Naturally Hedged Product Portfolio
Build products that make money in opposite macro conditions so troughs in one are peaks in another.
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 3
- Confidence
- 85%
Rather than a single-focus product, deliberately assemble a portfolio whose components profit under opposing macro conditions, so the business self-hedges through cycles. Banking is Kamat's canonical example: when interest rates rise, spending falls but deposit margins rise; when rates fall, spending and interchange rise. N26 leaned into savings when rates were high (to attract users with high yields) and into lending as rates fell (cheaper loans become attractive). The result is smoother performance through peaks and troughs than a single-focus company gets.
Origin
Mayur Kamat's framing of how N26 built out its product portfolio (cards, savings, lending) as a naturally-hedged system.
Core principles
- 01Pick products whose profit drivers move in opposite directions to the same macro variable
- 02A self-hedged portfolio rides troughs and peaks better than a single-focus company
- 03Time product investment to the macro — push what the current environment favors
- 04Banking is a '100%+ product': more accounts exist than humans, so TAM never caps out
- 05Hedging influences not just risk but how you sequence and scale the portfolio
How to run it
- 1
Map each product to its macro driver
For each product line, identify which macro variable drives its economics and in which direction (e.g. deposits benefit from high rates, interchange/lending from spending and low rates).
- 2
Assemble opposing exposures
Choose a mix where some products win when a variable goes up and others win when it goes down, so the portfolio nets out smoother across the cycle.
Pro tip Banking is naturally self-hedged: high rates lift deposit margins while low rates lift spending and interchange.
- 3
Time investment to the macro
Lean into the product the current environment favors — invest in savings when rates are high to attract users with yield, and in lending as rates fall and cheap loans become attractive.
Pro tip High-yield savings is a powerful acquisition tool specifically in a high-rate window.
In the wild
About 18 months prior, N26 was largely a bank with a card. It then fleshed out the portfolio: investing heavily in savings while interest rates were high (using high yields to attract users), then shifting investment to lending as rates fell and cheaper loans became viable.
→ A product portfolio that complements the macro, giving N26 a balancing act single-focus companies don't get.
Common mistakes
Single-focus exposure
A company concentrated on one product with one macro driver swings hard with the cycle and has no built-in offset when its environment turns unfavorable.
Is it for you?
Best for
Founders and product leaders in cyclical or macro-sensitive categories (fintech, banking, lending) building a multi-product portfolio
Not ideal for
Early single-product startups still finding product-market fit, where focus beats diversification
From the transcript
“it is uh it is a self-hedged product like when things get tough on one side of our business the interest rates let's say go…”
“we launched savings last year we invested heavily in savings uh because the interest rates were high”
“now which is investing heavily in lending because now you can get loans for lower prices”
“being able to kind of build products that complement the macro”
From the episode
Unconventional product lessons from Binance, N26, Google, more
Mayur Kamat (CPO at N26, ex-Binance Head of Product)