Be fundamentally different, not incrementally better | Jag Duggal (Nubank, Facebook, Google)

Overview of New Bank

The discussion introduces New Bank, highlighting its significant growth and unique approach to business.

Growth Strategy and Customer Focus

• New Bank is larger than Coinbase, Robinhood, Affirm, SoFi, and Lemonade combined.

• Emphasis on being fundamentally different rather than incrementally better.

• Strives for customers to love the service fanatically.

Diversified Product Offerings

• Built lending, investment, insurance products, and small business solutions.

• Projects are rarely scaled until they meet a compelling threshold score.

Strategic Clarity in Product Development

Insights into strategic clarity in product development based on Kevin Systrom's perspective.

Clear Strategy Execution

• Importance of having a clear strategy even if it may not be right initially.

Future of Banking Innovation

Exploring the potential for banking innovation in regions like Sao Paulo, Mexico City, and Bogota.

Geographic Innovation Hubs

• Speculation on the emergence of a groundbreaking banking company from Latin American cities.

Introduction to Jag Dugal - Chief Product Officer at New Bank

Introducing Jag Dugal and his background before joining New Bank.

Professional Background

• Previous roles at Facebook leading monetization efforts and at Google managing display ads.

Discussion Topics with Jag Dugal

Previewing the conversation topics with Jag Dugal regarding product development strategies and fintech trends.

Conversation Highlights

• Focus on building products that create fanatical user bases.

• Exploration of category design, product line expansion, and future fintech trends.

Sponsorship Message: Work OS & Mercury

Promotional messages for Work OS and Mercury financial services.

Work OS Features

• Facilitates adding enterprise features to SaaS apps seamlessly.

Mercury Financial Services

How to Drive Word of Mouth Growth

In this section, the speaker discusses the strategies and processes involved in driving significant word-of-mouth growth for a product.

Building a Product Team for Word of Mouth Growth

• The foundation for driving word-of-mouth growth lies in tapping into deep pain points that customers experience.

• Understanding and addressing customer dissatisfaction with existing services can be a powerful motivator for building a product that people will advocate for.

• Cultivating a culture within the organization that prioritizes customer satisfaction and aims for customers to love the product fanatically is crucial.

Cultivating Customer Love Through Product Development

This segment delves into how fostering customer adoration through product development is pivotal in achieving sustainable growth.

Core Values Driving Customer Admiration

• New Bank's core value of wanting customers to love them fanatically sets the tone for their approach to product development.

• Emphasizing customer discovery before building ensures alignment with customer needs and desires, leading to products that resonate deeply with users.

Operationalizing Customer Love in Product Development

Here, the focus shifts towards operationalizing the concept of building products that customers adore passionately within an organizational context.

Implementing Customer-Centric Processes

• New Bank's values include hunger, challenging status quo, building diverse teams, pursuing smart efficiency, and thinking like owners rather than renters.

Explanation of Customer-Centric Approach

In this section, the speaker emphasizes the importance of explaining to customers why they should care about a product before involving engineers in the project. The focus is on understanding the value proposition for customers.

Importance of Customer-Centric Approach

• The speaker highlights the need to consider why a product is great for customers and how it differs fundamentally from existing options in terms of quality, complexity, and price.

• Post-launch activities are discussed, including measuring product-market fit using techniques like the Shaun Ellis score and focusing on customer satisfaction metrics.

• The Shaun Ellis score methodology is explained, where customers are asked how disappointed they would be if the product disappeared. Achieving a high percentage of very disappointed customers indicates product-market fit.

• Cultural considerations impact the threshold for customer satisfaction; in Brazil, a higher percentage (50%) is set due to cultural tendencies towards politeness and optimism.

• The company prioritizes Net Promoter Scores (NPS) as well as World-beating NPS scores by tracking customer satisfaction rigorously across different products and regions.

Measuring Success Through Customer Feedback

This segment delves into how success metrics like NPS scores are used to gauge customer satisfaction post-launch and ensure continuous improvement based on feedback loops.

Utilizing Customer Feedback Metrics

• NPS scores are highlighted as crucial post-launch indicators of customer sentiment, with an emphasis on achieving high scores to drive organic growth through positive word-of-mouth referrals.

• Iterative processes are essential for refining products based on feedback; monitoring metrics like churn rates helps prevent customer attrition and maintain sustainable growth strategies.

• Building products that retain customers without leaks in their user experience is emphasized to create a strong foundation for viral customer acquisition strategies.

• Personal commitment to preventing "leaky buckets" underscores the importance of ensuring products meet high standards that encourage long-term customer loyalty and advocacy.

Implementing Shaun Ellis Score Methodology

This part focuses on operationalizing the Shaun Ellis score methodology within product reviews post-launch to assess whether customers truly love a product enough to recommend it to others.

Operationalizing Shaun Ellis Score

• The Shaun Ellis score serves as a key question during post-launch product reviews, aiming to evaluate whether customers not only like but love the product enough to become advocates.

Detailed Discussion on Product Development and Customer Satisfaction

In this section, the speaker discusses the importance of new product development and customer satisfaction, emphasizing the need to exceed a 50% satisfaction threshold.

Prioritizing Product Development

• Emphasizes the significance of customers feeling very disappointed if a new product they've never used is discontinued.

• Challenges the team to identify three to four key elements essential for surpassing the 50% satisfaction mark.

• Stresses the importance of aiming for greatness rather than settling for products that are merely "good enough."

Marketing Strategies and Product Enhancement

• Advocates for investing in product excellence over heavy reliance on marketing budgets like Google and Facebook advertising.

• Shares an example of a product, Assistência de Pagamentos (payments assistant), undergoing refinement to meet high standards.

Enhancing User Experience Through Iterative Improvements

This segment delves into refining user experience by addressing complex payment processes and ensuring reliability in bill payments.

Addressing Payment Complexity

• Describes the intricate payment system in Brazil with multiple payment rails and potential unreliability issues.

• Highlights the consequences of missed bill payments, such as negative credit reports, underscoring the need for a reliable payment solution.

Iterative Enhancements for User Convenience

• Discusses leveraging customer feedback through metrics like Sean Ellis score to enhance user experience.

• Emphasizes streamlining bill payments across various platforms to create a seamless user experience and increase customer engagement.

Optimizing Product Adoption and Customer Satisfaction

This part focuses on strategies to consolidate user engagement, automate processes, and drive significant growth in monthly active users.

Driving User Engagement

• Details iterative improvements made to facilitate multiple bill payments across different platforms efficiently.

• Discusses ongoing efforts to enhance user experience through continuous quality adjustments based on customer feedback.

Achieving Growth Milestones

• Reports substantial growth in monthly active users due to strategic enhancements based on user preferences.

Voice of the Customer in Product Management

In this section, the speaker discusses the importance of directly engaging with customers to gather feedback and insights for product development.

Importance of Direct Customer Engagement

• Traditional survey methods can be cumbersome and may not provide detailed customer feedback.

• Calling a small number of customers directly can yield valuable insights quickly.

• The speaker recommends picking up the phone to call customers for a more personal interaction.

Leveraging Direct Communication

• Phone calls allow for capturing nuances like tone of voice that statistics may miss.

• Emphasizing simplicity and directness in gathering customer feedback.

Challenges in Scaling Products

This part delves into the challenges faced by product managers when scaling products within organizations.

Pressure to Scale Products

• Intense pressure on product managers to scale products as expected by stakeholders.

• The importance of saying no to scaling prematurely to avoid potential issues at a larger scale.

Iterative Approach to Scaling

• Emphasizing iterative processes based on strong hypotheses and customer feedback before scaling.

Role of Product Managers in Decision-Making

The discussion focuses on the pivotal role of product managers in making critical decisions and pushing back when necessary.

Pushing Back Effectively

• Highlighting the significance of product managers pushing back against unfeasible ideas or projects.

• Exploring tactics for effectively communicating concerns and pushing back within organizational structures.

Cultivating Ownership Culture

Detailed Insights on Product Development and Customer Interaction

In this section, the speaker discusses the importance of an ownership mindset, clarity, data-driven decision-making, and dealing with strong-willed senior executives in product development.

Prioritizing Ownership Mindset and Clarity

• Emphasizes the significance of having an ownership mindset in product development.

• Stresses the need for clarity and data-driven decision-making when aiming for senior leadership roles.

• Encourages understanding trade-offs and challenges while making decisions about scaling products.

Effective User Research Strategies in Product Development

This part focuses on user research strategies, uncovering pain points, building hypotheses, and observing customer behavior effectively.

Uncovering Pain Points through User Research

• Acknowledges the challenge of consistently conducting effective user research.

• Highlights the value of anecdotes over sophisticated analysis in understanding customer needs.

• Emphasizes the importance of articulating clear hypotheses before conducting research.

Enhancing Customer Interaction through Hypothesis Testing

The speaker delves into the significance of hypothesis testing, avoiding bias, and observing customer reactions to refine product development strategies.

Refining Hypotheses and Observing Customer Reactions

• Advises teams to avoid falling in love with hypotheses to maintain objectivity.

• Suggests observing more than asking questions during customer interactions.

Account Invention and Social Banking

The discussion revolves around the historical context of joint bank accounts, their origins in women's rights movements, and the evolution towards modern social banking arrangements.

Account Invention and Historical Context

• Joint bank accounts originated in the late 19th or early 20th century coinciding with women's liberation movements.

• Initially, women in the US were not legally allowed to open a bank account without their husbands' approval.

Modern Social Banking Arrangements

• The concept of social banking extends beyond traditional social media interactions.

• Sharing financial goals within families can be more challenging than sharing other aspects of life.

Product Development Strategies and Customer Research

Insights into product development strategies focusing on customer pain points, avoiding premature selling, and adopting a customer-centric approach through research.

Customer-Centric Product Development

• Approach customer research by identifying pain points rather than pushing products prematurely.

• Engage customers to sell you on their needs rather than overselling your ideas.

Effective Data Handling with One Schema

Introducing One Schema as an efficient tool for handling messy data, enhancing spreadsheet import experiences for customers.

Simplifying Data Import Processes

• One Schema offers an embeddable CSV importer for SAS customers to streamline data handling.

• Correcting messy data ensures a seamless experience for users during spreadsheet imports.

Strategic Thinking and Execution

Exploring the significance of clear strategy formulation over mere execution prowess, drawing from personal experiences in strategy consulting.

Importance of Clear Strategy

• Emphasize clarity in strategic planning to navigate deviations effectively.

• Highlight the necessity of a coherent plan leveraging strengths effectively for strategic success.

Problem with Strategy and Vision

In this section, the speaker discusses the distinction between strategy and vision, emphasizing the importance of a specific and detailed strategy over a broad vision.

Understanding Strategy vs. Vision

• The speaker highlights that strategy is often confused with vision, which is a broad and vague aspiration.

• An example from 2014 is provided where a specific problem for customers was identified, leading to a tailored solution due to being branchless and digital.

• Strategy is described as very specific, detailed, and locked in, focusing on solving particular problems for targeted customers.

Importance of Coherent Strategy

This part emphasizes how a coherent strategy informs focused activities that lead to traction and success in contrast to diffuse execution without clear direction.

Benefits of Coherence in Strategy

• A coherent strategy guides minimal activities necessary for gaining traction and winning.

• Concentrated bets informed by strategy allow rapid evaluation of success rather than diffused efforts leading to unclear outcomes.

Building Strategic Muscle

The discussion centers on developing the ability to make strategic decisions through practice, frameworks, and concentration on key bets.

Developing Strategic Acumen

• Taking strategy seriously is highlighted as crucial for building strategic muscle.

• Frameworks such as "Play to Win" are recommended for honing strategic thinking skills.

Practicing Focus and Concentration

This segment underscores the significance of focus, concentration, and making clear choices in building successful startups through fundamentally different approaches.

Embracing Focus and Differentiation

• Practicing focus involves avoiding hedging and making concentrated bets based on clear understanding of customer needs.

Detailed Discussion on New Bank's Strategy

In this segment, the discussion revolves around the strategic approach of creating a new category versus entering an existing one, focusing on New Bank's success and differentiation strategies.

Importance of Creating a New Category

• Christopher Lockhead discusses the common debate about creating a new category versus entering an existing one.

• New Bank's intentional move to build a branchless bank based on smartphone rise in Brazil and Latin America.

• Success examples like Google, Netflix, Airbnb highlight the significance of being in the new category business.

Strategic Decision Making

• New Bank's deliberate choice to focus on credit first rather than traditional banking services like most others.

• Concentrated bets and defining a new category were key factors contributing to New Bank's success.

Innovation within Established Categories

• Even within established categories like consignado lending in Brazil, New Bank aims to offer fundamentally different experiences.

• Emphasizing the importance of designing and dominating your own category for company-level success.

Expansion and Diversification of Product Lines

This part delves into New Bank's evolution from a Brazilian credit card company to a comprehensive Latin American bank with multiple product lines.

Evolution of Product Offerings

• Transition from a Brazilian credit card company to a full-service Latin American bank with diverse product lines.

• Launching various products including bank accounts, lending, investments, insurance, and small business solutions.

Geographic Expansion

• Expansion beyond Brazil into Mexico and Colombia while diversifying product offerings in these markets.

Future Vision and Innovation

• Exploring phase three products beyond financial services such as e-commerce marketplace within the app.

The Future of Fintech and Banking

In this section, the speaker discusses democratizing banking services for all individuals globally and the challenges involved in achieving this vision.

Democratizing Banking Services

• The goal is to democratize banking services for all eight billion people on the planet.

• The speaker believes that providing banking services to everyone can be done more efficiently and effectively than the current model serving only ten million people.

Innovative Approaches in Business Expansion

This part delves into innovative strategies for expanding business units and product lines within a bank.

Strategic Business Expansion

• Exploring new product lines involves a strategic approach similar to creating a comprehensive spreadsheet outlining future endeavors.

Decision-Making Processes in Banking

The discussion centers around decision-making processes within a bank, emphasizing the importance of robust debate and continuous evaluation.

Decision-Making Strategies

• Decision-making involves smart individuals engaging in robust debates with transparency about pros and cons.

• Constant re-evaluation of performance metrics such as what's working well, what's not, and customer response is crucial for informed decision-making.

Strategic Scaling in Banking Products

This segment focuses on scaling banking products strategically by avoiding premature scaling before achieving product-market fit.

Strategic Product Scaling

• Emphasizes the importance of not scaling products until they have achieved significant traction with customers.

Building a Global Bank on Single Code Base

Discusses the endeavor to build a global bank using a single code base, highlighting challenges unique to fintech and banking industries.

Global Bank Development

• Striving to create the first global bank operating on a unified code base presents challenges due to local regulations and high stakes in financial services.

Financial Life Management and AI Integration

In this section, the speaker discusses the challenges individuals face in managing their financial lives and introduces the concept of leveraging technology, specifically AI, to enhance financial management processes.

Prioritizing Financial Organization

• Individuals struggle with remembering to pay bills monthly and save for long-term goals like their child's university education.

• The speaker highlights the need for better organization in life goals and mentions opening multiple bank accounts as a workaround.

Leveraging Technology for Financial Management

• Exploring ways to make financial management easier by utilizing technologies like AI.

• Addressing the challenge of unoptimized financial lives across income levels and geographies.

Envisioning Personalized Financial Guidance through AI

This segment delves into the potential of using AI to provide personalized financial guidance at different life stages, aiming to revolutionize traditional banking practices.

Personalized Financial Insights

• Introducing the idea of having real-time guidance on smart financial decisions based on individual life stages.

• Expressing confidence in current technology capabilities to offer such personalized services globally.

Integrating AI into Product Development

The discussion shifts towards integrating AI into product development processes, focusing on enhancing customer experience and operational efficiency within New Bank's offerings.

Utilizing AI Tools

• Exploring how AI tools are used within day-to-day operations and product development.

• Emphasizing the importance of improving customer experience while ensuring operational efficiency through AI integration.

Adopting an 'AI Native' Mindset in Financial Services

The conversation transitions to adopting an 'AI native' mindset within financial services, drawing parallels with past industry transformations for optimal integration of AI technologies.

Shifting Towards an 'AI Native' Approach

• Reflecting on the necessity of building products with an inherent focus on AI integration rather than superficial additions.

• Drawing insights from Facebook's mobile migration as a model for embracing an 'AI native' mindset in product design.

Learning from Failures: Career Reflection

The speaker shares a pivotal career failure story that led to valuable lessons learned, emphasizing resilience and adaptability in professional growth trajectories.

Embracing Failure for Growth

• Narrating a significant career failure that prompted rebuilding efforts and personal development.

Kennedy School and Business School Experience

In this section, the speaker reflects on their experience at the Kennedy School and business school, highlighting the challenges faced when transitioning to Google.

Challenges Faced in Transitioning to Google

• Traditional media advertising (radio, TV) operates differently from online advertising, focusing on brand advertising rather than direct response.

• Lack of knowledge about technical methodologies like reach and frequency in traditional media advertising posed challenges.

• Scarcity of inventory in traditional media compared to online platforms made it difficult to implement auction methodologies.

Evolution of Google's Strategy with YouTube Acquisition

This part discusses how Google pivoted its strategy based on learnings from failures and successes, particularly with the acquisition of YouTube.

Strategic Pivot towards YouTube

• Decision to have TV (YouTube) come to Google instead of chasing TV, leading to significant industry shifts over 15 years.

Impact of Acquisitions on Personal Journey

The speaker shares personal experiences related to acquisitions by Google and the emotional toll it took.

Personal Reflections on Acquisitions

• Emotional impact of potential layoff amidst personal milestones like marriage.

• Introduction of real-time bidding technology post-acquisition reshaped online display advertising landscape.

Lessons Learned from Strategic Shift

Insights into the strategic shift towards disruptive digital ad methodologies following acquisitions.

Key Takeaways

• Importance of perseverance and adaptability in navigating through failures and strategic transitions.

Interview Insights

In this section, the speaker discusses the importance of finding a disruptive vector to break through in a competitive landscape and highlights the significance of summarizing key takeaways from discussions.

Importance of Disruption

• Emphasizes the need for insurgents to find a disruptive vector rather than incremental improvements to stand out in a noisy environment.

• Recommends books like "Play to Win" and "Where to Play and How to Win" as valuable resources for understanding strategy and disruption.

Summarizing Key Takeaways

• Acknowledges the value of summarizing key points shared during discussions for clarity and retention.

• Mentions an inspiring autobiography, "From Third World to First," detailing Singapore's journey from adversity to success, akin to startup challenges.

Personal Recommendations

• Recommends watching "The Gilded Age" series for insights into technological disruptions in society.

• Shares enthusiasm for the Lomi kitchen composter as a product that brings joy through sustainable practices.

Life Motto and Career Choices

The speaker reflects on life mottos guiding career decisions, emphasizing the pursuit of fundamentally different paths over incremental improvements.

Guiding Principles

• Advocates prioritizing innovation over small advancements both in work and life choices.

Detailed Discussion with Jag Duggal

In this section, Jag Duggal discusses the importance of embracing failure, shares a personal story about smuggling mangoes, and talks about the significance of quality mangoes in his life.

Embracing Failure and Luxury of Being Different

• Embracing failure is crucial; not tolerating failure means conforming to others' expectations.

• Being fundamentally different is a luxury; it's essential to strive for uniqueness.

• Quality mangoes are a luxury good that many may overlook.

Smuggling Mangoes Story

• Jag shares a humorous anecdote about being caught smuggling mangoes from Trinidad to the US.

• Despite facing consequences like being on an agricultural watch list, he appreciates the value of quality mangoes.

Love for Quality Mangoes

• Growing up in the Caribbean instilled a deep appreciation for top-quality mangoes.

• The struggle to find similar quality mangoes in California highlights their significance in his life.

Building a Unique Brand: New Bank's Purple Revolution

This segment delves into New Bank's brand identity centered around the color purple and its unique connection with customers.

Purple Revolution and Brand Identity

• New Bank aims to build the world's first social and self-driving AI-powered bank with a focus on uniqueness.

• Customers affectionately refer to their credit card as "hosino," meaning little purple card in Portuguese, reflecting brand loyalty.

Customer Support and Origin Story

• Customers rallied behind New Bank during regulatory challenges, emphasizing their loyalty and support for the brand.

• The company's motto "the future is purple" symbolizes resilience and customer dedication through challenging times.