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Robinhood 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 doesn't sound like a finance company.
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The name itself tells you a lot about what the company stands for and what the products help you achieve.
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The number one health and wellness podcast. Jay Shetty. Jay Shetty.
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The one, the only Jay Shetty.
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What's a childhood memory that you have that you feel has impacted the work you do today?
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If I think about the childhood memories that I have that stick out, they're all kind of like somewhat traumatic, I would say, but I I think I had a very happy childhood by and large.
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Like I I wouldn't trade anything, but my childhood was full of uh significant change.
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So, a couple of the memories that stick out was going to the airport for the first time.
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You know, I I grew up in Bulgaria, a very small country in Eastern Europe.
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Uh I was born in the '80s, which was a time of communism.
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So, it was sort of like there was the West and then the Iron Curtain, and not a lot of back-and-forth travel.
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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.
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My father was given an opportunity to to go to the US to study, which was, you know, the the events that kind of conspired to allow that to happen could not have conspired uh at an earlier time, right?
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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.
1:51
So, he kind of went off uh by himself to uh see if he could make it and make a new life for us in in 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, you know, my parents were like, you know, your dad's going to America.
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You're not going to see him for for for a long time, you know, and it ended up being I think about 2 years before before I saw him again.
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I'm not a very emotional person.
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I've kind of been described as stoic.
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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 and uh I wasn't like allowed to to cross because of course I didn't have a ticket.
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I just like cried and bawled my guts out because it kind of sank in that I wasn't going to see him for for a very long time.
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That's probably one of the one of the biggest memories.
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Another memory, you know, perhaps a little bit more relevant to Robinhood was after I had moved from Bulgaria to the US and uh 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 in the home country.
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So we we'd gone back and I remember the exchange rate of the currency, right?
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It used to be a sort of like two Bulgarian leva for $1, but I came back and it was 2,000.
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So Bulgaria had gone through this incredible period of hyperinflation where the the inflation of the Bulgarian lev was the the highest in the world.
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This was 1996 and I think 1997 as well.
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I think there were 2 years.
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And so, you know, my grandparents' pensions were just worthless.
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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.
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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?
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We have to like choose like the the budget potato chips or shop at Shoppers Food Warehouse rather than Safeway because they have like the dented cans and stuff like that.
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So I I think from very early on um I got this understanding of like the importance of money and saving it and protecting it and that that was that was just like driving so many of the decisions that my parents were making on a daily basis.
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Yeah, thanks for sharing both of those actually.
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They they're such unique perspectives.
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With the first one, what was it like when you reunited with your dad after two years and the last time you saw him you were absolutely in tears?
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I remember that very vividly too actually.
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Yeah, because uh I landed in JFK Airport.
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I was 5 years old and um it was my first airplane flight and I remember I was just like puking my guts out that entire flight because uh you know, they they had some they were serving some food on the plane and I was traveling with my aunt who was like 15 years old at the time and she was like a punk rock teenager.
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Like she loved American music. She had her Walkman on.
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She liked, you know, Nirvana and grunge.
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She later settled in Seattle which uh which I think made a lot of sense.
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But anyway, they they brought us the food in the plane and, you know, it's funny, you think plane food was like just this trash, you don't want to eat it, but I thought it was it looked amazing.
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So, I just kind of like engulfed all of it.
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And then, of course, that led to me puking my guts out.
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And so, I didn't have a very fun plane ride.
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So, I felt a little off coming coming out on JFK and I hadn't seen my my parents in a long time.
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It was like I spent the the majority of the past year living with my grandparents.
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My dad first went, then my mom joined him later, and then I joined with my aunt. And so, I was very shy.
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It was it was almost like meeting strangers.
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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 I'd stick one eye out and get a look at them.
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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.
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And um it was this like Plymouth Duster from the '80s.
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I don't know if you know the car, but it had a mask.
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So, back in the '80s, cars would have masks out front and that was kind of the style.
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Um 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.
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You know, landed in a new place, skyscrapers everywhere.
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You know, there was just I remember the skyscrapers.
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You know, just nothing prepares you for that when you're coming from a very very small country.
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It took me a little bit of time to like get reacquainted with my parents.
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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 and realized who they were.
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Yeah, I mean it makes sense because you you would separate so young that it's almost like you maybe haven't even had an opportunity to to even build a relationship at that age.
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Yeah, I mean when my dad left I must have been three. That's what I mean.
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It's I can't even remember being three.
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Yeah, I mean I have very few memories from before then.
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It was it was basically saying bye to my dad at at the airport.
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Maybe my third birthday party I vaguely remember. Two pictures maybe. Yeah.
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The first snowfall, but yeah, it's like three or four memories and that's basically it.
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Yeah, and with the with the second short story you shared about the financial situation and seeing the inflation in Bulgaria and coming back to that world when you when you went back, how did someone like that how did a kid like you shy separate from parents seeing that in Bulgaria get to Stanford?
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Like what is that journey look like because I can imagine that that wasn't a simple or easy journey.
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That doesn't seem like a natural Yeah. natural progression.
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So when I got to the US, I didn't know how to speak English.
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That's what I was I was going to ask that.
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Was that your first language? Yeah.
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And uh Bulgarian was my first language.
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I think it kind of became clear, you know, once my dad uh went to the US then my mom tried to teach me English, but you know, it doesn't really work unless you're kind of talking to kids and doing it on a daily basis and I I was three anyway, so it it would have been tough going.
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So when I first got to the US and um and I went to school in Bulgaria and I never really like found uh found a good group of friends in school either.
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I was kind of a a lonely kid.
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I mean it was preschool and kindergarten, so um I I have too many memories of it, but I would always switch schools too.
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Like when I moved in with my grandparents, they obviously lived in a different part of town, so I would go to a different school.
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So, I never really like I didn't like the idea of school, and I remember kind of dreading having to go in this new country, and you even more so I didn't speak the language.
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I remember just like kindergarten was was really hard.
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There were all kinds of different types of kids.
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Um I couldn't really like navigate my way around.
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I didn't know who was who.
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I couldn't even tell the teacher that I needed to go to the bathroom, so I'd kind of hold it in all day.
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And then I remember first grade.
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Um I have this like one memory from first grade, which was I was in a little reading circle.
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And you know uh you know like the kids do these reading circles and you're reading like these basic books.
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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."
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So, I think that's when I kind of had the realization that maybe I was like intelligent or uh I identified as as a smart person.
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And I think my parents did this like really valuable thing in hindsight, which was they kind of like advocated for me.
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So, they never got into like the PTA or school activities or volunteering.
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They they just didn't have time because my dad was in grad school and working.
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My mom was working as well just to to try to supplement.
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And um and they're like, "You know, our kid uh our kid is smart.
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He should be in the accelerated like math. Can can he skip grades?"
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They're always trying to like push the teachers to put me in in another grade, and the teachers were like, "Well, well, he's small, and he doesn't really have that many friends.
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We don't really think it's a great idea for have to have him skip a whole bunch of grades.
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But, um you know, they they kept pushing and uh eventually, you know, I was given an opportunity to skip a grade and uh 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.
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And then, um my parents also had this way of like applying pressure, uh 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.
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We could sort of like get kicked out at any time.
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There was this like fear of deportation always.
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And so, it was kind of like you got to do well in school because uh otherwise, we might get deported.
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And for sure, you're going to have to get a scholarship because we're not making any money in this family.
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So, you're going to have to like if you want to go to college and make it in this country and get an education, it's kind of on you.
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I would I would kind of hear this and really internalize it at an early age, but it was quite intense.
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It was like, all right, well, I better just like always ace all my exams and and do well because there was like all this pressure of the the family making it in this country that I felt a big part.
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Yeah, that I felt a big part of.
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Did you Did it ever feel like too much or it felt like it just got you to perform and you locked in?
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Like, did you find pressure to be your friend or did you find pressure overwhelming?
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Yeah, I I don't think that it ever felt like too much.
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I think school felt school, at least kind of in the uh early days, was relatively easy for me.
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Yeah, I mean, um I kind of like sailed through elementary school.
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Um by the time I got to middle school, I was probably like 4 years ahead of uh my classmates, three or four years ahead in mathematics, for example.
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Um my dad always emphasized mathematics, too.
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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.
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So, all of this other stuff, like, you know, language arts, you know, you'll you'll figure that out. Math is like the thing."
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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?
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Like, when did you learn calculus?"
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And he was like, "Oh, I I learned calculus when I was in graduate school."
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I was like, "All right, I'm going to do it in seventh grade." Did you succeed?
14:26
Uh no, maybe it was like 11th grade or something. Precalculus, maybe. Yeah.
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Then I, you know, started doing it outside of school.
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I started doing all of these camps.
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Like, there there was this one um there was this one camp called CTY.
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I don't know if you've heard of it.
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Um I did that in middle school.
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And basically, the way it worked was you take the SAT.
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So, the SAT is the um Yeah.
14:52
For any listener who's not American, college entrance exam here.
14:54
Um I think it's required again now.
14:57
For a while, it wasn't required, but basically, you have to take it to get into a good college.
15:02
And for this camp, CTY, um you 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.
15:16
In eighth grade, uh I got a pretty good score. I think I got a 1370.
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And I'd skipped a grade, so I was like a a younger eighth grader, too.
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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.
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He's like, "770 on the on the math in the SAT?
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Like, that's higher than I ever got, you know, when I was in college."
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Um, so I think at at that point, I just I kept getting this reinforcement that, you know, I was really great at math.
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I should I should keep doing it.
15:50
And I guess Stanford, uh, how how I came to Stanford was an interesting story.
15:56
The second vacation that my family took after we moved to America, they took me to California.
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And my dad was like reading all these travel books, and he had this book like the 1,001 Places to See Before You Die.
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And a lot of them were on the West Coast.
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So, like, the Grand Canyon and uh, Sequoia National Park, where you could drive your car through this like big tree.
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I don't know if you've seen pictures of that, but we drove through the tree, and we kind of did this road trip through California.
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And there was this one day where we drove through San Francisco, and we spent the night there.
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And it was the middle of summer, and it was raining.
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It was like close to 0° C.
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So, I had to actually buy a jacket because I was just unprepared for this.
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Um, and so kind of kind of this miserable day.
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And then we drove down, uh, we drove down to Stanford, which is in Palo Alto, about 45 minutes south of the city, and everything cleared up.
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The sky was blue, not a single cloud in the sky. Um, it was sunny.
17:04
There were like, I think summer school was in session, so kids were like throwing Frisbee at the oval, and there were like kids picnicking in the main quad.
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And I just remember it felt so ideal idyllic particularly juxtaposed against how horrible San Francisco was that day um that I was like this is where I want to go.
17:26
Like my parents have been spending all this time talking about college, this seems like a fantastic college.
17:32
So back then I wanted to be a lawyer.
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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 going to I'm going to go and be a lawyer.
17:41
I had seen A Few Good Men, you know the Yeah. Tom Cruise movie. Yeah.
17:45
I thought being a lawyer was so cool cuz you get to like really get the people like these intense arguments.
17:52
I think I I I always remember that even when I applied for college, I applied early to Stanford as a result.
18:00
But uh the the lawyer thing I kind of grew out of.
18:03
For a while the American dream involved home ownership.
18:05
And I have mixed feelings about it to be honest because 401(k)s are fantastic and in particular if if an employer offers a 401(k) with a built-in match and they're matching your contributions, you know, that that's free money.
18:23
I think there are a couple of problems with traditional credit cards.
18:29
One is Was Robin Hood the story ever a part of your early life or was that just a name that stuck out as a name in and of itself? Yeah.
18:41
Did you watch the cartoon when you grew up or did you read the book? I did. Yeah.
18:45
No, I I watched the cartoon.
18:45
I was a big fan of that and of course Men in Tights uh was was another great one. Yeah.
18:50
The origin of Robin Hood the name was you know, the finance industry had a bad rap in the in the early part of the last decade. Mhm. Still does really. Still does.
19:04
So um you know, I my my girlfriend uh Selina uh my wife now but my girlfriend at the time, she was kind of like she started dating me. I was this entrepreneur. I had this idea.
19:19
And she had to kind of explain to her friends what I was doing.
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And And she was like a doctor and medical researcher at the time.
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So, it's a very concrete thing, you know?
19:29
Her friends were mostly researchers and doctors.
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So, she was like, "Well, uh Vlad, you know, he's in finance."
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But, then they'd be like this groan, like, "Oh, you know, they thought I was some kind of investment banker or something."
19:44
She's like, "No, no, no, but not that kind of finance.
19:45
They're like the Robin Hood of finance.
19:47
They're trying to help the little guy giving them tools to to invest and manage their money."
19:53
And so, when we were kind of coming up with the name, that was a name that that we got excited by.
19:57
And there were a couple of other names, too.
19:58
Like, uh we thought about naming the company Omaha, actually.
20:03
And uh we got pretty close to that one.
20:05
And in hindsight, you know, Warren Buffett and Charlie Munger were were never big fans of Robin Hood.
20:12
They were They were kind of like crapping on us from time to time publicly.
20:16
So, sometimes I think if we had named the company Omaha, maybe we wouldn't have had that element.
20:20
I'd also never been to Omaha.
20:23
So, that kind of like uh that sealed it for me. So, Yeah.
20:28
Robin Hood was a very controversial name.
20:29
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.
20:39
It doesn't sound like a normal finance company.
20:42
sound like a finance company.
20:42
And And And I think in hindsight, that was a really good thing because it's just memorable.
20:48
And it's like emotionally gripping.
20:50
And the name itself kind of tells you a lot about what the company stands for and what the products should like help you achieve. Yeah.
20:59
How old were you when you first started investing?
21:00
Yeah, you know, it it ties into what we were talking about earlier.
21:05
I was at home during the summer cuz, you know, my parents were working and I spent a lot of time with computers.
21:10
Um and one of the early things I discovered was like building a portfolio on Yahoo Finance, actually.
21:19
And this was 1997 late '90s. Wow, really, yeah.
21:25
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, 3Com which made the Palm Pilot, one of the first consumer PDAs at the time.
21:45
PDAs, oh my gosh, that Yeah, yeah, yeah. Yeah, I remember PDAs.
21:48
Um well ahead of their time, right? Yeah, very. I did decently well.
21:51
In hindsight, everyone was doing well on all those stocks for quite a long time cuz it was the the dot-com bubble.
21:58
But, um my parents basically saw an opportunity to motivate me to do well on the SAT to qualify for this camp that that we were talking about earlier.
22:09
So, basically they were like if you get above uh I think it was like a 1,300 on the SAT, we will let you invest with like the dollar amount of your score.
22:22
It was something like that.
22:24
And so, you know, I was like very motivated by this.
22:26
Um And so, when when I got my 1370 and my dad and I kind of he funded an E*TRADE account for me and I started investing. No way.
22:39
Do you remember your first investment? Yep. Yeah.
22:41
Uh I bought 3Com, the the company that made the Palm Pilot. Yeah.
22:47
My feeling was that this device was so interesting and they had started giving them out to my parents who by that point were working at the World Bank. Mhm.
22:56
And I was like, all right, well if if the World Bank is using them, this must be a company that, you know, is is growing and they'll probably be around for for a while.
23:07
And plus the device was just super cool.
23:11
You know, pretty 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.
23:16
So, um and actually through that I learned a lot about investing because what happened was there was a spin-off.
23:22
So, first it started at as 3Com, but then this Palm Pilot business was growing and they spun it off.
23:30
Uh so, then I had two stocks and then I started getting the prospectuses in the mail and the voting documents and I learned all about like shareholder proxy voting and and all of this stuff that a normal 12-year-old probably wouldn't wouldn't uh have occasion to learn about, but because I was invested, I actually like felt compelled to learn more.
23:52
So, yeah, I I think that really set me off on a lifetime of learning about investing in finance.
24:00
Yeah, how much how much did you make or lose?
24:02
At first I was I was up quite a bit.
24:04
Then in 2000, I think my my portfolio dropped to maybe like 20 30% of what I started with.
24:14
And then it I think it it probably took another 10 years beyond that for for that portfolio to be in the green again. Oh, wow.
24:21
But I mean, I would say it's the great thing about getting started young in general, not just for me, you have plenty of time to to actually like make up for the mistakes and you know, compounding over a long period of time corrects a lot of mistakes.
24:36
So, I think generally speaking, the earlier you can get started in investing, the better.
24:43
Yeah, that's it's fascinating hearing about your own investing journey and starting at 12 is is pretty young.
24:46
I mean, that's that's pretty impressive that you were able to compute and factor that in.
24:54
Have you ever taken an IQ test?
24:56
Like do you know your IQ? I have not. No. Okay, yeah.
24:59
I'm just see I was intrigued. Yeah.
25:00
Just based on everything you've been saying, I'm just like it's it's rare that I've I've met someone who's who's felt that they've always excelled since an early age.
25:08
Like that's not as common an experience anymore. Yeah.
25:12
I don't know if you meet people like that.
25:14
I mean, I do think that Stanford in particular uh is is kind of a interesting amalgamation of people.
25:23
So, uh you have a lot of people from like diverse modest backgrounds uh that come to Stanford and usually those people have like excelled academically, which is pretty amazing.
25:38
And then you also have people that uh come from like wealthy families from all over the world.
25:47
Yeah, I think some people consider that to be not ideal.
25:50
Like maybe it should all be merit-based and everything.
25:55
But I I think it actually has worked fairly well because what happens is um the the folks from modest means that have like really high horsepower get to make connections.
26:07
And you make connections with all these people and it kind of unlocks business opportunities for you.
26:13
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 uh indirectly or directly investors in Robinhood or they they advised us with certain things.
26:43
I think everyone is so diffuse in general because people people grow up in different places, but like college is one of those moments that people get brought together and you do in in in a place like Stanford in particular get to encounter a lot of a lot of really special people.
27:01
And you know, when I came to Stanford I I actually had no conception of going into business.
27:07
You know, that I kind of stumbled into that later.
27:10
By the time I got to college, I was interested in theoretical physics.
27:14
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? Mhm.
27:22
I I had read about relativity when I was in high school and I was just like the 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?
27:44
Um and then I you know, you try to understand more and deeper.
27:46
Um And the question that really motivated me was like why are why why do the laws of gravity look like this, but like all of the subatomic particles like all all the laws around particle physics look different and is there one theory that is basic that unifies both of them?
28:05
This this sort of like unification of quantum gravity was this topic that really interested me.
28:13
So I I came to Stanford to study that and that's kind of what what pushed me into into eventually doing math and and going to UCLA to study math with with a professor named Terry Tao.
28:25
But like if you think about that group of people, the folks at Stanford who come to study theoretical physics, um and you don't do that because there there's very little money in it particularly back then, right?
28:37
This was like pre data science and applied machine learning.
28:44
Um So yeah, actually by by the time I I got to that point, I was looking around and I'm like, "Wow, I'm I'm the dumbest person here.
28:51
These are just I'm surrounded by like some of the smartest people I've ever met."
28:55
Wow, and then and how did you get distracted from that pursuit?
29:00
Uh I was here at UCLA studying math and two things happened.
29:04
Um the number one thing was when I decided to go to graduate school and uh I I kind of I think my bubble of the academic world kind of burst a little bit because I had this romantic notion that you would kind of spend all of your time thinking about difficult problems and just like being creative.
29:30
It's almost like being an artist.
29:33
Like maybe there's not much money in it, but you spend a lot of your time just like practicing your craft, right?
29:39
But then I I was given this book.
29:41
It was called like The Mathematician's Survival Guide.
29:45
And it was like chapters about how to deal with the administration and the bureaucracy of the graduate department, how to advocate yourself with for 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.
30:02
And I think at that point I was like, "Oh man, like this is like a career and it's not like the career that I wanted."
30:13
Another thing happened at the same time.
30:16
So, my first month in grad school was September of 2008.
30:22
And Lehman Brothers went under that month.
30:25
It was It was the start of the global financial crisis.
30:27
You and I are basically the same age, I think, born in '87, right? Yeah, '87. Yeah.
30:33
This was kind of like uh uh maybe for you, for me certainly, like my uh the the folks that graduated in my year of college, some of them went to finance and some of them even went to work at Lehman Brothers.
30:49
And it was sort of like 1 month after they joined, you know, there was like photographs of them carrying their stuff out of the offices in boxes, right?
31:00
So, yeah, that that was a a tough time for for a lot of people.
31:05
A lot of my friends' parents lost their jobs that year.
31:07
So, it was the global financial crisis.
31:10
And, um Yes, so somewhat oddly, my good friend from college, whose name was Baiju Bhatt, who I ended up starting Robinhood with, he had gotten a job in finance kind of on a whim.
31:24
And and he managed to convince me that this time was the best time to start a finance company.
31:28
And of course, I wasn't like super committed to my PhD path because of of all the other stuff I mentioned.
31:36
So, I was like, "You know what?
31:40
This sounds like an interesting problem.
31:42
Let's let's see if we can do something here."
31:44
So, we rented a little house in South San Francisco, in the South Mission.
31:49
Um where we were paying like, uh, $300 a month in rent.
31:53
Uh, we're all living together.
31:57
Uh, I had to take care of this lady's cats, which was why the rent was so cheap.
32:01
That was kind of my first experience with entrepreneurship.
32:03
What attracted me to it was kind of the same thing that attracted me, um about math and and physics.
32:13
It was the act of creating something with you didn't really have to listen to anyone telling you what to do.
32:22
Uh, you could use your entire mental faculties and your creativity to like determine your own success and your outcomes.
32:30
You know, just like a couple of people who are really passionate and committed could build something and, you know, actually use it as a vehicle to sustain themselves economically.
32:40
So, um that idea, when I kind of discovered it, and I never really like thought of myself as an entrepreneur before.
32:48
I mean, it it wasn't really something that was common in the East Coast, to be honest, or in Bulgaria.
32:54
I mean, you had some, um but not technology entrepreneurship really.
33:00
And then when I kind of started doing it, and I started like programming and writing code, then I just like found the whole thing really intoxicating.
33:07
So, um even though we didn't have success, it basically our first idea failed within a year, um I just kind of knew that that I wanted to do it.
33:20
So, that that gave me the confidence to drop out of of UCLA, start something a little bit different, and it was uh it was the third idea that that we had that led to Robinhood, and that was kind of the one that really worked.
33:34
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, um that I I just knew I had to keep doing it.
33:50
Yeah, I mean, democratizing investing is such a at least at the time as well was such an ambitious goal to think about trying to get the average person to be able to have access to something that wasn't accessible to them just a few years before, especially in a place that seemed volatile.
34:07
You needed a lot of capital to get started.
34:10
I want to do a bit of investing basics for people who are listening, who may or may not be using your platform already, and want to understand a bit more about it.
34:19
If someone's sitting there going, and I remember being this person, so I remember 2013, I'd just left the monastery that I lived in for 3 years, and I'd gone back into the world of work, and I had a mentor who told me exactly which uh crypto to invest in in 2013. Which one did he say?
34:37
Well, at the time he was like Dogecoin?
34:40
No, no, it definitely wasn't.
34:43
At the time it was like um Ethereum, Lithium, like Oh, yeah. Litecoin, yeah. Yeah, yeah.
34:48
And so he was he was mentioning all these places.
34:49
And I remember in 2013 with very little capital, very little investment knowledge.
34:56
You see, now if someone said my uh mentor and uh what what did you call him? Your guru?
35:05
Yeah, yeah, mentor, yeah.
35:05
If if now someone's like, "Oh, my guru told me the which cryptocurrency to uh invest in."
35:09
I would be like, "Hey, you should be a little skeptical of this mentor."
35:14
But in 2013, that was actually like uh I should have listened.
35:19
before the space got uh got a little a little corrupted before the the pretenders came in.
35:26
Yeah, no, he'd been successful in tech investing and things for years and Yeah. I I'd met him. He was I was what? 26 at the time. He was 55. Oh, wow. Okay.
35:34
he you know, he'd he'd been around.
35:34
He was he was a very smart, thoughtful thoughtful person.
35:38
I didn't really understand anything about investing and and I grew up in a family where we didn't have a lot growing up.
35:44
There wasn't I didn't see my parents invest.
35:45
I didn't I didn't see them have that.
35:47
And so I remember being like he was just like, "Just put $1,000.
35:51
Put $100 into each of 100 pounds." I was in London.
35:55
So he goes, "Just put $1,000 pounds into $100 pounds into each and just see how it goes."
35:58
And I remember being so risk averse that I didn't even want to put $1,000 pounds into it.
36:02
And that's probably all I had at that time.
36:06
I was working a job where I made 31,500 pounds a year at Accenture. Mhm.
36:09
And I could in the UK, right? in the UK, yeah.
36:14
I could have put $1,000 pounds in. I didn't.
36:15
If I did, I it would have been a great investment.
36:17
Um but the question I'm asking is a lot of people don't invest because they don't have enough knowledge, but they also feel they don't have enough money.
36:26
At what point should you feel confident and comfortable to start investing? What amount?
36:32
And yeah, let's start there.
36:33
Yeah, I mean, a lot of Robinhood customers start with as little as $10.
36:38
And I think that was actually the innovation that Robinhood unlocked.
36:43
So, before we came into the mix, uh you used to have to pay a trading fee.
36:49
And if you started in the UK, you probably paid a trading fee at 2013 as well. I mean, still do.
36:55
The that market hasn't gone zero commission yet.
36:58
Let's say you have to pay $10 per per trade.
37:03
Well, that's, you know, uh if if you make a $100 investment, that's 10% of the of the actual value in the investment.
37:10
And if you want to sell it, you know, then that gets to 20% for the round trip.
37:15
And so, it doesn't really make sense to start with $100 uh in that sense because you have to count on many years of appreciation to just pay for your transaction fee.
37:25
But if you lower the fees to zero, you could start with any amount. Which is what you did. Exactly.
37:32
And and that was kind of our big uh that was that was sort of one of the three big innovations that I think made Robinhood possible and really made it take off.
37:41
It's eliminating the commissions and lowering the account minimums to zero.
37:45
Because a lot of brokers also had account minimums.
37:47
You couldn't even open an account unless you had $2,000 or sometimes more in there. We said, "You know what?
37:54
We really wanted And and the reason, by the way, that um they had these account minimums was these companies were not uh automated enough to service small accounts.
38:06
They would just lose money on them.
38:08
And so, we said to ourselves, "Well, it it would be uh it would not really uphold the mission of a company named Robinhood to have an arbitrary account minimum. We should make it zero.
38:22
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.
38:34
Like let's point everything towards uh 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 to the market.
38:47
And you know, 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.
39:02
So we kind of like that, but yeah, a lot of customers start with just $10 or even less.
39:10
And what what would you say are the three biggest mistakes new investors make when they don't know what they're doing?
39:16
I think it this is a little bit strange given like so much of Robinhood at least in the public realm is you know, meme stocks and meme trading, but I I think probably the biggest mistake one can make is buying something just because someone on the internet like thinks that you should buy it and is posting it.
39:37
Um I'm I'm personally a big believer in thinking for yourself.
39:44
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.
39:50
Like sure, use it as a signal, but like make your own decision and and kind of think through it yourself and don't just rely on the opinions and commentary of of others. Mhm. Any others?
40:05
Big mistakes that people make?
40:08
I think just like waiting to get started. Mhm.
40:10
You know, now particularly with the tools, it there there's, you know, with with Robinhood kind of entering the market, not just Robinhood, but most of the competitors that at least survive in the space, there's no maintenance fees, no kind of onboarding fees.
40:30
Keeping money in the savings account, where in particular now with high rates, you know, a lot of the banks are offering you 0%.
40:37
So, your your your money's just losing money sitting in savings, not not doing the simple things to optimize I I think are mistakes.
40:48
And there is so much free content out there on the internet, on YouTube, and um you know, that just spending even 30 minutes to 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 $1 as you can with thousands of dollars.
41:20
And you know, through another thing Robinhood pioneered, fractional shares.
41:23
You can invest any dollar amount in pretty much any stock.
41:27
You don't need a whole share.
41:27
So, one of the first things that we did, which we thought was very cool, was uh you have, for example, companies whose share prices are hundreds of thousands of dollars per share, like Berkshire Hathaway A shares, for example.
41:43
And uh you know, they they would almost pride themselves on having the share price that's inaccessible to normal people.
41:50
And not everyone could be invited to this club of like shareholders.
41:56
And they have the annual shareholder meeting.
41:57
But, you know, Robinhood figured out how to break up these stocks into pieces.
42:01
You can buy a dollar of it.
42:03
And you know, then you had all of these retail investors showing up at the shareholder meetings.
42:07
And I think that made those guys very angry actually in hindsight.
42:12
Um but it was very satisfying. you even pull that off?
42:15
Like how how's that even possible?
42:16
Yeah, it was a big technical challenge.
42:18
Yeah, big technical challenge.
42:21
Um basically, what happens is the company has to keep inventory in all of these names, and you imagine like Let's say, I mean, the way that this works is probably a little bit more complicated, but to simplify it, let's say 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.
42:48
And then, you know, when the total sum exceeds one share, then we go out and buy another one.
42:55
So, we're kind of like managing this portfolio of, you know, right around one share in in every instrument. Yeah. Yeah.
43:06
And then we can just do that through technology.
43:07
I mean, we have great engineers and data scientists and brokerage experts that that can manage the system.
43:15
If you had to say that for a new investor, there's certain factors they should understand about a stock before investing, what would you say are the three key things that they should know?
43:26
An amount of information they should have before they go in and put any amount in.
43:29
I guess without giving people too specific investment advice because I Yeah, I'm kind of not uh not really allowed to do that.
43:38
Um I'm a big proponent in investing in companies that create products that you like and and use.
43:48
You know, if if you use the product, if you think that the company that's making those products is improving the products, and if you're bullish on it could continuing to be useful, and you think it's trending in the right direction, um that that's been sort of my philosophy.
44:06
It's how I got started too.
44:06
And I think that's why if you look at the Robinhood customer base and and we're now publishing the stocks that our customers um are investing in most, uh we call it the Robinhood Investors Index, it tends to be consumer companies that make products.
44:24
Um They're sort of like heavy in innovation.
44:28
So for example, Nvidia, Tesla, Apple.
44:31
These are some of the most commonly uh invested stocks.
44:36
And it's because our customers are younger, they believe in the future, they tend to be early adopters of technology and innovation.
44:45
They believe in artificial intelligence, clean energy, electric vehicles.
44:47
Um So yeah, that those tend to be like both sort of like some of the most held instruments and some of the first instruments that uh that people kind of buy into.
45:03
We We also have a product first trade recommendations.
45:06
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.
45:15
I don't really know I don't want to pick my own stocks.
45:20
Over time we're increasingly getting better and better equipped to serve that customer.
45:24
So now, you know, you can just answer a couple of questions and we'll 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.
45:38
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.
45:46
I like to say that it's like playing a violin.
45:48
You're not going to learn to play a violin really well by like reading a book on how to play the violin.
45:54
Maybe if you're already really, really good and you're trying to get a little bit better, understanding the theory behind it is 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 the more you do it.
46:10
One of the things I became interested in when I was an undergrad is options trading.
46:13
A lot of my students my year were applying to be options traders.
46:17
That was like a before I went fully electronic, that was a job that people had, right?
46:22
And there was this book like options, futures, and derivatives.
46:30
Uh it was called something like that by Hull and it was like this thick dictionary explaining how all these option strategies worked.
46:35
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, um I think that would be just like an incomprehensible barrier.
46:53
But like you build up some intuition for these things by doing it and it's sort of like makes you more motivated to read the literature and it also sort of like gives you more real-world knowledge than than you could ever get from just reading.
47:10
So I think just like getting started and doing it is is the most important thing.
47:13
It's it's a skill like playing a sport or or playing a music instrument more than just like an academic pursuit.
47:20
Yeah, how many of you users do you find going beyond just that first trade?
47:25
Do you have a percentage of users that you know go beyond their first or second trade and kind of continue on and build and grow versus like they tried something out and kind of just said, "Oh, this is not for me.
47:35
I don't know what I'm doing."
47:37
With consumer technology, there's sort of a funnel for everything.
47:41
You know, there's people downloading the app.
47:42
Not everyone who downloads the app actually ends up creating an account.
47:46
Not everyone that creates an account funds it.
47:49
Um and you know, we're definitely focused on making sure that we have a really good funnel, that it's clean, that people who, uh, you know, enter are getting exactly what they want.
48:04
I'd venture to say that our funnel's probably much more efficient than those of our competitors.
48:10
Um, that said, there are things that certain customers want that we're not like ideal at offering now.
48:19
So, for example, if you want an advisor, a lot of people want a a financial advisor.
48:24
They want someone to manage their money for them, tell them exactly what to do.
48:28
Um, we don't have a great comprehensive solution for that yet.
48:32
Although we're working on it, I think we will get there eventually.
48:37
Would it be AI advisors or I think AI's certainly will be involved.
48:39
Um, if not, you know, replacing the advisor, certainly augmenting and giving them kind of superhuman capabilities and the ability to service more customers.
48:51
Um, but yeah, I I think that's certainly one of the most interesting applications of AI in financial services.
49:00
But, uh, yeah, right now the platform is like very self-directed.
49:05
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 we do attract some of those people that are really want to be hands-on with everything because it's a very easy to use tool.
49:29
We have we tend to have the lowest pricing across all, uh, services that we offer.
49:34
We sort of like from the very beginning have, uh, built with like the self-directed retail customer in mind. Mhm.
49:45
So, I think for that customer, there's probably no better fit.
49:48
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 there there's a lot of people like that.
50:01
They're like, "I don't even want to listen to a financial advisor cuz I feel like they're just going to talk down on me in a in a good scenario or rip me off in like a bad scenario."
50:13
And those people are like uh yeah, like they they tend to gravitate toward Robinhood.
50:19
At a time when investing's becoming more talked about, more diverse, there's more options, I want I want to get your personal opinion on people thinking about stocks versus people thinking about property, for example.
50:30
Like which of course is far more expensive, but I feel like we've seen a generational shift from people wanting to own their homes, purchase their homes, get a mortgage versus now people moving towards renting more.
50:40
Are you seeing that trend and are you seeing people move towards stocks?
50:45
Are you still What what's your personal take on people choosing between buying and renting versus using that capital elsewhere?
50:51
For a while the American dream involved homeownership. Yes. Yeah. Right?
50:58
Um and I have mixed feelings about it to be honest because there there's a lot of like corporate interests that are pushing for more homeownership.
51:08
I mean, if you're a bank and you're giving people mortgages, you know, a lot of people uh criticize leverage in the stock market.
51:15
Um but if you think about the amount of leverage in a 30-year fixed mortgage, Mhm. right? It's like ungodly. Uh right?
51:28
You end up paying much more uh in interest than you know, even the the principal uh sometimes.
51:33
Yeah, I mean, again, without without getting into investing advice, uh real estate I think has been tempting for people because like you can see it, you can touch it.
51:45
It's sort of like this thing that you can use and it feels like an investment even though it it really isn't um especially when you give it when you take into account all the fees like the brokering fees on either side of the transaction, property taxes, maintenance.
52:02
Meanwhile, you know, in the stock market you 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 market's increasingly global.
52:18
Um I I think and I wrote this article back in 2021 uh investing in the global markets is is really the new American dream.
52:27
And actually during the hyperinflation episode in Bulgaria in the '90s my grandparents um didn't have access to any tools that allowed them to invest in equities.
52:40
So uh my grandfather who is uh a medical doctor on Navy vessels in Bulgaria he had like a contact on the port side who would basically give him access to copper cookware.
52:55
So he would take his Bulgarian levs from his pension and get copper cookware.
52:59
We had this closet they had their this closet in their apartment that was just full of copper cookware and that was like that was their Robinhood app.
53:08
Like that's where they would self-custody their wealth.
53:10
I mean right now you can buy any stock uh you can buy crypto.
53:16
We started offering crypto in 2018 for uh uh the lowest fees in the industry.
53:21
And you can get, you know, you can get access to ETFs. You can have gold ETFs.
53:30
So really in your pocket you can diversify and uh hold pretty much any asset.
53:36
And you can even do real estate through the form of REITs and and other publicly traded ETFs.
53:41
Yeah, you can get exposure to that asset class, but like real estate investing in terms of buying a primary home, yeah, it's it's uh I think the story behind that is uh is difficult.
53:54
It's like very illiquid, high transaction fees.
53:57
You're kind of like picking uh a particular neighborhood.
54:01
So, even if the global real estate market does well, something could happen to that neighborhood, you know?
54:07
They could build a power plant next door and you're kind of in in big trouble.
54:12
So, even though I'm not making any uh investment recommendations, I think it's yeah, it's it's it's hard to kind of like equate those two.
54:22
And I think really the future is going much more toward investing in in publicly traded stocks and cryptocurrencies. Yeah.
54:29
Yeah, that's why I wanted to ask your opinion.
54:33
So, yeah, definitely not official advice.
54:35
I I read an amazing stat that said the next generation is set to inherit an estimated 72 trillion dollars over the next 20 years with 27 trillion going to millennials alone. Yes.
54:47
And that blows my mind because first of all, I'm like, who are those millennials?
54:52
That's a big wealth transfer. Yeah. wealth transfer.
54:55
When someone like you hears that, what goes through your mind?
54:59
What goes through my mind is there's a big opportunity for Robinhood.
55:01
There's a big opportunity for us because we've got more millennial app users than basically all of the incumbent brokerage competitors put together. Even more so, Gen Z.
55:12
I think if you look at Gen Z, over 60% of our competitive set just uses Robinhood.
55:20
Um and so we already have relationships with these folks.
55:22
Um and we're offering more.
55:24
Like we don't just offer stocks.
55:26
We have an awesome credit card.
55:29
We have among the best retirement products, an amazing retirement product with the first built-in match uh in an IRA.
55:34
We have a high yield product and we're adding just more and more over time.
55:43
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 offers and and rates and the user experience.
55:55
So, um, yeah, I 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 uh I think we're rapidly getting there.
56:11
What do you think you've done differently to attract those groups and those communities into your space?
56:16
Like what what what's been the big difference?
56:18
I'd like to say that uh the way we communicate and the marketing is a big part of it, but I think the biggest thing is um like the the economics, getting rid of account minimums and trading commissions, removing the friction.
56:35
These are all barriers that um prevented people.
56:39
Yeah, I I think I mentioned to you earlier that, you know, before Robinhood, if you had a hundred dollars, it would have just been nonsensical to invest.
56:47
The fees would have just ripped apart your portfolio.
56:53
And, you know, a lot of times there were barriers that prevented you from get getting started in the form of minimum account balance requirements as well.
56:59
So, we got rid of all of those and basically that allowed a whole bunch of customers that were previously underserved to be able to open accounts.
57:09
Um and, you know, unfortunately, a lot of those customers were from disadvantaged historical demographics and, you know, I 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.
57:25
Yeah, similar to the to the property question, I wanted to know your take on traditional retirement accounts like the 401k?
57:34
Like in comparison to the more aggressive aggressive growth strategies in stocks?
57:40
Like what's your what's your take there again from an opinion base?
57:42
Yeah, so 401ks are fantastic for those that you know, are privileged have an employer that offers one.
57:53
And in particular, if if an employer offers a 401k with a built-in match and they're matching your contributions, you know, that that's free money.
58:02
So that that value prop is very very strong.
58:04
But you know, not everyone has access to that.
58:10
And so what we've done is and actually I think over time uh users and kind of end consumers can be less reliant on individual employers.
58:24
And 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.
58:31
You know, maybe you'd work at the same employer for 20 30 years.
58:35
Then you'd retire and you would kind of subsist on the the pension plan.
58:39
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 in cloud of uncertainty, right?
58:53
So I think the the upshot is people have to take it upon themselves to to be responsible for their own finances and their own retirement.
59:02
I don't think that you can rely on the government.
59:04
I don't think you can rely on any one employer.
59:10
Many people aren't sticking around at a single employer for very long now, right?
59:15
And so what's important is having these investment accounts not tied to the employer and actually tied to the user.
59:23
You're kind of carrying around your your retirement with you.
59:25
That's why we launched our IRA products, your individual retirement accounts.
59:30
So, we offer Roth and individual retirement accounts.
59:35
If you're a Robinhood Gold subscriber, you get a 3% match on contributions.
59:41
So, basically you might not have an employer matching you, but Robinhood will match out of our own economics.
59:45
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.
59:58
You know, we had end of 2023, which was the first year that we launched our retirement products, we had about 1.
1:00:04
7 billion in assets under custody.
1:00:09
And that's gone up uh more than 6x since the beginning of the year.
1:00:13
So, now we have close to 10 billion in assets in in retirement accounts at Robinhood.
1:00:17
Was that was that a more recent development or was that something that was always part of the plan?
1:00:24
We had always talked about offering retirement products.
1:00:26
Um there's just I mean the the financial space is so big and there's so much that we want to do um that the like order of things becomes important and which what's first and you know, there there's sort of like always a balancing act between innovative new features that you don't find anywhere else but Robinhood um and those are things like our 24-hour market offering, which allows you to trade stocks 24 hours a day.
1:00:56
And we were the first to market with that for individual stocks like Tesla and Nvidia and Apple.
1:01:03
Things like retirement accounts that others offer, but you know, we we'd have to kind of like catch up and add them.
1:01:09
And of course, we try to put our innovative twist like the matches onto them.
1:01:13
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.
1:01:24
Um which, you know, as we're expanding globally and servicing other customers in in in different countries is also a a giant area of investment for us.
1:01:37
It's so interesting, isn't it?
1:01:37
Because I feel like you're seeing all these new disruptive platforms, technologies give people so much uh opportunity that wasn't accessible before, but often they command a even more scrutiny and uh challenge than banks or any anything else did in the in previous years.
1:01:59
I was wondering what your take on the GameStop movie was.
1:02:00
I don't know if you saw it.
1:02:02
Did you get to see it or I saw some clips of it.
1:02:06
Okay, you haven't watched the full thing. No.
1:02:07
I mean, I saw the clips that I was in, of course.
1:02:10
I wanted to I wanted to see how I was portrayed.
1:02:11
Uh certainly not out of vanity or anything like that.
1:02:16
Did they have to ask permission for that? No.
1:02:19
It was kind of the weirdest thing.
1:02:22
You know, your likeness and name can just be kind of taken and monetized, and I don't think the movie made very much money, but um yeah, they certainly didn't ask for permission. Right.
1:02:32
And then when you saw the clips of you in, how did you feel?
1:02:36
Like how did that I thought they kind of got my mannerisms right.
1:02:40
I mean, it made sense cuz I think they probably looked at interviews that I'd done, and you know, they they basically had figured out sort of like my way of speaking, and uh you know, the the actor that played me was very good-looking guy.
1:02:53
You know, the Winter Soldier.
1:02:55
Um I think they had to kind of make him look a little uglier so he could he could more accurately portray me, but hey, I'm not complaining.
1:03:03
Um the plot was obviously like complete fabrication.
1:03:05
I think um 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.
1:03:18
So, um I don't think they could actually like uh explicitly say the conspiracy theory, but they were just evoking it in all sorts of ways.
1:03:32
So, those parts were fictional, but I think they got my mannerisms right.
1:03:37
And then I I mean I saw you do at the time you did tons of interviews.
1:03:38
I think you did a Clubhouse with Elon and Yeah.
1:03:43
There were there were a bunch of different things that I I I saw that you did at the time.
1:03:46
What does it feel now reflecting back on that time?
1:03:48
Cuz I imagine that there was so much scrutiny, there was so much conspiracy, there was How how have you felt about it since then?
1:03:56
Like now you can look backwards on it, I guess, as opposed to at that time where you you're looking right at it.
1:04:03
What's changed over the last 3 years?
1:04:05
Yeah, you know, from time to time I do look at like some old clips um of of my interviews back then and you know, I kind of feel bad for myself because I I was a I was like a little kid, you know, it just the company was private.
1:04:19
Um I was always particularly at that time, I was just very focused on getting the technology to work and I didn't really want to be in the public eye and I 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.
1:04:41
I think what happened was uh you know, GameStop, for better or worse, put Robinhood sort of like firmly into the zeitgeist, right?
1:04:53
Before it was a little fringe.
1:04:55
I mean, we still had a lot of customers, but we we weren't we weren't like a politicized brand.
1:05:00
Um 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 that was my approach to interviews for a while.
1:05:24
I was like reading my points and trying to communicate the facts of the message.
1:05:27
But um you know, now now I know now that I'm much more wise and mature and uh still not nearly as uh as experienced as you.
1:05:39
You've probably done thousands of these, right?
1:05:41
But it doesn't really resonate with our audience to just like read the facts.
1:05:47
You have to give some emotion and some feeling and have some empathy and you know, you have there there has to be a little bit more.
1:05:55
a little bit more. So, I've I've had to kind of learn all that stuff and uh nowadays just look incredibly inauthentic and robotic and um 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
1:06:15
had to be something that I learned um in 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 advisers and lawyers and you know, professionals that are trying to protect me and the firm saying, "Don't say this. Be careful not
1:06:35
Be careful not to say this.
1:06:36
Be careful when you're kind of making this point that you don't make people think that you're actually meaning this."
1:06:42
So, any of 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 interpreted. hearing about it. Exactly.
1:06:55
Yeah, eventually to to some degree like uh you practice enough and it becomes second nature and you can kind of rip up all the guidelines and be pretty confident that you're doing the right thing.
1:07:08
But I think it has to be authentic and back then I was just like very inexperienced at all this stuff.
1:07:14
I sort of undervalued it and I think it took a while for me to get to like a basic level of competency. Yeah, no.
1:07:23
I mean I think it's fair.
1:07:23
I think that every founder goes through that journey of like you've been building something in private in in a room or an office for so many years and all of a sudden your company gets notoriety in mainstream culture. Yeah.
1:07:37
And then all of a sudden you're having to do things that you don't necessarily set out to do as a founder.
1:07:40
I feel like even actors go through that where you're just working on a movie on a set. Yeah.
1:07:46
And then you have to go promote the movie but or or you're seen in public and something impacts the movie and that wasn't necessarily what you signed up for.
1:07:54
What were the actual ramifications or consequences of all of that?
1:07:56
Like what actually how did that actually affect Robinhood apart from the cultural propelling?
1:08:02
Well, I think a lot of a lot of people who were just like looking at me at the time and maybe were not Robinhood users themselves.
1:08:11
Maybe some of them were Robinhood users but others were kind of thinking about it and were aware of it.
1:08:17
Um I think some people got the impression that I just like maybe didn't care about our customers.
1:08:24
Um I think that was the part that that actually like pained me and kind of stayed with me over time.
1:08:30
Uh they're like oh look at him.
1:08:32
He doesn't have any emotions and he's just like talking about these clearinghouse regulatory requirements but he doesn't understand the the pain that kind of customers went through who wanted to you know, buy GameStop or AMC or all these other things.
1:08:48
I mean like I definitely understood the pain.
1:08:50
That was those were some of the most painful sleepless nights for me going through that whole uh uh ordeal.
1:08:58
But yeah, my approach was always just um uh I don't I don't want to like talk about doing stuff. I like to do stuff.
1:09:07
So, uh I'm not going to like maybe maybe I'm not going to be like super emotive with my customers, but I'm just going to build them great products that save them tons of money and give them a great experience so that they can learn to invest and manage their money.
1:09:20
I think that was painful.
1:09:22
Obviously, the collusion narrative was painful because it was like But it was never proven.
1:09:28
There was no there's no like It was disproven.
1:09:30
I mean, learning how to communicate and actually like um to some degree like going through a crisis and then surviving and then sort of like learning from it and um building building back better so that you don't actually repeat the same thing again.
1:09:54
I mean, Robinhood's had our share of issues over the years.
1:09:56
Like we 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 they're a series of original mistakes.
1:10:06
So, we tend not to make the, you know, same mistake twice.
1:10:11
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.
1:10:17
And I think all of this all all of the crises, you know, I remember the dates, you know, it's like Wow.
1:10:24
you know, it's like January 28th, 2021 or December 12th, 2018 or March 2nd, 2020 right at the beginning of COVID when we had a day-long trading outage.
1:10:36
So, you kind of remember all of these events and kind of take different things away from them, but um I mean, at at the end of the day, we've been a company for 10 years and you're going to if if you're in a disruptive space where you're kind of challenging the status quo and and trying to change things.
1:10:56
Uh Some people are Yeah, if some people are going to be unhappy, right?
1:11:04
And uh you have to have thick skin to kind of get through that.
1:11:09
Yeah, it's a it's an interesting dynamic, isn't it?
1:11:10
When when companies are doing something for the first time, it's it's inevitable that there's going to be mistakes and mismanagement and challenges.
1:11:19
And I think And it's almost like, you know, if if you're being too careful, if you actually make zero mistakes, you might not be successful.
1:11:27
You're probably not going to be successful because you're just like not pushing hard enough.
1:11:31
Like it's like he At some point, not not taking any risk is like the biggest risk of all, particularly in like a hot competitive market.
1:11:40
So, you just you have to know the right amount.
1:11:42
I think it's a it's somewhat of a a fine dance.
1:11:46
But, it's it's it's certainly not acceptable to like play everything super safe in in the world of business.
1:11:54
And I guess the challenges because it's dealing with people's money, it's it's even a more heightened There's a heightened sense of of safety. Yeah, absolutely.
1:12:02
Yeah, and and people can be very emotional about their money. Of course.
1:12:06
I mean, it's especially if people are putting large sums in.
1:12:08
What What were some of the biggest mistakes that you felt and the lessons you learned from them that were so pivotal that you think would be useful for other founders, for for customers to hear, for for other people to just be aware of like this is how you now look at it versus at the time when you're like, well, we need to be risk per risk, try things out.
1:12:28
Designing our infrastructure uh with scalability in mind from day one probably would have saved us quite a bit of grief because we've we've had to like rewrite and like redo multiple times.
1:12:44
The conventional wisdom is you don't want to prematurely optimize anything.
1:12:47
The Silicon Valley sort of like tombs are littered with corpses of startups that had perfect infrastructure and no users, you know.
1:12:55
So, it's always hard to do the counterfactual on these things because like you know, if we had if we had over-invested in those things, maybe we like wouldn't have customers and then no problems but no customers, right?
1:13:08
I think we can end up being like tormented by our past too much, so I don't even I don't know how helpful it is.
1:13:17
Yeah, that's that's an interesting take. I I can see why.
1:13:19
I can definitely see why.
1:13:22
I mean, the only thing that stood out to me was you saying that your most difficult period was in 2022 when Robinhood's business took a hit amid the market downturn. Yeah, that's true.
1:13:33
And and I feel like what what was so what was what was so tough for you personally about that? I mean, you've Yeah.
1:13:39
Some people might hear that and be like, "That's crazy.
1:13:43
Like, how can that compare to GameStop, right?"
1:13:45
I think the thing about GameStop was it's like very acute difficulty.
1:13:48
Um you know, and it was like almost like a roller coaster ride, you know, it's like intense but it's over in 3 minutes and it's kind of clear what you have to do to to get out of that difficult situation.
1:14:03
And you know, we navigated it, we became a stronger company.
1:14:06
Um 2022 was like a slower burn, right?
1:14:11
And we had just gone public in middle of 2021, kind of at the end of the window.
1:14:17
The window has kind of been basically shut since then for IPOs, right?
1:14:21
And we kind of squeezed in right before things got really bad.
1:14:26
And so what happened was um you had this period where uh it became clear that inflation was getting completely out of hand and that freaked everyone out.
1:14:37
Um and then it became clear that the Fed was going to hike rates.
1:14:41
And we had kind of like everyone was prepared for a multi-year period of like zero rates.
1:14:47
Um and you know, to tame inflation, the Fed, who hadn't really dealt with inflation for 30 years, had to hike rates up at the fastest pace in the past several decades.
1:15:01
And what happens was when when rates go up, um people typically invest less because imagine if you can get 5% on your cash just sitting there and the stock market appreciates, you know, 7 to 10% each year pre-tax, um and you can get that 5% rate uh without taking on market risk, that becomes much more much more compelling relatively.
1:15:30
So, you'll have less investing.
1:15:32
And then that's what we saw.
1:15:34
Less people were interested in opening up brokerage accounts and investing for the first time.
1:15:39
And that was like our whole business, you know, that was the core of our business.
1:15:44
And we didn't really have anything for a high rate environment at that time.
1:15:48
And you know, there there was some criticism of this when we went public and some questions.
1:15:53
You know, the 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 20 million users in that time, but how are you guys going to do in a environment where the interest rates are higher, you know?
1:16:12
Is it is this just is Robinhood a zero interest rate phenomenon?"
1:16:16
Um of course, you know, we had answers to that, but until you prove that, uh people don't really believe you.
1:16:24
And so, we we actually had to like go through uh an incredibly challenging process of like changing the strategy of the company, effectively re-founding the company in 2022, um when you know, the the entire macro environment shifted.
1:16:45
And I think we we did a really good job.
1:16:47
I mean, within 6 months after that, we had gone adjusted EBITDA positive.
1:16:51
In 2023, we had GAAP profitability at the first time.
1:16:56
We now have eight business lines that are generating 100 million in revenue or more.
1:17:01
So, the business is very diversified.
1:17:03
More than half of the revenue is interest rather than transactions.
1:17:09
And now we're starting to get the question, "Wow, like Robinhood's doing so well in this high interest rate environment.
1:17:15
The Fed's going to cut rates.
1:17:16
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."
1:17:25
So, now I have to go backwards and and prove that customers still would want to trade options and crypto and equities. So, Yeah.
1:17:35
Yeah, it was I I think it's been interesting.
1:17:37
Yeah, it's funny how it just keeps oscillating between or cycling, I guess.
1:17:41
Well, the more times you do that cycle, I I always felt like when we were private, every time we raised a new round of funding, we had to kind of like re-prove ourselves to these new investors that came in and just didn't understand the company.
1:17:54
Um but then, you know, the longer we lasted as and we got up to like series H, I think, in private funding.
1:18:04
And you know, by that point, the series A, B, C investors had developed such a deep understanding of the company.
1:18:11
They They had so much trust.
1:18:13
And I think it's the same with with a public company, or at least I'd like to think so.
1:18:17
You know, you pick your investors, your investors pick you.
1:18:21
And the more cycles we go through, we are building institutional knowledge as a public company.
1:18:27
And I do think that, you know, the market is starting to to recognize that, "Hey, maybe this founding team, the management team of this company knows what they're doing.
1:18:39
And the more cycles we go through, I think the more we'll prove that out.
1:18:42
Yeah, and I think I read somewhere where you were saying that that time really changed how you looked at being a CEO and a leader.
1:18:48
And and reprioritizing the company was What was You You just talked there about almost what you did in terms of building product, diversifying uh income streams, you know, having all of the portfolio of how people could use uh Robinhood, but what was that like for you internally from a leadership perspective?
1:19:08
What changed as how you about how you led?
1:19:11
Yeah, so so there were there was this uh exercise that I would go through with uh with some of my team where I would imagine if uh a new person came into the role as as CEO.
1:19:26
And I've told this story a couple of times, and it It's It's not like I imagined myself being fired.
1:19:31
I was worried about that or anything like that.
1:19:35
But it was all almost like Okay, this thought exercise of Let's say I didn't come with any of the baggage of like having founded the company and made all the decisions to get us to this point.
1:19:46
If I could look at it from um with a beginner's mind and just say, "Hey, I'm here. I'm seeing this company.
1:19:53
This is kind of the state of affairs.
1:19:57
What would I do differently?"
1:19:57
And you know, I came up with a a bunch of things uh that like a stereotypical like top CEO coming in would would do differently.
1:20:08
They would pull back on remote first and get people in the office so they could collaborate and work together in person.
1:20:14
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.
1:20:24
People have a very hard time being inconsistent with their prior selves.
1:20:29
So I think that's like one mental barrier to get past.
1:20:35
Um 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, a relatively small component of very active traders.
1:20:50
And we actually weren't building products specifically for them.
1:20:52
And as a matter of fact, we looked at kind of this customer base um very deeply in 2022.
1:21:00
And these folks tend to be more sophisticated.
1:21:04
So, actually when when the markets are crashing or moving sideways, they tend to actually be more resilient cuz they can deploy more sophisticated strategies that can take advantage of all sorts of market environments.
1:21:20
And we saw what we saw was the more active someone traded, ergo the more revenue they generated for us, the less happy they were with Robinhood.
1:21:31
So, so actually our most active customers had like the least customer satisfaction with the platform.
1:21:34
So, then when we kind of like grokked this, we were like, this is a five-alarm fire.
1:21:41
Like, any healthy business, like, you know, you don't have to be a Yeah.
1:21:44
an MBA from Wharton to realize that your most valuable customers being like unhappy with you is a big problem.
1:21:53
So, um but what was remarkable was when we kind of like shifted focus towards making these active trader traders really, really happy, we fixed it like that, like much faster than I thought possible.
1:22:08
I think within 6 months we had basically like solved the problem.
1:22:13
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.
1:22:21
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.
1:22:34
I think by and large that was the biggest part of our of our turnaround as a company since going public. Mhm.
1:22:41
That's that's fascinating.
1:22:44
I mean to to discover that your deepest users are unhappy. Yeah.
1:22:46
It must be like such a Yeah, and part of it was like Robinhood was historically very targeted very focused on the first-timers.
1:22:57
We want to be someone's first brokerage account.
1:22:59
We want to make it as easy as possible to get started with $5, right?
1:23:03
But what happened was um one, a lot of the people that got started with us then became really sophisticated and like wanted more advanced tools and had more specialized needs but still loved Robinhood and loved the simplicity and the ease of use of the interface.
1:23:23
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.
1:23:35
Most of our competitors charge 65 cents per options contract.
1:23:39
So if you trade 100 contracts, that's $65. That's real money.
1:23:42
And there's some active traders that you know, spend thousands of dollars a month on other platforms paying these contract fees.
1:23:52
So even if like the platform's not really built for you, there's like a really strong economic incentive to use it.
1:24:00
So you had a lot of these like super active options traders that were using Schwab or E*TRADE or others.
1:24:06
Maybe they're using their charting from their other platform but they're putting the trades in via Robinhood and just to save fees.
1:24:11
So you know, we grew active traders.
1:24:16
We also had some using us because the the economics were so good. Yeah.
1:24:21
And in that way we sort of like built up this large active trader business incidentally while building products for first-time novice investors. Mhm.
1:24:31
Yeah, I mean, it it's so interesting that since the beginning everything everything you talked about from the name, there's always been people who've been disgruntled, slightly angry as you said earlier, like this feeling of like, "Oh, these guys are doing something, you know." Yeah.
1:24:48
Has has that kind of like has that kind of change now as a company matures and like people 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 as you've become more established as well, or does it get lonelier as things go on?
1:25:09
Well, I think in different ways it does get lonelier, uh but I would say in general, um I think in the past couple of years, especially, we've like fixed more problems than we've created, hopefully.
1:25:23
Uh and so our customers generally have been getting happier and happier, not just the active traders, but uh you know, the great thing when you fix things for active traders, they're like power users of the platform, so the customer experience for a more casual user improves as well.
1:25:38
So yeah, fortunately, you know, again, knock on wood, uh we we've been like we we've been avoiding like major catastrophes in the last few years.
1:25:50
Um which, you know, the last few years have been hard just with standard business challenges to to work through, so that's been really nice.
1:25:57
I think like to some degree, I I don't expect Robinhood to ever be perfectly understood and non-controversial, so it just comes with the comes with the territory, I guess.
1:26:12
What's made you comfortable with that?
1:26:13
I feel like that's obviously always hard.
1:26:15
We always want to be liked.
1:26:17
We want what we create to be, you know, overall seen in a certain way.
1:26:21
What what's made you comfortable with that?
1:26:22
Well, I think the first time that, for example, I I saw negative press about Robinhood, uh probably was like 2018, 2019.
1:26:30
So, for the first four to five years of the company's existence, it felt like everyone was kind of rooting for us.
1:26:38
Like the regulators were fans, right?
1:26:41
You know, I I remember our first FINRA exam, um uh we we had, you know, someone kind of looking at what we were doing.
1:26:49
FINRA's our primary regulator.
1:26:51
And, you know, this was a young guy.
1:26:53
Um He's like, "Hey, there's never any like new brokerages filing.
1:26:58
This is like super interesting. I wish you guys luck."
1:27:02
It gave me this feeling of like, "Wow, I every investor and person I talked to was like, "Run as far away from regulation as possible.
1:27:12
You don't want to be a regulated business.
1:27:13
It's going to just grind the company to a slow death.
1:27:15
So, find some way to do it via partnerships or something."
1:27:20
When we got started, it was unheard of to uh to like be a financially regulated startup.
1:27:27
It was really before the word fintech existed.
1:27:29
For example, Robinhood predated that.
1:27:32
Probably created it to to some degree.
1:27:34
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, uh big established gigantic competitors.
1:27:48
Um and, you know, we had the millennials on our side.
1:27:50
And and so, it was just like very very positive always.
1:27:53
And it kind of I was like, "I don't really get what all of the fuss is about.
1:28:01
Like, all of the negative press and all this stuff that people are talking about that's happening to other companies, maybe not us."
1:28:10
Eventually, I would get like the comms and marketing people that um they would come and show me the clock of like company perception. Have Have you seen this? I've not. No, I'm fascinated.
1:28:22
like this clock and like basically, when you're kind of here, everyone loves you and when you're kind of here, everyone hates you. that.
1:28:29
And and they were like, "So, you're here at like 4:00, but you should get ready in the next 6 to 12 months, you'll be here and and everyone's going to hate you."
1:28:38
And you just haven't seen it yet.
1:28:41
Yeah, and then it keeps going around and they were like, "Look, Facebook is here.
1:28:44
They're like a little ahead of you.
1:28:46
Everyone hates them now."
1:28:46
They ended up being exactly right.
1:28:47
And then a couple 6 to 12 months later, it was like all negative press.
1:28:51
But I guess like the way I got used to it was just going through that, right?
1:28:56
It's like the first time a negative article hits, you're like, "Holy It's negative press.
1:29:02
I've never seen it before."
1:29:04
And you you kind of feel like it's the end of the world.
1:29:06
And then, you know, after the 600th one, you're just kind of like, "Okay, it's another one of these things.
1:29:15
I'm just going to move on and and run my business." Yeah.
1:29:18
And then when the press turns positive, you're like positively surprised and you're not expecting it.
1:29:25
So, I think that's how I got through it.
1:29:27
You just get punched in the face enough and your face contorts to the shape of the fist, right?
1:29:34
What What How have you managed your your personal life through all this?
1:29:37
personal life through all this? Because I feel like, you know, when we start the interview today, you talked so much about your personal life and you know, how you came to this country and and the build and I feel like
1:29:47
you know, as you're an entrepreneur and your professional and personal life almost become one and you know, when you're building something is 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
1:29:59
Like that's how it has to work. That's how it goes.
1:30:01
What's been powerful for you in your personal life that you think is allowed you to reinvent, reboot, stay renewed, stay re-enthusiastic.
1:30:11
Like you seem as excited about Robin Hood today as I imagine you would have been in 2013 if not more.
1:30:17
And what what's been allowed you to renew your enthusiasm so consistently?
1:30:22
My kind of uh sort of like analogy of so many things, my mental model for so many things that I use uh in business and in life is kind of the the barbell.
1:30:38
Like I like to get things on opposite sides of the barbell, right?
1:30:40
And I tend to ignore the things in the middle, right?
1:30:45
So so basically for me personally, my work is like highly intellectual and that's maybe on one extreme.
1:30:53
And what's what's the opposite of like intellectual?
1:30:55
Just sort of like the physical.
1:30:57
Um so I really focus on that and it's just uh super basic.
1:31:02
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?
1:31:21
So now my like wellness routine and my training, I spend more time just dialing it in.
1:31:27
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.
1:31:34
I like to journal before bed and I like to shut off the devices.
1:31:38
The devices, by the way, has been the hard part for me.
1:31:41
You know, I like try really hard.
1:31:44
I have to do unnatural things to like stop from looking on my phone.
1:31:49
Like Like my phone's not with me right now, for example, because you know, I I would just it's hard to avoid looking at it.
1:31:57
Um and if I know it's in my pocket, you know, then it's almost like too close.
1:32:05
So, I mean, actually during the whole GameStop stuff, it was particularly acute for me because I was at home, so there was no boundary between work and personal.
1:32:15
And I was going a little bit crazy.
1:32:18
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 is happening.
1:32:28
Which ended up being a big problem the morning of GameStop because it took forever for my team to like get a hold of me.
1:32:37
And then now I Then for a while I slept with like three phones next to me, which it really backfired.
1:32:43
But yeah, my health I work out a lot.
1:32:43
Um I've gotten into like hot cold therapy.
1:32:49
At first I was doing cryo, but then I got like a cold plunge at my house that and and that really helped.
1:32:55
And yeah, just like the basics of sleep and diet, I think has has made a world of difference.
1:33:03
And just trying to like uh 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.
1:33:15
And your marriage you married too, right? You were mentioning. Yeah, yeah, yeah.
1:33:17
What's How's How's it been like dealing with all of this, but it sounds like you've been together for quite some time.
1:33:23
Like it's Yeah, I've been married for almost 10 years now.
1:33:26
Yeah, got a got a bunch of kids.
1:33:28
Um great kids and uh they don't really know what I do.
1:33:36
Same back to how your wife didn't know what you did either.
1:33:39
Yeah, um well, she did, but uh yeah, um Show them Robinhood, the cartoon, and they'll get it.
1:33:44
Oh yeah, they love that cartoon.
1:33:46
I think like the the credit card they kind of get a little bit cuz they know they can use it to buy toys.
1:33:54
Yeah, my my My is a great compliment to me. She's very patient. She's very empathetic.
1:33:59
All the things that I'm not.
1:34:04
And so she's just been an amazing partner through all the crises.
1:34:06
And she's sort of like knew me before Robinhood. Right?
1:34:10
I mean she she kind of helped come up with the name.
1:34:14
So I think I think she feels like Robinhood's like one of the children. Just kind of like I do.
1:34:19
Yeah, that's beautiful, man.
1:34:21
I wanted to this I'll probably cut and put back again.
1:34:23
I was the credit card there.
1:34:26
I'm intrigued as to product you created because you saw the traditional versions of them being ineffective. Yeah.
1:34:32
So when you go build a credit card what's what's wrong with a traditional credit credit card that you can get from anywhere else?
1:34:41
Like what what are you doing differently?
1:34:43
I think there are a couple of problems with traditional credit cards.
1:34:48
Um One is that basically the rewards are kind of incomprehensible.
1:34:59
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.
1:35:09
Um like media empires like the points guy were created on the back of this. Right?
1:35:15
It's like yeah, if if you want to spend 10 hours a week optimizing your points and max maximizing the rewards.
1:35:25
I I think that's pretty good.
1:35:25
But we wanted to create something that simplifies all of that.
1:35:28
And basically just by like using it for the vast majority of people, you know, you get the best rewards.
1:35:35
So a simple clear reward structure that you don't have to be like a PhD to decipher.
1:35:40
People building their credit if if you're a student and you are you know, you you don't have a credit history, uh typically you have to start out with like a really crappy card.
1:35:54
You have to sort of like upgrade your way to a nicer card once you prove that you're worthy.
1:36:03
And you know, there's a crappy starter card for people with no credit history and like the premium card for uh folks that have the means.
1:36:10
We asked, "Can we Can we fix that?
1:36:13
Can we actually have a starter card that has the same economics, the same reward, the same design uh for as like a highly premium card?"
1:36:22
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 uh sort of like give them to you in the same package.
1:36:40
Um And those are things like virtual cards.
1:36:44
I don't know if you've been to a restaurant, you probably you probably go to restaurants where you have to give your credit card to lock down the reservation.
1:36:51
Imagine you could create a virtual card so that not every restaurant has your actual card number.
1:36:58
And if you want to cancel the reservation, you don't have to call the restaurant, you could just disappear that virtual card, right? Got it.
1:37:04
Or, you know, 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 your real phone number. Mhm.
1:37:13
Helps maintain people's privacy.
1:37:15
And in fact, there are great innovative businesses privacy.
1:37:17
com created with with this notion.
1:37:20
We put all three of these things in in one package.
1:37:25
One card for everyone, the best rewards in the industry, 3% 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 uh a digital experience that's like world-class.
1:37:42
Um And we put all these together and it's it's definitely the best reviewed, most popular product that we've ever rolled out.
1:37:53
Uh even more popular than free trading.
1:37:55
So, it's it's been quite amazing.
1:37:57
And And now it's just like like we people want to rolled out faster.
1:38:01
That's the one limitation.
1:38:03
We had a over a million people join the waitlist for it within a month of announcement. And Wow.
1:38:10
the bet was that if we make the rewards in the product so good, we wouldn't have to spend the typical like $500 to acquire credit card user that the the big banks spend.
1:38:19
We could get it just organically.
1:38:21
And that seems to have proven out. Wow.
1:38:24
Now it's just about getting it into everyone's hands while also validating the economics and the underwriting of a new credit model.
1:38:33
Vlad, it's been fascinating talking to you.
1:38:35
You're truly a extremely unique individual in in in a positive sense. It's Oh, thank you.
1:38:40
It's really a brilliant Maybe some negative, too, you know.
1:38:44
Brilliant brilliant to dive into your mind, honestly.
1:38:45
It's uh it's it's been really fascinating for me.
1:38:48
We end every episode of On Purpose with a final five.
1:38:51
So, these questions have to be answered in one word to one sentence maximum.
1:38:56
So, Vlad, ten of these are your final five.
1:38:59
The first question is, what is the best advice you've ever heard or received? Be honest. Mhm.
1:39:03
Don't lie to others, but most of all, don't lie to yourself. Mhm. Good advice.
1:39:08
Question number two, uh what is the worst advice you've ever heard or received?
1:39:12
I think in the context of the of the company uh trusting experts who have done it before Mhm.
1:39:22
is bad advice, generally speaking.
1:39:25
I think you have to listen to experts and understand, but like I don't think people should blindly trust anything.
1:39:31
Uh question number three, if we saw one of your evening journal entries, what would we learn about you that we haven't learned today?
1:39:40
I still really love math.
1:39:42
And I spend uh a non-trivial amount of time trying to solve basic math problems. Really? Yeah. Oh wow. That's cool. In your journal? In my journal.
1:39:53
Yeah, yeah, you'll see pictures of like triangles and spheres and stuff in there. That's cool.
1:39:59
Uh fourth question, how would you define your current purpose?
1:40:02
I think it's it's to seek truth.
1:40:07
I think if I had to find like a personal I think a lot about like what are my what are my personal values?
1:40:12
What do I care the most about?
1:40:14
And I think my top value is is truth. Mhm. Actually. I care about truth.
1:40:23
And I mean in in terms of purpose, uh I I really want to understand how the universe works.
1:40:35
Mathematically or other Mathematically, physically, yeah.
1:40:36
I mean, we can start with that, but of course, psychologically is good, too. Oh, cool.
1:40:44
Financially, I think we're closest to that one.
1:40:48
Pretty close to understanding how it works financially.
1:40:49
And how do you define truth?
1:40:51
That's a sub question to that, not the fifth.
1:40:53
I think that's a really good question. How is truth defined?
1:40:54
Um I think that truth is something that multiple observers will simultaneously agree on. Mhm. Yeah.
1:41:07
So, if you had like multiple independent intelligent observers observing an event with like the same information, they should agree on it.
1:41:18
And if if they agree on it, then uh you have like high confidence if it's true.
1:41:26
Now, of course, if it's something that's like fact-based, it's even easier because you can just like prove that it's true if it follows from axioms, but um probably the more interesting one is if if there's some ambiguity.
1:41:39
Yeah, I also find But I think you need a notion of verification and and also some notion of like independence.
1:41:49
Yeah, one of my favorite verifications of truth I feel in my definition is timelessness.
1:41:54
That's something being timeless.
1:41:54
I it was as true a thousand years ago as it is today.
1:41:58
Yeah, like the Lindy effect. Lindy effect, right? Tell me about it.
1:42:04
Yeah, basically like um I think it was I read about it from Nassim Taleb.
1:42:10
Okay, yes, yes, yes, yes.
1:42:10
Yeah, so so basically like he says a good approximation for how long something's likely to be relevant is how long it's already been relevant.
1:42:23
So I think the the way he kind of describes it is the New York Times best seller list.
1:42:26
If a book sort of like hits the best seller list and is a best seller for one week, you can basically assume that it's going to be irrelevant in a couple of weeks, right?
1:42:39
But if, you know, the Holy Bible, people have been reading it for 2,000 years, you have pretty high confidence that it might it's it's going to be relevant 2,000 years from now in a way that you wouldn't with what's on the best seller list now. Absolutely. Absolutely.
1:42:54
Fifth and final question, we ask this to every guest who's ever been on the show.
1:42:57
If you could create one law that everyone in the world had to follow, what would it be?
1:43:01
I think there's too many laws.
1:43:05
Yeah, I think deleting laws is the more interesting thing.
1:43:07
If there was a law where in order to create a new law, you had to delete at least one existing law, I would feel much better about it. That's a good law.
1:43:17
If you think about overregulation, which I think is a big problem, it's really, really easy for new laws to be created, it's easy for like organizations and the government to get bigger, and that creates all sorts of problems.
1:43:32
Like it's it's impossible to get, you know, high-speed rail in California, right?
1:43:36
We need a force to counteract that, and right now it's very easy for these things to 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. Well said, Vlad.
1:43:53
Uh I look forward to many more conversations with you, philosophical, seeing you have the truth, psychological.
1:44:02
Uh truly truly wonderful to get to know you today, and thank you for being so honest.
1:44:06
Thank you for being so open and vulnerable, and uh even though you described yourself as stoic at the start, I definitely feel uh you you you shared you shared a lot of emotion in in what you shared.
1:44:15
So, thank you so much for for doing that. I really appreciate it.
1:44:19
Thank you for taking the time.
1:44:21
You know, it's been it's been a lot of fun, you know?
1:44:22
I don't usually do uh I don't do too many podcasts in general, but this was a unique experience. Yeah.
1:44:30
I'm very grateful grateful for your time. Thank you so much. Thank you.
1:44:33
Thank you so much for listening to this conversation.
1:44:35
If you enjoyed it, you'll love my chat with Adam Grant on why discomfort is the key to growth and the strategies for unlocking your hidden potential.
1:44:45
If you know you want to be more and achieve more this year, go check it out right now.
1:44:52
You set a goal today, you achieve it in 6 months, and then by the time it happens, it's almost a relief.
1:44:57
There's no sense of meaning and purpose.
1:44:59
You sort of expected it, and you would have been disappointed if it didn't happen.