The Exchanges

Q Well, thank you for your service, Jack. Now tell us about Smartling. So, so you hinted at what it does, but what are you doing? What's your business model? How do you make money?

A Yeah, so Smartling is a software company. We're a software company, and we are, we provide a SaaS platform, a software as a service platform that helps companies to translate their digital content more effectively and more efficiently, and so what does that mean? It means companies have websites and email and support content and other marketing materials that if they want to reach customers around the world, they need to translate into multiple languages, and if you're doing that at any kind of scale, It's just too hard to email things back and forth between an agency and then try to figure out where to put these in your content management systems, in your marketing platforms, and with software, we can take care of all that for you. The moment you create content that needs to be in 50 languages, we can capture that content, we can organize it, we can route it to the right translators around the world, and then we can deploy it right back where it belongs and put it in the hands of your customers faster. That's what we do.

AI assessment note: “we provide a SaaS platform, a software as a service platform that helps companies to translate”

Q And how does the tech actually work? Are there humans involved? Or is it all kind of AI and natural language processing?

A Yeah, so it's a little bit of both. There's definitely humans involved, and while, while AI and machine translation, you know, computer-generated translation, like something like Google Translate, you know, has gone, undergone some really incredible advances in the last year or so, um, the translation is still one of those things that really requires humans, particularly when you're talking about marketing content and high-impact content that's mission critical to your operation. But that said, You know, there are certainly things that we do to help to facilitate faster and better translation, and we do that through a combination of software and people. So we've got, you know, we have, you know, thousands and thousands of translators positioned around the world who understand- Are those all full-time?

AI assessment note: “Yeah, so it's a little bit of both. There's definitely humans involved”

Q Yeah, but Jack, are you giving me, the reason I'm asking this is because you can drive expansion revenue, so you can actually get to net negative revenue expansion if you're, if you're giving me revenue churn right now. Are you, are you giving me customer logo churn or revenue churn?

A Yeah, I'm actually giving you revenue churn, but what I'm actually saying is, is We expect that of our existing customer base, we hope that we will retain 90% to 92% of that revenue every year. In addition to that, we will be selling more customers. We will be selling more customers, and we'll be adding them to our base of revenue. I know you love numbers here, so the idea is that, you know, think of it like a bucket, and if, if in that bucket I am pouring more customers into the top of the bucket, but I've got customers and customer revenue dripping out of the bottom of that bucket, I want to make sure that the volume of, of water inside that bucket is always increasing.

AI assessment note: “Yeah, I'm actually giving you revenue churn”

Q And give me a sense of kind of Customer sizes you like to work with. What's the average customer paying you per month or per year?

A Yeah. So our, you know, our, our customers pay us anywhere from, you know, 10,000 dollars a year, all the way up to, you know, a couple million dollars a year, million, million dollar plus a year. And so it really depends on their particular needs. Um, you know, if you are a company that's producing a ton of content across 50 different languages, and you're doing this a lot around, around, you know, a dozen different channels, then you're going to need more software. If you're a smaller company or a two person mobile app that's just starting out and you've got something that could potentially be a hit in the future, And you're really just getting started with smaller content, a smaller number of languages. It doesn't cost quite as much. So it really depends on what your particular needs are.

AI assessment note: “customers pay us anywhere from, you know, 10,000 dollars a year, all the way up”

Q Jack, are you talking like five percent logo churn annually, or 10, 20, what is it?

A Yeah, so that's a great question. So, you know, we think about it both in terms of logo churn, and we think about it in terms of revenue churn. And realistically, because we have a spread of customers that might be paying us 10,000 dollars a year, all the way up to a million dollars plus, what's really more important to us is revenue churn. And so, what we're trying to do there is make sure that we can retain as much revenue as possible from here. And so, look, we're, we're always targeting something in sort of the exemplary SaaS range of about, you know, eight to 12% something in that sort of Sort of range is a really great place to be. By the way, we haven't always been.

AI assessment note: “what's really more important to us is revenue churn.”

Q All right. Very good. Uh, let's jump in here, Jack, and finish up with the famous five. Number one, what's your favorite business book?

A Famous business book. I love the book that's called, um, thinking fast and slow that helps, uh, that, that identifies, um, and I, and I'm, you know, and I probably should have prepared for this part of the conversation because I know there's something that you do. Thinking fast and slow is a terrific book that talks about, um, you know, our brains that are thinking brains and our brains that are leftover sort of lizard brains and the, and the kinds of parts of where we're, where we are evaluating, uh, opportunities and circumstances and who we should elect and who we should marry and all those kinds of things. And the fact that sometimes we make decisions based on very thoughtful, careful analysis, but an awful lot of times we're making decisions based on sort of that snap judgment of what happens, um, you know, as we're, as we're making, uh, you know, quick decisions on things. And sometimes those don't always happen. It's a terrific book. It's honestly one of the most profound books I've ever read.

AI assessment note: “I love the book that's called, um, thinking fast and slow”

Q What are those actual metrics? Is it number of languages, number of countries, number of seats? What are the utility metrics you price on?

A Yeah. So there's two products we have. And so to answer that question, there's really two products that we have. One is a product that we call our translation management system. It is a workflow management system to help companies to translate content more efficiently. The metric there is how much content are you pushing through the system? So if you're putting a little bit of content through a couple of different languages, very small. If you're putting hundreds of millions of words of translation across hundreds of languages, that's on the big end. So that's one product. The other product we have Acts like a content delivery network. In other words, what we're doing is, is when somebody has a website and they say, I've got a website in English, and we figured out that it's going to take us, I don't know, 12 to 18 months to be able to recode the application to be able to support multiple languages. It's a massive project. Instead of that, what they do is they call us up, and we use a product we call our global delivery network. And essentially, the company, all they have to do is, let's say their site was, you know, mysite.com. They can create fr.mysite.com for French or d e for my site.com domain management, sub domain management. And then what we will do is we will deliver then as traffic as, as a request is made by an end user to the site on the French version. We will take…

AI assessment note: “The metric there is how much content are you pushing through the system?”