Lenny's Podcast · May 16Be fundamentally different, not incrementally better | Jag Duggal (Nubank, Facebook, Google)
Wins by building fundamentally different products, with 80% to 90% of growth from word of mouth, and gates scaling on a 50% Sean Ellis score. It has over 90 million customers, is bigger than Coinbase, Robinhood, Affirm, SoFi and Lemonade combined, and had Mexico NPS of 94 to 95.
Tips
- Gate scaling on a Sean Ellis score of at least 50%▶ 16:17Nubank rarely scales a project until the Sean Ellis score hits its threshold, and 80% to 90% of its growth comes from word of mouth.
- Segment Sean Ellis results to find the bullseye cohort and build for it▶ 23:23Payments assistant scored about 40% overall but 70% among users with 4+ commitments on at least two of four payment rails. After dozens of iterations it went from hundreds of thousands to over 10 million monthly actives in about 15 months.
- Have product managers phone ten customers themselves▶ 26:30By the fifth call you can usually predict what customers six through ten will say.
- Fix problems while small and do not scale an unproven product▶ 29:45The Ultravioleta card launched July 2021 and only began scaling two to two and a half years later; aggressive scaling started in the last six to nine months.
- Aim to be fundamentally different, not incrementally better▶ 52:40Bill auto-pay sounds unexciting on the surface, but built across multiple rails it became a fundamentally different experience.
- Write the mock press release before engineering starts▶ 13:13
- Write a crisp hypothesis before customer research and argue against it▶ 36:00Nubank's live example is a hypothesis that the 120 to 150 year old joint bank account is not made for modern customers who share finances with spouses, kids and parents.
- Observe customers and ask indirect questions instead of pitching▶ 37:07Procter and Gamble's Swiffer came from observing how painful mopping is, which people had stopped noticing.
- Define strategy as a specific problem, customer, solution and advantage▶ 45:00Nubank in 2014: young urban middle-class Brazilians angry about card fees and denied credit for lack of history, served with a no-fee card made possible by being branchless and digital.
- Concentrate bets instead of hedging, even after you succeed▶ 55:35Nubank launched credit first rather than the bank account, and credit plus a branchless digital cost structure drove its success.
- Make an owner's duty to deliver bad news early▶ 31:40
- Track NPS after launch and treat small dips as alarms▶ 17:20Mexico NPS was 94 to 95 in the first couple of years; Brazil scores skew in the 70s, 80s and occasionally 90s.
- Start with a deep, emotional pain point and a customer-love culture▶ 7:00Nubank is bigger than Coinbase, Robinhood, Affirm, SoFi and Lemonade combined, with 80% to 90% of growth from word of mouth.
- Do not ask whether good enough is great enough▶ 20:45Several newer Nubank products sit borderline at 50%.
- Reinvent the category even when entering an existing one▶ 56:30Nubank was able to undercut Consignado pricing pretty dramatically.
- Design AI native products instead of appending AI at the edges▶ 1:11:10
