Today we present Gengo as our “WIP of the Week." Launched in 2008, Gengo is a crowd translation work intermediation platform (WIP) that makes it easy, fast, reliable and economical for businesses to have text and e-media translated.
The global translation market is predicted by Common Sense Advisory to be $47 billion by 2018, and growth is being fueled by globalization and new forms of digital content, like websites and mobile apps. In many ways, this fragmented translation industry, consisting of “language services provider” (LSP) aggregators and geographically dispersed translation agencies and largely freelance translators, has lent itself to platform solutions. The industry has also been one that has significantly assimilated technologies, such as machine translation, translation memory and others. In the past 10 years, a number of translation and localization online platform solutions have been cropping-up with different models, including several, like Gengo, offering pure (no machine translation) crowdsourced translation services.
Below we provide an overview of the Gengo business, platform and services, we offer some commentary on what a supplier model like Gengo implies for services procurement.
- Founded: 2008
- HQ location: Tokyo
- CEO: Matthew Romaine
- Corporate status: Privately held
- Investment to date: $24.2 million in six rounds. $5.4 million Series C round in April 2015.
- Investors from contingent workforce industry: Recruit Holdings
- Annual spend (revenue) on platform: Based on number of words translated in the interval between 2014 and 2015 (see numbers below) and assuming a $0.09/word, we estimate 2015 revenues to be in the area of $10 million.
- Annual growth rate: Based on the volume numbers below for 2013-15, we estimate double digit growth
- Other platform dimensions: Gengo has reported that at the start the business translated 3,405 words with 49 translators in its network. By the end of 2013, it translated 150 million words (cumulatively) with its network of 9,141 translators. In 2014, it reported reaching 200 million words with a network of 10,822 translators across 114 countries. And, in 2015, it reported reaching a cumulative total of 300 million words.
Gengo is a WIP that allows businesses to digitally request a range of different types of translations. Translations are provided to businesses under a service agreement with Gengo, not contractually with individual translators.
The Gengo platform connects to its vetted crowd of translators, engaging appropriate translators to perform the requested translations. The platform provides payments services, receiving client payments and disbursing payments to translators.
Gengo reportedly provides platform-based translation services to thousands of businesses ranging from SMBs to larger businesses including Salesforce, YouTube, TripAdvisor, Sony, Alibaba, Airbnb, Etsy, Huffington Post and Pearson. Perhaps not surprisingly, key business segments include media, travel, and ecommerce.
Interestingly, Gengo not only serves translation-consuming businesses directly. It also can integrate into the overall translation supply chain and act as a complementary upstream provider to “language service provider” (LSP) businesses, like Prisma, and other platform businesses, like Cloudwords.
Typical types of translations include social media posts, user-generated content, presentations, reports and app or web UI localization. Additionally, in travel: travel listings, user reviews, location guides; in ecommerce: product descriptions, user reviews, customer support information. Gengo is clear that it does not support complex specialized translations, including technical, legal or medical.
Translations can be ordered through the web portal (for smaller, burstier volumes) or ordered and retrieved through the Gengo published API (for larger, ongoing volumes).
Gengo pricing, using industry standard “per word,” is simple and does not vary by “language pairs”:
Standard pricing applies to simpler translations (e.g., social media posts), business pricing applies to more complicated, professional translations (e.g., app and website UI localization, presentations). Additional services include style guides, glossaries, translation memory and secondary cross checks.
Gengo would say it is able to maintain lower pricing than traditional alternatives due to transactional efficiencies of the platform model and the visibility into and ability to manage costs of translators. Gengo has claimed that a businesses can achieve up to a 70% savings on traditional translation.
Other benefits of the platform model would include improved response and cycle time. According to Gengo, “95% of orders are started within 120 minutes and completed in an average of one hour, depending on the language.”
The Gengo platform approach enables quality control through vetting of translators (only 10% pass the first set or hurdles), machine quality and human review of translations, customer ratings, and random serial evaluations of translators’ performance. Gengo claims it has an average client satisfaction level of 98%.
Why Should Services Procurement be Interested?
Admittedly, Gengo and all other current platform-based translation and localization providers amount to a small drop in a translation market approaching $50 billion in coming years. In addition, translation and localization are likely a relatively small percentage of your organization’s total indirect services spend, and you may view it as hopelessly out of your control because it dispersed and buried in functional budgets like marketing and IT. (We’ll let the category managers weigh in on that one.)
Still, Gengo is noteworthy because it is yet another example of a WIP, of which we know there are hundreds of various kinds today, that is demonstrating how an online platform-based provider can operate successfully in a specific service segment.
The model would appear to support various advantages (cost, speed, etc.) over traditional extended supply chain approaches, which involve service request and fulfillment across non-platform (LSP) aggregators, translation agency sub-aggregators and large numbers of freelance translators across the world.
Moreover, there is more that is instructive: In its sub-supplier relationship with Cloudwords — a digital-platform-based aggregator that connects into client businesses’ content management systems and connects to various translation providers — the Gengo case also begins to suggest the emergence of a new breed of digital services ecoystems and as-a-service models that will further compete with traditional players and models and offer services procurement new opportunities for visibility into otherwise hidden indirect services spend.
However, there will challenges, as digital platform-based services streams will be layered, interleaved and interchanged and will require new approaches to how they will be managed and procured.
But what if services procurement was able to get ahead of this trend and begin to evaluate and engage platform-based suppliers like Gengo and help organizations and business users to efficiently access these providers? In this case, services procurement can have its cake and eat it, too. Bring innovative consumption choices to internal business users while gaining visibility into and control over spend in these categories.
And if you believe in David and Goliath stories and in the power of platform models — like Uber — to scale and disrupt, then you might ask whether a now-small player like Gengo or its cousins could redefine the translation market and industry in coming years.