As businesses go global, the market for second-language acquisition continues to grow due to both increasing globalization and an increasingly diverse U.S. population. According to the 2010 Census, the foreign-born population of the United States is approaching 37 million people. Meanwhile, approximately 280 million Americans age five and older speak only English in their homes. How can companies capitalize on the proliferation of technology to help adults learn a second language? Enter LiveMocha. Founded in 2007 and located in the Seattle suburb of Bellevue, Washington, it is the largest online-based language learning service with 9 million members in nearly 200 countries. It's giving Rosetta Stone some serious competition by utilizing new technologies and offering a product at $150 to compete with the $500 to $1,000 that Rosetta charges for an equivalent service. Inc.com's Lou Dubois spoke with LiveMocha CEO Michael Schutzler, the former CEO of Classmates.com, one of the first social networks, about the continued need for secondary language acquisition in the United States, the industry's significant growth potential, and why Schutzler considers the company a mix of social networking and gaming mechanics.
You have a clear passion for this role. Where does that stem from?
From a personal perspective, my parents are immigrants and I grew up bilingual, speaking German and English. My first job out of college was for a telecommunications company that sent me all over the Middle East for six years, so I learned to read, write, and speak Arabic. I've always been interested in travel and other cultures and languages. Why LiveMocha, though? The other source of passion here is that we live in a globally connected world, whether we want to call it globalization or not. The bottom line is the workforce around the world has changed dramatically in just the last five years. All over the world, the bottom line is that you have a global workforce and there is a need for a comprehensive understanding of services and languages. And so we're in a great position to service that need.
You target both individuals and organizations. What are the benefits for each?
If you're an accountant, for example, and can speak English, you're in great shape. But if you can also speak Mandarin, you're in much better shape. And these days, you're up against people who grew up in China, got their schooling in the United States at some of the best colleges, and are fluent in Mandarin, English, and probably a third language. So from a competitive standpoint, if you have career aspirations, although its still true that English is the single biggest driver for opportunity from an economic perspective, the truth is from a competitive landscape, in a global workforce, if your only language is English, you're actually constraining your career opportunities. From an organizational standpoint, most companies recognize that if you have mastered one language outside of your native tongue, you'll be much more likely to develop cultural sensitivities to effectively collaborate in a global workforce. So as a business, you're better off hiring people with those skills and that demonstrated ability to work across different cultures and languages because it will only help your company grow.
Your Twitter profile states a company motto of "We will not rest until every person on Earth is fluent in at least two languages." How far are we from that becoming a reality?
The United States is in pretty bad shape, and it's not just the U.S., but also all English-speaking countries. The U.S., U.K., Australia and Canada all suffer from this myopia. Unfortunately, the language learning you are confronted with or offered in high school is classroom-based and text-based. You learn to read, write and pass a test. You don't get to practice the language much in a spoken word. And without practicing the conversation, you're basically just memorizing a bunch of symbols, and your retention is near negligible. Our entire construct is around what is necessary for you to pick up the key vocabulary and grammatical construction necessarily to have a conversation, and literally on lesson one, unit one we give you a chance to practice that both asynchronously and synchronously with native speakers. The truth is, you can get along just fantastic with about 1500 to 2,000 words in a language. You don't need to memorize the 20,000 words to be an orator.
How are you differentiating your business from the better-known Rosetta Stone?
The big difference is that we assume you are not a child, that you are over the age of 17, and you are actually an adult learner. There are 50 years of research that demonstrate this, but you need to actually understand the syntax of the target language as it maps to your current syntax. For example, it's not good enough to just learn vocabulary in German, but you need to learn how they construct a sentence, and your brain needs that to do the mapping. They assume your brain will do that work. We actually teach you that and then force you to practice that in conversation with a native speaker of that language, which is a radical difference between us and everybody else.
How do you manage the learning, as a community-based online service with instructors and students all over the world?
Everyone in the world, with the exception of many Americans, believes rightly so that if they're going to learn a language, they actually need help from a guiding hand that's not just a native speaker. They recognize that if you're learning Spanish, you can only learn so much from a book or a website, you actually need to practice with people. The entire community of nine million people at LiveMocha is a self-managed community, so the people have a rule of engagement that enforces this and makes it all about language-learning. So the community manages itself and the tutors build a reputation by serving people in the community and as they serve them well, they get rated by those people they're interacting with and by their peers. Over time, they accumulate what we call Mochapoints. And those with tens of thousands of mocha points are clearly sought after because they've clearly contributed to many people learning a language.
You have a background in social networking at Classmates, worked in social gaming at RealNetworks, and led marketing efforts at Monster.com. Why LiveMocha?
Well I was semi-retired, and at first they were looking for me to find someone who would be a candidate CEO. When I looked at the company, though, I thought it was a perfect combination of social networking and game mechanics. Yes, it's a language-learning site but the business model looks a heck of a lot more like that and might look closer to what Monster has than what Classmates did. So I just fell in love with the opportunities here because this is a completely global organization. With nine million members, and only 11 percent U.S.-born, it makes it really easy for us to match up all those pairs. So if you're an Icelandic speaker wanting to learn Greek or a Dutch speaker looking to learn French, we can find you not only good partners to practice with but also someone to help you grow. And that global scale makes it much easier to serve that need. It's quite fascinating to me how popular LiveMocha is in countries like Brazil and Korea, which are also hot marketplaces for online and social games. Those are highly communicative cultures and highly engaged online communities. The Russian-speaking community around the world is gaga for our English product and so is the Middle East, whether its Morocco, Egypt, Jordan, or Syria. Americans are really hot on Spanish and French, and maybe one of the big surprises is that in Brazil the No. 1 language is English, No. 2 is Spanish, but quickly on the heels of that is Italian, because of the popularity of a particular television show there.