In the first episode of 2021, Fabian Dieziger, Co-founder and Managing Partner of Swiss-based language service provider (LSP) Supertext, joins the pod.
Fabian talks about the local Switzerland market, Supertext’s US and Germany expansion, their copywriting roots, and why they have chosen to shun M&A in favor of organic growth.
Florian and Esther talk about Slator’s all-new 2021 Data-for-AI Report, which is designed to help LSPs evaluate and pursue opportunities in the fast-growing niche of providing data for AI customers.
Esther shares an update on how the UK-EU trade and cooperation agreement will impact freelance translators and interpreters on short-term missions to Europe post-Brexit.
Florian unpacks the US proposal to extend small business perks to LSPs generating up to USD 20m in annual revenues. And, in a last look back at 2020, the two select their top quotes of the year.
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Florian: Kick-starting 2021 with Supertext is a promising sign. Tell us a bit more about the company, how you got into this business. What is your background?
Fabian: I grew up in a very small village far from Zurich. I always wanted to leave and work in international business in a big city so I moved to Zurich and I started my career in the freight forwarding business. I became the Director of Final Transportation and Storage Business, arranging transport for museums and galleries. My brother was a copywriter at that time in a large advertising agency and he was helping me improve content. When I did marketing staff presentations, he did the editing for me, and it was always great.
At a certain point, we thought this was a great idea, you could upload a document and a professional copywriter could edit it for you, especially 15 years ago when the internet was much slower. This was the start of the idea behind Supertext and at that time, you were able to work together with the copywriter directly, or you would go to an agency, which cost a lot. We thought this was a great model and we searched for someone who could handle the technology. We found my school friend Rémy Blättler. He was in New York at that time at Sungard in IT technology. He developed our first website. Then we went live and this is how we got into the business. This is the first copywriting agency we started on the 1st of February, 2006, and on the next day, we got our first order.
Florian: How did you get that? From a contact or through search engine?
Fabian: We made a press release and somehow an order came in, we were surprised, but we celebrated. Then the next few days we got no further orders, but we steadily started growing in the first year. We made a turnover of around $30,000.
Florian: Did you ever feel like this needed to work otherwise you have a situation or did you gradually transition into this?
Fabian: We wanted it to work and at this time I still had my job, Rémy too, but Rinaldo was the first one to put time into it, and we gained a better status. We searched for investors and we found two investors. With our knowledge and this turnover, we created our jobs and went fully in, in 2007, where we made a quarter-million turnover. Then we got requests from clients asking us if we could do translation as well.
Esther: How do you think the transition from the origin in copywriting to heavy translation has influenced the DNA of Supertext?
Fabian: We always have the approach that since we are coming from copywriting, it is about how you can tell that the message arrives to the consumer. It is not about just translating as a task, it is more who you want to reach and what you want to say. I think this was always our approach and it is still our approach. This is slightly different because we see that a lot of other agencies are coming from specialist translations who are more complex and not marketing orientated.
Florian: Now you are a $50 million business, according to Slator’s 2019 LSPI. When you get that much work, how do you maintain that more creative flavor in a business, especially when you are going to get millions of words sometimes?
Fabian: We invest a lot into people and we pick very carefully. We have a lot of internal linguists. We invest a lot in quality. We believe that even today it is much more important that you deliver quality for content. We can see it in a lot of clients, where you will see really bad translations, mistranslations, which can damage a brand because it is technically translated right, but it is not cool. It is not their message, it is not transported in the target market.
Florian: When I worked in a Swiss LSP, people kept saying the Swiss market is different and people here are different. Maybe that was true 10, 20 years ago. How is it now? How do you feel the Swiss market compares to some of the other markets you are in? You have an office in Berlin and LA now, so what are your thoughts around the differences, if any?
Fabian: I think the difference is Switzerland is a very small market, but if you want to do business across Switzerland, you will have to do translations because we have four official languages. The largest market is the Swiss-German market, and then there is the Swiss-French market and the Swiss-Italian market. We see that our clients are mainly in marketing and communication. If you look at the United States, there is internet globalization, internationalization, more than 10 languages, they have localization teams, it is much bigger, it is international, brands are rolling out all over the world.
In Germany, there are a lot of industrial brands or startups in Berlin. That is the difference. The United States is huge, we can see that these accounts are huge because these are global brands and in Switzerland, it is big because there are a lot of local brands. We have a lot of clients that are only working for the Swiss market and they need translation specifically for Switzerland. This is what is underestimated by a lot of international players, because the Swiss-French is different, and the Swiss have high demands. I do not know any other market that has that high of demand in quality than Switzerland.
Florian: Do you think it is a major advantage that somebody picks up the phone in Swiss local dialect and can talk to the account manager at a retail company? In addition to understanding the local particularities, is that a key advantage for you in this particular market here or not so much?
Fabian: We always want to keep the local flavor. I think especially because there are a lot of smaller accounts here in Switzerland and that personal contact is very important to understand. I think this also makes a difference to the large players. It is like you call a standard dial number, one for the Swiss market, number two for China. This is definitely where we do not want to go. I think the personal touch is very important actually, very agile and I think this makes us special that there is a direct person behind you. We show the people behind, who is the person to get in touch with.
Esther: On the customer side, it is all quite domestic in Switzerland, from what you are saying. When you are talking about there being multilingual requirements within Switzerland, obviously the US is so different, what was the motivation for wanting to expand into the US in particular?
Fabian: My brother was on a sabbatical for three months in the United States, and he felt like we had been working for a long time. We opened up in Germany and it was time for a change and we have a great mission. We want to free the world from bad copywriting, go to the huge markets in Europe and the US and set it up. This was the motivation and Kristy, who was in our English team in Zurich also went with him. It is fantastic, we did our research. What kind of companies are around? Is there any chance that there is large potential with our creative approach?
We were seeing that the large volumes of work are going to the top 10 LSPs, but when it comes to transcreation, a lot of companies rely on freelancers. We thought this is a place where we can jump in and provide it as an agency specializing in this transcreation area. This has developed very well. For us, it is very important and very interesting to see more trends coming from the United States. We can learn from the different markets that help us develop our company from a global view.
Esther: Do you expect to expand into other regions and other countries as well?
Fabian: Why not? We are always looking for opportunities. Of course, we would be interested in the Asian market. I also think it has to do if we meet the right person who has the Supertext DNA, then we are ready to start in another market. We do not believe in this M&A. We believe that if we have someone here at Supertext and then bring them over we have start our own structure and not like buying another company.
I can tell you in California, it had not rained for a long time, we went over and then it was raining so we could plant our seeds and after some time we had something to look back at. Now we can see after last year we have more than doubled our turnover in the United States.
Florian: Let us talk about Covid-19. What do you see on the customer side? The type of work, demand shifts, what were some of the key trends for you coming out of this lockdown situation?
Fabian: We saw that the impact was different on different industries. Some were affected very hard, some less. We can see a shift in copying calls, we have much more, and a lot of machine translation post-editing, but this is also a general trend. Generally, we have been lucky and we also had onboardings of large accounts so we still have an increase of about 10% compared to the year before, which is a very good performance.
Esther: How did you adapt operationally? Presumably, you were working to some extent with distributed teams. What tools did you use to collaborate?
Fabian: I think two years ago we implemented Microsoft Teams, which is a great tool. Since some functions are similar to Slack, this helped us a lot. Every employee has a laptop and our system is based in the cloud. We were well prepared to work remotely, so it was not such a big thing for us. In the beginning, the employees did not like to work from home and then they got used to the situation and organizing their day differently.
Not everybody will be fully coming back because there are also advantages of working from home, but personally, I like to be in an office and have direct contact with our employees. I think it has changed, but we have adopted very well to it. I am proud of the whole team and how they managed it.
Florian: In terms of the direct sales, generally, and now with this distance component, how do you run sales and marketing?
Fabian: They are doing much more presentations online, like online calls and video conferences. Also before we worked a lot with the LinkedIn Sales Navigator to get new leads. We also produce a lot of great content on our blogs, and distribute via social media and get leads from there. Since a lot of this is people business, I think it is a little bit more difficult now to approach because if you know somebody it is much easier to do a video call, then if you make a sales call and then try to do video calls. It has also been a slightly different situation in Switzerland, we were not always in full lockdown so we were still able to see people. In the United States, it is different, but we are also working with online tools and that works out very well.
Florian: You mentioned that you are very much organic, in terms of the way you grow. Apart from the very early days of the company, have you taken on any outside funding since then?
Fabian: Yeah, we have no investors, we had business agents. We started with two business agents. Our last financial rounds were in 2007.
Florian: Why are you guys so set on organic growth? Maybe the absolute perfect partner will come around, but you are pretty much adamant you are not gonna buy another LSP.
Fabian: Speaking for me, I do not see a reason for buying another LSP in Switzerland. I would only do it if I am not doing my business right and I have problems in organic growth. Internationally, I can clearly see that but the efforts to bring people to gather on one brand and what they have to do in the long term, they will lose half of the turnover of every company you do an M&A with.
Currently, we are winning a lot of clients since the other players in Switzerland do M&A and international rebranding. With us, clients are finding a partner who is running their own business. I am doing it, it is a passion. It is not just private equity, it is not just about money. It is about passion for what we do and this also makes a big difference in the mindset of the whole company. It is what we are trying to roll out and push.
Esther: How do you see the funding boom that is happening in the TMS and MT space from an
LSP user perspective? How does that impact daily life? Are you getting better MT and TMS products because of these funding rounds?
Fabian: It is getting more complicated and more interesting. We have our own TMS, but we are also working with other TMS and other tools. For me, I always try to look at it from a customer perspective. How can I help the customer and solve their translation and internalization needs as best as I can? What are the best tools for the client’s situation? We are trying to use the tools that fit best. If it is ours, that is good. If not, it is another one. Every tool specializes in something different. We are also taking out all the MT pools, what language combination works, what kind of texts work with them. I think it is interesting, but a lot is popping up. Sometimes it would be cool if they are able to be one larger network that would work for everything, but then it is not independent.
Florian: If a client comes around with a $10,000 job but wants to use some obscure TMS, would you draw the line there and say no? Or are you open to using anything if you are set up for that?
Fabian: Maybe for 10,000, if it is a single project. Although it depends, most of the tools today are cool because you can export many things and we invest more than 1 million into our IT every year. We can handle all the formats so we are interested to find the solution, and find out what makes sense. Then we take it somewhere with all the tools you can download and then you have the data in a database so it is translatable.
Florian: In terms of the whole automation, human in the loop model, since you are in this creative space and where MT so far, has not provided a major boost to productivity, what is your take? How does the whole automation on the language side impact the more creative side of translation?
Fabian: We are focusing on both, the creative side and also machine translation, post-editing. On the machine, post-editing side, especially for machine translation, you have somebody to control it, and the approach too. You need somebody to test if the translations are right or not and if it is going in the right direction. In the creative part, if you are a brand who wants to emphasize your audience, you need a human because you will need somebody who really can transcreate. I think this is important and I think that will last. I do not believe that the machine can transcreate that great a copy, at least for a long time.
Florian: We had a quote from Chris Fetner, who used to work for Netflix and has now founded the new Entertainment Globalization Organization in LA. His quote, that we picked as one of our top quotes for 2020, said: “entertainment machine translation will arrive roughly at the same pace as when you would read a best-selling book that was completely generated by a Google engine”.
Fabian: I also think that today it is important. People are more online, they are reading. I watch Netflix and sometimes the dubbing or subtitles do not really match. It is really different, it depends on what language you are watching, if you are watching in English or German.
Florian: Let us close on your top three trends or predictions for this year. What is going to happen, business, non-business, Covid-19, non-Covid-19?
Fabian: My prediction is that we will launch a new service in the next few weeks, which will be very cool. I think we are filling a gap here and I can not tell you more on that. It is something to do with speed, machine, and human. I think that is also like a fast-turning topic so definitely something that will be a trend. Also what I said about the testing of machine translation, the context, if you have it in databases, how the end product looks, how you can make sure of the output, how you can solve this, to better test it. We will see more streaming stuff, we have much more requests for complete solution stopping and then whole service projects. I think selling product services is a trend that we are moving away from, instead, we sell solutions.