![]() So what does this backlash actually look like? In a popular Reddit post on the r/duolingo forum, a fed-up user labeled Duolingo "a sludge of dark patterns designed to foster addictiveness." The post claimed that the company treats users "as disposable guinea pigs for obnoxious A/B testing which prioritizes short-term user conversions over long-term user retention."."Maintaining our brand will depend largely on our ability to continue to provide useful, reliable, trustworthy and innovative products, which we may not do successfully," the company adds.Duolingo writes in its S-1 risks section: "Our brand and reputation may be negatively affected by actions we take that are viewed as contrary to that mission, such as features that are only available to Plus subscribers or changes to the free offering that are viewed as undermining how fun or effective the free offering is.".Duolingo runs the risk of garnering public backlash due to its monetization and engagement strategies. This isn't just making fun of an owl avatar. The Duolingo owl, for instance, has become a cultural icon for its nagging reminders that prompt users to continue their daily learning streaks. The S-1 boasts that the Duolingo brand "has become part of pop culture, appearing in internet memes." ( How do you do, fellow kids?) It bears mentioning that these memes aren't always positive, particularly as they pertain to some of Duolingo's more aggressive gamification techniques. Three themes stand out from the S-1 risks section: public perception, reliance on mobile app stores and competition. And some variable costs could come down: Duolingo indicates efforts to boost paid user retention beyond a year, which would allow them to pay 15% app store fees to Apple and Google instead of the standard 30%. This includes costs associated with engineering, product development and design. Instead, costs come largely from research and development, which represented 45% of total revenue from 2019 and 33% of total revenue from 2020. Perhaps of greatest concern for investors, those losses seem set to widen as it posted a net loss of $13.5 million for just the first three months in 2021.īut there are attractive economics: Duolingo's cost of revenues is low, leaving the company with a healthy gross profit. This coincided with a doubling of Duolingo Plus bookings from $72 million in 2019 to $144 million in 2020.ĭuolingo has maintained its impressive revenue trajectory in 2021: Revenue for the first three months of 2021 came in at $55.4 million, which was nearly double the $28.1 million generated in the same period for 2020.ĭespite the sustained revenue growth, Duolingo hasn't turned a profit. ![]() Duolingo Plus was the primary growth driver in this timeframe, as the number of subscriptions rose from 900,000 in 2019 to 1.6 million in 2020. ![]() The Duolingo English Test, priced at $49, was purchased around 344,000 times in 2020.īetween 20, Duolingo's revenue more than doubled from $70.8 million to $161.7 million. schools often require prospective international students to take an English proficiency exam. University admissions are the top use, as U.S. The company says it designed its lessons to be "bite-sized, on-demand and fun." It runs thousands of A/B tests on users to optimize engagement, though this product refinement strategy has sometimes alienated users (for more on that and the negging Duolingo owl, see "What could go wrong?" below).Īside from the core language-learning product, Duolingo also administers English proficiency tests on behalf of corporations and universities. Overall, the Duolingo app has garnered 500 million downloads and stands as the highest-grossing education app on both Google Play and the Apple App Store.ĭuolingo's distinguishing advantage is its use of gamification techniques to encourage users to spend more time on its app. Around 5% of those users paid for the ad-free Duolingo Plus subscription service. It averaged 40 million monthly average users for the quarter ended March 31, 2021. Duolingo is a mobile language-learning app that offers courses in 40 languages.
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