The problem with these short-term things is that the short-term passes. Like even if it's like two years, two years pass and then two years later you're like, crap, oh yeah, shouldn't have done that. And so there have been definite cases where we've done things and then, you know, a year later we're like, ah, I shouldn't, we knew what we were doing was better and we shouldn't have done that. So I think the biggest thing is just this is where this principle, Take the Long View, comes from. It's like we really mean that we want this company to be thriving in many years. And you know, whatever many means, I mean we like to throw around that it's a 100-year company. I don't know if 100 is the right time frame, 50 years, 20 years, I don't know, but it's not two years.
Welcome back to the Eric Ries Show. If you've ever seen a video of Duolingo's quirky green owl and thought to yourself, that is totally unhinged, it's actually by design. Today I'm joined by Luis Von Ahn, the co-founder and CEO of Duolingo. If you've ever tried to learn a new language, there's a good chance you've encountered Duolingo's iconic green owl. With over 100 million active users and the title of the most downloaded education app in the world, Duolingo has revolutionized language learning and more recently expanded into teaching math and music. Today Duolingo is a public company with a market cap north of $14 billion, all from that little green owl. Behind the success of Duolingo is an incredible story of innovation, resilience, and a company culture that truly embraces long-term vision with a side helping of viral, unhinged fun. In this episode, we talk about how the brand attributes of that green owl are intentionally unhinged but wholesome, as he puts it. And most importantly, we talk about something new, something called the Duolingo Handbook that is actually launching today. This is the manual for how Duolingo teaches its own employees how to stay true to its vision and purpose. An example of, in the episode you'll see, I call a leader guide after the first one I ever wrote. We'll link to it in the show notes. But this manual is a brilliant how-to. It explains Duolingo's unique approach to balancing monetization with mission, how they resist the temptation of short-term profits in favor of a century-long vision. Plus, you'll see the operational details of how they do it day in and day out, keeping employees aligned and putting customers at the center of everything they do. Plus, you'll also hear some early stories. For example, the turning point when Luis and his co-founder realized their product was too boring even for them, and how that challenge sparked their obsession with making learning as engaging as a game, and the importance of dog-fooding your own product. If you want to understand how it's possible to build a mission-driven business without sacrificing growth, or if you're just curious about the behind-the-scenes journey of a company that has touched so many of our lives, this episode is for you. Here's my conversation with Duolingo's Luis Von Ahn.
Hey Luis, thank you so much for doing this.
Thank you for having me here, Eric. It's really my pleasure.
I want to start with Duo because you guys have like maybe the most viral and crazy social media success of certainly of any company in your category. And I just, when you think about like edtech software kind of companies, like you don't think of, you know, really unhinged owl doing awesome social media stuff. So just like, you know, I love in the handbook it talks about that, that Duo's brand attribute is meant to be wholesome but unhinged, which I just thought was such a great phrase. But just tell me a little bit about the origins of that. Like how did you come to be such a social media powerhouse? You know, that never struck me as like your MO, you know, like a power social media user. Like how did it happen?
Yeah, I mean, it's a lot of things came together. So we've always had a mascot and it was a green owl. This, you know, when we started Duolingo, we thought it would be good to have a mascot to encourage learners to continue learning. So there was that. We chose an owl because it's tied in, at least in Western civilizations, it's tied to knowledge. The owl is green because my co-founder Severin hates the color green and we thought it would be funny to make the owl the color that he hates. So we've had a green owl for a while. At some point, the notifications that Duolingo sends you started being sent from the owl. It, you know, because the icon, the app icon is the owl's face and, you know, it looks like the notifications come from the owl. At some point, those notifications started being a little passive-aggressive. So for example, we came up with one, you know, we send you a notification every day to remember to use Duolingo, but if you haven't used Duolingo for five days in a row, we stop sending you notifications. At some point, we decided that it was a good idea to say that we're actually stopping. So we started on the fifth day of inactivity, we would send you a notification that said, hey, these reminders don't seem to be working, we're going to stop sending them for now. And that's kind of a very passive-aggressive thing to say. And pretty soon, that started, all kinds of memes started happening based on that, as if like our owl is very passive-aggressive. And then they just escalated. You know, people were saying, oh, the owl's going to come and kidnap my family if I don't use Duolingo, etc. So we started, it's kind of the internet came up with these memes of our green owl, Duo, being very insistent and he really wants you to do your lessons and he'll go through great lengths to get you to do your lessons, including kidnapping your family. So when we saw that, we, you know, at first this was just, that's just what the internet was doing. Then we started leaning into it ourselves. And so we started kind of, we started some April Fools campaigns where, you know, the owl would actually, there was one of our first April Fools campaigns was, we made a, one of these kind of cheap local TV lawyer ads, but it was an ad for a lawyer who was saying, if your family has been kidnapped or a loved one or your family has been kidnapped by an owl, I'll, you know, I'll get you some compensation and I'll get your people back. So that was our April Fools campaign. We actually made a kind of one of these crappy commercials. And so, you know, that had a lot. Then at some point, so that was going. At some point, we didn't have a TikTok account and we had just hired a young woman named Zaria who had just come out of college and, you know, she was not quite an intern but it's kind of intern age. And she was like, well, we should have a TikTok account. And we're like, okay, fine, you can do whatever you want with that TikTok account because we don't have a TikTok account. And then she showed us what she was going to post and it was these unhinged videos of basically somebody in an owl suit but doing weird stuff. And, you know, I personally didn't think this was going to get very much traction, but it turned out that people really liked the owl suit doing weird stuff. And, you know, it has grown quite a bit since then. I mean, at this point, you know, that owl suit has been invited to, you know, movie premieres, all kinds of things. It's very famous. But yeah, it kind of happened in part because the internet invented it and in part because we had a very junior employee who, I don't know how much she knew what she was doing. In retrospect, she probably would tell you that she knew what she was doing, but she did an amazing job and I was against it.
This episode is brought to you by my friends at Wilson Sonsini, the innovation economy's law firm. From the earliest days of the semiconductor industry to today's fast-advancing AI sector, not to mention healthcare and life sciences, Wilson Sonsini has represented the pioneers behind nearly every technology breakthrough. Based in Silicon Valley, Wilson Sonsini is connected to the top minds and institutions that inspire discovery and innovation, with strong ties to leading venture capital firms and investors in key markets from Silicon Valley to New York and London and beyond. In fact, Wilson Sonsini is consistently top-ranked for the number of venture financings it handles each year. For more information, visit wsgr.com.
Well, that, I love that, it's just a great lead into talking about the Duolingo Handbook and just the company building philosophy of that. Because at every point of that story, there's so many moments when some other company would have definitely gotten off the train. Starting with the very beginning, when people have internet memes made about them, most companies' reaction is defensiveness. You know, how dare they do that, that's offensive, they can't use my IP, they can't do this. You know, they have such a tightly controlled message. But then even more so to me, you know, hiring, you just, companies talk about hiring top talent all the time and yet they don't, first of all, they don't really take it that seriously. And second of all, when they do do it, they have this tendency to want to tell them what to do. And I'm always like, if you're hiring the best people in the world, why are you obsessed with telling them what to do? It seems exactly backwards. So talk about like just the humility of being willing to take a chance with like one of your most precious assets, the corporate brand, and let somebody run with it even though you yourself thought it was a bad idea.
Yeah, we're, the good news, we, you know, one of our principles is make it fun inside the company and we don't take ourselves too seriously. I mean, we work, you know, we work seriously but we don't take ourselves too seriously. So historically we lean into anything that is funny inside the company or outside the company. And so as long, you know, with the social media, as long as it wasn't offending anybody, we didn't care. And so, you know, I think that has been a good principle, just lean into the fun because it makes it so that the workplace is a lot more enjoyable. And in addition to that, our app really stands out in a lot of ways where, you know, it many times does things that kind of apps are not supposed to do. You know, sending you messages like, one of the messages that the owl sends, one of the notifications is like, hey babe, I miss you. Which by the way, we have heard from people that get in trouble because their significant other thinks that they're getting a notification from, you know, like an affair they're having or something, but it's just our owl. So we do stuff like that because we find it funny.
This is such an interesting combination of factors because you have on the one hand not taking yourself too seriously, but on the other hand, you know, in the handbook especially, it talks a lot about this commitment to excellence, holding a high bar, you know, the importance of quality. But on the other hand, it also talks about being long-term and like not going after short-term metrics, not going after short-term monetization, but still building a sustainable business. So a lot of people I think would look at that combination of things and say it's a little bit contradictory or there's a tension between those principles. Talk about how you resolve that tension in yourself and then how you've done that for the company too.
Yeah, there's definitely a tension in our principles. I mean, we have these, it's five principles that are outlined in the handbook. One of them is called Take the Long View, which basically says, you know, don't do short-term gimmicks or short-term hacks. A great example of not doing a short-term hack is, you know, we could make a lot more money tomorrow if we double the ad load. And we would make a lot more money tomorrow and probably our stock would go up. The problem is that it's short-term thinking because if we double the ad load, our user growth would slow and therefore in five years we would probably pay for that. And so we're more interested in what's going to happen in five, 20 years rather than what's going to happen next quarter. And we follow that principle quite a bit. That's not to say we've never done kind of dumb short-term things, we sometimes have, but generally we're pretty good at following that principle. So that's one. You're right, that is a little contradictory with, you know, something like having an owl doing crazy things. But we don't see it that way. In the case of like the owl doing crazy stuff, we actually think, you know, we're building a brand for the long term. And again, we don't do things that are going to, you know, hurt us in the short term, but just anything that gets the owl to be more famous, I think that's, we're good with that. And you know, the other one that you brought up is we have this other principle that is called Raise the Bar, which is basically just talking about a lot of excellence. That one is interesting because in the product we try to, you know, it kind of has to be pixel perfect and, you know, we have these very stickler designers that like will not let one pixel off. And it's funny that our TikTok is, I wouldn't say it's pixel perfect. I mean, in fact, it does really weird, it would lose its authenticity if it was. So that one, you know, when we say raise the bar, we don't mean that everything has to be pixel perfect. It just means everything has to be excellent. And there's some stuff that even when it's authentic, it's excellent. And that's, you know, I believe our TikTok is excellent even though the production value, by the way, cost, I've seen them film these videos. I mean, they filmed with some of them with me and them. It's just, it's just like a 22-year-old with an iPhone filming those videos. So, you know, we don't have like a fancy camera or anything. But I think the outcome is excellent. I can't tell you how many people sent me the video on the day of the TikTok ban of the owl being thrown in the garbage.
Oh yeah, because it's all over, like that made such a big impression. And yeah, you can just feel the authenticity of, you know, there's no high production value, it's not some like stage set with special effects. It was cool, that was pretty funny.
We, I saw them, I mean, I was in that video, although I was always just kind of, I was just typing stuff. But it was, I mean, we were, yeah, we were, they were honestly just having fun with it and genuinely sad that TikTok was going away. It turned out TikTok didn't go away, but they were genuinely sad.
Yeah, more like a TikTok kayfabe than a TikTok ban, certainly.
Okay, so I want to get back to these, but one thing I noticed when founders who are as successful as you've been talk about building their company, people sometimes feel like, man, that just seems too hard. How could I ever get to that level? Because of course you're talking about, you know, the green machine at the level that you're at today. So take us back in time, you know, talk about your journey into entrepreneurship. Like how did you even conceive the idea of becoming an entrepreneur in the first place? And you know, you've done a lot of stuff before Duolingo, you give us a little sampling of your background and what it was like to come here and do this.
Well, a couple of things. I mean, first of all, I did not expect to be an entrepreneur. I'm a little bit of an accidental entrepreneur. Now that doesn't mean that I'm not happy that I'm an entrepreneur and, you know, things have worked out. But I did not expect that. I, from very early in my life, I mean, when I was like maybe 12, 13, I wanted to be a professor, which is weird. I think most kids want to be like a detective. I wanted to be a professor, which tells you how nerdy I was. So I wanted to be a professor and I did, I became a professor.
What did you want to become a professor of?
Well, at first math, but eventually I became a professor of computer science.
So I became a professor of computer science and I was a professor of computer science, but then I started this project that was called reCAPTCHA. That was not a company, but it was, I think a lot of people have seen it. It's basically this annoying, by now what they look like is you have to pick all the pictures that have like a traffic light or something like that. Back then it looked like distorted words, so you had to type these distorted words. This was an academic project inside Carnegie Mellon University. But then it turned out that all kinds of companies started using it, even though it was an academic project. Like Facebook started using it as their signup form and we were actually making money. But we were still an academic project and there were these, you know, we were getting like checks for like $50,000 and they were coming to like my house. And at some point, Carnegie Mellon University got wind that this was happening and the lawyers came to my office and they were like, you can't do this, this is, you're doing, it's an academic project but you're making money off of it, like you can't do that. And I was like, I don't, I don't mean this is just kind of what's happening. And then they told me I had to spin out as a company. And so I did. And that's kind of what started, so that was my first company. It was a company called reCAPTCHA. It eventually got sold to Google. And then after that I started Duolingo. Again, interestingly, it started as an academic project. We were inside Carnegie Mellon University and then the reason that became a company was because at some point we had maybe about five people working on it inside the university and we knew we needed to hire more people. And then hiring more people was going to cost us, I don't know, a couple million dollars inside the university that would have required applying for a grant, usually from the National Science Foundation. And I started writing that grant and it was going to be like an 80-page document that I needed to write and it was going to, we were not going to find out about the funding for like nine months or something. And then at around that time I met these guys, Fred Wilson and Brad Burnham from Union Square Ventures, who just kind of on the spot, I mean, it wasn't on the spot like randomly, but it took about a week for them to offer me a million-dollar check. And I thought that was a lot easier than writing an 80-page grant proposal. And this is why we turned Duolingo into a company. And that's kind of what started as a company.
Did CMU get a cut of the equity in the company?
CMU got a cut, which by the time we IPOed was worth more than a building. And I am upset that they don't have a building named Duolingo. I would like that, or a building with a green owl. But there should be a statue of the owl at least.
Yeah, certainly at the very least there should be.
But there's not. So if any of you Carnegie Mellon head honchos are listening to this, please, I would like a statue.
Oh, that's really funny. Okay, so you had been, and do I remember right, you were a MacArthur Genius Grant winner?
I did get a MacArthur Genius.
You got, so tell us what that's like. Just talk about that for a second.
Yeah, I got that, that was a million years ago, in 2006. I had just started being a professor in computer science. It was because of my work on reCAPTCHA. You know, I got a phone call in my office, not even on my cell phone, I never got phone calls in my office. I got a phone call in my office and from somebody that just said, have you ever heard of the MacArthur Fellowship? And then I said, yeah, yeah, I've heard of it. And they said, this is not a prank, you won it. And you know, it's this kind of weird phone call that you get, complete surprise. And, you know, I was very proud of that, but I didn't know what to do with it. But it was, I'm very happy that I won that and it's an amazing program.
Talk a little bit about that because I think one of the things that's really interesting reading through the handbook and just, you know, I've known you for a while and Duolingo obviously is well-known, there's this sense of purpose that really just is like emanating from the document. That although this is a company, yes you're having fun, yes there's an economic engine to it, like there's something deeper going on. And reCAPTCHA was the same way. I can see a lot of people, you know, maybe a lot of our listeners may not be old enough to quite remember what a disaster the spam wars were, you know, before the idea of reCAPTCHA was invented. And that was like a really important public service that you performed on behalf of the whole internet. And yes, it eventually became a company, yes it eventually got sold to Google, but it wasn't really your motivation. Like what people normally think of as someone who's like out to make money, that's not really what they have in mind. So can you talk a little bit about like what is the thread of motivation that has guided you through these different projects that have led you having all this success, but I always got the sense from you that it wasn't about, you weren't like grasping for the fame and the success, that was more like a side effect of something deeper.
I think that's about right. In the case of Duolingo, it's always been a very mission-driven company. When we started, we knew that we wanted to do something related to education. I grew up in a poor country, I grew up in Guatemala, and I saw what the difference is between those who have access to good education and those who don't. And that's particularly true in the US. I mean, if you have money, you end up having access, you end up going to like a fancy university, etc. And then those who don't have very much money kind of don't and usually go to a lower-end school, etc. And therefore never end up making money because they don't have a very good education. Whereas people who do, yeah, become self-perpetuating. And this is, it's like 10 times worse in a poor country. And so I always, I saw that and I was fortunate that I got the education of a rich person even though I didn't grow up rich. I was fortunate that I was an only child of my mother who was a doctor. And doctors in Guatemala are not rich but at least they make kind of an okay living. But she spent her entirety of her, all of her salary and everything on my education. So I got the education of a rich person and I saw the difference between the education I got versus the education that other people in my neighborhood got, which was way worse. And so we wanted to do something that would give equal access to education to everybody. That was the idea. And with Duolingo, and so my co-founder Severin and I were big believers in this and we started that. Now the first few people that we hired with Duolingo were all, they were all Carnegie Mellon students and then we hired them to be at Duolingo. We loved the mission but they were zealots because these people were, they came in and they had the chance to go get a job at like, at the time it was like Google or Facebook making I don't know two or three times what we were offering them. But they came to work for us for the mission. So the first call it 10 to 15 employees put their money where their mouth was. They were really, really zealous for the mission. So what that did is over the years, they just, there was just this group of early employees who was very gung-ho on the mission. And so everybody who came in, they were either really bought into the mission or quickly got bought into the mission because these early employees were kind of really into that. So I think that just perpetuated and by now Duolingo is a pretty, still quite a mission-oriented company. And I think we're all big believers in that. And I think most everybody that works here, you know, this is not true of 100% of the people, but I would say most everybody that works here is a big believer in the mission, big believer in education, and they're very happy that it's kind of hard to argue against what we're doing. So, you know, if you work, you know, of course I'm a big fan of a lot of the big tech companies, but you can argue against, you know, oh I work for Meta, well I don't know, are you interfering with elections? Or I work, like you can argue against those. It's hard to argue against the stuff that we do because it's just teaching people something. So I think a lot of the people that work here really like that.
I appreciate you giving a shout-out to those early employees because, you know, in the press, the way that startups are written about, it's always, you know, genius founder do amazing thing. Yeah, you're an official genius TM founder though, it's even worse for you. You know, genius founder knew everything, figured everything out. And there's always these people in companies that I call them the torchbearers. They're like the people who really, you know, as you said, put their money where their mouth is, put their life on the line to make the thing reality. And of course, early employees, you tend to have those people. But in a strong culture company, you'll have new people kind of enter into that status where they have the moral authority internally to just say, look, this is what we stand for, this is what we're doing. And they're not always the people with the biggest title, they don't always get paid the most, they don't very often do not get the public recognition. But internally, if you ask around, who are those torchbearers, like they're known. And that interaction between founders and those people, so much of the value of startups comes from that moment.
100%. I couldn't agree more. I mean, there's a group of, you know, I don't know the number exactly, but there's a group of call it 30 to 50 people inside Duolingo that are like, really, this company is built on their backs. I mean, every employee has contributed, of course, but, you know, there's this group of people that have been around for like a decade or so and I'm good friends with all of them. I am extremely thankful for everything that they've done and honestly, I've done only a small fraction when you compare it with what this whole group has done.
Oh yeah, I remember hearing that was a big part of Steve Jobs' leadership style is that he would have like a regular retreat off campus from the Apple campus with top executives from the company, but it was not chosen by rank or hierarchy, but just by his personal sense of who he thought the really up-and-coming key people were. And it was like a major political battle to make sure you were one of those people. And it was very controversial, I mean, still was a very controversial practice, but it really established like this idea that there are these key people who are like really driving the way. I mean, I think that's 100% true of Duolingo.
What may not be true is my opinion of who they are versus reality may not be 100%.
Yeah, that is the downside.
I have my own opinion, the reality may be a little different, but I think I'm probably at least 80% right.
Yeah, well, and the important thing, the lesson for me is that you take responsibility for it. That is, you don't, you're not just like, well, whatever happens with the, you know, people I hire, they go off and do whatever. Like you have a real sense that like the company has a certain kind of integrity that has to be maintained.
Yeah, I really, I mean, and your customers can feel it. You know, it's one of those things, you very, back to the theme of authenticity, you can't fake it.
Yeah, I mean, that's how I feel. Talk a little bit about the early days, like what was the first product like? How did you get to the early traction that let you, you know, for example, raise money from our friends at USV or, you know, have a kind of early breakthroughs that got you to product-market fit?
It took us about a year and a half to launch something publicly. So we worked on it internally for about a year and a half. We ran into a big problem actually when we were working on it early on. We knew that we were going to teach languages and we knew that it was going to be a free way to teach languages and it was going to be the computer that taught you the languages. We knew that. We had this great idea that I'm a native Spanish speaker so I was going to make the first Spanish course and then my co-founder Severin is a native German speaker and he was going to make the first German course. Turns out actually he's not a native German speaker, turns out he's a native Swiss German speaker and I did not know that those were two different languages. I thought it was like British English. It's not, it's like a different language. Anyways, he does know German so he made the first German course. I'm going to assume that it sounded a lot like Swiss German. It's now completely been redone by the way. But anyways, we made those courses and we thought we had this great idea that I was going to learn German and he was going to learn Spanish. So we were going to learn each other's language through our software. So we started doing that. We ran into this huge problem that was I would come into the office every day and then I would say, hey Severin, did you do your Spanish? And then he would say, no man, so boring. And I had the same problem that it was, my God, learning German on that thing was so boring. And then that was the problem we had. We were like, well, we can't get ourselves to use our own thing. We're pretty committed to this and we can't get ourselves to do it. So how can we expect others to do it? So, you know, we started freaking out. And this is when we started kind of made it a big thing to make it as enjoyable as possible. And this is when we learned something that I still believe today is the hardest thing about learning something by yourself is staying motivated. So we spent a lot of effort trying to make the thing be fun enough that we would like it. And that just meant kind of turn it into a game as much as possible. So, you know, the lessons used to be 30 minutes long, we shortened them to be like 3 minutes long. We added progress bars everywhere. We started adding points every time you finish a lesson, etc. And we made enough changes that we found ourselves enjoying it. And so that's, you know, that was a big thing. And so by the time we launched, we were fortunate that we launched a thing that was pretty good in that it taught you languages, it was free, and it was enjoyable. I think that combo was pretty powerful. And that's kind of what got us to grow at first, it's just this combo that was free and fun. You got to understand at the time when we launched, which was 2012, the thing that was the kind of standard was this thing called Rosetta Stone.
I remember Rosetta Stone, yeah.
Yeah, they were mainly selling CDs and it was about $500. We came up with this thing that was an app and it was free. It just turned out that that combo, app, free, and also fun, was just a lot better of an offering for people than a CD that cost $500. And so that got us to grow quite a bit.
That's a classic your margin is my opportunity moment.
Yeah, they didn't have to sell that for $500.
Also, they probably should have gone on mobile a little sooner than that.
Well, yeah, it's just innovator dilemma 101.
And by the way, yes it is, because later they kind of saw what we were doing, but they were stuck because they spent a lot of money on marketing, right? And in order to make that work, they needed to charge that much money. And so they, I feel the pain of those meetings where they were trying to figure out, I really think there was nothing they could have done. I really think they were just like, well, what are you going to do? And so we were there, we were not spending any money on marketing, we were just growing a lot. And we were free. They had to have bought Duolingo at that time. That's really was their only, that is probably what they, I mean, we were not interested in selling, but that is probably what they would have had to do.
No, I think it's very important to the story for people don't realize this, like that one of the advantages of being a mission company is you can make promises to your customers that they can believe. Because the kind of typical mercenary company that gets this for sale, you know, you never know when some horrible company's going to come in and buy it. So even if you like the company, even if you believe in what they're doing, like they're one phone call away from one very rich person, you know, becoming like, you know, really crappy. So it's really difficult to have that kind of trust with customers if you do that.
Yeah, yeah, we were definitely, I mean, everybody that came in came in thinking we are going to do free education for the world. That's what we came in. And by the way, there's another interesting thing that happened was we weren't making any money at first. It was just free. And the way we supported ourselves was through venture capital. We had enough venture capital that we could pay for salaries.
But did I read right that it was Lila Sturdy, our mutual friend?
Lila Sturdy is the person that kind of forced me to start making money.
Okay, tell that story, tell that story because, first of all, that's what happened.
I mean, so we grew up, you know, we had grown, we had, I don't know how many users, but we had millions of active users at some point. At the time it was called Google Capital, but now it's called Capital G. It was this, you know, this venture firm, kind of later-stage venture firm, invested in us when we had zero revenue. And so Lila invested in us when we had zero revenue. The valuation was something like half a billion dollars or something like that.
And zero revenue, for those who don't know, there's some people who I'm sure are listening who are not familiar with startup economics and their mind is exploding right now. How can a company with no revenue be worth half a billion dollars?
Yes, I think that was different times in that I think it was more okay to have no revenue back then. I don't know, I know a fair bit of AI companies with no revenue right now.
AI is now back, you're right about that.
But I think it was more okay to have no revenue and I think also we had a lot of user traction. We really, we were growing organically, no marketing spend, and a lot of user traction. So I think the thesis was, look, at some point these people are going to figure out how to make money, but they have a lot of user traction. I think that was the thesis. And so they invested in us. But what I didn't know is that quickly after they invested in us, Lila flew, she's based in San Francisco, she flew here to Pittsburgh, we're in Pittsburgh, and she took us to a bar, Severin and me, and it turns out she can out-drink us. And she out-drank us. And after enough drinks, she just starts basically telling us, look, I don't care what you do, but tomorrow you need to start figuring out how to make money. And she said this amazing line, she said, look, there is no bigger fool than Google. Like you're not going to find a bigger fool, like another venture firm that gives you a higher valuation. You're just not gonna, you have to make money. And so anyway, she kind of scared us enough that the next day, hungover and all, we started trying to figure out how to make money. Which by the way was actually quite hard in that, not figuring out how to make money exactly, but culturally for the company, almost everybody who came in here came in with the promise of free education. When I said we need to start making money, they were like, but why?
And they, you know, they really, they thought making money was evil. That was kind of the premise. And it took me about six months to convince everybody. At the time we had maybe, I don't know, 100 to 150 employees. It took me about six months to convince them, particularly that old guard of employees that came early on.
I was going to ask about because, yeah, like why isn't it evil to take a free education thing and make money off it? Like how did you make the moral case that this is the right thing to do?
I don't think it's evil. I don't think making money is evil. And the case, and I think it, I'm a big believer and I believe it's been true, is look, we have about 150 people and, you know, we can't really grow very fast in terms of employees and therefore in terms of what we work on and in terms of what our impact is if we don't have more money. So making money actually will allow us to satisfy our mission much faster. And it, boy, it's been true. I mean, as soon as we started making kind of significant amounts of money, we were able to start hiring way more and we were able to start working on many more things. And so we really expanded our courses. By now we started teaching other things like math and music. And it's all because we have this nice revenue stream that allows us to do that. I think if you're not making money, you can't do that. And I think that's, you know, it is not true that there are no successful nonprofits out there, that is not true. However, I will say it is rare to find nonprofits out there that have that much impact. You know, there are some, but it is rare to find some exceptions. And I think it's because if you don't have this revenue stream, it's just hard to have that much impact. I think that's just how it is.
It's a very rare thing when you have this true alignment between the mission and the business model such that the more the model, the more the mission is accomplished, the more money the organization makes and the more that can be reinvested. And one of the most common ways that that alignment gets broken is through greed. You know, that's what I, one of the things I really liked about the handbook is and talking about the allergy to short-termism is, you know, there's lots of ways you could make money today. You already mentioned one, you could dump, you have way more ads, you could dramatically increase the number of notifications, you could raise prices, you could reduce the quality of the premium product. I give you 25 ideas right now, no problem. And they all work in three months. They all work three months. You only count, you only look at your metrics three months from now, you'll be great, stock price up. Most companies with for-profit investors simply cannot resist the lure of that behavior. So much so that Cory Doctorow coined the term literally enshittification to describe what happens to most internet platforms when they get put under this financial gravity. So talk about, but I get how you reassured them in those early days, but now you've been at this quite a few years since then, you've obviously faced the temptation of the One Ring many times. You found a way to resist it.
I think the reason people talk about making money as being evil is there's this widely accepted idea in our culture that resistance is impossible, that eventually the system will win and you'll give up. So talk about how, like structurally, how have you built the company to resist that temptation and to create that alignment and protect it? We have, but I'll start by admitting that we haven't been 100% good at it. We've definitely had, been tempted. And it's even more stark when you have, when you're a public company and you have a stock price, right? Because, and it's true for everybody involved, including me, you look at it and you're like, man, that stock, like I could be worth more money. Like it's, there's definite temptation. I think the thing that has worked best for us is just this knowledge that for most people who work at Duolingo, this is certainly true for me and I think most everybody who's making decisions, we have realized that this is probably the last job we'll have. Like, and I don't really want to, you know, I'll be bored retiring. Like I want to be here for a very long time. And I think that's true for most everybody. I won't say everybody and I won't, you know, I'm sure that some of these people will leave, like I'm sure. But I think most everybody that is high up, that is making decisions at Duolingo, really sees themselves as, you know, we call them lifers. I think we're like, a lot of us are lifers. And I think when you realize that, you're like, well, I don't know, I kind of don't want to shoot myself in the foot two years from now. And, you know, the problem with these short-term things is that the short-term passes. Like even if it's like two years, two years pass and then two years later you're like, crap, oh yeah, shouldn't have done that. And so there have been definite cases where we've done things and then, you know, a year later we're like, ah, I shouldn't, we knew what we were doing was better and we shouldn't have done that. So I think the biggest thing is just this is where this principle, Take the Long View, comes from. It's like we really mean that we want this company to be thriving in many years. And, you know, whatever many means, I mean we like to throw around that it's a 100-year company. I don't know if 100 is the right time frame, 50 years, 20 years, I don't know, but it's not two years. And I think that's what's done it. I got to tell you, you know, I'll give you an example just so that people don't think that, you know, it's easy when you hear a lot of times you hear these podcasts or read books and like, oh my God, they've done everything perfect. And I'll give you an example where we didn't follow this. There was one time, few quarters ago, this was, I don't know, two years, I don't know how long ago, a year, two years ago, where we thought we weren't going to hit the quarterly guidance. We thought so far that hasn't happened. So far we have hit, we have like a perfect streak. We have every time beaten the guidance. We've done well in the stock market because of that. So we've done, there was one quarter where we thought that wasn't going to happen. It turned out we were wrong, actually, turned out we surpassed it. But we thought it wasn't going to happen, things weren't looking so good. And my CFO comes to me and he was, he's quite worried. Of course, this is also a, you know, it's an amazing CFO, Matt Skarupa, his ass is on the line in some sense because he's this is the CFO who's never missed a quarter. And then he's like, what are we going to do? Went home, I thought about it for a second and I came back and I'm like, I know what to do. We are going to show two ads instead of one. I actually thought that.
