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

28:17That 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 maybe you could share of just like how to operationalize collecting this data? You know, we've used a series of tools. Many of the main survey vendor tools, we still use many of them, but we don't standardize or find one that dramatically changes our life beyond the mindset of we are going to make sure that this product has product market fit before we scale it. One of the things I've seen throughout my career is a product manager and CPO.

28:59With it today, a new bank every month, is 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, as he's saying, she's your bag of mentors. We all wanted to scale, we all are very excited about it. We had the product review six months ago and we thought this is going to be amazing. And the pressure on that product manager 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.

29:47Something 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. 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 at 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.

30:25But you're bouncing a dead cat 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 show analyst does. It's a bring science to some of that art of making that judgment call. This point you made about, it's the PM's job to push back and stop bad things from happening. I think it's such an important one. A lot of PM's are just told here, build this thing and they kinda know this is not good at work, this is a bad idea. But either they don't think they should be pushing back or they are not good at it.

31:00From the PM's you work 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, like you said, all this pressure that's coming down on that? One of the things I've learned relatively later in my career, I wish I'd learned it decade earlier, decades earlier even, is how important culture is. And we've talked about the five 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.

31:39If you really don't think it's gonna work, don't tell me what I wanna hear. Incomvant on you, it's expected of you. Has 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. 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 at companies that have gone, especially startups that have scaled well, you usually have people who have been in that boat, who have seen products that weren't working, who have killed them or have pivoted them pretty dramatically.

32:26And there's a lot of respect for someone who has a real clarity of thought and 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 most senior executives in whichever company are 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 whatever function as a leader. To, if you think you are practicing for one of those senior jobs, it's sort of let's say a mid -level.

33:13Then you got it, it doesn't come miraculously when you get a C -suite title. It's something that's going to be practiced and it's something that is expected. And I think that's not a just a new bank thing. Certain cultures promoted better than others, but I think it's pretty universally important. And so I would just encourage people to try it, understand the trade -offs, understand the challenge, articulate the other side. 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 hold. And we're all going to forget that we told you to scale the thing.

33:56We're all going to still blame you at the end of the day. So you might as well bite the bullet earlier, pivot it when it's easier to do. And it'll work out better in the end. I want to come back to one more thread and then I'm going to go in a different direction. You talked a bit about talking to customers, finding innovative ideas, not just listening to what they're telling you. There's this whole skill of user research and interviewing customers and finding the pain point, figure out to build, do you have any tips or tactics or 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?

34:39I will share a couple of thoughts, but I will tell you as a preface that it is arguably the area right now that I still wrestle with. I still think I and we are not doing it as well. I've never seen it done quite as consistently great as it could be. And I think it's an area for where like design thinking and a lot of the design function can help us.

35:08But 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 New Bank and other times we miss on one dimension or the other. First off, per your Jeff Bezos anecdote, the anecdote usually trumps the data. And there are many times when I see teams that are, you know, 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 of the value of the customer's words and the anecdote.

35:55That's one. The second one that I believe very, very strongly in is I think teams often skip the step of clearly 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 a make of it because it's not either validating or invalidating your hypothesis because there isn't a hypothesis. So it just becomes an interesting conversation. 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.

36:44I'm a lawyer for my hypothesis. I'm not a judge of whether the hypothesis is right or not right. So I think that's another common pitfall. I've fallen into that one too many times to count. And then the last thing I would highlight is even when you have a strong hypothesis and you're actually in the mode of doing the research, observe more than ask questions if you can. Ask indirect questions, more than direct questions. Would you love this product? Like excited product manager has been working for two months on a design. You're searching for the problem more than the solution. You're searching for, you're looking indirectly and asking in multiple directions the same question rather than trying to find a yes, they love the thing you've been thinking about and sweating on for a long time.

37:44And if you can, observing is better than asking. Although that's a tricky skill. Those are the things that I look for. With the hypothesis point, just to make sure people understand your suggestion there is before you start talking to customers, doing your easy research as a PM or just 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 will lead them to be really excited about your product. That way you will get very clearly or yes, bang the table excitement and you will know when you're getting that reaction.

38:26Is there an example that just to make it even more concrete? Because I imagine many PMs are kind of feeling like they have to be on biased and just like, let's see, let's see if this is something we should do and I don't want to bias anyone against it. Is there a quick example of a hypothesis? One of the famous examples that somewhat hypothesis related and somewhat observation related is the invention of the swiffer from Procter and Gamble, right? The people hate mopping and they will do it and they won't even realize how painful an experience it is because they've just developed the workarounds and they just deal with the burden.

39:05But if you observe very granularly what the problems are, then you can see where the problems are. And so bring a strong hypothesis to that this is a real problem even if customers aren't telling you its problem because they've just sort of gotten used to it. So that's one. We have a hypothesis at New Bank, I'll give you one that's live. We have a hypothesis at New Bank that the joint bank account, I was doing some research on this just last week. The joint bank account was invented in the early, it's actually hard to say, but it was invented depending on where you would source you believe in the late 19th or early 20th century.

39:49And it was basically invented coincidence with the social movements, sort of the women's liberation social movements before women in the US were legally allowed to vote where women were not allowed to open a bank account without their husband's prior approval. That is the era from which the joint bank account that we still live with today came from. It's 120 to 150 years old. I don't think it's surprising, or 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.

40:45So we're going into a product development cycle that says there is a new social banking arrangement 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 my parents, who might be helping me pay for my child's education as an example of 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're experiencing pain points. And it becomes very hard when you're in and they save it a little bit in the direction of what you hope they would say to not be like jump in with a lot of excitement and then get into more of a cell mode with them.

41:40And almost try to sell against your idea, push back against your idea, make the customer sell you in the interaction and you play the devil's advocate. So those are the kinds of things we search for as we build products. That sounds like a great idea. I believe in a hypothesis. Today's episode is brought to you by one schema, the embeddable CSV importer for SAS. Customers always seem to want to give you their data in the messiest possible CSV file. And building a spreadsheet importer becomes a never -ending sink for your engineering and support resources. You keep adding features to your spreadsheet importer, the customers keep running into issues.

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43:03For listeners of this podcast, one schema is offering a $1 ,000 discount. Learn more at oneschema .co slash leddie. I wanna talk about strategy. I know that you have a very strong perspective on how to think about strategy and approach strategy. This is something that everyone always wants to get better at. Every PM is always told. You wanna 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 in your advice, Tiffox. I will readily admit I bring a bias. I spent almost a decade at the beginning of my career after college working at a strategy consulting firm.

43:42So I bring a bias, which is in, 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 a nice PowerPoint. It was to ship code and that was doing a poor job of that for at least the first 12 to 18 months. But I think there is almost a countervailing 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 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.

44:35What we don't hear about are the companies that got the strategy wrong, never got even to the conversation and all of their great execution was multiplied by zero. Great execution multiplied by a poor strategy is a waste of everyone's time. And because the strategy isn't clear, you can waste a lot of time executing years and years against something that was destined never to work. One of my favorite quotes from the Valley is from Kevin Sistram in the early days of Instagram. I heard him say it at a conference. This is pre the Facebook acquisition. Music, I don't know how old he had just left Google he has probably been in a 20 some years old.

45:18He 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 because no plan ever is. You will have a clearer read on if you are going off course because you have a very clear idea what was supposed to be happening. And so I think being very clear in your strategy is really important. You've had some great guests on the podcast. Richard Rumalt is one of my absolute favorites. He's written a couple of books, one called Good Strategy, Bad Strategy, another more recent one called The Cruts, 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.

46:08Strategy isn't an ambitious goal. It's not an aspiration. It's not a set of financial outcomes. It is a coherent plan for how you gonna apply your strengths in a leveraged way against a core important problem. That's a very, very rough paraphrase 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, big aspiration. New bank strategy isn't, we wanna be the world's largest neo bank. We do, but that's not an interesting way to dimensionalize the problem. In 2014, we had millennial, middle class, urban Brazilians who hated paying credit card fees and were not able to get credit in the first place because they were too young and without a credit history.

47:12And we could offer them not just a lower price credit card, but a no fee credit card, which was an emotional thing. That fee got people 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 centipastomer with a very specific solution based on a very specific advantage. By the way, all of this predated my, does it got nothing to do with me? I wasn't there. But that's what I mean. Strategy is very specific. It's very detailed. It's very locked in. And working backwards from that, I think is really, really important.

47:54And if you get that strategy right, it informs the minimal set of activities you need to do to get traction and to win. Whereas if you don't have that degree of coherence, you're trying to surrol the customers. You maybe we should go to Mexico 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 country. Whereas strategy allows focus and it allows a much more rapid read of whether your focused bets, your concentrated bets are actually working. You've had some investors on your podcast over the years and they will tell you that concentration is what bills well.

48:42Diversification 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. And because you're concentrating bets, those bets are high stakes. You need to be very, very clear on what bets 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 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?

49:17Is it reading good strategy, bad strategy, practicing it? What do you find the most helpful in helping you build this muscle? Is it, you know, one is taking it seriously. It's a little bit like what we talked about with New Bank's culture. First, you got to want the customer to love you fanatically is something that you value. After that, I think frameworks really help whether it's good strategy, bad strategy, whether it's played a win from a relatively recent guest of yours, Christopher Lockhead, who I really admire. Whether it's where to play how to win from Roger Martin, which is a phenomenal book about.

49:52He's coming on the podcast in a few weeks. Easy, he's fantastic. And having those frameworks, all of which in many ways, if you synthesize them, are getting at the same thing around focus, around a clear understanding of the customer, around not trying to be in the words that we literally have them 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 slightly different ways. Once you understand the frameworks and you distill them, then it's about practicing them and practicing them as scary.

50:31Heaging is a peeling. Heaging means you don't have to make choices. Heaging sounds smart. Concentrating all your bets is the thing the desperate people do. And startups are desperate entities because they're burning cash in almost every instance. But successful startups, the ones that become profitable, I'm very wary of giving the places I worked of the successful company with one or two monster products in New Banks now in that fortunate position that starts to get conservative, that starts to forget that focus, concentration, customer obsession are every bit as important that even though the company won't go bankrupt if products 3, 4, 5, and 6 don't succeed because products 1 and 2 are monster cash flow drivers.

51:34That's a slow path to death. And so practicing that discipline and having, and I use this word very intentionally, having the courage to make those hard choices and to concentrate the bets is, which goes against, by the way, a lot of what's taught in business school and a lot of PMs are MBAs is really important. And then it's a matter of you get better the more you do it and you get 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 at New Banks save be fundamentally different? The product team, a little over a year ago, we put together some Shwad, which was fundamentally, I have a mantra within the company since roughly the time I join, which is we're in the business of being fundamentally different not incrementally better.

52:39Again, 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 wanna overstate the case. There are certain features where you're in the incrementally better business, not every single thing of the hundred things you're launching a year can be fundamentally different. But we're searching for those anchors that are gonna be fundamentally different all the time around which you build some sustaining innovation as well. But we are in the fundamentally different business not being incrementally better business.

53:09I love that. And that's a great segue to where I wanted to go, which is I know your big fan of category design, you mentioned Christopher Lockhead, former guest. This is actually one of the more common debates on this podcast of do people believe in we should be creating our own category or should we not? Is that a terrible idea? Is a good idea? Feels like you're in the campo. This is actually very good and important. I'd love to hear your perspective and also just like how New Bank did this. You know, Lenny, literally earlier in this week, I was listening to your podcast with, I believe it's Todd Jackson, ex -Gmail product leader and now venture capitalist.

53:47And you guys had a very interesting discussion about it. And I think he took largely the other side of the argument that you go in a category where customers are already spending money. And 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 and how I believe. I think overall, particularly in 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 long list, Salesforce, etc, etc.

54:28That's really important. In New Bank'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 a branchless bank based on the rise of the smartphone in Brazil and Latin America time, the sort of rapid inflection. And a branchless bank that could bring, as David likes to say, a bank branch, put a bank branch in your pocket, where at the time access was the big problem and that you could do that on a digital cost structure that allowed you to essentially disruptively price across the board. Was the thing led to the massive wave of success multiplied by unlike almost everywhere else in the world, including in the US, where the answer was, we're going to do the bank account first.

55:30New bank's answer was no, we're going to do credit first. And credit is 10 times harder than 100 times more risky because you get credit wrong as a young company that doesn't know how to do it yet. You blow 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. Now, there are times when you're trying to go into an adjacent market, we've recently gone into a market called Consignato in Brazil, which is secured lending for government employees, very stable job, easier to underwrite against their salary at a much lower interest rate.

56:18That's a market that's existed for a 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 middlemen. We built it D to C and we've been able to price it very to undercut the pricing pretty dramatically. 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. 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.

57:00And even when you're entering a place where customers are spending money, I think going in with a mindset that says, this is going to be a bit better. And I think Todd would probably agree with this given the way he described it. You should try to be reinventing that category even if you're not inventing that. Amazing. I like this 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 do not create a category inside is waiting so far in terms of volume. But there's a lot of passion from this other section. I'm happy to be on the contrary inside with it.

57:36Okay, there's a few more things I want to touch on before we wrap up. It feels like new bank is one of the historically most successful companies are launching new business lines. I think you guys are about you like 10 years old and how many products slash business lines are there at this point? It depends on how you categorize it. But I would say we have roughly a dozen to 20 four -plot of clients. Okay. That's well. Our story started as a present. We were a Brazilian credit card model liner in an app and all the rest of it. Around the time, slightly before but around the time I joined, the phase two of the company, the mandate of what we were trying to do, which has really been the story the last five years is we're going to go from a Brazilian credit card company to a full solution Latin American bank which meant we launched five new products.

58:30We launched a bank account which allowed us to go from being a secondary banking relationship to increasingly a primary banking relationship of about half of our 90 plus million customers are now, we are the primary relationship. 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 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 Colombia. And now we are starting to take the full suite of products and go beyond credit card in Mexico and Colombia as well.

59:15So depending on how you look at that matrix, we are a dozen plus products and we're working on the phase three of our products which is moving beyond financial services. We've launched an e -commerce marketplace within our app which is perhaps a bit counterintuitive if you're coming from the US. And we're also envisioning a world where banking is, again, to use the phrase that we love at New Bank fundamentally different than it has been in the last 100 years. And we believe that social technologies, self -driving and AI technologies can build a just completely different experience where we're not building a bank branch and putting it in your pocket.

1:00:03We're building a personal banker which today, I don't know, 10 million people around the world have access to and you got to have a lot of money to do it. We believe that job can be done, that we believe that job can be democratized ultimately to all 8 billion people on the planet and we believe it can be done better for those 8 billion even than the 10 million are getting today. But that's a lot of work and that's to use Christopher Locke and his co -authors language. That's the new category that we are trying to define over on a global basis. It's gonna be a tiny little banker to fit in your pocket, tiny little person.

1:00:44That's it. 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. 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? I wish I could tell you that there was this predestined master plan that was so scientific.

1:01:23The reality is smart people around the table with a culture of robust debate and real candor about the pros and cons is sort of how we went about it. 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. 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 account is probably a good product at some stage. But a lot of it in terms of sequencing and when we invest where some of it's obvious, where's what's the tam and what do, where's the customer paying?

1:02:10But a lot of it is art and a lot of that resolution of the art and the debate comes from a fairly robust debate. So I'm avoiding your question because I have no good answer. Just a lot of complicated decision making. But I think what's interesting is coming back to you very early lesson is using the gate of, is this hitting this 50 % of people be very disappointed before launching feels like a key. Yeah, that's the one thing is we don't scale, we try not to scale big problems. And so we try to solve our problems when things are small. Our ultraviolet, our sort of higher income rewards based credit card.

1:02:52We launched, it happened to be, I think it was July 4th, 2021, was the launch date. So it's easy for me to remember. We've started scaling it two to two and a half years later. In the meantime, we were in the, figuring out, where's 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 six to nine months where we can start scaling aggressively, learning some of the credit dynamics that are different and reinventing some of those methodologies. And there's a second phase of scaling that will come.

1:03:28But yeah, one form of destruction we don't get into is fixing massive problems that we've overscaled before they were written. That's a bit of an overstatement. But nothing's quite that clean. But generally, coming back to your thoughts on the future of Fintech and in LATAM, especially, you talked about how the vision is essentially a banker and everyone's pocket. Is there anything more there? Just like where do you think all this goes in the future in terms of Fintech banking for people in LATAM and then globally? Yeah, you know, there are a handful of principles called them hypotheses that we believe.

1:04:12And 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 hoped at the beginning. But first off, the idea that banking should be holistic, that we need to provide a full solution across what we call 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. So one is we want to be a full solution back. 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 iterating through is, we are trying to build and some might argue this is, I'm overstating a bit, but just to be clear, we are trying to build what we believe is the first global bank on a single code base.

1:05:20I come from a world places like Google and Facebook, Google my first product management experience. I was not allowed to launch unless my product was ready for 40 countries and 40 languages. I believe language number 40 was finished. So we were always making sure the thing worked in finish. And there are good reasons why ad, but global online advertising worked that way and was a great principle by Google. When you get into FinTech and into banking, where the regulations are very local, where the stakes are much higher than that you serve the right 300 by 250 ad, there is a lot of pushback on that kind of, we're just gonna scale this everywhere, sort of mindset.

1:06:06And so how do you marry those two things? There are global banks like City or Cent and Air, a lot of them have been built up through acquisition, a lot of them are on distinct code bases and technology infrastructures. 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 social mechanics around your financial life, not in general, not another WhatsApp, not another Twitter and self -driving automation. Why do I have to remember to pay this bill every month? Why do I have to remember to save for my child's university education every month?

1:07:00Why can't I keep my life goals really well organized? 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. How do we make the life cycle of 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 tasks. We have a phrase we started using at New Bank, which I really like that David first introduced it. Customers everywhere around the world are partially unoptimized financial lives.

1:07:53I think that's true, regardless of income level, regardless of geography, regardless of sort of life stage 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 hoping your savings account of a specific kind of stacks of batteries in this way. These are imminent. These are problems that should be solved and should be solved soon and can be automated and can be where insights can be brought to bear for customers who are not super sophisticated in their level of financial education, which by the way is almost all of us.

1:08:33Some of the people who think they're the most sophisticated are the ones who burn the most money in casinos that they call the stock market. And 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 little 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 want to remodel, whatever it might be. We think the technology is there or there about to be able to do that. Why not have the company that reinvents banking and come out of São Paulo, Mexico City, Bogota?

1:09:14Why 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 going to 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 the podcast called AI Corner. So let's walk over to AI Corner. All right. Usually 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 tooling. But I'm also curious just how you're integrating AI into the product.

1:09:46You mentioned it in this little bit, but just how AI is going to supercharge the stuff that you're building. We use some of the tools that everyone is using these days. Our ring -fist version of chat GPT and some of the standard tools. We're using them in some of the obvious initial wave ways. How can we improve our customer experience? 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 18 or so months.

1:10:32And 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 spoke a while ago, Fiji Simo, who's now at the CEO, InstaCard, but she was talking about the evolution 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, 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?

1:11:24What would you design if these tools existed from the start? I mean, Facebook's migration to mobile is a phenomenal example 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 even seven, eight years later when I joined about the company had IPO'd and needed to find a business model and Fiji was sort of responsible for making that happen. And the core of it was bringing this mobile native mindset. So we are trying to think through what is an AI native mindset? Infinancial services, what would that look like? And that requires analysis as much as analogy.

1:12:06And we are very much in the middle of that process and we don't know all of the answers. Meta four of a, what if everyone in the world, regardless of their income or wealth, had a private banker for sat next to them that they could turn to whenever they needed to. Is a good metaphor. And so we are using that metaphor and seeing where it takes us. Let's now move on to a different corner, failure corner, this 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 wrong, ideally really wrong, and how that impacted and helped you in your career kind of a lesson you learned from that experience?

1:12:53There's a pretty seminal story for my career that ultimately ended in failure and that I had it to sort of rebuild from. I had done strategy consulting for just shy of 10 years. I decided I was going to go to grad school. I was going to pivot my career into public policy and politics. I was at the Kennedy School of Government at Harvard and a year into that, a friend of mine had had his, the startup he was working at get acquired by Google.

1:13:31This 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 perhaps 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 TV radio and print 2006. My friend convinced me to drop out of grad school both the Kennedy School and Business School. I'd done a year of the Kennedy School. I was one credit short and business school I had done a week of and moved out here to California and join Google. First off, the premise of the hypothesis proved to be wrong or at least harder than we thought and in the following way.

1:14:36Terrestrial 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 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 auction methodologies to work in a broadcast medium, some very interesting technology.

1:15:19At 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 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 bloggers and small websites. 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 smart bet. 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.

1:16:13In the meantime, Google had acquired YouTube. And somewhere along the way, and this was over multiple years, Susan would just get the leadership team of Google and Google ads in particular, came to the conclusion that rather than Google chasing TV, let's have TV come to Google IE YouTube. And we've seen what's happened in the ensuing 15 years where court cutting and all of the rest. And now the online digital ad methodologies that Google is 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.

1:16:59There was a point where Google did a small layoff and it was largely concentrated in my group of this acquisition. Along the way, Google acquired YouTube, Google also acquired double -click and double -click 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 and moved 3 ,000 miles west. That felt really crappy. There's a great song from around that time, which is a mashup from Coldplay and JZ's of Lost. You should listen to the lyrics just because I'm losing, doesn't mean I've lost as literally the first line.

1:17:44And I would have that on repeat at that time.

1:17:50Within a couple of years, or within a year, probably a year and a half maybe, I was also around the time I was getting married. So it was a lot going on.

1:18:01It turns out that within a year, sort of post a double -click deal, Google decided, look, with YouTube as an anchor asset and some other things, and the double -click acquisition, there was a technology now pretty well established, 15 years later called Real Time Bidding and we were gonna bring the search auction methodology across the entire web for all of the display advertising. And we were gonna use that core underlying infra 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 were gonna use that disruptive vector, something fundamentally different, not just incrementally better, to essentially dislod Yahoo from owning brand advertising online.

1:18:49And I ended up getting that mandate because I had learned a lot about how brand advertising worked 12, 18 months earlier. So that was a fairly spectacular failure. The acquisition, by the way, ended up in arbitration, big lawsuits, depositions, and it was messy from all sorts of angles. So we all worked our way through that. And then in the end, we ended up building what is still to day, I believe, Google's second largest business, which is the display advertising business. But that transition was messy, excruciatingly difficult from a strategy perspective, as we talked about earlier, but from a emotional toll as well, and figuring out your way, given I was new to product management, 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.

1:19:52Do you think the lesson there is basically that song, just because you're losing, doesn't mean you've lost or that you're a loser, and just keep going? Yeah, I mean, bloody mindedness is a dramatically underrated quality, as we, you know, over intellectualized 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 are is also key. Jag, we've covered everything, I was hoping to cover and more, before we get to a very exciting lightning round, is there anything that you'd love to leave listeners with or share kind of as a last tidbit?

1:20:34I would just summarize a couple of core points. I think the idea of perseverance and being very clear about what you're trying to do, trying to achieve, and how much it is worth to you, and how much you're willing to fight for it, 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 an important lesson. I think the other thing that I would just, you know, emphasize again is, and it goes a little bit back to the debate you're trying to frame up, on new category or existing category, I think.

1:21:26Within that debate, there's really a synthesis that says, I think most people would agree, if you're trying to break through as an insurgent, you cannot fight on the ground that the incumbents have stand for. You have got to find a disruptive vector, and that means searching hard for what is fundamentally different, so that it breaks through the noise, and the volume of the noise has just gone up so much in the last 15 years, and I think that's even growing in importance. Incrementally better doesn't get you there. It doesn't get you there unless you have that hook. I love that you summarize your key.

1:22:12Take aways, something I've been wanting to do, and I might ask every guest to try to summarize what they've shared, because that is incredibly helpful. With that, we've reached our very exciting lightning round. Are you ready? I am ready. Let's do it. First question. What are two or three books that you recommend most to other people? The business book. So one is played a win. I think that is a great modern strategy book that takes a lot of what's happened in the digital world and summarizes it really well. Second one that I would highlight, which I think is a really good, non -digital world summary, and really distillation of the essence of strategy.

1:22:57And 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. And then, as I mentioned, I went to study public policy in politics back 15 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 an autobiography of the founding prime minister, of Singapore from 1965 till he retired. He passed away a couple of years ago, Liko and you. His book about the story of being 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.

1:23:52His book is called From Third World to First. 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. And it's a very tricky ride. And it requires a ruthless honesty about where you stand and what it will take to succeed. And it usually gets purified up when told in retrospect, but it is messy every step of the way. And I think it's an awesome, it's an awesome, unapologetic summary of what it takes to achieve greatness in a very different sphere than we're used to talking to. I love that. I definitely want to read that now.

1:24:40Next question, do you have a favorite recent movie or TV show you've really enjoyed? There's a great series that my wife and I watched fairly recently on HBO called Beguilded Age, which really shines a very interesting light on how technology, this is from the late 1800s, 19th century. How the technological changes disrupts both the economic world and the world of wealth, but also the social dynamics in a society. It's fascinating because we're going through, we're living through a new Guilded Age right now. And we're seeing a lot of those dynamics, but Tobor charged on social media. So extra, extra exciting.

1:25:31Good times. Do you have a favorite product that you have recently discovered that you really like, either an app, some physical, anything that's bringing you joy? I was listening to your podcast with Christopher Luckett 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 forgot what question you asked him. And he mentioned the Lomi. It's a gin countertop composter. And my 13 year old daughter has been, who is very idealistic and has been honest to do composting for over a year now. And we bought a Lomi. And we just did our fifth batch of soil last night.

1:26:27And it works exactly as advertised. And it is fantastic. And I get a great amount of joy as does the whole family, actually, in doing the right thing, in doing it in a modern way, in doing it in this accelerated time frame overnight. And it's really a new category of product of a kitchen appliance that I remember Christopher talking about, creating countertop space is a precious asset. And we're happy we did it. So that's a very recent last three week story. This makes me so happy. I also think Chris is gonna, it's gonna be his favorite episode of all my podcasts. A lot of love for him. That's incredible.

1:27:15I 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? In work in the very narrow confines of work, I've used it at probably at least a dozen times in this podcast, which is about car for me for an hour and a half at work. We're in the business of fundamentally different, not incrementally better. I think that's the core motto. And I think it works in a slightly modified way for life as well. You live, you build the life you wanna build. And it's not going to be checking the boxes that everyone wants you to check.

1:28:10There 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, to the horror of my parents, I dropped out of Harvard. Like what the hell was I thinking to come out to Silicon Valley? And that went as we talked about pear shape within weeks. There was a time when I left Facebook to, not that long ago, four years ago, to go join this crazy, Sao Paulo -based 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.

1:29:02And so fundamentally different is important. Now it's a luxury good. You gotta be, it's easy for some of us who live in the Bay Area and in Silicon Valley too. And so I'm very conscious of that. That it's a privilege and it's a luxury good. But I think everyone should strive for their version. I love that you extend that 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. Apparently you were convicted of smuggling mangoes at some point in your life. Can you share that story?

1:29:43Yes, as I mentioned, I grew up in Trinidad in the Caribbean. And outside my brother in my bedroom was a mango tree that was abundant and spectacular quality set of mangoes. And here in the US, I think and speak very definitively for California. The mangoes are subpar, forget about incrementally better. They are simply subpar. An American that don't think realize what a good mango actually is and what a joy it is to behold. So every time I would go home, I would try to bring mangoes back. And one time coming through Miami International Airport from the Caribbean, I had a dozen mangoes wrapped in newspaper, slipped in between my clothes.

1:30:37And I hadn't counted on the fact that this was several months before 9 -11. But I hadn't counted on the fact that the US Department of Agriculture had got smart to the fact that if people are coming from the Caribbean, they are bringing in food. That is a given. And they're going to try to smuggle it by. So they ran the entire plane through agricultural inspection. The guy looked through the X -ray machine and said, you've got 11 mangoes in your bag, sir. At which point, I knew I was caught. And I said, well, you missed that one. I could see the picture. Like you missed that one. It's actually 12.

1:31:15I ended up on an agricultural watch list. But then 9 -11 happened. And there were three or four years whereas a management consultant. So I was at an airport twice a week. I, you know, those you used to get on your ticket. SSS, which they said was random. Every flight for three years, I was flagged for a special screening because of my love of mangoes. So it was worth it. Mangoes are misunderstood, underappreciated food. 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.

1:32:04I have been rehabilitated. And one of the great things about working with the Brazilian companies, the quality of mangoes and Brazil are top -notch. So I get to, I get to partake fairly regularly these days. It's unfair. I am going to ask you for your Semenger recommendations. Jag, I've kept you long enough. I feel like this podcast episode was definitely not incrementally better. It was certainly fundamentally different. Thank you so much for being here. Two final questions. Working folks find you if they want to reach out. Maybe follow up on stuff. And how can listeners be useful to you? Thank you.

1:32:34Lenny, I really enjoyed it. I appreciate it. Very kind words. Best place to find me is probably on LinkedIn, Jagdugo. Relatively unique name, fairly easy to spot and find there. And I am always looking for stories and for opportunities. I'm always looking for stories of fundamentally different. So I would love to hear those. Especially when they're done against the odds or when there's a more convenience 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 Gobly Gook, I know, but Silicon Valley buzzwords, but but we mean it.

1:33:25And so anyone who wants to join the what we call the purple revolution, our brand color is purple. Love to hear from you wherever you are in the world, because because we have people everywhere. And if they're interested is at like newbank .com slash careers. Is there really one right? Yes. Amazing. By the way, do you have a color, a name for your purple brand color? We call that we are customers call the little purple credit card, the Hoshino Hoshino in Portuguese means purple. Hoshino basically means little purple card. And 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.

1:34:19And it turns out the central bank and our customers call the central bank and said, you cannot let this happen. 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 banks saying the future is purple. So that's part of our origin story. I'll let you go. Jagger, awesome. I feel like this is going to help a lot of people. Thank you so much for being here. Lenny enjoyed it so much. Thanks a lot. 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.

1:35:01Also, please consider giving us a rating or a leaving review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at Lenny's podcast .com. See you in the next episode.