Our guest today is the Chief Operating Officer of Fundbox, Cetin Duransoy.
In this role, Cetin is responsible for managing and growing the core credit business, as well as building and expanding the company’s product platform.
Cetin joined Fundbox from Visa, where he served as the company’s Head of Global Installment Products and led a team of product managers, engineers, and technologists to build the next generation of payment products and solutions. During his tenure, Cetin oversaw the creation and development of the company’s installment payment ecosystem that enabled issuers to offer, and sellers to display, installment plans to cardholders, authoring the initial white paper and leading the program from conception to launch within three years.
He also designed loyalty and benefits products and solutions that increased customer engagement for issues and merchants.
Prior to joining Visa, Cetin spent 15 years at Capital One, where he held various leadership roles both in the credit card division and retail bank. In his last role at Capital One, he led the Small Business Lending and Deposits teams, where he was responsible for all aspects of the business and associated P&L. Prior to Capital One, Cetin held various engineering roles.
Cetin holds a B.Sc. in Mechanical Engineering from METU, Turkey, and an MBA from the University of Maryland.
In This Conversation We Discuss:
- Defining yourself as a leader and understanding the leadership styles
- How to find the adaptive and entrepreneurial qualities in hiring opportunities
- How a new leader can help the senior staff manage the company changes without ruffling feathers
- What Cetin focused on and avoided in the first 90 days of a new employee
Connect with Cetin Duransoy: LinkedIn
Fundbox – https://fundbox.com
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Our guest is the Chief Operating Officer of Fundbox, Cetin Duransoy. In this role, Cetin is responsible for managing and growing the core credit business, as well as building and expanding the company’s product platform. Cetin joined Fundbox from Visa, where he served as the company’s Head of Global Installment Products, and led a team of product managers, engineers, and technologists to build the next generation of payment products and solutions.
During his tenure, Cetin oversaw the creation and development of the company’s installment payment ecosystem that enabled issuers to offer, and sellers to display installment plans to cardholders, authoring the initial white paper, and leading the program from conception to launch within three years. He also designed loyalty and benefits products, and solutions that increased customer engagement for issues and merchants.
Prior to joining Visa, Cetin spent fifteen years at Capital One, where he held various leadership roles, both in the Credit Card Division and retail bank. In his last role at Capital One, he led the Small Business Lending and Deposits teams, where he was responsible for all aspects of the business and associated P&L. Prior to Capital One, Cetin held various engineering roles. He holds a Bachelor of Science in Mechanical Engineering from METU in Turkey, and an MBA from the University of Maryland. Cetin, welcome to the show.
Thank you, Cameron. Happy to be here.
I was wondering where the name Cetin was from. Turkey is on my bucket list, a very short list now of a country that I need to get to. Is it as beautiful as everybody says?
It is, definitely for visiting purposes. Istanbul became a very large city these days. Too large to live in for my taste, but it’s a beautiful place.
They said the south of Turkey. Is that where I’m supposed to go? Cappadocia is south of Turkey?
You can find everything everywhere, the middle of Turkey, Cappadocia, the south of Turkey, the beach and the rest and the mountains in the east. It’s a pretty diverse geography. I’m sure you would love it.
It’s on our list. We’re going to be spending a bunch of time over in Europe, and that one’s going to be high up the list. Thank you for doing this show. I really appreciate it. Before we dive into your experience and what you’ve been doing with Fundbox, can you explain to us what Fundbox is?
Fundbox is basically a financial platform for small businesses. We have various products and ever-expanding products, if you will. Mainly, our core product right now is helping small businesses with their capital needs. Then we have new payments product being launched. Various needs that the small businesses need.
What would some of those needs be?
Short-term cashflow is a huge problem, Cameron, for small businesses. Specifically, an average time for an invoice to be paid is around 19 days. There are around a couple trillion dollars waiting to be paid at any point in time. This is the money locked in on invoices, and having this money be paid-in in a much earlier time frame basically unlocks the growth potential of small businesses. That’s one of the key problems that we have been solving since the inception of the company.
We are coming up with more innovative products. The product that we call Flex Pay, as an example, is basically giving the flexibility to our customers in paying invoices. Customers can basically use our own checking account for their payroll, for their insurance. The money is being pulled, and then the customers have a certain timeframe to decide if they want to pay the money back in full or if they want to take a short-term loan to pay that money. Various needs of small business customers.
In terms of the invoices that are out and helping the companies with those short-term loans, is that what factoring used to be called? Or is it similar to maybe the payday loans business for people, but you’re doing it more for the business?
Factoring is a very specific business model where the invoices are now owned by the factoring company, once the invoice is paid. We solve the exact same problem, but differently. We do not own the invoices, the invoices are still our customers, if you will. These are fairly short-term loans. We have loans anywhere between 12, 24. We launched more for 52 weeks, but that’s probably less for invoices, but more for slightly longer capital needs of the small businesses.
Are you competing with traditional banks? What’s your value prop against a traditional bank?
Cameron, I guess my time at Visa taught me the concept of a frenemy, which is, “We compete, we partner with banks.” We actually believe partners are going to be great growth potential for us because small business divisions in banks traditionally are less invested compared to the consumer or the commercial businesses. We have spent over time $150 million to build our platform. We see that as a great opportunity to license our technology to banks to basically serve their customers as well. We partner, we compete. That’s the new life, the connected life in the 21st century.
Do you fund these loans faster than the typical retail banks are doing for companies? Is that something that is your value?
The short answer is yes, but more important than the speed, I think it is the use of AI. Small business lending is traditionally done by paper. You submit bank statements, you submit income statements, the IRS tax forms. What we do is everything is electronic. We are completely paperless. The customer connects to your bank, the customer connects to your accounting software, and our models basically assess the risk of the customers real time.
The decision is given 99% of the time within minutes. Then last 1% is we get a signal that there might be a fraud, therefore, we pull that account and look at it more deeply if there’s fraud on that application or not. That’s the biggest differentiator. When you look at the small businesses, nobody creates a small business just for the sake of. They have a passion on something, and they want to run that business. When they are running that business, the financials is not necessarily the thing that they want to think about. The time spent on the application is an incredibly important time, perhaps more important than how fast they’re going to be getting the funds.
How about in terms of the rates as well? Is it a competitive rate to what the retail banks are doing? Are you more expensive?
There is one area that we are not directly competing with the banks, which is short-term loans. The banks are more for capital expenditures, so five years. Our solution is short-term. Given the short-term nature, it is the fee of the amount that has been borrowed. Our pricing is competitive with similar solutions that are being offered in the marketplace, but there’s no direct competition with the banks per se, if that makes sense.
It does. There’s a company out of Toronto, Canada called Clearbanc. Is that similar to what you’re doing? Are you going after a similar clientele? Do you have certain verticals that you do to go after and some that you don’t?
First of all, Clearco is familiar with the company. There are lots of similarities between what we do and what they do. One of the areas that we focus on more is the B2B clients. When you look at the B2C small businesses, their options set, when it comes to short-term funding, are many because they accept credit cards. Whenever they accept credit cards, there are lots of solutions out there. We have credit card provider, etc. to close that short-term gap, if you will.
In B2B business, this option is less relevant because they don’t typically accept credit cards and it is all invoice-based, and that’s where we come in. That has been one of our differentiators in the customers that we are serving. Perhaps 80% of our customers are more B2B. We are not exclusive to B2B, but given the invoicing nature, 80% of our customers are B2B.
Are you going after the online businesses, or do you work with the offline businesses as well?
I would say more offline than online. Again, our models obviously differentiate between online and offline businesses in terms of the risk profile per se. In terms of whom we go after, one of the largest verticals that we target and we have a great customer base is professional services, whether it is the architects and lawyers. One other differentiator of ours is we have a very big partnership business. Most of our customers coming in are coming in through our partners, and that defines what type of customers that is coming into us.
I’ve got a couple of clients that I coach that are very large personal injury law firms. They’ve got an $8 million advertising budget. They’re very large, substantial, 200-some employees, but they’ve got some big invoices out with their personal injury claims. Would that be something that you guys would be able to fund or finance potentially?
I haven’t thought about it.
I’ll do an introduction later and see if there’s anything that they can do because it’s a need that they have. They have a claim for $3 million, and they’re waiting for an insurance company to pay that off six months later and they know it’s coming. It’s just the insurance company is like, “We’ll get it to you in 160 days.” I love that you’ve got a product called Flex Pay. One of my former clients is a company called FlexPay.io. I don’t know if you’ve bumped into them at all.
Basically, when credit cards are getting declined, they help companies reduce those decline rates and get the credit card processed faster. They’re a Montreal-based company, a really wonderful team. How big is Fundbox? How many people? I guess it’s big, you just spent $150 million.
We are a little over 300 people.
It’s not a small startup, but it’s still a massive difference from leaving Visa to come over there.
What was it that had you make that change?
At Visa, I worked with so many different companies, different sizes, different types. One of the things that has always appealed to me on the fintech side of the equation is how nimble they can be. My analogy is if the larger companies that you named are more of a transatlantic ship versus we are a speedboat. Just to give you an example, the Flex Pay example that I have given to you was an idea in August of 2021. We launched that product in six months’ timeframe. The speed at which things we can do is quite amazing.
One of the things that I was also considering is that as we are doing these things so fast, “Are we breaking things?” The answer is no. It is the coordination cost being so much lower that is creating that speed in the smaller companies and the focus that we have. That’s one of the big advantages. That’s why I was very well-prepared to make the transition, if you will. I haven’t had too much of a surprise as I was coming in because I was expecting a much more nimble environment than I found it.
It’s got to be fun for somebody who’s as smart as you are and having the industry expertise that you have to then go and work with a company where you can deploy ideas super-fast, versus two years later, hoping that we can get this thing out of the box. How have you had to change or adapt as a leader to that pace? Have you had to change or was it easier?
Certainly. Within the financial sector, obviously, there are monitoring meetings. We look at much of the metrics. I used to do that monthly or quarterly, and here I do that weekly. Things are moving much faster but the fundamentals don’t change, Cameron. In the end, running the business has a series of fundamentals. The company becomes smaller, and the frequency of which the things that we look at increases, if you will. It’s a direct correlation with the speed at which we are going. If you are going 30 miles per hour, you don’t need to check how fast you are going all the time. If you’re going 80 miles per hour, you better check much more frequently because bad things can happen.
I’m intrigued with the 300-people size as well. With you coming into that size of a company, how specifically did your leadership styles change, or did those change at all?
I don’t think it did. My leadership philosophy is, “Hire the smartest people and get out of their way. Enable their creativity and support them as needed.” I’m not a very top-down leader, but I’m a big believer that, “Show people the North Star, hire great people, and just support them.” That works in the larger companies that I work with. It is working here at Fundbox. We were slightly over 200 when I joined. We are going through a massive growth curve but again, the fundamentals of the leadership have not necessarily changed.
When I’ve been running smaller organizations like in that couple hundred size, I’ve often been worried about hiring seasoned executives who have come from large corporations, worried that they wouldn’t be able to adapt and become entrepreneurial. What do you think you would look for to know that somebody could come out of the bigger organizations and become entrepreneurial or adapt?
I don’t think I’m the creator of this word, but I heard it somewhere, that intrapreneur, which is people who try to break things inside a larger organization. I, myself, have not necessarily been the best rule follower but, “Should we change this?” The installment initiative at Visa was not given to me. It wasn’t even my job. I said, “We should get in here,” which became 100 people team over time.
When we are hiring people from larger organizations, I think that’s one big quality that we are looking for. Have you been an entrepreneur or have you been more of a, “Vision is there. Let me just follow that vision and execute on that.” Execution is incredibly important. In the meantime, that entrepreneurship quality, I found it to be fairly easily transported into smaller organizations and turned into an entrepreneurship.
My next question ties into when you came into the organization. Here you come in as the COO into a 200-person company, and there’s a whole bunch of people that have been there working in their jobs and doing their job, and now you come in as their boss and as that seasoned executive. How did you help them manage their emotions? How did you help come in and settle in without ruffling feathers? That’s got to be a really hard thing for you to do, but also for the company to do.
That’s very true. The interview process was a big help. I met with the CEO and the founder four times, four interviews. On top of that, I had thirteen other interviews, including all of my would-be future directs, as well as all the people whom I would work with. That interview process really prepared me well, and even prepared all the other folks who are going to be better in my team or will be working with me on parallel so that everybody knew what they were getting into.
The good part of it is people who would report to me had a saying in my hiring. I found that to be a very interesting thing at Fundbox that I’m not necessarily used to, but I’m loving it so far, and applying the same principles. Meet the people, and put them into the interview panel to those people who will be reporting to this person. Again, we’re going super-fast.
We don’t necessarily have time for months and months of adjustment between the new leader and the people who would be in that leader’s organization. We try to pull that forward as much as possible during the interview process. Going back to your original question. By the time I started, I think I knew everyone, and everyone being every one of my directs obviously, everyone’s motivations, where they want to go, what they want to do. I did not face much of a problem.
Back when I was building 1-800-GOT-JUNK as the COO, I had 6 or 7 of my team hire their Head of Sales and they did a lot of the interviews. Once they hired the Head of Sales, they were all so excited to be working for him because they knew everything about him. It’s interesting, companies need to do a lot more of that, as well. Talk about your first 90 days or first 100 days coming into the company. What did you focus on? What did you avoid doing? Were you careful at all or guarded? How did you approach that?
In all my job changes, even inside the company or going into a new company, I have the 30, 60, 90-day rule. 30 days is only observation. I don’t even open my mouth. I listen, which might be unsettling for the employer, if you will, “We hired this guy. He’s not talking anything. What’s happening here?” The second 30 days, 30 to 60 days is sharing my reflections with, definitely in this case, it was the CEO, Prashant, as well as CFO. It’s like, “This is what I am observing. Here is how I am thinking about approaching this problem.” Then 60 to 90 days is all about the execution, now acting on those reflections.
When I look at Fundbox, and how that has been applied, I think 30 days was 30 days. We squished the second 30 days into probably a 2 to 3 weeks’ timeframe. It was faster. By the time week seven hit, I was making all the new process changes in place. Again, the big companies have figured out certain things like the processes are much better, etc. Finding that perfect match between, “How am I not going to lose the nimbleness, but bring the structure?”
As I come in, I introduce the series of business processes in place, which have been very well-received at every level in the organization. The weekly meetings that I’m talking about were a result of those. It brought so much more structure and also allowed us to move the levers because we see things in real-time. If something is not going well or something is going really well, should we double down on that thing or should we pull back from that thing? Those were the results of some of the observations, and then, therefore, the new business processes that I put in place.
You’re an engineer by background in fintech. I would imagine you’re very much on procedures and systems. Then you meet this fast-growth organization as well, which is still in the same space. Do you throw out the process at times and just grab the diamond in the rough? Or do you constantly try to balance between both? I don’t know if that question is clear.
It is, but it is constantly trying to balance both. The common expectation is processes slow things down. If you look at the application of processes in larger organizations, that, I think, certainly is true. In the meantime, it doesn’t have to be. If used well, I actually have seen processes speeding up things because it creates more structure on how we’re going to see things.
I’ll give you one example. If I would let my calendar be filled with things and if something new pops up, I would have waited until the next 2 to 3 weeks to be able to look into that thing. All my Wednesday mornings are empty, and people come in, put things into the agenda. Nothing waits more than a couple of days until the next Wednesday in our organization because I will always have time on Wednesday mornings. If there are ten topics, we start dividing the time. Instead of me looking into one topic for 30 minutes, I look at it for twenty minutes, but we squeeze everything into those Wednesday mornings. Therefore, nothing waits.
It’s a process. Is it slowing down? I don’t think so. It is speeding things up. That balance is super important. Also, even in product development and technology implementation, leaving processes can be very dangerous because making mistakes and errors in coding becomes a huge problem. Following processes there, looking into go-no-go meetings before we launch, which may look like it is slowing things down. Maybe it is for a couple of days, but the errors that it removes from the system eventually speed things up.
I like that. Talk to me about the go-no-go meetings, and then I’ll ask my other question. What’s a go-no-go meeting look like for you?
Basically, it is every single person who played their role in the launch of that product, who comes into the room, obviously virtual room these days, and I look at literally the eyes of the person like, “Do you have a go or no go? Tell me why.” My first job out of college was actually in rockets, and we did have go-no-go meetings. It was military rockets as opposed to the more civilian rockets. I don’t think I never made peace with the military rocket portion. That’s why I quit after a couple of years, but it taught me many things.
It’s not actually that different than the go-no-go meetings that you see in the movies for rocket launches. Obviously, people are not going to die hopefully in our case. There are less stakes out there. I look at the eyes of the person and say, “Go, no go, and tell me why.” It’s amazing that, “Word is mine, floor is mine. Now I need to talk.” It puts so much responsibility to that person on, “Yes, I’m a go. Here is the reason.”
I like that you’ve gone back to that three times on the, “Here is why. This is my reason.” It’s so important because you’re growing their skillset and their confidence on forcing them to do that, aren’t you?
Last two questions. You mentioned earlier that you try to get out of their way and support them. What does that mean for you in terms of supporting them?
In terms of supporting them, couple of things. Number one is if they want to use me as a brainstorming person, that I can brainstorm with them. They might say, “Help, I’m thinking about this versus that.” I can tell them on, “Here are the pros and cons as I see it.” I’m a very Socratic teacher. My kids will probably tell you that they hated that nature because I never give the answer, and I let people get to the answers by asking them the questions. I believe the depth of learning increases materially with Socratic teaching. Supporting the people is when they ask for help. It’s basically going through that process with them. If they have 2 or 3 options, just working with them on the pros and cons of each and every one of them. The goal is never to make a decision on behalf of them.
One thing I always love to do when I was on the other hand of the equation when I was more junior, when I’m going to my superiors, I never ask, “Should I do it?” It was my nature, maybe too much of a rebellious nature that I had. I always said, “I evaluated A, B, C. I’m going to do A. Let me know, if you have any problem with that.” I try to push that with all my directs as well all the time. Don’t make me make the decision because you are far closer to the facts. I may have more context at times, but you are far more closer to the facts and you make the choice. I’m always going to have the veto right. The more senior person is always going to have the veto right, but don’t let the more senior person choose for you. You choose on your own.
That’s really strong leadership too. I love that you mentioned the Socratic method where you ask a lot of the questions to get them to discover for themselves what the answer is versus giving them the answer. Again, that grows their confidence and their skillset. I want to go back to the 21, 22-year-old Cet and you’re just getting started in your business career. What advice would you give the 21, 22-year-old?
The thing that I would tell myself is it’s going to be just all right. I was so impatient, “When am I going to be the CEO?” Everything was taking it so seriously. At the end, it’s going to be all right. Just calm down a little.
It’s funny because when I asked you the question, I saw you look up and start to smile. I knew it was something around, “Just chill and relax. We’re going to be okay.” It’s amazing. Cetin Duransoy, the COO from Fundbox. I really appreciate the time. Thank you so much for sharing with us on the Second in Command show.
Thank you, Cameron. Thank you for having me.
That was great.