Arne Schepker, the CEO of the popular Berlin-based language learning platform Babbel, is stepping down, and the company’s co-founder and former CEO Markus Witte is stepping back in to lead the company “into a new phase while searching for Arne’s successor with patience,” the company said. This new phase, unsurprisingly, will involve AI.
Witte will not claim the CEO role for the time being, but instead will be executive chairman and managing director.
After almost exactly five years as the sole CEO — and a few months prior as co-CEO together with Witte, who had held the position in the preceding years — Schepker decided not to renew his contract, he told me. Witte will continue in his role as Executive Chairman and will now also take on the Managing Director position.
“I just couldn’t get to a strong enough ‘yes’ and as a CEO, I don’t feel you can do the job with just 100 percent commitment. It needs to be 180 percent, no matter what. And I couldn’t get there, and I didn’t feel that was enough and right and sufficient for the team, for the company, for our shareholders, so I decided not to extend my contract,” he said.
Schepker joined Babbel as its CMO in 2015. At this point, he said, he’s seeing repeating patterns. He couldn’t quite get excited about another round of creating an annual budget and setting OKRs for the team.
“That’s reason number one. Reason number two is that the timing actually is quite good, because we are, anyways, moving into a new phase as a company,” he said. In addition, he also wants to take more time to travel with his family for at least the next year. “Don’t expect anything on my LinkedIn feed until next winter.”
He also noted that he was happy to be able to do our interview together with Witte. “I think a founder who built the company, who built our first products, who built our culture, who built all the foundations that I was able to work off of, and someone who I deeply trust and have a strong alignment with is a fantastic transition,” he said.
During Schepker’s tenure, Babbel’s revenue grew 6x to around $300 million, with a team of almost 1,000 people.
“We’ve achieved what we wanted to achieve,” he said. But what he’s perhaps most proud of is that the company was able to help students during the pandemic and now Ukrainian refugees with their language learning needs for free.
“There’s no monetary value to that. I can’t even prove you an ROI on it. Still to the day, I cannot, but not a conversation goes by where that’s not brought up, whether that’s a press interview, a candidate interview, or just a dinner with friends.”
So what does the next phase of Babbel look like? Witte told me that he believes as technology is changing, AI can now play a more direct role in helping people learn a new language. Babbel already used machine learning under the hood, but it never billed itself as an “AI company.” Instead, it always put an emphasis on the teachers and experts it worked with to create its courses (in no small part to differentiate from competitors like Duolingo).
With the technology moving so quickly, though, Witte also acknowledged that it’s hard even to think about strategy beyond the next half year.
“We’re in a phase where even people building large language models don’t know what the next generation will be able to do,” he said. “And so I think even companies of our size, so not very early-stage startups, need to be more nimble than they ever have been.”
And at this stage, he believes, having a founder back at the helm of the company may actually be an advantage because it’s easier for him, as a founder (and one of the largest shareholders in the company), to make risky changes to the company’s strategy.
In Witte’s view, we’ve now reached a point where the combination of large language models, which tend to excel at language-related tasks, and Babbel’s deep expertise in language learning, will change how the company goes about teaching its customers. Before, the technology simply wasn’t there. “We have come to the point where what we said before is not true anymore,” he said.
Schepker also noted that at its core, Babbel’s mission and the problem it tries to solve is a human one.
“The problem to solve is still human language learning. You still want to speak to someone in another language. You want to have a conversation with a loved one, a family member, whatever it is,” he said. “There’s a real opportunity here for Babbel to use all the didactic knowledge that we have, to use all the data that we have, to use this new technology and put that together and create a real, personalized and powerful language learning journey that finally gets us to crack the problem for real. Because we’ve made language learning easier, but it’s still work.”
In addition to navigating the change brought upon by AI, Witte also noted that he wants to focus on creating more “moments of delight,” for the company’s employees and users. “These things that bring a smile to your face, on all the different levels, that’s what I’m driving towards,” he told me. “That’s kind of my mental model in the moment. I don’t think we have to excel in everything. I don’t think we have to polish everything, but I want these moments of delight on all dimensions, on all levels.”