Vasco’s founder story was written and recorded in February 2020. We caught up with him again in May and discussed the current circumstances around COVID-19.
Vasco: The last few months have been the most challenging in my journey as a founder. The global pandemic has not only impacted the way we live and work, it has affected the business world and the global economy in an unprecedented way. As a result I had to make tough decisions to ensure the Unbabel vision stays alive. What I found was that this was also an opportunity to take stock and rethink everything, from product market fit to how I run the company. I’m now confident that we are stronger than ever and that becoming the world’s translation layer is just around the corner.
What got you started on your journey with Unbabel?
I’ve been fascinated by language since I can remember, my mother was a professor of English linguistics, so linguistics was always around. But for me, language and AI were connected. I don’t know if it’s correlation or causation but this idea that language is such an important part of our intelligence and involves our ability to express intelligence has always fascinated me. I did an undergrad with a major in artificial intelligence and a minor in competition linguistics and then a Master’s and PhD in natural language processing.
Then I did a couple of startups and through the process of that I met the person that’s now my co-founder and CTO, João Graça. We both came back to Portugal after our PhDs, Joao did his in machine translation and machine learning. When we met it became quite obvious that we both shared a very strong passion for languages and we decided it was time to do something together..
What was your vision back then? / How was your idea initially received by investors?
The vision changes over time as you understand better the scope of the problem. For us, it was initially more of an itch that we wanted to scratch and we saw an opportunity as machine translation wasn’t seamless. What we saw in regular translation was cumbersome and not scalable. We felt that combining the two would have a lot of advantages; we felt we could build the product and we’ve enabled this to happen. With the first investors we talked to, we got laughed out of the room because we weren’t really prepared. We thought we were just meeting them for a coffee and hadn’t really thought about monetization, we just knew we wanted to do something with translation. But when we went in, the coffee suddenly turned into a fully fledged pitch and we were not really prepared and the investors didn’t know how we were going to make money. I think that was a good wake up call – to really take that part of it seriously and how to talk about with investors. Once we figured that part out, I think it was very well received and we got into Y Combinator a couple of months later. I think part of why it was received well was that we were able to talk much more fluidly about how we saw the impact we could have on the world.
What inflection points / turning points have impacted you the most?
Definitely getting into Y Combinator. It vastly accelerated the path we were on, also from a practical perspective in terms of valuation, access to resources and the network. I think our Series A was another big inflection point because right after Series A we hired Wolf (Wolfgang Allisat), our first commercial person. And that got us going from pretty much zero revenue to starting to think about enterprise and how we shift our product to serve that segment of the market.
What has been your experience of hiring exceptional people?
For founders, it’s challenging at the beginning of the hiring process because you don’t know what great looks like because you’ve never hired for that role before. And when you’re starting out as a founder, you want to know everything that’s going on in the business and still manage these people that you bring in. But I think that’s a mistake because you want someone that creates a change in the company and to do that usually means bringing in someone who’s a different class to what you’ve seen so far. So you have to be ok with letting go because if you’re going to hire someone that’s better than you, you have to give them the autonomy to do what they do best.
I think great people want to join a company in which they have that autonomy and join a company that has a strong mission and has high potential – those things usually end up going hand in hand. For technology companies especially, those people are key and if you don’t have the right people you’re not going to reach your potential. To become successful, it’s a requirement to hire game changers.
What have been some of your biggest challenges?
There’s specific challenges that have to do with the complexity of the market. There’s a whole new trend and articles coming out about AI companies and how AI companies are actually somewhat different to SaaS companies.
AI companies are more like deep tech companies in a way but through metrics they’re somewhere between SaaS and service companies and still trying to figure out what the right shapes and metrics really are. What we see is it takes longer for AI companies to find product market fit because you have a lot of tech to develop and the AI to build, so there are a lot of variables that go into it. So there’s the usual challenges of ‘how do we find product market fit’ and ‘how do we narrow the scope and continue to get focused’ etc. But I think there’s more of a meta challenge which is dealing with the speed of change. If you’re growing at the rate that we’re growing, everything you do is changing, every year, for example the company structure, the type of people you hire, the product, the go-to-market movements, the offices.
So the amount of change and the lack of stability around the people, processes and infrastructure of the company creates a challenge in itself. You almost need to build a new company every eight months or so, depending on what stage you’re at, and then you need to readapt all of the infrastructure, and operating system of the company. To do this every few months is a challenge.
Building a big business must take its toll on the founders, how do you cope?
What I’ve noticed is that, for the first couple of years, you don’t really think about coping, you just think about getting your head down and doing the work and I think that’s true pretty much for every business. It doesn’t matter what industry you’re in but during the first three years of running a business it’s a slog and you’re trying to establish yourself, create processes and do whatever it takes. After Series A, my job became less about the number of hours I worked and how this correlated with output and rather more about the number of good decisions I made and how this then correlated with output. I came to this realisation when I started working with a coach, who started taking me through the process of going from a Founder to a CEO. As part of that transition, you start to understand that you do need to take care of yourself, from a physical, mental and emotional perspective, to be best placed to make the right decisions.
You also need to be able to disconnect every once in a while and take two or three days to disengage with the world. I also try to limit the amount of decisions that I have to make. It’s a bit silly, but for the last year I wore pretty much the same thing everyday, usually just jeans and a t-shirt, to simplify things. Also, as I split my time between Lisbon and San Francisco, it means I have the same wardrobe in both places, so I don’t have to think about what to pack when I’m travelling, again reducing the amount of decisions I need to make. More recently, this simplification of decision making has positively impacted my ability to manage the business and be more present.
The other important thing is to not feel guilty for having fun. This sometimes feels controversial because you do have this tendency to feel that running a startup is supposed to be hard, and it is hard. It feels like if you’re not miserable, then you’re doing something wrong, so there’s a bit of self discovery to do there. But hard work and misery don’t have to go hand-in-hand; the more you enjoy what you do, the better you get at what you do. Being miserable is not sustainable but working hard and having fun is.
How important are the people on the journey with you?
You spend, as a minimum, around a third of your time with these people. If you’re doing something but don’t enjoy the people you’re doing it with, you’re really going to start hating it, so you need to surround yourself with people who you enjoy being with. It will add value to the company’s journey and also to yourself.
What surprised you the most about your journey?
How little anyone actually knows about how to build a successful company. We spend a lot of time with theses and theories. Some of that stuff, such as structuring how people behave, are more well studied but there’s just no exact formula for success. Because there’s no formula, there is no one that’s going to build your company for you. There’s no Wizard of Oz, Oracle and so on, that can just give you the answer of how to get there.
Who inspires you?
It’s cliched in a way but I do get inspired by Steve Jobs and Elon Musk. I think Steve Jobs’ way of positioning a product is amazing and as is Elon Musk’s willingness to dream the impossible. Elon Musk’s expertise and understanding of the world are just from a completely different perspective. I think that I tend to be inspired by people who do the unexpected and I think Musk is trying to build the future. I think most people that build a tech company are trying to build the future – they want to be a part of the future that they envision but it’s hard to do and it’s so easy to just not do it and be content. But I think a lack of contentment is part of what breeds the necessity to create something.
I’ve been increasingly of the opinion that technical evolution, or evolution in general, comes from a fundamental discontentment with the status quo, and that’s usually hard because it means that there’s something you’re not happy with in life. If you’re content with life, you don’t want to change it. Innovators are often not well adjusted people to normal life, so it makes you wonder whether that’s a requirement to becoming an innovator.
If you could go back to when you were first starting out with Unbabel, what would you say to yourself?
It’s a bit irrelevant what I say, because you have to live the real, valuable advice to be able to understand it. When I first started out, I wasn’t in position to understand it. You hear a lot of mysterious, high level, general advice that I now realise comes from seeing a lot of things. This could be advice such as ‘growth cures all ills’, ‘do what people paid for’ or ‘don’t spend too much time on this’ – at the time I’d think either ‘I’m already doing that’ or ‘no I don’t want to do it like that, especially if I’m going to build this ambitious product’.
The challenge is that you always have limited resources, always, even if you look ahead and think ‘when I’ve raised 60 million, I will have unlimited resources’ it feels like it’s a waste of time to do something small to begin with, when you should be doing something big, but if you don’t do the small things you can’t do the bigger things and that’s a bit of a struggle. I’d tell myself it’s ok to focus on something small and that it’s part of perseverance. The founder of Esports told me that with startups it’s all about surviving long enough to win. And whilst that sounds cute, I now realise that if you keep persevering and trying to solve a problem that you will eventually figure it out. If you survive long enough, you will find a useful solution.
What advice would you give an entrepreneur considering taking VC funding?
It’s an incredible path to take. It accelerates your ability to do very meaningful things in the world but it means you’re also agreeing to create a massive company. That’s really the goal, you’re not agreeing to create a mid-sized company, so if your drive is to create something big, to have an impact, to create innovation and to change the world, then it’s the right way to go.
As with the people you surround yourself with on the journey, you also have to like your investor. To have them spend a lot of time with you, sit on your board etc, you need to get on with the person.
And finally, how’s your experience been setting up a startup in Portugal?
I think Portugal is going through a great moment and I think there are a lot of advantages. There’s some similarities with Israel, for example, we’re small enough that it pushed us to think global from day one. Most people in Portugal speak English, so it makes it easier to make the company an international one. The infrastructure is great and where in the same timezone as London and it’s close to London, as well as having a bunch of direct flights to lots of other places.
Portugal went through a certain period a few years back and that actually created more of a willingness to take risks, which I think created this movement of startups and there’s really good talent, such as engineering talent. But, if you’re running a B2B company, you really have to think about how you’re going to get close to your customers, as soon as possible. A lot of things you end up doing and the people you need to meet will be outside of Portugal, including your investors. So it does also require spending a lot of time outside of Portugal. But if you’re willing to do that, then it’s a great place to start up a business.