Business News

How Google's 'best app of 2018' was built off the back of a failed project

Key Points
  • Language learning app Drops was named Google’s Best App of 2018.
  • CEO and Co-Founder Daniel Farkas built the app after his first product failed.
  • Drops saw revenue increase fivefold between 2017 and 2018.
Drops is the first multi-language app to teach Hawaiian.

In 2018, language learning app Drops was named Google's "best app of 2018," surpassed 10 million downloads, and saw revenue increase fivefold.

The app claims users can learn a new language — it currently offers more than 30 — with minimal time and commitment.

But according to co-founder and CEO Daniel Farkas, it took a huge failure to put him on the right track to building a successful platform.

"Being European I realized quickly that speaking more than one language was the key to the global marketplace," the Hungarian entrepreneur said.

Farkas' idea for an app stemmed from his own experience of trying to learn a language as quickly as possible, when he noticed a gap in the market for a quick-fix solution. Eventually, he and co-founder Mark Szulyovszky developed LearnInvisible — but although the app had all the tools required to learn a new language, users were bored and didn't commit for long enough to learn anything.

"We had to learn the hard way that our first baby was a bit ugly. It was really hard," Farkas told CNBC. "But we're really conscious of our mistakes and have spent a lot of time analyzing what went wrong — we realized that effectiveness alone is not enough. With LearnInvisible, people just didn't come back after trying it. So we decided to start from scratch."

The co-founders decided to incorporate all of the educational effectiveness of Learn Invisible with a more engaging concept, and launched Drops in 2015.

"We basically decided to build a game, but this is a game with a more noble purpose," Farkas said. "Boredom is the learner's enemy, so we have a lot of focus on visuals — we are obsessed with design and wanted to build a beautiful design."

They were also mindful of knowing an app's limitations. Users of Drops learn by associating images with words in a gaming format, but the platform doesn't delve into the complicated depths of individual languages.

"Drops focuses on vocabulary because we want to do one thing really well — we don't offer a whole menu of language knowledge, such as grammar," Farkas explained. "We do not believe an app is able to get you to fluency — acquiring all of that knowledge best done by practicing with a teacher. And we are not filling the teacher's role."

Business lessons

Farkas' first venture into app development also taught him key business strategy lessons.

"We needed a strategy for how we were going to bring the product into the market, and we had no idea about (how to run a business)," he told CNBC. "We built the first version of LearnInvisible without key people and just hoped everything was right. It didn't prove to be the case."

Through launching a product without advice, the founders learned how they wanted their business to be operated. According to Farkas, the way Drops is now run is key part of its success. He told CNBC the company, which is based in Estonia, has no physical headquarters but still employs people all over the world.

"We try to keep ourselves lean and mean — that's our trick," he said. "Our current headcount is 14, which means in a span of two months we can come up with and implement an idea. That can't be done in bigger organizations."

Unique offering

Drops' unique offering and strong user satisfaction rate is now leading to financial success. The app recently surpassed 10 million downloads, with year-over-year revenue increasing fivefold in 2018.

Although it took two years for the app to reach 1 million users, Drops is now gaining an average of 1 million users every six weeks. And with its continuous growth, the app — which adds an average of two new languages every month — is likely to attract more users.

The rapid expansion of Drops' language offering has helped the app stand out in a crowded market.

Competitors Memrise and Duolingo draw on similar memory aid techniques to Drops, with both apps launching between 2010 and 2011. With more than 300 million users, DuoLingo is valued at $700 million, while Memrise was named Google's best app in 2017. Traditional subscription services Rosetta Stone and Babbel also offer their customers the option of taking classes on mobile apps.

However, none of those services offer as many different languages as Drops – which is the first multi-language learning app to offer lessons in Hawaiian.

"It's become important to us to work to preserve indigenous languages," Farkas said. "We've connected with local language teachers (to develop the service), and it's something we're planning to go on with."