In the grand finale of our 9th season of The Room Podcast, we are absolutely thrilled to introduce Cristina Junqueira, the Co-founder of Nubank, a leading global digital financial services provider catering to over 85 million individuals in Brazil, Mexico, and Colombia. Nubank utilizes cutting-edge technologies and groundbreaking business strategies to craft innovative financial solutions and user experiences for both individuals and small to medium-sized enterprises. These solutions are designed to be straightforward, user-friendly, convenient, cost-effective, empowering, and human-centered. Driven by its mission, Nubank is actively promoting access to financial services throughout Latin America.
Cristina’s journey began in Rio, Brazil, where she completed her Bachelor of Science and Master of Science in Industrial Engineering at the University of Sao Paulo. She embarked on her professional path at Boston Consulting Group (BCG) with a desire to accumulate knowledge and keep her career options open. Subsequently, her journey led her to graduate school, where she earned her MBA from Kellogg School of Business. After business school, Cristina initially ventured into an executive role within a bank in Brazil. However, she soon realized her passion for a more disruptive role and recognized an untapped market in fintech. When she crossed paths with her co-founder, David, who shared a similar vision, they seized the opportunity to launch something new, eventually giving birth to the concept of Nubank.
In this episode, we discuss three key themes: rooting product diversification and innovation in solving customer problems, putting the customer first, and building resilience and adaptability amidst challenges.
Theme 1: Rooting product diversification and innovation in solving customer problems
Cristina explains that when she founded Nubank, she chose a non-traditional path, starting with credit cards as the initial offering. This approach was distinct from most other financial players, who typically began with debit cards. Starting with credit cards presented a unique set of challenges — requiring credit underwriting, capital, funding, and the assumption of risks such as delinquency. However, it was a strategic choice based on a significant demand for credit.
Moreover, the customer relationship dynamic was inverted. Nubank established trust by relying on customers to repay them, as opposed to customers needing to trust the institution to safeguard their deposits. This unique approach laid a solid foundation and by the time Nubank introduced its account product, customers were already demanding it. They were eager for an account product, a debit card, personal loans, and more.
Although this strategy was different, it allowed Nubank to build a strong customer base with loyal demand for their products. For fellow founders, it is important to consider the customer problems when designing products. Nubank’s strategy underscores the potential opportunity when aligning product development with customer feedback and demand.
Theme 2: Putting the customer first
Before founding Nubank, Cristina worked in the credit card business. When she was running the division, she realized that “I was spending a significant amount of money on telemarketing to sell these credit cards, yet I was barely offsetting the churn … it almost looked like a leaky bucket.” She realized that the reason behind this issue was that customers were not genuinely interested in the product they were being pushed to buy. In fact the industry at the time was built on the premise of building a product, aggressively marketing it, and getting as many customers as possible to buy into it, and then making money. This led to an epiphany: what if she created financial products that customers genuinely desired and this is exactly what she aimed to do with Nubank.
Remarkably, more than 80% of their customers have joined organically through word of mouth, reducing the necessity for extensive marketing efforts. If you’re a founder, consider drawing inspiration from Nubank’s customer first approach. Embracing a customer-centric perspective could prove highly beneficial in the growth and go-to-market motion of your business.
Theme 3: Building Resilience and adaptability amidst challenges
Operating in the financial services sector, Nubank is subject to the regulatory risks that constantly hover over the industry. Cristina shares a pivotal juncture in Nubank’s journey when the Brazilian government considered changing regulation in a way that would require the company overnight to have access to billions of dollars in funding because of a change in the settlement cycles for credit cards. In response, Crisitna shares that the company did “everything that we possibly could. We reached out to the regulator, we reached out to the executive branch and educated them on the unintended consequences of such measures. We worked with the press, we worked with opinion makers. We had to even address customers at some point because at some point this got to the press.” Heatwarmingly, Nubank’s customers rallied behind business, extending their support and reaching out to authorities to consider how the new rule change could jeopardize the company’s survival.
For aspiring founders, it’s important to recognize that the entrepreneurial journey may not always follow a linear path. However, taking initiative, pursuing solutions, and having the unwavering support of a dedicated customer base can prove instrumental in surmounting challenges.