Key insights

• 💰 Duolingo's revenue model is mainly supported by AI, A/B testing, and gamification
• 📊 Majority of revenue comes from sources other than advertising, with a small percentage of users paying
• 🎮 The app's gamified approach has helped attract millions of users and differentiate itself in the language learning market
• 🌍 Despite offering free language lessons, the company has managed to reach a $7.7 billion valuation through its unique strategies and usage of AI and A/B testing
• 📈 Duolingo faced pressure to generate revenue, introduced ads and subscription tier, went public in 2021
• 💡 Majority of revenue comes from a small fraction of active users, with growth through gamification and subscriptions
• 📲 The company uses push notifications to remind users to return to the app, with AI determining the most effective messages for specific users and times
• 🎰 Duolingo uses a bandit algorithm to optimize notifications and content engagement, leveraging AI and huge amounts of user data for success

Q&A

• What new revenue-generating feature is Duolingo considering?

  Duolingo is considering offering AI-powered role play features at a premium price while maintaining its mostly free product model. Additionally, the company is exploring new ways to increase paying customers, including the introduction of an AI-powered Duolingo Max tier.

• How does Duolingo personalize the learning experience?

  Duolingo uses A/B testing and AI algorithms to personalize the learning experience and improve engagement. Despite the potential to increase subscriptions, the company prioritizes user experience over short-term gains and does not resort to aggressive tactics like forcing subscriptions or excessive ads.

• What algorithm does Duolingo use to optimize notifications?

  Duolingo uses a bandit algorithm to optimize notifications and content engagement. The algorithm balances between exploiting known successful options and exploring new ones, leveraging AI and a massive amount of user data for its success.

• How does Duolingo use push notifications to engage users?

  Duolingo uses push notifications to remind users to return to the app. These messages have evolved over time to become more effective, with a 3% rise in retention. AI is used to determine the most effective messages for specific users and times.

• How many daily users does Duolingo have?

  Duolingo has around 34 million daily users. The majority of these users utilize the app for free language learning.

• What is Duolingo's revenue model?

  Duolingo's revenue model is supported by AI, A/B testing, and the use of gamification techniques. The majority of its revenue comes from sources other than advertising, with only a small percentage of users paying for the app.

• 00:00 Duolingo is a popular free language learning app with a $7.7 billion valuation, mainly supported by AI, A/B testing, and gamification. Only a small percentage of users pay, and the majority of revenue does not come from advertising.
• 01:25 Duolingo faced pressure to generate revenue, introduced ads and subscription tier, went public in 2021, majority of revenue from a small fraction of users, growth through gamification and subscriptions, meticulous approach to app development and testing.
• 02:44 Duolingo uses push notifications to remind users to return to the app, with the messages evolving over time to become more effective. The company uses AI to determine which messages are most effective for specific users and times.
• 03:54 Duolingo uses a bandit algorithm to optimize notifications and engaging content, leveraging AI and huge amounts of user data for success.
• 05:09 Duolingo uses A/B testing and AI algorithms to personalize the learning experience and improve engagement. They could significantly increase subscriptions but prioritize user experience over short-term gains.
• 06:25 Duolingo is considering new ways to generate revenue, such as offering AI-powered role play features at a premium price, while still maintaining its mostly free product model.