Be fundamentally different, not incrementally better | Jag Duggal (Nubank, Facebook, Google, Quantcast)
Jag Dougal, Chief Product Officer at NewBank, discusses building products customers love fanatically, developing clear strategy, and NewBank's unique approach to product line expansion. He shares how to achieve massive word-of-mouth growth and envisions the future of fintech as a personalized, AI-powered "banker in your pocket."
Deep Dive Analysis
12 Topic Outline
Nubank's Remarkable Achievements and Word-of-Mouth Growth
Building Products Customers Love Fanatically: Nubank's Culture and Values
Operationalizing Customer Love: The Sean Ellis Score
Iterating Products Based on Sean Ellis Score and Customer Feedback
Tactics for Uncovering Customer Pain Points and Hypotheses
Developing a Clear and Focused Strategy
The Philosophy of Being Fundamentally Different, Not Incrementally Better
Category Design and Reinventing Existing Categories
Nubank's Approach to Launching New Product Lines
Vision for the Future of Fintech and AI-Powered Banking
Integrating AI into Product Development and Customer Experience
Lessons from a Career Failure at Google
6 Key Concepts
Fanatical Customer Love
This is Nubank's first core value, emphasizing a deep commitment to building products that customers adore so much they enthusiastically recommend them. It means prioritizing customer delight even when faced with operational or financial pressures, aiming for products that inspire word-of-mouth growth.
Sean Ellis Score
A methodology to measure product-market fit by asking users how disappointed they would be if the product went away. Nubank sets a high threshold, typically 50% of users stating they would be 'very disappointed,' to ensure a product truly resonates before scaling.
Fundamentally Different vs. Incrementally Better
Nubank's core product philosophy that aims to create entirely new or radically improved experiences rather than just minor improvements over existing solutions. This approach is believed to be essential for achieving breakthrough success and inspiring fanatical customer love and word-of-mouth growth.
Strategy (Richard Rumelt's view)
Strategy is defined as a coherent plan for applying strengths in a leveraged way against a core, important problem, rather than just an ambitious goal or aspiration. It requires specific details, focus, and concentrated bets to achieve traction and win.
Category Design
The process of intentionally creating and dominating a new market category or reinventing an existing one. For Nubank, this meant building a branchless, digital-first bank in Latin America and focusing on credit first, disrupting traditional banking models.
AI-Native Products
Designing products from the ground up with artificial intelligence at their core, rather than merely appending AI features to existing products. This involves reimagining what's possible when AI capabilities are foundational to the user experience, such as creating a 'personal banker' for everyone.
7 Questions Answered
Nubank's growth is driven by tapping into deep customer pain points, fostering a culture of fanatical customer love, and using rigorous product development techniques like the Sean Ellis Score to ensure product-market fit before scaling.
Nubank requires at least 50% of customers to state they would be 'very disappointed' if the product went away, adjusting from the typical 40% due to cultural biases in Brazil.
PMs should adopt an 'owner, not renter' mindset, bringing clarity and data to articulate why a product isn't ready, understanding that senior leaders respect well-reasoned pushback and that scaling an unready product leads to bigger problems later.
Effective research involves clearly articulating a hypothesis beforehand, observing customer behavior more than directly asking questions, and asking indirect questions from multiple directions to avoid bias and truly understand underlying problems.
A good strategy is a coherent plan that leverages an organization's strengths against a specific, important problem, rather than being a vague aspiration or an ambitious goal. It provides focus and allows for rapid assessment of whether concentrated bets are working.
Nubank doesn't follow a rigid master plan but relies on robust debate, constant re-examination of performance, and a core principle of not scaling big problems. Products are iterated extensively in a 'lab' phase until they demonstrate strong product-market fit before aggressive scaling.
Nubank envisions a holistic, full-solution bank built on a single global codebase, leveraging social mechanics and self-driving automation. The ultimate goal is to democratize access to a 'personal banker' for everyone, using AI to optimize financial lives.
19 Actionable Insights
1. Cultivate Fanatical Customer Love
Make “customers love us fanatically” a core company value and North Star, biasing decisions in favor of customer delight to drive word-of-mouth growth. This intentional cultural focus ensures customer love is prioritized in all product development.
2. Be Fundamentally Different
Aim to build products that are fundamentally different, not incrementally better, as this approach is what truly breaks through market noise and gets customers to tell their friends.
3. Tap Deep Customer Pain Points
Start product development by identifying and addressing a very deep, emotionally held pain point for customers, even if they don’t explicitly articulate it, as this forms the foundation for beloved products.
4. Define Strategy Clearly
Develop a coherent, specific, and detailed strategy that outlines how to apply strengths against a core problem, rather than vague aspirations, to enable focus and rapid learning from execution.
5. Concentrate Startup Bets
As a startup, make concentrated, high-stakes bets rather than hedging or diversifying, as this focus is essential for building wealth and achieving significant impact with limited resources.
6. Measure Product-Market Fit
Use the Sean Ellis Score by asking customers how disappointed they would be if the product went away, and iterate until a compelling threshold (e.g., 50% “very disappointed”) is met before scaling.
7. Set High PMF Threshold
Aim for a high product-market fit threshold, such as 50% of customers being ‘very disappointed’ if the product went away, to ensure exceptional product quality and strong customer resonance.
8. Don’t Scale Small Problems
Resist the pressure to scale a product until it has definitively achieved product-market fit, as scaling a small problem only leads to a bigger, more costly mess later.
9. Empower PMs to Push Back
Foster a culture where Product Managers act as owners, expected to push back with clarity and data against scaling products that aren’t ready, even when facing pressure from leadership.
10. Conduct Direct Customer Calls
For deep, unfiltered feedback, product teams should directly call 10 customers from a bullseye segment to quickly understand pain points and what truly resonates, avoiding layers of interpretation.
11. Articulate Clear Hypotheses
Before conducting customer research, clearly and crisply articulate a specific hypothesis to guide the inquiry, ensuring that the feedback gathered can validate or invalidate a clear point of view.
12. Observe More Than Ask
During customer research, prioritize observation and asking indirect questions over direct inquiries, and challenge customers to sell you on their needs to uncover unarticulated pain points.
13. Use Mock Press Releases
Before committing engineering resources, write a mock press release explaining to the intended customer why they should care, ensuring clarity on the product’s fundamental value proposition.
14. Track NPS and Churn
Maniacally track Net Promoter Score (NPS) and churn metrics post-launch to continuously monitor customer satisfaction, loyalty, and retention, ensuring a “non-leaky bucket” for sustainable growth.
15. Build Holistic Financial Solutions
Envision and build a full-solution bank that addresses all “financial seasons” of a customer’s life (spending, saving, investing, borrowing, protecting) for a comprehensive and integrated experience.
16. Build Global Single Codebase
Strive to build a global bank on a single code base, leveraging technology for scalability and efficiency across diverse markets despite local regulations and higher stakes.
17. Design AI-Native Products
Instead of merely appending AI to existing products, strive to design “AI-native” products from the ground up, fundamentally reimagining experiences with AI at their core for future innovation.
18. Practice Perseverance
Cultivate “bloody-mindedness” and persistence, remaining clear-eyed about challenges and odds of success, as this is an underrated quality essential for overcoming setbacks and achieving long-term goals.
19. Live Fundamentally Different Life
Build a life that aligns with personal aspirations rather than merely checking societal boxes, embracing the courage to make unconventional choices and tolerate potential failures.
7 Key Quotes
We're not trying to be incrementally better. We are trying to be fundamentally different.
Jag Duggal
We want our customers to love us fanatically.
Jag Duggal
Good enough isn't good enough. Is it great enough?
Lead Designer (Nubank, quoted by Jag Duggal)
We may not be right, but at least we are clear.
Kevin Systrom (Instagram, quoted by Jag Duggal)
We are not going to take a small problem and scale it. Cause if we do that, we end up with a big mess.
Jag Duggal
Customers everywhere around the world live harshly unoptimized financial lives.
David Vélez (Nubank Co-founder, quoted by Jag Duggal)
Just because I'm losing doesn't mean I've lost.
Coldplay/Jay-Z (quoted by Jag Duggal)
1 Protocols
Customer Feedback for Product Iteration
Jag Duggal- Identify a bullseye segment of customers who show high engagement or specific pain points.
- Pick up the phone and call 10 of these customers directly (rather than relying on researchers or large surveys).
- Observe more than ask questions, and ask indirect questions to uncover true pain points, avoiding selling your hypothesis.
- Use the direct feedback to identify gaps or resonating features and iterate quickly to improve the product.