Advice Line with Luis von Ahn of Duolingo

Duolingo co-founder Luis von Ahn joins Guy on the Advice Line to answer questions from three early-stage founders. Plus, Luis shares insights on how data can help entrepreneurs understand what their customers really want. First, Steph in Chicago wonders how to manage expansion opportunities for her art-filled vending machines. Then Blair from Atlanta discusses his challenge of selecting which products to focus on with his tech accessories brand. And finally, Stephanie in Indiana considers the best way to fund more employees for her growing business designing living plant walls. Thank you to the founders of Good Things Vending, Bair, and Naturspire for being a part of our show. If you’d like to be featured on a future Advice Line episode, leave us a one-minute message that tells us about your business and a specific question you’d like answered. Send a voice memo to [email protected] mailto:[email protected] or call 1-800-433-1298. And be sure to listen to Duolingo’s founding story https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/c36f182d-492e-41cb-bfeb-2d4cb13f42df/embed as told by Luis on the show in 2020. This episode was produced by Katherine Sypher with music by Ramtin Arablouei. It was edited by Casey Herman. Our audio engineer was Cena Loffredo. You can follow HIBT on X & Instagram and sign up for Guy's free newsletter at guyraz.com http://guyraz.com and on Substack https://guyraz.substack.com/. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 5:19Guy Raz?

  Hello and welcome to The Advice Line on How I Built This Lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show, who will help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice memo at [email protected]. And make sure to tell us how to reach you. And also, don't forget to sign up for my newsletter.

• 6:03Guy Raz?

  It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free at guyraz.com. And we'll put all this info in the podcast description. All right, let's get to it. Joining me this week is Luis Von An. He's the co-founder and CEO of Duolingo. Luis, it's great to have you back on the show.

• 6:23Speaker 01

  Great to be here, Guy.

• 6:25Guy Raz?

  You were first on How I Built This back in 2020. We will put a link in the podcast description for any of you who have missed that episode because it's so good. Really, one of the best ever. In that conversation, Luis, we talked about your childhood in Guatemala, like your early love for math. One of the, I think a lot of people were kind of stunned to hear about this. You were instrumental in helping to develop a technology called CAPTCHA, which is, of course, those annoying sort of characters that you have to read to confirm that you are a human. Thank you for protecting the internet. You became a professor at Carnegie Mellon, and then you got a MacArthur Genius Grant. You worked at Google for a bunch of years, and then you walked away to start Duolingo in 2011.

• 7:07Guy Raz?

  And we told that whole story on the show. It's such a good story. Your company, Duolingo, has just exploded since we spoke. I think about a year after our interview, you guys went public in 2021.

• 7:19Speaker 01

  Correct.

• 7:19Guy Raz?

  And today, you've got a market capital of like $13 billion, and you're still in Pittsburgh.

• 7:24Speaker 01

  That's right. We're still in Pittsburgh.

• 7:26Guy Raz?

  It's just an incredible story. Luis, before we get to some of our callers, I'd love to just kind of catch up on where we left off because I think when we spoke, Duolingo was valued at like $1 billion. Of course, it was already amazing. As I mentioned, now about $13 billion. You've grown so much. You've got 900 employees. Tell me a little bit about how you had to adjust as a leader of a rapidly growing, expanding company and brand. What's changed for you?

• 7:57Speaker 01

  Yeah, I mean, every year of my job is a little different, which is something that I like. I mean, we started almost 14 years ago. And since we last spoke, like you said, we became a publicly traded company. That makes my job a little different. First of all, I have to be a lot more careful about what I say about the future, which was not the case before. I've had to really learn that. For us, I think it's been really positive, being a publicly traded company, because our stock has done well. But really, I think it has also made us operate a lot better. I like to use this analogy that, you know, when you're a private company, nobody's really looking at how you operate. So it's as if you had a house and never had any guests. Usually that means that you're not forced to clean all that much. But if you're a publicly traded company, you have a lot of guests.

• 8:41Speaker 01

  So basically really forces you to make sure that all your processes are very well structured and everything. The other thing that changes when you're a publicly traded company is your forecast starts really mattering. We have to have forecasts that are really precise. And I actually really like it. I mean, now we really know it doesn't make sense to hire 500 people next year because that will make us very unprofitable. And so I think we've done very well in that respect.

• 9:04Guy Raz?

  One of the things I recently in my newsletter, I wrote about the idea of sort of ignoring the shiny new object. And in your space, there's a lot of competition. There's a lot of companies that that came after you, some that were around before you. And I wonder how much you, I mean, of course, you guys have a pretty strong position, if not the dominant position in in this space. But there's obviously AI is is coming into in play and that's going to be really significant, increasingly significant. But the other thing is some of these competitors also offer, you know, video with a live person, for example, or different ways of learning language. Do you guys look at that and say, well, we should really compete in all of these spaces? Or do you sort of tend to focus on what you're doing well and you kind of stay in your lane?

• 9:47Speaker 01

  We don't really look at what competitors, particularly in language learning, are doing too much. You know, for one, if you take all people who are learning languages and mobile apps, 90% of them are using Duolingo.

• 9:59Guy Raz?

  Wow, that's amazing.

• 10:00Speaker 01

  So that's one thing. But the other thing is we mainly compete for is time. And so for us, what we look at is we look at what Instagram's doing. We look at what mobile games are doing. We look at what TikTok's doing because those are real competitors. And the reality is we are losing. We are we are losing against TikTok and Instagram. They are significantly larger than we are. What we want to do is we really want to teach you a language and we want to teach it to you well. Now, interestingly, with live humans, by the way, this is one of the funniest things that I've ever seen. When you talk to people who are learning a language and you ask them, what do you want to do? The most common answer is like, I want to talk to live humans. That's what they tell you.

• 10:37Guy Raz?

  Yep.

• 10:38Speaker 01

  And we've said, OK, so if you tell us that if Duolingo had live humans, you would use it. You know, they tell you, yes, of course I would use it. You even ask, would you pay for it? And they say, sure, I would pay for it. And then you ask the next question is an amazing. You ask, would you do it right now? And invariably, the answer is no, not right now. It just turns out that talking to people in a language that you're not comfortable with, like 90% of people don't want to do that.

• 10:59Guy Raz?

  I think that's so interesting. It's an important point because you can apply this across categories, right? Which is to say that market research, especially sort of, you know, surveys are not always reliable. And I make, I've made this analogy before. When I, when I first, you know, sort of came up with the idea for this show and I made a couple of pilot episodes, we ran it through panels of people. And universally, they hated the show. This is like 10 years ago. They hated the show, and yet here we are, right? 10 years later. And I think that, that the point is so right because people will say, yeah, of course, I want a person. But, but when it comes down to it, they want the convenience of being able to interact with a language learning, you know, platform whenever they want.

• 11:40Guy Raz?

  And it just makes a lot of sense that you get this kind of data, but your response is not to go and do it, but to say, you know, actually, we don't think what people are telling us is actually true.

• 11:50Speaker 01

  Yeah, I mean, this is in the history of Duolingo. This is one of, been one of the most amazing lessons that I've had. Our users, or users in general, people don't really know what they want. They'll tell you all kinds of things, but you have to look at this, not their words, but their actions, like their behavior. Just turns out people prefer playing mobile games than talking to other people. They may not tell you that, but it just turns out that's the case.

• 12:16Guy Raz?

  Luis, let's take some calls and find out what people you help with. What do you think?

• 12:21Speaker 01

  Let's do this.

• 12:22Guy Raz?

  All right, let's bring in our first caller. Welcome to the Vice Line. You were on with Luis Van An from Duolingo. Tell us your name, where you're calling from, and a little bit about your business.

• 12:29Speaker 02

  Hi Guy and Luis. My name is Steph Crim, and I'm calling in from Chicago, Illinois. I am the founder and the keeper of a business called Good Things Vending. We take full-size snack vending machines, refurbish them, customize them, and stock them with local artwork, vintage and nostalgia items. And try to bottle a little bit of all that our city has to offer in an automated vending machine.

• 12:56Guy Raz?

  That's awesome. Steph, thanks for calling in. Congrats on, on starting this business. Cause you know, now vending machines are getting, at least in the US, they've been cool in, in like Asia for a long time, but they're getting cooler. You go to airports and you see people selling electronics and cosmetics and cupcakes and all kinds of things. So these are just vending machines that might ordinarily sell like packets of Lays, but you've refurbished them and they, and you can get like one of a kind things in them?

• 13:23Speaker 02

  Yeah, exactly. So the, I very much agree with you. I think vending is having a moment. My machines are not those high-tech machines that you see at the airport. Our machines are refurbished machines that may have been in a municipal basement or in a school cafeteria. We fix them up so that they are compatible with a credit card reader and then we have an artist paint them and we stock them with local artworks. So stickers, pins, patches, whatever you make, if we can shrink it down and drop it from about four feet, we'll put it in the vending machine.

• 13:54Guy Raz?

  Wow. How many of these machines do you have? They're all around the Chicago area right now?

• 13:58Speaker 02

  Yes. Yeah. So we launched the first one in 2021 and now we are up to seven machines with the eighth one going out next week.

• 14:07Guy Raz?

  And are they inside, like where are they located?

• 14:10Speaker 02

  They're in other businesses. So I am utilizing the community that's already been built around a spot. So I want to put myself in places like the popular local brewery or the conservatory around the corner. We love hospitality spaces. We love city landmarks. We love community buildings.

• 14:30Guy Raz?

  That's awesome. And, and tell me a little bit about, how much does it cost? Like, does each product cost?

• 14:35Speaker 02

  So right now, everything in the machine is $20 and under. The goal is to keep it super accessible, but it's definitely a higher price item than you'd usually see in a vending machine. Bigger profit margins, still economy of scale, like it's still about the number of machines that I can get out there. But last year, for the first time, we broke $100,000 in gross revenue. And in quarter one of 2025, we're up 53% from quarter one of 2024. And that's without factoring in additional revenue streams. We just have a new website launch with a web store that will eventually have some of these artist goods on it.

• 15:11Guy Raz?

  Yeah.

• 15:11Speaker 02

  Exploring some of those other areas.

• 15:13Guy Raz?

  Awesome. Okay, before I bring in Luis, tell us what your pain point is. What's your question for us?

• 15:18Speaker 02

  Absolutely. So there's been a growing interest, both in vending machines and specifically in the model that I've been building. And as Good Things Vending grows, we're receiving opportunities that exceed our current capacity. How do we decide when to say yes and scale quickly, hiring and expanding to meet demand versus saying not yet, risk losing those opportunities, but maybe taking the time to build more sustainably? What framework or decision-making strategies would you recommend?

• 15:49Guy Raz?

  All right, good questions. Luis, I'd love to bring you in. First of all, any questions for Steph?

• 15:54Speaker 01

  This sounds really interesting. You know, these are artists. Some of them may have social media presence. Do you use their social media presence to boost up where the machines are, et cetera?

• 16:04Speaker 02

  Yeah, that's, I mean, a big part of it is community weaving. The idea is that we can all amplify each other. If you know that this brewery gets folks who are like loving Chicago things, and then you put objects from makers who are making Chicago things, it sort of has a natural harmony between those audiences, and there's a desire to amplify each other. I will say that the vending machine part of it has done a lot for us on social media. We had a few like natural videos go viral, which has brought a decent sized audience to us. So now we're getting to kind of platform artists as well, which has been really joyful.

• 16:37Speaker 01

  That's great. I mean, that's a really good positive feedback loop, because you can just, you know, get more people to post on social media. Then your social media gets more popular, and then there's a whole feedback loop. So I love that.

• 16:48Speaker 02

  That's the hope.

• 16:49Guy Raz?

  Yeah.

• 16:49Speaker 01

  Yeah.

• 16:49Guy Raz?

  Steph, what, tell us a little bit about your goals here. I mean, you started this in 2019. You had the first machine 2021, and now you're approaching eight machines in Chicago. But what's your, if you could like look out in five or 10 years, what do you want this business to be?

• 17:05Speaker 02

  Yeah, I mean, it's such a good question and one that I wish that I had a clear answer to. I built this out of a love for community and art and vending machines and didn't really think that it would catch this kind of wave, but I'm not super attracted to the idea of franchising, like for what that would mean for my life, for how I would have to operate. But there's so much interest in folks who want to sort of take this business model and bring it someplace else. I think for me, I want to share the knowledge and I'd love to build a business that can sustain here and create exposure for artists in Chicago. I don't want to be doing the biggest possible thing. I always want to be able to be connected to the community that got me involved in this in the first place, which is the creative

• 17:48Speaker 02

  community, hospitality community. So whatever comes next, I'd like it to be something that allows me to have the job that I want selfishly. You know, I want to be able to enjoy putting weird stuff in vending machines.

• 18:00Guy Raz?

  Yeah. Louise, I'm curious to get your take on this because I don't think that this is an either or choice. I think you could, I think that she could do both, you know, work with a community and artisans and sort of hospitality space, but still think about this as a business. I mean, this is a, this is a model that is replicable. It's not easy to replicate because you have the connections, the contacts, and you're creating these amazing, beautiful machines with great things in them. And to me, it seems like an interesting thing to think about if people are coming to you and saying, hey, Steph, I want to do this in New York. I want to do this in Los Angeles, to say, okay, well, let's set up a, you know, a division. I'll help you set up a franchise of my business and you

• 18:44Guy Raz?

  can take it there. Anyway, Louise, I've been curious to get your take on that.

• 18:49Speaker 01

  Yeah, I agree that having, you know, it really makes you operate pretty differently and understand things better if you have a second city. You know, this is true with restaurants, this is true with a lot of things. As soon as you open your second city, you kind of start understanding a lot better what your business really is. You know, what is just Chicago and what is your business? So, you know, I would really recommend that if it's taking traction. Another question that I have is, are you working on this just by yourself?

• 19:15Speaker 02

  I mean, I have one contract worker, Dave, who's been incredible and like restocks machines for me, but I think my hesitation with going to other states is that I really think that what makes Good Things Vending exceptional is that really earnest connection to community. There's like also tons of locations in Chicago that want, like, I can't keep up with the one in Chicago.

• 19:34Speaker 01

  That makes a lot of sense, but just in general, I would say I have seen people, it just happened to me too, sometimes I'm just a little afraid of the unknown. And it may not be another city, but just, you know, this is why I asked about if you're working with other people, it seems like you're at a point where you could hire another full-time person and just, they can worry about just the mechanics of it all. And then you can start really thinking about how exactly you want to expand, because although that takes time, thinking how you want to expand. If you say, okay, maybe it's just Chicago needs a lot more places. Okay, well, that's a, that's a thought. Another thought that I had, if you are in a position where people are asking you, but you cannot quite deliver on all the requests, first of all, that's an excellent position

• 20:19Speaker 01

  to be in. It's way better than the other position where nobody wants your machines.

• 20:23Speaker 02

  Agreed.

• 20:24Speaker 01

  So, so that's an excellent position, but you know, you can really start trying to do things when there's scarcity on your end. You can say like, well, okay, you know what? I have so many requests that at this point, I'm asking that if you want the machine in your place, you gotta pay, you just gotta pay a thousand bucks. I'm making up, I don't know if a thousand dollars is the right number at all, but you just, you gotta pay this to locate it there because there's just too much demand. Or there's like a waitlist and then you can even make it a whole thing, you know, it's just like. It just reminds me of kind of fancy restaurants where all these people are trying to vie to really get themselves in the waitlist or whatever. So you can, if you have a scarce resource, you can, you can really do that.

• 21:01Guy Raz?

  I'm going to double down on this, Luis, because I think this is exactly right. I think you should focus less on what's in the machines right now for, for a brief period of time and focus more on how you can expand the machines, right? And so you mentioned that you have somebody working with you part-time and, you know, your revenue is still fairly modest. So I imagine that you might be nervous about bringing on somebody full-time. There may be an opportunity to try something a little bit unorthodox here, which is, you know, maybe look at some of the business schools in, in the area, Northwestern or Chicago, and see if there might be somebody from one of those places who, who would be willing to come and work with you for, you know, a percentage of your business to help you grow it, knowing that they weren't going to make a lot of money initially, but that

• 21:45Guy Raz?

  there's a spark here. That's the first thing I would think about doing. The second thing is, I would really look at the data. Luis mentioned, I mean, his business is so data-driven and so many decisions are made or not made because of the data they're getting in. I mean, I would think about adding artisanal foods, snacks that other people in Chicago are making. I mean, try different things out and see what's working, because I think that you have an opportunity to really measure, you know, what kind of sticks with people.

• 22:18Speaker 02

  I think we have food in one of our machines. It was a location request, something that we're definitely like looking to expand a bit more. I will say that one of the advantages of my product spread is that it's a higher profit margin. Nothing expires, which is massive. So I think that there are some things that make me hesitate on food, like logistically, but we are finding that there is some interest. But yeah, I think like moving in the direction of trying to find folks who maybe have that business education would be very helpful.

• 22:48Guy Raz?

  And also, as Louise, as you mentioned, I mean, the idea of getting people who want these machines in their stores to help finance them, right? I mean, I mean, you think about how, you know, a lot of times when developers are looking to attract a great store, you know, like an Apple store that's going to attract a lot of people, right? Or a Chick-fil-A or a brand that just brings a lot of foot traffic, they will give those brands, those businesses massive deals because they want to attract other businesses into that mall or whatever it might be. You might want to think about what you're doing in a similar way. I mean, you are a premium product that's fun, it's interesting, you're attracting makers and, you know, people who go to maker fairs and also startup people.

• 23:30Guy Raz?

  And when they know, when they see your vending machine in a cool bar or a shop, they know that that is a cool store, which already has an impact on the, you know, sort of the perceived value of supporting that place.

• 23:43Speaker 02

  It's very interesting. I like from, it sounds like less from a monetary direction, like not getting them to buy in as a source of income, but more as a prestige component, like you got to buy in if we're going to move. Is that the thought?

• 23:58Speaker 01

  Can I interrupt with one thing?

• 23:59Guy Raz?

  Yeah, please.

• 23:59Speaker 01

  That just kind of reminded me of something. When we started Duolingo, I can best describe us as communists. We did not want to make money. Nobody in the company wanted to make money and it was thought of as a, as an evil thing. The reality and what we have found is, I think we're still like that, but we have found that a lot of times with things like when I said, like you can get people to pay a thousand dollars to put your machine there, et cetera, is not necessarily so much about making money and it doesn't have to be a bad thing. It's like that can fund the rest of your operations to actually let you have more of these machines. But also if these places are willing to put in the money for something, that means they care. And that that's a way to suss out how much this place actually cares about having

• 24:43Speaker 01

  your machine versus a place that just doesn't care all that much.

• 24:46Speaker 02

  Yeah.

• 24:46Speaker 01

  I think that would give you better results. So it's not necessarily about like we're just, or at least I'm not necessarily trying to tell you, oh, just, just squeeze everybody and make as much money as possible.

• 24:54Speaker 02

  Totally.

• 24:54Speaker 01

  I don't, it's, it's not like that. And I think I, I'm, I'm noticing a little bit of early Duolingo in your, in your thinking, which we were like, no, no, no, don't worry. I'm not really trying to make money.

• 25:05Speaker 02

  I listened to your episode and I was like, when does being precious get in the way of the goal? Like, very much, I feel that way. But I think some of it is on a practical level, too. Like, if somebody bought in on a machine, I think that a lot of our best locations, because being put in a good location makes more money than anything else that we can do. A lot of those locations are not locations that can afford anything. I think the only other thing that like itches at the back of my brain is if it's not my business, if it's not Good Things Vending, my interest isn't representing every artist community in every city. But a vending machine could do that in every city. Could do it. And how to move through that sort of part of the interest and that part of the business where folks are showing a high level of interest in sort of like replicating or

• 25:51Speaker 02

  building their own version.

• 25:53Speaker 01

  Yeah, I mean, I, I think in, in general, my inclination would be to just make the, the best possible thing I can in Chicago. And then if it's good enough, it'll, it'll just get copied.

• 26:04Speaker 02

  Yep.

• 26:04Speaker 01

  I mean, it'll, it'll just happen.

• 26:05Speaker 02

  Yep. Kind of relieving advice, honestly. I'd love that.

• 26:09Guy Raz?

  I'm Steph Crim. The brand is called Good Things Vending. Thanks for calling in. Good luck.

• 26:12Speaker 02

  Thank you. Thanks for having me on. Appreciate y'all.

• 26:15Guy Raz?

  Good luck. Thank you.

• 26:16Speaker 01

  Thank you. Thank you.

• 26:17Guy Raz?

  Yeah, I, every time I'm, I'm like walking through an airport, I'm like, do I need a pair of, of noise cancelling headsets from that vending machine? Like I do-

• 26:24Speaker 01

  But you end up with one.

• 26:25Guy Raz?

  I, I'm looking, I'm looking at it. I'm like, you know, you know what I mean? Like, there is some things, but it's a cool idea. And I've seen different kinds of versions of this. And it's like, there's this kind of Venn diagram of like, people go to maker fairs and craft fairs and-

• 26:40Guy Raz?

  That's a critical mass of a community. I mean, there's a lot that I can see happening with something like this.

• 26:47Speaker 01

  In addition to that, I really love that Steph wants to elevate Chicago, wants to elevate the arts. In my experience, that type of business usually is a lot more successful, even if early, if the founder is not necessarily all that much into making money, et cetera. They end up making more money than the ones that are where the founder's like, I just want to make money. There's something to be said about somebody who really cares about about their community and what they're doing.

• 27:15Guy Raz?

  Stay with us because after the break, we'll talk to another founder working to take their business to the next level. That's after the break. I'm Guy Raz and you're listening to the Advice Line right here on How I Built This Lab.

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• 31:14Guy Raz?

  Welcome back to the Advice Line on How I Built This Lab. I'm Guy Raz, and my guest today is Duolingo founder Luis van An. Luis, let's take another call. Let's do this. Hello, welcome to the Advice Line. You are on with Luis van An from Duolingo. Welcome. Please tell us your name, where you're calling from, and a little bit about your business.

• 31:32Speaker 05

  Sure. Hey, Guy. Hey, Luis. My name is Blair Hasty, calling in from Atlanta, Georgia. My business I founded is called Bear. Bear is a design-driven brand creating high-end tech accessories that blend thoughtful design with durable, precision craftsmanship. We use premium materials like merino wool felt, machined metals, and fine leather, avoiding disposable plastics to ensure longevity and sustainability. And our first product, TAME, is a minimalist cable organizer for Apple MacBook users.

• 32:00Guy Raz?

  Got it. Okay, well, welcome to the show, Blair. You design products that are accessories for phones and computers?

• 32:09Speaker 05

  Correct. So, right now, we're focusing on Apple accessories. My background is industrial design, so I've been doing this for 20-plus years. So, we have TAME, which is a simple cable wrap for MacBook products.

• 32:23Guy Raz?

  Cable wrap for the, for what?

• 32:24Speaker 05

  For the, the charging cable.

• 32:26Guy Raz?

  Okay, okay, gotcha. Okay, yep.

• 32:27Speaker 05

  So, it very easily wraps, it kind of encapsulates the, the charging block for the, the computer itself. And then the other product is, is called TOTE. That one actually is, we're having a little bit of issues with that. So, but it's, the idea is that it is a sling bag for Apple's Vision Pro headset. It's, it's a fairly bulky headset, so it requires an external battery pack.

• 32:51Guy Raz?

  Right. Which normally people would put in their pockets, I guess, right?

• 32:55Speaker 05

  Correct.

• 32:55Guy Raz?

  Or hold it. It's like a little bag that holds the battery pack.

• 32:59Speaker 05

  Yep. The idea was for people who either have too much in their pockets, or like women who oftentimes don't have pockets. The issue I kind of alluded to earlier was, I think Apple has experienced some...

• 33:11Guy Raz?

  They're not doing well with the Vision Pros.

• 33:13Speaker 05

  No.

• 33:13Guy Raz?

  It's not doing well. It's not doing well.

• 33:15Speaker 05

  It's no secret.

• 33:16Guy Raz?

  I'm, I'm looking at a photo of this and on your website. And so, your thing is all about design, using merino wool and leather and nice metal. And these are your two kind of first products. Before I bring in Luis, tell me what your questions are.

• 33:30Speaker 05

  Sure, so I originally came in to this thinking that my biggest challenge was how to stand out in this crowded market, but I've realized that my real challenge is about making sure that I'm focused on the right product in the first place. So Tame was meant to launch alongside Tote, which was expected to be the momentum for the brand, but when Tote didn't happen, it's not really taking off like we had expected. So Tame is left standing on its own as the hero product for the brand, which is a role that it was never meant to play. So the question is, when you have multiple ideas but limited resources, how do you decide which one is worth pursuing and how do you validate whether it is a real market demand before investing too much?

• 34:09Guy Raz?

  All right, Luis Fanon, this is time to bring you in here.

• 34:14Speaker 01

  I mean, that's a very hard question in general. I will say a couple of things. We have learned a Duolingo. We've been burned by similar things by, in fact, the identical company as you. I'll tell you the story that happened. I mean, we had Apple really try to get us to do an app for the Apple Watch. And they tell you, oh, you know, these are going to sell like crazy. Don't worry, if you do it, they're going to sell like crazy. They always say that. What we've learned is not to bet on these very new products because you really never know if they're going to work. So it's not that Apple Watch didn't work. Apple Watch ended up working, but what didn't work was apps on Apple Watch. There's just, that's just not a thing.

• 34:58Guy Raz?

  They aren't. I barely use them. I really barely use them, yeah.

• 35:02Speaker 01

  They tried to make them a thing, they're not a thing. But there was no way to know beforehand because Apple swore to God they were going to be a thing. And so we've learned, we make products for established platforms. You know, sometimes people are like, oh, you want to be there early. I don't think you do. I mean, especially in the type of business that you're in, you don't need to be the first ever carrier of a certain product or whatever. You just need to be one that stands out because you have really amazing materials, et cetera. So I just, for one, I would definitely not bet on new products.

• 35:38Speaker 05

  I think that was my struggle early on going into this. I kind of was going back and forth weighing the benefit of, you know, do you go after the mass market or do you try to go after the smaller market, which is a little more niche, but you can be a, you know, a big fish in a small pond, essentially. So that was kind of the two I chose apparently a little bit poorly, but I'm looking to pivot and to readjust some of the strategy around some of those things.

• 36:06Guy Raz?

  Yeah, I mean, I think that there is no, I'm gonna hear from people, but I just don't believe in saturated markets. I really don't. And we've had episode after episode after episode that's proved this to be correct. Liquid Death entered a $300 billion market, water. Who would be stupid enough to go into water that's dominated by Coke and Danone and Pepsi? Well, he wasn't selling better water. Mike Cesario was selling a better brand. You know, he was, he was selling monster style, you know, energy drink things that looked like beer, but it was just water in a can. Say what you want about it, but he entered a very crowded market and he proved that there's always an opportunity. But what I tend to find, I think

• 36:47Guy Raz?

  that there's something to this idea of really leaning in locally and starting local. I mean, you're in Atlanta. It's a majorly important place with, you know, important companies like UPS and Coca-Cola and Delta. But aside from that, there is a growing, thriving tech community. There's a lot of creatives there. And is there a way for you to start, sort of start to try and find that wormhole initially into the creative community in Atlanta who are like, oh, what's that? You know, what's that cool merino wool case you have around your iPhone or that cool bag that you're using made out of merino wool and leather? Or that to me is a really interesting way to at least start and to see if you can gain traction and then get feedback from people on what they want.

• 37:32Speaker 05

  Yep. No, I think that's, that, that makes a lot of sense.

• 37:35Speaker 01

  Starting in Atlanta is, first of all, really cool.

• 37:37Speaker 05

  Thank you.

• 37:38Speaker 01

  Um, because it's such a cool city. But really, I mean, a lot of these, you know, what you're doing, the accessories, they're a bit like fashion. And I think the way to get these things off, off the ground is to start with.

• 37:53Speaker 01

  With kind of the artists or the hipsters or the, you know, the people that are, that are maybe not very wealthy or, but they're just the cool people that everybody wants to emulate. And if the cool, young, hip people are wearing these, I think that's kind of how these things take off.

• 38:07Speaker 05

  Yeah.

• 38:08Guy Raz?

  Yeah. I mean, this is, this is the story with Instagram, Luis. I mean, they, they, they launched by making it available only to photographers for the first likes, like two months. Just a thousand photographers that they identified and said, hey, will you play with this?

• 38:23Speaker 01

  Yeah.

• 38:23Guy Raz?

  You're trying to find creatives. You're trying to find like first movers and I think that that's where the opportunity is going to be.

• 38:31Speaker 05

  Awesome.

• 38:31Speaker 01

  Yeah, I would sell some of them in Goodwill somehow. A lot of these people buy their stuff in Goodwill and then everybody wants that.

• 38:37Guy Raz?

  About that. I don't know about that. Don't listen to that piece of advice. Don't go to Goodwill. But it's interesting because you do have something differentiated, right? You are in a quote unquote crowded space, but merino wool, I don't think a lot of people are using that to make cases. There's some leather, but not that much. It's mostly hard plastic. So I feel like there's some opportunities here to work with the material you have that can really differentiate what you're putting out there.

• 39:01Speaker 05

  Well, glad you identified the material because that's obviously, you know, obviously sustainable materials, but also higher end materials that can stand out in, in the category that we're putting these products in. And I really do like your idea, Louis, about see what we can do to get these in some products in the hands of some, you know, influential people. And one of the other things that I am trying to explore is this idea of scent branding, which is trying to own every part of the unboxing experience. So that includes what you smell when you literally take the product out of the box, which is a coffee latte scent that is applied to the inside of the packaging. I don't know if you've noticed this, but a lot of times when people open branding products, especially like.

• 39:43Speaker 05

  Tech products, they're, they're tend to have like a plasticky kind of factory smell.

• 39:47Guy Raz?

  Yeah.

• 39:48Speaker 05

  It's still a work in progress, but also trying to think through long-term how we can start to build a brand apart from just the look and the feel of it.

• 39:54Guy Raz?

  I, I'm just gonna be honest with you. It's interesting. It's definitely threw me for a little bit of a curve here.

• 40:01Speaker 05

  Yeah.

• 40:01Guy Raz?

  Um, but I think that, that your energy should be focused on what products appeal to people.

• 40:07Speaker 05

  Yep.

• 40:07Guy Raz?

  What designs appeal to people. That's really where you can smell things interesting, but I'm not sure that's gonna be the game changer, but that's my, I might be wrong. I might just have critiqued a billion dollar idea.

• 40:19Speaker 05

  I, I don't think it's the billion dollar idea, but I think it's a, it's a small piece in the puzzle that could, you know, be enough that just sort of tips somebody one way or the other one day.

• 40:28Speaker 01

  Blair, you're such a designer. You're just reminding all our designers. I keep telling them, like Guy, I'm like, just concentrate on the right thing. And they're like, no, no, no, no. But look at how this was made.

• 40:40Guy Raz?

  Yes.

• 40:40Speaker 01

  But you know what? I think that some of the best ideas come from this type of stuff. So, you know, I, I keep at it, but you are such a designer.

• 40:48Speaker 05

  Well, thank you so much. I, I really appreciate that. That's a compliment.

• 40:52Guy Raz?

  Blair, good luck. The brand is called Baier, B A I R. We're cheering on, man. Good luck. We'll follow, we'll follow up with you.

• 40:58Speaker 05

  Thanks, Guy. Thanks, Luis. I really appreciate it. Thanks for taking the time.

• 41:02Guy Raz?

  Thank you.

• 41:02Speaker 01

  Thank you.

• 41:04Guy Raz?

  Do you have a, you must have a, a nice case on your phone?

• 41:07Speaker 01

  No, it's not a particularly nice case on my phone. I have it here. I mean, it's a case because I tried it, I tried it without a case for a while and it just keeps breaking. So I have just a random case I bought at, at the Apple Store when I bought my iPhone.

• 41:20Guy Raz?

  Yeah.

• 41:21Speaker 01

  They do these things where they change the size of the iPhone by like a millimeter each time. And now the previous case doesn't work.

• 41:30Guy Raz?

  All right, we're gonna take another quick break, but we'll be right back with another caller. Stay with us. I'm Guy Raz and you're listening to the Vice Line right here on How I Built This Lab.

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• 43:01Guy Raz?

  Welcome back to The Advice Line on How I Built This Lab. I'm Guy Raz, and today I'm taking your calls with Luis Von On from Duolingo. Luis, let's get back into it and take another call. Let's do this. Hello, welcome to The Advice Line. You are on with Luis Von On and me. Please tell us your name, where you're calling from, and a little bit about your business.

• 43:19Speaker 08

  Hi, I'm so happy to be here. I'm Stephanie Carlson. I am in Carmel, Indiana, which is just north of Indianapolis. I founded Nature Spider Landscapes in 2016 after raising four children. My intent was to teach people how to build, plan, and grow their own gardens, but somehow it evolved. Into biophilic design, which is the practice of bringing nature indoors. And today, fast forward almost nine years, and we offer interior and exterior landscape, design, build, installation, and maintenance services, creating designs inspired by nature.

• 43:53Guy Raz?

  Got it. Okay, so I'm assuming what you're talking about are like those like plant walls you see inside of stores and is that what you do?

• 44:02Speaker 08

  Living walls, moss walls. We also do interior landscapes. We design green spaces, bringing nature indoors to create healthier, happier places.

• 44:10Guy Raz?

  And tell me about how this business started.

• 44:12Speaker 08

  I was just gonna help people design gardens. So I, all my kids, every year, we planted a garden and it was fun. It was great to eat your own food. We love making salads out of our gardens. So I was like, okay, they're all grown up. I need a new baby. I might as well start a business. So I started Nature Spire Landscapes, thinking I was going to teach people how to grow gardens, build their beds, design. And then it just evolved as we were doing this, someone would say, hey, can you do this? Oh, I have an office. Can you do this? And during 2020, when everybody was going home, the plant business really blew up and everybody was wanting plants in their homes. And once people went back to work, biophilic design became very, very popular because the one way you can encourage people to come back to work is to make their space prettier and more attractive.

• 44:57Guy Raz?

  That's awesome. I mean, I love, I'm looking at your website and I love those like walls of moss or ferns or plants. They're so cool. Every time I see one, I'm like, I want one in my house, but I just, it's too complicated. But tell me a little bit about how the business is doing. I mean, are you guys making money? Is it challenging right now? Or what's going on?

• 45:18Speaker 08

  So we've done actually really well. We've had some great opportunities to do exterior landscaping and, you know, we've done some apartment buildings, some mete areas, some rooftops. We also did the Bison Tenure Unity Plaza here and for the Pacers in Indianapolis. We do do moss walls in homes, so that's an option for you.

• 45:36Guy Raz?

  All right. And this all in the Indianapolis area?

• 45:40Speaker 08

  Well, we've been in Chicago. We've been in Knoxville. We've gone to New York.

• 45:44Guy Raz?

  Nice.

• 45:45Speaker 08

  But most of it's in Indianapolis, but I do want to grow into some other areas.

• 45:48Guy Raz?

  How many people do you have working for you right now?

• 45:50Speaker 08

  I have five right now. So when I have something that I know my staff can't handle, I bring in my subcontractors.

• 45:59Guy Raz?

  Tell us what you before I bring in Luis, what's your question for us? So what's your pain point?

• 46:03Speaker 08

  Okay, so right now, we have grown so much, we are almost at a million dollars in revenue.

• 46:07Guy Raz?

  Amazing, congrats.

• 46:09Speaker 08

  Thank you, and I want to get there this year, maybe a little bit over, but I need more people, but I need to know how to pay those people. So we have great revenue, we don't have a great profit.

• 46:20Guy Raz?

  Because the costs are high. I mean, I'm looking at the quality of what you put out there, and I cannot imagine how expensive, but how much it costs you.

• 46:29Speaker 08

  Right, and they're not easy. I mean, when you do the moss wall designs, the fabrication is very challenging. And I mean, we have so much demand, and there's so many opportunities for us to go and get, and it's hard, we just can't get it all because we don't have enough people. And I'm really scared of burning out the good people I have, because I have to be really respectful of their time and their abilities. So I'm at a point where I need more people, and I need to figure out how to pay those people. Do I do it through loans? Do I take some more money out of my savings? Because I know if I have the people, we'll get the business.

• 47:02Guy Raz?

  Luis, please.

• 47:04Speaker 01

  I have one quick question. I assume you've thought of this, but can you not charge more?

• 47:08Speaker 08

  That's what we're working on, too. We are going to start charging more. And actually, I think this is kind of how I viewed it. I wanted the job so badly that I just wanted to make sure they are happy with the price, but now I need to start charging more. Because if you look at our website and our Instagram, we have created some, just I'm so excited with what we've created, beautiful projects. And we have a portfolio and a personality and a brand now that people trust.

• 47:31Speaker 01

  I mean, in general, I think you really want to make sure that you have a good business, and a good business is good profit. I've had to learn this the hard way from our CFO. I didn't really understand that before. But really, if you can charge more, you should just do that, because that will solve most of your problems. I mean, otherwise, yeah, you can get loans, you can get all that, and I wouldn't be against you getting a loan, that would be perfectly fine. But if you can do it without loans or without any of that, that would be much better.

• 47:59Guy Raz?

  Yeah, I mean, also, I would think that in a business like yours, you could probably charge.

• 48:06Guy Raz?

  Enough where your profit margin exceeds 50%. Yes. Because so much of the value that you bring isn't in the actual plants or moss. It's in your brain. It's in the design of the sense. And that's not something that is easily replicated. Right? So I would think that that pricing is the first thing to tackle for sure. Because you want to be able to have enough cash flow where you can fulfill all the demand. Right? You need other people on your payroll. And probably what do you? I mean, to have a full time employee, I mean, if you're including benefits and other things, you're probably looking at at least 50, 60 grand a year, probably for

• 48:49Speaker 08

  Exactly.

• 48:49Guy Raz?

  A starting person. Right? Yeah.

• 48:51Speaker 08

  Yeah. And I want to pay them well. They do. They work hard and they deserve to be paid well. And that will keep them loyal to my company. So I'm looking for other revenue streams too. Like we're maybe going to do a plant shop. We're looking at a plant cafe. We're looking at, you know, maybe renting our space for activities after hours. So we're, I'm kind of looking at other revenue streams. Cause a lot of times we'll have, you know, it's not consistent revenue. We may have a great month, bring in a hundred thousand dollars. And then, you know, 30 days later, someone hasn't paid and I'm doing whatever I can to keep the cash flow going.

• 49:27Guy Raz?

  What is your worry about taking out a loan? I mean, you've got a business. You've got a business model. You've got an established track record. I'm, I'm assuming at this point in your life, you might even have property. Maybe you've got a house or something. So you're in a better position to get an SBA loan than somebody who's, you know, 22, who's, who's got no assets and is just starting out, right? It's just harder to get.

• 49:48Speaker 08

  Right.

• 49:48Guy Raz?

  What's, what would be your reluctance to take an SBA loan?

• 49:52Speaker 08

  You know what? I think I'm kind of very serious about looking into the SBA loan. The rates was one of the things, but it would help me grow.

• 50:00Guy Raz?

  Yeah, it would give you more cash. Luis?

• 50:02Speaker 01

  I mean, yeah, I think getting a loan makes a lot of sense. I'm still stuck on the idea that. Your pricing is such an interesting thing. A lot of times, people think that the lower price will just sell more. And it's probably a little more volume. That's probably true. But especially for businesses like yours, I think you can just set your own price and just say, "Look, we're high end." I mean, this is similar with things like contractors or a lot of times art installations. There's the range of things like art installations, which I would think plants can be thought of as art installations.

• 50:34Speaker 08

  Completely.

• 50:34Speaker 01

  The range is insane. I mean, you can get it from $50, or you can get $50,000. I just, I can imagine that you can probably increase your price, and that would make you even more desirable. And you just tell people, "We are, you're paying for quality. We are the highest quality." I think you want to get to a position where your profit margins are high.

• 50:52Speaker 08

  And I think maybe hiring another person so that I can spend more time on estimating. And we're really doubling down on marketing, too. Marketing and sales are what we're really doubling down on this year to get to that higher profit margin.

• 51:06Guy Raz?

  I think a lot of, a lot of times, a mistake a lot of entrepreneurs make at the beginning, and I count myself among them. And I think, Luis, you'd count yourself among them, too, is that we really undervalue what we're offering. I mean, if I told you, Luis, in 2012, right, when you started Duolingo, that people would pay 60 bucks a year for this product, you would have been like, "What?"

• 51:26Speaker 01

  Oh, for sure. And by the way, this is the thing that our CFO keeps telling us. The reality is, it's not even 60 bucks a year. I mean, we can charge 150, and people will pay it.

• 51:33Guy Raz?

  Yeah.

• 51:34Speaker 08

  Yeah. Well, we're getting more well-known, which is nice. And yeah, I think I definitely have to raise my prices and just put a value sticker on it.

• 51:41Speaker 01

  That would help a lot, because then immediately, your margins are good. And then you can afford to hire, et cetera.

• 51:47Guy Raz?

  By the way, I'm just thinking, like, I don't know. I just, for some reason in my mind, I keep thinking about music. Any of these walls have music coming out of them?

• 51:56Speaker 08

  No, but that'd be a great idea. In fact, we were playing with the scent idea that Blair mentioned, of adding scents along with the plants into these offices.

• 52:04Speaker 01

  Coffee, coffee scents.

• 52:06Guy Raz?

  Coffee scents.

• 52:06Speaker 08

  Coffee scents.

• 52:07Guy Raz?

  Coffee beans, you can have coffee plants.

• 52:09Speaker 08

  To make a place smell good, at the same time, they are enjoying their plants.

• 52:13Guy Raz?

  But maybe like you could add a, you could add a waterproof speaker. Part of your price and say, hey, you know, we also.

• 52:19Speaker 01

  For triple the price.

• 52:21Guy Raz?

  Triple the price.

• 52:22Speaker 01

  Triple the price we put in.

• 52:23Guy Raz?

  There'll be nature sounds, birds.

• 52:25Speaker 08

  That actually is not a bad idea.

• 52:27Guy Raz?

  Just beautiful, you know, like a zen garden like and it's subtle.

• 52:31Speaker 08

  That is a really good idea. So when the students are studying in the mechanical engineering building over at U of I, they're getting this extra oomph.

• 52:40Guy Raz?

  I'm telling you, do that. I want to know if you, I want to, I want to find out if you can do that. Stephanie Carlson, the brand is called Nature Spire. Good luck. Thanks for calling in.

• 52:48Speaker 08

  Thank you. It's been great. Loved talking with you.

• 52:50Speaker 01

  Thank you. Thank you.

• 52:52Guy Raz?

  I've always seen those. I'm like, it'd be so cool to have that in my house, but then I'm worried that it's going to drip on the floor. But I'm sure there's like there, there are all these redundancies put in, right? To prevent that.

• 53:00Speaker 01

  Yeah, we have, we have a few plant walls here at Duolingo. It works and they're, they're beautiful.

• 53:05Guy Raz?

  Does music come?

• 53:06Speaker 01

  No, no, they don't have music. I like that idea.

• 53:09Guy Raz?

  Yeah.

• 53:10Speaker 01

  But, you know, I'm really hoping Stephanie will just, um, next time she shows up to give a quote, she just doubles.

• 53:17Guy Raz?

  Yeah.

• 53:17Speaker 01

  Whatever she was going to say, just double it.

• 53:19Guy Raz?

  Yeah.

• 53:20Speaker 01

  I bet you some people will say yes.

• 53:22Guy Raz?

  I agree. I agree. Um, Luis, I, you know, I've asked everyone who comes on the show a version of this and I, and I'd still every time, um, it's, oh, I'm always surprised and amazed at the answer. But now that you, I mean, you came in when you started Duolingo, you, you had already, you had a lot of experience. You'd worked at Google, MacArthur Fellowship. I mean, you did a lot of things going in the right direction for you, but, um, but nothing to say, hey, now start a tech company and that's going to be valued at $13 million and going to transform how people and languages. If you could now go back to 2012, when you were starting that and you could sort of give yourself advice, what would you, what do you think would have been helpful for you to know back then?

• 54:03Speaker 01

  Oh, a number of things. Certainly we took too long to monetize. I mean, we didn't, we did not start monetizing until 2017. So it's five years and I would have told myself. Monetized a little sooner than that. And again, it's not because it's so much about making money. It's because it really allowed us to fulfill our mission. When we started making money, we were also able to invest more in teaching more people. It took me a long time to realize that there are certain shortcomings that I have that are okay and that, you know, I just always kept trying to be like, no, I gotta be good at this and this and this and this and this and this. And the reality is, yes, you should always try to be better at everything, but there's some stuff that you're just kind of never going to be great at.

• 54:45Speaker 01

  And what you do is you just hire people who are great at that and let them do that. So most everybody in my executive team is excellent at something that I'm really bad at. And I am now fully okay and not apologetic about the fact that, for example, I am just not very interested or good at finance. I'm just not. And at some point, you realize you should get the right person to do the right job.

• 55:07Guy Raz?

  Makes a lot of sense. Luis Fanon, co-founder of Duolingo and the CEO of Duolingo. Thanks so much for joining us.

• 55:15Speaker 01

  Thank you, Guy.

• 55:16Guy Raz?

  By the way, if you haven't heard Luis's original How I Built This episode, you've got to go back and check it out. It's so good. And here's one of my favorite moments from that interview.

• 55:25Speaker 01

  You know, I was feeling good. I thought, okay, well, we can continue raising money for a while. And at some point, we raised money from Google. Capital G is one of their investment arms. And the 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, that's when we started kind of freaking out and trying to figure out how we're going to make money.

• 55:55Guy Raz?

  Thanks so much for listening to the show this week. Please make sure to check out my newsletter. You can sign up for it for free at guyraz.com. Each week, it's packed with tons of insights from entrepreneurs and my own observations and experiences interviewing some of the greatest entrepreneurs ever. And if you're working on a business and you'd like to be on this show, send us a one-minute message that tells us about your business, the issues or questions you'd like help with. And hopefully, we can help you with them. And make sure to tell us how to reach you. You can send us a voice memo at [email protected] or call us at 1-800-433-1298 and leave a message there.

• 56:40Guy Raz?

  And we'll put all this in the podcast description as well. This episode was produced by Catherine Seifer with music composed by Ramtin Arablouei. It was edited by Casey Herman. And our audio engineer was Sina LaFredo. Our production staff also includes Alex Chung, John Isabella, Elaine Coats, J.C. Howard, Iman Maani, Chris Messini, Carrie Thompson, Niva Grant, and Sam Paulson. I'm Guy Raz, and you've been listening to How I Built This.