The Easiest Way to Start Investing Today— No Experience Needed (You Just Need $1!) with Robinhood CEO

who's built something truly culturally phenomenon. And I think a lot of you may be using the product already, a lot of you definitely have heard about it, and a lot of you may have a lot of questions like I do, and so I'm so excited to have on on Purpose. Vlad Tenev the CEO and co founder of Robinhood.

Vlad is a FIR generation immigrant from Bulgaria. In twenty thirteen, Vlad co founded Robinhood and pioneered commission free investing with an intuitive mobile first interface, and today Robinhood has more than twenty three million funded customers and over one hundred and nineteen billion assets under custody. Please welcome to on Purpose Flood kind of Flood. It's great to have you here.

up in Bulgaria, very small country in eastern Europe. I was born in the eighties, which was a time of communism, so it was sort of like there was the West and then the Iron Curtain and not a lot of back and forth travel. My first time to the airport was actually after the Berlin Wall fell. Communism in Bulgaria had kind of collapsed, or was on the verge of collapsing.

My father was given an opportunity to go to the US to study, which was you know, the events that kind of conspired to allow that to happen could not have conspired an earlier time, right, But you know, he had to go by himself because we just didn't have the money to like send even my mom with him, much less my mom and me, So he kind of went off by himself to see if he could make it and make a new life for us and kind

of this new land. And I think I they were trying to prepare me for this because I was an only child, and you know, the weeks leading up to it, and my parents were like, you know, your dad's going to America. You're not going to see him for a long time, you know, And it ended up being I think about two years before before I saw him again. I'm not a very emotional person. I've kind of been

described as stoic. I wasn't a very emotional child, and I just remember like when we got to the gate and I and my dad kind of like went to the other side. I didn't I wasn't like allowed to cross because of course I didn't have a ticket. I just like cried and baled my guts out because it kind of sank in that I wasn't going to see him for a very long time. That's probably one of

the one of the biggest memories. Another memory, you know, perhaps a little bit more relevant to robinhood, was after I had moved from Bulgaria to the US and we had gotten enough money to have a vacation, and of course the only place to go back on vacation was to see my grandparents back in the home country. So we'd gone back, and I remember the exchange rate of the currency, right, It used to be sort of like two Bulgarian leva for one dollar. But I came back

and it was two thousand. So Bulgaria had gone through this incredible period of hyperinflation where the inflation of the Bulgarian lev was the highest in the world. This was nineteen ninety six, and I think nineteen ninety seven as well. I think there were two years and so, you know,

my grandparents' pensions were just worthless. Everyone in the country was struggling, and I think those early moments were when I developed this like visceral understanding of how important money was, because I think to a kid, money's maybe not so important, but to me, you know, my parents were new in

the country. They were just like getting started from scratch, basically starting from zero, and I always felt like every decision, every family decision, had this like layer of like how much money is going to be spent on this, how important is it we have to like choose like the the budget potato chips, or shop at Shopper's food warehouse rather than Safe Way because they have like the dented

cans and stuff like that. So I think from very early on, I got this understanding of like the importance of money and saving it and protecting it, and that that was just like driving so many of the decisions that my parents were making on a daily basis.

Nirvana and grunge. She later settled in Seattle, which which I think made a lot of sense. But anyway, they brought us the food in the plane, and you know, it's funny. You think plain food was like just this trash you don't want to eat it, but I thought it was It looked amazing, So I just kind of like engulfed all of it, and then of course that led to uh me puking my guts out, and so I didn't have a very fun plane ride. So I felt a little off coming coming out on JFK, and

I hadn't seen my parents in a long time. It was like I spent the majority of the past year living with my grandparents. My dad first went and my mom joined him later, and then I joined with my aunt, and so I was very shy. It was it was almost like meeting strangers, you know. Of course I knew they were my parents, but after not having seen them for a while, I was like kind of hiding behind my aunt's leg and it would stick one eye out

get a look at them. And there's this picture of me in the parking lot of JFK Airport when they kind of like showed me the family car for the first time, and it was this like Plymouth Duster from the eighties. I don't know if you know the car, but it had a mask. So back in the eighties cars would have masks out front, and that was kind

of the style. And I could tell you could tell by looking at me that I was like this shy kid, very very nervous, didn't really know what was going on, you know, landed in a new place, skyscrapers everywhere, you know, there was just I remember the skyscrapers, you know, just nothing prepares you for that when you're coming from a very very small country it took me a little bit

of time to like get reacquainted with my parents. You would think I would just like jump into their arms and it would be like we we didn't miss a moment, But there there was definitely a little bit of hesitancy and shyness before I kind of warmed up and realized who they were.

I was kind of a lonely kid. I mean it was preschool in kindergarten, so I don't have too many memories of it. But I would always switch schools too. Like I moved in with my grandparents, they obviously lived in a different part of town, so I would go in a different school. So I never really liked I didn't like the idea of school, and I remember kind of dreading having to go in this new country, and even more so I didn't speak the language. I remember

just like kindergarten was was really hard. They were all all kinds of different types of kids. I couldn't really like navigate my way around. I didn't know who was who. I couldn't even tell the teacher that I needed to go to the bathroom. So it kind of hold it in all day. And then I remember first grade. I have this like one memory from first grade, which was I was in a little reading circle and you know, you know, like the kids do these reading circles and

you're reading like these basic books. And I still remember this first grade reading circle and I was like, man, I can read, And not only can I read, but I'm reading better than all these American kids. So I think that's when I kind of had the realization that maybe I was like intelligent or I identified as a smart person. And I think my parents did this like really valuable thing in hindsight, which was they kind of like advocated for me. So they never got into like

the PTA or school activities or volunteering. They just didn't have time because my dad was in grad school and working. My mom was working as well, just to try to supplement, and they're like, you know, our kid is smart. He should be in the accelerated like math. Can he skip grades? They were always trying to like push the teachers to put me in another grade, and the teachers were like, well, well, he's small and he doesn't really have that many friends.

We don't really think it's a great idea for to have him skip a whole bunch of grades. But you know, they kept pushing, and eventually, you know, I was given an opportunity to skip a grade. And I did like very very well at school. But I kind of had this fairly early realization that I was smart and kind

of good at math and sciences. And then my parents also had this way of like applying pressure, which I think was like kind of honest from their perspective, but also might have been a little bit strategic, which was we're new to this country. We're immigrants, like we're not citizens. We could sort of like get kicked out at any time.

There was this like fear of deportation always, and so it was kind of like you got to do well in school because otherwise we might get deported, and for sure you're gonna have to get a scholarship because we're not making any money in this family, so you're gonna have to, like if you want to go to college and make it in this country and get education, it's kind of on you. I would kind of hear this and really internalize it at an early age, but it

was quite intense. I was like, all right, well, I better just like always a saw my exams and do well because there was like all this pressure of the family making it in this country that I felt a big part. Yeah, that I felt a big part of.

years ahead in mathematics, for example. My dad always emphasized mathematics too, you know, he was he was an economist in Bulgaria, and he was always like, well, you know, if you're good at math, you can kind of do anything. So all this other stuff, like you know, language, arts, you know, you'll you'll figure that out. Math is like

the thing. And there was also a little bit of a competitive element because I would be like, oh, Dad, you know, how old were you when you figured out like this type of math, Like when did you learn calculus? And he was like, oh, I learned calculus when I was in graduate school. I was like, all right, I'm gonna do it in seventh grade. No, maybe it was like eleventh grade or something pre calculus maybe. Then I

you know, started doing it outside of school. I started doing all of these camps, like there was this one. There was this one camp called CTY. I don't know if you've heard of it. I did that in middle school. And basically the way it worked was you take the SAT. So the SAT is the for any listener who was not an American college entrance exam here. I think it's required again now for a while it wasn't required, but basically you have to take it to get into a

good college. And for this camp ct Y, you basically took it as a middle schooler, and then you know, depending on how well you did on this test, you could like qualify for certain classes. In eighth grade, I got a pretty good score. I think I got a thirteen seventy and I'd skipped a grade, so I was like a younger eighth grade or two. And at that point, you know, I had this math teacher in my middle school and he had to like sign some stuff to

have me go to this camp. He's like seven seventy on the on the math and the SAT like that's higher than I ever got, you know, when I was in college. So I think at that point, I just I kept getting this reinforcement that you know, I was really great at math. I should I should keep doing it. And I guess Stanford. How I came to Stanford was

an interesting story. The second vacation that my family took after we moved to America, they took me to California and my dad was like reading all these travel books and he had this book like the thousand and one Places to See Before you Die, and a lot of them were on the West Coast, so like the Grand Canyon and Sequoia National Park, where you could drive your car through this like big tree. I don't know if

you've seen pictures of that. We drove through the tree, and we kind of did this road trip through California, and there was this one day where we drove through San Francisco and we spent the night there and it was the middle of summer and it was raining. It was like close to zero degree celsius. So I had to actually buy a jacket because I was just unprepared for this. So kind of kind of this miserable day,

and then we drove down. We drove down to Stanford, which was in Palo Alto, about forty five minutes south of the city, and everything cleared up. The sky was blue, not a single cloud in the sky. It was sunny.

They were like I think summer school was in session, so kids were like throwing frisbee at the oval and they were like kids picnicking in the main quad, and I just remember it felt so idyllic, particularly juxtaposed against how horrible San Francisco was that day that I was like, this is where I want to go, Like my parents have been spending all this time talking about college. This seems like a fantastic college. So back then I wanted

to be a lawyer. So there's this photo of me on that road trip in front of the law school at Stanford, and I'm like, yeah, this is where I'm gonna I'm gonna go and be a lawyer. I had seen a few good men, you know, the Tom Cruise movie. I thought being a lawyer was so cool because you get to like really get the people, like these intense arguments. I think I always remembered that even when I applied for college. I applied early to Stanford as a result, but the lawyer thing I kind of grew out of.

to her friends what I was doing. And she was like a doctor and medical researcher at the time, so that's a very concrete thing. You know, her friends were mostly researchers and doctors. So she was like, well, Vlad, you know, he's in finance. But then there'd be like this groan, like, oh, you know, they thought I was some kind of investment banker or something. She's like, no, no, no, but not that kind of finance. They're like the Robinhood

of finance. They're trying to help the little guy, giving them tools to invest and manage their money. And so when we were kind of coming up with the name, that was a name that that we got excited by. And there were a couple of other names too, Like we thought about naming the company Omaha actually, and we got pretty close to that one. And in hindsight, you know, Warren Buffett and Charlie Munger were never big fans of Robinhood. They were kind of like crapping on us from time

to time publicly. So sometimes I think if we had named the company Omaha, maybe we wouldn't have had that element. I'd also never been to Omaha, so that kind of like that sealed it for me. So Robin was a very controversial name, and I think that's what made it powerful, because you either love it or you're kind of like repulsed by it to some degree. But it's not boring.

Finance actually, and this was nineteen ninety seven, late nineties. Wow, So during the dot com boom, when somehow, I don't even know how I came across this, but I was building a portfolio of companies that I recognized, like Yahoo three Com, which made the Palm Pilot one of the first consumer PDAs at the time PDAs. I'm like, yeah, yeah, yeah, I remember, well ahead of their time, right, yeah, very

I did decently well. In hindsight, everyone was doing well on all those stocks for quite a long time because it was the dot com bubble. But my parents basically saw an opportunity to motivate me to do well on the SAT to qualify for this camp that we were talking about earlier. So basically they were like, if you get above I think it was like thirteen hundred on the SAT, we will let you invest with like the dollar amount of your score. It was something like that.

And so you know, I was like very motivated by this. And so when I got my thirteen seventy and my dad and I kind of he funded an e trade account for me and I started investing.

You know. Pretty soon after my dad brought it home, he didn't know how to use it, so I just took it and started playing with it. So and actually through that I learned a lot about investing, because what happened was there was a spinoff. So first that started at as three Com, but then this palm Pilot business was growing and they spun it off, so then I

had two stocks. And then I started getting the prospectuses in the mail and voting documents, and I learned all about like shareholder proxy voting and all the stuff that a normal twelve year old probably wouldn't wouldn't have occasion to learn about. But because I was invested, I actually like felt compelled to learn more. So yeah, I think that really set me off on a lifetime of learning about investing in finance.

experience anymore. Yeah, I don't know if you meet people like that.

of unlocks business opportunities for you. So, you know, a lot of the folks that I met in my undergrad and the different types of people, I think at the time I kind of didn't recognize this, but they ended up helping me in my business career, either because they became journalists that like helped tell the story of Robinhood, or they joined venture capital firms and they became indirectly or directly investors in Robinhood, or they advised us with

certain things. I think everyone is so diffuse in general because people grow up in different places. But like, college is one of those moments that people get brought together, and you do in a place like Stanford in particular, get to encounter a lot of a lot of really special people. And you know, when I came to Stanford, I actually had no conception of going into business, you know that I kind of stumbled into that later. By the time I got to college, I was interested in

theoretical physics. That was like my passion because I was consumed by this question of, like why are the laws of the universe the way they are? I had read about relativity when I was in high school, and I was just like the first time I read like the you know, Einstein's Book of Special Relativity, it just blew my mind. And I had to read it like six or seven times to figure out what was going on, you know, and then I you know, you try to

understand more and deeper. And the question that really motivated me was like why do the laws of gravity look like this, but like all the sub atomic particles like all the laws around article physics look different, and is there one theory that is basic that unifies both of them. This sort of like unification of quantum gravity was this topic that really interested me. So I came to Stanford to study that, and that's kind of what what pushed me into into eventually doing math and going to UCLA

to study math with a professor named Terry Tao. But like, if you think about that group of people, the folks at Stanford who come to study theoretical physics, and you don't do that because there's very little money in it, particularly back then, right, this was like pre data science and applied machine learning. So yeah, Actually, by by the time I got to that point, I was looking around

and I'm like, wow, I'm the dumbest person here. These are just I'm surrounded by like some of the smartest people I've ever met.

But then I was given this book. It was called like the Mathematicians Survival Guide, and it was like chapters about how to deal with the administration and the bureaucracy of the graduate department, how to advocate yourself for yourself with the department chair, how to make sure that you get like a good research fellowship so you don't have to spend all of your time teaching undergraduate classes. And I think at that point I was like, oh, man, like this is a career and it's not like the

career that I wanted. Another thing happened at the same time. So my first month in grad school was September of two thousand and eight, and Lehman Brothers went under that month. It was it was the start of the global financial crisis. You and I are basically at the same age, I think, born in eighty seven. This was kind of like maybe for you, for me certainly, like the folks that graduated my year of college, some of them went to finance and some of them even went to work at Lehman Brothers.

And it was sort of like one month after they joined, you know, there was like photographs of them carrying their stuff out of the offices and boxes. Right, So, yeah, that was a tough time for a lot of people. A lot of my friend's parents lost their jobs that year,

so it was the global financial crisis. And yes, somewhat oddly, my good friend from college, whose name was Beiju Bod who I ended up starting Robinwood with, he had gotten a job in finance kind of on a whim, and he managed to convince me that this time was the best time to start a finance company. And of course I wasn't like super committed to my PhD path because of all the other stuff I mentioned. So I was like, you know what, this sounds like an interesting problem. Let's

see if we can do something here. So we rented a little house in South San Francisco in the South Mission where we were paying like three hundred dollars a month in rent. We're all living together. I had to take care of this lady's cats, which was why the rent was so cheap. That was kind of my first experience with entrepreneurship. What attracted me to it was kind of the same thing that attracted me about math and physics.

It was the act of creating something with you didn't really have to listen to anyone telling you what to do. You could use your entire mental faculties and your creativity to like determine your own success and your outcomes. You know, just like a couple of people who were really passionate and committed could build something and you know, actually use it as a vehicle to sustain themselves economically. So that idea when I kind of discovered it, and I never

really like thought of myself as an entrepreneur before. I mean, it wasn't really something that was common in the East Coast, to be honest, or in Bulgaria. I mean you had some but not technology entrepreneurship really. And then when and I kind of started doing it and I started like programming and writing code, then I just like found the

whole thing really intoxicating. So even though we didn't have success it basically our first idea failed within a year, I just kind of knew that that I wanted to do it. So that that gave me the confidence to drop out of UCLA start something a little bit different, and it was it was the third idea that we had that led to Robinhood, and that was kind of

the one that really worked. I think that the actual experience and the mindset of an entrepreneur just like resonated with me very very deeply, and I was having so much fun, like unlike anything else that I had done, that I just knew I had to keep doing it.

understand a bit more about it. If someone's sitting there, going and I remember being this person, So I remember twenty thirteen, I just left the monastery that I lived in for three years, and I'd gone back into the world of work, and I had a mentor who told me exactly which crypto to invest in in twenty thirteen.

there wasn't I didn't see my parents invest. I didn't see them have that, And so I remember being like, he was just like, just put one thousand dollars, put one hundred dollars into each of one hundred pounds. I was in London, So he goes, just put one thousand pounds into one hundred pounds into each and just see how it goes. And I remember being so risk averse that I didn't even want to put one thousand pounds into it. And that's probably all I had at that time.

I was working a job where I made thirty one five hundred pounds a year at Eccentria, and.

Let's say you have to pay ten dollars per trade, Well, that's you know, if you make one hundred dollars investment, that's ten percent of the of the actual value in the investment, and if you want to sell it, you know, then that gets to twenty percent for the round trip. And so it doesn't really make sense to start with one hundred dollars in that sense because you have to count on many years of appreciation to just pay for

your transaction fee. But if you lower the fees to zero, you could start with any amount, which is what you did exactly, And that was kind of our big that was that was sort of one of the three big innovations that I think made Robinhood possible and really made it take off. It's eliminating the commissions and lowering the account minimums to zero because a lot of brokers also had account minimums. You couldn't even open account unless you had two thousand dollars or sometimes more in there. And

we said, you know what we really wanted. And the reason, by the way that they had these accounts minimums was these companies were not automated enough to service small accounts. They just lose money on them. And so we said to ourselves, well, it would be it would not really uphold the mission of a company named Robinhood to have

an arbitrary account minimum. We should make it zero. We should hold ourselves to that standard, and we just should like incent ourselves to make the business as efficient as possible, because I think that would be the long term correct way to build the business. Like, let's point everything towards creating a forcing function for us to be more efficient and more automated and adopt technology more aggressively and be

the first to do it relative to the market. And a company where everything is pointed towards using technology to lower the cost of things, make things as usable as possible, and as automated as possible, that seems like a long term robust structure for a company. So we kind of like that, But yeah, a lot of customers start with just ten dollars or even less.

you should buy it and is posting it. I'm personally a big believer in thinking for yourself, and like buying something because people on social media are saying it's a good idea, It's just like kind of anathema to me, Like, sure, use it as a signal, but like make your own decision and kind of think through it yourself and don't just rely on the opinions and commentary of others any others.

the competitors that at least survive in the space. There's no maintenance fees, no kind of onboarding fees, keeping money in the savings account where in particular now with high rates, you know a lot of the banks are offering you zero percent, so your money is just losing money sitting in savings, not doing the simple things to optimize I

think our mistakes. And there is so much free content out there on the internet, on YouTube, and you know that just spending even thirty minutes to get educated and actually just like getting started and opening an account and creating the habit of investing even if you don't think you have much money. The technology is there so that you could actually do the exact same things with one dollar as you can with thousands of dollars. And you know,

through another thing, Robinhood pioneered fractional shares. You can invest any dollar amount in pretty much any stock. You don't

need a whole share. So one of the first things that we did, which we thought was very cool, was you have, for example, companies whose share prices are hundreds of thousands of dollars per share, like Berkshire hathaway A Shares for example, and you know they would almost pride themselves on having this share price that's inaccessible to normal people, and not everyone could be invited to this club of

like shareholders and they have the annual shareholder meeting. But you know, Robinhood figured out how to break up these stocks into pieces and you can buy a dollar of it, and you know, then you had all these retail investors showing up at the shareholder meetings, and I think that made those guys very angry actually in hindsight. But how did you vary?

you want to buy a dollar of Berkshire Hathaway. Well, then we would essentially have to keep inventory of a whole share and then allocate internally different pieces of it, and then you know, when the total sum exceeds one share, then we go out and buy another one. So we're kind of like managing this portfolio of you know, right around one share in every instrument.

It's how I got started to and I think that's why if you look at the Robinhood customer base and we're now publishing the stocks that our customers are investing in. Most we call it the Robinhood Investors Index, it tends to be consumer companies that make products. They're sort of like heavy in innovation, So for example, in Nvidia, Tesla, Apple, these are some of the most commonly invested stocks, and it's because our customers are younger, they believe in the future.

They tend to be early adopters of technology and innovation. They believe in artificial intelligence, clean energy, electric vehicles. So yeah, those tend to be like both sort of like some of the most held instruments and some of the first

instruments that people kind of buy into. We also have a product first trade recommendations, and it's difficult for the service to recommend individual stocks, but for someone that actually comes in and they say, you know, I just want to invest, I don't really know, I don't want to pick my own stocks. Over time, we're increasingly getting better

and better equipped to serve that customer. So now you know, you can just answer a couple of questions and we'll recommend a diversified portfolio of ETFs, explain to you what all the pieces are, and then you'll kind of see how it all works mechanically. And I think sometimes just like going through the process of making a trade, it's much simpler than like reading a book on it I

like to say that it's like playing a violin. You're not going to learn to play a violin really well by like reading a book on how to play the violin. Maybe if you're already really really good and you're trying to get a little bit better understanding the behind, it is going to help. But otherwise it's just sort of like pick up the thing and start practicing, and you'll get better the more you do it. One of the things I became interested in when I was an undergrad

is options trading. A lot of my students my year were applying to be options traders. That was like a before went fully electronic. That was a job that people had, right And there was this book like Options, Futures and Derivatives. It was called something like that by Hull, and it was like this thick dictionary explaining how all these option

strategies work. And I just kind of imagine, you know, if someone had to understand that book before kind of like going into options trading or discovering it for the first time, I think that would be just like an incomprehensible barrier. But like, you build up some intuition for these things by doing it, and it sort of like makes you more motivated to read the literature, and it also sort of like gives you more real world knowledge

than you could ever get from just reading. So I think just like getting started and doing it is the most important things. It's a skill like playing a sport or playing a music instrument, more than just like an academic pursuit.

those of our competitors. That said, there are things that certain customers want that. We're not like ideal at offering now. So for example, if you want an advisor. A lot of people want a financial advisor. They want someone to manage their money for them, tell them exactly what to do. We don't have a great comprehensive solution for that yet,

although we're working on it. I think we will get there eventually one of the advisors, I think AI certainly will be involved, if not you know, replacing the advisors, certainly augmenting and giving them kind of superhuman capabilities and the ability to service more customers. But yeah, I think that's certainly one of the most interesting applications of AI and financial services. But yeah, right now, the platform is

like very self directed. It's for folks that want to be in control of their money, and like, you know, like the the most hardcore Robinhood users are the ones that really are just kind of like optimizing everything, you know, they're optimizing their taxes, they're optimizing all of their fees and commissions. And we do attract some of those people that really want to be hands on with everything because

it's a very easy to use tool we have. We tend to have the lowest pricing across all services that we offer. We sort of like from the very beginning, have built with like the self directed retail customer in mind. So I think for that customer, there's probably no better fit. If you want to be in control over every aspect of your finances and you actually in some cases are openly distrustful of other people telling you what to do,

and they're there's a lot of people like that. They're like, I don't even want to listen to a financial advisor because I feel like they're just gonna talk down on me in a good scenario or rip me off in like a bad scenario. And those people are like, yeah, like they tend to gravitate toward robin Hood.

a mortgage versus now people moving towards renting more. Are you seeing that trend? And are you seeing people move towards stocks? So you still what's your personal take on people choosing between buying and renting versus using that capital elsewhere.

and you're giving people mortgages. You know a lot of people criticize leverage in the stock market, but if you think about the amount of leverage in a thirty year fixed mortgage, right, it's like ungodly right, you end up paying much more in interest than you know, even the principle sometimes yeah, I mean again, without getting into investing advice, real estate I think has been tempting for people because like,

you can see it, you can touch it. It's sort of like this thing that you can use and it feels like an investment, even though it really isn't, especially when you give when you take into account all the fees,

like the brokering fees on either side of the transaction, property, taxes, maintenance. Meanwhile, you know in the stock market, you have it on your phone now, commission free, some of the lowest fees, access to like the widest variety of companies that are really even though it's the US market, by and large, the US markets increasingly global. I think, and I wrote this article back in twenty twenty one, investing in the

global markets is really the new American dream. And actually, during the hyperinflation episode in Bulgarian the nineties, my grandparents didn't have access to any tools that allowed them to invest in equities. So my grandfather, who was a medical doctor on navy vessels in Bulgaria, he had like a contact on the port side who would basic give them access to copper cookware. So he would take his Bulgarian leves from his pension and get copper cookware. We had

this closet. They had this closet in their apartment that was just full of copper cookware, and that was like that was their robinhood app like that's where they would self custody their wealth. I mean, right now you can

buy any stock, you can buy crypto. We started offering crypto in twenty eighteen for the lowest fees in the industry, and you can get you know, you can get access to ETFs, you can have gold ETFs, so really in your pocket you can diversify and hold pretty much any asset and you can even do real estate through the form of reats and other publicly traded ETFs. Yeah, you

can get exposure to that asset class. But like real estate investing in terms of buying a primary home yet, it's I think the story behind that is is difficult. It's like very liquid, high transaction fees. You're kind of like picking a particular neighborhood. So even if the global real estate market does well, something could happen to that neighborhood. You know, you build a power plant next door, and

you're kind of in big trouble. So even though I'm not making any investment recommendations, I think it's yeah, it's hard to kind of like equate those two. I think really the future is going much more toward investing in publicly traded stocks and cryptocurrencies.

Like we don't just offer stocks. We have an awesome credit card, we have among the best retirement products, an amazing retirement product with a first built in match in an IRA. We have a high yield product, and we're adding just more and more over time, and we're making it really easy to transfer your account. If you're you know, a customer of a legacy brokerage to Robinhood so you can take advantage of all these amazing and rates and

the user experience. So yeah, I think that we'd like to put ourselves in the position where Robinhood is like the home for all of these assets, and I think I think we're rapidly getting there.

the part of your portfolio. And you know a lot of times there were barriers that prevented you from getting started in the form of minimum account balance requirements as well. So we got rid of all of those and basically that allowed a whole bunch of customers that were previously under served to be able to open accounts, and you know, unfortunately a lot of those customers were from disadvantage historical demographics.

And you know, I think it's a great thing that we've now kind of opened the doors to basically everyone to open up an account and become an investor.

I mean, it used to be that you would have a job and you could like count on that employer's pension to take care of you. You know, maybe you'd work at the same employer for twenty thirty years, then you'd retire and you would kind of subsist on the pension plan, and then of course social Security kind of

filled in some of the gaps. But I'd say the future of Social Security is very much shrouded and a cloud of uncertainty, right, So I think the upshot is people have to take it upon themselves to be responsible for their own finances and their own retirement. I don't think that you can rely on the government. I don't

think you can rely on any one employer. Many people aren't sticking around at a single employer for very long now, And so what's important is having these investment accounts not tied to the employer and actually tied to the user. You're kind of carrying around your retirement with you. And that's why we launched our IRA products, your individual retirement accounts. So we offer roths and individual retirement accounts. If you're a Robinhood Gold subscriber, you get a three percent match

on contributions. So basically you might not have an employer matching you, but Robinhood will match out of our own economics in a world where you can't rely on a single employer and you have these accounts that should travel with you. I think that it's much more future proof

and the product's really been resonating. You know. We had end of twenty twenty three, which was the first year that we launched our retirement products, we had about one point seven billion in assets under custody and that's gone up more than six x since the beginning of the year, so now we have close to ten billion in assets in retirement accounts at Robinhood.

And those are things like twenty four hour market offering, which allows you to trade stocks twenty four hours a day, and we're the first to market with that for individual stocks like Tesla and Nvidia and Apple, things like retirement accounts that others offer, but you know, we'd have to kind of like catch up and add them, and of course we try to put our innovative twist, like the

matches onto them. And then there's just like scaling the infrastructure, and that includes things like customer support and just making sure that the infrastructure gets more reliable and sophisticated to handle more, which you know, as we're expanding globally and servicing other customers in different countries is also a giant area of investment for us.

I think people really liked this whole conspiracy theory thing, and you know, there was this like conspiracy theory of collusion floating floating around particularly at that time, So I don't think they could actually like explicitly say the conspiracy theory, but they were just evoking it in all sorts of ways, So those parts were fictional, but I think they got my mannerisms right.

where you're looking right at it. What's changed over the last three years.

in the public eye. And I certainly didn't see myself as you know, some kind of political figure wrapped up in some kind of political quarrel over investing or regulation. I think what happened was, you know, GameStop for better or worse put robin Hood sort of like firmly into the zeitgeist right before it was a little fringe. I mean, we still had a lot of customers, but we weren't

we weren't like a politicized brand. And I think at that point I really had to learn really quickly not just how to like build technology and lead teams to do it, but also how to represent the company. And you know, it's like you can see in those interviews, I'm kind of like reading a script and that was my approach to interviews for a while. It was like reading my points and trying to communicate the facts of

the message. But you know now now, I know now that I'm much more wise and mature and still not nearly as as experienced as you. You've probably done thousands of these, right, but it doesn't really resonate with our audience. To just like read the facts, you have to give some emotion and some feeling and have some empathy, and you know, there has to be a little bit more. So I've had to kind of learn all that stuff.

And now they just look incredibly inauthentic and robotic. And I think the the more time has passed, the more I'm kind of trying to be as authentic as possible

in my appearances. And I think that had to be had to be something that I learned and doing so, especially in that time where the stakes were super high and we were about to go public, and you know, you have like all sorts of advisors and lawyers and you know, professionals that are trying to protect me and the firm, say, don't say this, be careful not to say this. Be careful when you're kind of making this point that you don't make people think that you're actually

meaning this. So and if you're kind of running the algorithm through your head of like what you can't say and what you what you should say, and how what you're saying could be kind of like interpret.

feel like even actors go through that way. You're just working on a movie on a set and then you have to go promote the movie, but or you're seen in public and something impacts the movie, and that wasn't necessarily what you signed up for. What were the actual ramifications or consequences of all of that, Like, what actually, how did that actually affect Robinie apart from the cultural propelling.

with me over time. They're like, oh, look at him, he doesn't have any emotions and he's just like talking about these clearing house regulatory requirements, but he doesn't understand the pain that kind of customers went through who wanted to you know, buy game stop or AMC or all these other things. I mean, like, I definitely understood the pain that those were some of the most painful sleepless

nights for me going through that whole uh ordeal. But yeah, my approach was always just I'm I don't I don't want to like talk about doing stuff. I like to do stuff, so uh, I'm not gonna like, maybe maybe I'm not going to be like super emotive with my customers, but I'm just gonna build them great products that save them tons of money and give them a great experience so that they could learn to invest and manage their money.

I think that was painful. Obviously, the collusion narrative was painful because.

definitely haven't been perfect. But I mean one thing I'm proud of is they're all like we've made mistakes, but they're a series of original mistakes, so we tend not to make the you know, same mistake twice, and so like throughout all of these we've just like built up a ton of scar tissue and learnings and have been a much stronger company. And I think all of this, all of the crises, you know, I remember the dates.

You know, It's like, you know, it's like January twenty eight, twenty twenty one, or December twelfth, twenty eighteen, or March second, twenty twenty right at the beginning of COVID when we had a day long trading outage. So you kind of remember all of these events and kind of take different

things away from them. But I mean, at the end of the day, we've been a company for ten years and you're gonna if you're in a disruptive space where you're kind of challenging the status quo and trying to change things, some people are if some people are going to be unhappy, right, and you have to have thick skin to kind of get through that.

to know the right amount. I think it's a it's somewhat of a fine dance, but it's it's certainly not acceptable to like play everything super safe in the world world of business.

you know. Yeah, yeah, So it's always hard to do the counterfactual on these things, because like you know, if we had if we had overinvested in those things, maybe we like wouldn't have customers and then no problems but no customers, right. I think we can end up being like tormented by our pass too much. So I don't even I don't know how helpful it is.

one kind of at the end of the window. The window has kind of been basically shut since then for IPOs, right, and we kind of squeezed in right before things got really bad. And so what happened was you had this period where it became clear that inflation was getting completely

out of hand, and that freaked everyone out. And then it became clear that the FED was going to hike rates, and we had kind of like everyone was prepared for a multi year period of like zero rates, and you know, to tame inflation, the FED, who hadn't really dealt with inflation for thirty years, had to hike rates up at

the fastest pace in the past several decades. And what happens was when rates go up, people typically invest less because you imagine, if you can get five percent on your cash just sitting there and the stock market appreciates, you know, seven to ten percent each year pre tax, and you can get that five percent rate without taking on market risk, that becomes much more much more compelling relatively, so you'll have less investing. And then that's what we saw.

Less people were interested in opening up brokerage accounts and investing for the first time, and that was like our whole business. You know, that was the core of our business, and we didn't really have anything for a high rate environ at that time. And you know, there was some criticism of this when we went public and some questions, you know, the analysts and investors would be like, well, Robinhood, you've done really well during COVID and during this extended

period of zero rates. The company has gone to twenty million users in that time. But how are you guys going to do in a environment where the interest rates are higher? You know, is this just is Robinhood a zero interest rate phenomenon. Of course, you know we had answers to that, but until you prove that, people don't

really believe you. And so we actually had to like go through an incredibly challenging process of like changing the strategy of the company, effectively refounding the company in twenty twenty two, when you know, the entire macro environment shifted, and I think we we did a really good job. I mean, within six months after that we had gone adjusted ebadat positive. In twenty twenty three, we had gap

profitability at the first time. We now have eight business lines that are generating one hundred million in revenue or more so, the business is very diversified. More than half of the rent revenue is interest rather than transactions. And now we're starting to get the question, Wow, like Robinwood is doing so well in this high interest rate environment, the Fed's going to cut rates. What are you guys going to do when when the Fed cuts the rates?

And like, you can't. You can't have these like high interest rate revenue streams firing on all cylinders now, So now we have to go backwards and and prove that customers still would want to trade options and crypto inequities. So it was I think, n interesting.

developed such a deep understanding of the company. They had so much trust and I think it's the same with the public company, or at least i'd like to think. So, you know, you pick your investors, your investors pick you, and the more cycles we go through, we are building institutional knowledge as a public company, and I do think that, you know, the market is starting to recognize that, hey, maybe this founding team, the management team of this company

knows what they're doing. And the more cycles we go through, I think the more we'll prove that out.

us to this point. If I could look at it from with a beginner's mind and just say, hey, I'm here, I'm seeing this company, this is kind of the state of affairs. What would I do differently? And you know, I came up with a bunch of things that like a stereotypical like top CEO coming in would do differently. They would pull back on remote first and get people in the office so they could collaborate and work together

in person. And even though I had turned Robinhood into a remote first company not too long before, I reversed my own decision there, which was kind of tough from a self consistency standpoint. People have a very hard time being inconsistent with their prior selves. So I think that's

like one mental barrier to get past. Another one was I just made this realization that you know, if you look at our business, a lot of our revenue is generated by you know, relatively small component of very active traders, and we actually weren't building products specifically for them. And as a matter of fact, we looked at kind of this customer base very deeply in twenty twenty two, and

these folks tend to be more sophisticated. So actually, when when the markets are crashing or moving sideways, they tend to actually be more resilient because they can deploy more sophisticated strategies that can take advantage of all sorts of market environments. And we saw what we saw was the more active someone traded Airgo, the more revenue they generated for us, the less happy they were with Robinhood. So so actually our most active customers had like the least

customer satisfaction with the platform. So then when we kind of like grock this, we were like, this is a five alarm fire, like any healthy business, Like, you know, you don't.

like solved the problem. Yeah, it's kind of interesting, a lot of introspection to how we ended up sort of like ignoring the active trader audience for for so long. I think once we sort of like refocused on that and and really started treating them like the important constituent part of the user base that they are. Uh, the company just started doing much better. I think by and large that was the biggest part of our of our turnaround as a company since going public.

abuse of the interface. But the other part was if you think about our options trading platform. For example, we're one of the few, very few that offer options trading for no contract fees. Most of our competitors charged sixty five cents per options contract, So if you trade one hundred contracts, that's sixty five dollars. That's real money. And there's some active traders that you know, spend thousands of dollars a month on other platforms paying these contract fees.

So even if like the platforms not really built for you, there's like a really strong economic incentive to use it. So you had a lot of these like super active options traders that were using Schwab or e Trade or others. Maybe they're using their charting from their other platform, but they're putting the trades in via Robinhood and just to save fees. So you know, we grew active traders. We also had some using us because the economics were so good. Yeah, and that way we sort of like built up this

large active trader business. Incidentally, while building products for first time novice investors.

see you become established and not obviously competitors. But when you look at the people who felt that way initially, do you find that founders are reaching out, you're more connected to people and as you've become more established as well, or does it get lonelier as things go on?

as well. So yeah, fortunately, you know, again knock on wood, we've been like we've been avoiding like major catastrophes in the last few years, which you know, the last few years have been hard, just with standard business challenges to work through. So that's been really nice. I think, like to some degree, I don't expect Robinhood to ever be perfectly understood and non controversial, so it just comes with the comes with the territory.

a young guy. He's like, hey, there's never any like new brokerages filing. This is like super interesting. I wish you guys luck. It gave me this feeling of like wow, I every investor in person I talked to was like run as far away from regulation as possible. You don't want to be a regulated business. It's going to just grind the company to a slow death, so find some way to do it via partnerships or something. When we got started, it was unheard of to like be a

financially regulated startup. It was really before the word fintech existed. For example, Robin Wood predated that probably created it to

some degree. And then you know, the press was always telling this David and Goliath tale where we were these little guys that were going after the you know, big, established, gigantic competitors, and you know, we had the millennials on our side, and so it was just like very very positive always, and it kind of it was like, I don't really get what all of the fuss is about, Like all of the negative press and all this stuff that people are talking about that's happening to other companies,

maybe not us. Eventually I would get like the comms and marketing people that they would come and show me the clock of like company perception. Have you seen this? It's like this clock and like basically, when you're kind of here, everyone loves you, and when you're kind of.

was just going through that. Right. It's like the first time a negative article hits, you're like, holy shit, it's negative press. I've never seen it before. You kind of feel like it's the end of the world. And then you know, after the six hundredth one, you're just kind of like, Okay, it's another one of these things. I'm just gonna move on and run my business. Yeah, and then when the press turns positive, you're like positively surprised and you're not expecting it. So I think that's how

I got through it. You just get punched in the face enough and your face contorts to the shape of the fist.

almost become one. And you know, when you're building something that's growing as fast as you are, you get absorbed and you have to be like you know, you sleep and dream and eat Robinhood, Like that's how it has to work, That's how it goes. What's been powerful for you in your personal life that you think is allowed you to reinvent, reboot, stay renewed, stay re enthusiastic, Like you seem as excited about robin Hood today as I imagine you would have been in twenty thirteen, if not more.

And what's been allowed you to renew your enthusiasm so consistently.

and it's just uh, super basic. And you know, when I started, I would kind of not really spend too much time and effort on my health. But as I've gotten older and the job's gotten more stressful, I notice that like effort I put in here pays off multiples. Right, So now my like wellness routine and my training, I spend more time just dialing it in so making sure I get the right amount of sleep, that I have an awesome mattress that like I keep my bed at

the right temperature. I like to journal before bed, and I like to shut off the devices. The devices, by the way, has been the hard part for me. You know, I like try really hard. I have to do unnatural things to like stop from looking on my phone, like my phone's not with me right now, for example, because you know, I would just it's hard to avoid looking at it. And if I know it's in my pocket,

you know, then it's almost like too close. So I mean, actually during the whole game stop stuff, it was particularly acute for me because I was at home, so there was no boundary between work and personal and I was going a little bit crazy, and so I had this thing where I would try to sleep with my phone in a different room so I'm not always just tempted to check out what emergency is happening, which ended up being a big problem the morning of game stop because

it took forever for my team to like get a hold of me. And then now then for a while I slept with like three phones next to me, which it really backfired. But yeah, my health, I work out a lot. I've gotten into like hot cold therapy. At first I was doing cryo, but then I got like a cold plunge at my house that and and that

really helped. And yeah, just like the basics of sleep and diet, I think has made a world of difference, and just trying to like I don't think I've figured out the device thing and sort of like my rhythm of the day perfectly, but that's a that's a work in progress.

So I think I think she feels like Robinhood's like one of the children, just kind of like I do.

of incomprehensible. I think that anytime there's like websites devoted to like exactly how you should kind of like work through your points to optimize the value you get from all the points, like media empires like the Points Guy were created on the back of this, right, It's like, yeah, if you want to spend ten hours a week optimizing your points and maximizing the rewards, I think that's pretty good.

But we wanted to create something that simplifies all of that and basically just by like using it for the vast majority of people, you know, you get the best rewards. So simple, clear reward structure that you don't have to be like a PhD to decipher people building their credit. If you're a student and you will are you know, you don't have a credit history, typically you have to

start out with like a really crappy card. You have to sort of like upgrade your way to a nicer card once you prove that you're worthy and you know there's a crappy starter card for people with no credit history, and like the premium card for folks that have the means. We asked, can we can we fix that? Can we actually have a starter card that has the same economics, the same rewards, the same design, uh for as like

a highly premium card. And then the digital experience. You know, most cards don't really think through how to take all of the things that technology and you know, fintech has given us and sort of like give them to you in the same package. And those are things like virtual cards. I don't know, if you've been to a restaurant, you probably you probably go to restaurant. It's where you have to give your credit card to lock down the reservation.

Imagine you could create a virtual card so that not every restaurant has your actual card number, and if you want to cancel the reservation, you don't have to call the restaurant. You could just disappear that virtual card, right Or if you want to sign up for a free trial, you can create a virtual card seamlessly and that can be your free trial card, but you don't have to

give them your real phone number. Helps maintain people's privacy and in fact, there are great innovative businesses Privacy dot Com created with this notion. We put all three of these things in one package. One card for everyone, the best rewards in the industry, three percent cash back on all categories, a beautiful physical card, including the solid gold variant which I have in my wallet I can show you.

And a digital experience that's like world class. And we put all these together and it's definitely the best reviewed, most popular product that we've ever rolled out, even more popular than free trading. So it's it's been quite amazing, and now it's just like like we people want to rolled out faster. That's the one limitation. We had over a million people join the wait list for it within

a month of announcement. And the bet was that if we make the rewards and the product so good, we wouldn't have to spend the typical like five hundred dollars to acquire a credit card user that the big bank spend. We could get it just organically, and that seems to have proven out. Now it's just about getting it into everyone's hands while also validating the economics and the underwriting of a new credit model.

true if it follows from axioms. But probably the more interesting one is if there's some ambiguity.

to be irrelevant in a couple of weeks. Right, But if you know the Holy Bible people have been reading it for two thousand years, you have pretty high confidence that it might it's it's going to be relevant in two thousand years from now in a way that you wouldn't with what's on the bestseller list now.

get bigger and more laws. But like periodically we've got to go in there and slash laws and make things smaller, and there's there's a lot of pressure against this.