How a YT’s Recommended Vendor Makes $1M/Year Developing Emotional Speech Synthesis

Alexander Konovalov

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Published: August 8th, 2023

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Alexander Konovalov

Founder, vidby

$83K

revenue/mo

Founders

Employees

vidby

vidby.com

from Risch, Zug, Switzerland

started September 2021

$83,000

revenue/mo

Founders

Employees

Discover what tools recommends to grow your business!

G Suite

social media

Facebook

Twitter

YouTube

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Slack

Jira

crm

Zoho

Discover what books Alexander recommends to grow your business!

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Hello! Who are you and what business did you start?

I'm Alexander Konovalov, the CEO, and co-founder of vidby, along with my partner Eugen von Rubinberg. Our Swiss-based startup, which traces its origins back to Ukraine, offers AI-powered translation and voiceover services for corporations, educational institutions, influencers, and whoever needs fast and accurate localization. We believe that brands need to localize their services, or they risk dying unnoticed.

Vidby is not about AI hype: it provides the highest quality of translation and video dubbing with reported accuracy levels ranging from up to 99% to 100%. With vidby, individual brands and businesses can choose from 75 languages, 65 dialects, and a diverse range of voices, including children, adults, and older adults. That helps them establish better connections with their international audiences and enhance engagement.

According to independent experts, vidby is now considered one of the top five products in the automated video translation and dubbing market. We take immense pride in being a Google technology partner and YouTube’s recommended vendor. Currently valued at an impressive $73 million, vidby is making a significant impact.

Eugen von Rubinberg and Alexander Konovalov, co-founders of vidby

What's your backstory and how did you come up with the idea?

In 2013, I founded my first startup, which focused on translating video calls. We were trailblazers in this field, introducing the world's first video call service with built-in translation. Our innovative approach caught the attention of Forbes, who recognized our technology as a competitor to Skype and Viber. Not only that, but we also clinched the top prize at the Innovative Breakthrough 2013 Competition.

This achievement opened my eyes to the untapped potential of real-time translation for video conferences and calls. It became clear to me that this niche held substantial opportunities for profitable business development.

However, in 2018, our journey took an unexpected turn. Our team had expanded to 120 members, and we were simultaneously working on five ambitious projects. Unfortunately, we encountered a series of obstacles that forced us to hit the pause button and temporarily abandon our original idea. With only five team members remaining, we faced the daunting task of resolving financial, legal, and organizational challenges.

In 2021, we reemerged with a stronger concept – vidby. Currently, our team comprises 87 talented individuals who are leveraging cutting-edge technology to refine and deliver this sought-after solution.

Take us through the process of building the first version of your product.

Don't be overly concerned with your competitors. Their startups are just like yours, and their achievements should be no benchmark for your success.

When we started developing vidby, we had limited resources at our disposal. To optimize both time and funds for front-end development, we took an innovative approach. We decided to release an initial prototype on Telegram, allowing us to gather valuable feedback and gauge user interest. Now we use Telegram for customer support, and the widget on the website is connected to our CRM system.

After getting that positive response, we began negotiating with investors. Their support enabled us to release a minimum marketable product (MMP), which took us six months and the effort of three developers.

We emerged with a Telegram chatbot for placing an order. Besides, our product initially received an automatic translation mode, the first version of the speech transcription editor, payment acceptance, and a website. Shortly after that, we officially register the company.

Here's a glimpse at the essence of our initial prototype:

Vidby: User Profile Settings

Vidby: Order List

To successfully grow and scale, we cared about the personal development of every team member at vidby. We recognized the need for their growth to align with the rapidly expanding company.

Employees require external motivation to never settle for what they've already achieved. During the scaling phase, we had to replace our CTO. While our former CTO was an exceptional software developer, managing a team amid rapid growth required a different skill set.

Describe the process of launching the business.

We started vidby with eight years of experience under our belt, which helped us avoid many common mistakes that inexperienced startups make. We took off when there wasn't a lot of hype surrounding our field. We acted as visionaries, seeing things from a unique perspective.

We didn't pay much attention to the numerous experts and market analysts as their opinions were limited by the current state of the market and technologies. Instead, we focused on creating something groundbreaking.

One of the most valuable lessons we've learned at vidby is that perfectionism can be the worst enemy of startups. We're based in Switzerland, where, just like in Germany, a culture of perfectionism often goes to extremes.

So we've come to realize that waiting for a product to be flawless is pointless. You need to launch a product as early as possible. And one more thing: don't be overly concerned with your competitors. Their startups are just like yours, and their achievements should be no benchmark for your success.

When we began seeking investors, we realized the importance of finding partners who believed in the future of our company and our ideas rather than focusing solely on the company's current status.

Vidby went against all the financing rules commonly accepted in the startup market. You've probably heard that to find investors, you have to deliver a ready product and demonstrate six months of 20% monthly traction, the number of sales, and clients.

I haven't seen it working this way in real-life business. If you had all that, you'd be able to choose from multiple investors. But you need to attract investments at earlier stages. Searching for sources of funding, you should experiment and strive to stand out from your competitors.

If we had waited for venture capital funding, vidby simply wouldn't exist. We chose to forge our path in search of necessary investments. We decided to engage as many shareholders as possible who were interested in investing in our modern solution. Currently, vidby has over 250 shareholders and has successfully raised over $5 million in funding.

Since launch, what has worked to attract and retain customers?

From the very beginning, vidby's exclusively provided paid plans. Yet, our high-quality service at affordable rates has increasingly appealed to customers.

From the beginning, we deliberately avoided offering a trial version and instead provided only paid access. It might be seen as a controversial decision, but our goal was to filter out bots and random users, focusing our efforts on the B2B market.

We initially set the price at $0.9 per minute. Later on, we introduced three B2B subscription options and an additional service for the First Version Upgrade Surcharge. Soon after, we added two more options, which were based on the difference in the quality of translation and dubbing. In total, we made four price adjustments. This August, we're introducing another update, which includes a freemium model and subscription options.

Transparency in pricing has always been a core value for us. It's often hard to understand the pricing of our competitors since it resembles a Turkish bazaar: you only find out the price by asking the manager in the right way, after scheduling and having a call.

That's discouraging!

As a client of translation services myself, I experienced this process many times, which led me to implement a clear fixed price at the time of placing an order and a price calculator for our customers.

Today we have a user base of over 20,000, and our audience continues to expand. We've successfully collaborated with big names such as Samsung, Siemens, Cisco, Kärcher, Generali, McDonald's, and Harvard University.

To increase traffic and sales, vidby takes a comprehensive approach to building our sales system. Our product requires not only online interactions but also demos and negotiations. The sales funnel can take from two to four months. So we remain patient and consistently move forward.

I'd like to emphasize that the earlier your startup sets up analytics, the better. However, to efficiently use analytics at the outset can be challenging. Gradually implement analytics and begin leveraging its capabilities as early as possible.

Vidby also employs referral programs to increase sales. The marketing and sales strategies employed depend on the particular product and target market segment. In our case, we target corporate B2B sales. We focus on building both online marketing and sales as well as an offline corporate sales system. This journey is long and challenging, but at the same time, it's a gold mine.

Sometimes, things don't go smoothly, and customers stop using your product. To win back customers, you first need to understand why they leave. For example, one of the reasons customers may reject vidby is the lack of a free version. We don't offer a free version as we focus on the professional segment.

In addition, the translation market is structured in a way that customers either want a perfect AI-powered translation and dubbing product or no product at all. Vidby initially offered a fully automated mode. But the AI-driven technology won't be perfect for many years to come. That often discouraged customers who didn't understand how to improve or if it was ever possible to improve the translation and dubbing.

That's why we recently added the Improve Quality option.

Customers may sometimes feel that a product is missing the specific features they need. When they discover that new features have become available, they're highly likely to come back. Given that customer behavior pattern, we introduced notifications about product updates.

Another common method to regain customers is by offering a discount. Honestly, I don't appreciate this method. If there's no match between a customer and your product, they won't buy it even at a lower price. However, this method is worth trying as a hypothesis.

We care about more than just running the business and prioritize responding to crises and difficult times. Like any citizen, I wanted to help defend my country when the ongoing military conflict with Russia started.

Vidby gave the technology to Ukrainian authorities and embassies, free of remuneration of course. By July 2022, some 70 speeches given by President Zelenskyy had been translated into 30 languages. It was a total of over 10,000 minutes of video material.

How are you doing today and what does the future look like?

I won't reveal all the numbers of our success. From publicly available information, I can say that the revenue from service sales in 2022 amounted to $997 thousand. Our mid-term business goal is to go for an IPO in 2026 with a valuation of over $1 billion.

We have significantly increased the average cost of our services by offering different quality options. We currently offer four options, while competitors only have two.

Currently, we don't offer subscriptions, only on-demand order placement. However, we are working on adding subscription plans. In addition, we're planning to expand our reach to new audiences and regions and offer new products. We have upcoming releases to present soon. But it'll be better to check updates for yourself.

Through starting the business, have you learned anything particularly helpful or advantageous?

We've learned that bloggers and content creators are not our primary audience. In terms of importance and size, they come seventh. Large international companies come first, those creating videos for internal employee training, equipment usage and repair instructions, repairs, and so forth. It took us some time to realize this, but it's great news for us.

We've exceeded our initial plans in terms of product quality and features. However, it's still not enough for the market. The most challenging aspect we're currently working on is emotion synthesis. When that's accomplished and available, it'll significantly impact the market. For now, there is a slow transition toward AI voiceovers.

The buzz around ChatGPT has played an important role in driving vidby progress. Businesses have recognized that they need to move along with AI, or AI will progress without them.

We made the correct decision to block and decline working with clients from Russia after the start of the war in Ukraine. Initially, we did not have content pre-moderation procedures in place, as no one could have foreseen such a situation.

However, when customers from Russia attempted to utilize our platform to translate their propaganda, we put in considerable effort to block their payments, IPs, and accounts, and to track and remove their orders.

As for achievements and advancements, I'm particularly proud of getting the status of YouTube’s recommended vendor and entering the list of the world's most well-known Swiss companies.

I strive to combine my technical skills and experience in marketing, PR, legal, and financial aspects, which greatly facilitates my work and vidby's promotion. In addition, I've learned to be effective by splitting responsibilities with my business partner.

I take charge of technical implementation and operations, while Eugen von Rubinberg handles investor relations. Together, we're responsible for marketing and sales.

What platform/tools do you use for your business?

I like the Ukrainian task manager Worksection, a very intuitive tool. When it comes to team communication, my top choice is Slack. It offers a useful message reminder feature that keeps everyone on track. I also like using the Schedule Message function in Gmail and Telegram. For efficient software development management, I prefer Jira. I also like Zoho CRM.

What have been the most influential books, podcasts, or other resources?

I'd recommend Funky Business: Talent Makes Capital Dance. This book provides an inspiring vision of the future from people who were never considered experts but rather seen as theorists.

Why Smart Executives Fail: And What You Can Learn from Their Mistakes This book vividly shows how people with limited resources managed to build a successful business and how they failed in their other ventures despite having all the necessary means for success. In other words, achieving success in one business doesn't guarantee success in another, and failure in one endeavor doesn't imply failure in others.

Advice for other entrepreneurs who want to get started or are just starting out?

A big mistake you can make is following other people's advice without really thinking it through. You have to consider your unique situation and what works best for you. Don't try to copy someone else's success by strictly following in their footsteps. It's great to get inspiration, but make sure that particular actions align with your vision and goals.

Don't get too fixated on what your competitors are doing either. That can distract you from focusing on your startup's growth and innovation.

Don't underestimate yourself or your team. While it might be helpful to listen to specialists, remember to trust your instincts first. Take a good look at your strengths and use them to your advantage instead of waiting for perfect conditions.

Finally, find the proper balance between your dreams for the future and the reality you face at the moment—whether there are issues with funding, talent, or your product. Stay grounded, stay adaptable, and you'll find your way to success.

Are you looking to hire for certain positions right now?

Vidby currently has the following job openings:

Affiliate Marketing Specialist. We need an experienced individual who will set up partner programs with complementary products that are in no direct competition with us (for example, video editors).
Sales Specialists. We're looking for a highly motivated and result-oriented professional. The compensation for this position will depend on individual performance.

We offer full-time employment. The compensation will depend on the specialist's location and qualifications.