“Free” is the most important keyword on the World Wide Web. It implies “free of charge”. Babbel has been “free” in this sense for almost two years. More than 500,000 users have registered for the platform. Now, with the release of Babbel 2.0, we start charging. Why? Might this seem unfair? Shouldn’t the internet – and education in general – be free for all? So many other sites seem to show that this model works.
Our plan, in fact, was to partially finance Babbel with advertising. We intended to provide a “freemium” product that would have a basic version that was public, while providing additional premium content for those who might want to dig deeper. But now we see this just doesn’t work. It simply is not possible to build a high-quality online learning environment while simultaneously selling ad space effectively.We tried to bring these two objectives together. But ultimately we had to accept that a business model appropriate for social networks and news services is plain wrong when applied to online education.
Babbel is now one of the first online services to decisively abandon this antiquated idea of “free”. We certainly still want to make the world – or at least the internet – a better place, but we no longer think that we can do so using online advertising. In this (admittedly epic) blog postI’d like to give some background about our decision and some words on some related, internet-wide changes.
Free as in “Free Sharing” or as in “Freebie”?
The internet does provide a number of highly valuable things for free. Software such as the Linux operating system or the Mozilla browser belongsto this category, as well as some online encyclopedias and communities. It’s wonderful how many useful things you can find onlinethat are absolutely free. This is thanks to a combination of internet technology, on the one hand, and the selfless dedication and idealism of a great number of people all over the planet on the other.
But beyond these truly free services, there are a great number of websites, as well as search engines, freemail, and a good portion of online dictionaries and social networks, that are sponsored by ads. In contrast to Open Source software and Creative Commons, where developers and authors often work for free, ad-sponsored services are designed to make money – and they do.
What’s Wrong with Ads?
Of course, making money is not necessarily a bad thing. But ads can have drawbacks for users of these sites, some of which are obvious and some of which are not so apparent.
The most striking downside of advertising is the ads themselves. They have to attract attention, so they are flashy. They are constantly evolving to keep us from becoming immune to them. The objective is consistently to draw our attention away from other things like news or blog posts and to make us read, click and interact with more ad content and, ultimately, buy a product. Advertising’s main strategy is interruption. And interruption is what we at Babbel are trying to avoid.
Yet another aspect of online ads is that they don’t have to get everybody’s attention. They can focus on a specific target group. So besides making ads more attractive, promoters and engineers are working to “target” them to those who are most likely to respond (i.e. to buy). To do this, user data has to be collected, processed, and analyzed. This data analysis doesn’t harm people per se, but more and more internet users want to protect their privacy andare justifiably feeling uneasy about it. I must admit I feel a bit uneasy myself when I see how much it is possible to know about the users of your website when their personal data is what you’re after.
But there is another, more insidious, drawback of ad-sponsoring that is less visible to the naked eye: the true customers of these ad-sponsored services are not the users but rather the advertisers. And as everywhere else, the Customer is King. This means that these services are not optimized for the best use-value but for the best click-rates and advertising revenue. Of course, users need to be brought back to the website somehow in order to see the ads and to click on them… but that is just a means to another end.
These downsides of ad-sponsoring are especially problematic in a learning application. If we want to build a new kind of learning environment that really works, we simply cannot let the learner’s attention consistently get drawn away. We don’t want to spend our engineering resources on ad targetting, but rather on improving the Refresher and Recommendation systems. Most of all, we need our customer to be the learner.
Our idea is to create a new kind of online learning system that adjusts itself to the needs of the learner and makes it easy to comprehend new subject matter without too much effort. This has yet to be done successfully, and we have no real role model we can emulate or by whom we can “be inspired”. It’s pioneering work, and it requires expertise to be constantly rethought and redone.
To significantly improve our service and to approach that user-centered learning environment we’re dreaming of, we’ve put together an extensive team of professionals from different disciplines. Software developers and internet specialists work side by side with more than 20 teachers and language experts. Simultaneously, we are striving to make this complex application easy to use and more or less imperceptible behind the content.
So yes, Babbel 2.0 is commercial. This means that we want to – and have to – make a living from of it. We’ve got some financing and loans, but ultimately, wehave to pay our own bills. And it seems that advertising is the wrong way to do this.
Because we deliver Babbel over the internet and don’t have so many variable costs per user, we can keep the price relatively low. Instead of charging more than a hundred Euros per product, as many learning software companies do, Babbel goes for a price of €4.95 to €8.95 per month. That’s affordable for anyone who wants to learn a new language. Also, we make it a point to have fair conditions. There are no hidden costs or implicit commitments. Users can cancel their membership at any time without any unpleasant surprises.
Internet Beyond the Advertising Industry: Will this be Web 3.0?
It’s clear that we are breaking a taboo. Many internet users think that all online services should be free. A lot of them will be angered by our change in strategy. But we’re convinced this will be the best way. As a matter of fact, we think it brings with it a lot of exciting opportunities.
As the internet plays an increasingly important role in all our lives, unreliable quality becomes more and more of an issue. If we use the internet for our basic everyday needs, we can’t afford to waste time comparing and verifying information and stitching together our own services. We need quality delivered steadily and without distraction. Again, this is especially true for online education.
This is why paid services have a great future. The demand for high-quality services and providers who don’t monetize user data is rising. After the huge wave of ad-sponsored “Web 2.0″ websites, these new business models might be the core of what could be “Web 3.0.”
Paid services are particularly advantageous for small providers and start-ups because you don’t need to reach a “critical mass”. You can survive on the subscriptions of your customers, even if you have a comparably small niche market. That’s why this potential Web 3.0 could be more diverse – and less monopolistic – than what we see now. Babbel 2.0 is one step in that direction. We hope that many users take that step with us.
Babbel is changing – for the better. With the just-announced funding of one million Euros from the EU’s European Regional Development Fund (ERDF) and the State of Berlin, we have plans to expand through 2011 in technology and content. This means new and improved vocabulary packages, Beginners’ Courses, grammar lessons and an even better learning experience. The funds will be complemented by 200,000 Euros of our own.
In contrast with various other online learning platforms, Babbel.com is completely ad-free. The idea is to keep up the quality of the content with an eye to Babbel.com’s 500,000+ users, and not to advertisers. Not exceptionally in the world of young internet companies, up until now our earnings have been significantly less than our expenses. With the help of venture capital and the appeal of a completely revamped platform, we’re looking toward a unique and exciting new future for language learning on the internet.
We’re very pleased that we’ve been selected to present for the start-up track this year at Next09, which will take place in Hamburg May 5 and 6. Next is an annual networking and trend conference for the European web industry.
The theme of the conference this year really resounds with Babbel: the idea is “Shared Economy”. The basic concept is that the more businesses share their success, the more they can ultimately profit – an idea the we too share! Markus Witte, Managing Director and one of our founders, will present Babbel to some of the other 1500 participants, familiarizing them with our experiments with a “freemium” model and the fun of learning while helping one another out on the Babbel platform.
Markus will be speaking in Hamburg Winterhude (Kampnagel
) at 5:40 p.m. on May 6. He’ll be the last speaker before the final keynote at 6pm.
In these days the Babbel Blog will be going through some changes, and our readers will notice a shift in the content. The focus will now be more on the Babbel online language learning platform itself. You will find ideas and tidbits from Babbel’s creators, news about — and stories from — Babbel users, and articles and interviews on internet-based elearning in general, among other things.
We have to say goodbye and thanks to Mara and Lorenz, the two blog editors. Thanks for the great work, journalistic quality and dedication you put into this project!
Mara and Lorenz’s interviews and articles will however still be available here. If you read German, you can follow some of Lorenz’s work at his blog on education gaming, and Mara will be overseeing English language content at Babbel and also on this blog.
Stay tuned for upcoming posts!!
Polyglot happy wishes to Babbel.com that hasn’t stopped talkin’ since it launched in January 15, 2008! (Pictured at a little birthday shindig from a hazy last night in Berlin above.) Have any multilingual birthday wishes? Comment away… and check out some of behind the scenes features below to see a bit more how the intuitive, interactive language learning platform ticks. Alles Gute zum Geburtstag, happy Bday, feliz cumpleaños, joyeaux anniversaire, buon compleanno!
The Babbel Blog team took a short trip on the UBahn over to the Berlin office of Babbel.com, the interactive language-learning platform, to speak with Ulrike Kerbstadt (right) and Sylvie Roche (left). They are Just two of the folks responsible for the learning content at the website. Click here to listen to the interview that is part one in a series taking a gander “Inside Babbel”.
Babbel Blog: What do you do at Babbel?
Ulrike Kerbstadt: I’m responsible for language learning content. I develop the material with a team of native speakers and have the didactic background.
Sylvie Roche: I’m content editor and work with the same team developing other kinds of content.
Babbel Blog’s Interview with Frank Schüler und Matthias Hornberger of Kizoo, a Babbel investor. Schüler is Kizoo’s president and was managing director of subsidiaries of Web.de; Hornberger is Kizoo’s CFO and responsible for Finance, Controlling, Investor Relations & Corporate Affairs. (For the original German version click here)
When did you first hear about the “internet”?
In business terms it was around 1995. We probably all figured out what roll the internet was going to play at the university. For me personally, in ’91 and ’92, it was a communication tool between universities. I myself was in New York then, and at the time the internet was already an important communication tool with people back home.