Duolingo is an EdTech platform that leverages gamification thereby helping millions of people learn language in a fun and easy way. Their mission is to make language education fun, universally accessible and personalized. The idea of Duolingo initiated while looking for a solution of a problem when over the internet, computer translations of languages was not good enough and the only option that was available was to use professional translators which require an enormous investment. The obstacle that was faced was there a lack of bilinguals in the world and a lack of motivation to translate texts for free, so the idea of Duolingo was born wondering how the translation into every major language can be done using the knowledge of millions of people for free?
Guided by its mission and the past experiences of the founder born and raised in a developing country where only the privileged have access to quality education. Through Duolingo he created a way for people to have access to education wherever they are. Since millions of people around the world wanted to learn a new language and usually pay quite a hefty fee for doing so, either by paying for classes or for software. Duolingo created value not only for these users who wanted to learn a new language offering users a premium experience for free but also for the organizations who needed help in translating texts like CNN while simultaneously translating the web. This innovation creates two separate kinds of value for two user groups from the exact same event or transaction.
So, how the two kinds of value created are when the user partakes in these translations, they exercise their language skills and gain points for completing each lesson and hit the milestones while learning a new language but at the same time they can get the same users to translate any short segment of text provided for free. A backend software would then sift through various translations of words in the sentence to pick a combination that fits best and through aggregation of many users’ exercises could gather a full crowdsourced translation of any document. Duolingo can therefore capture this value from its free app by selling a translation service on the back end. They charge clients between 5 and 20 cents per word for translation, far less than the price a professional translator would have charged.
Other aspects of value creation for the platform are support for a broader user community via discussion boards. The users can interact directly with each other. It allows connecting through social media accounts like Facebook, Twitter, etc. Additionally, it gave the option to the users to vote on the quality of translations.
Duolingo started with the concept of a fair business model for education, its services are targeted at the mass market, those who are interested in learning a second language but do not have the funds or time to commit to a formal language course. The platform’s courses also appeal to users who do not enjoy traditional teaching methods and instead prefer a more casual learning experience. Initially the company didn’t charge the users and focused on value creation for the user, but the value capture was contingent on users’ engagement on the app. So, company’s initial focus was to make user experience of the app as friendly, easy and fun as possible to accelerate engagement. Duolingo incentivized the users psychologically by expressing a “feeling of appreciation” to the users that kept the users motivated and engaged to continue learning. To do so Duolingo has created milestones, progress quizzes, skill tests and monthly progress streak (borrowed from the gaming industry) to reward persistence, to encourage the users to keep using the app and feel invested in learning, to continue to capture the value.
One of the challenges that existed with the initial value capture model was the users of the app were skewed towards beginners, which might have impacted the quality of translation as advanced level of translation was demanded by their customers. Additionally, I also see a major issue of not incentivizing the users, for Duolingo to control how frequently and how long they wish to use the platform.
The value capture with this initial revenue model was quite cumbersome process or translation business is not generating enough money to cater the high platform cost. So, for sustainability purpose, Duolingo then added advertisements on its website to generate revenue and moved away from its main offering of its translation feature. Duolingo then adopted a new monetization strategy of freemium model and paid versions of the application with ad-free to provide a better experience. Additionally, the latest addition to their revenue model is their Test Center Certification Program which includes English proficiency test like TOEFL or IELTS called Duolingo English Test at a much lower price of $49.
Duolingo has brought quality and effectiveness of its language platform on par with the quality branding. With growth and monetization secured, and with tremendous value creation, as I see it Duolingo is no longer in survival mode, but it will be interesting how the future of Duolingo will pan out.