Duolingo’s Interesting Business Model
The most interesting startup I found in Massive Open Online Course is called Duolingo. The reason is that the business model of this startup is pretty interesting which I didn’t know before. It serves two purposes in one, which is called “twofer” by its CEO Luis Von Ahn, who is a computer science professor in Carnegie Mellon University. Duolingo does this by offering free online language courses to students while training them by asking them to translate simple phrases in documents.
As we know, the usual business model of online courses company, like Coursera, earn profits by asking for tuition fees from students if they want to finish the course successfully with a certificate from Coursera. Another online courses company, Udemy, asks for tuition fees from students if they want to join in the course. But in Duolingo, it offers totally free courses to students. This is initiated by CEO Luis Von Ahn because in his home country Guatemala, he saw how expensive it was for people in his community to learn English. So this inspire him to provide this free online language learning education application to help more people to have free education. But how can Duolingo keep surviving by offer free courses? To handle this, Duolingo originally used a crowdsourcing business model, which asks learners to training their language knowledge and skills by asking them to translate content. And these content are from organizations and companies which pay Duolingo to translate those content. For example, back in 2013, Duolingo had agreements with CNN and BuzzFeed to translate articles for the companies’ international sites. So in this way, Duolingo finds its own business model to find a balance.
Actually, Luis Von Ahn is called the father of crowdsourcing. This brilliant business model was originally used in his company called reCAPTCHA, which is bought by Google. He found that Google and Amazon were facing challenge when scanning old books which may have difficult-to-scan typesetting. He then suggest use those parts which are difficult to scan as captchas, which is used to ask users to type in what they see on password-protected forms to protect websites against bots. So in this way, it uses your free labor to verify hundreds of millions of words from books that scanners can’t parse. And this is just like what Duolingo is doing. Your free labor helps to translate the documents, which helps Duolingo to earn money. Then Duolingo offer more free courses to help more people to learn languages. And then more people can provide more free labors in higher quality. This is like a cycle.
But the original intent of Duolingo was to provide free education with high quality. So the translation business, though can help Duolingo to make profit, is not their main focus. If Duolingo keep enlarge this business, it will become a translation company instead of education, which violate Luis Von Ahn’s intent. And luckily, Duolingo also notices this. So after raising $45 million series D round led By Google Capital, Duolingo’s spokesperson said that they would gradually be backing away from translation business and focus on language certification and other business opportunities. I am glad that they can see this and change the business model accordingly. So this also tells that one company doesn’t need to stick to one business model. The company should change and develop. When a company is not sure what they should do next, just ask yourself what your original intent and goal was, then the company would not lose and have better and long lasting development.