# 180 Next Generation Localization Software with Phrase CEO Georg Ell

Introduction and Background

In this section, Georg Ell introduces himself as the CEO of Phrase, a leading localization language tech platform. He discusses the global distribution of his team and the various office locations.

Georg's Background and Office Locations

• Georg mentions having colleagues in 28 countries with substantial offices in Prague and Hamburg.

• Phrase has an office in Pittsburgh led by Alon Lavie, expanding their presence.

• Georg shares his career journey from Microsoft to Tesla, highlighting experiences at Yammer and a UK education technology business.

Transition to Phrase and Industry Fascination

Georg explains how he transitioned to lead Phrase after selling an education company. He delves into his fascination with the language industry.

Transition to Phrase and Industry Fascination

• Discovering Memsource sparked Georg's interest in the language industry, leading him to appreciate its complexity.

• Falling in love with the culture at Phrase, Georg expresses his passion for the language industry due to its multilayered nature.

Unique Aspects of Language Industry

The discussion revolves around the unique characteristics of the language industry that foster respect and curiosity among professionals.

Unique Aspects of Language Industry

• The industry attracts individuals with a love for learning, teaching, and languages other than their first language.

• Despite competition, there is a healthy and respectful environment within the language industry.

Memorable Episodes in Language Industry

Reflecting on memorable episodes within the past 18 months in the language industry that highlight its distinct environment.

Memorable Episodes in Language Industry

Background and Early Impressions

In this section, the speaker reflects on their initial experiences in a new role, highlighting key moments from the past 18 months.

Reflecting on Early Experiences

• The speaker recalls attending LocWorld Berlin shortly after starting their role at Memsource, noting the warm reception and recognition of the company's brand.

• They express how joining a well-loved company like Memsource boosted their confidence and affirmed their decision to be part of the team.

• Initially facing a steep learning curve, the speaker gradually gained understanding through customer interactions and team support, leading to increased confidence in their vision for the company.

Challenges and Successes in Rebranding

This segment delves into the strategic decision to unify Memsource under the Phrase brand, exploring motivations and challenges encountered during this process.

Unifying Memsource Under Phrase Brand

• The decision to transition from Memsource to Phrase was initiated by David Čaněk, showcasing his humility and commitment to a unified identity.

• The move aimed at creating a cohesive business entity without internal divisions while respecting both companies' histories and successes.

• Choosing "Phrase" as the unified name was driven by its simplicity, relevance to language, and strong branding potential. External agency collaboration facilitated effective branding adjustments.

Implementation of Unified Branding Strategy

This part focuses on executing the rebranding strategy internally within Memsource, emphasizing unity and clarity in communication.

Executing Rebranding Internally

• By ensuring seamless integration between teams post-rebranding, efforts were made to eliminate internal divisions within the company structure.

Phrase Rebranding Strategy

In this section, the speaker discusses the rebranding strategy of Phrase and how they transitioned internally before announcing it publicly.

Internal Rebranding Process

• The company changed all internal software to reflect the new branding without revealing it externally.

• They sponsored LocWorld and repeatedly mentioned the new brand to cement it in people's memories.

Product Offerings: Translate and NextMT

This part focuses on the product lineup of Phrase, specifically Translate and NextMT, discussing their functionalities and strategic implications.

Product Lineup Details

• Phrase offers products like TMS, Strings, Translate, Orchestrator, Analytics, and NextMT.

• Translate serves as a machine translation aggregator with an AI auto-select feature for optimal engine selection based on content analysis.

Translate Services by Phrase

Here, the speaker delves into the details of Phrase Translate services and its utilization of AI and machine learning technologies.

Machine Translation Services

• Phrase Translate aggregates about 30 third-party engines with an AI auto-select capability for content-specific engine application.

• Customers can choose from various engines or opt for Phrase's proprietary engine (NextMT) which leverages translation memory for enhanced quality.

Future Roadmap: Localization Software Evolution

The discussion shifts towards future plans at Phrase regarding localization software evolution through AI integration.

Future Plans & Announcements

• Phrase aims to redefine localization software in upcoming announcements by leveraging AI at its core.

• Quarterly announcements are scheduled with a focus on defining the next generation of localization software in September.

Phrase Business Model: Software Focus & Neutrality

This segment highlights key strategic aspects of Phrase's business model emphasizing its software-centric approach and neutrality in providing solutions.

Business Model Insights

• Emphasis on being a software company rather than a service provider or marketplace to maintain clarity with customers.

• Neutrality is crucial for offering customers control over their translation processes while collaborating with multiple professional services organizations seamlessly.

Discussion on Ideal Customer Profile and Localization Maturity

The conversation delves into the ideal customer profile for localization services, considering factors like localization maturity and complexity.

Ideal Customer Profile

• An ideal customer for localization services should possess a certain level of localization maturity and in-house capacity to manage the process effectively.

• Working with customers at varying levels of maturity is common; effective collaboration often occurs with clients facing complex requirements rather than solely those with high maturity levels.

• Large enterprises sometimes underestimate the complexity of localization, leading them to seek more advanced solutions after initial attempts with simpler options. This transition can be challenging but highlights the importance of addressing complex requirements.

Impact of Pricing Tiers on Customer Segmentation

The discussion focuses on pricing tiers, customer segmentation, and the upcoming changes in pricing strategies.

Pricing Tiers and Customer Segmentation

• The company currently offers lower-priced tiers catering to a significant portion of its customer base, showcasing that even small organizations may require solutions for reasonable complexity in their needs.

• While a substantial number of customers operate within lower tiers, there are also higher-tier customers engaging with enterprise-level pricing structures.

• A comprehensive revamp of pricing strategies is underway, set to launch by the end of September, aiming to align pricing models more closely with evolving customer demands and product offerings.

Evolution Towards Unified Product Suite Pricing Model

The conversation shifts towards discussing product vision, roadmap alignment with pricing strategies, and efforts to streamline product integration through a unified suite model.

Unified Product Suite Pricing Model

• Feedback from customers highlighted challenges in utilizing different products due to separate licensing fees; this prompted a reevaluation towards integrating capabilities seamlessly across the suite without additional licensing barriers.

• Efforts are directed at removing barriers between products within the suite to facilitate easier access for customers across various functionalities without requiring multiple licenses or complex procurement processes.

New Section

In this section, the speaker discusses the flexibility in providing different options to customers based on their volume and capability needs.

Providing Flexible Options

• Customers can choose from different options (A, B, C) based on their volume and capability requirements.

• The approach allows customers to explore a full range of capabilities offered by Phrase.

• Emphasis is placed on enabling custom workflows through an orchestrator that integrates various APIs and webhooks.

New Section

This part delves into breaking down barriers between different capabilities within the product vision of Phrase.

Breaking Down Barriers for Custom Workflows

• Removing pricing and licensing barriers between TMS and Strings capabilities.

• Introducing Orchestrator as a custom workflow engine to access all enabled APIs and webhooks.

• Enabling building custom workflows across all capabilities collectively for a unique offering in terms of workflow breadth.

New Section

The discussion centers around the evolving comprehensive offering of Phrase with a focus on machine translation quality estimation and proprietary MT integration.

Evolving Comprehensive Offering

• Integration of machine translation quality estimation as a significant trend.

• Introduction of Orchestrator in a no-code environment for building workflows.

• Highlighting the importance of proprietary MT for competitiveness within the Translation Management System (TMS) landscape.

New Section

Exploring the concept of generative AI's potential impact on transforming website experiences into dynamic, personalized interactions.

Generative AI Transforming Website Experiences

• Envisioning real-time streaming of websites through generative AI for hyper-personalization.

• Discussing how content could dynamically adjust based on individual interests like sports preferences or recent activities.

• Imagining a future where internet content is continuously updated in real time, leading to vast increases in content volume.

New Section

Addressing the shift in content creation dynamics towards machine-generated high-value content due to increasing volumes necessitating scalable solutions like API-first approaches and advanced workflows.

Shift Towards Machine-Generated High-Value Content

• Inversion of traditional content value pyramid with machine-generated content at the top.

• Importance of scalability and complex workflows in handling massive volumes efficiently.

Investments in Artificial Intelligence

The speaker emphasizes the need for significant investments in artificial intelligence to enhance capabilities and streamline processes efficiently.

Importance of AI Investments

• Big investments required in artificial intelligence to leverage existing capabilities effectively.

• Custom workflows designed to enable dynamic evaluation of machine learning models based on customer constraints like time, budget, and volume.

• Utilization of multiple machine learning models and engines to ensure fit-for-purpose applications for customers.

• Emphasis on AI workflow and scale investments rather than individual providers for quality assessment at every stage.

• Focus on helping customers build personalized solutions through complex workflows and third-party distribution networks.

Hyper-Personalization in Marketing

Discussion on hyper-personalization in marketing campaigns, exemplified by a case study involving a used car dealer's tailored approach.

Hyper-Personalization Case Study

• Example of hyper-personalized marketing campaign for a used car dealer, Carvana, targeting individual customers with tailored messages.

• Implementation involved creating numerous versions specific to each customer using an actor's voice recordings.

• Detailed personalization included factors like customer location, route details, weather conditions, and events along the way for enhanced customer experience.

Real-Time Content Generation Challenges

Addressing the complexities of real-time content generation across multiple languages and the importance of managing model drift and quality control.

Challenges in Real-Time Content Generation

• Complexity increases when generating content across various languages; companies like Phrase play a crucial role in such scenarios.

• Need for continuous monitoring due to model drift where past strategies may not be effective today or tomorrow.

Detailed Discussion on Orchestrator and No-Code Visual Editor

In this section, the speaker discusses the Orchestrator, a no-code visual editor that enables users to create complex workflows using APIs and webhooks within Phrase Strings and Phrase TMS.

Orchestrator Functionality

• The Orchestrator is a no-code visual editor allowing drag-and-drop creation of multistage and branched workflows with any API or webhook. It integrates seamlessly with Phrase Strings and Phrase TMS.

• Users need a technical understanding of the products to input fields for workflow creation but do not require coding skills.

Evolution Towards User-Friendly Interface

• Currently, users need some technical proficiency in Phrase products for effective use. However, future iterations aim to simplify the interface for business users.

• The goal is to empower business users to define workflows without extensive technical knowledge.

Value Proposition of Orchestrator

• Historically, companies relied on APIs for custom functionalities, requiring time-consuming development processes involving multiple team members.

• The Orchestrator offers rapid workflow creation without extensive development cycles, providing flexibility and cost-efficiency.

Enhancements and Customer Adoption of Orchestrator

This segment focuses on the evolution of the Orchestrator product towards user-friendliness, enhanced capabilities, ease of use, customer engagement through workshops, and encouraging customers to explore its potential.

Product Enhancements

• Continuous improvements have removed volume limitations from the initial launch version in February.

• By September, the product becomes fully capable with enhanced usability features like examples and starter packs for customers.

Customer Engagement Strategy

• Workshops are conducted with major customers to delve into maximizing the utility of the Orchestrator.

• Encouraging customers to try out the tool firsthand leads to increased adoption due to its transformative impact on workflow management.

Ease of Use and Support

• Simplifying user experience by making it more intuitive through drag-and-drop functionality aligns with customer preferences for zero-code solutions.

New Section

In this section, the discussion revolves around the potential of leveraging LLMs for end-user deployment, particularly focusing on linguists as end users and the concept of experts-in-the-loop.

Leveraging LLMs for End User Deployment

• The speaker highlights that TMS' are well-positioned to utilize LLMs for end user deployment, with a specific focus on linguists as end users.

Features and Capabilities of LLMs

• The conversation delves into the features and capabilities that could enhance efficiency from a translator or multilingual editor's perspective.

• Possible functionalities discussed include shortening, lengthening, adjusting vocabulary, and other editing capabilities.

• An anecdote is shared about a capability to expand a 2000-word document into a 10,000-word document.

New Section

This segment emphasizes efficiency in linguistic tasks by reducing human review percentages while anticipating an increase in content volume.

Focus on Efficiency

• The primary goal is identified as enhancing efficiency for linguists to maximize impact within limited timeframes.

• Emphasis is placed on minimizing the volume requiring human review through AI quality estimation and dynamic processes.

Anticipated Increase in Content Volume

• Predictions suggest a significant surge in content volumes, necessitating quick error detection and rectification due to potential brand risks associated with machine errors at scale.

• Investments aim to identify critical aspects swiftly and facilitate prompt actions for efficient operations.

New Section

This part discusses the importance of value-added services beyond basic functionalities provided by companies in the language industry.

Beyond Basic Functionalities

• While acknowledging common features like suggestions or text adjustments as essential, the real value lies in integrating these functions into workflows effectively.

• Companies should focus on addressing high-value content efficiently to reduce risks and ensure quality where necessary.

New Section

In this section, the speaker discusses the partnership between Phrase and Lionbridge, emphasizing their role as a technology partner to Lionbridge and the importance of their collaboration.

Partnership with Lionbridge

• Phrase is a technology partner to Lionbridge, providing core tech functionality.

• Lionbridge values their own technology but acknowledges Phrase as a core component in their technology stack.

• The partnership involves technical and commercial aspects, including training for Lionbridge teams to enhance their use of Phrase with customers.

• Working with global and complex partners like Lionbridge pushes Phrase beyond its comfort zone, leading to valuable growth opportunities.

New Section

This part delves into funding landscapes and recent activities related to funding for Phrase, shedding light on the company's financial journey.

Funding Landscape and Recent Activities

• Initiatives requiring capital are welcomed by Phrase, whether from revenue or external sources like funding or investment.

• Details about Phrase's funding history include bootstrapping initially, private equity involvement with Carlisle, and a subsequent debt round.

• The company strategically allocates funds into AI investments among other key areas such as workflow and scale.

New Section

This segment explores the current funding environment in business SaaS applications compared to the hype surrounding AI technologies.

Current Funding Environment

• AI funding at seed stages remains sensible due to reasonable valuations; however, larger rounds witness inflated valuations in the AI sector.

• Venture debt plays a role in providing additional capital for companies like Phrase without imposing unfavorable terms.

New Section

Here, the discussion shifts towards private equity investments within language tech companies and how valuations have evolved over time.

Private Equity Investments

• Private equity has funded many language tech companies; however, valuations have become more realistic compared to previous years' high multiples.