language market leader Rosetta Stone and others have seen share prices drop.

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Looking ahead, growth in the language space is forecast to slow to 4.4 percent annually through 2019, down from 5 percent from 2009 to 2014, according to IBIS World.

"It's a fragmented space. Brand names like Rosetta Stone that are in there have a limited scope," said Ray Valdes, a research vice president at market research firm Gartner.

But von Ahn argues Duolingo's vast, 100 million user base helps set it apart. While dozens of students may take a single course, Duolingo's audience reach is much broader.

"I've wanted to be a teacher from the beginning. One of the things that frustrated me the most was the scale with which I operated as a teacher," he said.

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Partnering with schools

Von Ahn also sees potential for sponsored content that does not overwhelm users with advertising. For example, Duolingo could secure potential restaurant sponsors for a digital class on ordering food in another language.

And Duoliingo is collaborating with schools.

The company recently rolled out its free service for schools, which von Ahn says complements tutor-led lessons by allowing teachers to better track students' progress with Duolingo's technology. Instructors can also assign homework and encourage extra practice on the app platform.

And securing contracts with schools could serve as another potential revenue stream for Duolingo, said Carbonell of Carnegie Mellon.

Bigger picture, von Ahn said Duolingo's personalized lessons, emphasis on analytic feedback and natural fit on mobile platforms will drive the company forward. "Our goal is to be as good as a one-on-one human tutor," von Ahn said.

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