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We're back.
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Last week we looked forward to a very futuristic vision that you are building, Aether Flight.
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Data centers in space, solar panels in space.
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Now we're going to take a little bit of a walk down memory lane.
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I think maybe we start again with what we have here in the office.
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I think it's called the chalkboard of destiny where you originally scoped out the idea for Robinhood.
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Tell us a bit about that.
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>> Yeah, this this chalkboard has been with me and with my co-founder for many many years.
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It was originally in our We lived together off campus at Stanford for >> super close to Stanford?
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Yeah, we were we're besties at Stanford.
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We took all the same classes together.
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We're both, you know, only children, both children of immigrants, both grew up in Virginia.
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Families both moved to the US cuz our parents were pursuing higher educations here. Um You're kismet.
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Both had some variation of this haircut when we met.
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Uh and we were both studying physics and math and took a lot of the same classes together, became very good friends.
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Uh coincidentally one of our very good math friends is a fellow by the name of Andrew Yarmola, who happens to be uh heading up engineering here.
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I think he might be right around the corner.
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So it's it's a new thing, but a continuation I guess, too. Yeah. >> Yeah.
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This chalkboard has a lot of good juju. Yeah, that's the word. Love it.
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So I read that 75 VCs rejected you guys. That's it?
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Cuz it was it was it more than hundreds? I mean >> seed round? Take us back. What was the idea? It's a dark memory.
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I don't think about that many notes. Those damn VCs. Yeah.
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>> [laughter] >> Um What was it like back in the day getting rejected by a lot of people?
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>> What did they miss, I guess?
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Well, I remember it quite well.
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So let me tell you the criticisms.
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Number one, young people will never invest in stock market.
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Number two, you'll never figure out how to build a business here.
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There's no What's the business going to be?
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How are you ever going to build a business?
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Number three, you have no idea how to do this. You're a math kid. So is your co-founder.
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Like you have no I don't see Google on your resume anywhere.
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I don't see any of the big tech companies.
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You don't have a consumer products.
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Um also you'll never get, you know, any of the capital to do this because we're rejecting you. Amongst other reasons.
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Any of those top three were Well, that one that one's a bit self-referential that last one, but yeah.
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So what like Why don't you just go and build a photo sharing app? Oh, no way.
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Like just why are you doing this?
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Just go build a photo sharing app.
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Go build a social network.
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You know, that's where all the interesting stuff is happening.
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This finance thing it's not going to work.
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Don't don't work don't worry about Don't worry Don't work on it.
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What would you look for now if you were on the other side trying to find the next Byju's Vlad?
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What would you be looking for to not miss it? The people. The people.
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Yeah, I think this is the thing at at the seed stage the early stage like whatever you're working on then it's probably going to change.
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And if it doesn't change then you're a bad entrepreneur.
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Because as a good entrepreneur you have to be aware of the circumstances and like be willing to iterate on ideas, right?
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Like I actually think kind of one of the hallmarks of being good entrepreneur is being a person that changes their mind a lot. What does that mean?
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It means you're testing your ideas out.
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You drive your Put a stake in the ground.
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This is what I think it is and you sort of test the idea and if you learn something new you're not the dogmatic one that says, well, I'm going to stick to my original idea.
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You're like, no, I'm going to do the I'm going to like basically, you know, gradient descent my way to the thing that I think is going to work. Yeah, yeah.
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So I think it actually at the early stage it is so much about the entrepreneur. Are they in it?
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Do they have that dog in them?
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Are they going to be relentless in figuring out how to get to success?
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Um and is the opportunity big and interesting, right?
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I think this is also kind of looking back much more clear is if you think of the sliding scale of like easy ideas versus hard ideas.
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They're kind of all hard.
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Like building companies is just hard hard.
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And if you start on something that looks easy to begin with it might turn out to be hard in a different way.
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It's like it's easy to understand, therefore a lot of people understand it.
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Therefore it's super crowded and competitive.
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versus something that looks really hard and therefore nobody's working on it.
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If you have a strong first principle based view on what the idea there is and the people.
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And and the people you'll cut through.
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Rather than pattern matching too much.
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Okay, we're going to try and get a little tactical here.
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For the some of the entrepreneurs listening.
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So you've launched a product.
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When did you have a sense that it was working?
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What was the moment you were like, okay we've got some product market fit here. Very early on.
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There was a day that we released the version the first version of the website.
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It's actually pretty >> Yeah. It's pretty startling.
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And I had not seen product market fit for a consumer product before this. I'd been looking for it.
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That was kind of the thing that I was very very keenly interested in figuring out.
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Which is how do you build something that millions of people that you've never met will find useful. How do you do that?
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What's the playbook on that?
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Like where's that Give me the textbook.
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Like how do I How do you do this? Yeah.
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And it frankly seemed like magic when people would figure it out.
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And this is like the thing about finding product market fit with a consumer product is it's you know it when you see it, and it's rather elusive.
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Yes, it's like catching lightning in a bottle.
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Yes, it's very, very elusive.
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>> You guys had a super creative website launch, I remember at the time, like a countdown. Uh a waitlist.
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>> Waitlist, but it was like it was pretty innovative.
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Yeah, it in in turn, I think there was a lot of people that then kind of did the same thing afterwards. >> Yeah, yeah. >> Which not hating.
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No, no, imitation is the most sincere form of flattery.
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There was a there was a a company back in the day um called Mailbox. Do you remember that? >> No.
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It was an iPhone app that was like an inbox app. >> Okay.
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And I remember being like holy cow, this is like the best design product I've ever seen before.
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I think they were then acquired.
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I think they were I think they were acquired by Dropbox, if I remember correctly.
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Um and I think no longer exists.
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But they had a a waitlist mechanism where when you signed up for it it showed you the number of people behind you in line to use their product, and there were people in front of you in line to use their product.
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And I thought that was just super compelling.
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And so, we ended up doing a variation of that with >> Yes.
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uh with the first announcement.
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So, it was you know zero commission stock trading and it if you typed in your email address, you would get early access, and we'd show you where you were in line.
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>> And that value proposition was compelling enough that just loads tons of people signed up, basically.
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But that is the that is the hard part.
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>> Yeah, to figure out what that was. >> What is that thing?
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A lot of people didn't like it it that's not necessarily something people were looking for, you know? >> yeah.
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So, it's like how do you communicate what the thing is, and how does it fit into people's lives?
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>> you already know how you would make money down the road when you guys were offering this thing for free, or you're like, "Hey, let's just get loads of users on we'll offer this thing for free, and we'll figure it out in time."
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A little bit of column A, a little bit of column B.
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I mean, I think that the approach was so different, and like the way the business would operate would be so different that we knew how traditional online brokerages made money.
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Like we would look at the public filings and kind of try to infer what the business model could be, but it's so dependent on how many people use it, what kinds of people use it, meaning is it a bunch of wealthy people or is it, you know, what ended up being the core user base, which was frankly a lot of younger college age Americans. Yeah.
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That was kind of the core bread and butter.
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It's a lot of people that use it. >> Yeah.
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It's such a cool inversion of the existing business model.
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Yeah, and I took real issue with the way that it had operated before. Yeah.
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Because again, this is kind of my viewpoint and paraphrasing here a little bit, but my view was like before before Robinhood, before we created, the primary use case for investing in the stock market was for retirement age Americans, retirement age families.
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It was plus or minus a handful of years.
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This is a tool to help you with retirement.
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By extension, the majority of people that use these products were of that age range.
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And I remember that juxtaposed with the backdrop of Occupy. You remember that? Yeah.
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Where our generation was I mean, they were angry.
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They were angry about the way the financial system worked. Occupy Wall Street.
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>> Yeah, Occupy Wall Street.
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They were angry about the way it worked.
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And um I remember thinking to myself this is kind of the genesis of the company.
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Uh there's another way here, right?
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There's one way in which what a lot of people are advocating for, which is you tear the system down, right?
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The system's broken, like we got to start over from scratch.
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At the same time as a child of immigrants to this country, I'm like what is going on here? Yeah.
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Like this does not make any sense.
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This financial system is the envy of the whole world.
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People literally give up their lives and relocate here because this is the land of opportunity. Right. Like I live this. My family did this.
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And and to see a generation of young people be like this this thing's broken, it's not for us, like tear it down.
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We're like there's another way here which is you can actually have more people be a part of the capital markets and more people share in the outcomes good or bad and not feel disconnected from it and therefore sort of feel like they're not participating in it.
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And so the the other option was you get everybody a part of it.
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I want to come back to that.
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I want to come back to that point.
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Um Okay, in terms of your Did you have a North Star metric when you guys did start growing that you were focused on?
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And what were the growth channels that worked best for you guys as you went from I guess zero users to now millions of users?
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Yeah, there was a lot of organic growth.
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There was people sharing links to using Robinhood on social media.
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That was kind of the bread and butter in the early days. >> Okay. Okay.
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It was almost entirely word of mouth.
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>> So just have an amazing inside and product that grows that grows virally.
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That would be the the best way.
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But did did was it I mean you know Build something really useful for people. >> There you go.
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And if you do people will use it.
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And communicate it in a way where we talked about this earlier that property of transitivity.
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Like this is the By the way, this is kind of key. I love that.
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Can you can you can you elaborate on that? Yeah.
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This is this is a math concept applied to building consumer products.
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Does the messaging that you have have the prop property of transitivity?
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Meaning if I explain what the product is to you and you explain it to somebody else what is the version that you explain it to somebody else?
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Like if you play the game of telephone, like after three or four hops, our people are like, "Oh yeah, it's a Chinese restaurant."
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And you're like, "Oh, we're just an online stock brokerage."
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You know, like what are we?
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It just totally got lost in translation.
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>> And so what what what I really focused on then was spending a lot of time with actual customers or or I guess not even actual customers, hypothetical customers, people in the real world.
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And being like, "Here's what we built. What is this?"
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Like how would you explain this to somebody?
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How would you explain this to a friend?
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How would you explain this to a family member?
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And through that very, very simple thing, you can learn more about why your product exists, why it will work, why it will fail than talking to any number of professionals in the industry.
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They just go directly to the primary research.
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How do You have an idea for the product.
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You've written it down on a website, it's an email, it's in marketing documents, whatever, right?
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Put it in front of people and be like explain this like your job is now to explain this thing to a friend.
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Like what are you going to say?
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I remember like looking for that to draw insights and be like, "Oh, we I interviewed 10 people or our team interviewed 10, 20 people, right?
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And we kept hearing this way of describing it and then it's really synced.
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Like I like the way it sounds or like, you know, it's a it's a very like colloquial way of describing it and we just take that and incorporate that into the messaging. It's amazing.
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It sounds so easy, but it's actually very hard to do this, right?
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Because it requires such clarity of thought and what goes into the product and I think saying no to so many things.
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So it sounds easy the way you're describing it.
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And I definitely think the focus on primary research is sensible, but having built, you know, quite a few products myself, it's much harder to deliver on it than in practice, which is why it's it's quite rare.
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Um Also, coming back to Steve Jobs, I remember one of his famous interviews quotes is like around attention that people give.
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People don't give a >> No.
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They do not give a what you're working on.
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>> Totally self-interested on whether it People are in their own little little zones, right?
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>> So, if you're going to make something and you want other people to find it useful, you don't have a lot like you are the human nature dictates that you are not going to get much attention from people.
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So, whatever you're doing, if it's too complicated, it's dead on arrival. Yeah.
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So, it's got to fit into people's lives.
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It's got to be simple, straightforward, and it has to like map to something that they cared about independently of your product.
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And you really capture that when you start talking to people that you've never met before.
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And I mean, I would go into a lot of this sort of customer research thing with our researchers, and clients people, and engineers.
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I'd take them all into the random parts of the US and be like, let's go interview 30 people an hour long back-to-backs over this week. Amazing.
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And by the end, like your face feels like it's going to fall off your head.
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I think that's that's a good transition.
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I mean, you you you led product, right? At at Robinhood.
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That was But you guys were co-CEOs, which is a pretty unusual setup, I would say.
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As we typically look at teams to back, we would generally um not not like co-CEO own models cuz you kind of want one person to be the tiebreaker when things are tough.
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But you guys had an incredibly successful collaboration doing that over a decade. What was the secret? What are any any tips?
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Very high level of mutual trust.
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Or sorry, high level of mutual trust and respect and admiration. >> Okay. That's the key. I think that's the key.
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>> guess I guess zones of excellence.
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My mental model for always was um whichever one of us feels passionately or strongly about a problem or an area of the business, it's like let that person run. Okay. Got it.
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So, defer to my co-founder whenever he felt passionately or strongly about something.
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>> and I guess very capable at.
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Well, the the capable part comes from that mutual trust respect respect and admiration, right?
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Like I fundamentally admired and trusted and respected his ability to solve problems. >> Sure.
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I think the other part of it also was there was a friendship that was at the core of it.
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I think that's so powerful.
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I think that's so underrated, right?
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It's sort of like basic things, right?
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These are basic human things. And startups are hard.
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If you don't have mutual trust, mutual respect from a friendship or you know with the Collison twins being brothers, right?
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I think that's a huge competitive advantage when it when it goes right. Yeah.
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How do you maintain a friendship during all the tough times that come in a startup?
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And what was the most dire nadir that you guys had at Robinhood together?
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I mean, I think that particular moment has been pretty well documented. Okay.
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The thing called GameStop.
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Uh that was That was bad. That was really hard. Super hard. Super challenging.
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>> How'd you get through it?
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Uh like grit, tenacity, and not giving up. Okay. Right?
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There I mean, it it was yeah, it was To this day, it's like Jesus, that was a very >> brings brings up It's very challenging.
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It's like definitely the most challenging professional experience that I've had.
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It's also clarifying, focusing, builds a ton of character.
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Um and you kind of live through all the permutations of the hardest version of doing what you're doing.
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How did we get through it?
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I guess I said hard work, grit, tenacity, and not giving up.
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Not think It's the most important thing. Yeah. Yeah. Fight another day. Yeah. Fight another day.
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Robinhood, super impactful company.
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I think it's very much delivered on the mission that you guys set out with.
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It's democratized access to investing in a in a huge way.
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Um I remember we were talking about democratizing finance when democratized was not a thing. >> not a thing.
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Now it is Now it certainly is.
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But you guys did it, um which is amazing to see and it's uh you know, it's changed culture.
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It's brought way more people into the financial systems, but it hasn't been perfect, right?
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I think there's probably some interesting knock-on effects that you probably hadn't anticipated maybe when you started the company.
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We've now seen the emergence of prediction markets.
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I don't know if that's good or bad.
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Different people have different views.
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What's your take on all of that?
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I think it's been an incredibly disruptive technology.
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And I think that you know, people use technologies and tools in lots of different ways across the board.
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I think the thing to me that is the most important thing and the thing that I kind of look back on with the most pride on is this the thing that I talked about a couple of minutes ago, right?
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Is when we started the company, young people across America uh the How do I paraphrase it?
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Not knowing what you were doing with your finances was kind of cool. Do you know what I mean?
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It's like you got to care about that stuff.
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Like that sort of like counterculture thing where it's like, "Yeah, that That stuff is lame.
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I'm just going to live my life and be cool and free."
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And you're like, "I remember thinking to myself like that's not cool."
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>> [laughter] >> Like not knowing about your money's not cool. >> cool.
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That's That's self-destructive. >> Yeah, yeah. Right?
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And like our our culture and our society reinforcing people being uninformed about this stuff is not a good thing.
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Um and instead we should live in a world we should have a society where people understand it's a very important and powerful thing that they need to develop their own way of doing through the course of their lifetime. What is this thing?
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Like being a good steward of your own money and a steward of your own resources and taking a degree of personal agency over that for yourself.
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And when you fast-forward the clock to a decade and a half almost now, um there's a vibe shift, right?
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For young people, It's almost the opposite.
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It's almost the opposite.
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It's a point of pride for people.
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It's like, "Yeah, I know what I'm doing. Like I'm investing.
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Like, you know, I figured this out. I'm researching stuff.
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I'm learning about stuff."
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And that's very To me, that is like a hugely positive societal change. >> Yeah.
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Where again, the mission and the genesis of this thing is we wanted to We We as people wanted to live in a world where our peers were invested in the outcomes of our capital system.
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And any other alternative was going to be really tumultuous and and crappy, right?
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So, I think that's like There's a lot of >> That's huge.
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There's a lot of phenomena that emerges from it, but fundamentally people care.
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And I think that that's Giving people choice.
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Giving people the potential to participate.
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>> The tools, I think Ultimately, I think that's a really I I That That always >> relevant.
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Making them a part of people's day-to-day lives.
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I do think prediction markets are the one thing I I'm not yet sold on because I think it creates such a financialization of social reality in interesting way that has very unknown knock-on effects, but I think democratizing the ability to invest for me, that's just like a That's a net positive.
20:53
I wish we had more of it in Europe and the UK, to be honest.
20:54
Um I'm going to finish up with some personal questions.
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I've I've inverted this interview.
20:59
You usually start Well, we inverted the clothing, too.
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Yeah, that's a really nice cardigan, by the way. Thank you.
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Black looks great on you.
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If you had to choose three photos >> Next time we should switch places.
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>> [laughter] >> I want the shoes.
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Yeah, we can do that, too. Um and the necklace.
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This is a question we ask all our guests, but if you had to choose three photographs that define your life, what would they be and what have you learned from them? Yeah, okay.
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One of them's got to be the IPO.
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I'm putting it in your your mouth now.
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>> that was that was immediately going to be one.
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I think um trying to trying to think about what the third one would be.
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Um the first one is very obviously ringing the bell and having my eldest son on my shoulders. That's awesome.
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And I have a picture of that up in my in my my my desk at home.
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And did things change for you after the IPO?
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I mean, in mentally, emotionally Yeah, of course, right? >> Yeah.
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It's a different different chapter and it's as an entrepreneur, in my humble opinion, that is the one of one of the Mount Everest that you climb. Clearly.
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Um that's that's happily one of them.
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I would say another one was visiting Caltech with my dad when I was in high school and my mom as well.
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I think that one is really interesting because you may not know this about me, but I lost like nearly a third of my body weight in high school from exercising.
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I grew up and I was very very overweight kid. Like wow. A very overweight kid.
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Um and that was like taken before I lost all that weight.
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I look like a different person 6 months later. What was the secret? Don't eat and exercise.
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>> [laughter] >> Or I guess eat a lot less and exercise. That that old formula. Yeah, that old formula.
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Calories in, calories out. Yeah. Mhm.
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I would say the third one that comes to my mind is a picture that my parents have this picture at home of me when my mom and my dad and I lived in Alabama when I was a little kid.
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My dad would take me and he would put me up in this tree um right by our house.
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And like it's like a very warm uh warm when I think about that cuz like from that age I can't really remember any of it.
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I can't remember what happened, but I remember the way it made me feel, the feelings, yeah.
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Sounds like you're very close to your parents.
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Yeah, and my son my boys as well. Yeah. Yeah. Must be proud of you. >> Yeah.
23:33
And last question, um you can't be humble on this one.
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Uh which typically isn't a problem with Americans, but you know, we got we got we got we got to ask so say it.
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Um what is it about you that's enabled you to be so successful? Yeah.
23:47
Um I really when I put my mind to something, I do not give up.
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And I have a mental rule for myself which is um whatever I'm trying to do that's new just rush to the finish line.
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Like starting an idea I've been professionally operating in industries where I don't know what I'm doing.
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I didn't know finance when I started it.
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Didn't understand aerospace when I started this, right?
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And my viewpoint on it is whenever I try something new um try to fail as quickly as possible and don't be afraid of like seeing an idea through to failure because um I've found this pattern that it's usually in the process of failing an idea that I'm like, this is the actual idea.
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>> Yeah, but certainly you're learning.
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Yeah, this is the actual It's usually in the last 20% of trying a new idea out that you're like, well, this was wrong, but it >> [clears throat] >> it was it if I had not gotten to this place, I wouldn't have known that that was the idea. >> Yeah.
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So So, I think that that's like And the thing is like when I set my mind to something I do not give up. >> And you're all in. I am all in.
25:07
I'm also not a great multitasker.
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Like I do few things and I just do them.
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I'm a big believer in periods of deep imbalance.
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Like when you're obsessed, like you're all in and then you have this concept of kind of chapters in your life.
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I really I really resonated with me cuz I think maybe you want a life of balance over the course of your life, but there are going to be periods where you have to be very like imbalanced to to just achieve the goal and and get the joy of of going all in on something for a period. Yeah. Yeah. All right, man.
25:38
Balance The balance becomes a thing when you're a parent.
25:40
It's a little different, I think. Yeah.
25:41
You got to have a bit of it.
25:44
Man, this has been such a pleasure.
25:45
Yeah, this has been great.
25:46
>> Awesome, really enjoyed it.
25:46
Um I love the cardigan too, by the >> Let's let's change clothes more often and uh great to see you. Yeah, likewise.