Lessons on creating a $17 billion learning company, going viral with an owl, and ditching short-term thinking with Luis von Ahn (Duolingo)

The Eric Ries Show

In today’s episode ofThe Eric Ries Show, I am joined by Luis von Ahn, CEO and co-founder of Duolingo.

With Duolingo, his mission was simple: make language learning accessible to everyone—not to build a for-profit company. Fast forward to today, and Duolingo has grown into a $17 billion business with a reported 90% of the online daily active users in the language learning market.

In our conversation today, we discuss the following topics:

• How hiring an intern led to Duolingo’s viral mascot

• Duolingo’s revenue strategy that helped their stock be up over 100% in the past year

• How only 10% of users pay but make about 30% of the revenue in the education app category

• The newly published Duolingo Handbook and its critical role within the company

• How turning learning into a game changed everything

• Why Duolingo spent the first five years focusing on improving retention

• Duolingo’s unique approach to experimentation and how to apply it

• Why Duolingo isn’t focused on market investors but on building a 100-year company

• And much more!

—

Brought to you by:

• Wilson Sonsini – Wilson Sonsini is the innovation economy’s law firm.Learn more.

—

Where to find Luis von Ahn:

• LinkedIn:https://www.linkedin.com/in/luis-von-ahn-duolingo/

• X:https://x.com/luisvonahn

—

Where to find Eric:

• Newsletter:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ericries.carrd.co/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

• Podcast:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ericriesshow.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

• YouTube:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.youtube.com/@theericriesshow⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

—

In This Episode We Cover:

(00:00) Intro

(03:10) How Duolingo’s passive-aggressive mascot, Duo, became an internet sensation

(09:21) Why Luis took a chance on the Duo campaign—despite his doubts

(11:30) Take the long view: Duolingo’s principle to build a lasting brand

(12:52) Duolingo’s commitment to excellence

(14:54) Luis’s journey to entrepreneurship

(18:28) Luis’s MacArthur Fellowship “genius” award

(20:13) The inspiration behind Duolingo’s mission and how they stay in alignment with it

(26:16) Early learnings that shaped Duolingo into a fun product

(29:14) How Duolingo gained an edge over Rosetta Stone

(32:45) How a company with no revenue can be worth a billion dollars

(33:10) The VC who pushed Luis and Severin to monetize

(36:05) How Duolingo stays focused on long-term sustainability

(40:12) A mistake Duolingo made by focusing on the quarter rather than long term

(42:15) The importance of trust and “the cultural bank”

(44:11) Duo class shares and ways Duolingo resists hyper-monetization

(46:30) A case for staying under-monetized

(48:23) Why Duolingo wrote a handbook, and the process of creating it

(54:00) The cadence of evaluating the relevance of the handbook

(55:01) Eric’s “two-way reviews”

(58:34) An explanation of Duolingo’s “green machine”

(1:01:42) Product reviews and a/b testing at Duolingo

(1:06:32) Why Duolingo takes a stance against MVPs in their handbook

(1:10:07) How Duolingo’s v1 meets Eric’s definition of MVP

(1:11:45) Duolingo’s early strategy focused on retention

(1:16:22) Duolingo’s testing philosophy

(1:18:13) Lightning round

—

You can find the transcript and references at⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.ericriesshow.com/⁠⁠⁠⁠⁠⁠⁠⁠

—

Production and marketing by⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://penname.co/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.

Eric may be an investor in the companies discussed.