Introduction
Most of you will know the app Duolingo. For those who don’t, it is a language-learning app that is used worldwide with 200 million users that can choose many languages to learn. Maybe you have tried to learn Spanish, French or another language on the app. What most people like about the app is the way it brings gamification to learning a language. Also, and not unimportant is that the app is free to use. But how does Duolingo make its money?
How did Duolingo start?
Duolingo started by a question raised by Luis von Ahn (the founder of RE-CAPTCHA and Duolingo) in 2009, wondering how the internet could be translated into every major language using the knowledge of a 100 million people for free?
People initially wondered why translations couldn’t just be done using computer translations. However, computer translations at this moment and even more so back in 2009 were not good enough to translate texts on the internet without mistakes. Besides, another option, using professional translators, would require an enormous investment that no firm is willing to pay for.
How did Duolingo manage to ‘recruit’ a 100 million people to translate the internet? The two main obstacles they faced is that there is a lack of bilinguals in the world and a lack of motivation to translate texts for free. They solved both issues with one solution.
Millions of people worldwide want to learn a new language and usually pay quite a hefty fee for doing so, either by paying for classes or for software. Duolingo lets users learn a new language for free using their app while simultaneously translating the web. As a beginning user, you’re given very simple sentences/words from the web which you must translate. The quality of your translation is then checked with the results of the translations of other users, and after a translation has been cross checked several times it gets combined into a verified translation. As you progress you will start getting more complicated texts which both helps the learner and Duolingo.
Monetization
The company was started with the concept of a fair business model for education. Currently the business model for education is that the student pays for his courses with fiat. However, many students worldwide don’t have the funds necessary to pay for education. As such they can pay in a different way by using the app and investing their time in learning the language. By doing so they create value for Duolingo by translating text on which they can monetize by selling the translations to companies who want them. Though this was the initial core revenue model, nowadays Duolingo is focusing more on gaining revenue from their Test Center Certification Program as it is not the mission of Duolingo to become a translation business but to stay an education company. Moving forward the new direction of Duolingo is emphasising on becoming an adaptive platform that tailors teaching to the strengths and weaknesses of individual learners driven by feedback from language students using the app. The ultimate goal for the company is to give every student access to a private virtual tutor with the use of their technology.
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Consumer Value Creation 