# Duolingo Co-Founder on Why $3M is Harder than $100M to Raise

Why You Should Always Take Tier 1 VCs Even at Worse Terms · Why Europe Can't Win Unless the US Screws Up · How AI Impacts the Future of Work and Education with Severin Hacker

20VC · May 19, 2025 · 92 min · 18,616 words
Speakers: Severin Hacker, Harry Stebbings
Source: https://www.996.fm/episodes/20vc--ep-66e38788/

## Cold open

**Severin Hacker** [0:00]:

You should always try to raise money from the best Tier one VCs, even if the terms are slightly worse, because so much signaling. It's harder to raise 3,000,000 than it is to raise 100,000,000. But I can guarantee you Duolingo would not have been able to raise any money in Europe. You know, we had $0 revenue for the first five years.

**Unknown** [0:21]:

How much was the Series A?

**Severin Hacker** [0:22]:

3,000,000 at 15. Yeah. I think we only had one offer. It was Unisquare or back to university.

**Harry Stebbings** [0:28]:

This is 20 VC

## Intro

**Harry Stebbings** [0:30]:

with me, Harry Stebbings. Now for years, I've been battling with one of my dear friends, Nico Wittenborn at adjacent, that consumer subscription does not yield mega mega outcomes. Well, I've just come to the conclusion that I have really lost this debate, and the guest today proves that I am wrong. Duolingo is a $24,000,000,000 market cap company today with a 100,000,000 monthly active users. And joining me in the hot seat is their cofounder, Severin Hacker. This is such a wide ranging discussion on everything from how AI changes the future of education, companies, to how to pick your life partner, and the decline of Europe. Now that is topic breadth for you. But before we dive into the show today,

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## Conversation

**Harry Stebbings** [4:31]:

Severin, I'm so excited for this dude. I had Luis on six or seven years ago. I've heard so many great things before this show from Miami Bing, from KP, Brad now, but from USV, many others. So thank you so much for doing this.

**Severin Hacker** [4:45]:

Thank you. Thank you for having me.

**Harry Stebbings** [4:47]:

I would love to start, though, with the news of the day. I don't like the whole of like, tell me your life story and normal podcast intros. Duolingo came out as being AI first the other day. What does that mean? And what does that not mean so people have a clear understanding?

**Severin Hacker** [5:01]:

Okay. So maybe taking a step back. Why did we start Duolingo? What is our mission? Duolingo's mission is to provide the best education and make it universally available. That's why Luis and I started this company. In the past, the best education was only available to the the richest people. The kings that had, you know, the private tutors for the kids. That was the way to learn. And by the way, this is still true today. If you wanna become the best tennis player, you hire a one on one tennis coach.

**Harry Stebbings** [5:27]:

You actually you actually see this. I remember there was a US Open final, I think it was, and the two female players in the final were both daughters of billionaires.

**Severin Hacker** [5:34]:

Yeah. Exactly. So so, you know, they got the one on one tutor. When we started Duolingo, we saw the potential of technology to do this but for everyone. We can't all afford these one on one tutors. That's too expensive. But with technology, there's a way that anyone can have access to a one on one tutor with the same efficacy. And that's why we started Duolingo. From day one, it was technology first. Back then, it was software. Now we call it AI. So in a way, not much has changed, except AI has become a lot better.

**Harry Stebbings** [6:03]:

Take me to that discussion then, where you're inside the room with Luis and the board, and you decide, okay, we need to fundamentally change how we do everything and reshape the organisation of this company towards being an AI driven company.

**Severin Hacker** [6:16]:

This has been, you know, going on for the last two and a half years. So we were one of the launch partners of OpenAI when they first launched Cheap D4, and we immediately saw the the potential of this technology to help our mission. What was it that you saw that gave you such optimism? When you first had access to it, it was impressive. It was like an iPhone moment. You just realized, this is the future. We're gonna use this everywhere. And then it's like the second question is like, how do you use this at Duolingo? And the first thing we realized is this can really help us accelerate content production. In the past, it would always take us a long time to produce new courses. But then with AI, there's there's a potential that you can pump out a lot of these courses all at once. In fact, we just did that. You know, it it took us twelve years to to build the first 100 courses or so. And now within one year, we built another 148 courses. It would have taken us decades to build this.

**Harry Stebbings** [7:08]:

How are you using AI to then 12 x content creation within Duolingo?

**Severin Hacker** [7:14]:

By the way, there's still a lot of human in the loop. So, for example, the curriculum design, that's all human made. Anyway, inside Duolingo, there's a lot of these short sentences, the the ones you see in in in the lessons. And those are now produced with with AI. There's also this concept of viability. You you wanna introduce new words one at a time, and you can give these constraints to the AI. It's like, create a sentence that uses these words, doesn't use any of the other words, and only uses these grammar concepts, and it can do that. And that's how we've been able to generate the sentence content within these courses.

**Harry Stebbings** [7:44]:

With respect on the curriculum design, when you look at completion rates of students and you have the data that you have, in six months, would it not be better to let AI do curriculum design, knowing all of the completion rates, success rates, satisfaction rates, NPS scores, to actually build that curriculum itself?

**Severin Hacker** [8:03]:

The industry is definitely moving that way. One of the most amazing things about Duolingo is we have this massive user base. We're by far the largest learning platform out there, by far, orders of magnitude. We see how people learn. It's like the largest school, you know, like we see it. Usually in education, the studies were done with, you know, 20 to 30 students. We have hundreds of millions. That allows us to look at, okay, does this curriculum design work versus this versus that? And we can use that data to improve the curriculum design itself. But not only that. So, you know, right now, we still have these courses and, you know, your curriculum is the same as mine. But really, I think the future is gonna be quite different where you say, like, you might be interested in in rugby and you have a trip plan to, I don't France. I think France also is big into rugby. And you could then custom design a course just for you. It is exactly the vocabulary you want to use when you go to France. You know, it could completely different from mine. Why do we even create this batch on the on the back end? Like, why don't we create it on the fly when you need it, when you open the app? It's like, this sentence is custom designed for you, every single exercise.

**Harry Stebbings** [9:04]:

So personalization is the future

**Severin Hacker** [9:05]:

of education in your mind? I think that's part of the reason why these one on one tutors are so good because they know where you are. They're really good at assessment. Think of the tennis coach again. They know where you are. They know where you need to go, and they're very good at giving you the feedback. And they also know how you differ from other players.

**Harry Stebbings** [9:21]:

I was actually watching Zurich last night on an interview, and he was saying the future of content is not passive consumption of videos like we have today. It's the interactivity where you will talk to the video and suddenly the fitness trainer will actually say, oh, no. You should have 12 grams of protein, not eight grams of protein. And it's that interactivity that will drive it. How do you think about personalization balance with interactivity in the future of content and the future of education? To what extent is it multimodal? You know, a thing I love about Duolingo that makes me sound weird as anything is I'm walking around London, and then I'm going, Bruno es Americano. And it's multimodal. It's me my voice playing back. It's me typing. There's many different modes.

**Severin Hacker** [10:01]:

Yeah. Yeah. Yeah. I think it's gonna be multimodal. We have this feature inside the app called video call with Lily. So you can call Lily. Lily is one of our characters. She's the one with the the purple hair. She's not a one on one tutor. She's more like a friend, but she remembers stuff. So she remembers, for example, that, you know, that I like cooking. She knows where I live, etcetera, etcetera. She personalizes in that way, but it's full conversation. So you learn by conversing with an AI friend. And I think that's gonna be super important.

**Harry Stebbings** [10:27]:

How has the way that you build internally in Duolingo changed with AI? What tools do you use? How has it changed cadence? How has that changed?

**Severin Hacker** [10:35]:

We use AI in in three ways at at Duolingo. Number one is content generation, and that's where we've seen, you know, the biggest success. Number two is AI features that you previously couldn't build. So this is, again, this video called with Lily. It's a interactive conversation with an AI bot. Two years ago or three years ago, you couldn't build. Now you can do it. And it's actually the thing that, you know, was was lacking in the product. If you ask our users, like, what's missing in Duolingo? It's like this conversational piece. Like, speaking. I wanna get better at speaking. And now we we can do this, and it's a really, really, really powerful feature. Great adoption with this video call with Lily feature. And I think there's more to be done there, both making this feature better, but then also maybe there's there's new AI features that we can now build. And the third is overall productivity improvements across the company. Software engineers using Cursor, using AI for customer support.

**Harry Stebbings** [11:23]:

Do you mandate Cursor?

**Severin Hacker** [11:25]:

Do you say, Hey, we prefer you to use this or this? How do you do that? We don't mandate. Surprisingly egalitarian, and we just say use AI tool or use whatever makes you more productive, and we pay for it. You can use Cursor, you can use ChatGPT, you can use Copilot, and then we see what people actually use.

**Harry Stebbings** [11:43]:

Where is AI much better than people? And where is it not as good as people and actually has quite a lot of room to improve?

**Severin Hacker** [11:49]:

You know, early on, there were a lot of these hallucinations, the AI making stuff up. I think they have gone down, number one. But then also number two, for us, it's not a problem if they hallucinate because we teach languages. As long as the language is grammatically correct, it is okay, you know, if it makes up a historical fact. We don't teach history. It's like, the hallucinations are not a problem for our use case.

**Harry Stebbings** [12:10]:

I bet you have users, though, that are like, no, it was 1914, not 1916. Yeah. Yeah. We don't go that far into it. But when you have so

**Severin Hacker** [12:19]:

many users, you're like, there's always one.

**Unknown** [12:21]:

Yeah.

**Severin Hacker** [12:22]:

No. So so the hallucinations are not not a problem. I think there's a lot of Silicon Valley hyperbola round software engineering getting replaced very quickly. I'm less sure about that. I try all of these tools, and I think there's still a lot they can't do well. What can they not do well? On the software engineering side, I think what they're really good at is going from zero to 80% for a simple app, the the replete, the lovable. And then the larger codebase gets, the worst they get. Adding the next 10% takes as long as the first 80. And they kind of create their own tech debt, which they also cannot really solve. And then the other thing they're really good at is just isolated transformations. So in a single file, add all the comments or change a function to use different input parameters or something like that. Really good at that. What they're not good at is large code bases and adding a feature, even a simple one, to a large code base.

**Harry Stebbings** [13:15]:

Do you think you will have more or less software engineers in five years' time at Duolingo?

**Severin Hacker** [13:20]:

You know, if you had asked me a year ago, I would have said 100% more. Now I'm a little bit less certain, but I think two things will change. So in a way, what these AI tools do is they lower the entry level to get into software engineering. Right? So, you know, your mom can maybe build an app with Vlogable or something like that.

**Unknown** [13:39]:

She

**Severin Hacker** [13:39]:

has to. Right. Right. So so there you go. The other thing it does, it just lowers the cost of lines of code producing software. And then there's the German's paradox, which says the cost of a good goes down, you will actually have more demand for it. I also believe some of this will be true. So I think there will be a lot more people writing apps. Whether they will actually touch the code or not, I'm not sure. And then I think the second thing is, like, are we gonna call them software engineers, or what are we gonna call them? One thing we see is inside Duolingo, we have the three biggest functions within Duolingo are product, engineering, and design. Those compose probably about 80%, 70 to 80% of our workforce. But with AI, you can see that there's maybe like a new role, kind of a product engineer designer, like one person who can do all of these roles to a certain degree. They can build a prototype, and then maybe at some point, they need to hand it off to an actual software engineer or an actual designer. That's gonna be part of the future. So I think it's gonna be more software, a lot more software, a lot more people creating software. Whether we're gonna call them software engineers or not, I'm not sure. And then I think there's gonna be this convergence of roles of product engineer and design.

**Harry Stebbings** [14:49]:

So for everyone coming out of university state or contemplating university courses state and who are told, I'll CS in five years' time. It's not gonna be worth it. If I was your little brother and I'm 18 and I'm like, help me, Severin, should I do CS at university? What would you say?

**Severin Hacker** [15:04]:

So I did my CS degree. It's it's now quite a while ago. They don't actually teach you coding. People think like, oh, CS means coding. What they teach is kind of the fundamentals of, not even software engineering, but, like, how computers work. And then computer science is kind of applied mathematics. Okay. So I do believe there's still a lot of value in thinking logically, which is something that the best CS courses teach you. They don't teach you Java or Python, and they shouldn't. I think that part is gonna go away. Like all the details of of, you know, actual coding, but the the fundamentals of problem solving, that will still be available.

**Unknown** [15:39]:

And so should I do it?

**Severin Hacker** [15:41]:

I would say for the next five years, probably still a good investment. Yeah. You know, like there's like, okay, so if extrapolate, okay, so once you have full AGI, okay, we no longer have jobs. Nobody has to work anymore. We have UBI, etcetera. It's like the paradise. Do you actually buy that? I believe that's gonna happen. The big question is when? I don't think it's gonna be next five years. Maybe it's gonna be next ten years if you really see a broad adoption of these technologies. More likely, maybe twenty years or so. Today, in The US, if you run into a stranger at the conference, so the first question is usually what do you do? But in this future world, the the first question might be like, what are your hobbies? You know? Like, because we don't have jobs anymore. So so everything is gonna be, like, about not work.

**Harry Stebbings** [16:32]:

I I do just question it, though. Think we can because it quite often get a little bit overexcited. It's like, you know, when you have the agricultural revolution, it's like, oh my god, we had a 100 people in a field, and now we have this combine harvester. We have one person driving it. We're all gonna have no jobs. We have computers and calculators. What are accountants gonna do and people gonna do and what we have? We always find the next thing to do. The idea that society will live in this UBI lack of utility state, I hope is not true.

**Severin Hacker** [17:00]:

The other thing that is interesting about this is this is more on a on a philosophical note is if you just ask people, you know, do you like your job? I can ask anyone here. They all love your job. You love your job. I'm sure you love your job. Right? You would do it for less money more most of the Dude, I did it for free for you. I I would. I literally I get paid to hang out with

**Harry Stebbings** [17:18]:

amazing people. Like, are you kidding me?

**Severin Hacker** [17:20]:

Yeah. So so for for for us, it's it's it's not just income. Right? It's We derive purpose from our job. But for a lot of people, the job is just they do it for for the income. They don't derive purpose from it. The people that derive purpose from their job, who work the most, etcetera, you know, the tech people and and and the investors and all of these people close to the AI revolution, I think we are most afraid of it because we feel we might lose our purpose. That's why we are sometimes not optimistic about this future world.

**Harry Stebbings** [17:50]:

Sorry. I had Jason Lampkin, who's a very famous SaaS investor, on the show recently. He said the hard thing is with young people, they just don't wanna work. Fundamentally, they don't wanna work, and AI is as good as they are at sales, at marketing, whether you're an SDR, whether you're a social media content creator for memes or GIFs or whatever it is. And so in twelve months, we're gonna see huge, huge unemployment in this kind of lower level tech employee, and it's gonna happen. Do you think that's true?

**Severin Hacker** [18:17]:

I'm not sure. So so here's another thing. The general consensus is that these AI tools are really good for senior software engineers or staff level software engineers. Right? You know, they have been trained, and now they can use AI, and they become much more productive. They're now a 10x engineer. You know, AI the the the channel consensus is that AI can do the job of an entry level engineer. Therefore, let's stop hiring entry level engineers and only hire senior engineers. But I think that's a mistake, and we're actually not doing that at Duolingo. We still hire from universities. One of the reasons is we believe that people that grow up with these tools and, you know, start using these tools early will become much better at using them. So in a way, yes, they're

**Harry Stebbings** [18:57]:

Why is that? Because young people have more plastic minds to new tools and new processes? What's the thinking behind that?

**Severin Hacker** [19:02]:

It's I think it's just like I bet the person who spent a thousand hours using ChatGPT is a lot better at using it than I am. And I think that that's the case for the new grads. You know, Duolingo wouldn't be where it is today in terms of our social media presence if we never hired from Gen Z. It's like, you need to know your target demographic. And, you know, Zaria, who was on your show before, she she's Gen Z. And and and without

**Harry Stebbings** [19:27]:

She just fundamentally understands it in a way that someone who's not Gen Z In could never understand

**Severin Hacker** [19:32]:

fact, when I open TikTok and look at our own Duolingo, I don't get it. I was like, why is this funny? Why do people watch this? But it's super, super popular.

**Harry Stebbings** [19:41]:

Yeah. You're you're not Gen Z anymore, Severin. I'm sorry, dude. You

**Severin Hacker** [19:44]:

you don't

**Harry Stebbings** [19:44]:

fit in that demographic. We we mentioned that how it changes, like engineering, product design. Another big area is customer support, and we chatted about it a little bit before. How does AI change customer support processes, workloads within Duolingo?

**Severin Hacker** [19:59]:

Yeah. So we started using an AI tool for customer support. I think it's another one of these early applications of AI where AI can really do a great job and transform an industry. We have found for a lot of the AI can do 70 to 80% of the tickets that we get. And then people always like, oh, well, okay, you guys, you don't need human customer support agents anymore. That's not true because you still have the other 30% or so. But then not only that, now that, you know, you have these kind of like an unlimited AI customer support agent, you can actually give customer support to a much broader base. So so far, we only give it to our subscribers, the ones that that pay for Duolingo. But if we can, you know, reduce the cost of customer support by 10x or 100x, then we can actually give it to everyone. Classic classic example of turbines paradox. Right? So as cost goes down, demand goes up.

**Harry Stebbings** [20:50]:

Who do you use for customer support?

**Severin Hacker** [20:52]:

We use Decagon. Yeah.

**Harry Stebbings** [20:54]:

I would love to have their CEO on the show. Think he'd be a fascinating one on the future of customer support. You know what I'd love I'd to do a panel with a couple of different providers. 70 to 80% is really very significant. Can I ask you, when you think about offering it to more people and then also the implementation of you mentioned, like, the features that you have, like implementing AI across the Duolingo product suite, it costs money? At the end of the day, you have to pay OpenAI for a lot of these features, and a lot of companies are. Do you see margin degradation by offering AI across the full product suite because you're not charging more, but you are having an additional cost out to a model provider?

**Severin Hacker** [21:29]:

In terms of margins, as I explained before, there's these three use cases at Duolingo. Number one is the content generation. So content generation is just, it's good for margins, right? Phenomenal for margins. Yeah. So, and and it's also like it's a one off thing. You generate the content, then it's done. And then number two is these AI features like what you call with Lilly, where you actually have a a unit cost. You directly interact with a LLM on the back end and you have to pay for that API call. Right? So there's an actual unit cost there. And then, you know, you have to make that viable. So we have three tiers. You know, the free tier, there's super, and there's max. And it's mostly now our max, the higher tier subscription, because of that reason. Right? So so we we would like to give this to everyone. But the reality is today, there's a unit cost to to AI, and therefore, in our higher tier subscription. We believe all of these costs will come down. So the one you know, the the the batch processing cost has already come down. There's a lot of competition there. And then in the kind of the real time models, multi model, there's also gonna be we hope there's gonna be a lot of competition. Costs will come down. Eventually, I think we'll be able to give this to a lot more people or almost When

**Harry Stebbings** [22:37]:

you think about, like, model relationships, you mentioned obviously being early access with OpenAI. How do you think about the the flexibility of moving between models with different generations of model, with different specialties of model? Do you think you will have relationships with five model providers? Or do you think it's like, oh, no. We're tied to OpenAI?

**Severin Hacker** [22:55]:

I think there's gonna be a lot of competition. In more specialized use cases, the division models or for us, you know, audio is very interesting, multimodels. There's there's less competition, and you can see that there could be companies that keep a lead. For our voices, we also work with 11, and they're just amazing models, amazing voices. I can see that might be harder to replace with one or the other model.

**Harry Stebbings** [23:19]:

When I hear you say about, like, eleven Labs there or Decagon there or even think about Duolingo, the thing that I am struck with is, but OpenAI are gonna do that. And I just love to go to the moment where I think Duolingo stock actually took a hit. And I never talk about, like, public market prices, I don't know why we're not going there. But I think it actually took a hit when there was the concern that OpenAI and ChatGPT would move into language learning very significantly. Can you take me to the internal discussion around, oh, shit, are ChatGPT and OpenAI going to move into the application layer for language learning?

**Severin Hacker** [23:56]:

The other thing that that I think you see happening in in in the public markets, and and this is my only comment about this, is, like, this bifurcation of the of the market into is this an AI winner or is this an AI loser? I think by mistake, we were first put into the AI loser category, and now it changed to, like, oh, no. Duolingo is gonna be an AI winner. And there's lots tailwind from AI. And, you know, I outlined some of this.

**Harry Stebbings** [24:19]:

So there was never a concern for you internally. You never had a call with Luis where you're like, oh, shit. Is Sam gonna do this?

**Severin Hacker** [24:25]:

And I assume here you mean, like, OpenAI or ChatGPT building a really good language tutor.

**Harry Stebbings** [24:31]:

Yeah. Like, can they take away a lot of your very, very casual users by doing a very simplistic chat with a friend, choose your language?

**Severin Hacker** [24:41]:

That's definitely somewhat of a concern. I think there's a bunch of things to be said about that. So first of all, what is the hardest part about learning a language?

**Harry Stebbings** [24:50]:

I would say the discipline.

**Severin Hacker** [24:52]:

Yes. It's the actual motivation. And, you know, by the way, this is one of the key insights of Duolingo. We've been sharing this with the entire world for the last ten years, and still nobody seems to believe us. So the hardest part is motivation. And Duolingo is because it's so gamified. It's really good at this. It's a motivation engine. I call it a motivation engine. It really gets you to come back every day and do Duolingo. And if you stick to it and you do the hard material, you will actually learn a language. That is the power of Duolingo. In general, people underestimate how important that is. So if you wanna build something that is, you know, as good as Duolingo, you have to solve this somehow. If you ask our users, what do you do if Duolingo went away? They never mentioned any of our language learning competitors. They're like, oh, would spend more time on social media. And then the second thing is if I was Sam Altman, I would go after the big trillion dollar companies. Why go into, you know, language learning when you can go into search or social media? Those are the, you know, the the big Well, if you're sitting

**Harry Stebbings** [25:53]:

there as Sam's day, you're thinking there's kind of a couple of core areas which are winners. There's chat, which we already own. There's two, which is customer support, which I think they'll buy someone very soon. There's coding, which they've obviously just bought someone. And then I'd say language learning is the fourth. As you said, it's so perfectly I mean, LLM is kind of in the name. It is so perfectly aligned to the use case of what they are best at. It's not a stretch.

**Severin Hacker** [26:17]:

Yeah. We'll we'll see.

**Harry Stebbings** [26:19]:

We shall see. One thing that I'd love with this

**Severin Hacker** [26:22]:

You know, the the other thing is, like, it's it's the Luis always says, there's a difference between being a first class citizen and a second class citizen as a feature. Right? So Duolingo works because we have these gamification mechanics. We have the streak, we have the XP, we have the leaks and all that. And you can build this all inside a different app. But if it's just kind of a second class citizen buried somewhere, again, it's like it's hard to make that experience as sticky as it if you build an app just for this purpose.

**Harry Stebbings** [26:52]:

Is there anything within Duolingo that's a second class citizen that you wish you could make a first class citizen?

**Severin Hacker** [26:59]:

There's one thing maybe. So so we have these stories inside Duolingo. So so every now and then you get a story. I think they're actually becoming really good again with AI. And there's kind of an entertainment aspect with this. Like maybe you could actually make them more prominent, go into more like reading, including like your first language, L1, or maybe something for kids, like learning how to read. But we haven't have done that yet.

**Harry Stebbings** [27:24]:

Yeah. When you when you

**Severin Hacker** [27:24]:

It's not at the the the level of, you know, Harry Potter.

**Harry Stebbings** [27:28]:

You know, one one thing that strikes me when I, you know, I use Duolingo every day, it is exactly what you said there, which is like the little things which make the product experience delightful. And it reminds me of Gustav Soderstrom from Spotify who always told me the details are not the details. They are the product. And there's so many little things which make me feel that when I use Duolingo. To what extent do you believe that and advise that to founders who call you versus Jesus, don't spend too long on the way that something pops up. Just get it done in the early days.

**Severin Hacker** [27:59]:

I think ultimately product quality is details. Luis, he's obsessed with details. You know, he can he can spot something like being not properly aligned within half a second. The details really, really matter. If you if you look at retention, which is the main metric we care about, it's like the details really matter. It really matters. It also matters in terms of how likely are you to recommend it to a friend. And you're not gonna say, oh, you know, it's like, oh, it's super like, you know, details are really good. But it's like, it's a great app. That's all details. Difference between a good app and a great app is details.

**Harry Stebbings** [28:33]:

Can I ask you, where did you spend time that with the benefit of hindsight, you're like, ah, we shouldn't have spent time there?

**Severin Hacker** [28:39]:

So we started with languages. But the mission was always all of education. Right? So at some point, it's like, okay, let's let's build new subjects. We wanna add new subjects, and then someone said, let's add math. Math is another one of these, like, fundamental skills that we'll probably need to learn for the next hundred years or so. And then the first idea was to build a new app. In fact, we built a new app. We built a new math app. Like completely standalone? Completely standalone. Wow. So there was Duolingo, the main app, and there was an entirely new math app. Did have a name? Well, yeah. It's the Duolingo math app. Creative. Well done, Severin. Wonderful. And then we realized, you know, this is looking more like the main Duolingo app, and it's like we were about to add a leaderboard and, you know, a league system and a streak. And I was like, why are we doing this? Like, why are we replicating this whole functionality? That was insight number one. And then insight number two is for the user, it was also not a great experience because first you had to know that Duolingo had a a math app. Then you had to find an app store, then you had to download it, then you had to install it, then you had to grant it permissions again to send you push notifications. It was like, wait, is this streak different from my Duolingo streak? It feels very much like Duolingo, but it's not quite Duolingo. And then we said, no more new apps. If it's education, it goes into the main app. But it's kind of like a super app strategy. Right? So now the good thing is, like, all the content and all that, we can just transfer in. So we didn't, you know, throw it out, but merged it with the the main app.

**Harry Stebbings** [30:07]:

Can you talk to me about chess? How did the chess come about? We mentioned it outside, and it was a great story. How did chess come about? And talk to me about that.

**Severin Hacker** [30:16]:

Chess chess is a is an interesting one because, you know, is it is it really education? You know, it helps you think. I mean, we we had this discussion before. Should you still study computer science? I think chess is similar in a way that it helps you think, helps you think logically. And so we believe it fits within the mission of Duolingo, that's number one. And then it was two people who were just super passionate about chess. And it's like, hey, let's let's try to build a chess And we were Two

**Harry Stebbings** [30:39]:

people internally.

**Severin Hacker** [30:40]:

Internally. Yeah. Yeah. And we were not convinced at first. But this is Why are you not convinced? We we don't wanna build just a game. Right? Like, there needs to be some educational aspect. That that's always a a trade off between, okay, are you just a game or are you an educational game or are you just, you know, a textbook boring experience? So you have to, you know, find find the balance between the two. We don't wanna eat just a game. So with chess, it's different. Like, so chess is is not, you know, like a racing game or something. Chess is, you know, it helps you think. So that's why why we're good with it. But then how does this fit into the path? How does this look inside Duolingo? Can we make it fit into the Duolingo design language and all that? So that that's another concern. But then this is, again, super interesting. And so the two of them, they built this prototype with AI. The PM and designer and the PM, he has some engineering background, so he knows how to think logically. But he hadn't written much code before Duolingo or at Duolingo. But he was able to build this first version just using Cursor and and and a bunch of AI tools. And the prototype is what convinced us that we should do this. You know, if it had just been a a Figma design, we probably was like, you know, maybe maybe not. But the prototype was so good that it convinced everyone. It's like, yeah, let's build this.

**Harry Stebbings** [31:53]:

What was it about the prototype that was so good? It was fun? It was progressive in terms of mindset? It

**Severin Hacker** [31:58]:

could play it and it it just felt like this this belongs inside the app. You know? It's like when when when you just see a screen, it's like, yeah. Maybe you have to kind of imagine it versus if you have the prototype, it's like, well, this looks and feels like Duolingo. The other thing is that because of AI, again, we we were able to build this within nine months. Fastest we ever created a new course.

**Harry Stebbings** [32:18]:

So nine months from start to finish? Yeah. Wow. And normally it would be Years. What do you not have that you would love to have in terms of activity? You said that you've added languages, you've added maths, you've added music, and now we have chess. What's the next one that you'd love to have?

**Severin Hacker** [32:34]:

What I'm most passionate about is the social aspect of the app. You know, I think we have these leaderboard mechanic. We now have this massive user base, and we have all these brand love. People love Duolingo, and I feel like there's an untapped potential of connecting the people that are on Duolingo. I don't know how to do it. So but

**Harry Stebbings** [32:51]:

I'm I'm very What would that look like? Sorry. Duo social? Duo date? Because Duo date's not a terrible idea. It's not.

**Severin Hacker** [33:00]:

Well, yeah, I don't know. It could be something like that. It could be, you know, learning together, but it could also be a lot of untapped potential that there's not that many apps that have.

**Harry Stebbings** [33:09]:

Would you ever open a physical school? I And know that sounds completely counter what Duolingo is all about, but having in New York a branded amazing experience where people could go for a week, meet the owl, sit with people in their leaderboard, and build that community play that is really special and different?

**Severin Hacker** [33:28]:

That's a good question. So not sure about that directly. But one thing that is interesting about education is okay. So there's k to 12, and then there is higher ed, universities, college, etcetera. One thing that's interesting when when people talk about education, we always assume it's the instruction. Here's a skill. I learned this skill, and now I go from A to B. That's kind of like how we think of education. But higher ed, for example, is actually more than that. Going to college, it's three things. It is the actual instruction. It's the actual teaching. It's actually the the learning of new skills. Okay. That's number one. But then there is also the degree, the the credentials. Right? So, universities, Harry, you got a degree. You, you know, successfully finished this this course, and you can put this on your on your LinkedIn or resume. And and then an employer can say, oh, I guess, you know, Harry did take this computer science class, and therefore we can hire them as a engineer. So that's credentials. Number two. Very important. Because otherwise, you would always have to prove again that you know something. Right? But that's the purpose of the degree. And number three is the social aspect. So a lot of people meet their partner at the university and their friendship network. So most companies that look inside edtech, they just focus on number one. But I think if you really wanna let's say, if you really wanna disrupt the Harvard's of the world, you have to solve all three. You want to disrupt the Harvard? No. So we we wanna achieve our mission. That that's why we started this company. Okay.

**Harry Stebbings** [34:58]:

But by achieving your mission, are you not disrupting Harvard?

**Severin Hacker** [35:01]:

Yeah. We would be. But one thing is on on the second thing, so we have not solved the the social thing. Right? Okay. This is what higher ed does. But on the number two, the credentials, one thing we're also very passionate about is is the Duolingo score. I'm not sure if you've if you notice it within Duolingo, but we now give you a score, like how good you are at at this language. And and we want this to become the way people talk about language proficiency. So it's like, hey. My Duolingo score is 61 in French. And then people know, okay. I guess you can have, this kind of conversation, etcetera, etcetera. So we're getting into the credentials or the degree aspect of it with this score.

**Harry Stebbings** [35:37]:

It's actually pretty helpful. The amount of times you're all say, oh, you know, do you speak French? And you're like, a a little bit. And it's like, it'd be helpful to say, oh, I'm actually a 40. And they're like, okay. Not really. He's stupid. You know? Or whatever it is. Do know what I mean? It's, like, quantifies it a lot more easily. Can I ask you, you and this is kinda jumping around, but you mentioned, like, the push notifications element? Does that make a difference still? We have so many push notifications with the oversupply of push notifications. Are you like, that was ruined. It was good or not?

**Severin Hacker** [36:05]:

Still makes a huge difference. And we know because whenever the service goes down that sends the push notifications, you can see the dip.

**Harry Stebbings** [36:12]:

Really?

**Severin Hacker** [36:12]:

Yeah. Yeah. Yeah. A 100%. It's it's It's huge. It's massive.

**Harry Stebbings** [36:15]:

Wow.

**Severin Hacker** [36:16]:

Going back to the other. So there was the higher ed three things for K-twelve. You know, people also say, Okay, my kids, they go to school to learn things. But again, it's not just the learning. In fact, a lot of K-twelve is childcare. So even if you solve one aspect of it, like let's say you have an AI tutor that is really, really good, you still need to solve the childcare problem. It's unlikely that people will just go to a school without any humans, without any teachers and just use apps and then go home. Or that we would have some sort of optimus, you know, in in the school. I think there's a lot of it needs to be done by humans still. And by the way, the other thing is, like, I do believe that the AI tutors will become really, really, really good. It's gonna be the way most people learn most things in the future.

**Harry Stebbings** [36:59]:

What does the future of schools look like then with that? Is it, like, 10 children sitting in a class with AI tutors?

**Severin Hacker** [37:05]:

I I think that there's still gonna be this this human element of what do I need to learn, kind of guidance and coaching and motivation, and also why should I learn this. And AI will never tell you, like, why you should learn this. It's like, they'll help you learn it, but it's not gonna tell you, you know, why should I learn this? Why is this important?

**Harry Stebbings** [37:22]:

Do know what I wish you had? I'm sorry. You have leaderboards, which is like social status or social mechanics that drive motivation and incentives. I'm sure you've studied this. I have because I'm a loser. And it's financial incentives. And it's actually when you offer someone money, they are much less likely to do something. When you take money away from them, they are much more likely to do it. Basically, the fear of losing is much more than the gain of winning. And I wish that Duolingo had this. For every day you don't do your streak, we'll take a committed amount off you. Say I commit to a £100 a day. Dude, I would do that. Wanna do that? 100%. A 100%.

**Severin Hacker** [37:59]:

You can you can just give me the money whenever. No. No. That

**Unknown** [38:05]:

would be the best I could give to you, but another 100. Harry's just giving me money. Turn off his push notifications, guys. No more.

**Severin Hacker** [38:13]:

Yeah. Yeah. I mean, you know, the the streak is exactly this loss aversion mechanic. Right? So it's like, it's motivating to build up your streak, but it's like, I absolutely do not want to lose my streak. I will do a lot things stories of people who do

**Harry Stebbings** [38:28]:

crazy things to

**Severin Hacker** [38:28]:

Oh, yeah. Yeah. It's great. And then we also sometimes get emails like, you know, I was on this trip to climb Mount Everest, and I couldn't extend my streak. And can you please, you know, restore it or something? And I had no Internet access.

**Unknown** [38:43]:

Do you go, no.

**Severin Hacker** [38:44]:

No. No. We we we it depends. By the way, also when there's you know, there was a power outage in in Portugal and Spain, we proactively extended our streak. So

**Harry Stebbings** [38:53]:

I do want to talk a little bit about how you work because you're fascinating in how you work. I saw in in some of your posts, you said you're not good at finishing the final 20% of a project or a bit of work. That seems problematic, is it? And how do you reflect on that?

**Severin Hacker** [39:09]:

It would be problematic if it was just me and ever or everybody was like me. You need to have complementary skills within the founders, but then also within the whole exec team, within the whole company. Right? So if everybody was really bad at finishing by the way, last 20% are basically details. You need to have someone who's obsessed with details. In Duolingo, that that is Luis. From day one, he was just obsessed with details, and he really cares. And I I I also care about details, but he is an order of magnitude better at that.

**Harry Stebbings** [39:38]:

Has he ever been obsessed on details to the detriment of the company? Dude, we don't need to obsess over it that much. Come on. That's a

**Unknown** [39:48]:

yes, but I'm not sure whether I should say

**Severin Hacker** [39:56]:

You know, he he he mostly mostly works with the PM org, the product org, and they would probably say something like that when, you know, we still have this product review process where every change goes through a review and Luis sits in most of those. So he's He still does. He still does. So that's a founder mode. For him, it's like he's still in most of the product reviews. And I think that's rare for a company CEO of our size, where where the CEO sits in most of the product reviews.

**Harry Stebbings** [40:23]:

Wow. So you decided to delegate that to the product team on whether he obsesses or not. I love that. How do you you said founder mode there. It drove so much engagement and discussion. How do you reflect on it? And when you look at your own style of management and leadership, how do you think about that?

**Severin Hacker** [40:40]:

My role has changed practically every year since the beginning, since when we started. So

**Harry Stebbings** [40:45]:

Yeah. Tanzin told me this. I spoke to him from General Atlantic. I stalked you. I told you. And he said your role has changed so significantly.

**Severin Hacker** [40:52]:

Yeah. Yeah. Yeah. So so early on, I was implementing the thing. I think I was building Duolingo. And then it it it morphed more into code review architecture, how to build the the back end system and and all that, system design. And then it morphed more into management hiring. I think I'm actually quite good at hiring. But then I, you know, there's also other stuff that people wouldn't expect from a CTO. You know, I was the one who pushed for hiring our first product manager. It was actually interesting because Luis, at the time, he's like, oh, we don't need product managers. He had seen some of them at Google and he had worked with some of them. He's like, hey, you know, I don't think they provide that much value and we don't need this. You know, I can do this myself. We just need a bunch designers like, no, no, we really should. You know, like if every single company has a product manager at our size, maybe maybe we are wrong. Let's hire one. And if it doesn't work out, then, you know, we can we can still go with that. But obviously, that was the right decision. Obviously, that was the right decision, so.

**Harry Stebbings** [41:50]:

Hiring. What do you think makes you good at hiring that is non obvious or not typical?

**Severin Hacker** [41:56]:

We have a really strong consumer brand. So literally everyone knows Duolingo at this point worldwide.

**Harry Stebbings** [42:02]:

Given the strength of Duolingo's brand, do you think Duolingo is underpriced today? I think we dramatically underpriced brands. And when you think about global brands, which billions of people know.

**Severin Hacker** [42:13]:

Underpriced in in terms of

**Harry Stebbings** [42:16]:

Monetary value. Like

**Severin Hacker** [42:17]:

Oh, the stock price? Yeah. I I cannot talk about that. But one I mean, it it is just amazing. Do

**Harry Stebbings** [42:25]:

you see what I mean by that? Like, you know, people often think about Manchester United, global brand, for example. And I think it's drastically underpriced given the fact that you have that children in India, Nepal, Brazil wearing a Man U shirt, and it's a $5,000,000,000 company.

**Severin Hacker** [42:39]:

I think

**Harry Stebbings** [42:39]:

at

**Severin Hacker** [42:39]:

some point we were bigger on TikTok than Nike, a brand that has existed for a very long time. We all obviously know Nike. And the other thing that is like I always say is like we run the world's most efficient marketing organization. It's like people think, oh, yeah, know, they're they're big because they, you know, they spend a lot of money on advertising and social media influence and so. By impact, we must be the the the most efficient marketing org. It's a small team. How big is the team? 40 or so. 40 people or so. The reason for it is for a very long time, we had no marketing budget. We didn't advertise nothing, like $0 marketing budget. Because we're also not profitable, we also didn't have any revenue. So it was like, no, we can't spend money that we don't have. So that was like the constraint. But then the constraint was really good at enforcing us to come up with good ideas. We always say the Duolingo marketing, it's it's not powered by money. It's powered by ideas. You know, what do you see in our TikTok channel? So it's it's, you know, having the the the green owl, our mascot, having the costume, and also, you know, kind of doing unhinged things and and and kinda like also making fun of of ourselves in a way. That is, like, why it is so effective.

**Harry Stebbings** [43:48]:

You mentioned about the not having PMs. And actually, if all the biggest companies have them, maybe there's something to it. And it makes me think of this like conventional rules are conventional for a reason sometimes. What conventional rules do you find are conventional for a reason? One. And then what one conventional rule do you find? That's just the way it's been, but it's not right. Got to feel sorry for my other half. I ask questions like this on date night.

**Severin Hacker** [44:16]:

Well, first of all, I I would say you should not always, but every now and then, especially when there's a big technology shift like now, you should question all of these assumptions. You know, how you build companies. I think we're in the middle of this massive transformation. You can build companies with probably 10 times fewer employees. So that convention is completely overthrown, that you need to hire a lot of people. That's one thing. I would say early on, there was like this disbelief that you can run a completely flat organization, right? No managers, no hierarchies, no levels. And that's not really possible. At a certain scale, you need to have managers or layers, or you need to have some sort of hierarchy, career progression and stuff like that. I think that the oldest organization in the world, the the Catholic church that is still around, it's very hierarchical. And I think there's probably some reason for it. Yeah.

**Harry Stebbings** [45:09]:

Does that not go against founder mode and Luis sitting in the product reviews? And when you think about managers on managers and layers and the diffusion of kind of knowledge and power that comes with those layers.

**Severin Hacker** [45:20]:

Yeah. And I think how do you strike the balance, right, between the two?

**Harry Stebbings** [45:23]:

What do you still do today that you don't think you should do? So, like, for me, I let you know, I listen to every single show we do, and I yeah. Yeah. Ten years in. Why? It's because it's my product. I'm not shipping product that is not perfect.

**Severin Hacker** [45:36]:

You know, I'm actually quite good at delegating things and and kinda like self awareness of what I'm good at, what I'm bad at, what I like, what I don't like, what is beneficial to the company and what is not beneficial. So that's also why my role has always changed. And one of my principles is reduce, automate, delegate. Can you walk me through that? Yeah. So the main idea is maybe like once a month, once a quarter. So really think about, does this need to be done at all? What happens if you don't do it? If you just don't do it, is it the end of the world or is there an actual negative effect? So that's number one. And in particular, what happens if I don't do this? And then number two is what you cannot reduce, what you cannot remove. Let's say you decide, okay, this actually needs to be done. Then the second question is like, can I automate it? Now, again, with AI, it's a lot easier. Like, can I automate this part of my job? Can I use ChatGPT to do this report or answer this question? Self injuring. That's very natural. It's like, okay, can we build a tool that does this for me or the company or whatever? And then what you can't automate, you delegate. Okay. So that I I try to delegate to other people in the org. You know, I've handed off most of the day to day engineering to our head of engineering. She's really good with this. I'm now a little bit out of the out of the weeds. I'm thinking more right now, actually, I'm only focused on two things. One is, like, with AI. Like, what's gonna happen? Like, what what does the future look like in our space? What is the implications for Duolingo? What actions do we need to take? That's number one. I probably spent 80% of my day thinking and acting on this, this AI question. And number two is is more m and a. And it relates to the the first question. M and a. Like, you know, what companies should we buy? Where do we invest externally? That's basically all I do right now.

**Harry Stebbings** [47:16]:

Where have you not invested that you would like to invest? Could it could be an M and A strategy where it's like, oh, I wish we'd bought an avatar company. I wish we'd bought an early eleven Labs competitor. I wish we'd integrated x.

**Severin Hacker** [47:28]:

We did make a bunch of acquisitions.

**Harry Stebbings** [47:30]:

How many have you made?

**Severin Hacker** [47:31]:

Four or five.

**Harry Stebbings** [47:32]:

Any lessons from doing that? I remember having Dynasty Silver on from Lightspeed, the payments provider. And I they've done the 18, and there was a lot of lessons there.

**Severin Hacker** [47:40]:

Very interesting. So one insight. And in hindsight, it's it's kind of obvious. You know, they say, like, what what is the best predictor of two founders working out? Like, you know, they're actually they're they're not gonna get into a fight and founder conflict. And the number one thing to look for is have the two founders worked before they started this this company? Have they worked together? For example, Luis and I, we had been working together on, you know, research for two years prior to starting Duolingo. By the way, it's not the same as friendship. You can know someone for a very long time, but they might be very different at work. So prior work experience of working together, that is number one. If M and A, it's the same thing, I actually think. It's do you have prior experience working with this company? Yes or no. So I would say that's the number one advice is like, have you worked with them before? It can also be an investment relationship.

**Harry Stebbings** [48:32]:

Do you do Duolingo ventures? Do you invest early?

**Severin Hacker** [48:35]:

We just made some minority investments, but it's it's it's not a lot.

**Harry Stebbings** [48:39]:

It's always with a view to buy, essentially.

**Severin Hacker** [48:42]:

We have to figure this out.

**Harry Stebbings** [48:45]:

It's a competitive space. I've seen many competitors. I remember, think I came pretty close to doing around in practica. How do you view the competitive landscape today and the distribution of value across it? Is it like Uber and Lyft where Uber takes 90% and everyone else takes 10% and that's Duolingo and everyone else? Is it a much more distributed value kind of dispersion? What does that look like?

**Severin Hacker** [49:08]:

In consumer, it's much more winner take all mechanic. So we've been now running this for twelve years. Every single year, there was one or two companies that grow really fast in in language learning. One or two. Inevitably, they go down again. What happened is they use venture money to grow through paid acquisition. So they spend it on Facebook ads, Google ads, and they go really fast. But the only thing that matters is retention. You can spend as much money as you want. If you don't have retention, it's a leaky bucket. All these people are gonna leave. Now we're gonna see one of those. We're not scared because we've seen this play out a million times. So the one company I'm scared of is one that has higher retention than Duolingo.

**Harry Stebbings** [49:56]:

What's the day retention number that matters to you?

**Severin Hacker** [49:59]:

Of the millions and millions of people that use Duolingo, how many come back tomorrow? All of these correlate with each other. So if your current user retention is very high, you also have very high d seven retention. You also have very high d 30 retention, but you get a data point every single day.

**Harry Stebbings** [50:13]:

Okay. That's absolutely fascinating. Reminds me of Alex Schultz who says exactly the same thing on, like, retention, retention, retention. I do wanna ask before we move into a quick fire. You're European. You are also based in New York. When you look at Europe today, I sit here, and I'm very aware of our fading into irrelevance, which is why we do things like Project Europe. How do you think about Europe? Are we fading into irrelevance? And how do you see that having the perspective of being a European in The US?

**Severin Hacker** [50:40]:

I'm very conflicted internally. I want Europe not to fade into irrelevance, of course. However, if you ask me, a young founder, European founder came to me, like, hey, I have this brilliant idea of how to use AI or like a new model or something like that. What should I do? A 100 go to Silicon Valley. A 100%. Absolutely maximize your chances. And by the way, you know, this is Why? Why? The environment is so much stronger. And, you know, I I can say this because we we built Duolingo in Pittsburgh. We're not a Silicon Valley company. We don't have an office in Silicon Valley. We succeeded despite not being in Silicon Valley. And and by the way, there's also pros of not being in Silicon Valley. But I can guarantee you Duolingo would not have been able to raise any money in Europe. You know, we had $0 revenue for the first five years. Zero. There's no European investor who would have invested. Not in Switzerland, not anywhere in Europe.

**Harry Stebbings** [51:33]:

Do you think that's true today? I'm not being rude, dude. You're a really smart guy. You came out of great institutions. Luis, I know, is a super smart guy too, out of great institutions. There's so much money in Europe now. Dude, I'll give you a term sheet today when you would but just the two of you coming I in with

**Severin Hacker** [51:51]:

think it has changed to a degree, but it's still you need to look at what do these the most ambitious people and and and, you know, the the founders, where do they go? It's a little bit sad because in in York, I see a lot of European founders, and I often think, like, how successful would they be if they had stayed in Europe? And I think for most of them, would

**Unknown** [52:08]:

say, best

**Severin Hacker** [52:10]:

maybe half as successful, or maybe some of them, 0%. And I I I would like to change that. I would like to change it. I mean, that's why, you know, I I invest in Project Europe. We need to change that because

**Harry Stebbings** [52:21]:

How do you think then about Synthesia, about 11 Labs, about some incredible lovable in Sweden being built from Europe?

**Severin Hacker** [52:28]:

They should deserve all of our support. The sad part is also, I think in, you know, in Silicon Valley is like being a tech founder is is really, mostly a good person. Of course, there's also it's it's it's it's inspiring. Right? So so people want to be that. I think a lot in a lot of people in in Europe, you you just like, why are you doing this? Like, why? Why? Or or or they they they look at it as like, oh, yeah. You know, they're just doing it for the money or this suspicion you can't be too successful or you can't be you shouldn't be too ambitious. And I think that that that is very detrimental to the the European startup ecosystem.

**Harry Stebbings** [53:05]:

You shared an insight with me before that I'd never thought about about having offices in San Francisco as a non SF HQ'd company. What was that insight, and how did it lead to your not wanting to have an office in SF?

**Severin Hacker** [53:18]:

Yeah. So Duolingo does not have an office in Silicon Valley or anywhere in California. The reason is when we thought about opening one and, of course, all of our investors, they said, you gotta open an SF office. And we, in fact, did go to SF and we looked at office space. We were this close to opening an office in SF. But before we pulled the trigger, we asked a bunch of founders who had companies that were headquartered outside of Silicon Valley and then opened an office in in Silicon Valley. And we asked him, what do you think? It was a good decision, bad decision. And all of them said, worst single decision ever. And I said, why? And they said, well, you know what happens is it creates this internal funnel of your best employees moving from your HQ to Silicon Valley, which by itself is not a problem. The problem is then they get recruited away by the whatever the hot Silicon Valley companies at the time. You know, like, it could be Airbnb or Uber at the time. Maybe now it's OpenAI or Anthropic. And you basically create a hiring funnel for Silicon Valley, and you you lose your your talent. That was also, like, new to me. And then I was like, no. No. Let's not do that.

**Harry Stebbings** [54:24]:

I love that. I hadn't thought about that at all. And so you will not do an office in SF? Nope. You think I would be more successful if I was in SF? I know that's an unfair question to ask, but it's something that I've always been told, Severin, for years and years. You have to. You have to. Why are you in London?

**Severin Hacker** [54:38]:

As a founder, I would say a 100%.

**Harry Stebbings** [54:39]:

Let me tell you my rationale, and you can see if you think I'm right, you can call bullshit on me. Like, in SF, I'm competing against Peter Fountain, Marc Andreessen, Vinyl Khosla, Eli Gil, the Collisons, Daniel and Nat Friedman. I I rate myself. I buy my product, but that is a fucking hard market. And Marc Andreessen getting you around to his house for breakfast on a Saturday morning and Europe? That's probably two good VCs.

**Severin Hacker** [55:05]:

You know, by the way, so I started angel investing with very similar thesis in Pittsburgh because there's no one other than me and Luis. But then, you know, a lot of those companies eventually moved to Silicon Valley. So but, yeah, that was that was exactly my my investment thesis in in Pittsburgh. But I think as an investor, it's not clear. As an investor and, you know, doing the show, I think it's it's not clear because you this is much less crowded. You can really become the the the top, you know, investor that founders wanna work with in Europe. I agree. But I was explaining this as a as a founder. If you wanna start a business, an AI business, and you have this crazy idea, would you stay or not? I would move. But that's exactly the problem. How can we change that? You know, part of the problem this this is a little non obvious, is part of the problem is it's so easy to move to Silicon Valley. A good degree and you can raise money, etcetera. The US is actually really good at, you know, getting these brains to come to Silicon Valley. In a way, the best thing that could happen to Europe is if The US made it really hard to immigrate for founders. If they made it really hard, if they restricted immigration such that people like me couldn't move there anymore, then I would build it here. And what I would do first, it was like, let's first change the environment here to make it easier for startups to succeed. Right now, there's there's also no no pressure from the industry to change the regulation to, you know, make it easier to start companies because I can just go. I guess, I can vote with my feet.

**Harry Stebbings** [56:33]:

What would you change about Europe? Is it the regulation? Is it the level of capital? Is it the mindset that we tell young people?

**Severin Hacker** [56:40]:

Regulation is is definitely hurting.

**Harry Stebbings** [56:42]:

No great entrepreneur was stopped by regulation, though, Which is like, Travis wasn't stopped by regulation with Uber. Elon with SpaceX wasn't stopped by regulation. Regulation does not inhibit the greatest entrepreneurs.

**Severin Hacker** [56:53]:

Again, I think it depends if there's an alternative or not. Again, as a founder, I can, like, okay. I I can work with the EU regulation on AI, which is some of the dumbest regulation ever. You know, the the the Ottoman Empire, they had when when, you know, they invented the printing press, it's like, oh, this is not good. It's not good for our community. It's not let's not do the printing press. I feel like the a EU AI act is that. Let's not do AI, you know, because there could be negative repercussions or negative side effects or something. It's that dumb. If there was no alternative, then I would agree. By the way, you know, for example, in in in Uber's case and and Airbnb, there's a lot of local regulations. There's actually lots of alternatives. So even if, like, say, one one city doesn't work, like, like New York, this is the regulation, you have 200 other cities in in The US.

**Harry Stebbings** [57:40]:

If you could go back to the early days of Duolingo and do something differently, what would you do most significantly?

**Severin Hacker** [57:46]:

We're pretty open on this. I think that the two mistakes we've made at Duolingo, they were not fatal, but Obviously, $20,000,000,000. I would say the two big, big ones were, one, we waited too long with monetization. So we just didn't take it seriously enough early on, and we were operating under this business model of let's raise more money. Like, our business model people ask, what's your business model? I go, oh, it's venture capital. So and eventually, we did take it seriously. And and, you know, we're very good at at at this now. We have this internal concept of the green machine. It's like, run a lot of experiments, see what works, and then double down. And that's what we did with monetization. It's it's super good now. But we just waited for too long.

**Harry Stebbings** [58:27]:

Was that because of naivety? Was that because of a push for user growth and engagement?

**Severin Hacker** [58:31]:

Yeah. Combination. So it was also like the the investors that didn't push us to monetize at all, which is it was always counterintuitive to me. It's like, why don't they ask for monetization?

**Harry Stebbings** [58:40]:

But I never would because I'd want engagement and I want user behavior and I want habit forming. Don't fucking put a paywall in front of them.

**Severin Hacker** [58:47]:

Yeah. And then, you know, our investors, they also invested in in Twitter and and and some of these and and for those platforms, was always the right decision to just grow users first. Grow users first. So that's what we did. So number one is we knew we could always grow users first. Number two is we knew we could always raise more money. And I think the other one was our mission. Right? So so our mission is to provide the best education and make it university available. For a long time, we didn't know how to build a business model that is compatible with this mission. Right? So for a long time, it's like everything has to be free. But then we realized, no, no, no. What really matters is that we don't exclude people. You should be able to learn everything that is on Duolingo without a bank account. And it's still true today. You know, most of our users do not pay Duolingo. They use the free tier. That's actually another thing I'm I'm very proud of. It's like, it's not just great business, but it's it's a great business with a great purpose. That's also, like, why we probably waited for a little bit too long. You know, we should have started two years earlier. Number two is what we also waited for too long hiring more senior managers. Up until 30 employees or so, it was completely flat. A lot of people from new grad. It was pretty chaotic.

**Harry Stebbings** [59:53]:

That goes against everything everyone says to me on the show. Everyone always eschews, don't hire the senior manager. If they've been there, done it before, the playbook's not transferable. You want youngsters that you bring up through the ranks. They want to be involved more in the weeds and hands on. Beware of the manager.

**Severin Hacker** [60:11]:

You cannot run a thousand person company with all new grads. You need you need a little bit of both. By the way, today, it's still like Duolingo is a very young organization. We still hire a lot of people directly from from university.

**Harry Stebbings** [60:26]:

You mentioned you always knew that you could raise more money. I love that. What was the business model? Venture capital. Harry's like, thank God I still have a job. But when you think about the fundraisings that you did, what was the hardest?

**Severin Hacker** [60:37]:

A series a.

**Harry Stebbings** [60:38]:

Talk to me about that.

**Severin Hacker** [60:39]:

We started as a research project at Carnegie Mellon University. The belief was, oh, this it's these two academics. Luis was a professor, and I was a PhD student. It's these two academics, and they're gonna build something that's not gonna make any money, and they're gonna sell to Google. Okay? And then that that was kind of the belief. And by the way, that that belief lasted until we actually made money. So for, like, five years. The first five years, yeah. They're they're, you know, these, like, these these two researchers and they're gonna build this this thing and they're eventually gonna sell. They're not gonna become a public company or anything. That was one reason. And then this was 2011. We were raised on a prototype and there was a website.

**Unknown** [61:19]:

For Series A?

**Severin Hacker** [61:21]:

Yeah. Yeah. My my co founder, he had two prior exits, so he had a track record. That was actually the the other belief was like, okay, these two researchers are gonna sell to to Google. And number number two is like, even if this one doesn't work out, it allows us to invest in Luis's next next company. So they were basically buying a ticket for the next next company companies. Including the first one, they didn't believe that this was gonna become this big.

**Unknown** [61:44]:

How much was the Series A?

**Severin Hacker** [61:46]:

3,000,000 at 15. Yeah.

**Harry Stebbings** [61:48]:

That was the Series A? Yeah. Yeah. Was. It's a pleasant pre seed today. That's like your friends and family Yeah. Who do a PayPal round. Dude, that is

**Severin Hacker** [61:57]:

We never raised seed or pre seed. This was because we we we had these NSF grants, so we built this project inside the university. So Series A was our first

**Harry Stebbings** [62:06]:

round. Who did that round? And can you take me to the moment when you signed the term sheet?

**Severin Hacker** [62:10]:

Union Square Ventures. It was hard. I think we

**Harry Stebbings** [62:13]:

How many nos did you We may

**Severin Hacker** [62:14]:

have to cut this afterwards, but I think we only had one offer. It was Union Square or back to university.

**Harry Stebbings** [62:21]:

But isn't that amazing, that Union Square, one of the best firms in the world recognized and statistically proven with data, and the one offer? This is what I see so often, though. I don't think there's anything controversial about that. That just shows quality in picking.

**Severin Hacker** [62:36]:

Yeah. Absolutely. Absolutely. I mean, and and they were amazing investors. I know, if any firm What do

**Harry Stebbings** [62:40]:

you think they saw that others didn't?

**Severin Hacker** [62:42]:

Okay. So one thing that was true back then is we did the Silicon Valley roadshow. We actually did get a lot of interest from Silicon Valley VCs at a time, but they all made it a requirement to move to Silicon Valley. That was always the question. Okay. We're super interested. We don't wanna make a deal here, and blah blah blah. When are you moving to SF or Bay Area? And we're like, we're not moving. And then they immediately lost interest. By the way, some of them later invested in later rounds. But they didn't wanna be the first one in a non Silicon Valley company. Yeah. And so Union Square, they didn't care. They said, in fact, said, we're the only investor that doesn't care that you're in Pittsburgh. That is true.

**Harry Stebbings** [63:21]:

Do you think the best founders need investor value?

**Severin Hacker** [63:24]:

No. I would say the best founders do not need investor value. However, I would say investors need to have your back. Absolutely. That is important. You should always try to hire, raise money from the best Tier 1 VCs, even if the terms are slightly worse. I mean, there's again What made you say that? Because so much signaling. Series A was the hardest, but because Unisquare invested. It's like every other investor is like, okay, what does Unisquare do? Because they had this amazing track record and amazing performance. And if Unisquare invests in your company, they will look at it. Really, really, really powerful. Every other round, was a lot easier. That's that's the weird thing. It's like, it's harder to raise 3,000,000 than it is to raise a 100,000,000.

**Harry Stebbings** [64:08]:

I totally see that. What was the easiest round to raise?

**Severin Hacker** [64:11]:

The the the latest ones. Yeah. It was just everybody wanted to

**Harry Stebbings** [64:14]:

invest. Was there a question with you and Luis where you're like, do we think 5,000,000,000 and this is obviously at the time. Do we do we think that's not a bit high? How do you reflect on price and overpricing when you have such demand?

**Severin Hacker** [64:25]:

We were thinking, we like, don't wanna have a down rent. No down rents. Okay. By the way, we also never had a layoff. You know, growing fast, but we were never we never went on a hiring spree or and we never wanted to have a down rent. And the the problem also with with raising a lot of capital at a super high valuation is, like, the expectations become very, very big. Obviously, you're not worth that much at the time, but they all want you to grow into that valuation. Right? So that's why they invest. Oh, yeah. You know, today, you know, if you if you take your ARR multiple or whatever, which by the way, was infinite. The joys of raising their revenue. It's great. So you're obviously not worth that much, but we believe that you're gonna be worth that much a couple of years down the road. So that's one one thing we wanted to avoid. We wanted to avoid a a down round, and we wanted to avoid having an investor that just has extreme expectations that we cannot live up to. That was kind of our philosophy. The other thing I I learned on on on the fundraising is, I thought every deal is custom. Every deal is custom. Like, your Series A is different from my Series A, and your Series B is completely different from my Series B. And what I realized, there's only three possible deals. One is no deal. Doubts. Bad outcome. And that's the default, right? It's like nobody wants to invest. Number two is you get a standard deal. And the standard deal is what most companies get at your stage, the standard Series A deal. I don't know what it is today. About 15

**Harry Stebbings** [65:50]:

to 20% dilution, whatever the price and input is.

**Severin Hacker** [65:52]:

That was basically our deal at the at the time. Right? So you got a standard deal. And then there's, like, the the extreme outlier deal. That's, one or two companies of a generation get that one. Facebook got that one or Uber, Airbnb, they probably got some of those.

**Harry Stebbings** [66:06]:

You see it more and more today, which is actually, I think, brilliant rounds for companies where they raise, say, a 100,000,000 on a $2,000,000,000 price. And you're like, wow, a 100,000,000 is a lot of money to bring into a company financing wise, but only diluting 5% is a small amount for quite a large and significant amount to bring in. I think they're good rounds to do for companies.

**Severin Hacker** [66:26]:

Yeah.

**Harry Stebbings** [66:26]:

And so those are the three types?

**Severin Hacker** [66:27]:

Those are the three types.

**Harry Stebbings** [66:29]:

Did you do the third type?

**Severin Hacker** [66:30]:

We never did the third type. We always got pretty much a standard deal. I think the the last couple were more competitive. And, you know, by the way, we could have raised a lot more at higher valuations, but we didn't do it.

**Harry Stebbings** [66:40]:

Who was the most helpful investor?

**Severin Hacker** [66:42]:

Uniscare was great. Bing is actually great. You know, Bing is is is a is a rare type of investor because he is very product minded. He uses the product, and he gives us a lot of feedback on the product. He's obsessed with with product. Most investors are they're more like business business types and like, okay, investment and, like, you know, return and EBITDA and and and all that. And Bing is is a very different type of investor.

**Harry Stebbings** [67:07]:

And going into a territory, you might go, Harry, wave the white flag. Do you like being public? I have a new theory that why would anyone go public today when if you have a consumer brand, you never need to? And what I mean by that is if you're the Collisons, if you're Ali at Databricks, if you're Elon at SpaceX, you don't need to go public today. The extension of private markets is so significant that there's just no need. If Duolingo were private today, would you go public?

**Severin Hacker** [67:35]:

Yes. So I I I I'm I'm in in the camp of, yes, you should go public. It's actually the better thing for the ecosystem. In fact, I believe there should be more European companies going public because In The US?

**Harry Stebbings** [67:48]:

So

**Severin Hacker** [67:48]:

It doesn't matter. Doesn't matter. As long as, you know, it kind of flows back to the European ecosystem. But for Duolingo, it's been a great journey, actually. Going public, bringing the Nasdaq, the Bell, career highlight. By far, it's like it's it's incredible. You know, I I felt like you know, I grew up in this small town in in in in Switzerland, made it to The US, got a PhD, started this company. It's my first job. I've never worked anywhere else. And then this became this huge hit, massive audience, millions and millions of people loving the product, great purpose, unicorn, Decagon, public company. You feel like it gives you this achievement. It feels like you won a big tournament. You're not done. Right? It's not done. It's not and it's not

**Unknown** [68:29]:

It's a milestone. It's not a finish

**Severin Hacker** [68:30]:

line. It's not and and I think that that's also really important that you don't think it's done. Right? I'm still with the company. Most founders that are not CEOs, they leave after four or five years, you know, once they're fully vested or at least when they when they get acquired or IPO. I'm still with the company. The one thing I think is, yes, these private markets are now much, much, much bigger, and there's lots of pros of staying private. For us, before we went public, our finance team, for example, was two people. Now it's, I think, 25 or so. So there's a lot of overhead. And the financial markets, they really care about predictability. So in fact, I feel like they care even more about that than they care about the actual profit margins or growth or whatever. They really care that you can't predict. And I think that the way they see this is, like, if you can't predict the future of your business, you're not a good operator. You probably don't understand what drives your business or they kind of, like, lose trust in the in the management team. So something like that.

**Harry Stebbings** [69:24]:

Do you not think that's the biggest weakness now more than ever before? Because this is a time where there's no predictability, where models can change, where deep sea can come out and completely change how we think about, let me, China's approach to AI or open source or whatever that is. And actually, respectfully, I don't think we can predict very well. To you now doing M and As, investing, thinking about the future of AI, God, that's negative to place a premium on predictability.

**Severin Hacker** [69:51]:

Yeah. There's so much uncertainty in the market right now. I think right now, if if you're a private company, there's a stronger argument for staying private. But for the very, you know, the much more mature businesses like Stripe, I think you want to go public because you create this liquidity for your employees. And yes, there's like other ways to do it and you can do secondaries and all that. One thing I am also proud of is that, you know, we hired all these people. We made lots of millionaires. That money flows back into the ecosystem. Now it flows back into, you know, the Pittsburgh ecosystem and maybe some of it, the New York ecosystem. But if you had more European companies, Spotify, go public and and then making lots of employees make some money and then maybe start own companies, that is that is, like, what we need. That's that's what we need in Europe.

**Harry Stebbings** [70:36]:

I agree. I just don't know if that mechanism is IPOs. I think you need a consumer brand to have that extension in private markets. If you're a boring b to b company that does, I don't know, whatever no one cares about, you kind of have to go public because there's not, like, appetite, I don't think, on the later stage demand in the private markets. But, like, Duolingo could stay private today longer, and there's so many different ways of getting share buybacks. There's so many people who want to have that late stage secondary access. I think you can do it. I think that's a big question for the next few years. I think the other big question is, like, Deliveroo. Deliveroo sold for 2,900,000,000. It was priced at 1,500,000,000 on the UK stock exchange. It's a $1,400,000,000 delta in how they value a company. Mega. Listen, dude. I wanna do a quick fire. I could talk to you all day. What's the biggest near death experience with Duolingo? Is that like a day where you're like, oh my god, that was the hardest day?

**Severin Hacker** [71:24]:

It's not a single day, but it's the first five years we had. We're very confident. When you said five, I was

**Harry Stebbings** [71:31]:

like, five days?

**Severin Hacker** [71:32]:

Five five years? Oh my god. Yeah. Yeah. We just didn't know how to find a business model that aligns with our mission. It was it was hard.

**Harry Stebbings** [71:39]:

What's the best angel investment you've made and why do you think?

**Severin Hacker** [71:42]:

I'm not a good angel investor.

**Harry Stebbings** [71:44]:

Why?

**Severin Hacker** [71:44]:

There's no route between being a good founder and a good investor. Ultimately, they're different things. First of all, the the investment cycle is ten years. Right? So versus as a founder, at least early stage, you get data points every day. You you can learn. The feedback loops are so much faster. I think I'm better with the the fast feedback loops than the ten year investment horizons. I've had a few successes like a 10 x or something. But

**Harry Stebbings** [72:07]:

You've had a few 10 x's?

**Severin Hacker** [72:09]:

Yeah. Yeah. That's

**Harry Stebbings** [72:10]:

pretty rare. You know? So

**Severin Hacker** [72:14]:

I I I would I would not consider myself In an

**Harry Stebbings** [72:16]:

investor's game. What do you hear a lot from investors that you're like, really?

**Severin Hacker** [72:25]:

So one thing, they they ask this question, like, what is the secret sauce? Why is tooling so successful? And they look for an answer that is like a one word explanation. And you can tell when you give them the actual answer. They're disappointed. They wish the answer was it's a streak. That's that's the secret sauce. You know, it's this one mechanic. That's why we're so successful, and we we invented it or whatever. We maximize it or whatever. Or it's it's the leaderboards. Or it's like, oh, we're we're so good at, you know, like, this particular market. It's like it's it's like Brazil. That's that's a secret sauce. We we figured out how to crack Brazil. And, you know, like, whatever. Like, they they want an answer like that. Then Luis keeps telling them the true answer, which is it's running thousands and thousands of AB experiments. The streak mechanic, for example, you know, we added it. That was one experiment. But then we've probably run 300 experiments fine tuning the streak mechanic, and that's where you get the gains in retention. And that's what ultimately drives the growth of Duolingo, which, you know, is still super fast. Like, we're still growing so fast. The the green machine is like is like that what I mentioned before is like we run a lot of experiments. This is also true for marketing. It's not AB experiments, but it's more like, let's try this on TikTok. Let's try this on Instagram, and then double down on the stuff that works. And that's it. That's the secret sauce. It's it's the process. It's it's not a single feature.

**Harry Stebbings** [73:48]:

The thing I find hard with that process, though, is, like, the compressed timeline on outcomes. And what I mean by that is content's a really good example. It takes time to know if content works. And so you have to do things with no obvious gain in the short term for compounding long term advantage. Does that make sense? It's almost a bit like the gym. You don't gain muscle day one, day two. Week one, you'd be like, Harry, quit this. This AB test is failing. But three months in, it shows.

**Severin Hacker** [74:14]:

I would agree with that. I think there's like the trap you can run into is you only run tiny experiments, right, like on on your purchase page or you you run these tiny experiments on on copy or something. And I think it's very important that you have your portfolio of changes. So you have lots of low risk, small changes, but you also have some big changes. And a big change could be adding chess or adding math. And that that's how you stay innovative and relevant. Otherwise, you end up in a in a local maxima where, you know, you can't get that because you optimize yourself into that.

**Harry Stebbings** [74:47]:

What have you changed your mind on most in the last twelve months?

**Severin Hacker** [74:50]:

AI and the impact of it. I've gone back and forth on basically any of the fundamental questions like, is it gonna change the world? Are we gonna have more engineers or fewer engineers? One thing I think that gets lost in the conversation is that, okay, let's assume AI really drives productivity gains. We all become more productive. You become more productive. I become more productive. Everybody we work with becomes more productive. Let's say 30%. Is that good or bad?

**Unknown** [75:17]:

Good.

**Severin Hacker** [75:18]:

That's great. You know, one of the big problems we have is demographics. We all need to become more productive. We don't have enough kids. Then, how are we going to finance our welfare systems? How are we going to finance our governments? We need every single productivity gain we can get. In The US, there's this huge deficit. There's all the debt. But if you can grow the economy 10% year on year instead of 1% or I guess right now we're in a recession. But if you can grow it 10% or more, all of these problems will go away. It will really be an age of abundance.

**Harry Stebbings** [75:53]:

Will we have AI friends in the future more than normal friends?

**Severin Hacker** [75:57]:

No. That I don't believe. No, I think the human to human interaction, the value of that will go up significantly.

**Harry Stebbings** [76:05]:

Why?

**Severin Hacker** [76:06]:

There's gonna be value on verified human, even if it's not as good. So for example, in the art world, I believe that art that was made before 2022 is gonna increase in value because it's verified human. You know, Picasso, we know it was Picasso.

**Harry Stebbings** [76:23]:

But there wasn't Sam Altman masquerading as his Exactly. Who's the most underrated founder in AI right now?

**Severin Hacker** [76:30]:

We talked about Decagon. Think that it's an amazing company.

**Harry Stebbings** [76:33]:

Whose life do you secretly admire and why?

**Severin Hacker** [76:36]:

This is Naval Ravikanth quote. It's a nice second. The true measure of intelligence is if you get out of life, what do you wanna get out of life? By that definition, I'm maybe 80% successful or intelligent.

**Harry Stebbings** [76:50]:

What do you not have that you want?

**Severin Hacker** [76:52]:

I have an investor friend. I'm not gonna share who it is, but but I feel that guy has kind of figured it out for himself.

**Harry Stebbings** [76:59]:

What do you not have? You said 80%. What's the 20%?

**Severin Hacker** [77:02]:

You know, one one thing I would say is one of the reasons why I said yes to this podcast or why I wanted to be on this podcast is I feel like I'm reduced to just Duolingo. My identity is Duolingo. I'm founder of Duolingo. Every introduction, right, starts with, oh, Severin, founder and CTO of Duolingo. And I feel there's much more to me, to my personal my identity than just Duolingo. That's the other 20 that I have not really explored or haven't been able to share.

**Harry Stebbings** [77:31]:

I think the hardest thing is identity is tied to company. And when your identity is tied to your company, the performance of your company denotes the happiness of yourself. I have this. I've only ever had one job, which is 20 VC. When we're not doing well, either fund or media company, I'm depressed. That's hard.

**Severin Hacker** [77:47]:

So true. And I have talked to many founders who left their their company, and there's like, I would say half of them fall into depression because their identity is the company. And, you know, another thing, I don't know if if if you noticed this, but Could you ever leave?

**Harry Stebbings** [78:03]:

Don't laugh, but when it is so tied to you like yours is to you and mine is to me, eleven years, yours is even longer.

**Severin Hacker** [78:09]:

The thing is like, just I still enjoy it so much. And sometimes I wish like I, you know, hated my job and it would make it easier to to leave and do something else. But I still really enjoyed another point. It was like when early on, and it's still somewhat true, when the employee leaves, quits, it's like a punch in the gut. It depends which employee. Sure. Sure. Sure. Sure. But, like, it's like, why did I leave? What did I do wrong? Do they not believe in this company anymore? You know, I I I think about this for for weeks.

**Harry Stebbings** [78:38]:

Neil Mehta asked a brilliant question from Green Oaks. He likes to go into a company and ask the employees, are your best days ahead or behind you? When I ask you that for Duol, why would you say they're ahead of you?

**Severin Hacker** [78:51]:

Well, thanks for assuming that there's a lot ahead of us. As I said, going back to the very beginning of the conversation, it's like the mission is this, to provide the best education, make the university successful. But now I think we can really do it. You know, we can really build an AI tutor that is as good as the best human AI tutors. And we can do it for everyone, not just the rich. And that will change the world. I really think this is the moment. We had to wait for ten years to get to this stage. But I think this AI wave is gonna really enable us to do this.

**Harry Stebbings** [79:22]:

Final one on public market caps and stuff. I believe you probably, I don't know ownership structures, whichever we should do. I believe you'd probably be a billionaire technically. So well done. My question to you is, do you think about money? And how does money and happiness correlate or not correlate for you?

**Severin Hacker** [79:41]:

Yeah. And I've also spent a lot of time thinking about this question. The weird thing is I wish I hadn't. You know, like I feel like it's not a productive, you know, am I happier now than I was when I was a grad student? And is it because of because the money or is it because of the success or is it because I know myself better? And it is very hard to disentangle all the different factors that go into happiness. I would say, though, that there's different levels of wealth. And they actually did this study, I think, with post exit founders. They asked them how much is enough? How much is enough? When do people switch their opinion? Okay. Now this is enough. The the answer they got was do you know what the answer was?

**Unknown** [80:20]:

$20,000,000. No.

**Severin Hacker** [80:22]:

A 100,000,000.

**Unknown** [80:23]:

100,000,000? 100,000,000. Jesus. Inflation is real. Woah. So so so that's a that's a long long.

**Severin Hacker** [80:28]:

Was the the answer of those people. It's kind of like when you stop, I guess, worrying about it because it's so much. I mean, it's so much. I I want Did

**Harry Stebbings** [80:38]:

you have a number when you started?

**Severin Hacker** [80:39]:

No. I I I I want this is a missionary company. And tweeted this recently. It's like, think that the counter intuitively, the founders that start with a purpose and a mission and are not focused too much on money end up usually doing better. Maybe people don't give them credit, but but I do because I'm in the same situation. I I think Bill Gates or or Marc Zuckerberg you know, Bill Gates wanted to put a computer on every desk. And then he realized, okay. Well, how do I do this? And one way of doing it or maybe the only way of doing it is starting a company. They're not like, I'm gonna start a company to become rich. That's like kind of the reversing. It's like you have to think like, okay, what change do wanna see in the world? What do people want? How can I help other people? That's ultimately in an ideal capitalist environment that should drive value. And I do believe that that that's, you know, why why these companies got started and, you know, Mark Zuckerberg maybe, you know, connecting people.

**Harry Stebbings** [81:33]:

What do you think was the biggest needle mover for for your happiness? And because for me, there's like, pay rent, easy. I can live life like I kind of want to, but I'm not loaded. I still kind of need to work, but I'm not loaded. Probably a couple of million. There's the 10 to 20, which is like, I'm pretty good. Adding another 80 is not gonna change much, actually. I still have a super nice house and I'm good. And then there's the 100. I can take jets when I want to.

**Severin Hacker** [81:58]:

I do believe I'm, you know, happier now than not by a lot. I was pretty happy in my twenties too, but but a little bit. I think there's this this sense of achievement and it will never go away. Even if Duolingo collapses tomorrow, it's still a good thing. It's like, you know, I tried, you know, and it worked out for a while and maybe goes away. But I would still have this this sense of achievement. And in other things, like, you know, when when people just share their Duolingo stories or when I, you know, I was in Venice a year ago or two years ago and they have the the bus is a boat. Right? So I took the bus on the canal and next to me was this woman, like, literally, like, sitting next to me was this woman doing Duolingo. And I was just looking at and I was like, you know, if she knew, you know, I was sitting next didn't Did you say anything? No. Said nothing. I was just for ten minute ride, she was doing her Duolingo, and I saw, like, how she used it. And I was just like, this is amazing.

**Harry Stebbings** [82:57]:

Does

**Unknown** [82:57]:

money

**Harry Stebbings** [82:58]:

change marriage?

**Severin Hacker** [82:59]:

Wow. I thought it was gonna be the the quick run. It is I I think the answer depends on your answer of the question is, does money change people? Because if it changes people, it'll probably change marriage. So I assume the answer is yes, but it depends on the people. Did it change in your case? A little bit. So so we met before, you know, I was successful. In fact, my now wife, at the time girlfriend, she for the first couple of years, she she made more than me. So we kind of reversed that. And she knows me from when I wasn't very successful, when I was just a dude with with some crazy ideas. I think it's different than if I had to date someone now because, again, everybody like, everything starts with this. Oh, cofounder of Duolingo. And then super successful, everybody well, everybody knows Duolingo. My CEO like, my my cofounder is obviously way more famous. But it's hard to remove that. So in fact Who's

**Unknown** [83:56]:

done that?

**Severin Hacker** [83:57]:

I I wish you could go into like, you could switch. You know? Like, you could go into incognito mode, like, in in the browser. It's like, you know what? I'm just gonna put on glasses and it's like, I don't wanna in fact, you know, people sometimes yeah. Always ask you, what do you do? And when I'm in a in a in a room where I know they don't know who I am, I sometimes give a wrong answer. Say, you know, I used to say like like an Uber driver. Of course, nobody nobody really believes that. Or I say, like, I'm a software engineer at a tech company. Or I say, I'm a patron of the arts, which is not entirely untrue. Because I know how the conversations go when I tell the truth. There's a next question is, how many languages do you speak? Next question is, how did you start Duolingo? You know? Why has

**Harry Stebbings** [84:42]:

it been so successful? Was it Brazil?

**Severin Hacker** [84:46]:

And the next question, like, if they're a user, it's like, oh, I love I love your, you know, my streak is this long. And and that's actually the one if they're actual users, it's much more interesting to me.

**Harry Stebbings** [84:56]:

A final final one, I promise, but an important one. Everyone has said, including Warren Buffett, the most important thing in life is partner selection, who you choose to spend your life with. I spoke to everyone on your cap table, really, and they all said about the special relationship you and Luis have. I'm intrigued. We mentioned marriage there. Whether it's Luis or marriage, I don't mind really. What would be your biggest advice on partner selection?

**Severin Hacker** [85:18]:

So for for founders, I think it's it's a little easier. One thing is like, have you worked previously with this person? The key is worked, not hung out at the bar. I was like, have you worked with this person prior to starting this company? And Luis and I, we had worked together for two years prior. So we kind of already knew how we work and what we're good at, what we're bad at, priorities. And we actually had this very early on. Had this because I went from he was my superior. He was my PhD advisor and I was his student into an equal relationship where we're equal co founders. And I was like, cannot trust this guy. What if he just fires me after a year? So, you know, we we I wrote down a little contract between the two of us. I still have a copy at home where we outline exactly like, you know, this is how we're gonna make decisions. It's it's like this short. This is how we're gonna make decisions. This is, you know, Luis's responsibility. This is Severin's responsibility. And we both signed it. And I think that avoid a lot of conflict. And and the other thing that's interesting, I think a lot of the conflicts happened in the first two years. What was the

**Harry Stebbings** [86:22]:

biggest conflict?

**Severin Hacker** [86:24]:

Probably what to build the product itself. There were conflicts there. And then also on hiring, not hiring, firing, etcetera. There were a bunch of conflicts as well. And then I think we had it all worked out. And it's amazing. I only meet with Luis every other week. And sometimes the meeting lasts ten minutes. We go into a meeting, like an exec team meeting, and I have a pretty good language model of, like, what he's gonna say or how he's gonna react to a certain idea without because we had been working together for, you know, the first six, seven, eight years in the same room every day for fifty, sixty hours a week. I know him better than probably any other person other than my wife and vice versa.

**Harry Stebbings** [87:05]:

Your wife, biggest advice on partner selection romantically?

**Severin Hacker** [87:09]:

I would say, do you enjoy talking to this person?

**Harry Stebbings** [87:12]:

You enjoy talking to many people?

**Severin Hacker** [87:14]:

Yeah. But but I think it's like

**Harry Stebbings** [87:16]:

I call it the Tuesday night test, which is like in five years time, will you be excited for just you and them to sit down and just talk? And there's very few people where five years time Tuesday night, it's a cold February evening in Pittsburgh or London or wherever you are, if it's like, hell, yeah.

**Severin Hacker** [87:34]:

Yep. I think that's one thing. And I think then also, like, mutual support. You know, do they support you in in what you do? Or is there a competition? I think competition you don't wanna have competition in in any of these relationships.

**Harry Stebbings** [87:46]:

This has been one of the most wonderful, wide ranging discussions I've had. I'm so pleased we got a chance to do it. Thank you for being so open. You have been amazing. Alright. I mean, it shows like that where I remember why I love what I do so much. I love the natural and authentic conversation at the end there. If you wanna watch the episode, you can find it on YouTube by searching for 20 v c. That's two zero v c. But before we leave you today,

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