The Exchanges

Q Ok. And what was it that made you think, we need to do this, right? We have to do this.

A Yeah. So that motivation definitely came from, uh, the Occupy Wall Street movement, I would say. And there was a, there was a period of time where before we started Robin Hood, Vlad and I were living in New York. We were building another company, uh, called Kronos at the time, which was building technology for institutional broker dealers, hedge funds, trading firms. And here we were, these fairly scrappy young gentlemen trying to start a business. And We, we kind of realized that what we were doing was actually in the crossfire of this much bigger thing, which was that a lot of younger people were very upset with the way the financial services industry operated. And that was the first time that it really got us thinking to ourselves, kind of, what are we doing? And why are we doing this? Shouldn't we be doing something bigger than this? Like, shouldn't we be taking all the things that we know about finance and the privilege that we've had getting great educations growing up in this country? See if we can do something bigger, something better. And so that idea stayed with us, I would say, for about six months before the idea for, for what would be Robinhood first came out, um, which was actually over a phone call.

AI assessment note: “that motivation definitely came from, uh, the Occupy Wall Street movement”

Q Okay, so how did you find that delay? I mean, the entrepreneurial excitement, you know, at best I can last a week when I have something new. So how, how on earth did you find that, uh, kind of feedback loop in waiting for the regulatory hurdles?

A It was horrible. Um, it was, it was a lot of waiting through the darkness, um, because we knew we wanted to be able to offer a free stock brokerage. The ability for consumers to trade stocks for free, that was the thing that we thought was going to be technologically capable and be something that a lot of people would, would really like. In order to do that, we had to first be a broker dealer, we had to get a lot of things in place, and that process of Getting the green light from the regulators to be able to do business in the United States takes at least about a year and a lot of money. And during that period of time, it's a really bad idea to speak publicly about the things that we were planning on doing, because if we had done so, we would have basically been soliciting customers for financial services, uh, product without the requisite licenses. So that's a big no, no from the regulators. So We had to be, we had to kind of just bite our tongue and wait until we got our licenses and hope we did at the time, because it was definitely a question mark and had to convince a lot of people that the idea was good, even though we had no traction. And the reason we didn't have traction was because we couldn't talk about it, not because it was a bad idea.

AI assessment note: “It was horrible. Um, it was, it was a lot of waiting through the darkness”

Q What do you, what do you think caused that kind of virality then? To be, you know, to be brutally honest, if it was just a, a simple kind of landing page, what was it? Was it the value proposition that Robinhood was offering? Zero percent commission fees?

A Well, I think it's, I think that's definitely a big part of it, but I, I think the, the bigger thing is that it was, it crossed. Robinhood is one of the products that crosses the 10 X better threshold, right? There's this, there's this magical idea, um, that if a product, a new product is 10 times better than what's out there, then that's kind of the requisite for it to have real product market fit. We put all of our efforts into Doing the one thing that we thought we could do so much better than what was out there would be impossible for a consumer in their right mind to say, we'll use some thing other than Robinhood. And that thing was the trading commissions, right? And it was just so easy to understand. It's like you could pay 10 dollars with another brokerage, or you could get the same thing for Robinhood for free. And by the way, it's a really nice design product. And by the way, it's called Robinhood. And it's a product that speaks to a younger demographic that previously has felt a little disenchanted. So I would definitely say the biggest thing was that we, we delivered a 10 X improvement on, on a very real part of the experience of, of what, what Robinhood does.

AI assessment note: “I think that's definitely a big part of it, but I, I think the, the bigger thing”

Q Ok. And what was it that made you think, we need to do this, right? We have to do this.

A Yeah. So that motivation definitely came from, uh, the Occupy Wall Street movement, I would say. And there was a, there was a period of time where before we started Robin Hood, Vlad and I were living in New York. We were building another company, uh, called Kronos at the time, which was building technology for institutional broker dealers, hedge funds, trading firms. And here we were, these fairly scrappy young gentlemen trying to start a business. And We, we kind of realized that what we were doing was actually in the crossfire of this much bigger thing, which was that a lot of younger people were very upset with the way the financial services industry operated. And that was the first time that it really got us thinking to ourselves, kind of, what are we doing? And why are we doing this? Shouldn't we be doing something bigger than this? Like, shouldn't we be taking all the things that we know about finance and the privilege that we've had getting great educations growing up in this country? See if we can do something bigger, something better. And so that idea stayed with us, I would say, for about six months before the idea for, for what would be Robinhood first came out, um, which was actually over a phone call.

AI assessment note: “that motivation definitely came from, uh, the Occupy Wall Street movement”

Q Okay, so how did you find that delay? I mean, the entrepreneurial excitement, you know, at best I can last a week when I have something new. So how, how on earth did you find that, uh, kind of feedback loop in waiting for the regulatory hurdles?

A It was horrible. Um, it was, it was a lot of waiting through the darkness, um, because we knew we wanted to be able to offer a free stock brokerage. The ability for consumers to trade stocks for free, that was the thing that we thought was going to be technologically capable and be something that a lot of people would, would really like. In order to do that, we had to first be a broker dealer, we had to get a lot of things in place, and that process of Getting the green light from the regulators to be able to do business in the United States takes at least about a year and a lot of money. And during that period of time, it's a really bad idea to speak publicly about the things that we were planning on doing, because if we had done so, we would have basically been soliciting customers for financial services, uh, product without the requisite licenses. So that's a big no, no from the regulators. So We had to be, we had to kind of just bite our tongue and wait until we got our licenses and hope we did at the time, because it was definitely a question mark and had to convince a lot of people that the idea was good, even though we had no traction. And the reason we didn't have traction was because we couldn't talk about it, not because it was a bad idea.

AI assessment note: “It was horrible. Um, it was, it was a lot of waiting through the darkness”

Q And then in that vein, the next five years for you and for Robin Hood, What's, what's in the pipeline?

A I would like to see Robin hood become an international financial services company. I would like to see us scale like internet company scale, not like tech or not like financial services companies. I would love to be live across. All of Europe, I would love to be doing business in most of Asia, South America. I think at five years, it'll be really interesting if we're talking about how can we let people in places like Africa start saving their money in the US stock market. I mean, that kind of gets at the heart of the point of what Robinhood is. Robinhood is a really cool app, and it lets people trade stocks for free, which is also really cool. But when we start thinking about Robinhood as a company, That connects people's savings account from around the world. We think that the really broader mission of Robinhood is to act as an equalizing force by allowing everybody in the world to be able to invest in the best investment products, the likes of which we really haven't seen before.

AI assessment note: “I would like to see Robin hood become an international financial services company.”

Q What do you, what do you think caused that kind of virality then? To be, you know, to be brutally honest, if it was just a, a simple kind of landing page, what was it? Was it the value proposition that Robinhood was offering? Zero percent commission fees?

A Well, I think it's, I think that's definitely a big part of it, but I, I think the, the bigger thing is that it was, it crossed. Robinhood is one of the products that crosses the 10 X better threshold, right? There's this, there's this magical idea, um, that if a product, a new product is 10 times better than what's out there, then that's kind of the requisite for it to have real product market fit. We put all of our efforts into Doing the one thing that we thought we could do so much better than what was out there would be impossible for a consumer in their right mind to say, we'll use some thing other than Robinhood. And that thing was the trading commissions, right? And it was just so easy to understand. It's like you could pay 10 dollars with another brokerage, or you could get the same thing for Robinhood for free. And by the way, it's a really nice design product. And by the way, it's called Robinhood. And it's a product that speaks to a younger demographic that previously has felt a little disenchanted. So I would definitely say the biggest thing was that we, we delivered a 10 X improvement on, on a very real part of the experience of, of what, what Robinhood does.

AI assessment note: “I think that's definitely a big part of it, but I think”

Q And so how did you engender such mass excitement? I mean, a million signups to a waitlist is incredible.

A Yeah, well, we had no idea that was going to happen. I actually remember we, when we first announced that waitlist, which I think was about a month or two later at the end of 2013, the weekend before we put our website live, we were having these conversations of like, maybe we should have a waitlist that shows people where they are online if they want to join the product. We were having these conversations. We're like, well, what happens if there's like Like a hundred people on this list. Like that's, should we just not show it if it's less than 5000? There's, we were kind of trying to over engineer this problem. It's like, well, if it's under 5000, we'll just tell people they're on the list. And if it's over 5000, then maybe we'll show their spot. And like, maybe we should change it to 20,000. So we were kind of like pondering these issues. And a couple of days later, one of our engineers was just like, well, let me toss it up on the web because we need to make sure that the domain works and stuff like that. Website was just live. Nobody knew about it. We thought we were wrong. Somebody had found our website because previously we'd released another financial app called Robinhood, which was kind of in the beginning of 2013. And we had started redirecting the traffic from that to our new website, thinking that not a lot of people were actually checking it out. So, you know, kind…

AI assessment note: “we had no idea that was going to happen... Posted it on Reddit”

Q And before we dive into the quickfire round, I have to touch on the incredible cap table that, that exists with Robin Hood. You know, you've got Index, Andreessen, GV, even movie star Jared Leto. So, so how did you come to meet your investors? And what were the, the defining reasons for choosing the investors you did?

A The way we met most of our, our investors was from pitching them and pitching them and pitching them and pitching them. Having a few of them saying, yes, we'll give you a little bit of money to play around with. Yeah, we're very fortunate to have some world-class investors. Um, it's really great having the team at Index. They've been with us for a very long time. I think their, their domain expertise in financial services is very helpful and day-to-day kind of surprises us with just how useful they can be. Um, we've had a lot of, we've had a lot of, uh, celebrities join as investors in Robinhood, which I think frankly, it very squarely falls into the category of, holy shit, this is really cool.

AI assessment note: “The way we met most of our, our investors was from pitching them and pitching”

Q um, I, I do think probably one of the biggest improvements, so that Robinhood offers that others don't have is the design. Um, And it's the first fintech startup to win an Apple Design Award. Um, yeah. Yes, big that up, that's an achievement, so well done on that. But what's the thesis then behind the design, and how has that evolved? What's the kind of general thinking behind it?

A I would, I would love to tell you that there's some, that there's a big overarching thesis to design at Robinhood. There, there is a, there is to a certain degree. I would say the dominant factor, though, is that it's just something that We, as human beings that make Robin Hood, it's one of the things that we just really love. It's like one of our, I hate to use this word, but it's one of our passions. Like, we've always really liked the idea of building beautiful things. I think that there's a lot of ways that we have rationalized our love for just building really, really pretty things. In the context of what Robin Hood does, having a very simple and elegant design communicates a deliberation in the product that we make. And in turn communicates trustworthiness for our consumers. But if I told you that was the real reason that we did it, I would be lying to your face. The reason that we spent a lot of time on design and the reason that today, even today when Robin is actually a much bigger company that I, I spend most of my time on design is just because we love it. Like it, we just really, really like it. We care about it. So I just, we'll spend time on things we care about.

AI assessment note: “it's one of the things that we just really love.”

Q um, I, I do think probably one of the biggest improvements, so that Robinhood offers that others don't have is the design. Um, And it's the first fintech startup to win an Apple Design Award. Um, yeah. Yes, big that up, that's an achievement, so well done on that. But what's the thesis then behind the design, and how has that evolved? What's the kind of general thinking behind it?

A I would, I would love to tell you that there's some, that there's a big overarching thesis to design at Robinhood. There, there is a, there is to a certain degree. I would say the dominant factor, though, is that it's just something that We, as human beings that make Robin Hood, it's one of the things that we just really love. It's like one of our, I hate to use this word, but it's one of our passions. Like, we've always really liked the idea of building beautiful things. I think that there's a lot of ways that we have rationalized our love for just building really, really pretty things. In the context of what Robin Hood does, having a very simple and elegant design communicates a deliberation in the product that we make. And in turn communicates trustworthiness for our consumers. But if I told you that was the real reason that we did it, I would be lying to your face. The reason that we spent a lot of time on design and the reason that today, even today when Robin is actually a much bigger company that I, I spend most of my time on design is just because we love it. Like it, we just really, really like it. We care about it. So I just, we'll spend time on things we care about.

AI assessment note: “I would love to tell you that there's some... big overarching thesis”

Q And so how did you engender such mass excitement? I mean, a million signups to a waitlist is incredible.

A Yeah, well, we had no idea that was going to happen. I actually remember we, when we first announced that waitlist, which I think was about a month or two later at the end of 2013, the weekend before we put our website live, we were having these conversations of like, maybe we should have a waitlist that shows people where they are online if they want to join the product. We were having these conversations. We're like, well, what happens if there's like Like a hundred people on this list. Like that's, should we just not show it if it's less than 5000? There's, we were kind of trying to over engineer this problem. It's like, well, if it's under 5000, we'll just tell people they're on the list. And if it's over 5000, then maybe we'll show their spot. And like, maybe we should change it to 20,000. So we were kind of like pondering these issues. And a couple of days later, one of our engineers was just like, well, let me toss it up on the web because we need to make sure that the domain works and stuff like that. Website was just live. Nobody knew about it. We thought we were wrong. Somebody had found our website because previously we'd released another financial app called Robinhood, which was kind of in the beginning of 2013. And we had started redirecting the traffic from that to our new website, thinking that not a lot of people were actually checking it out. So, you know, kind…

AI assessment note: “Posted it on Reddit, so it's like a Friday night, and then all of a sudden”

Q Okay. And how do you, how do you assess product market fit? That's a really interesting thing that obviously we don't have on the schedule, but I have to ask them, how do you know when you've hit product market fit? And then, and then what do you do once you've hit it?

A Oh gosh. Yeah. That's a really tough one. I think it's a, I think it's a really tough question to answer and it falls into the categories of like, there's so many different ways of Quantifying it or qualifying it or saying, well, this happens and that happens. But the, the fact of the matter is it's this product market fit is there when the product in its early days grows at a pace that was unexpected, right? If there is unexpectedly fast growth, people are sticking around. That's a really good indication that there's product market fit. So that's kind of the thing that I look for, even as we continue to build new things. Is there something here that's growing much faster than we thought it was going to? Even if we plan for quote unquote fast growth. Mm-hmm. Whenever something happens that's unexpected, that's non-linear, that's usually a good sign of there being product market fit. And I think a good, an example of that with Robinhood is Robinhood Instant has, I think, very strong product market fit. In the 1:12 hours after we announced it, we had about a 100,000 people that had signed up to use it, so that was like, holy shit. For, for founders, entrepreneurs, first timers, newcomers, look for things that are That have unexpected growth. Cause that's usually a really good sign. If something's growing faster than, than you expect them, there's something special there.

AI assessment note: “If there is unexpectedly fast growth, people are sticking around.”