E736: Robinhood uses free stock trading to open access to the entire American financial system; co-founder Vlad Tenev talks mission, building a billion dollar startup & the business of millennial money management

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about this episode

We are pleased to have one of Jason’s investments as our guest today, Robinhood co-founder Vlad Tenev. Tenev went to Stanford in 2004 looking to become an academic, first studying physics and later math. During this time, he met and became good friends with his co-founder Baiju Bhatt. Together, they started a bootstrapped and profitable software company called Chronos Research, which was formed to respond to the increased influence of algorithmic trading in the financial industry. This inspired them to build something bigger than just software that helps hedge funds and banks optimize their trading. Robinhood is a no-fee stock trading app with a mission to open up access to the American financial system. So, whereas other discount brokerages charge $7-$10 for every trade and have account minimums of $500-$2,000, with Robinhood, there are no minimums and no trading commissions, thus tapping into an underserved part of the market. Join us to learn how Robinhood went from a clever idea to a billion dollar valuation.

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Timestamps:

00:49: Jason introduces today’s guest, Robinhood co-founder Vlad Tenev

01:48: Mission of Robinhood is to open up access to the American financial system

02:52: Vlad talks about his background and the story of how he met his co-founder Baiju Bhatt

06:36: Vlad explains how he went from academia to starting Robinhood

15:46: Robinhood app

20:47: Cost

22:57: How Robinhood protects against stocks that are about to collapse

28:30: Advice for approach to investing: set it and forget it vs learn how to own individual stocks

33:20: Regulatory approval process

35:35: Robinhood has largest pre-launch audience of any financial product in history

40:00: Backend for cost of doing all this

42:45: Short shares as a revenue stream

44:19: Tipping point

50:00: Off hours trading and why the stock market isn’t 24 hours

54:34: Hacking risks

01:00:40: Average age of Robinhood customers is 30

01:05:18: Focus of Robinhood has been and will be to use data to improve customer experience

01:07:11: The best place to start is to make something simple and build from there

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