If English were the only language on the planet, Jani Penttinen would be out of business. In reality, Penttinen’s translation company Transfluent is in great demand.
Jani Penttinen vividly recalls the turning point of his entrepreneurial career. In early 2007, Xiha, a social network he had almost single-handedly built as a hobby, had seen enormous growth and just a few months earlier had peaked at 26 million active users from 200 countries – huge numbers for a social network at the time. Then it all started to fade.
“We noticed that there is this thing called Facebook that everyone was talking about and that it was growing around the world,” Penttinen says.
People who were once active users of Xiha started dropping out and moved over to Facebook. Traffic and revenue started to fall fast, and Penttinen was faced with a hard decision – do nothing or pivot.
Rovio, the Finnish gaming company, had previously asked Penttinen to build a site where users of their games could get information in their native language. The Xiha team began work on that project while figuring out what to do next but soon noticed that what was meant to be a one-off project led from one customer to another. At the same time, the team was able to refine the business model and the service process. They chose to abandon the social networking arena and go all-in with translation services.
“We gathered all the expertise we had for dealing with different languages and people from different backgrounds and ended up founding Transfluent,” Penttinen explains.
Hindsight is always 20-20, but in Xiha’s case, Penttinen later came to understand much that might have changed the company’s destiny. He didn’t know anything about venture funding at the time and was building Xiha with very limited resources.
“I think we had all the right cards in our hands to succeed with Xiha – if only we knew what to do with them,” he recalls
Xiha’s numbers certainly give him ample reason to ponder different scenarios.
“If you grow to more than 20 million users in a couple of years, you are well set to raise money in Silicon Valley, build a team, and maybe get into the game. Or maybe not. Of course, it’s hard to say. Maybe we would have failed with Xiha anyway,” he says.
Penttinen fully acknowledges that there is no reason to dwell on the past, but also knows that it’s important to analyze past events and decisions. Why? Decoding prior experiences forms the basis for learning.
“Things don’t always go as you planned – and that’s a good thing,” Penttinen says.
Nowadays Penttinen embraces the micro failures in each day.
“It’s very important not to be afraid of failure.”
In addition to the art of learning from failure, Penttinen has also been implementing other Lean Startup principles at Transfluent. Their customer feedback loop serves as a basis for testing the waters before actually building products or features.
“That’s how we have been building the company so far. Before we have the product, we go and talk to our customers telling them we have a new product and asking if they would like to start using it. If they say yes, we go and quickly get into building it. That’s how we have ended up with something that is in great demand, a lot of people are willing to pay money for it, rather than building it first. Micro failure is better than a grand failure.”
The secret to translation
Transfluent, launched in 2011, is Penttinen’s endeavor to eliminate language barriers – a people-powered service that translates text via the Transfluent user interface. With more than 100,000 translators working in over 100 languages, Transfluent has become an immense network of translators quickly available to serve customers.
“The system finds who is available and assigns the task. When the work is done, it goes back to the customer,” Penttinen explains.
Transfluent is mostly used by businesses and the translators are paid “whatever they would normally be paid working in a translation company”. The rates for customers are also similar to those charged by traditional translation providers. At the end of the day Transfluent is a business service that works almost like a traditional translation company, “just much faster and more flexible,” Penttinen notes. But there is more in the Transfluent mix – what Penttinen describes as the company’s “secret sauce”, data.
“We have them [the translators] do a test, have another translator evaluate and score it, and when applying for a specific type of work, like comic books or legal text, the test will be different and will be analyzed and scored differently. So when a customer comes to us asking for a translation for a legal text for example, we know who is the best in our network to handle the job. We constantly keep updating the scores as we progress, do more work and get feedback, to maintain the world’s largest database of quality data on translators. That allows us to do any type of project at any time knowing that we can deliver what the customer is expecting.”
Trade as a driver
Transfluent’s customers come in all shapes and sizes. Subtitling for film companies and translations for games are essential for the entertainment industry, but most customers’ needs lie in day-to-day communications.
“What we do is mostly customer support and marketing related,” Penttinen outlines.
“A lot of different types of things that require fast response times for the translation tasks,” he adds.
Notable changes in the global landscape such as increasing connectivity in various parts of the world have served as macro-level drivers for Transfluent’s business. Working with translation has provided Penttinen with a unique view of globalization. One pattern seems clear: trade drives communication.
“We see a lot of demand in the U.S. for Spanish and Chinese. Our office in Finland sees a lot of need for Finnish to Russian, English and German. So it’s mostly that wherever we are, we see a lot of demand for the languages used in countries that the locals do business with,” he explains.
“More and more companies are going global and communicating in a new way. Companies can ship and accept payments in any part of the world so there’s no reason why they wouldn’t also be marketing abroad,” Penttinen adds.