#1384 Johann Kerbrat | Robinhood's Crypto Strategy Revealed

Johann Kerbrat is the Vice President and General Manager of Crypto at Robinhood. In this conversation, we talk about what they are building, who is using the product, surprising data points, Bitstamp acquisition, licenses, and future outlook for crypto and Robinhood. ======================= Buy and sell cryptocurrency in a tax-advantaged crypto IRA with iTrustCapital. Enjoy 24/7 access, lowest fees in the industry, and tax benefits for your retirement. Open and fund an account today at ⁠⁠https://www.itrustcapital.com/pomp⁠⁠ to receive a $100 USD funding bonus. ======================= Introducing Espresso - the world’s most interactive portable display. They have a portable screen that is incredibly light, comes with a nice stand, and the user interface is very easy. Anyone who listens to this podcast can go to ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠us.espres.so/pomp⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. They have a brand new offer waiting for you. ======================= Meanwhile is the world’s first licensed and regulated life insurance company built for the Bitcoin economy. Protect your loved ones with sound money built to manage life’s uncertainty and a broken financial system. Their BTC-denominated Whole Life Insurance policies allow HODLers to pass more BTC on to their loved ones and a tax-advantaged way to access BTC for liquidity during their lifetime. Visit their website at ⁠⁠https://meanwhile.bm/⁠⁠ to join the waitlist for a policy and to learn more. ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's up guys? Bang bang. Today we've got Johan Kabrot. He is the Vice President and General Manager of Crypto at Robinhood. In this conversation, we talk about what they're building, who's using the product, some very interesting, surprising data points, and then

• 0:43Anthony Pompliano?

  we also talk about why it is so important for a platform to have both equities, crypto, how they think about licenses, why they just bought a company for $200 million, and then what is coming down the pipe from Robinhood. I really enjoyed this conversation because Robinhood has become one of the most important products when it comes to thinking about finance, especially with a younger generation that is more digitally native. And so to hear from somebody inside the company about what they're building, how they're building it, and why they're making some of the decisions that they are, is incredibly informative. I hope that you enjoy this conversation. Here is my conversation with Johan.

• 1:14Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:38Anthony Pompliano?

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• 2:10Anthony Pompliano?

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• 2:53Anthony Pompliano?

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• 4:20Anthony Pompliano?

  You get a little discount and you'll get a beautiful screen. Trust me, I use mine every day. You'll love the Espresso screen and I think it'll make you more productive. Go check them out today by clicking on the link in the description. Today's episode is brought to you by Meanwhile. Meanwhile is the world's first licensed and regulated life insurance company built for the Bitcoin economy. Operating on the Bitcoin standard, they do everything in Bitcoin. You pay in Bitcoin, they pay claims to your family in Bitcoin, you take out policy loans entirely in Bitcoin when you need liquidity. Meanwhile, Bitcoin life insurance has redefined what it means to hodl. Protect your family from life's uncertainty and a broken financial system. Build intergenerational Bitcoin wealth while the cost of living skyrockets in dollar terms.

• 5:02Anthony Pompliano?

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• 5:47Anthony Pompliano?

  these things, et cetera. But when you see some of this more political disagreements, et cetera, in other countries that are not developed, you see a lot of crypto use. What is it in France? Is it a lot of crypto use, not as much? How do you evaluate it maybe versus the United States and maybe a developing nation?

• 6:04Speaker 02

  Yeah, I think that's something that changed quite a bit in France. So I think back in 2008, 2009, when that was the big financial crisis, I think France as a European country got hit more than maybe like what we saw in the US. So for example, Greece, the central bank froze some of their accounts. And so I think at the time, that's how I got into crypto. I got very interested into a system that was decentralized. And I think that's something that we see a lot in France. We have very good engineers, very good cryptographer coming from there. And that's what was interesting, I think, for me this year. You know, it's seeing How the politics have been driven crypto out of the US.

• 6:45Speaker 02

  And when I came from France to the US because I felt like I could come into a country that was embracing like new technology. So, you know, definitely interested to see how things developed and uh how the elections are going to go around like the crypto world. But hopefully what we see that, you know, the US embraced innovation again.

• 7:02Anthony Pompliano?

  Yeah. So in the United States, definitely now, um it's become an issue, right? It looks like uh kind of the conservative movement is leaning into it, saying, hey, we're going to be a pro crypto, pro Bitcoin uh candidate and and party. Um, I think Democrats maybe are like a little bit more split, right? So like, there's definitely some that are very pro the technology. Um, and not just crypto, I think, pro AI, et cetera. And then obviously there's some that that aren't. Um, in France, has crypto become kind of a political topic yet? And what I'm trying to measure really is like, I think people in the United States are a little surprised at how quickly it's become, you know, uh one of the big topics in um of the United States. What is it in maybe France and kind of the broader European?

• 7:40Speaker 02

  Yeah, I I think one thing that we've seen in uh in the EU is that they actually adopt a new framework called MICA. Uh, it's coming into effect in January of next year. Um, and you know, the framework as every regulation is not completely perfect. There is a lot of things that we could improve or not. But at least there was a framework that was allowing companies to execute on on crypto in a in a way that was regulated and working with regulator. I think France in particular has a very good um regulator called the IMF. And they've been embracing crypto and helping companies to get uh up to speed with the market. So, um, yeah, I think, you know, what we've seen in the US also is that there is a lot more discussion around how do we regulate it?

• 8:23Speaker 02

  We saw a few bills going through uh in the past six months. And, you know, hopefully we can start this debate again and and finally have a system where companies like us have a way to to operate safely.

• 8:35Anthony Pompliano?

  Now, I think most people look at kind of the Robin Hood user base, whether it's in the United States or internationally. And if you're a sophisticated kind of traditional player, you almost kind of like thumb your nose. Like, they don't know what they're doing, right? I know a lot of people who use the product, right? I know a lot of people in crypto who allocate much more money than you would think that they, you know, have and allocate to the platform. How do you guys think about when building the product? You know, so much of crypto, I always joke, like, we just need better designers, you know, and some of this user experience stuff, like the Bitcoin wallet address, the fact that a lot of people still type in the full string of letters and numbers is kind of crazy. But also, there's like an

• 9:16Anthony Pompliano?

  actual aesthetic, right? And if there's one thing that my friends would say about something like Robin Hood, they're like, it's just beautiful. It's very intuitive. It's very easy. And so are you building that for everybody? Or do you have to build it specifically for somebody who maybe isn't as sophisticated to use, you know, kind of one of these more traditional kind of investing interfaces?

• 9:35Speaker 02

  Yeah, I think there is a few things here. So one on crypto, I definitely agree. You know, I always say I'm an ex engineer. And as an engineer, I feel like we lost ourselves in crypto. We, you know, always talk about protocol and how things are working, transaction, all these things. At the end of the day, what the user want is the thing to work, you know, they want to be able to send a message and not think about what blockchain is going under the hood. But at Robin, we are trying to build product for everybody. So, you know, you can be first time investor. We have a lot of our customers are first time investor, never traded stock or equities or crypto before. And we also have very advanced trader.

• 10:17Speaker 02

  And I think, you know, when we build our product, we try to think about this different segment. And so for the new investor, we try to invest a lot in educational content. So we have learn program, learn module where you can, you know, access the module, learn about something, maybe about crypto, maybe about how to use a specific order type. And at the end, we will maybe also give you a reward to encourage you to do more of this. And for the advanced trader, we actually invest a lot in new features. For example, on Robinhood, we launched new order types for crypto. So you can do stop loss. We also have advanced charts and things like this that, you know, not the everyday user is going to use, but the more advanced investor will actually be excited about it.

• 11:02Anthony Pompliano?

  Now in crypto, there's a couple of different things you can do. You can come in, you can buy and hold an asset. You can obviously sell. There's staking, there's, you know, kind of sending or receiving crypto such or like how deep into maybe like the crypto native use cases do you want to get? Or do you think you need to get? And part of that to me is like, really, you can just like buy, sell or hold a stock, right? There's not, there's not much you can do. Part of the promise of why these assets are valuable is because you can do more with them. And so as what started as a brokerage, like, like how far down that crypto native path, do you think the product can get?

• 11:35Speaker 02

  We went already pretty deep in the, in the past. So, you know, now on Robinhood, in the US, you can buy and sell 15 cryptocurrency. You can also transfer if you're eligible. So you can deposit or transfer out of the platform. We also launched a self custody wallet that is available in 140 plus countries. So using the wallet, you can access all the apps that exist currently. You can go on social network. You can, you know, do all the things that web three has to offer and it's quite a, a big space. And then in the EU, we also started to incrementally build new features like staking. For example, we launched staking on Solana a month ago, and it's been something that people are interested.

• 12:20Speaker 02

  The, the main thing we are doing before deciding to build a future is really discussing with customers and getting user feedback. When we talk to them, we ask them like, what do you want to see on Robinhood? And then, you know, we try to build it in a way that they, they will actually use.

• 12:34Anthony Pompliano?

  And when you're talking to those users, what are they saying? Like, why are they buying these assets? Are they speculating, which like a lot of people don't like that, but that is a huge use case for all financial assets, not just crypto, but all financial assets. Are they doing it from like an inflation hedge standpoint? Are they doing it to like, they want to do NFTs or just like, what are the users actually telling you on the platform?

• 12:53Speaker 02

  We have all of it. You know, a lot of people are actually using Robinhood as a, what we call an on-ramp. So they buy on Robinhood, transfer right away on their self custody wallet. And, you know, then they are going to, to participate to NFT marketplace. They are going to go on social network, like this kind of things, gaming. Is also one that has been taking off more and more that we see a lot more people buying on Robinhood and going to play games on Web3. We see a lot of people doing it as a hedge, like Bitcoin is one of our top recurring investments. So people that are doing like DCA, they can place order like on a recurring basis on Robinhood.

• 13:33Speaker 02

  So yeah, we have a bit of everything and that's really the beauty of Robinhood and the complexity also. When you build product is you have to kind of think about all these type of customers and all their use case.

• 13:45Anthony Pompliano?

  Now, you said gaming is taking off. I used to play a lot of video games when I'm younger, now not so much, so I'm kind of out of touch with maybe the gaming thing. What is it that people are doing in the Web3 gaming that maybe they can't do in, you know, kind of Web2 world? And like, what specifically are they doing from Robinhood? Are they just buying ETH or Solon or whatever and pulling that over or are they doing something else?

• 14:05Speaker 02

  Yeah, that's right. So they buy ETH or any other asset on the platform and then they transfer and then on their wallet they can buy things for their games. They can also contribute to some video games, like some have a subscription to be able to access it. So it's all of this kind of thing that, you know, it's a very specific segment of our customers, but still something that we want to make sure that they can do.

• 14:28Anthony Pompliano?

  Yeah. Now, you guys recently announced a pretty large acquisition of Bitstamp. I think it was $200 million US.

• 14:35Speaker 02

  That's right.

• 14:36Anthony Pompliano?

  And my understanding is this is part of like a broader European kind of focus and rollout. When I worked at Facebook, on the day I left, I remember somebody had told me that 87% of the users of Facebook were outside the United States. And we had a lot of US users, right? So like, it's just like the world is this like huge place. I think that America is probably the capital of kind of crypto industry and definitely of like traditional finance. Is this just a how do we grow users, we go elsewhere? Or is there something else about Europe that is, you know, pushing you guys to make a big acquisition and kind of push and focus on that part of the world?

• 15:10Speaker 02

  Yeah, so I think on the EU side, what we were excited about is this MICA framework that I mentioned. So really gives one regime that we can follow and have access to the entire EU market. In terms of population, it will be something comparable to the US population. So a large market, one regime, and we can be in business. For the acquisition, there was really three big points. So one, the expansion, like you mentioned, Bitstamp has over fifty licenses across the globe. They also have UK, Singapore on top of the EU licenses. So, you know, this is a big step forward for us. On top of the launch that we did in December in the EU.

• 15:51Speaker 02

  The second thing was expanding into a global cryptocurrency exchange. So Robinhood is a marketplace. We send the order of customers to market maker. We act as an agent. With Bitstamp, like this is an exchange. So things can be very different and we can offer a different type of product. Thanks to having an exchange connected. And the third thing was diversification of revenue. We will be able to now offer a suite of product to institutional customers. And that's something that, you know, we have not done at all at Robinhood. Like we are purely retail application. And Bitstamp has this relationship with institution for the past ten years plus. And so, you know, we are going to have an established business already up and running.

• 16:36Speaker 02

  And we'll be able to really capitalize on that.

• 16:39Anthony Pompliano?

  Now, speaking of licenses, you guys through this acquisition get licenses all over the world that, you know, are absolutely valuable. That also is coupled with, my understanding is that you have a bunch of licenses now in the United States. Maybe even all of the licenses, if I'm not mistaken. And it seems like maybe that's actually a Herculean effort. Rather like getting the licenses in the US is maybe harder than people who have never gone through the process would realize.

• 17:02Speaker 02

  Yeah, I think, so we don't have all the licenses, but we are available in every state of the US. So a few weeks ago, I think we announced that we were available in Hawaii, Puerto Rico and the US Virgin Islands. So at this point, Robinhood is available everywhere in the US. It is a lot of work because every state has a different regime. So for example, we are licensed with New York, the New York DFS, and we have the Bit license. And on some other states, you need the money transmitting license. It's a it's a lot of work, but we are happy to finally be available everywhere.

• 17:36Anthony Pompliano?

  Yeah, that that makes sense. What's most surprising to you when you look at the stats? So you said earlier, you talked to a lot of the users. I assume most teams talk and you know, people say stuff. But whenever I look at survey data that's self-reported, I always say to myself, like, do they really believe that? Or are they just kind of saying that because they they want somebody to kind of perceive them a certain way? But you guys also have the benefit, you have user data, like. Are most purchases recurring? Are there certain assets that maybe would surprise us that people are buying that? You know, what we don't know about, or there are certain regions where, you know, it's very, very popular that we wouldn't think about? Just what are some of those data points that you could share?

• 18:08Speaker 02

  I don't think there's anything really surprising. I think recurring is one of our big items where, you know, sometimes to see that. People are really interested to do our cost average and make sure that. They are taking advantage of this type of product has been interesting. I will say the the most surprising stats for me was always like the number of new investors that we have. And that's something that really gets me excited to work at Robinhood, like knowing that we are helping a lot of people. That didn't necessarily have the financial education that, you know, I think we should all have. Or didn't necessarily have the financial background, never wanted to get into the space of of investing, of buying stocks. And I was one of them to be to be completely frank.

• 18:54Speaker 02

  So seeing that Robinhood has been helping all these people is something that makes me really happy.

• 18:59Anthony Pompliano?

  Now. There's a lot of other exchanges that might be jealous of you all, and let me explain. It seems like the very large, you know, New York Stock Exchange, NASDAQ, et cetera. Some of their leadership has started to talk about, well, like, hey, these ETF things seem to be working. Like, maybe we should start thinking about listing the assets directly, right? So we could go buy spot Bitcoin, spot ETH, et cetera. CBOE, I think, is another one that this kind of. Then there are maybe what I'll call kind of the startup or incumbent type exchanges. And historically, they have tried to be very specific, right? So they've been a stock portfolio type exchange, or they've been a crypto exchange, et cetera.

• 19:40Anthony Pompliano?

  You all are one of the first, if not kind of definitely the leader, I think, in trying to build. No, we're going to serve multiple markets on one exchange from the kind of challenger seat.

• 19:54Anthony Pompliano?

  Seeing these other people start to change their mind or kind of pushes competition towards you, is that validating what you guys are doing? Or is that like a concern where you guys are saying, hey, this is a big risk to our business, we gotta go and try to mitigate it?

• 20:04Speaker 02

  No, I think it's a good validation. I think, you know, we've seen it from the beginning of Robinhood. Initially, when Robinhood launched commission-free, every competitor were like, this is never gonna work. And now, you know, it's hard to find a broker that offer commission or doesn't offer at least a commission-free product. So I think, you know, for us, it's been a good validation that when people are trying to do the same thing that you're doing, it's you're going in the right direction. But I also think it's a very tough product to launch. You know, it took us a long time for us to be able to support the tens of millions of customers that we have. And for crypto in particular, there is a lot of work in terms of custody, supporting transfer in and out, you know, that's a very big platform.

• 20:49Speaker 02

  And, you know, it took us many years to get where we are. But I think, you know, for us, we're also not stopping here. Like, I think we are at the very beginning of a new world. I think blockchain and crypto in general can help bridge the gap between traditional finance and the future. And we really think that, you know, with tokenization and things like this, we will be able to actually improve all these systems.

• 21:13Anthony Pompliano?

  Now, as you see that competition happening and they kind of creep into, you know, you mentioned no commissions. Payment for order flow obviously has become this hot topic, everyone wants to talk about it, etc. Crypto is a little bit different, but there may not be as many of those opportunities from what I understand in terms of kind of alternative, you know, revenue generation for exchanges. So how do you balance, hey, we're known for, you know, in the stock world, kind of zero commission, but you still gotta make money, right? You guys aren't running a charity. So how do you think about, you know, kind of monetization opportunities in the crypto world?

• 21:46Speaker 02

  So we took a place where we decided to be absolutely transparent. So started last year, we started to show on the order flow exactly how much the spread is on an order and how much rebate and revenue we are making from the order. And we thought that was Very interesting thing because we saw our competitor doing the opposite. Um. So if you look at some of our competitor, they will charge a fee, but they will also charge a markup on the spread. And at the end of the day, it's very hard for a customer to see how much they are paying uh to to the merchants. So what I recommend customer in general is to look at the quantity that they will receive, like how many Bitcoins are you buying at the end of the day? Don't look just at the the dollar amount

• 22:29Speaker 02

  and compare between the platform. And you will see that in average, uh, Rabin crypto offers the lowest cost to buy a Bitcoin and and all the other crypto we offer.

• 22:38Anthony Pompliano?

  When you look at that low cost, is that a big selling point? Like, you know, I always say to myself, um, I care about fees, but I don't know if everyone cares about fees, like, you know, or how many people are just saying, hey, I'm putting 20 bucks in, you know, every week and whatever the fees are. If fees were 20%, they probably would still buy, right? Like they're kind of fee insensitive. How what do you guys see on the platform?

• 22:58Speaker 02

  I think it depends of the customer. So, you know, we have some customers that are very active traders and they want to be on the platform and just trade a lot of time. For them, the fees are very important. And we have the the traders that are a bit less active, to your point, that just want exposure. And they will be less convinced that this is a key feature. But for me, it's also important because we want to open uh, you know, access to cryptocurrency to everybody. And I think that we cannot do that if we just keep charging here here and there. And I think the the recurring is a is a very good example. If you look at some platform, uh, they're actually charging you more on smaller size of of your orders than on the bigger size. So basically, if you're

• 23:40Speaker 02

  doing a a recurring order every week, you will pay a lot more than if you were doing one order of, I don't know, a thousand dollar. So that's the kind of thing that, you know, doesn't sit super well with me. Like, if we really want to make crypto accessible to everybody, you cannot penalize them at the same time uh for smaller orders.

• 23:56Anthony Pompliano?

  I guess kind of what what's interesting to me is like, okay, so you get these people coming in, there's kind of a very diversified set of group. You guys built this beautiful product, easy to use, kind of very intuitive. I think you have this brand. Um, and maybe what is unique is that like you've got the backing of a much larger organization, uh, but also in a weird way. Kind of Robinhood crypto as a startup like within the company? Is that maybe like a accurate characterization?

• 24:19Speaker 02

  I think that's that's like something like that. I think that's how I like to describe it. I think the, you know, we have the huge company, Robinhood, very strong balance sheet, very strong leadership team and, you know, overall just a huge company now in the US. And so it allows us to have access to a lot of things like resources wise and and overall, I think it's making our product better because to what we were discussing at the beginning, you're able to access all these different type of financial instrument within within one app. But I think also for us, it's it's challenging, right? Because we we have to work with different regulator like the, you know, the brokerage side is regulated by FINRA, by the SEC.

• 25:04Speaker 02

  On our side, we're regulated by the New York DFS. And so we have to find ways on how to all work together and cohabitate in one app.

• 25:12Anthony Pompliano?

  Now, you work with a very talented team.

• 25:17Anthony Pompliano?

  How do you guys make decisions? Like if you're the startup and they're kind of like the the mothership, right? And you've got to build this. How do you make decisions? How do you think about like, we should go get net new, you know, crypto users versus like, let's go knock on the door of the, you know, the brokerage account users and get them to start using crypto? Like, like, just talk through some of these nuances where, you know, there's obviously a lot of benefits to being a startup inside of this kind of bigger thing. But there's also probably some, maybe not impossible questions, but like things you have to navigate, right? As you kind of build a product.

• 25:44Speaker 02

  Yeah, I think we we really navigated that well. So we have this general manager structure now that basically you have a general manager for the equity business, one for the crypto business, and we have many, many other businesses. And so, you know, when there are discussion to have, like, it's usually like a small group that goes together and we decide on prioritization, like, you know, what is going to bring the the most return on investment or what is advancing the mission the most? Like this kind of things. But overall, you know, we are a large company now. We have a lot of resources, so we're able to attack like the different problem at on different front and we can not always have to choose one or the other. So that's why you saw a lot of the work that we've been doing on the brokerage side,

• 26:27Speaker 02

  for example, has been very successful in the past, you know, few quarters. And on our side, we've been also attacking a different front with the EU expansion or with the Bitstone acquisition.

• 26:41Anthony Pompliano?

  And as you're doing that, can you keep just going through acquisition? Or do you have to push into these countries and kind of run big marketing campaigns? And one of the things crypto is not shy of is marketing. And there have been some amazing global campaigns and there's been ones where they looked amazing and they ended up not being amazing for one reason or another. So how do you think about like user acquisition, M and A, and then just kind of like word of mouth, you know, spreading without you guys really spending money?

• 27:08Speaker 02

  Yeah, I think it's a combination of the three. So I mean, it makes sense for us when we really feel like there's a acceleration that comes from it. Or if there is, you know, very strong tech that we can get or, you know, licenses, you know, or combination of the three. But it's not something that we necessarily want to do for every single country. I think the marketing campaign is also something that it will really depend, I think, you know, to do that at scale. You have to be, you have to know the market. You have to really understand how the competition is working as well. So I think it's a bit difficult, but for us, like the word of mouth is always something that has been working very well since, you know, the beginning of Robinhood crypto or Robinhood in general, referral, word of mouth.

• 27:54Speaker 02

  People just seeing the product and seeing how much better it is than the other product out there. And then they are sharing it with their friends and this kind of things.

• 28:01Anthony Pompliano?

  When I think of Robinhood, I think again, kind of the startup taking on the giant. You guys have self-directed, I'm going to call them wealthy investors, just and if you're investing, you probably have more money than obviously if you weren't investing. But this idea of a self-directed investor, for those that aren't familiar is you're not going through an RIA. You're not going through, you know, kind of these traditional channels. Just go download Robinhood and you can start, you know, buying, selling, whatever.

• 28:25Anthony Pompliano?

  You all have that user base for sure. The incumbents, the Black Rocks, the JP Morgans, those, they're all now saying, wait a second, we want to focus on self-directed wealthy investors. As they are trying to come after kind of your user base, are you all trying to go after their user base of institutions and large, you know, financial organizations and kind of the larger pools of capital? And so it's kind of this race as to like, who can hold on to their existing user base, but also get some of the market share from the other?

• 28:51Speaker 02

  Yeah, I think, you know, there's always a bit of a game of trying to attract new investor, new investor type. We've done a lot of campaign also where we, we give like, for example, a bonus if you're bringing accounts from outside of Robinhood. So, you know, we've been trying to attract this investor. But I think at the end of the day, our main focus for us is to build a product that people want. I think, you know, you can try to do whatever you want in terms of marketing campaign or anything like that. If the product at the end is not what they are looking for, it's not going to work. So for us, a lot of our work is to make sure that any missing features that we have that are preventing customers to join Robinhood, we are going to build them as soon as possible and make sure that they can come in.

• 29:33Anthony Pompliano?

  What is the hardest part of your job?

• 29:37Speaker 02

  That's a good question. I think really you want to build everything possible. You know, you look at everything happening in the, in the space in crypto in general, for example, is, it's every day, there is something new, every day, something exciting. And so you want to build everything. And so prioritizing and making sure that you're making the right decision is probably the hardest part.

• 29:59Anthony Pompliano?

  Now, in this job, what is unique is that there's some things that you can control, right? You guys may spend a certain amount of money, you may do a certain things to drive user base or assets you list, licenses you go after, et cetera. And then sometimes just the, you know, the gods smile down on finance platforms and

• 30:17Anthony Pompliano?

  kind of the reaction to COVID happens. COVID, obviously a horrible situation, but then the government steps in, prints all this money, people are locked in their homes and like, here we go. Everyone wants to gamble in, you know, financial markets. Robinhood, a huge winner there, many other things as well. Are there other events maybe that are coming up like, you know, US election or others that you guys say, hey, we actually think that this could be a big accelerator and you will either try to do marketing stuff or product things around those events related to kind of capitalize?

• 30:43Speaker 02

  We tend not to look too much at this kind of events because I think once it's very hard to predict, you never really know what's going to happen. Like you've seen it in 2021, 2022, like catalysts can just change and it's very hard to predict. So for us, the main focus that we have is that we want a platform to work and work well, no matter what. So, you know, if we have million of customers suddenly waking up and wanting to trade something, we want to make sure that we can be here and available for them. That's been the main focus at this point. And you can see it on how we built Robinhood Crypto, for example. We launched it in 2018, in January or February of 2018.

• 31:24Speaker 02

  So the dead of the winter of crypto, you know, a lot of people were saying that crypto was dead at the time, like one of his cycle. And Robinhood still decided to launch crypto because they were like, you know, this is something for the future, this is something that is going to be important. And so we want to make sure that this platform is available to the customer. So yeah, you know, like looking forward, for sure, there are some events like the the political election and more things. For us, like the main focus is going to be like, can we be here and can we be available and for our customers?

• 31:56Anthony Pompliano?

  And how do you measure customer success? Like it's a very interesting question because what you measure is ultimately what's going to move, right? And so I could imagine there's some sort of like customer satisfaction. There could be some sort of like, hey, what is the percentage of wallet share that we have? There's probably like, did our customers make money or not, right? Like there's a couple of different types of measurements. So, you know, when you wake up in the morning, what are the stats that you go and you like want to pay attention to? And why are those the things that are so important?

• 32:23Speaker 02

  Yeah, I think the few you mentioned, so customer happiness, for example, so we look at, you know, CX tickets and we see how people are satisfied with the answer that they got. We look at market share, wallet share. We also look at, you know, people engaging with the platform, are they coming back? Or are they removing their funds from the platform and leaving? Rating on the platform, you know, on the Apple Store, on Play Store, like how people are rating Robinhood. There is like a variation of metrics that we look at and we want to make sure that, you know, everything goes to the north to make sure that people are happy with the product.

• 33:02Anthony Pompliano?

  Do people on Robinhood make money? And obviously, everyone's different, whatever. But what I mean by that is like, um, the United States is very unique in that we have the global reserve currency. And so for the last, you know, 50, 60 years, if you just bought equities and didn't do anything, you probably ended up okay, right? Again, you could have bought the one stock that, you know, went debt to zero or whatever. But for the most part, like, the market just kept going up and to the right. Um, crypto, obviously, very similar, you know, type thing. Um, but I think Robinhood maybe is reputation is like, there's more like active trading. But I don't know if that's actually true or not. So like, how do you think about, you know, kind of the more short-term oriented people trying to tactically do things versus, I don't know, maybe like some sleepy incumbent people go, you know, they just put their money in, they forgot about it, right? Type, type, uh, thing.

• 33:47Anthony Pompliano?

  So like, what is maybe like the truth in terms of the, the general user kind of behavior on the platform?

• 33:54Speaker 02

  I, I think it's very hard to say. Like, it will, it will really depends on the type of user, to your point. Um, if you look at some of the features that we have, for example, we, uh, if you're a gold customer, we give you a very high yield on, on your cash, which is something that you will not get at your normal bank or something that you can just, uh, put the cash on the platform and completely forget about it for, for the next six months and we will give you the yield. So it's not necessarily like a, a real situation of, um, on Robinhood, they are only active trader. If you also look at the type of account that we have now, we also added IRA. So, you know, people can actually contribute for their retirement. Um, and then there is the, the suite of products that we have, uh, from, uh, ETF to, uh, to any type of, of financial instrument.

• 34:38Speaker 02

  And so that's something also interesting for crypto, right? If you wanna get exposure to, to Bitcoin, for example, you can go on Robinhood Crypto, get the actual underlying assets and you can transfer in and out. You can also get on your retirement account and buy one of the ETF or get into your, your stock account and also buy one of the ETF. So we give you the choice. We don't necessarily push you one way or the other. What we try to do is we give you the Content and the learnings for you to make the right decision for what's right for you as a customer.

• 35:08Anthony Pompliano?

  And then one of the things that I always talk to startups about is like, sometimes you have to fire customers. Like, you know, if, I don't know, let's say you have a product and somebody actually spends a little bit of money. Many founders will tell you like the customer who spends the least amount of money is the biggest headache, right? Not true in all businesses, but that's one example for certain types of businesses. Is there a type of user that you guys actually are saying, hey, we know that people can do this on the platform, but maybe it's not the focus, that's not the type of customer that we're looking for. And, you know, I'll give you maybe kind of an opposite example, which is like when the Bitcoin ETF got approved. There were some of these platforms that were like, oh, this doesn't fit our investing, you know, framework. We're not going to let our clients pick.

• 35:49Anthony Pompliano?

  Obviously, they got blasted by kind of Bitcoin world and people saying like, why don't you let your customers pick? But like, what are some of the things that you guys are actively not doing? Or, you know, types of, you know, activities that you want to avoid on the platform?

• 36:02Speaker 02

  Yeah, I think it's one of those to say, because for us, really the goal is to give the choice of the customer. Like, I don't think Robinhood wants to make the decision like, hey, you should buy Bitcoin on spot instead of the ETF. If you look at when the Bitcoin ETF got approved, we actually had added like the 11 ETF the next day on the platform. So, you know, we were on the principle that more access is better for customer. I think the only type of, you know, restriction that we'll put on customer is a thing that will not comply with regulations. So if you're trying to transfer crypto to a forbidden country or something like that, that's really the only case where, you know, I can, I can think of something like that.

• 36:43Anthony Pompliano?

  Is it public who is the like most famous Robinhood user? Like, is there, is there?

• 36:49Speaker 02

  I don't think we have a top user at this point.

• 36:52Anthony Pompliano?

  Yeah, no, I just like, I'm assuming that there, you know, there's people who are celebrities or whatever who have Robinhood accounts. I just don't know if they're public or not.

• 37:00Speaker 02

  I'm sure there are some, but I couldn't tell you.

• 37:03Anthony Pompliano?

  Yeah, it's top of mind because recently the Republican Vice President nominee JD Vance, there was this article that came out and they were like, they looked at it as public Venmo, like history, right? And so some platforms have the ability, you know, you can communicate or whatever. But, but I do think people would be surprised, right? You know, when, when I worked at Facebook, you would be like, oh yeah, like there are people using the products that you're building every day. And it's one rewarding, but also two is you realize like, hey, this is having a massive impact on, on people. So I didn't know if there's anybody who sticks out.

• 37:38Speaker 02

  You know, if, if there was, it would be them like actually saying it like we, we take privacy pretty, pretty seriously. So I don't think, but the, the social aspect is something that is always interesting for sure for Venmo. I didn't think about that. I remember also at some point it was Bill Gates or something that was found on Venmo. So that's definitely interesting.

• 37:58Anthony Pompliano?

  I mean, if you get a Venmo, if you get paid on Venmo from Bill Gates and you can, you know, screenshot that or something.

• 38:04Speaker 02

  I'll take a screenshot.

• 38:05Anthony Pompliano?

  Yeah, so pretty, pretty helpful. Maybe one of the last things we can talk about is as the GM of kind of crypto, I would assume that you kind of have to look at this as like the CEO of the crypto, you know, business. So product is one piece of it, kind of strategy, things like that, but also talent and like, who are you hiring? Where are you finding these people? What is the pitch as to why they should work at Robinhood on crypto? You kind of just walk through a little bit as to like, how do you figure out who's on that team and ultimately gets to us work in the business?

• 38:35Speaker 02

  Yeah, we, we actually hired a lot of people in the, in the past few years. We, we grew our team quite a bit. I think for us, what we try to find is a combination on, you know, if it's an engineer, like we want of course, like technical expertise, technical talent. If it's on the product side, we want also a bit of an entrepreneurial spirit because a lot of these products are brand new in, in the world. And so we want to make sure that they can think of that. But really we have some core values at Robinhood. One of them is customer focus and that's really what I look at the most. You know, when I interview somebody is how do they? They think about product, how do they think about the person who is actually going to use a product at the end of the day?

• 39:15Speaker 02

  Um, but yeah, we have a fairly distributed team. We have a team in, uh, in, in New York. We have teams in, in Menlo Park as well. So, you know, trying to find all the places where we can get talent and then we, uh, we try to make it work. At the end of the day, the, the most important thing I think for us is to make sure that people are excited about the mission and that they want to work towards it.

• 39:37Anthony Pompliano?

  Uh, people working in the office, remote mix?

• 39:39Speaker 02

  We have an hybrid system. Um, so, uh, a lot of people are in the office and we also have a few people that are hybrid and, and kind of distributed toward the, the United States.

• 39:50Anthony Pompliano?

  At some point, you just have enough people where like you're going to have people doing different things.

• 39:53Speaker 02

  Definitely, yeah.

• 39:54Anthony Pompliano?

  Okay. Um, where can we see people to find you on the internet? And if they want to go check out the crypto products on Robinhood?

• 40:00Speaker 02

  I mean, robinhood.com, um, you know, that's the easiest. You can also download the app and, and you will find the crypto, uh, as it's on tab. And so you can find everything crypto on the, on the tab.

• 40:10Anthony Pompliano?

  Amazing. Thank you so much for doing this.

• 40:11Speaker 02

  Thank you so much.