Ryan MacDonald: Thanks for taking my question. Congrats on the nice quarters. Luis, I’m curious with the integration of math and music into the core app. How do you start to think about moving forward about the experience for the learner based on whether you’re a paid subscriber versus a free user on math and music in the core app? And how do you think about moving forward incentivizing more consistent engagement of moving that MAU to DAU over time?
Luis von Ahn : Yes. So thank you for the question Ryan. So in terms of monetization for math and music. Really the way to think about them for now it’s as if they were another language course. All that applies to language courses applies to math and music. So for example if you are a free user and you do the Spanish course at the end of the lesson you have to see an ad. Similarly if you’re a free user and you’re doing the math course at the end of a lesson you have to see an ad. There’s also a notion of also hearts where whenever you make a mistake you lose the heart, that happens in math, that happens in music, that happens in the language course. They’re very similar in that respect. And we’re going to continue working on trying to monetize our users better by basically offering extra things in the premium subscription.
So there may be — just like with languages we have things like the practice hub or certain extra things we’re going to have extra things for both math and music. Now I should remind, there’s a lot of questions about math and music, which is great. We’re very excited about math and music, but I should remind you for the foreseeable future the vast majority of our business is in language learning. There’s still a lot of room to grow in language learning. So the majority of the experimentation is still going to be there. So yes I think that’s that.
Ryan MacDonald : That’s helpful. And maybe a follow-up just give me for Matt or Luis. That was interesting in the shareholder letter about the experimentation you did on paid advertising this year and how that drove sort of a 50% increase in users on the platform. I’d just love to hear a little bit more color on maybe what you did differently this year that drove such a notable increase? Thanks.
Luis von Ahn : So, there’s a number of things. I mean we’ve just gotten a lot better at figuring out what to say in our ads. And also we are in a really interesting position where we are a company that has users in essentially every single country in the world. And we don’t have to deal with things like licensing music or anything like. We don’t have to deal with stuff. We just we just can serve the app to any country in the world. So, one of the things that we’ve gotten really good at is being able to shift budget between countries. If prices get higher in one country and lower than another we just shift budget because for us it doesn’t matter all that much whether a user comes from Vietnam or from Thailand or something. I mean, it matters in the conversion rate, but we have the math to figure out when it makes sense to shift budget from one country to another.
And so we’ve gotten very effective by that. And that’s something that not many apps can do because first it’s just really — we just have users in every single country in the world. So it’s stuff like that that we just over time have gotten smarter at. I should mention though we did that, but it is still — it is the case that the overwhelming majority of our users come in organically. I mean, this is — we have relatively small marketing budgets where we’re doing that. But yes, we’ve gotten a lot better at it.
Deborah Belevan : Thanks, Ryan. Your next question comes from Zach Morrissey of Wolfe Research.
Zach Morrissey: Great. Thanks. So I just wanted to I guess double-click on the user growth side of things. You’ve talked about the improvement in retention in prior years and quarters specifically the current user retention rate. As you kind of think about the growth, we’ve seen this year it’s obviously been very impressive. Can you kind of parse through how much of that has come from kind of improvement in the retention? And as we kind of look ahead next year, how do we think about kind of room for further improvement in retention kind of supporting user growth? And then second just on competition. Obviously, the growth you guys are posting kind of speaks to your ability to kind of execute well. But obviously, Google last month kind of grab some headlines kind of entering the space.
So if you could just kind of talk about your view on kind of the evolving competitive landscape? And more specifically, how do Duolingo’s kind of competitive moats can kind of last relative to a larger platform, such as Google, which has scale, data, technology, et cetera?
Luis von Ahn: So, great question. For user growth, we believe that the main thing that has affected user growth is improvements in free user retention. That’s it. I mean it’s not 100%. Like I said a lot of our marketing has helped too, but I would say more than 50% is just improvements in user retention. Current user retention rate is probably the biggest lever that we’ve had. It’s not the only one but it’s the biggest lever that we have to move. We expect there’s still a lot of room there for us to improve. I mean obviously, again just like with user growth, you cannot improve user retention forever. You also cannot improve user growth forever. But we still think there’s room there. So we’re happy with that. In terms of competition, there was the headline about Google.
Google, of course, is company that we all admire. I spent a couple of years at Google. A lot of us have spent time at Google. The particular feature that made headlines is we actually — the team that has — that’s working on this feature, which is a small research team has been in contact with us. They are trying to do something to just make the search experience better for people who are in the language learning ecosystem. And one of the things that they want to do is start sending those users to apps like ours. So we don’t see them really as competitive. And that’s kind of one thing. The other thing is — and just for — in general for competition, we have a strong belief that the hardest thing about learning a language is staying motivated.
And that is something that we really excel at. And we just don’t see our competition spending much effort and that’s certainly not Google but kind of the rest of our competition. And I think that’s really — probably the biggest thing that has made us grow a lot, it’s because a lot of our users — we give them motivation to continue going. And that has done things, for example, we’ve called this stat before. In the US 80% of our users were not learning a language before Duolingo. So the reason we’re getting so many of these users is because we have made learning a language so easy and so engaging that they just come. And so to me that’s the biggest moat. I mean we have other things. The streak is a big moat, for example, people don’t want to lose their streak, when they go to another app that’s a big moat.
