Konstantin Dzhengozov: Taking Risks In Business And On The Mountains

Konstantin Dzhengozov is co-founder and CFO of Payhawk, one of the leading spend management solutions for domestic and international businesses. It is relatively rare for a CFO to be listed among a company’s founding team, though it is becoming more common.

Konstantin and I had the chance to discuss his experience being a company founder AND CFO, how Payhawk stays innovative, his definition of future success, intense focus, dislocated shoulders, and more.

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Konstantin Dzhengozov grew up in Sofia, the capital of Bulgaria. Talented at math as a kid and drawn to analyzing businesses and business ideas, he identified a natural progression to become involved in finance when he went to college. He received his bachelor’s degree in economics from The University of Sofia and then received a Master’s in Finance from The University of World and Natural Economy in Sofia.

Following graduation, he worked for KPMG as a management consultant for approximately five years, working on everything from business valuations to due diligence and feasibility studies. The wide range of experiences was formative early on in his career.

“I had a very broad range of different experiences that shaped my knowledge and strengthened me, because working as a management consultant can be very stressful,” he said. “Early on I had a lot of exposure to working on big projects, but at one point I thought that it would make sense to get involved in the real business.”

He moved on to a Bulgarian technology company that was eventually acquired by U.S. company Progress. It was looking for someone with his background to be responsible for internal valuations, acquisitions and budgeting. At first, he was hesitant.

“I wasn’t sure if it was something that was right for me, especially the tech sector,” he explained. “Looking back, it was one of the best decisions that I ever made in my life because it completely changed me on a personal and professional basis.”

He worked with the company founders from day one with a large amount of freedom. It also gave him the chance to be a part of the small team that facilitated the acquisition when Progress acquired it for $264 million, one of the biggest deals in the region.

Looking back, it was a catalyst for the tech development happening in Bulgaria. Following that acquisition, more people started companies of their own. It was also during that boom when, Dzhengozov met the other co-founders of Payhawk. Impressed by the company’s innovative product, and business model, he made a decision to join as co-founder and CFO, believing strongly in the company’s potential.

Payhawk is a spend management solution that helps companies to get accurate and timely information while focusing on cost management. The problems that Payhawk solves are inherent in companies of every industry, geography, and size, allowing them to provide a solution that helps departments function effectively and concentrate on creating the greatest value. Payhawk not only digitalizes spend by allowing users to upload receipts and invoices, but it allows companies to create and implement spend policies and approvals.

The combination role of co-founder and CFO is a unique combination that makes his role different from most CFOs, but each co-founder also has dual roles. Hristo Borisov serves as co-founder and CEO; Boyko Karadzhov as co-founder and CTO; and Dzhengozov as co-founder and CFO. Their professional backgrounds and personalities allowed them to naturally settle into their responsibilities.

“Hristo is the big visionary–the steam engine who gets us all going,” he said. “He was the person who had the idea of Payhawk in the first place. Boyko is an engineer and the brains behind the product we have today. So that made me responsible for making sure that everything else ran smoothly, that we had a sound business model.”

This meant engaging in all different aspects, from pricing, to opening offices, creating policies, having calls with accountants and investors, and more. Dzhengozov admits he doesn’t fit the traditional framework of the role but prefers the versatility.

“It’s not limited to finance, but I find it fascinating,” he said. “All my career, I have been very interested in anything outside of the finance world. How the business works, how we make decisions, how we can be more profitable, how we can execute better, how we can operate in a more lean way.”

Being CFO also gives Dzhengozov a unique perspective with Payhawk’s customers since he is doing the same job. It’s something that helps him keep his finger on the pulse of innovation, especially compared to what other competitors are doing in the space. Being on the same level allows for a level of transparency between him and his customers, making feedback a premium feature of those relationships.

“The key to our success is having the ability to listen to our customers and create constant feedback regarding what is working, what is not working, where their biggest pain points are, how we can solve it with technology and automation, and how we can make their lives easier,” he said. “We combine this in a user-friendly way so that it doesn’t matter if you’ve worked with Payhawk for a year or if you are a new user. You can easily get your hands on anything and without any onboarding, do everything you want to do with the product.”

Although the tool makes various finance functions easier and the company has experienced the kind of success that makes it a unicorn (it is currently valued at more than $1 billion), it might be logical to assume that Dzhengozov’s role is also easy. But, managing the financial operations of Payhawk has its challenges.

One challenge is that the company is constantly growing and innovating, either taking a different look at pricing or its business plan; in the early days Dzhengozov estimates that there were at least 20 versions of the business plan. He describes his work as always evaluating opportunities to become more lean, keeping the current business plan granular and robust. There was one decision that led to a great deal of success.

“One of the key decisions that we took early on was that we were going to have two separate revenue streams,” he said. “Unlike some of the competitors in the U.S. that started offering a product for free, we decided that we have expertise in business in building B2B software. So we started charging for this software as a service type of an offering from day one. The other revenue stream came from card usage and the actual payment service.”

Another key decision that has contributed to the company’s success is a sense of openness. Whether that describes Dzhengozov’s leadership style or the interior design (“no one can hide in a separate office”), it allows for increased collaboration and a unique company culture. He says that he wants to keep the startup vibe and culture.

“We like to be open and very focused on what we do, and we like to hear everybody’s opinion. Everybody’s free to speak if they see something that doesn’t work or if they see something that needs to be improved,” he explains. “Sometimes this is hard, but we try to operate in this manner and are strict on the people that we hire. We are focusing on hiring the top 1% of the talent out there.”

With that in mind, culture is something that they take very seriously. Agility, flexibility, approachability, fast decision-making, running (and failing) fast, experimentation, and preparing better for next time are all hallmarks of the mindset from which Payhawk operates.

The eventual vision for Payhawk is to be the global leader in the space. Currently, Payhawk has customers from more than 32 countries and is one of the only products on the market that can be used by companies within the European Union, the UK and the U.S. But, there is still a great amount of potential.

“The problems that we are solving apply worldwide to any type of company, regardless of their size, their geography, or their industry,” he explains. “We really want to be the global player that is going to be leading this space. Why not even do a big IPO someday in the U.S.? The biggest success for me personally is going to be if we manage to have an impact on the ecosystem and expand on that vision so that we can have future entrepreneurs and VC funds from the U.S. to focus on this part of the world.”

When Dzhengozov isn’t consumed with thoughts about Payhawk or what the future will hold, he can be found outdoors. It’s the only way he can shut his brain off.

“I really enjoy biking in the mountains and downhill rides, because it gets my mind off things,” he said. “I’m really focused on the exact thing that I’m doing right now; if not, I’m gonna fall. One of the things that I’m blessed with is I have a high threshold of physical pain. I can experiment a lot and try some crazy stuff, and I don’t feel like I’m going to hurt myself too much. I recently got back from a ski trip in Italy where I managed to dislocate the same shoulder three times in a span of three hours.”

He was snowboarding three days later, despite medics’ advice to rest. His reasoning?

“I decided it was OK to risk it.”

Some people are wired for risk in life…and in business.