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Also, I got an email recently from a well-known, respected angel investor, who said, “Andrew, I keep seeing these spots for Scott Edward Walker. Should I really email him? Should I really talk to him?” And I said, “Yes, absolutely.” How do I know? Because I’ve known Scott Edward Walker for years. I’ve worked with him, he’s been great. But more importantly I see the emails coming back from people who are telling me about their positive experiences using Scott Edward Walker, the lawyer that entrepreneurs love. Especially tech startups. So give him a call. Walker Corporate Law, if you want to find more information.
Finally, if a friend of mine came to me and said, “Andrew, I want to sell something online”, you know what I would do? I would send them to Shopify.com. Why? Because Shopify.com is so easy to set up they’ll never have to bug me with tech support issues, and because they’re going to be so well-represented online with this beautiful site that actually increases sales, that it’s just going to do wonders for my reputation to be the person who inspired that and led them to it. All that’s to say, if you, or anyone else, needs to start a store online, will you please check out Shopify.com? You’re going to be grateful, you’re going to thank me, and more importantly, the people whose stores get set up because of your recommendation are going to thank you. Shopify.com.
Here’s the program.
Andrew: Hey everyone. My name is Andrew Warner. I am the founder of Mixergy.com, home of the ambitious upstart, the place you come to listen to successful stories about entrepreneurs who did it. So how does a guy who tries to just earn a little beer money end up generating millions in revenue? Joining me today is Christian Arno, founder of Lingo24, an online translation company with a large international presence. Christian, welcome to Mixergy!
Christian: Hi there, Andrew, how you doing?
Andrew: Good. So I said, “generating millions in sales.” Big question is, how many? How many did you get last year?
Christian: Last year it was about $8 million and this year it should be $10 million.
Andrew: $8 million in revenue last year?
Christian: That’s correct, yeah.
Andrew: How much money did you guys use to start the – I’m making a joke – was it, I shouldn’t say it in a kidding way, I should say, you’re bootstrapped, aren’t you?
Christian: Absolutely, yeah. The money for the business actually came from investing in shares during the dot-com boom. I put some money from a student loan into a company called Knowledge Monitored Software. It multiplied in value 100 times, so that gave me some comfort, I guess.
Andrew: And that came just a little bit after from what I understand. At the very beginning it was just you and a friend who were just boot-strapping this translation business.
Christian: Yeah, it was very much a student translation business. The idea was to use student translators to use the power of the website that the [inaudible] and just see what we could do.
Andrew: All right. I want to cover the story of how you got here, but I’ve got to ask you, you and I have known each other for a while now, at least I’d say maybe a year or so. We’ve talked about doing this interview for a while, but for some reason we haven’t been able to do it. Why not?
Christian: Well, I’ve just been doing an around-the-world trip. I went three months. I got engaged, and I set up a Euro-Pacific business, and I went to South-by-Southwest, where we met briefly. A fantastic around-the-world trip and this business gives you that flexibility.
Andrew: Who was running the company while you were around the world?
Christian: My business partner, Jack, is our operations director and he makes sure the thing runs very well. We’ve got very capable management structure.
Andrew: How connected were you while you were away?
Christian: I was a little bit too connected I think a lot of people who visit your site relate to the fact it’s hard to cut yourself off. But I did get a bit of a break.
Andrew: All right, awesome. Actually, before I get deeper into the story, and find out how you got here, where were you? I’m curious about this around-the-world trip.
Christian: The basic structure was the first month Africa, second month Asia, and third month the Americas.
Andrew: Oh cool. All right. Going back in time, you launched this when you were doing what? What was the job you had?
Christian: I was a student. I was studying French and Italian at university, and I was on my year abroad in Italy and I had several friends from different countries in Europe, all of whom spoke one language, plus English. And none of them had much money, not enough money to have enough fun, I guess, and so I set up this horrendous looking website [inaudible], and tried to sell us as a student translation alternative to the professional translation companies. I was astonished, we got some customers, and the idea, although it was very slow at that stage, it proved that people were looking for translation online, and that there was a lot of opportunity for using internet technologies to do things more efficiently. So, it’s just gone on from there really.
Andrew: Are you someone who was always an entrepreneur, even as a kid growing up? Were you starting little businesses?
Christian: There is a bit of a track record. I think the main one was the one day on the bus back from school, I had some chewing gum which I’d bought for one pence, and I was asked by another kid if he could have some of my chewing gum and I said yeah, you can, but if you give me two pence. That was a decent profit margin. I used to get 20 pence pocket money a week in those days, and by the end of that week, I turned it into 84 pence, which is a pretty good percentage at the time, when one of my friends’ mothers shot it down because she thought it was immoral. That was the first day of ducking and diving I guess.
Andrew: You know what? It’s amazing, I keep hearing about entrepreneurs who’ve had these little businesses selling candy and they always get shut down! It’s usually a teacher, or maybe a principal, but I never heard of another mother saying don’t do this, you’re taking advantage of people.
Christian: Yeah, what’s that all about? We should be encouraging entrepreneurialism. I don’t know.
Andrew: If you were painting, no one would say, put the paint brushes down, you’re going to do something immoral with them. You’re expressing creativity.
Christian: People get a bit tetchy when its to do with money I guess, maybe.
Andrew: I guess so. All right. So you had this idea, you launch a website, and you said, “I somehow got customers.” I want to know how you got customers. Most people, they throw up a website, nobody comes, they’re watching my interviews for hours to figure out how to get more customers, they’re going online and reading as much as possible, they’re buying advertising, all that, to just get customers, and you just somehow got them. How did you do it?
Christian: Well, this was very early days of the Web. And that’s it; Google wasn’t even prominent, it was Yahoo listing, but the business really got going when I started to get a grip of asking everyone how you can get to the top of Google. We’ve now got some pretty good rankings, certainly in Europe; in America we could do with developing a lot further.
Andrew: So right from the beginning, you were using search engine optimization to get people to your site.
Christian: Yeah, that was clearly- I mean, I did experiment early doors with going to networking events and even more traditional marketing methods, but it was a lot better in returns. Internet marketing is absolutely the foundation of our business.
Andrew: What about this windfall that you had. At what point did you decide to invest in the stock market?
Christian: Well, that was when everything was going mental towards the end of the century. There was a lot of share traded on a liquid market. I just read a tip about it, I thought that sounds like something that’s going to excite people, sharing knowledge over the internet. A friend and I actually put 500 Pounds in each. If we’d sold at the right time, which of course we didn’t, we could have bought a house together, could have lived happily ever after. We still made enough money out of it to give us a good foundation.
Andrew: What I read, was that it was on the Ofex [SP] market. What is the Ofex market?
Christian: I’m not actually sure if it still exists. It’s off exchange, it’s not like the main Fritz [SP] index, it’s more lightly regulated, more cost market. More risky.
Andrew: I see. So is this a one-time thing that you just happened to do well, or were you investing a lot and this was one hit out of a collection of hits and misses?
Christian: At that stage I was quite interested in that, the rate at which things were growing. It was quite compelling. I’m not really into it now.
Andrew: What got you out of it?
Christian: I think I can do better with Lingo. I think I’m building something a lot more solid. We’re building a really exciting culture around Lingo so that’s what I want to be doing, not reading bulletin boards all my life.
Andrew: You know what, though, most people, if they have a hit, and as I read it, the stock that you picked up was 20 pence the day you got it, it rose to more than 20 pounds, giving you 15 thousand pound windfall, which you sold. Most people, would have that, and they would just be focused on how do I get that again? Unless they had a big hit, also, that warned them, this is not easy money, this is dangerous, go focus on something you have full control over. Did you have one of those?
Christian: No, I knew it was exceptional, I didn’t ever want that to be my job, to invest in shares. I wanted to create real value myself, and then I think I founded Lingo because I wanted to build a company of substance, one that people were inspired by.
Andrew: So, you got extra money. What did you do with it? How did you invest it in the business?
Christian: Well, I don’t know about the reputation Scottish people have got, I’m sure, around here for being . . .
Andrew: Cheap?
Christian: . . . cheap. Yeah. Careful with money. Within Scotland, people from Aberdeen, the city I’m from, are famously tight. The business has very much been run at low cost, and that money was used for getting the website online, for getting it developed. And legal costs.
Andrew: It cost you 15,000 pounds to get the website online, and legal expenses?
Christian: No. I would say that was really giving me living costs while I got the business going. Not being directly invested in the business.
Andrew: This cheapness about Scotland, is this something the Scottish are proud of? Or is that an insult that I just lobbed at you without even paying attention to it?
Christian: I think a bit of both. We’re proud to be careful with our cash; we’re not flashy. We get good value with what we buy. I think Scots are quite proud of that calmness.
Andrew: I thought so. All right. So I didn’t insult you today.
Christian: Absolutely not, you’re fine.
Andrew: By the way, you were at the Mixergy South by Southwest event, do you feel I insulted Tim Ferriss?
Christian: Tim Ferriss is an inspirational figure. I think he gets lots of [inaudible] there, but I think he’s got thick skin.
Andrew: You’re saying he can take it.
Christian: Yeah. He’s got literally a thick skin, with all that stuff he does in the gym.
Andrew: You know what? It’s so hard to tell what’s going to land, and what’s not going to land and I’m trying to do a good job here and talking, talking, talking, without any editing, without much written in front of me, there’s always a risk that I’m going to say the wrong thing, or the right thing that won’t come out right, or that won’t be heard properly. So that’s why I figured I’d check in. I figured you and I are good friends now, you’d tell me honestly if I were insulting a whole people, or a guru.
Christian: You’re going to be popular in Scotland I’m sure.
Andrew: I’m going to be popular? Good. Right on. So, you started investing a little bit in the software, you hired a lawyer, you started building this into a real business. What’s the next thing that you did?
Christian: The main thing was to start getting a grip of our web [inaudible] analytics, and ranking on the search engines.
Andrew: Roughly, what year was this?
Christian: We’re talking 2002 now. Quite a while ago, Lingo is going to be 10 this year. So that was relatively early days, but the competition for places was limited. And there wasn’t anyone at that stage doing exactly what we were doing, running the translation industry’s dot-com. All the existing translation companies were a little bit behind the curve, and focused more on what I call old-tech. They just didn’t see the opportunity online. From there the business started to flow without me having to really go out and seek it. And the next step after that was for us to set up in New Zealand. The “24” in the name Lingo24 is because we always aspire to operate 24 hours a day. And in New Zealand you’ve also got a lot of native English speakers, but with Asian language skills. They’re very difficult to find in the UK. So that was the next step for us I guess.
Andrew: Do you remember what you were paying when you were buying AdWords from Google?
Christian: I don’t remember what we were paying.
Andrew: It must have been pennies at the time, though, no?
Christian: I think it was. I think we’re talking 10 cents, whereas now for some of those terms we’re talking $4 and upwards.
Andrew: What were your margins at the time?
Christian: The margins have always been fairly steady around the 50% mark.
Andrew: So 50 pence out of every pound was profit, and you could- are we talking about net profit or gross profit? Are these 50 cents after paying for advertising?
Christian: That’s before paying for advertising.
Andrew: So you have 50% of every dollar, every pound that comes in, to spend on advertising to grow the business.
Christian: In theory, yeah, at that stage, to wrap it up. Again, we were so tight we wouldn’t have pushed all that. Although we’ve grown relatively fast, we’ve never taken huge risks, financial risks. We haven’t thrown huge cash at it, we just tried to work things carefully keep costs low, keep things tight. And that’s the way it’s grown.
Andrew: What about all these companies, though, that say you have to go big or go home. They maybe looked at your company back then, eight years ago, and said “Christian’s just not investing heavily. If he has a system that works, he’s paying 50 cents for a dollar in revenue, what he should do is just go out and raise money and pump it through the system and go big and sell in two years.” Why wasn’t that appealing to you?
Christian: Yeah, that was very much the sort of VC route and it’s one that my dad actually had not such a great experience with a venture capitalist, and that maybe turned me off, that route. We’ve become more of a traditional business now, earlier in our life we were very anti- doing things the way that everyone should do them. We’re happy to keep doing what we’re doing, build a special culture and I’m really happy we did that. It’s not all about getting sides [inaudible] really quickly. We’ve got a scale now where we can complete with everyone in the industry, and with the big guys in terms of technology, with the small guys in terms of how personal we are. I’m very happy with that set up.
Andrew: Did you say that your dad had an issue with a venture capitalist, a bad experience?
Christian: That’s right. He was in the oil exploration business up in Aberdeen and he was essentially dumped by a venture capital firm when the oil price went down and activity exploring for oil went down correspondingly. Maybe I have an inbuilt fear of venture capitalists and what they can do.
Andrew: So they invested in his company they saw that the market was changing from the way they expected it to be, it was different from they expected, and they said so long, we’re not going to continue to help grow this company.
Christian: I think they even knew. The business is very cyclical, exploring for oil, obviously if the price is high people are exploring a lot, if it’s low people don’t do anything. They know that there are these cycles, and I think there were some politics at play or something. I know it wasn’t a good experience.
Andrew: What did he do after that?
Christian: He ran a science center, for children to do hands-on science experiments, how the world works. Pretty cool, actually, pretty inspirational.
Andrew: Was it his own science center, or he went to work for a science center that was already established?
Christian: He went to work for another one.
Andrew: So he didn’t go off and start another oil exploration business, he didn’t jump into entrepreneurship, maybe because it was such a painful experience for him. You’re watching it, why don’t you say to yourself, forget this whole entrepreneurship? A guy who is a good man can suddenly lose his company to someone who decides the market’s just not right for it right now. Why didn’t you say after that, not just forget venture capitalists, but forget all entrepreneurship?
Christian: I think I’ve always wanted to build a company. I’ve always had ideas and seen how things could be done better. A lot of our breed, if you like, are constantly seeing ideas, or seeing opportunity to do things better. I could never really envisage working for anyone else, so there wasn’t really another option.
Andrew: Entrepreneurs are a breed unto their own, huh.
Christian: We are a breed. And I think we’re an exciting breed to be [inaudible].
Andrew: Did you say you were a teacher for two weeks?
Christian: I was a teacher in theory for a year. Although it stopped quite quickly when I was in Italy because I don’t really have the patience to be a good teacher.
Andrew: What got you to start teaching?
Christian: That was part of my degree course. You spend a year abroad, our college had an exchange with a college in Italy so I got transferred over there.
Andrew: All right. So the business started with the idea that students would be doing the translations. How did that work for you?
Christian: That worked pretty well. The costs were low, but students are notoriously unreliable. So when I graduated myself, I decided to run it as a proper professional translation company. Lingo24 has always only used professional translators.
Andrew: Did you have any bad experiences where translators weren’t students in the early days? Did I read about some issues with the way English is spoken in different parts of the world, the way other languages are spoken in different countries?
Christian: One of the issues is where you’ve got native speakers of a language who live abroad for a while. And I found this myself actually when I lived in Italy, that I would come back and speak to my friends in English, but they would be, like, that’s not correct English! That’s weird. Because I was using some weird Italian style and construction, and we found out there was a German translator living in the UK who really had lost his sense of German syntax, the way words hang together, and so we really want translators now who are based in the country for which the text is intended, who are living and breathing the language. Who are [inaudible].
Andrew: You just revealed your revenue to me. You stood by as I asked you personal questions about your father, you’re being open about how you got here. I don’t want to be greedy here and pull information from you, and not give you a chance to get something valuable out of the program yourself. So, what’s a win for you? How do I make this . . . we’re about halfway through the session, how do I make this a win for you?
Christian: The concept I really came to talk to you about, Andrew, is foreign language internet. I think a lot of people who are selling online, obviously that includes pretty much anyone, are missing out on a huge opportunity by not looking at selling their services, their products, their information, whatever it is, in languages other than English. The rate of growth of internet usage in languages other than English, everything from Russian to Brazilian Portuguese to Vietnamese, etc, is much quicker than it is in English. And yet, the competition online to get those eyeballs, to get those buyers, is really very limited indeed because a lot of companies are focused on the English language market. And now only 31% of people looking for stuff online are actually doing so in English. Because there is this lack of , this disparity if you like, between the demand for content in other languages, and the supply, that’s a real opportunity for forward-thinking businesses. So I wanted to encourage your readers, your watchers, to look into the foreign language internet and think about which languages and which countries could be exciting, and really profitable markets for them.
Andrew: I want to come back to that because I want to find out how we can figure out which, of all the languages and all the countries in the world, we should be getting into, if we don’t have enough experience with all of them, if we haven’t traveled around the world the way that you have. So I’m going to come back to that. Let’s continue with the narrative about New Zealand. Go other side of the world, and you launch a base from there, how do you know who to talk to, how do you know who to recruit? How do you communicate with them, considering the time differences?
Christian: I tried to organize a lot of things by phone and by email before I went over. And that was a bit of a disaster, I didn’t get much set up. So I just went over. My first employee, I actually met in an internet café. I was trying to get online and get adverts going and meet people, and I met a Korean guy called Austen, who was a fantastic linguist, and for many years, in a café. After that, I just put up some [inaudible], I networked with people in the translation community. We built a small team of four people, which helped us take advantage of the nighttime, daytime difference between the UK and New Zealand.
Andrew: So you didn’t need customers in New Zealand yet, you just wanted to know that you had translators there, and that there would always be a translator available for your customers.
Christian: Yeah, translators and also project managers, so that people could make sure that the projects get done to the requisite quality standards, on time, and on budget.
Andrew: Why was it so important for you to go 24, so soon, instead of just focusing on your part of the world? 24 hours a day, meaning.
Christian: Part of that was that it was a good time in my life to go and spend some time in New Zealand, there was a little bit of lifestyle business decision-making in there. Part of it was that our clients were increasingly aggressive, I guess, in terms of how quickly they wanted things done. Everybody wants things done yesterday, and while nobody can quite do things yesterday, we can at least get things done quicker than rival companies by doing them overnight. So whereas a normal translation company would take an order at 4:00 in the afternoon, and say yeah, we’ll assign that tomorrow morning, we would say we’ll assign that in two hours and it will be on your desk tomorrow morning. That was a real differential here early on.
Andrew: That’s one of the things I loved about the business early on and that’s what I was trying to flesh out, in the beginning part. You do get to travel because of this company, you do get to experience, not just explore, but really experience the world. What was it about New Zealand that made you want to go and spend some time there?
Christian: I’ve got a bit of a family link with New Zealand. My great-great-great grandfather actually founded the city of Christchurch, so I was quite keen to go over and see that place. There was, until the recent earthquake, a statue of him up in Cathedral Square. I hope they’ll put it back up. That was one side of it. The other side s that it’s very outdoorsy, and people have got great character there. So it was a great place to spend a few months. I’d highly recommend a visit, particularly the [inaudible] of New Zealand.
Andrew: So you were running the company from New Zealand, I mean, you were running it back home, and helping to launch it right there in New Zealand.
Christian: Yeah, but that’s . . . Jack, my business partner, had a jogging business and he was essentially running the UK operation and I was trying to get things established in New Zealand. And throughout the life of Lingo, that essentially has been the pattern, that Jack really makes things work, and I’ll sort of develop it in a new location or in a new way strategically.
Andrew: What is it about Jack that can help him run the operation and keep it going when you need to travel. A lot of entrepreneurs don’t have someone like Jack. What makes him so good?
Christian: Jack is incredibly capable. Understanding people, at all levels, and making things happen. He commands respect effortlessly. I’m a less solid personality, I can be erratic, and moody, and all those sorts of things, whereas Jack is like our rock. He has been the rock of Lingo, and continues to be the rock of Lingo, in my mind, to make it work.
Andrew: Can you give me an example of how he works, or what he does?
Christian: He’s actually [inaudible] me in the Philippines. I went over earlier in the year, to establish, to recruit the management team over there. We’ve now got nine people fixed in the Philippines. And he’s now going over to make sure that as we establish the operations, that everybody understands exactly where they fit in to the whole operation, and that all the questions are asked professionally and capably. I’ll go in and sort of brick the back [inaudible] of something, and he’ll make sure that it really works.
Andrew: What is it about him? Is he a structured person? Is he someone who can organize things, who can put checklists into place?
Christian: Yeah, he is organized. He’s not manically organized, in a scary way, but he understands what’s important and he sets up an environment in which that gets done.
Andrew: I’ve got to find an interview with someone like Jack, or maybe with Jack. I want to get some details on this. I want to know how entrepreneurs, who keep thinking about the next thing, as you said earlier, because that’s our breed, I want to know how they can find someone like Jack and how that new person can be trained properly, can work properly to organize the company and keep it operating, while the visionary is out there envisioning and building new things.
Christian: I met Jack through tennis. We played tennis at college, so I’d advise people to play tennis.
Andrew: You’re serious.
Christian: I think it was very lucky to find him, and that he was interested in joining the business.
Andrew: So Jack was not the cofounder. There was a another cofounder. Who was that person?
Christian: Joss Shepherd [SP] was the other cofounder. He was the sort of techie. He helped build the foundation of the website and the backend.
Andrew: How much money did you guys put into the business in the beginning beyond the 15 thousand that you got from the market?
Christian: Nothing. There is an organization called the PSYBT, the Prince’s Scottish Youth Business Trust, who gave us a very lost-cost loan initially to get things moving.
Andrew: How much of a loan?
Christian: 5,000 pounds, $8,000.
Andrew: Wow. That’s it? And then what happened to your cofounder?
Christian: We’ve had a couple ups and downs in the business. There was one stage when we lost our position. We were very reliant on rankings on Google several years ago, and we lost our rankings. And I was speaking to Joss about what we would have to do, that people would have to leave the company. And we actually talked about someone else. But then Joss said, well, maybe I should leave. He knew that he was relatively expensive, and he thought it might be a good time to go. I think he was an extremely good start up CTO if you like, but it was probably a good move for both him and for me. But we’re good friends, I met my fiancée at his wedding recently, and he’ll be at the wedding, it’s all good. He’s got actually quite an exciting new venture called HipSnip.com which is all about giving your friends recommendations as to what brand or what type of thing they should buy. So keep an eye on HipSnip.com.
Andrew: HipSnip. I read in my research that you bought him out for 120,000 pounds. Where’d you get the money to buy him out?
Christian: I borrowed that from my dad. My dad’s not one of these guys who would just give me the cash like that, and I’m still actually repaying that, with interest, as we go on. So, it was a loan from my dad.
Andrew: Is the business profitable now?
Christian: Yeah, the business is profitable. It’s never as profitable as we really think it should be, because we always see ways in which we can spend money that will add something to the business, make it more exiting, drive it further. But it’s profitable, yeah.
Andrew: Forgive me, sometimes I feel bad asking questions, but that’s what we’re here to do, to have me ask questions, and you’re an adult you can say Andrew, push off, I don’t want to answer this. But, if you’re doing $8 million in revenue, wouldn’t 120,000 pounds be relatively small compared to that, and relatively easy to just pay off and say, “Dad, thanks for getting us here we’re moving and we can take it on from here.”
Christian: To pay off the loan to my dad, you’re saying?
Andrew: Right. Considering how much revenue is coming in?
Christian: Yeah, I don’t take much money out of the business. I don’t have that amount to pay back. I pay myself a relatively conservative salary and all the money goes into developing the business.
Andrew: So the net margins are fairly small, sounds like they may even be less than 10%?
Christian: Yeah, they are less than 10%.
Andrew: Beyond translators, who account for about 50% of your revenue, what other expenses are there?
Christian: The main one would be our people. We’ve got now, roughly 160 people around the world, and they’re all full-time, salaried employees. Managing the translation process, that’s where most of it goes.
Andrew: Is that more than 50% of the revenue?
Christian: Is that more than 50% of the revenue? No. We are profitable, but we’re not very profitable.
Andrew: Other expenses, there’s no office space from what I read, around the world people work from their homes, right?
Christian: No, actually our website’s being updated at the moment. Sorry about that, Andrew. We moved to having people in some offices about three years ago, because we were finding that the challenge of communicating and of building a culture, with everyone working from home, was just impossible.
Andrew: Really? What kind of issues were you finding with that?
Christian: There were issues with discipline, there were issues with basic things not being understood, the whole coordination was not right. We were finding it hard to realize when people were not really putting forth the effort, it just opened up a big can of worms, which having people together in centers of knowledge makes a lot better.
Andrew: Give an example of something that didn’t go right because you were not all in the same office and everyone was in their home.
Christian: I wouldn’t have a specific example. I just say that the whole thing was not as tightly organized as I think it is now. And people weren’t getting messages clearly between one another because they couldn’t just grab the guy next door and say, “What do you think about this? How are we going to do it?” That’s the sort of problem we were facing.
Andrew: You’ve seen some of my interviews now, and now you’re on the side being interviewed. How does it feel to be interviewed?
Christian: You ask very interesting questions and you go all over the place. You keep me on my toes.
Andrew: Anything felt uncomfortable so far? Maybe I’m misreading you, but I feel like something I said just went a little beyond what I should have. And I see that sometimes in my interviews.
Christian: No, I’d like to give you more details whereas I don’t always have the detail in my head. My brain just gave up.
Andrew: So let’s continue with the narrative. You set up an office in New Zealand. What was next for you after that?
Christian: This was very sort of Wild West stages of Lingo. Our largest client at that stage, [inaudible], says we’re going to give you a deal, $80,000, which at that time, was an incredible amount of money to me, if you set up in China. So go and have a look at China, if you can set up there, we’ll give you this contract. So my colleague and I, Austin, actually, from New Zealand, went up to China, we tried to recruit people. We had a lot of people looking at us, how young we were, how inexperienced, how foreign we were, and thinking, “We can take these guys for a ride.” And we recruited two people, to manage that project, and we won the project, that was all very happy days. It was just a bit shocking, later on, when we found out that one of the guys we’d recruited was actually a convicted murderer. It was an unbelievable shock. And we found out also that he was diverting money from the company into his coffers. So we had a rude awakening really to what can go wrong in business, having been very optimistic and idealistic and naïve about how things worked.
Andrew: So looking back, if you and I were to learn from your experience, you, me and a third person who was listening to us, how would you do things differently? You go into a new country, you don’t know the environment, and you want to make sure that you don’t get yourself caught up in a scheme by a murderer who ends up taking your money. What do you do? How do you prevent that?
Christian: I think part of the problem is trying to do things too quickly. And part of the problem was trying to do things in a culture which is very alien to me, I don’t speak Chinese, I never spent time in China. I just was given an opportunity and went for it. Now that I’m a more experienced business person I would look for people I trust, maybe an American-Chinese person, or British-Chinese person, or a friend of a friend, who could do a good job within China. I wouldn’t try to do it myself, I wouldn’t try to go there for a period of two or three weeks and set everything up. The culture is very different and you’ve got to recognize early on what you can do and what you really need to get other people to do. That’s the sensible answer. But it’s much more exciting to actually go there and try and make these mistakes.
Andrew: I get that. Alright. And we’re never going to get it all perfectly right, but now that I’ve heard you say that, and my audience has heard you say that, if anyone of us decides we’re going to go to a foreign country to set up shop, we’ll probably bring a friend along, we’ll probably maybe [inaudible] out, or email you and say, “Who do you know in China, who should I go say hello to and introduce [inaudible]?”
Christian: Yeah, that’s a help.
Andrew: So what kind of customers do you have, that one of them would send you an email, or approach you, and say we’ll give you $80,000 if you can set up shop in China and translate for us?
Christian: Well, Lingo’s customers are across all manner of sectors, from travel and tourism, to PR, you know, to the big corporates and to farm and to oil and gas to fine arts, etc. I guess, the situation when I’ll do that is when they feel they trust us enough, we understood their technology, we delivered a good service, and they felt we could make that happen in another country for them. Trust is absolutely huge in translation because obviously what you’re getting back … do you speak French, Andrew?
Andrew: No.
Christian: No. So if I gave you back a French translation of a document you give me, you’re trusting me that it good.
Andrew: Right. I can’t double-check your work, unlike anything else where, like if I have someone edit this video, I can double-check their work. I can’t do that with translation. Right.
Christian: Exactly. So the trust goes up.
Andrew: Do you get customers like that, just from Google AdWords? An SEO, a customer who is going to come in and say go in to China for us, we’ll make sure you make money from it?
Christian: No, they would trust us with much smaller, they tend to step up what they give us. We do an $80 project and then they’ll step it up over time.
Andrew: But they initially find you online, through SEO or Google?
Christian: The vast majority do. A lot actually come to us through referral [inaudible] and we do have a sales team as well, but the majority come from typing in ‘translation services’ to Google or something like that.
Andrew: What did you do with SEO that Google downgraded you?
Christian: That’s a really good question, because I don’t know. I don’t think we did much wrong, we’ve always been good middle-class boys, and tried to stay clean and do white hat stuff. I think it might have been that there was some duplicate content. Some content that was on our site that was also on another site. I think that might have been the problem at one stage. But now we’ve had the sites well and truly cleaned and we do a lot of work to make sure that anything we’re adding to the web is really adding to the value of the web, rather than just for our own promotional ends.
Andrew: I’m looking here to see what else am I curious about, what else can I bounce to you, since I have as you said, been bouncing around a whole lot. At what point did you earn your first million dollars? Do you remember that? Or your first million pounds?
Christian: That’s a very interesting question. The business would have got to a million pounds in 2004, 2005. For us actually, last year, when we got to 5 million pounds, $8 million, that as a big thing for us because we had consistently got to .8 or .9 and just missed out on those psychological big million pounds numbers. So to get about 5 million was a big step for us.
Andrew: What contributed to your biggest leap forward over the last few years?
Christian: It’s definitely been our own use of foreign language internet marketing. We’ve now got a situation in which the UK accounts for less than 40% of our business.
Andrew: Less than 40% of your business now is coming from your home?
Christian: Yeah. That’s absolutely right. Now the US accounts for less than 10%. And so the majority of our business comes from foreign language markets, the likes of Sweden, Denmark, Norway, Germany, Austria, Switzerland, The Netherlands, and etc. So we very much practice what we preach about the foreign language internet and find it really quite easy actually to get prominence in those foreign language markets.
Andrew: So let’s talk about how to do that. I’ve got a listener in my audience who runs a website called Ties.com. Let’s suppose that he says, “Ties.com is doing well in the US, I want to go overseas.” First consideration is, well, which country do you go into? What do you suggest? How does he figure it out?
Christian: For an American business, I would say you want to look for cultures which are relatively similar to yours. And I would say that Northern Europe is a very affluent market, and it is not a million miles away culturally from what happens in the US. I would look to research your competition online using Google’s keyword tool which you can tailor, and using Google’s automatic free translation tool actually, which for a term like ‘ties’ would be very accurate. So I put your top key phrases into Google translate, then put them into Google keyword tool for that country, and I would then look to see who was ranking highly, for the terms that you felt were good for you, and whether there was an opportunity for you, because you offer something slightly different, or better, or because nobody was very strong in those markets.
Andrew: I see. Take the words, go to Google translate, translate them, pop them into Google’s research tool, see how those key words are competitive, or non-competitive, and then find the country, do I understand that right, where they are least competitive, and go there.
Christian: Yep. That’s exactly right, yeah. And the cost of doing it is really minimal. You can do that obviously on your own for free. And then the way we broke into the Scandinavian markets was by doing micro-sites of our own main site, which were five pages long, cost about $300 to translate those into those languages, and we just waited, little by little, for the amount of business to build up to the stage where we could have a dedicated account manager whose a native of that language who could then take relationships further. This is one of the reasons I’m so passionate about the foreign language internet: it’s accessible to any small- or medium-sized business. And I think that people need to embrace the foreign language internet early in their development, because it’s actually easier than gaining prominence in the crowded English language market online.
Andrew: I like the idea of creating micro-sites because that answers the next question I had, which is there’s so much content on our websites, if we just wholesale translate it all, it’s going to be overwhelming. Some of it’s going to work and some of it’s not going to work, there’s no real way to know what we’re missing. So you create a micro-site in the country that makes sense, you test it out, what about shipping costs, and all those things that we take for granted, like customer service being available in the US time and not in European time, or all those little things that I can’t even come up with right now.
Christian: Sure, well I think there are ways that you’ve got to adapt your service if you can’t provide that support. One of the things, we’re going to launch our new website this year, in 63 different countries, and we don’t speak internally all of the languages of those sites. So our solution for that will be that we’ve got a help yourself service. For example, our Polish language thing, whereby we don’t have a phone number, we don’t have customer service, it’s just a web-based ordering system for translation services.
Andrew: Can you do any of this for us, or is there a company that we can hire that does this for us? Because I’d like to be able to say, you know, Christian makes sense, I need to do this, but I want to know exactly how much it’s going to cost me, I want to just have that test out there, and see if my costs will be covered in any reasonable amount of time, and then if it is, then I could dive in and do it myself. But until then I’d like someone else to handle it for me.
Christian: We at Lingo24 can absolutely advise on how to make the most of the foreign language internet. We’ve also launched a new service, we’ve got just two clients at the moment, for whom we are seeding articles. So we pitch *PR* stories to publications, blogs, in the target market, in this case in Germany and in Spain. We get them to the top of the search engines in those countries. We’re absolute delighted to help. Our attitude is very much that if we keep the costs lower for you at the start, we’ll help you get a return and then little by little, we’ll be able to help you build up, the number of countries you’re in, or the amount of content you’ve got in a specific country market, etc. It’s not a big splash, it’s an iterative process.
Andrew: So going back to my example of my friend’s site, he has Ties.com, great domain, you’d create a micro-site on his domain? Or another domain?
Christian: Let’s say for Germany, I’d say Ties.de. And I would host it in Germany. Because obviously, Google is favoring local sites.
Andrew: Interesting.
Christian: You need to be hosted in that country and have that domain as such.
Andrew: So you’d set that up for them, you’d start looking for keywords, you’d have the whole site up and running, on it’s own, then you’d go to bloggers and start talking about it with them and have them write articles and link over to it, what would all that cost?
Christian: We would also actually come up with the stories and write the stories. For what we call promwork, PR online marketing, in languages other than English, that does get a little bit more expensive and we need some commitment from people to go with it. It starts around 1,000 pounds, so $1,500 per month, to do that. We’re happy to give people advice on how they can do that themselves, or to assist with other things at lower costs. I think that would be a phase two or three for most people. And if people are wanting to keep costs low they can get the keywords right, get the content up, and not be building links to it, and still have a lot of success in many foreign language markets because the competition just isn’t there.
Andrew: I can imagine actually. I bet there isn’t a Mixergy in hardly any other languages. They just can’t be out there competing. They can’t be out there training entrepreneurs to grab every fricking inch of business that’s available to them.
Christian: We’re going to have to talk after this Andrew, I smell an opportunity.
Andrew: Actually, what about content sites? Content is very unique. I’ve asked you questions that I know are totally acceptable in America. I would sit down and ask you about your dad’s company, and about your revenue, maybe about how many women you slept with, how many whatever, and there’d be no problem. In foreign languages, foreign cultures, it’s not acceptable. How do you adjust for that when you expand content sites?
Christian: I guess it depends on which culture you’re going into. You always need to have a local who’s within the country to, at the very least, cast an eye over what you’re doing. Ideally, to do it. So for example, we employ a blog editor in Germany to adapt content. Or to create fresh content that’s suitable for the German market. If in doubt, you can service [inaudible] what you’re doing. Part of the problem, and this is with translation as well, to be funny, or to be topical, to really connect with people, a lot of [inaudible] end up using very local humor or local references. Which clearly is not going to work in a foreign country. So people need to be sensitive. They need to get advice and get peers within the country to review what they’re doing.
Andrew: I think that’s everything on my list, except for promo. Before we started, you said, and this was very nice of you to have asked it, said, “Andrew, does it make sense for me to give out a promotional code here in the interview?” And I said, I don’t know if we’ll feel promotional or not. I say this, let’s try it, and let’s get the audience’s feedback. Does it work for you? I mean, you tell me afterwards, does it end up sending you any kind of business? And the audience, I’m going to ask you guys to tell me, does it feel a little too promotional, does it take away from the content? Does it feel like maybe, I’m doing an ad for Lingo24 instead of doing an interview about entrepreneurship? So Christian, what’s the promo code, and guys in the audience, come back and give me feedback either way, what do you think? What is it?
Christian: Okay, cool. Well, we really want to help people take advantage of the foreign language internet. And we want to do that for much reduced costs. So what I’ll do is, the first ten of your readers who come to us, we will deliver foreign language internet services including translation, up to a value of $1000, if they just mention ‘Mixergy’ when they give us a call.
Andrew: So they will get what, up to a value of $1,000? How much will they pay?
Christian: They will get foreign language internet services up to that level for free.
Andrew: That’s what I thought you were saying. Really? So what’s in it for you?
Christian: We want stories. We want people to take advantage of it and we will be promoting them in press, and internationally as well.
Andrew: So you’re going to give ten of my people $1,000? Seriously, I want to understand, what’s the ulterior motive in that? You want case studies? You have enough customers for case studies.
Christian: Yeah, we do but it’s such a big opportunity I feel so passionate about it that I’m prepared to put my money where my mouth is.
Andrew: You’ll create the small site that we talked about for them in a foreign language.
Christian: Yeah, we’ll do that. And I’m very confident actually, that if we invest that money for them, that we would get them a return, and that they will then come back and ask us to do more work. Maybe in other languages, maybe more in the same language, that overall, even that giveaway will give us a return.
Andrew: Can I suggest this, that instead of the first ten, maybe you pick the most appropriate ten? I hate to see this go to somebody who has got a website that is not really running, just because they were first five people, or first ten people, that they’d get it for free.
Christian: You’re right. Tell you what I’ll do. I will talk to you. I’ll get a list of them, and some day in the future, maybe the end of June or the end of July, or something like that, we’ll have a look together at that list, decide who’s best and award the prize from that. How about that?
Andrew: Yes, except that I’m not going to take the blame for it for people. So let’s say, Tristan, my producer, he will be the person who’s responsible. That way if anyone’s not happy, they could go to Tristan who’s in Paris and very well-sheltered from my audience, who’s mostly in the US, and they could go to him and potentially complain but not to me. I don’t want to disappoint my audience, but I also want to make sure that if you’re getting ten people free service that they’re a good fit for you. So Tristan, or someone else we’ll find will do it. Christian, thanks for doing the interview. Guys, check out Lingo24.com and give me feedback on what you think of the [inaudible] promotion. All right. Thank you.
Christian: Thanks a lot.
