StarZero All shows Try the podcast clipper →

May 11, 2018 · 20m · top-founders

1021 How He Solved Translation Marketplace Space and Grew 7x YoY to $24m in Revenue

Ivan Smolnikov · 11m spoken Nathan Latka · 6m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

Smartcat CEO Ivan Smolnikov joins Nathan Latka on The Top Entrepreneurs podcast to break down how his company disrupted the $40 billion translation industry, scaling revenue 7x year-over-year past a $24 million annual run rate through a hybrid SaaS-marketplace model.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 37.1% of the talking time here. How this is scored →

Nathan as informed peer 6.0 Guest teaching 3.4 Guest disagreement 1.6 Nathan pushing back 2.8
05100:0010:0020:000:49–3:01 · Nathan as informed peer 5/10 Introducing Ivan Smolnikov and the Smartcat Vision Nathan introduces Ivan and challenges him on how Smartcat differentiates from well-known competitors like Rev.com, Speechpad, and Fiverr. Ivan calmly educates Nathan on the technical necessity of workflow automation, translation memory, glossary management, and global payouts for enterprise translation.3:01–7:54 · Nathan as informed peer 6/10 Evaluating SaaS Versus Marketplace Revenue Breakdown Nathan probes Ivan's revenue model, questioning why Smartcat favors a marketplace fee over more predictable SaaS revenue. Nathan also drills into the cap table mechanics and the corporate spin-out from Ivan's previous $24M translation agency.7:55–10:33 · Nathan as informed peer 7/10 Solving Marketplace Dynamics and Scaling Past Two Million Monthly Nathan uses Ivan's customer counts and baseline SaaS fees to deduce and confirm Ivan's monthly run rate of over $2M. Ivan explains his strategy for solving the marketplace chicken-and-egg problem by giving away core workflow software for free to both translators and buyers.10:36–14:18 · Nathan as informed peer 5/10 Sponsor Message: ProsperWorks CRM Integration Following the mid-roll ad read, Nathan investigates billing mechanics and net retention. Ivan details how real-time translation memory calculation lowers customer costs by up to 70% while driving net negative churn through expansion.14:18–17:47 · Nathan as informed peer 7/10 Unit Economics, Market Size, and 7x Year-Over-Year Growth Nathan evaluates unit economics (LTV/CAC ratio exceeding 10x) and calculates the historical revenue trajectory from the 7x YoY growth metric. Ivan clarifies his growth targets and answers the Famous Five questions.0:49–3:01 · Guest teaching 5/10 Introducing Ivan Smolnikov and the Smartcat Vision Nathan introduces Ivan and challenges him on how Smartcat differentiates from well-known competitors like Rev.com, Speechpad, and Fiverr. Ivan calmly educates Nathan on the technical necessity of workflow automation, translation memory, glossary management, and global payouts for enterprise translation.3:01–7:54 · Guest teaching 3/10 Evaluating SaaS Versus Marketplace Revenue Breakdown Nathan probes Ivan's revenue model, questioning why Smartcat favors a marketplace fee over more predictable SaaS revenue. Nathan also drills into the cap table mechanics and the corporate spin-out from Ivan's previous $24M translation agency.7:55–10:33 · Guest teaching 3/10 Solving Marketplace Dynamics and Scaling Past Two Million Monthly Nathan uses Ivan's customer counts and baseline SaaS fees to deduce and confirm Ivan's monthly run rate of over $2M. Ivan explains his strategy for solving the marketplace chicken-and-egg problem by giving away core workflow software for free to both translators and buyers.10:36–14:18 · Guest teaching 4/10 Sponsor Message: ProsperWorks CRM Integration Following the mid-roll ad read, Nathan investigates billing mechanics and net retention. Ivan details how real-time translation memory calculation lowers customer costs by up to 70% while driving net negative churn through expansion.14:18–17:47 · Guest teaching 2/10 Unit Economics, Market Size, and 7x Year-Over-Year Growth Nathan evaluates unit economics (LTV/CAC ratio exceeding 10x) and calculates the historical revenue trajectory from the 7x YoY growth metric. Ivan clarifies his growth targets and answers the Famous Five questions.0:49–3:01 · Guest disagreement 2/10 Introducing Ivan Smolnikov and the Smartcat Vision Nathan introduces Ivan and challenges him on how Smartcat differentiates from well-known competitors like Rev.com, Speechpad, and Fiverr. Ivan calmly educates Nathan on the technical necessity of workflow automation, translation memory, glossary management, and global payouts for enterprise translation.3:01–7:54 · Guest disagreement 2/10 Evaluating SaaS Versus Marketplace Revenue Breakdown Nathan probes Ivan's revenue model, questioning why Smartcat favors a marketplace fee over more predictable SaaS revenue. Nathan also drills into the cap table mechanics and the corporate spin-out from Ivan's previous $24M translation agency.7:55–10:33 · Guest disagreement 1/10 Solving Marketplace Dynamics and Scaling Past Two Million Monthly Nathan uses Ivan's customer counts and baseline SaaS fees to deduce and confirm Ivan's monthly run rate of over $2M. Ivan explains his strategy for solving the marketplace chicken-and-egg problem by giving away core workflow software for free to both translators and buyers.10:36–14:18 · Guest disagreement 1/10 Sponsor Message: ProsperWorks CRM Integration Following the mid-roll ad read, Nathan investigates billing mechanics and net retention. Ivan details how real-time translation memory calculation lowers customer costs by up to 70% while driving net negative churn through expansion.14:18–17:47 · Guest disagreement 2/10 Unit Economics, Market Size, and 7x Year-Over-Year Growth Nathan evaluates unit economics (LTV/CAC ratio exceeding 10x) and calculates the historical revenue trajectory from the 7x YoY growth metric. Ivan clarifies his growth targets and answers the Famous Five questions.0:49–3:01 · Nathan pushing back 2/10 Introducing Ivan Smolnikov and the Smartcat Vision Nathan introduces Ivan and challenges him on how Smartcat differentiates from well-known competitors like Rev.com, Speechpad, and Fiverr. Ivan calmly educates Nathan on the technical necessity of workflow automation, translation memory, glossary management, and global payouts for enterprise translation.3:01–7:54 · Nathan pushing back 4/10 Evaluating SaaS Versus Marketplace Revenue Breakdown Nathan probes Ivan's revenue model, questioning why Smartcat favors a marketplace fee over more predictable SaaS revenue. Nathan also drills into the cap table mechanics and the corporate spin-out from Ivan's previous $24M translation agency.7:55–10:33 · Nathan pushing back 3/10 Solving Marketplace Dynamics and Scaling Past Two Million Monthly Nathan uses Ivan's customer counts and baseline SaaS fees to deduce and confirm Ivan's monthly run rate of over $2M. Ivan explains his strategy for solving the marketplace chicken-and-egg problem by giving away core workflow software for free to both translators and buyers.10:36–14:18 · Nathan pushing back 2/10 Sponsor Message: ProsperWorks CRM Integration Following the mid-roll ad read, Nathan investigates billing mechanics and net retention. Ivan details how real-time translation memory calculation lowers customer costs by up to 70% while driving net negative churn through expansion.14:18–17:47 · Nathan pushing back 3/10 Unit Economics, Market Size, and 7x Year-Over-Year Growth Nathan evaluates unit economics (LTV/CAC ratio exceeding 10x) and calculates the historical revenue trajectory from the 7x YoY growth metric. Ivan clarifies his growth targets and answers the Famous Five questions.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 46% · guest 54%0:00 · Nathan 46% · guest 54%3:00 · Nathan 20.1% · guest 79.9%3:00 · Nathan 20.1% · guest 79.9%6:00 · Nathan 27.6% · guest 72.4%6:00 · Nathan 27.6% · guest 72.4%9:00 · Nathan 64.2% · guest 35.8%9:00 · Nathan 64.2% · guest 35.8%12:00 · Nathan 28.9% · guest 71.1%12:00 · Nathan 28.9% · guest 71.1%15:00 · Nathan 27.3% · guest 72.7%15:00 · Nathan 27.3% · guest 72.7%18:00 · Nathan 45.5% · guest 54.5%18:00 · Nathan 45.5% · guest 54.5%
Sharpest disagreement ▶ 17:52 Slight pushback on classic business literature

When asked for his favorite business book, Ivan expresses skepticism about Jim Collins' 'Good to Great,' pushing back on the durability of its core advice.

 Hardest push from Nathan ▶ 3:37 Nathan questioning reliance on marketplace revenue

Nathan directly challenges Ivan's business model shift, pressing him on why he would phase out high-margin, predictable SaaS subscriptions in favor of volatile marketplace transaction cuts.

 Biggest teaching moment ▶ 2:08 Ivan explains the necessity of enterprise translation memory

Ivan explains why consumer freelance platforms fail for enterprise localization, schooling Nathan on automated glossaries, translation memory reuse, and multi-country settlement compliance.

 Nathan holds their own ▶ 9:03 Nathan deduces total revenue from split metrics

Nathan demonstrates sharp financial acumen by instantly calculating Ivan's minimum gross revenue from customer counts and SaaS percentages to prove the company makes over $2M monthly.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Ivan Smolnikov and the Smartcat Vision 5522 Nathan introduces Ivan and challenges him on how Smartcat differentiates from well-known competitors like Rev.com, Speechpad, and Fiverr. Ivan calmly educates Nathan on the technical necessity of workflow automation, translation memory, glossary management, and global payouts for enterprise translation.
Evaluating SaaS Versus Marketplace Revenue Breakdown 6324 Nathan probes Ivan's revenue model, questioning why Smartcat favors a marketplace fee over more predictable SaaS revenue. Nathan also drills into the cap table mechanics and the corporate spin-out from Ivan's previous $24M translation agency.
Solving Marketplace Dynamics and Scaling Past Two Million Monthly 7313 Nathan uses Ivan's customer counts and baseline SaaS fees to deduce and confirm Ivan's monthly run rate of over $2M. Ivan explains his strategy for solving the marketplace chicken-and-egg problem by giving away core workflow software for free to both translators and buyers.
Sponsor Message: ProsperWorks CRM Integration 5412 Following the mid-roll ad read, Nathan investigates billing mechanics and net retention. Ivan details how real-time translation memory calculation lowers customer costs by up to 70% while driving net negative churn through expansion.
Unit Economics, Market Size, and 7x Year-Over-Year Growth 7223 Nathan evaluates unit economics (LTV/CAC ratio exceeding 10x) and calculates the historical revenue trajectory from the 7x YoY growth metric. Ivan clarifies his growth targets and answers the Famous Five questions.

Statements from this episode (16)

Insight
Enterprise translation requires workflow automation, not just freelance marketplaces
“The difference is that first you don't have automation workflow technology on the platform, and without that, It can't work for big customers because if you're a big company with good budgets, you just can't deal today without automation technology. You can't …”
Ivan Smolnikov May 11, 2018 ▶ 2:10
Assertion Not checkable as stated
Smartcat customers spend an average of $10,000 monthly
“On average, it's about 10 K but there are customers who are paying us, like, 100 K or 200 K even.”
Ivan Smolnikov May 11, 2018 ▶ 3:23
Assertion Not checkable as stated
Smartcat generates 85% of revenue from marketplace and 15% from SaaS
“Actually, around 10, 15% is coming from SaaS model, and around 85% is coming from marketplace model, because we are more focused on it right now.”
Ivan Smolnikov May 11, 2018 ▶ 4:31
Disclosure
Smartcat raised a $4M seed after bootstrapping with $5M prior profits
“Right now, not much, actually just four million dollars because it was pre revenue around a year and a half ago. It was like seed round. But before that, we invested close to five million dollars from our own profits within two years when we started to develop…”
Ivan Smolnikov May 11, 2018 ▶ 5:13
Insight
Raising venture capital requires a focused pure software business
“First to raise money from venture capital, you need to have a focused business, you know, just doing software development.”
Ivan Smolnikov May 11, 2018 ▶ 5:53
Assertion Not checkable as stated
Smartcat has close to 300 paying customers
“I would say close to 300 paying customers at the moment.”
Ivan Smolnikov May 11, 2018 ▶ 8:43
Assertion Not checkable as stated
Smartcat hosts nearly 100k freelancers across 150 countries
“And close to 100,000 freelancers from 150 countries at the moment.”
Ivan Smolnikov May 11, 2018 ▶ 8:56
Assertion Not checkable as stated
Smartcat monthly revenue exceeds $2 million
“We are above two millions.”
Ivan Smolnikov May 11, 2018 ▶ 9:21
Insight
Free single-player SaaS solves the marketplace chicken-and-egg dynamic
“And that was our primarily idea to build something valuable for people, both for supply and demand and to give it away for free. Once we have it, people are coming to use our technology, both suppliers and customers. Suppliers are using our technology, even in…”
Ivan Smolnikov May 11, 2018 ▶ 9:46
Assertion Not checkable as stated
Smartcat retains approximately 95% of its paying customers
“Actually right now, because we have not so many paying customers, the retention is around 95%. If you mean lower retention.”
Ivan Smolnikov May 11, 2018 ▶ 13:08
Assertion Not checkable as stated
Smartcat accounts expand by 30% to 35% year-over-year on average
“I would say close to 30, 35.”
Ivan Smolnikov May 11, 2018 ▶ 13:30
Assertion Not checkable as stated
Smartcat operates without a sales team and relies on inbound adoption
“We don't have sales team because we have a lot of customers coming because of that technology, you know, and then we see if a customer is starting to grow, a customer success team is focusing on them to help them grow better.”
Ivan Smolnikov May 11, 2018 ▶ 13:51
Assertion Not checkable as stated
Smartcat's fully weighted CAC is between $1,500 and $5,000
“They cost us from thousand and a half up to 5000 to acquire them fully.”
Ivan Smolnikov May 11, 2018 ▶ 14:36
Assertion Not checkable as stated
Smartcat maintains an LTV to CAC ratio exceeding 10 to 1
“The ratio of lifetime value to cart is like more than 10 usually what we see right now.”
Ivan Smolnikov May 11, 2018 ▶ 15:52
Assertion Not checkable as stated
Smartcat has onboarded 20% of all global freelance translators
“And literally we have listed all of them already on our platform, and we have 20% of supply side, which is 20% of all freelancers globally.”
Ivan Smolnikov May 11, 2018 ▶ 16:34
Prediction Not checkable as stated
Smartcat grows 20% month-over-month and projects 7x revenue growth
“We have been growing 20% months to months. So this year we should complete these like seven, seven times growth compared to the beginning of the year.”
Ivan Smolnikov May 11, 2018 ▶ 17:04
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more