Duolingo and College Degrees: A Non-Disruptive Approach

Duolingo's Evolution: Balancing Mission and Market Demands

Significant transformations have occurred at Duolingo since its initial launch at TechCrunch Disrupt almost a decade ago, when the language learning company had no immediate plans for monetization. The once-scrappy application has since developed into a recognized consumer brand and a financially successful enterprise.

This expansion prompted the startup’s recent decision to become a publicly traded company, a relatively uncommon move for a consumer-focused edtech business.

Navigating Public Market Expectations

CEO and co-founder Luis von Ahn revisited TechCrunch Disrupt this year to discuss how the scrutiny of public markets influences the company’s strategic direction. With new capital acquired through its IPO and increased public attention, Duolingo is defining its future trajectory and establishing clear boundaries for its development.

Becoming a publicly listed entity necessitates openness to evaluation from the public markets, where investors seek viable businesses capable of generating profit and increasing in value.

However, what occurs when a company prioritizes objectives other than maximizing financial gain?

A Commitment to Free Access

Duolingo’s formative years were characterized by a reluctance to implement monetization strategies, driven by its core mission of providing accessible, free education. When the company eventually introduced subscriptions, it refrained from restricting access to learning content.

Instead, the subscription model focuses on enhancing the user experience—eliminating advertisements and permitting unlimited errors. Currently, approximately 95% of Duolingo’s user base utilizes the platform without charge.

Von Ahn strongly asserted that Duolingo is unlikely to begin paywalling learning features for its subscription service, despite now being under the observation of retail investors.

The Value of a Free User Base

“We have established a firm boundary on this issue,” he stated. “While we could potentially increase short-term revenue by paywalling certain features, I believe it would hinder our overall growth.”

He believes that the free user base actively contributes to marketing the app through word-of-mouth referrals, offsetting the potential revenue lost by monetizing only a small percentage of users.

Exploring New Revenue Streams

Duolingo’s self-imposed limitations necessitate the exploration of alternative revenue-generating initiatives. The company is currently investigating the reintroduction of enterprise contracts, potentially offering upskilling solutions for employees within organizations.

Additionally, it is revising its Duolingo for Schools product, providing language teachers with tools to monitor student progress, and developing a family plan.

Avoiding a "Slippery Slope"

Von Ahn cautioned that paywalling learning content could initiate a “slippery slope” for the business. “If we were to start charging for certain aspects of language learning, we would inevitably end up charging for everything,” he explained. “Therefore, we are drawing a clear line—we will not charge for elements that are crucial to the learning process.”

Balancing Mission and Investment

Sustaining this delicate equilibrium between its mission and monetization requires Duolingo to continually assess whether a new feature justifies the investment. A key ambition is to establish a proficiency standard recognized by institutions, enabling learners to standardize their comprehension and expanding Duolingo’s market reach.

Redefining Language Aptitude

This initiative aligns with the company’s goal of redefining how language aptitude is measured. “Currently, when someone is asked about their French proficiency, the typical responses are ‘I am intermediate’ or ‘I completed four years of high school French’,” Von Ahn noted. “Our aspiration is for individuals to state, ‘I’m a Duolingo 65.’”

Leveraging the Duolingo English Test

Duolingo has prior experience in the accreditation domain. The Duolingo English Test, which contributes 10% of its revenue, is an online exam accepted by over 4,000 universities globally, allowing students to demonstrate their English proficiency during college applications.

Von Ahn expressed the company’s intention to eventually integrate the app and the test, enabling users to receive an estimated score based on their daily exercises.

A Defensible Position

“If we can achieve this integration, we will be in a highly secure position worldwide,” Von Ahn said. “If everyone begins using Duolingo as a reference point for their language skills.”

Acknowledging Current Limitations

Despite the ambitious vision and existing university partnerships, establishing a proficiency standard presents challenges. Duolingo currently cannot guarantee fluency in a language through its app, nor can it ensure a new English speaker will pass its own Duolingo English Test.

The company recognizes the need for further improvements to the app’s effectiveness and has dedicated its largest team to this specific purpose, according to Von Ahn.

Not Aiming to Replace Traditional Education

However, the co-founder clarified that Duolingo will not strive to become a substitute for in-depth language learning. “I don’t believe edtech companies will be able to disrupt a college degree from Oxford anytime soon,” he stated. “I think individuals can achieve a significant level of accreditation without attending a university, which will be sufficient for securing employment, and I anticipate this will become increasingly possible within Duolingo.”

Focusing on Practical Proficiency

This perspective reflects the company’s long-term focus: assisting individuals in reaching a proficient—though perhaps not entirely fluent—level of language learning.

“We are not interested in training individuals from zero to become a Pulitzer Prize winner in a language,” Von Ahn said. “Our goal is to enable people to attain a level of proficiency sufficient to secure a knowledge-based job or attend a university like Stanford. That is enough for us.”

Beyond Accreditation: Expanding Subject Matter

Von Ahn’s statements indicate that, despite the Duolingo English Test, the startup is not planning to expand into becoming the primary credential for language proficiency. This is somewhat unexpected, given the natural inclination for the company to enhance its teaching capabilities over time.

Von Ahn countered this notion. “I believe that for the vast majority of people, that is simply not their primary interest,” he said. “If your English is adequate for employment, you could further refine it through extensive reading. The return on investment for us would likely be minimal.”

Architecting Future Expansion

The app’s boundaries, in Von Ahn’s view, will shape its expansion into new subjects.

While a small portion of Duolingo’s team is currently working on projects outside of language learning, Von Ahn addressed the company’s plans for growth beyond its core product. For instance, it has developed a literacy app for children and is currently creating a math app for elementary school students. These represent potential monetization opportunities, but also require ensuring users achieve a solid level of comprehension without relying on accreditation.

“The subjects we can effectively teach are those that require substantial repetition,” Von Ahn explained. “From geography to elementary physics, there is much we can offer.” However, Duolingo is unlikely to incorporate short-term skills like Photoshop or complex subjects like philosophy.

“We might explore those areas in 20 years, but within the next two to three years, it is improbable,” he concluded.