Oct 13, 2017 · 25m · 20vc
20VC: Duolingo's Luis von Ahn on How CEO's Can Scale With The Company, How VC Herd Mentality In The Valley Really Works and How Chatbots & AI Play A Role In The Future of EdTech
0:00 / 0:00
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, Duolingo co-founder and CEO Luis von Ahn joins Harry Stebbings to discuss the creation of Duolingo, the integration of AI and gamification in education, venture capital dynamics, and his evolution as a leader scaling the company toward an IPO.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 28.6% of the talking time here. How this is scored →
Harry as informed peer 2.7 Guest teaching 2.3 Guest disagreement 0.7 Harry pushing back 0.7
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 15:47 Rejection of 'hire fast, fire fast' axiom
Luis directly rejects Harry's question premise on whether he agrees with 'hire fast, fire fast', stating Duolingo does the exact opposite by hiring slowly and giving employees second chances.
Hardest push from Harry ▶ 15:31 Harry calls out Luis's firing executionWhen Luis mentions having to fire someone four times because they did not realize they were fired, Harry interrupts to put the blame on Luis directly, stating 'I think that's your fault, Lewis'.
Biggest teaching moment ▶ 7:02 Bloom's Two Sigma study lesson on tutoringLuis educates Harry on educational psychology by referencing Bloom's Two Sigma study, explaining how 1-on-1 human tutoring moves students two standard deviations above classroom medians.
Harry holds his own ▶ 18:51 Harry explains VC data sourcing toolsWhen Luis expresses confusion about why 12 VC firms reach out simultaneously every few months, Harry demonstrates domain authority by explaining the mechanics of automated VC data tracking tools.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| The Founding Story and Social Mission of Duolingo | 1 | 3 | 0 | 0 | Stebbings asks high-level background questions on Duolingo's social mission and why EdTech is broadly considered a difficult sector. Von Ahn educates the host on the economics of global language learning and structural obstacles in EdTech regulations and content creation. | |
| The Impact of Artificial Intelligence and Chatbots in Education | 2 | 3 | 1 | 1 | Von Ahn explains educational psychology, specifically citing Bloom's Two Sigma study on one-on-one tutoring effectiveness. Stebbings interjects playfully about scalability, while von Ahn gently reframes chatbots as uniquely suited for language learning rather than general subjects. | |
| Gamification, User Retention, and Guilt-Free Entertainment | 4 | 2 | 0 | 0 | Stebbings demonstrates preparation by citing specific user retention metrics and a growth experiment involving the red badge icon from Duolingo's VP of Growth. Von Ahn details retention benchmarks and how Duolingo positions itself as guilt-free entertainment against gaming apps. | |
| CEO Leadership Development and Scaling Organizational Management | 3 | 3 | 3 | 2 | Stebbings quotes former Tinder CEO Sean Rad and challenges von Ahn's initial firing story, playfully assigning him fault. When Stebbings asks if he agrees with 'hire fast, fire fast', von Ahn explicitly rejects the premise, explaining Duolingo's opposite philosophy. | |
| Navigating Series E Fundraising and Partnering with Drive Capital | 5 | 2 | 0 | 1 | Stebbings questions why Duolingo only raised 25 million at a 700 million valuation and demonstrates venture capital expertise by explaining how automated data sourcing tools trigger simultaneous investor outreach. Von Ahn outlines his rationale for choosing Drive Capital over Silicon Valley firms. | |
| Quickfire Round: Books, Workouts, VC Changes, and Future IPO | 1 | 1 | 0 | 0 | A friendly quickfire round covering books, von Ahn's intense 16-minute workout routine, diversity in venture capital, and Duolingo's path toward a 2019 IPO without pushback or conflict. |
Statements from this episode (19)
Von Ahn: 1.2 billion people worldwide are learning a foreign language
“It's a huge audience, 1.2 billion people in the world learning a foreign language.”
Von Ahn: $80 billion is spent annually on language learning worldwide
“About eighty billion dollars a year, eight zero, eighty billion dollars a year are spent on language learning.”
Von Ahn: Two-thirds of language learners study English to escape poverty
“Most of the people that are learning a foreign language, about two thirds of them, satisfy three properties. First, they're learning English. Second, the reason they're learning English is in order to get a job. And third, they are of low socioeconomic conditi…”
Von Ahn: Core EdTech apps cannot rely on crowdsourced content
“If you're going to decide to teach something, there is a big problem, which is, I don't believe there's an easy way to do a really simple app where in some way kind of you crowdsource the teaching from one side to the other. Like, for example, think of Instagr…”
Von Ahn: EdTech scaling is blocked by fragmented district budgets
“Education is usually at the district level, at the school district level, where, where things are spent, so it's not like you can have a contract with the whole U.S. School system, or anything like that, and different district levels teach differently, differe…”
Von Ahn: One-on-one tutoring outperforms 98% of standard classroom students
“I mean, there's a lot of studies in educational psychology that show, you know, the most famous one is something called the Bloom's Two Sigma study. It shows the following. It compares a student In a standard classroom, let's say with 30 other students or 20 o…”
Von Ahn: Chatbots Work for Language Learning but Not for Math
“I don't think it's all that useful to have something like teaching math where you have a chatbot because the conversation is not the real element. You know, you're somehow trying to teach math. Whereas in languages, you're trying to teach the conversation. So …”
Von Ahn: MOOC platforms like Coursera have abysmal 1.5% completion rates
“A lot of the MOOC companies, they're the massively online course companies like Coursera and Udacity, et cetera. The retention numbers for their courses are abysmal. I mean, of the number of people that sign up, something like one and a half percent or two per…”
Von Ahn: Duolingo achieves 55% Day 1 retention, crushing typical edtech
“Of the people who sign up on Duolingo, about 55% come back the next day. That's a number that is comparable to pretty good games, and if you look at usually education companies, the numbers that you get there are, you know, 10% come back the next day, or 15% c…”
Von Ahn: Duolingo's Day 7 user retention is north of 30%
“Ah, for us, on, returning on D-seven, so on the seventh day, probably, you know, it's north of 30%.”
Von Ahn: Supercell achieves an impressive 20% Day 365 user retention
“We look a lot at companies like Supercell, who I admire a lot. They're making these amazing games where their D three 65 retention, like one year later, you know, they're looking at things like 20% on the three 65th day people are there.”
Von Ahn: Duolingo rejects Silicon Valley's 'hire fast, fire fast' philosophy
“No, I do not agree with that. We're actually doing quite the opposite. We're, Very picky at hiring. I mean, we have raised quite a bit of money. We have raised about a hundred and eight million dollars. So we would be able, we only have about a hundred employe…”
Von Ahn: Duolingo raised $108M while keeping headcount to just 100 employees
“We have raised about a hundred and eight million dollars. So we would be able, we only have about a hundred employees.”
Von Ahn: Duolingo negotiated down its Series E raise size
“We did not want to raise a lot of money, so in a weird situation, we actually were negotiating down on how much money we needed to raise as opposed to up.”
Von Ahn: Duolingo was close to breakeven during Series E
“Yeah, we negotiated that down. It's because we didn't think we needed more money. I mean, Break even very soon.”
Stebbings: VC data tools trigger synchronized outreach to startups
“They all have kind of data sourcing tools, and so when you have inflections in, in growth charts, in retention rates, in employee count, they all get notified at the same time.”
Von Ahn: Silicon Valley VCs consider a Pittsburgh location a downside
“So, you know, for most kind of Silicon Valley investors, you know, it's a downside that we're in Pittsburgh, and I understand that.”
Von Ahn: Many venture capital firms still have no female partners
“In particular, I find that the VC world is not very diverse. I mean, many, many firms that you see have no female partners.”
Von Ahn: Duolingo's revenues will justify going public by 2019
“Well, we want to be a publicly traded company. I don't know when that'll happen. It's kind of very early to tell. We're gearing up towards that. I think our revenues are going to justify it in maybe, I'm hoping that in 2019 our revenues would justify a publicl…”