Why Has Every Translation Startup got...

Why Has Every Translation Startup got it Wrong?

Posted in the TechCrunch Forum

Gary Player

Auckland, New Zealand

#1 Mar 5, 2012
The translation industry is a US$34 Billion dollar industry growing at 15% annually and one that technology is revolutionizing. Many new start-ups are trying to capitalize on the translation market but have they got it right? Grant Straker, CEO of global translation company Straker Translations, whose clients include Sun Life, BP, Creative Technologies and Caterpillar, believes most start-ups have got it wrong and they will never get the returns they are promising investors.

From the outside it looks like an easy win for a start up Ė a massive industry locked into old desktop technology and a sitter for online transformation. The main industry suppliers (translators) are freelancers and are generally willing to pimp their skills so there are no issues with getting the same quality staff as the existing industry players. To get going youíll just need to build a system for managing the translators, some quality management tools, and a job management portal. Use your SEO skills to get up the Google rankings, chuck in an API and away you go - youíre on the road to a $100 million exit in a few years.

Straker believes many start-ups have taken this view and many investors are going to get burnt because of it. The basics of the business model are there and given it is such a huge industry many will have initial success, especially if they burn some VC capital to build up deal flow. Over time things will start to fade and here is why Straker thinks this will happen.

What many fail to understand is the basic economics of the translation industry says Straker, the price you pay translators is benchmarked against what that person would earn doing another job with their skill set. If someone can earn $60K per year doing another job for working a 40-hour week, then they need to earn around $28 an hour. If they are getting paid by the word (the economic unit of the industry) at a rate of $0.104 (10.4 cents) per word then they would need to translate around 300 words in an hour, which is the industry average. For the most common language pairs translation startups are pricing to clients at somewhere around $0.12 -$0.14 cents per word, which means they are either paying for translators at the low end of the quality scale or making very little margin.

Whist many start ups will focus on offering lower prices to try and win business they are entering a business where many of the established players have a very low cost of sales due to the amount of repeat business they get from existing customers. They also have years of data on translators and their quality that is something start-ups will have to acquire.

So what is the secret to being a successful translation start up? Straker believes it is being a high margin business that can grow and maintain good margins; to do this you need to have the low cost of sale but also the low cost of supply. Itís the low cost of supply Straker believes is the real key and they have spent nearly all of their time and resources on building tools that make translators go faster. "If we double the speed at which a translator works then it halves our supplier cost, but only if the translator is paid by the hour and not by the word."

Straker Translations have built a business model around ďtranslations by the hourĒ which means they can offer low prices to their clients but still make good margins by dropping their supplier costs. "Whilst this is great for our customers itís also great for our translators, they earn the same money but are translating more content at the same quality."
Gary Player

Auckland, New Zealand

#2 Mar 5, 2012
C Carter

New York, NY

#3 Mar 8, 2012
Is this DIY public relations site? Because that above from Mr. Player was pure advertising.

Ho Chi Minh City, Vietnam

#4 Jun 16, 2013
Hi, if you found this comment on other sites then it is still from me. I came to work for Straker from their such ads and now want to share my experience after working and observing them for some time from their job postings so you can have a cautious decision when dealing with them. This is no ill-intended but just an insight.

I dont know how good Straker Translation is to their customers regarding their translation quality but from the viewpoint of a freelancer, I have to rate down these guy on quality.'

They have a bidding system which seems to be operated by machine that can gradually bring down the standard rate from 10 to 3 and even lower. The translators are chosen by a machine instead of human like they said and In their system, only the lowest bidder got the job. I tend to bid higher on their proposed when appropriate but always failed with higher rate, so when It got to the point of unacceptable, I and many excellent translators I know working for these guys stop bidding totally. Then their translations are only done by new comers desperate to grab any jobs regarless of time, specialization and a healthy and fair rate.

I think as a ethnic employer and player, as least they should have a lowest limit in their bid rate but they dont. The end suffers are freelancers and customers. These guys dont play fair.

Btw, their bidding time is very short, about 30 minutes and I haven't experience their platform. I only provide literal human translation jobs for them and they are all bid job so no comment on their platform.

Tallinn, Estonia

#5 Apr 8, 2014
"...itís also great for our translators, they earn the same money but are translating more content at the same quality."

So, one gets to work twice as hard for the same pay? Yeey!

Tokyo, Japan

#7 Mar 13, 2015
The topic is kind of loaded, the assumption being that whoever posted this topic has inside knowledge...That being the case, then share it so that we know where you're coming from!

Many translation companies are purely business entities, run by business people which donít have an understanding of, or even a passion for translation, translation processes, translation tools or the translation industry in general. Essentially, the industry is being overrun by entities engaged primarily in pursuit of profit, not in providing quality translation services to the benefit of the consumer that has made the phenomenal growth of the industry possible.

These folks are, however, doing a boss job packaging poor quality translation tools and methodologies such as machine translation, translation clouds, translation crowdsourcing and everything in-between as a cheap alternative to professional human translation. Essentially, they have tried to commoditized translation. And, this is where their lack of understanding of translation comes into play -- Although one can, and should, commoditized the SERVICE of translation, the ACT of translation itself -each translation being a unique product- can not be commoditized with current machine translation technology & methodologies.

Want to get it right? Then understand that translation is a uniquely human endeavor. And, will continue to be so until artificial intelligence starts to rival humans. Now this: http://japan-translators.saeculii.com/english...
Elite TransLingo

Hayward, CA

#8 Mar 31, 2015
I do believe in Human professional translations that are done by human linguists compared to machine translations for the best possible results.

Source : Elite TransLingo
Margaret Reid

Los Angeles, CA

#11 Aug 18, 2017
In my opinion, it happens because they provide bad-quality automatic or part-automatic translation. This is awkward cause all people can get the same automatic translation for free using google translate or something like that. Why should they pay for it??? But I see situation is getting better now, we can use a lot of quality services with human translations like https://thewordpoint.com/
Maxi Schwarz

Ottawa, Canada

#12 Aug 19, 2017
I've been translating some 30 years. The successful companies I work for do not function as the article proposes: they understand translation thoroughly, can and do push quality, and can work intelligently with professionals due to this. The writer of the quoted article seems to be trying to sell a product to wannabe startups, and is misinforming them about the nature of the industry, and esp. of translators and about translation.
The idea of "speeding up productivity" through technology is not a new one. It only lends itself to a few types of texts. In other cases, such automation reduces quality, prevents quality, and slows down the professional. Meanwhile I'm sure that not "**all**" startups fail. Those following this type of advice quite possibly will - including if they are so misinformed about translation to go for such things.
And no - the fee of a translator is not 0.10 as the writer states. It is often substantially higher, and clients are willing to pay such fees. Nor would I be willing to charge less in order to enable a misinformed startup offering me mechanization for a process he doesn't understand, to compete against my knowledgeable clients who share my value of quality.

Chicago, IL

#14 Dec 28, 2017
I don't agree with a phrase that "EVERY Translation Startup got it Wrong". No, it hasn't. You know, we may say that about all start-ups. Some of them finish their businesses after a half-year of work, some of them become really successful companies. A good example is https://supremedissertations.com/

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