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Said one ex-drug dealer at the prison: “You need to reduce the want to use drugs with a meaningful activity. This keeps me grounded.”

Today, we'll discuss Duolingo’s rapid rise in user growth (and revenue).

All this, and more, in just 4 minutes to read.

— Matthew

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HOW DUOLINGO SUPERCHARGED GROWTH

It’s all a game

Among Time Magazine’s top 100 most influential companies are the usual suspects: Apple, Chipotle, and Disney. But there’s also Duolingo, an American tech company founded by two immigrants that produces the gamified language-learning app with hundreds of millions of downloads. 

Duolingo has been powered by its AI model, Birdbrain, before AI became a buzzword. More recently, it has incorporated new tools like Chat GPT-4. 

Since its 2012 launch, everything is rooted in its mission to “develop the best education in the world and make it universally available.” It teaches over 40 languages today. While high-end language tutoring can cost thousands of dollars, almost all of Duolingo’s services are free to users. 

This is the Duolingo story and how the company has grown revenues at a blistering pace, crushing incumbent Rosetta Stone in the process. 

The roots

It’s 2009, Guatemalan entrepreneur Luis Von Ahn has sold his software company to Google, and he’s hungry for his next adventure. Von Ahn, only 31 years old at the time, wanted to make something in education, so he partnered with a computer scientist, Severin Hacker, and founded Duolingo in 2011 in Pittsburgh. 

The idea caught on early and grew rapidly in its first few years. If you have the app, you know Duolingo peppers users with push notifications, urging them to keep their streaks and use the app daily to build language habits. There are leaderboards, points, levels, and other tools that make learning a language feel less like a boring lecture in school and more like a game or competition. 

More than 20 million people use the app daily, but it wasn’t always that way.

Supercharged growth

Duolingo was big by 2018, yet growth had stalled. A few product tweaks supercharged revenue growth over the next four years, leading to its 2021 IPO. (Duolingo stock is up about 200% year-to-date, though that’s after a rough stretch post-IPO. Currently, its market cap is about $8.8 billion.)

Duolingo says about 80% of its growth comes via marketing’s most enduring tactic: word-of-mouth. Most subscribers use the free, ad-supported version, and many come from referrals or social media. 

Rather than advertise on TV, Duolingo focused on social media, like TikTok, with comical posts, memes, and jokes that stand out. Duolingo has over 8 million followers on TikTok, making it one of the most followed accounts on the app. It also posts light-hearted ads on Twitter and Instagram. 

“Our marketing team has really found its stride in terms of the levers that work and don’t,” Duolingo’s marketing head said on an earnings call this year. “And it’s organic. It’s not paid stuff.” 

Duolingo has a team dedicated exclusively to ensuring its product lends itself to quality social media posts — like sharing your 42-day streak with friends. Building an identity and becoming part of each customer’s daily routine has been integral to Duolingo’s success.   

Duo the owl

Talk about personality: a green owl called Duo is the mascot and the face of Duolingo.

The strategy creates a bond between Duo and users. It makes them feel loyal to the character and engaged with the app, and it’s an extension of the company’s brilliant yet simple marketing plan.

“The role of marketing, the way I see it, is for us to try to be top of mind with users and nonusers,” Duolingo’s marketing head said this year. “So that every day, if a user or nonuser can come across our brand, whether it’s through social media, or whether it’s through some activations that we’ve done, for example, like our space in Roblox, it’s a way for them to be reminded that they haven’t learned the lesson today.” 

Customers also love Duolingo because it’s an easy-to-use app. As a Georgetown marketing professor said this year: “It’s boring, but it’s profitable if you have a product that kills it in terms of its functionality.”

Duo the owl

Duolingo could have tried to emulate Rosetta Stone, but Duolingo thought bigger — and differently. 

They made micro changes for years, A/B tested, toyed with marketing campaigns, and made hundreds of subtle iterations. For instance, Duoling saw that users downloaded and opened the app but didn’t create an account. So, they moved the signup page back, just as a test. It worked, driving a 20% uptick in signups. 

Thanks to their constant tiny optimizations, Duolingo rose from 100,000 to 200 million users (a 2,000x increase) in only seven years.

Duolingo obsesses over metrics on everything related to their users, but they also rely on qualitative data, reading customer surveys and feedback, including emails.

They’ve left no stone unturned for years, always searching for new ways to resonate with users.

Dive deeper

For more, watch the video of how Duolingo became a big money-maker.

See you next time!

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