Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
That Apple's big event last week, a lot of the focus was, of course, around the iPhone. It makes sense, it's the most important products for Apple. What got my attention and this is what I talked to my wife about, like the next day, the new translation function on the AirPods. It's so cool, so it automatically translates words that are spoken to the wear and then the user can then speak back and show the translation live on an iPhone to another person. We live in the future, Carol.
I mean, it's really amazing. It's like, okay, so if you don't have a language, sometimes you feel lost in a country. But this really kind of makes it very easy to communicate with other folks.
So it raises a question about how we're going to use language in the future. And in fact, on that day we saw DUELINGO shares they were up as much as six percent. Then Apple showed off the new feature, the stock fell. So someone I'm sure who watches this closely. Tim Allen, he CEO of Babble, the language learning platform, He joins us from Berlin. Tim, good to have you with us. How are you.
I'm good, Thank you for having me. I really appreciate it.
Yeah, congratulations on the new gig. I'm curious how you watch the tech in the space, And I know you have some really interesting stuff that you and the team are doing around AI, But how do you watch the tech coming from Apple or Alphabet that are now offering this real time translation? Does it make it so we're not going to need to learn languages in the future.
You know, language learning is the oldest software known demand, so it's not going anywhere. What I love about what Apple and Google have done is it actually generates more interest in the space. So what we find interesting, especially on our product Babble, is when users or learners go to take a trip or go into a foreign country, they actually come back and they're more interested in learning
the language. So we see all of this as a tailwind because we think that ultimately, you know, I think the technology is really cool as well, Right, it's so interesting put in the AirPods you can go from one to the other. But what people will then do is adopt and go, oh, I really want to get.
Into the language. I really want to belong to the language.
That's happening right now because it volume well, So Tim, I get that that's happening right now because that technology isn't widespread. But I can just imagine in a few years, you know, we won't even need maybe won't even need another device. We'll have it just it'll be a wearable and then it'll be even more seamless. Do you see that continuing to drive demand.
What's interesting about that is, like I think, short of a neural implant, people are going to always be learning languages, right, so that at a universal language. Those are the two things that could disrupt the market. So what will end up happening is that the iPhone when it came out, everyone declared the death of language learning. Right because you could hold up your phone you could do the same translation that the air pods are offered today. Even a wearable
can do it. The difference is that people actually want to live and breathe inside of the language. In fact, we just launched a part of our new technology that that explores AI that brings both the pedagogy and the human learning aspect of it together with AI called Babbill Speak and what that does. It allows people to actually practice the language of learning with with an AI coach and AI tuner, so there's pre defined conversations you can
practice with. It does small corrections, but we see this as a compliment. We see this as a way for people to actually learn and accelerate the transmission of the language. I think the new technologies are really going to allow for dabbling inside of the language. It's going to be great on the go, it's going to be great for those one time use cases, but people will always want to learn and live inside of a language themselves.
How do you view them more generally? Tim kind of the landscape of learning apps With the introduction of GPT five, we saw the team create a custom language learning app in minutes during the demos. I mean, it's kind of amazing how quickly all this is happening and how quickly you can do things. Do you view AI products like this is a real competitive threat and what can you do to keep your user base and sustain growth?
Yeah? I watched the same demonstration.
It was a cool friendshipp that they had created. It has limitation?
Is it correct?
Are you like, oh my god, this is going to be what was difficult for us?
What was cool?
No, definitely not in Oh my God, it was a cool because it was created so quickly. And what I think is so cool about it is people are starting to learn on demand. What the difference is though, is I think that people will want pedagogy, they'll want lessons, they'll want content, They'll want to be able to actually know that they're getting a trusted guide through the language learning process. Large language models, as you know, are good
at many things, they're good everywhere. They've been declaring for now almost two years that they're going to take away all of the jobs and you know, just really disrupt all the markets. But I think what ends up happening is when you start to get into really narrow spaces such as language learning, people want to know that they have a real lesson plan, that they have really the transmission of the language in a way that's going to adapt to them. And that's what we think AI is
going to empower. Inside of babble, we think it's really going to allow for the personalization of your individual learning plan. But with the content, the pedagogy, the transmission, so you retain you're able to speak it, you feel fluent and you actually feel comfortable with it. So I think from a build perspective, it's really interesting. We look at it as a tool to really help facilitate and go to
market a lot faster. I think for a transmission and a trusted content, it'll actually end up being niche markets with real players such as ourselves.
All right, So the truth will probably be in usage or the stickiness. And I'm assuming then you're signing up more and more people. You're very enthusiastic amid all of this potential competition. So give us an idea of customers, usership, people sticking to the platform. Give us some metrics.
We're growing, we're going on, we have large demand. In fact, September is one of our larger months. Just give it back to school and back to office after the summertime that in New Year's as you can tell, the New Year's resolutions tend to be really heavy periods for us. What I could say is we have millions of subscribing customers. We're signing up thousands every single day. Demand has not waned on this side of the equation. We're really excited
about the future. I actually get more excited about more of the players showing interest and actually saying, hey, look this is cool. Understand a language. Play with a language. But when you want to go really learn a language, go to the providers you trust to, such as TAMU.
Say millions, it'd be great if you get one millions, a lot different than ten million or twenty million. So just give us an idea if you could. And how much is corporate versus kind of individual? And what are folks paying for a subscription? And how long do they stay with you?
Yeah?
I know probably have over two thousand business clients b to be clients. So I can tell you that we just signed Inner Miami Football Club. They're using it for their players, their coaches, their teams in order to teach them the languages and what they need to be. We've created a custom content for them as well, which gets
really exciting. But I can tell you it's millions of consumer customers, and I can tell you it's more than one million, and it's more than two million, and it's more than three million, so it goes on up from there.
Yeah.
So and what do people pay corporate versus individuals? Yeah?
Yeah, so on individuals, there's a variety of packages as you can imagine there's a variety of price points. We have a lifetime price point that we can that users can subscribe for a life and they get all of the features and all of the things that we actually upsell to and then you know, there's monthly plans. It is the normal subscription model for what users want from any moment of time.
All right, but give me an idea. So Tim wants to learn what language Spanish? Spanish?
Practice my Spanish better.
He just wants to kind of learn Spanish, So give us an idea. So he signs up, and what would you be paying, like on a monthly basis or if you wanted the lifetime yes?
Yeah, yeah, So if Tim you came to the site and signed up and downloaded the app, you could pay one hundred and ninety nine for the lifetime and then there's also discuts available, as all good subscription sides have.
But then there's the monthly fee.
Of twenty nine ninety nine that you could be paying as well.
So okay, so why could do one nine nine for life? Yeah, that's a lot less expensive than competitors such as do a Lingo, which is you know that plus sum I think per year.
So no catch, come on, no catch, So Tim signs up. I mean, and that's provided you stick around. No, I'm not trying to say, but right like, you've got to be around, right yeah.
I look, with any languaeing, there has to be a real commitment to it and you have to actually practice and utilize it.
Right.
But we see the.
Life happens right the families. You know, I have kids. I'm learning German right now. Right, I've moved to Berlin for the job. I knew very little German altogether. But what I could tell you is I have life come up, the kids have school, the kids have activities. I will pick up, I will put down. I will pick up and put down. But the one nine nights of life.
Okay, interesting. We I'm curious about do a lingo in the competition that you see there. I'm wondering if you've considered moving outside of languages. We we use dual linguo at home, but more so for chess and reading with our kids. I don't know if it works, but it's great. The six year old has fun than we do for Spanish right now.
Yeah.
Yeah, you hit the core market there, which is the games are great and the great learning transmission, especially for the younger audiences. Right now, our specialty is language learning, where we're we really focus on that, we folks, on the transmission of language learning. We want to make sure that you have the most effective means in order to go from a zero to one conversation. And the way we look at that is you feel confident walking into a room and being able to know that you're speaking
the language in which you're looking to speak. So we focus all of our linguistics, all of our teachers, all of the human centric pieces, and then we actually use AI as the tool to facilitate that in order to help make that happen faster. So that Will Speak is a good example of that, where we continue to allow you to practice speaking, continue to allow you the conversations, but we're hyper focused there. We really think that the
games are going to leave to other people. We're focused on the languages you are.
Okay, So that's a note like moving outside of languages.
Okay, Yeah, languages are sweet spot when it.
Comes to the AI spend and something we talk about a lot, right, I'm curious about what you guys are spending. What are you spending it on? Is it on engineering talent. Is a data centers, is it content? Is it something else?
Yeah, we've be cashful Positives twenty eleven. It's a private company, so we're not out there raising capital. We are well funded. We're doing very well. Where we reinvest on our capex is we look for engineers, we're looking on AI talent, We're looking at the infrastructure. We're investing in what's going
to actually transmit and actually forward the future. We actually think that this is an exciting time to be really looking at product features with our proprietary data set and our proprietary motes that we have inside of our ecosystem. You know, we have hundreds of millions of lessons completed a year. That's very rich data to be taking into proprietary llms and data models and really working inside of the AI to work towards the most effective product in terms of transmitting the language.
Are you at this point able to use AI to create language courses? Are you able to use AI to do what humans used to do in recent years?
We actually married the two. You know, where the real sweet spot was is not in removing people from creating the languages. It's facilitating the people to create the languages, so we do. Just to answer your question directly, we do use AI. We use it with the human centric piece. We've always found that our linguists and are also our teachers are the best to formulate all of the content so it can transmit better than anyone else and more effective. And so what we find is we marry the human
with the AI tools. So we're using the blend of both goals. We haven't replaced jobs in order just to replace jobs.
All right, I've got one really really important last question for you, Tim, how's the German going? Sure, how's the German going?
You know, I'm be Schinzpec and de Deutsch, so it's using my Babbel every day, very little, but I'm learning very slowly.
So okay, maybe next time he's on we do the interview in German, we get Matt Miller in here.
Oh I'm on, I'm game.
Matt would definitely do that really really well. All right, Tim, thanks so much fun to talk with you and get some time and hear what you guys are doing, especially when it comes to AI to incorporate and get in Tim Alan, chief executive officer of Babbel, joining us from Berlin, Germany,