Liz Elting and Phil Shawe met in an international finance class at New York University’s Stern School of Business in 1991. She had majored in modern languages in college and had spent several years working in the translation industry. He had always planned on becoming a banker after gaining his MBA, but was beginning to have second thoughts.
They became friends and began talking about starting a translation company together. “I always loved languages and I wanted to find a way to use them in business,” says Ms Elting, who is fluent in French and Spanish. “And Phil was a risk taker who liked the idea of being his own boss.
Mr Shawe, who jokingly claims limited linguistic talents, speaking only “English on a good day”, says: “We found there was an opportunity to build a translation company, focused on service, that could take on high-level, complex projects and deliver them quickly.”
They set up shop in a dorm room at NYU. The room, according to Ms Elting, was “ridiculously small” and contained a rental computer, a fax machine and a hand-me-down desk, which also served as the dining table. They subsisted on a steady diet of noodles. “Seven days a week, we worked from the time we woke up to the time we went to sleep,” Mr Shawe recalls.
Their first order of business was making cold calls to prospective clients and building up a network of linguists. “We spent the first six months trying to generate business,” Ms Elting says. “We made thousands of phone calls and sent out thousands of letters. For every 1,000 calls, we’d get one or two projects.”
Ms Elting says that, especially in those early days as an unknown company trying to drum up business with potential clients, the “Stern credential was very helpful”. “Having our MBAs made us more credible,” she says.
Eventually all the hard work and long hours paid off. Today Ms Elting and Mr Shawe are at the helm of TransPerfect, one of the biggest language services companies in the US, with 650 employees and offices in 43 cities including Singapore, Sydney and Amsterdam. Last year the company grossed revenues of $112.8m (£57m).
The bulk of TransPerfect’s business comes from translation services for law firms, life sciences companies, financial groups and marketing companies. The company also conducts court reporting, over-the-phone interpreting, technical writing and transcription services.
Business plan
“I like the fact that every project is different and related to people’s need to communicate,” says Ms Elting, who is president and chief executive of TransPerfect. “I love the idea of solving clients’ problems.”
Of course, “solving clients’ problems” has not always been easy. At the outset, the pair decided against pursuing outside investment. They each had several thousand dollars in the bank and Ms Elting says that because they wanted to get their business running as soon as possible, they felt there was not time to “write a long business plan and try to raise money”.
“I thought: ‘Why wait?’ There’s no time like the present,” she says. “We figured we’d spend as little as possible, operate with a sense of urgency and not invest until we were profitable.”
Mr Shawe adds that since they were “used to living like students” the idea of temporarily foregoing a solid income was not so daunting. “We weren’t accustomed to having a certain lifestyle and we had no family commitments,” he says, adding that they each took a salary of $9,000 for the first three years and “placed every dime [they] made back into the organisation”.
Without seed money, there was added pressure to take on every assignment that came their way. “In order to get business, we needed to agree to do projects that were very challenging,” Ms Elting says.
The first of those big, challenging projects came from a US-based mining and exploration group. The company commissioned them to translate a technical feasibility study concerning a goldmine in Russia, and gave them 30 days to complete the project.
Intense month
“There were fewer than 20 people in the world who had enough knowledge of geology to understand the document, and could translate it from Russian,” Mr Shawe says. “So we flew them all in, put them up in hotels, and they worked out of our dorm room.”
It was an intense month, but they got the job done. And their success enabled Ms Elting and Mr Shawe to move out of their dorm and into a one-room office on Park Avenue South. Soon after, TransPerfect hired its first official employee.
But those long days and nights continued. With a mix of joyful nostalgia and relief that it is over, Ms Elting remembers spending one Christmas Eve and Christmas Day cooped up in the emerging markets trading floor of Goldman Sachs, the investment bank, working with linguists on translating a lengthy document about the privatisation of a Latin American telecommunications company.
“Everyone else was spending time at home with their families,” she says. “We thought: Is this worth it? Should we keep doing this? But Goldman became one of our big clients.”
TransPerfect is today the largest privately held translation company in the US, and the third-biggest company in the industry. The company has a network of more than 4,000 certified language specialists and project management staff.
Mr Shawe says he is happy about where the business is now, and the fact that he and Ms Elting now “work ‘on’ the business, not ‘in’ the business”. “When the company was younger, Liz and I used to captain all the sales events,” he says. “But we’ve gotten to the point where we have a layer of management underneath us that can do that. Our management team has come into its own and that has allowed Liz and me to focus on growing the business.”
Both Mr Shawe and Ms Elting took entrepreneurship classes during business school, and say they owe some of their success to Stern. “Stern, besides being the place that Liz and I met, gave me a good base level knowledge of finance, accounting, business law,” Mr Shawe says. “It truly helped us incubate the business.”
The co-founders say that the company has recently stepped up its acquisitions and is likely to make more this year. Ms Elting does not rule out the possibility of one day taking the company public, but she says that, at the moment, she and Mr Shawe are happy where they are. “For now, we like being the two bosses,” she says.
Read more...
