Vlad Tenev (Part 2)

Returning to continue his conversation in Part Two, Vlad Tenev is the co-founder and CEO of Robinhood. He launched the trading platform alongside Baiju Bhatt in 2013 with the goal of making investing more accessible through commission-free stock trading for everyday investors. Under his leadership, Robinhood expanded beyond equities into options, ETFs, cryptocurrency, banking products, and private market investing, and the company went public in July 2021. In addition to Robinhood, Tenev is the co-founder and executive chairman of Harmonic, an AI-driven platform focused on organizing and analyzing business and market data. ------ Thank you to the sponsors that fuel our podcast and our team: AGZ https://DrinkAG1.com/tetra ------ Squarespace https://Squarespace.com/tetra Use code 'TETRA' ------ Athletic Nicotine https://www. AthleticNicotine.com/tetra Use code 'TETRA' ------ Lectio 365 https://Lectio365.com ------ Sign up to receive Tetragrammaton Transmissions https://www.tetragrammaton.com/join-newsletter

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

• 0:02Rick Rubin?

  Tetragrammaton.

• 0:23Speaker 01

  I think that mathematics, card mathematics, isn't computational at all. It's almost like art. It's really about figuring out an insight, a non-obvious insight, that unlocks a problem. Yeah, and I think the reason that I like it is because it's all about figuring things out. And I think that insight, there's a lot of it that's kind of mechanical. It's like, once you have it, you just turn the crank and you get the you get the proof or you get the answer. Yeah, that special insight can be really, really magical. And to me, it's just about figuring things out.

• 1:08Speaker 01

  So the reason I actually got into mathematics, if you remember, it's because of physics. When I was a kid, one of the first books that my dad sort of encouraged me to read was Stephen Hawking's Brief History of Time. And that book deals with kind of the big questions, right? What happened before the Big Bang? Why is the universe the way it is? You have this constant that measures the flatness of the universe. Right? And if it's like, basically like, too high, the universe is going to expand at an increasing rate and everything is just gonna just die out in this like expansionary death.

• 1:52Speaker 01

  If it's too low, the universe is gonna re-collapse again. We would have never had galaxies and stars. And it turns out, if we measure it, ours is exactly one. It's like, immeasurably close to one in this equilibrium between like, death by expansion and death by contraction, which is crazy. If it's a little bit off, we would have never existed, right? If the laws of physics weren't exactly what they are, we probably would have never formed. Yeah, because and also, the universe has to be the exact age where

• 2:33Speaker 01

  one set of stars would have had to form and die and collapse. And we would have been because the our bodies are made of supernova debris. So there has to have been at least we have to be second generation in a sense. So those were the questions that kind of motivated me like, where did we come from? Why are the laws of physics the way they are? Is there one fundamental force? Like, we know that electricity and magnetism, we we found out that those were one force. Radioactive decay that we figured out was part of that. Then we figured out the strong force. Then the next one is, well, if you follow that train,

• 3:15Speaker 01

  all of the forces must have been one to begin with. So there must have just been like one thing. What is that? That's what really, I think, motivated me, just figuring that stuff out. I think one of the things that I often think about from physics is the double slit experiment.

• 3:35Rick Rubin?

  Particle or the wave?

• 3:37Speaker 01

  Yeah. Yeah, the the double slit experiment is something that just sort of simple to understand. But I never really have been able to come up with, like, actually, the the explanations that I can think of for it are kind of scary to me.

• 3:56Rick Rubin?

  Scary in what way?

• 3:58Speaker 01

  So the double slit experiment basically shows that by nature of us observing something or it even being possible to be observed, its properties change. So I think if you if you study quantum mechanics, which which I did, they sort of say, oh, everything's consistent, right? The math just sort of explains it. There's no spooky retro causality where you go back in time and change things. But it's just that the observer and the thing being observed, the subject, are part of one system.

• 4:41Speaker 01

  And the observer can kind of impact the subject.

• 4:46Speaker 01

  Yeah, and so what that makes me think of is, is this some kind of like lazy evaluation, right? In programming, you have this concept of lazy evaluation.

• 4:55Rick Rubin?

  I don't know what that is.

• 4:57Speaker 01

  So if you have a computer program, that computer program has a bunch of memory that it can access. But to be efficient, you don't want to claim all the memory right away. So when the program gets to a particular point, then it claims the memory, only when it's needed. Let's say your program was simulation of the Earth, and you were just in the middle of the Pacific Ocean. It would only load sea. So you would only see blue ocean around you, and it wouldn't load America yet. But then maybe you get closer and, okay, now you're within 15 miles.

• 5:41Speaker 01

  You see some coastline on the horizon. Then America appears in the program, and that memory is claimed. So that's kind of how people program computers, because it's much more efficient. I don't want to claim all the memory for the whole Earth if you're only here and you only need all of this circle around you to experience the program. So, yeah, what I think of in the back of my mind when I think of the double slit experiment is, does the universe work that way?

• 6:13Rick Rubin?

  Yeah.

• 6:13Speaker 01

  And is it, is it, okay, we're being efficient here. And if nobody's actually observing these particles, they're just a probabilistic haze that just looks like a big wave. And then only, only when you look at them do they exist.

• 6:29Rick Rubin?

  And I think now it's even changed to where you can predict in advance whether it's going to be a wave or a particle. It doesn't have to be in time. It can be pre.

• 6:42Speaker 01

  Yeah. Yeah, it's called the delayed choice quantum eraser.

• 6:47Rick Rubin?

  Yeah.

• 6:48Speaker 01

  Yeah, where they actually. Create two particles, right? One of them goes through the standard path and the other one goes on a very, very long journey where they can erase the history. They've done this actually over in the Canary Islands, a big multi-island quantum eraser. Yeah, and they kind of end up at the same place. If it's possible through data analysis after the fact

• 7:14Rick Rubin?

  Yeah.

• 7:14Speaker 01

  to reverse engineer which way the thing went, then there will be no interference. But if you erase it and you make it impossible, then the interference shows up again. It's pretty crazy.

• 7:28Rick Rubin?

  It's crazy. There's so much we don't understand. Do you think things like that are solvable or no?

• 7:35Speaker 01

  I think it's worth trying. Yeah, I think so. I mean, that's really the point of physics and why I'm interested in AI models, too. I think they could be solvable.

• 7:47Rick Rubin?

  Are you into puzzles?

• 7:50Speaker 01

  I like to play around with puzzles from time to time, yeah, but...

• 7:55Rick Rubin?

  But math scratches the puzzle itch for you?

• 7:59Speaker 01

  I think so. I mean, puzzles, they're a good way to pass time, for sure.

• 8:04Rick Rubin?

  Mm-hmm.

• 8:05Speaker 01

  But I don't think... I think it's different than true understanding. It's almost like a game.

• 8:12Rick Rubin?

  Yeah.

• 8:13Speaker 01

  How mathematically interested are you?

• 8:16Rick Rubin?

  I'm interested, but I don't know anything about it.

• 8:19Speaker 01

  I can tell you my favorite, um, simple math problem. I think it illustrates this sort of difference between math being sort of like a computational thing and more artistic, conceptual.

• 8:35Speaker 01

  So this is a triangle, right? We call it ABC, the three vertices. So let's say it's isosceles triangle,

• 8:47Speaker 01

  which means that these two sides have the same length. So one kind of interesting fact about isosceles triangles is that it turns out

• 9:00Speaker 01

  because these two sides have the same length, these angles are also the same.

• 9:07Speaker 01

  So what that means, the way you kind of write that is AB equals BC implies that...

• 9:20Speaker 01

  Angle BAC equals angle BCA, right? And if you look at this, I think the interesting thing is that this is kind of a self-contained fact. You've got these three points. The only thing you're using in this statement is those points. You have AB equals BC, so BAC, which is this angle, is equal to BCA. But then the question is, how do you prove it? Like, why is this true? And the reason it's true requires you to do something that I can... This is like the... There's one creative step here.

• 10:04Speaker 01

  And you actually have to construct a new point from scratch. So you say, okay, I can create a point in between A and C, and I'll call it D. And this point is the midpoint, right? It's exactly... I can create a midpoint. If these two points aren't the same, there's a line connecting them that has some length. And if I have the midpoint, I can connect it to B. And then I get two triangles. Triangle ABD, then triangle BDC. Now, these triangles are actually the same triangle because by nature of this being the midpoint,

• 10:49Speaker 01

  this side is the same as this side, right? And then they're sharing this side. And so you have two triangles that are congruent. They have the same sides. And what that means is that all of the angles are the same, too. This angle is the same as that angle. This angle is the same as that angle. And there, you get the fact that these two angles are the same. And this problem, by the way, is not just difficult for some humans, but it was somewhat difficult for AIs too. And it's because the first versions of AI geometry solvers would kind of work with the points. And I'd say we have three points.

• 11:33Speaker 01

  You just have AB and BC and you're not using anything else for the statement. So where does this point D come from? And that's kind of the genius of it. You have to know that by creating this new point, which is a midpoint.

• 11:50Rick Rubin?

  You can test.

• 11:51Speaker 01

  You can, you can kind of like create this new additional structure that helps you unlock it. Even though this point D doesn't actually appear in the statement anywhere, right? There's no D in here or D in there. So that's called an auxiliary construction. And the first AI models that did really well at solving geometry problems. The only thing they did was figure out what the right auxiliary constructions to make would be. And then the rest of it is just all computational. I mean, obviously, this is a pretty simple example.

• 12:29Rick Rubin?

  In the abstract, the idea of adding a new piece of information that unlocks the picture, even though that new piece of information isn't really part of the equation.

• 12:40Speaker 01

  Yeah.

• 12:41Rick Rubin?

  That's beautiful.

• 12:42Speaker 01

  Yeah, I think there's a certain elegance to it for sure. And I think there's crazy things in physics that still blow my mind that nobody can explain. Yeah, and if I had to start another company, I mean, I think, I think harmonic scratches the itch. There's like a very deep well of if you can just keep going and and figuring out all this stuff. I think it, I think you could just keep going forever. But there's also things in the real world that we can't understand and we can't explain. And I think that harkens back to figuring out why the laws of the universe are the way they are.

• 13:22Rick Rubin?

  Yeah. Tell me about your spiritual life.

• 13:25Speaker 01

  Yeah, I'm, I'm trying to, to figure that out.

• 13:30Speaker 01

  I think a lot of my day to day is sort of figuring things out. I mean, the way that this kind of, I think you asked math and physics, how do they influence what I do? I mean, a lot of what I do is really thinking of products, figuring out how people will use those products to have them have as much success as possible. Like, what can get someone to really value using Robinhood? And rolling out these products, combining them together, just gives you so many things to learn, right? There are a lot of things that we don't, that we don't understand.

• 14:11Speaker 01

  I think a big part of me is just being curious about it and sometimes just letting randomness take over. So I know you're into astrology. I have astrologer friends and I listen to them. If they tell me it's a bad day to launch a product.

• 14:31Rick Rubin?

  Yeah.

• 14:32Speaker 01

  Or that it's gonna be a bad day for me to initiate something. I try not to initiate anything on that day. Yeah, and, and I think that there's, it just shocks me that as a rational person, there's a lot of times where they've just been totally right and I can't explain it, but.

• 14:52Rick Rubin?

  And you think it goes beyond superstition, it's something else?

• 14:55Speaker 01

  I think so. I think it, it goes back to something in the physical world that we don't understand. Like, why do people have out of body experiences? Nobody can explain it. I've seen all the cases where someone's literally clinically dead, no heart rate, and then they just remember everything that's happening to them in that state.

• 15:22Speaker 01

  Yeah, so I I make my my decisions assuming that I have agency and of course I can control things, but I think I also am somewhat superstitious in the sense that even if I can't explain something, if someone has really high conviction, I'll go with it.

• 15:41Rick Rubin?

  Tell me the whole GameStop story and for the story, take Robinhood out of it. I know that there's a Robinhood component, but that's tangential to that whole story.

• 15:56Speaker 01

  So I think the the news story of GameStop started with this idea of retail investors banding together on Robinhood to like take down the hedge funds, right?

• 16:12Rick Rubin?

  Solely on Robinhood?

• 16:15Speaker 01

  I mean, by and large on Robinhood, I think the other brokers had some of the spillover, like when we had to shut down the buying, particularly at that point, people were like, okay, I want to buy GameStop and they started downloading other apps as alternatives. But I think it started off being Robinhood being the lion's share and certainly we were the ones associated with the positives and then later the negatives of shutting it down.

• 16:43Rick Rubin?

  Still, take Robinhood out of it for a minute. So there were retail buyers trying to take down hedge funds. Explain that.

• 16:53Speaker 01

  I'd say there were a couple of things going on at the time, some of which were COVID related, right? One of the things was, I think, this nostalgia and sympathy for companies that were kind of unfairly harmed by COVID. So GameStop and AMC, probably the the two biggest examples, but there are also others like Nokia. A few months earlier, there was a big thing about Hertz and American Airlines, right? Which were, you imagine, people aren't renting cars, people aren't getting on planes, nobody's going to a movie theater, you're not. Going to a brick and mortar, you know, video game retailer to do your gaming.

• 17:37Speaker 01

  And unlike the global financial crisis, the government wasn't like stepping in to help these businesses and bail them out. So I think there was a little bit of, we're rooting for these businesses.

• 17:47Rick Rubin?

  Yes.

• 17:48Speaker 01

  I remember shopping at GameStop and buying video games and selling my old games when I was a kid. So I kind of want them to succeed. So I think there was just an environment where retail had, to some degree, extra money from the stimulus and they were like-

• 18:04Rick Rubin?

  Did it happen around the time of the stimulus?

• 18:06Speaker 01

  Yeah, big time.

• 18:07Rick Rubin?

  So that also plays into the story. I didn't know that.

• 18:10Speaker 01

  Yeah. And the other thing that happened that not a lot of people realized was in 2020, Robinhood actually had a big free stock referral program. So anytime you joined, you would get a free stock. Think of it as a referral incentive. If you refer a friend to open up a Robinhood account, you'll each get one. If you refer seven people, you'll get seven, right? GameStop, I think it was a fairly low-priced stock at the time, was one of the more common ones. So a lot of Robinhood customers-

• 18:42Rick Rubin?

  I see.

• 18:42Speaker 01

  Which just, I mean, the customer base grew very quickly during 2020, had GameStop as their first stock on the platform. So there was like an added level of, you know-

• 18:55Rick Rubin?

  Connection.

• 18:55Speaker 01

  Yeah, your first stock on the platform is everyone remembers, to some degree, their first stock, right? At least I do. And so then, in December of 2020, I started noticing on Reddit chatter about GameStop. And I didn't think that it was particularly notable at the time because you've seen chatter about so many different stocks and so many things happening. But yeah, there, there was this guy, Deep Fucking Value was his handle. So later it turned out that this guy was a financial professional. He worked for some company in Massachusetts.

• 19:37Speaker 01

  But he started making videos, videos analyzing GameStop. And one of the things that he noticed was Ryan Cohen, who was the founder of Chewy, it's a pet food company, that did very, very well. I think it sold to Amazon for a large amount of money. And then Ryan Cohen had then bought GameStop shares, right? And- This was part of the fundamental analysis that he did. The thesis was something like Ryan Bowen, smart guy, very business savvy. He's getting more involved in this company. He's seeing some value here, so maybe we should all be watching. And then he bought some shares and he started building up a following.

• 20:20Speaker 01

  And what happened was GameStop started ticking up, started building more of a fan base. And then January hit. And January was a huge inflection point in retail activities. And so what happened was, it wasn't just GameStop, but GameStop was a big story. Dogecoin, which is one of the cryptocurrencies, started going gangbusters. And what happened was, you know, GameStop would tick up. Every time it ticked up, he would get more and more fans. So it created this self-referential viral loop almost where, you know, it would go up.

• 21:01Speaker 01

  He would do a video, he would get more fans, said, well, this is amazing. And then it kept going. And as the price went higher and higher, it got more attention and more people would come in, more retail customers. By January 28th, it was all over the news, right? So the news was like helping amplify.

• 21:25Rick Rubin?

  But the news was that this stock that was historically not performing very well, all of a sudden, because of someone on Twitter, is getting a lot of attention.

• 21:36Speaker 01

  Yeah, he built an army, right? And then I think a lot of stories sort of formed around that. Like, they looked at all the people that were shorting the stock and it was hedge funds.

• 21:49Rick Rubin?

  Explain that whole system.

• 21:51Speaker 01

  So the way short selling works is...

• 21:55Speaker 01

  Most people, when they want to trade, are long a stock.

• 22:01Rick Rubin?

  They're buying it to succeed.

• 22:03Speaker 01

  Yeah, they want the stock to go up.

• 22:05Rick Rubin?

  Yeah.

• 22:05Speaker 01

  So they buy it and they hold it long, right? What you can also do is to take the contrary view and you short a stock.

• 22:12Rick Rubin?

  So you're betting against the stock.

• 22:14Speaker 01

  You're betting against the stock. And the way that that works mechanically is you go and borrow the stock from someone who holds it. There's a marketplace for this. People who are long it and are holding it could choose to release their stock into this marketplace and they earn some more income for this. The short seller.

• 22:34Rick Rubin?

  Are they selling it or not selling it?

• 22:36Speaker 01

  They're lending it.

• 22:37Rick Rubin?

  Lending it.

• 22:38Speaker 01

  And then they can call it back. They can recall it, right? So let's say you want to short a stock and I own it. I can lend it to you through the stock lending marketplace.

• 22:49Rick Rubin?

  What are the rules around that? Are there any?

• 22:52Speaker 01

  There's a lot of rules around it. I think the most important one is that in most situations, I mean, there are some exceptions. You can't sell a stock short if you haven't secured a borrow. And that's called naked shorting.

• 23:08Rick Rubin?

  I don't know what that means. Explain that.

• 23:09Speaker 01

  So in order to sell it short, I have to have borrowed it from someone.

• 23:15Rick Rubin?

  You can't short it if you don't have it.

• 23:16Speaker 01

  Exactly.

• 23:17Rick Rubin?

  I see.

• 23:17Speaker 01

  Yeah. And actually, there's some exceptions to this. Some people are allowed to short it without having it. But by and large, for the normal person, you can't do that. So you have to secure the borrow. And you can imagine for financial stability and things like this, you don't want to just have unconstrained shorting.

• 23:37Rick Rubin?

  Yeah.

• 23:38Speaker 01

  The reason that rule was put in place was because that happened to some companies. Actually, I might have this wrong, but I think it might have happened to either Lehman Brothers or Bear Stearns and been a part of the global financial crisis.

• 23:54Rick Rubin?

  Interesting.

• 23:55Speaker 01

  For that reason, what's called naked shorting is like severely clamped down. But yeah, that's what shorting is. You can sell it and then at some point you have to pay back your borrow.

• 24:07Rick Rubin?

  Can you find out who's shorting stocks?

• 24:10Speaker 01

  So if you're a hedge fund, you publish.

• 24:12Rick Rubin?

  I see.

• 24:12Speaker 01

  You have to publish your positions and that includes your shorts. If you're kind of past a certain level. If you're a normal retail customer, not really. And interesting thing, at that time, Robinhood didn't permit shorting. We have since rolled out the ability to short. We did that a couple of months ago, but Robinhood was long only equities platform.

• 24:36Rick Rubin?

  So was part of the reason that GameStop stock was selling was because they were aware of the short positions against it? Or was that not part of the story?

• 24:48Speaker 01

  So there's been studies about this. And by and large, the conclusion is the reason the GameStop stock went up was because more and more people were buying it. So the short covering, so to speak, I think was something like 10% of it or less. Because you can imagine this whole thing was investigated. The SEC came out with a report. I think the conclusion was something like there was a big narrative around the hedgeys reloading their shorts and, you know, doing all this. But by and large, the reason for it was just more retail buying because it went viral on social media.

• 25:29Rick Rubin?

  Was the story for the retail buying to happen? That it was against the hedge funds or no?

• 25:37Speaker 01

  The story morphed into that.

• 25:39Rick Rubin?

  I see.

• 25:40Speaker 01

  Yeah, I think in the days before.

• 25:43Rick Rubin?

  There was an aspect to the story. Again, I didn't really understand this stuff very well, but it was almost like a continuation of the Occupy movement in some way.

• 25:51Speaker 01

  Yeah, I think it probably to some people was a continuation of the Occupy movement.

• 25:57Rick Rubin?

  Was it like an activist based thing? Or was it just, we like the story of GameStop, so we're going to invest in GameStop? Or was it more than that?

• 26:09Speaker 01

  Yeah, I mean, there's a lot of different people involved and a lot of it's anonymous. And, you know, not all of them want to sit for interviews. This guy, Keith Gill was his name, Roaring Kitty, or Deep Fucking Value, which was the first one that I remembered.

• 26:25Rick Rubin?

  Yeah, I remember Roaring Kitty.

• 26:27Speaker 01

  Yeah, he essentially disappeared, right, completely off the radar. And there was a movie about this.

• 26:32Rick Rubin?

  Wow.

• 26:33Speaker 01

  Dumb Money. I don't know if you saw it.

• 26:35Rick Rubin?

  I did not.

• 26:36Speaker 01

  Sebastian Stan played me, so I felt good about that. They picked a very good-looking guy to portray Vlad Tenev. But yeah, there was certainly a narrative around that, like, we're an army, we're gonna go take down the hedgies, right? They're coming after us, they're reloading their positions. I can't tell you how much people actually believed that. Some people probably did.

• 26:57Rick Rubin?

  Well, did it have any impact on the hedge funds or no?

• 27:01Speaker 01

  Well, yeah, a lot of the hedge funds that were short while this thing was riding up and got out of their positions for huge losses. Some of the hedge funds failed, in fact.

• 27:12Rick Rubin?

  So then it was a successful...

• 27:15Speaker 01

  Yeah.

• 27:15Rick Rubin?

  ...activity?

• 27:16Speaker 01

  Yeah, from that standpoint, for sure. Yeah, yeah. And then, you know, the hedge funds will tell you, well, my LPs are pension funds, so pensioners lost a lot of money. So I can see the argument on both sides, but certainly some hedge funds lost a lot of money for that, yeah.

• 27:32Rick Rubin?

  Okay, so now the Robinhood piece is that the buyers were Robinhood customers?

• 27:38Speaker 01

  Yes.

• 27:39Rick Rubin?

  So a lot of the transactions happened on Robinhood?

• 27:42Speaker 01

  Yeah.

• 27:43Rick Rubin?

  But I don't feel like Robinhood's the story. It seems like you're fairly passive in this story.

• 27:49Speaker 01

  Yeah, I mean, we weren't doing videos and saying, come on, you know, we're coming after the... We weren't the generals in this fight, for sure.

• 27:56Rick Rubin?

  No, you were the service provider.

• 27:58Speaker 01

  Yeah, I think there was some kind of poetic irony in the name of the product being Robinhood, it being free, and the retail investors using Robinhood to take down the hedge funds. But yeah, no, I think the reason people were using Robinhood was Robinhood had become synonymous with investing during that time period. Roaring Kitty wasn't using Robinhood. I think he had in Morgan Stanley account. Yeah, but we were pretty much the platform that a lot of the activity was happening on.

• 28:28Rick Rubin?

  And then, did you get shut down? Or did you choose to shut down? What happened?

• 28:32Speaker 01

  So the dramatic story was, on January 27th, you know, Robinhood was kind of a hero, in a sense. Like, we were, people were using our platform against the man.

• 28:42Rick Rubin?

  Yeah.

• 28:43Speaker 01

  And then what happened was, we basically had to pause, not even for a crazy long period of time, but for something like 12 hours, buying of game stuff.

• 28:56Rick Rubin?

  Not even one day?

• 28:57Speaker 01

  It was pretty much one trading day, but, uh, yeah, not a full 24 hours.

• 29:03Rick Rubin?

  Was it clear that it would be short, or no?

• 29:06Speaker 01

  It was not clear.

• 29:07Rick Rubin?

  It was just shut off?

• 29:08Speaker 01

  Yeah, yeah, yeah.

• 29:09Rick Rubin?

  Was there an announcement, or no?

• 29:11Speaker 01

  There were some announcements, but they were very sort of corporate, legalese sort of thing.

• 29:18Rick Rubin?

  And also, you don't know what's gonna happen next.

• 29:21Speaker 01

  Yeah, I mean, from my perspective, as the person running the platform, there were a few things going on in my mind, right? Number one, we had a sizable PR issue in March of the previous year, which was at the beginning of the whole COVID shutdown, and Robinhood was growing like crazy, where it was like a total platform outage. So the whole platform, every stock was out for...

• 29:47Rick Rubin?

  How long was that for?

• 29:48Speaker 01

  It was for one full trading day at first, but then there were kind of aftershocks, where there was another outage for a couple of hours, so...

• 29:57Rick Rubin?

  Do you know what caused those?

• 29:59Speaker 01

  Intense load, and our systems not really being, being ready for it. Because our load probably went like 10x in the span of a pretty short period of time.

• 30:09Rick Rubin?

  Understood.

• 30:10Speaker 01

  So, in the back of my mind, as this whole GameStop situation was unfolding, and we were climbing the App Store ranks, at one point, on January 27th, we were the number one downloaded app in the country.

• 30:21Rick Rubin?

  Wow.

• 30:22Speaker 01

  Not even financial app. We were ahead of like TikTok and Instagram.

• 30:26Rick Rubin?

  And you think that was because of the GameStop story?

• 30:29Speaker 01

  Yeah, yeah. Everyone was downloading Robinhood.

• 30:32Rick Rubin?

  Yeah.

• 30:32Speaker 01

  And so in the back of my mind, my fear was... Total platform shutdown because of load, right? And I was like, okay, let's get the engineers to make sure. Like, we were having daily war rooms, code red situation. What are all the bottlenecks? But yeah, what we didn't see was this clearinghouse deposit situation, which kind of came out of nowhere. Yeah, so basically, as a broker, we have to put up firm capital to back the positions that our customers make from trading. And the formulas for how much cash from our balance sheet we have to put up kind of depend on how one-sided the flow is.

• 31:16Speaker 01

  So typically, under normal circumstances, people are buying and selling. So you kind of end up being flat. But in this situation, when something's going up and all the retailer are pretty much buying, it was very one-sided. These rules reared their ugly head and basically made our deposit requirements balloon. They went from sub 100 million a couple of days before GameStop to in the billions within a span of something like 24 hours. And then how did all this play out, right? I was sleeping. And at this point, I was trying this thing.

• 31:58Speaker 01

  So you can imagine the depths of COVID. I was just online all the time, probably working 20 hours a day. My laptop was usually next to my bed. And I was kind of going a little loony. So I was trying this thing where I slept with my phone in another room because I just thought that this is bad for my mental health. I need some kind of reset. And my folks on the East Coast, who were doing like the morning open preparations, were trying to get a hold of me. And eventually, they called my wife. My wife does sleep with her phone next to her. So they find out how to get to her.

• 32:41Speaker 01

  She wakes me up and she is obviously perturbed by this whole situation to begin with because nobody ever calls her. Like shit hasn't hit the fan to that degree. She's like, oh, my God, oh, my God, Vlad, there's something going on. I can't really understand it. But they need you. They need you. So I go. I pick up my phone. My phone is unusable. It's like, I don't know if you've ever seen these clips of Kim Kardashian getting like, having her notifications on and posting an Instagram post. And then you see all the notifications just churning from the millions of followers. It was kind of like that, right? The phone was unusable from text messages and calls.

• 33:23Speaker 01

  And I would have these messages like, "What the fuck are you doing? How could you side with them?"

• 33:28Rick Rubin?

  Wow.

• 33:29Speaker 01

  Yeah, it was just people were upset. They thought that we were siding with the hedge funds and we were colluding with them in some way.

• 33:35Rick Rubin?

  Who decided to shut it down for that 12 hours?

• 33:38Speaker 01

  It was the president of the brokerage of the clearing firm. And part of this is just, we have a bunch of businesses and they have presidents. And of course, you know, the presidents are responsible for all of the regulatory matters and running the business. So this one, the president, you know, made the call. And it was a tough call for a variety of reasons, right? Because you can kind of think of the counterfactuals, what would have happened? And there's some scary stuff that happens. Lehman Brothers shut down. They had to liquidate. And these rules around capital requirements, they're not optional. So they can come in and shut you down. And you saw FTX a couple of years later.

• 34:23Speaker 01

  Just when the survival of the firm is in question, I think the most important thing turns out to be, you have to protect all of the people's money, right? And kind of became a question of, all right, there's a lot of people on the platform that aren't trading GameStop. And there's some people that are trading GameStop for sure, and they're upset, but...

• 34:44Rick Rubin?

  Was the whole system turned off or just GameStop trading?

• 34:47Speaker 01

  It was GameStop, but also a bunch of the other meme stocks.

• 34:51Rick Rubin?

  I see.

• 34:52Speaker 01

  There were a handful of others, AMC. And then I wake up and I'm hearing the story of, basically Sheets came in and a lot of this was automated. Of, you can think of this as like a tax bill coming in with $3 billion.

• 35:08Rick Rubin?

  Yeah.

• 35:08Speaker 01

  And then we can't get on the phone with anyone to explain it to us. And then another one comes in and it's lower, 1.7 billion, and...

• 35:16Rick Rubin?

  So was it not clear to you what was going on at the time?

• 35:19Speaker 01

  It was not clear. My first thought was actually maybe the central clearing system.

• 35:27Speaker 01

  Has some issue.

• 35:28Rick Rubin?

  Uh huh.

• 35:28Speaker 01

  And maybe they're just, sometimes when things are overloaded, just bogus numbers are being sent out. And then there was just this, this latent fear of if it's three billion today, and let's say we managed to come up with this money, and, and we did, knock on wood, right?

• 35:45Rick Rubin?

  Wow.

• 35:46Speaker 01

  We came up with it. What if it just keeps going?

• 35:48Rick Rubin?

  Yeah.

• 35:49Speaker 01

  Could it be 50 billion tomorrow?

• 35:50Rick Rubin?

  Because the day before, it was 100 million.

• 35:53Speaker 01

  Yeah. It had gone up by over an order of magnitude. So yeah, we, we made the tough call to, the president made the tough call to shut it down.

• 36:01Rick Rubin?

  Yep.

• 36:02Speaker 01

  And then what we did was, we went out, we broke up into a couple of work streams. We had the engineering one, making sure the systems were stable. Then we spun up a money raising one of, we don't know exactly how much money we need, but it's pretty clear we need some more money because we don't know what's gonna happen in the future. And then there was the public relations one of, okay, I figured out how to make some calls and get through my phone, but the Robinhood brand and what we stood for was kind of under attack, so we had to like communicate. And at the time, the story was that we were colluding with the hedge funds.

• 36:44Speaker 01

  There was a narrative that the White House had called me to shut down GameStop trading. And so there was this fake collusion narrative that we felt like we had to dispel. Nobody knew about this deposit requirements thing.

• 36:57Rick Rubin?

  Yeah.

• 36:58Speaker 01

  And if you think about it, it's very technical and hard to explain and less compelling as a narrative than Robinhood is turning their back on the poor siding with the rich and taking the poor's money. Hedge fund collusion, simple, delightful narrative. This like clearinghouse, market plumbing thing, very hard to understand.

• 37:18Rick Rubin?

  Were you able to solve that the next day when it got turned back on?

• 37:23Speaker 01

  No. We thought we would be.

• 37:25Rick Rubin?

  Yeah.

• 37:26Speaker 01

  Yeah, and from my perspective, you could imagine, fresh in my mind was the full platform outage of March of the past year. And I was kind of like, what's the big deal here? At least we didn't shut down the platform. To some degree, I was like, wow, the engineering held up. And we were able to serve all of the buy and hold customers. But no, you know, once this collusion narrative took off, it was like wildfire.

• 37:51Rick Rubin?

  I see.

• 37:51Speaker 01

  And I gave some very bad press interviews.

• 37:54Rick Rubin?

  Yeah.

• 37:55Speaker 01

  And my instinct was, look at all this noise on social media. We have to get out there right away. We have to communicate with the customers. We have to tell people we're not colluding. And so the first messages were like highly scrubbed, generic, legalese messages like, we did not do this at the direction of any other market participant or market center, or we didn't want to say Citadel or hedge funds or anything. So there was these generic things. And then, of course, the reaction was, of course, they're colluding.

• 38:28Rick Rubin?

  Yeah.

• 38:28Speaker 01

  Look at this shit. They sound just like what someone colluding and doing some stuff would say.

• 38:32Rick Rubin?

  Hostage videos.

• 38:33Speaker 01

  Exactly. Yeah, they're telling us they're not colluding. So obviously they're colluding. And then I did these interviews with the press, with Andrew Ross Sorkin, where I just kind of had my talking points and I was reading them and, you know.

• 38:49Rick Rubin?

  Were you scared?

• 38:51Speaker 01

  I mean, I wasn't scared. I was actually like, I want to go out there. This is my time to lead, you know?

• 38:56Rick Rubin?

  Yeah, yeah.

• 38:57Speaker 01

  This is my time to show what I'm made of as a leader. Because I'd been kind of a reclusive, not reclusive, but I hadn't really been out there very much.

• 39:06Rick Rubin?

  Yeah.

• 39:06Speaker 01

  Kind of just building behind a keyboard and not doing a lot of talking. So I wanted to go out there. And actually, after the interviews finished.

• 39:18Speaker 01

  I ended up thinking like, I thought that went pretty well, you know? Felt like I got my points across.

• 39:23Rick Rubin?

  Yeah.

• 39:23Speaker 01

  I read them. You know, throughout, throughout the years since then, I keep thinking, was there some magic collection of words that I could have said? Or interview I could have given that would have taken the temperature down and would have solved that issue and helped the brand out? Cause it's, it's been a gradual rebuild in the years since then of the brand and the, and the public perception around that. Largely, it's just time has healed the wounds. People kind of move on. But yeah, I still play that back. If those interviews had gone better and I had given like a super charismatic response and said, hey, this was a really bad situation.

• 40:07Speaker 01

  We weren't ready for it. We didn't have $3 billion at the time.

• 40:12Rick Rubin?

  Yeah.

• 40:12Speaker 01

  We didn't really know. But yeah, I'm not sure. Probably to some degree, maybe it could have helped 20%. I don't know if those magic words existed. I think we were just in a really tough spot. I think the moment I picked up my phone and it was just buzzing with all the hate texts, it was probably too late to do much about it.

• 40:32Rick Rubin?

  Do you feel like now it's completely in the past and the brand has recovered?

• 40:38Speaker 01

  I think the brand recovered. There's still people that bring it up for sure.

• 40:42Rick Rubin?

  Wow. How many years ago was it?

• 40:44Speaker 01

  Five years ago.

• 40:45Rick Rubin?

  Yeah.

• 40:46Speaker 01

  Yeah. So I, it's not completely gone. We look at this thing called net promoter score.

• 40:51Rick Rubin?

  What's that?

• 40:52Speaker 01

  So it's basically a measure of product loyalty. You ask people, how likely are you recommend something? Or there's another version of it, like if this product disappeared today, how unhappy would you be? And if they say seven out of, if they say eight out of 10, nine out of 10, or 10 out of 10, they're considered a promoter and they're like 100 points. If it's six or under, they're a detractor. And if it's seven or eight, they're neutral. So it's a little bit of a contrived measure, but directionally, it's, it's pretty useful. And so NPS of 100, everyone loves you. NPS of negative 100, everyone hates you. NPS of zero, you've got as many promoters and detractors.

• 41:37Speaker 01

  So ours plummeted on that day.

• 41:40Rick Rubin?

  What was it before? Do you remember?

• 41:42Speaker 01

  It was pretty high. I don't know if we've ever shared it, but I mean, it was up there with some of the best companies. And it actually, yeah, I mean, it crashed. It crashed. Yeah. And so we were able to measure this old adage that trust is slowly earned, but can be lost very, very quickly. We saw that in the number. It just went down.

• 42:03Rick Rubin?

  Yeah.

• 42:03Speaker 01

  And then it took many years, probably three years. 2024 was when it got back to like pre GameStop levels. And it was a combination of, I think, GameStop decreasing in importance and us improving the rest of it. Well, yeah, even today, you see some people that that mention it.

• 42:24Rick Rubin?

  You didn't make any mistakes. You were asleep.

• 42:27Speaker 01

  Well.

• 42:28Rick Rubin?

  There was no way you could have even been thinking that this is something that could happen.

• 42:34Speaker 01

  No, I mean, yeah, of course, you could second guess and you could say, should we have been better prepared?

• 42:40Rick Rubin?

  Prepared for what? Prepared for an earthquake? Or prepared for a fire? How can you be prepared for any possible event?

• 42:49Speaker 01

  Yeah, I did think by and large, we were in firefighter mode from the beginning. And it was sort of like, okay, this thing happened. Let's clean it up. I think, I think a lot of the armchair quarterbacks were like, well, they should have been better prepared. Should have been capitalized with a lot of money. I was very happy that our system stayed up from an engineering standpoint. That was the known risk. But yeah, if I had to look back, I think my interviews left something to be desired. It was funny. Like I did my press. Everyone was watching those interviews. I did one with Andrew Cuomo on CNN, who I followed a lot during COVID because he did like all these COVID commentary. That one's viewed millions of times. And yeah, when I look at it.

• 43:33Speaker 01

  It's not very confidence inspiring. You know, I could have done a little better on the communication.

• 43:37Rick Rubin?

  But it was also the first time you ever in that position.

• 43:40Speaker 01

  It's like trial by fire, right?

• 43:41Rick Rubin?

  Yeah.

• 43:42Speaker 01

  And then I did a clubhouse with Elon Musk, which Elon Musk interviewed me.

• 43:48Rick Rubin?

  Great.

• 43:48Speaker 01

  About what happened with GameStop. And I think that one went better.

• 43:52Rick Rubin?

  Yeah.

• 43:53Speaker 01

  Because that's the one where I've I shared the details, the $3 billion capital call, the NSCC, the DTCC, all the all the players. And yeah, but that happened on Sunday. And I think what happened really was

• 44:09Speaker 01

  the the whole thing was over by Sunday because the market closed on Friday. And then there was the weekend and the story shifted.

• 44:19Rick Rubin?

  Yeah.

• 44:19Speaker 01

  And I think people lost interest. So what what actually ended up? I think there are some people that blame Robin Hood for ending the whole GameStop thing. But I think the reality is it probably would have ended anyway. And what really ended it was the weekend. And these types of things, these like short squeezes. They're pretty episodic. And usually if something like spikes up a lot, it doesn't end up at like a permanent plateau of high price. Throughout history, a big spike up usually followed by a big crash.

• 44:55Rick Rubin?

  Especially considering it wasn't based on the quality of the GameStop business. It wasn't Tesla shipping their new model. It wasn't that.

• 45:09Speaker 01

  Yeah, I think certainly people criticized the fundamentals of it. And and I think we got some blame for both sides, right? We got blamed from the GameStop traders, the retail army for doing the position closing only trades. And then also from the people that weren't doing it. That were like, oh, Robin Hood facilitates this GameStop stuff and we don't like that. So you could imagine we were sort of sandwiched by both sides. And when I went to testify in front of Congress. It was like very, very stark. And it was mostly from the people that didn't believe that the GameStop activity was healthy market activity. And they were just asking us about, is your platform responsible for the whole thing to begin with?

• 45:52Rick Rubin?

  Yeah, it's like, did you instigate it?

• 45:54Speaker 01

  Yeah, and I was like, well, it was all over the news. It was all on social media. The trading didn't originate, like the Roaring Kitty was using E-Trade. But everyone, I think what I realized is when something like this happens, people look for someone to blame.

• 46:11Rick Rubin?

  Yeah.

• 46:11Speaker 01

  And I think unfortunately and through lack of savvy, we kind of became the scapegoat.

• 46:18Rick Rubin?

  Tell me about your note-taking habits.

• 46:21Speaker 01

  Yeah, this is something that I started kind of recently and I am not as regular as I should be. But every night I kind of like to wind down and just take notes about my day. Just kind of like what's going through my mind, what bothers me. And then I also like to look ahead to tomorrow and just think of like the the top three things that I need to get done. Usually the list is like 10 or 15, but I really focus on the top three.

• 47:00Rick Rubin?

  Do you think of it as journaling?

• 47:02Speaker 01

  Yeah, but it's actually, it's a little bit more, it always rears into

• 47:07Rick Rubin?

  To-do list.

• 47:08Speaker 01

  To-do list, a little bit, yeah. So it's kind of like half journaling, half to-do list. But I also try to do, like on Sunday, I'll do it for the week. At the beginning of the month, I'll do it for the whole month. And then I'll also do it for the year. So it's kind of like December, end of December. If I'm at home, I'll just think through my year and what I want the year to be. And I kind of say, all right, if it's December 29th, 2016, and I'm kind of looking back and what would it take me to feel good about? What just happened?

• 47:46Rick Rubin?

  Do you ever look back?

• 47:47Speaker 01

  Yeah.

• 47:48Rick Rubin?

  You do?

• 47:48Speaker 01

  Yeah.

• 47:49Rick Rubin?

  Great.

• 47:50Speaker 01

  I look back. Yeah, and that's actually some of the most fun stuff. And I noticed, wow, I'm thinking about a lot of the same things.

• 47:57Rick Rubin?

  Yeah.

• 47:58Speaker 01

  Yeah, basically, I'm thinking about half the things that I was thinking about a year ago. So those are kind of unresolved and maybe that tells me something. And then there's just a whole bunch of new stuff.

• 48:11Rick Rubin?

  When you're thinking about a new idea, do you write about it?

• 48:16Speaker 01

  That's changed a little bit. A lot of my ideas that I have are software ideas. Like, there's this new product or new feature, a new piece of software that I could build. Lately, I've just been building them.

• 48:28Rick Rubin?

  Oh, great.

• 48:30Speaker 01

  And that's been kind of fun. Yeah, or I go on my chalkboard and I sketch stuff out. That's like if I really want to get my hands dirty and feel it, yeah.

• 48:39Rick Rubin?

  Do you build stuff coding in a traditional way or vibe coding?

• 48:43Speaker 01

  Vibe coding. I think now it's just.

• 48:47Rick Rubin?

  That's coding now?

• 48:48Speaker 01

  Now that's coding, yeah. I remember when I first started coding. Yeah, it always blew my mind how the vast majority of software engineers didn't really know the internals of the systems. Like, they didn't learn assembly language or memory management or pointers. And I think there's two ways to look at it, right? Some people would say, well, that's a great thing because it democratized coding. You didn't have to. A lot of people don't want to deal with all that stuff. They get bored of it. And so it opened up coding to a lot more people. But I always thought you have to really understand all the stuff to really know what you're doing and to get the most out of it. I think now you're seeing it again. So I still think it's important to understand

• 49:32Speaker 01

  what the code does and how it works. But the vast majority of people that are coding now probably didn't code a year ago.

• 49:41Rick Rubin?

  Yeah.

• 49:42Speaker 01

  You know about the other business I started, right?

• 49:44Rick Rubin?

  No, tell me.

• 49:45Speaker 01

  I was a mathematician or an aspiring mathematician. So a couple of years ago, I found.

• 49:52Rick Rubin?

  You have a PhD in math. You're not an aspiring mathematician.

• 49:55Speaker 01

  Well, I dropped out. So I just left with my masters after one year. Yeah, so basically. Harmonic's goal is to build what we call mathematical superintelligence, which is an AI that can solve math problems at a superhuman level.

• 50:12Rick Rubin?

  How is that different than what an LLM does?

• 50:15Speaker 01

  Well, LLMs can certainly solve math problems, but when we started this, which was 2023, they made mistakes with addition, right? They would just add things and subtract things.

• 50:29Rick Rubin?

  I read an article last week about that. It's not solved.

• 50:33Speaker 01

  No, it still happens. But you could see a lot of the ingredients being there, like the substrate existing for creating AI that's superhuman at solving mathematics. But it's just, it wasn't there at the time. It's still not quite there. I think we're, Harmonic, which is the company, has a product called Aristotle. Aristotle's very much at the frontier. And the big thing that is getting in the way, the big obstacle that we have to solve, is the hallucinations. So you can imagine, if you're writing a history essay or just doing research, hallucinations are not that big of a deal.

• 51:14Speaker 01

  I mean, annoying, but you can generally, one hallucination, one mistake, doesn't destroy the entire argument. But if you have a complex mathematical theorem or something that you need to prove, it could be thousands of steps. And a hallucination in one of the steps essentially invalidates the whole thing. So the whole thing is just garbage. So in order to solve mathematical superintelligence, you have to solve this hallucination problem and make sure that every step of reasoning is logically sound and follows from the axioms and that you can trust the conclusions. And if you do that, you solve this like subtraction being wrong problem.

• 51:59Rick Rubin?

  Isn't that the case, though, with AI writing code?

• 52:02Speaker 01

  It's 100% the case with AI writing code. These things are very, very connected. So the issue with vibe coding.

• 52:12Speaker 01

  Is that you just create a lot of slop code. You can think of this mountain of code, right? And you just, anytime you send another message saying, okay, add this feature, fix this bug. Oh, this thing screwed up. The code just increases, which I think works in some cases, but it creates this problem and changes the job of the software engineer from someone writing the code to someone like trimming this bonsai tree or like dealing with this conflagration of nonsense and clamping it down. So there is a problem with vibe coding too, which is there's just hallucinations that you also have to solve.

• 52:55Speaker 01

  And I think the bet that we're making with mathematical superintelligence with Aristotle is that these things actually have the same solution. And that solution is something called formal verification. So what formal verification is basically you write a spec. The spec is essentially, you can think of as the list of properties and rules that your system has to follow. And then you formally and mathematically prove that any code that you generate follows these rules. And now formal verification existed before AI.

• 53:35Speaker 01

  The French have deployed it like in a lot of places, like the Paris train stations are formally verified. And you can mathematically prove that the trains aren't going to hit each other. And I think there's something like 30 years with no accidents. But these are humans hand crafting, very artisanal work of just making sure that all of the mathematical properties are proved by hand. So the bet that we're making is there's actually going to be a new paradigm of vibe coding and vibe proving where it's not just like the Wild West, but things are constrained by these theorems that you have to follow.

• 54:18Speaker 01

  And if I think about harmonic, the sort of like North Star goal is to solve a millennium prize worthy problem. So like one of the big problems of mathematics. And I think that with a fairly high degree of confidence, these don't get solved very often. The last one was about 20 years ago. By this Russian guy, Grigori Perelman, he solved the Poindexter conjecture. I think the next one very likely will be either significant AI assist, or maybe even largely solved by AI. So that's kind of the long-term goal. But of course, we have to break that down into shorter-term goals. And the first accomplishment we had was to get a gold medal,

• 55:01Speaker 01

  or gold medal-level performance at the International Math Olympiad, which is like the most prestigious math competition, but sort of high-school-level problems. Still highly creative, like these are smart high schoolers. Like, I never even went to the IMO as an aspiring mathematician. I was sort of like three rungs below it. So I think even that was a big accomplishment. But then, we went from that to solving like small, unsolved, research-level problems. I think now we're getting to the point where we're used to solve and formalize more meaningful results that people actually have tried to solve by hand, but couldn't. Not because of lack of attention, but because they're just hard.

• 55:45Speaker 01

  So I think there's this rising capability that I think will culminate into true research-level math results.

• 55:53Rick Rubin?

  That's really exciting.

• 55:55Speaker 01

  Yeah, vibe proving, I call it. The fun thing is like, you have these Erdosch problems. Have you heard of Paul Erdosch? Yeah, there's actually this picture of Terry Tao when he was a child. I think he was seven years old, sitting with an old Paul Erdosch, I think who was probably in his 70s or 80s at that time. He was a Hungarian mathematician. He was kind of a traveling mathematician. So he would go and stay at people's houses. He would just come up with a suitcase and be like... I'm gonna stay with you for two weeks. What are you working on? I'll help you with whatever math you're working on.

• 56:32Rick Rubin?

  Yeah.

• 56:32Speaker 01

  I think he was like hopped up on amphetamines the whole time. You travel the world, stay in people's houses. And so he became the most prolific mathematician. Yeah, there's actually an Erdos number, kind of like the Bacon number, which is how many degrees away are you from Kevin Bacon? Right, Kevin Bacon, zero. If you're in a movie with Kevin Bacon, you're one. If you're in a movie with someone that was in a movie with Kevin Bacon, you're two. So there's a Erdos number as well.

• 57:00Rick Rubin?

  Yeah.

• 57:01Speaker 01

  Paul Erdos is zero. If you've published a paper with him, it's one. There's also an Erdos Bacon number, which is you add the two. And there's actually someone with, I think, an Erdos Bacon number of two. So someone from Goodwill Hunting, who had co-authored a paper with Paul Erdos. So anyway, this guy, during his whole lifetime, there's like 1,100 Erdos problems that have been collected, half of them unsolved. And you know, people collect them. Now there's a library of them. So now Aristotle's being used to solve and formalize all of them. And they're just, they're dropping like flies.

• 57:40Rick Rubin?

  That's great.

• 57:41Speaker 01

  Like every week you have. And sometimes it's by amateurs. It's someone who's not a mathematician, but they're essentially vibe proving. Like they're an AI savvy student and they're just making contributions to the field. And that would have been inconceivable five years ago.

• 57:58Rick Rubin?

  That's amazing.

• 57:59Speaker 01

  Yeah, like both because it's hard, but mostly because you have all these like crank amateur mathematicians that are like, I've proved this big theorem, but nobody's even gonna pay attention to it.

• 58:11Rick Rubin?

  Yeah.

• 58:11Speaker 01

  Right, because to get a mathematician to like concentrate and most of the time there's some mistake, but you have to like really concentrate to find it. But what formal verification results in is the machine can check the proof.

• 58:25Rick Rubin?

  Yeah.

• 58:25Speaker 01

  So you don't have to convince anyone. If it compiles, it's guaranteed to be accurate.

• 58:30Rick Rubin?

  That's great.

• 58:31Speaker 01

  I gave a TED Talk about the future of AI. Okay, and there's a lot of doomerism out there where people think nobody's gonna have any jobs because the AI models are gonna do everything that we can do, but they'll do it a thousand times faster and better.

• 58:51Speaker 01

  I'm probably a little bit more optimistic for a couple of reasons. One is that there's so many of these things that we don't understand. Like, we don't understand what's going on with the fundamental fabric of reality, which you can see with simple things like the double slit experiment. We don't know what happened at the beginning of the universe. We don't understand what happens with out-of-body experiences. So that tells me with a fairly high degree of confidence that there's some aspects of what we consider intelligence that are quite possibly outside of your own brain. It's probably not that, hey, if you understand just how the brain works

• 59:35Speaker 01

  and image it and duplicate it and copy it and move it into the cloud, that you can replicate what's going on here. Which makes me think, well, there's probably some aspect of our intelligence that can't be replicated by just AI models getting better and better and faster and faster. I think you also see it, you know, AI capability is growing, but it's not like clearly overshooting human capability. It's like we saw a big jump from generation three of the Transformers to generation four. But then it's kind of like, at some level where it's always questionable whether it's smarter than humans or not. It's like converging to some level of ambiguity

• 1:00:19Speaker 01

  of whether it's like much better than us or not, rather than just it shooting far ahead and becoming incomprehensible. And then also the fact that, well, if you look at our jobs and what we do, probably 50 years ago, they would have looked at what we do and thought that we were just having fun and we're not doing real work. We're not in a factory, we're not doing manual labor, so. Probably we would conform to our ancestors' idea of technological unemployment. They would say, oh, these people aren't working. They're having meetings all day. They're on Zoom calls. They're managing companies. So, yeah, I think I'm a little bit more optimistic in that sense.

• 1:01:02Speaker 01

  I don't think that we're likely to see a big AI doom and gloom scenario.

• 1:01:09Rick Rubin?

  Do you think that the influence of your parents being involved in finance impacted you?

• 1:01:15Speaker 01

  Yeah, maybe in a roundabout way. When I was growing up, I was really interested in math and physics and sciences. And for a while, I just didn't really think or care about doing anything commercial in nature. Right? I just wanted to make discoveries and do cool stuff. And my impression, growing up, was my parents were very like professional, stable existence. It was really about having comfortable benefits, being able to provide a good life for me. It was sort of like they took this giant risk in moving the entire family to the US. And it was really all about stability.

• 1:02:00Speaker 01

  You know, I think I was rebelling against that a little bit. And I just really wanted to be a scientist or a mathematician or some kind of inventor. That was what I what I kind of gravitated toward.

• 1:02:16Rick Rubin?

  Do you live in the Bay Area now, Noel?

• 1:02:18Speaker 01

  Yeah.

• 1:02:18Rick Rubin?

  How long has it been?

• 1:02:22Speaker 01

  A while. Yeah, I mean.

• 1:02:24Rick Rubin?

  Before the company?

• 1:02:25Speaker 01

  Before, so I moved around quite a bit. I have lived in LA as well, but I was born in Eastern Europe and then moved with my parents to the East Coast of the US. And then I went to Stanford.

• 1:02:39Rick Rubin?

  You were five, I think?

• 1:02:40Speaker 01

  Yeah.

• 1:02:41Rick Rubin?

  Do you remember life before at all?

• 1:02:44Speaker 01

  Yeah, for sure.

• 1:02:44Rick Rubin?

  Really?

• 1:02:45Speaker 01

  Yeah, I mean, I don't always remember like, oh, when I was three, this happened or when I was four.

• 1:02:51Rick Rubin?

  But you remember the general feeling of it?

• 1:02:53Speaker 01

  Yeah, because it was just a very big discontinuity, right? So I can basically say, okay, well, this was all the stuff before I moved to the US. And this was all the stuff after. And it was so different that, you know, that bucketing makes it very easy to bucket my memories.

• 1:03:11Rick Rubin?

  Why did your parents decide to move?

• 1:03:14Speaker 01

  You know, at around that time, this was in the early 90s, there was a huge transition in Eastern Europe. Basically, the Berlin Wall fell. You saw the Iron Curtain lifted.

• 1:03:27Rick Rubin?

  Yeah.

• 1:03:28Speaker 01

  And the late 80s in Bulgaria was a time of crazy optimism. Bulgaria was doing very, very well. Population was growing. People had a pretty good standard of living. We were winning Olympic gold medals. So everything by all measures was really good. But my grandfather, I remember when he was still alive, he'd tell me the stories like, I think this empire is going to collapse, being the Soviet Union and all the satellite states. So he kind of pushed my dad to strongly consider coming to America. And then an opportunity came up. So right after the Iron Curtain lifted

• 1:04:11Speaker 01

  and people from outside Bulgaria were allowed to come in to the country, this group of folks from the University of Delaware came to visit. And my dad was a professor at the time at the Economic University of Varna. Varna is like the summer capital, they call it in Bulgaria. It's on the beach, so it's kind of nice. The biggest industry is tourism.

• 1:04:37Rick Rubin?

  What was his subject?

• 1:04:39Speaker 01

  He studied tourism. That was.

• 1:04:41Rick Rubin?

  He was a professor of tourism?

• 1:04:43Speaker 01

  He was a professor of tourism.

• 1:04:44Rick Rubin?

  Is there such a thing?

• 1:04:46Speaker 01

  I mean, it was the biggest booming sector, so.

• 1:04:49Rick Rubin?

  I've never heard that before.

• 1:04:50Speaker 01

  Yeah, he was a professor of tourism. And he had a business on the side, which was essentially a tourism business. So he was an entrepreneur too, where they would basically take the French tourists. There was an influx of people from France that were visiting Bulgaria and they had all these buses and they would take them around the country. Which was funny because I went with my wife. Last time I was in Bulgaria was 2016. And my parents came with us. My dad was like, I remember when I would take the tourists and I would take them around. And he took us through all these back alleys in some of the cities.

• 1:05:23Rick Rubin?

  Do you think your dad still thinks of that as home?

• 1:05:27Speaker 01

  I think so, yeah. So he was thirty-one when he came over to the US. So, you know, his formative years, all of his friends from high school, you know, they're all still in Bulgaria. So when he goes back, that's when he's hanging out with people, staying up late at night. You know, in America, I think it's really just the family and, you know, he's got a couple of friends from work. But Bulgaria, I think he still thinks of as home. So these folks from University of Delaware came. They were impressed by my father because at the time in Bulgaria, if you were a professor of economics, there was a lot of pressure institutionally to teach like Marxist theories,

• 1:06:12Speaker 01

  like Adam Smith, free markets, those were all taboo. So they had all of the Western literature locked up in the basement. It was like banned literature. And my dad would tell me the story about how he would sort of like sweet talk the librarian essentially, and she would let him go down there and he would read all this stuff and it would make its way into his thesis. But his thesis was about a taboo subject. And so they made it hard for him to actually defend his dissertation and finish. So they were kind of holding it up. But then everything shifted, right? And when these folks from University of Delaware came,

• 1:06:57Speaker 01

  that weakness was like his biggest strength. They were like, okay, well, there's people here that actually aren't Marxists and who understand this stuff. And so he got an opportunity to get a scholarship, to do a master's at University of Delaware. That was nineteen ninety-one. He moved over there. And he had to go by himself because he wasn't sure whether we had a future in the country, you know? And then my mom came about a year later. And then I came about six months after her in summer of nineteen ninety-two. Basically, I finished kindergarten in Bulgaria. I stayed with my grandparents. But yeah.

• 1:07:34Rick Rubin?

  What do you remember about your first trip?

• 1:07:37Speaker 01

  That was my first trip out of the country, the first trip on a plane.

• 1:07:40Rick Rubin?

  Yeah.

• 1:07:40Speaker 01

  And I remember, you know, one of my memories was like. My weekly phone call with my dad. Because back then, of course, it was very expensive to call between the US and Bulgaria. So it was once a week for basically 10 minutes. We would get on the phone.

• 1:07:55Rick Rubin?

  And how long hadn't you seen him?

• 1:07:56Speaker 01

  A year and a half. There's still pictures of me from when I landed at JFK. My parents took these pictures of me and I remember my aunt brought me over. She was like a punk rock teenager at the time. She was like 17 years old. And I was shy to like see my parents. I was like hiding behind her and kind of peeking out because I'd I'd basically forgotten them, you know?

• 1:08:20Rick Rubin?

  Yeah. Did you go into New York?

• 1:08:23Speaker 01

  Went into New York.

• 1:08:24Rick Rubin?

  How different was that than anything you'd seen before?

• 1:08:26Speaker 01

  That blew my mind. Yeah, that blew my mind. Just like I never seen.

• 1:08:31Rick Rubin?

  Did you speak any English?

• 1:08:32Speaker 01

  No English, no. And they dropped me into school right away.

• 1:08:36Rick Rubin?

  Wow.

• 1:08:37Speaker 01

  So it's like, here's kindergarten, right? I did kindergarten again in the US and it was just no English. So I had to kind of learn it from scratch, basically.

• 1:08:49Rick Rubin?

  Would you say you learned it more from watching television, movies, or from speaking to people?

• 1:08:54Speaker 01

  Speaking to people because we didn't have television.

• 1:08:56Rick Rubin?

  Really?

• 1:08:57Speaker 01

  Yeah. My parents got a television. I remember it was about six months after we moved for the second time. First, we were in Delaware, then we moved to College Park, Maryland. And my dad continued with his studies. He got a PhD, his second PhD at University of Maryland. And our first TV, which was six months after we moved in there. Someone had thrown out this like shitty black and white TV. It was probably from like the 60s or 70s, you know, those TVs with the two knobs?

• 1:09:28Rick Rubin?

  Yep.

• 1:09:28Speaker 01

  The big knob was like it changes channels by the 10s. And then there was the little knob, which was missing that lets you change channel by the ones. Then we figured out, okay, if you get a wrench, you can just like kind of adjust it and and get to channel five or something. And of course, no cable. Couldn't really afford that, so.

• 1:09:48Rick Rubin?

  Was it frustrating not being able to talk to people? What was that experience like?

• 1:09:52Speaker 01

  Yeah, so kindergarten, I think it was pretty frustrating. I found in an old briefcase when I visited my parents in DC a couple of months ago. There was my old report card from kindergarten, right? Where the teacher writes notes. And I remember January of 1993, Vladimir is adjusting to kindergarten. He's adjusting to the new school. He's not talking to the other children yet, but he's at least not crying and he enjoys playing with these toys and drawing or whatnot. And that made me kind of sad. It's like, oh, I wasn't talking to the other children for probably four or five months.

• 1:10:33Rick Rubin?

  Yeah.

• 1:10:34Speaker 01

  But yeah, I remember being frustrated because I wanted to play with a certain thing or a toy and I didn't know how to express that to the teacher. And she wouldn't understand me when I tried. That was probably my, my memory from kindergarten. And just seeing all the different types of kids. It was a very cosmopolitan. People from University of Maryland would send their kids to the schools, like the local school. So it was just smart kids, right? Professors, kids, grad students, post docs. So that kind of blew my mind and, and that was really cool.

• 1:11:09Rick Rubin?

  How do you think English being your second language and being thrown into it that way impacted your life? Is that one of the pieces of why you are who you are?

• 1:11:20Speaker 01

  I think absolutely. I think about it now in the context of having my own children, right? I have three kids who are roughly that age. You know, I have an eight-year-old, a seven-year-old and a three-year-old. So right around this time period. And they have everything, right? They can get the best tutors, got a chess teacher, someone teaching them piano. Yeah, when I was that age, my parents were, they, they each had two jobs. So I basically, they would drop me off at the bus stop in the morning. I would come back from school at 3:00 PM. I'd have to walk back as a five-year-old from the bus stop to my apartment.

• 1:12:04Speaker 01

  At first, my parents would say, okay, go to the, our neighbor upstairs has your key. So just go and she'll give you the key and let you in and whatnot and make sure you're all right. Then they realized, well, we're asking a lot of this kid. He's just already walking a mile from the bus stop and everything and navigating all this complex logistics. We might as well just have him keep the key in his backpack. So I'd let myself in, do my homework, call my mom to check in. And then if I finished my homework, I could go play outside with my friends. And then my parents would come back at 8:00 PM, sometimes 8:30. We'd have dinner together and I would go to sleep. And then my dad usually would be working late into the night anyway.

• 1:12:47Speaker 01

  So I kind of just saw him on weekends.

• 1:12:50Rick Rubin?

  Yeah, so it probably made it okay for you to be by yourself and good work ethic.

• 1:12:56Speaker 01

  A lot of time by myself. There was always this like threat that my parents would not be able to pay for my college. So I better get a scholarship because finances were always tight. And there was always this subtle threat that our status in the country was not very secure. Because we were just like student visa holders, right? And we could go back to Bulgaria at any moment.

• 1:13:22Rick Rubin?

  Did you look back on Bulgaria as I'm glad I got out of there or no?

• 1:13:26Speaker 01

  No, because, well, I did like America, but I didn't necessarily fear it. I loved my grandparents. I didn't particularly love school. I think I enjoyed school in America much more.

• 1:13:41Rick Rubin?

  What was different about that?

• 1:13:43Speaker 01

  You know, I just kept moving between different schools. I had like this one school when my parents were there. And then when I moved with my grandparents, I went to a second one and then I had to go to a third one. So I just remember moving schools and never really being able to settle in and have a group of friends. In the US, oddly enough, first grade, I started making friends. At the beginning of the year, my English was pretty weak, pretty rudimentary. But by the end of the year, I was actually like in advanced English, right? So I had kind of like, I started taking English and math with the people from higher grades. And I had my group of friends.

• 1:14:27Speaker 01

  And then I stayed in that school for four years. So it was like kindergarten through third grade, which at that time was the longest I'd been at a place. So the the longer it went, the more acutely I felt that I didn't really want to go back to Bulgaria, the more settled and kind of American I felt. And then I remember my parents, 1996 was when they started doing a little bit better. My dad had finished his PhD. He'd gotten a full-time job at the World Bank.

• 1:15:02Rick Rubin?

  What was he doing at the World Bank?

• 1:15:04Speaker 01

  At first, he was a consultant, but then he became an economist. And then he paid for my mom to get her MBA at Georgetown. And then she joined the World Bank as well. So they worked there together for their entire career, you know, 25 years plus for my dad.

• 1:15:21Rick Rubin?

  How much do you know about the World Bank?

• 1:15:23Speaker 01

  I know a little bit about it.

• 1:15:25Rick Rubin?

  Tell me what you know. I know very little about it. Is it private?

• 1:15:29Speaker 01

  Technically private. So the the different countries own shares in the World Bank Group. At least this is how it is for the IFC, the International Finance Corporation, which is part of the World Bank Group. It's like the IFC, IMF, and then the World Bank itself. And then there's another one called MIGA. I forget what it stands for.

• 1:15:54Rick Rubin?

  Is the World Bank in competition with other banks or sort of different than other banks?

• 1:15:58Speaker 01

  It's kind of different than other banks. So the shareholders are countries. And my understanding of it at least is, so the the IFC you can think of as kind of a venture capital firm. So they make investments in private enterprise in.

• 1:16:16Rick Rubin?

  On behalf of governments.

• 1:16:17Speaker 01

  On on behalf of their shareholders, yeah, which tend to be governments.

• 1:16:21Rick Rubin?

  Is it only governments or can other people invest with them?

• 1:16:25Speaker 01

  I don't think others can invest.

• 1:16:27Rick Rubin?

  It's only governments?

• 1:16:28Speaker 01

  I think it's only governments. So, yeah, you can think of it as a venture capital firm. So my mom, my mom's job was to go and like, like underwrite investments in, you know, it would be like a chemical plant or a fertilizer company. Or she did a university at one point. And, you know, they invest for a return. But different than a typical venture capital structure because there's really no carry that accrues to the partners. I think all of it goes to the shareholders, which are the countries. And then there's the IMF, which sort of like provides monetary assistance to countries, not to private enterprise.

• 1:17:10Speaker 01

  So, you know, if there's a currency crisis, the IMF can step in and actually provide assistance to stabilize it. But yeah, my impression of it, big company. You know, I would go with my parents to work when I was a kid and I just loved that they had the fast internet. So that's kind of where I figured out how to use the internet and play computer games. I didn't take a particular interest in what they were actually doing, but I loved being able to like use the internet and use computers at their work. That was the first time I kind of discovered that stuff.

• 1:17:50Rick Rubin?

  What decisions have you made over the years that were considered questionable by experienced people around you, but turned out well?

• 1:18:00Speaker 01

  A lot of the consequential decisions, I think, in Robin Hood's history, launching with zero commissions, a big criticism or question we would get early on is, well, why not some commission?

• 1:18:13Rick Rubin?

  Yeah.

• 1:18:13Speaker 01

  How about like $3 or 99? You know, why does it have to be zero? Doing the credit card with 3% cash back, that was risky. Doing crypto as a regulated financial firm.

• 1:18:26Rick Rubin?

  Yeah.

• 1:18:26Speaker 01

  I mean, that's like you're going into the fog at that point in 2017. Crypto was not an accepted asset.

• 1:18:33Rick Rubin?

  Dangerous.

• 1:18:33Speaker 01

  It was dangerous. Prediction markets recently, big one. Like the big criticism we get now is, how is it not sports betting? Does sports betting belong next to your retirement account? If I had to sum it up, yeah, I think that in some ways it's gotten easier over time. I think.

• 1:18:55Speaker 01

  Making some decisions and having some proof points that they work out even if people doubt them.

• 1:19:03Rick Rubin?

  Yeah.

• 1:19:03Speaker 01

  That kind of like builds up my bank of credibility and then, you know, I can lose that. Some of it fluctuates with the stock price too. I noticed when the stock is doing well, people get a little bit more, not deferential, but I think I earn a little bit more respect, even though it's a little silly to have that be tied to the stock price.

• 1:19:24Rick Rubin?

  Do you bet on prediction markets or do you use it more for ground truth understanding?

• 1:19:30Speaker 01

  I use it more as understanding and a source of information, so I prefer to browse them. But I make trades from time to time.

• 1:19:39Rick Rubin?

  And how's that experience been? I've never done that.

• 1:19:42Speaker 01

  It's been really good for me. Yeah, and I don't have a huge track record. But I've personally done well, right? And I think it's because I've tended to focus on things where I have some conviction and kind of some understanding.

• 1:19:59Rick Rubin?

  Have you learned anything about Wall Street through your Robinhood adventure?

• 1:20:04Speaker 01

  You know, I don't even really think of Robinhood as a Wall Street company. Wall Street now is like almost a media environment. If you go to the New York Stock Exchange and you see CNBC there and there's a couple of people trading, but mostly they're trading exotics, so sort of like niche products. Mostly it's where you see Jim Cramer and Mad Money and they're like broadcasting, so it has a ceremonial purpose. I think what's happened in the past 30 years, and I think now it's accelerating, is technology, what used to be sort of considered a separate sector, the technology sector, started.

• 1:20:47Speaker 01

  Eating everything. And so the most interesting Wall Street companies aren't really on on Wall Street anymore. It's just like the the platforms are in Silicon Valley, I think increasingly. And it's sort of this long, drawn out story of people's habits are hard to change. A lot of older people, up until recently, were still using dial up internet, right?

• 1:21:14Rick Rubin?

  Yeah.

• 1:21:14Speaker 01

  But with every new generation, I think it becomes easier and easier. I think Wall Street's like primacy as the center of financial activity is sort of vestigial from this old like brick and mortar in person way of doing finance. I mean, look at 24 seven trading. So it used to be that even now markets are open according to East Coast Wall Street working hours, right? Nine thirty to four P M. Eastern. But, you know, we rolled out 24 hour market. We unshackled that. And now it's kind of like increasingly markets open Sunday evenings

• 1:21:57Speaker 01

  when our 24 hour market session starts. And I think eventually it'll just be indistinguishable. So we're kind of getting rid of the last vestiges of being tied to East Coast U. S.

• 1:22:10Rick Rubin?

  That's

• 1:22:10Speaker 01

  New York working hours.

• 1:22:12Rick Rubin?

  Tell me about your media diet.

• 1:22:15Speaker 01

  I tried to ignore most things. The things that are hard for me to ignore are just X. I post on X and I use it a lot for work. And then my feed is kind of this sort of combination of A I. Related news. Probably half of it is A I. Related. And the other half is like financial services, politics and Robin Hood related.

• 1:22:39Rick Rubin?

  And tell me something you believe now that you didn't believe when you were young.

• 1:22:46Speaker 01

  I think now I believe that I can do anything and that all it takes is the desire to want to do it. I think when I was young, I very much felt like I was like

• 1:23:04Speaker 01

  subject to forces outside of my control and a relatively small amount of things that I could do were under my control. Yeah. Like I could do well in school, I could do my homework, get good grades. But where I lived, what country I was in, what school I went into, outside of my control. And the idea of actually creating a business or building something like a physical thing that mattered felt a little bit outside of the realm of possibility. I never felt like I could build something meaningful.

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