Fundamentally Different, Not Incrementally Better
Only a fundamentally different experience gets customers to tell their friends about it.
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 5
- Confidence
- 95%
Duggal's operating mantra at Nubank (literally printed on the team's coffee mugs) holds that word-of-mouth growth is caused by fundamental difference, never by incremental improvement. The test is applied at product-review level on three dimensions at once — quality, complexity, and price — with an explicit attempt to break the tradeoff between them. It is not a demand that every feature be revolutionary; it is a demand that the anchor products be, with sustaining innovation built around them.
Origin
Duggal's own mantra, introduced at Nubank around the time he joined. It draws on Christopher Lochhead's category design (Play Bigger / Play to Win) and Roger Martin's 'Where to Play, How to Win', and on the Amazon working-backwards mock press release technique. Duggal frames it against the counter-position argued by Todd Jackson on the same podcast (enter categories where customers already spend).
Core principles
- 01Only fundamentally different gets customers to tell their friends; incrementally better does not.
- 02Attack quality, complexity, and price simultaneously and try to break the tradeoff between them.
- 03As an insurgent you cannot fight on ground the incumbents hold firm — you must find a disruptive vector.
- 04You don't have to invent the category, but you should reinvent it.
- 05Not every feature can be fundamentally different — search for the anchors that are.
- 06Noise volume has risen sharply; the difference bar rises with it.
How to run it
- 1
Write the mock press release before any engineer is assigned
Borrow Amazon's technique: before a single engineer is staffed, explain in two paragraphs — addressed to the intended customer, not to the exec — why they should care. If you cannot, there is still work to do on the idea.
Pro tip Write it to the customer, not about the customer. The shift in audience exposes hollow value propositions fast.
- 2
Interrogate the idea on quality, complexity, and price at once
In product and design reviews (Nubank runs them several times a week), ask: why is this fundamentally different for the customer? How does this redefine the category on quality, on complexity, and on price — usually all three at the same time? Look explicitly for a way to break the tradeoff constraint you'd normally accept.
Pro tip Nubank's original card was not a cheaper credit card, it was a no-fee credit card — a category redefinition on price made possible by being branchless and digital.
Watch out Breaking the tradeoff isn't always possible. Reach for it frequently; don't fake it.
- 3
Find the disruptive vector, not the better version
Identify the axis on which the incumbent structurally cannot follow you — a cost structure, a channel, a distribution model. Nubank went direct-to-consumer and digital into consignado (secured lending for government employees), a decades-old category served through middlemen, and dramatically undercut the pricing.
Pro tip The disruptive vector usually derives from a structural advantage you have and they don't, not from effort.
Watch out If your differentiation is 'a bit better', you have no hook, and you will not break through the noise.
- 4
Apply the bar at company level, relax it at feature level
Insist that anchor products be fundamentally different. Accept that some of the hundred features you ship in a year are legitimately in the incrementally-better business — sustaining innovation built around the anchors.
Watch out Companies with one or two monster cash-flow products get conservative and let the difference bar slip on products three through six. Duggal calls that a slow path to death.
- 5
Reinvent even when you enter an existing category
If you enter a market where customers already spend money (the safer bet), enter it with a reinvention mindset rather than a me-too mindset. Even inside an established category, build a fundamentally different experience.
In the wild
Almost every neobank elsewhere in the world started with a bank account. Nubank deliberately started with credit — which Duggal calls ten times harder and a hundred times riskier, because getting credit wrong as a young company blows everything up and the money never comes back. Combined with a branchless, digital cost structure enabling disruptive pricing, the card was not cheaper but no-fee, which removed an emotionally infuriating charge.
→ A concentrated bet on a new category produced a bank now bigger than Coinbase, Robinhood, Affirm, SoFi and Lemonade combined, with more customers than Bank of America across just three Latin American countries, and 80-90% of growth from word of mouth.
Consignado (secured lending against the salaries of government employees) has existed in Brazil for a couple of decades, transacted through middlemen and non-digitally. Nubank entered this established category but built the product direct-to-consumer and digital rather than copying the existing distribution.
→ Nubank was able to undercut the incumbent pricing dramatically — a fundamentally different experience inside a category it did not invent.
Common mistakes
Buying growth instead of building difference
Most companies route their VC funding straight to Google and Facebook ads. Duggal spent much of his career taking that money in — and says it is a far better scenario when paid acquisition is a small portion and the main investment goes into making the product great enough that you don't need it.
Fighting the incumbent on ground it holds firm
An insurgent competing on the incumbent's chosen dimension loses by default — the incumbent has more of everything on that axis. Difference must come from a vector they cannot follow.
Demanding that every feature be revolutionary
Overstating the case burns the team out and produces theatre. The mantra applies to anchor bets; sustaining innovation around them is legitimate incremental work.
Going conservative after the first monster product
Once one or two products throw off cash, focus, concentration and customer obsession quietly stop being enforced on new bets — because the company won't die if they fail. That is precisely how a great company decays.
Is it for you?
Best for
Founders and product leaders building an insurgent product against entrenched incumbents, or expanding a successful company into new product lines.
Not ideal for
Regulatory, compliance, or table-stakes feature work where parity is the goal, and mature product lines where sustaining incremental quality is the correct investment.
From the transcript
“we're in the business of being fundamentally different not incrementally better again it goes back to only fundamentally different gets customers to tell their friends”
“why is this great for the customer why is this fundamentally different for the customer how does this redefine the category”
“if you're trying to break through as a as an Insurgent you cannot fight on the ground that the incumbents have stand firm you have…”
“even within an established category we've tried to build a fundamentally different experience”
“you should try to be Reinventing that category even if you're not inventing that category”
“we love the Amazon mock press Release Technique explain to me before we've put a single engineer on the project not explain to me actually…”
From the episode
Be fundamentally different, not incrementally better
Jag Duggal (Nubank, Facebook, Google, Quantcast)