The SlatorCon tour took in three global cities across two continents in 2019 and featured a total of 28 speakers representing the full breadth of the language industry — from startups, language technology and language service providers to the buy-side and finance.
Here, we revisit the key takeaways from our events calendar in 2019.
SlatorCon London – May 2019
SlatorCon San Francisco – September 2019
SlatorCon Amsterdam – November 2019
Startups and Technology
Jean Senellart, CEO, Systran
When Systran’s Jean Senellart took the stage at SlatorCon London, it was not the first time. The machine translation (MT) veteran made his debut at SlatorCon London 2018, taking participants on a whistle-stop tour of MT history; from rules-based MT to current-state neural MT (NMT), and much more.
In May 2019, Senellart drew attention to Google’s self-attentional transformer NMT model. First introduced in 2017, it has since become the leading model in both research and deployment, and no technology has managed to supersede it in two years, he said.
Senellart also highlighted the current hot topics for machine translation researchers, including the interaction between MT and TM, post-editing, and low resource languages. The field of unsupervised learning, Senellart said, has the potential to greatly impact MT output quality.
Slator 2020 Language Industry Market Report
The Systran CEO gave a word of advice to the MT community, reminding the SlatorCon audience that the MT touch-point for customers is the product rather than the technology: “We’re talking about the technology like it’s the thing that the user wants,” he said. “They don’t want the technology, they want the product.”
Mark Brayan, CEO, Appen
A layer removed from MT is the world of language data, a booming niche of the language industry, also known as “AI support services.” Language data is used to train AI and machine applications such as MT engines and much more. At the heart of the language data space is Australia-listed company Appen, which makes use of its huge crowd of remote workers to collect, process, and label massive amounts of data. “The more data the better,” Appen CEO Mark Brayan said, adding that one needs to keep in mind that “data is expensive, complicated to collect, and complicated to work with.”
While Appen’s operations rely on a vast army of human annotators to create and check data that will eventually be used for speech and image recognition tools, it is more than a numbers game. The breadth, variety (and, ultimately, quality) of the data also matters greatly. To get the best results from speech data, for example, factors such as accent, age, acoustic setting, and so on must suit the specific use case of the customer, Brayan said.
Andrew Bredenkamp, Founder and CEO, Acrolinx
Also well versed in the rapidly evolving data labeling market for AI is Acrolinx’s Bredenkamp, who told SlatorCon Amsterdam participants that the market is valued at around USD 0.5bn and set to double in the next four years. While it is true that data has become highly sought-after and hugely valuable, it is not all roses in the market for AI-related services, Bredenkamp cautioned.
In his view, while more and more language service providers (LSPs) are exploring the market, the middleman is starting to get squeezed. The growth of the direct-to-client freelance market is putting pressure on intermediaries, as are the new machine-first alternatives that the AI community is exploring in an attempt to remove bottlenecks.
According to Bredenkamp, although there are limits to what AI can achieve, it would be a mistake to impose human restrictions on its potential. Indeed, he expects and welcomes the possibility of AI bettering human-level intelligence: “Why should it stop there? We aren’t the limit,” Bredenkamp said. “I think this will be good for us. Let’s all get used to it. It will be a brave new world.”
Language Service Providers
John Fennelly, CEO, Lionbridge
Competing with Appen in the language data space, LSP Lionbridge is making an aggressive bet on the AI support services business. In an on-stage interview with Slator Co-founder Andrew Smart, Lionbridge CEO John Fennelly said that this line of business is nothing new for them and that they have been operating in the AI market for more than a decade.
Of the company’s core localization business, Fennelly said that he sees the market shifting away from services toward a tech-enabled services model, which may leave a few smaller competitors flailing.
Lionbridge returned to growth in 2018, Fennelly said, as the company’s focus on expanding verticals such as gaming and life sciences appears to have paid off. “You can’t do everything,” he pointed out, adding that Lionbridge is “focusing on key markets where we think there’s a lot of potential” and “committing more capital” to these priority verticals.
Smith Yewell, CEO, Welocalize
At SlatorCon London, Welocalize CEO Smith Yewell spoke on how to execute M&A in the language industry. Yewell, who founded Welocalize more than two decades ago, had 17 acquisitions under his belt as of May 2019 (and another one since). There are many potential pitfalls to avoid and, sadly, “half of M&A fails,” Yewell said.
Though a lack of vision, culture clashes, and an unclear path to execution can lead to M&A fails, according to Yewell, “the biggest threat to M&A is when the talent leaves.” And this is all the more true for service companies. Yet the key lies in being able to demonstrate that staying on presents an opportunity: “The majority of our leadership team across the company, all came through acquisitions,” Yewell said, pointing to Welocalize’s track record for retaining and developing acquired talent.
Phil Shawe, CEO, TransPerfect
Growth was front and center at TransPerfect CEO Phil Shawe’s presentation at SlatorCon San Francisco. Shawe described the journey of building the company he co-founded more than 25 years ago from its humble beginnings into the language industry juggernaut it is today.
Growth equals survival, Shawe said. And growth allows an LSP to give pay raises to employees without going out of business. Yet growing to a certain size brings with it a challenge of its own: “It’s very, very difficult, once you get larger, to maintain a high growth rate,” Shawe said.
According to the TransPerfect CEO, the answer is in strategically thinking small rather than thinking big: “If we run 20 or 30 different small businesses and we run them all responsibly, and they all have a high growth rate, and they all have high profit margins, at the end of the day, we’re going to end up with a USD 700m business that’s going to have those same characteristics,” he said. To succeed in this, Shawe said it is important to measure the minutiae “like crazy,” hire entrepreneur-minded people, and be as transparent as possible across the business.
Jack Welde, CEO, Smartling
Concluding the day’s speaker lineup at SlatorCon San Francisco was Jack Welde, CEO of language services and technology provider Smartling. Welde gave his take on global content production, describing its importance and evolution.
From the perspective of global companies, “content is how you reach prospects, reach customers,” Welde said. This need to engage customers wherever they are and whatever language they speak, means that companies are increasingly required to create and update large volumes multi-language content across multiple platforms, Welde explained.
Yet customers still have budgets to manage, and often need help to discern which specific content to localize and how to go about it. Whether it is providing a retailer with details of trending items so they can decide which items to translate next, or helping a manufacturer reduce localization outsourcing costs by differentiating between content types, data is informative and powerful, Welde said.
Yaron Kaufman, Co-founder and CMO, One Hour Translation
As customers and LSPs alike explore the use of machine translation, many are unsure whether now is the time to invest, said Kaufman speaking at SlatorCon Amsterdam. For customers, the appeal of MT is either driven by a desire to save costs or by the need to process huge volumes of content.
Customers want to know whether MT is “good enough.” Kaufman believes it is, and backed this assertion by pointing to One Hour Translation’s NMT report. OHT tracks the performance of popular MT engines, including Amazon Translate, Baidu, DeepL, Google Translate, and Yandex, by testing the output of 100 general phrases. The results from the engines are analyzed and given an NMT score, which is published in a publicly-available quarterly report.
The performance of the MT engines tested has improved rapidly, even from quarter to quarter, Kaufman added, adding however that generic engines do not perform as well for domain-specific content such as gaming.
Language pairs, of course, also play a role. Although still imperfect, Kaufman said NMT is indeed good enough and, on average, customers using machine translation (or MT plus post-editing) can expect to save around 30% of translation costs.
Finance
Tomasz Tunguz, Partner and Managing Director, Redpoint Ventures
Sri Chandrasekar, Partner, Point72 Ventures
Charles Stubbs, Partner, MSouth Equity Partners
Led by Slator Co-founder Florian Faes, the SlatorCon San Francisco investor panel featured three language industry investors representing both venture capital and private equity.
Tomasz Tunguz, whose VC firm is invested in tech-enabled startup-LSP Lilt, spoke of industry transformation. The Redpoint Ventures Partner said he sees an opportunity for AI-powered agencies to disrupt the industry. Though such agencies may not look very different from traditional LSPs on the surface, “under the hood they’re going to be much more efficient,” he said. The result? They will either choose to undercut the market or run the business “at a higher net income margin,” he added.
Sri Chandrasekar, who led VC firm Point72’s investment in NLP startup PolyAI, agreed and elaborated on the idea of technology transforming the industry: “Perhaps just as importantly,” he said, “technology is enabling a whole new class of language translation and actually expanding the size of the market.” Two weeks post-SlatorCon, Chandrasekar also led the USD 60m Series C investment in Unbabel.
Offering a private equity perspective, Charles Stubbs of MSouth Equity Partners outlined what he described as a slightly more simplistic strategy. Stubbs said that MSouth, which teamed up with language industry veteran Jeff Brink to form Big Language Solutions in 2019, saw three main reasons for investing in the language industry: fragmentation, customer demand, and revenue growth. According to Stubbs, language translation is “an industry that’s growing 7% year over year, double or triple GDP — that always interests us — and low capex investment. We traditionally love business services.
Patrick Prokesch, Senior Director, I5Invest
From an M&A advisory perspective, Prokesh walked SlatorCon Amsterdam participants through the various investment models common to the language industry. Of these, private equity and venture capital are the most dominant forms of investment and, according to Prokesch, were responsible for USD 0.3bn worth of language industry investment in 2019.
The right choice of investor would depend on what a company is looking to do, since there are differing expectations from different types of investor, Prokesch said. Private equity, which focuses on mature companies and largely relies on buy-and-build strategies, aims to generate 2-3x return on investment; while venture capital investors have a comparatively high-risk appetite and are looking for higher returns in the region of 10x.
Prokesch believes that the purpose of taking on a partner should be to gain access to opportunities that would otherwise be unavailable to a business; whether this means penetrating new markets or building faster. Securing investment is a lengthy process and one that relies on being able to tell a compelling story to potential investors as well as building relationships, Prokesch added. His perspective in a nutshell: “We believe that great companies are bought and not sold.”
Buyers, Users, Enterprise
Amanda Smith, Director of Language Strategy and Content Business Operations, EMEA, Discovery Network
Justin Walton, Global Content Operations Manager, ITV
Jan-Hendrik Hein, Director of Media Operations, A+E Networks UK
Led by Slator Co-founder Andrew Smart, the SlatorCon London media panel featured three senior media localization buyers from Discovery Network, ITV, and A+E Networks UK. The panel discussion focused on challenges relating to managing increasing volumes of media entertainment content.
Discovery localizes “over 100,000 hours of content per annum in EMEA alone,” Smith said, and to support these volumes, they use 55-plus in-territory vendors. Over at A+E Networks UK, on the other hand, Hein said that they localize into 20 languages: “All of the dubbing and subtitling is done by language service providers,” he said, “although we have an in-house team of Language Supervisors — all qualified linguists — who manage those relationships, specific guidelines, and run the RFPs.” ITV’s volumes are “more modest,” according to Walton. The team localized around “800 hours of dubbed content” in 2018, he said, all of which was outsourced. Most of ITV’s content is high-end drama (think Downton Abbey).
Smith, Walton, and Hein also walked the SlatorCon participants through the complexities of current media localization realities; from linear scheduling, licensing and multilingual shows, to localizing archive content and, of course, emerging technology.
Mario Tarantino, Content and Merchandising Manager, Huel
Mario Tarantino of UK-based food startup Huel outlined the process of launching localization operations from scratch. Starting out with a blank slate in early 2018, Tarantino had rolled out localization into eight languages when he spoke at SlatorCon London in May 2019.
Tarantino described the initial process of deciding what content to translate and into which languages based on factors including current and potential market opportunity. He detailed Huel’s localization operating model; from utilizing freelance resources and in-house employees through to using a single vendor (LSP) for localization and a third-party app for delivering translations.
True to startup form, Huel monitors conversion rates before and after the launch of localized websites. Tarantino said that localization had driven an increase of more than 1% in conversion rates. While this may not sound like a huge boost, relative to typical e-commerce conversion rates of 1–3%, the figure takes on more meaning.
Adelina Lear, Client Services Manager, ICON plc
From her vantage point of working with a huge contract research organization or CRO, Adelina Lear spoke to SlatorCon London participants about the complex process of servicing the language needs of life sciences customers. ICON’s typical customers include the likes of pharma giants, who play a crucial role in researching, creating, and distributing drugs, with the aim of bringing breakthrough pharmaceuticals to market.
Lear described the wide variety of document types generated as part of the clinical trials process, many of which require translation in order to comply with regulations governing the industry. She then discussed what could be one of the language industry’s most operationally complex areas: linguistic validation. The process, which involves a series of steps such as multiple forward and back-translations, as well as extensive quality assurance, leaves zero margin for error.
Claire Tsai, Head of Globalization, Cloudflare
Similarly to Huel’s Tarantino, Claire Tsai was her own one-person team when she started at cloud-based web security and network services company Cloudflare in 2017. From there, Tsai embarked on a journey of helping Cloudflare in “going global.” Cloudflare now localizes between 10–17 languages for consumer apps, Tsai said, and they plan to add more.
In implementing her data-based strategy for expanding Cloudflare internationally, Tsai said she learned to steer clear of “vanity metrics,” which, for example, measure mere page views rather than actual viewer conversions. Instead, looking at the right metrics helps a company localize selectively, by prioritizing the items (such as check out) that have the most impact on the bottom line.
Chip Huyen, Senior Deep Learning Engineer, NVIDIA
Working at AI hardware production company NVIDIA, Chip Huyen bridges the gap between academia and enterprise. Huyen’s own experience includes stints at Netflix and teaching at Stanford. Explaining the differences between the state of neural machine translation (NMT) in academia and “the real world,” she outlined ways in which “real-world applications are more complex than academic datasets.” For one thing, academia provides a controlled setting for NMT. Not so in the real world of industry, where there are no limits to sentence length and no enforced definitions of content type, she said.
According to Huyen, NMT research is currently exploring areas such as document length, unsupervised training, and quality estimation. The latter is more of a preoccupation for industry researchers, who have a vested interest in gauging the level of effort required to take NMT output to a deliverable standard. However, she said, quality estimation remains “underexplored” in academia.
Meredith Stegall, Director of Language Services, Parkland Memorial Hospital
With 882 beds and more than one million outpatient visits each year, Dallas, Texas-based Parkland is no small hospital. At SlatorCon San Francisco, Meredith Stegall described why and how she led an initiative to insource the vast majority of Parkland Memorial Hospital’s considerable interpreting needs.
From spending some USD 9m of tax-payer money on interpreting in a 70%-outsourced model back in 2017, Parkland now employs more than 80 interpreters at its onsite call center and has delivered massive savings to boot, Stegall said. At current rates, interpreting through the Parkland call center costs USD 0.55 per minute compared to third-party vendors at USD 0.74 per minute. Totted up, the insourcing program has delivered some USD 1.5m in annual savings in addition to creating jobs locally.
Vinicius Britto, Global Localization Manager, Bose Corporation
Andrea Guisado Munoz, Senior Localization Architect, KAYAK
Alvaro Villalvilla Merelo, Senior Global Localization Manager, Nike
Balázs Benedek, Co-founder and CTO, Easyling
Joining the three localization buyers on stage at SlatorCon Amsterdam was Balázs Benedek of Easyling as well as Slator’s Florian Faes, who moderated the enterprise and e-commerce panel.
First tackling the complex activity of SEO localization, the panel also discussed their views on the single biggest value-add a language service provider can bring to a client’s organization, and much more.
For Britto, global account management was top of mind: “What account management can you provide to make my job easier?” he asked the LSPs. For Nike’s Merelo, the ideal LSP is a “Swiss Army vendor,” focused on problem-solving. He also said that good account management skills are key to developing a partner-style relationship with customers — and the industry could do better in this area. At KAYAK, Muñoz’s team favors working with freelancers alongside the in-house team and rarely uses LSPs, “but I could see where they could help in situations when we need scalability very quickly,” she added.
On the topic of MT, Muñoz said it is something the team considers whenever new translation requests come in. They assess factors including content type, scope, volume, and visibility, she said, to see whether MT makes sense. Easyling’s Benedek described MT as being used to remove the communication barrier in online fora, where users post around the same topic but in different languages. He also believes that MT is a good option for low-budget, high-volume scenarios, “when there are more words than dollars.”
Michal Antzcak, Head of Localization Technology, Paypal
For a group of people focused on language and communication, LSPs do not always do the best job of talking to customers in a way that really “speaks” to them, Antzcak told SlatorCon participants in Amsterdam.
Many suppliers are quick to emphasize their competitive prices, quality commitments, and tech stacks, Antzcak said, yet they fail to demonstrate how localization can impact things that customers really care about: revenue metrics, KPIs and, ultimately, making their vision a reality.
For Antczak, what makes more sense is for LSPs to instead focus on helping customers communicate with end users in a more personalized way. For example, LSPs could use what their customers know about the end users and tailor localization accordingly: Where do they live? How old are they? What kind of communication methods do they prefer? How do they feel about the company / product / service? If LSPs could then also discern how best to use technology such as MT and NLG to create highly targeted content, “that would be true innovation,” Antczak said.
Jimena Almendares, Global Expansion VP, Intuit
At SlatorCon Amsterdam, Jimena Almendares delivered a keynote speech tackling the question of how a big, public company like Inuit perceives and executes international expansion. Almendares described how Intuit, a US-based company, managed to bring their Quickbooks accounting product to the new and complex market of Mexico in just inside of three months. Fast forward, and the product has one of the highest revenues per customer.
When it comes to expansion projects like this one, Almendares said, localization is just a drop in the ocean, and there are myriad factors at play; from HR and legal considerations to the regulatory environment in a new market. Conducting research up front and finding the right local partners to support you is crucial, she added.
Her top success tips for other businesses looking to expand internationally? Understand your target customers and their particular pain points. Define your brand voice based on local preferences and likely impact. Secure cross-functional buy-in internally. And embrace the local culture for hiring and management practices.
Hartmut von Berg, Head of Localization, LogMeIn
With his eye firmly fixed on fueling international growth at listed SaaS provider LogMeIn, von Berg explained his team’s evolution from internal translation provider to globalization consultancy, a journey which is still ongoing.
In von Berg’s mind, change was needed because “to fuel International growth, localization needs to be transformed away from providing translation services towards influencing business decisions about investments into international markets.”
In an initial move, LogMeIn formed a dedicated localization team by bringing together the company’s localization employees, who were housed in two separate functions after a 2017 merger. Von Berg then dropped all his engineering responsibilities to head the newly created localization team.
One crucial step was to centralize localization budget management, moving budget responsibility away from internal customers such as marketing, product, and customer care. While budget ownership still lies with these functions and “they still decide what to localize […], we manage it,” von Berg said.
Looking forward, von Berg pinpointed the areas of SEO localization, MT, and terminology management as current priorities. LogMeIn is currently developing an SEO localization solution in-house since “we looked into the industry and we couldn’t identify a really good solution,” he said. As regards MT, the team is using it to improve scalability and serve unaided markets, he said. Meanwhile, strong terminology management, von Berg believes, is key to delivering “global customer experience with consistent terminology.”
Slator
Florian Faes, Co-founder and Managing Director, Slator
Opening proceedings at all three SlatorCons in 2019, Slator’s Florian Faes gave his trademark take on trends impacting the language industry. Faes referenced Slator’s own data and insights stemming from research conducted for the inaugural Slator 2019 Language Industry Market Report, published just hours before the SlatorCon London event in May 2019.
In London, Faes described Slator’s approach to sizing and segmenting the market; which, by its very nature, operates cross-border. From one angle, Faes described how Slator defined and sized the 10 primary industry verticals that make up the USD 23.2bn language industry, based on end-customer segments.
Examined from a supplier perspective, Faes said, Slator identifies four distinct groups of players that service the addressable market for language services: Super Agencies, Leaders, Challengers, and the Longtail, a large chunk which comprises freelancers, boutique agencies, as well as internal corporate and public sector translation functions.
With 10% market share, the five Super Agencies lead the global full-service LSP contingent from a revenue perspective: TransPerfect, Lionbridge, RWS, SDL, and Welocalize. As customer spend drops, accounts become less readily serviceable by large LSPs, Faes explained, largely because of the escalating cost of sale. Among the likely winners in an evolving language industry, he singled out the Super Agencies, localization technology platforms, and tech-centric service providers as being well positioned to succeed.
With a spotlight on media localization at SlatorCon London, Faes identified strong growth in this language industry niche, also found in technology and gaming. These three markets, followed by life sciences, will be the most attractive verticals for translation and localization providers over the next three years, he said.
Skip forward four months to the other side of the Atlantic, and Faes’s message at SlatorCon SanFrancisco reaffirmed many of his assertions from London, as he spoke of the language industry’s main markets, players, technology developments, and growth opportunities.
Expanding on the role and positioning of Super Agencies, Faes also outlined the current M&A environment, touching on newly-completed sizable deals, such as Big Language Solutions’ acquisition of ProTranslating and the BTI Studios and IYUNO merger.
According to Faes, what is currently dominating the focus in much of the industry is machine translation. MT, he said, is becoming more integrated into the supply chain as the entire industry retools in response to technology becoming more available, and as clients grow more interested in leveraging MT to achieve productivity gains and cost efficiencies.
Developing this idea at the third leg of the SlatorCon tour, in Amsterdam, Faes told conference attendees that there is still room for the market for machine translation to grow and mature.
The industry is trying to figure out how MT can complement and work together with other translation tools that are well-embedded in company tech stacks, like TMS and productivity (CAT) tools. The opportunity for providers lies in developing a product that makes it easier for translators and linguists to interact with machine translation, Faes said.
Revisiting growth hotspots in the industry, Faes highlighted pockets of disruption that are influencing the media and game localization verticals, as subscription-based streaming platforms are shaping the competitive landscape.
He also gave an update on the state of funding in the language industry, pinpointing a shift in the nature of investments. Five years ago, Faes said, investors were pitched on the idea of uberizing the marketplace, whereas now it is very much AI-based.
Save the Date
We are pleased to announce the dates and locations for SlatorCon 2020.
- London, UK, May 5–6, 2020
- San Francisco, US, September 2020
- Barcelona, Spain, November 2020
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