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

0:00 Nubank is bigger than Coinbase, Robinhood, Afirm, SoFi, and Lemonade combined. Eighty to ninety percent of Nubank's growth is through word of mouth. We're not trying to be incrementally better. We are trying to be fundamentally different. We want our customers to love us fanatically. It feels like NewBank is one of the historically most successful companies of launching new business lines. We built a lending product, we built an investments product, we built an insurance product, we built a series of small business products. We rarely scale a product. project until we know the Sean Ellis score hit a threshold that we find really compelling. I want to talk about strategy. Kevin Sistram in the early days of Instagram, I heard him say it at a conference. We may not be right, but at least we are clear. Even if your strategy isn't right, you have a very clear idea of what was supposed to be happening. Where do you think all of this goes in the future? Why not have the company that reinvents banking come out of Sao Paulo, Mexico City, Bogotá?

0:59 Today, my guest is Jack Dougal. Jack is chief product officer at New Bank, which is one of the most under the radar monster businesses that you'll ever come across. with a fanatical user base and a really unique approach to building product. Before New Bank Jack was director of product management at Facebook. leading monetization of video and third party content, including news, gaming and influencer content. Prior to Facebook, he was senior vice president of Product and Strategy at Quantcast, and group product manager and head of strategy for display ads at Google, which was Google's second largest business at the time.

1:35 In our conversation, we cover how to build products that people become fanatical about, how to develop a strategy. Category design, product line expansion, the future of fintech, and tons more. With that, I bring you Jack Dougal after a short word from our sponsors. And if you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes.

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4:34 Jag thank you so much for being here. Welcome to the podcast. Lenny, I'm honored to be here. A big fan of the show and uh look forward to the conversation. So thanks for having me. I'm even more honored. Thank you for being here. I wanna start by sharing just some facts about Nubank that I think are gonna

4:51 blow people's minds. I think a lot of people in the US especially are sleeping on U Bank. And I think this is gonna help people that are listening pay even more attention to the stuff we're gonna talk about and the lessons we're gonna share. So one. New bank is bigger than Coinbase Robin Hood, a firm.

5:07 So five. and lemonade combined. Eighty to ninety percent of Nubank's growth is Through word of mouth. Three, New Bank has more customers than Bank of America, which is one of the four big banks in the US.

5:24 While also only operating in three countries in Latin America. That's right. And then also you guys held the Guinness World Record for the world's largest simultaneous unboxing. for a credit card that you launched at some point, although I think somebody beat that record. Is that accurate? I believe that is that is correct. We've recently set a new world record for the first underwater credit card transaction.

5:50 So we're always looking for some fun some fun things to do there. Uh, I like that that's a record no one can break'cause it was the first one. That's a sneaky way to get a record. Yeah. That's hilarious. So my sense is the reason that Nubank

6:04 thrived and made it is There's this obsession with building a product that Customers are fanatical about the stat that I shared of eighty to ninety percent of growth is word of mouth. And this This idea of growing through to mouth in this way is the dream.

6:17 of every company, whether you're consumer business B to B. A bank especially, very unlikely that you grow at this rate. The word of mouth. So I wanna try to help people learn from what you guys have figured out about how to drive. Such massive word of mouth.

6:29 Roth. And maybe just a start from the product perspective. How do you build a product team and a product development process? That enables

6:38 you to build a product that people get fanatical about and just want to tell all their friends about. Yeah, I think there are a few things that are the fundamentals of of making that happen. And to be clear a a lot of this predates my joining the company about a a A little bit short of five years ago.

6:57 But I think is an incredible story and is part of what inspired me to join. But first I would say Really think hard and and tap into a very deep pain point. the large incumbent Brazilian banks were amongst the most profitable in the world. They were also amongst the most

7:17 hated in the world. And my personal experience with that is early in my career, twenty years earlier in the late nineties, I had done a consulting project in Sao Paulo. And I remember walking to lunch one day with the client, um was a friend of mine, and we were going to Classic Charascaria uh in Sao Paulo. And we w we were walking by

7:40 His bank branch. And we were at a uh a stoplight and he basically said That's my bank and I hate them. It's nineteen ninety seven, and it always stuck in my head. It stuck in my head for twenty years later when you know to be First reached out to me.

7:56 So we we were tapping into a deep paint point we can go into exactly why, but that was I think one one thing. The second thing that that I would say, and this is very intentional from from David and Ed and Chris, our founders, is We have a culture. At New Bank. Which is the most

8:15 alive in our employees' minds than I've ever experienced having worked at Google and Facebook and other places like that. I would bet that probably eighty to ninety percent of our employees could recite the five values to you if you stop them in the hall. It's not just on the wall somewhere. And the first of those values

8:35 Peculiar set of peculiar phrase, set of words strung together. We want our customers To love us. Fanatically. And I remember when I interviewed at New Bank. For the first time and actually flew down to Sao Paulo.

8:50 I remember seeing that phrase and thinking These are my guys. These guys are taking this seriously. And a lot of my interview process from my side was really vetting if that was real. Or if that was a sign on the wall. So I think you start with the intent.

9:07 That you are going to Make your customers love you. And there are a million reasons operational a convenience Sh uh short term financial viability, which is a real thing when you're a venture funded startup.

9:23 Um Any number of reasons why you can compromise those things on the edges in in a decision sort of Day to day, minute to minute. Ah, we can cut the the edges, cut the corner here on that. And look, I don't think we have been perfect on that, but we try very hard. And when when

9:42 There are hard decisions to be made. We bias in favor of the customer, the customers love. Will they want to tell their friends and and and neighbors and family about it? And so I think that's the heart of it. Once you get those things right. The deep pain point.

9:59 And a culture. That is Maniacal. About making your customers fanatical. Then you start to do the the the the trade craft.

10:10 of product development. You make sure. then you focus on customer discovery before you start building. You make sure that that discovery Uh

10:21 Is is focused not simply on asking the customer. But on innovating on their behalf. You make sure that you take techniques from all over the place, from Procter and Gamble to Google to you name it. of maybe you can't ask the customer to tell you what

10:38 massive new innovation they they would love. You've got to observe them and find their pain points even when they aren't noticing it. And then you You build as you build, you you commit to

10:56 Measuring whether they in fact love the product, not fooling yourself about that. And iterating like crazy over and over and over again until you get it. Just right. So those are some of the principles. But I think the trade craft. Follows

11:11 The The Focus on finding a real deeply held emotionally held pain point. And a culture that says that's your North Star. Amazing. There's so many threads there I'm gonna follow.

11:26 First of all, I want to go back to the values. So you said there's five. You mentioned one. Can you just quickly share the rest? You know, the five I'll I'll mention them in the the order that that, you know, most resonate with me. First We want our customers to love us fanatically. Second

11:40 We are hungry and we challenge the status quo. Third, we build strong and diverse teams. Fourth, we pursue smart efficiency. And one that is that is in many ways underlying all of it is We think and act like owners.

11:58 Not Renters. We do what is right. Even when no one is telling us to do it. Um

12:07 And we have many instances of of our employees sort of taking that degree of extreme ownership um as they build products and get them launched. Okay, and then going back to This idea of building product. People love fanatically.

12:21 You talked about how there's this the number one principle in it's gonna be on everyone's minds when they're building is like build products people have fanatically talked about you index. Towards if you had to make a decision, we're gonna do something people love. Is there anything more you could share about just how you operationalise This For example, is there like designer views where just like you come in or your head of design comes in like

12:42 Is this helping customers love us fanatically? Like what what's in the systems and processes of how you operate that allows you to build that other than just cool, everyone has to remember this. This is what we're trying to do. Yeah, we do a few we do a few things. And again, I I don't wanna also overstate that, you know, we've achieved some kind of Nirvana. We we honored many of these things in the breach sometimes, but Mm.

13:04 We we have a s a A series of of techniques that we've you know, bag borrowed stolen from other places, some of which we've in invented uh on our own, but some examples. We love

13:18 The Amazon mop press release technique. Explain to me before we've put a single engineer on the project. Not explained to me actually. Explain to the Intended customer. Why they should care.

13:31 'Cause if you can't tell me in two paragraphs Why The customer you're building this for should care. Then there's still work to do. So that's one technique.

13:40 We do have product and design reviews um several times a week. uh where we're asking ourselves that question, why is this great for the customer. Why is this fundamentally different for the customer? How does this

13:55 redefine the category that we are thinking about. Um on the dimensions of quality, on the dimensions of complexity, on the dimensions of of price. Uh and usually on the dimensions of all three of those at the same time.

14:12 uh and breaking some of the trade off constraints that you often wrestle with. And seeing if that's possible. Which Which is isn't always possible, but we but we we frequently uh reach for that and sometimes find it.

14:26 And then there are the things you do after you've built and launched the product, whether it's alpha, beta, or a later stage, uh, the measurement stuff. Um And you some of your previous guests have talk o talked about product market fit and how do you measure we

14:42 Actually it's strange'cause you know, I was sitting here in Silicon Valley for for You know, well over a decade. I land in Sao Paulo when I first joined Nubank. And the small product team at the time was telling me about this thing called Sean Ellis score. And we recently had Sean visit us in Sao Paulo and talk to all of the product

15:03 Managers and designers But We are are amongst the most fanatical followers of his methodology anywhere in the world. We rarely scale a project. product we've launched until

15:16 We know the Sean Ellis score and we know that it's hit a threshold that we find really compelling. Can you describe the the actual score in the in the approach? Yeah, this the Sean Ellis score is a really simple methodology used by lots of lots and lots of companies that the uh a gentleman Sean Ellis uh popularized well over a decade ago. Which basically ask your customers at each stage and and

15:41 At each stage you have a small number of customers, then a larger group and and growing over time. But at each stage you ask them Um How disappointed would you be If this product went away. And what Sean has said is that if

15:55 At least Forty percent of your customers are not Very disappointed. Not just a little disappointed, but very disappointed. He has sort of a essentially a three point scale. Uh not disappointed, somewhat disappointed, very disappointed. If at least forty percent are not very disappointed.

16:12 you haven't reached product market fit. Now we've had to do some things in New Bank. Brazilians are a um culturally happier group than the global average. So For us our threshold isn't forty percent. We've generally moved it up to fifty percent. I don't believe we have product market fit. Unless fifty percent of Brazilians are telling us they they would be very disappointed,'cause Brazilians are inherently Polite. Um more more polite and more optimistic than average. So we make our own little tweaks and adjustments, but

16:41 We find that to be very uh very helpful as a company this extends beyond product We are addicted to our NPS score. And we reach for world beating net promoter scores.

16:57 as a company and product vertical by product vertical. uh as well and we we are maniacal about tracking how we do. And again we We We compensate for some cultural biases and we make sure that we hold ourselves to a high bar. But uh there are been for example in Mexico, we've recorded an NPS when we've when we launched the first couple of years.

17:19 of ninety four, ninety five, right? So I've never heard of it. Yeah, which is way better than we got in Brazil, but our NPS scores skew in the seventies, eighties, and and occasionally nineties. And when they dip down even one or two points Like That's a reason for alarm and we we try to figure out why and we try to make sure that we

17:39 We make the iterations. So uh Those are the things we build in. I'm glad you got into this. I was gonna get into how you measure this stuff. So what it sounds like is the Sean Ellis

17:50 survey is used kind of as you iterate and Ex Kind of launch towards launch. And then NPS is maybe post launch to see how people like the product. And PS is post launch. We also look at metrics like churn to make sure that uh we're not building a leaky bucket. And that's part of this

18:08 viral customer acquisition loop that we've built. We want to make sure we're building products That are great enough. That our customers will tell their friends and we don't have to invest as much in marketing to drive our growth. And that only works.

18:24 If the customers you get. You retain. I have built earlier in my career products that have leaky buckets. And that's a very frustrating treadmill to be on. So um so I am personally maniacal about making sure that the bucket doesn't have a hole in the bottom. So in this Sean Ellis piece, which is really interesting because I think it's something a lot of people can adopt if they're trying to build

18:47 Products people. Love and also that succeed. Is this like a goal for every project and like I don't know the strategy or the one pager it's like Or is it just implied? Okay, we're not gonna We're not gonna move past this gate if

18:58 Fift, less than fifty percent of people are not. very disappointed. Is that how it's kind of operationalized? Yeah, we basically operationalize it. We don't have it as a hard and fast rule that is, you know in black and white, but essentially that's the question people know they're gonna get in any product review. That's a post launch, you know, post data kind of product review is What's the Sean Ellis score? How do you know that customers love it? Not just not just like it, but love it to the degree.

19:24 that they're gonna tell their friends about it. That's that's pretty baked in culturally at this point. This is an incredible insight and I think it explains a lot of the success you guys have had'cause that's a very high bar. Like many people run the survey and getting Getting it to past like twenty percent is very hard. Like varied

19:40 Like you have to be very disappointed if this new product they've never used goes away. That's a high bar, right? Most people are like ah, whatever. I don't need this thing. And you're saying you look for fifty percent Of People feeling very disappointed if this new thing they've never used before goes away.

19:58 Yeah, that's right. There are several sort of on the newer newer side of products that we're launching now we're at. borderline fifty and my push to the team is What are the three, four, five things you need to build? to really get decisively beyond beyond fifty. And what are the what are the segments or cohorts where it is above fifty? And what is that telling us versus the cohorts where it's

20:21 You know, lower than that. So we we put a lot of analytical effort and a lot of depth of thinking to you know, we were in a we were in a product review several years ago and our lead designer, um uh who's ex Google and ex Facebook. Um

20:38 We were in a review together and and the team was saying, We think this is good enough for launch. And he used a phrase which both Um Christian Kara, one of our co founders and I have now adopted, which is good enough isn't good enough. Is it great enough?

20:53 Is it great enough?'Cause that's the bar. particularly for some of our ten pole products, but but we try to apply it largely across the board. A lot of companies, not just in Brazil or Latin, but everywhere, spend a ton of money on marketing. Their V C budgets b V C funding basically goes to Google and Facebook. And I've spent a lot of my career taking that money on board for Google and Facebook.

21:16 But it is a much better scenario. If that's a small portion of what you're doing and the main portion of what you're doing is actually investing in making the product great. that you don't have to do that. Is there an example of a project that comes to mind that was kind of below that bar and then You pushed it above where you like here's the thing we we're missing. Yeah, I'll give you one that we're wrestling with right now. We have a product called Assistenti di Pagamentos, payments assistant.

21:43 Paying bills in it's right now only launched in Brazil. We haven't yet launched it in in Mexico and Colombia. Ping bills in Brazil. Is Quite complex. There are four different ways, four different payment rails

21:58 Different payments have to go You know, that are that different payments use. from the mobile payment system that has that has exploded in Brazil over the last three years called PIX that's become fairly world famous in the fin tech world. to more standard and some more uh archaique rails as well.

22:16 So if you're a customer, you've got to keep track of your bills like we all do. You've got to keep track of which rail. You gotta collect your bills. You gotta make sure they are that you pay them. And some of the Rails actually aren't that reliable. So you've paid it. It doesn't go through.

22:32 And the consequences for not paying a bill is getting reported to the credit bureau and becoming what is called negativado. having a negative mark on your credit. And that can be a big deal. For the average customer.

22:46 And so this was a real deep pain point. And as we launched the product in a you know, Reed Hoffman style, you know, if you've if you are not embarrassed by V one, you've waited too long. As we as we've done that. Uh last year. We found that a very interesting pattern. We had a decent

23:06 Sean Ellis score. Um Borderline forty, I forget the exact number, but basically in that ballpark. But we found that customers who had There was a small cohort of a customer base.

23:19 Who had More than four plus commitments. registered. And even more so within that small cohort, an even smaller bullseye cohort. who had more than four commitments on at least two of the four rails.

23:35 And there Sean Ellis score. Hit seventy. Oh well. And we're like okay.

23:41 The key is We need to consolidate across these rails, not have them one by one. And we need to make it easy for customers to onboard and multiple bills across multiple rails. Um

23:58 And and then the automation takes over and people see the real benefit. Because there are ways. On the surface, if you said to the average person anywhere, you know, any sort of Developed country. We're gonna auto you know, we're gonna have a bill auto pay.

24:12 That's On the face of it, not necessarily exciting. But if you build it right. It is actually A fundamentally different experience rather than incrementally better experience, and uh

24:25 And that's what we've done. We've systematically made Dozens of iterations on the product. To Allow customers to in one go Do multiple bills across multiple rails.

24:38 And make that tiny bullseye cohort that we had segment that we had. A larger and larger proportion of the customers who are trying. And uh and and by the way, that's a journey still underway. We have a whole roadmap. For the next year.

24:54 of of lots of small quality adjustments that we're gonna gonna make and We've seen some great feedback we're now over ten million monthly actives on that product. when we were struggling in the hundreds of thousands about fifteen months ago. That is a really interesting insight there of just using the score.

25:11 and survey to narrow in on who actually loves this the most and see if there's something there. Is that something that you generally do, or is that just like, Oh wow, that was came up in this exam? We we do that fairly frequently. When we did our we have a uh a high income rewards credit card, we it's called Ultra Violeta, we went through a similar process where at launch there were many different customer segments. But there was one that really loved the product. And it was not surprising. There were the ones that the cust where the customers spent enough each month that they got the fee waiver.

25:44 And then all of the other benefits that we had built in really Um resonated. Um, whereas if you're paying the monthly fee Those other benefits were were not quite as exciting, um or didn't quite compensate. So

25:59 We've done this several times and we've started recently combining it with trying to get very agile in getting that feedback from that bullseye segment. So We've told many of our product managers and designers Over the last Two years. Don't worry about serving a thousand customers.

26:17 Taking three weeks serving a thousand customers, getting a bunch of cross tabs. Well Even at the end of which it's very hard to read. The real fine green customer feedback. So I'm we just tell them, call ten of them.

26:30 Pick up the phone yourself. Don't have 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 de of of distance built in. You

26:43 Pick up the phone. Call ten of them. And Nine times out of ten, by the time you've made your fiscal, you could predict what's customers six, seven, eight, nine, and ten are gonna tell you. And then you know.

26:55 What it is That is the gap. Or what it is that is truly resonating that you want to double down on. So We're constantly trying to iterate in small ways the ways to get really that voice of the customer. straight line in to the people who are building the product.

27:11 I love this advice. I imagine as a PM that is uh extremely scary to go call a customer. Most people don't do that. Um By the way, do you actually Operationally, is it actually a call or do you recommend the email? What do you actually recommend they do?'Cause we literally

27:25 Pick up the phone. Okay. Pick up the phone phone. Okay. Because you can get tone of voice. You know. Brazilians and Mexicans are incredibly expressive. Um there is There is a degree of real fine grain sense that the statistics never tell you. Yeah.

27:43 That uh and it's very aligned with, you know. design thinking and there's a lot of literature around how this works well. And I wouldn't say we're doing it especially to the best practice scientific. We're just like Just make the call, make it as simple as.

28:01 unobtrusive with as min as little overhead as possible. To make sure the voice of the customer is coming. directly into the teams that are building. Jeff Bezos had this quote on it. This is the Lex Friedman podcast, where if you're if you have data and you have an anecdote

28:14 Usually the anecdote is is right. I love that. That that's That sounds exactly right to me. To make it even more tactical for the surveys you run, is there any tool you find like how do you actually collect this data? Is there anything interesting there you could share of just like how to operationalize collecting this? data. You know, we've we've used a series of tools, uh many of the s the the main survey vendor tools, we still use many of them, but we don't standardize or find uh one that dramatically changes our life.

28:44 Beyond the mindset Uh We are gonna make sure That this product has product market fit. Before we scale it.

28:54 One of the things I've seen throughout my career as a product manager and and and CPO, we live with it today at New Bank every Every month. Is the pressure on the line product manager To scale the product that the entire company The entire executive team

29:11 The entire management chain. Has been counting on. We're launching this thing, asistancia pagamentos. We all want it to scale. We all are very excited about it. We had the product review six months ago and we thought. This is gonna be amazing. And the pressure on that product manager. Mm.

29:27 To scale a product. is immense. And the job of the product manager in many instances is to say no. And you know, one of the things I try to say frequently within the walls of New Bank is We are not going to take a small problem and scale it, because if we do that, we end up with a big mess.

29:47 Something isn't working at small scale, no problem, especially if we have a strong hypothesis and a lot of ways of getting Good customer feedback. We iterate, we iterate, we iterate, we get it right. And then once we get it right. Scaling, if you do it right, in many cases takes care of itself, because the customer is now excitedly telling their friends.

30:08 Whereas you can pour a lot of money and a lot of effort And when you have a big app like New Bank or Places like Google and Facebook. You can make any product look great for months, if not years, because you have such a large customer base to you can always get'em to try it with all sorts of Basic techniques.

30:25 But You're bouncing a dead cat. And uh and then you've got a real big mess to untangle when the thing is much, much larger. So We try to be pretty disciplined about that. And that's a lot of what the Sean Ellis does is it brings science to some of that art. of making that judgment call.

30:42 This point you made about it's the PM's job to Push back and stop. bad things from happening, I think is such an important one. A lot of PMs.

30:50 are just told here, build this thing and they kinda know this is not gonna work, this is a bad idea. But either they don't think they should be pushing back or they are not good at it. From the PMs you worked with that are good at Convincing and pushing back, like we should not do this yet. Do you have any tactics or ways of communicating that you found effective for pushing back to

31:11 Like you said, all this pressure that's coming down on them. One of the things I've learnt, you know, relatively later in my career, I wish I'd learnt it, you know decade earlier, decades earlier even. Is how important culture is. And I we talked about the five

31:27 Cultural tenets, but this idea of we are owners, not renters. You're an owner of that product as the product manager or the lead engineer or the lead designer or in fact anyone on the team. Um If you really don't think it's gonna work. Don't tell me what I want to hear.

31:44 Incumbent on you, it's expected of you. As an owner. To tell me the bad news and tell it to me early. Even when it's convenient. Even when there's a promotion at stake.

31:55 Um, you know, these dynamics get very real very quickly. Then look, I don't think it's gonna work and here's why. Or it's not working and here's why. Or we should kill it and here's why. The second thing I would say is Senior leaders uh Companies that have gone, especially startups that have scaled well. You usually have people who have been in that

32:19 Boat. who have seen products that weren't working, who have killed them or who have you know, pivoted them pretty dramatically. And there's a lot of respect for someone who has a real clarity of thought. And a and

32:31 brings a high bar and is not simply going with the flow. So I think that's the main thing is Bringing that ownership mindset. And the second is Bringing clarity and bringing data and understanding that

32:48 Most senior executives in whichever company or strong willed and bring strong opinions. That's part of the job description. That's okay. It is your job. whether product or design or engineering or or whatever function as a leader.

33:06 to If you think you are practicing for one of those senior jobs, it's sort of let's say a mid level. And you gotta the it doesn't come miraculously when you get a A C suite title. It's something that's gotta be practiced and

33:21 And And it's something that is expected. And I think that's not a just a new bank thing. Certain cultures promote it better than others, but um But I think it's it's pretty uh universally Important. And so I would just encourage people to

33:38 To try it, understand the trade offs, understand the challenge, articulate the other side. But if you genuinely believe it's not r yet ready to scale your product. At the end of the day, the big mess is a thing, you're still gonna owe And we're all gonna forget that we told you to scale the thing. World will still blame you at the end of the day. So

33:59 You might as well bite the bullet. earlier pivot it when it's easier to do. And uh And it'll work out better in the end. I wanna come back to one more thread and then I'm gonna go in a different direction.

34:13 Uh you talked a bit about just all About. Talking to customers. Finding Innovative ideas, not just listening to what they're telling you.

34:21 There's this whole skill of User research and interviewing customers and finding the pain point. Figure out what to build. Do any just like I don't know, tips or tactics or

34:31 uh lessons you've learned about just how to do this well. How to Uncover The pain point and then figure out what to actually build when you're interviewing customers. I'll share a couple of thoughts, but I will tell you as a preface that it's

34:44 It is arguably the area right now that I still wrestle with. I still think um where I and we are not doing it as well. I've never seen it done quite as consistently great as it could be. Um And I think it's an area for where like design thinking and a lot of the design function can help us. Um

35:07 But uh but It's very, very it's one of the areas of greatest inconsistency that I see in product development. Having said that, a couple of things that I see. that we sometimes do really well at Nubank and other times we we we miss on one dimension or the other. First off

35:25 For your uh Near Jeff Bezos uh uh anecdote. Uh the anecdote usually trumps the data. And there are many times when I see teams that are, you know Doing very sophisticated analysis.

35:41 And they've sort of forgotten what the question is or what the conclusion they can draw from it truly is. So never lose sight. Um the value of the customer's words and the anecdote. That's one.

35:56 The second Uh one that I believe very, very strongly in is I think teams often Skip the step. Of clearly

36:08 very, very clearly working very hard to be super crisp in articulating their hypothesis. If you don't have a hypothesis, you're gonna spend a lot of time researching. You're gonna get a lot of data back, qualitative, anecdotal, or quantitative. And you're not gonna know what to make of it'cause it's not either validating or invalidating your hypothesis because there isn't a hypothesis. So it just becomes an interesting conversation.

36:34 The third one. Is I've got a hypothesis. I've got it really crisp. And now the pitfall is I've fallen in love with my hypothesis. I'm a lawyer for my hypothesis. I'm not a judge of whether the hypothesis is right or not right.

36:50 So I think that's another common before I've fallen into that one. Too many times to count. And then the last thing I would I would highlight is even when you have a strong hypothesis and you're actually in the mode of doing

37:04 The research Observe More than Ask questions if you can. Ask indirect questions more than direct questions.

37:16 Would you love this product? Excited product manager who's been working for two months on uh On a design. You're searching for the problem more than the solution. you're you're you're searching uh for you're looking indirectly and asking in mul from multiple directions the same question.

37:37 Rather than trying to find a yes, they love the thing you've been thinking about and swaying on for a long time. And if you can, observing is better than asking. Although that's a tricky That's a tricky skill. Uh

37:50 Those are the things that I That I look for. With the hypothesis point, just to make sure people understand your suggestion there's before you start talking to customers doing research is as a PM or just

38:01 Anyone on the team essentially Have a perspective on what you think is Gonna be True. Is that how you think about it? Exactly. Have a point of view on What you think the customer will say that is that

38:14 that will lead them to be really excited about your product. Mm. That way you will get very clearly Yeah. Or Or yes, bang the table excitement and you will know.

38:25 when you're getting that reaction. Is there an example that just to make it even more concrete?'Cause I imagine Many PMs are kind of feeling like they have to be unbiased and just like Let's see. Let's see if this is something. We

38:36 should do and I don't want to bias anyone. Against it. Is there is there a quick example of a hypothesis? One of the famous examples that's that's somewhat hypothesis related and somewhat observation related, um is the you know, the invention of the Swifer from Procter and Gamble, right? The People hate mopping.

38:54 And they The They will do it and they won't even realize how painful an experience it is'cause they've just developed the workarounds and they Just

39:03 Deal with the burden. But if you observe very granularly what the problems are, then you can You can you can see where the problems are. And so if you bring a strong hypothesis to

39:16 that this is a real problem, even if customers aren't telling you it's a problem because they've just sort of gotten used to it. So that's one. Um We have a hypothesis New bank. I'll give you one that's live. We have a hypothesis at Nubank that the joint Bank account.

39:33 I was doing some research on this just last week. Uh the joint bank account was invented in the early it's actually hard to say, but but it was invented depending on where you what source you believe. in the late nineteenth or early twentieth century. And it was basically invented coincident with the social mov sort of the women's liberation social movements before women in the US were legally allowed to vote. Um

40:01 Where women were not allowed to open a bank account without their husband's prior approval. That is the era for which the joint bank account that we still live with today came from. Hundred and twenty to a hundred and fifty years old.

40:17 I don't think it's surprising our hypothesis is it's not surprising that that artifact that that product Is not made. For the modern customer. That it is Easier

40:31 For me to share a Spotify playlist. With my wife or my daughter. then it is for me to share Uh A savings goal.

40:44 Just mechanically. So we're going into A product development cycle that says There is a new social banking Arrangement.

40:55 That is not about Tweeting and it's not about social very broadly defined. It is about our financial lives are inherently social and it is very hard to share. With my spouse. With my kids. With

41:08 My parents who might be helping me pay for my child's education as an example use case. It's a very strong hypothesis. But when you go into the research with the customer, you don't try to sell them. You try to see if they are experiencing pain points. And it becomes very hard when you're in and they say even a l something a little bit

41:32 In the direction of what you hope they would say. Jump in with a lot of excitement and then get into more of a sell mode with them. And almost tried to

41:44 Sell against your idea. Push back against your idea. Make the customer sell you. In the interaction. Mm-hmm. And you play the devil's advocate. So th those are the kinds of things we We um we search for

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43:12 I want to talk about strategy. I know that you have a very strong perspective on how to think about strategy, how to approach strategy. This is something that everyone Always wants to get better at. Every PM is always told.

43:23 You want to get Build your strategic thinking muscles and This is really important to your career. I'd love to hear your taken how you approach developing strategy and your advice to folks.

43:34 I will readily admit I bring a bias. I spent Almost a decade at the beginning of my career, right after college, working in a strategy consulting firm. Right. So I bring a a bias, which is an to some degree, certainly for the length of time I did it, an unusual background for a product manager. When I first showed up at Google, it took me a couple of years to realize my job was not to produce all

43:58 A nice power point it was to ship code. And I was doing a poor job of that for at least the first twelve to eighteen months. Um But I think there is almost a countervailing

44:11 Dogma. in Silicon Valley or in tech companies more generally. That strategy is easy. And execution is everything. And I think that's probably because

44:24 There are A small number of companies that get the strategy right, but the legendary companies that we all know about not only got the strategy right, but then executed it really crisply. What we don't care about are the companies that got the strategy wrong never got even into the conversation. And all of their great execution was multiplied by zero. Great execution multiplied by a a poor strategy.

44:48 Is a waste of everyone's time. And because the strategy isn't clear. You can waste a lot of time. Executing uh years and years against something that was destined never to work.

44:59 One of my favorite quotes. From the valley Um from Kevin Sistram in the early days of Instagram. I heard him say it at a conference. This is pre the Facebook acquisition. He was like I don't know how old he had just left Google, he was probably

45:16 I don't know, twenty some years old. He said, We may not be right, but at least we are clear. And what I love about that is Even if your strategy isn't right and it will never be exactly right,'cause no plan ever is. You will have a clearer read on if you are going off course'cause you kinda ha you have a very clear idea of what was supposed to be happening.

45:40 And so I think Being very clear in your strategy. is really important. Um, you've had some great guests on the podcast. Um Richard Roumelt is one of my absolute

45:52 uh favorites. He's written a couple of books, one called Good Strategy, Bad Strategy, another more recent one called The Crux. Where he does a great service. To the world. By even more than describing what strategy is, focusing at the beginning about what strategy isn't. Strategy isn't an ambitious goal. It's not an aspiration. It's not

46:13 А сет фалком. It is a coherent plan. For how you gonna apply your strengths in a leveraged way. Against A core

46:26 important problem. That's it. Very, very rough paraphrase of of the way he thinks about the world. And I find that we often confuse strategy with a vision, a broad idea, a very, very broad, vague.

46:41 uh aspiration. New bank strategy isn't we want to be the world's largest neo bank. We do. But that's not An interesting way to dimensionalize the problem.

46:54 In twenty fourteen, we had Millennial Middle class Urban Brazilians

47:02 Cool. Hated. paying credit card fees and were not able to get credit in the first place'cause they were too young and without a credit history. And we could offer them Not just a lower priced credit card, but a no fee credit card, which was an emotional thing. That fee got people.

47:21 Angry. And we could do that because we were branchless and digital. Now that is a coherent description of a very specific problem for a very specific set of customers with a very specific solution based on a very specific advantage. By the way, all of this predated my'cause it's got nothing to do with me. I wasn't there. But

47:41 That's what I mean. Strategy is very specific. It's very detailed. It's very locked in. And uh working backwards from that I think is is really really important. And if you get that strategy right, it It informs

47:58 the minimal set of activities you need to do. traction and to win. Whereas if you don't have that degree of coherence. You're trying to serve older customers. You maybe we should go to Mexico.

48:11 prematurely. All sorts of things happen and your execution gets very diffuse. And you can't even tell why you're not getting traction across the company. Whereas Strategy allows focus. And it allows a w much more rapid read. of whether your focused bets, your concentrated bets

48:31 are actually Working. You've had some investors on your podcast over the years and they will tell you that concentration is what builds wealth. Diversification is what preserves wealth. You're a startup.

48:47 You're not trying to preserve anything. You're trying to build something. It requires Concentrated bets, not hedging. And because you're concentrating bets, those those bets are high stakes, you need to be very, very clear on what what bet you're making and why you think it's gonna succeed. When you work with PMs on your team and in the past that are trying to get better at this muscle.

49:10 And following this advice that you're sharing of strategy. What do you find most helps them build this muscle? Is it just doing it over and over and over and over? Is it? You know, reading good strategy, bad strategy. practicing it. What do you find is most

49:21 Helpful in helping you build this muscle as a human. One is taking it seriously. It's a little bit like what we talked about with New Bank's culture around first you gotta want the customer to love you fanatically as something that you value. After that, I think frameworks really help. Whether it's good strategy, bad strategy, whether it's play to win from a re relatively recent guest of yours, Christopher Lockhead, who I who I really admire. Um

49:47 Whether it's where to play, how to win from Roger Martin, which is a Phenomenal book of the book. He's coming on the podcast in a in a few weeks. Is he? He's he's f he's fantastic. And um And having those frameworks, all of which in many ways, if you synthesize them, are getting at the same thing around focus.

50:06 around a clear understanding of the customer around not trying to be in the words that that we literally have'em on new bank coffee mugs, we're not trying to be incrementally better. We are trying to be fundamentally different. These are all very similar ideas expressed in in in slightly different ways. Once you understand the frameworks and you distill them. Then it's about practicing them and practicing them is scary. Hedging is

50:34 Hedging is appealing. Hedging means you don't have to You don't have to make choices. Um Hedging sounds smart.

50:43 Uh Concentrating all your bets. Is the thing that desperate people do. And Startups are desperate are desperate uh entities because they're burning cash in almost every instance.

50:57 But successful startups, the ones that become profitable, I'm very wary having, you know Giving the places I worked of The successful company with one or two monster products and new bank's now in that fortunate position. That starts to get conservative, that starts to forget that Focus concentration.

51:17 Customer uh obsession. Are every bit as important. That even though the company won't go bankrupt if products three, four, five, and six don't don't succeed because product one and two are are our monster cash flow drivers. That's a slow path to death.

51:36 And so Practicing that discipline And having And I use this word very um Intentionally having the courage to make those hard choices.

51:50 Uh and to concentrate the bets. It is Which goes against, by the way, a lot of what's taught in business school and a lot of it, PMs are are are MBAs. is really important. And then it's a it's a matter of you get better the more you do it. And uh

52:07 And you get more more practiced and more grooved and more principled in how you get to A methodology the more you do it. Did you say the mugs uh at You bank save. be fundamentally different.

52:20 My the product team. Um Uh a little over a year ago, uh we we put together some schwag. Which was fundamentally I have a mantra within the company since roughly the time I joined, which is we're in the business of being fundamentally different, not incrementally better. Again, it goes back to only fundamentally different gets customers to tell their friends. Incrementally better. And by the way, there are certain features. I don't want to overstate the case. There are certain features where you're in the incrementally better business, not every single thing of the hundred things you launch in a year.

52:54 Can be Fundamentally different. But we're searching for those anchors that are going to be fundamentally different all the time around which you build some sustaining innovation as well. But we are in the fundamentally different Business.

53:07 Not be incrementally better. better business. I love that. And that's a great segue to where I wanted to go, which is I know you're a big fan of category design, you mentioned Christopher Lockhead. Uh former guest. This this is actually one of the more common debates on this podcast of

53:21 Do people believe in We should be creating our own category or should we not? Is that a terrible idea? That is a good idea. Uh, it feels like you're in the campo, this is actually Very good and important.

53:31 I'd love to hear your perspective and also just like how Nubank did this. You know, Lenny, literally earlier in this week. I was listening to your podcasts with I believe it's Todd Jackson. Ex Gmail product leader and now venture capitalist. And you guys had a very

53:49 Uh interesting discussion about it. And I think he He took largely the other side of the argument. that you go in a category where customers are already spending money. And I It's hard to argue with that. fairly robust logic. I will tell you how I think about it. It forced me to think about where are the nuances in in how it

54:07 I think overall, particularly on a company level. successful companies are typically in the fundamentally different business. They're in the new category business. Google was in the new category business. Netflix, Airbnb, you can go down the the long list, Salesforce, uh, et cetera, et cetera.

54:26 Um And that's really important. In Nubank's case. We were the first and it is actually not that important that we were the first, but we were very intentionally Trying to build

54:44 Yeah. branchless bank based on the rise of the smartphone. In Brazil and Latin America at that time. Yeah, sort of Rapid inflection.

54:54 And a branchless bank that could bring, as David likes to say, a bank branch, put a bank branch in your Clock it. where ac at the time access was the big problem. And that you could do that on a

55:08 digital cost structure that allowed you to essentially disruptively price across the board. Was the thing that led to the The massive wave of success multiplied by

55:22 Unlike Almost everywhere else in the world. Including in the US, where the answer was we're gonna do the bank account first. New bank's answer is no. We're gonna do credit first. And credit is Ten times harder and and a hundred times more risky.'Cause you get credit wrong as a young company.

55:39 that doesn't know how to do it yet. You've blown you've blown everything up. The money's never coming back. Those two again concentrated bets. Defining a new category. Where I think the key to our success.

55:55 Now There are times when you're trying to go into an adjacent market. We've recently gone into a market called Consignado in Brazil. which is secured lending for government employees. Very stable job.

56:12 Easier to Underwrite? Against their salary. At a much lower interest rate. That's a market that's existed for

56:20 Couple of decades in Brazil. And our job was to go in there and we believe we built something that is fundamentally different. It wasn't digital. It went through middleman. We built it D to C. And we've been able to price it very to undercut the pricing pretty dramatically.

56:36 Um so even within an established category We've tried to build a fundamentally different experience. But there are also times when look. It's not quite me too, but the differentiation's a bit more Incremental.

56:50 But at the company level, I think it's absolutely imperative. To be Designing your own category so you can then dominate it and defining your own category. And even when you're entering a place where customers are spending money, I think Going in with a mindset that says this is gonna be a bit better and I think

57:08 Todd would probably agree with this, uh given the way he described it. You should try to be reinventing that category even if you're not inventing that category. Amazing. I like I like this uh battle we're forming here of people on two sides of this debate and I'm excited to see where it goes over time. Feels like the uh do not create a category decide as winning so far in terms of volume.

57:30 But uh There's a lot of passion from this other section. I'm happy to be on the contrarian side with the Okay, there's a few more things I want to touch on uh before we wrap up. Um It feels like New Bank is one of the historically most successful companies are launching new

57:45 business lines. I think you guys are maybe like ten years old and how many product slash business lines are there at this point. It depends on how you categorize it. But I would I would say we have roughly

57:58 A dozen to twenty For the client. Um that's wild. Our story started as a Brazil we were a Brazilian credit card monoliner in an in an app and and all the rest of it. Around the time slightly before, but around the time I joined the m the Phase two of the company, the mandate of what we were trying to do, which has really been the story of the last five years, was we're gonna go from a Brazilian credit card company.

58:22 to a full solution Latin American bank. Which meant We launched Five new products. We launched a bank account, which allowed us to go from being a secondary banking relationship.

58:36 to increasingly a primary banking relationship about half of our Ninety plus million customers are now. Uh. We are the primary relationship.

58:45 We built a lending product, we built an investments product, we built an insurance product, we built a series of small business products. While we were doing that. We were also Making the leap. To prove

58:58 Despite a lot of skepticism, that our business model was exportable. And not a unique Brazilian phenomenon. So we launched into Mexico and launched into into Colombia and now we are starting to take the full suite of products and go beyond credit card in Mexico and Colombia as well. So depending on how you look at that matrix.

59:17 We are, you know, a dozen plus uh products and we're working on the phase three of our products, which is Um moving beyond financial services, we've launched a an e commerce marketplace within our app. Um Just perhaps a bit counterintuitive if you're coming from the US. And we're also

59:35 Envisioning a world Where Banking is again to use the phrase that that we love at Nubank fundamentally different Then

59:46 It has has been in the last hundred years, and we believe that social technologies, self driving, uh and AI technologies. can build a a just completely different experience where we're not building a bank branch and putting it in your pocket. We're building a personal banker.

1:00:05 Which today, I don't know, ten million people around the world have access to and you gotta have a lot of money to to do it. We believe that job can be done. That we believe that job can be democratized ultimately to all eight billion people on the planet. And we believe it can be done better for those eight billion even than the ten million are getting today.

1:00:25 But that's a lot of That's a lot of work. And that's, you know, to use Christopher Lockhead and his co authors, um Language, that's the new category. That we are trying to Define.

1:00:37 over on a global basis. It's gonna be a tiny little banker to fit in your pocket. Tiny little person. That's it.

1:00:45 I wanna follow on this thread, but before we get there. So in terms of Adding new product lines and business units. Watching how New Bank has done this, is there something you've learned about just how to do this well? Like I'm imagining there's a spreadsheet. Where here's all the things we're gonna do in the future.

1:01:01 Here's how we're Thinking about all the factors of all new businesses we can launch. Is there anything there you've seen of just like, wow, that's a really smart way of thinking about the sequencing slash where to expand next that you think other folks can learn from.

1:01:16 I wish I could tell you that there was this predestined master plan that was so scientific. The reality is smart people around a table with a culture of robust debate and real candor about the pros and cons. Is is sort of how we went about it.

1:01:38 And a constant re examination of how things are going, what's going well, what's not going well, what's taking off, what's not yet taking off. Um, what are the principles by which we're making these decisions has been important. Some of these things are obvious. If you're running a bank, a bank account is is probably a good product at some stage. But uh but a lot of it in terms of sequencing and when we invest where Some of it's obvious, you know, where's what's the town?

1:02:06 And and and and what do where's the customer paying? But a lot of it is art. And a lot of that resolution of the art and the debate uh comes from from a fairly robust debate. So I I'm I'm avoiding your question'cause I have a ter I have no good answer. Just a lot of complicated uh decision making.

1:02:25 But I think what's interesting is coming back to your very early lesson is using the gate of is this hitting this fifty percent of people be very disappointed before launching feels Like I keep Yeah, that's the that's the one thing is we don't scale We try not to scale big problems, uh and so

1:02:42 We we try to solve our problems when things are small. are ultravioleta are are sort of uh higher income uh rewards based credit card. We launched it happened to be I think it was July fourth, twenty twenty one was the launch date, so it's easy for me to remember. We we've started scaling it.

1:03:01 Two to two and a half years later. In the meantime, we were in the lab figuring out where is the product market fit, why is it not resonating. Oh, it's resonating with these guys. What do they particularly love? Let's iterate there. And now we're at a point In the last

1:03:14 six to nine months where we can start scaling aggressively. Um learning some of the credit dynamics that are different uh and and reinventing some of those methodologies. And there's a second phase of scaling that will come. But uh yeah, we we One form of destruction we don't get into is fixing.

1:03:33 massive problems that we've overscaled before they were written. That's a bit of an overstatement, but uh nothing's quite that clean, but uh but generally true. Coming back to Your Thoughts on the future of

1:03:48 Fin Tech and in Latam especially. You chat you talked about how the vision is essentially A banker and everyone's pocked it. Is there anything more there of just like where do you think all this goes in the future?

1:03:59 Terms of FinTech banking for people in Landsam and then Globally. Yeah. A a handful of

1:04:07 Principles call them hypotheses that we believe and there are I should be super clear, unproven hypotheses. That will take years for us to prove out, and I'm sure there will be pivots along the way as we learn that. Things aren't quite the way we would have

1:04:24 hoped at the beginning. But First off The the idea that banking should be Holistic. That we need to provide a full solution across what we call the

1:04:37 the five or six financial seasons of someone's life, right? We spend We save, we invest, we borrow. We protect, et cetera. And that's a lot of what we've been working on. For the last handful of years.

1:04:51 So one is we want to be a full solution bank. Second, something we have started We have had some real success in on the business side. We've made some mistakes on the technical side that we are uh iterating through is We are trying to build

1:05:08 And and Some might argue this is uh I'm overstating a bit, but But just to be clear. We are trying to build what we believe is the first global bank on a single code base. I come from a world places like Google and Facebook. Yeah, I remember Google my first product management experience.

1:05:26 I was not allowed to launch. Unless my product was ready. For forty countries and forty languages. I believe language number forty was Finnish. So we were always making sure the thing worked and finished. Um And there are good reasons why you add you know

1:05:45 global online advertising work that way. It was a great principle by Google. When you get into fin tech and into banking where the regulations are very local Where the stakes are much higher than that you serve the right three hundred by two fifty ad. There there is a lot of pushback on that kind of Oh.

1:06:03 We're just gonna scale us everywhere. sort of mindset. And so How do you marry those two things? There are global banks like City or Santander.

1:06:13 A lot of them have been built up through acquisition, a lot of them are in On Distinct Cool. code bases and and technology infrastructures.

1:06:23 We believe there's a lot of leverage. If you can build A global bank on a single code base. That's another principle that we are trying to make real. The third is that

1:06:36 Social mechanics around your financial life, not in general. Not another WhatsApp, not another Twitter. And Self driving automation.

1:06:50 Why do I have to remember to pay this bill every month? Um why do I have to remember to save for my Child's university education. Every month. Why can't I keep my life goals really well organized?

1:07:04 Um Which is almost impossible to do. My wife and I open up different bank accounts at different banks just to try to do that job, which is Talk about customer workarounds. Um How do we make The life the s life cycle of

1:07:22 Managing your financial life. exponentially easier leveraging these technologies and then using AI, which is an overhyped term right now, but AI to sort of turbo boost these These uh These tasks.

1:07:38 You we have a phrase we started using at New Bank, which I I really like that David first first introduced it. Customers. Everywhere around the world live harshly unoptimized financial lives. I think that's true, regardless of income level. Regardless of geography.

1:07:58 regardless of sort of life stage uh uh of where people are at. If you have a young child, it is very hard to keep track of all the things you should be doing. You should be opening a savings account of a specific kind, this tax advantage in this way. These are these are These are imminent these are problems that should be solved and should be solved soon, uh, and can be automated and can be Where insights can be brought to bear.

1:08:24 for customers who are not super sophisticated in their level of financial education, which by the way is almost all of us. Some of the people who think they're the most sophisticated

1:08:36 Are the ones who burn the most money in casinos that they call the stop market. And so uh So these are some of the principles around which we are envisioning the next phase. What if there were someone right next to you? who could tell you what the smart move was to make today At this life stage, you've just had a child, you've just gotten married, you've just bought a house, you just

1:08:58 Wanna remodel, whatever it might be. We think the technology is there or thereabouts to be able to do that. Why not have the company that reinvents banking come out of

1:09:12 Sao Paulo, Mexico City, Bogota. Why does it have to come out of San Francisco, New York, or London? We see no reason why it can't it can't be us. So we're gonna give it a whirl. Amazing. I love all of this. I can't wait for this to be real. You mentioned AI, so I just have a couple more questions. You mentioned AI. We have a recurring segment on this podcast called AI Corner.

1:09:32 So let's walk over to AI corner. All right. Usually I I ask how you use AI in your day to day and your team, just like what are the tools and things you find useful to help your team operate? with AI and fueling, but I'm also curious just how you're integrating AI into the product. You might touch on this a little bit, but just how AI is gonna

1:09:49 Supercharge the stuff that you're building. We use some of the the tools that everyone is is using these days, um, you know, are are, you know, uh ring fest ring fenced version of uh of chat GPT and and and some of the standard tools. We're using them in some of the

1:10:11 Obvious initial wave ways. How can we improve our customer experience? Uh if you're fanatical about customers, you're fanatical about customer experience and new bank has always been that way. How can we make it even better while we're also making it more efficient. So we're doing All of those things as part of our Coming up the learning curve in the last eighteen or or or or so so months.

1:10:34 And then we're starting to think about what are the ways in which we can build AI native products. And I will not pretend to you that we've cracked that code. But A former boss of mine uh spoke spoke A while ago, um uh Fiji Simo, who's now uh the CEO at Instacart, but she was talking about the evolution

1:10:59 when she was the product lead for Facebook ads back when The big migration from the desktop. to mobile was happening and she talked about we needed to become mobile native. And by Analogy

1:11:15 companies today need to figure out what does AI native mean? Not how do we append AI at the at the corners of the product, but how do we build it at the heart? What would you design If these tools existed. from the start. I mean Facebook's migration to mobile is a phenomenal example of that.

1:11:34 Of that pivot and they like to joke and I wasn't there at Facebook at the time, but they like to joke at Facebook, um, even Seven, eight years later when I joined about the company had IPO and needed to find a business model and Fiji was sort of responsible for making that happen. And the core of it was was bringing this mobile mobile native mindset.

1:11:54 So we are trying to think through what is an AI native mindset. Um In financial services. What would that look like? And that requires

1:12:03 Analysis as much as analogy. And we are very much in the middle of that process and we don't know all of the answers. The metaphor of a What if everyone in the world, regardless of their their income or wealth had a private banker

1:12:19 for sit sat next to them. That they could Turn to whenever they Whenever they needed to. is a good metaphor.

1:12:27 And so we are we are using that metaphor and seeing where it takes us. Let's uh now move on to a different corner, failure corner. This is another recurring segment on the podcast. Is there a story you could share of A time in your career where you failed, where something went Ram.

1:12:46 Ideally really wrong. And how that impacted and helped you. in your career, kind of a lesson you learned from that experience. There there's a pretty seminal story for my career.

1:12:56 Um Uh that that ultimately ended in failure and that uh That I had it just sort of rebuild from. Um I had done strategy consulting for just shy of ten years.

1:13:11 I decided I was gonna go to grad school. I was gonna pivot my career into public policy and politics. I was at the Kennedy School of Government, uh at Harvard, and um A year into that. A friend of mine had had his the startup he was working at get acquired by Google.

1:13:32 This company was premised on the idea that you could bring AdWords, AdSense style advertising. To the terrestrial radio market. And Google one of Google's

1:13:44 The biggest diversification bet Google was working on at the time beyond Search and display which were up and running. was let's go disrupt T V radio and print. Two thousand and six.

1:13:58 My friend Convinced me grad school. Both the Kennedy School and Business School.

1:14:06 Um, I done a year of the Kennedy School. I was one credit short and uh In business school I had done a week of. And No Out here to California.

1:14:17 And join Google. First off The uh Premise. of the the hypothesis proved to be wrong or at least harder than we thought.

1:14:31 And Uh in the following week. Terrestrial radio or for that matter TV advertising, broadcast media advertising works very differently. It serves actually a different market. It serves brand advertising top of funnel kinds of goals as opposed to the bottom funnel that Google really knew well. So that was one piece. There were all sorts of technical

1:14:57 methodologies like reach and frequency that are really important that We simply didn't know about. We were determined to run an auction. We have patents to our name to this day that were How do we bring

1:15:11 auction methodologies to work in a broadcast. medium, um some very interesting technology. At the end of the day, one of the things that you really needed was a surplus of inventory of ad inventory. Which there actually isn't that much of.

1:15:30 Relatively speaking, compared to online? The other thing that is true. is the people who control that inventory are not nearly as fragmented. So when you're negotiating with NBC or CBS Or clear channel. They have much more leverage than in the online world of, you know, bloggers and uh and small websites.

1:15:52 So the fragmentation wasn't there. The methodology was different. It was going to be a tougher slog. And in the meantime Google made actually a very

1:16:04 Smart. Yeah. And this was a pivot on Google's part. Based on a lot of learnings from the failure on the one side and some of the success happening on the side of YouTube. In the meantime, Google had acquired YouTube. And

1:16:17 Somewhere along the way, and this was m over multiple years. Susan Wajisky and the leadership team of uh Google and Google Ads in particular. Came to the conclusion that rather than Google chasing T V

1:16:31 Let's have T V come to Google, i.e. YouTube. And we've seen what's happened in the ensuing fifteen years where Cord cutting and all of the rest. And now The added. Online digital ad methodologies that Google is

1:16:47 Best in the world at. can be applied in a much more straightforward way. But I was collateral me and some of the teams I was a part of, we were collateral damage in that Evolution. There was a point.

1:17:00 Where Yeah. Google did a small layoff and it was largely concentrated in my Group. Um of this acquisition.

1:17:10 Along the way Google acquired YouTube, Google also acquired DoubleClick, and DoubleClick served all of the brand advertising online. And a couple of years later. Well, firstly at the time. I was within weeks of being laid off. Having dropped out of two grad schools.

1:17:25 And move three thousand miles west. That felt really crappy. There's a there's a A great song from around that time, which is a A mash up.

1:17:37 From Coldplay and Jay Z uh Lost. You should listen to the lyrics. Just because I'm losing doesn't mean I've lost is literally your first line, and I would have that on repeat. At that time. Um Uh within a couple of years, or within a year, probably year and a half, maybe. Um I was also that was around the time I was getting married. So it was a a lot going on.

1:17:57 Um It turns out That Within a year. Sort of post the double click.

1:18:07 Deal. Google decided, look. With YouTube as a as an anchor asset and some other things. And double the double click acquisition There was a technology

1:18:17 No. now pretty well established, fifteen years later, called real time bidding, and we were gonna bring the search auction methodology across the entire web for all of display advertising. And we were gonna use that core underlying infra

1:18:33 to be able to build not just a spot market, direct response advertising, but a futures market, which could apply to brand advertising. And we are gonna use that disruptive vector. Something fundamentally different, not just incrementally better. To essentially dislodge Yahoo from owning brand advertising online. And I ended up getting that that

1:18:51 Mandy. Because I had Learnt a lot about How brand advertising works. twelve, eighteen months earlier. So

1:19:01 That was a s fairly spectacular failure. The acquisition, by the way, ended up in Uh arbitration. Big lawsuits. um depositions and it was messy from all sorts of uh Angles

1:19:18 Um, so we we all worked our way through that. And then in the end we ended up building what is s even still today, I believe, Google's large second largest business, which is the the display advertising business, but That transition was messy.

1:19:32 Excruciatingly difficult. From a strategy perspective, as we talked about earlier, but from a From a emotional toll as well and figuring out your way given I was new to product management.

1:19:45 I was new to Silicon Valley, I was new to Google. I was new to advertising. And I had no idea whether I was ever gonna be good at it or not. Yeah. Do you think the lesson there is is basically that song, just because you're losing doesn't mean

1:19:58 You've lost or that you're a loser. And just keep Keep going. Yeah, I Bloody mindedness is a

1:20:04 Dramatically underrated quality. Quality. um as we you know over intellectualize um from strategy to execution and all the other things. Uh Sometimes persistence is key and persistence while still being clear eyed about what the odds of success are is also key.

1:20:23 Jag, we've covered everything I was hoping to cover and more. Before we get to our very exciting lightning round, is there anything that you'd love to Leave listeners with or share kind of as a last tidbit. I I would just summarize a couple of core points I think the

1:20:39 The idea of Perseverance. and being very clear about what you're trying to achieve and how much it is worth to you and how much you're willing to Fight for it.

1:20:56 While also being very open and transparent to feedback that you're getting from people from the market about whether what's working and what's not. And knowing what parts to let go and what to hold on to really tightly is is an important lesson. I think the other thing that I would just, you know, emphasize again is

1:21:17 And this goes a little bit back to the the debate you're trying to frame up. Um Uh uh a new category or existing category, I think. Within with with within that debate, there's really a synthesis that says and I think most people would agree. If you're trying to break through as uh

1:21:35 As an insurgent. You cannot fight on the ground that the incumbents have Stand for You have gotta find a disruptive vector. Uh and

1:21:48 That means searching hard for what is fundamentally different. So that it breaks through the noise and the noise the volume of the noise has just gone up. So much in the last fifteen years. I think that's even growing in importance. um incrementally better doesn't get you there.

1:22:05 It doesn't get you there unless You have That hook. I love that you summarized your key takeaways. I the something I've been wanting to do and I might ask every guest to try to summarize what they've shared. Because uh that is incredibly helpful.

1:22:20 With that we've reached our very exciting lightning round. Are you ready? I I'm ready, let's do it. First question, what are two or three books that you recommended most to other people? The business book, so One is play to win.

1:22:33 Um I think that is a great modern strategy book that takes a lot of what's happened in the digital world and summarizes it re summarizes it really well. Um Second one that I would highlight, which I think is a really good non digital world summary is some

1:22:53 And really distillation of the essence of stratagy. And as you mentioned earlier, he's coming on your podcast soon from Roger Martin is where to play and how to win. Which I think is a classic. Mm-hmm.

1:23:05 And then I you know, as I mentioned, I went to uh I went to study public policy and politics back Fifteen years ago. One of the ultimate startups and one of the ultimate startup stories in my mind is the story of Singapore. And there's a autobiography of the founding prime minister

1:23:26 of Singapore from you know Nineteen sixty five. Till he retired. He passed away a couple of years ago, Li Kuan Yu. Um His book about the story of being

1:23:39 Kicked out Singapore being kicked out of Malaysia as a tiny in business terms sub scale little country. With no natural resources. is I think incredibly inspiring. His book is called From Third World to First.

1:23:56 And I think it's a great story. that in many ways is a parallel to what startups try to do, which is essentially go from Third class to first. Yeah. And and it's a very tricky ride. And we requires a A ruthless honesty.

1:24:12 about where you stand and what it will take to succeed. And it usually gets puttified up when told in retrospect. But it is It is messy every step of the way. And I think it's an awesome

1:24:27 It's an awesome An apologetic summary of like what it takes to to achieve. greatness in a very different sphere. than we're used to talking to. I love that. I I definitely want to read that now.

1:24:40 Uh, next question. Do you have a favorite recent movie or TV show you've really enjoyed? There's a gr the great series that my wife and I watched fairly recently, um on HBO called The Gilded Age. Which really shines a a very interesting light on how

1:24:58 Technology this is from the you know late nineteen late eighteen hundreds, nineteenth century. How the technology technological changes disrupts Both the economic world and the world of of wealth but also the social dynamics in a society. It's it's Fascinating'cause we're going through

1:25:18 We're living through a new gilded age right now. And we're seeing a lot of those dynamics, but Turbocharged on On social media. So extra

1:25:30 Extra exciting. Good times. Do you have a favorite product? that you have recently discovered that you really like either an app Some physical.

1:25:40 Anything that's bringing you joy. I was listening to Your podcast with Christopher Lockett. And it was on the treadmill when I was doing it. And in the middle of it he mentioned a product around the idea of category design. I think I forget what question you asked him. And he mentioned the loamy.

1:25:59 Hm. Kitchen countertop. Compostor. And My

1:26:07 Thirteen year old daughter. has been Uh who is you know very idealistic and has been on us to do composting for Over a year now.

1:26:20 And we bought a loamy. And we are we are I just did we just did our fifth batch of soil last night. And uh It works exactly as advertised. And it is

1:26:34 Fantastic. And I get a great amount of joy, as does the whole family, actually, in doing the right thing and doing it in a modern way and doing it in this accelerated time frame overnight and uh It's really a new category of product of app kitchen appliance that uh I remember Christopher talking about that uh

1:26:57 Creating creating countertop space is a precious asset and we we're we're happy we did it. So uh that's a very recent last Three week story. This makes me so happy. Uh I also think Chris is gonna this gonna be his favorite episode of of all my podcasts.

1:27:13 A lot of love for him. Uh, that's incredible. I gotta I gotta get me one of those. Two more questions. Do you have a favorite life motto? That you often Think about, come back to, share with friends or family that's been useful in work or in life.

1:27:27 In work in the very, you know narrow confines of work. I've used it it probably at least a dozen times, uh in this podcast, which is About par for me for an hour and a half at work. Uh We're in the business of fundamentally different, not Not

1:27:42 Incrementally Better. Um, I think that's That's the core. car car motto.

1:27:51 It works it works in a in a slightly uh modified way for life as well. You know, you live You build the life you wanna build and it's not going to be Checking the boxes that Everyone wants you.

1:28:07 to To check there was a time When I was at a consulting firm and I was a partner and I dropped out to go back to grad school and people thought I was crazy. Then there was a time when I dropped out, you know, like

1:28:23 to the horror of my parents, I dropped out of Harvard, like what the hell was I thinking, uh to come out to Silicon Valley. And that went As we talked about pear shaped Within weeks. There was a time when I left Facebook to uh not that long ago, four years ago, to go join this crazy Sao Paulo based

1:28:42 Bank, what did I know about banking? What the hell did I know about Brazil really? If you're not clear on what it is you are trying to do, and if A and B if you are not willing to tolerate failure. Then You're just checking the boxes of someone else's expectations. And so fundamentally different is important. Now it's a luxury good.

1:29:07 You gotta be you gotta be it's easy for for some of us who live in, you know, the Bay Area and in Silicon Valley to And so I'm very conscious of that, that it's a privilege and it's a luxury good. But I think everyone should should strive for their version of I love that you extend that.

1:29:25 idea not to just business but also your life. I didn't even think that it goes that far. Final question. I know you have to run really soon, but I can't not ask about this. Uh Apparently you were convicted of smuggling mangoes. At some point in your life.

1:29:40 Can you share that story? Yes. Uh as I mentioned, I grew up uh in Trinidad in the Caribbean. Um And outside My brother in my bedroom was a mango tree that was

1:29:57 abundant and spectacular quality set of mangoes and Here in the US, and I can speak very definitively for California. The mangoes are are subpar. Forget about incrementally better. They are simply subpar. Um and Americans I don't think realize what a good mango actually is and what a joy it is to behold.

1:30:18 Mm. So every time I would Go home. I would try to bring Man goes back. And one time coming through Miami International Airport from from the Caribbean

1:30:32 I had a dozen mangoes wrapped in newspaper. slipped in between my clothes and I hadn't counted on the fact that this was Several months before nine eleven. But um I hadn't countered the fact that The U S Department of Agriculture had

1:30:49 Got up. smart to the fact that if people are coming from the Caribbean, they are bringing in Food. That is a given. And they were gonna try to smuggle it by. So they ran the entire plane through agricultural inspection.

1:31:03 The guy looked through the X ray machine and said, You've got eleven mangoes in your bag, sir. At which point I knew I was caught and I said, Well you missed that one. I can see the picture. But you missed that one. It's actually twelve. I ended up on a Agricultural watch list, but then nine eleven happened. And there were three or four years where as a management consultant, so I was at an airport twice a week.

1:31:27 I you know those you used to get on your ticket S S Which they said was random. Every flight for three years. I was flagged for a

1:31:38 special screening. Um Because of my love of mangoes. So uh so It was worth it. Um mangoes are are are a misunderstood, underappreciated fruit.

1:31:51 So uh Um If you grow up in the Caribbean you can't you can't it's hard to go without Top quality mangoes, and so I still struggle here in Cali. I hope you've been rehabilitated from your life of crime.

1:32:03 Because I have been rehabilitated. And one of the great things about working with a Brazilian company is the quality of mangoes in Brazil are top notch. So I get to I get to partake fairly regularly these days. It's unfair. I am gonna ask you for your Saminga recommendations. Jag, I've kept you long enough. I feel like this podcast episode was definitely not incrementally better. It was certainly fundamentally

1:32:25 Different. Thank you so much for being here. Two final questions. Where can folks find you if they wanna reach out, maybe Follow up on stuff and how can listeners be useful to you? Thank you. Um, Lenny, I really enjoyed it. I appreciate it. Very kind words. Um, best place to find me is probably on on on LinkedIn, Jag Doogle. Um Uh a relatively unique name, fairly easy to spot and find there.

1:32:49 And um I I'm always looking for stories and for opportunities. I'm always looking for stories of of of fundamentally different. So I would love to hear those.

1:33:02 Um Especially when they're done against the odds or when there's a more convenient or easy choice. And We are in the business of building the world's first social and self driving AI powered bank, which sounds like a lot of MBA gobbledygook, I know, but Silicon Valley um buzzwords, but But we mean it.

1:33:25 And so anyone who wants to join the what we call the purple revolution. Our brand color is purple. Um Love to hear from you wherever you are in the world because uh 'Cause we have people everywhere.

1:33:41 And if they're interested, is it like newbank.com slash careers. I believe that's right. Yes. Amazing. By the way, do you have a color, a name for your purple? Brand color. We call not we, our customers call Uh the little

1:33:57 purple credit card the Hoshinho Hosho in Portuguese is Means purple. Cosino basically means little purple card. Mm.

1:34:06 And there was actually a moment uh A point when there was a risk because of some regulatory issues that were happening in Brazil in twenty sixteen, where there was a chance that Nubank would have to shut down. And it turns out the central bank Uh our customers called a central bank and said, You cannot let this happen.

1:34:25 And from that day one of the engineers said when it was just a hundred or so people The future is purple. And we have T shirts all over New Bank saying the future is purple. So that's That's part of our

1:34:39 origin story. I'll let you go, Jag, you're awesome. I feel like this is gonna help a lot of people. Thank you so much for being here. Lenny enjoyed it so much. Thanks a lot.

1:34:49 Great to great to chat. Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show.

1:35:10 At Lenny's podcast dot com. See you in the next episode.

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