Isabelle shares how Translated expanded from its core business of serving tens of thousands of small clients sourced through SEO to taking on large enterprise accounts such as Airbnb.
She also discusses the Pi Campus she founded and leads with husband and Translated Co-founder and CEO, Marco Trombetti.
In the early part of the pod, Florian and Esther share their top five picks from Slator’s most viewed stories of 2020, singling out the year’s heavy-hitters, such as RWS’ acquisition of rival LSP SDL (the #1 breaking-news story of 2020), and Acolad’s acquisition of AMPLEXOR.
Florian’s other picks include: Freelancers’ AB5 exemption win in California; LSPs suing a client over “polluted” TMs in Canada; and the launch of the world’s largest language model, GPT-3, which took the Internet by storm.
Esther’s top hitter was the Slator’s 2020 Language Service Provider Index (LSPI). Also on her list were the Stratus Video’s sale to AMN Healthcare. And, incidentally, Stratus was one of the fastest-growing LSPs in 2019 (another top pick), while Netflix’s subtitling research and ASICS Digital’s localization buyer feature also made the cut.
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Florian: Welcome back to SlatorPod with Isabelle Andrieu, Co-founder and Chairman of Translated. Translated has been a big name so tell us a bit more about the background. How have you gotten into this business? What is the language component of it? You started very early in the business in 1999, tell us a bit more about that?
Isabelle: I am French and I am also a mother of three kids. I studied Applied Languages, so Italian, English and German, in Grenoble, in the French Alps. At the age of 22, I moved to Rome with my husband, Marco Trombetti, who is the Co-founder. We decided to begin this company together as it was a natural thing we could do together, me being a linguist and him being a computer geek. We wanted to stay together, so we started up a translation company in 1999, it has been 20 years now. We started in a room next to the seaside. It was nice, but hard to find good people to work with in a remote location so we moved to Rome pretty soon. I was the COO of the company for some years.
Today I respond to the board of directors and I also help with the education within the company training. I have another role in a spin-off of Translated, it is a school that prepares the next generation of engineers with AI. I serve as the CEO there, it is called Pi School. The company is owned by myself and Marco, and Alessandro Cattelan is the COO right now. He is on this amazing journey with us, starting as a project manager back in 2008 and now he has been running all the operations for three years. The start for Translated was a little bit slow, but now after 20 years, we run this company with 120 employees. We operate in Rome and the US and we have 150,000 customers and 250,000 freelance translators around the world. It has been a journey.
Florian: Let us talk a bit about the challenges this year. How has 2020 been for you? You have this huge client base, you have a very good insight into what parts of the language industry are doing well, which other parts have struggled this year? Tell us a bit more from a client-side, but also operationally for you as a company, how have you managed this very tricky year so far?
Isabelle: It has been a very complex year, but with a positive trend at the end. In March, we went in complete lockdown and after two months we lost 30% of our revenue. Dealing with small and medium enterprises, a lot of companies decided not to work with foundations, but we immediately set up two main goals. One goal was nobody would go in intensive care in the company and the other was that no one would lose their job. We created this task force, to tackle these issues and there was one person responsible for each particular issue. One for the revenue, one for the security, one for the remote work situation and one also for the psychological support of the team. We managed like that.
After one or two months, we received an impressive amount of work that was very unexpected. The revenue went much higher than the best-case scenario that we planned when COVID-19 started. The winning bet we made was to do things a little bit differently, working a lot with communication and helping clients with more support and at the end, that paid off because it was really positive. The trend went very high, so we are closing the year with really good results.
Florian: From a customer point of view, where did you see the biggest hit, but also the biggest bounce backs or which ones were steady in terms of the segments?
Isabelle: With tourism, we had very big clients that went completely out of business. Manufacturing was okay and geographically speaking Germany, all these countries were not really touched and the business continued to grow. In the beginning, there was this great need of communication for people. We had a lot of clients that needed that, and we had to give them a lot of support and, increasing night shifts, different services that we put in plan to help them communicate more.
Esther: Translated is also quite well known for using SEO and Google ads. Can you tell us a bit about the profile of these smaller, maybe ad hoc, long-tail clients? How do they come into the business and also what challenges or how do you make sure that you are servicing their needs in addition to the needs of the larger customers?
Isabelle: We started as a long-tail translation company. We had no money to invest in advertisements when we started. What we did is that we started to position ourselves by doing reverse engineering with search engines. It was easy to do with Alta Vista, Yahoo and local search engines in 1999. Then Google came with PageRank and it was no longer possible, but luckily we had enough money to start advertising. We attract a lot of small businesses and individuals, but what is interesting is that it is really in our genes the way we serve small and medium enterprises and you get a lot of satisfaction when you help them go global for the first time. It is now our culture and I think it is going to stay for a long time. Even though it is true that we have grown organically with the enterprise business, our long-tail soul remains. If we are able to manage a very large number of clients with completely different needs in a profitable way, the complexity of a large enterprise becomes less hard.
Florian: I would agree with you that managing a large number of small accounts is probably more challenging because when you get all these big volumes from big accounts, you can optimize the process, structure it, fine-tune it, with small clients it is a little harder, so how do you manage this? Did you ever say no to a job? Would anything be too small? Has the tech become so sophisticated for you that a lot of it is automated?
Isabelle: The technology within the company is really sophisticated so we are able to respond to very small chunks of words. I do not think we ever say it is not our culture because we managed to automize all the processes, it is not a big deal serving small requests.
Florian: How about direct sales? Do you have 10 or a dozen direct salespeople on staff or is that something you do not do or you mostly do everything inbound?
Isabelle: We are a product company, the main strategy is that we design products and services that people want. Until last year with a hundred employees, we did not have any salespeople, no one, only online marketing. But with the growth of the enterprise markets, we decided to hire a sales team in the US led by super Michael Stevens. Our teams look more like evangelists than salespeople because the way we do enterprise is by doing integrations and partnering with the companies to have them grow. For small and medium enterprises, it is the same process we have, but more complex. It is more a consulting approach and more partnership rather than being a vendor, so we provide them with TranslationOS, our platform.
In terms of communication and marketing, we are planning big things for next year. In the next quarter, I can say that there are three main goals that are going to be live. First of all, we are going to release a short movie that is called Lara, it is a lovely and incredible story about this little girl that speaks all the languages in the world. The movie was done in Salina, it is a small Sicilian Island and this little girl has the gift of languages and more or less she represents people from the industry. We are Lara, project managers are Lara, also, globalization managers that help enterprises go global, they can refer to that little girl. It is dedicated to all the people that work hard to make people be understood.
The second thing that we are preparing for communication and marketing is a translation study center directed by a brilliant Italian journalist, Luca De Biase. Imminent is the name of the project, so we will produce an annual report that speaks about the power of language. The third thing we are preparing, which is bigger and more exciting, even scary, I cannot disclose. It is much more adventurous, we are operating that in Rome and San Francisco, so stay tuned.
Esther: We ran a Buyer feature earlier in the year with Airbnb, who mentioned that they work with Translated as their global language services vendor. Given the setup of your sales team, with a new customer that comes in like Airbnb, how do you move that opportunity through the sales funnel and close?
Isabelle: It is a different management approach, more complex, and moving to enterprise has been a real challenge for our project managers and accounts. We had to hire new positions, such as solution architects. To respond to a big enterprise, you have to be very efficient with processes and work on criteria and bring quality. For us, it is been a big win because even if the model is different when you adapt to small and medium enterprises treating large enterprises, it is easier. We treat them as partners or a consultant company. We work in total transparency with them, for instance, with Airbnb, we hired their entire transition team internally and they let us run their business in total transparency. Everything was disintermediated, but they are still charged per word. It is really interesting as a model.
Florian: Let us talk a bit about ModernMT, this is a machine translation solution technology portal. Can you tell me a bit more, the connection between Translated and ModernMT and then the development of ModernMT? Also, who are the key clients right now, where do you see the most traction for you?
Isabelle: ModernMT, it is a machine translation that learns from corrections and it was the natural continuation of Matecat. We decided to partner with our scientific partners at FBK to release the technology. It has two main good things. The first one is that it has the ability to consider the content of the whole document you are translating and the second thing is that it continuously improves by learning from human corrections. It is available in 60 languages and we use it internally in Translated. We decided also to make a spin-off of ModernMT that generates business with small buyers, such as translators and big enterprises as users.
Florian: Broadly, where do you see the human in the loop model, the productivity of a translator, the embedding of it in your organization specifically, in terms of going from purely word-based to more of an hourly payment approach and a much more interactive way of working with MT?
Isabelle: The benefits you can see are definitely on large accounts and using modern MT impacts on the quality in general. What it does is it helps the translator avoid doing a lot of research. If you have a collaborative team there are more aligned with what the client wants, and you avoid correcting, again and again, the same mistakes. The style and terminology are maintained in the document and in terms of volume, it is not really impacted, because at the end you can definitely increase it a little bit and go up to five to six thousand per day. The most important is the fact that suggestions given by the machine are already in line with what the client expects. It allows for good productivity supported by the machine.
Esther: What about for clients? Do you think that generally, clients are becoming more mature in the way that they are thinking about machine translation? What kind of trends are you observing on the client-side in the areas of machine translation, adoption and localization maturity, generally?
Isabelle: For Translated, the maturity we have among the clients is very variable. We like to work with clients that need to scale. They already have predictable timing, they need to expand, they already have process organized well, but still fluid. That is the kind of client we want to work with.
Florian: I do not think I have ever covered, in my time at Slator, anything M&A, transaction at Translated. What is the thinking there, purely organic? What is the strategy?
Isabelle: It has been Marco and I, the two owners, since 1999. We discovered venture capital very late. We did not really need it, we are makers, we like to make things, we do not like to consume them. We do not like to buy things. I promise that if you will find something better than what we have, then we will buy it. But for now, it is not planned.
Florian: You are saying buying, but why not turbocharging your growth by bringing on some external capital, if that has ever been a point of discussion? If it has been a great ride so far, then maybe you do not want to change it.
Isabelle: There are a lot of things going on, we take decisions rapidly and we are going very fast. We have a lot of food on our plate right now and maybe doing acquisitions, it would not be that easy for us to manage the company. It is smooth right now, so having all the members on board probably will slow us down. It has been our philosophy. We do not have a lot of time, and as I said, we are makers.
Esther: Could you tell us a bit more about the Pi Campus? Share a bit more about what is involved in that?
Isabelle: Pi Campus is a venture fund and when we founded Translated, we discovered how hard it was to go global. We know a lot of AI and we wanted to share our knowledge with startups, due to the nature of our company using AI, artificial intelligence, since the very beginning. In order to help other startups that apply AI, grow and go global, we decided to invest in some of them. It was six years ago and now we have 49 investments, some are located in Rome on our campus. There are 250 people around the campus, including Translated and some are based in Europe and California. Marco, the CEO of Pi Campus, is really involved in that and he has connections with VCs in California. One of them is Pi School that I run, which is interesting and helps engineers to know a little bit more about AI and supports companies in their digital transformation.
Florian: You are saying Pi Campus is a VC fund and invests as a vehicle, but also provides the location, pre-COVID and post-COVID, that people gather and run their businesses in.
Isabelle: There are not so many startups right now in the campus, but yes we do invest a small amount, from 50 to a hundred thousand depending on which amount we get from that company. We invite them to stay in the campus for six months. The truth is that they love staying there because the campus is fantastic. We offer a lot of services for them. We have this nice ecosystem with a lot of young people pushing their startups and us being mentors or advisors, it is really dynamic. 50% are Italian startups that apply AI in different fields, such as, medicine, transportation. AI is the driver, and 25% are European and 25% are from California.
Florian: As we are heading into 2021, what is your broad outlook for the business, for where things are heading and maybe also a little bit for the language industry, more generally.
Isabelle: First of all is to recover from the pandemic, and after we need to have a lot of fun and see people. Starting traveling again, I think that is one of the main goals. For Translated, we are preparing the launch of new products that we are seeing as key products for the future. There is this trend where there is more and more video content, and there is nothing really out there in the language industry that supports translators to be more productive. We are preparing some products regarding this. We are continually growing our enterprises and expanding on larger accounts. The third thing we are doing is working on the quality of the service, translation quality in general. These are the main goals that we are doing right now.