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Investment Memo Practice- Fluent

Jul 22, 2020

Quick note before we begin:


Fluent is a Chrome Extension that substitutes French words into the page you’re currently reading. Their Product Thesis is that by increasing your exposure to French vocabulary words in situ, you can become more comfortable with the lanauge. I’ve been using Fluent on and off for a handful of months. Useful Links
Website link
Public-facing product roadmap

I will examine Fluent from the hypothetical standpoint of: Would I invest $1M into this company and expect it to make money? How much money would you expect it to make? What would need to be true and where would you need to de-risk in order for that outcome to be more likely? Let’s begin.

To: Investors
Re: Fluent
Jul 22, 2020


At the moment, we do not recommend an investment in Fluent. There are too many unproven hypotheses and open questions with large amplitude to be confident in an investment, such as:


Language learning is a broad market, and competitors can best be thought of in terms of their approach, which then informs their business model:

Rosetta Stone is, by far, the most successful and recognizable commercial brand in this space. However, its high price point and brand relegate it to an older, professional persona.

The Space

The most useful way to think about learning a language is by breaking it down into 4 main functional skills: Read/Write/Listen/Speak.

There are other elements, of course—idioms, cultural touchpoints, slang, etc—but these are the functional skills.

We can also think about language proficiency as gathering enough knowledge to satisfy these heuristics:

Hand-drawn 2-axis chart. X-axis shows Read, Write, Listen, and Speak going left to right; Y-axis shows Group to Solo from top to bottom. Dots on the chart show selected competitors: Duolingo is in the bottom left because they target Write/Solo. FluentU is in the bottom right at Listen/Solo; Rosetta Stone is bottom-right-most at Speak/Solo. College Classes are at the top right with Speak/Group. There is a stick-figure in the bottom left, which symbolizes a beginner language learner. Dotted arrows connect the stick-figure to each of the dots. For College Classes, the dotted arrow makes stops at Read/Group, Write/Group, Listen/Group, before ending at Speak/Group. For Rosetta Stone, the dotted arrow makes stops at Read/Solor, Write/Solo, Listen/Solo, and ends at Speak/Solo

As you ladder up in the heuristics, you progress from needing to focus mostly on Reading to needing to focus mostly on Speaking. Your practice also progresses from being able to be done Solo to needing to be done in a Group

Currently, Fluent targets the Read/Solo quadrant:

Same chart as above, but with Fluent included. It exists in the bottom-left corner, at Read/Solo

Business Model

At this point in time, Fluent does not appear to have monetization. The models in the industry that they can choose from, however, are:

The most likely evolution in business model looks like:

  1. [Bootstrap] Build Daily engagement and test Outcomes (i.e. does immersion help users become better at reading French?) in Product’s current iteration
  2. [Bootstrap or ad-supported free version, depending on funding] Track progress with User Accounts; build a dedicated desktop/mobile web experience to run spaced repetition exercises for users
  3. [Recurring monthly subscription] If users are seeing success in French literacy, convert some portion of them to Paid Subscription
  4. [Layer on other models where the Product can support]
    1. In order to target Listen/Speak, connect users together and charge a per-session fee
    2. Offer courses that prep students for certifications

And the set of metrics they’ll use to pilot each stage:

  1. Topline metric: count of Daily Users who hover over at least n words
  2. Metrics: Installs; Engagement (probably a middle-funnel Engagement metric like ‘clicks on pronunciation’); Median difficulty progression rate (i.e. how quickly do users ramp up the difficulty)

Risks and open questions

There are a considerable number of open questions that we need to test to be more sure about an investment. In no particular order:

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