Interview with Markus Witte of Babbel.com
June 2, 2009
The following is an email interview with Markus Witte, Co-Founder & a Managing Director of Babbel.com. It is part 2 of our focus on this fast growing startup out of Berlin. [Check out part 1 here] Babbel.com is a globally-focused Language Learning Platform, with over 300,000 users. I’m impressed with their innovative plan for using their API as a core strategy leading to increasing their pipeline of users & paying customers.
GSB: I’ve read how your team met when working at Native Instruments. But, can you provide a little deeper story on how & why the 4 of you came together to create Babbel?
Markus: That’s right, the four Babbel founders met at Native Instruments. We had all been working there for some time, though two of us had second jobs. Our Technical Director, Thomas, was an IT consultant at Accenture, and Toine, who is now responsible for R&D and for the server back-end, was also self-employed as a software developer. At Babbel, Lorenz and I are now the Managing Directors — or CEO’s as you might say in the US. Back then, my role at Native Instruments was online marketing and building up and maintaining the website while Lorenz was one of the founders of Native Instruments.
Lorenz was really the creative mind behind Babbel. As he was always working on new business ideas and generating online concepts for Native Instruments, we often sat down together to talk about new projects. Lorenz had this idea for an online collaboration platform for musicians that was really groundbreaking — and I totally jumped at it. When we realized however that this was something that wasn’t going to be possible at Native Instruments, we started thinking about breaking off and starting a more or less independent company. We contacted Thomas and Toine, who are two of the best software developers we know. By then they had already left Native Instruments. We were really excited about the team and began thinking about different business ideas. Online language learning simply seemed the best thing to do because it was a rapidly growing market and, at least in late 2006, the competition was very limited.
GSB: Is the unstable economic climate affecting consumers desire to pay for entertainment learning environments such as Babbel? Also, is it affecting your ability to secure more funding for future growth?
Markus: Of course the bad economy affects almost everybody. People tend to be more conservative in their spending, and it can be difficult to sell anything in this climate. But we also see the opposite effect in our market. Pressure in the labor market has increased, and continuing education, or let’s say, extra-curricular learning, has become more important than ever. As we offer a very affordable way to increase foreign language skills, we seem to have the right product at the right time.
The VC market on the other hand is not very favorable for start-ups, as values have decreased significantly. We do however see a lively interest from different international VC’s. At this point, securing more funding is not the problem, the real question is if the conditions are acceptable. Fortunately, we are well-funded for the time being and don’t have to rush towards the next round.
GSB: Can you talk a bit about your coming API & how it will help you increase market penetration?
Markus: From a technical point of view, Babbel is different than most other websites. It is a Rich Internet Application (RIA) which means that the technical structure is clearly divided between front-end and back-end layers. Both layers are already communicating over an API. Opening this interface enables application developers all over the world to use Babbel content in all kinds of environments and contexts. Of course this is a great advantage for our current users, as they can recap their lessons in the way they feel most comfortable. As these third party applications will spread into different networks and markets, we expect to find a lot of new users.
Our primary objective is to improve the learning experience for existing users and continue to provide innovative content for new users. We’re going to offer paid content on top of the free service, and we’re confident people will like it. When it comes down to it, we’re going to have to find a way to sustain our business through revenue we make, but we truly anticipate that we’ll also be able to continue supplying a quality service that is completely free.
GSB: Can you give some examples of the types of developers & applications you expect to utilize your API?
Markus: Babbel content could be very interesting for anybody who builds internet applications, be it on mobile platforms like iPhone or Android, as desktop applications under Windows or Mac OS, or as plugins for social networks like Facebook or Hi5. These applications can be distributed free of charge or sold by the developer. We’ll provide our content for free, and only charge the customers who want to buy our premium services.
GSB: Is there a “united startup community” in Berlin supporting each other? How easy is it to recruit new staff & Rails developers in this market?
Markus: Yes, there is a lively startup scene here in Berlin. Our location here in Kreuzberg is a little off the industry hotspot in Mitte, but we are in constant contact with many small and larger startups. Startup events like these help a lot to maintain and intensify contact among startups.
- “Echtzeit” http://www.deutsche-startups.de/echtzeit/
- the TechCrunch meetups e.g. http://www.techcrunch.com/2008/05/07/techcrunchcrunchgear-meetup-berlin-june-11
- the Berlin Web Week http://berlinwebweek.de/
