Localization Business School: Diving into localization – Creating your own clear blue startup ocean

I have seen the future of localization and their names are Sofia Pessanha and Vasco Pedro, the cofounders of Unbabel. Their startup is backed by Google Ventures, Matrix Partners, IDG and Y Combinator. Pessanha and Pedro represent a new generation of entrepreneurs with a fresh new approach to localization, who as a result find recognition, support and funding unprecedented in the history of the translation profession.

Of course, the duo is in good company with people such as Scott Yancey of Cloudwords and Jack Welde of Smartling. And let’s not forget that Smith Yewell founded Welocalize in his basement when larger companies such as Lionbridge already dominated the field.

With the exception of Pedro, none of them has a background in translation or localization. All see these disciplines as serious business opportunities. Pessanha has a background in business administration and marketing. Yancey studied website development and psychology. Welde started out in software development and is a combat veteran like Yewell, who prior to starting his company received the Bronze Star for service in Operation Desert Storm during the first Persian Gulf War.

This group of exceptional business people uses value and innovation as the important parameters for managing their success. They have implemented emerging technologies to develop new approaches to localize faster, better and cheaper with a keen eye on operational profit margins. Consciously or not, they answered the four questions shown below. The answers are in Table 1.

Which factors from the traditional translation business can be eliminated?

How can cost structures for buyers be reduced to be both different and competitive?

What features and services should be raised well above the commonly accepted practice?

What offerings need to be created that traditional translation services have never offered?

To be sure, we have quite a number of brilliant minds in localization. I cannot name them all in this column. It is also true that these five startup founders are outstanding representatives of rule breakers who have transformed the profession by making their competition irrelevant. They have created their own blue ocean, as opposed to staying in a red ocean bloody from the cutthroat competition in a crowded industry.

To quote W. Chan Kim and Renée Mauborgne from Blue Ocean Strategy: “The only way to beat the competition is to stop trying to beat the competition. In red oceans, the industry boundaries are defined and accepted, and the competitive rules of the game are known. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. The creators of blue oceans, surprisingly, didn’t use the competition as their benchmark. Instead of focusing on beating the competition, they focus on making the competition irrelevant by creating a leap in value for buyers and [their] company, thereby opening up a new market space.”

Creating a blue ocean is not just about using technologies. Successful startup founders in localization have always understood how to use new technologies to their advantage to better compete on price, quality and speed.

But this new breed of transformative startups thinks differently about localization. For them it’s not just about running a successful business. It’s about changing the game and setting new rules. The time and opportunities to do just that have never been better.