Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business
Speaker 1: Week with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2: That Apple's big event last week, a lot of the
Speaker 2: focus was, of course, around the iPhone. It makes sense,
Speaker 2: it's the most important products for Apple. What got my
Speaker 2: attention and this is what I talked to my wife about,
Speaker 2: like the next day, the new translation function on the AirPods.
Speaker 2: It's so cool, so it automatically translates words that are
Speaker 2: spoken to the wear and then the user can then
Speaker 2: speak back and show the translation live on an iPhone
Speaker 2: to another person. We live in the future, Carol.
Speaker 3: I mean, it's really amazing. It's like, okay, so if
Speaker 3: you don't have a language, sometimes you feel lost in
Speaker 3: a country. But this really kind of makes it very
Speaker 3: easy to communicate with other folks.
Speaker 2: So it raises a question about how we're going to
Speaker 2: use language in the future. And in fact, on that
Speaker 2: day we saw DUELINGO shares they were up as much
Speaker 2: as six percent. Then Apple showed off the new feature,
Speaker 2: the stock fell. So someone I'm sure who watches this closely.
Speaker 2: Tim Allen, he CEO of Babble, the language learning platform,
Speaker 2: He joins us from Berlin. Tim, good to have you
Speaker 2: with us. How are you.
Speaker 4: I'm good, Thank you for having me. I really appreciate it.
Speaker 2: Yeah, congratulations on the new gig. I'm curious how you
Speaker 2: watch the tech in the space, And I know you
Speaker 2: have some really interesting stuff that you and the team
Speaker 2: are doing around AI, But how do you watch the
Speaker 2: tech coming from Apple or Alphabet that are now offering
Speaker 2: this real time translation? Does it make it so we're
Speaker 2: not going to need to learn languages in the future.
Speaker 5: You know, language learning is the oldest software known demand,
Speaker 5: so it's not going anywhere. What I love about what
Speaker 5: Apple and Google have done is it actually generates more
Speaker 5: interest in the space. So what we find interesting, especially
Speaker 5: on our product Babble, is when users or learners go
Speaker 5: to take a trip or go into a foreign country,
Speaker 5: they actually come back and they're more interested in learning
Speaker 5: the language. So we see all of this as a
Speaker 5: tailwind because we think that ultimately, you know, I think
Speaker 5: the technology is really cool as well, Right, it's so
Speaker 5: interesting put in the AirPods you can go from one
Speaker 5: to the other. But what people will then do is
Speaker 5: adopt and go, oh, I really want to get.
Speaker 4: Into the language. I really want to belong to the language.
Speaker 2: That's happening right now because it volume well, So Tim,
Speaker 2: I get that that's happening right now because that technology
Speaker 2: isn't widespread. But I can just imagine in a few years,
Speaker 2: you know, we won't even need maybe won't even need
Speaker 2: another device. We'll have it just it'll be a wearable
Speaker 2: and then it'll be even more seamless. Do you see
Speaker 2: that continuing to drive demand.
Speaker 5: What's interesting about that is, like I think, short of
Speaker 5: a neural implant, people are going to always be learning languages, right,
Speaker 5: so that at a universal language. Those are the two things
Speaker 5: that could disrupt the market. So what will end up
Speaker 5: happening is that the iPhone when it came out, everyone
Speaker 5: declared the death of language learning. Right because you could
Speaker 5: hold up your phone you could do the same translation
Speaker 5: that the air pods are offered today. Even a wearable
Speaker 5: can do it. The difference is that people actually want
Speaker 5: to live and breathe inside of the language. In fact,
Speaker 5: we just launched a part of our new technology that
Speaker 5: that explores AI that brings both the pedagogy and the
Speaker 5: human learning aspect of it together with AI called Babbill
Speaker 5: Speak and what that does. It allows people to actually
Speaker 5: practice the language of learning with with an AI coach
Speaker 5: and AI tuner, so there's pre defined conversations you can
Speaker 5: practice with. It does small corrections, but we see this
Speaker 5: as a compliment. We see this as a way for
Speaker 5: people to actually learn and accelerate the transmission of the language.
Speaker 5: I think the new technologies are really going to allow
Speaker 5: for dabbling inside of the language. It's going to be
Speaker 5: great on the go, it's going to be great for
Speaker 5: those one time use cases, but people will always want
Speaker 5: to learn and live inside of a language themselves.
Speaker 3: How do you view them more generally? Tim kind of
Speaker 3: the landscape of learning apps With the introduction of GPT five,
Speaker 3: we saw the team create a custom language learning app
Speaker 3: in minutes during the demos. I mean, it's kind of
Speaker 3: amazing how quickly all this is happening and how quickly
Speaker 3: you can do things. Do you view AI products like
Speaker 3: this is a real competitive threat and what can you
Speaker 3: do to keep your user base and sustain growth?
Speaker 4: Yeah? I watched the same demonstration.
Speaker 5: It was a cool friendshipp that they had created. It
Speaker 5: has limitation?
Speaker 4: Is it correct?
Speaker 3: Are you like, oh my god, this is going to
Speaker 3: be what was difficult for us?
Speaker 4: What was cool?
Speaker 5: No, definitely not in Oh my God, it was a
Speaker 5: cool because it was created so quickly. And what I
Speaker 5: think is so cool about it is people are starting
Speaker 5: to learn on demand. What the difference is though, is
Speaker 5: I think that people will want pedagogy, they'll want lessons,
Speaker 5: they'll want content, They'll want to be able to actually
Speaker 5: know that they're getting a trusted guide through the language
Speaker 5: learning process. Large language models, as you know, are good
Speaker 5: at many things, they're good everywhere. They've been declaring for
Speaker 5: now almost two years that they're going to take away
Speaker 5: all of the jobs and you know, just really disrupt
Speaker 5: all the markets. But I think what ends up happening
Speaker 5: is when you start to get into really narrow spaces
Speaker 5: such as language learning, people want to know that they
Speaker 5: have a real lesson plan, that they have really the
Speaker 5: transmission of the language in a way that's going to
Speaker 5: adapt to them. And that's what we think AI is
Speaker 5: going to empower. Inside of babble, we think it's really
Speaker 5: going to allow for the personalization of your individual learning plan.
Speaker 5: But with the content, the pedagogy, the transmission, so you
Speaker 5: retain you're able to speak it, you feel fluent and
Speaker 5: you actually feel comfortable with it. So I think from
Speaker 5: a build perspective, it's really interesting. We look at it
Speaker 5: as a tool to really help facilitate and go to
Speaker 5: market a lot faster. I think for a transmission and
Speaker 5: a trusted content, it'll actually end up being niche markets
Speaker 5: with real players such as ourselves.
Speaker 3: All right, So the truth will probably be in usage
Speaker 3: or the stickiness. And I'm assuming then you're signing up
Speaker 3: more and more people. You're very enthusiastic amid all of
Speaker 3: this potential competition. So give us an idea of customers, usership,
Speaker 3: people sticking to the platform. Give us some metrics.
Speaker 5: We're growing, we're going on, we have large demand. In fact,
Speaker 5: September is one of our larger months. Just give it
Speaker 5: back to school and back to office after the summertime
Speaker 5: that in New Year's as you can tell, the New
Speaker 5: Year's resolutions tend to be really heavy periods for us.
Speaker 5: What I could say is we have millions of subscribing customers.
Speaker 5: We're signing up thousands every single day. Demand has not
Speaker 5: waned on this side of the equation. We're really excited
Speaker 5: about the future. I actually get more excited about more
Speaker 5: of the players showing interest and actually saying, hey, look
Speaker 5: this is cool. Understand a language. Play with a language.
Speaker 5: But when you want to go really learn a language,
Speaker 5: go to the providers you trust to, such as TAMU.
Speaker 3: Say millions, it'd be great if you get one millions,
Speaker 3: a lot different than ten million or twenty million. So
Speaker 3: just give us an idea if you could. And how
Speaker 3: much is corporate versus kind of individual? And what are
Speaker 3: folks paying for a subscription? And how long do they
Speaker 3: stay with you?
Speaker 4: Yeah?
Speaker 5: I know probably have over two thousand business clients b
Speaker 5: to be clients. So I can tell you that we
Speaker 5: just signed Inner Miami Football Club. They're using it for
Speaker 5: their players, their coaches, their teams in order to teach
Speaker 5: them the languages and what they need to be. We've
Speaker 5: created a custom content for them as well, which gets
Speaker 5: really exciting. But I can tell you it's millions of
Speaker 5: consumer customers, and I can tell you it's more than
Speaker 5: one million, and it's more than two million, and it's
Speaker 5: more than three million, so it goes on up from there.
Speaker 4: Yeah.
Speaker 3: So and what do people pay corporate versus individuals? Yeah?
Speaker 5: Yeah, so on individuals, there's a variety of packages as
Speaker 5: you can imagine there's a variety of price points. We
Speaker 5: have a lifetime price point that we can that users
Speaker 5: can subscribe for a life and they get all of
Speaker 5: the features and all of the things that we actually
Speaker 5: upsell to and then you know, there's monthly plans. It
Speaker 5: is the normal subscription model for what users want from
Speaker 5: any moment of time.
Speaker 3: All right, but give me an idea. So Tim wants
Speaker 3: to learn what language Spanish? Spanish?
Speaker 2: Practice my Spanish better.
Speaker 3: He just wants to kind of learn Spanish, So give
Speaker 3: us an idea. So he signs up, and what would
Speaker 3: you be paying, like on a monthly basis or if
Speaker 3: you wanted the lifetime yes?
Speaker 5: Yeah, yeah, So if Tim you came to the site
Speaker 5: and signed up and downloaded the app, you could pay
Speaker 5: one hundred and ninety nine for the lifetime and then
Speaker 5: there's also discuts available, as all good subscription sides have.
Speaker 4: But then there's the monthly fee.
Speaker 5: Of twenty nine ninety nine that you could be paying
Speaker 5: as well.
Speaker 2: So okay, so why could do one nine nine for life? Yeah,
Speaker 2: that's a lot less expensive than competitors such as do
Speaker 2: a Lingo, which is you know that plus sum I
Speaker 2: think per year.
Speaker 3: So no catch, come on, no catch, So Tim signs up.
Speaker 3: I mean, and that's provided you stick around. No, I'm
Speaker 3: not trying to say, but right like, you've got to
Speaker 3: be around, right yeah.
Speaker 5: I look, with any languaeing, there has to be a
Speaker 5: real commitment to it and you have to actually practice
Speaker 5: and utilize it.
Speaker 3: Right.
Speaker 4: But we see the.
Speaker 5: Life happens right the families. You know, I have kids.
Speaker 5: I'm learning German right now. Right, I've moved to Berlin
Speaker 5: for the job. I knew very little German altogether. But
Speaker 5: what I could tell you is I have life come up,
Speaker 5: the kids have school, the kids have activities. I will
Speaker 5: pick up, I will put down. I will pick up
Speaker 5: and put down. But the one nine nights of life.
Speaker 2: Okay, interesting. We I'm curious about do a lingo in
Speaker 2: the competition that you see there. I'm wondering if you've
Speaker 2: considered moving outside of languages. We we use dual linguo
Speaker 2: at home, but more so for chess and reading with
Speaker 2: our kids. I don't know if it works, but it's great.
Speaker 2: The six year old has fun than we do for
Speaker 2: Spanish right now.
Speaker 4: Yeah.
Speaker 5: Yeah, you hit the core market there, which is the
Speaker 5: games are great and the great learning transmission, especially for
Speaker 5: the younger audiences. Right now, our specialty is language learning,
Speaker 5: where we're we really focus on that, we folks, on
Speaker 5: the transmission of language learning. We want to make sure
Speaker 5: that you have the most effective means in order to
Speaker 5: go from a zero to one conversation. And the way
Speaker 5: we look at that is you feel confident walking into
Speaker 5: a room and being able to know that you're speaking
Speaker 5: the language in which you're looking to speak. So we
Speaker 5: focus all of our linguistics, all of our teachers, all
Speaker 5: of the human centric pieces, and then we actually use
Speaker 5: AI as the tool to facilitate that in order to
Speaker 5: help make that happen faster. So that Will Speak is
Speaker 5: a good example of that, where we continue to allow
Speaker 5: you to practice speaking, continue to allow you the conversations,
Speaker 5: but we're hyper focused there. We really think that the
Speaker 5: games are going to leave to other people. We're focused
Speaker 5: on the languages you are.
Speaker 3: Okay, So that's a note like moving outside of languages.
Speaker 5: Okay, Yeah, languages are sweet spot when it.
Speaker 3: Comes to the AI spend and something we talk about
Speaker 3: a lot, right, I'm curious about what you guys are spending.
Speaker 3: What are you spending it on? Is it on engineering talent.
Speaker 3: Is a data centers, is it content? Is it something else?
Speaker 5: Yeah, we've be cashful Positives twenty eleven. It's a private company,
Speaker 5: so we're not out there raising capital. We are well funded.
Speaker 5: We're doing very well. Where we reinvest on our capex
Speaker 5: is we look for engineers, we're looking on AI talent,
Speaker 5: We're looking at the infrastructure. We're investing in what's going
Speaker 5: to actually transmit and actually forward the future. We actually
Speaker 5: think that this is an exciting time to be really
Speaker 5: looking at product features with our proprietary data set and
Speaker 5: our proprietary motes that we have inside of our ecosystem.
Speaker 5: You know, we have hundreds of millions of lessons completed
Speaker 5: a year. That's very rich data to be taking into
Speaker 5: proprietary llms and data models and really working inside of
Speaker 5: the AI to work towards the most effective product in
Speaker 5: terms of transmitting the language.
Speaker 2: Are you at this point able to use AI to
Speaker 2: create language courses? Are you able to use AI to
Speaker 2: do what humans used to do in recent years?
Speaker 5: We actually married the two. You know, where the real
Speaker 5: sweet spot was is not in removing people from creating
Speaker 5: the languages. It's facilitating the people to create the languages,
Speaker 5: so we do. Just to answer your question directly, we
Speaker 5: do use AI. We use it with the human centric piece.
Speaker 5: We've always found that our linguists and are also our
Speaker 5: teachers are the best to formulate all of the content
Speaker 5: so it can transmit better than anyone else and more effective.
Speaker 5: And so what we find is we marry the human
Speaker 5: with the AI tools. So we're using the blend of
Speaker 5: both goals. We haven't replaced jobs in order just to
Speaker 5: replace jobs.
Speaker 3: All right, I've got one really really important last question
Speaker 3: for you, Tim, how's the German going? Sure, how's the
Speaker 3: German going?
Speaker 5: You know, I'm be Schinzpec and de Deutsch, so it's
Speaker 5: using my Babbel every day, very little, but I'm learning
Speaker 5: very slowly.
Speaker 2: So okay, maybe next time he's on we do the
Speaker 2: interview in German, we get Matt Miller in here.
Speaker 5: Oh I'm on, I'm game.
Speaker 3: Matt would definitely do that really really well. All right, Tim,
Speaker 3: thanks so much fun to talk with you and get
Speaker 3: some time and hear what you guys are doing, especially
Speaker 3: when it comes to AI to incorporate and get in
Speaker 3: Tim Alan, chief executive officer of Babbel, joining us from Berlin, Germany,