Duolingo · B2C · language learning app
Make paid features free when a test shows they earn little
Took a small revenue hit on purpose to grow free users
What they did
What happened
In their words
Why Your Free Users Are Your Real Growth Engine – Cem Kansu, Duolingo CPO
Cem KansuSo let me talk about actually two features that we, one of them we just did and we are about to do. So Practice Hub I talked about. We have realized that number one, as a goal, we would like to provide more value to our free users because free users, there's the missionary reason why.
Cem KansuWe want to teach more people, but there's the business reason, which is free users are our marketing engine. Duolingo grows as an entire user base and as a business through word of mouth. Word of mouth is much stronger if your free product is stronger because you might or might not pay, irrelevant.
Cem KansuIf you're using Duolingo, you tell your friends about Duolingo and say, "This is awesome. I'm learning Spanish." They try it, they do the same. So that's how Duolingo really grows. That's the majority of our growth engine and that growth engine, of course, gets stronger if we can provide more value to free users.
David BarnardHow did you determine that?
Cem KansuWe tested it. We tested giving it for free and compared it to a B condition or a control condition where it is part of Max. The impact, well, there was impact, but we decided to reduce our revenue, but rather provide value for our free users because we believe that's the right thing to do in the long term.
Cem KansuAnd there's one more reason, which is when we first introduced this feature, it was financially impossible for us to make it free because it uses LLM calls to explain basic... What it does for the record is you give an answer, you answered something, and we basically use LLMs to describe to you what you got wrong for your specific answer.
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More from this episode
- Keep lessons free and sell learners' translations to news sitesSmall revenue; dropped by 2016 (price race and low translation quality)
- Charge $1-3 to fix a broken streakA good share of users paid; showed how much users value their streak
- Show one ad only after a lesson ends, and test it against retentionRetention mostly neutral, at most a slight hit, across ad tests
- Count ad complaints per million users and compare them to other complaintsMissing-course complaints were 3x ad complaints; ads launched
- Block gambling and sketchy ad types, even if it costs revenueAccepted lost ad revenue for better experience; no numbers
- Sell ads directly to brands and have app characters introduce themUsers like the format; slow to sell because it's custom
- Use the end-of-lesson ad slot to advertise your own paid planGuest says house ads beat programmatic ads; no numbers
- Run 3-6 month holdouts for changes whose effects show up lateNew push lifts can turn negative after about 6 weeks
- Sell a one-time ad-free month at $3, $5 or $10 to test demandUptake far above expectations; led to the subscription
- Launch a plan with no ads, offline use, and 'support our mission'About half of early buyers paid to support the app; started a run rate
- Offer a free trial even though the app is already freeOne of the biggest unlocks; guest had expected it to flop
- Tell users on the paywall you'll remind them on day 5 of a 7-day trialWon A/B tests by easing fear of subscription traps
- Change the buy button to say 'Try for $0.00'Beat 'Try for free' on both trial starts and trial-to-paid
- Give subscribers unlimited hearts so mistakes never stop their lessonsBig turning point: raised subscription conversion and retention
- Add new subjects inside the main app instead of launching new appsSeparate apps were 'hard mode'; in-app works better, but many users still don't know
- Offer live human tutors on demand in a higher-priced planFailed: users joined, panicked and left; later replaced by AI video call
Tags: freemium, free-tier, llm-costs, long-term