Episode Transcript
[00:00:01] Speaker A: Yeah. So that's the multi billion dollar question is what is the future of a language services industry? And I think you have to go back to the definition of language services and what I don't think of it as is a translation business. Translation is part of the product. But what effectively, language service providers deliver to their customers is an end result.
[00:00:29] Speaker B: The following is our conversation with Alexandra Jarvis, the chief strategy officer at Toppan digital language TDL, and Christophe Djaouani, their president. We go over their most recent acquisition of Mainright, an austrian LSP, and many more details about the inception of TDL and how they have grown over the past few years. Enjoy.
Hello, everyone, and welcome to localization today. My name is Eddie Arrieta and I'm the CEO of multilingual Media. Alex and Christoph, thank you so much for joining us today. It's a morning for us here in Colombia. How are you both doing? Where are you located right now?
[00:01:13] Speaker A: Yeah, so I'm in sunny London.
[00:01:15] Speaker C: Hello, everyone. And I'm based in Paris.
[00:01:18] Speaker B: That is fantastic. And how are the olympics going? How are you feeling it? Are you feeling it? Or are you not so happy?
[00:01:24] Speaker C: No. Very good. Very good. It's a good vibe in the city. It's a good attraction for France as well. We are doing very good. So it's a cherry on top of the cake as well to be there, but, yeah, a very good atmosphere in Paris.
[00:01:38] Speaker B: Well, we are here today to talk about recent acquisition by TDL. Alex, you are here to tell us a little bit more about why these strategies happen. But before we get there, I will get to know both of you a little bit more. Alex, where did you come from and how did you roll evolve? How did you get to be the chief strategy officer? Then we'll get to know Christophe. I think many more in the industry know him, but I'm sure we learned something new today. Alex, tell us everything about you.
[00:02:14] Speaker A: Yeah, sure. So I've only been in the language services industry since about 2017, and prior to that, I was an equity analyst focusing on technology companies, predominantly in the UK and public markets. So I did that for a very long time, looking at all sorts of businesses, including software, but also semiconductors, you name it, media companies, novel materials, you name it. I sort of covered it. But when I left the city in 2017, I'd been at that point covering a stock called SDL for about a decade. And subsequently I went to join SDL in a strategy M and A and investor relations role. So that was my first exposure to working within a corporate and indeed within the language, service industry itself. And I was responsible for strategy across the board, including services, strategy, also technology, and then communicating that to the market.
And during that time, I did an acquisition of a business called John Language Solutions, which is where Christophe and I met subsequent to working at SDL. About three years or so, that business was acquired by RWS. And at that point, I left with Crystal to go and set up Tokland Digital language.
That's that in a nutshell.
[00:03:43] Speaker B: That was a big jump. That was a big jump. So RWS and topan. And where in the world did Topan started? Was it a conversation? Was it a copy? Was it an email? What was it?
[00:03:57] Speaker A: This was during Vaseline is just in. I suppose the conversation started during COVID so that's quite important to understand. And I pretty much literally just had a baby as well, so a few months old. So the sort of plan to go and build a business started really on a WhatsApp message, I suppose. Kristoff, and then sort of went from there, really. We built a lot of the strategy and a lot of the thinking pretty much remotely, and a lot of the foundations of the business were built during that kind of COVID era, really.
[00:04:37] Speaker B: That is really great. And I presume, of course, the dynamics of the market and the social dynamics were so different during the inception of the organization, a lot of social distancing going on. And I presume that has been changing since the inception of the company. So it's a Covid company that then becomes, well, non Covid, because nobody has Covid. So how has that evolution been? Has things become, I guess, easier, better, more optimistic? And I presume, you know, when you grow up in times of hardships, well, the easy times are really delightful because you make the most out of those. But what has your evolution been as a company since COVID to these days?
[00:05:29] Speaker C: I think what I. The feelings that I have is that when you create a company during COVID it's actually making the company more resilient because of the market conditions that you build the company on. Right. So initially, it was also smaller. Right. We were not as big as we are now. I mean, already here we are, 300 plus employees. So we started really kind of small the company. Right. And I think that having this Covid situation where it was a lot of Zoom over communicating, I mean, during this period, you really needed to do some over communication, was very important for us to kind of always be online and still try to have a touch point or kind of one meeting once in a while, you know, to kind of see each other. You also filter what you do during this meeting. During the meeting, face to face was more towards kind of the values, towards some of the what we want to create and some more dynamic question of discussions that was hard to build during online session. Then I think that, like I say, I think it makes a company stronger, more resilient because of the history of where you are created and in the market condition. And then as you grow, it's more important to do face to face because you want to carry on to the next level. Right. Some of the evolutions that we are doing, you want to have more engagement from people as well, towards what needs to be changed. You want to be some more towards the feedback from the people that are on the field, speaking with customers. So it was kind of critical, as we grow, to kind of have more and more face to face meeting in order to increase the engagement of our employees.
Same with our clients. I think we were one of the first ones that kind of moved forward and decided to go straight into face to face meeting with clients to get and extract some values, but also validating the project that we were kind of creating here for TDF.
[00:07:31] Speaker A: So we set up the business in the first half of 2021 with just effectively Christoph and I and a small number of people. We then did an acquisition of business called Global Lexicon, which is a UK based, but with operations in the US and Spain.
We acquired that in August 2021. We then did our second acquisition of a business called Translate Media in April 2022. And that business, again, UK headquartered, but with operations in Hong Kong, China, Poland, predominantly, and I, a little bit in the US as well. So that gave us a very firm foundation for business already. We then built quite aggressively, organically, on top of those businesses in terms of sales, technology and operations, and effectively created a third leg to the business, really focused on regulated industries.
So where we kind of got to by the end of 2023 was a business which was delivering around 40 plus million dollars of revenue. A good third of that is fully organic, and the remainder from the two acquisitions, and then going into this year, we looked again for further acquisition, and that's where we came across mine rart and completed that in July.
[00:09:00] Speaker B: That's great. And I love to also hear your perspective on Christophe's perspective on the industry. There you are coming from COVID acquiring companies, growing, building different business lines and succeeding on many nations, because it's a multination, and you're completely right, multi language, multination industry.
What is the outlook for industry? What does the industry look like? Do we have a positive outlook for industry? Is it growing, is it shrinking? What's happening?
[00:09:35] Speaker A: Yeah. So that's the multibillion dollar question, is what is the future of the language services industry? And I think you have to go back to the definition of language services, which really helps you understand the future of the market. So segmentation is really critical. So when we think of the language services market, I think of it as probably about $20 billion market, and substantially, I think of it as a, as a business process outsourcing market.
What I don't think of it as is a translation business translation is part of the product, but what effectively language service providers deliver to their customers is an end result based on, yes, translation, but also project management, document engineering, vendor management, quality management, technology solution engineering. It's a whole spectrum of services that effectively complete the business process of transforming content into many languages. And it does that as an outsourcer. So when you think of language service providers as that, and not as simple translation agencies or a translation technology, then you understand the potential dynamics of that market a little bit better, where it's more defensive and where it has certain weaknesses. So looking forward, our strategy was really focused on complexity and what we call premium markets. But those premium markets are defined by all of those characteristics that I've just described. The needs of the clients tend to be quite high risk and business critical. So the content itself is high value, and the processes behind those pieces of content are also tend to be quite complicated. So there may be a regulatory element to it, but there could just be a very high volume or lots of different formats, file types. It could be very deep requirements around document engineering. There could be very fast time to market. So it's a business process outsourcing industry in reality, and those complexities are not going to go away anytime soon. Even when you throw machine translation at it or chat GPT at it, that's only solving one small part of the problem, which is the language transformation itself. The translation AI can be used to help in some of those other parts of the processes, for sure, but it's by no means one silver bullet to solve the whole of language services. So I think as long as you're focused on the more complicated end of the market, particularly parts of the market driven by regulation, I think there's a strong outlook in terms of the overall growth of the market. I think the market was down last year, it may well be down again this year. That's really a read through to the end markets. Typically, the language services industry grows in line with the revenue of its end customers. So where you see a pullback in the technology sector, or wherever it might be, we'll also see a pullback in language services revenues. But within that, there's room for market share growth, and that's where we've been very successful. So our market share gain last year was probably towards 40%. So we grew 36% organically and the market shrunk. And we'll again grow at a similar level this year, which I think validates our idea of really focusing in on those more complex parts of the market when other providers may be moving towards more generic solutions or western water providers just don't have the breadth of capability to service those requirements.
[00:13:49] Speaker B: Thank you, Christophe.
[00:13:52] Speaker C: Yeah. Let me add a little bit on what I think towards the market.
Number one, I will say three years ago, because when we started this project three years ago, it was a lot of negativity towards creating a new LSP on the market. I think people were looking at us and saying, guys, this is crowded. I'm not sure what you are doing. I think it was a lot of negativity. Certain a couple of people as well, telling us, listen, I'm not sure this will not be successful.
We are going. Just to replicate some things that you create in the past is not going to go anywhere. Well, I think that an important fact today is that after three years, we are going to do 60 million, which means that the project is validated from the customer standpoint, because this is being done in only three years. I will say the critical aspect to get market share is really the differentiation that you are bringing in the market. And we are bringing the differentiation with our people, number one, which is critical with the expertise that we are having. So agility as well that we are bringing. And the creativity and innovation.
Just to make the parallel a little bit here, think about some of the luxury brand that was in the market. You got this Hermes and VMH, and at one point, you also got Gucci. And Gucci was going down. And then they decided to bring the proper.
They bring Tom Ford to redesign. They kind of got the pricing level right and they actually managed to build a sustainable business coming out of nowhere. But what was the critical element of it? Differentiation. And I will say that this is what we do in the marketplace. We differentiate ourselves from the generic players in the marketplace. So we have our own identity and it's being validated by customer. And like I. Let's say it's very important for us to just play on the. On the, you know, on the more complex project in this type of segments that are super high risk as well. And we can add value to the customer and very important as well. Why we are so different, because we really put the client at the heart of everything we do. So it's really about customer centricity and we create everything based on the customer requirements. So like I said, not generic, but we're able to customize our approach to our customer. And today this is innovative because you have so many different providers, lsps in the world that try to do the same thing and actually no need to do the same thing. Think in the past about Ikea, the furniture industry, it's a very challenging one. But look at Ikea. They actually did something completely different. They took the industry on a completely different angle. So let's remain humble and with humility. We are not Ikea. We are nothing. Gucci. However, hopefully this is giving you a bit of principle towards what we are building here together.
[00:17:10] Speaker B: Thank you for sharing, Christophe and Alex, also for sharing your thoughts on the industry. I think that gives a huge insight. I think that's going to be very valuable for the listeners.
Of course, now we're talking about strategy and the DAC region and UC growth. And I kind of helped, jokingly said initially, and you are doing acquisition. Everyone is like a lot of companies are complaining that they are not growing, that they can make investments, but here you are acquiring or integrated into your ecosystem main. Right. Could you tell us a little bit more about what that means, how it came about, what that means? Why is that important and why do you decide to go into these regulated, high risk content sectors?
[00:18:01] Speaker A: Yeah, so from inception, we were focused on what we call regulated industries, and we've got a particular focus on areas like life science and increasingly medical devices. For example, we were introduced to myelite about a year ago, and what immediately struck me was the core DNA of the business was very aligned to ours.
So real customer centricity, very much a solutions focus. So almost kind of bespoke solutions, very innovative around technology and sort of pushing the barriers and the frontiers on how to use technology.
I'm very keen to do so very high levels of customer service and then alignment around the type of sectors that they were looking at as well. So particularly, for example, they've got one of the isos for medical devices.
And then the DAC region is a very interesting region. It's quite fragmented in terms of vendors. It's also a market where you really need to have a local presence, sometimes even a hyper local presence, but you certainly need a german speaking capability. So all of those things added up to make an interesting acquisition opportunity for us. So right culture, right attitude. And we've proven through our past two acquisitions that we were able to take businesses and accelerate their growth by investing around them through sales capability, operational capability and technology. So that's really the core of what we're trying to do with mine rock and really, so take a jewel of a business and really help put sort of rocket boosters underneath it. That's not mixing too many metaphors, but to really help them grow. So really core to our m and a strategy is important to understand. We are a growth focused business. And when it comes to m and A, we don't buy businesses in order to take synergies. We buy businesses in order to pursue, pursue growth and invest in both.
[00:20:12] Speaker B: Thank you. Thank you for sharing. That sounds very promising. Christoph, anything you want to add on that, if you can also add where you are at physically as well as Topan, where else in the world are you at? I think that would be really helpful.
[00:20:27] Speaker C: Sure. I think the mine right acquisition, just to add on what Alex say, very strategic for us right now, also acquisitions that Alex did were not opportunistic, but very strategic towards our approach. I will say that with mine rat, we are getting also a very good pool of talents.
Innovator as well, really focusing on technology. I'm very impressed by the reputation of minhut in our industry. Minhart equal quality and this means equal token as well. High level of customer service plus quality. So a very good fit towards the culture, towards the people, but also towards ambitions that we have together to provide and to differentiate ourselves, like I said previously, versus others in the market as well. Now in terms of top one, we are spread a little bit everywhere in the globe. We can actually follow our clients. We can centralize or decentralize based on the request of the customer. We are in the US, in multiple city in the US, west coast as well in the Middle west. In the US, we have in Europe, different locations. We have Poland, we have France, we have Belgium, we have the UK, we have Spain.
These are the major ones. We are adding now Austria and some other region around for the future. Strong presence in Asia with Tokyo, with Singapore, with Hong Kong, with Beijing as well and Korea. We say our latest office in Asia. So this is really our global footprint at this point. Just again, want to remind you that three years ago we had only one location and right now we have all these locations. We are organized with hub in each continent, and then we have satellite offices as well.
[00:22:38] Speaker B: All right, thank you for sharing that. And of course, now you've made some reference to these, Alex and also Christophe, the reputation of Mainrid, their level of services, the talent, what they do aligns, the culture aligns with Topan.
This, of course, given the history you've also shared, Alex has worked out for you already. You bring growth to the company that's been acquired and it brings growth to Topan as well.
Is there anything you could tell in particular about where you see the growth is going to be for main, rad and Topan? What are some of the things that you see are going to grow there?
[00:23:26] Speaker A: So thinking about the dark region in particular, we break it into two stages. So the first phase is to really help them grow in markets where they're already targeting. So that's particularly engineering, life sciences and medical devices. So just to really give them the firepower to increase their market share in those sectors, because obviously we're bringing a three continent, if it's the right word, operational platform.
So us, Europe and Asia coverage. So we should give them sort of more operational firepower to win those larger clients in those sectors. So that's phase one. And then phase two will be to expand the number of sectors that they sell into. So bringing our expertise in, for example, financial services, market research and sort of layer that onto their strategy as well.
[00:24:31] Speaker C: Yeah, no, I think it's bringing us scalability. I think we're able to take some of the mind customer and expand them globally. And it's allowing us as well from a TDL standpoint to use these international clients that want to have kind of a satellite in that region to have this office and this center office over there. So we're able from the minerat location to service Germany, Austria and Switzerland. So very strategic for us, for the customers that we have. So the whole idea is how we can expand shelf wallet as well in terms of the existing accounts. Very hard to get new accounts, as we all know, right. Especially when it's an aggressive marketplace like today. But what can be done is how can we expand inside existing account as well. So this will help. So this is really adding a key strategic geographical expansion to our existing footprint and we know as well, right. It is that, I mean, this is a hot market. It's a very sizable market in Europe, the DAC region. It's also resonate towards quality again. Right. This is really our positioning about how you can bring quantity at a fair price. Clearly everyone wants to hear, but at a fair price. But quantity orient, bit like Japan. Very close also between Japan and this region. Very similarity as well.
[00:26:07] Speaker B: Excellent. Thank you again, Christoph and Alex. I have one more question about the transition.
This is already happening. What happens now?
You go to the offices you have on all hands, you have a retreat. What happens if you can tell us? Of course, that would be super insightful.
[00:26:29] Speaker A: Yeah, sure. So it's the fun part, after all of the process of a transaction. So me and Christophe have already been out to Austria. They both their site there and spent time answering questions and helping them get to know us. So the first part is the people part, and then the reality is there's a period of learning. So even when you're involved in an m and a transaction, there's still a huge amount to learn afterwards. So there's a sort of period of intense learning and listening for the next three to six months where we'll really understand each other's processes, whether that's on sales, operations, technology, and then where it makes sense, we start to align and then integrate. So the first things you integrate would be something like finance and marketing, HR, and some of the it. But some of the, frankly, the bigger pieces, like operations and systems, will take a lot longer time, and we're not in any rush.
Mine, right, is functioning well as a business. We're there to support it, but we're not there to cause any disruption, and that's really critical. So approaching all of these acquisitions with the right growth mindset, with humility, and there'll be some things that we do better and plenty of things that they do better. So, yeah. Learning phases is part one of the post acquisition period.
[00:27:58] Speaker C: Yeah, I know. I think humility is very important about how we can and what we can learn from them. I will say that the time of integration completely changed for the last couple of years. And I think with Alex, we are taking a different approach towards making sure we are not destroying existing value of the company. So it's really about how we can protect the value of the company, how we can build on the existing foundation. From a people standpoint, from a culture standpoint, first, I think that this is the most important to look at what kind of opportunity we can have and to go back to the elements. That I say about how we can be so successful at this point in the market is the differentiation that we are bringing to the market. And Mineheart is also bringing differentiation. So for us is ready to understand what are the core differentiations that they are bringing to the customer. To add this towards our entire selling point and negotiation as well. STDM.
[00:29:04] Speaker B: Great. And actually, I have a final question, let's say a bonus question. And as I was thinking about it, whenever I hear growth and acquisition, and I think of new functions appearing and new talent needed, I presume Topan is hiring. And which areas, which functions are you currently hiring for? If you're hiring for, you are looking to add team members to your business? Where are you hiring if you are?
[00:29:39] Speaker A: Yeah. So we're hiring across the business, really predominantly in operations. The vast majority of our people are in operations, but we're beefing up, particularly in the US, for example.
And then there are some functions that we're also increasing our focus on, for example, in technology and AI, for example. But yeah, there's always open requests for hire in the business, and we have a really excellent team who goes out and finds talent and develops it. Then the other part of that is obviously making sure that when people join us, that they have a positive experience and receive the support and training they need to develop and flourish as well.
But certainly we've gone from pretty much two employees to over 300 in three years. So that's been quite a journey.
[00:30:39] Speaker B: I can't imagine. Christopher, you have anything to add to that?
[00:30:42] Speaker C: Yeah, no, I think that we are looking always to expand. I think the quality of the people and the mindset and the characteristics, the personality of the people matters a lot for us, making sure we're adding the right talents. I mean, we have a couple of set of criteria as well. And humbleness, humility is one also to carry on the project and to really add value. But I will say just a final note on this. I mean, our team is very diversified as well. Also, it's not only talking about it. So we have people coming from different horizons. And this mix it in our group is also making us stronger, and we want to continue to build on that.
[00:31:26] Speaker B: And just to end, is there anything else you like to mention to the industry, to the main rad team, to the topan team, to the community, your clients, anything at all that you'd like to mention?
[00:31:39] Speaker C: I think, yeah, for me, I would like first to thanks everyone for the support. I think we had a lot of positive vibe in the industry, despite some who were a little bit negative at the beginning. So a lot of help from our colleagues in the industry, a lot of trust from our clients and partner, which was essential for us to kind of build this project.
A warm welcome towards minor employees, but also not forgetting about all the existing TDL employees as well, that have been kind of building that with us. So I think it's super exciting to be where we are. We managed to differentiate ourselves. We managed to create a name for ourselves, and we will continue. I will say that this is just the beginning.
[00:32:38] Speaker B: And this was our conversation with Alexandra Jarvis, chief strategy officer of Toppan Digital language Tdl, and Christophe Djaouani, their president. My name is Eddie Arieta, CEO here at multilingual media. Thanks for listening.
