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STRATEGY

Hot Tip: Outsource to Go Global
 

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Even back in 1992, when Liz Elting and Phil Shawe started TransPerfect Translations Inc., their goal was as ambitious as it was clear-cut. They wanted to build the largest foreign language translation company in the world. It was a remarkably lofty aspiration, considering that they were still graduate students living in a New York University studio apartment and subsisting mostly on Ramen Pride Noodles and Kraft Macaroni & Cheese.

Elting and Shawe's hopes rested on a basic premise: that the increasing globalization of business and the growing use of information systems technology would vastly ramp up the demand for foreign language translation. Before entering NYU's Stern School of Business, in 1990, Elting had worked in the marketing department at Euramerica Translations Inc., a large translation company also in New York City. She remembered that some customers had grumbled about missed deadlines and poor quality, and she believed that there was room for competition.

Euramerica was an exception in an industry known for mom-and-pop companies. In launching TransPerfect, Elting, who was then 26, and Shawe, who was 23, were unlikely entrants into the market, and they plunged into it with an unusual strategy. Neither was a linguist. Elting's specialty was international business and marketing. Shawe, who had worked at Chemical Bank, had experience in finance, as well as risk management and marketing. Rather than translating foreign language materials themselves, they decided to outsource everything. They would position TransPerfect as a company that would do its best to accommodate any language, any turnaround time, and any volume of work, relying on professional translators, editors, proofreaders, desktop publishers, and interpreters -- all hired as temporary workers for each job.

The virtual company they created consisted of little more than a rented computer and a fax machine (total start-up costs: $150 to cover the first payment on a leased PC and to install a second phone line), plus themselves.

The work came in dribs and drabs, as Shawe cold-called Fortune 500 companies with overseas operations and Elting worked her contacts to recruit freelance translators. But in 1993, Cyprus Amax Minerals, a large mining company, seemed to call the partners' bluff: Could they translate a 600-page mining feasibility study to be presented to the Russian government in nine days? Shawe and Elting scrambled to line up nine native Russian speakers with mining expertise. Installed in Elting and Shawe's apartment, the translators labored in eight-hour shifts. "One was at our kitchen table, another was on the couch, and another was at the desk," recalls Elting. TransPerfect finished the project on time, leading to $400,000 worth of additional business with Cyprus Amax.

TransPerfect has grown into a $15 million company with 85 employees, mostly account executives and project managers, scattered among its 11 offices in the United States and 3 in foreign countries. (A fourth overseas office, in Paris, is scheduled to open in September.) But the vast majority of the company's workers are still freelancers.

This article was adapted from material that first appeared in Inc. magazine in August 1999.

Last updated: Aug 1, 1999

DONNA FENN is the author of Upstarts! How Gen-Y Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit From Their Success, an exploration of the ways Gen Y is changing the entrepreneurial landscape.
@donnafenn




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