Ask HN: I cannot afford to scale…

If you can't charge more then you need to spend less time doing the work. Is there a way you can automate your process more?

You say you cannot increase costs because of competition? Are you sure about this? I understand its scary to price yourself above competitors, but that doesn't mean you can't do it.

For example, the software I sell is more expensive than all of the competing products. However, I know that as we have similar fixed costs, I only need to sell around 1/3 the volume that they do in order to make a similar profit. People don't always go for the cheapest option- indeed most people avoid it.

Until you've tried raising your price you really don't know what you can get away with (and I think you may be surprised, especially if you're getting people coming to you via personal recommmendations). Companies like Apple have made enormous amounts of money selling products which are more expensive than the competition.

This doesn't address your scaling concern though. Are there parts of the process that are automatable? For example- could clients preprepare their app in a certain way that makes it easy to extract and translate all the data.

Raise your rates. It is simple. If you provide a higher quality service then you will continue to do well. As you said you are turning away potential clients at this point. That means you have very little to lose by raising your rates a bit. You are already losing business, might as well turn a better profit while you do it.

Don't assume that you cannot charge more than the competition. If your service is better / faster / higher quality / more personal and so on, customers will be willing to pay a premium. Perhaps not all of them, but some.

You can always quote a higher initial price, and if the potential customer makes it clear that it is more than he's willing to pay, you give him a "new customer discount". Then, once he knows how great your service is, he might become a return customer and then pay the full price.

Outsource the writing, then spend time doing the quality checking rather than the hard yards. That should allow you to scale 2-3x faster & take on more work.

The downside is trying to find good contractors who can translate to a standard that you set.

Good luck!

Also consider "small scale automation". Maybe you can't automate a process or even part of a process and maintain the level of quality you're looking for, but take a look at the individual tools you're using and whether or not you're using them efficiently when performing specific steps. Is switching back and forth between apps too slow? Are there keyboard shortcuts you should become familiar with? Are there plug-ins/extensions that can automate something simple (in the .Net space, something that might help an app translation process is a refactoring macro that will "extract selected string to resource file".

And as others have said... if you're product is better, raise your price. Just be ready to explain WHY you're better to your customers. :)

I think you have an 'easy' choice here.

1. Like other people have said, increase your price and fewer people remain. It is polite self selection

2. Outsource the actual job. make your job relating with the customer and pay people to do the translation (per job). your work will be to review what they have done and interact with the customer.

3. Focus on the one that had higher money/time ratio. So if it is the highly technical jobs or the phone apps, you chose.

Congratulations, you have a good problem :).

PS: NEVER reduce your quality.

outsource it.

http://mygengo.com should sort you out.

you still take on clients, you just won't be the one doing all the translation yourself. your role will be more of a project manager / QA role. should be easier to scale.

Charge more. You seem to be stuck with the idea that if you charge more you will lose clients. Do you have any evidence that this is true? Have you talked to existing clients and said "I'm pretty busy, but if you pay X I can fit you in this week?" What did they say to that? Did you try putting out a new ad with higher rates? Do you get lower feedback? Or the same feedback.

Speaking as someone going through the process of commoditising at a fixed price what is traditionally a very variable price service business, my biggest piece of advice is figure out how to be profitable at one type of job in this space, systemise and do only that, and say not to everything else.

Once you're profitable at that one type of job ("type" here could be size of app, type of client, whatever) you can repeat the process. Rome wasn't built in a day and you don't have to cater to everyone immediately.

Work out how you can automate each step, but most importantly the qualification step that will tell you if the client is a profitable one for your process or not.

Once you've done this, you'll find it easier to outsource each part of the process.

Firstly, set a minimum per project. There is a overhead to every project and that needs to be accounted for. Each project needs to make enough profit to buy you lunch.

Secondly, look at any non-key functions that you are performing and see if a Virtual Assistant can help you with.

Thirdly, you have to believe this: people are not that price sensitive. You might be $50 more expensive than other people, but most don't care about that $50, especially if it is paid for by the company, and there are other factors - deadlines, professionalism, etc.

Fourthly, try hard to increase your quotes until 20% of people reject you for being too expensive. If you are in a price competition, you will always invariaribly feel stuck in the future just like you are now.

Hi Guys,

Thanks for all the answers so far - much much appreciated. A few points I should clear up.

1) I do outsource translation. I work closely with a group of freelance translators who I interviewed back in January when I started up. I wish I could speak 20 languages, but I don't ;-)

2) Running a business unfortunately isn't just Project Management and Project QA. There's also finances, marketing, the website to maintain. Certain things can be outsourced, and I have for the smaller jobs.

3) I am happy to make some investments to improve long term returns. Indeed, I didn't pay myself last month to pay for a few improvements. Not ideal when you have rent, but sometimes sacrifices have to be made and I'm ok with that.

4) After reading your comments I'm a little less nervous about increasing prices. I worry, of course I do, that'll I'll be too expensive. Pricing is definitely something I am learning, it isn't easy.

What do you guys think about partnering with someone? Perhaps taking on a junior partner so we can work together towards common aim of Applingua… Is this ever a good idea?

You answered your own question.

"I don't charge enough."

Tada. Fix that.

Don't be afraid of charging for something the brings value to the table. I see a little bit of both, crappy apps charging huge amounts of $ and awesome apps almost for free. It amazes me how can companies or developers put so lower prices and something that probably took them a lot of time to create. So, if your app is awesome, users recommend it, charge it for the right price. You might loose cheap clients, but you highlight yourself from the competition.

If your level of service is better than your competition, you should charge more. Price is of course a parameter to compete on, but it is not the most important one.

The cheaper competition no doubt have much more work, and many more customers. Even so, they will be much less profitable.

The big issue is not that you cannot afford to scale.

It is that your business model cannot scale - effectively, you are hand crafting widgets, not leveraging technology to increase productivity.

Adding another translator, adds approximately one unit of capacity. Another document, well, that adds approximately one unit of work. Sure, growth can occur arithmetically, but there is no possibility of exponential or even geometric growth.

To make the issue more intractable, the iOS ecosystem provides less opportunity to acquire and apply more efficient tools - there is a significant degree of rigidity in the technology stack (i.e. you can't employ a tool written in LISP easily in order to improve throughput).

What you have is ownership of a small business - which is entirely consistent with your initial goal of owning a company. And you are facing the same issues all small businesses face - the problem of hiring people who might not do things exactly the same way you would.

Good luck.

  Sure, growth can occur arithmetically, but there is no possibility of exponential or even geometric growth.

> You all know client work involves last minute changes and lengthy email discussions.

For which they should be billed. By the hour.

If they want a fixed price contract, they can go elsewhere and find a job shop that will never go the extra mile when the time runs out. Emphasize the value proposition you bring by providing in-depth professional services. Emphasize the fact that your extra billable hours are pay-as-you-go: every time something gets worked out, they are getting proof of just how much you are worth.

Two things I would recommend:

1) Charge more. Lots of other people have said that too. If you have to turn away customers, then you know you can raise your rates. You need to do a/b testing on this (i.e. high-low) until you find the proper rate at which the number of customers is balanced by the price you charge.

2) You need to automate some stuff. If I were you, I would invest a little time into writing a simple tool where you can enter the corpus of text and translate it via Google Translate. If you set up your tool to allow multiple inputs, you can easily start a project by filling in all the text to be translated and hit "Go". Afterwords, you just go through each translated entry and correct things. This should be significantly easier than doing every single thing by hand, over and over.

1. Raise your prices 2. Find someone locally to help part time with translation. In this economy, there have gotta be some good bi-lingual people who need some extra cash irregularly to do translation. 3. Create a system to make the process more scalable, so that the person doing the translation doesn't need to know anything about programming. 4. Find more hours in the day and push yourself until you do have enough fulltime work for a second person. 5. Setup good relations with app developers that you've already worked with. They are going to keep creating apps, and their new apps, updates, etc... will all need translation. This can help make work more steady.

A good strategy for pricing in this situation is with an "express service." This allows you to keep your existing "list price" but of course the delivery time for that will go up by days/weeks/etc. Your express service has a guaranteed quick delivery at a much higher price. You now have a way to capture a premium for customers that are in a rush. It's a win-win with no risk of downside due to a complete price change.

> I can't increase costs because of competition, even though I am sure my service provides a much higher quality translation.

Self-limiting belief. Self-fulfilling prophecy. Whatever you want to call it, this one single sentence will kill your business.

If you are providing a higher quality service than the competition, then guess what? You should be charging more.

If you're not getting the clients you need when charging more ... well, your marketing sucks. Position yourself as a premium service. Provide a better experience and charge for it. Get customers by encouraging referrals, etc, etc.

Look at Apple. They charge twice as much as their competitors for the same hardware. Why? They provide a premium experience and they charge extra for it.

Why are you competing on cost?

Hi! This is the Market Economics Fairy! I help supply and demand equilibrate everywhere! If you're turning away customers it means you've set your prices too low! Raise your prices until you have exactly as many customers as you can handle!

Sincerely, the Market Economics Fairy!

You could follow the advice of many commenters here and increase prices. I recommend you increase prices on new customers, but maintain similar prices for current customers, since they've been early adopters of your service. The danger of suddenly raising prices on existing customers (or radically changing the service) is that you might lose them (see Netflix).

Many services are very hard to pin a price on.

Raise yours. Find new people willing to pay the increased rates.

Oddly enough, I've found raising prices to make people MORE DETERMINED to get you sometimes.

Do you get much repeat business? Can you speak to old/previous clients and find out what they would be willing to pay?

Can you improve your own productivity, what takes up most of your time when managing the translation?