How I Built This with Guy Raz - Advice Line with Luis von Ahn of Duolingo

Episode Date: May 1, 2025

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

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It had tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city, made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.com slash host. Hello and welcome to the advice line on how I built this lab.

I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show who will have. help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice memo at hibt at id.wondry.com and make sure to tell us how to reach you. And also don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest

entrepreneurs. You can sign up for free at guyraz.com. And we'll put all this info in the podcast description. All right. Let's get to it. Joining me this week is Luis von On. He's the co-founder and CEO of Duolingo. Luis, it's great to have you back on the show. Great to be here, Guy. You were first on how I built this back in 2020. We will put a link in in the podcast description for any of you who have missed that episode because it's so good. Really, one of the best ever. In that conversation, we talked about your childhood in Guatemala, like your early love for math. One of the, I think a lot of people were kind of stunned to hear about this. You were instrumental in helping to develop a technology called CAPTCHA, which is, of course, those annoying sort of characters

that you have to read to confirm that you are a human. Thank you for protecting the internet. You became a professor at Carnegie Mellon, and then you got a MacArthur Genius Grant. You worked at Google for a bunch of years. And then you walked away to start Duolingo in 2011. And we told that whole story in the show. It's such a good story. Your company, Duolingo, has just exploded since we spoke. I think about a year after our interview, you guys went public in 2021.

Correct. And today you've got a market cap of like $13 billion. And you're still in Pittsburgh. That's right. We're still in Pittsburgh. It's just an incredible story. Luis, before we get to some of our callers, I'd love to just kind of catch up on where we left off. Because I think when we spoke, Duolingo was valued like a billion dollars, of course, is already amazing.

As I mentioned now, about 13 billion. You've grown so much. You've got 900 employees. Tell me a little bit about how you had to adjust as a leader of a rapidly growing, expanding company and brand. What's changed for you? Yeah, I mean, every year of my job is a little different, which is something that I like. I mean, we started almost 14 years ago. And since we last spoke, like you said, we became a publicly traded company that makes my job a little different.

First of all, I have to be a lot more careful about what I say about the future, which was not the case before. I've had to really learn that. For us, I think it's been really positive being a publicly traded company because our stock has done well. But really, I think it has also made us operate a lot better. I like to use this analogy that, you know, when you're a private company, nobody's really looking at how you operate. So it's as if you had a house and never had any guests. Usually that means that you're not forced to clean all that much.

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

One of the things I recently in my newsletter I wrote about the idea of sort of ignoring the shiny new object. And in your space, there's a lot of competition. There's a lot of companies that came after you, some of that were around before you. And I wonder how much you, I mean, of course, you guys have a pretty strong position, if not the dominant position in this space. But there's obviously AI is coming in play, and that's going to be really significant,

increasingly significant. But the other thing is some of these competitors also offer video with a live person, for example, or different ways of learning language. Do you guys look at that and say, well, we should really compete in all of these spaces, or do you sort of tend to focus on what you're doing well and you kind of stay in your lane?

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

So that's one thing. But the other thing is what we mainly compete for is time. Yeah. So for us, what we look at is, we look at what Instagram's doing. We look at what mobile games are doing. We look at what TikTok's doing because those are real competitors. And the realities, we are losing.

We are losing against TikTok and Instagram. They are significantly larger than we are. What we want to do is we really want to teach you a language and we want to teach it to you well. Now, interestingly, with life humans, by the way, this is one of the funniest things that I've ever seen. When you talk to people who are learning a language and you ask them, what do you want to do? The most common answer is like, yeah, I want to talk to life humans. That's what they tell you. Yep.

And invariably, the answer is no, not right now. It just turns out that talking to people in a language that you're not comfortable with, like 90% of people don't want to do that. I think that's so interesting. It's an important point because you can apply this across categories, right? Which is to say that market research, especially sort of, you know, surveys are not always reliable. And I make this, I've made this analogy before. When I first, you know, sort of came up with the idea for this show and I made a couple of pilot episodes, we ran it through panels. of people and universally hated the show.

This is like 10 years ago. I hated the show and yet here we are, right, 10 years later. And I think that the point is so right because people will say, yeah, of course, I want a person, but when it comes down to it, they want the convenience of being able to interact with a language learning platform whenever they want. And

it just makes a lot of sense that you get this kind of data, but your response is not to go and do it, but to say, you know, actually, we don't think what people are telling us is actually true. Yeah, I mean, this is in the history of Duolingo, this has been one of the most amazing lessons that I've had.

Our users, or users in general, people don't really know what they want. They'll tell you all kinds of things, but you have to look at this, not their words, but their actions, like their behavior. Just turns out people prefer playing mobile games than talking to other people. They may not tell

you that, but it just turns out that's the case. Luis, let's take some calls and find out what people need help with. you think. Let's do this. All right, let's bring on our first caller. Welcome to the advice line. You were on with Louise Von On from from Duolingo. Tell us your name where you're calling from and a little bit about your business. Hi, Guy and Louise. My name is Steph Crim and I'm Colin Ann from Chicago, Illinois. I am the founder and the keeper of a business called Good Things Vending. We take full-size snack vending machines, refurbish them, customize them, and stock them with local artwork,

vintage and nostalgia items, and try to bottle a little bit of all that our city has to offer in an automated vending machine. That's awesome. Steph, thanks for calling on and congrats on starting this business. Because, you know, now vending machines are getting, at least in the U.S., they've been cool in, like, Asia for a long time, but they're getting cool to go to airports and you see people selling as electronics and cosmetics and cosmetics and cupcakes and all kinds of things. So these are just vending machines that might ordinarily sell like packets of lays. But you've refurbished them and you can get like one-of-a-kind things in them? Yeah, exactly. So I very much agree with you.

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

They're all around in the Chicago area right now? Yes, yeah. So we launched the first one in 2021. And now we are up to seven machines with the eighth one going out next week. And are they inside? Like, where are they located? They're in other businesses. So I am utilizing the community that's already been built around a spot.

So I want to put myself in places like the popular local brewery or the conservatory around the corner. We love hospitality spaces. We love city landmarks. We love community buildings. That's awesome. And tell me a little bit about how much does it cost? Like, does each product cost? So right now, everything in the machine is $20 and under.

The goal is to keep it super accessible. But it's definitely a higher price item than you usually see in a vending machine. Bigger profit margins. still economy of scale. It's still about the number of machines that I can get out there. But last year, for the first time, we broke $100,000 in gross revenue. And in quarter one of 2025, we're up 53% from quarter one of 2024. And that's without factoring in additional revenue streams, we just have a new website launch with a web store that will eventually have some of these artist goods on it, exploring some of those other areas. Awesome. Okay, before I bring in, Luis,

Tell us what your pain point is. What's your question for us? Absolutely. So there's been a growing interest, both in vending machines and specifically in the model that I've been building. And as good things vending grows, we're receiving opportunities that exceed our current capacity. How do we decide when to say yes and scale quickly, hiring and expanding to meet demand versus saying not yet risk losing those opportunities, but maybe taking the time to build more sustainably? what framework or decision-making strategies would you recommend? All right, good questions. Luis, I'd love to bring you in. First of all, any questions for Steph?

This sounds really interesting. These are artists. Some of them may have social media presence. Do you use their social media presence to boost up where the machines are, et cetera? Yeah, that's, I mean, a big part of it is community weaving. The idea is that we can all amplify each other. If you know that this brewery gets folks who are like loving Chicago things, and then you put objects for makers who are making Chicago things,

it sort of has a natural harmony between those audiences and there's a desire to amplify each other. I will say that the vending machine part of it has done a lot for us on social media. We had a few natural videos go viral, which has brought a decent-sized audience to us. So now we're getting to kind of platform artists as well, which has been really joyful.

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

Yeah. Steph, what, tell us a little bit about your goals here. I mean, you started this in 2019. You had the first machine in 2021, and now you're approaching eight machines in Chicago. But what's your, if you could, like, look out in five or ten years. What do you want this business to be? Yeah. I mean, it's such a good question and one that I wish that I had a clearer answer to.

I built this out of a love for community and art. and vending machines and didn't really think that it would catch this kind of wave. But I'm not super attracted to the idea of franchising, like for what that would mean for my life, for how I would have to operate. But there's so much interest in folks who want to sort of take this business model and bring it someplace else. I think for me, I want to share the knowledge

and I'd love to build a business that can sustain here and create exposure for artists in Chicago. I don't want to be doing the biggest possible thing. I always want to be able to be connected to the community that got me involved in this in the first place, which is the creative community, the hospitality community. So whatever comes next, I'd like it to be something that allows me to have the job that I want selfishly. You know, I want to be able to enjoy putting weird stuff in vending machines. Yeah. Luis, I'm curious to get your take on this because I don't think that this is an either-or choice.

I think you could. I think that she could do both, you know, work with a community, an artisan. and sort of the hospitality space, but still think about this as a business. I mean, this is a model that is replicable. It's not easy to replicate because you have the connections, the contacts, and you're creating these amazing, beautiful machines with great things in them. And to me, it seems like an interesting thing to think about if people are coming to you and saying, hey, Steph, I want to do this in New York.

I want to do this in Los Angeles to say, okay, well, let's set up a division. I'll help you set up a franchise of my business, and you can take it there. Anyway, Luis, I've been curious to get your take on that. Yeah, I agree that. It really makes you operate pretty differently and understand things better if you have a second city. You know, this is true with restaurants. This is true with a lot of things. As soon as you open your second city, you kind of start understanding a lot better what your business really is.

You know, what is just Chicago and what is your business? So, you know, I would really recommend that if it's taking traction. Another question that I have is, are you working on this just by yourself? I mean, I have one contract worker, Dave, who's been incredible and, like, restocked machines for me. But I think my hesitation with going to other states is that I really think that what makes good things vending exceptional is that really earnest connection to community. There's, like, also tons of locations in Chicago that want. Like, I can't keep up with the want in Chicago. That makes a lot of sense.

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

It's way better than the other position where nobody wants your machines. Agreed. So that's an excellent position. But, you know, you can really start trying to do things when there's scarcity in your end. You can say, like, well, okay, you know what? I have so many requests that at this point, I'm asking that if you want the machine in your place, you know, you can really start. You got to pay, you just got to pay a thousand bucks. I'm making up, I don't know, if $1,000 is the right number at all. But you got to, you got to pay this to locate it there because there's just too much demand. Or there's like a wait list.

And then you can even make it a whole thing. You know, it's just like it just reminds me of kind of fancy restaurants where all these people are trying to vie to really get themselves in the wait list or whatever. So you can, if you have a scarce resource, you can really do that. I'm going to double down on this, Louise, because I think this is exactly right. I think you should focus less on what's in the machines right now for a brief period of time and focus more on how you can expand the machines, right? And so you mentioned that you have somebody working with you part time and, you know, your revenue is still fairly modest. So I imagine that you might be nervous about bringing on somebody full time. There may be an opportunity to try something a little bit unorthodox here, which is, you know, maybe look at some of the business schools in the area, Northwestern or Chicago and see if there might be somebody,

from one of those places who would be willing to come and work with you for, you know, a percentage of your business to help you grow it, knowing that they weren't going to make a lot of money initially, but that there's a spark here. That's the first thing I would think about doing. The second thing is I would really look at the data. Luis mentioned, I mean, his business is so data driven and so many decisions are made or not made because of the data they're getting in. I mean, I would think about adding artisism. food, snacks that other people in Chicago are making. I mean, try different things out and see what's working, because I think that you have an opportunity to really measure, you know, what kind of sticks with people. I think we have food in one of our machines. It was a location request. Something that we're definitely, like, looking to expand a bit more.

I will say that one of the advantages of my product spread is that it's a higher profit margin. Nothing expires, which is massive. So I think that there are some things that make me hesitate on food, like, logistically, but we are finding that there is some interest. But, yeah, I think, like, moving in the direction of trying to find folks who maybe have that business education would be very helpful. And also, as Luis, as you mentioned, I mean, the idea of getting people who want these machines in their stores to help finance them, right? I mean, you think about how, you know, a lot of times when developers are looking to attract a great store, you know, like an Apple store. store that's going to attract a lot of people, right? Or a chick-fil-A or a brand that just brings a lot of

foot traffic, they will give those brands, those businesses, massive deals because they want to attract other businesses into that mall or whatever it might be. You might want to think about what you're doing in a similar way. I mean, you are a premium product that's fun. It's interesting. You're attracting makers and, you know, people who go to maker fairs and also startup people. And when they know, when they see your vending machine in a cool bar or a shop, they know that that is a cool store, which already has an impact on the, you know, sort of the perceived value of supporting that place. It's very interesting.

I, like, from, it sounds like less from a monetary direction, like not getting them to buy in as a source of income, but more as a prestige component. Like, you got to buy in if we're going to move. Is that the thought? Can I interrupt with one thing that just kind of reminded me of something? When we started Duolingo, I can best describe us as communists. We did not want to make money. Nobody in the company wanted to make money, and it was thought of as an evil thing.

The reality and what we have found is I think we're still like that, but we have found that a lot of times with things like when I said, like you can get people to pay $1,000 to put your machine there, et cetera, is not necessarily so much about making money and it doesn't have to be a bad thing. It's like that can fund the rest of your operations to actually. let you have more of these machines, but also if these places are willing to put in the money for something, that means they care. And that's a way to suss out how much this place actually cares about having your machine versus a place that just doesn't care all that much.

I think that would give you better results. So it's not necessarily about like we're just, or at least I'm not necessarily trying to tell you, oh, just squeeze everybody and make as much money as possible. It's not like that. And I think I'm noticing a little bit of early duolingo in in your thinking, which we were like, no, no, no, don't worry. I'm not really trying to make money. I listened to your episode, and I was like, when does being precious get in the way of the goal? Like, very much I feel that way.

But I think some of it is on a practical level, too. Like, if somebody bought in on a machine, I think that a lot of our best locations, because being put in a good location makes more money than anything else that we can do. A lot of those locations are not locations that can afford anything. I think the only other thing that, like, itches at the back of my brain is if it's not my business, if it's not good things vending, my interest isn't representing

every artist community in every city, but a vending machine could do that in every city. Could do it. How to move through that sort of part of the interest and that part of the business where folks are showing a high level of interest in sort of like replicating or building their own version. Yeah, I mean, I think in general my inclination would be to just make the best possible thing I can in Chicago and then if it's good enough, it'll just get copied. Yep. It'll just happen.

Yeah. Kind of relieving advice, honestly. I'd love that. Steph Crim, the brand is called Good Things Vending. Thanks for calling in. Good luck. Thank you. Thanks for having me on.

Appreciate you. Good luck. Thank you. Thank you. Yeah. Every time I'm like walking through an airport, I'm like, do I need a pair of noise canceling headsets from that vending machine? Like I do it?

You end up with one. I'm looking at it. I'm like, you know what I mean? Like there is something to it. But it's a cool idea. And I've seen different kinds of versions of this. And it's like there's this kind of Venn diagram of like people go to maker fairs and craft fairs. And that's a critical mass of a community.

I mean, there's a lot that I can see happening with something like this. In addition to that, I really love that Steph wants to elevate Chicago, wants to elevate the arts. In my experience, that type of business usually is a lot more successful. even if early if the founder is not necessarily all that much into making money, et cetera, they end up making more money than the ones that are where the founders like, I just want to make money. There's something to be said about somebody who really cares about their community and what they're doing. Stay with us because after the break, we'll talk to another founder working to take their business to the next level.

That's after the break. I'm Guy Raz, and you're listening to the advice line right here on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Raz, and my guest today is Duolingo founder Luis von Ane. Luis, let's take another call. Let's do this. Hello, welcome to the Advice Line. You are on with Luis von On from Duolingo.

Welcome. Please tell us your name, where you're calling from, and a little bit about your business. Sure. Hey, Guy. Hey, Luis. My name is Blair, Hasty, calling him from Atlanta, Georgia. My business I founded is called Bear. Bear is a design-driven brand, creating high-end tech accessories that blend thoughtful design with durable precision craftsmanship.

We use premium materials like marino wool felt, machined metals, and fine leather, avoiding disposable plastics to ensure longevity and sustainability. And our first product, Tame is a minimalist cable organizer for Apple MacBook users. Got it. Okay. Well, welcome to the show, Blair. You design products that are accessories for phones and computers? Correct. So right now we're focusing on Apple accessories. My background is industrial design, so I've been doing this for 20 plus years. So we have Tame, which is simple cable wrap for MacBook products. Cable wrap for the, for what? For the charging cable. Okay, okay, got you. Okay, yep. So it very easily wraps. It kind of encapsulates the charging block for the computer itself. And then the other product is called Tote. That one actually is we're having a little bit of issues with that.

But it's the idea is that it is a sling bag for Apple's Vision Pro headset. It's a fairly bulky headset, so it requires an external battery pack. Right. Which normally people would put in their pockets, I guess, right? Or hold it. It's like a little bag that holds the battery pack. Yep. The idea was for people who either have too much in their pockets or like women who oftentimes don't have pockets.

The issue I kind of alluded to earlier was I think Apple has experienced some... They're not doing well with the Vision Bros. No. It's not doing well. It's not doing well. It's no secret. I'm looking at a photo of this on your website. And so your thing is all about design using merino wool and leather and nice metal.

And these are your two kind of first products. Before I bring in, Louise, tell me what your questions are. Sure. So I originally came in to this thinking that my biggest challenge was how to stand out in the crowded market, but I've realized that my real challenge is about making sure that I'm focused on the right product in the first place. So Tame was meant to launch alongside of Tote, which was expected to be the momentum for the brand. But when Tote didn't happen, it's not really taking off like we had expected. So Tame is left standing on its own as the hero product for the

brand, which is a role that it was never meant to play. So the question is, when you have multiple ideas but limited resources, how do you decide which one is worth pursuing and how do you validate whether it is a real market demand before investing too much? All right, Luis Fanon, this is time to bring you in here. I mean, that's a very hard question in general. I will say a couple of things. We have learned a duolingo. We've been burned by similar things by, in fact, the identical company as you.

I'll tell you the story that happened. I mean, we had Apple really tried to get us to do an app for the Apple Watch. And they tell you, oh, you know, these are going to sell like crazy. Don't worry. If you do it, they're going to sell like crazy. They always say that. What we've learned is not to bet on these very new products because you really never know if they're going to work. So it's not that Apple Watch didn't work.

Apple Watch ended up working. But what didn't work was apps on Apple Watch. There's just not a thing. They aren't. I barely use them. I really barely use them. They try to make them a thing. They're not a thing.

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

I think that was my struggle early on going into this. I kind of was going back forthweighing the benefit of, you know, do you go after the mass market or do you try to go after the smaller market, which is a little more niche, but you can be a big fish in a small pond, essentially. So that was kind of the two. I chose apparently a little bit poorly, but I'm looking to pivot and to readjust some of the strategy around some of those things. Yeah, I mean, I think that there is no, I'm going to hear from people, but I just don't believe in saturated markets. I really don't.

And we've had episode after episode after episode that's proved this to be correct. Liquid death entered a $300 billion market water. Who would be stupid enough to go into water that's dominated by Coke and Danone and Pepsi? Well, he wasn't selling better water. Mike Cesario was selling a better brand. You know, he was selling monster-style, you know, energy drink things that looked like beer, but it was just water in a can. Say what you want about it, but he entered a very crowded market and he proved that there's always an opportunity. But what I tend to find, I think that there's something to this idea of really leaning in locally and starting local.

I mean, you're in Atlanta. It's a majorly important place with, you know, important companies like UPS and Coca-Cola and Delta. But aside from that, there is a growing, thriving tech community. There's a lot of creatives there. And is there a way for you to sort of start to try and find that wormhole initially into the creative community in Atlanta? They're like, oh, what's that, you know, what's that cool marino wool case you have around your iPhone or that cool bag that you're using made out of marino wool and leather? or that to me is a really interesting way to at least start

and to see if you can gain traction and then get feedback from people on what they want. Yeah. No, I think that makes a lot of sense. Starting Atlanta is, first of all, really cool. Thank you. Because it's such a cool city. But really, I mean, a lot of these, you know what you're doing, the accessories,

they're a bit like fashion. And I think the way to get these things off the ground is to start with kind of the, artists or the hipsters or the, you know, the people that are that are maybe not very wealthy or, but they're just the cool people that everybody wants to emulate. And if the cool, young, hip people are wearing these, I think that's kind of how these things take off. Yeah. Yeah. I mean, this is, this is the story with Instagram, Luis. I mean, they launched by making it available only to photographers for the first like two months. Just a thousand

photographers that they identified and said, hey, will you play with this? Yeah. You're trying to find creatives. You're trying to find like first movers. And I think that that's where the opportunity is going to be. Awesome. Yeah, I would sell some of them in Goodwill somehow. A lot of these people buy their stuff in Goodwill and then everybody wants that. I don't know about that. Don't about that. Don't listen to that piece of advice. Don't go to Goodwill. But it's interesting because you do have something differentiated, right? You are a quote-called crowded space, but merino wool. I don't think a lot of people are using that to make cases. There's some leather, but not that much. It's mostly hard plastic.

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

but a lot of times when people open branding products, especially like tech products, they tend to have like a plastic-y kind of factory smell. Yeah. It's still a work in progress. but also trying to think through long term how we can start to build a brand apart from just the look and the feel of it. I'm just going to be honest with you. It's interesting.

It's definitely threw me for a little bit of a curve here. But I think that your energy should be focused on what products appeal to people. What designs appeal to people. That's really where you can smell things interesting, but I'm not sure that's going to be the game changer. But that's my, I might be wrong. I might just have critiqued a billion dollar idea. I don't think it's the billion-dollar idea, but I think it's a small piece in the puzzle that could, you know, be enough that just sort of tips somebody one way or the other one day. Blair, you're such a designer.

You're just reminding you all our designers. I keep telling them, like, Guy, I'm like, just concentrate on the right thing. And they're like, no, no, no, no. But look at how this was made. But you know what? I think that some of the best ideas come from this type of stuff. So, you know, I keep at it. But you are such a designer.

Oh, thank you so much. I really appreciate that. That's a compliment. Blair, B-A-I-R. B-A-I-R. We're ching on, man. Good luck. We'll follow up with you. Thanks, Guy. Thanks, Louise. I really appreciate it. Thanks for taking the time. Thank you. Thank you. Do you have a, you must have a nice case in your phone? No, it's not a particularly nice case in my phone. I have it here.

I mean, it's a case because I tried it without a case for a while and it just keeps breaking. So I have just a random case I bought at the Apple store when I bought my iPhone. Yeah. They do these things where they change the size of the iPhone by like a millimeter each time. And now the previous case doesn't work. All right, we're going to take another quick break, but we'll be right back with another caller. Stay with us. I'm Guy Raz, and you're listening to the advice line right here on how I built this lab.

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

Hi, I'm so happy to be here. I'm Stephanie Carlson. I am in Carmel, Indiana, which is just north of Indianapolis. I founded Nature Spire Landscapes in 2016. after raising four children. My intent was to teach people how to build, plan, and grow their own gardens, but somehow it evolved into biofellic design,

which is the practice of bringing nature indoors. And today, fast forward almost nine years, and we offer interior and exterior landscape, design, build, installation, and maintenance services, creating designs inspired by nature. Got it. Okay, so I'm assuming what you're talking about are those, like, plant walls you see inside of stores

and is that what you do? Living walls, moss walls. We also do interior plantscapes. We designed green spaces, bringing nature indoors to create healthier, happier places. And tell me about how this business started. I was just going to help people design gardens. So all my kids, every year we planted a garden. And it was fun.

It was great to eat your own food. We love making salads out of our gardens. So I was like, okay, they're all grown up. I need a new baby. I might as well start a business. So I started nature spire landscapes thinking I was going to teach people how to grow gardens, build their beds, design. And then it just evolved as we were doing this.

Someone would say, hey, can you do this? Oh, I have an office. Can you do this? And during 2020, when everybody was going home, the plant business really blew up. And everybody was wanting plants in their homes. And once people went back to work, biophilic design became very, very popular. Because the one way you can encourage people to come back to work is to make their space prettier and more attractive. That's awesome.

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

I've had some great opportunities to do exterior landscaping. And, you know, we've done some apartment buildings, some of many areas, some rooftops. We also did the bicentennial unity plaza here for the Pacers in Indianapolis. We do do moss walls and homes. So that's an option for you. All right. And this is all in the Indianapolis area? Well, we've been in Chicago.

We've been in Knoxville. We've gone to New York. Nice. But most of it's in Indianapolis. But I do want to grow into some other areas. How many people do you have working for you right now? I have five right now. So when I have something that I know my staff can't handle, I bring in my

subcontractors. Tell us what you, before bringing in Luis, what's your question for us? What's your pain point? Okay, so right now we have grown so much. We are almost at a million dollars in revenue. Amazing. Congrats. Thank you.

And I want to get there this year and maybe a little bit over. But I need more people. But I need to know how to pay those people. So we have great revenue. We don't have a great profit. Because the costs are high. I mean, I'm looking at the quality of what you put out there. And I cannot imagine how expensive, but how expensive.

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

Do I do it through loans? Do I take some more money out of my savings? Because I know if I have the people, we'll get the business. Luis, please. I have one quick question. I assume you've thought of this, but can you not charge more? That's what we're working on, too. We are going to start charging more. And actually, I think this is kind of how I viewed it. I wanted the job so badly that I just wanted to make sure they were happy with the price, but now I need to start charging more.

Because if you look at our website and our Instagram, we have created some just, I'm so excited with what we've created, beautiful projects. And we have a portfolio and a personality and a brand now that people trust. I mean, in general, I think you really want to make sure that you have a good business, and a good business is good profit. I've had to learn this the hard way from our CFO. I didn't really understand that before. But really, if you can charge more, you should just do that.

Because that will solve most of your problems. I mean, otherwise, yeah, you can get loans. You can get all that. And I wouldn't be against you getting a loan. That would be perfectly fine. But if you can do it without loans or without any of that, that would be much better. Yeah, I mean, also, I would think that in a business like yours, you could probably charge enough where your profit margin exceeds 50%. Yes.

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

Yeah. And I want to pay them well. They work hard and they deserve to be paid well and that will keep them loyal to my company. So I'm looking for other revenue streams too. Like we're maybe going to do a plant shop. We're looking at a plant cafe. We're looking at, you know, maybe renting our space for activities after hours. So I'm kind of looking at other revenue streams because a lot of times we'll have, you know,

it's not consistent revenue. We may have a great month bringing $100,000. And then, you know, 30 days later, someone hasn't paid. And I'm doing whatever I can to keep the cash flow going. What is your worry about taking out a loan? I mean, you've got a business, you've got a business model, you've got an established track record. I'm assuming at this point in your life, you might even have property. Maybe you've got a house or something. So you're in a better position to get an SBA loan than somebody who's, you know, 22, who's got no assets and it's just starting out, right? It's just harder to get. Right. What would be your reluctance to take an SBA loan? You know what? I think I'm kind of very serious about looking into the SBA loan.

The rates was one of the things. But it would help me grow. Yeah, it would give you more cash. Luis? I mean, yeah, I think getting a loan makes a lot of sense. I'm still stuck on the idea that your pricing is such an interesting thing. A lot of times people think that the lower price will just sell more. And it's probably a little more volume.

That's probably true. But especially for businesses like yours, I think you can just set your own price and just say, look, we're high end. I mean, this is similar with things like contractors or a lot of times art installations. There's the range of things like art installations, which I would think plants can be thought of as art installations. The range is insane. I mean, you can get it from $50,000, you can get $50,000. I can imagine that you can probably increase your price, and that would make you even more desirable.

And you just tell people, you're paying for quality. We are the highest quality. I think you want to get to a position where your profit margins are high. And I think maybe hiring another person so that I can spend more time on estimating. And we're really doubling down on marketing too, marketing and sales, or what we're really doubling down on this year to get to that higher profit margin. I think a lot of times a mistake a lot of entrepreneurs make at the beginning. And I count myself among them.

And I think, Luis, you'd count yourself among them too, is that we really undervalue what we're offering. I mean, if I told you, Luis, in 2012, right, when you started Duolingo, that people would pay 60 bucks a year for this product, you would have been like, what? Oh, for sure. And by the way, this is the thing that our CFO keeps telling us. The reality is it's not even 60 bucks a year. I mean, we can charge 150 and people will pay it. But yeah. Yeah.

Well, we're getting more well-known, which is nice. And, yeah, I think I definitely have to raise my prices and just put a value sticker on it. That would help a lot because then immediately your margins are good. and then you can afford to hire, et cetera. By the way, I'm just thinking, like, I don't know, I just, for some reason in my mind, I keep thinking about music. Do any of these walls have music coming out of them? No, but that would be a great idea.

In fact, we were playing with the scent idea that Blair mentioned of adding scents along with the plants into these offices. Coffee, coffee, scents. Coffee scents. Coffee sense. You can have coffee plants. To make the place smell good at the same time, they are enjoying their plants. But maybe, like, you could.

add a, you could add a waterproof speaker as part of your price and say, hey, you know, we also for triple the price. Triple the price. For triple the price we put in. There'll be nature sounds, birds. That actually is not a bad idea. It's just beautiful, you know, like a Zen garden. Like, and it's subtle.

That is a really good idea. So when the students are studying in the mechanical engineering building over at U of I, they're getting this extra umph. I'm telling you, do that. I want to know if you, I want to find out if you're going to do that. Stephanie Carlson, the brand is called Nature Spire. Good luck. Thanks for calling in. Thank you. It's been great. Love talking with you.

Thank you. Thank you. I've always seen those. I'm like, it'd be so cool to have that in my house, but then I'm worried that it's going to drip on the floor. But I'm sure there's like there are all these redundancies put in, right, to prevent that. Yeah, we have a few plant walls here at Duelan. Go, it works. And they're beautiful. Does music come? No, no, they don't have music. I like that idea. Yeah. But, you know, I'm really hoping Stephanie will just, next time she's, she's,

shows up to give a quote, she just doubles. Yeah. Whatever she was going to say, just double it. Yeah. I bet you some people will say yes. I agree. I agree. Luis, I, you know, I've asked everyone who comes in the show a version of this,

and I still, every time, it's, oh, I'm always surprised and amazed at the answer. But now that you, I mean, you came in when you started Duolingo, you had already, you had a lot of experience. He'd worked at Google, you want a MacArthur Fellowship. I mean, a lot of things going in the right direction for you. But nothing to say, hey, now start a tech company and that's going to be valued $13 million is going to transform how people are languages. If you could now go back to 2012 when you were starting that and you could sort of give yourself advice, what would you think would have been helpful for you to know back then? Oh, a number of things.

Certainly, we took too long to monetize. I mean, we did not start monetizing until 2017. So it's five years in. I would have told myself, monetized a little sooner than that. And again, it's not because it's so much about making money. It's because it really allowed us to fulfill our mission. When we started making money, we were also able to invest more in teaching more people. It took me a long time to realize that there are certain shortcomings that I have that are okay.

And that, you know, I just always kept trying to be like, no, I got to be good at this and this and this and this and this and this. And the reality is, yes, you should always try to be better at everything, but there's some stuff that you're just kind of never going to be great at. And what you do is you just hire people who are great at that and let them do that. So most everybody in my executive team is excellent at something that I'm really bad at. And I am now fully okay and not apologetic about the fact that, for example, I am just not very interested or good at finance. I'm just not.

And at some point, you realize you should get the right person to do the right job. Makes a lot of sense. Luis Fanon, co-founder of Duolingo and the CEO of Duolingo. Thanks so much for joining us. Thank you, Guy. By the way, if you haven't heard Luis's original high-built this episode, you've got to go back and check it out. It's so good. And here's one of my favorite moments from that interview.

You know, I was feeling good. I thought, okay, well, we can continue raising money for a while. And at some point, we raised money from Google. Capital G is one of their investment arms. And the partner from that firm sat me down and she said, nobody else will invest in this company if you don't figure out how to make money. You know, you're not going to find a bigger fool. We're the biggest fool.

And that's when we started kind of freaking out and trying to figure out how we're going to make money. Thanks so much for listening to the show this week. Please make sure to check out my newsletter. You can sign up for it for free at guyraz.com. Each week, it's packed with tons of insights from entrepreneurs and my own observations and experiences interviewing some of the greatest entrepreneurs ever. And if you're working on a business and you'd like to be on this show, send us a one-minute message that tells us about your business, the issues or questions you'd like help with, and hopefully we can help you with them. And make sure to tell us how to reach you. You can send us a voice memo at hibt at ID.wondery.com or call.

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