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May 16, 2024 • 1hr 35min
Be fundamentally different, not incrementally better | Jag Duggal (Nubank, Facebook, Google, Quantcast)
Lenny's Podcast: Product | Growth | Career
Jag Duggal is the Chief Product Officer at Newbank, a rapidly growing neobank based in Brazil. Prior to Newbank, Jag held product leadership roles at Facebook, Quantcast, and Google. In this episode, Jag shares insights on Newbank's product development approach, strategy formulation, and vision for the future of fintech.
Be fundamentally different, not incrementally better | Jag Duggal (Nubank, Facebook, Google, Quantcast)
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Key Takeaways
- Build products people love fanatically - Newbank's success is driven by an obsession with creating products customers are fanatical about, leading to 80-90% growth through word of mouth
- Use the Sean Ellis score to measure product-market fit - Newbank aims for 50%+ of customers to be "very disappointed" if a product went away before scaling
- Be fundamentally different, not incrementally better - Focus on creating disruptive products that redefine categories rather than small improvements
- Develop clear strategy and concentrated bets - Have a coherent plan to apply strengths against core problems, not vague aspirations
- Practice category design - Successful companies often create and dominate new product categories
- Call customers directly - Product managers should personally call 5-10 customers to get rapid, unfiltered feedback
- Don't scale problems - Iterate and achieve product-market fit before aggressively scaling products
- Build AI-native products - Reimagine financial services with AI at the core, not just as an add-on
Introduction
Jag Duggal is the Chief Product Officer at Newbank, a rapidly growing neobank based in Brazil. Prior to Newbank, Jag held product leadership roles at Facebook, Quantcast, and Google. In this episode, Jag shares insights on Newbank's product development approach, strategy formulation, and vision for the future of fintech.
Topics Discussed
Newbank's Remarkable Growth (4:38)
Jag highlights some key facts about Newbank's success:
- Bigger than Coinbase, Robinhood, Affirm, SoFi and Lemonade combined
- 80-90% of growth comes through word of mouth
- More customers than Bank of America while only operating in 3 Latin American countries
- Held Guinness World Record for largest simultaneous credit card unboxing
This remarkable growth is driven by Newbank's obsession with building products customers love fanatically.
Building Products People Love Fanatically (6:43)
Jag outlines Newbank's approach to building beloved products:
- Tap into deep pain points - Newbank addressed Brazilians' frustration with incumbent banks
- Embed customer love in culture - Newbank's first value is "We want our customers to love us fanatically"
- Focus on customer discovery - Observe customers to find unarticulated needs
- Iterate relentlessly - Keep improving until customers truly love the product
Jag emphasizes: "We are trying to be fundamentally different, not incrementally better."
Measuring Customer Love with the Sean Ellis Score (15:22)
Newbank uses the Sean Ellis score to measure product-market fit:
- Ask customers "How disappointed would you be if this product went away?"
- Aim for 50%+ to say "very disappointed" before scaling (higher than typical 40% threshold)
- Use score to identify which customer segments love the product most
- Iterate to expand the "bullseye" segment that loves the product
Jag shares an example of using this for Newbank's bill payment assistant product.
Calling Customers Directly (25:07)
Jag recommends product managers personally call 5-10 customers to get rapid feedback:
- Avoid layers of researchers and reports
- Get direct, unfiltered customer insights
- Hear tone of voice and emotional reactions
- Often can predict responses after just 5 calls
"Pick up the phone yourself. Don't ask a researcher to come up with a plan to go do the research, to then summarize it, to then bring it to you, which has so many degrees of distance built in."
Don't Scale Problems (28:20)
Jag emphasizes the importance of achieving product-market fit before scaling:
- Resist pressure to scale products prematurely
- Iterate at small scale until product is working well
- Scaling a flawed product creates "a big mess"
- Use Sean Ellis score as a gate before scaling
"We are not going to take a small problem and scale it, because if we do that, we end up with a big mess."
Developing Strategy (42:01)
Jag shares his perspective on strategy development:
- Be very specific and detailed - Not just broad aspirations
- Focus on applying strengths to core problems - Not just financial goals
- Make concentrated bets - Don't hedge across many options
- Have courage to make hard choices - Avoid trying to do everything
- Be clear even if not right - Clarity helps detect if strategy is working
"Great execution multiplied by a poor strategy is a waste of everyone's time."
Category Design (53:10)
Jag advocates for creating new product categories:
- Successful companies often define new categories (e.g. Google, Netflix, Airbnb)
- Even in existing markets, try to reinvent the category
- Newbank created a new "branchless bank" category in Brazil
- Allows dominating a category you define
"At the company level, I think it's absolutely imperative to be designing your own category so you can then dominate it."
Newbank's Product Expansion (57:37)
Jag outlines Newbank's product expansion approach:
- Started as Brazilian credit card company
- Expanded to full-service bank (accounts, lending, investments, insurance, small business)
- Launched in Mexico and Colombia
- Moving beyond financial services (e.g. e-commerce marketplace)
- Vision of AI-powered personal banker for everyone
The Future of Fintech and Banking (1:03:46)
Jag shares Newbank's vision for the future of banking:
- Holistic banking across all financial needs
- Global bank on single codebase for efficiency
- Social mechanics for financial collaboration
- Self-driving automation of financial tasks
- AI-powered personalized guidance for everyone
"Why not have the company that reinvents banking come out of São Paulo, Mexico City, Bogotá? Why does it have to come out of San Francisco, New York or London?"
AI in Banking (1:09:23)
Jag discusses Newbank's approach to AI:
- Using standard AI tools to improve customer experience
- Exploring how to build "AI-native" financial products
- Aiming for AI-powered personal banker for everyone
- Still early in process of reimagining banking with AI
Failure and Persistence (1:12:34)
Jag shares a personal story of failure and persistence from his time at Google:
- Left grad school to join Google's radio advertising initiative
- Project ultimately failed and team was laid off
- Pivoted to help build Google's display ad business
- Learned importance of persistence through setbacks
"B****y-mindedness is a dramatically underrated quality as we over-intellectualize from strategy to execution and all the other things. Sometimes persistence is key."
Conclusion
Jag Duggal's insights from Newbank's success highlight the importance of building products customers love fanatically, measuring product-market fit rigorously, developing clear strategy, and aiming to be fundamentally different rather than incrementally better. By focusing on deep customer pain points, iterating relentlessly, and reimagining entire product categories, companies can drive explosive word-of-mouth growth. As fintech evolves, there are opportunities to leverage AI, social mechanics, and automation to create transformative new banking experiences for customers globally.
