Uncapped #33 | Vlad Tenev from Robinhood

Vlad Tenev is the co-founder and CEO of Robinhood (NASDAQ: HOOD), which transformed financial services by introducing commission-free stock trading and democratizing access to the markets for millions of investors. As of Q3 2025, the company is doing $1.27 billion in revenue with 11 business lines each doing roughly $100 million. We discuss the evolution of online brokerage platforms from Schwab to E-Trade to now Robinhood. Vlad delves into the launch of Robinhood, the impact of the global financial crisis, and how mobile and high-frequency trading have transformed finance. The conversation explores the rise and success of prediction markets, the importance of engaging younger generations, and how AI is enhancing the future of trading. --- Timestamps: (0:00) Intro (00:27) History of online brokers (4:15) The rise of Robinhood (9:15) Changing sentiment among generations (14:18) Incentive alignment with customers (18:47) The emergence of prediction markets (25:50) Economic value vs entertainment (28:26) Growing degree of risk taking (35:21) Tokenization and private markets (39:33) The impact of AI on Robinhood (43:35) What excites Vlad about AI (46:59) Reflections on being a founder --- More on Vlad: https://robinhood.com/us/en/ https://x.com/vladtenev More on Jack: https://www.altcap.com/ https://x.com/jaltma --- https://linktr.ee/uncappedpod Email: [email protected]

• 0:00Speaker 00

  We call it vibe trading. So you know how there's vibe coding? I think there will be vibe trading, which sounds a little flippant.

• 0:06Speaker 01

  Well, but you know, the thing you said that we're not a trading platform. It's like, you know, it's like a financial home. It's like vibe finances. It's like, you know, because you have all these other products, I assume it's going to, you know, like vibe set up my, you know, kids 529 account, which is, you know, not.

• 0:19Speaker 00

  Totally. Here's the areas that I'm most interested in.

• 0:23Speaker 01

  All right, Vlad, I'm super excited to be here. Thanks for doing this with me today.

• 0:26Speaker 00

  Well, glad to have you.

• 0:27Speaker 01

  Okay, so I wanted to start by getting sort of your historical lay of the land of online brokerage. And maybe we don't have to go all the way back, but if you could sort of just go back to, you know, maybe like the early days of online stock trading into sort of like, you know, Vanguard and Schwab and Fidelity. And now you've got like online platforms for trading that are modern like Robinhood. Just like, what's sort of the history and sort of the narrative as you see it?

• 0:53Speaker 00

  There's a great book about this, A Piece of the Action by NoSara. It covers basically the modern, the rise of the modern financial industry,

• 1:04Speaker 00

  which is super interesting. I mean, it's basically a story of a big wave of democratization associated with lower costs. So Charles Schwab began in the seventies. I think there's a lot of similarities, if you look back between what Charles Schwab was to begin with, and kind of what Robinhood is sometimes accused of being, right? Before Schwab, Merrill Lynch was, was the big broker. And really they had brokers that would sell you trades and call you and convince you to buy stuff. And they would charge hundreds of dollars per trade.

• 1:45Speaker 00

  And then after that, there was the, the event that led to the creation of Charles Schwab was called May Day. I forget the exact date, but it was in 1972. And up until that point, commissions were regulated. So you could not charge under a certain amount per trade for commission.

• 2:06Speaker 00

  And May Day led to deregulation of trading commissions, which allowed Schwab to enter the business. And Schwab said, you know what? We're going to cut costs. We're going to make it as efficient as possible. So we're not going to have branch offices. You're going to call us on the phone. We're not going to try to sell you anything. We'll just process your ticket over the phone, make your trade, and we'll do it for, I don't know what it was, call it $75 per trade. And so they were in the news in the early days for creating this like extremely sophisticated phone dialing system that could handle lots of simultaneous, like they innovated using the tools they had at the time.

• 2:49Speaker 00

  And then in the 1980s, the Apple II came out, right? And actually in Palo Alto, not very far from here, two guys, Bill Porter and I forget his partner's name, Randy or something, they met at a party. And Bill Porter had just bought an Apple II computer. And he had this idea of what could I, what if I use this, this machine to trade stocks from my home? And, you know, the two of them got very excited about this idea and they decided to make a business out of it. And E-Trade was born. And of course, that was sort of the origins of it.

• 3:31Speaker 00

  It went public 10 years later during the dot com boom. And it became one of the first profitable dot coms, right? For a long time, they were accused, the whole internet thing was dismissed as a fad. Nobody thought that there would be a way for many of these companies to make money. But online brokerage was, I think, one of the first, if not the first, proven business model that could be profitable in the internet era. So that was E-Trade. And you probably remember, maybe, maybe when you were a kid, they were heavy on marketing. They had that baby. It was kind of a cultural moment. The dot com boom was when I started trading myself. I opened my first brokerage account. And then Robin Hood started.

• 4:18Speaker 00

  Let's say, what would have that been? 2015 was when we launched, 2012, 2013 was when I got the idea. And our big innovation, I think, I think there were three innovations that led to Robinhood. First was obviously mobile. Everyone else had ignored mobile. And we made the bet that, you know, people were saying mobile is a toy. Nobody would do serious financial transactions on their smartphone, but that that would become primary. And so we'd like built for that when everyone else was ignoring it. The second bet we made was that high frequency trading had completely changed institutional finance on an infrastructure

• 5:02Speaker 00

  level. So entire rooms that would have been full of trading desks, people picking up phones and making trades, were being disrupted by five to 10 kids out of MIT creating HFT firms. And so we took the technology from a sophisticated, high-frequency trading firm, and that became the backbone for our retail product, which allowed us to lower costs and offer commission-free trading. And at that time, commissions were still between $7 to $10. So that was a huge disruption. And the third thing, the company was sort of formed in the wake of the global financial crisis and the whole Occupy Wall Street movement. And if you think back on

• 5:45Speaker 00

  the global financial crisis, I had graduated Stanford 2008 and gone to grad school. My first month in grad school, Lehman Brothers went under. It was kind of an interesting thing, because a lot of my friends, the ones that were most secure in their financial careers, just all of a sudden, as quickly as they came into their jobs, and you know, they had their internship at Lehman Brothers, they got their return offer, they were very proud, they had, you know, three years of job security in front of them, and then they were gonna go get an MBA. There was this well-defined path. And then it evaporated. Evaporated, and you had the images of them with the packing up their cubicles with the boxes. There was just a lot of disillusionment.

• 6:27Speaker 00

  Delusionment, particularly among young people, among millennials with the financial system. Because some of this happened to them, they saw it happen to their parents. It felt like they were the victims, young people in particular, of forces beyond their understanding that were just like packaging products and taking risk, making things complicated. And that there was no accountability, you know, no one went to jail as a result of crimes committed in the global financial crisis. Nobody big, anyway.

• 6:59Speaker 01

  Yeah.

• 6:59Speaker 00

  And I think this really, this led to the Occupy Wall Street movement, which was really a young person, a millennial thing. And I think it opened the door to a new brand in the space. Like, no love was lost between young people and the big financial companies. And Robin Hood, along with mobile, along with the great technology that enabled commission-free trading, I think had a particular resonance because it was a very optimistic message in a way. It was kind of the anti-Occupy, whereas Occupy said, "The system doesn't work. We've just have to reset and start it all over," which I think was not really actionable.

• 7:43Speaker 00

  And that's why the whole movement ended up fizzling out without much impact. And we were saying, "Why don't we plug you into the system? If we get more and more people to become investors, to own the best companies, and we want to make it easy and engaging and actually enjoyable to do so, then we could solve a lot of these same problems." And I think at the time, there was a need for a new brand. And the story of Robin Hood resonated just as much as the product and the technology.

• 8:13Speaker 01

  When I think about like Schwab, Fidelity, Vanguard, for some reason, I think those brands were always not deeply connecting with like the younger generation. Or like they weren't like maybe going out of their way to be as loud of a brand as they could have been.

• 8:28Speaker 00

  Yeah.

• 8:28Speaker 01

  You know, when I think about like the big banks, there was definitely a lot of like animosity between just like the population and the big banks. I feel like that, for whatever reason. I feel like there was neither animosity nor love towards those brokerages. Did you experience it that way? Or is that maybe just I wasn't paying attention?

• 8:44Speaker 00

  I think a lot of people lump the brokerages and the big banks into.

• 8:49Speaker 01

  You think they get lumped into one?

• 8:51Speaker 00

  I think so, yeah. I mean, and not even those guys, but you look at the market makers like Citadel. You saw this during the GameStop era. I mean, there's just an association that there's sort of like these puppet masters that are moving things around in the dark and nobody understands. And I think trust in general tends to be quite low.

• 9:12Speaker 01

  Yeah.

• 9:13Speaker 00

  Now, now that was at the time. Now, I think Gen Z and Gen Alpha, there's almost this opposite thing happening where the old, big storied incumbents are kind of cool again.

• 9:27Speaker 01

  Interesting.

• 9:27Speaker 00

  And so we're trying to figure out how to navigate this scenario, right?

• 9:30Speaker 01

  I didn't know, like, can you share more about that?

• 9:32Speaker 00

  I, I think there's a broader trend of things that are old and kind of, you know, maybe that your grandparents would use being cool again. So Gen Z's are really into buying vinyl and cassette tapes are selling again.

• 9:47Speaker 01

  I like vinyl.

• 9:48Speaker 00

  Ten years ago, maybe it would have been very hard to get a cassette tape. But now.

• 9:51Speaker 01

  I didn't know that.

• 9:51Speaker 00

  People are buying them. And so, you know, my daughter asked me if she could have a Walkman. And I think in the same way, financially, people are actually like the, the younger generation is interested in retirement. You and I are probably close to the same age. When I was graduating from college in 2008, I wasn't really thinking about retirement that much.

• 10:14Speaker 01

  Yeah, I was 2011 and same.

• 10:16Speaker 00

  Yeah. Like retirement seemed really, really far away. Now, Gen Z's are opening retirement accounts at 19 years old. So they're like, they're thinking a little bit more conservatively, I think, than, than prior generations. I'm not, I'm not a cultural historian, even though I try to be.

• 10:34Speaker 01

  It's important context because I, I assume that for a business like yours, I would think that capturing the sort of like hearts and minds of people between, you know, 18 and 30 must be super important for the long term.

• 10:47Speaker 00

  Yeah, and there's a lot of counterintuitive things there. For example.

• 10:52Speaker 00

  For for older people, I think we've had a lot of success. You would think with with older customers, we would emphasize how, you know, stable and how long we've been around and all these things. But but actually, that resonates very strongly with young people.

• 11:08Speaker 01

  And older people want to hear this.

• 11:09Speaker 00

  Older people want to be that.

• 11:10Speaker 01

  You could be plugged into the cool new thing.

• 11:12Speaker 00

  Yeah, it's innovative, you know, easy to use. We have all these features.

• 11:16Speaker 01

  Is that new for you or was it this way for you all along?

• 11:19Speaker 00

  I think it's relatively new for us.

• 11:21Speaker 01

  Like you had to invert those seven years ago or something?

• 11:23Speaker 00

  Yeah, I think we have to constantly change the way we think about our products, communicate our products, what we build.

• 11:33Speaker 00

  And I think the the trap that we would like to avoid is to some degree, these companies that came before us, Schwab, E-Trade, they're kind of stuck in a generation. Like E-Trade was very popular with Gen X. It became a Gen X broker. Schwab, you know, average customers in their 60s, maybe 70s now. So it's very much the broker of the boomer generation. But what we try very hard to do is always pay attention to the next generation, while also moving up market in the sense of being able to serve older customers, you know, people that are in their 60s and 70s because they have needs and they also have a lot of assets that we could benefit from.

• 12:18Speaker 00

  So we've been trying to do both over over the last 10 years with, I think, some success.

• 12:24Speaker 01

  How do you think about, if at all, sort of like index fund type investing versus like a more hands-on, active style of trading? And I'm asking because when I think about like Vanguard or Schwab, I think of them as like pioneers of like, you know, and champions of like the passive investment sort of mindset.

• 12:41Speaker 00

  Absolutely.

• 12:42Speaker 01

  And when I think of Robinhood, I think of like you can trade for free and so therefore you should trade.

• 12:46Speaker 00

  Yeah.

• 12:46Speaker 01

  Like, how do you think of those things? Does it matter? Is it, you know, people should do both? Do you strongly advocate for one or another for young people?

• 12:53Speaker 00

  When I first started raising capital for Robinhood, there was this perception that ETFs and index investing had kind of eaten the active trading market and that there was no growth in trading. And there was all this growth in ETFs and that was just going to continue. And young people wouldn't want to trade. They just wanted to buy ETFs.

• 13:19Speaker 00

  I think that that's not exactly true, and I think we've demonstrated that. But it's not a graduation. A lot of people ask, okay, well, is do you first start out trading individual stocks and eventually graduate to buying and holding ETFs? What we've seen is it's not that people go from being a trader to being an investor. As their money grows, they just have more and more buckets, right? They have your retirement, long-term money, which for many people is passively managed. But they always want to have a little bit at least that they're making decisions on.

• 13:58Speaker 01

  Yeah.

• 13:58Speaker 00

  And so we've tried to conform to that. It used to be that there was only one account in Robinhood. And I think one of the big unlocks for us in the past four years, I'd say, is figuring out how to actually conform to people's mental accounting of their finances. And now you can have, you know, over 10 accounts and many different account types.

• 14:18Speaker 01

  Do you think of your role as just give people the tools to do whatever they think is best? Or do you think of your role as we're gonna help create certain sort of healthy patterns and pathways for people to do the right thing at the right time?

• 14:34Speaker 00

  Yeah, so at the top level, we are aligned, like we make money generally proportional to our total assets under custody.

• 14:42Speaker 01

  You want your customers to do well?

• 14:44Speaker 00

  We want our customers to do well. We don't want them to send their accounts to zero. The best behavior for us is if someone's account balance with us just monotonically and continuously grows over time. I think the best way to do that is to actually conform to how customers like to use financial products. And this has pushed us to, we don't really think of ourselves as a trading app anymore. The way to describe what we are and what we're increasingly becoming is a financial super app. Like, we want to be your primary and your secondary financial account. So we have Robinhood Banking, which is rolling out right now. I think it's the best banking product on the market. And if we serve customers well-

• 15:28Speaker 00

  There their direct deposit comes into Robinhood. And then, once we've got the direct deposit, it's sort of like our assets to lose. And we look at all the ways in which customers take money off the platform. We ask ourselves, is that something that should be happening on platform? And I think that's what's pushed us into this multi-product line conglomerate. It's like a financial conglomerate. You know, across some of our businesses, we do have a fiduciary responsibility where, you know, the leaders of those businesses, for example, Robinhood Strategies, they spend day and night thinking about how they can make as much money for you as possible. Other businesses are more about selection, like, for example, prediction markets. What do customers want to trade?

• 16:12Speaker 00

  How can we make sure we have the highest market share relative to our peers?

• 16:17Speaker 01

  Yeah, actually, this is a good moment to sort of transition to that. Robinhood has like a crazy number of big businesses. I think the stat I heard was 11 businesses at over 100 million of revenue. So could you just like talk about just at a high level, like what the portfolio of businesses are?

• 16:32Speaker 00

  We organize it into kind of three arcs. So one of those arcs is we call it number one and active traders. So we want to be the place where if you're an active trader, you would feel like you're at a disadvantage using any other platform. And that's where you have our options business, our crypto trading businesses, Robinhood Legend, which is a new product that we have that's active traders on on web. I was talking to you a little bit about how there needs to be a like a cursor for web, if that makes sense, like a AI-driven active trading home for for the people that are extremely sophisticated. That's what Robinhood Legend is. And that's where our prediction markets business is as well.

• 17:15Speaker 00

  It's like, what are the things where we can track our market share? We're for now sticking to regulated financial products. So that's kind of the organizing principle. And we look at our market share and we want it to to grow over time. The second bucket is just, we call it number one and wallet share. All of the things that lead to all of your finances being on Robinhood. The credit card, our Robinhood Gold program, which is kind of the subscription wrapper that.

• 17:44Speaker 00

  Gives you a better deal on everything. We have retirement, which is now 25 billion in assets. We made some acquisitions there to trade PMR, which is you can actually get a a human advisor, which will eventually grow into hopefully your point person for your family office for those that have one. But the the end game there is how can we get all of your money in Robin Hood? And how can we get everyone to be a gold subscriber? So that you just get incredible value from everything?

• 18:12Speaker 01

  Yep.

• 18:12Speaker 00

  And then the third bucket is we call it number one global financial ecosystem, which is us growing our business across two linearly independent vectors. One is from retail only to business and institutional. The other is from US only or US primary to fully global. And we think, you know, in 10 years, over half of our business can be X US and cut another way, over half of our business can be non retail. So I think there's multiple vectors by which we can grow at 10x and we're trying to kind of go after all of them.

• 18:47Speaker 01

  Can we talk about prediction markets a little bit? I think that's been like a very interesting new category that has grown crazily.

• 18:54Speaker 00

  Yeah.

• 18:55Speaker 01

  And obviously, it's been like a big success for for you all. Like, what has made prediction markets take off in the way that they have, do you think?

• 19:01Speaker 00

  This is a funny one, because there's actually a very simple answer, and it's just one thing. The sort of like big bang of prediction markets was the presidential election last year. In my opinion, you know, I've been kind of a student of prediction markets for many years. I've just loved them. And I remember in 2016, with the presidential election, I was like voraciously looking at the prediction markets, trying to figure out who was going to win this thing. And at that point, there was nothing in the US. It was basically Betfair, which is a UK based exchange that was that was pricing the odds

• 19:43Speaker 00

  in real time. And, you know, you could tell you're watching the news, they didn't have an answer on that election for until the next morning, when when Clinton conceded that 7pm, 7:30 Pacific at night.

• 19:58Speaker 00

  Betfair showed, you know, Donald Trump had a 95% chance of winning. So that was, I think, the first instance where you could tell that this was a valuable new forecasting tool and source of information. Yep. And then in 2020, it was the same thing. Predictit was probably the main platform, which was run as a research experiment. But I remember everyone, they had this nice electoral map. They had prediction markets, not just for the, the election as a whole, but for each state. And their website crashed from so much use on election night. And for the longest time, having prediction markets for the US elections were impermissible. Like the CFTC said, no.

• 20:43Speaker 00

  And then there was a Supreme Court case that got resolved literally a month before the election last year that said, actually, it's okay. You can, you can roll out federally regulated CFTC presidential election markets. And that surprised everyone. Like, nobody thought that this result would shake out this way. So credit to Kalshi for actually taking on that fight and, and going to the Supreme Court and, and arguing for their business. When we saw that, we basically mobilized our entire company and we're like, we have two weeks to get this ready. We've got to be ready for, for the presidential election.

• 21:21Speaker 00

  And that week, we were actually, uh, it was, it was very high degree of difficulty because we, we began integrating with Kalshi for that. And then Kalshi didn't get the approval to, uh, allow other brokers to connect. So then we integrated with Forecastex, which is, which is another DCM. But our team sprinted towards this thing. Then we had to change vendors. So we had to sprint again and we shipped it with about a week before, a week to go before the presidential election. And we still saw, uh, I think over half a billion contracts traded. Wow. Which is a big business for us. And then what happened was. Essentially, the same argument that you can make for why

• 22:08Speaker 00

  the presidential election has a lot of economic value could be adapted to the Super Bowl, like a big sporting event. Clearly, a Super Bowl, huge event, lots of economic value. And then you could imagine, you know, if the Super Bowl has economic value, every football game has economic value as well, because the Super Bowl is just a function of what happens the rest of the season, and it allows you to make those trades more granularly. And that has essentially unlocked the sports prediction markets industry, which has been a big thing.

• 22:42Speaker 01

  Which is enormous, right?

• 22:44Speaker 00

  Yeah, and if you look at it, it's a disruptive force to traditional sports betting, because sports betting is state by state regulated. It's a patchwork. Taxes are quite high. You have this annoying effect where, you know, if you're using one of these sports betting apps in New York, you get shut out, and then you have to drive across the bridge to New Jersey. And maybe there you have different products and services. Brick and mortar, rules intended for brick and mortar casinos have been applied to digital platforms, which I think makes a little bit less sense in this case. So it's been a disruptive force.

• 23:25Speaker 00

  And for Robinhood, if you look on a contracts traded basis, it's been doubling quarter after quarter. And in October, which is just one month, we did more than all of Q3 put together. And I think that's a function of more contracts, not just in sports, but diversity across the board. Like, we have really interesting AI contracts too, where you can trade what's going to be the best AI model at the end of the year, what's going to be the AI coding model that wins. It's just more people finding out about it, figuring out what prediction markets are. So it's getting more adoption within our user base. We're also getting new customers coming in. But yeah, I think, at least definitely on the retail side,

• 24:09Speaker 00

  we're kind of the only broker that offers. Prediction markets to a significant degree right now. One of the things I'm very proud of is how quickly we like jumped on it. I mean, there's some of our competitors have been integrating and trying to do this for years and they still haven't shipped. I think it's not just a trading product. This is a unique one where there's actually a huge use case, almost as a media forecasting tool. I did like a tweet storm about this a couple of months ago. I said, prediction markets, a way to think about them is they're truth machines. Like we're bombarded by all this information constantly.

• 24:45Speaker 01

  Right.

• 24:46Speaker 00

  Like anyone can write anything on Twitter, it can go viral.

• 24:51Speaker 00

  How do you sift through what's real and what's not and what's actually going to happen? Well, now we've created a tool that lets you do that. And I think the benefit is not just for the folks that are trading. It's almost like the trading and speculating is doing the work.

• 25:04Speaker 01

  Yeah.

• 25:05Speaker 00

  So that all of us have this reliable source of information.

• 25:08Speaker 01

  I should have looked this up before I came here, but I feel like I remember seeing that like if you ask a million people to guess the weight of a cow or something ridiculous like that.

• 25:17Speaker 00

  Yeah.

• 25:17Speaker 01

  It's actually very like, the middle is actually very close. And I feel like that is basically what prediction markets are doing, right? It's like the wisdom of crowds betting with like skin in the game leads to truth.

• 25:28Speaker 00

  Yeah, I think the skin in the game is the big distinguishing feature rather than just a poll. I mean, you can run a poll, but yeah, it's, it's different because it's a price. This is a price, it's not a poll, it's not a guess, it's from people with real skin in the game. And I think that's, there's empirical evidence that they're super accurate, even one month before the event in question.

• 25:49Speaker 01

  To what extent do you think of prediction markets as like economic value via this like truthy sort of outcome from the wisdom of crowds with skin in the game versus just like a cool form of entertainment for people?

• 26:04Speaker 00

  Yeah, we, we get asked this all the time.

• 26:06Speaker 01

  And that is that, by the way, I love poker, for example.

• 26:07Speaker 00

  Yeah, isn't it just gambling? But the thing is. Every tradable asset has had that criticism over time, right? Futures contracts where people have been speculating over the price of oil or the price of gold. I mean, this was a huge fight back in the, I think, 60s where a lot of people were on both sides saying, you know, retail shouldn't have access to these products because it's just speculation. But, but I think, yeah, another word for gambling is speculation, right?

• 26:40Speaker 01

  Well, but also, I mean, there's nothing wrong with gambling, really. I mean, like-

• 26:42Speaker 00

  Put aside that, and I agree. Without speculation, you can't have a functional financial market. So we need the speculators. Otherwise, things just don't work. You need people that have a view on what's going to happen in the future to create the market. And, and I think most people would agree, we need the market. But that said, I don't think everyone should be speculating with 100% of their money. That's an extreme case.

• 27:08Speaker 01

  I have no, I'm just thinking out loud here for fun, but like, I suppose maybe the counter there would be, it's useful to get price discovery on like, like an equity asset or something like that. But there's not particular value to getting price discovery on the outcome of the Ravens game or something. I imagine there'd be some counter like that.

• 27:26Speaker 00

  Yeah, and, but, but it's, it's definitely the case that, that has value because any forecast has value.

• 27:32Speaker 01

  The politics is a good example where there's obviously value.

• 27:35Speaker 00

  Well, just think about how much money is there in informing people and like commenting on what's going to happen to that Ravens game.

• 27:44Speaker 01

  Totally.

• 27:45Speaker 00

  People buy the newspaper to read the sports section and see the commentary. You're listening to SportsCenter. And I think that's just going to become a bigger and bigger part of the economy. Like, let's say we get to this future where AI is automating more and more jobs, right? One of the things that probably will be difficult to automate is entertainment and sports with real humans. So I would make a bet, actually, that this just continues to grow. And, you know, the, the lion's share of jobs and job families that we consider in the future probably look to us like some form of entertainment today.

• 28:25Speaker 01

  Totally. One of the things that I asked Dylan Field about on the podcast the other week, that I think maybe kind of relates to prediction markets, it kind of relates to some of the other things we've been talking about, is I have this sense that- I think to some degree with, you know, today's young people, but I think it's actually with all of us. There's, there is some growing degree of like a financial sort of aggression or like you might like the negative way to say it might be gambling. And that's a positive way to say it might be risk taking.

• 28:55Speaker 00

  Yeah.

• 28:56Speaker 01

  I think it shows up in a lot of ways, like obviously prediction markets are easy to point to. I also gave the example when I was talking to Dylan about like collectible cards, kind of, you know, that and like NFTs. And you have these like, you know, small things that, you know, people start speculating on like crazy. I think a lot of behaviors that people have just in general have gone sort of the way of like a lot more like risk, I would say. And I don't think that's a bad thing, but to me it seems like a thing. And I'm just curious if it's something that you've noticed, if it's something you've thought about at all, how you think Robin Hood, you know, suite of products can, you know, channel that in positive ways. I don't know. I'm just curious how you think about it.

• 29:35Speaker 00

  Yeah, I actually think that it's not a huge fundamental change in people's mindset, but more what they have access to. So for example, it used to be very difficult and cost prohibitive to invest in individual stocks. I think there's a big reason why, why ETFs had extreme product market fit. Because before ETF came along, if you want to be invested in 500 companies, you're not going to buy 500 individual stocks. You could get that diversification quite simply and easily. We're on a trajectory where people want more granular ways to express their opinion about things.

• 30:18Speaker 00

  So one example I can give you is how many times have you seen a company just blow out their earnings estimates? Like they, they blew out EPS, they blew out revenue, but the stock goes down.

• 30:34Speaker 01

  Yeah.

• 30:34Speaker 00

  And folks get frustrated because they're like, I'm a student of this company. I figured out, you know, I have a pretty good model of how well they're going to do, but the stock might not always be a perfect representation of that. So, you know, then you have. Prediction markets for EPS and revenue, where if you have a point of view of how something's going to shake out, you can actually trade that more directly. Options trading, I think, is part of this trend too, where maybe you do want to hold a company for a very long time, but you have a view that it's going to do well this quarter. So you can design a contract and trade it profitably based on that viewpoint. Then you have, you know, zero day contracts, which take that to the extreme, which is, I

• 31:18Speaker 00

  have a pretty good idea of how something's going to do today. And maybe it's an earnings day and you don't want to take the time decay risk. So I think in general, even though to some degree, these are called more complex products, there's a certain simplicity in that so many things drive the value of a stock, but like these contracts let you express a more granular point of view. And, and I think the other thing is they just weren't available easily. You would have had to be very, very sophisticated, have unique access to have them in the past. And now, you know, through tools like Robinhood, we make them available to traders with costs that are really low. And then I think the third thing is you hear a lot about it in the news, predominantly

• 32:03Speaker 00

  because it's more interesting than like buy and hold passive investing. Like everyone wants to write about options trading and prediction markets and crypto because it's speculative. You have big swings. Nobody's interested in writing the story about how, you know, index funds are gaining AUM or money market funds are seeing huge inflows, even though that's also happening. So, so I think it's the combination of these three things that makes it seem like there's a huge increase in speculation. But I think on a relative basis, the story is much more tempered.

• 32:36Speaker 01

  I mean, it's probably also true what you're saying where like if in the year 1950, you gave people, you know, a smartphone with an app that let them bet on the baseball game they were watching, a lot of people would have bet. And so I think the tooling probably is just expressing, you know, like human interest to do various things. I guess, you know, if

• 32:52Speaker 00

  There was always been speculation. You look back, Isaac Newton.

• 32:56Speaker 01

  There's just been a lot of friction in the past, though.

• 32:58Speaker 00

  Yes.

• 32:59Speaker 01

  Like now, the EPS example is really good because I think a lot of times people are like, you work really hard to, you know, take a certain view on a company and you have confidence in it. And then you bet on a proxy, which is like share price goes up.

• 33:11Speaker 00

  Yeah.

• 33:12Speaker 01

  It's a good, it's a good example.

• 33:13Speaker 00

  Totally.

• 33:14Speaker 01

  There was a trend over time that I do think is like harder for young people is it does seem like it is, like compared to, and maybe this is sort of like a not truthful nostalgia, but I think like, it probably seems to be the case that like our parents' generation had an easier time like buying a first home than today's like recent college grad or something like that. So I do wonder if there is like a long-term trend that does make it harder to like, get on the financial ramp for people out of school, whether it's to do with, you know, home prices going up on a relative basis, or something to do with, you know, inflation, or, or I don't know what else, but it does seem like there is a long-term directional trend where it's harder for young people to like,

• 33:58Speaker 01

  get into the place in their financial life that they want to get to at a young age.

• 34:02Speaker 00

  I think that's true. I think the social safety net has kind of frayed a little bit. I mean, you have the homeownerships becoming a little bit more difficult, a lot more difficult in the Bay Area perhaps.

• 34:14Speaker 01

  Yeah.

• 34:14Speaker 00

  You also have the student loan burden.

• 34:18Speaker 01

  Which is like a disaster.

• 34:19Speaker 00

  Yeah, the cost of education has just continued to inflect.

• 34:24Speaker 01

  Yeah, it's gone nuts.

• 34:24Speaker 00

  I mean, I went to Stanford and when I was there, the tuition plus room and board was like

• 34:30Speaker 01

  Fifty?

• 34:30Speaker 00

  Forty to fifty, right? And now I think it's like eighty to ninety.

• 34:34Speaker 01

  Yeah.

• 34:36Speaker 00

  Which is insane. And state schools have kind of encroached upon the forty to fifty level for, for in-state tuition in some cases. So yeah, I think, I think there's a lot of problems.

• 34:47Speaker 01

  It's probably like a lot of these like, sort of like, common goods have just gotten hard to get.

• 34:52Speaker 00

  There's a lot of, there's a lot of that. That's a huge problem for sure.

• 34:55Speaker 01

  That would be a big opportunity for you though, to engage with people young and find some way to sort of give, you know, products that can help them get there.

• 35:03Speaker 00

  Well, you, you know what's gone the other way? Trading commissions.

• 35:07Speaker 01

  Yeah.

• 35:08Speaker 00

  In our generation, trading commissions were like a hundred dollars per trade when, when I was born. And now there is zero. So when, when you hitch it on to the technology wagon, yeah, I think things get taken to zero pretty quickly.

• 35:21Speaker 01

  Another thing along these lines I'm really interested in is now, as I suppose as a venture capitalist, you know, a lot of value gets created in private markets. And I think as companies, I mean, you're public, but a lot of, you know, peer companies that are of similar scale are private. And a lot of value compounds in private markets. And I think that's becoming more true every year. And so maybe, you know, this touches on like the tokenization of everything type of idea. Where like one way that you could help, you know, bridge some of these gaps would be to like, give people access to some of these hard to access, you know, equities.

• 35:54Speaker 00

  Yeah, I mean, this is something that I'm personally very passionate about. I think that it's one of the biggest iniquities in capital markets. It wasn't too long ago, I mean, a few years before we were born, Microsoft and Apple went public at valuations in the hundreds of millions.

• 36:13Speaker 01

  Right.

• 36:14Speaker 00

  Right, or maybe low, single digit billions.

• 36:16Speaker 01

  And then like 99.9% of their value, you know,

• 36:19Speaker 00

  is created in the public markets. Yeah. And you still see examples of that. Right now, you're seeing a lot of companies that are worth hundreds of billions, like at the frontier of their industries, you know, not, not just OpenAI and Anthropic, but also SpaceX, which is leading the, the space revolution.

• 36:36Speaker 01

  Yeah.

• 36:36Speaker 00

  Before they're available to retail, it's, it's not hard to imagine that they're going to be in the trillions. Right? And then what kind of appreciation? To get a, a Microsoft IPO till now appreciation, they're going to have to get to a quadrillion of value.

• 36:52Speaker 01

  It's tough.

• 36:53Speaker 00

  It's going to be tough.

• 36:54Speaker 01

  It's a lot of billions.

• 36:54Speaker 00

  Without hyperinflation, right? So yeah, I'm very motivated. I think XUS, we've, we're, we're pushing on tokenization, which I think is probably something like the end state. A lot of people have to get comfortable with the implications of it. And it's, it's really going to be disruptive.

• 37:12Speaker 01

  Can you explain how it would work or works?

• 37:15Speaker 00

  At the fundamental level, it's, it's basically the same idea as what stable coins are. You have some traditional financial stuff that you put in a bucket. And, you know, in stable coins, it's US dollars and treasury notes and, and bonds. And you mint and burn tokens against that. The traditional stuff stays in the bucket and the tokens are freely tradable on blockchains. So you can imagine 24/7 liquid trading around the clock, just like a stock. And the only time tokens change hands with shares is in like a mint and burn scenario. So another analog is you imagine it's kind of like an ETF or an ADR.

• 38:00Speaker 00

  You have a bunch of stuff here, S and P 500 ETF warehouses, the underlying stocks. The ETF is traded freely. And then at some point, very rarely, you have a mechanism that exchanges the underlying for the ETF, which is more of an institutional product. But yeah, you can extend this concept with blockchain technology to anything. So you can put private stocks or SPV LP interests in the bucket.

• 38:28Speaker 01

  Do you think that's where things go in the US over time?

• 38:31Speaker 00

  I think so. Yeah. I think that it's, it's really hard to imagine a cleaner solution. I think a lot of people talk about on-chain issuance. I don't think the end user gives a shit about on-chain issuance or really any of this. The end user just wants economic exposure to things in a way that works. And I think some mechanism of this, and there's a lot of questions to be answered, right? So currently in Europe, this, the structure is a derivative. But this is more of like a paperwork thing, right? The underlying mechanism could stay the same and the regulatory description of it and what it is, and whether you get ownership or voting rights, that could all change.

• 39:16Speaker 00

  So I think there's going to be questions of, is it a derivative? Is it a tokenized stock? Is it a new thing? Do you get to vote your shares? But we'll, we'll be able to make it at least as good as, from an experience standpoint, as the existing things that are out there.

• 39:32Speaker 01

  Obviously, everybody talks about like AI. Now, I'm, I'm curious how much of an impact it has been for you to date and where you think it's going to be the most impact in the future.

• 39:43Speaker 00

  A lot of people speak about this in generalities, don't they? I think that-

• 39:47Speaker 01

  Well, if you just speak in generalities, then everybody just, you know, make, you know.

• 39:49Speaker 00

  Yeah, yeah.

• 39:50Speaker 01

  Value goes up, so you just say AI and it's good.

• 39:52Speaker 00

  Yeah, I, I like to measure things. I think we're very-

• 39:57Speaker 00

  Yeah, we we we pick the areas kind of internally that we thought AI would make the biggest difference for us. And then we spent a lot of time trying to, we continually spend time thinking about how to measure it and how the progress should go.

• 40:11Speaker 01

  Did you have any guesses that you thought would matter and it didn't? And then were there any where, you know, you were surprised in the other direction?

• 40:17Speaker 00

  The two areas where we really invested big time in were customer support and engineering.

• 40:23Speaker 01

  Right.

• 40:24Speaker 00

  Which I think were the two most, if you had to think about where human capital really matters. Writing code determines how fast we ship products and fix bugs and improve infrastructure. Customer support's like the frontline interface.

• 40:37Speaker 01

  Yeah.

• 40:37Speaker 00

  With our system.

• 40:38Speaker 01

  Yeah, I think outside of chat, those are probably like the biggest two AI markets so far. So that makes sense.

• 40:42Speaker 00

  Yeah. And so customer support, we measure AI deflection.

• 40:45Speaker 01

  And it's worked super well.

• 40:46Speaker 00

  Worked super well. And with deflection rate, which you probably can can understand, but I don't know if most viewers would. You kind of look at, it's a measurement of what ticket would have gone to a human, but instead has been fully solved by by AI.

• 41:06Speaker 01

  What'd you get to?

• 41:07Speaker 00

  I don't know if we've announced that publicly.

• 41:10Speaker 01

  But something good.

• 41:11Speaker 00

  It's it's relatively, it's very high. I think it's the best in the industry, actually. And we do all this work in-house. We don't use vendors.

• 41:18Speaker 01

  Have you measured if it doesn't just, you know, save costs by, you know, not touching a human? But have you measured if there's also higher satisfaction on the way the ticket was handled? Like, is it both a better experience and cheaper?

• 41:29Speaker 00

  We do measure that, and I think the story is complex. And the reason is there's some percentage of people, call it 10 to 15%, that just don't like talking to an AI agent. They have, you know, predisposition to not like that. We actually track that number and that's going down over time too, which is very good.

• 41:48Speaker 01

  Yep.

• 41:48Speaker 00

  And then we have to do all this work to make the agent try to convince them, right? It says, actually, I'm very helpful. Give me a try, you know? The wait might be quite long.

• 41:57Speaker 01

  Shut up, agent. Yeah, that's good.

• 41:58Speaker 00

  Yeah, it's it's getting better and better. And there was an incident a couple of weeks ago where our AI customer support agents actually went offline for a few hours. Immediately, the phone started ringing like crazy. So then we have. We have clear, direct evidence that the deflections are actually real. We haven't talked much publicly about progress there, but we're doing an AI event in a couple of weeks and I think that one will be good. And then engineering, we look at obviously number of lines of code that are contributed by AI. And we also look at overall like commits per engineer per month. And both basically have been going up into the right. And I think for those areas, those are

• 42:43Speaker 00

  probably the important things to track if you're an entrepreneur, like if you're looking for metrics. And I think they're controversial because the engineers will say, oh,

• 42:51Speaker 01

  It's not about the lines of code, it's about the quality of each line. And you're like, yeah.

• 42:54Speaker 00

  Yeah, exactly. But let's look at the data and just investigate more deeply, right?

• 43:01Speaker 01

  I remember we found that it was not just, we did like a sort of like a core sampling on this. We found that engineers who contributed more lines of code also contributed higher quality per line of code.

• 43:11Speaker 00

  We've seen the same thing. Yeah, yeah. The two, the two aren't as contradictory as you might, you might think. And then I think the next one is just marketing and creative output. You should measure the total throughput of marketing creative and also like the lion's share of that should be generated by AI. I think the tools at this point are good enough to where you can actually move the needle a big way.

• 43:35Speaker 01

  I feel like the cursor idea you mentioned should be very interesting. If at some point you can get to a place where you like sort of trust Robin Hood enough to just sort of tell it, here's what I'm looking for, both in the short term and the long term. Here's my risk appetite. Here's the products I want. Just like go make it all happen.

• 43:51Speaker 00

  We call it vibe trading. So you know how there's vibe coding? I think there will be vibe trading, which sounds a little flippant.

• 43:57Speaker 01

  Well, but you know, the thing you said that we're not a trading platform. It's like, you know, it's like a financial home. It's like vibe finances. It's like, you know, because you have all these other products, I assume it's going to, you know, like vibe set up my, you know, kids five 29 account, which is, you know, not.

• 44:10Speaker 00

  Totally.

• 44:11Speaker 01

  Yeah.

• 44:11Speaker 00

  Here's the areas that I'm most interested in. So I think vibe trading and going down that path of helping first active traders, but eventually seeping into more general use cases with indicator analysis. Right now, these guys are writing code in languages that you and I have never heard of to write these custom indicators and different scanners. So we can turn that to English and we announced that through our Robin Hood Cortex for Legend product at our active trader event a few, a few weeks ago. We have Stock Digest and Crypto Digest in app, which actually are really cool, like incredible feedback from users so far.

• 44:54Speaker 00

  Basically, the way it works is you get a notification saying some stock or crypto is up 5%. You immediately want to find out what's going on. And so we actually give you a digest in the product that explains and it, it's up, it's accurate up to seconds or, or low single digit minutes. And that's been really good. So, so you could imagine AI unobtrusively being this like assistant and some, in some cases autonomous financial agent for many of these things. I also think that there's just some really, really boring stuff that's very hard right now that we're going to push to fully automate. So moving your bank account.

• 45:37Speaker 00

  I don't know if you've ever moved a bank account, but it's a pain in the butt. Yeah. You have all sorts of bills that are hooked into it, all sorts of subscriptions. Totally. And I think at some point you'll just press a button and that bank account will move. And the first companies that figure out how to do this are going to have a pretty big advantage because like it's considered a very sticky thing precisely for this reason. Nobody wants to go to the effort of, you know, changing their credit card number or their, you know, ACH information for 20 to 30 different things. Yeah, you don't even know what you forgot. Yeah, you don't want to even think about it. And yeah, it's just, that's why it doesn't happen. I think if we can, if, if, if it becomes a button, and I think it's headed there, right?

• 46:21Speaker 00

  Then, you know, it's going to be very disruptive to a lot of incumbent firms. Moving brokerage accounts, same idea, very complicated. They don't want to make it easy either. Like your counterparties are not interested in having like a streamlined integration.

• 46:36Speaker 01

  Totally, but I guess an agent that read all of your documents from the old brokerage could figure out everything that you needed to know, I suppose.

• 46:43Speaker 00

  Yeah, yeah, it could be like, you know, if you have a person doing this on your behalf and they make the calls, they talk to customer support, they have access to your emails.

• 46:53Speaker 01

  Yeah.

• 46:54Speaker 00

  Uh, there's no reason why an AI agent won't be able to do all of that work for you.

• 46:59Speaker 01

  Yep, maybe just to um, finish up, um, I guess you've been doing this for over 10 years now and um, obviously, you know, over a hundred billion dollar public company, but you still have, um, I know like an intensity, a drive like to keep going. So I am, I guess one thing I'm curious about is where have you found the sort of drive to stay hardcore detail focused, like, you know, founder through like, you know, both a lot of years, but also it's like you've gotten to like a level of success where it would be easy to not bite so hard. But obviously you're pushing the boundary on so many things at once.

• 47:33Speaker 00

  I think that the one amazing thing that you have as a founder of a company that I don't think is as easy if you're an employee or even a senior executive is ultimately you have a lot of control, right? So if there's something about your company that doesn't work well, um, or that you don't like, or you find yourself having to say things to the employees that you don't agree with, I think that's a, a, a good opportunity to reset and, and to change something. You either have to change something about yourself or about your policies or what you're saying. I think I learned this during COVID, which was a hard time for us for, for many reasons,

• 48:14Speaker 00

  but also for me personally, um, was some of the folks in the company, uh, maybe also like the press and what you're hearing from the internet pushed me into the directions where I was just like saying things that I didn't really believe in. Like, oh, we really care about having the best health and wellness benefits so that our employees can feel good and, you know, you can bring your whole self to work. And I noticed that I was saying things that I didn't really believe in. And I think that's the source of ultimately a lot of unhappiness and.

• 48:49Speaker 00

  At the end of the day, as a founder, I think the company values have to be your values. The way you run the company has to be the way you run your life to some degree. And I became unhappy when there was a disconnect. And then I figured out, okay, actually, this is why I'm unhappy. I have to fix it.

• 49:06Speaker 01

  Yeah.

• 49:06Speaker 00

  And the good thing was you have the power to fix it because you're, if you're lucky enough to still be running your company as the founder, then it, the buck stops with you for, for better and for worse.

• 49:17Speaker 01

  And I'm sure you've just gotten much more confident to like call like you see it and make changes as time's gone on. And you have more years doing it and everything too.

• 49:24Speaker 00

  Yeah, for sure. And I think I have to, obviously, we're doing very well right now. There were times where we were doing quite poorly in the eyes of other people. And I've been through maybe like two or three of these cycles. So I know there's probably going to be some time in the future where we're shitheads again.

• 49:41Speaker 01

  Do you do anything in the good times to like bank any of the like good vibes? Or any of the just like sentiment, like can you bank any of it for the hard times? Or is all you could do, just know it's gonna not always be good?

• 49:52Speaker 00

  Good question. I try to go on more podcasts, right? Yeah, maybe most people don't want to talk to me, right? When, when we're, when we've done something bad.

• 50:01Speaker 01

  I'll do one with you in the next buzz. We can run it back. Well, this was super fun. Thanks a bunch for doing this with me. I really enjoyed it.

• 50:07Speaker 00

  Yeah, likewise.