Before you write off translation services as an unsexy business, consider our global economy.
From Calcutta to Kalamazoo, the world's pockets are splitting at the seams with population growth. Since 1980 in the U.S., the Hispanic population has grown from 14.6 million people to nearly 52 million, per the latest Census Bureau tally.
Companies are going global as well. LinkedIn recently made a push into China, while Facebook, Twitter, and Yahoo are all vying for social dominance by adding users worldwide. Translation factors in because every aspect of their services must be comprehensive, says Rick Antezana, a partner with Dynamic Language, a language translation provider based in Seattle. And that, in part, makes the category worthy of inclusion in Inc.'s 2014 list of the best industries for starting a business.
"More than ever, companies of every size are looking to expand their market and to engage with customers on a deeper level," he says, noting the $35 billion in revenue the space generated in 2013. "Consumers worldwide want everything on their own terms, and that includes a preference for communicating in their own language."
The same is true of employees. "An organization like Starbucks has to support their employees and customers, so every aspect of what they do, including human resources, has to be translated," says Antezana.
The Sweet Spots
Phil Shawe, co-founder and CEO of TransPerfect, a 21-year-old language translation provider, says the sweet spot for his company has been e-commerce. Retailers overseas, for instance, may be giants in their own neighborhoods, but when they expand out, they're virtually unknown and need to work hard to introduce themselves.
When the French beauty retailer Sephora underwent a huge expansion into Canada in October 2012, it needed to cater to both English and French speakers. Not only was this good business, Canadian law requires that any company with a physical address in a French-speaking province of Quebec include Canadian French on its website. Otherwise the company's business license would have been revoked.
Antezana adds that companies must also craft their marketing messages to new audiences or risk looking silly if miscues arise. "Tracking all that content and translating it accurately takes so much," he says. "There have to be multiple steps in the quality control process so the content doesn't embarrass the company."
There's also opportunity to cultivate clients among software and other tech companies. "If you're in Microsoft Word and using the drop-down menu, you can't just give that to a translator and ask them to copy and paste the words back into the new software," says Shawe. "It's about making that process more efficient."
Breaking the Code
You might think a translation service simply employs hundreds or thousands of pajama-clad linguists who sit in front of their computers all day translating line by line, but those days are long gone. Translation services have increasingly become technology companies.
Often, the biggest barrier to entry is the technology required of the industry. "It's a huge differentiator," says Shawe, noting TransPerfect's Onelink technology, which allows companies to host a foreign language site on another company's servers. "It requires a research and development budget, and time. It's taken us 10 years to get our software to where it is."
Specialization is also important for translation businesses just entering the market, says Elizabeth Elting, the other TransPerfect co-founder and CEO. "It's about being an expert and your reputation and doing the best you can do, and then growing from there."
She adds that new entrants should also be prepared to come into the industry with significant startup capital. "When we started, anybody could make some calls and send out some letters and say they're a translation company. But providing the most cutting edge tech requires some funding. It's a bit of an investment at this point."
Still, when an industry is projected to grow to $39 billion by 2018, as translations services is, investors shouldn't be too difficult to convince. "We're seeing a lot of new players enter the market and starting to get good-sized funding rounds," says Jani Penttinen, the founder and CEO of Transfluent, a tech platform that connects 50,000 translators and specializes in content management tools that help clients receive and send email in a foreign language or do the same thing on their blogs. "There's a lot of new activity in the U.S. for language translation, which is a great thing."
The Fine Print
Even the most forward thinking companies face competitive challenges.
Commoditization remains a big hurdle in the industry, as are clients who fail to appreciate the link between high prices and stellar results. Both may drive prices down. To counter this, entrepreneurs must convince these clients that when they're dealing with sensitive products like medical devices, the threat of legal action is real.
Translation companies are also seeing a trend toward consolidation, something Antezana has noticed. "It's happening now more than it has in the past," he says. "For some organizations, that's their growth strategy. They're not trying to grow by marketing." For its part, Dynamic Language acquired The Language Bank last December.
Then there are machine translation services, which are digging into some companies' market share. Dry content such as appliance manuals are more likely to be cannibalized by machine translation, says Shawe, something "Google and other places are getting better at."
With machine translation now more sophisticated than ever, customers are beginning to demand services that were once hard to come by, such as video interpreters who can help clients communicate with the deaf and off-site interpreters who assist with doctors' appointments. "It's about staying up on what the tech is and finding the best way to utilize it," says Antezana.
"Corporations are realizing they don't want an office in Buenos Aires and Lima translating things the same way," says Shawe. "If they had a global management system, or GMS, then they'd be able to leverage previous work among these different offices they have worldwide. These corporations are realizing they're spending a lot on this and that if I'm Johnson & Johnson, I need to organize this because the quality isn't as great, the production isn't consistent, and it's not as cheap and fast as it can be done. The brand voice will get lost."