HUMAN RESOURCES

They Aimed High, but Now Their Translation Business Is Stuck

Could a new CEO do better?
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When Claudia Mirza and Azam Mirza started a translation business five years ago, they had big ambitions, and for a while, their operation, Akorbi Language Consulting, thrived. After just two years, sales broke $1 million, driven by translation jobs for corporate clients such as Southwest Airlines and Aetna. But that was as good as it got. For the past three years, the Mirzas say they feel as if they have been hitting their heads against the wall. The more they spend on sales and marketing, the more their business seems to shrink. Lately, it's gotten so bad that the couple is on the verge of the unthinkable: bringing in an outsider as CEO. "Just because I own the business doesn't mean I am the best person to lead the company," says Claudia. "Are we the right people to run it, or should we let someone else take the reins?" Azam wonders.

Self-doubt is often the kiss of death for entrepreneurs, but you can't fault the Mirzas, who often finish each other's sentences, for wondering if they are up to the task. When the couple launched Akorbi, they were full of bravado. They saw a fast-growing global translation market worth billions of dollars and figured they could get in on the action. Now, that plan is looking less than realistic. Indeed, the Mirzas fear that getting to the next level of growth and profitability may be something they cannot do on their own.

For Claudia, always a self-starter, opting to go to an outsider would be tough. She launched her first business, a copy center and translation service, to put herself through business school in her native Colombia. She wound up with two full-time employees translating study guides for college students and discovered she had a knack for managing. Later, she moved to the United States and took a corporate job with a telecom company. She met Azam in a Dallas Starbucks in 2000. Azam, who grew up in southeastern India, had been an IT consultant at Ernst & Young before going into IT work on his own. Wouldn't it be great, Claudia thought, if she, too, could get out of the corporate rat race and launch her own venture? Azam, who loved being his own boss, was all for it. "We are skeptical about working in an environment where our life and livelihood are decided by someone else," says Azam.

After doing some pro bono translation from English to Spanish, Claudia began thinking about returning to the translation business. Soon after the couple got married in 2002, she persuaded Azam to join her. With his technical background and her experience, the two of them figured they could create software that would make it easy for corporate customers to automate high-volume routine translations in order to reduce reliance on human translators.

Claudia sought out some high-profile but still nonpaying clients, such as the Dallas Arboretum and the Greater Dallas Hispanic Chamber of Commerce. The duo used savings from previous careers to finance the launch. Azam handled sales and project management, while Claudia oversaw translations.

At first, the Mirzas advertised in the yellow pages but soon decided to target large companies willing to spend several thousand dollars per translation contract. By November 2002, through word of mouth, Akorbi won its first paid project: translating brochures into Spanish for 3M.

As more jobs came in, the Mirzas began hiring enough employees so that at least three translators worked on each job -- including brief memos, billboards, or hefty insurance guides -- to get the subtleties just right. Azam also set up as an IT consultant, helping companies find freelance tech staff members.

Soon the Mirzas were signing on to do work with insurance companies, advertising agencies, and government offices. Akorbi's staff grew to eight full timers in Dallas, a dozen in Buenos Aires and Medellín, Colombia, and five tech developers in India, as well as a network of hundreds of freelance translators who pitched in on big jobs. By 2005, the company had 33 language clients and nine IT customers. Revenue jumped from $20,000 in 2003 to $1.2 million in 2005. Spanish translations accounted for about half the business, with Chinese a strong second.

The company developed a reputation for its attention to cultural nuances and reliability. A recent slogan for Dallas Area Rapid Transit, for instance, "Dump the Pump," was rendered into lyrical, rhyming Spanish by Akorbi: "Keep your wallet safe and say goodbye to the gas station" is the English rendering. Says DART's media supervisor, Carmen Hillebrand: "I can give them an assignment and know I am going to get exactly what I need on time."

The business was going so well that Azam figured he could indulge his greatest passion -- owning and racing horses on the regional circuit. He had bought his first horse, for just $5,000, in 2002. Over the next several years, Azam was able to own and race a succession of horses; he now owns three, Claudia's Agenda, Claudia's Forum, and Powerful Claudia. What's more, the horse racing turned into a helpful marketing tool for the business. The Mirzas have entertained executives from Aetna and Bromley Communications, a Hispanic advertising agency, by taking them to races in which Azam's horses competed.

As it happened, demand for translation business was far greater than it was for IT, and the IT business was being hammered by competitors overseas. So, in 2005, the pair decided to back away from IT staffing and go full bore on translations. Freed from his IT work, Azam would use his tech know-how to help the company push so-called localization services, an offshoot of the translation business that helps companies adapt their websites and software to foreign markets. The plan was to take two steps back and then make a big leap ahead by marketing these new translation tools to land bigger jobs.

But the big payday has yet to come. Two years after the Mirzas implemented their plan, Akorbi had 56 language customers -- but revenue had dipped to $904,000. Those disappointing results occurred despite the Mirzas' beefing up the sales staff from three to five people, with each employee making some 50 cold calls a day. All told, the company poured $200,000 into sales in 2006 and 2007, including about 1,000 mailers sent out each week. Though the company had been earning small profits since 2005, the Mirzas were hardly satisfied with what they viewed as a paltry return for all the time and energy they had invested in the business. Clearly, something needed to be done, but what?

To rally the troops and figure out the next step, the Mirzas shut down the company for a day in October 2007 and brought their Dallas employees together in a rented conference room with the company's top producing Latin American translators, who flew in for the day. The group was patched in to the rest of the overseas staff by teleconference for a marathon strategy session. The Mirzas started with a presentation that analyzed Akorbi and the translation market. But the day was also intended to boost morale. The staff took notes and threw out suggestions. The Mirzas decided to reconsider their pricing, which some staff members viewed as too low. They also discussed opening a Washington, D.C., office to be in a better position to bid for government contracts. Says Maria Clara Buzzini, translation services manager: "The meeting helped us understand the big picture."

Shortly after the meeting, Claudia and Azam decided to let go of one sales staff member in order to redeploy funds to improve Akorbi's visibility on search engines. The latter was a move they had toyed with before, but they finally realized that mining the Internet for jobs was an important strategy that couldn't be ignored.

Though it's too early to tell if focusing on the Internet will help jump-start business, the Mirzas continue to beat themselves up for not being further along. "I'm tired of seeing the same million [revenue] number," says Claudia. She says 99 percent of Akorbi's customers return, but the company just can't seem to gain ground. "We want to know what we should be doing that we are not doing right," says Azam.

To help them answer that question, they say, they are on the verge of hiring a top-level outsider with more perspective and experience. That could be a CEO or a sales executive. Either way, says Claudia, "I know I need someone aggressive who can keep my company on its toes." But the Mirzas have yet to post a job opening because of worries about the risks of handing over their labor of love to another person. As Claudia is quick to point out: "At the end of the day, we are liable for what happens to this business."

The Experts Weigh In

Get more global

Investing in the Mirzas' sales team in India and divesting in Dallas would allow them to target companies doing business in and between South America and India and China. I see room to grow in these markets. Internet marketing should be seen as only a complement to a diverse sales strategy. Akorbi is going through a predictable phase of stagnation after rapid growth in the early years. The underlying success story is based on Claudia's drive to succeed. What more could an outsider at a CEO level bring to Akorbi?

Maureen Rabotin
Founder
Effective Global Leadership
Paris

Go for the big fish

The Mirzas should hire a professional sales manager, but not a CEO. Each salesperson should bring in at least $500,000, if not $1 million. To do that, Akorbi should resist the temptation of being everything to everyone. Focus instead on a couple of verticals, like insurance. The Mirzas can increase their average margins by pitching projects that require more languages. Their current approach catches the small fish but doesn't bring in real profitable projects. They should also talk about how they have helped existing clients.

Renato Beninatto
Partner
Common Sense Advisory
Lowell, Massachusetts

Dump the cold calls

Instead of a new CEO, the Mirzas should create an advisory board to vet strategic decisions. They should have at least two clients on the board, as well as sales, marketing, PR, legal, operations, and financial and creative specialists. They should figure out a way to never have to make another cold call. It's better to simply ask for client referrals. The salespeople need to learn about client organizations: Who is in the clients' food chain? The idea is to stop treating jobs in isolation and think of clients as part of an ecosystem.

Marty Avery
Founder
What If
Calgary, Alberta

What would you do?

Should Claudia and Azam Mirza hire an experienced CEO or sales chief to get their company back on a growth track again? Or should they just be patient and weather what may simply prove to be an unavoidable slow patch? Write to us at mail@inc.com and tell us what you would do if you were in the same situation.

Last updated: Oct 1, 2008




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