The challenge of internationalisation is critical to any ambitious European technology company – if they want to build a category defining company, thinking about when and how to internationalise is a critical decision and has profound implications on the business from an organisational, commercial and technological perspective.
This is an extract from an interview with Vasco Pedro, CEO, Unbabel. You can listen to the podcast in full here.
- Building a category leader from a small country like Portugal means thinking globally from day one
- Hiring leaders with proven expertise in global expansion is critical
- Stay mindful of your culture – hire to it and invest in it
Unbabel’s “Translation as a Service” platform allows modern enterprises to understand and be understood by their customers in dozens of languages. Powered by AI and refined by a global community of tens of thousands of human linguists, Unbabel delivers professional-grade content at the scale required by modern enterprises like Pinterest, Skyscanner, Under Armour and Rovio. Backed by Scale Venture Partners, Notion, Microsoft Ventures, Salesforce Ventures, Samsung NEXT and Y Combinator, Unbabel is accelerating the shift to a world without language barriers.
Unbabel embodies the challenge of internationalisation from two perspectives – globalising themselves, but also helping their customers to globalise their businesses. Unbabel started in Portugal in 2013 and was the first Portuguese company to successfully apply to Y-Combinator in the autumn of 2014, but the business grew initially in Portugal. It took three years to mature the technologies before we started to commercialise and grow around the world and at the same time Portugal has emerged as a technology ecosystem with companies such as Talk Desk, FarFetch, Unbabel, Uniplaces.
Setting the scene
The biggest initial challenge we faced as a Portugese business was to accept that our customers, investors and many of our employees would come from outside Portugal, so we would have to do a lot of work outside our home market to attract the best employees for example. That’s not an uncommon challenge for companies in small countries, but it’s not an impossible challenge.
How have you decided when, where and how to globalise?
We have always had a presence in San Francisco, and felt it was important to have that anchor. We used to joke that it was easier to sell to Portugese customers as a US business, than as a local company. As a tech company based in Silicon Valley, people are maybe more likely to try you out. But having one or two people based in a market is very different from building a significant presence.
When we looked at potential markets, Europe as a whole is the biggest market for us, but the UK, Germany and France are all different and fragmented markets, that want to be engaged in a way that is familiar to them – in their own language, conscious of their culture. It’s similar to the thesis of Unbabel, which is that you need to speak the language of your customers when interacting with them, especially in Spain, France and Germany.
Then you have the US market, where approximately 50% of global companies are headquartered, so we always knew it would be a big market for us.
And then Asia. This is the fastest growing market, largely driven by China and Chinese businesses expanding internationally.
We raised our most recent round of investment to fund internationalisation, and decided that for now our focus will be in the US, so I’ve made that move and we are building a team on the ground in San Francisco.
As the company rapidly grows around the world, maintaining culture becomes a critical challenge.
When Notion first invested in late 2016, Unbabel had 25 people, all based in Lisbon . We now have 160 employees, more than 20 of whom are based in SF, and by the end of 2019 we plan to have more than 300 people. So a critical question to answer is “how do you ensure that the home business in Lisbon – the heart beat of the company, with our product and tech – continues to thrive while building a culture that works at scale”?
The way for us to make sure that the heart of our operation, Lisbon, keeps pumping is to hire great leaders, and Notion was very helpful in this regard, in helping us to understand its importance.
So how do you keep a company growing fast around the world?
You hire people who’ve done the role before and fit the culture and you give them responsibility and autonomy.
You stay mindful of your culture. A big part of that is maintaining strong bonds between the founders (and leaders)and making sure to spend time together, so that you don’t let too much “emotional debt” accumulate.
To have our culture permeating throughout the company is critical too, so we run an annual retreat and this has had a massive impact. Two years ago we codified our values, known as our Declaration of Interdependence. We are all dependent on one another, and trying to achieve great things together, so what are the basic rules we want to govern ourselves by? What are the rights and obligations of the individual vs the company. We are increasingly realising that the retreat is an amazing space to work on culture. There is also a lot of activity outside of work, and that seems to work for us. The downside of that is that it is largely Lisbon based, and for those based elsewhere they may have FOMO (fear of missing out). People can feel detached, as there is so much going on in Lisbon, so we have to be mindful that they don’t feel that they’re missing out. .
We hold this truth to be self-evident, that all Unbabelers are created equal.
As we scale, the codification of our culture is happening as we go.We are building the parachute as we freefall and hope we will have it finished in time!
The same thing holds true for our organisation and it gives us real freedom. We do this, not by reinventing the wheel, but by hiring people with real experience. It’s also about defining what makes us different and then figuring out how to innovate our processes, so that they become part of the ‘Unbabel way’ of doing things.
How does Unbabel help customers internationalise?
We focus primarily on customer service and remove language as a variable in the equation of delivering great customer experience. Right now, if you want to serve customers globally, you end up with several customer support teams spread around the world and that makes it very hard to scale. What we do is give companies the operational agility to serve customers in their language of choice. If a customer is using Salesforce for example, they use our plug in, and it means every one of their agents can deliver support in any of the 28 languages we offer. This will really super charge agents to deliver an amazing experience, as every agent will really understand their product and won’t have to worry what language the customer is using.
Three years ago, the concept of detaching language from the service was so novel, that it meant a lot of education was required. Suddenly it was no longer so foreign, and once companies get it, they start to realise all the things they can do to speed up the whole sales process.
How do you deal with the cultural differences that come with running a global business?
From day one, we set out to build Unbabel as a global business, not a Portugese one. The official language in the business is English. There are signs at the door in Lisbon that say “From this point on, only English” – so even if there are two Portugese people in the kitchen having a cup of tea, they speak English.
About 40% of the company is now non-Portugese and a lot of the important interactions that create the bonds are not about business, so we are making sure that language is not a barrier to our business and making sure our culture is accessible to everyone in the company.
We want the experience of a new employee to be as smooth as possible, but it’s still harder to attract people to Lisbon than it is to London, New York or San Francisco. So if we want to employ the best people in the world, then we need to accept that they will have other options from the likes of Facebook, Google and all the other big brands. So we need to ensure that we provide an experience that makes new employees happy with the choice they’ve made. Not just the choice of where they work, but also where they live, or where their kids go to school.
Communication is an area where we have to keep on changing and improving.
We’ve tried a few approaches. Previously every Tuesday was a KPI day and every Friday an all-hands day in Lisbon. But now, not only do we have too many people to fit in one room, we also have 30 different teams and people all around the world.
We are currently iterating again and if we want a high points / low points for each team, each week, that’s 30 updates from 30 teams! Not only does it take too long, but no one is able to take it all in.
Our ambition is to be a truly global business.
This is a $40bn market, but there is not one company that does more than $500m in revenue, as the largest companies are not tech businesses. So we will continue to grow in Europe, grow in the US, grow in Asia and will have a strong presence on every continent. But the very way in which companies will communicate around the world is also going to change, which will mean us expanding beyond customer services into other business operations across marketing and sales, making it super easy for companies to communicate internally and externally.
Beyond that, we think about language in terms of data; it’s an asset of the company. All the data flows in, out and around a business. What we are excited about is building the layer on top of that, building the understanding.
The mission of Unbabel is to build universal understanding.
What we are doing now is just dealing with the data that flows into companies, but when you start to build understanding on top of that, we can unlock even higher levels of understanding.