Achieving growth without advertising

Last updated: 12-09-2020

Read original article here

Achieving growth without advertising

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy

By the time the language app Duolingo ran its first advertising campaign last autumn, it had already amassed 300 million users.

Launched in 2011, Duolingo was developed at Pittsburgh’s Carnegie Mellon University by Luis von Ahn, a professor of Computer Science and Severin Hacker, one of his PhD students. Early versions were shared with students and teachers – their enthusiastic response to the fun, game-styled approach created word-of-mouth that quickly snowballed beyond Pittsburgh. ‘People would download Duolingo for free and because they had a good experience, they’d tell five of their friends,’ says von Ahn.

From that initial uptake, the company fostered online forums around the languages it offered – such as French- learners sharing tips and encouraging each other’s enthusiasm for French food and music. Enthusiasts were turned into advocates, spreading the word to families, friends and communities.

Having sold his previous invention, ReCaptcha, to Google, von Ahn had a more altruistic motivation for his new project. ‘We wanted everybody to have equal, free access to language education. But ‘free’ also served as our marketing engine. The rapid growth in users gave us a significant amount of data on how people learn, so we were able to improve our product more quickly.’

Early investors were initially excited by the apparent possibilities of Duolingo’s huge user base, but von Ahn maintains it was only when the company had been valued at $500m that they started to consider how they would monetise it via ads and subscriptions.

Before that point, while other language apps threw resources – human and financial – at marketing and charged a premium price for the product, Duolingo focused on improving the product itself. Even today, 80% of Duolingo’s employees work on the product, which remains free.

Product-led PR has remained the core of Duolingo’s marketing strategy. The PR team remains tiny – with just three employees worldwide – but imaginative new products, such as the Valyrian language from Game Of Thrones, achieve (free) media coverage both at launch and after subsequent success. From word-of- mouth beginnings, the app has cemented itself as the world’s most popular language-learning app.

1. NPS: Net Promoter Score is a tool used for gauging how likely a customer is to recommend your business to a friend. Customers are asked how likely it is that they would recommend you on a scale of 1-10. Promoters are 9-10; passives are 7-8; and detractors 0-6. Percentage of promoters minus percentage of detractors = NPS. The higher the better.

2. TAM: Total Available/Addressable Market is the total market demand for what you’re selling, and the most amount of revenue you can possibly make. It’s something that features in pretty much every pitch deck.

3. ARPU: Average Revenue Per User is an indication of the amount of money a business can expect to generate from one customer. Particularly useful for subscription businesses, the equation is simple: total revenue divided by total number of users.

This board on Notion features a huge list of general starter ideas for getting your first 100 customers.

In a 20-minute podcast, author and associate professor at Harvard Business School Thales Teixeira details how some disruptive giants went about getting their first 1,000 customers. 

Seth Godin's TED Talk, ‘The tribes we lead’, argues that the internet has ended mass marketing and explains the importance and power of building community.

This article was first published in Courier Issue 33, February/March 2020. To purchase the issue or become a subscriber, head to our webshop.


Read the rest of this article here