Crypto News: Can Duolingo keep its streak alive?

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Hola, it's Bill. Like millions of people around the world, I started using Duolingo during the pandemic—mostly because my then-13-year-old stepson was also using the language-learning app for school. I soon got hooked, studying Spanish every day… even though, frankly, I had no real need to do so. It seemed a better use of time than doomscrolling social media, that's all.

And it felt more like playing a game than like studying, with colorful cartoon characters, easily completed lessons and, of course, the app's mascot, Duo the owl, who needed me to keep my daily "streak" going. I couldn't let that silly owl down—it might make fun of me on Duolingo's bonkers TikTok account. Eventually, I got curious about the company behind the app, and that's when things got really interesting.

Duolingo's mascot, Duo, has become a TikTok sensation. Photograph by Ross Mantle for Bloomberg Businessweek

As I write in the latest issue of Bloomberg Businessweek, Pittsburgh-based Duolingo is a unique company that finds itself at a turning point. It began in the late 2000s as a grad student's Ph.D. project at Carnegie Mellon University; now it's a publicly traded tech company with 500-plus employees and a $2.8 billion market cap. Co-founders Luis von Ahn and Severin Hacker insist that their language app (and their newer literacy and math-teaching apps) has to be accessible to anyone for free. Its popularity has exploded, to more than 56 million monthly active users, but it's not just used by Bob and Trudy studying Spanish for their trip to Cancún; more than half of Duolingo users are learning English, and many are immigrants and refugees who need to learn a language to get a better job in their new countries. Only a small fraction actually pay to subscribe. "Our free app is better than most other companies' paid app," von Ahn told me. "How do you compete with free?"

How does a company with a free product and a nonprofit-esque mission ("To create the best education in the world, and make it universally available") survive on Wall Street? Can you change the world and make money? So far, so good. While its stock price has lagged since the July 2021 IPO, along with every other tech company's, Duolingo keeps attracting droves of new users—and paying subscribers.

Behind the scenes is a massive AI machine (called "Birdbrain") that relentlessly optimizes the app, for learning, but also (increasingly) to monetize its millions of users. Revenue has jumped every quarter, but when the company rolled out a major app redesign this fall, howls of protest echoed across social media. Can Duolingo continue to soar without alienating its millions of fans? Click here to find out. —Bill Gifford, Bloomberg Businessweek contributor

"Sam Bankman-Fried's $30 million Bahamas penthouse looks like a dorm after the students have left for winter break. The dishwasher is full. Towels are piled in the laundry room. Bat streamers from a Halloween party are still hanging from a doorway. Two boxes of Legos sit on the floor of one bedroom. And then there are the shoes—dozens of sneakers and heels piled in the foyer, left behind by employees who fled the island of New Providence last month when his cryptocurrency exchange FTX imploded."
Read "Inside Sam Bankman-Fried's Penthouse After FTX's Fall" by Zeke Faux

Illustration by Maxime Mouysset for Bloomberg Businessweek

Children keep dying from the blackout challenge. Why isn't the world's most popular app doing more to protect them?
Read "The Tragedies of TikTok" by Olivia Carville

The Arroyo family in Arriani Arroyo's bedroom. Arriani died after doing a challenge she found on TikTok. Photograph by David Kasnic for Bloomberg Businessweek

Stay tuned for tomorrow's Bw Daily starring Max Chafkin, and check out Businessweek for more!