Smartcat CEO Ivan Smolnikov on why we don’t sell “seats” (per-user licenses), and why we believe this is profoundly positive for the industry.
Cognitive biases are a nasty thing. When I attend industry conferences, people often ask me why we don’t sell “seats” (per-user licenses) at Smartcat like other vendors do. Sometimes this is accompanied with worried looks, as if we were trying to hide something. The last straw was this question on Quora, which basically sums up these questions and fears.
In this article, I want to explain why we’re not selling seats, and why this is profoundly positive for the industry.
Not selling licenses and not counting users is a part of our essential philosophy and the motivation behind building Smartcat in the first place.
Our founding team has been in the industry for many years and has built several successful businesses. In the early 2010s, we had a quick-growing LSP and felt constrained by translation technologies that had existed for the last 15 years. In 2012, I met Jean-Luc Saillard, now Smartcat COO, who had been experiencing the same problems in his US-based translation company.
We felt that while other industries had already benefited from cloud-based, easy-to-use, collaborative solutions, translation technologies were stuck in the 1990s, with complex, expensive and mostly desktop-based products dominating the market. We were dreaming of a solution that would allow us to manage projects with dozens of collaborators from different countries — project managers, translators, editors, and so on. A solution that would be intuitive, cloud-based, scalable, and powerful, allowing us to focus on our business and growth.
That is how Smartcat’s key values came to be. And that is why we designed Smartcat for quick and unlimited scalability.
Ok, you could say, a cloud-based, easy-to-use, quick-start, and inexpensive solution sounds good — but why don’t you sell seats still? Because we believe that in today’s translation industry you just cannot count on a software based around the seat model for your key production process without adding unnecessary hassles for your users. Think of it: There are not many industries out there where 90% of the “seat-consuming” users of the main business application are freelancers.
Of course, this is not a strict rule. I saw successful translation companies where everyone was sitting in one office, but a typical LSP employs 10 times more freelancers from all over the world than it does in-house employees. And this quantity is anything but stable, changing from month to month or, if you are growing really fast, from day to day. You never know when a huge project will come, requiring more translators, editors, DTP people, and so on.
And this is the reality we are living in since the 1990s, a reality that was brought by the Internet and globalization and that allowed LSPs to grow faster and companies to enter new global markets more easily.
But, funnily enough, on the technology side, not much has changed ever since. Some progress was made, of course. First there came client-server solutions enabling some collaboration. But only on paper: Running a company with 200+ in-house and 2000+ freelance translators, I never managed to truly benefit from them because of high prices and the inconvenience of creating and running projects with multiple distributed participants. Combined with the hardware infrastructure and the expertise needed, these factors made this technology out of reach for small to medium size language service providers.
Then we got the first cloud-based applications. They were a step forward from client-server tools, but in essence they were replicating the same constraining experience, only in the cloud. You still could not effectively set up multi-user collaboration without splitting documents into parts, and giving everyone the same context information to enable consistency was a challenge as well.
And, of course, you still had to count licenses every day, as if you were an accounting firm and not a translation company. Count the freelancers and/or managers, then convert all this into the necessary number of “seats,” then think of how to better “pass” them among the participants…
Shouldn’t you instead focus on your core business? Don’t you feel these barriers are ridiculously artificial for the 21st century?
And if you do, why do you think this model is so common despite being clearly inapplicable to today’s translation business?
People are prone to cognitive biases, that’s why. Someone created translation software 25+ years ago and started selling it by the seat. Then, 20 years later, someone decided to migrate it into the cloud (which was a good thing), but didn’t care (or dare) to get rid of the seat-selling model. One change at a time, right?
To reiterate, counting seats just doesn’t fit in the translation business, where more than 90% of the headcount in companies are freelancers and where new collaboration projects with a different number of them are set up on a daily basis. You have to allow all these people to collaborate efficiently, and you cannot afford holding an excess seat inventory “just in case”. And you have to let project managers be productive and not a bottleneck transmitting information flows from one collaborator to another.
We continue our own suffering by inertia. Traditional software vendors are afraid of changes. Moreover, some will do their worst trying to convince you that buying licences is the only right “ideology”. But if you ask them how it helps their users, they will hardly be able to answer. All this is eerily similar to the five monkeys experiment.
But we are not monkeys, are we?
That is why, when we were building the first-ever multi-user CAT editor, we knew from the very beginning that we would never force our users to count seats. We were convinced that we didn’t want our users to worry about having enough licenses each time they set up a collaboration project with many new freelancers. And our industry is all about collaboration.
So let’s just forget about counting licenses, shall we? You’ll see right away how much easier and better it is when you don’t need to measure the amount of technology you can afford to run your projects — today or tomorrow.
Gökhan Fırat, Operations Manager at Localex
“The rapid spread of cloud technologies worldwide proves that the cloud-based translation tools are one of the key factors for higher productivity, better economics and higher translation quality. Smartcat simply provides us all of these! We don’t have to worry about counting licenses anymore; all we need to do is adding as many linguists as we want, and assigning them to the related projects. This great flexibility gives us the chance to not to worry about licensing costs for the big projects that need collaboration and/or crowdsourcing.”
Jeff Weiser, Translation Back Office
“There are simply no strings attached. The platform’s exceptional technology perfectly aligns with Smartcat’s frictionless approach to collaborative translations, and this ‘no seat’ model serves as the basis of our close partnership with them.”
Juan Baquero, General Director at Baquero Translations
“I must admit that when I first heard about Smartcat I though it was impossible to have such a comprehensive solution without an actual license. When I learnt about the possibility of registering and having all your projects as if it were a Gmail account I thought there was a hook somewhere I could not see. Then, they made it even easier for me providing this excellent collaborative solution to all my freelancers right on the spot. So I realized no unstable seats were needed this time, you can watch your projects grow from your throne.”
Our example shows that a “seat-free economy” is indeed possible. All we have to do is get rid of the cognitive biases and stop blindly following the naysayers.
Well, and stop doing the seat-counting monkey work.
P.S. In the next few articles I will get deeper into why Smartcat is safe and secure to use, where our revenues come from, and why “seat sellers” are so anxious when confronted with this new reality. In the meantime, you may want to check out our security statement and plans.