1 month ago
March 12, 2021
Travod CEO Elena Grigoras on Biz Dev, Brexit, and Buy vs. Build
Travod CEO Elena Grigoras joins SlatorPod to discuss LSP’s past, present, and future. Elena talks about the company’s customer mix and how Travod manages the balance of servicing both third-party LSPs — initially the company’s primary focus — and end customers.
She discusses the relationship with Travod’s sister companies, Worldminds and Traduno (translation technology arm), and parent company Mondia Technologies Group, as well as the rationale behind keeping the entities separate.
Elena outlines Travod’s technology stack, which includes their proprietary business management system, Traduno, and discusses market demand for customer portals, which she sees as a means to help clients manage their translation workflows and assets.
Drawing on her background in sales and marketing, Elena shares Travod’s approach to business development and hiring sales talent, and talks about the company’s recent website relaunch. She also gives her take on translation pricing trends, touching on the role of the per-word rate, the impact of effort-based pricing, and her vision of a value-based pricing model.
As CEO of a UK-headquartered business with a large employee base in Moldova and Romania, Elena talks about the unfolding impact of Brexit. She also unpacks the differing approaches to geographical expansion: building from scratch vs. M&A.
First up though are Florian and Esther, who discuss the week’s language industry news, sharing more insights and analysis from the Slator 2021 Language Service Provider Index (LSPI). Florian talks about Netflix’s approach to A/B testing website copy in multiple languages, and Penn’s State College’s research into machine-generated content detection.
Esther shares some recent financial information from interpreting giant LanguageLine, which derived more than 90% of its USD 618m revenues from remote interpreting services in 2020. While over-the-phone interpreting (OPI) still dominates the company’s service mix (81%), LanguageLine has also grown video remote interpreting revenues (VRI) to more than USD 50m.
The two close with a few words on an intriguing company memo from Japan-based LSP Rozetta, which has banned its employees from speaking any language other than their native one. Why? Rozetta says they accomplished so much in the field of MT that they have managed to create a “‘Free Language World,’ eliminating the need for individuals to learn multiple languages.”
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Florian: Elena tell us about Travod, so the origin story, the growth, what client segments do you do work with?
Elena: I joined the company eight years ago. It was a very small entity when I joined it and I came with a completely non-linguistic background. The only thing I had was English knowledge and working for an American company. It was very small, under 10 people and revenue was probably under half a million, but I think I was lucky to come across very talented and hungry people, people that gave a lot of loyalty and commitment to the company. They were the first colleagues which we built the company with and they are still with the company today.
We started purely to do something amazing, to do something that does not exist here, but make it something international. I think going after the LSP segment was the easiest thing to do back then when there were so many LSPs out there and they needed support because they did not have enough project management capacity. We built something that would help them expand the capacity whenever it needed because it is a fixed cost.
It has also been a tremendously rewarding journey that we have learned so much together with our LSP fellows in the industry and we have been serving hundreds of LSPs all the time. We have strategic bonds today with many of them and they know they can rely on us, but we also had to let go of some of them because of the pricing, they simply could not afford the expensive service of Travod, or because some mergers happened and they just had to change the policy.
However, the LSP journey has been tremendously rewarding in terms of getting the skills, getting the technology, diversifying the knowledge, but also being a great support to them and they have been a great support to us for the learning part. Around two years ago, we wanted to do more and I think it is natural that we wanted to grow, we wanted to give more opportunities to our people, we wanted to use the technology which we developed to good use.
It is great to serve our LSP friends and clients, and we are going to do this continuously as long as it is efficient for them and for us and creates added value. We are also looking at the buyer segments right now and I think this is explained by the hirings which we have done and with the expansion of technology.
Florian: What did you do before Travod? You said you worked for an American company, but how did you end up in this industry? What was the origin story?
Elena: I am probably one of the youngest CEOs in the industry and when I was given this mission, I was very fresh, very green, but I was coming with a strong business development and sales development background where I was capable and I proved that I could build things in some business capacity. I came to the company with this pure purpose. I was lucky to have my partners give me complete freedom. They trusted me, having this kind of trust and this freedom of flexibility to somebody who is so young is rare.
I did not have any linguistic background. I just came and said, let us build something and then hire the right people for the company, hire salespeople, hire business development, hire people that know the technology or have passion for it. We did all this. I was not something that I did alone finding or having the luck to find the right people at the right time that could basically blend together and create this organization that could attract other people and quicken the foundation. Later on, after many years, we can say, let us go out there and hire chief people, people that can basically get the company from a 10 million revenue level to something much more through our own efforts, through our own funds. That is basically what we have done.
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Esther: Can you tell us a bit about the relationship with your sister company Wordminds, how that works and what is the rationale for remaining separate rather than combining?
Elena: The companies have different histories and have different leadership and they began at different times. They have their own culture. The processes now are very much aligned, everything is standardized, certified and everyone follows the same processing tool, same management, but at the core, each team has its own identity and we do not want to kill that. I think that is the pure joy that we managed to achieve in creating the company that made us who we are today. Do we step on each other’s foot? We do not, the shared revenue on the shared accounts are completely different, which tells what two different companies can achieve and can grow revenue in different ways.
The team at WordMinds or Travod, with the right strategy in place, could go off to different accounts and it could give added value. Imagine it is a merger and acquisition, so you just buy another company, but you can also create one and just say, okay, you have different leadership and just go after a different segmentation or different vertical. I think it is synergetic because we are using common resources but also have separate cultures that run separate people and separate things. It is just a different baby in the house so I think it is fine. We do not know what it is going to be like in the future.
Florian: What are some of the different similarities that you are seeing in LSPs as clients and end clients? What are different dynamics and maybe conflict when you work with both?
Elena: We are very cautious about the conflict and not going after our LSP clients. This is absolutely not happening. We have similarities when it comes to pricing. We have a perception of, if you go after the buyers market you may have access to a lot more margin and a lot more revenue and profits. It may not be for all the cases, because you are also competing with the simple decision of the buyer not to do translations because it is expensive for them, or to do machine translation because it is a massive movement of the market, or simply, do it with internal resources and use their own people for that.
It is also a battle for margins and for profits. A lot of buyers are getting educated, so the maturity of the localization is growing, it is moving up and it is different than it was five years ago. You are also dealing with very knowledgeable buyers who know what they want, know what they need and how much they want to pay so you need to be really open and transparent with your people, with your contacts.
In terms of educational efforts, educating the buyer takes time, but it is rewarding. It takes time to understand what is the focus of the project. What do you want to achieve? How are we going to achieve it together? Do we need to custom a solution together? What do you want to get from this project? Are you going to measure the value, the impact? After this discussion, you can really talk about pricing and if you are going to do it.
With our LSP partners, it is commodities, it is based on pricing so it is timeline, pricing, instructions, requirements. It is very easy to deal with. It is very easy to process. It is very easy to turn around things because you are dealing with a very educated partner. With the buyers, it is a learning journey for us and for them and how you can make this learning journey together, because the opportunities on the market are massive, and they come from different companies with different work backgrounds, and you do not want to stick to just one niche. You are opening yourself. When you get there, it is a completely new project every time and you just need to educate yourself and learn about it, but also invite your partner to the education process as well. This is the part which LSPs can or should play a major role, like how we are getting our people, our buyers educated about it.
In terms of education of efforts, this basically is different for LSPs and for buyers. I think it is also the risk that with the LSPs you have a partner which you have worked with over the years. You do not need to worry about the credit, with rare exceptions. With the buyers, you are taking a different shot. You need to say, okay, we are going into this, but we need to be aware that we are putting the money on the table and many things could happen, especially in COVID-19. Luckily we have been safe and I hope all the LSPs have been safe, but a lot of things happened in the market. It has been very turbulent and your money with the buyers is a question of doing due diligence and credit checks. You need to be aware of what you are doing and how you are doing it. Obviously, you may not have the power to operate on prepayment, so you want to give them some terms that do not make you competitive. I think credit risk is also a difference between the buyers and the LSP.
Esther: Thinking about how customers engage with, for example, the portal, what kind of technology have you developed in house? Tell us a bit about your tech ecosystem.
Elena: Even in 2013 when I joined the company there was some kind of technology in-house. It was very basic, always superficial, but it was something where you would process projects, track them and so on. In 2017 we said let us do something big because we are growing and we do not want to stick to licenses for other providers in the market because it is going to be a fixed cost fee and a dependency we should be avoiding. It was also a passion, let us do something creative. Let us create something that we could be proud of because the resources which we have are accessible, let us build our own technology. This is what we want to do. This is what is going to help us be sustainable in the future and also grow, create new value.
We have our own business management process system, which is called Traduno and it is the third sister company in Mondia Group. Recently in the last 12 months, we have been integrated with Memsource. Basically, a lot of things get automated and then get processed faster and I think this is the thing which we wanted to have in the past and we are getting there and I see other beautiful things developing in the future, like other kinds of integrations with machine translation, other kinds of engines. There is the end-to-end ecosystem that we built and it encapsulates the sales side with the project management and then with the linguistic side QA. You have everything in one place and the file basically does not leave in the system, so this is what we wanted to achieve.
How we can make this kind of thing circulate smoothly but also how we can keep all the communication in one place and not go through emails and files and Excel. It is happening only there and now through the client portal. Then we said, we also need the clients there and not because we want them there, but because clients want to be in this ecosystem. They actually look for a client portal where they can feel they can control the projects, their spending, and look at KPIs real-time progress. It is a thing which the market wanted and I think we went with it and I believe it is quite an asset for the companies to have one. It also helps the clients to get organized because they may also have a very chaotic process. It is a management asset for teams across geographies, to have one access point and just see what is going on in there. I think LSPs should be able to allow or give this to their clients, a control instrument over their spending and deliverables. This is basically more or less what we have as technology.
Florian: What do you do on the sales and marketing side? What did you do pre-COVID-19 and then during COVID-19 because obviously, the game has changed? What is your approach to fill the top of the funnel and then how do you nurture it down to actual conversion?
Elena: That is interesting and I think our approach changed completely during COVID-19 and for this, I am very grateful. I think COVID paid it’s tribute to something which the company will never forget. It was hectic. It was hard, but also it gave us so much learning insights that I am completely grateful for. Pre-COVID-19, I think the majority of us in the industry have this myth that you need to go to a conference, you need to be on a plane and meet the customer. I can only imagine how much we spent on this, how much resources we invested in this direction. Maybe clients had this thinking, I cannot buy if I do not see somebody in my office shaking my hand.
There was one need that we put down, to hire the best sales talent in the market, which we never did by the way, because they came with their portfolio, with their network and they are going to just take the clients from somebody else and this is fast quick revenue. There were two kinds of approaches that we had to face. COVID-19 changed the approach completely because you do not have the resources to just keep hiring, also you cannot travel so what do you do about it? You look at your processes.
Obviously, I am a fan of sales and marketing, that is more my speciality than probably the technical side so we said, okay, we need to take a process approach to this. How are we going to build a funnel? I think when it comes to the industry, a lot of practices hire the best sales talent. They will come up the network and this is how you probably could build a business, but we did not have this, we simply could not afford it and we did not want to keep this thing going. We just started to build a CRM, mass emails, LinkedIn, landing pages, all these kinds of things that basically help you become sustainable because you have control of them. Issues like how to generate leads, how to engage with the audience, how to find new opportunities because I do believe that you do not need to go and steal somebody’s client.
There is so much opportunity on the market that it is growing and companies are created every year and they grow at a different speed these days than they probably grew 20 years ago. There is so much on the market going on, especially in the tech sector, e-commerce, manufacturing that there is work for absolutely all of us in the industry. I am a fan of, let us build it from scratch, let us have our own way of doing things and why not look at what other industries do. How do other industries basically get traffic and get leads? I am always looking at other industries more than what other players do in the market. Yes, we should be looking at that as well, but also how do other companies generate profits? What do they do with the website, with the landing page, with the CRM and so on? That is basically what we did.
We relaunched our website. We had a different logo in the past and we wanted something new, we wanted to feel fresh and young and dynamic so we completely changed our face. We changed the logo, we changed the colors, we changed everything, so it completely changes our approach and how we have been seen and approached by the market. We said, we are a serious company, we want to deliver superior service so we need to communicate digitally in a way that people do not only trust when you just tell them, but they also can trust you by the whole image which you put out there.
It starts from the website and how you communicate and how you say hello and how you put your picture in the signature and how you deliver your service and how you follow up. All these kinds of things together are basically the foundation of sales and marketing, and it is not only how you look, it is basically if you walk the talk so do you deliver on promises and can you also be referred by your clients to other people that can get to your new business.
Talking about marketing I think COVID-19 proved to us that yes, you need to have a presence. We all miss traveling and going to conferences, but I think I miss people more than just going there and getting business. With digital marketing, with the right knowledge, right approach, you can do massive things in this industry. I have always been a fan of TransPerfect. Those guys are a selling machine and they generate business for all the channels, but I think digital marketing just opens so many things for all of us here, access to all the companies in the world. We only need the internet for that. I think this is what LSPs in industries have been looking at, how they could revamp their image using different digital channels.
Esther: Looking at your approach to business development and potentially targeting these Greenfield clients. How do you communicate things like pricing? How do you explain the per word model to them and how do you see that evolving, maybe shifting towards other pricing models in the future?
Elena: I think that is a topic that is ongoing in all the companies in the industry because something is going on in the market and I am not sure who is to be blamed for what is happening with the pricing. With the price per word, you can make lots of money in this industry because we are coming from an economy of countries where you do not pay that much for words.
At the same time, I think all of us expect that buyers should pay more because the complexity of the projects is completely different from what it was five years ago. It is not only translation but all this technology development. You have lots of integration and lots of things you need to do around the project to have it done. I am not sure if 90% is translation or maybe only 30% is translation and all the rest is completely different things that you have to do around the project. We need to get this done. It is not only to translate it and move one. I think buyers are getting educated about price per word. They basically know that somebody charges 5 cents and somebody charges 25 cents and so on.
Another thing is that this machine translation coming to the market makes companies say, well, let us pay per effort? It is not big enough for price per word, which was not ideal in the past and we all said we should be moving from a commodity to a utilization model where we need to look at this as a service, not as just selling words. Now I think it is becoming worse because you pay for the effort. I am just getting blinded because you do not know how much effort you should do. A lot of things that you cannot put in a mathematical order or mathematical calculation are happening in projects and you need to quantify that as well in the price. I need to prove that besides these bills, we need to do this.
Companies started to get the custom pay per effort so based on how much changes you are going to make, or how much changes occurred while you are reading. They are going to pay for that, which to me sounds completely underpaying and completely undervaluing what people do to that project. It is not only the linguists that do it, it is also now project managers, people that actually have to look at many things until the machine is going to be more or less, ideal, which I am not confident is going to be soon. Still, this is what is happening right now in the market and lots of things start to go into this direction, pay per effort.
The ideal model, which I see in the future and I think some companies will get there and some buyers will probably get there as well is a value-priced model where companies would be able to understand what kind of value we create with this translation, with this project overall. There are two dimensions in this which we touch. It is one that as a provider you have to understand your client so what exactly they aim to achieve, what is their problem they want to solve? It is also a revelation for them like, do they really have a problem? Do they know they have a problem and are they open to solve it? If they solve it, will they know that they basically solved it and they can measure it? Ideally, it would be a profit sharing value price model. This is where I believe the future of the pricing in the industry should be going.
It is because there are so many projects which do not involve only translation. I think when it is project-based pricing, of course, you have to probably break it down into different pieces, this is what we are going to price you for. There are different elements of being transparent about what you are going to do inside the project. It is important and necessary when having discussions with the buyers, but it cannot be priced per word or price per hour. It has to be more than that. I think if we achieve or reach the level where we can know what valuing rate is for the client and the client knows the value, which basically they created by translating within this project, I think it is so much rewarding. I know it is a lot of effort, but I think it is so rewarding.
If companies start doing that I think more and more buyers will become aware of why we are doing this translation project, but it is exactly our goal. We had some use cases we looked into. What happened to our clients after they translated this massive content and then we say, okay, their revenue grew by X in that market or they basically grew their presence. It is for us a sign of pride, basically, by touching this, we contributed to something. My question is, do clients know about it? Do they know that because of these projects they basically managed to achieve this expansion internationally? You cannot do otherwise. You need to communicate to your audience in their language so it is indispensable in my opinion.
Pricing is a big topic right now, how we price and it is a mishmash. I think we use different approaches with different buyers because they are used to different kinds of ways, but for LSPs, it is an educational effort to make them understand and be aware of why. Basically explaining it to get them on board and to get them to buy in.
Esther: Thinking about Brexit, what have you observed so far, impacts, challenges, anything to do with hiring or services that is challenging for you as a result of Brexit at the minute?
Elena: I think the biggest thing which we faced and we expected it, but we did not expect is going to happen immediately after it took place, was the perception of Brexit. In the previous year when we applied for tenders many of them had this stipulation, UK residents may not be granted the tender. This year we had one situation where companies are saying you are in the UK, we have our regulations in the European Union, we can not even consider talking to you. Something is happening and I think companies in the UK, especially in our industry will look into the diversification of geographical presence. I think it is the right thing to do. It is not our fault. I think it is probably a good thing, to push you out of the comfort zone and look at different things. Still keeping your roots in the UK, but also having some backup and I think this is probably the next thing which we are considering doing because you want to serve the clients and all the markets, and you do not want this to be your boundary or impediment not to do it. It is strange, but if things are getting regulated in this way, I think people just need to respect it.
Florian: Travod has not done much M&A so what is the thinking behind that and is there plans to do some acquisitions in the future?
Elena: I think if it is for the right purpose at the right time, yes, why not? I think it can be both ways, acquiring something, but also merging with somebody. I think we are open and we do believe there is value in that. I do not think that you should be doing it because everyone is doing it and I think this is a hot topic in the industry. What I am missing personally, that I do understand the rationale, is you want to grow the revenue, you want to grow your powers, international presence, you want to maybe build a company and then sell it, as this private equity is going on. You think you are going to solve a problem by buying somebody but in reality, you may not solve it, you may only escalate it.
After these mergers and acquisitions took place, what happened inside those companies? How did people survive, what kind of synergetic value was created, and not just because we all say it is going to create some synergetic value, let us do it. Besides the P&L that we all look at and the revenue growth, was there synergetic value created for good and did people leave a good period of their life while this merger and acquisitions took place because I know that it is not an easy thing to do. You do not want to destroy your culture, work with people under pressure or lose people because of that so to me it is a sensitive topic, but we are definitely open to it.
I think it has to happen for the right reasons at the right time through a well thought process and having a strategic view, like what exactly we aim to achieve here in the next years and just have a roadmap. I do believe in the strengths of it, especially when you put two companies together, one has some assets and another has different assets and you just blend them together. Of course, it is in the leadership’s hands to make these things work well and be communicated well.
For us, we have always been independent financially. Would things have been different if we had investors at our door giving us money? I do not know, maybe yes, maybe no, we do not know. What I know is that being responsible for our own financials and profit made us very responsible for how we spend this money, how we basically secure this cash and how we grow through our own money. It is a huge responsibility, but it is very educational for businesses. It is easy to say let us spend $5 million. I think it is very hard to say let us make these changes. Let us make these stretches through your own funds so you have to look at every $50, how you are going to spend them and it is a huge exercise for leadership in all companies. For this kind of thing, I am grateful because I know how money has to be made and how you spend them, but we are definitely very open to any kinds of things that could create value for all of us. It can be buying somebody or just starting from scratch in a different country. I think there are pros and cons for each option, but it just has to be right for the company.
Florian: What is your outlook for the next three to five years for the industry as a whole?
Elena: We do not really know what is going to happen in five years. Obviously, I think machine translation is a big hit and it is the next most fascinating thing I am looking at. You have to have the buy-in of the buyers, how to use it, when to use it, how you are going to feed your content into raw MT, heavy editing, what is the process for each, how you sell each piece. Machine translation is fascinating. We should not be running away from it. We should not be using it aggressively for everything and for everyone, I think that is wrong.
Automation, artificial intelligence, data. I think those are the most attractive things right now, but in terms of internal orientation, I think we are now in the process to get things really organized internally here. Create a stronger foundation of the companies that you can scale up without shaking. In the next three, five years, I think machine translation is going to be the biggest topic that we are going to still discuss.
Can a tool tell you or can an engine tell you that an engine could be used for all the content? Can they communicate and say this content is not giving enough? It is not fit for what you were trying to do here because right now we are only relying on human review. If the quality is bad, humans translate it. Can a tool, can Amazon tell you when you try to push Swedish into French or Swedish into Italian, this is not what you should be doing. You should probably consider a human. Are we going to get there when the tools could also cooperate with us and say, what is good and what is bad? I think this is what everyone is looking at, artificial intelligence and machines as power. It is what fascinates us and what everyone is going to do in the next few years. Stay competitive and also do things with less effort for more money.