Duolingo · Strategy · Entry · 45 to 60 minutes

How should Duolingo fund growth?

Duolingo is a mobile app that helps people learn languages through short, game-like lessons. Answer this product management case and get it graded line by line against a weighted rubric.

Product strategy
Monetization
Tradeoff analysis
Experiment design
Metric design

The situation

You are an entry-level PM at Duolingo. The app has built a large global audience with short lessons, strong daily habits, and a product that has been free so far. Leadership, including Luis von Ahn, now needs a plan to make the business sustainable as server, content, design, and engineering costs grow. They have asked you for a recommendation on the first monetization strategy for the core app. This is hard because education users are price sensitive, and Duolingo's brand is tied to broad access and a friendly learning experience. A pushy revenue model could reduce trust, retention, or learning time, but a weak model may not generate enough revenue to support growth. You need to decide whether Duolingo should monetize through ads, subscriptions, content access, in-app purchases, or some combination, and how to test it before a broader rollout. Your recommendation should consider both short-term revenue and longer-term effects on user behavior, brand perception, and product quality.

What to produce

A 1 page strategy memo, 700 to 900 words.

Your answer must

State your recommended monetization approach and the main user segment or behavior it targets.
Compare at least two credible alternatives and explain why you would not choose them first.
Explain the expected impact on learner experience, retention, and brand trust, including the biggest tradeoff.
Define one primary success metric, at least two guardrail metrics, and a simple rollout or experiment plan.
Identify two major risks and how you would mitigate them.

Constraints

Keep the proposal within the existing Duolingo app, not a separate new business.
Your plan should be testable within two quarters through product changes and experiments.
Do not assume a large new paid marketing budget or a major expansion of course content.

Format

Use clear sections such as recommendation, alternatives, tradeoffs, metrics, and risks.

How Duolingo actually played it

Explains how Duolingo moved from fully free to monetizing motivation with optional upgrades while keeping the free product strong.

Keep the free tier valuable while offering optional upgrades
Monetization can improve the product
Measure growth after introducing paid options

Built from When free isn't really free: the Duolingo way to monetize by Sreerag Panat.