Avalinguo

Avalinguo is the first app for developing talking skills in foreign languages where real users appear as avatars in a virtual room, using the cellphone, computer, or a VR headset.
With the avatars instead of video tiles like in Skype, users keep privacy about their clothes, their place, etc., and it feels less awkward to talk to strangers and to make mistakes. Users can join sessions whenever they want, there is no need for finding partners, scheduling, etc. The virtual room promotes immersion and makes it easy for the users to get involved in virtual games.

Pre-sales, tested in beta, app in Google store (search "avalinguo"

The Avalinguo app is oriented to independent language learners who want to apply in real conversation what they have learned. Some studies show that language learners, unlike other products such as baby diapers, are not tied to an age demographic group or sex, not even specific countries: there are language learners absolutely all over the world. But we have the requirement of having a smartphone and of course an internet connection, which gives some 3,500 million.

The problem we solve is what we call the “talking gap”, which is the contrast between, on one side, the wide availability of online content like video, podcasts, and books, and on the other side, the frustration language learners feel when they don’t find opportunities for talking practice. This is a huge problem, felt by millions!

Avalinguo is the first app for developing the talking skill in foreign languages where real users appear as avatars in a virtual room, using the cellphone, computer, or a VR headset.
The advantage of Avalinguo is that, with the avatars instead of video tiles like in Skype, users keep privacy about their clothes, their place, etc., and it feels less awkward to talk to strangers and to make mistakes. Users can join sessions whenever they want, there is no need for finding partners, scheduling, etc. The virtual room promotes immersion and makes it easy for users to get involved in games and virtual situations.

The direct competitors are companies providing talking practice to language learners, and they are: 1) platforms for one-to-one tutors, where iTalki is by far the dominant one; in the paid market, they take at least 50% of it; 2) language exchange platforms, like Tandem, which are inexpensive or free for the final user; the market share of language exchanges in terms of monetary value is a small fraction; 3) Independent language teachers and small schools, which are a big fraction of the market (some 30%), though this segment was heavily hit by the COVID-19 health crisis.
Nevertheless, most of the language learners don’t have talking practice almost at all, and they just carry on talking alone, reading, and watching videos in the target language. They are the most underserved ones.

Compared to private tutors, like iTalki, Avalinguo virtual rooms with a tutor are less expensive (because there are some 4 students instead of just one), but it’s not yet a big classroom where students can “hide in the back and relax”. Group conversations tend to be far more engaging than the student alone with the tutor (I have been myself in a French group conversation workshop for years with plenty of fun). Compared to individual language exchanges (each of the two parts is a native speaker of the language the other one wants), again, group conversations are more engaging than individual ones. According to the owner of Innovative Languages, the first date in language exchanges is fun, the second one less so, and after the third one it becomes extremely boring and usually, the two participants stop doing it. I also talked with the owner of Tandem and he told me they have thought of adding group conversations but for them, the profitability of this endeavor is questionable for the moment; I think it takes the agility of a startup to make it a reality.

This service is offered as a monthly subscription, just like Netflix, and this is the main revenue of the business. Other revenue streams could include ads in the walls of the virtual rooms, as well as sales of digital goods such as special avatars, voices, and the like.
Running costs are low because the service is based on software that runs on the cloud, which is becoming increasingly cheaper. The company is fully remote and we don't have offices (even before COVID). The main expenditure has been on software development.

The business model is by subscription, mostly directly from the language learners using it, but another channel is to sell a number of subscriptions to universities or big companies as a perk for their students or employees.
The main matric is of course MRR.

We need some money for software development, as most of the features we plan to have in Avalinguo are not in the current prototype available at the Google store, like for instance: cross-ratings of the session participants (1 to 5 stars), Mini-games for boosting the engagement in the sessions, Machine-learning-based evaluation of the pronunciation and fluency, and more. Of course we are not adding all of this to the initial product, and most of the features will be financed by the income, but more than 50 thousand dollars are needed for an initial compelling product.
We don’t need offices, as we are fully remote (we started like that before COVID-19 hit).
We don’t need to have our own servers, as we use cloud services like AWS, which can be adjusted depending on the workload (a big workload means lots of customers, which means lots of money to pay that).
Avalinguo is a very lean company.

Right now the 100% Avalinguo equity is split in 52% for myself and 48% for Ensitech, a partner company, but soon we are going to dilute that to be 80%, having about 10% for an investment ranging from $50,000 to $100,000 USD (the remaining of the 20% will be for employee incentives).

Virtual Reality is becoming a commodity, not a disruptor anymore, as is increasingly so with Artificial Intelligence, so in the case of Avalinguo, there are no real technology risks. The market risks come mainly from the fact that Avalinguo operates a two-sided market, with one being the language learners and the other the tutors; in this sense, it’s similar to Uber, and, in the language learning industry, to iTalki. Those companies took a big investment to get there because you need to lose money in one of the market sides while developing the other one unless you can grow them in perfect synchrony, which is very difficult to do. We are aware this is a real challenge.

- In June 2019 we took and completed the MIDE (Madrid Innovation-Driven Ecosystem) Bootcamp, an initiative of cooperation with the Mexican private university Tecnologico de Monterrey. The program was presential in Madrid.
- In January 2021 we graduated from the Founder Institute Frankfurt chapter program, specialized in Language learning. The program was fully remote and only 4 out of the initial 15 startups graduated.

Avalinguo was a finalist at the World level at the Global EdTech Startups Awards (GESAwards 2020) at the track “Learn and Connect”. Out of 204 applicants in that track, Avalinguo was one of the 5 finalists (didn’t win).