6 ms·

Anybody else feel a little nervous when a free language tool is valued in the hundreds of millions?

by smaili 11y ago

jamisteven 11y ago
Indeed.
hmate9 11y ago
They provide official language exams right on your mobile device for $20.
- Someone1234 11y ago
  What does "official language exams" mean?
therobot24 11y ago
Nah, they definitely provide value. Have you used it before? For someone who only took a few years of a foreign language in high school, it's a great refresher. If they could also structure the lessons to teach in a similar way to the classroom (e.g., actively showing different conjugations instead of just assuming you'll remember or pick up on it yourself) then they'll be golden.
- jfoster 11y ago
  They've found an effective solution for self-study. Anything contextually different (eg. for classrooms) might need a vastly different solution. Suppose they even managed to come up with that classroom solution for language learning. How does what they currently have help them? Teachers, schools & government education departments make the purchasing decision for classrooms, so what students use in their time outside class isn't especially helpful in driving more sales of a classroom solution. If they came up with something good for classrooms, they might as well axe or install paywalls into their existing stuff.
  - therobot24 11y ago
    > How does what they currently have help them? It helps the user better understand the language, which I believe is their goal to begin with. For example, their current approach presents a conjugated word in the context of a provided sentence or phrase. When I'm refreshing a language this isn't a big deal, but if I'm starting from scratch I don't have the foreknowledge to understand exactly when and why the word appears as such. I don't really need to argue that learning the language structure is much easier than memorizing a large list of words and phrases. More simply a better tool for learning, is a better product on their end. They don't have to sell it to schools, but if teachers see that it can work in tandem with their curriculum then it will translate to more users. > If they came up with something good for classrooms, they might as well axe or install paywalls into their existing stuff. You're only looking at monetizing and forgetting about growth.
    - jfoster 11y ago
      > You're only looking at monetizing and forgetting about growth. Because of the valuation size, and because I think they've succeeded at growing quickly and becoming the most well-known language learning solution. Everything else about Duolingo looks really good, but the monetization side of things seems to be the elephant in the room. What I'm also pointing out is that the growth among language learners cannot be easily translated into growth in institutions. To grow in institutions they will still need sales teams, and their consumer userbase doesn't necessarily gain them much of an advantage in that game. All that said, in this article they hint at having plans beyond the $20 certification they've announced. To achieve the valuation they've now got, I think it's fair to say they do have a solid plan that they just haven't made public knowledge yet. It's probably something that will be a bit controversial among their userbase, like paywalls.
- organsnyder 11y ago
  Same here. I took two years of Spanish in high school, and two semesters in college. I never put much effort into those classes, as I knew I couldn't commit the time to becoming fluent (I was taking them to fulfill core requirements at the liberal arts college I attended). Now, I'm finding myself slowly reactivating and building on that knowledge using Duolingo, to the point that I should be able to strike up basic conversations fairly soon.
talideon 11y ago
Not at all, because the free language tool is just half of what they do. The part that actually makes the money is crowdsourced translations, which are done by more advanced students as practice.
- cshimmin 11y ago
  Actually from the posted article, it sounds like they've been phasing out the translation-as-a-service part of their business for over a year now. Their reasoning is that "eventually businesses tend to pay more attention to the parts of the company that are profitable," and they want to be an education company, not a translation company. Evidently they're planning to make money from paid certification tests and they have "other plans to monetize".
jasondc 11y ago
Rosetta Stone, which seems to be the current leader in language training made $261 million last year. The funny thing is Duolingo is now valued higher than Rosetta Stone: https://www.google.com/finance?q=RST https://www.google.com/finance?q=RST
- DannoHung 11y ago
  Yeah, and there's a reason for that: https://www.google.com/finance?q=NYSE%3ARST&fstype=ii&ei=jlJ4VYHGPMecqwG53IHIAg https://www.google.com/finance?q=NYSE%3ARST&fstype=ii&ei=jlJ...
- rubyrescue 11y ago
  Rosetta Stone's DVD based revenue model is crumbling.
- charlesism 11y ago
  Having used both Duolingo and Rosetta Stone, that seems about right. Rosetta Stone will probably survive, but not by selling directly to end-users.
daniel-levin 11y ago
>> Instead, the company is now using its Test Center certification program as a revenue source (the tests cost $20) and says that it has other plans to monetize.
philipjoubert 11y ago
They also monetize with a paid translation service. The service is exposed as challenges to users and in effect they crowd translate stuff.
- jfoster 11y ago
  Read the last part of the article. They still do that for CNN, but are not taking on new customers for that service.
- deleted 11y ago
  [deleted]
bdcravens 11y ago
It's worth less than some companies that provide even less value.
melling 11y ago
They have a business model where they sell translation services to CNN, etc. I don't have a business model but I'm trying to bootstrap an iOS language software company. Duolingo is really good but I think language learning is difficult enough that there are other good ideas worth pursuing. Anyway, if anyone is learning another language, I'd appreciate any feedback on my apps. Here's my Spanish app: https://itunes.apple.com/us/app/h4-spanish-lite/id388918463?mt=8 https://itunes.apple.com/us/app/h4-spanish-lite/id388918463?...
- jfoster 11y ago
  From the article: > As a company spokesperson told me, the company actually tabled its ambitions around translations about a year and a half ago and hasn’t scaled the businesses or accepted new clients (it’s still working with CNN, though).
  - melling 11y ago
    Well, that gives me a little hope. Consumers don't part with their money as easily a business does. People want technology to change education but they don't want to spend any money.
  - organsnyder 11y ago
    That makes sense to me. Automated translation software has made huge strides in the past decade, so Duolingo's crowdfunded approach (as cool as it is) will likely be obsolete in the fairly near future anyways.
- nols 11y ago
  I don't think they rely on translations anymore, now their income comes from certified exams.
mbesto 11y ago
So you might ask “how can you make money giving away a learning app?” This past week DuoLingo answered that question with the commercial release of the DuoLingo Test Center. The DuoLingo Test Center is currently free but it won’t be for long. Give it a try if you’d like to see how it works. Once the DuoLingo Test is accepted at schools and employers, the company plans to charge $20 to take its test. There’s an established incumbent (monopoly) in this market called TOEFL. If you’ve come to the US to study, you’ve probably taken this test. It’s a lot more expensive than $20 per test and DuoLingo is out to prove it can do this testing less expensively and better. [0] - http://avc.com/2014/07/freemium-in-education/ http://avc.com/2014/07/freemium-in-education/
- mattmanser 11y ago
  A non-profit with a cool $1 billion in turnover according to this dodgy looking site: http://www.guidestar.org/organizations/21-0634479/educational-testing-service.aspx http://www.guidestar.org/organizations/21-0634479/educationa...
- rkrzr 11y ago
  I hope they succeed in taking away some market share from TOEFL. The TOEFL test is ridiculously overpriced for what they provide and your results expire (no joke) after 2 years. Since clearly you will have forgotten everything you knew about that language in 2 years time... Go Duolingo!
  - Grue3 11y ago
    >Since clearly you will have forgotten everything you knew about that language in 2 years time... They are not wrong. I passed Duolingo Spanish course (it might have been extended since then) and barely remember anything now. I was also studying German in school, and later French by myself to the point where I could even speak with native speakers a little. Hardly remember anything either. English is the only foreign language that I haven't forgot because I use it constantly. But if you're not using a foreign language, after passing the test you will completely forget it in 2 years.
jfoster 11y ago
I agree with your sentiment. There's no denying that they are a valuable tool for language learners, but they do not have the monetization figured out yet. Originally they were going to provide translation services, which hasn't worked out. Now they're trying to provide certifications for people who pay a fee. Will that work? Maybe it will. What feels odd is that the valuation is so high for a company that hasn't yet figured out a reliable way to make money from what it does. If all else fails, they could install paywalls, but a substantial portion of their users might abandon them at that point.
jgalt212 11y ago
Not to be trite, but they can (not saying they do) make good coin selling all sorts of personal data about their users to the highest bidder. https://news.ycombinator.com/item?id=7698130 https://news.ycombinator.com/item?id=7698130 So it's not free in the free beer sense.
rawnlq 11y ago
Duolingo is started by Luis von Ahn who invented reCAPTCHA. He pioneered the field of human computation: https://www.youtube.com/watch?v=tx082gDwGcM https://www.youtube.com/watch?v=tx082gDwGcM. He can monetize this in a similar way. Crowd sourced translation service where the more advanced language learners translate books or something. It will be higher quality than google translate for sure.
- wan23 11y ago
  Good guess, but the article explains how paid translation wasn't working so well for them. It seems unclear how they are going to make enough money to justify this valuation.
- thraxil 11y ago
  The article explicitly states that Duolingo moved away from this model though: "As a company spokesperson told me, the company actually tabled its ambitions around translations about a year and a half ago and hasn’t scaled the businesses or accepted new clients"
ianstallings 11y ago
Have you used it? It's much more than that. It's actually quite a good learning tool for more than just languages. The system is smart.
rokhayakebe 11y ago
Not really. The course can be free, but the certification paid. If every year 1% of the user base pays $50 to $100 for certification, that is worth $50M to $100M in revenue. I know there was a time I would pay $100 to get an English certification (before coming to the US for school). I also "help" teach French in college and privately. If they required a certification, I would not have minded paying $200 at that time to get a certificate.

Anybody else feel a little nervous when a free language tool is valued in the hundreds of millions?

by smaili 11y ago

Anybody else feel a little nervous when a free language tool is valued in the hundreds of millions?

jamisteven 11y ago

Indeed.

hmate9 11y ago

They provide official language exams right on your mobile device for $20.

Someone1234 11y ago
What does "official language exams" mean?

therobot24 11y ago

Nah, they definitely provide value. Have you used it before? For someone who only took a few years of a foreign language in high school, it's a great refresher. If they could also structure the lessons to teach in a similar way to the classroom (e.g., actively showing different conjugations instead of just assuming you'll remember or pick up on it yourself) then they'll be golden.

jfoster 11y ago
They've found an effective solution for self-study. Anything contextually different (eg. for classrooms) might need a vastly different solution. Suppose they even managed to come up with that classroom solution for language learning. How does what they currently have help them? Teachers, schools & government education departments make the purchasing decision for classrooms, so what students use in their time outside class isn't especially helpful in driving more sales of a classroom solution. If they came up with something good for classrooms, they might as well axe or install paywalls into their existing stuff.
- therobot24 11y ago
  > How does what they currently have help them? It helps the user better understand the language, which I believe is their goal to begin with. For example, their current approach presents a conjugated word in the context of a provided sentence or phrase. When I'm refreshing a language this isn't a big deal, but if I'm starting from scratch I don't have the foreknowledge to understand exactly when and why the word appears as such. I don't really need to argue that learning the language structure is much easier than memorizing a large list of words and phrases. More simply a better tool for learning, is a better product on their end. They don't have to sell it to schools, but if teachers see that it can work in tandem with their curriculum then it will translate to more users. > If they came up with something good for classrooms, they might as well axe or install paywalls into their existing stuff. You're only looking at monetizing and forgetting about growth.
  - jfoster 11y ago
    > You're only looking at monetizing and forgetting about growth. Because of the valuation size, and because I think they've succeeded at growing quickly and becoming the most well-known language learning solution. Everything else about Duolingo looks really good, but the monetization side of things seems to be the elephant in the room. What I'm also pointing out is that the growth among language learners cannot be easily translated into growth in institutions. To grow in institutions they will still need sales teams, and their consumer userbase doesn't necessarily gain them much of an advantage in that game. All that said, in this article they hint at having plans beyond the $20 certification they've announced. To achieve the valuation they've now got, I think it's fair to say they do have a solid plan that they just haven't made public knowledge yet. It's probably something that will be a bit controversial among their userbase, like paywalls.
organsnyder 11y ago
Same here. I took two years of Spanish in high school, and two semesters in college. I never put much effort into those classes, as I knew I couldn't commit the time to becoming fluent (I was taking them to fulfill core requirements at the liberal arts college I attended). Now, I'm finding myself slowly reactivating and building on that knowledge using Duolingo, to the point that I should be able to strike up basic conversations fairly soon.

talideon 11y ago

Not at all, because the free language tool is just half of what they do. The part that actually makes the money is crowdsourced translations, which are done by more advanced students as practice.

cshimmin 11y ago
Actually from the posted article, it sounds like they've been phasing out the translation-as-a-service part of their business for over a year now. Their reasoning is that "eventually businesses tend to pay more attention to the parts of the company that are profitable," and they want to be an education company, not a translation company. Evidently they're planning to make money from paid certification tests and they have "other plans to monetize".

jasondc 11y ago

Rosetta Stone, which seems to be the current leader in language training made $261 million last year. The funny thing is Duolingo is now valued higher than Rosetta Stone: https://www.google.com/finance?q=RST https://www.google.com/finance?q=RST

DannoHung 11y ago
Yeah, and there's a reason for that: https://www.google.com/finance?q=NYSE%3ARST&fstype=ii&ei=jlJ4VYHGPMecqwG53IHIAg https://www.google.com/finance?q=NYSE%3ARST&fstype=ii&ei=jlJ...
rubyrescue 11y ago
Rosetta Stone's DVD based revenue model is crumbling.
charlesism 11y ago
Having used both Duolingo and Rosetta Stone, that seems about right. Rosetta Stone will probably survive, but not by selling directly to end-users.

daniel-levin 11y ago

>> Instead, the company is now using its Test Center certification program as a revenue source (the tests cost $20) and says that it has other plans to monetize.

philipjoubert 11y ago

They also monetize with a paid translation service. The service is exposed as challenges to users and in effect they crowd translate stuff.

jfoster 11y ago
Read the last part of the article. They still do that for CNN, but are not taking on new customers for that service.
deleted 11y ago
[deleted]

bdcravens 11y ago

It's worth less than some companies that provide even less value.

melling 11y ago

They have a business model where they sell translation services to CNN, etc. I don't have a business model but I'm trying to bootstrap an iOS language software company. Duolingo is really good but I think language learning is difficult enough that there are other good ideas worth pursuing. Anyway, if anyone is learning another language, I'd appreciate any feedback on my apps. Here's my Spanish app: https://itunes.apple.com/us/app/h4-spanish-lite/id388918463?mt=8 https://itunes.apple.com/us/app/h4-spanish-lite/id388918463?...

jfoster 11y ago
From the article: > As a company spokesperson told me, the company actually tabled its ambitions around translations about a year and a half ago and hasn’t scaled the businesses or accepted new clients (it’s still working with CNN, though).
- melling 11y ago
  Well, that gives me a little hope. Consumers don't part with their money as easily a business does. People want technology to change education but they don't want to spend any money.
- organsnyder 11y ago
  That makes sense to me. Automated translation software has made huge strides in the past decade, so Duolingo's crowdfunded approach (as cool as it is) will likely be obsolete in the fairly near future anyways.
nols 11y ago
I don't think they rely on translations anymore, now their income comes from certified exams.

mbesto 11y ago

So you might ask “how can you make money giving away a learning app?” This past week DuoLingo answered that question with the commercial release of the DuoLingo Test Center. The DuoLingo Test Center is currently free but it won’t be for long. Give it a try if you’d like to see how it works. Once the DuoLingo Test is accepted at schools and employers, the company plans to charge $20 to take its test. There’s an established incumbent (monopoly) in this market called TOEFL. If you’ve come to the US to study, you’ve probably taken this test. It’s a lot more expensive than $20 per test and DuoLingo is out to prove it can do this testing less expensively and better. [0] - http://avc.com/2014/07/freemium-in-education/ http://avc.com/2014/07/freemium-in-education/

mattmanser 11y ago
A non-profit with a cool $1 billion in turnover according to this dodgy looking site: http://www.guidestar.org/organizations/21-0634479/educational-testing-service.aspx http://www.guidestar.org/organizations/21-0634479/educationa...
rkrzr 11y ago
I hope they succeed in taking away some market share from TOEFL. The TOEFL test is ridiculously overpriced for what they provide and your results expire (no joke) after 2 years. Since clearly you will have forgotten everything you knew about that language in 2 years time... Go Duolingo!
- Grue3 11y ago
  >Since clearly you will have forgotten everything you knew about that language in 2 years time... They are not wrong. I passed Duolingo Spanish course (it might have been extended since then) and barely remember anything now. I was also studying German in school, and later French by myself to the point where I could even speak with native speakers a little. Hardly remember anything either. English is the only foreign language that I haven't forgot because I use it constantly. But if you're not using a foreign language, after passing the test you will completely forget it in 2 years.

jfoster 11y ago

I agree with your sentiment. There's no denying that they are a valuable tool for language learners, but they do not have the monetization figured out yet. Originally they were going to provide translation services, which hasn't worked out. Now they're trying to provide certifications for people who pay a fee. Will that work? Maybe it will. What feels odd is that the valuation is so high for a company that hasn't yet figured out a reliable way to make money from what it does. If all else fails, they could install paywalls, but a substantial portion of their users might abandon them at that point.

jgalt212 11y ago

Not to be trite, but they can (not saying they do) make good coin selling all sorts of personal data about their users to the highest bidder. https://news.ycombinator.com/item?id=7698130 https://news.ycombinator.com/item?id=7698130 So it's not free in the free beer sense.

rawnlq 11y ago

Duolingo is started by Luis von Ahn who invented reCAPTCHA. He pioneered the field of human computation: https://www.youtube.com/watch?v=tx082gDwGcM https://www.youtube.com/watch?v=tx082gDwGcM. He can monetize this in a similar way. Crowd sourced translation service where the more advanced language learners translate books or something. It will be higher quality than google translate for sure.

wan23 11y ago
Good guess, but the article explains how paid translation wasn't working so well for them. It seems unclear how they are going to make enough money to justify this valuation.
thraxil 11y ago
The article explicitly states that Duolingo moved away from this model though: "As a company spokesperson told me, the company actually tabled its ambitions around translations about a year and a half ago and hasn’t scaled the businesses or accepted new clients"

ianstallings 11y ago

Have you used it? It's much more than that. It's actually quite a good learning tool for more than just languages. The system is smart.

rokhayakebe 11y ago

Not really. The course can be free, but the certification paid. If every year 1% of the user base pays $50 to $100 for certification, that is worth $50M to $100M in revenue. I know there was a time I would pay $100 to get an English certification (before coming to the US for school). I also "help" teach French in college and privately. If they required a certification, I would not have minded paying $200 at that time to get a certificate.