Tech

The CEO of $2.5 billion Duolingo explains why he’s telling all employees to come to the office on Tuesday, Wednesday, and Thursday as the pandemic ends

  • Duolingo employees are expected to return to the office on September 1 following a “3+2” schedule. 
  • CEO Luis von Ahn didn’t aspire to be an entrepreneur. He studied math and invented CAPTCHAs. 
  • After selling two companies to Google, von Ahn decided to improve English language-learning.
  • See more stories on Insider’s business page.

Luis von Ahn may be the CEO of the language-learning startup Duolingo, but math is his first love.  “I did not want to be an entrepreneur or a founder,” he tells Insider. “I wanted to study math.”

So when the 350 employees of his $2.5 billion company are asked to return to Duolingo’s Pittsburgh headquarters on September 1, they will be following a simple math formula, or as von Ahn puts it, a “3+2” schedule, where they are in the office on Tuesday, Wednesday and Thursday, and work from home the other days. 

“That’s what we settled on because I kind of want everybody to be there together,” said von Ahn. “We chose those dates because that also allows people to have long weekends if they want to go somewhere for the weekend.”

Aside from a different work schedule, “Duos,” as they commonly refer to each other, could return to the office as employees of a newly public company. As Insider previously reported, Duolingo has hired bankers for an IPO that could come as soon as this summer, according to sources.

Luis Von Ahn Duolingo



MadriCR/Wikimedia Commons


The journey from Guatemala City to Carnegie Mellon 

As a kid growing up in Guatemala City, von Ahn, 42, said he was a nerdy kid who grew up in a middle-class family as an only child. When he was eight years old, he asked his mother for a Nintendo, but got a computer instead. To pass the time, he loved watching American TV series like “MacGyver” and “The A-Team.” 

With Spanish being the primary language spoken at home, von Ahn said he learned how to speak English by attending a private American school.

“My mom spent almost every single dollar she had on paying for the fanciest school in the country, which is the American school, so that’s how I learned English,” he said.

One day, since von Ahn was a top student at his school, he met with a recruiter visiting from Duke University. After completing a series of standardized tests, he found himself in Durham, North Carolina as a student at Duke. Unsurprisingly, he majored in mathematics, and went on to obtain a PhD in computer science from Carnegie Mellon. 

While at Carnegie Mellon, he came up with the idea for the CAPTCHA – short for Completely Automated Public Turing test to tell Computers and Humans Apart – a program that produces a series of distorted letters and numbers used as a way to deter spam and automated data extraction from a website. 

His program was a great success because internet companies at the time were trying to tackle the problem of malicious actors creating millions of fake email accounts. Yahoo started using his program, and then soon after, “pretty much every website in the world started using it,” he said. 

After his PhD, von Ahn decided to stay on at Carnegie Mellon as a 25-year-old professor teaching computer science to a class of about 250 students.

Von Ahn wasn’t satisfied with version one of the CAPTCHA program and thought the 10 seconds it took for users to verify the info was being wasted. So he set out to work on a second version, selecting a few of his students at Carnegie Mellon to work with him. And Severin Hacker, one of his star pupils, ended up becoming his Duolingo cofounder.

Von Ahn was also able to take the core of CAPTCHA’s first version and adapt it to develop technology that could digitize books and other documents. The problem was, he didn’t have anything to digitize. 

Yet, he was eager to show off his CAPTCHA program to the world. So he flew to Dallas, Texas to give a speech, and by chance, Marc Frons, then CTO of  The New York Times, was in the audience. After he stepped off the stage, Frons approached him and offered a proposal for von Ahn to digitize 130 years of the newspaper’s editions. The price tag he offered: $42,000 for each year of content. 

“And so pretty quickly, I started receiving these checks for $42,000 every few days and I didn’t quite know what to do with them,” he said.

Eventually, Carnegie Mellon found out about the checks and told him he couldn’t keep his job as a professor. So he decided to start his own company, reCAPTCHA.

Luis von Ahn_04

Luis von Ahn at Duolingo HQ

Duolingo


From inventing CAPTCHAs to becoming CEO of a unicorn

As a bright mathematician, computer science professor, and inventor of the CAPTCHA, von Ahn could have retired before he turned 30.  After Carnegie Mellon, he was sitting on enough cash after selling two companies he founded — ESP Game and reCAPTCHA — to Google. The price of the two acquisitions remains undisclosed, but von Ahn says he received “tens of millions of dollars,” all of which he pocketed because the companies weren’t funded by VCs.

In 2011, instead of an early retirement, von Ahn decided to get back to his original passions and combine his love for math and education. 

“I always saw education as this kind of thing that just brought major inequality, because people who have money can buy themselves the best education in the world and the people who don’t have very much money barely learn how to read and write,” he said.

His initial thought was to teach coding and math, his two areas of expertise. But eventually landed on a better way to teach English, inspired by the opportunities that were available to him after learning English as a second language in Guatemala.

Duolingo officially launched in 2012 after the team spent a year building the first free version of an app that helped people learn English. Today, Duolingo offers over 100 free courses in 40 languages and counts around 40 million monthly active users. The company now has a free to premium business model, although 96% of users are still using a free version.

To make money, Duolingo generates revenue through ads, subscriptions, and a language certification test. A subscription to the app’s premium version, Duolingo Plus, which lets members remove ads and download lessons offline, costs $12.99 per month.

The company has raised a total of $183 million since its founding from investors including Union Square Ventures,
CapitalG, Kleiner Perkins, NEA, and Ashton Kutcher.

In 2019, the company generated about $90 million in bookings – a key metric for Duolingo and similar companies used to track business performance – and doubled that in 2020.

Laela Sturdy, a Duolingo investor and board member, and General Partner at CapitalG, Alphabet’s independent late-stage growth fund, said she invested in von Ahn and the company pre-revenue, an unusual step for a growth-stage investor.

“I really believed then, and still strongly believe in the massive impact that company is having globally on social mobility and educational outcomes,” she said. “And what I also believe is, a great business model can match that mission, and can be additive to the flywheel of that impact.” 

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