Where is the Billion dollar translation agency?

United Translation Agencies

Most LSPs I spoke with do not agree that NMT is going to revolutionize the market. Most of them do not see (yet) any loss of business to NMT, and some think that NMT is just another technology that may be good for simple translations but will never fit complex projects.

While I do not share their view re. NMT, I think there is still a way to get to a Billion dollars LSP with or without NMT.

The idea is to create a consortium of leading LSPs and later combine them to make the world’s largest LSP. Before going into details, one has to remember that, to date, no strategy was successful in getting any LSP to one billion dollars in annual sales (or close to it). TransPerfect, the biggest LSP, that mostly grew organically, is still $385m short of the $1B mark, with 2017 revenue of $615m.

United Translation Agencies (UTA) is a concept and a strategy that can build a billion dollar LSP relatively quickly.

The idea is to initially create a partnership of approx. 40 LSPs, each with at least $7m in revenue and at least 7 years on the road (7x7). The sweet spot is LSPs with $10m to $50m/y. These LSPs will Not need to change anything in how they work. At first, they just agree on partnering, creating smooth and efficient work process and a payment settlement procedure between them. In addition to some coordinated marketing, like putting the consortium logo on their site, adding it to marketing material etc.

So the modus operandi of the member LSPs is preserved, with no overhead. Their work with other UTA LSPs is more efficient because they agree in advance re. prices, process, project handling etc.

In the next stage, UTA members will be able to work on the same translation management platform (e.g. OHT, SmartCAT, XTM etc.) in order to move projects between them and manage payments even more efficiently.

Just by taking these simple, mostly declarative, steps participating LSPs will immediately benefit from being a part of one of the world’s largest translation brand. They will get more business thanks to brand recognition. They will instantly become known globally and not just locally like today, and naturally, they will be more efficient and more profitable.

A good analogy is the major accounting firms, like Ernst & Young, that bought local accounting firms and made them part of the global brand. A similar partnership also exists in IT services, e.g. GWA — Global Workspace Alliance, 11 member companies provide IT services in 90 countries with over 30,000 employees.

Apart from getting to billion dollars in aggregate revenue quickly, UTA is all about creating opportunities!
* The opportunity to be much bigger much faster,
* the opportunity to generate rapid growth,
* the opportunity to be part of the world’s largest LSP,
* the opportunity to have an exit on better terms, and
* the opportunity to take part in an industry revolution!

The idea is that once there is a sufficient number of members working together smoothly, it will be possible to create a financial package that will put them all under the same roof and effectively create the world’s largest LSP. So the members are local but the total business is global, just like in the E&Y example.

The advantages of this approach are clear; it is easy to implement; there is no financial risk until all LSPs work smoothly together as partners; when relevant, doing a standard financial deal for all LSPs is faster than negotiating M&A one by one; LSPs do not need to change the way they work; it is easy to ramp-up once the concept is working and proven with a small group, etc.

Finally, this approach/ strategy was never tried before, and it may actually work.