After failures in previous start-ups, Vasco Pedro had several of ideas to iron out for his next project in 2013 when he took four tech colleagues on a surfing trip in Portugal.
Handing out four notebooks, the quintet rode the Algarve’s west coast waves and carved out the first seeds of Unbabel, a leading AI company which aims to bridge language barriers.
“It was a way of trying to capture the moment in time [before everyone got jobs],” recalls Pedro, Unbabel’s now co-founder and CEO. “I had this sense of a great team who had been through the trenches and were strong and worked well together.”
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Blending AI with human-refined real time translation, Unbabel has helped major brands like Microsoft (MSFT), Nike (NKE), GymShark and Facebook (META) connect with customers in dozens of languages.
Over a decade, the company, which employs 220 staff, has secured over $130m (£104m) in funding and generates around $50m in annual revenue. “When I told people in the beginning that maybe we could do this, the reaction was that we were crazy,” adds Pedro, who holds a PhD in language technologies from Carnegie Mellon.
Despite being innovators, it has been hard graft for Unbabel’s founders since they were invited in 2014 to become Portugal’s first start-up accepted into Y Combinator, the US accelerator programme.
Sofa so good: Unbabel founders (left to right) Bruno Prezado Silva, Vasco Pedro, João Graça and Hugo Silva.
The quintet spent a winter in San Francisco doing ‘one year’s work in three months’, the four male founders living in bunk beds and the sole female founder Sofia Pessanha’s room doubling up as a sales call room during the day.
A decade later, Pedro stood on stage at Lisbon’s Web Summit to showcase the firm’s Halo project. “It was the first time where people stopped me as it had an emotional connection and resonance for people,” says the Portuguese native.
Combining generative AI and wearable tech, Halo translates brain signals directly into language, which allows people to communicate through thought, with no speaking or typing required.
“The experience for the user feels like you have a voice in your head that’s helping you interact with the world,” adds Pedro. “If someone asks you a question, a voice in your head gives you a few answers that might be relevant to the situation.
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Halo, which aims to be more robust before rolling out to more customers, transforms patterns of bioelectrical signals into language, capturing binary yes and no answers from patients, while Pedro says the next iteration will enable patients to initiate conversations “in a more fluid way”.
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“In essence it is creating a new channel of communication. We aren’t reading people’s thoughts, we are creating an easier way to interact without having to use your voice.”
Pedro says that being a fan of comic books, fantasy and sci-fi as a child has given him a sense of empowerment.
“When you’re a kid aged six, building something meaningful is hard, but when you can code it gives physical projection to your imagination,” he says.
“A lot of tech has the ability to change the world but you don’t have such a visceral reaction from users from day zero in that it [Halo] now enables me to regain communication with a loved one. It’s emotionally powerful.
Vasco Pedro leads Portugal’s leading language AI company. · Ramsey Cardy via Getty Images
“A lot of times as a founder you are also thinking about product market fit. With Halo it was a different scale as users really need it and you feel there is a need and commitment to using the product.”
A few years ago, Unbabel took the decision to drop some of its clients as Pedro looked to arrest customer dissatisfaction. “It was an exercise of trying to lose our ego a bit and look at our customers, their experience and what was really working,” admits Pedro.
Now, Unbabel has launched Widn.AI into the competitive translation space, a language AI solution built for businesses who “want reliable, high-quality translations without the high cost.” Unbabel say that its AI model beats OpenAI’s GPT-4o and other commercially-available platforms on translation.
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Pedro says: “We are moving into AI-only products but the entire industry of translations is starting to go through a transformation. We are seeing that at Unbabel too.”
The move has been further cemented after Pedro saw the results of a competition the firm set up, matching AI machines against its own army of human translators.
“I don’t think from a technical perspective that in the next three to five years max it will make sense to have humans translating words,” reveals Pedro.
“I have been a big advocate for the last 10 years that humans will be an important part of it. What I am seeing now is that humans slightly have the edge but the exponential growth I am seeing is that won’t be the case [in three years].”
Impact of AI in business
We haven’t really seen the impact of productivity in companies because of AI. I think we will see more of that. Companies will grow but not so much in people, the growth will be supported by each of their employees to be more productive in different AI tools.
Product market fit
Until you have a product market fit, nothing else matters. We have a strong culture within developing, investing and coding. It does create an environment where people love to work and be a part of. I have many ex-employees who wanted to come back as they thought it was the only or the last place they felt true meaning in their work.
Unbabel says its AI model beats OpenAI’s GPT-4o and other systems on translation. · Supatman via Getty Images
In the end, if you focus on external things and don’t put all your energy into nailing the problem, finding your customers and building something people want to use, it will come back to bite you.
Leadership
I’ve always had an ease stepping into a crisis and it stems from college days when my brain would slow down and it would control my emotions in being able to problem solve. It gave me a sense that it was something I was good at and being able to improvise.
I used to measure the amount of hours I was coding or in creating something. Now I am measuring the decisions I am about to make. You have to be more conscious about how to get yourself to your top performing capability, as when the time comes you could be burned out or mentally drained.
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