Are you able to disclose the price Duolingo paid for a 4k MRR bootstrapped app?
I bought back my acquihired startup
21–30 of 105 posts
Re: I bought back my acquihired startup
#22Hi! Steve here. Happy to hang around here for a while if anyone wants to ask anything! :-)
Without asking for numbers you don't want to share, how did the price you acquired it back for compared to the price they originally purchased it for?
Hmmm... I'm actually not sure if I can talk about the numbers from the original sale in 2017. But I'll say that the original sale was paid partly in stock options which vested over a few years and ended up being worth a lot. And the price of the buy back was much much less than that.
Funnily enough, in the original sale I negotiated for more cash and fewer options. Luckily for me they only moved a little bit in my direction since the options ended up being worth much more.
Re: I bought back my acquihired startup
#23This is great, I love to see these work out. This type of re-acquisition can be difficult to see through to completion. The acquiring company has moved on and doesn't want to spend resources on dealing with it. I had tried to do this too at one point but then then newish CEO of the company we were trying to buy it back from was gone and we sorta gave up.
Sorry to hear that.
I imagine it would have been a lot harder in my case if we'd actually integrated Readlang with Duolingo, sharing user accounts and that kind of thing. Luckily it was quite separate. I was a little stressed dealing with accountants and tax stuff here in Spain, and worrying that the technical transfer would go smoothly. But dealing with Duolingo was super easy.
Re: I bought back my acquihired startup
#24Hi! Steve here. Happy to hang around here for a while if anyone wants to ask anything! :-)
Not related to the buyback but more generally to Readlang, how did you select the pricing?
I've noticed a sort of bimodal distribution of prices in language companies with the sleek/modern looking ones centering around 5$/month, and more traditional companies going for 20$/month for seemingly the same service (so the latter not presented as a luxury alternative to the former). Wondering if you did any A/B testing or generally what your methodology was if you don't mind sharing.
Re: I bought back my acquihired startup
#25Nice story, with a good ending. Never heard of Readlang before, but for sure I’m going to give it a try. Bravo Steve and well done on getting back your “creation”.
Re: I bought back my acquihired startup
#26Earlier quoted context omitted.
Yes I have a brief one, sorry that it's not specifically related to Readlang! You kind of stopped blogging as much when you joined Duolingo, what would you say were the biggest factors why? I'm assuming Duolingo weren't super restrictive on what you could post so that might not be the big reason, but I could be wrong!
Good question! There was a lot to do and I was kept busy just with internal communication, so didn't feel the urge to share externally so much. Also, getting outside attention didn't feel as important given my role at the company compared to when I was alone running my own project. I actually remember asking them how restrictive they would be when it comes to sharing when I joined and they said they weren't as secret…
Thank you for answering!
The internal/external rift is so interesting and perfectly reasonable. Hard to spend time self editing after an exhausting day, and guess that's where places like Twitter really shined. Yet I wish that gap could be bridged somehow, it feels like many great posts with overlooked details are left unwritten because of the lack of external validation combined with internal hurdles.
Meandering now, but your blogs are enjoyable reads and that's the most envious quality I have of writers!
Re: I bought back my acquihired startup
#27Hi! Steve here. Happy to hang around here for a while if anyone wants to ask anything! :-)
Not related to the buyback but more generally to Readlang, how did you select the pricing? I've noticed a sort of bimodal distribution of prices in language companies with the sleek/modern looking ones centering around 5$/month, and more traditional companies going for 20$/month for seemingly the same service (so the latter not presented as a luxury alternative to the former). Wondering if you did any A/B testing or…
Not a ton of methodology behind it!
I started at $10 per year, then gradually raised prices as the product got better, always keeping existing subscribers happy by grandfathering them. At one point it was $4.99 every 3 months, which is the plan my mum is still on :-) For a brief time I offered a lifetime subscription for $100 and sold a few but felt uncomfortable offering to keep the service running forever with no further payments so killed it.
I ended up at $5 / month or $48 / year. It's possible I might increase it a bit more in future but for now I think it's better to keep these prices and try to grow user numbers instead.
One thing I noticed with some companies was that the yearly plan was very heavily discounted compared to the monthly one. To me that gave the impression of lacking confidence that monthly users will stick around long term, so I didn't want to do that.
Yeah I think it's true that popular mainstream consumer products tend to be cheap and highly polished, and that more niche products tend to be higher priced and less polished.
Re: I bought back my acquihired startup
#28@steveridout Interesting post and journey, thanks for posting. Readlang - what would you say is the user persona you're going for? I need to learn (tourist) French. I'm not going to read sites about "where is the bathroom?", for example.
It's mainly for intermediate and advanced learners who want to tackle longer texts. I originally made it so that I could read novels in Spanish. Readlang may not ever be appropriate for complete beginners. But it could do better at providing stories written in simple language appropriate for beginners in specific situations like yours. Right now there is a public library of shared texts: https://readlang.com/fr/libra…
Very cool - thanks! Best wishes on building - product build is one of the most fun pursuits in the world!
Re: I bought back my acquihired startup
#29Warms my heart to see a big company make this deal with the author rather than just shut it down. Bravo Duolingo.
I often think about this precise scenario. There are so many cases and times where a big company shuts something down that would be perfectly viable at a different scale. My previous company got acquired by Verizon and then shut down because it didn't scale to a $1B business within five years (or something like that). I'm not claiming it was a viable business in the first place (it probably wasn't) but now we'll never know. And for this story, there's a thousand others. I understand that sometimes the small company becomes intertwined with the big company to a detrimental extent, but there are also plenty of cases where a separation is still very well possible. The separation doesn't even need to be the business whole, but it could be a constellation of IP and resources, for which someone creates a new business entity. I wish that more execs created that possibility, instead of just writing off a financial loss and calling it a day. While the write-off makes business sense to the bigger company, and there may not a huge business justification for spinning off instead of shutting down, there's also just something to doing the right thing in terms of providing continuity to the users of your product, and giving engineers a chance to double down on a product development that they may have faith in.
Re: I bought back my acquihired startup
#30Are you able to disclose the price Duolingo paid for a 4k MRR bootstrapped app?
It was a mix of cash and stock options which vested over a few years. There was a confidentiality clause in the contract so I can't be super specific. But I asked ChatGPT what a typical price per employee is in an acquihire and it gives the following answer. I'll just say that the common range it gives doesn't sound crazy to me.
> In general, the price per employee in an acquihire can range from $100,000 to over $1 million, with a more common range being between $250,000 and $500,000 per employee.