11 Oct 2023

Moving from start-up to scale-up: Advice from someone who did it

Picture this: a group of friends, Thomas Holl, Toine Diepstraten, Lorenz Heine, and Markus Witte, with a shared background in the music industry, decided to take on a completely different challenge – creating the online language learning platform, Babbel. They were not language experts, marketers, or backed by investors when they started out, and, as you might guess, those early days were a bit of a rollercoaster.

But here is the thing about startups: they are rarely a smooth ride. They demand passion, adaptability, and a whole lot of determination. In this article, we are going to dive into Thomas Holl's experiences as one of Babbel's co-founders. While his story is uniquely Babbel's, the lessons he has learned along the way are like a roadmap for any startup aiming to make it big.

Embrace the journey

Every start-up has its challenges, but this is part of the process. As Holl states, “We saw the opportunity,” which led them from the heart of Berlin to New York.

Seven tough but successful years after launching, the founders decided to expand from Europe to the US, making lots of mistakes along the way. 

However, as is sometimes the case when you take an alternative route, some of the more unconventional choices started to pay off. 

“I am proud to say that we have grown into a platform offering 14 languages, a self-learning app, Babbel Live - online classes led by expert teachers, and over 20 podcasts,” affirms Holl.

Innovate and adapt

In today's fast-paced digital landscape, innovation is the lifeblood of startups. Holl recalls, “there simply was no category for online language learning... it was hard to convince people that they could learn a new language on the web.” Yet, they persisted and continuously innovated their offerings.

For startups, the ability to adapt and innovate is crucial. As technology evolved, smartphones became a game-changer. Holl explains that “[Babbel] premium model, which is subscription and fee based, was also a new concept we were pushing in that space.”

Understand your market

As Babbel expanded into the US, they faced unique challenges. Holl admits, “At the time, we underestimated the fact that most Americans do not need a second language to do business.” Recognising differences between your expectations and the business reality and adapting accordingly is crucial for global growth.

For Babbel, the challenge lay in adapting to the fact that in Europe, languages are often learned out of necessity for work, travel preparation, and genuine interest. In 

contrast, in the United States, language skills are often viewed as more of an optional extra. 

As a result, “for B2C audiences in the US, we tend to use the terms ‘self-improvement’ and ‘lifelong learning’, both of which are very popular in America,” tells me Holl. 

Diversify with purpose

It is important not to get stuck in one idea that works - society is always moving and adapting, and so are your customers. Staying on top of the latest trends and predictions is very important when thinking about adapting your start-up’s business model.

When Babbel launched Mexican Spanish for the US market, they took into account the specific needs of our B2B customers, such as those in the healthcare, construction and landscaping industries. They also navigated different payment systems, legal requirements and marketing strategies, while ensuring that their core language learning technology remains effective. “This approach has resulted in greater engagement and better learning outcomes for our users, because it is practical and genuinely useful to users,” explains Holl.

Advice for start-ups

Offering advice for fellow matured start-ups, which want to stay ahead of the game, Holl recommends investing in technology and ensuring that you stay abreast of technology trends: “These changes will drive your customers' expectations and habits, and it is important to invest in and lead these changes early. Even at the risk that they will not become mainstream. But sometimes they allow you to solve a real customer problem much better than you could before.”

Second, Holl notes the importance of understanding evolving customer needs, as with AI, products and your customers' habits will change rapidly, and you should adapt to that.

Conclusion

In conclusion, the journey from startup to scale-up is a dynamic ride, and Babbel's story provides a roadmap for aspiring entrepreneurs. It underscores the importance of determination, innovation, market understanding, and adapting to evolving customer needs. Embracing change and staying ahead of technology trends are also key to success. As you venture into entrepreneurship, remember that challenges are opportunities, and lessons learned pave the way for growth and success.

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