Posted - 07 May 2024
In January 2024, while the leading language learning apps collectively amassed 26.7 million downloads, Duolingo alone garnered 16.2 million downloads in that month alone!
Leading language learning apps worldwide in January 2024
ABOUT DUOLINGO
Duolingo was founded in 2011 by Luis von Ahn and Severin Hacker, with a mission to make education free and accessible to people worldwide.
It is the most downloaded education app in the history of the App Store and in 2019 became the top-grossing education app worldwide.
As of now Duolingo offers 105 courses in over 40 languages and has recently ventured into solving the English proficiency test market gap with the Duolingo English Test (DET).
And today, as of May 2024, the company is valued at $10.69 Billion. This makes Duolingo the world's 1556th most valuable company by market cap.
Today, with over 800 million downloads and 2 million users taking the DET test worldwide, Duolingo has undoubtedly transformed the way people learn languages and undergo language testing.
Duolingo outperformed the combined downloads of its top 10 competitors. Moreover, its retention rate surpasses even popular games like Candy Crush and Royal Match.
On top of it, Duolingo's had 74 million monthly active users in 2023.
Now, they're leveraging this success to address broader educational challenges, including English proficiency testing, math, and music education.
This remarkable achievement stems from an exceptional product design strategy!
A Brief History of Duolingo
Louis Von Ahn, spotted the business opportunity in foreign learning language
Louis mainly observed 2 things
Foreign Language Learning market is huge ~ Market of More than1 billion people, as learning a Foreign language helps you get a Salary Hike or land a new Job in different countries.
Learning a language is costly and unaffordable ~ Back then, it used to be $500 for a single language course
And this led to the birth of Duolingo.
Duolingo's Product-led Growth
While many companies grow through paid marketing, Duolingo actually acquired ~80% of their users organically.
Duolingo expanded its consumer base by providing an interactive and gamified approach to language learning, making it accessible to a broad range of users, from beginners to more advanced learners.
Wait!🤔
What is Product led Growth?
Product-led growth represents a market approach wherein the company focuses on developing and refining a product that transforms customers into devoted advocates, thereby initiating a viral growth cycle.
This methodology emphasizes the creation of a superior product that addresses genuine customer needs, leveraging the product itself to stimulate word-of-mouth recommendations and natural expansion.
This strategy is notably potent, as existing product advocates facilitate a self-sustaining cycle of new user acquisition, significantly diminishing customer acquisition expenses, particularly for burgeoning startups.
Duolingo’s product-led growth is based on 5 pillars
Freemium Model
Duolingo offers a freemium model, providing basic language learning content for free while offering premium features through Duolingo Plus.
Personalization and Gamification
Duolingo integrates gamification elements into its platform to make language learning fun and engaging. Users earn points, badges, and streaks for completing lessons, reaching milestones, and maintaining daily practice habits. These gamified features incentivize regular usage and create a sense of achievement, motivating users to continue learning.
Within their product, Duolingo harnessed the concept of Instant Gratification. Learners on Duolingo have the ability to rectify mistakes promptly during their courses, thereby establishing a sturdy groundwork for their language proficiency. The learning process is not only promptly strengthened by real-time feedback on exercises—an established strategy for habit development and learning—but also rewarded instantly through accrued points and gems, reinforcing their dedication to learning.
Community Engagement
Duolingo fosters a sense of community among its users through features like forums, leaderboards, and social sharing. Users can interact with each other, share their progress, and participate in language challenges and competitions. This community-driven approach encourages collaboration, peer support, and a sense of belonging, which enhances user engagement and retention.
Data-Driven Iteration (A/B Testing)
Duolingo has a learning-driven team that is obsessed with A/B testing and data analysis. The company continuously experiments with new features, user interfaces, and content variations to optimize the learning experience and drive user growth. By collecting and analyzing user feedback and behavior data, Duolingo identifies areas for improvement and iterates on its product to better meet user needs and preferences.
One of Duolingo's initial experiments involved its soft-walled signup page. Recognizing a significant dropout rate at the signup stage despite successful user acquisition efforts, Duolingo focused on retaining users once they entered the learning environment.
They introduced the concept of soft-walled signup pages, allowing users to commence learning immediately while encountering optional signup screens that could be bypassed to continue learning.
This single experiment led to a remarkable 20% increase in Daily Active Users (DAUs) for Duolingo.
Mobile-First Approach
Duolingo's mobile app is central to its product-led growth strategy, allowing users to learn languages anytime, anywhere. The app's intuitive design, offline capabilities, and personalized learning experiences cater to the needs of mobile users, enabling Duolingo to reach a wide and diverse audience globally.
Duolingo' Data Led Growth Model
The Growth Model represents a set of metrics devised to initiate our growth strategy using data. It functions as a Markov Model, deconstructing key metrics such as Daily Active Users (DAU) into smaller yet meaningful user segments for our business.
This entails categorizing all Duolingo learners, whether past or present, into activity states on a daily basis and tracking the rates of transition between these states.
These transition probabilities are monitored as retention rates, such as New User Retention Rate (NURR), rates of user deactivation (e.g., loss of Monthly Active Users, or MAU), and rates of user reactivation (e.g., reactivation rate).
The model above classifies users into 7 mutually-exclusive user states
New users: learners who are experiencing Duolingo for the first time ever
Current users: learners active today, who were also active in the past week
Reactivated users: learners active today, who were also active in the past month (but not the past week)
Resurrected users: learners active today, who were last active >30 days ago
At-risk Weekly Active Users: learners who have been active within the past week, but not today.
At-risk Monthly Active Users: learners who were active within the past month, but not the past week.
Dormant Users: learners who have been inactive for at least 30 days
Duolingo's User Retention Strategy - The Hook Model
Duolingo adeptly applies the principles of the hook model to transform language learning into a habit-forming activity.
Hook Model Basically consist of four phases - Trigger, Action, Reward & Investment.
But How Duolingo, does it exactly? 🤔
Trigger
Duolingo employs three primary strategies for push notifications.
Firstly, they utilize various personas to deliver these notifications, with the app's mascot Duo adopting a playful and encouraging tone, while another persona, Lily, adopts a more sassy teenager persona.
The tone was made to be friendly, more then guilt-provoking. Their effective copy tests brought a 5% increase in DAUs
Secondly, leveraging AI and data analysis, Duolingo determines the optimal timing for sending notifications, typically 23.5 hours after the user's last activity. Chances are learners would be free at the same time the next day.
Thirdly, Duolingo ceases sending notifications after seven days of user inactivity. However, before discontinuing notifications, they employ a passive-aggressive approach, aimed at encouraging users to resume their language learning activities.
Through these personified notifications, Duolingo successfully re-engages a significant number of users.
Action
In the context of user behavior, an action signifies the smallest step a customer takes in anticipation of a reward.
For example, on Instagram, actions may include opening the app, accessing Direct Messages (DMs), or responding to them.
In the case of Duolingo, an action refers to opening the app and completing a brief language-learning lesson, typically lasting around just 3 minutes.
Reward
Upon completing a lesson, instead of receiving a badge or maintaining a streak, Duolingo rewards users with experience points (XP).
For instance, users may earn 10 XP for a lesson, which accumulates to contribute to a daily streak.
If users consistently complete tasks or maintain their learning routines for a specified number of days, they receive badges as a reward.
Similar to the strategy used in casinos, Duolingo incorporates sound effects that activate reward centers in the brain, encouraging continued engagement with the app.
This stage corresponds to the third phase of the hook model, known as the variable reward stage.
INVESTMENT
As per the IKEA effect, voluntary investment of effort, time, or money in a product increases its perceived value.
For instance, despite long periods of inactivity, users often retain their Facebook accounts due to the investment of time spent building their social networks.
Similarly, Duolingo introduces features that psychologically invest users in the app.
One such feature is the streak, where users are rewarded for daily usage. Even though these streaks offer no tangible rewards, their value increases over time due to the user's investment of effort.
Remarkably, this gamification strategy has led to impressive results, with 3 million daily active users in 2023 maintaining streaks for over 365 days.
Furthermore, Duolingo incorporates elements like the League, where users earn experience points and compete on leaderboards.
Participants are grouped randomly based on similar activity levels, and those who accumulate more experience points ascend the ranks.
Additionally, every Sunday marks the beginning of a new weekly League, with the top 10 participants advancing to the next tier. However, there are repercussions for low engagement, such as demotion in ranks or removal from the League.
Through these mechanisms, Duolingo effectively employs positive and negative feedback to motivate learners, ensuring continuous engagement.
Thus, by initiating with triggers such as push notifications, prompting actions from users, and delivering variable rewards and psychological investments, Duolingo cultivates a cycle of learning that continually brings users back to the app.
BUSINESS LESSONS FROM DUOLINGO
Focus on Customer Retention - While customer acquisition is crucial, Duolingo emphasizes customer retention. Duolingo focuses on retaining a large and dedicated user base.
Habit-Formation - Duolingo understands the importance of becoming a habit-forming product. By leveraging the principles outlined in Nir Eyal's book "Hooked," Duolingo has created a platform that urges users return to regularly, embedding language learning into their daily routines.
Personalization and Gamification - Duolingo's success lies in its ability to personalize learning experiences and gamify language learning. By tailoring content to individual proficiency levels and incorporating game-like elements such as streaks, rewards, and leaderboards, Duolingo keeps users engaged and motivated
Utilize Behavioral Psychology - Duolingo incorporates principles of behavioral psychology to motivate users. For example, the use of variable rewards and psychological investments taps into users' intrinsic motivation, encouraging continued engagement with the platform.
Address Unmet Needs - Duolingo identified a gap in the language learning market and addressed it by offering free, accessible, and engaging language learning courses. As a result, Duolingo has attracted millions of users worldwide.
Global Expansion and Localization - Duolingo's global success stems from its ability to localize content and cater to diverse language learning needs. By offering courses in over 40 languages and adapting content to different cultures and regions, Duolingo has expanded its reach and accessibility.
Innovate and Diversify - Beyond language learning, Duolingo has diversified its offerings with initiatives like the Duolingo English Test (DET), which disrupts the traditional English proficiency testing market.
Balancing Free and Premium Offerings - Duolingo's freemium model allows users to access basic language learning content for free while offering premium features through Duolingo Plus. This balance between free and premium offerings has enabled Duolingo to monetize its platform while remaining accessible to a wide audience.
