Frameworks for product differentiation, team building, and thinking from first principles | Ayo Omojola (Carbon Health, Cash App)

0:00cash up as a team, we really cared about what we could do that was different and better than what else existed in market. Being different is not enough because very easy to build a thing that's different from what exists today because you just have to look at what exists and ain't built something else. Being better is not enough because it's also easy to say, hey, I'm going to make this thing better and just charge you more money for it. It has to be better than what it's today in a way that matters to the end of user. And for us, for a long time, it was when someone says, Hey, why are you being in the gunner?

0:28I'd be like, try and send me a dollar that I can use now. And there's only one I could do it with. Welcome to Lenny's podcast where I interview world -class product leaders and growth experts to learn from their hard -won experience as building and growing today's most successful products. Today, my guest is Io Omanjala. Io co -created and scaled squares popular cash cart, alongside the hugely popular cash app. He's currently chief product officer at Carbon Health, One of the biggest and fastest growing health tech companies in the world. He's a former founder, he's on the board of Pinwheel, and he's an angel investor in companies like Mercury Bank, Fair, Modern Treasury, and dozens of other startups.

1:06In today's episode, we dig into lessons from building and scaling the cash card and the cash app. The importance of differentiation when you're building a consumer product or any sort of product. How to successfully build a startup within a startup. How to succeed in both FinTech and in health tech. Plus, my favorite part of the conversation, a handful of incredibly insightful and practical principles and philosophies around hiring, team building, leadership, and going deep on problems. Io is such a fascinating human and leader, and I am excited for you to learn from him. With that, I bring you Io, Amagula, after a short word from our sponsors.

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4:09I owe welcome to the podcast. Thank you for having me. I owe a feeling this is going to be a really fun conversation as doing a little research on you ahead of this chat. And I found this interesting thing that you did in the past where I found you answered over 100 questions on Kora about people trying to ship stuff and mail stuff and have no idea what's going on there. And so tell us what is going on. In 2015, I'd been a cashmob for about a year. You know, I had massive burnout from my last company. Once you I see kind of like, did a hard pivot, imploded a little bit, stuff kind of picked up, sold to somebody eventually.

4:44And my brother, who's my co -founder and I had this idea. And I think it was, I think it was actually from printing and mailing my section 83B for something that I'd done. And I was like, why is there, why can't I just like go on the internet and like, do this? And so I had this idea to build an application where you could give a document and address and we would print an email for you for you. And it was right around when Bob was founded, which is Bob is like this printing a mailing API. So we built this thing called Mailform. I think it's like one of the top consumer print and mail things on the internet.

5:22Actually, I'm sure many people will listen to this. We'll have used them for it. And then we had to figure out how to grow it. And the way that I actually learned how to do SEO was running around the internet, trying to find ways to tell people that we did this and they would find us. And we actually ended up like, funny as it turns out, we ended up building a whole sort of SEO, like content infrastructure around it that has really, you know, impacted my thinking. But all the answers I'll call her were me just trying to get people like, you know, If you remember, a 2014 core was this massive thing.

6:00So all of the insulin core were me trying to get people who might be thinking about the problem that we were solving to realize that we exist. That was my guess. It was going to be either user research on the space of shipping and mailing things. There was a growth tactic and it clearly is the second. You're saying this product still exists? That some people can still use? Yeah, it exists. A lot of people use it. We have many big customers that you've heard of and use. I won't say their names because I don't know if they want me to do that. but like, you know, I would say like there are a couple of large like delivery tech companies that use us to mail $10 .99 W2 forms.

6:37What have you? Holy moly. Okay. And it's just a side project of yours. Yeah. What a many. Amazing. Let's talk about your cash app experience, which I imagine was a pretty transformative period in your career. And you from an understanding of a major impact on the success of the app and the business that was built there, to give folks a bit of scale and understanding of this, just the cash app in general. Can you just briefly talk about how big was it when you joined the scale of the app and then whatever you can share about just the scale today? So when I joined cash app was probably sub 50k active, like people moving money.

7:17Today, I think it's north of 50 million Active's on a monthly basis with all different types of money movement like the coin, PDP, card, stocks, and I think it's something like North of 70 or 80 million active zone and annual basis. Wow. Okay. Great. What I want to talk a bit about is the cash app to me is a rare example of a huge consumer app success story. I've been angel investing for a while now and I've just learned how rare consumer apps work, like they never were. And this one worked. Even within a big company, you think that there's a huge chance of something working if they have the support of a big company and the platform, things like that.

7:59Still, they almost all fail. And so what I'm curious about is what do you think you all did most right? One to launch it successfully in the consumer space and then two to keep it growing and scaling to where it got today. My perspective is that And I think this is a, you don't like this kind of answer. I'm like, I'm like the same. The thing Cash App did right was like 10 things, not one. Like it was, there were like 10 things that actually best in class, like insane talent density, insane focus, very strong at fraud. A lot of, a lot of the way, Brian and Dustin and Jesse and Downdy tried to organize them with Jack support was just really firewalls from the rest of Square.

8:54The hero customer was a consumer and up the merchant, so it was literally in 100 % of the trade -offs that consumers and needs came first. And that's a very, very hard thing to do inside a company, like it made people angry actually. Really insane focus on design. incredible like depth in this is the thing that I think you will appreciate but it's very hard to appreciate just like as a you know consumer of things people would be like hey what's the difference in you in Venmo and the only reason you would ask that is if you just hadn't thought about it for a second now today there's like a lot of converging some features like you know sort of Venmo sort of caught up on a lot of things but at the time like Venmo didn't have push to debit Venmo didn't have, instead, like, for like three or four years in the United States, the fastest and lowest cost -weight movement money in the country between any two people who had bank accounts was cash -up.

9:52And I think that kind of changed in 2017 when PayPal, Venom, Apple Cash, etc. kind of came out and launched a lot of things. And so I think actually it's possible that having done only one of those things while cash -up might have been successful. But I think the reason it's defrencially successful in the market today is the compound on effective all those things. What are some of the lasting lessons that you take to other consumer apps that you're like carbon health, for example, or founders that you work with? Because all those things are amazing, hard to replicate sometimes. Is there stuff you extract from that?

10:26Like, here's something that I'm gonna do at any time, I'm building a consumer app. Is it like the design led component? Is there anything else along those lines? This is the thing I struggle with. I saw on Twitter somebody say this comment that like a lot of times when people describe their success to you. What they're really saying is like, this is my lottery ticket number. So to be honest, before I go down this diet tribe, I don't actually know which of things are replicable. I just know like kind of what I believe to be true. And you know, I'm trying to sound some of the work that's on that, et cetera.

10:55So I think cash up as a team, we really cared about what we could do that was different and better than what else existed in market. And for us, for a long time, it was instant. And if you look at all the products, like you'll see this sort of theme of like, you know, when you cash out, there's an instant option. When you get a cash card, we issue your card to you instantly. When you sell stocks, money's available instantly. When you sell Bitcoin, money's available instantly. Like literally, there's no like, aw, circle, circle, circle, processing. It's like available to spend. And I think there's something actually lasting about the concept of instant because they're still in the world today are like lots of businesses and proceeds that are like asynchronous, but not for any reason other than that's just the way the world is.

11:48So I think that's like one thing that's kind of narrow. And then I would say another thing that I think is really broad is just be really crisp about why what you're doing is different and better than what exists today. And it's like being different is not enough because very easy to build a thing that's different from what exists today Because you just have to look at what exists to name build something else and being better is not enough because It's also easy to say hey, I'm going to make this thing better and just charge you more money from it for it And so I think that there's like you know different Like you optimize for doing a thing that's different.

12:25It has to be better than what exists today and it has to be better than what it's today in a way that matters to the end user or to the buyer, like kind of depending on where your market is. And then like after all that, it also, you have to be in a domain that matters. Because it's very easy to get those three right, like to build like a really like how to say this, a thing that's different and better than what exists today in way the matter is to end users could also just be art, which is just like art is a complex thing to scale. And so you have to like then also get the economics right, get the entire pipeline of like how you ship, how you build, how you talk about it, all that stuff has to work as well.

13:08I think there's some really great lessons there just to kind of mirror back what you're saying, just differentiation in this case ends up being really important. And if you're trying to disrupt someone doing something like say Venmo, like you can't just be better of Edmau you have to be different. And it sounds like incident was the differentiator in this case. For a long time. Yeah, yeah. Or rather, it was the cut through the clutter differentiator. There were like actually like a lot of other sort of long tail of things that were doing those different, but it was like instant was the same where you know, when someone says, hey, why are you better than me?

13:40I'm not, I'd be like, try and send me a dollar that I can use now. And there's only one I can do it with. And I think the other element of this, it connects to something I'm working on in the newsletter is when you're trying to find a big idea, especially in B2B, but in this case, it works in B2C, it needs to be important, and it needs some matter. Like, it can't be a better thing that nobody values highly, because then you will make money in B2B and B2C people won't even use it. So these are really great. You mentioned in passing, when we were preparing for this, that block was trying to kill the cash app for a lot of time.

14:15Early on. I wouldn't say like block was trying to kill a cash app. I think that there were many, many people who worked there that absolutely, like, and I mean, this is a nice way. Identity is retired with square being a merchant business. Believe that the investment in cash rap was, could have been better deployed elsewhere. Didn't want to work on consumer. There was just like a myriad of, and then I'm like, I'm sure people were there at time and say, like, we probably also made mistakes and didn't communicate get well and then sell it well and so on. But there was a crazy amount of friction.

14:50I'll put it that way. He wasn't like, he just wasn't like, you know, a thing I will 100 % give Brian credit for is he was really effective at making sure that we had a shot. Zooming out for a moment and thinking about just Square and Block and how they operate as a product company and as a business, is there anything that you've taken away from that experience that you bring with you to where you are now, which I want to talk about next. I don't know necessarily if this was intentional. My guess is it was probably just like a consequence of square going through going public and trying to be sort of a rigorous financial institution.

15:27I think when you are in a large organization trying to do a actually new thing, I think small teams are better than big ones, period. and forcing the teams to be super thoughtful about hitting milestones and actually adding value. Because there's this thing people say about, hey, it's started with an startup with a fake. And the reason I think it's fake is because, like, when you're in startup, you actually worry about paying the people work for you. And when you aren't side -by -coming, you just don't. And there's just a difference between having that existential fear of, are we going to be here tomorrow?

16:05and not. So I think a consequence of not having that existential fear is that it's easy to just be like, okay, anymore resources and the organization has some habits around how you acquire resources and if the leadership of the leadership building the new thing happens to be good at that, you can have growth in a new projects people size that doesn't match the new projects success potential. And I think that actually ends up being attacked over time. That's a really good point. I didn't think about asking about that. But in this case, it was a startup within a company that did well. And I also agreed, it rarely works.

16:45And it did here. What is it? What is it that you think that was so essential to make you work? And you just talked about it. How would you summarize just like here's the thing? Everyone should do when they're maybe starting something small within a big company that's new. There are some macro things where I do believe we were children are fortunate like mobile, etc. When I joined cashapp a lot of the people working on it were fairly tenured both at square and just like in their careers and had like done sort of really meaningful things. And as a consequence I do think there's like this is a thing I haven't quite been able to articulate it well but there is something around like a small tightly knit senior team super focused on a problem and the smallness means just like let's pair with some kitchen and then the tightly knit means a lot more trust and then I think like Brian was obviously just he'd been at square for a long time to be the organizational I was a color operator around there new like talent like who was good that he wanted or the, you know, Bren on board.

17:52And I think that combination of things, like, well, not my guess is, there are other things, but I think like without that thing, you would actually have been really, really difficult. I think that's an awesome lesson, just like a small trusted team that has seniority and leadership trusts to operate and not just like, hey, what the hell are you doing? It's time to, time to, time to ship faster. The cash -out team stayed super senior for a long time. And you said small, how small would you, was it slash what do you recommend when you say it should be a small team percent like this? You know, a lot depends on the thing.

18:28I don't think there's a one shot answer. When I joined Casabas like 11 or 12 and it wasn't much more than that for like a year.

18:41And even I forget how big it was when I was like, we had real scale and real business before we had a real headcount, I guess, the way I would say. And like, kind of had to fight for every headcount. And I think the headcount disposal was a Sarah Freier thing from Squares. She's just, you know, really, really disciplined about making sure that if you were trying to bring people on and spend the company's money, you'd really just fight it. I think that's a really good takeaway. Well, let's transition to talking about what you're currently doing, carbon health. You went from consumer fintech to consumer health tech.

19:17First of all, just real quick, just how did that transition happen? Was that some of your plan? Or is that just like you went and exploring that's re -ended up? There's more, I went on exploring it's where I ended up. I think I'd say there's maybe three parts. There's one part where when I was exploring, there's this guy, Russell Friend, who now works at Carbon, who introduced me to like a third of my network in Zombole. And the nicest guy and basically he said, hey, there's this guy who's amazing. He was founder of You to Me. And now he says come to call Carpenter Health. His name's Aaron. You need to talk to him.

19:55And I was like sure. And Aaron and Aaron is brilliant. And also had a this crazy way of explaining a complex problem in a way that made the solution obvious. And so it was like, who's like, oh yeah, like, here's how we're going to do it. And here's, you know, the thing we spent like two and a half hours together. And then at the end, I was like, oh yeah, like this is obviously somebody she's just built this thing. And then I think the second part was, I think everyone's the hero in their own story. I'm no different. So like, I think when I left cash app, I went out and think about to do next. I was thinking of starting a company and doing all that stuff.

20:35And one of the muscles that we really just spent a lot of time building in Kashaap was going really, really deep into the regulatory wallpaper of the problems we were trying to solve. And so we would have sessions where we'd be sitting in a room, like product engineering, legal compliance, et cetera, with some regs literally blown up on a projector screen and a section of text highlighted and being like, hey, what does this really mean? Okay, what if we build a product this way? What if we structure money movement this way, et cetera? And so I casted myself instead as, hey, what if I could be good at regular businesses instead of just good at money?

21:17And that was the way that I tied the two together. There were a bunch of other sort of very personal like ego things like I want to build teams as well as mostly founders. I both my parents were doctors and I've been through some sort of scary experiences in the healthcare system. So there was just like a part of it, there was about sort of mission and background, but the career part was really about how do you stitch two things together? And I also wanted to learn, there was this thing that happened in my like, fourth year at Cash App where I was like, oh, because other thing that we have to build, that would be amazing if we actually build it, which is what Pinwheel, the company I'm on the board of actually is, I was like, hey, we got to build like this platform for payroll.

22:00It's like, you know, the last giant money movement thing that hasn't really come to the needle in a long time and I can get the organization Convince the bill which kind of is what it is. I'm a and b I was like, oh, I want to have that insight How can I have that insight of like what the second thing is faster the second time around and? I'm sad to report the three years in a carbon I've not had it yet. You got a lot going on. I am not surprised So I was going to ask what draws you towards regulated, highly regulated industries being a cash app. And I like that you already went there. Basically, just found that that's maybe the thing that you could get really smart at.

22:42And that applies to a lot of different markets. That's an interesting insight about yourself. This could be the thing that I get good at. Yeah. Or differentially better at the other people. You kind of mentioned this off to the side. This idea that you like to hire founders. And can you speak more to that? just like what that means in your day to day and then maybe how your team looks today is that is a mostly founders or some large percentage. Yeah, I think team looks today about half and half. So I had this experience going through I see where and just like kind of growing up in my career in Silicon Valley where a new bunch of founders who were like absolute beast like incredible people could do amazing things and they would bounce off organizations they would be like, all right, I'm gonna go work Amazon and just like not last.

23:31And when I was a cash app, I went through a bunch of hiring processes where I was like, hey, like we should try to hire, you know, some founders to do this, like look at these companies, et cetera. And a thing would happen that, and this, this part really isn't about founders, although founders like one way, so do this happens. But I think that happened quite often is by the time you get us, as a higher men, you get a bunch of resumes to look at. You post a job, a bunch of people apply, you're partnering with a surcer. By the time you get a bunch of resumes to look at, they've screened out everyone that doesn't just fit inside a box.

24:06And it's like, at Google, Facebook, Amazon, Microsoft, Apple, and then at certain set of schools, and then a certain type of experience, et cetera. And so what happened is if you just happen to not look like that profile, I don't even see you. And I would say, hey, like, I would like to hire some non -traditional candidates here who were like founders or whatever. And I would just never get it. It was almost like the machine just worked a certain way. Like there was an algorithm and the algorithm was upstream of me. And I have this belief that these sort of these people that I'd seen many of whom have now gone on start companies that are doing quite well would be incredible value add.

24:52Like basically, if you just, it's kind of like, if you just hold on to a rock for a little bit, it can take you like pretty far. And so this is one of the things that I talked to Aaron about actually early on when I joined Cardin. And I would literally in the job posting, I'd be like, if you've been a founder before, even if your server was failed, please plot it this. Because like, you think that's, I think common among founders too, is there's this sort of imposter syndrome that goes hand in hand with the chip on the shoulder. And so my team is much longer than it was, but I probably think the whole time that I'm going to carbon hired about 50 % founders.

25:36And I'm actually a 100 % certain that thesis was right. And I think it just came with costs that were kind of theoretical time and I didn't and I now they're real. I think like the two big costs are if there's any waste or bullshit in your organization like they fucking see it right away and call it out. And so there's this like you have to like they're just these scenarios where I just be like I just have to sit and listen and somebody tell me all the things that were doing wrong. So there's one, it's just like, it's a way to cut your bullshit. That's one cost. And I think the second cost is, and I say cost as in like, it is not better for the organizations.