Five years ago, Michael Kriz, a former expatriate magazine writer turned businessman, borrowed $50,000 from a friend to launch a global business-to-business translation company.
“That was essentially the starting capital for the business,” the 40-year-old president of Acclaro Inc. said recently at his company”™s glass-enclosed loft headquarters overlooking the Hudson River in downtown Irvington. The company”™s Latin name translates as “to make clear.”
Clearly Kriz”™s business model ”“ that of a boutique consulting firm offering custom-built translation and technical services to large companies localizing their products and information to compete in global markets ”“ has worked. Since that initial $50,000 investment, annual revenue at Acclaro now is in the $10 million range, Kriz said. With minimal advertising, the company has attracted and retained such major clients as Oracle Corp., Sony, Nokia, Yahoo! Inc. and Germany-based SAP AG, the world”™s largest business software company.
Its revenue growth rate recently earned the young and expanding company a fourth-place ranking in the 2007 New York Technology Fast 50 list presented by Deloitte & Touche USA. Acclaro ranked highest of four Westchester County companies on the list, which ranks technology, media, telecommunications and life sciences companies headquartered in the state by percentage revenue growth over five years.
Leading the list was Sirius Satellite Radio Inc. in Manhattan. Seven of the top 10 companies, including Acclaro, are private. The top 10 companies had an average revenue growth rate of 13,107 percent over five years, compared with a 6,581 percent growth rate for the top 10 in the 2006 Fast 50 rankings.
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American in Paris
Kriz was a recent college graduate living and working in Paris, France, when he was serendipitously introduced to the field of freelance translation. He and an American friend turned a weekly magazine for expatriates that they had started into a translation services company that grew to provide translations in 12 languages.
“I was 21 years old and I didn”™t know the first thing about business,” he recalled. Localization, the process of adapting products and information for multilingual and culturally diverse markets in which Acclaro specializes, was as new a business concept then as Kriz was new to business.
“It”™s one part linguistics, one part cultural, one part technical production,” he said of the localization process. “The more subtle things are cultural references that are different.” For example, “The word for computer is different in Latin American Spanish culture than it is in Spain,” he noted.
Returning to the U.S. in the early 1990s, Kriz held management posts in technology and marketing companies riding the wave of globalization and its market companion, localization. In 2002, after a year at GlobalWorks, a multicultural marketing company in Manhattan, he decided to start a business that would fill a middle market that had been “sucked up” as competing localization companies consolidated, he said.
“There was a midsized boutique that was kind of customer-focused that was missing,” he said. “We wanted to fill that void.”
Nationwide, “I would say there are probably less than 50 companies like us. The top 25 are the ones we bump into on a regular basis,” said Kriz.
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Talented team
“Basically, it was like putting the band together,” said Kriz, who contacted former colleagues, such as Ora Solomon, Acclaro”™s vice president for operations, to join him in his startup venture. “It was good timing in that we didn”™t have to wait around too long for revenue.”
Today, the company has a little more than 50 full-time employees and 25 temporary contract employees at its offices in Irvington, Maynard, Mass., and San Francisco. It draws from an international pool of about 1,000 closely screened independent contractors to translate materials in the areas of technology, finance, life sciences, global health and marketing into more than 30 languages.
“It would be very hard to staff that internally,” Kriz said of the translation services, which account for about 40 percent of company revenue, while engineering, multilingual keyware testing and other technical and management services for companies make up the balance. Translators live in their native market “so they are current with all the language and cultural issues,” Kriz said. “The trick is hiring someone who is very familiar with English, too.”
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Growth, challenges
“There are different growth drivers in our industry,” Kriz said. “The biggest one is the proliferation of content on the Web.” For company Web sites, “That information needs to be translated. Companies that are serious about competing in that market have to provide it in that language.
“By far, the fastest-growing service that we”™re offering is related to multilingual search engine marketing.”
“One of the things we do differently is co-locate with customers” at their offices in the course of a project, Kriz said. “Going on-site is such a benefit to the relationship with the client. It”™s such an enabler of communication in an age when most people work with e-mail.
“I think we have the highest client retention in the industry because we simply haven”™t lost a client,” he said.
Despite its global reach, Acclaro thus far has targeted as clients only companies based in the U.S.
“We have a growing client list in New York area,” Kriz said. “We feel like this market was underserved by good companies like us. Surprisingly, the New York area does not have a lot of business-to-business translation companies like us. The demand is strong. There are large global brands and Fortune 500 companies here.”
“The biggest restraint on our growth is being able to hire people,” with the required skills set and experience, Kriz said. “We get the rug pulled out from under us every year. We”™ve hired people and we can”™t get visas. Because of the quota, we can”™t bring in the talent. It”™s a real problem. It”™s forcing us to locate our people abroad.”
Acclaro is opening its first foreign offices in Paris and in Buenos Aires, Argentina. That is both a response to visa restrictions and the cost-minded globalization trend. “It”™s competitive enough that we have to be supplying cost-effective resources for our clients as well,” Kriz said.
Then again, “Our company was global from the get-go in that we have a team that”™s spread out across 35 or 40 countries.”
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