Porter's 5 Forces

Low: There are many substitutes when it comes to language learning, and most only require basic access to the internet: Youtube, language learning textbooks, language exchange meet ups, etc. However, the threat of substitution is low when it comes to the development of language speaking skills. It is unlikely that customers can find inexpensive opportunities to regularly and conveniently practice their speaking skills in authentic real-life scenarios.

Medium: With Loqui’s freemium AI-powered universe, the value of Loqui is unaffected by the size of its user base. However, there are various alternatives to choose from and switching costs are low. Loqui builds customer loyalty through the nature of its game design: the user essentially creates a second life and thus invests in its virtual narrative.

Low: High start up costs, industry experience, data assets, and technical savvy result in high barriers to entry. While a basic VR environment takes 1-8 weeks to develop, initial AI development can run up to 36 months. Loqui’s freemium universe is also designed to serve as a key source of data for AI development and improvement (e.g. speech recognition for specific languages, identifying areas of weakness, improving gameplay design, etc.).

High: As Loqui’s product is its language learning game, its suppliers primarily include talent in game design, technology development, and linguistics, which are in high demand.

Medium: Currently, the biggest players in the VR language learning space are Mondly and ImmerseMe. Launched in 2014, Mondly currently hosts 80 million users worldwide and offers lessons in 33 languages. The majority of these users are English language learners.