How Luis von Ahn built a $6.5 billion startup (without selling a thing).

Welcome back to another edition of The Wise Exit!

In today's edition, you'll learn:

• How Luis von Ahn built a $6.5 billion startup (without selling a thing).

• What is your insurance agency worth?

• 3 common reasons why business sales fall through (and how to avoid them).

Let’s dive in …

How Luis von Ahn built a $6.5 billion startup (without selling a thing)

Imagine this...

You've just created an app that's being used by millions of people worldwide.

It's the number one education app in the world.

And it's completely free.

What do you do?

If you answered, "Start charging for it..."

Congratulations. You're wrong.

Here's the story of how Luis von Ahn built Duolingo, the $6.5 billion language learning startup, without selling a thing:

A Humble Beginning

Luis grew up in Guatemala, where learning English could double your income potential. A recruiter from Duke University discovered Luis and helped him apply. In 1996, Luis moved to the United States to attend Duke, graduating at the top of his class.

The Birth of an Idea

After selling two successful tech startups, reCAPTCHA and a game that Google bought, Luis had an idea: what if computers could teach languages to everyone for free?

In 2012, Duolingo was born.

Building a User Base

Luis focused on growing Duolingo's user base. He gave a TED talk that went viral, and soon, Duolingo had a waiting list of over 300,000 names.

The Unconventional Business Model

For years, Duolingo didn't make a dime. They focused on providing a free, high-quality language learning experience.

In 2017, with 10 million active users, they finally introduced a business model similar to Spotify or dating apps:

• Use Duolingo for free, with ads

• Pay for a subscription to remove ads and get premium features

A Lesson in Culture

Luis learned from his family's candy business that an "us vs. them" mentality between bosses and employees doesn't work.

At Duolingo, he fosters an egalitarian culture where everyone is valued. He even has drivers give feedback on how potential hires treat them during airport pickups.

The IPO and Beyond

In June 2021, Duolingo went public, and its shares soared to $141. But for Luis, it's not about the money.

It's about the mission: developing the best education app in the world and making it universally available.

Three lessons stand out from Luis's journey:

1. Focus on providing value before worrying about profits.

2. Cultivate a positive, egalitarian company culture.

3. Stay true to your mission, even when you hit it big.

Featured Blog 📰

Valuing an insurance agency can be a tricky business. The traditional rule of thumb - multiplying annual commissions by 1.0 to 1.5 - is often misleading.

In this blog post, we dive into the origins of this rule, explore alternative valuation methods, and provide a handy calculator to estimate your agency's worth.

Read the blog post: Insurance Agency Valuation Rule of Thumb [Complete Guide]

M&A Tips from Brian Dukes 💡

3 common reasons why business sales fall through (and how to avoid them).

You’ve put in the work. You’re ready for the next chapter.

But something’s stalling the sale.

Here are the top 3 reasons why business sales often collapse …

Read the full post on LinkedIn.

That's all for now.

Tune in next Wednesday for another set of M&A lessons, and have a great rest of the week.

Best, Brian Dukes