Audio Transcript: Translation tool breaks $1.2m run rate, 3,000 customers – Marko Hozjan
Thanks to Nathan Latka and Founders of Taia, we now have a new useful video to transcribe. Especially, when it is about our translation/transcription industry! Enjoy the thorough read!
Audio Transcript automatically produced by GGLOT
Nathan Latka (00 : 00)
Hey folks my guest today is Marko Hozjan, he’s building a cool called to translate tool that helps the translation via the combination of Ai and human translators. He’s a manager and passionate about leadership and business operations. He’s been a serial entrepreneur for many years with many companies founded and exited. He’s also an experienced sailor, he’s the book war and he also book warm in the topics of leadership in business, in a person with very liberal views. Marco you ready to take it to the top?
Marko Hozjan (00 : 26)
Yeah sure. So firstly
Nathan Latka (00 : 28)
Yeah come up with the idea of God’s and if people want to follow on its T. A. I. Aa dot IO.
Marko Hozjan (00 : 34)
Exactly. So actually the idea came from a language school that me and my partner Matea had before this business. So we started a language school and it grew and grew and we soon realized that we cannot scale it. So at that time first demands for translations came within the language school. We started first we we call it a traditional translation agency or uh within the field they call it the L. S. P. Language service provider. And we quickly saw that we could only compete with price and the whole market is competing with price and then the market is really outdated. So with our technology and with our business knowledge we actually combined this together. And
Nathan Latka (01 : 18)
When did you create it
Marko Hozjan (01 : 21)
In 217 and then tire was then born into 18
Nathan Latka (01 : 25)
Got a 2017 agency launched and how much revenue the agency do in 2017.
Marko Hozjan (01 : 30)
Almost nothing like a couple of 10,000.
Nathan Latka (01 : 35)
Okay call like $30,000 or something. You then launched the technology in 2017 and walk me through what our customers paying you today on average per month to do these translations?
Marko Hozjan (01 : 46)
Oh it really depends. So we have translations is as a product is very very complex and very very different. So we have customers that order one time for €100 and we have customers that order a couple of €10,000 per month. So it’s very different. Our focus of course is B2B so medium to big sized companies that need a lot of translations but anyone can come to our platform and order any kind of translation.
Nathan Latka (02 : 13)
Okay what do you price off of is a number of words
Marko Hozjan (02 : 16)
Exactly. So we have two products. So the whole platform actually is a one stop shop for any translation needs that you have from machine translation up to advance human translations. But within the platform we have our own SAS tool which is subscription based. So the everything else is word proper word based but the SAs party subscription based, this is catapult and the main function of it is for you to translate on your own.
Nathan Latka (02 : 45)
I see. So so how many customers do you have paying either for catapult or your machine learning service?
Marko Hozjan (02 : 51)
Nathan Latka (02 : 53)
Oh wow. There’s a ton of customers. And where were you? Exactly a year ago. How many customers?
Marko Hozjan (02 : 58)
Less than 1000.
Nathan Latka (03 : 01)
Okay. So there’s been a lot of growth, did you do that? You have you raised capital?
Marko Hozjan (03 : 05)
We have we have raised capital. So yeah, when you raise, so last year October 1.2 million. And before that 200 case altogether? 1.1.2 plus 201.4 altogether. So yeah, this is for European standards. Actually a lot.
Nathan Latka (03 : 25)
Yeah. When you raised 1.2 million last year, what valuations? You raise that at
Marko Hozjan (03 : 29)
Nathan Latka (03 : 30)
Was that or was that a good valuation? Looking back?
Marko Hozjan (03 : 34)
Nathan Latka (03 : 35)
Was that pretty money or post money?
Marko Hozjan (03 : 37)
Nathan Latka (03 : 39)
So 7.2 posts interesting. And what was the company doing in terms of revenue? And when you do the round?
Marko Hozjan (03 : 45)
Uh so in 2 20 300,000. And our plan for this year is 1.5 mil.
Nathan Latka (03 : 52)
What did you do last month?
Marko Hozjan (03 : 55)
Oh good question. Around a 100,000
Nathan Latka (03 : 58)
Wow. Okay, interesting. And how many people on the team today? Full time. 30. How many engineers?
Marko Hozjan (04 : 05)
Mm. Oh okay, let’s say 12 at least. So because engineers, you people mostly mean developers and similar or with machine people that work on machine translation. But we have engineers in, we have linguists, we have marketing gurus and so on. So I always called him engineers as well.
Nathan Latka (04 : 27)
How did you grow from, you know on average $25,000 per month? Last year to $100,000 per month this year. Where is all that growth coming from? Uh huh.
Marko Hozjan (04 : 35)
Actually the growth was mostly due to old school cold call sales. But now we want to really scale it up by transforming this this funnel old school funnel into an online marketing, lead generation, marketing automation and so on. So to really autumn is the sales and to move it towards the marketing funnel. Not so much the sales funnel of course the big fish. So the bigger customers will still have their own B. D. M. S which means that uh BDM takes over because they are not a one time customer. They just usually need to sign a contract. You have a procurement process and so on.
Nathan Latka (05 : 18)
When you say cold calling customers walk into that process. How do you get the list of phone numbers and from you know of the right people to call.
Marko Hozjan (05 : 25)
Sure. So firstly we chose the industry’s the industry’s we chose based on what we do best and which in some industries are more interesting when it comes to translations than others. Then you have to many types of software. Now lately we use zoom info before we use many others. So that’s it otherwise linked in as well. But these the software’s where you can get this kind of data. We have
Nathan Latka (05 : 53)
What were the top two industries you picked?
Marko Hozjan (05 : 56)
Um One is we call it business services where you have finance, banking, insurance and similar so business services and the other is manufacturing. These were the first to that we picked because they had they were the best fit because we’re focused at a time for document translations. But now we’re converting more and more into rising category service categories which are e commerce software and gaming.
Nathan Latka (06 : 25)
So what job titles at the insurance company will you go after the phone numbers of in zoom in vivo?
Marko Hozjan (06 : 31)
It really depends how big of an insurance company if it’s big. They for sure have a localization manager otherwise heads of departments for example, mostly marketing. They are mostly responsible for texts and similar stuff. Otherwise heads of different departments for example, it’s really, really interesting how different it is from company to company when it comes to a decision making, decision making for translations. And most of the companies that they don’t have this centralist with localization management. Each department orders, translations on their own.
Nathan Latka (07 : 09)
Got it. And how much do you pay them info each month to get access to all the phone numbers?
Marko Hozjan (07 : 16)
Uh we pay yearly about 10K.
Nathan Latka (07 : 19)
Is it worth it?
Marko Hozjan (07 : 22)
Who are difficult question because for now this is the third software that we use and we’re not satisfied with any of it really
Nathan Latka (07 : 30)
Marko Hozjan (07 : 32)
Nathan Latka (07 : 33)
And who was before that?
Marko Hozjan (07 : 35)
Oh I can’t remember the name. It was some UK software, I can’t remember the name
Nathan Latka (07 : 41)
And why is it, why are you not happy with it? What are they missing?
Marko Hozjan (07 : 44)
Just just the quality of data. So for example you can get a phone number you call and they say the person is not working there anymore. Are you getting uh an email? And it should be accurate. But it’s not just the quality of data, the most important thing that they should have.
Nathan Latka (08 : 00)
Yeah, that makes a lot of sense. Now obviously you’re up 3000 customers and doing that at $1.2 million. Right. Are you profitable or burning?
Marko Hozjan (08 : 07)
Burning still could be profitable but we’re burning so we have enough for until the beginning of 2022. So that’s why in autumn actually now we are starting our new Round to close our next round in the first quarter. In 20.
Nathan Latka (08 : 28)
So how much do you uh in the bank you have right now?
Marko Hozjan (08 : 32)
Okay. Half a mil.
Nathan Latka (08 : 35)
Okay. And how much are you wanting to raise?
Marko Hozjan (08 : 38)
This is not clear yet. It depends on our results this next six months but around three million.
Nathan Latka (08 : 47)
And how what valuation are going to try and raise out
Marko Hozjan (08 : 50)
Again? Not clear. It depends on the better the results next six months, the better the evaluation. So yeah. You know what
Nathan Latka (08 : 59)
Would make you have a violation will make you happy?
Marko Hozjan (09 : 02)
A chicken and egg. So really difficult. So for example at least times to what we did. But now you caught me a bit off guard but I would say
Nathan Latka (09 : 16)
You mean you raised in a $6 million x. That yeah. Now were you the only founder you 100%.
Marko Hozjan (09 : 25)
No. We are two founders. Me and my co founder material, we have half.
Nathan Latka (09 : 29)
Okay, did you guys put it 5050 at the beginning? Yes. And and then the new investor took what? About 50 12, 13% of the business?
Marko Hozjan (09 : 40)
Uh when the 20% of the business. So with the six mil 20% of the business
Nathan Latka (09 : 47)
Got to the investor company on 20%. You bet on 40%. Yeah. Yeah interesting. Okay. What’s next on a product for a map? What are you guys gonna build next?
Marko Hozjan (09 : 57)
So we’re mostly focused on the sex part. So this L. S. P. Part is built. So it’s actually a very much automated platform where you can order any any type of translation. But this part is not so scalable as the sex part, but it is very necessary for the sex part to have more fuel. So now we have the catapult a tool where anyone can translate by themselves using the power of machine translation, keeping the formatting intact and so on. Uh Next we’re going to continue with building empty products. So we see the future in machine translation. Machine translation is gonna go everywhere, but not as a we want to Yeah. Um offer it as a professional service which means for example if you use google translate today, you have to copy based formatting is not in fact if you need additional services you don’t get and so on. So machine translation for advanced users and then we have tons of tons of opportunities within the integration part because this problem is not solved. There is a big pain, there is no standard when it comes to translating software, web page and so on and we want to become the standard so which means we want to be one platform that solves the translation problem.
Nathan Latka (11 : 18)
How do you measure a turn?
Marko Hozjan (11 : 21)
Yeah. What is it or how do we measure it?
Nathan Latka (11 : 25)
How do you measure it? Yeah.
Marko Hozjan (11 : 29)
I don’t know. I should ask my CMO. I’m not sure.
Nathan Latka (11 : 33)
Okay let me ask you what is charged today.
Marko Hozjan (11 : 37)
Uh Good question again I’m not sure what our turn is. So
Nathan Latka (11 : 45)
I asked about purpose because your model it’s hard to measure because you have a usage based model and then a SAS based model so people love the product and they keep increasing usage. That sort of looks like net revenue expansion if they decreased usage it looks like contraction and that’s very different than a SAS model paying a flat fee per month to do something right
Marko Hozjan (12 : 04)
Later we’re going to have to do, we’re gonna do Matrix for both separately because they are even though there are part of one platform and then you just choose you want to outsource or you want to do it yourself because this is how we do it. Now. When we have a customer we ask them if the customer is a company to outsource or do you transfer you have your own team Because the trend is that the company’s translate more and more by themselves. The reasons are technical knowledge, SeO optimization, security and so on and machine with machine translation. Actually you don’t need such good translators anymore because you just posted it something that that’s good.
Nathan Latka (12 : 45)
Last question is, how much did you spend on paid marketing last month?
Marko Hozjan (12 : 51)
Uh not so much because we’re yeah. Okay. Let me give you a number around 30K.
Nathan Latka (13 : 00)
But house member,
Marko Hozjan (13 : 02)
This number is increasing month by month.
Nathan Latka (13 : 06)
And how many new customers did you have last month?
Marko Hozjan (13 : 15)
Now this is another tricky one because you ask customers we because our we gained approximately 300 users. But it’s not necessarily that each user becomes a customer, You know because some you they some users just just come on the platform. This will see so I would say that about 80% of users definitely become customers.
Nathan Latka (13 : 40)
So called 200 new customers on 30,000 spend. You spent about 150 roughly? A $150 to get a new customer.
Marko Hozjan (13 : 48)
Yeah. Our costs when it comes to sales acquisition are still high.
Nathan Latka (13 : 54)
Why do you say it’s high? You’re our crews. About $4050 a month per customer on average or paying 150. So you get paid back in three or four months. Right.
Marko Hozjan (14 : 04)
I don’t know when I read the comparisons with other or with similar with our, with our competitors or with similar companies. These numbers were usually lower,
Nathan Latka (14 : 18)
Interesting. Well, it’s, it’s the right place to focus. Let’s wrap up here. Marco with the famous five. Number one. What’s your favorite book?
Marko Hozjan (14 : 25)
Never split the difference.
Nathan Latka (14 : 27)
Number two. Is there a ceo you’re following are studying?
Marko Hozjan (14 : 32)
Nathan Latka (14 : 34)
Number three. What’s your favorite moment tool for building to
Marko Hozjan (14 : 38)
Online tool for building tire?
Nathan Latka (14 : 40)
Yeah. It’s a tool that you ate?
Marko Hozjan (14 : 43)
Mm hmm. It has been a second because there are many. Uh huh. A good one. Mm hmm. For building tire.
Nathan Latka (15 : 02)
Just think about what you use this morning.
Marko Hozjan (15 : 05)
I used revolution online banking, but it’s not for for building tile. We use transferwise, uh, as a bank instead of a bank account. For example,
Nathan Latka (15 : 15)
Here we go. Number for how many hours of sleep every night?
Marko Hozjan (15 : 19)
Last night. five hours. Otherwise about seven.
Nathan Latka (15 : 24)
And what’s your situation? Married? Single kids?
Marko Hozjan (15 : 27)
Yeah. Like not married, but in a relationship with one boy.
Nathan Latka (15 : 33)
And how are you not
Marko Hozjan (15 : 34)
With one Little Boy? I’m 38.
Nathan Latka (15 : 38)
God Sorry. 1, 1 kid in. You’re 38.
Marko Hozjan (15 : 41)
Yes. And I’m going to stay with one kid.
Nathan Latka (15 : 44)
This is my,
Marko Hozjan (15 : 45)
This is our decision. One isn’t
Nathan Latka (15 : 47)
Very cool. Last question. Something you wish you knew when you were 20,
Marko Hozjan (15 : 52)
Uh, to have a mentor in which books to read
Nathan Latka (15 : 57)
Guys there, we have a tire dot io, they help you translate your stuff, You’re localizing your website, things like that. They pay, they have a model where you pay per sort of word translation and also that a catapult model, which is basically sas serous. They have over 3000 customers doing 100 grand per month in revenue today from 25 grand a month just a year ago. So nice growth. They’ve raised 1.2 million on a $6 million valuation last year. Looking at raising at the end of this year, Early next year, three million, maybe like 12 or something higher. We’ll see what happens over the next 12 months mark when his co founder split the equity 50 50 at the beginning. So healthy capital management as they look to take over the space marco thanks for taking us to the top.
Marko Hozjan (16 : 35)
Thank you needn
Nathan Latka (16 : 37)
One more thing before you go, we have a brand new show every thursday at one p.m. Central, it’s called shark tank for SAS we call it deal or bust. One founder comes on three hungry buyers, They try and do a deal live and the founder shares back and dashboards, their expenses, their revenue are poo cock ltv, you name it, they share it and the buyers try and make a deal live. It is fun to watch every thursday one PM Central. Additionally, remember these recorded founder interviews go live, we released them here on Youtube every day at two PM Central to make sure you don’t miss any of that. Make sure to subscribe button below here on Youtube. The big red button and then click the little bell modification to make sure you get notifications when we do go live. I wouldn’t want you to miss breaking news in the Saskatchewan, whether it’s an acquisition, a big fundraiser, big sale, a big profitability statement or something else. I don’t want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private slack community for B two B Sas founders. You want to get in there. We’ve probably talked about your tool, if you’re running a company or your firm, If you’re investing, you can go in there and quickly search and see what people are saying. Sign up for that at Nathan locker dot com forward slash slack. In the meantime, I’m hanging out with you here on Youtube. I’ll be in the comments for the next 30 minutes, feel free to let me know what you thought about this episode. And if you enjoyed it, click the thumbs up, we get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We gotta push him away, click the thumbs up below to counter them and know that I appreciate you guys support. All right, I’ll be in the comments see, uh.
Gglot (18 : 13)
Transcribed by Gglot.com