Nov. 2, 2022

How an IT company finances a foundation with its profits with Blagovesta Pugyova

How an IT company finances a foundation with its profits with Blagovesta Pugyova

Is it possible for a charity to own a profitable software development company? 

Well it is. The Bulgarian foundation ‘Give a Book’ owns 41% of the IT company Childish. It employs 30+ people and the company's focus is developing business and team-building web applications using the Python programming language.

The model in which an IT company finances a foundation with its profits is so impressive for Bulgaria that Childish won an award from the Forbes Business Awards 2022 in the "Socially Responsible Company" category.

Hear the story of this amazing woman, Blagovesta Pugyova, who is the founder of both the foundation (Give a Book) and the startup Childish. 

Highlights

1:00 – where did you grow up and how has that changed your view of the world?

2:45 – as a kid what responsibilities did you have?

4:03 – as a kid, who did you want to be when you grew up?

5:24 – what was your early career path like?

7:07 – when did you realize that you should start ‘Give a Book’? (amazing story of how Blagovesta and volunteers visited an orphanage)

11:40 – what do volunteers like about being a part of this program?

13:50 – how many institutions were you able to bring Give a Book in?

14:28 – what are the demographics of your volunteers?

16:10 – how many people contact you outside of Bulgaria wanting a program like this?

17:10 – when did you get the idea of Childish and who are you primarily serving?

22:32 – when clients hear about Childish, what do they get excited about?

26:00 – what is the projected revenue and what strategies have you used to grow the company?

27:08 – how do you identify if a candidate is a good fit for the culture?

28:10 – what’s next for you personally?

29:16 – what is a book that has impacted how you think about running your business?

 

Make sure to stick around for the Innovators Can Laugh segment! You won’t want to miss Blagovesta’s hilarious answers!

Do you wish to connect with our special guest?

Visit Blagovesta website:https://www.childish.eu/en/

 


 
 

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Transcript

Do you think it's possible for a charity to own a profitable software company? Well, it is the Bulgarian foundation give a book owns 41% of the it company. Childish. The company employs 30 people and its focus is developing business and team building web applications. Using the Python programming language, the model in which an it company, finances, a foundation with its profit is so impressive for Bulgaria that childish won an award from the Forbes business awards, 2022 and the socially responsible company category.

So today we're chatting with blog Ove. Pug Voya. Who's the founder of both organizations. We learned about her childhood, her parents' influence and other fun things like her favorite TV show. Let's dive in. Hey, you're listening to innovators can laugh. The fun startup podcast. I'm your host, Eric notcher on ICO.

We interview an innovative entrepreneur in the European tech startup scene. Every week. My goal is to have my guests share their wisdom or having a little fun in the process. Now let's dive.

Wow. Great Bulgaria. I'm trying me too. Me too. yeah, no, I'm trying. So I always like to get started from the beginning and ask my guests. Where did you grow up? How has that shaped your view of the world? Oh, it's like the stars say thank you for this question. It's one of my favorites because I actually grew in a small town outside of the capital.

So it was really. Almost village life. My parents had a farm. We had cows. I was all the summer. I was somewhere around with them and it was really fun. They're very good companions. You have time to read, you have time to think, to analyze the clouds, the clouds that were modern in other times, then to date.

So very, very interesting childhood with. Good parents and entrepreneurial parents, although in a very small scale, but really showing you how it, it's not that dangerous to try something new. Yeah. How were they entrepreneurial? Were they just selling some of the goods at the markets or how were they entrepreneurial in other ways?

They, they were entrepreneurial in the nice sense that they tried different things. They had this thing with the farm and they sold the farm. They started having a store for some kind of groceries, food or forage different things. So they, they changed things, but they all were successful and they changed, changed another thing.

But this was brave as my mother said for, for her initiative, I probably like, I didn't like my job, so. Tried to start something and open this store just to, to make the money I made in this job. And then she said in the first month I made double the money in, in the job. So it turned out that I, I don't have the, the strange boss, but I also have better revenue.

So as a kid, what responsibilities did, did, did you have, did they give you any on the farm or any other, any chores or anything? Yes. But it's not the typical of a, like a city child to, to, to clean her room or wash dishes. It was more like you would stay on the farm for one week and you get one point for every day spent on the farm.

And at the end of the summer, you can buy a bike with these points were like buy a computer, buy, whatever you choose. And it was always the case with my brother who had less points than me. and I was giving him loan. Points so, so we can buy a computer together. yeah. That's cool. It, it was, it was cool.

Yeah. yeah, that's cool. They gamified your, your experience and your responsibilities. Very. I need to do that with my son. He's five now, but I think he's at the age where I could start doing some of this stuff help out around the house. Mm-hmm . I don't have a farm to send them to, but maybe in the future, I'll meet somebody who has a farm and I can do that.

It's a good idea for startup, like for helping children develop this responsibility. It's, it's a startup. I've never seen it. So , that is a good idea. Okay. Now, a as a kid, who did you want to be? When you grew up, did you have a, an idea of mine, of something that you wanted to do as an adult? I wanted to be an astronaut, but then I realized that when we had to travel somewhere longer away, it was, I, I didn't felt very well in the car.

So I guess in the, in the space would be even worse. So this made me give up the dream, but I really liked it. I, I climbed on top of the house, on the roof without my parents knowing and analyzed the stars and really, really liked it. I went a little bit further than the pure dream, but didn't reach any.

Like practice training or something. that is really practical except the proof. Yeah. Well, cool. Well, you're you got closer than I did. In fact, I'm from Houston where NASA is base and I never, I never went to NASA until my, my, my mother-in-law and father father-in-law came to visit. and they wanted to see NASA.

And that was the very first time I went and it was, it was a good experience. I wish I went when I was a kid. yeah, it sounds exciting. If you are accepting guests, let me know. well, when I do go back to Houston, I'll let you know, and maybe you could come for a visit now. Mm-hmm . . What was your early career path like?

Like what was like the first job that you did in high school? And then what were you doing while you were in college? In high school? I, I worked in the store of my parents since like I was 15 and then it is university. I chose university that allowed me a little bit more freedom to have a full-time job.

So I started as a reporter in one of the national TVs. I didn't like it stayed for a, let's say a year, then I. Back to what I studied finance and accounting, and I was accountant and tax consultant for a while, then made a master degree in international tax law because this was what interested me. I went to London and London school of economics for this came back, became a tax consultant in Deloitte.

And after Deloitte, I changed a little bit, the. Spheres moved more into the management positions than into the pure professional sphere of consultant and tax consultant. And somewhere there, I, I always joke. I'm joking that I, I work different things. But now that I like 15 years after starting my career, I realize that like every knowledge and every moment from there help me to, to do better things now.

And when like a colleague of ours said, oh, I've lost three months working on this, like technology that no other else in the world is using. Like, why is that? It's lost time. No, no time is lost. You never know after 10 years. So whether you need it. So I had a lot of this , you know, at the same time you, you started a, a program where a foundation called give a book.

And when did, when did you start this? And what was the aha moment that you realized that, Hey, you know, there's volunteers that wanna do this? There's the kids that like this, and I can develop some sort of program around this, but first just kind of share briefly what it is and then tell us about your journey.

Mm-hmm yeah. Give a book in Bulgaria and pod NIGA is let's say one of the most popular volunteering organizations in Bulgaria. We have like hundred volunteers every year who are long term volunteers. So they join and they mentor a kid for, for a long time. The kids are living in. Social institutions and they're between seven and 18 years old, which is stage that they're, they rarely have the chances to be adopted.

So they really need someone mentoring the them and guiding them. And so it doesn't sound like my. Background and what I studied, but it is more about the empathy it's probably, I have, as you went back to the family, somehow there are people who bring it more and they're watching and seeing more about other people's feelings.

They're usually UX designers nowadays. But for me, this was the moment with, when I worked in the television, actually the disappointment was. We made reportings for children who were involved in prostitution or some other scary things for teenagers. And I realized that the television wouldn't do anything.

People are seeing it. They feel sorry about these cases, but. They're distant. It it's, it's not there. It cannot help. And I had this really naive idea. Like what's the difference between me and them. I I've read books, they haven't read books. So I will gather some books and bring them to them. It's like so easy.

And we did this, we went to the children, brought the books. It was really not at that time because no one accepted to other people. 12 years ago, just to go and visit orphanage in Bulgaria. They were really close institutions. And to somehow for the books they accepted us to, to go there. We had to register a foundation at one moment later, but some somewhere there in the third.

Visit, for example, I had this like insightful moment that, so we are trying to reach together with the kids and it, it's not the perfect, we are trying, kids are going somewhere around and I saw in the corner far away, a kit and a volunteer, the volunteer is reading and the kit is looking like it's is the sun like.

He's not moving. It was really bright moment for them and bright moment for me. Like, we need to have them one to one. We need, we don't, they don't need groups visiting them. Like they, they, they hit sometime. Yeah. They need one person to trust and one person to respect them. And this was really the innovative thing when I decided, okay, we'll bring people.

We didn't change the name. We still are called give a book because it's good that they associated with the books. We, we don't leave the books totally, but they're somewhere second stage after everything else. When you said that you had that light bulb moment, when you saw the volunteer and the child and you realized this is what the kids need, they need the attention, you know, from adults, an adult taking the time out of their, of their, to create a connection.

And even if it's just as simple as reading a. To a kid, but being there being present, I can very relate to that years ago, I created a program for kids and it was to curb, childhood obesity and in Houston, pretty much all over the states. Actually, there's a big problem with childhood obesity. I have more kids playing video games.

They're not quite active. And there's a lot of fast food. So there's a lot of kids who are overweight and many kids just don't have parents who are active or try to get them engaged in sports. And so I thought, Hey, why don't I create a program? Where kids, regardless of their gender, regardless of their athletic or not.

And regardless of their economic status, why don't I create a program where each kick can wear fitness trackers, and as a team, they can see which, which classroom can generate more moves. Than the other classroom. So you had classrooms competing against each other, but being in the classroom and just leading the kids and some fun exercises and talking to them gave me more fulfill fulfillment than anything I've ever done in my life.

And so for, for. You know for you. I wanna know. Is it the same feeling? I mean, you're very successful. You went to school in London, you came back, you worked at Deloitte, we're gonna get into shallow dish, which is your company right now. But what was that feeling for you and what do volunteers. Of this program really like about it as, as well.

Can you, can you just kind of talk more about that? Yes, yes. You definitely have seen it and it is really energizing and they, there is always a question like actually volunteering is, is selfish in the good way thing. It really helps you as well. It gives you the feeling that you are, you are doing something even though sometimes it's not that successful at the moment.

Like we, we cannot have success with every. We probably have success with half of the kids, but we have success with a hundred percent of the, of the volunteers, because for them, this is also engaging them and giving them something more meaningful in life. And I see that this, this site is also important.

And for me, I'm like in the first year I was trying to communicate with every kid and oversee everything and help everyone make sure everything goes alright until one moment when I was. At the same time there we, there was no one in working in the foundation. I said it, we, we should be and good foundation.

We wouldn't have staff. We would do everything volunteers. So I had this burnout where we got the psychologist to see one of the kids. And he said, actually, you, you, you look. Worse than him. It's just take this business card and call me anytime during the, the day, because I see that you're talking to too many kids, too many volunteers.

Yes. You're working too many hours and it doesn't work. So at one moment, I, I brought this empathy to overseeing the process and helping. The volunteers be better. So I I've lost this huge direct communication with the kids. Although I, I have my kids who are, I'm communicating with I'm mentoring, I'm visiting them, but it's not like it was before, but the big conclusion really for me is it's an it's like per to Mo it's energizing for the volunteer.

It helps the child. So it's like the good in the world grows from both sides. It's it's not, no, nothing is lost in this yeah. Process. Now, were you able to get this in multiple institutions outside of Sophia? Like how many, how many institutions were you able to get this program in like 25 or 30? Something like this?

It's it's also. Pretty dominantly outside of the capital, because if, if children in Soia need some supports, then children outside of Soia need much more. Okay. At least in Bulgaria, active people are more concentrated in E Soia. People who are looking for some kind of helping in this. So we actually were Mo mostly focused even outside of Sophia.

Okay. And, and your volunteers, are they mostly like a specific demographic or are they spread out from all ages in professions? No, it's, it's all ages. Like they're her 80 year old lady or 70 year old lady who comes with her. Grandchildren who are two and four, for example. So it's, it's quite D like huge.

They they're different. They have different backgrounds, different professions different like wealth. It's not like someone has good profession and good money, so he can afford to give time, not like this at all. It's mostly like you go in the bus, that's traveling to outside of, with the volunteers and.

You see different people, but they're all good people because they didn't show choose just to, to stay at home on Saturday and like watch a movie. It's not a bad thing, but you, you can have both. Yeah, no, no, no, no, no, absolutely. Okay. So, so there's. So, this is how you sort of coordinate. There's like a bus that maybe leaves on a Saturday morning at a specific time and volunteers just meet up and then they go for a few hours and they come back to the city.

Is that generally how things work? Yeah. Yeah. It's generally this, but it, it repeats every month minimum once a month. So there are places where we go for 12 years. Without stopping, let's say except a few months during the pandemic restrictions, but they, they really realize that we come back because very often they have some cases that someone comes and never comes back again.

But for us, they know we, we will be there have, have other places outside of Bulgaria contacted you. And wanted your guidance on how to implement such a program in their country. Cuz I'm very curious if that exists here in Romania, because if it does, I would love to do some volunteering or something like that.

Do you often get inquiries? No. No. I think it's not that popular outside of Bulgaria. We haven't had such partnerships I think, but I'm really open to share. Like it's something. It's good to happen. Probably you might have something like this. The difference for us is that we really make it very open and everyone is welcome because many people are not sure that this is for them.

And it's more difficult to make them try. Once you make them try turns out that they're good for this, but if you. What a huge barrier before them, you might lose a lot of people who might help and maybe that's the, the thing that helped us reach such a scale and reach so many people. So definitely I'm happy to share ideas and insights.

Yeah, no, we could talk more about that. On another cob, let's move into your company. Childish. When did you realize, or when did you get the idea for childish and, and just tell us, you know what, well, who's, who's the main audience who you're primarily serving and what is it that you guys do? Eh, I think that I started thinking about my company even as a teenager and my mother always said, no, no, it's having clear company is very difficult.

Don't. And so now I realize it's really difficult because it, you have a lot less freedom, but let's say that it came to reality somewhere like 34 years ago. When I decided that I probably really have to. Try to invest my knowledge and my experience and my creative thinking into something that I am guiding, because I didn't agree how my boss, for example, guided the, the processes.

And he's not obliged to listen to me, but maybe I should try and do it myself and see how difficult it is because now idea wise it's it, it, it was really like this, it is difficult, but yeah, so. At that moment. I, I was trying, I was looking for it somehow to have something that is my own and just the culture that I like and the mood that they like and values that I like and, sorry.

That's okay. This is like a coffee machine. Can you edit it later? no. That's okay. Sometimes there's, sometimes there's a lawnmower in the background that just starts as well. And I can't do anything about it. yeah. It's it's. It's good for everyone to hear really? There's some coffee around. It's one of the benefits of working there, right?

Good coffee machine. yes. Yes. It's. So you, you choose your coffee when you're your own boss. So, yeah, so it's everything actually started to get in reality when I was trying to somehow find the balance between found the foundation and the social work and my business skills. And I was like, okay, I it's difficult to mix them if I am more.

To overqualified to go and work in the foundation because I know a lot more that is needed there. And there are other people who are better with children and can do this better than me, but maybe I can combine them somehow in another way. So the, I had disagreement with my partner, let's do the company and let's say like several weeks after that.

So we decided that we will donate 50% of our. To the foundation, because you are both really involved in the foundation. We gave a lot of time and we knew how difficult is to finance. Something that is not a shoes or soup for a child, like going to someone, asking for funding, saying that this money will take some volunteers to travel to the children's to, to.

It's not true for the kids. Then I want to give money for the kids, not for the volunteers. And so we started, we started a company like this, which was very novel for Bulgaria. The idea came from the Dutch company that works like this. It's very pop. This model is very popular in, in the Western countries, but here in the B I guess, at least in Bulgaria is.

It was like what you have, how come it's. It was very strange. Yeah. And we started the company with the idea to go into software development and outsourcing, and we really wanted to start with Python because we had this concept about going into data science at one moment, just the two of us weren't strong enough to have this , but to grow such team.

But we started working in this direction. So at the moment the company is Two main departments. One is web development, mostly Python, which the modern JavaScript frameworks. And we do, we do work for a lot of startups because Python is very adaptive, very quick to working very scalable. So it's very good for such applications.

And the other department is actually the, the. Data science department that we had this name, childish dream in the beginning. And it is now there. We have data scientists that engineers stronger crowd people. So we could do all these big data orchestrating and data analytics and AI. And it's really fun.

In this, in this direction because everyone is talking about AI and, oh, I want an application with AI and it's like, okay, I, I can sound competent here. I can tell you how you should do it. What kind of people you should hire can give you advice. And they're like, okay, it's really hype at the moment. Force, but we had this vision three years ago to go into this direction.

And like every startup, there were moments when, okay, maybe it doesn't work. Maybe it doesn't work. Maybe it wouldn't work. But now we are in a phase that it, it really works. We've we have the, the great team we have the culture, the people we have the structure. We also have a good spinoff product that is going well.

And he has clients. ABB or international manufacturing companies that are using our software to manage the maintenance of their machines, which is very responsible. And we are up at the moment, but you know, in life it's always like this ups and downs. Once it's it's ups and downs, it's, it's pretty fun.

And I I'm, I'm happy. We, we did this when clients first hear about childish. And when they discover it, like, what is the one, what is one of the things that they, they love about it? I mean, of course you have an experienced team of Python developers, but what else do they get excited about working with you and, and, and the team over there?

Of course, the thing with the foundation is a huge for, for them mostly all of, but we don't talk much about it unless we see there's connection and we go to second stage with the people. Because somehow in the first moment it's related to a foundation, are the kids working with developers? And it's like, oh no, we want really good services.

So we don't expose this in at the first stage. But when we meet the people, they see our developers, they understand red is independent company and it, and they. Understand about the, the structure as well. It, it is very important for them because especially when, like, let's say a startup is looking for a long term partner, it's you really need people who you can trust and are not there only to make money because you, you are doing it also not only about the money.

So they see this nature. So this is, this really makes a difference and it also makes some difference inside the team because we hire people who have chosen us as an employer somehow because of this as well. And they have their own mission. So, mm. It is. Really a unique feature for us. Okay. Are there any tax benefits of this new, of this structure that you have where 50% of the profits are funneled into, into the nonprofit?

Yeah. As an ex tax consultant in the world, I can tell you no, no. In Bulgaria, there are no, no benefits, but in the, in the European countries where this is there, actually one of the arguments to use this structure applied structure. Is because there is verify inheritance tax. For example, if I'm someone with a strong business and I leave the business to my children, they will get a smaller portion.

So a huge portion will go to, to the tax authorities, depending which country it is. If you give it to a trust or a foundation or some social initiative. There is social. There is tax benefit for this. So it usually stimulates people to create this mixture. Like I live 50% to my children. I live 50% to a foundation to do this.

Mm-hmm and in Bulgaria, this is not there, but it's, it's something that except if people are good and they want to do good, you, the states somehow help them and, and give them the. To end the roles to, to do it. So it's something that should be changed, but I'm happy that having this structure is one, probably one of the first, at least, I don't know, another company in this direction structured like this.

Okay. It is good that people are coming and asking me. Okay. It sounds interesting. How, how does it work? Why do we do it? There are no, no benefits, but the benefit is that like, if, if I take my dividends, I take them. Then the foundation has the full right to take. It's dividends. It's not whether the CEO decides to make a donation.

Got it. It has the rights to have this dividends. Okay. And it has the rights of the shares if we are sold to someone bigger who wants to buy us. Yeah. Yeah. Okay. In terms of growth for childish and, and projected revenue, what is the projected revenue for 2022? And what strategies have you implemented to what?

To grow the company we expect. 1 million Euro this year. And the strategy so far has been actually to reinvest everything in, in the company. Like it's very important to hire strong people and you should hire them in it's. It's not like some of the outsourcing companies who wait for a project and then set up the team.

You need to test the people, work with them. Bring them the culture and the attitude you need test their skills. So this is disinvesting in people is, is a good strategy that is paying off because we don't have anyone who has like left the company. But sometimes we might choose to, to separate with someone only because he might be.

Great developer or great person or whatever, but we have some minor difference in the, in, in the, in the philosophy, in the attitude to life, to, to doing good to other people. Yeah. And such stuff. So we are trying to. Create this culture during the recruitment process, what are some things that you're doing to try to identify that this is a person that is right?

That is a good fit for the culture. Of course, purely technical. It's always important to, to see that someone is doing something on the side like you are. If you're a developer, you are reading books or doing some trainings online, being closed only in into the field of work is not, is not the great thing.

And. People should be open minded. And somehow, I don't know, it's, it's a little bit related to feeling, but you need to feel this person that is honest and good. Like, like you are it's it's energy that, that you feel. And very often, if, if we. Make a recruitment with doubts about this pure and honest, childish energy in the people.

Then it, it turns out that it brings other problems. Yeah. So we are looking for this childish attitude to life. Okay. Okay. What's next for you personally? Veta. Oh, personally I, if we take out the, the company and personally, I had this summer, I had this long trail in Bulgaria. It's called com , which is 16 kilometers from one end to another and going to the seaside walking.

So. It is, it just finished like two weeks ago, but it is being out of all the work and everything for two, three weeks is three weeks actually almost it's like you you've cleaned your mind. Like, I don't know. I, I don't have a comparison because this kept for the first time for me, but I'm ready for many new.

In, in life with this free mind that I have now. And I don't know when I need more time for this, but it's a good advice for, for everyone who like me, didn't allow this, this time for him or her to really just switch off for a while and leave all this luggage that we carry in our heads for a while. Okay.

Okay. What is a book? Or article it could be even a Twitter thread or a podcast that has impacted how you think about running your business. Oh, not sure, actually, it's I, I really liked no, I, to be, to be honest, I'm reading, I'm not reading many like entrepreneurial or business books. Okay. I think I. One thing that really impacted me was Peter drer's books.

So when I read them as a student and they were really interesting with all the examples for innovation. So it is, it is something I would recommend. Okay. But to be honest at the moment I'm reading most fiction literature, it's, it's something that makes me like, just again, clean this luggage that we are bringing in our heads.

So it's, I, I really prefer to find times about fiction than. Read about business. Okay. And it, it gives also some lessons, but in another sense, okay. Right now for just a few fun questions, the first question is, does corn belong on pizza? No. Okay. Okay. For those that are not watching the video, you gotta check out Lego's reaction on this question here.

no, I hate to realize it, but I'm purely. Italian. Yes. okay. Style. So no, no corn. Yeah, no potatoes in the pizza and no such stuff. All right. Yeah. Same here. Same here. What is a favorite TV show that you can watch again and again, I don't have a TV for many, many years. Okay. All right. All right. Well, what do you, what do you do?

Do you have any for entertainment? Do you listen to a podcast or any, anything like that? Not much. I'm actually fan of European movies and I'm, I have subscription for movie.com. Okay. It's also, I think it's also somehow startup. And it's mostly about European cinema and some more like old and underground movies.

Okay. It, it is stuff I like. And all right. All right. And the last question for you, what was the best advice that your mom or dad gave you? ? I, the, the, it, it is advice giving it as a sentence is, is never. Like it doesn't work. It, this is what I preach about communicating with children. You should give it by example.

So the advice was actually staying next to my mother, which was like very active and the, the driver of the, of the family business. So it was. Really a good lesson to stay next to her for many years and see how she does everything and how, how she treats the, her work. And actually the one example was that once she had a huge delivery of wheat for the store, it was like 10 tons in front of the store.

And at this moment they had like two hours to get it into banks and get it into the store. And there came a huge. Which brought all, all down the street and it, it, there, it was all gone like products for a lot of money. And all the people around said, oh my God, how do you feel? What are you doing now? I'm calling, what can I do?

It's gone. I'm calling the next delivery guy to arrange the next delivery. What can I do? It's it goes on. So this is the style that I have adopted from her. And if something bad happens, Go for the, for the next project and the next delivery. And you, you should keep the words rolling. Yeah, no, absolutely.

Keep that same enthusiasm after a uh, after you've been knocked down Aveta this has been a wonderful experience. Thank you so much for coming on the show for everybody listening, I will include links to childish. And give a book in the show notes. Hey, I don't know how to say goodbye in Bulgarian, but I don't wanna say goodbye because I hope to continuously get to know you better and chat more about, give a book some other time.