Advice Line with Luis von Ahn of Duolingo

In short

How I Built This with Guy Raz: Episode Summary

Episode Title

Advice Line with Luis von Ahn of Duolingo

Episode Description

In this episode, Luis von Ahn, co-founder of Duolingo, joins Guy Raz to provide insights and advice to early-stage founders facing business challenges. The episode features questions from three entrepreneurs, touching on topics such as business growth, product focus, and funding for expansion.

Key Themes and Discussions

Introduction of Luis von Ahn

Background: Co-founder and CEO of Duolingo, previously involved in developing CAPTCHA technology and worked at Google.
Company Growth: Duolingo went public in 2021 with a market cap of approximately $13 billion and has grown to 900 employees since its inception in 2011.

Segment 1

Listener Calls and Advice

Caller: Steph from Chicago (Good Things Vending)
Business Concept: Vending machines offering unique local art and nostalgic items.
Challenge: Managing expansion opportunities while maintaining sustainable growth.
Advice from Luis:
Consider charging for placement in high-traffic locations to create a waiting list and gauge interest.
Focus on building a strong community connection, which can drive demand organically.

Caller: Blair from Atlanta (Bear, tech accessories)
Business Concept: High-end tech accessories focused on design and sustainability.
Challenge: Deciding which products to focus on amid market saturation.
Advice from Luis:
Avoid betting on new, unproven products.
Start local by targeting creative communities and influencers to build brand awareness.

Caller: Stephanie from Indiana (Nature Spire Landscapes)
Business Concept: Landscaping design specializing in biophilic design and living walls.
Challenge: Expanding the team to meet growing demand without sacrificing quality or profit margin.
Advice from Luis:
Reevaluate pricing strategies to ensure profitability without compromising the perceived value.
Explore additional revenue streams while considering the feasibility of obtaining loans for growth.

Key Takeaways from Luis von Ahn

Understanding Customer Behavior: It's crucial to distinguish between what customers say they want and what they actually do (e.g., preference for convenience over interaction).
Monetization Timing: Duolingo took five years to monetize; earlier monetization could have accelerated growth and mission fulfillment.
Hiring for Strengths: Recognizing personal shortcomings and hiring experts to fill those gaps can strengthen a company’s leadership.

Conclusion

The episode underscores the importance of community, pricing strategies, and a strong understanding of customer behavior in entrepreneurial success.
Luis emphasizes that focusing on quality and charging appropriately can lead to sustainable growth and profitability.

Additional Information

Production Details: The episode was produced by Katherine Sypher, edited by Casey Herman, and features music by Ramtin Arablouei.
Engagement Invitation: Listeners are encouraged to submit their business challenges for a chance to be featured on a future episode.

Listening Options

Available on the Wondery App, Apple Podcasts, or Spotify.
Early access and ad-free episodes are available to Wondery+ subscribers.

Transcript

Automatic transcript. May contain errors.

0:00Wondery Plus subscribers can listen to How I Built This Early Early and Ad Free right now. Join Wondery Plus in the Wondery app or on Apple Podcast. I love traveling with my family. We did an awesome trip this summer. And one of the things that made the trip so special were the Airbnb experiences we did. Immersive tours, cooking classes, a chance to get coffee with a world-class barista. I had so much fun on those experiences that I decided to host my own Airbnb original experience in San Francisco, designed to help you think about how to unlock your next big move in your career or even in your life.

0:41To learn more about my Airbnb original experience, head to Airbnb.com slash Guy. Listening on Audible helps your imagination soar. And no matter what you like, Audible's romance collection has something to make you swoon. Here's your invitation to have it all. Find a book boyfriend in the city and another on the hockey field. Or if nothing on this earth touches your heart, you can always find love in another realm. Hear modern rom-coms from authors like Lily Chu and Allie Hazelwood, the latest romantic-y series from Sarah J. Maas and Rebecca Yaros, and Regency favorites like Bridgerton and Outlander.

1:19And that's only the beginning. Audible has an incredible selection with over 1 million audiobooks, podcasts, and Audible originals all in one easy app. And you can enjoy Audible anytime while doing other things. Household chores, exercising, on the road, commuting, you name it. Audible makes it easy to drop into your fantasies during your everyday routine without needing to set aside extra time. There's more to imagine when you listen. Your first great love story is free when you sign up for a free 30-day Audible trial. Visit audible.com slash built. Is your AI built to work with the tools your business relies on?

1:56IBM's AI agents can easily integrate with the tools you're already using so they can work across your business, not just some parts of it. Get started with AI agents at ibm.com. The AI built for business, IBM.

2:17Hello 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 hibt at id.wondery.com. And make sure to tell us how to reach you.

2:58And also, don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free at GuyRoz.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 Ahn. He's the co-founder and CEO of Duolingo. Luis, it's great to have you back on the show. Great to be here, Guy. 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.

3:39One 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. And we told that whole story in the show. It's such a good story. Your company, Duolingo, has just exploded since we spoke.

4:11I think about a year after our interview, you guys went public in 2021. Correct. And today you've got a market cap of like$13 billion. And you're still in Pittsburgh. That's right. We're still in Pittsburgh. 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 a billion dollars, which of course is 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.

4:53What's changed for you? 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.

5:28So 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. So basically, it 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.

5:59And so I think we've done very well in that respect. 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 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 this space. But there's obviously AI is coming into 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.

6:35Do 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? 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 on mobile apps, 90 % of them are using Duolingo. Wow, that's amazing. So that's one thing. But the other thing is what 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.

7:09We look at what TikTok's doing because those are real competitors. And the reality is we are losing. 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. And we've said, okay, so if you tell us that if Duolingo had live humans, you would use it.

7:40You 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. Isn't it 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. 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 surveys, are not always reliable.

8:08And I've made this analogy before. When I first 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, I hated the show. This is like 10 years ago. I hated the show, and yet here we are, right, 10 years later. And I think that the point is so right because people will say, yeah, of course, I want a person. But when it comes down to it, they want the convenience of being able to interact with a language learning platform whenever they want. 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.

8:48Yeah, I mean, this is in the history of Duolingo. This has 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. Luis, let's take some calls and find out what people need help with. What do you think? Let's do this. All right, let's bring in our first caller.

9:21Welcome to the advice line. You're on with Luis Van An from Duolingo. Tell us your name, where you're calling from, and a little bit about your business. Hi, Guy and Louise. My name is Steph Krim, 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. That's awesome. Steph, thanks for calling in. Congrats on starting this business.

9:57Because, you know, now vending machines are getting, at least in the U.S., they've been cool in like Asia for a long time, but they're getting cool. 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 you can get like one of a kind things in them. Yeah, exactly. So 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.

10:36We 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 artwork. 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. Wow. How many of these machines do you have? They're all around the Chicago area right now? 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. And are they inside? Like, where are they located? They're in other businesses. So I am utilizing the community that's already been built around a spot.

11:14So 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. That's awesome. And tell me a little bit about how much does it cost? Like, does each product cost? 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.

11:53And 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, exploring some of those other areas. Awesome. Okay, before I bring in Luis, tell us what your pain point is. What's your question for us. 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.

12:30How 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? All right, good questions. Luis, I'd love to bring you in. First of all, any questions for Steph? 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, etc.? Yeah, that's, I mean, a big part of it is community weaving.

13:04The 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 for 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. 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 and then your social media gets more popular and then there's a whole feedback loop.

13:45So I love that. That's the hope. Steph, tell us a little bit about your goals here. I mean, you started this in 2019. You had the first machine in 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? Yeah, I mean, it's such a good question and one that I wish that I had a clearer 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.

14:22But 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 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. I want to be able to enjoy putting weird stuff in vending machines.

14:57Yeah. Luis, 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 the hospitality space. But still think about this as a business. I mean 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.

15:32I want to do this in Los Angeles to say, okay, well, let's set up a division. I'll help you set up a franchise of my business, and you can take it there. Anyway, Luis, I'd be curious to get your take on that. Yeah, I agree that having – it really makes you operate pretty differently and understand things better if you have a second city. 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.

16:09Another question that I have is, are you working on this just by yourself? 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. 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.

16:41And 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 all of 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 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 to be in.

17:17It's way better than the other position where nobody wants your machines. Agreed. 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 got to pay. You just got to pay$1 ,000. I'm making up. I don't know if$1 ,000 is the right number at all. But you got to pay this to locate it there because there's just too much demand. Or there's like a wait list. And then you can even make it a whole thing.

17:48It just reminds me of kind of fancy restaurants where all these people are trying to vie to really get themselves in the wait list or whatever. So if you have a scarce resource, you can really do that. 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 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 your revenue is still fairly modest. So I imagine that you might be nervous about bringing on somebody full time.

18:20There 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 the area, Northwestern or Chicago, and see if there might be somebody from one of those places 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 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.

18:58I 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. 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.

19:39But, yeah, I think like moving in the direction of trying to find folks who maybe have that business education would be very helpful. And also, as Luis, as you mentioned, I mean, the idea of getting people who want these machines in their stores to help finance them, right? I mean, you think about how a lot of times when developers are looking to attract a great store, 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.

20:15You might want to think about what you're doing in a similar way. I mean, you are a premium product. It's fun. It's interesting. You're attracting makers and, you know, people who go to maker fairs and also startup people. 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. 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.

20:50like you got to buy in if we're going to move? Is that the thought? Can I interrupt with one thing 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 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$1 ,000 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.

21:24It'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's a way to suss out how much this place actually cares about having your machine versus a place that just doesn't care all that much. And 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 squeeze everybody and make as much money as possible. It's not like that. And I think I'm noticing a little bit of early Duolingo in your thinking, which we were like, no, no, no, don't worry.

22:01I'm not really trying to make money. 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.

22:36But a vending machine could do that in every city. Could do it. 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 building their own version. Yeah, I mean, I think in general, my inclination would be to just make the best possible thing I can in Chicago. And then if it's good enough, it'll just get copied. Yep. It'll just happen. Yep. Kind of relieving advice, honestly. I'd love that. Steph Krim, the brand is called Good Things Vending. Thanks for calling in. Good luck. Thank you. Thanks for having me on.

23:12Appreciate y 'all. Good luck. Thank you. Thank you. Thank you. Yeah, every time I'm like walking through an airport, I'm like, do I need a pair of noise canceling headsets from that vending machine? Like I do. But you end up with one. I'm looking at it. I'm like, you know, you know what I mean? Like there is something to it. 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 art fairs, and that's a critical mass of a community. I mean, there's a lot that I can see happening with something like this.

Read the full transcript

23:44In 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, etc., 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 their community and what they're doing. 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.

24:19I'm Guy Raz and you're listening to The Advice Line right here on How I Built This Lab.

24:31If you've been listening to the show these last couple of episodes, you've probably heard me mention the Airbnb original experience that I'm hosting. And I'm so excited to have a chance to connect with listeners in a completely new way. It's called the Reinvention Lab, and it's designed to help you think about how to unlock your next big move in your career or even in your life. I'll help you discover your own story in ways I do on this show with my guests. And attendees will get a chance to take a deeper dive with me on so many lessons I've learned from this show. Lessons that have transformed how I work and think about the future.

25:09All proceeds from the event will go to support the Ronald McDonald houses that helps families stay near their children who are being treated at nearby hospitals. It's going to be really fun and I can't wait to meet you. So come join me in San Francisco and take your idea to the next level. To grab your spot, visit airbnb.com slash guy. It's going to be great. Now a quick break switching topics to one of our favorite sponsors, Vital Proteins. Vital Proteins is the number one brand of collagen peptides in the U.S. By taking collagen peptides every day, you can help support your hair, skin, nail, bone, and joint health.

25:50And now you can try Vital Protein's new collagen and protein shake. It has all the benefits of collagen in a ready-to-drink chocolate protein shake. With 30 grams of protein, it's great for healthy hair, skin, nails, and joints. And it's perfect. When I'm on the go, I use it at the gym. I use it after a workout. It's delicious. And the chocolate flavor is awesome. I highly recommend it. Go to www.vitalproteins.com to learn more and where to buy. Get 20 % off your next order by entering promo code BUILT at checkout. Ever had one of those afternoons where your brain just quits on you? You're sluggish, hangry, maybe even a little foggy.

26:35What if it's your glucose? See, glucose is an energy currency for your mind and body. When it's stable, you're on point. When it crashes, so can you. That's why Lingo is so interesting. Lingo is a glucose wearable designed to help you connect the dots between your glucose and what you eat, how you move, and how you feel. It shows your glucose data in real time. Instead of guessing, you see the impact of your choices. Maybe that healthy snack is actually sending your glucose on a roller coaster. Or that afternoon walk is the perfect stabilizer. It's about unlocking your consistent best all day long by truly understanding your body's unique responses.

27:15Get to know your glucose and learn about how to build healthy habits that work for you with Lingo, designed for you by Abbott. Through November 30th, use code GUY10 on HelloLingo.com to get 10 % off a Lingo plan purchase, one use per customer. This offer cannot be combined with other offers, U.S., Puerto Rico, and U.K. only. The Lingo Glucose System is for users 18 years and older, not on insulin. It is not intended for diagnosis of diseases, including diabetes. Individual responses may vary.

27:57Welcome 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. Sure. Hey, guy. Hey, Luis. My name is Blair Hastie. Calling him 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.

28:29We 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. Got it. Okay. Well, welcome to the show, Blair. You design products that are accessories for phones and computers? 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 simple cable wrap for MacBook products. Cable wrap for what? For the charging cable.

29:09Okay, okay, gotcha, okay, yep. So it very easily wraps. It kind of encapsulates the charging block for the computer itself. And then the other product is called Tote. That one actually is – we're having a little bit of issues with that. But the idea is that it is a sling bag for Apple's Vision Pro headset. It's a fairly bulky headset, so it requires an external battery pack. Right. Which normally people would put in their pockets, I guess, right? Correct. Or hold it. It's like a little bag that holds the battery pack. Yep. The idea was for people who either have too much in their pockets or women who oftentimes don't have pockets.

29:48The issue I kind of alluded to earlier was I think Apple has experienced some... So they're not doing well with the Vision Pros. No. It's not doing well. It's not doing well. It's no secret. I'm looking at a photo of this 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. 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.

30:24So TAME was meant to launch alongside of 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? All right, Luis Fanon, this is time to bring you in here. I mean, that's a very hard question in general.

31:00I will say a couple of things. We have learned at 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 it 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.

31:39There's just – Yes. That's just not a thing. They aren't. I barely use them. I really barely use them. Yeah. 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.

32:17So I just, for one, I would definitely not bet on new products. I think that was my struggle early on going into this. I kind of was going back 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 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. Yeah, I mean I think that there is – I'm going to hear from people, but I just don't believe in saturated markets.

32:55I 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. He was selling monster-style 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 that there's something to this idea of really leaning in locally and starting local.

33:36I mean, you're in Atlanta. It's a majorly important place with 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 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.

34:15Yeah. No, I think that makes a lot of sense. Starting in Atlanta is, first of all, really cool. Thank you. 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 the ground is to start with kind of the artists or the hipsters or the people that are maybe not very wealthy, 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. Yeah. Yeah. I mean, this is the story with Instagram, Luis.

34:54I mean, they launched by making it available only to photographers for the first, like, two months. Just a thousand photographers that they identified and said, hey, will you play with this? Yeah. 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. Awesome. 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. 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?

35:28You 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. Well, I'm glad you identified the material because that's obviously, you know, obviously sustainable materials, but also higher end materials that can stand out 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.

36:02And 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 brand new products, especially like tech products, they tend to have like a plasticky kind of factory smell. 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.

36:38I'm just going to be honest with you. It's interesting. It's definitely threw me for a little bit of a curve here. Yeah. But I think that your energy should be focused on what products appeal to people, what designs appeal to people. That's really where you can smell things interesting, but I'm not sure that's going to be the game changer. But that's my – I might be wrong. I might just have critiqued a billion-dollar idea. I don't think it's the billion-dollar idea, but I think it's a small piece in the puzzle that could be enough that just sort of tips somebody one way or the other one day. Blair you're such a designer you just remind me of 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 but you know what I think that some of the best ideas come from this type of stuff so you know I keep at it but you are such a designer oh thank you so much I really appreciate that that's a compliment Blair good luck the brand is called Bear B-A-I-R we're ching on man good luck We'll follow up with you.

37:41Thanks, Guy. Thanks, Luis. I really appreciate it. Thanks for taking the time. Thank you. Thank you. You must have a nice case in your phone. No, it's not a particularly nice case in my phone. I have it here. I mean, it's a case because I tried it without a case for a while, and it just keeps breaking. So I have just a random case I bought at the Apple store when I bought my iPhone. Yeah. They do these things where they change the size of the iPhone by like a millimeter each time. and now that we have previous cases and work. All right, we're going to take another quick break, but we'll be right back with another caller.

38:18Stay with us. I'm Guy Raz, and you're listening to The Advice Line right here on How I Built This Lab.

38:31Shopping for eggs should be simple. A happy hen makes a happy egg. And that's why eggs from Happy Egg are so delicious. Happy Egg partners with family farms across the Midwest to raise happy hens outdoors. The proof is inside the shell. A tasty orange yolk. It's the difference you can see and taste. I just made an incredible omelet with eggs from Happy Egg. It was delicious and so fresh. Once you crack open a happy egg, you can see and taste the difference right away. It's obvious. Visit www.happyegg.com slash built to find happy egg near you. This episode is brought to you by Klaviyo, the only CRM built for B2C and the key to making Black Friday and Cyber Monday your biggest wins yet.

39:26When the holidays hit, your competition only gets louder. That's why the most successful brands use Klaviyo to cut through the noise and build personalized relationships that drive more revenue. With Klaviyo, you get marketing, service, analytics, and all your customer data together on one AI-powered platform. It's everything you need to build lasting customer relationships. Send exclusive email offers to your VIP customers. Deliver perfectly timed text to high-intent shoppers. Maximize your ad dollars with precision. Join the more than 176 ,000 brands, including Away, Patrick Ta, and Dollar Shave Club, already growing with Klaviyo.

40:13Make this holiday season your best yet at klaviyo.com.

40:30Welcome back to The Advice Line on how I built this lab. I'm Guy Raz, and today I'm taking your calls with Luis Fanon 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 Fanon and me. Please tell us your name, where you're calling from, and a little bit about your business. 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.

41:12And today, fast forward almost nine years, and we offer interior and exterior landscape design, build, installation, and maintenance services, creating designs inspired by nature. 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? Living walls, moss walls. We also do interior plantscapes. We design green spaces, bringing nature indoors to create healthier, happier places. And tell me about how this business started. I was just going to help people design gardens. So all my kids, every year we planted a garden And it was fun.

41:47It was great to eat your own food. We loved 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.

42:27That'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 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? So we've done actually really well. We've had some great opportunities to do exterior landscaping. And we've done some apartment buildings, some of many areas, some rooftops. We also did the Bicentennial Unity Plaza here for the Pacers in Indianapolis.

43:02We do do moss walls in homes. So that's an option for you. All right. And this is all in the Indianapolis area? Well, we've been in Chicago. We've been in Knoxville. We've gone to New York. Nice. Most of it's in Indianapolis, but I do want to grow into some other areas. How many people do you have working for you right now? I have five right now. So when I have something that I know my staff can't handle, I bring in my subcontractors. Tell us what you, before I bring in, Luis, what's your question for us? What's your pain point? Okay. So right now we have grown so much. We are almost at a million dollars in revenue.

43:37Amazing. Congrats. Thank you. And I want to get there this year and 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. Because the costs are high. I mean, I'm looking at the quality of what you put out there and I cannot imagine how, not how expensive, but how much it costs you. 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.

44:12and 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. Luis, please. I have one quick question. I assume you've thought of this, but can you not charge more? 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 were happy with the price.

44:47But 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. 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. But 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.

45:20You 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. Yeah. I mean, it's also I would think that in a business like yours, you could probably charge enough where your profit margin exceeds 50 percent. 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 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.

46:03You 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 ,000,$60 ,000 a year probably for a starting person, right? Yeah, and I want to pay them well. 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 maybe renting our space for activities after hours. So I'm kind of looking at other revenue streams because a lot of times we'll have, it's not consistent revenue.

46:47We may have a great month, bring in$100 ,000. And then, you know, 30 days later, someone hasn't paid, and I'm doing whatever I can to keep the cash flow going. 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 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 22, who's got no assets and is just starting out, right? It's just harder to get. What would be your reluctance to take an SBA loan?

47:21You 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. Yeah, it would give you more cash. Luis? I mean, yeah, I think getting a loan makes a lot of sense. I'm still stuck on the idea that 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.

47:57There is the range of things like art installations, which I would think plants can be thought of as art installations. 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. 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.

48:28Marketing and sales are what we're really doubling down on this year to get to that higher profit margin. I think 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 a year for this product, you would have been like, what? 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 a year. I mean, we can charge$150 and people will pay it.

49:02Yeah. Yeah. 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. That would help a lot because then immediately your margins are good and then you can afford to hire, et cetera. By the way, I'm just thinking, I don't know, for some reason in my mind, I keep thinking of the music. Do any of these wolves have music coming out of them? 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. Coffee, coffee scents.

49:35Coffee scents. Coffee scents. Coffee beans. You can have coffee plants. To make the place smell good at the same time they are enjoying their plants. But maybe like you could add a, you could add a waterproof speaker as part of your price and say, hey, you know, we also... For triple the price. Triple the price. For triple the price, we put in a water. There'll be nature sounds, birds. That actually is not a bad idea. It's just beautiful, you know, like a Zen garden, like it's subtle. 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.

50:09I'm telling you, do that. I want to know if you, I want to, I want to find out if you're going to do that. Stephanie Carlson, the brand is called Nature Spire. Good luck. Thanks for calling in. Thank you. It's been great. Loved talking with you. Thank you. Thank you. 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 are all these redundancies put in, right, to prevent that. Yeah, we have a few plant walls here at Duel and Go. It works. And they're beautiful. Does music come out?

50:36No, no, they don't have music. I like that idea. Yeah. But, you know, I'm really hoping Stephanie will just, next time she shows up to give a quote, she just doubles. Yeah. Whatever she was going to say, just double it. Yeah. I bet you some people will say yes. I agree. I agree. Luis, you know, I've asked everyone who comes on the show a version of this, and I'd still, every time, I'm always surprised and amazed at the answer. But now that you – I mean, you came in when you started Duolingo. You had already – you had a lot of experience. You'd worked at Google. You went on a MacArthur Fellowship.

51:11I mean, a lot of things going in the right direction for you. 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 learn languages. If you could now go back to 2012 when you were starting that and you could sort of give yourself advice, what do you think would have been helpful for you to know back then? Oh, a number of things. Certainly, we took too long to monetize. I mean, we did not start monetizing until 2017. So it's five years in. I would have told myself monetize a little sooner than that. And again, it's not because it's so much about making money.

51:47It'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 got to 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. And what you do is you just hire people who are great at that and let them do that.

52:18So 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. Makes a lot of sense. Luis Fanon, co-founder of Duolingo and the CEO of Duolingo, thanks so much for joining us. Thank you, Guy. By the way, if you haven't heard Luis's original High Build 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.

52:55You 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. 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 try to figure out how we're going to make money 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 guyroz.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 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.

53:53And 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 hibt at id.wondery.com or call us at 1-800-433-1298 and leave a message there. And we'll put all this in the podcast description as well. This episode was produced by Catherine Seifer with music composed by Ramtin Erablui. It was edited by Casey Herman, and our audio engineer was Sina Lafredo. Our production staff also includes Alex Chung, John Isabella, Elaine Coates, J.C. Howard, Iman Ma 'ani, Chris Messini, Kerry Thompson, Neva Grant, and Sam Paulson. I'm Guy Raz, and you've been listening to How I Built This.

54:40If you like How I Built This, you can listen early and ad-free right now by joining Wondery Plus in the Wondery app or on Apple Podcasts. Prime members can listen ad-free on Amazon Music. Before you go, tell us about yourself by filling out a short survey at wondery.com slash survey. For a limited time, earn up to 200 ,000 bonus points with the IHG One Rewards Premier Business Card. Visit ihg.com slash business card. Cards issued by JPMorgan Chase Bank and a member FDIC offer subject to change. Terms apply.

From the publisher

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 hibt@id.wondery.com or call 1-800-433-1298.

And be sure to listen to Duolingo’s founding story 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 and on Substack.

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Ask about this episode