Entrepreneur Tanya Bakalov, above center, celebrates her 2016 Ernst & Young Entrepreneur of the Year award with her fellow Boston-based winners last spring. FOUNDERSWIRE PHOTO
Female Founder of the Week (FFoW) is a celebration of the Boston-connected women who are building businesses that drive change around the world. Tanya Bakalov, serial entrepreneur and founder of BetterSkills, takes this week’s honors for taking on the multifaceted economic problem of understanding, nurturing and retaining the modern work force.
By SHELAGH BRALEY
BOSTON—Entrepreneurship gets easier the second time around, but only if you develop better skills, says serial founder Tanya Bakalov.
This Ernst & Young 2016 entrepreneur of the year started her journey at 23, building a company called SevOne—now one of the biggest startups to ever emerge from the Delaware ecosystem.
“Back that many years ago, ‘startup’ was almost a dirty word. Nobody did a startup, especially not women,” she says. “There was just not an ecosystem that you could tap into.”
Bakalov had come from Bulgaria at 18 to go to the University of Delaware, and graduated with a degree in accounting. “So I thought I was going to be an auditor for all of my life, a CPA. I never thought I was going to be in a startup of any kind.”
She started her career with Deloitte and was working as a consultant and an auditor for Fortune 500 companies. Her husband, also a U of Delaware graduate, was a computer scientist working for a bank when he came up with the idea for SevOne. It wasn’t long before he convinced her to come on board as the salesperson.
“I said, I don’t know anything, I’ve never sold anything in my life. I’m an auditor,” she says, laughing. “But I took the plunge and both of us were like, ‘Well, it’s eat what you kill.’
“You have to make the first sale, you have to make everything happen,” she says. “Little by little, we started getting a few clients, to the point where we started going and pitching to VCs.”
The fund-raising process was not easy, Bakalov remembers, for two young, newlywed entrepreneurs with no experience and no network. “They didn’t take us seriously, even when we had the clients, not at all—because we were young, and married, and immigrants … citizens, but immigrants. They were worried about, ‘Well, are these two people going to survive? If we put our money into this, what’s going to happen?’”
It took time, she says, but they finally got their first funding from Osage Venture Partners, based out of Philadelphia. Over the next 10 years, SevOne went from zero to $90 million in revenue, sold $400 million worth of software to customers all over the world, and expanded the company to more than 500 people.
“I think we’ve been on Inc. 500 as a fastest growth company for five or six years in a row,” she says.
Then the couple sold the majority of the company to Bain Capital here in Boston, where there is still a significant presence, she says.
But something fascinating happened on the way to $90 million in revenue: Bakalov got another idea.
“The idea for BetterSkills was really a combination of a few things I saw, first at Deloitte. You start there right out of college, and it’s an incredible amount of learning that you have to do. You’re surrounded by mentorship, surrounded with different kinds of companies that you serve, and work with different teams,” she says. “You have to have experience in a lot of different areas to be good at what you do.”
Compare that with a traditional company that functions in departments and silos. Bakalov says work can be tracked, but only using many disparate systems.
“So if I’m tracking my training myself, no one else knew what kind of classes I took. My co-workers didn’t know if or when I passed my CPA, didn’t know how many courses I went through, didn’t know who my mentor was, they didn’t know what projects I was doing,” she explains.
“So it was harder for the next project: How would the manager know who you are and what you’re actually doing to grow yourself? How are you going to be competent, how are you going to grow into a senior consultant, manager, senior manager?”
She mapped it all out, and then considered the data that arose from SevOne’s growth. Starting around what she calls the “magic number” of 100 employees and a second office, “all communication and everything that you had known about the people that you worked with went away. So now you’re relying on other people to come in and do those interviews for you and hire the next person.”
The candidate who comes in will be interviewed by three or four people, Bakalov says, “and then at that point, their resume gets chucked in the trash can. The person starts in two weeks, and nobody knows who this person is. How awkward is that? And they know nothing about the people who work around them. Where did they work before? Maybe I went to school with somebody. Or maybe I have common interests. Is there a way I can see that?”
Or maybe you need an employee with a particular skill, like the ability to use a new software that didn’t exist three years ago. “It’s much more important to expose workers to the right set of skills,” Bakalov says. “We don’t want to just put them all in a room and say, “OK, now teach my hundred developers Java.” Maybe half of the people are already experts in Java. Where’s the information about that? Now I’m wasting their time putting them into training they don’t need, and they’re bored, they’re not learning anything. And I’m wasting my money.”
BetterSkills, fresh off a $1 million seed round backed by Bain, is a talent development and analytics platform that solves the problem of how to really know and nurture a company’s work force. It is in beta with a number of clients, slated to launch fully in spring. “What happens after two years is you stagnate, they don’t promote you or they don’t give you a clear path where you really want to go, and so you just leap to another company,” Bakalov says. “You say, ‘They’re not invested in me, so I’m not invested in them.’ But managers don’t have access to the information they need.
“That’s what I’m doing: bringing together the whole of information about an employee, to help people know who’s working for them, and so HR can be a partner in that,” she says.
When the process succeeds, Bakalov says, teams work cohesively, job frustration levels go down, retention levels go up. “And that’s what companies like to see. By making this available through BetterSkills, it’s going to transform work cultures,” she says.
“It doesn’t matter what you do, what type of industry you are in, you are paying for people,” she says. “If you think you can get those people to be engaged, to really feel what you are doing, to feel like they’re part of the team and the company cares about them, they will give back much more.”
Having already built a successful company, Bakalov says there still aren’t any short cuts. “Because of all of the years of experience and having access to capital, I’ve shaved two to three years off what SevOne had to go through in its initial stages. Things do happen faster.
“I think it’s just knowing what’s going to happen next, or knowing what are the things I need to do,” she says. The second time around, she just knows better.