Transcription
Florian Faes 00:02
Got transcription, media law and remote interpreting. Fantastic couldn't be better.
Ivan Smolnikov 00:09
You never hired a supplier sir, regardless if they are agencies or freelancers.
Florian Faes 00:15
And welcome to episode 83 of Slader. PA today without estar. But with me, your guest who's Florian. So we have on the program today a fantastic guest, Yvonne Smolny cough, the CEO of SmartCAT, one of the most interesting companies in the space, most interesting language technology company in the industry. But before that, bear with me for a few announcements around our upcoming Sleater con Conference, which I really want to share with you. Lots of interesting guests, lots of interesting speakers. And of course, the usual amazing platform that we're using hop in, but first, basically, we have Joshua Gould, the CEO of the big word, you know, the big word while we were away, they got a new majority shareholder private equity firm that invested. So Joshua is going to talk to us about for decades working with the government lessons for the language industry. Really looking forward to that. Then we're heading over to Pinterest, Francesca DiMarco, internationalization lead at Pinterest is going to tell us more about how they built an internationalization team to drive global strategy. Then a quick break where you guys can network you know, we have booth exhibitions, the whole remote experience and looking forward to that and the whole the networking kind of the networking roulette thing, which which I made a lot of great connections at last couple of Slater cons then we got Yara talls he of blend continuing and talking about cross border ecommerce growth best practices from leading brands. I'll be moderating the content creation in the age of AI panel with Constantine seven cough intento Yokohama of Korean and esteem, Michael Lopes of E to F. And then a special treat the panel on video localization. I think we found an amazing lineup of panelists really covering the three core areas that we had in our video localization report, which we spoke about last time kind of takes a bit of a broader look at, you know, the audio visual localization space. So we got fired out to be at the UN from Kudo to CEO. We have Chris Reynolds, the executive vice president, General Manager of Deluxe one of the biggest media localizers and Tom living. The founder and CEO of vervet who raised a ton of money recently, more into transcription space, we got transcription, media log, and remote interpreting. Fantastic couldn't be better. And obviously three amazing experts there. Then we are moving on to game localization with SAR con loot Foley F, the Global Director of localization at Riot Games. Looking forward to that closing the conference on a you know, funny No, we game localization. So really, really looking forward to that. And then Andrew is closing the conference. And then there's going to be you know, networking, exhibition, session rooms, etc. So, without further ado, head over there, sign up September 8, and we'd even less ado, I'll bring you Yvonne Smolny kowski of SmartCAT inches a couple of seconds and welcome back to Slayter PA today with Ivan Smolnikov, CEO of SmartCAT Hi, Yvonne.
Ivan Smolnikov 03:41
Thanks for it in pleasure to be here. Thanks for inviting me.
Florian Faes 03:44
Absolutely. Great to have you here. Yvonne. So where in the world does this podcast find you today?
Ivan Smolnikov 03:50
Boston where leaf and during this crazy month recently? Almost decent travel?
Florian Faes 03:58
Yeah, same here. Same here. I'm doing domestic tourism. Like I've never done it before. I've undiscovered country
Ivan Smolnikov 04:05
in the US, you know, which is great. There's like lots of opportunities to travel across the country and you don't really need to go somewhere.
Florian Faes 04:14
That's right. That's right. Yeah. Yeah, sometimes I wonder you know, how would verify was back in Singapore where I used to live for some time. It's like, okay, you're in this little island forever. Anyway, you're in the US Island. Nice Island. It's a nice island. But you know, you get to the end of it at some point. All right. So Boston. So yeah, so I said before, I think smart kids, one of the most interesting companies in the language industry. So why don't you tell us a bit more first about your background, like how you got into this? I think you you were originally a founder of an LSP as well. Right. So just tell us a bit more about your background, how you got started in this industry and how you started SmartCAT how it
Ivan Smolnikov 04:55
started in the industry is still a mystery for me because I graduated in like the Physics and Technology was really doing hardcore research in physics was internship was with Samsung, in Korea, then in Canada. And then somehow I found myself building the online translation engine agency, it was like 2003, I guess. And at the time, we didn't have yet companies such as Django, or when our translation or una with like all these online companies that are today, quite, still quite popular. But at the time when we were building company like that, it was out of Moscow. And just after two years, I sold a portion of that company to a B group. And then I still I continued running that company for another 10 years, it was 2006, I think, yeah, another 10 years until 2016, the name of the company was AB language solutions, steel all into a fair portion of the company. And it was running it very independently inside of IP group and grew it into top 50 by CSA, and the company is still around. It was rebranded into our Terra after I left the company, and it's still the kind of one of the largest in Europe, and in top 50, maybe top 60? I don't know exactly, honestly, because I haven't been doing anything with that business for last five years now. So pretty long history in the industry.
Florian Faes 06:29
Absolutely. I think you must be one of the first if not the first, like math, science, physics, PhD on this podcast, because usually people come in from some random language angle, or maybe some industry angle, but not really from from this.
Ivan Smolnikov 06:44
That's why I'm saying it's surprising to me. It does happen. But you know, it's happening. I guess it's much like it's, it should
Florian Faes 06:52
give you a competitive advantage when maybe when you get into the tech side of things. So I guess that's why you also then did decide to go more tech with SmartCAT. So just tell us the origin story, the elevator pitch, how it got started, think
Ivan Smolnikov 07:07
that's the you're right, I always gravitated towards like building something on technology side. And my LSP company was also very much technology powered LSP back then. And then, you know, just I found myself at some point understanding that probably you can't do that much with just traditional LSP approach that they wanted. And that's how its market idea was born probably in 2015 2016. The idea was, literally to build a new type of SAS platform that souls back then I was thinking like about two major problems, maybe free first was to give SAS platform to everyone without really charging them for licenses on per user basis. Because I really feel hurt all the time and still think that it's pretty much diminishing for the industry to sell and charge per seat, because we will deal with freelancers, and you never know how many you will need tomorrow. Second was that idea of combining Sass platform with marketplace of suppliers, both freelancers and agencies. And the idea was that sourcing freelancers, even back then with my agency was always tedious because we I remember, he dealt like maybe these 2000 people all around the globe, and sourcing them, testing them, verifying them was always kind of a big, big thing. very time consuming, very labor consuming, consuming, expensive. And that problem, I felt, and that's one of our key focuses at the moment, I felt we could save soul for the industry much better. Not just this catalog of freelancers, but rather this combination of sass and marketplace of suppliers where we know much more about each supplier than you can read in the series. Because of the you know the performance, you know how they really deliver timely or not, you know, the real feedback from the customers, how the customers are satisfied. And ultimately we can tell you if a supplier is a fit for particular content, and that's one of our key technologies in our backends today. And third problem was actually payments. We select dealing with 2000 people all around the globe. I remember we had a team of people who you're really managing these payments for different payment methods, so that freelancers are happy and not you know, disappointed with us sending them wire transfers, and they just losing like 10% of the money. So this problems kind of motivated me to start building smartcard back in 2015 2016. And in 2016, I set it up and raise my first money like seed money and then another round aren't in the US in 2018? And then the last round? Six, seven months? Almost a year? Yeah. Yeah. September, September August 2020. Yeah.
Florian Faes 10:13
So we got the no seeds we got which we'll talk about kind of the sourcing of the Freelancers, The linguist and the payments component, right, which was, which is a core differentiator for Is there any part of your business that's kind of services revenue where he actually delivered a service to a client? Or is it is it just platform I mean, quote, unquote, just platform.
Ivan Smolnikov 10:39
It's both. We don't deliver service as an agency in the traditional way, but you can, you can really buy services from us through our platform. The difference is that you always know transparently who supplier so we never hide who suppliers are, regardless if they are agencies or freelancers, as a buyer, and buyer can be also both agencies and freelancers, you always know who your suppliers are, you literally call them my team inside of our platform. And that helps you to really convey the signal about what you want from them uninterrupted. Because usually, for the long supply chain, when it's like large agency, then small agency, then freelancers, real producers, they never get actually the actual signal from a customer and can't communicate back effectively. Now case, it's all open, it's all transparent all the time. And you as a buyer, also see rates for for suppliers, and you can see how much you spent. And you can optimize that you can juggle suppliers quickly with just a couple of clicks. Because you don't have a obstacle or barrier to switch to another supplier. It's never like that, it's easy, you can just really do a couple of clicks, and you can start working with a new supplier, but at the same time you accumulate data inside of your account. transition is smooth and quick. And it's a single agreement. So it's definitely a new model for the industry. Because from one hand, you have convenience of a single agreement, like if, excuse me, if you would work with this one large agency. But at the same time, you have this convenience of having all the marketplace in front of you all the suppliers, so you can choose them easily and quickly. You can optimize your costs, you can optimize quality, you can train people, and they are motivated to really be educated by you because they have these kind of direct relationships. And they this relationships perceived as direct, but it's just coming from a single agreement, which is an agreement with smart, good,
Florian Faes 12:48
but smart wouldn't have like a project management team that would help facilitate it right basically the claim that's the platform part. So you wouldn't get Yeah, like that. Okay, yeah, got it.
Ivan Smolnikov 12:57
Yeah. But at the same time, look, there are two components of it first, LSPs, for sure they do the project management on their own. And customers, I see they tend to have someone who is doing some part of project management. But at the same time, step by step, we are really automating project management. And that's good both for LSPs. And then customers, because for LSPs, it's the second largest cost after the pay to freelancers. And we really make project managers like three times more productive for end customers, once they integrate this platform, all the processes, just continuous delivery, they don't do essentially any project management because it's kind of automatic, including selection and management of suppliers. Technology does it.
Florian Faes 13:45
Got it? So you basically have three stakeholders here that are working on the platform. So it's the enterprise, right? It's the freelance linguists, and then it's the language service providers, both as in a sense of resource if like an Enterprise Client chooses to work with a particular agency or bring their own kind of be bring their own agency to the project, or LSPs, that actually are using SmartCAT as their kind of TMS solution. Right. And then we went to the freelance. Just tell us a bit more about that dynamics here. This must be kind of complicated, because there's some competitive elements in there. Again, the transparency like LSPs don't like when people see it, or like which and suppliers they're using, etc. I mean, must be quite a complex ecosystem. They're
Ivan Smolnikov 14:31
headed complex. Yeah, absolutely. And that's kind of both exciting and complicated part of what we're doing, because we need to, you know, if we need to go through this complexity all the time, we need to align interests of stakeholders. We need to optimize product for them. And I can talk a lot about it. So if you feel like it's a bit redundant, please stop me but
Florian Faes 14:58
in a nutshell, the time interval A
Ivan Smolnikov 15:02
Nutshell is like that surest, if a buyer chooses to work with an agency agency is not forced to open the supply chain, they can still work with freelancers and buyer want. Now it is just a choice for both in the agency and the buyer how to do that. And we see many buyers just work with freelancers directly on our platform. And I think that that's because we do solve this problem of having not having multiple contracts and multiple invoices, but we provide them with the benefits of dealing with freelancers such as quality and transparency and everything. But it's, at the same time, many buyers still prefer and come all combined working with agencies and freelancers. And that's good as well, because for some complex big projects, agencies can do a better job and they are more qualified, they have some additional layer of expertise. And that's a combination, which is kind of liberating for buyers, because they can't, they can, they can now afford a deal increase like 10, or 20, or sometimes 50 suppliers. Sometimes we see buyers localizing into 20 languages, and they have 10 agencies and you know, 60, freelancers working all together in combination, depending on the language barrier, and complexity of the project. So we really do our best to align interests here and not to have any competition. And for agencies, what is great in our platform, first, they do use us as all in one GMs platform. And that's pretty unique. Or usually you need to combine capitalize from ntms product. And these two never really work efficiently together because of different limitations in integration between traditional business or translation management systems and get platforms. And if you have this limitation and integration, you can't actually build effective continuous delivery process. Because this continuous delivery actually stops this integration, you need to transfer data manually. And that's where you have this waste of project management efforts. We combine that in a single platform, we provide them with all connectors integrations are all on single on a single platform, they can use it either for free, or they can buy a subscription, which is flat and independent on number of users. And that's a big, big benefit for them. Because they save a lot of money, they save a lot of project management efforts, they can optimize costs and suppliers thanks to our marketplace where we have 450,000. Now freelancers, in different language players, so a lot of benefits having all on a single platform, and then they can go and buy and sell to buyers the services more effectively. Because they are now much more effective themselves. Also, we have this partnership program for them where they can resell SmartCare to the buyers. And in this case, they don't have technology cost at all, if your buyers is on SmartCAT, you don't have technology cost to this market at all. That's kind of beneficial for them.
Florian Faes 18:18
So for under 50,000. That's like all of them.
Ivan Smolnikov 18:21
I think maybe half of them, but you will see you know, we are adding 10,000 more every month organically. So I don't know when it's going to stop but 10 10,000 consistently every month without any advertising budget.
Florian Faes 18:37
Today, things I want to talk about now like first just briefly subscriptions, but then also payments. So you mentioned subscriptions. How do you manage that? Like we spoken about subscription translation as a subscription in previous podcast segments? Like? Is it a certain upper limit to people that max this out consistently? Or like Isn't it very hard to sell translation as a subscription? And how do you manage that?
Ivan Smolnikov 19:03
Good question, if you don't sell services as subscription, in our case, it's also pretty sophisticated model. But I think that that's our competitive advantage as well. Subscription. First, we have a very powerful freemium component that any user can use us for free for freelancers who don't have subscriptions at all. For agencies and end customers, we have very large limits of what we call today's Smart words. And what is smart towards smart towards is essentially automatic translation which we do for you. You can use it or you can avoid it, it's up to you. So if you don't use automatic translation that comes from smartcard, you can avoid by paying a subscription whatsoever and all other features everything is available, no limitation on number of projects users, you can payments.
Florian Faes 20:00
Got it. So just let me pause here for a second I get it. So you're basically not or I mean, the limit for routing content through smart card is very, very high until you actually get charged for the tech. But of course, you still have to pay the supplier for the service.
Ivan Smolnikov 20:14
Yeah, absolutely. And you see the costs, as I said, transparently on the marketplace, and then you can, you know, kind of pick them for a particular project, you can combine your supply chain, and you can modify it on the go essentially, dynamically with any project. Because it's not, you know, you're not, you're not locked in as a buyer on the single supplier for another 12 or 24 months after you have just run RFP process. And that's the beauty of it. But after that you pay for all suppliers services, with a single invoice at the end of the month is like net future net 45, depending on how you choose it. And this invoice actually accumulates all supplier costs that you had in the previous month, it can be one supplier or 100 suppliers.
Florian Faes 21:04
How hard is that to pull off on the back end? Like just logistically for you guys? I mean, just okay, the pulling together the invoice I can, I guess that's partially a challenge. But doing the payments, like how does that work
Ivan Smolnikov 21:18
this these are literally three different products under the foot Shures is a TMS but it's not just standard TMS. It's has a complexity of what you said three different target audiences. And for all of them, what we are aiming to achieve is all in one platform. So we solve all your problems. If you're on SmartCAT, you don't need to actually use other technologies such as additional GMs platform for I don't know, managing your customers, or you don't need to use additional catalogs from. So that's one part of complexity. The second part is marketplace itself. And marketplace is not just a listing of freelancers or agencies. It's not just static profiles, it's actually connected to this GMs platform. And TMS platform feeds these profiles is real, actual performance data. And based on this actual performance data, we can match you automatically with best suppliers not just based on language pair, but on content domain actually. And so when you upload some specific document, we can tell you who are the best suppliers, from English into German in this specific domain field. There's another thing and marketplace complexity and matching technology. It's a big thing is the separate big team inside of smartcard. And that marketplace works for all parties as well. It's like for end buyers, for agencies and for freelancers. freelancers are only consumers agencies are both on both sides. They are consuming marketplace and they are participants of the marketplace themselves. And then buyers are just buying from marketplace, and various third FinTech product. And that's like literally different products, we can charge you in any currency in any country with a single invoice. For example, we can we can give you an invoice in Japanese yen or in Japan, and you will pay this this invoice for 100 suppliers spread across the globe. And this suppliers we will go to the our personal account in SmartCare. They choose the preferred payment method, which would allow them to withdraw money from SmartCAT in the currency and VSA preferred method in the country. And that's additional big thing. And it's also connected with TMS platform because TMS platform feeds it with billing data. Otherwise, you won't be able to accumulate into a single invoice every month.
Florian Faes 23:44
Maybe just a strange question. But like, are you exposed to any currency risks? Or something? Are you like settling this daily? Or how does that work? Sorry, um,
Ivan Smolnikov 23:54
it's, it's not a big deal for us at all. Because as a supplier, you can choose to get money in US dollars, regardless where you are, right. And if a buyer pays us US dollars here, you can you can mitigate your currency risks on your own. Let's put it this way. But in case of withdrawing money, how it happens, usually, it's pretty straightforward. If as a buyer, you just paid someone in US dollars, then we will convert it into your domestic currency if you prefer to withdraw it in your domestic currency in the moment of your withdrawal. So essentially, you see this exchange rate at the moment of your withdrawal. So we have never experienced any any losses or issues. Let's put it this way.
Florian Faes 24:42
And now we have years of like data, so probably not something that's going to blindside you at some point. Hey marketplaces, so nobody has managed to, I think what you call a horizontal platform, no horizontal platform has kind of ever managed to crack translation local So we had this pro finder by LinkedIn. I think there was Upwork tried it at some point earlier. Like, why don't these large platforms managed to crack translation? Well, what do you think what's the key are the top three reasons why they failed so far?
Ivan Smolnikov 25:20
I think that's, I can, I can tell you top one reason for that. And maybe we can then come up with a couple more, if you need to. But the top one reason is the following. The catalog of suppliers doesn't present value for enterprise buyers. Because as an enterprise buyer, to deal this, this variety of suppliers, you need to technology, you need technology around it, which is very powerful and very vertical and specific. You can't just go with a effectually suggested or no project management tool together is a catalogue of freelancers, or agencies. Because first, you need to automate this whole workflows, how you exchange content and how it works. You need this automatic translation component in it, which we call smart words. And it combines all best machine translation engines, translation memory, glossary management, all key checks on top of it, right? That the number one core value that any buyer in this industry, including enterprises and agencies want to see right? seconds. catalog of freelancers won't help you. If you need to Source Select and test these freelancers, yourself. Yeah, so you need you need technology to be not just integrated with this, or workflow TMS platform, but also help you to source and verify the suppliers otherwise, you do it yourself. And then what is the point right, then that's what you pay usually agency for to do it for you, right. And that's when you have both pros and cons of this standard model. So if you don't combine catalog of suppliers, vertical software that automates the entire workflow plus sourcing, contesting and payments, that doesn't present significant value for enterprises. And that's why no horizontal cord catalogues of freelancers, you're successful in this industry?
Florian Faes 27:18
Is there. Is there an example of like, where it really worked? I mean, for example, on Upwork, which are some of them? would, you know, like, which ones are the most popular categories that actually work on such as engineers? Engineers or
Ivan Smolnikov 27:30
engineers? Yeah, interesting. It's is because the workflows for engineers are so different. And as a buyer, you don't meet actually, anything, except for just talent, to really, really make it work. But in case of our industry is very different, actually. And, yeah, so maybe also, it's kind of close to successful. These are designers. Yeah. But other than that, for enterprises not really, going very well.
Florian Faes 28:05
I need to get your design or your design is fantastic. Like with the lock from home, and just the general like, even the website, I'm not happy with how ours is I need to, I need to step it up.
Ivan Smolnikov 28:19
She will enjoy your comments, I'm sure.
Florian Faes 28:22
Oh, seriously, it's so clean. It's very, very well done. So from the matching perspective, that super hard candidate the project management hard there, you got those hundreds of 1000s of freelancers. How do you how do you a qualify and vet them, like at scale in production? And then what are some of the key issues there? I mean, this is, you know, from my time as an LSP. I mean, it's always like, it's one of the hardest things to do, like you find a qualified person that person's done tends to get very busy, you can't use them anymore for a particular project, because they're booked out in something else.
Ivan Smolnikov 28:56
And that's it, there's a problem just holding the alright. And, again, both agencies and an end customers, because agencies really appreciate that component. They're always in the situation, when they have some projects that don't have enough freelancers, they're always in the situation when they have a new project for a new customer, and they just don't know where to source freelancers for them. And in our case, look, this is multi layer technology. And that's where I think we apply to the machine learning or you can call it AI the most. It's actually starts from just basic things such as language barrier and say number of words on our platform in the same domain field and Domain field on this layer can be just something that customer identified, uploading the content and Freelancer indicated in the profile then rates should be matched. I mean, it should be in your budget, right? And you look into customer feedbacks, which we accumulate as well. But after that, Now we can go into another layer where we can actually analyze the main field of the content. If you upload the content, in reality, there is no such domain as legal, just pure legal, it's legal for something, right? If you if you have a contract for oil and gas station that's very different from your contract, when you invest when you invest money in the company, the diva vocabulary will be very different as you'll be like two totally different type of contents. So this legal doesn't help a lot. And that's where we help both enterprises and project managers inside of an agency to really understand what is inside of this content. And who are the best freelancers who really translated before similar contracts and successfully. So these two things are very important. And they are purely technology based, which is similar content, which means that we can analyze kind of semantic fields of this content and can tell you it's not just about legal, but it's about specific terminology, which prevails in the original content. And here is freelancer who did similar content successfully five times before in this language barrier. And successfully that's not just based on the customer feedbacks. It's probably also based on number of transactions to this freelancer, if a freelancer retains a customer for like 15 months, and this is reputable customer, that means something right? Yeah, we don't, we don't uncover this data, because it's confidential as well as content itself. But based on our technology, we can tell you who is the best candidate for that. And that's very valuable.
Florian Faes 31:44
Hey, on the other end of the extreme, if somebody actually just wanted to, like an Enterprise Client, if they wanted to translate, edit everything in country review everything by themselves, is that something that they could do? And how often do you see them actually trying to do this
Ivan Smolnikov 31:59
question? Great question. You know, we sold that experience I had in the industry, it was surprising to me to see last two years how many buyers actually start just editing content themself?
Florian Faes 32:11
Wow. So post that from the empty or? Yeah, that's,
Ivan Smolnikov 32:15
that's what we call smart boards. And look at the difference with just royalty is, there are many differences. But in a nutshell, we combine multiple different MTU engines plus translation memory. So you always get completely automatic translation this market, you can you can actually, you can, you can opt not to have it. But by default, you always, always will have automatic translation from SmartCAT segments never empty, basically, by default, never. Yes, by default. And that's a combination of translation, memory and empty. And it always learns from what how you edited, right? It's not exchanged across accounts, because it's because of confidentiality. But inside of your account, we always learn from your content, and you can upload more content, or we can crawl your website and help you to build translation memory from scratch, it depends. But it's always populated in this pre translation. And the thing is that the quality of these automatic translation is always growing. And surprisingly, for me, a lot of enterprises during the last probably like year and a half or two years, found that for many content types, they don't need to outsource it anymore. Well, they just go with the internal reviewers, who are the in country marketing, content writers or marketing managers, whoever. And for some type of content, they just do reviewing themselves. It doesn't mean that they stop outsourcing at all. And I want to believe and I think it's true that they don't even reduce the budget, because overall, they still want to spend the budget because they have more content they could afford otherwise. But for some portions of content, they can either use automatic translation without any editing now, or they really go with what we call insourcing, they edit content inside of the company. And this market is easy once again, because we don't count it. We can allow you either do it internally via some limited number of users. You can send invites to like 1000s of people in your company. And we don't charge you a penny for that. That's that's convenient, right? And that's the difference. Second, that you can invite your volunteers or users, sometimes we see people invite their users and they really do reviewing for them for free. And you can do standard model you can invite agencies you worked with before you can invite freelancers, you new or you can go to a marketplace. So generally is like four different options with SmartCAT how you can proceed with editing or consuming the automatic translation.
Florian Faes 34:52
So it's that theory that basically as you're lowering the hurdle for interacting with empty maybe budgets. I mean, I guess as an industry, we should hope the budgets overall don't get caught. But just the amount of content that gets localized just expands so much more, right, and probably the quality for the user and not the market user. But the eventual kind of the person consuming, the content gets better and better and better, like with Canva design just got so much better over the past five years, because everybody could use these kinds of tools. Now with translation as well, it just grows the pie of good well translated content.
Ivan Smolnikov 35:30
Absolutely. And that's what I'm seeing. And that's what I hoped for back like five years ago when I started to market. And that's what I'm seeing today is that. And that's why I believe that agencies and freelancers shouldn't be shouldn't worry actually shouldn't be scared of automation. Because the total amount of work, which is being outsourced, is not reducing is not is not shrinking. That's that's what I see, at least, because we as humanity as the business world, we produce more and more content. In my opinion, content becomes kind of driving force for sales and marketing, I see that sales and marketing kind of converge into, you know, content, strategy, content management, content delivery. And specifically, it seems like it's it accelerated with COVID, because you don't need this field presence anymore in different countries. And you can just go with effective content strategies. And what it means is that you always have like 10x, or sometimes 100x more content in your company that you would like to localize, then your budget can afford. And that's the problem. So it's not a problem of, you know, shrinking budgets, it's about having more content, translated in different ways automatic, a little bit edited by users or your employees, editing, this high quality level by professional linguists and agencies, et cetera.
Florian Faes 37:03
When you started, I think you weren't fully, like five years ago weren't fully focused on the enterprise. Is that Is that correct? Was it mostly like you transition into the enterprise over the past? Like, three, four years, more or less, right?
Ivan Smolnikov 37:17
Look, it's not, we haven't, we didn't experience any change. And our strategy is just about that problem of platform complexity when you have three distinct target audiences. And you actually develop under the developer under the hood, three different products for them. It's hard, you just can't, you know, you can't address it all simultaneously. And that's why I think that we started not even with product for agencies. But we started with product for freelancers, we first got traction with freelancers, because the simple cat product back in 2016, was enough for them. And that's how we populated our marketplace. And then we went to agencies and said, Look, guys, we have this nice product and freelancers, and also we are building payment components, would you like to try it? And then I would say in other next two to three years after 2016, we will focus primarily on agencies. You're right, but we never, we never kind of, you know, ran away from from enterprises, we always had enterprises as our customers, but we didn't do any marketing for them. We didn't develop specific features for them. And then maybe the end of 2019, beginning of 2020. That's where we added more resources into both our product development and marketing for enterprises, because we already felt like both freelancers and agencies products, they will mature enough to allow us to focus more on enterprises. At the same time, it was all these kinds of enterprise customers.
Florian Faes 38:54
I mean, I was also asking, because you the Freelancers, probably they I mean they found you like on their own almost I mean, there's there's probably a fair amount of push from your side as well, but it's fairly automatic, then the the LSPs are easier to find, right? You go to a slatercom you go to a gala, you go to a lock world, maybe. But selling to the enterprise is very, very hard and different and complex. I mean, how did you find the sales and marketing effort? When you're getting into this in this vast, vast field of the enterprise, which is literally any company on the planet, right?
Ivan Smolnikov 39:31
First, we are still learning that I can't honestly can't boast here that we are absolutely correct that and we know how to do that scale super effectively. Second, you know, I think that as well as we are probably not yet super cool and super effective is our marketing. I should admit that I believe so I think that we have huge room for improvement even do Thanks for your compliment.
Florian Faes 40:02
Come on you first wants to do a remote conference. Like I was like, Oh, no. Like it was April.
Ivan Smolnikov 40:08
You know, that was surprising, right? Yeah. April 2020.
Florian Faes 40:11
Are we supposed to be the conference guys? And then you guys came in with like, lock for me.
Ivan Smolnikov 40:16
It was great idea for marketing team. I really enjoyed it. And for me, it was specifically great and VIB derailing from your question, but we will we will get back. It was like, I didn't even come up with this idea. It was entirely you know, from our marketing team. And it was like, Okay, are you guys going to make to the remote conference? Right? We used to travel to conferences. Yeah, we will do that. And that was just one month after lock down. So early, it was 2520 2500 attendees. And like, I think 4000 to five 5000 Something registered people and 2400 attendees, most of them, or at least half of them were simultaneously present in a single room, which was essentially the largest conference and we keep growing since then. So it was good. Marketing? Yes, there are some some bright, bright steps, for sure. But still, I believe we have huge room for improvement in our marketing, and enterprise sales. But back to your question. I think what we are doing differently, and what we are doing good. And this is not marketing and enterprise sales. What we do here good is product growth. It's about us having really good quality, easy to use effective product that anyone can start using for free. And that creates a pretty large funnel of users of all types for us, including enterprises today. And also our product, our design, which doesn't push you to buy and pay for any user assumes easy sharing. So viral acquisition also works for us. It's not if there is no, there are no obstacles for you, as an end buyer. If you jump on the platform and have just translated the single file for you to magically, to then share it with your colleagues quickly. And then invite an agency that you knew before. And then an agency will invite 100 freelancers, or these freelancers, then, will bring a couple of agencies they knew and so on, and so forth. So this vital acquisition loops still work for us. And I can't say that they work as effectively are for end buyers as they work for freelancers and agencies. But still, it generates quite a lot of end customer acquisition for us today. And I think we primarily continue kind of focusing in doubling down on this product lead growth component, where we have a powerful product, a lot of value is sharing. And that's something that we believe in quite strongly. But at the same time, you do want to strengthen our enterprise sales and marketing in parallel. But that's kind of work in progress.
Florian Faes 43:14
Is that where some of the venture funding is going into as well? I mean, you raised three times you mentioned and most recent one, again, was bought a year ago, maybe if you can speak a little bit to just raising from VCs. How How's environment, I guess, yeah, you raced, still post pandemic, just like how is that? How are the dynamics? How do the VCs that you speak to perceive kind of the language industry at large as well?
Ivan Smolnikov 43:45
First, I think that raising in the language industry is harder than just in like, in probably some other software industries, because I think, for many VCs, it's still lots of unknowns, like what is what is about this lash industry, how really, you can create such a value that would allow you not necessarily in our case, to compete with agencies directly, we are not AI agency whatsoever. But to provide value that would allow to accumulate both buyers and suppliers on a single platform, and the leverage from how they essentially transact between each other. So from one hand, that's very appealing and interesting and intriguing strategy for for VCs as well. And for me personally, that's why I'm I'm pursuing it, and I believe it creates a lot lots of value for the world. And for both buy side and supply side from another hand. You're totally right. And that's something we discussed today. It's hard, it's complicated. And in addition to this complexity, this language industry which is very fragmented, like 10s of 1000s of agencies, right, and they all scattered all around the globe. We don't know how many buyers out there So it's kind of pretty weak for them. And that that makes fundraising harder. During the COVID, I think fundraising was hard for for literally every startup, it's kind of improved. It's accelerated for some companies such as FinTech companies, pure fintechs, for example. But for majority, it was harder than before. And it's kind of blossomed again, maybe six months ago in the US, but we raised it was kind of in the middle of pandemic, so it was really hard. Yeah, they were back to your question about the money goes there. Go ahead. Not not yet for sales and marketing. That's why I'm saying there's still room for improvement. We have 150 people on board to the in house, I mean, full time employees. And more than 50% of them I am the product. So they are engineering, engineering, product management, data analytics. But sales and marketing is this very small teams at the moment, like literally tiny
Florian Faes 46:04
guys, so let's close on like industry outlook, but also your roadmaps, the next two to three years, where do you see SmartCAT? Go? And where do you see the industry at large going to have a view on that?
Ivan Smolnikov 46:15
What they see as our major value and where Vigo is that? We see that enterprises really can get all technologies in a single platform, not necessarily all of them are developed by smart guy but he accumulate lots of interesting technologies under the hoods fascist all empty engines, we are thinking of integrating some content analysis engines such as JPG free, etc. So we see this smartwatch component is something that allows you to process content automatically. And then decide if you want to edit this content at all. And that's not necessarily about translation, it can be the content in the original language, we can process speech to text, for example, and then allow you to edit or not, or we can help you to, I don't know, improve your original content with jpg free, and then process it via machine translation, which seems to be promising for support teams, for example. And that's one of our core components. And then we add two more components that we see are valuable for enterprises, and they are already incorporated into the platform. First is this selective editing workflows, you can either go with your own team, or you can invite suppliers, you know, or you can source automatically for large marketplace of agencies and freelancers. And that creates lots of flexibility. And third, you can you can deal with all that via a single contract with one invoice at the same time benefiting from deal increase all the suppliers kind of directly because you see the rates you can communicate to them. But contractual paperwork invoicing, it's all kind of removed out of your, your responsibilities. So these three components we see as major benefit for all enterprises. In addition to integrations, you know, this IT compliance, data security and procurement compliance. That's all kind of incorporated already. And wherever you go, is that we strengthen this automatic language processing component, and make sourcing and vetting human resources, including agencies or freelancers doesn't matter. More and more robust so that you don't need to think who are the best people who can do it for you, you can just click a button and it works. That's where you go are in terms of the industry, I think that inevitably, we go all into that combination of automatic language processing, and then human workflows. And I think that's one thing another another thing is that service providers who really do lots of manual work, they are not really competitive today. And they should think about it. And this manual work comes not necessarily from things they are thinking about yours, such as machine translation that comes from managing files, manually is this help of the product managers, not integrating with content management systems and really exchanging documents manual is a customer's then transferring files inside of the internal systems between GMs and k, then sending files to freelancers. That all consumes lots of money in time. And that's not competitive today, and that won't be competitive tomorrow. I'm kind of very confident about it. And I think that the best way to go is to really automate all of that and to become experts. Consultants are selling force for your customer, helping them to really make right choices with a quantity and choosing what needs to be automatically translated or localized or transformed somehow what doesn't doesn't need to be transformed at all, and what needs to be edited and how that still requires some, you know, strategy, some thinking and some help from from experts. And that's where we enable, I think, lots of benefits for agencies as well. So they can kind of resell platform, becoming our partners, and then automate everything on it and become trusted advisors for the customers seeing how it all goes on autopilot. So that's my view, at least for how it's going to evolve in the next couple of years. But I would avoid, you know, giving forecast for more than two, three years, because it's too far.
Florian Faes 50:46
Who knows, we just got hit by not just but you know, what if COVID 2022 God forbid, comes around. Thanks, Yvonne. That was that was super interesting. Thanks so much for for taking the time today. I hope we can catch up in real life at some point when the US opens up. I'll be over there.
Ivan Smolnikov 51:05
Yeah, absolutely. And in the US, it's kind of very, very comfortable these days. I hope that it's not going back but it might it might actually go back.
Florian Faes 51:15
Well, they don't allow us over there yet. I think I just listened to podcasts as they were one guy said he had to fly the turkey like a UK citizen, flew to Istanbul for two weeks. So he could then travel to Texas.
Ivan Smolnikov 51:28
You could you can fly to Moscow. Then you can fly from Moscow to New York City over his direct flight and it works. It makes
Florian Faes 51:36
sense. Yeah, the Schengen area still not allowed to trail. Anyways. All right. Well, thanks so much, Yvonne. Thank you catch up soon. Right.
Ivan Smolnikov 51:44
Absolutely. Thank you.
