MBA 603 – Capcha Duolingo
- Identify 2 of the problems Luis von Ahn was trying to solve.
- List 3 things that motivated Luis von Ahn over his entrepreneurial career.
- Why are users motivated to continue with the Duolingo app?
- How would you have solved the problem for the newspaper archives in 2007?
PODCAST TRANSCRIPT :
LUIS VON AHN (CO-FOUNDER, RECAPTCHA): You know, I was feeling good. I thought, OK, well,
we can continue raising money for a while. And at some point, we raised money from Google.
CapitalG is one of their investment arms. And a partner from that firm sat me down, and she said,
nobody else will invest in this company if you don’t figure out how to make money. You know, you’re
not going to find a bigger fool. We’re the biggest fool. And that’s when we started kind of freaking out
and trying to figure out how we’re going to make money. But we had no idea how we were going to
make money.
(SOUNDBITE OF MUSIC)
GUY RAZ (HOST): From NPR, it’s HOW I BUILT THIS, a show about innovators, entrepreneurs,
idealists and the stories behind the movements they built.
(SOUNDBITE OF MUSIC)
RAZ: I’m Guy Raz. And on the show today, how a perfect storm of skill and luck drove Luis von Ahn
to create CAPTCHA, then reCAPTCHA, and then Duolingo, a foreign language app valued at $1.5
billion.
(SOUNDBITE OF MUSIC)
RAZ: Think about the small moments or decisions in your life that actually had a huge impact on
how your life turned out. Maybe it was a conversation you struck up with the person next to you on
an airplane. Maybe it was a party you reluctantly went to only to meet the person you’d eventually
marry. Or maybe it was a decision to stay on vacation an extra day that sparked a new idea. For
Kevin Systrom, it was a random remark from his girlfriend that made him decide to use filters on
Instagram. For Blake Mycoskie, it was a chance meeting with a group of young Argentineans who
took him to the countryside where he saw kids with no shoes that one day inspired him to create
Toms. And for Luis von Ahn, it was a free lecture at Carnegie Mellon University in 2000.
We’ll get deeper into the story in a few minutes, but that single lecture would lead him to invent two
ingenious new tools. The first was CAPTCHA – yes, CAPTCHAs, those annoying twisted and blurred
letters you have to type into a website to prove you’re human. And the second one was Duolingo,
now the biggest language-learning app in the world, which is now getting even more popular
because people are looking for new things to do now that they’re stuck at home. Both CAPTCHA
and Duolingo were designed to harness the power of crowdsourcing to solve problems. And I’m
going to blow your mind here. If you have ever typed in a CAPTCHA or used Duolingo, there’s a
good chance you’ve taken part in a massive online collaboration that you probably weren’t even
aware of.
And it’s amazing how Luis came up with all this, but let’s start at the beginning. Luis was born in
Guatemala in the late 1970s. Both his parents were doctors. And though he was surrounded by
poverty and violence in Guatemala City, Luis grew up in comparative privilege. And as a kid, he
spent a lot of time hanging out at the family business.
VON AHN: My mother’s family actually had a candy factory. Everybody is always amazed at the fact
that I grew up with a candy factory, and, you know, they think that it was like “Willy Wonka” or
something. I was not all that much into the candy itself. I was into the machines because, basically,
the candy is made by these gigantic machines that, you know, pump out I don’t know how many
thousands of pieces of candy per hour. And basically, all my weekends I spent playing at the candy
factory. And I would take the machines apart and put them back together. There would be some
extra pieces after I put them back together, usually, and that would be a problem.
RAZ: What kind of student were you? Were you – was school pretty easy for you?
VON AHN: Yeah, I was pretty nerdy. Basically, I was really good at math.
RAZ: Yeah.
VON AHN: Math was just easy to me. I – you know, what I would do during the summers is basically
get either next year’s or, you know, a couple years later math books and basically do all the
exercises.
RAZ: Wow.
VON AHN: It kind of came easy. But the way I really got good at it is by doing hundreds and
hundreds…
RAZ: God.
VON AHN: …Of exercises.
RAZ: That’s what you would do in the summertime?
VON AHN: Yeah.
RAZ: Wow.
VON AHN: I kind of was bored. I mean, I was an only child.
RAZ: Yeah.
VON AHN: I didn’t have that much to do. This is – remember; this is also pre-Internet, pre-everything,
so…
RAZ: Yeah.
VON AHN: …What was I going to do?
RAZ: Man.
VON AHN: That’s what I did.
RAZ: I was putting playing cards in the spokes of my bicycle and buying Jolly Ranchers at 7-Eleven.
VON AHN: (Laughter).
RAZ: Should’ve done math books. So you were – did you just love math? I mean, was it – it sounds
like kids don’t think about their future. They’re not like, I’m going to study math so I can be in tech
one day. Like…
VON AHN: No.
RAZ: …You must have really enjoyed it.
VON AHN: I did. I enjoyed it. It was like a puzzle for me. By the way, this is not the only thing I did. I
mean, I also played a lot of video games, pirated video games, in my Commodore 64.
RAZ: Like, floppy disks – on floppy disks?
VON AHN: Floppy disks – yeah, that’s right. I wanted a Nintendo when I was 8. My mother would not
get me Nintendo. She instead got me a computer, a Commodore 64, and I couldn’t figure out how to
use it. But eventually, I kind of – I read, like, the manual and stuff, and I figured out how to use it
more. And then I figured out I could pirate other people’s video games. And so I became a little hub
in my little neighborhood. But these were not other kids. These were adults…
RAZ: Yeah.
VON AHN: …Or kind of, basically, young adults who had a computer. And they would come to my
house, and I would take their games and give them my games in exchange, so I – then I collected a
pretty large number of video games.
RAZ: But I should mention – right? – that – I mean, because your childhood sounds pretty nice, but,
like, as a kid, I guess, or even as a teenager, there was a civil war in Guatemala, right? I mean, we
know that today, there’s a lot of violence there. And obviously, there’s violence in the U.S. and in
other countries, too, but Guatemala has been particularly hard hit. I mean, did it feel dangerous
when you were a kid?
VON AHN: Yes, it did. There was a civil war pretty much since I was born in ’79 to 1996. There was
a civil war going on the whole time. It always felt dangerous. When I was 15 or so, my aunt was
kidnapped for ransom. I mean, she was gone for seven or eight days.
RAZ: Wow.
VON AHN: People’s cars would be stolen. I don’t – every couple of months, somebody’s car would
be stolen in my family. Going out past 7:30 p.m. was rare.
RAZ: Yeah.
VON AHN: You needed to go out in a large group if you were going to go out past 7:30 p.m. And,
you know, I did – my house had walls and barbed wire. And, yeah, it felt dangerous. I mean, this is
one of the reasons I came to the U.S., actually. I mean, you know, when I was – after my aunt was
kidnapped, I thought to myself, I don’t want to live here.
RAZ: Yeah. And I guess you did end up leaving Guatemala for college ’cause you went to Duke in
North Carolina. And you would – you described yourself as a, like, a math nerd in school. And is that
what you intended to do – like, to do something in math?
VON AHN: That’s what I wanted to become – like, a math professor. I was pretty certain I wanted to
become a math professor. You know, at the time, I thought the best thing that I can do is really learn
a lot of math, and I really loved it. And I thought it was futile to learn how to deal with other people.
And it is interesting because my job these days is 100% just dealing with other people and people’s
problems.
RAZ: Wait; I’m just trying to understand this. So by becoming a math professor, you thought, hey; I
wouldn’t have to deal with people. I would just deal with, like, facts and data and numbers.
VON AHN: Yes, yes. And, you know, I’ll do math research all day long, and every now and then I’ll
teach a class, but whatever. That’s like a tax. That’s what I thought.
RAZ: So – all right. So you are – so you get your degree, and you’re following this path to go into
academia. And you go into a Ph.D. program at Carnegie Mellon.
VON AHN: Correct.
RAZ: And I guess you go into computer science, right?
VON AHN: Yes. I changed from math to computer science because I visited a math grad school,
and what people were saying – the professor was saying, oh, I’m working on this open problem that
nobody’s been able to solve for the last 300 years. And I thought, I don’t think I’m smart enough.
RAZ: Yeah.
VON AHN: I mean, if you haven’t done it and nobody’s done it in 300 years, that’s kind of not for me.
Whereas when you visit in computer science – I mean, this is the crazy thing – people are like, oh,
yeah, I solved an open problem yesterday.
RAZ: Wow.
VON AHN: It’s a much younger field.
RAZ: Yeah.
VON AHN: And so that – I thought that was much more exciting, for me at least.
RAZ: So you are – you started – this is the year 2000. You start your Ph.D. program at Carnegie
Mellon. And I guess, like, really soon after you start, you go to some talk by – someone from Yahoo
comes to campus to talk about Yahoo. Yahoo was a big deal in 2000. Is that – what’s the story?
VON AHN: Yeah. That was serendipity again. Most of the things that have happened in my life are
serendipitous. I was a first-year Ph.D. student. I had been at Carnegie Mellon for maybe two months.
I had – you know, the first thing you got to do when you become a Ph.D. student is find an advisor. I
had found myself an advisor, and we went to a talk together. This guy from Yahoo, who was the
chief scientist of Yahoo at the time – and like you said, Yahoo at the time was the, you know, the
biggest tech company out there. And he came to give a talk at Carnegie Mellon, and it was – the talk
was basically 10 problems that they didn’t know how to solve at Yahoo. And I was an enterprising
Ph.D. student, and I thought, I’m going to try to solve these problems.
RAZ: And what was the problem that he said they had?
VON AHN: Yeah. So the problem for this particular one was there were people who were writing
programs to obtain millions of free email accounts. And so Yahoo at the time gave out email
accounts…
RAZ: Sure.
VON AHN: …For free.
RAZ: Yep.
VON AHN: And some people thought it would be good to send spam from Yahoo accounts. The
problem is each Yahoo account only allowed you to send, like, 500 messages a day. So if you want
to send 10 million spam messages per day, you just have to get a bunch of Yahoo accounts. And
from each one of them, you send 500 messages.
RAZ: And this is the era – I remember this, and we all remember this – where you would get
hundreds of messages – spam messages – about certain bodily enhancements. You would get…
VON AHN: Yes.
RAZ: …Messages about…
VON AHN: Yes.
RAZ: …The hormone growth things, I mean, baldness. I mean, it was…
VON AHN: Canadian pharmacies…
RAZ: Canadian…
VON AHN: …Selling you Viagra.
RAZ: Yes, right.
VON AHN: Yeah, yeah, yeah.
RAZ: Just spam. It was a huge problem.
VON AHN: Yep.
RAZ: And he was like, we can’t figure out how to stop these computers or programmers from making
– you know, just creating all these email accounts.
VON AHN: Yeah. And so that was the problem.
RAZ: And just to be clear, these spammers were not physically setting up each individual email
account.
VON AHN: No. They had written programs that would just set up millions of email accounts a day, or
however many per day. So I thought about it for weeks and months, and I talked about it with my
Ph.D. adviser Manuel. And together, we came up with a solution, which was – the thinking here is,
look; computer programs can get a million email accounts per day because, well, a computer
program can do things very fast.
RAZ: Yeah.
VON AHN: And it also doesn’t get bored.
RAZ: Right.
VON AHN: Humans – a human can’t get very many email accounts. So how about this? How about if
we make sure that whatever is getting an email account is actually a human and not a computer
program? Then we started thinking, OK, well, how can we distinguish between a human and a
computer?
RAZ: Yeah.
VON AHN: And that’s where this idea came about. It’s this idea of a CAPTCHA, where it’s basically
these distorted characters that you have to type whenever you’re buying tickets on Ticketmaster or
getting, you know, an email account or stuff like that. The idea is that a computer can generate one
of these, you know, basically take some letters, put them in an image, distort them, and then it can
give them out. And it turns out that humans can read these – well, at the time, humans could read
these very well; they still can – but computers could not. So…
RAZ: By the way, I can’t read them. I’m the human that can’t read them. I can’t read CAPTCHAs.
VON AHN: Well, I don’t know how much of a human you are (laughter).
RAZ: Now they’re like, point to every stop sign. Point to every bridge.
VON AHN: Yes, yes. It’s changed.
RAZ: Yeah, yeah.
VON AHN: But basically, at the time, the idea was humans can read these distorted characters
much better than computers. So let’s give – basically, every time that somebody is trying to get an
email account, let’s give them a test to see if they’re human or not.
RAZ: And you just start doing this on your own? Like, did you tell Yahoo? Did you tell him? Or were
you just like, this is fun. I want to figure this out, like, just working independently.
VON AHN: Yeah, I mean, with my Ph.D. adviser. It was – it became our research. It became our
research subject. And, yeah, we did not tell Yahoo.
RAZ: ‘Cause it sounds like, here’s the kid getting the mathematics workbooks in the summer. It’s like
you – just seemed like a fun thing to solve.
VON AHN: Yeah, it was fun. But that’s like – that’s the core of the Ph.D. program, I think. You know,
you’re trying to find problems that others haven’t solved.
RAZ: I got you. OK.
VON AHN: And you’re – this seems like a problem that other people hadn’t solved, so we were
working on it.
RAZ: And you called it CAPTCHA.
VON AHN: Yes.
RAZ: Did you name it CAPTCHA? And what does that mean?
VON AHN: It’s an acronym.
RAZ: Sounds like capture – to, like, to capture.
VON AHN: Yeah, yeah. It’s an acronym that sounds like capture, which, you know, the idea was to
capture the, you know, the bot or…
RAZ: Yeah.
VON AHN: …The computer program. It stands for Completely Automated Public Turing Test to Tell
Computers and Humans Apart. So, you know, it’s just an acronym, but now I think most people have
heard of the word CAPTCHA but do not know what it stands for.
RAZ: And you come up with this thing, CAPTCHA, and what do you do? Do you, like, email this guy
at Yahoo and say, hey; I’ve got your solution for you?
VON AHN: Yeah, basically. I mean, we emailed him, and we said, hey; you know, we think we have
a solution. Here’s some code. You know, and we explained how it worked. And what was amazing –
and now that I know how large companies operate and how slow things move…
RAZ: Yeah.
VON AHN: …What was amazing is within about a week of when we sent them this…
RAZ: Yeah.
VON AHN: …It was already functional…
RAZ: Wow.
VON AHN: …You know, live – it was live. So I guess the problem that they had was so big that when
they saw this, they were like, OK, let’s do it now.
RAZ: So they saw this, and they’re like, oh, my God, this is great. And so you must have just – I
mean, you were, like – what? – 25, 26.
VON AHN: Twenty-one.
RAZ: Twenty-one – oh, my God. So you – right, so all of a sudden, you’re an overnight millionaire –
multimillionaire.
VON AHN: No, no, no, no, no. No money was – no money exchanged hands here.
RAZ: Wait. You gave CAPTCHA to them? You just said, hey; here you go?
VON AHN: Yep. I mean, listen…
RAZ: You gave it to a multibillion-dollar company? You just gave them CAPTCHA?
VON AHN: I didn’t know how things worked.
RAZ: (Laughter).
VON AHN: And, you know, the truth of the matter is it’s probably a good thing, in retrospect.
RAZ: Yeah, yeah.
VON AHN: I mean…
RAZ: Right.
VON AHN: …Who knows what would’ve happened? But, you know, I don’t have regrets. But, yes,
that was – that’s what started happening. And then basically, every other website started – you know,
they saw that it was in the front page of Yahoo, so every other website started copying or making
their own version. Within a couple of years, pretty much everywhere on the Web, you know, when
you had to get an email account, when you had to enter a comment on a blog, when you – where
you had to buy tickets on Ticketmaster, you had to enter one of these.
RAZ: You were the guy. You were the guy who made it really hard for dopes like me to get it right. I
have to constantly…
VON AHN: It was annoying. It was annoying to people.
RAZ: Yeah, yeah.
VON AHN: And every time that I would be at a party or something and, you know, they would ask
me what I did and then they would get me to explain my research, I had to explain that I had done
that.
RAZ: And they would say…
VON AHN: What the hell?
RAZ: They would kick you out of the party.
VON AHN: Screw you. Screw you.
(LAUGHTER)
RAZ: But some of the research you did – I mean, you did actually write some software that you sold
for – I think for some money this time. I mean, just, like, could you briefly explain how that happened
and what you were working on?
VON AHN: Yeah. I mean, this is – it’s funny. I mean, at the time, this was not called crowdsourcing,
but my Ph.D. research was basically on crowdsourcing. I had worked on CAPTCHA, where the idea
was that humans can do some things computers cannot.
RAZ: Yeah.
VON AHN: So my Ph.D. research was basically about finding things that computers could not yet do
and then finding ways to get people to do them. And in particular, the main thing that I did in that
time was a game. And people loved to play it, but as they were playing it, they were actually helping
computers figure out what’s inside an image.
RAZ: How did the game work?
VON AHN: The way the game worked was this. You went to a website, and you got randomly paired
with somebody else who had shown up to the website.
RAZ: Got it.
VON AHN: And you were both shown the same image.
RAZ: Any image, a random image, like an elephant?
VON AHN: An image from the Internet, yeah. And you were told, type whatever the other person’s
typing. Just start typing words, and if you or one of your words matches one of their words, you both
get points.
RAZ: Got it.
VON AHN: What was interesting about this game is that the words that people typed – the only thing
they had in common was the image, so the words that people typed were basically related to the
image because if you’re told to do this, what are you going to type? If you see a picture of an
elephant, you’re going to type elephant because you think the other person is also typing elephant.
RAZ: Sure.
VON AHN: So those words were really good labels for things, were really good tags for the image,
basically. So I put it online. I programmed it. Millions of people played it. And this was a game that
was helping label all images on the Web. Then at some point, actually, Google, in fact, bought it.
They just bought the technology…
RAZ: Yeah.
VON AHN: …And then it got implemented. They changed the name from the ESP Game – which I
call it the ESP Game because ESP, extrasensory perception; the idea was, like, try to think what the
other person was thinking – to the very amazing name of the Google Image Labeler, which is much
less interesting.
RAZ: And so they bought this from you. And was that, like, life-changing money? I mean, were you
all of a sudden super rich?
VON AHN: No, I was not super rich, but it was good.
RAZ: Got it. OK, so you went on to earn your Ph.D., and you get a job at Carnegie Mellon.
VON AHN: Correct.
RAZ: You’re a young professor. You’re on tenure track. And, by the way, early on in your academic
career – I should mention this – you were granted a very – like, one of the most prestigious awards,
the MacArthur Grant, known as the Genius Grant. Basically, they pick a few people a year and give
them, like, half a million dollars of unrestricted money to work on whatever they want. I mean, that
must’ve been mind-blowing.
VON AHN: Yeah, that was – you know, I’ve gotten a number of awards in my life, but, I mean, that
was a particularly – that was probably the most impactful one…
RAZ: Yeah.
VON AHN: …In terms of just how I felt. And also, they do this crazy thing where they – you have no
idea that you’re being considered or anything, and they call you randomly.
RAZ: Yeah, yeah.
VON AHN: They figure out your phone number. One day you pick up, and then they just tell you,
you know, have you ever heard of the MacArthur Fellowship? And, you know, you say yes, and then
they just tell you. And you’re like, wow, what the hell? First you think it’s a prank. I thought it was a
prank.
RAZ: Yeah. And I guess, like, around this time, too – I don’t know if this is apocryphal or not, but I
read that Bill Gates personally called you to try to convince you to leave your job at Carnegie Mellon
and to go work for Microsoft. Is that true?
VON AHN: That is true.
RAZ: Like, what – like, you pick up your cellphone, and it’s like, please hold for Mr. Gates? Or was it
like he…
VON AHN: It was pretty much like that. It was pretty much like that. I mean, it was somebody, you
know, basically said that, please hold for Mr. Gates.
RAZ: And you were like, OK. And he gets on the phone, and he’s like, Luis, it’s Bill Gates here.
VON AHN: That’s exactly right. I had been an intern – I had been – like a year and a half before that,
I had been an intern at Microsoft. And so I had good ties with Microsoft, and they really wanted to
hire me for Microsoft Research. And so that is how Bill Gates spent – I don’t know – 45 minutes to an
hour trying to convince me to go there.
RAZ: Wow.
VON AHN: I was very flattered, but, you know, at the time, I just wanted to do my own thing, be a
professor.
RAZ: How do you say no to Bill Gates? What – you were like, oh, wow. Thank you, Mr. Gates. That
sounds so nice. I’m so honored, but I just – you know, no.
VON AHN: I didn’t actually say no.
RAZ: OK.
VON AHN: I said I would think about it, and then I said no to, like, a recruiter. But, yeah, it was not
easy. I mean, he’s a major hero of mine. I mean, he’s just an amazing human being. But I just
wanted to be a professor at the time. I thought, I want to do my own thing. I want to be a professor.
And that’s what I wanted to do.
RAZ: Yeah. Was money important to you? I mean, you know, was it important to you?
VON AHN: It mattered. And it’s interesting. I guess it mattered more than it does now. It’s nice to
know that I, you know, I could buy a nicer car or get a nicer apartment or something. So it’s nice, but
it was – it’s never been my driving force, I would say.
RAZ: OK, so you decide, I’m not – Bill Gates, thank you. No thanks. I’m not going to Microsoft. I’m
going to stay doing this work. So you are now – were you lecturing? Were you teaching classes?
VON AHN: I was teaching. I was teaching a huge class. It was called Great Theoretical Ideas in
Computer Science. That’s just a fancy name. It’s basically a discrete math class that people who
don’t do well there usually change majors.
RAZ: And you’re like – not like John Nash, but I’m thinking about that movie. You’re in front of a, like,
a big blackboard or a whiteboard and doing equations and problems in front of 250…
VON AHN: Yeah, slides had already been around.
RAZ: OK.
VON AHN: So I use PowerPoint. I use PowerPoint.
RAZ: I got you.
VON AHN: I’m not that old.
RAZ: Right. I got you. Yeah, yeah. Yeah, you’re right. OK. So you’re teaching. And you had done
CAPTCHA. And lots of people are saying, hey; it’s annoying. And you’re like, yep, I hear you. And
people kept saying that to you? Like, you kept hearing that?
VON AHN: Yep, yep. And that’s when I started thinking, each time you do it, you waste about 10
seconds of your time. And I just started – this thought just came to me of, wow, how much time am I
wasting of humanity? And, you know, I did a little back-of-the-envelope calculation, realized about
200 million times a day somebody types a CAPTCHA. And that’s when you got 200 million times a
day times 10 seconds, so humanity as a whole is wasting about 500,000 hours a day typing these
CAPTCHAs. And that’s when I started thinking, related to, you know, all my research that I have
done, is there something we can get humans to do while they’re typing a CAPTCHA that is also
useful and we get them to do something useful?
RAZ: Yeah.
VON AHN: And it occurred to me that, yeah, we could get them to help digitize books.
RAZ: How did – sorry. Pause. How did you come to that idea? So, like, when you type in a random –
random letters from a CAPTCHA, you were thinking, wait; how do we have a secondary use for this,
and maybe…
VON AHN: Yeah.
RAZ: …It’s books – digitizing books. How did you even – how did that even occur to you?
VON AHN: I was thinking for a long time, can we get people to do something but at the same time
kind of extract valuable computational effort from it, until it finally occurred to me, oh, there’s all these
projects out there trying to digitize all of the world’s books. Google had announced a really…
RAZ: Yeah.
VON AHN: At the time, it seemed kind of insane – an ambitious project that we’re going to take all of
the world’s books, everything that’s ever been written – there’s 100 million books ever written – and
we’re going to put them online.
RAZ: Yeah.
VON AHN: This is what we’re going to do. And now, in this process, the way the process works is
you take a book, physical book, then you scan every page. And then the computer needs to be able
to decipher all of the words in those photographs.
RAZ: Yep.
VON AHN: Now, the problem is that computers cannot – at the time could not recognize many of the
words. About 30% of the words computers could not recognize. And the reason for that, by the way,
which is this amazing thing, is the same reason why computers could not read CAPTCHAs.
Basically, this looked kind of like distorted letters.
RAZ: And distorted letters are just inherently difficult for computers to recognize.
VON AHN: Yeah.
RAZ: Like, that’s the point of CAPTCHA.
VON AHN: That’s right. And so it occurred to me, oh, wow. What if we just take the words out of a
book that the computer could not read and then we send them to people while they’re typing
CAPTCHAs on the Internet? So basically, next time you type a CAPTCHA, the words that you see
are actually coming from a book, and whatever you enter is, in fact, used to help digitize a book.
RAZ: Do you remember when you came upon that idea? Was it like in a flash, or was it just like – did
it occur to you…
VON AHN: I remember. I was driving from Washington, D.C., back to Pittsburgh because I had been
to some National Science Foundation panel or something like that. Then I spent the next, you know,
few weeks just kind of going over it and over going over it. And I thought, OK, this will work. And, you
know, I started building the system. But then I recruited a guy who was – his name is Ben Maurer. He
was maybe a freshman in computer science at Carnegie Mellon. He was one of my students. He
was in my class. In my large class, he was the best student. And I thought, you – you can help me
build this. And so together, we built the system that would take a scan of a book and extract all the
words the computer could not recognize and then send them as a CAPTCHA.
Now, we decided we’re going to go to big websites and we’re going to tell them, hey; look. We have
this CAPTCHA service. It’s free. It’s better than yours. Yours is relatively crappy. This one’s pretty
good, and we’ll give it to you for free. But all we have to be able to do is see what your users can
type – are typing during this so that we get to digitize the books.
RAZ: And did websites start – like, start to use this tool?
VON AHN: You know, some small websites started using it. The first largeish – it wasn’t even large.
The largest website for a while that was using us was called Online Booty Call.
RAZ: Nice (laughter).
VON AHN: And they were – to get an account in Online Booty Call, you had to…
(LAUGHTER)
VON AHN: You had to type a CAPTCHA, and it was our CAPTCHA. And every time, every person
that was getting an account in Online Booty Call was starting to help digitize stuff.
RAZ: God bless them.
VON AHN: God bless them, indeed. And at some point, a website that was relatively new at the time
decided they needed to put a CAPTCHA on their registration flow, and they called us up. And it was
there a website called facebook.com.
RAZ: (Laughter).
VON AHN: And they were relatively new. And they were like, hey; listen. You know, we saw – we
came across it. It seems like you have a good CAPTCHA. Can we – you know, can we put it up?
Sure.
RAZ: This in 2007?
VON AHN: Probably 2006, 2007.
RAZ: OK.
VON AHN: Yeah. You know, we said, OK, cool. And they did it. And that website was growing very
fast, and so pretty soon, we just had a ton of people using our thing. And then at some point, I was
giving a talk somewhere in Dallas about this system and how we could digitize books, et cetera. And
the guy who was the CTO of The New York Times was in the talk, and he said to me, hey; you know
what? We have this archive of 130 years of content from The New York Times that we have not
been able to digitize, particularly because computers cannot recognize the words. How about you
digitize it for us?
RAZ: And just – I’m just – just out of curiosity, eventually, I’m assuming, you thought this could make
money.
VON AHN: We thought.
RAZ: OK.
VON AHN: We thought. But we really didn’t – it was – we kind of thought we could make money, but
we didn’t know how.
RAZ: Yeah.
VON AHN: And what happened is this guy, you know, he then sent me an email. He said, no, I was
serious. Let’s do it. How much would you charge me to do this?
RAZ: Charge them to do what? To digitize…
VON AHN: To help digitize their content.
RAZ: The New – old New York Times?
VON AHN: The entirety of The New York Times archive. And so, you know, we kind of scrambled,
and we had no idea how much to charge them.
RAZ: Yeah.
VON AHN: And we just thought to ourselves, OK, how much would this person have to pay people
to digitize? Because the only other solution is people.
RAZ: Yeah.
VON AHN: So we came up with something, and we said, OK, divide by four.
RAZ: Yeah.
VON AHN: And that’s what we charged. And we – the number we came up with was, for every year
of content, we will charge you $42,000.
RAZ: For every year of content in The Times, OK.
VON AHN: Yeah.
RAZ: Yeah.
VON AHN: So for every – ’cause if you take one year, all editions of that year, we’ll change you
$42,000…
RAZ: OK.
VON AHN: …To digitize that whole thing. That’s the number we came up with. And then they said
yes.
RAZ: And how many years of – that’s, like, 120, -30 years of….
VON AHN: Yeah. So this is several million dollars of a contract there. But they said, OK, we’ll pay
you per year. Let’s do it one year, then another year, then let’s see what happens. And so they sent
us the first year. We did it. And it turns out, because Facebook was already using our CAPTCHA, we
actually were digitizing relatively fast. It was…
RAZ: Like, how quickly would it take to digitize a year of it?
VON AHN: A year was being done in about a week.
RAZ: What? A week of people typing in CAPTCHAs could digitize a whole year of The New York
Times?
VON AHN: Yes. So that’s what was going on.
RAZ: I’m just – here’s a question – right? – which is – say I was getting on Facebook in 2000 – this is,
like, 2008, I think, when The Times approaches you, right?
VON AHN: Yup. Yup.
RAZ: So I’m on Facebook in 2008, and I sign up for it. And I’ve got to write a CAPTCHA, and the
word that I’ve got to decipher is anxiety. It’s one of my favorite words. And I type that in. But how do
you know, how does CAPTCHA know that I did that accurately?
VON AHN: That’s a very good question. So what happens is, for you, we actually give you two
words. We give you, one, is the word anxiety. It’s a new word that we just got out of – whatever – The
New York Times. And then the other word is a word that we already have digitized. We already know
what the answer is for the other word.
RAZ: OK.
VON AHN: And then we don’t tell you which one’s which. We just tell you, please type both.
RAZ: Yup.
VON AHN: And if you type the correct word for the one for which we already know the answer, we
assume you’re human, and then we also get some confidence that you typed the other word
correctly.
RAZ: Got it.
VON AHN: And if we give this new word to, like, 10 different people and they all type the same – you
know, the same word, they all type anxiety, then we agree…
RAZ: Then you know it’s right.
VON AHN: Yeah. Then we know it’s right.
RAZ: So your accuracy was pretty high.
VON AHN: Very high, yeah.
RAZ: Wow. So within a week or so, you get this first year of The New York Times digitized. And then
presumably, they’re like, OK, let’s keep going.
VON AHN: That’s right. And so what started happening is they started sending us checks for
$42,000, coming in pretty quickly.
RAZ: (Laughter) Nice.
VON AHN: And by the way, we had no company. We had nothing. And at some point, Carnegie
Mellon got wind of this.
RAZ: Yeah.
VON AHN: And they’re like, wait a second.
RAZ: Yeah.
VON AHN: You’re kind of running a company here, but not really because there’s not even a
company. You’ve got to get out of here.
RAZ: Yeah.
VON AHN: They had a standard deal that’s – OK, if you’re going to start a company based on
something that you came up in your research, we’ll take 5% of this company. And so that’s what
happened.
RAZ: Got it.
VON AHN: So we just said, OK, how about you keep 5%. We’ll start a company. And so we did. We
started a company. I got a lawyer. We formed a company. And pretty soon, we were making, you
know, $42,000…
RAZ: That’s insane.
VON AHN: …Every few days.
RAZ: And did you call it reCAPTCHA?
VON AHN: It was reCAPTCHA Inc. Yes.
RAZ: And did you leave Carnegie Mellon or did you stay on as a…
VON AHN: No, I stayed as a professor.
RAZ: OK.
VON AHN: This was a – really, a side hustle. Every – I stayed as a professor.
RAZ: I love this.
VON AHN: Ben, who was also working on it, stayed as an undergrad. He was, like – by then, he
was, like, a sophomore. So he just stayed as an undergrad.
RAZ: Wow.
VON AHN: I stayed as a professor. It was a side hustle. But it was making quite a bit of money, for
us not doing all that much in there.
RAZ: It’s incredible. I mean, you basically have a side hustle (laughter) where all of the work is being
done for you by people who aren’t – don’t even know and wouldn’t really care ’cause it takes them
two seconds, and they’re getting a free Facebook account. Meantime, they’re digitizing The Times,
and you’re getting $42,000 checks every couple of days from The Times.
VON AHN: Yup.
RAZ: (Laughter) It’s…
VON AHN: That was the – that was what was going on.
RAZ: It’s just – it’s, like, one of the most genius businesses ever. Like, I – can we – can you – we talk
after this interview is over to figure out a thing like this? ‘Cause this is amazing.
(LAUGHTER)
RAZ: You don’t…
VON AHN: Yeah, that…
RAZ: You don’t have any employees. It’s just incredible.
VON AHN: Yeah. It was pretty good. But then, you know, that went on for some time. And then,
actually, Google, in fact, bought it for their own book digitization process.
RAZ: Wait. Hold on. They approached you. They saw this, and they saw that this was really – and
they said to you, hey; we can use this for our books digitization.
VON AHN: Yes. Yes.
RAZ: And – what? – they, like, threw a number on the table.
VON AHN: Yes. I mean, multiple numbers were thrown out.
RAZ: Yeah.
VON AHN: And in the end, we decided this was a good home for it, so we, you know, sold it to
Google. And this time, I did go to Google for two years. So I took a leave of being a professor.
RAZ: OK. So you were running this company, this small business. Google buys it from you, which is
just incredible. You’re still, at this point, really young. This is really life-changing.
VON AHN: Yeah, especially since we didn’t have investors or anything, so all the money went to us.
RAZ: And your startup costs were relatively low.
VON AHN: Yeah.
RAZ: Wow. All right, so you get acquired by Google. You are still a professor at Carnegie Mellon in
Pittsburgh, but you went to California to Silicon Valley to go work at Google.
VON AHN: Google happens to have an office here in Pittsburgh.
RAZ: OK.
VON AHN: And so I was spending about half the time here in Pittsburgh and half the time in
California.
RAZ: And what were you doing at Google? Were you still just basically running reCAPTCHA?
VON AHN: Well, the first order of business was to integrate reCAPTCHA into the Google
infrastructure. That took about a year. But I was still a professor. And even though I was on leave, I
still had Ph.D. students. And towards the end of that first year, I started getting very, very interested
in this project which happened to turn into Duolingo.
RAZ: And presumably, Luis, I mean, given that you’d already turned down Microsoft, like, four years
earlier, you were not going to become a Googler. You really – I mean, this is part of the deal. You
had to go…
VON AHN: No, I wasn’t.
RAZ: …Work with Google, make this happen. But it sounds to me like you’re so restless. You were
not going to just work in a big organization.
VON AHN: I wasn’t going to do that. Yeah, it’s not my thing. I mean, I kind of have to do my own
thing.
RAZ: What do you think the reason for that is?
VON AHN: I don’t know. I mean, you know, probably because I’m an only child. I don’t know.
RAZ: Are you just restless?
VON AHN: I’m restless, and I’m also obsessive. I obsess on one thing. And this is what happened
with Google in the end. I mean, I was starting to get obsessed on this new project Duolingo, and I
just had to leave. And, by the way, leaving cost me quite a bit of money because some of the
reCAPTCHA payment required that I stay there for three years, yeah, and I did not stay for three
years.
RAZ: So you had to give up some of the money. But in the meantime, you’re still at Carnegie Mellon
teaching. And I guess you got a graduate student there who would eventually become your co-
founder at Duolingo. And I think his name is Severin Hacker. Is that right?
VON AHN: Severin Hacker. Last name is Hacker.
RAZ: I mean, it’s like a movie name. His name is Severin Hacker.
VON AHN: And, by the way, the way I met him – I was literally sitting in my office one day, minding
my own business. And then this lanky guy shows up – super tall and super skinny – and he says, hi;
I’m Severin Hacker. And I just said, what? I didn’t even parse it. And then he just did hand gestures.
Severin – he did a gesture that is, like, basically cutting his arm…
RAZ: Yeah.
VON AHN: …’Cause he was severing it.
RAZ: Yeah.
VON AHN: And then Hacker, he just did, like, as if he was, like, moving his fingers, like, typing with a
computer.
RAZ: Oh, my God.
VON AHN: And I’m like, oh, Severin Hacker. Wow. And he said, yeah, I’m here, and I would like to
do research with you. I want to work with you. And I said, yeah, sure. Your name is so amazing, I’ll
do it.
(SOUNDBITE OF MUSIC)
RAZ: When we come back in just a moment, how Luis and, yes, Severin Hacker take the
reCAPTCHA business model and try to use it again to teach people foreign languages for free, and
how they discover that particular model is just not going to work. Stay with us. I’m Guy Raz, and
you’re listening to HOW I BUILT THIS from NPR.
(SOUNDBITE OF MUSIC)
RAZ: Hey. Welcome back to HOW I BUILT THIS from NPR. I’m Guy Raz. So it’s around 2012, and
Luis has been working at Google for two years, and he’s got one more year to go to get fully paid
out. But he’s itching to get going on his next project, so he walks away from Google early.
VON AHN: Interestingly, what motivates me started changing quite a bit after the reCAPTCHA
acquisition because I really thought, OK, I’m in a really fortunate position in my life.
RAZ: Sure.
VON AHN: I now – you know, I don’t particularly need to worry about money. Can I do something
that helps people? And so I really started thinking about education. And Severin, fortunately, was
also very much into education. So we started thinking, can we do something with education that
gives it away for free? And the thinking really was, there’s all these people that I grew up with in
Guatemala very poor – and a lot of people talk about education as something that brings equality to
different social classes, but I always saw it as the opposite, something that brings inequality,
because what happened, at least, you know, in my case – those who have money can buy
themselves the best education in the world, and those who don’t barely learn how to read and write.
RAZ: But you’re thinking along the lines of, like, what is something that can be free but that would
kind of be self-generating? So, for example, many business models offer a free service with
advertising. That’s Facebook’s model. That’s Google’s model. They capture your data, but you get
this service in return. But you were thinking, how can I create something that doesn’t cost people
anything but that can be sustainable?
VON AHN: That’s what I was thinking. I was thinking, can we make it sustainable? And can we
make it free? And languages, in particular, changed. I mean, Duolingo is a way to learn languages.
We ended up going to languages particularly also because in both of our cases, we’re not native
English speakers.
RAZ: Severin was not either?
VON AHN: No.
RAZ: Where’s he from?
VON AHN: He’s from Switzerland. He’s a Swiss German native speaker. And so in both of our
cases, learning English completely changed our lives. And I just knew – you know, when I was
growing up, everybody in Guatemala wants to learn English, and nobody could afford it. And turns
out that in most countries in the world, if you know English, you can double your income potential.
So we thought, OK, can we figure out a way to teach people a language, in particular teach you
English, in a way that’s free and – but also self-sustaining? Like, how can we make it so that it kind of
pays for itself?
RAZ: OK, so you’ve got this language – you think language is where it’s going to be at because that’s
how we can actually help people increase their income, for example, especially in other countries.
VON AHN: Yeah.
RAZ: And then the next question is, OK, what is that – what does that thing look like?
VON AHN: Yep, that’s what we were thinking, and then eventually came up with this idea, which is
pretty similar to reCAPTCHA. Turns out today, Duolingo does not work this way. It is a good idea,
but it is a relatively impractical idea.
RAZ: So what was it?
VON AHN: So the idea was this. We’re going to give the service entirely for free, but instead of
having people pay us, we’re going to get them to help us translate stuff. So, look; there are all these
companies that want to translate stuff. For example, CNN would like to translate all their news that
they publish from English to Spanish. They’re currently paying people to do that translation. We
thought, OK, what if we get these people who are learning English on our platform – what if as a part
of their way to practice, you know, after they learn some stuff, we tell them, hey; here’s this CNN
article. Can you translate it? It’s in English. You’re learning English. Can you translate it into
Spanish?
And then if we get multiple people to translate the same thing and they kind of collaborate with each
other to make a translation, at the end, we’ll get a translation. And we thought, OK, we could sell that
translation back to somebody like CNN and make money that way.
RAZ: And you would use this same technique as uses reCAPTCHA. Like, 10 people got the same
exact sentence so you knew it was right.
VON AHN: I had to be a little smarter than that. It turns out if you give a sentence to 10 people,
they’ll all translate it differently.
RAZ: OK. Yeah, right.
VON AHN: But, generally, yes. I mean, we would use, you know, kind of – they had to be pretty
close to each other. Then we also had another step where in the exercise to the person wasn’t,
translate this, but, tell us whether this translation is right or wrong.
RAZ: Right.
VON AHN: So some people would check the translations. But in the end, we built a system, actually,
that worked pretty well that, basically, you could give it a text in English. There were people who
were learning English or who could be learning English, and then they would be – they would help
translate it. And then the system would pop out a translation that was made by people, and the
translation was very good.
RAZ: It’s – instead of CNN paying some translation service, they would just pay you.
VON AHN: Yes.
RAZ: And you would, again, like The New York Times sending you 42,000 (unintelligible) – you
would just have your students learning a language, but they would also be translating these articles
into their native language.
VON AHN: That’s exactly what the idea was.
RAZ: So, OK, so you have this really great idea. And, by the way, and I’m assuming you’re funding
the whole project – right? – because…
VON AHN: Yeah, it was a Carnegie Mellon project, and it was being funded by a grant from the
National Science Foundation and also from my MacArthur Grant at Carnegie Mellon.
RAZ: Got it. OK.
VON AHN: Funding, at the time, what it meant is basically paying for Severin’s salary.
RAZ: Yeah. And so at what point did you say to Severin, all right, let’s spin this out and start a
business and figure out who, you know…
VON AHN: This was also an interesting thing. We were – OK, we thought, OK, we’re – let’s do this.
This is a good idea. We’re convinced it’s a good idea. Let’s do this. But the first thing we need to do
is hire more people ’cause the two of us just can’t do it. So we started hiring people, but all inside
Carnegie Mellon. We realized actually hiring people was pretty expensive inside our university. And
then we thought, OK, well, what I need to do is apply for a bigger grant from the National Science
Foundation.
And I started working on that. And these grant applications – this is, like, 30 pages long, and you
have to wait, like, a year to hear whether you get it or not. And it’s, like, a couple million dollars,
maybe. And so I was working on that. And then suddenly, I got connected to a venture capital firm,
Union Square Ventures. And, you know, I talked to them about this. And very quickly, they get back
to me. And they’re like, hey; we could fund this. I didn’t have to write 30 pages. It was much easier to
get that money. So we thought, OK…
RAZ: They wanted to just – they wanted in on this because, well, first of all, you had a track record.
VON AHN: It was mainly the track record, in retrospect.
RAZ: Yeah.
VON AHN: And, you know, I now have a relatively good relationship, like, close relationship with the
Union Square folks. I mean, they’ve now told me, look; we never thought this would work, but you
had a really good track record, so why not?
RAZ: They want to invest in you.
VON AHN: Right.
RAZ: So when they approach you and they say, we want to fund this, we want to invest in this – and
at this point, you had not dealt with outside investors in your career.
VON AHN: We had not. And also, this was still not a company. So at that time, we just thought, OK,
well, let’s make it a company, and let’s take some funding. Yeah.
RAZ: And how did you do that? Did you – was there – I mean, Severin was your student. So was
there an uncomfortable conversation, or was it pretty clear? You’re like, listen; it was my idea. I’m the
boss, so I’m going to have X percentage. And…
VON AHN: You know, Severin is just – I think it’s partly because he’s Swiss or because he’s like a
computer. He’s like Mr. Spock. He had that conversation with me. I didn’t have it. He sat down, and
he said, I want us to write a contract. But it’s not a lawyer contract. I just want to write basically a
word document that we write, a few lines long, that just basically says what our understanding is.
And we’re both going to sign it. And we wrote down a contract that was just really simple. It was like,
we’ll go in it half and half.
RAZ: Yup.
VON AHN: And all decisions related to hiring we’re going to do together. All decisions related to – I
don’t even remember what else. But there’s, like, three or four bullet points.
RAZ: Yup.
VON AHN: And then it just said his name and my name, and we signed it, and that was it.
RAZ: So – all right, so you create a company. And you’ve got some interested investors, and I think
you raised, like, $3-plus million from a bunch of different investors, right?
VON AHN: It was $3.3 million, which – at the time, this was a normal series A. So it’s $3.3 million
from Union Square Ventures and $300,000 from a combination of Tim Ferriss and Ashton Kutcher.
RAZ: Ashton Kutcher, he was, like, way ahead of the rest of Hollywood. Now everybody wants to be
Ashton Kutcher.
VON AHN: (Laughter) Ashton Kutcher is very smart guy in that respect.
RAZ: Very smart guy.
VON AHN: I mean, yeah, he’s…
RAZ: He was way ahead of the game.
VON AHN: Yup.
RAZ: I mean, everybody now wants to be an Ashton Kutcher. They’re like…
VON AHN: Yup.
RAZ: Right? It’s like, there’s LeBron James, and there’s Serena Williams, and there’s – anyway. All
right, so Ashton Kutcher – with that money, did you get an office? Did you get a staff? How many –
did – were you able to hire a bunch of people?
VON AHN: Yeah, we heard a few people. We did get an office very close to the Carnegie Mellon
campus.
RAZ: OK.
VON AHN: And, you know, we started working on it. And at the time, pretty much everybody told us,
you’re not going to be able to beat Rosetta Stone. Like, why would anybody use this? You know, we
just kept on saying, well, because it’s free. This is going to be free. And that was our our main selling
point. We didn’t know if it was going to work. But we – you know, we worked on it, and we launched.
We launched duolingo.com in 2012. And it was very fortunate that I had given a TED Talk about this.
As soon as that went online, we got a ton of people come to duolingo.com. And…
RAZ: To try it out.
VON AHN: To try it out.
RAZ: Yeah.
VON AHN: And it started growing pretty fast because it was a free way to learn a language. And,
you know, at the end of your lessons, we would say, hey; here’s this article. Do you want to help us
translate it? And we landed a contract with CNN and a contract with BuzzFeed that we were going to
translate all their news from English to Spanish.
RAZ: How – by the way, how did you convince – I mean, was it relatively easy to…
VON AHN: We were just cheaper. It didn’t cost us any money to get the translations.
RAZ: Sure.
VON AHN: Our users were doing it. We just said, oh, how much do you, you know, pay for…
RAZ: Yeah.
VON AHN: At the time, it was, like – they paid, like, 10 cents a word.
RAZ: Right.
VON AHN: We said, oh, we’ll do it for…
RAZ: I got you.
VON AHN: …Five cents a word. And it worked. You know, the translations worked on everything.
There was one problem. The amount of money that we were going to make was actually relatively
small, and it’s because translations are – it’s a pretty sh***y business, translation.
RAZ: Yeah.
VON AHN: It’s 5 cents a word, but then pretty soon, suddenly, you know, the people from – I don’t
know – BuzzFeed found somebody else that would do it for 4 cents a word because it would…
RAZ: Sure.
VON AHN: And then we’re like, fine, we’ll do for 3.
RAZ: It’s a race to the bottom.
VON AHN: It’s a race to the bottom. And then computers are getting better at it.
RAZ: And by the way, you – I’m assuming you didn’t want to found a translation service. You were
founding an education company.
VON AHN: That’s right. And when – one thing we realized is, as we were executing on these
contracts, we realized that’s where the money’s coming from. So we’re spending more and more of
our effort making sure the translations are accurate as opposed to teaching well.
RAZ: And it was – there was no ads. It was just a website, initially.
VON AHN: No ads. Mmm hmm. Mmm hmm.
RAZ: But you had a lot of people who signed up, right? Like, a couple of million.
VON AHN: Yeah, exactly. We were growing. It was good. But then a couple of things happened.
The first thing that happened is we realized this was not going to be a great business. The other
thing that happened is we hired one engineer and a summer intern. They started on the same day
on a summer. And we told them, hey; the two of you, you don’t know each other. We’ve heard these
apps are the thing now instead of websites, or they’re starting to become the thing. Can you two
make a companion app to Duolingo, to duolingo.com? Let’s try that. That’s going to be your, you
know, kind of summer project. Let’s make a companion app to duolingo.com.
They came back at some point and said, you know what? It doesn’t have to be a companion app.
We can actually do all the functionality of Duolingo. We can fully learn a lot of aspects of the
language from this app. So we developed it. We launched it. And we were at exactly the right time
because there were other apps to learn a language in the App Store, but they were pretty crappy
and also cost money. And so very quickly, this became the most downloaded education app of all
apps.
RAZ: Wow. And you guys were there, like, right as apps were, like, totally starting to explode.
VON AHN: Yeah, that’s right.
RAZ: And how were you – I’m just curious. How were – I mean, you did not have – I mean, you’re an
educator, and you’re a professor. But how were you building a curriculum in different languages?
Were you…
VON AHN: Yeah, this is great. I mean, yeah, we didn’t – we had no idea I mean, we went and read
some books about how to teach languages. And first of all, most everybody does not agree on what
the best way is to teach a language. And then so we thought, OK, this is pretty hard. Let’s just take
what we can from the books and put it out there. So I made the first Spanish course myself because
I’m a native Spanish speaker. Severin made the first German course himself.
RAZ: And this was going to be just, like, kind of the gamification model, where it was just level up,
level up, level up, level up?
VON AHN: Yes. That’s the other thing that we realized in the process. When we started making the
first versions of the courses, we had people try it out, and people would say, oh, my God, this is
really boring. The hardest thing about learning something by yourself is staying motivated. So let’s
make it fun. So fortunately, early on, we made something that was both fun and also taught you a
language.
RAZ: Got it. All right. So you launch this thing. Is it pretty clear to you, you know, by the end of that
year, by 2013 – I mean, I think you get 15 million users by the end of that year.
VON AHN: Yep.
RAZ: Was it pretty clear to you that it was not going to make money, it was not going to be
sustainable just by doing contracts with news organizations?
VON AHN: It was. It was. And particularly because we couldn’t figure out how to make the
translation stuff work on our app. Just people couldn’t type that much in the app, et cetera. So we
just could not figure that out. And the majority of our users were in the app. So I made the difficult
decision to cancel those contracts and forget about trying to make money and just raise more
venture capital. And sure enough, we had some very good investors who decided to invest. And
that’s how we were sustaining ourselves.
RAZ: So you’re basically sustaining yourself off investment cash. But did you feel like you had to
change your business model?
VON AHN: I mean, that – you know, this, by the way, has been one of the biggest struggles with
Duolingo. Our mission from the beginning has been to give free language education.
RAZ: Got it.
VON AHN: This is why we started the company. That is the thing. There’s an easy way to make
money here, which is just charge for it. And so when we talk to investors, the first thing I would tell
them is, look; the one thing that will not change is I’m not going to charge for people to learn a
language here. And so – you know, people would invest. And I think, a lot of times, they would invest
and they would think, OK, eventually, they’re going to charge.
RAZ: Yeah, right.
VON AHN: But I told them, you know, I’m not going to charge. And so we raised funding. I mean, we
raced – I don’t know. But at some point, we had raised close to about a hundred million dollars. And
we’ve…
RAZ: Wow. Wait. Hold on. Stop. Pause. Hundred – I mean, you’re not manufacturing a product in a
factory. Why – I’m just thinking it’s ones and zeros in a computer. What…
VON AHN: You got…
RAZ: Tell me why it’s so expensive.
(SOUNDBITE OF MUSIC)
VON AHN: Here’s the thing. You want to hire really good engineers and really good…
RAZ: Yeah.
VON AHN: …Designers and really good product managers? They are not cheap.
RAZ: I get you.
VON AHN: You got to pay them. And (laughter) that’s the expense.
RAZ: Right. These are the most expensive – software engineers are the most expensive part of – but
you’re based in Pittsburgh. You’re not based in California.
VON AHN: Correct. And you would think that because we’re based in Pittsburgh, you…
RAZ: It’d be cheaper.
VON AHN: Yeah. It’s not true. There’s a reason. From the beginning, we decided we’re going to hire
only the very best people. And the very best people have offers from companies in California. And
they say, I have this offer that is for – you know, I’m just graduated from college. I have this offer that
is for $130,000. Are you going to match it or not?
RAZ: Yeah.
VON AHN: And so what do you do? But we had no idea how we were going to make money. I
mean, the first way we tried, which was these translations, we had given up on. And at some point,
we raised money from Google – CapitalG is one of their investment arms. We raised money from
them. I believe it was 45 million bucks that we raised from them.
RAZ: Wow.
VON AHN: And, you know, I was feeling good. I thought, OK, well, we can continue raising money
for a while. Like, whatever. I don’t know – I don’t need to figure out how to make money. We can just
continue raising money for a while. And partner from that firm sat me down. And she said, you know,
you’re not going to find a bigger fool.
RAZ: Yeah.
VON AHN: We’re the biggest fool. And nobody else will invest in this company if you don’t figure out
how to make money. If you have zero plans to make money, nobody else is going to invest in this
company. And that’s when we started kind of freaking out and tried to figure out how we’re going to
make money. And that was a difficult time for the company.
RAZ: Yeah. But, I mean, it doesn’t seem like it would’ve been that complicated because you could
just run ads, right?
VON AHN: Yeah.
RAZ: Was a part of you like, oh, ads – I don’t want ads?
VON AHN: Yes. We were very precious about this. We cared a lot about the user experience in
Duolingo.
RAZ: Yeah.
VON AHN: And we thought, first of all, we’re never going to put ads in here. Secondly, we’re never
going to charge people. And basically, Laela from Google was like, well, I don’t know how you’re
going to make money because these are the standard ways of making money. But you’ve got to
figure it out.
RAZ: This is an important point because I think a lot of businesses start out this way, with really
strong principles that seem right.
VON AHN: Yep.
RAZ: But when you say that, you actually kind of put your – box yourself in, because sometimes,
there are reasons to do some of those things in order to accomplish the bigger goal, for example, of
delivering a free product.
VON AHN: You are completely right.
RAZ: So you had to basically do a 180. You had to have hard conversations with people and say,
hey; you know, we got to start thinking about maybe advertising on our site. And maybe…
VON AHN: We did – at the time we had – I don’t know how many employees – 60. But it’s funny
because the people we had hired early on, they had offers from, you know, companies that were –
had much bigger names than us – Facebook, et cetera. And the reason they had come work for us is
because they really believed in our mission of kind of giving free language education. So we had
ended up with basically 60 to 70 zealots…
RAZ: (Laughter).
VON AHN: …Who all just wanted to give free education.
RAZ: The mission, yeah.
VON AHN: Yeah, the mission. Like, we’re here for the mission. To this day, it is still like that, which
is great. But we had a year of turmoil where basically we’re like, OK, well, we need to figure out how
we’re going to make this sustainable because we’re not going to be able to raise much more funding,
you know, if we never make money.
RAZ: Yeah.
VON AHN: And so sorry, but there’s got to be a way to make money.
RAZ: And if you don’t have money, you don’t have a business.
VON AHN: We don’t have a business. And we’re not going to be able to reach the number of people
we want to reach. At some point, enough people got convinced that, OK, we’ll put an ad at the end of
every lesson. I remember we showed it to our head designer, who…
RAZ: Yeah.
VON AHN: He almost vomited.
RAZ: I get it. I mean, did people say to you or did you get the feeling that, like – I don’t know – people
thought that you were selling out?
(SOUNDBITE OF MUSIC)
VON AHN: Yeah, I think so. And, you know, I don’t think it’s too many people because I think I,
myself, went through a transformation that took me – it took me several months to go through this
transformation.
RAZ: Yeah.
VON AHN: So I – and, you know, we put the ad at the end of every lesson. And fortunately, that
actually – it gave us quite a bit of money. I mean, as soon as we put that ad, our run rate went from
zero to, like, 10 million bucks a year.
RAZ: Wow.
VON AHN: One tiny ad – it didn’t even cover the whole screen.
RAZ: What was the company?
VON AHN: Oh, we – you know, we used Google Ads.
RAZ: OK.
VON AHN: So…
RAZ: You used Google Ads. Yeah. OK.
VON AHN: They came from everywhere.
RAZ: Everywhere. OK.
VON AHN: Random places.
RAZ: Not latenightbootycall.com (ph), though, I hope.
VON AHN: (Laughter) No. And soon after that, we got a bunch of people who would tell us, hey; I
don’t like ads. Can I pay you to turn off the ads? And we thought, OK. How about we launch this
subscription service where the main thing is you can pay us to turn off the ads? It turned out – and
this is just – we really just didn’t realize this. Subscriptions made us a ton more money than the ads.
RAZ: And what was the – what would it cost to subscribe?
VON AHN: Nine ninety-nine per month.
RAZ: OK, so a little bit more than Spotify. But through that, you could do any language you wanted,
any course with no ads.
VON AHN: Right. And if you didn’t want to pay, you just had to watch…
RAZ: The ads.
VON AHN: …You know, see the ads at the end of a lesson.
RAZ: And so all of a sudden, you had people who were willing to pay some money. But still, I mean,
we, of course – I know we know the advertising model and podcasting, and it’s still a small
percentage of people. When you get a freemium version – right? – even Spotify, most people are still
getting it for free and dealing with the ads.
VON AHN: Yes. So while at first it was very few, by now – I mean, it’s been a couple of years since
we added our subscription. By now 3% of our users pay for the subscription.
RAZ: Which is a lot because how many total users do you have?
VON AHN: A lot. I mean…
RAZ: Tens of millions.
VON AHN: Yeah. I mean, active users right now – we have about 40 million monthly active users,
and about 3% of them are paying subscribers.
RAZ: All right. Now here comes the tough part, which is – Duolingo, of course, is free. So, you know,
it’s a free offering, but, of course, even with free offerings, there’s going to be criticism. And, you
know, there have been – professors who specialize in this have said, you know, you can’t really get
that proficient with Duolingo. You know, maybe I can learn some words or phrases, but it’s not –
doesn’t really actually teach me a language. And before we dive into this, just in general, when you
hear this criticism, does it make you defensive, or does it make you think, like, maybe we got to
make this a little better?
VON AHN: The truth is there’s a lot of marketing out there that tells you that you can learn a
language in nine days. This is not true. Actually learning a language takes years.
RAZ: Yeah.
VON AHN: This is the first thing to understand.
RAZ: Yeah.
VON AHN: Secondly, there’s various levels, of course. Duolingo teaches you pretty well from zero –
so starting from the beginning – to about intermediate depending on the language that you’re
learning.
RAZ: Yeah.
VON AHN: If you want to use Duolingo and start from zero and get to the point where you’re the
poet laureate of that country, that is unlikely to happen…
RAZ: Yeah.
VON AHN: …With Duolingo by itself. That’s just not going to happen. But the way we see it is, A, we
keep getting better and better. B, if you look at any single method – I mean, take, for example, the
single method of U.S. high school education.
RAZ: Yeah.
VON AHN: It kind of doesn’t work very well. How proficient are people who take Spanish throughout
high school at the end of high school? On average, not that proficient.
RAZ: Right.
VON AHN: And our goal with Duolingo – and we’re not there yet, but our goal is to get people from
zero to a level of the language – it’s a level called B2, which is where you can get a knowledge job in
that language. You know, Google, for example, employs software engineers here in the United
States whose English level is B2.
RAZ: OK.
VON AHN: That is our goal. We’re not there yet.
RAZ: So we interviewed James Park, who created Fitbit, and Fitbit – the genius of Fitbit was it was
like a gamified exercise, right? Like…
VON AHN: Yeah.
RAZ: People are like, I did 10,000 steps today, or, you know, I made it. It’s hard to get humans to
change habits, so how do you get, let’s say, a significant percentage of people to finish a language
program?
VON AHN: Yeah. This is what we spend a lot of our time on. And, you know, this is one of the things
that – when we get criticisms, one of the things that they don’t take into account is a lot of the
research about how to teach a language is done with people who are, in some sense, held hostage
in the classroom.
RAZ: Yeah.
VON AHN: The hardest thing about learning a language is staying motivated. So we spend a lot of
effort trying to make Duolingo more motivating and more fun, and the way we do that is just by
adding game elements. I mean, using Duolingo – a lot of people refer to it as playing Duolingo. It’s
just – it feels a lot like playing a game.
RAZ: You get rewards. You get, like, level-up kind of thing.
VON AHN: That’s exactly right. And other things we do, for example, here – this is another
interesting thing we do. We want you to use Duolingo every day. I mean, the truth is if you actually
want to learn a language, you’ve got to turn it into a habit. One thing that is really powerful for us is
send – we send you notifications. So we have a pretty sophisticated artificial intelligence system – it’s
one of the most sophisticated things we have – that figures out when to send you a notification and
what to say in them.
RAZ: Yeah.
VON AHN: And, for example, one of the most powerful things we – you know, we’ve done is after
about five days, if you haven’t come back, we send you a notification that says, these notifications
don’t seem to be working. We’re going to stop sending them for now. That turns out to be an
extremely powerful way to get people to come back because they feel guilty that we’re stopping to
send the notification, so that gets them to come back.
RAZ: Yeah. It’s like, hold – you got to hold people accountable…
VON AHN: Yes.
RAZ: …Which is very hard. This is why people have personal trainers – because otherwise, they
won’t go to the gym.
VON AHN: Yeah.
RAZ: But why would somebody pick Duolingo over any other language app? You mentioned
Rosetta Stone, for example, right? And I’m sure you’ve looked at it. And, I mean, obviously, you’re a
competitor, but they probably do a decent job teaching languages. So why wouldn’t you just, like, do
that?
VON AHN: Yeah. I mean, before we launched, Rosetta Stone was the biggest thing in the world.
And everybody told us, you’re not going to be able to beat them.
RAZ: Yeah.
VON AHN: By now I would say we probably have 50 times more users than they do. Our revenue is
probably five X (ph) their revenue.
RAZ: Oh, my God.
VON AHN: Something to that effect. There’s a big reason. It’s the fact that we’re free. And this is one
of the things that – our mission, which is really giving free language education, I think is actually good
for business.
RAZ: Yeah.
VON AHN: We don’t spend very much in marketing. We have all these people – 97% of our users
don’t pay us.
RAZ: Yeah.
VON AHN: So it’s just – I think we just have this huge user base of people who are basically our
marketing engine. But a lot of companies in education eventually turn into marketing companies…
RAZ: Yeah.
VON AHN: …For the following reason – you realize, man, making improvements in how well you
teach is hard. And it really is very hard. It takes years. So for every dollar you have, you quickly
realize it’s actually better to spend your dollar marketing your product rather than making your
product better. I’ve been, you know, a hard-liner on this. We spend all our effort just making the
product better. And the main reason is I think we’re really in it kind of for the long term. And I think in
the long term, the better product will win. And this is why we don’t spend so much money on
marketing.
RAZ: Luis, in December of 2019, your company was valued at $1.5 billion. Now we are all in a very
different world. A lot of the businesses that have been on HOW I BUILT THIS are really struggling –
huge companies, airlines, you know, products. They’re in trouble. Some of them will not make it
through this. Are you guys seeing a negative impact? Are you seeing people – or because people
are stuck at home, may be different. I mean, Netflix is doing great. What’s going on with you guys
right now? Because you’re all remote – working remotely presumably.
VON AHN: We’re all working remotely, yes. I’m here just by myself. I came here to record this, yep.
And we are closer to the Netflix. We’re seeing increased demand.
RAZ: Like, significantly increased?
VON AHN: Yeah, significantly. Our revenue has gone up about 50%. So we used to make about
$400,000 a day. We now make about $600,000 a day.
RAZ: Wow. But the ad market is drying up.
VON AHN: Yeah. But we make very little money from our ads. Most of our money is from
subscriptions.
RAZ: So because people are sort of stuck at home, you’re seeing people signing up for Duolingo?
VON AHN: Yes, we are seeing that. And the interesting thing is we see it – you know, we have users
everywhere in the world. Only 20% of our users are in the U.S. We’ve seen it in every single country,
and this is an amazing thing. The first country we saw it, obviously, is in China. As soon as there
was, you know, social distancing measures in China, our traffic in China doubled. And I kind of never
thought it would happen anywhere else. But soon after that, Korea was like that. Japan was like that.
Then Italy went like that. The rest of Europe went like that, then the U.S. And so we’re seeing
massively increased demand because of this.
RAZ: So what’s the exit? I mean, you’ve got investors. Obviously, they convinced – you were
convinced that you had to keep it sustainable and to grow it. And you’re now valued at $1.5 billion.
And I know you’re not public, so you don’t probably disclosure your – you know, whether you’re
profitable or not but sounds like you’re, you know, keeping the lights on pretty well. What’s the end
game? At some point, you know, it’s sell or go public.
VON AHN: The end game here is to go public. That’s what we’ve been working towards. It’s going to
be very difficult to say these days when we’re going to go public because, you know, with this whole
COVID thing, the markets are really crazy. But we – you know, we have the revenue now to be able
to go public. We are cash flow positive. And one of the things that I think is really important is, the
way I see it, we have so much more still to go in terms of how much better we can teach and also
teaching other stuff. We recently released an app to teach reading to young kids. It’s called Duolingo
ABC. I think there’s a huge amount of impact that we can do with that. So, I mean, to me, it’s just
keep going with this. That’s the goal.
RAZ: Luis, given all of the things that have happened to you, I mean, your incredible success, how
much of that you attribute to your intelligence and how hard you worked and how much do you think
it’s because you were lucky?
VON AHN: I was definitely lucky. I mean, launching an app at the time we launched the app was
exactly the right time and launching an app in late 2012 was a really good time to launch an app. So,
you know, I’ve been incredibly lucky. I think that and I think just hard work on the same thing. I get
obsessed with the same thing. I mean, I’ve been working on Duolingo for now eight years, and I’m
pretty obsessive about it. So I think it’s both.
(SOUNDBITE OF MUSIC)
RAZ: That’s Luis von Ahn, on co-founder of both Duolingo and reCAPTCHA. By the way, Lius says
that having a tech company based in Pittsburgh actually helps to attract top talent, even from places
like Silicon Valley. For starters, the median price of a home in Pittsburgh today is about $180,000. In
San Jose, it’s almost $1.1 million. In fact, a while back, Duolingo put up a recruiting billboard in San
Francisco that simply read own a home, work in tech, move to Pittsburgh.
(SOUNDBITE OF MUSIC)
RAZ: And thanks so much for listening to the show this week. You can subscribe wherever you get
your podcasts. You can also write to us at hibt@npr.org. And if you want to send a tweet, it’s
@HowIBuiltThis or @GuyRaz. Our show was produced this week by Casey Herman, with music
composed by Ramtin Arablouei. Thanks also to Julia Carney, Candice Lim, Neva Grant and Jeff
Rogers. I’m Guy Raz, and you’ve been listening to HOW I BUILT THIS.