May 16, 2024 · 1h 35m · lennys-podcast
Be fundamentally different, not incrementally better | Jag Duggal (Nubank, Facebook, Google)
0:00 / 0:00
▶ Watch on YouTube →
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this in-depth conversation, Nubank Chief Product Officer Jag Duggal joins Lenny Rachitsky to unpack how the Latin American fintech giant achieved unprecedented organic scale through fanatical customer love, disciplined product-market fit validation, and a strategy centered on being fundamentally different rather than incrementally better.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Lenny holds 18% of the talking time here. How this is scored →
Lenny as informed peer 2.4 Guest teaching 4.6 Guest disagreement 0.9 Lenny pushing back 0.1
speaking balance: gold is Lenny, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 53:35 Jag embraces contrarian stance on category creation
Jag explicitly takes the contrarian side against conventional VC wisdom discussed on the podcast, insisting that insurgent companies must define and reinvent categories rather than merely enter existing ones.
Hardest push from Lenny ▶ 53:10 Lenny frames the category creation debateLenny challenges the category design premise by pointing to previous guest Todd Jackson's argument that startups should simply go where customers are already spending money.
Biggest teaching moment ▶ 43:40 Jag dismantles the Silicon Valley execution dogmaJag dismantles the common tech dogma that strategy is trivial and execution is everything, demonstrating that great execution multiplied by poor strategy yields zero.
Lenny holds their own ▶ 4:44 Lenny rattles off Nubank comparative metricsLenny demonstrates deep domain knowledge by comparing Nubank's scale against the combined market capitalization of major US fintechs and Bank of America's customer count.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Lenny as informed peer | Guest teaching | Guest disagreement | Lenny pushing back | Why |
|---|---|---|---|---|---|---|
| Episode Preview and Core Themes | 0 | 0 | 0 | 0 | Lenny introduces the episode and summarizes Jag Duggal's background and core interview themes. | |
| Sponsor Segment: WorkOS Enterprise Features | 0 | 0 | 0 | 0 | Host sponsor read for WorkOS and Mercury. | |
| Nubank's Rapid Scale and Viral Word-of-Mouth Growth | 4 | 2 | 0 | 0 | Lenny lists impressive comparative scale statistics about Nubank to set up the conversation, which Jag confirms and builds on with a humorous anecdote about underwater transactions. | |
| Uncovering Customer Pain and Cultivating Fanatical Love | 2 | 5 | 1 | 0 | Jag explains the origins of customer obsession at Nubank, describing the deep customer hatred for Brazilian incumbent banks and how Nubank built its fanatical customer love culture. | |
| Nubank's Five Core Values and Extreme Ownership | 3 | 6 | 1 | 0 | Jag breaks down Nubank's 5 core cultural values and how they operationalize customer obsession using Amazon mock press releases, Sean Ellis PMF scores, and high NPS benchmarks. | |
| Avoiding Leaky Buckets and Holding the 50% Threshold | 3 | 5 | 1 | 0 | Jag details why Nubank maintains a strict 50% threshold on the Sean Ellis score and prevents leaky buckets rather than relying on paid acquisition. | |
| Case Study: Iterating Assistência de Pagamentos | 2 | 6 | 1 | 0 | Jag provides a detailed case study of the Assistência de Pagamentos product, explaining how cohort segmentation revealed the power users who drove the Sean Ellis score to 70%. | |
| Direct Customer Discovery: The Power of Phone Calls | 4 | 5 | 1 | 0 | Jag emphasizes that PMs should directly call 10 customers rather than commissioning long research reports; Lenny connects this to Jeff Bezos's quote on customer anecdotes. | |
| Resisting the Pressure on PMs to Prematurely Scale | 2 | 6 | 2 | 0 | Jag warns against the organizational pressure on PMs to prematurely scale broken products, arguing that scaling early creates a massive mess and just bounces a dead cat. | |
| Extreme Ownership and Pushing Back with Candor | 3 | 5 | 1 | 0 | Lenny asks how PMs can push back against executive pressure, and Jag outlines the necessity of extreme ownership, delivering bad news early, and bringing data-backed clarity. | |
| Conducting Effective User Research and Hypothesis Formulation | 3 | 6 | 1 | 0 | Jag outlines common pitfalls in customer discovery, emphasizing the need for crisp pre-research hypotheses, avoiding being a lawyer for one's ideas, and observing over asking. | |
| Hypothesis in Action: Rethinking the Joint Bank Account | 3 | 6 | 1 | 0 | Jag illustrates hypothesis formulation using Nubank's rethinking of the 100-year-old joint bank account structure, explaining how to test it without pitching or biasing the user. | |
| Sponsor Segment: One Schema CSV Importer | 2 | 6 | 2 | 0 | Following a sponsor read, Jag explains why tech culture's belief that execution is everything is flawed, quoting Kevin Systrom and Richard Rumelt to show strategy defines leverage. | |
| Developing Strategic Muscle: Fundamentally Different over Incremental | 3 | 6 | 1 | 0 | Jag explains how PMs can build strategic discipline by making concentrated bets rather than hedging, reiterating Nubank's motto of being fundamentally different. | |
| The Category Design Debate and Entering Adjacent Markets | 4 | 6 | 3 | 2 | Lenny highlights the recurring podcast debate on category design vs entering existing categories. Jag explicitly defends the contrarian position, arguing insurgents must reinvent categories. | |
| Scaling Multi-Product Lines Across Latin America | 3 | 5 | 1 | 0 | Jag recounts Nubank's multi-product expansion across Brazil, Mexico, and Colombia, moving from a credit monoline to dozens of product lines including marketplace e-commerce. | |
| The Future of Global Fintech: A Single Codebase and Pocket Bankers | 3 | 6 | 1 | 0 | Jag details Nubank's vision of building the first global bank on a single codebase and providing an AI-driven personal banker to solve unoptimized financial lives. | |
| AI Corner: Moving Toward AI-Native Financial Services | 2 | 5 | 1 | 0 | In the AI Corner segment, Jag explains how Nubank is aiming for AI-native product architectures by drawing an analogy to Facebook's mobile-native pivot led by Fidji Simo. | |
| Failure Corner: Google's Radio Ad Venture and the Display Pivot | 2 | 7 | 1 | 0 | In Failure Corner, Jag shares a detailed story of dropping out of Harvard to join Google's failed radio ad initiative, surviving layoffs, and turning those learnings into building Google Display Network. | |
| Key Takeaways: Perseverance and Finding Disruptive Vectors | 3 | 5 | 1 | 0 | Jag summarizes key career takeaways on bloody-minded perseverance, disruptive vectors, and highlights Lee Kuan Yew's book on Singapore's transformation. | |
| Lightning Round: The Gilded Age and The Lomi Composter | 2 | 3 | 0 | 0 | In the lightning round, Jag shares his favorite recent show (The Gilded Age) and product discovery (the Lomi kitchen composter). | |
| Life Motto: Crafting a Fundamentally Different Life Path | 2 | 4 | 1 | 0 | Jag applies his business motto—fundamentally different, not incrementally better—to career and life choices, describing his unconventional pivots. | |
| Lightning Round: The Trinidadian Mango Smuggling Incident | 2 | 3 | 0 | 0 | Jag shares a humorous story about being caught smuggling Trinidadian mangoes through Miami airport and ending up on an agricultural watchlist. | |
| Connecting with Jag Duggal and The Purple Revolution | 1 | 3 | 0 | 0 | Jag explains the origin of Nubank's 'Roxinho' card and Purple Revolution culture, and Lenny wraps up the episode. |
Statements from this episode (27)
Nubank is larger than Coinbase, Robinhood, Affirm, SoFi, and Lemonade combined
“NewBank is bigger than Coinbase, Robinhood, Affirm, SoFi, and Lemonade combined.”
80% to 90% of Nubank's growth is driven by word of mouth
“80 to 90% of NewBank's growth is through word of mouth.”
Nubank has more customers than Bank of America across just three countries
“Three new bank has more customers than bank of America, which is one of the four big banks in the U S while also only operating in three countries in Latin America.”
Duggal: Incumbent Brazilian banks were among world's most profitable and hated
“The large incumbent Brazilian banks were amongst the most profitable in the world. They were also amongst the most hated in the world.”
Duggal: Product concepts need more work if not explainable in two paragraphs
“Because if you can't tell me in two paragraphs why the customer you're building this for should care, then it's still work to do.”
Nubank requires a 50% Sean Ellis score because Brazilians are culturally polite
“For us, our threshold isn't 40%. We've generally moved it up to 50%. I don't believe we have product market fit. Unless 50% of Brazilians are telling us they would be very disappointed because Brazilians are inherently polite more, more polite and more optimis…”
Duggal: Nubank achieved 94-95 NPS in Mexico and typical NPS in 70s-80s
“There are been, for example, in Mexico, we've recorded an NPS when we launched the first couple of years of 9495. Right. So yeah, which is way better than we got in Brazil, but our NPS scores skew in the seventies, eighties, and occasionally nineties.”
Duggal: Nubank bill-pay feature reached over 10M MAUs in 15 months
“We're now over ten million monthly actives on that product when we were struggling in the hundreds of thousands about 15 months ago.”
Nubank instructs PMs to call 10 customers directly instead of surveying
“We've told many of our product managers and designers over the last two years, don't worry about serving a thousand customers, taking three weeks serving a thousand customers, getting a bunch of crosstabs, or even at the end of which it's very hard to read the…”
Duggal: Customer Research Patterns Emerge by the Fifth Direct Phone Call
“You pick up the phone, call 10 of them, and nine times out of 10, by the time you've made your fist call, you could predict what's customer six, seven, eight, nine, and 10 are going to tell you.”
Duggal: Product Managers Must Resist Immense Executive Pressure to Prematurely Scale
“The pressure on the line product manager to scale the product that the entire company, the entire executive team, the entire management chain has been counting on. We're launching this thing. We all wanted to scale. We all are very excited about it. We had the…”
Giant platforms like Nubank and Google can mask failing products for years
“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, you can always get them to try it with all sorts of basic techniques, but you'r…”
Duggal: Executives will still blame PMs if pressured products fail
“But if you genuinely believe it's not yet ready to scale your product, at the end of the day, the big mess is the thing you're still going to own. And we're all going to forget that we told you to scale the thing. We're all going to still blame you at the end …”
Duggal: Customer anecdotes usually trump quantitative data analysis in product research
“The anecdote usually trumps the data. And there are many times when I see teams that are, you know, doing very sophisticated analysis 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 …”
Nubank is developing social features to replace legacy joint bank accounts
“Our hypothesis is it's not surprising that that artifact, that that product is not made for the modern customer. That it is easier for me to share a Spotify playlist with my wife or my daughter than it is for me to share a savings goal just mechanically. So we…”
Duggal: In customer research, play devil's advocate and make the customer sell you
“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 something a little bit in the direction of what you hope they would say …”
Startups must concentrate bets because diversification preserves wealth while concentration builds it
“Concentration is what builds wealth. Diversification is what preserves wealth. And you're a startup. You're not trying to preserve anything. You're trying to build something. It requires concentrated bets, not hedging.”
Duggal: Only Fundamentally Different Products Drive Word-of-Mouth Growth
“Again, it goes back to only fundamentally different gets customers to tell their friends.”
Nubank uniquely launched with high-risk credit instead of standard deposit accounts
“Unlike almost everywhere else in the world, including in the U S where the answer was, we're going to do the bank account first. New bank's answer was no, we're going to do credit first. And credit is. 10 times harder and a hundred times more risky because you…”
Duggal: Companies must reinvent categories to dominate, not just improve incrementally
“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 th…”
Duggal: Nubank is primary bank for about half of 90M+ users
“About half of our 90 plus million customers are now we are the primary relationship.”
Nubank is attempting to build the first global bank on one codebase
“We are trying to build what we believe is the first global bank on a single code base.”
Duggal: Companies must build AI into product cores, not product edges
“Companies today need to figure out what does AI native mean? Not how do we append AI 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?”
Duggal: Display advertising remains Google's second-largest business
“And then in the end we ended up building what is even still today, I believe Google's large, second largest business, which is the display advertising business.”
Duggal: Bloody-minded persistence is a dramatically underrated career quality
“Bloody mindedness is a dramatically underrated quality quality. As we, you know, over intellectualize from strategy to execution and all the other things sometimes persistence is key and persistence while still being clear eyed about what the odds of success a…”
Duggal: Smuggling Mangoes Put Him on SSSS Airport Screening for Three Years
“I ended up on a agricultural watch list, but then nine 11 happened. And there were three or four years where as a management consultant, so I was at an airport twice a week. I, you know, those you used to get on your ticket SSSS, which they said was random. Ev…”
Nubank customers petitioned Brazil's central bank to prevent its 2016 regulatory shutdown
“There was actually a moment a point when there was a risk because of some regulatory issues that were happening in Brazil in 2016, where there was a chance that new bank would have to shut down. And it turns out the central bank our customers called the centra…”