How Taia Translations Reached €100K Monthly Revenue and 3,000 Customers in 2021 (Interview with Co-Founder Marko Hozjan)

Introduction and Background

Nathan Latka

00:00Hey, folks. My guest today is Marko Hozjan. He's building a tool called Taia, a tool that helps the translation via the combination of AI and human translators. He's a manager and passionate about leadership and business operations. He's been a serial entrepreneur for many years with many companies founded and exited. He's also an experienced sailor. He's the book And he also bookworm in the topics of leadership and business, and a person with very liberal views. Marko, you

00:24ready to take us to the top?

Marko Hozjan

00:26>> Yeah, sure. Firstly, yeah.

Nathan Latka

00:28How did you come up with the idea, Taia? And if people want to follow along, it's taia.io.

Origin Story: From Language School to Translation Tech

Marko Hozjan

00:34>> Exactly. So actually the idea came from a language school that me and my partner Matthija had before this business. We started a language school and it grew and grew and we soon realized that we cannot scale it. At that time, first demands for translations came within the language school, we started first, we call it a traditional translation agency or within the field they call it the LSP language service provider and we quickly saw that we could

01:05>> only compete with price and that the whole market is competing with price and that the market is really outdated. With our tech knowledge and with our business knowledge, we actually combined this together and

Nathan Latka

01:18When did you launch Taia, Marko?

Launch Timeline and Early Revenue

Marko Hozjan

01:21>> In 2017, and then Taia was then born in 2018.

Nathan Latka

01:25Got it. So 2017, the agency launched. And how much revenue did the agency do in 2017?

Marko Hozjan

01:30>> Almost nothing, like a couple of 10,000.

Nathan Latka

01:36Call it $30,000 or something. You then launched the technology in 2017. Walk me through what are customers paying you today on average per month to do these translations?

Pricing Model and Customer Range

Marko Hozjan

01:47>> Oh, it really depends. Translations as a product is very, very complex and very, very different. So we have customers that order one time for €100 and we have customers that order a couple of €10,000 per month. So it's very different. Our focus of course is B2B, so medium to big size companies that need a lot of translations, but anyone can come to our platform and order any kind of translation.

Nathan Latka

02:13Okay, what do you price off of? Is it number of words?

Marko Hozjan

02:17>> Exactly, so we have two products. So the whole platform actually is a one stop shop for any translation need that you have from machine translation up to advanced human translations. But within the platform we have our own SaaS tool which is subscription based so everything else is word, proper word based but the SaaS part is subscription based, this is catapult and the main function of it is for you to translate on your own.

Customer Count and Year-Over-Year Growth

Nathan Latka

02:45I see. How many customers do you have paying either for Catapult or your machine learning service? 3,000. Oh, wow, it is a ton of customers. Where were you exactly a year ago? How many customers?

Marko Hozjan

02:59>> Less than a thousand.

Nathan Latka

03:01Okay, so there's been a lot of growth. Did you do that organically or have you raised capital?

Fundraising History and Total Capital Raised

Marko Hozjan

03:05>> We have raised capital. When

Nathan Latka

03:09did you raise?

Marko Hozjan

03:10>> So last year, October 1,200,000 and before that 200 case altogether 1.2 plus 2 100, 1.4 altogether. So yeah, this is for European standards actually a lot.

Nathan Latka

03:25Yeah, when you raised 1,200,000 last year, what valuation did you raise that at?

Marko Hozjan

03:29>> 6,000,000.

Nathan Latka

03:30Was that a good valuation looking back?

Marko Hozjan

03:33>> Yes.

Nathan Latka

03:34Was that pre money or post money?

Marko Hozjan

03:37>> Pre money.

Nathan Latka

03:38So 7.2 post, interesting. And what was the company doing in terms of revenue when you did the round?

2020 Revenue and 2021 Monthly Run Rate

Marko Hozjan

03:46>> In 02/20, 300,000. And our plan for this year is 1.5 mil.

Nathan Latka

03:52What did you do last month?

Marko Hozjan

03:54>> Good question, around 100,000.

Team Size and Engineering Headcount

Nathan Latka

03:58Wow, okay, interesting. And how many people on the team today full time?

Marko Hozjan

04:04>> 30.

Nathan Latka

04:05How many engineers?

Marko Hozjan

04:06>> Okay, let's say 12 at least. So because engineers, mostly mean developers and similar or with machine people that work on machine translation, but we have engineers in, we have linguists, we have marketing gurus and so on. So I always call them engineers as well.

Cold Outreach as Growth Driver

Nathan Latka

04:27How did you grow from, on average $25,000 per month last year to now $100,000 per month this year? Where's all that growth coming from?

Marko Hozjan

04:35>> Actually the growth was mostly due to old school cold call sales. But now we want to really scale it up by transforming old school funnel into an online marketing lead generation marketing automation and so on. So to really automize the sales and to move it towards the marketing funnel, not so much the sales funnel. Of course, the big fish, so the bigger customers will still have their own PDMs, which means that a PDM takes over because

05:10>> they are not a one time customer. Just usually need to sign a contract. You have a procurement process and so on.

Industry Targeting and ZoomInfo Strategy

Nathan Latka

05:18When you say cold calling customers, walk me through that process, how do you get the list of phone numbers of the right people to call?

Marko Hozjan

05:25>> Sure, so firstly we chose the industries, the industries we chose based on what we do best and which some industries are more interesting when it comes to translations than others. Then you have many types of software. Now lately we use ZoomInfo before we used many others. So that's it. Otherwise LinkedIn as well, but these the softwares where you could get these kind of data we have.

Nathan Latka

05:53What were the top two industries you picked?

Marko Hozjan

05:59>> One is we call it business services where you have finance, banking, insurance and similar, so business services and the other is manufacturing. These were the first two that we picked because they had, they were the best fit because we were focused at a time for document translations, but now we're converting more and more into rising service categories, which are e commerce, software and gaming.

Nathan Latka

06:25So what job titles at the insurance company will you go after the phone numbers of in ZoomInfo?

Marko Hozjan

06:31>> It really depends how big of an insurance company. If it's big, they for sure have a localization manager. Otherwise, heads of departments, for example, mostly marketing, they are mostly responsible for texts and similar stuff, otherwise heads of different departments. For example, it's really, really interesting how different it is from company to company when it comes decision making for translations. In most of the companies that they don't have decentralized with localization management, each department orders translations on

07:09>> their own.

Nathan Latka

07:10Got it. And how much do you pay ZoomInfo each month to get access to all the phone numbers?

Marko Hozjan

07:16>> We pay yearly about 10 ks.

Nathan Latka

07:19Is it worth it?

Marko Hozjan

07:22>> Oh, difficult question because for now this is the third software that we use and we're not satisfied with any of it really.

Nathan Latka

07:30Who'd you move from?

Marko Hozjan

07:32>> Apollo.

Nathan Latka

07:33And who was before that?

Marko Hozjan

07:35>> Oh, I can't remember the name. It was some UK software. I can't remember the name.

Nathan Latka

07:40And why is ZoomInfo not why are you not happy with it? What are they missing?

Marko Hozjan

07:44>> Just the quality of data. So for example, you get a phone number you call and they say the person is not working there anymore or you get an email and it should be accurate, but it's not. Just the quality of data, the most important thing that they should have.

Nathan Latka

08:00Yeah, that makes a lot of sense. Now, obviously you're at 3,000 customers now doing about a $1,200,000 run rate. Are you profitable or burning?

Burn Rate, Cash in Bank, and New Raise Plans

Marko Hozjan

08:07>> Burning still. Profitable but we're burning. So we have enough for until the beginning of twenty twenty two. So that's why in autumn, actually now we are starting our new

08:22>> round to close our next round in the first quarter in twenty twenty two.

Nathan Latka

08:29How much in the bank do you have right now?

Marko Hozjan

08:34>> 0.5 a mill.

Nathan Latka

08:35And how much are you wanting to raise?

Marko Hozjan

08:38>> This is not clear yet. It depends on our results this next six months, but around 3,000,000.

Nathan Latka

08:47And what valuation are you going to try and raise at?

Marko Hozjan

08:50>> Again, not clear. It depends on the better the results next six months, the better the evaluation.

Nathan Latka

08:59What valuation would make you happy?

Marko Hozjan

09:02>> A chicken and egg.

09:07>> Really difficult. For example, at least times two what we did, but now you caught me a bit off guard, I would say in You these

Nathan Latka

09:17mean you raised at a $6,000,000 valuation, you want to do at least two X that on your next Yeah. Now, you the only founder? Do you want a 100%?

Marko Hozjan

09:25>> No, we are two founders. Me and my co founder, Mattia, we have, have.

Nathan Latka

09:29Okay, did you guys split it fifty-fifty at the beginning?

Marko Hozjan

09:32>> Yes.

Nathan Latka

09:33And then the new investor took what, about 12%, 13% of the business?

Marko Hozjan

09:42>> 20% of the business. So with the 6 mil, 20% of the business.

Nathan Latka

09:47Got it. The investor currently owns 20%, you guys each own 40%.

Marko Hozjan

09:51>> Interesting.

Product Roadmap: Machine Translation and Integrations

Nathan Latka

09:53Okay, what's next on a product roadmap? What are you guys going to build next?

Marko Hozjan

09:57>> So we're mostly focused on the SaaS part. So this LSP part is built. So it's actually a very much automated platform where you can order any type of translation. But this part is not so scalable as the SAS part, but it is very necessary for the SAS part to have more fuel. So now we have the Catapult, a tool where anyone can translate by themselves using the power of machine translation, keeping the formatting intact and so

10:26>> on.

10:28>> Next, we're going to continue with building MT products. So we see the future in machine translation. Machine translation is going to go everywhere, but not as a, we want to

10:41>> offer it as a professional service, which means, for example, if you use Google translate today, you have to copy paste formatting is not intact. If you need additional services you don't get and so on. So machine translation for advanced users, and then we have tons of opportunities within the integration part because this problem is not solved. There is a big pain. There is no standard when it comes to translating software web pages and so on. And

11:11>> we want to become the standard. So which means we want to be one platform that solves the translation problem.

Churn and Usage-Based vs SaaS Metrics

Nathan Latka

11:18How do you measure churn?

Marko Hozjan

11:22>> What is it or how do we measure it?

Nathan Latka

11:25How do you measure it? I

Marko Hozjan

11:29>> don't know. I should ask my CMO. I'm not sure.

Nathan Latka

11:33Okay, let me ask you a different one. What is CHRM today?

Marko Hozjan

11:39>> Good question again. I'm not sure what our churn is.

Nathan Latka

11:45I ask for purpose because your model, it's hard to measure because you have a usage based model and then a SaaS based model. So people love the product and they keep increasing usage. That sort of looks like net revenue expansion. If they decrease usage, it looks like contraction. That's very different than a SaaS model of paying a flat fee per month to do something, right?

Marko Hozjan

12:03>> Yeah, later we're going to have to do, we're going to do matrix for both separately because they are, even though they're a part of one platform and then you just choose, you want to outsource or you want to do it yourself because this is how we do it now. When we have a customer, we ask them if the customer is a company, do you outsource or do you have your own team? Because the trend is that

Paid Marketing Spend and New Customer Adds

Marko Hozjan

12:27>> the companies translate more and more by themselves. The reasons are technical knowledge, SEO optimization, security, and so on. With machine translation, actually, you don't need such good translators anymore because you just post edit something that's good.

Nathan Latka

12:45Last question is how much did you spend on paid marketing last month?

Marko Hozjan

12:51>> Not so much because we're yeah, okay, let me give you a number around 30 ks. This

13:03>> number is increasing month by month.

Nathan Latka

13:06And how many new customers did you add last month?

Marko Hozjan

13:15>> Now this is another tricky one because you asked customers, we gained approximately 300 users, but it's not necessarily that each user becomes a customer because some users just come on the platform, this we'll see. So I would say that about 80% of users definitely become customers.

CAC, ARPU, and Payback Period

Nathan Latka

13:40Call it 200 new customers on 30,000 spend, you spent about roughly $150 to get a new customer.

Marko Hozjan

13:48>> Yeah, our costs when it comes to sales acquisition are still high.

Nathan Latka

13:53Why do you say it's high? Your ARPU is about $40, $50 dollars a month per customer on average, you're paying $150 so you get paid back in three or four months.

Marko Hozjan

14:04>> I don't know, when I read the comparisons with other or with similar with our

14:13>> competitors or with similar companies, these numbers were usually lower.

Nathan Latka

14:18Interesting. Well, it's the right place to focus. Let's wrap up here, Marko, with the famous five. Number one, what's your favorite book?

Marko Hozjan

14:25>> Never Split the Difference.

Nathan Latka

14:27Number two, is there a CEO you're following or studying?

Marko Hozjan

14:33>> No.

Nathan Latka

14:34Number three, what's your favorite online tool for building Taia?

Marko Hozjan

14:38>> Online tool for building Taia.

Nathan Latka

14:40Yep, it's a tool that you like.

Marko Hozjan

14:47>> Just give me a second because there are many.

14:55>> Oh, a good one

15:00>> for building Taia.

Nathan Latka

15:02Just think about what you used this morning.

Marko Hozjan

15:05>> I used Revolut online banking, but it's not for building Taia. We use TransferWise as a bank instead of a bank account, for example.

Nathan Latka

15:15Okay, there we go. Number four, how many hours of sleep do get every night?

Marko Hozjan

15:20>> Last night, five hours. Otherwise, about seven.

Nathan Latka

15:24And what's your situation? Married, single, kids?

Marko Hozjan

15:27>> Yeah, like not married, but in a relationship with one boy.

Nathan Latka

15:33And how old are you?

Marko Hozjan

15:34>> With one little boy, yeah. I'm 38.

Nathan Latka

15:38Got it, so sorry, one kid and you're 38?

Marko Hozjan

15:41>> Yes, and I'm going to stay with one kid. Is our decision, one is enough.

Nathan Latka

15:48Very cool, last question, something you wish you knew when you were 20.

Marko Hozjan

15:53>> To have a mentor in which books to read.

Nathan Latka

15:57Guys, there I have it, taia.io, they help you translate your stuff, your localizing your website, things like that. They pay they have a model where you pay per sort of word translation and also then a catapult model, which is basically SaaS service. They have over 3,000 customers doing a $100k per month in revenue today, up from $25k a month just a year ago. So nice growth, they've raised 1,200,000 on a $6,000,000 valuation last year.

16:20Looking at raising at the end of this year, early next year, 3,000,000 on maybe like a 12 or something higher, we'll see what happens over the next twelve months. Marko and his co founder split the equity fifty-fifty at the beginning. So healthy capital management as they look to take over the space. Marko, thanks for taking us to the top.

Marko Hozjan

16:35>> Thank you, Nathan.

Nathan Latka

16:37One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it. And the buyers try and make a deal live. It is fun to watch every Thursday one

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