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How to translate disruptive innovation to the world

Aqrate is the Bologna-based company that embodies the essence of the word ‘disruptive’. It is the only company in the world that is progressively changing a market niche, that of translations, upsetting the normal equilibrium by introducing process innovation and developing highly sophisticated algorithms. 

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When can one define a company as disruptive? According to Clayton Christensen who coined the term in 1997, it is those small companies that, with little means, enter a certain market and subvert the established order. This is not the only characteristic. Disruptive companies target a neglected segment and have a business strategy that focuses more on the business model than on the product alone. This means persevering and overcoming temptations to monetise immediately. Well, there is an innovative company in Bologna that meets all these requirements: Aqrate.

The italian company, founded in 2015, aims to revolutionise a very closed market that has been functioning in the same way for decades, that of translations.

Two schoolmates conquering the world

Marco Baglioni and Michele Fariselli, the founders of Aqrate, are two long-standing friends since their school days. Their lives separate after high school. Michele starts some successful entrepreneurial activities including setting up a software house for personnel management while Marco starts working for one of the largest translation agencies. “I soon realised that the translation market was not at all transparent and had asymmetries,” Baglioni explains. When you need a translation, you send the file to be translated to the agency, which counts the words using dedicated software and submits a quote that is accepted or not. “The client has no way of checking how many words need to be translated.” It is as if the client were a blind person assisted by his trusted escort (the translation agency). Aqrate, on the other hand, is the opportunity to regain sight. Who would give up this opportunity? “We don’t replace the agency, we don’t do the translations, we simply take over the part of the analysis that until now was carried out by the agency and do it more efficiently, allowing much greater recoveries. And in doing so, the customer can continue to use their own trusted translators.” 

How Aqrate innovation works

The Bologna-based company has been working for years on the development of algorithms that allow for more recovery from the translated history, reducing even more the part to be translated. “When I worked in the translation agency, I realised how much money the client could save but was unaware of the problem. That’s how we decided to create Aqrate, a web-based platform that gives the client back control of their translated history and performs efficient calculations”.

Let’s take an example. If I have to translate the phrase ‘turnover has grown in the last 2 years’ or ‘turnover has grown in the last two years’, the software generally used by translation agencies identifies these two phrases as similar but not equal, generating a higher cost.  “You will say: ‘details’. Well, that’s not really the case because large companies that have to handle high translation volumes can save even millions of euros with these details, as has happened to some of our customers. All this is possible simply by giving the client control over what he translates and not by blindly relying on the agency.”

How much is the world translation market worth

The world translation market is worth around $60 billion a year and is largely managed by a few agencies operating globally. In practice it is a kind of oligopoly, like the seven sisters for oil, which dictates the rules, develops the algorithms and tells the client how much he has to pay. “Aqrate wants to make the market more transparent and competitive by introducing more quality controls. If I go to get petrol but the distributor’s meter is broken and I am presented with a bill for 30 euros, even if I am a friend of my petrol station attendant, I think it is fair to have the right to know how much petrol has gone into the tank. That’s how the translation world, before Aqrate, worked’.

A disruptive business model

Michele Fariselli, who has worked in the business application world for years, knows that market well. “All software houses charge a licence for use and maintenance, with Aqrate we went against the tide”. Over the years, Marco and Michele have observed how much money can be saved by counting more efficiently. “Basically, Aqrate costs the company nothing because the business model is based on success fees. If a company used to spend 100,000 euro a year before Aqrate, with Aqrate it can reduce that to 40,000 euro and even more in later years. Those 60,000 euro savings are divided between us and the customer” says Fariselli.

When being innovative means going through difficulties

As was to be expected, when an innovation seeks to subvert established equilibriums, it finds resistance, as happened at Aqrate.

While some translation agencies see the italian company as a threat because they see their turnover being reduced, others have seized the opportunity.

Our mission is to make the world of translations more transparent.

Michele Fariselli

“By giving control back to the customer, we have eliminated barriers to entry because until now, it has been the practice for a company to work with the same translation agency that holds all the translated history. Thanks to Aqrate this is no longer the case and many agencies have been able to work with clients they had never worked with before”Baglioni says. Aqrate has a narrow market segment. It targets those large companies that operate in international contexts such as engineering, mechanical engineering, automotive, pharmaceuticals and others. “We feel like David against Goliath. It’s often an uphill road, but when an enlightened management understands the advantages of Aqrate, they never go back”. Among the difficulties that Marco and Michele recall is an episode that made them reflect. “We were talking to the management of a large company to whom we were showing test results that simulated savings of over 65%. The head of purchasing stood up and told us that such savings would put a strain on the historical relationship with their translation supplier. We asked ourselves: if he had had to pay out of his own pocket, would he have had the same problem?”. 

Perseverance is one of the words quoted by Christensen. As the translation business is a very narrow niche, the Bologna-based company was never able to obtain funding rounds in order to grow rapidly. “Over the years we have had slow but continuous growth, the difficult thing is to make ourselves known and above all to make big companies understand that they have a problem and that they can save hundreds of thousands of euros.” In 2021 Aqrate also landed in the US with some clients including the non-profit Lean In founded by Sheryl Sandberg former COO of Meta.

The greatest satisfaction came in 2022 when Leonardo Global Solutions, the procurement company of the Leonardo Group (an Italian defence and aerospace company) adopted Aqrate for translation management.  “The Aqrate solution has integrated well into our processes to cope with translation requirements in very diverse contexts. Through constructive cooperation with the supply chain already involved in these services, it was possible to see results in terms of both quality and economic efficiency right from the start. A concrete example of value-added Open Innovation and collaboration between industry and SMEs, on which to reflect as a model for other experiences”  says Michelangelo Fani, Head of the Professional and Digital Services in Leonardo Global Solutions.

Like all disruptive companies, Aqrate also decided to resist the temptation to sell its algorithm to translation agencies for easy monetisation. Nor are Marco and Michele frightened by the advent of machine translation and artificial intelligence in general as it could further the development of their optimisation algorithms.

“Our mission is to make the world of translations more transparent. We know it won’t be easy, but perseverance has proved us right and winning the trust of companies like Leonardo, Sacmi, Rainbird, is no small feat. We would like to expand this family of enlightened companies,” conclude the two founders of Aqrate.

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Written By

Federico Bastiani is a freelance journalist, TEDx speaker, innovator, communication specialist. He writes about innovation for different media and he is also an innovator himself. In 2013 he created Social Street, a social innovation which spread all around the world and featured in the New York Times.

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