✍️ WHAT CAUGHT OUR EYES
How Duolingo grew from 5M to 200M users in 5 years using product-led growth
At volumes of millions, it's impossible to grow sustainably without ensuring retention. Along with growing users from outside, Duolingo decided to double down on growing users from inside.
Duolingo's product-led growth was based on 3 main tenets: Gamification, Obsessive A/B testing, Learning-driven flow. All of their product growth-hacks detailed below fundamentally rolled back to these 3.
Soft-walled sign-up: Duo had a major leak at their sign-up page. However, it was easy to retain users once they got the Duo learning experience. They thus decided to let users begin learning instantly, but face sign-up “soft-walls”. These were optional sign-up screens, that could be avoided to continue learning. After ~3 soft walls, learners would lose their progress if they wouldn't sign up. This led to a whopping 20% increase in DAUs.
Lingots: following the ABC's of any gamification handbook, Duolingo introduced their virtual currency, “Lingots” onto the app. Earning them? You earned some for every lesson you completed successfully. Spending them? Lessons, perks & “streak freezes”.
Streaks: a streak is an increasing counter for the # of consecutive days a learner learns, to incentivize them to keep repeating their cognitive behavior. As learners' streaks increased, so did their willingness to retain it.
Badges & Leaderboard: while streaks continued engaging learners, Duolingo began visually prioritizing “XP” points and introduced new badges for learners. Learners that were demotivated by streak-losses now had something else to stay engaged.
Notifications: with the introduction of self-goal-based streaks, Duo now had a legitimate reason to send notifications. Notifications were optimized to be sent 23.5 hrs after the app was last used. Chances are learners would be free at the same time the next day & their tone was made to be friendly, more than guilt-provoking.
Notification dot on app-icon: not just sending the notifications, but a simple hack of adding a tiny red dot to the app icon when folks had been notified to practice, showed them over 1.5% increase in DAU.
In all that Duo had made possible, there were 2 biggest learnings they uncovered: (a) users don't know exactly what they want, you should thus feed everything to an A/B test, (b) testing is a game of instinct. In infinite option-sets, you can still realistically only test the top 3.
Social Networking 2.0
Early in social network days, people used to debate if there would be "one ring to rule them all" or if people would use different networks for different purposes/aspects of themselves.
Initially, it looked like Facebook won and would be the one ring.
The FTC filed a lawsuit in December claiming that “Facebook holds monopoly power in the market for personal social networking services in the US, which it enjoys primarily through its control of the largest and most profitable social network in the world”)
Having one identity is a core principle for Facebook, which is great for advertising if nothing else, but at odds with the desire of many to be different parts of themselves to different people in different contexts.
But public broadcasting by default actually constrains your ability to communicate, because you run into a conflict: your “whole self”, versus others’ only somewhat overlapping interests.
People have been talking about the "unbundling of Craigs List", "unbundling of LinkedIn" for a long time, but this inherent paradox could explain an upcoming unbundling of Facebook. But not the way that it happened in the other examples.
Social 2.0, the unbundling of Facebook, will happen (is happening) around each individual person's interests:
We'll most likely continue to see more interest-driven social networks emerge in areas of parenting, shopping, sports, fantasy sports, gaming, networking (both professional and personal), education, entertainment, etc.
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👏 WHERE THE MONEY WENT
🇪🇺 Notable EU early stage Consumer rounds :
Curb, a Sweden-based delivery food brands operator, raises €3.2M with EQT - link
Agora, a UK-based beauty social network, and shopping app, raises £5M with Draper Esprit/Lakestar - link
Actio, a Germany-based coaching platform for accessing live yoga and meditation group sessions, raises €8.5M with HV/Cavalry - link
🇺🇸 Notable US early-stage Consumer rounds :
Joro, a US-based consumer carbon footprint tracking app, raises $2.5M with Sequoia - link
Metafy, a US-based platform for one-on-one coaching from champion-level gamers, raises $3M with Forerunner - link
Meet Cute, a US-based 15-minute rom-com podcast startup for GenZ, raises $6.25M with USV/LocalGlobe/Lerer Hippeau - link
Workit Health, a US-based teleconsultation platform for addiction-related issues, raises $12M with FirstMark/Lux - link
Sunday, a US-based subscription-based startup that makes green lawn-care products, raises $19M with Sequoia /Tusk/Forerunner - link
Little Spoon, a US-based maker of baby and toddler foods, raises $22M with Valor Equity - link
🔭 Notable later stage Consumer rounds :
Rec Room, a US-based social gaming platform, raises $20M with Madrona/Sequoia/First Round/Index - link
Cleo, a UK-based financial assistant designed for Gen-Z, raises $44M with EQT/Balderton /LocalGlobe - link
Gorillas, a Germany-based grocery delivery startup, raises $44M with Coatue - link
Citizen, a US-based mobile app that notifies users of nearby emergencies and crimes, raises $50M with Greycroft - link
Public, a US-based social stock investing company, raises $65M with Accel/Lakestar/Advancit - link
Brainly, a Poland-based peer-to-peer learning platform for homework, raises $80M with Learn/General Catalyst - link
23andMe, a US-based at-home DNA testing company, raises $82.5M with Sequoia/NewView - link
Lydia, a France-based consumer payment, loan, and insurance app, raises $86M with Accel - link
Discord, a US-based chat platform heavily used by gamers, raises $100M with Greenoaks/Index - link
Grove Collaborative, a US-based household products marketplace, raises $125M with Morgan Stanley/Sculptor/NextView - link
Oscar Health, a US-based health insurance company, raises $140M with Tiger Global/Dragoneer/Baillie Gifford/Coatue - link
StockX, a US-based marketplace for sneakerheads, raises $275M with Tiger Global/Altimeter - link
🍭 Notable Consumer Exits
Poshmark files for IPO. Poshmark is a US-based second-hand clothing marketplace with backers including Mayfield/GGV/Menlo/Inventus - link
MTG acquires Hutch Games for $375M. Hutch Games is a UK-based developer and publisher of mobile racing games - link
Cazoo acquires Drover. Drover is a UK-based car subscription service for new and used cars with backers including Target/Autotech/RTP/Cherry - link
Amazon acquires Wondery. Wondery is a US-based podcast network with backers including Greycroft/Lerer Hippeau/Advancit - link
🖤 - HEARTCORE
Congrats to Dubsmash for joining forces with Reddit!
Much 🖤 from Heartcore