The Iced Coffee Hour - Confronting The CEO Of Robinhood - Why Most Investors Lose Money

Episode Date: August 24, 2025

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We are seeing a phenomenon that I have never seen. The weapon of choice for these new traders are platforms like Robin Hood. GameSap shares tanking today. Robin Hood and other brokers making it tougher to trade the stock. How tired are you of talking about it? It's okay. You can be honest. So you created Robin Hood, the financial app that introduced probably millions of people to investing. Do you think that there should be stronger guardrails and stronger disclosures in place?

I think it's hard for me to imagine a world where I would say no. So what is your prediction in terms of where the U.S. economy might be headed over the next few years? I think technology-wise, where in probably the most interesting time ever, you have AI, which has the potential to change every single aspect of our lives and the way we interact with the world. You've got cryptocurrency, reshaping money itself, and that's why trading and finance have to evolve to. So if you were to answer the not so simple question of why did you disable GameStop Buy button, how would you now answer? Vlad, thank you so much for coming on the iced coffee hour. I feel like this is something we've been trying to do for years at this point. All of us have used Robin Hood.

We're big fans. However, we have never seen you and Roaring Kitty together in the same room. Yeah. How can we confirm you're not the same person? I mean, I never claimed to not be the same person. I've tried getting in touch with him in the past, but I don't know, he's, uh, I'm not convinced he's a real person. He's very elusive.

He's a little elusive, yeah. Have you guys met him? No. You would love to. If he's watching this, by any chance, Keith, please, we would love to have you on the show. We've, we've reached out, and I don't think he's ever responded. He's never seen it as far as we're aware. Yeah.

Well, maybe the next one you can interview both of us together. That would probably be a good one. I think that would break the internet. That really would. Yeah. That would be the first definitive proof that we're not the same person. That's so funny. So I'm curious.

So we have a chart here. I want to show you. Why do you think the average retail investor is so poorly in the markets? That's a good question. I'm trying to think whether it's actually true from my perspective that the average retail investor does poorly. So because we publish. Thanks. we publish Robinhood data around this.

We have the Robin Hood Investors Index, and that tracks how our customers do relative to the market, also what their top 10 holdings are. And, you know, it fluctuates quite a bit. You can compare it against QQQQQ and other tech stocks and ETFs. And our customers tend to be overweight in innovation and technology and also crypto. So in times when those do poorly, which happens from time to time, our customers tend to do less well than the indices. But in times like right now where innovation, technology, crypto is doing well, they tend to do very well. So I think I think that historical number might be if I had to guess from a time where there were commissions on every trade. And a lot of the studies that show retail investor underperformance assume a $10 commission.

And obviously that amount eats into your returns as you trade more and more. The difference is now we have zero commissions on equity trades. And so a lot of those analyses don't make sense. And I think a lot of the conventional wisdom around retail underperformance has been under these sort of antiquated assumptions. Is there anyone you think that should not be investing? Is there a type of person maybe where, hey, this is probably not for you? What we try really hard to avoid is people investing in things accidentally or things that they don't understand. So I think disclosure is very, very important.

It should be clear to the user what the instrument is. I mean, it should be clear that, for example, it's a cryptocurrency. It should be clear if it's equity or some type of leverage product. If they want to trade options, it should be clear that, you know, they're suitable for options. But once you get to that, if someone's really telling you. you, you know, I want to invest in this IPO or I want to trade options. I think it's hard for me to imagine a world where I would say, no, you know, you shouldn't be doing that. So you created Robin Hood, the financial app that introduced probably millions of people to investing that would

have never been investors otherwise with zero dollar trades and a very beautiful UI. While that's really good, because I think I think everyone should be. investing. If you're not investing, I think that you're losing out and you're not doing your future self-a-service. There's also the counter side of that, which is it could introduce some people that are not super knowledgeable in the markets or don't have the expertise to be investing to investing, and they can end up losing money. Do you think that there should be stronger guardrails and stronger disclosures in place to prevent people without the knowledge to be investing? Or do you think it's a better thing that everyone just kind of goes in and it's, you know, the survival of the fittest?

I think that more people should be investing. We give people lots of options now, right? So obviously for our active traders, we have to be at the frontier there and you can trade options, futures, prediction markets. I mean, we pride ourselves on having very comprehensive selection, low fees, rock bottom margin rates for the active trader market. But not everyone wants to actively trade. or is suitable for it.

And so we have Robin Hood strategies, which I think is the best robo, the best digital advisor on the market with some of the lowest fees in there, a fee cap if you have above $100,000 and just like a beautiful interface.

And that's been off to a fast start. We rolled that out just a couple months ago and it's already at over half a billion in AUM with 100,000 customers. So it's growing quickly. We also have retirement We know, we've got over 20 billion in retirement assets on the platform. To my knowledge, I think it's the fastest growing IRA product that I've heard of, you know, gone from zero to 20 billion in just a few years.

And if you look at what we incentivize, retirement is actually what's incentivized because there's a built-in match into the product on every contribution. So we'll match 1% for retirement and 3% if you're Robin Hood gold member. And, you know, we run match promos and things like this. But if you actually think about what's like intrinsically incentivized, it's our retirement products. And I think the true story is a lot of people have money in different buckets. So you'll have someone with, you know, a few thousand dollars, maybe more that they're discretionary trading. And then they'll have a big retirement portfolio and they'll use Robin Hood strategies as well. So if you think about the discretionary bucket, the sort of like area of the portfolio, people are self-directing, taking risk, I think I've always viewed that as sort of like competing with a consumption bucket. So this is probably money you would have spent otherwise. You know, you'd have spent it on entertainment. You maybe would have like bought stuff on Amazon. And that's what we saw from the very beginning when we were looking at Robin Hood and where the money that these young people were.

investing was coming from. It wasn't usually coming from another competitor because Robin Hood was their first account. And when we talked to customers, they'd say, if it wasn't for Robin Hood, I wouldn't be an investor. I'd probably be spending this money. And so Robin Hood actually, I think, took money from the consumption bucket and put it in investing. And I think when you take that lens, that discretionary bucket looks a little bit different. That's what I tend to agree with. is it seems like Robin Hood kind of took those people that would be spending it on extra streaming services or spending it on random luxury goods or things that they don't necessarily need. And they put it into, usually with Robin Hood, the old connotation, I don't know exactly how it's

being used now, was that they would put it into like slightly a riskier stocks or more fun sort of investments, which is, I still think, I mean, magnitudes better than just spending it on some random, you know, extra expense. Yeah. And I think also a lot of the people that really, like there's some kind of. customers that are all in on discretionary trading, right? They trade options, they trade futures. And you talk to these people and they're basically entrepreneurs. A lot of those folks are entrepreneurs, right? And, you know, we have meetings with them and sometimes we do dinners with our best customers. These people want complete control over all of their finances. They have very strong points of view around many things. And I think that Robin Hood and Trump, trading is a way to reflect that point of view. They think certain companies are going to do well.

They feel like they deeply understand cryptocurrencies. Some of them are sports junkies. And they have an incredibly deep understanding of different sports teams and what's going on. They're tracking the injury reports. So I think there's a big parallel between self-directed trading and entrepreneurship. If you think about me, very few entrepreneurs actually succeed. And if you think about what it is, It's like a complete 100% leverage bet on like one undiversified thing.

And, you know, should we have less entrepreneurship? I don't know. I think we should have more, even though, you know, it doesn't always work. I did a short recently that got a lot of views and it was on Robin Hood. Oh, gosh. It wasn't the one where you're like, I'm closing my Robin Hood account. Here's why. Was it?

No. It was this one. Turn it up. So I bought Robin Hood stock at $32 a share. Okay. And it dropped as low as seven. Oh, I saw this. And I doubled down.

And I bought more. The reason it went down was because I told Jack, I bought Robin Hood. I saw this. He immediately. He goes on his phone, buys it. Immediately. And I kid you not, the day he bought it. Once that's a 10.

And I told Jack on the podcast, I'm like, dude, you've got to sell the stock. And he says, I'll flip a coin. And if its heads, I'll sell off its tails. I'll keep it. It's fine. He flips it. sure enough, he has to sell the stock. It sells the stock.

The next day, it's up 10%. The next day, there was a big announcement that they received an investment. At first you were telling me kind of a joke, but you genuinely believe this. I actually came across that clip on social media, and I was expecting

like some very deep, fundamental or technical analysis about your investment philosophy. So it gave me a little chuckle. No. It just got funnier and funnier as it went along. Honestly, my only analysis was that I genuinely like Robin Hood as a company, and it's all I see on social media on Wall Street bets,

and on Twitter, everyone just posts the Robin Hood screenshots. Yeah. And very few people ever post Schwab. And I thought, just by the metrics of that and the price it was straight, it just, it made sense to me. And then jackpot. Yeah. So I'm curious, if you map out all of the users on Robin Hood across a line, and this is like people that make a lot of money, high risk, people that lose a lot of money, high risk.

And then in the middle, you have like the very. conservative investors, where would you say Robin Hood falls? Like, what does this chart look like on Robin Hood as opposed to other brokerages if you take Vanguard, for example, or you take Schwab or any other sort of exchange? I think that, well, first, it's hard to actually compare because no brokerage reveals data to that granularity. I mean, we can track our market share and we sort of like goal on that. And actually, the goal is to be number one in market share. And, and actually, the goal is to be number one in market share across every asset that we offer, equities, options, crypto, margin, which has been growing very, very well. So we don't have a goal on the precise decomposition, but at a high

level, one of the things we really track very, very closely is customer retention. So it benefits Robin Hood if customers do better over the long run, because our revenue is actually I mean, if you look at our revenue and divide that by our assets under custody, the total platform assets on the platform, that number has been fairly consistent over the years. It's kind of like in the 2% range, you know, sometimes a little bit higher, sometimes lower. But basically our revenue scales with the assets under management. So long term, we're very aligned for our customers to do well because if they do well, they're, account balances increase, our AUM increases, and we're a healthier company. And a few interesting things.

One, AUM now is over a quarter trillion, which is a big number. I can now say trillion when I describe our AUM, even though it's less than one, but still, I think a quarter of a trillion is a big milestone for us, particularly as such a young company. Average account size broke 10,000 per customer. And, you know, criticism of Robinhood would be these are tiny accounts, a few thousand dollars, Schwab's at, you know, hundreds of thousands. How is this ever going to be a serious broker? But, you know, account balances are growing and our customers are getting wealthier. They're putting more and more of their dollars into Robin Hood.

And I think we'll get there to the point where our customers have, you know, six figure, six figures, average account size. How much of that, though, is just the market has gone up so much over the last few years in terms of average account size that if the market were to fall, you would see a big discrepancy. This episode is brought to you by Defender. With its 626 horsepower twin-turbo V8 engine, the Defender Octa is taking on the Dakar rally, the ultimate off-road challenge. Learn more at landrover.ca. There. Yeah, I mean, we also look at net deposits. Net deposits is the portion of it that's, I guess, under our control. And last year was 50 billion in net deposits, which is a big

number, big number. And this year, we're on track to exceed that, right? We did, we've had two of our top three net deposit quarters in the history of the company in the first two quarters of this year. You know, Q4 of last year was quite strong as well. But yeah, Q1, Q2 have been strong. Q3 is off to a good start. So it's not just the market. People are also putting more money. But we want to benefit for market appreciation too, because if you look historically, you know, market goes up by 10%ish per year and that compounds. So we want to be winning in net deposits.

We want to make sure, I mean, up to our control, our customers are invested in stocks and other assets that have long-term appreciation potential. I think the combination of those two make for a great company. How much do you look at specific user data? For example, if you have one trader that's wildly outperforming everyone else on Robin Hood. Maybe they're getting like consistent 1,000% returns every single year. And you said you reach out to these people and you'll take them to dinners and stuff like that. But do you ever feel like incentivized to copy trades? And is that even legal to do? To like look at all the user data. You see one account just consistently crushing. Yeah, yeah. We don't really do that. I mean, we don't do that. And, yeah. Yeah. Yeah, actually, I think traders in particular are pretty sensitive about their privacy. And that's why, I mean, I think we have certain regulatory obligations. So it's not even legal to do that? I'm not sure it would, I don't know about the legality of it, but it would at the very least be frowned upon. I mean, depending on what exactly we're doing.

Of course, there are certain regulatory obligations that we have. like we have to do surveillance and look out for things like market manipulation and things of that nature. But yeah, generally like looking at who's making money and trying to understand their trading strategies. We don't do that. That's a jack wants to do. See, that's the thing. If I own Robin Hood, I would just go straight to Chris Camillo's portfolio. Do you know who Chris Camillo is?

I do know him, yeah. Yeah, I would just go straight to that portfolio and just be like, all right. What is Chris? I'll hire an assistant and just map out every single trade he's doing. Here's what we were talking about earlier. What I would love to see is a voluntary opt-in feature where you could opt-in and share your trades to other people publicly. And all people would see on you because you would stay anonymous is just your account balance.

And you can comment on a feed and be like, I just made this trade and it's like account balance 20 million and people like, yeah, might be something. Jazz at 10,000. Yeah. I'm going all in on Dogecoin and people like, okay, maybe. Okay, so that's a fundamentally different thing than, you know, us just looking at the data and trading for our own corporate account. So I definitely think there's value in what you're saying if it's clear to the customer that. Although really quick, I just want to say that we had a sponsorship supposed to be going right here.

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Thank you so much, CozyEarth for sponsoring this episode. And now let's get back to the podcast. If it's clear to the customer that, you know, I can opt into sharing my trades and other people can track me and see how my portfolio is doing and maybe, you know, follow along and copy my trades within some type of parameters, I think that would be an interesting product. Actually, when Robin Hood started, I don't know if you guys know this, but we launched in 2013 as a social network. So the name before we changed it to Robin Hood was Analyst. And the idea was that we have all of these retail investors on social media and the Internet, and they should have the ability to share their point of view of stocks. So we took the idea of an institutional analyst, you know, the folks that rate stocks,

buy, sell, or hold, set price targets. And the attempt was to, like, democratize that. So anyone can be an analyst. We created the social network where people could rate stocks and write comments. And our initial vision was that once we got approved to be a broker, we would sort of, like, layer on trading. So you can not only analyze a stock and, but you can also, you know, buy it and you can see your real portfolio. And so, Sometimes I think about, we ended up making the decision that, like, these are two very complicated businesses independently to put together. And the demand for commission-free trading was so high that we just, like, abandoned all of that for the time being and just focused on making the trade button as simple and streamlined and easy as possible. But sometimes I think about that because very much in our DNA to build those types of products.

And who knows, maybe some point we'll revisit. I would love to see that and be able to track people based on their percentage return, dollar amount return, and account value. And would you, would you, you'd sign up for that network and be willing to, you'd be willing to opt in and share your trades with followers. Yeah, but as long as it's anonymous, as long as people didn't know it was me, all it would show is the account size and what I'm buying and selling. I do not want to be associated to track. to be anonymous or not. I think, because I personally wouldn't care

if I was, you know, if I could show my trades a big, Jack Selby just made this trade. And then you do the opposite. And they do the opposite of whatever. Yeah. I think most people would probably want to be known and they could build a following.

But yeah, I mean, I think, I think if you, I could see the use case for wishing to remain anonymous too. But I think there that raises a question of like, who is this person and why would I follow them, you know? So we've spoken to a lot of people on the podcast that have either been acquired or they've IPOed. And they said after that massive landmark event,

their quality of life can slip a little bit. And they can feel some sort of like purposelessness or meaninglessness because they, you know, that was their entire existence was building up this company. And then you have this massive event to kind of forego a lot of your equity and ownership of the company. How have you noticed that work with your life?

Did you notice after you guys IPOed there was a quality of life slip? or would you say that that was not your experience? There was definitely a little bit of a quality of life slip, but I don't know if it was the IPO itself or the timing of it. So we went public in July of 2021 at sort of like the peak of the secular bull market before things went really south. And we were actually one of the last IPOs before the window got shut.

I think Ribian went after us by a couple of months. but I think the IPO window shut for many, many years shortly after us. And you could tell the vibe was shifting right around the time we were going public. Like we didn't have a particularly hot road show. It wasn't, you know, like some IPOs where it was 60x over subscribed. So you can tell there was a little bit of a vibe shift. Like everyone was kind of understanding. Government's printing a lot of money.

Inflation is creeping up. So something's going to have to change. And so pretty soon after our IPO, our stock took a pretty big hit. You know, we went public at $38 per share. We traded. It was actually looking recently. When was the exact day we hit the bottom? Mid-2020, we closed at like $6.80 something.

So a huge drop, right? What did that feel like at the time to see that? It felt rough. It felt rough. And I mean, they tell you that you should ignore. the stock price and focus on building your business. It's especially hard for a company like Robin Hood whose business is the stock market to ignore stock prices, especially our own. And also, I think it's harder to ignore on the way down than on the way up because on the way down, you know,

people get concerned about, you know, the long-term viability of the company, their compensation, if you look at employees. So hard to ignore, especially. on the way down. And I think they really look to leadership to point a way out, right? Like, show direction and inspire people so that they know it's a company that's worth betting on. So I don't think it was the IPO itself, but going through a hard time post-IPO where we went public after the game stop stuff, there was a little bit of like short-lived euphoria around the time of our IPO. And then afterward, like the reality set in of we're a business that was compared to now much more fragile. We went through COVID. We transitioned to being a remote first company.

We blew out our headcount and grew our headcount 5, 6x. People weren't working well together. We weren't shipping. And then the macro environment, which was a tailwind during COVID, rapidly reversed and became a big headwind and people stopped trading. So, you know, all of that happened simultaneously. And so I didn't have the problem that you were suggesting, which is, oh, my job is done, like mission accomplished. It was more just like being hit by several freight trains of like unique challenging problems and, you know, having to like stop them or dodge them.

them and having to navigate that. So I felt there was no loss of purpose. It was like a slow burn of like different mini crises. Do you think that was an overreaction? Because I remember at that time, you were trading at a market cap that was equivalent to your cash on hand. Yeah. And I remember seeing that and thinking, how is this not a buy at this price? Because you're basically buying, dollar for dollar the cash you have. Yeah. How does that make any sense? I don't know if it was an overreaction as much as sort of us having to build trust with a new set of investors.

And I felt like we had to do this when we were a private company. You know, we raised as a private company, we raised different rounds of funding, seed, series A, all the way up to series G, which was our last round before IPO in 2021. one. And in a lot of those rounds, you bring in a new investor for the first time. And I always felt like there was a period of having to earn the trust of the new investor. Maybe they don't really understand how we operate. They're trying to figure out, did they make a mistake with the, did they overpay for the company? They don't really know us that well. And I felt like for each new one, there was a period where, okay, we had to prove ourselves. This is a new person. They don't know us. We had to build trust. And I think when we went public, it was very much the same. You know,

different set of investors. You know, you had the hedge funds. You had the long onlies. You had retail, which for Robin Hood is a big chunk. But, you know, you'd think we always have retail. But no, as a private company, we didn't have any retail. So that was new for us. And I think that there was a period where we had to earn the trust of that shareholder base. And I think we've managed to do that. Finally, I could see the tide turning in 2024 kind of last year. Yeah. From my perspective, it seems like there's still that discrepancy between Robinhood

where people still associate to some degree with more like childish or like, it's a bunch of early 20s with something like a vanguard or a Schwab that seems to have more that like legacy push behind it. How do you intend to bring Robinhood to that level? A couple of years ago, our best customers maybe would have hundreds of thousands of dollars in their Robin Hood account, maybe millions. But then as we've added more things and we become more established, I started talking to customers who are moving over tens of millions. You know, now I'm talking to customers that are moving over hundreds of millions into their Robin Hood accounts. And, you know, my aspiration would be someone like me, you know,

whatever classification I'm in should be able to have all of their wealth in Robin Hood. That should be just optimally managed at the lowest cost. And we can serve someone like me, all of their financial needs that should then accrue to everyone. And I think the problem that the incumbents are ignoring is there's a great wealth transfer that's underway. According to some statistics, over $120 trillion is going to be. be handed down from baby boomers and silent generation to younger generations. And I think I see increasingly

that Robin Hood has the potential to be the main beneficiary of this, right? The young people already have Robin Hood accounts. We're increasingly building tools to make Robinhood more useful to you if your family members are on it, not just your kids and your spouse, but also your parents. And nobody's thinking about that problem. The incumbent brokerage is, they kind of get worse for you if you add family members accounts. But Robin Hood's going to get better. We already have this with banking and with credit card, but it's going to come to investing as well.

There's going to be a multi-generational experience. And I think Robin Hood eventually for the mass market will play a role similar to what a family office would do for a high net worth individual. We can put a family office in your pocket that can manage not just your finances, but like all of your strategic life decisions when it comes to to your family. And I think we'll get there much more rapidly and with a much higher quality product than, you know, anyone in our industry. So on a personal level, how has your approach to money changed going from someone who didn't have maybe a ton of money to now someone who has plenty of it, especially post-IPO and with the recent stock growth of Robin Hood, how has your approach to

money changed? And also on top of that, we had Michael Saylor on the podcast a while ago. Oh, yeah. It was very interesting because that day, micro strategies went down like a few percent. Yeah. And we had calculated he had lost like, what, hundreds of millions of dollars in personal net worth. And we're sitting with him. And then after the podcast, he checks his phone, probably checks micro strategy stock for the first time that day. And he was just, you know, meanwhile he's losing hundreds of millions of dollars. Like how does this work for you on a personal level? And once again, the approach to money.

How has that changed? I think one thing that hasn't changed is, you know, I'm an immigrant. I grew up in a household where we were very conservative about all of our spending. And I think that imbued in me once I got a little bit of money, I still have, this deep need to make sure I'm getting a good deal on stuff, even if it's irrational. So every time I purchase anything, I look at it from an investment lens. Am I getting a good deal? Am I buying some asset that'll depreciate? I would be very reluctant to buy a new car, right? The only time I would consider buying a new car if it's literally like the first one in a model. And it's so good. And like I

can't find a used one. Yeah. But, you know, I buy used cars. You buy used cars? By used cars. What's the last used car you bought? Uh, a 2021, uh, 9-11 turbo S. Actually, I didn't buy it. That's a lease. That's a lease. Why'd you lease it instead of buying it? Got a good deal. How often do you look for good deals? And like, where else do you save money? In everything that I do. I look for good deals. What does your wife think of this? Does she think like, you know, come on, we can get the car. We're at the point now. We don't have to worry about these things. Don't need to buy the manager special flank steak for 70% off.

I think she complains about it a little bit, but sort of jokingly because she also understands it's, you know, the way that I've always been, the way that I am. And so it's, you take the, it's what she loves about me. It's the principle of it, though. It's like even though you can waste the money, you shouldn't. Yeah. And, you know, I think there's a bit of confidence. It's a good feeling to feel like, all right, at least I don't have to worry that someone's going to take advantage of me financially because this guy is just going to like do a colonoscopy on any potential transaction. Does that ever hurt?

So I think that's very comforting in a way. But when you go and negotiate something, does it ever hurt when they look you up and they're like, oh, this guy can afford it? Like, I could charge whatever I want. Yeah, they can just look up your name and net worth. And if there's a B after your name, like it's, you know, I feel like that's a different from car salesman to buying a house to like having trades been over. Like everybody I feel like would just give a premium just because they can. Yeah, yeah. But, you know, there's ways that you can turn that into a positive too.

Yeah. I mean, if you think about wealthy people, a lot of times they get free stuff because, you know, you can just be like, well, how awesome would it be to tell other customers of your business that, you know. you're selling Lady Gaga address, right? So they get luxury items for free a lot of times. What's the craziest free thing you've ever gotten? Do you ever have a really successful trader, make a bunch of money? They're like, I got to send him a gift.

Yeah, I'm not allowed to accept those. Unfortunately, I think we have to donate them to charity by and large. They got to change that. Yeah. Yeah. So, yeah, I don't get a lot of gifts, or at least not a lot of gifts that I can keep. And so what about your?

own personal investing philosophy, how has it changed now? Do you go into more like asset protection mode or how do you view money as you've climbed up this this money ladder? It hasn't changed very much because still the like vast majority of my net worth is in Robin Hood shares. And how does that feel then like on a swing up or a swing down? I mean, Robin Hood was like up one percent today. Yeah, you hit an all-time high this morning. Oh, amazing. You didn't know that? I didn't. I didn't know that. I mean, I knew in the past week we've been doing well, but, uh, how do you not check the share price every day? I, because even on my account, I check. I feel like it would drive you crazy. Multiple times a day. I do, I don't want to make it seem like I don't check the share

price because I do, uh, even though I try not to, but, but I do try not to. Yeah, because it can be really distracting. Like, I don't want to feel, because if it's down, you know, four or five percent, which sometimes it is for no reason, I don't want to have a bad day. right so um and i also don't want to get too excited and think that i'm winning if it's up for no reason that's exactly true same thing for the podcast it's like if we have a video that does really well i try not to let myself feel good because i know if i do then when videos do poorly for who knows what reason then i try not to let myself feel bad it's like you have to remove your emotions from the reality of the situation it's exactly like that yeah but really quick one thing that i've noticed from

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automate the busy work, and track performance all in one place. Check them out today at baselaine.com slash iced. That is baselaine.com slash iced to sign up or just click the link down below in the description, baselaine.com slash iced. Thank you so much to Baselaine for sponsoring this episode. So what is your prediction in terms of where the U.S. economy might be headed over the next few years?

I think there's a cloud of uncertainty around these things always, right? So I think you have to counterbalance the sort of like bearish indicators, which are sort of like productivity growth historically has been pretty low in the U.S. And nobody's really been able to figure out why. I think outsourcing of the industrial base has been a big contributor to that. you have us printing money, right? And in a way that's us borrowing from future generations to fund our spending now, which I think is a problem. Countries that have typically been big buyers of treasuries have kind of gotten out of that market, China probably being the best example there. And, you know, there's like seeds of geopolitical conflict or outright war brewing. And that's just,

those are kind of the bearish indicators, right? Yeah. But there's some bullish indicators, too, that make me feel very optimistic. I think technology-wise, where in probably the most interesting time ever, like technology keeps marching forward. You have AI that has the potential to solve some of these issues, including productivity and the borrowing from the future through massive GDP growth. if, you know, AGI or ASI is unlocked.

And it looks like the U.S. is leading in that, particularly Silicon Valley, which makes me feel very good. You've got cryptocurrency, again, which the U.S. very much in some ways companies are leading. And I think we're looking to onshore some of the innovation that's gone offshore in the past few years. And I think you have some things that we're proud to be a part of, which are ways to reverse the borrowing from the future to fund the present and instead use the present to fund the future, like this Invest America initiative that somehow miraculously passed and was part of the reconciliation bill, which would actually fund every new child born in this country with $1,000 in great American companies, which I think is very cool.

What's Robin Hood's plan with the $1,000 Trump account? Yeah. I think it goes very much into our strategy of making financial platform that's multi-generational work for the entire company. So right now, to have a Robin Hood account, you have to be over the age of 18. I think this is one lever by which we'll expand it to folks that are under 18. And whether you're zero years old or, you know, 100 years old, you should have an amazing Robin Hood experience tailored to your needs. I'm curious if you, I mean, maybe you can't even comment on this, but are there any regulatory provisions or rules that you think are just dumb and should go away? I think you should be able

to invest if you're under 18. And I think if you got all those, a lot of people, they front load loss. Because when I first started investing, I had no idea what I was doing. And I tried, you know, selling calls and I was making money and I got greedy and I started buying calls and then I lost everything. Yeah. And it made me learn so many valuable lessons. But I started doing it. that once I already started making decent money. And so I lost an amount of money that, you know, is a little uncomfortable to lose. Granted, I'm in a different position now than I still was back then. But I think it's good if you're just getting into investing to have some money that you can

lose. And most of the time, if you're like 16, 15, 17, and you've made a few hundred dollars over the summer, so much better to lose that than after working for 10 years, learning about saving, learn about investing, then finally trying and then losing that hard-earned cash and then maybe taking a 10-year break from investing because of that experience. It's funny. I have a story about that. I was 14 or 15.

I made a Scott trade account when they had $7. And about $2,000 that I had saved up into that account. And I was on a penny trading forum. And I found some like random stocks that people were saying like, oh, this whole chart is going to go up. And I doubled my money from $2,000 to $4,000. And I got very confident that how easy that was to make $2,000 lost it all. But that was, but that lesson. That lesson was amazing on Scott trades.

And then I got lucky. I made it all back. I put it into Ford stock. I had like $400 left over and I bought Ford stock at like a dollar or something a share in 2009. And just forgot about it and it just made it back eventually. But it took, you know, a solid like seven years to make it back. But I did. I started investing.

I opened up a brokerage account at E-Trade in 1999. So my dad had given me an incentive because I was part of this program where you had to take the SAT as a middle schooler. And if you take the SAT and do well, you get into this summer program where you basically get to do math, do like one year of math in three weeks. I don't know you guys heard of this. It was called CTY. So anyway, he incentivized me. He's like, if you get above a 1,300 on the SAT, I will give you your score in cash.

So I got very motivated. I was very excited because, you know, I was like 12 years old. And I don't think he thought that I would do it because 1,300 as a 12-year-old is a good score. Anyway, I got a 1370. And he said, all right, I'll give you a little bit more than that. But it's going to be in a brokerage account where you're not going to be able to just withdraw the money. I think back then it was even hard to do that.

That's smart. And that was in 1999, mind you, right before the dot-com bubble burst. So I invested in a bunch of companies. There was a time period where I made a lot of money and felt very, very confident. And then I had to navigate the crash and what happened subsequently. But I learned a lot of lessons. I learned what happened when I learned about company mergers and reorganizations because I bought stock in this company. any 3-com. I don't know if you guys remember. No. But 3-com made the Palm Pilot. And there was a

spinoff. So for every 3-com share, I had a palm share and I would get the prospectus. And I'd be like, oh, wow, I got these free shares. What happened? So I learned about mergers and reorganizations. I learned about bankruptcies. What happens when the company that you invested in because you were driving past its office building on the Dulles-Toll Road in Virginia? And you thought the office building looked very nice. So you bought stock in it. And then it goes bankrupt and what happens to your stock. And I think these are very boring things to read about in a book and actually understand. But once you experience it with your own money and your own shares, you understand it very deeply and viscerally. And it's like engaging to you. So I always said like investing in trading is similar

to playing a violin. Like you can't learn to play a violin well by just like reading music theory in a textbook. You have to pick it up and play it. And the first time you play it, it's going to sound very, very bad. But if you keep playing it for 10, 20 years, the sky's the limit. And I think investing and trading have a lot of similarities with that or playing a sport. Do you see any other rules, though, that are out there that you just think to yourself, why does this exist? Oh, yeah. I think that many. The accredited investor rule, probably a prime candidate. So if you guys are not familiar with it or the viewers are, basically you can't invest in a private company unless you're a high net worth individual. So there's either an income threshold

or a net worth threshold, which shuts out 80% of people from investing in private companies. I think it's particularly pernicious now when we have all these AI companies, a lot of which are private. Or SpaceX, for instance, which is, you know, the leading company and the space revolution, which is very, very exciting. It's very, very exciting to a lot of people, a lot of potential, but it's private. So you're shut out of it. And I think one fear that I do have about the future is that you've got the genie coefficient at a historic high. Income wealth inequality is historically high. AI and those technologies appear. or at least there's risk of this, it's not clear how it'll shake out, but it appears that they'll have a centralizing effect. So they'll probably put more wealth in the hands of fewer and fewer organizations. And my fear is that if that wealth leads to an inflection point in wealth and income inequality and kind of the political unrest and the stressors and like the civil unrest that that could cause could actually stop progress or thwart progress.

or at the best case lead to lots of distractions. And I think that's why I'm so compelled to make sure that, you know, we have more people bought into capitalism and particularly with these AI companies that, you know, more normal people can be invested and exposed to the upside there. Because otherwise, I think, yeah, I think we could have some negative effects. What would you say is your strongest doomsday argument for America's economy and what the average person should be doing about that. And then on the other side, the strongest argument for a flourishing economy over the next 10 years. I think the strongest argument for a flourishing

economy will navigate this technology and societal transition well, right? Like, we're aware of the problem. We're going to make the fixes. We're going to invest and make sure the U.S. is at the center of these technological shifts and will kind of like make the necessary adjustments to our policies to ensure that that's the case, making it easy for the best talent around the world to come here working for our companies. Encourage capitalism, which means protecting it

and making sure that more and more people are bought into the system as investors, which I think we can play a strong role. And then GDP growth inflects and actually compensates for the spending and we balance the budget that way. So I think that's a nice scenario. Negative scenarios, you know, you look at people losing confidence in our currency, getting into conflict, increasing spending much more aggressively and much further, losing talent. to other countries that are more business friendly. Yeah, those are all negative things

and could lead to instability. Although really quick, before we go into that, don't worry, this isn't a sponsor, but we do need your help. Right now, one in ten people around the world don't have access to clean drinking water. It's something so basic that all of us just seem to take for granted. That's why we're teaming up with Mr. Beast, Mark Rober,

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I'm sure you have your finger on the pulse of what people want to be investing in, the changes they want made. I think that what we're seeing now is that a lot of our customers are heavily invested in innovation names on the public side. So you have Nvidia, Tesla, Apple, Amazon.

A lot of like Mag 7 investing is happening. and I think people are making a bet that, you know, those are going to be the industries that drive the future. And I think so far, at least this year, it seemed like a prescient bet. I think another lens is looking at what the wealthy people are doing. Wealthy people are diversifying. They're investing in private companies. They're investing in real estate. As I'm sure you guys know, I saw real estate in your chart as well, has done very,

very, very well. So wealthy people have access to these things. And right now, retail investors on Robin Hood have, like, not great access, admittedly. I think that's going to change, and we're going to open up the floodgates to that. And what that's going to do is, I think there will be a positive downstream effect of more entrepreneurship. More people will be starting companies if you have access to retail capital and the, you know, quarter trillion on Robin Hood and other platforms. What I don't think will change. Welcome aboard via rail. Please sit and enjoy.

Please sit and sip. Play. Post. Taste. View and enjoy. Via rail, love the way. Is the appeal of investing. I think investing will become more attractive.

It will become more necessary. I think everything that we're seeing with AI, and even if you believe in these scenarios, where you'll have large-scale labor force disruption, job loss in some sectors. You kind of saw a preview of what that looked like in 2020 at the beginning of COVID. And what happened was lots more people started investing in the markets. So I think that's a durable effect. And I think that if I had to guess, investing will be a much bigger portion of every individual's life 10 years from now than it is today.

Here's what I'm thinking is that 10 years from now, we're going to have 24-7 trading where I could go online or on Robin Hood and trade at 2 o'clock in the morning. And I want to see shares prices go all the time. Well, you basically already have that. I mean, we have a 24-hour market except on Saturdays and early part of Sundays. Exactly. But so I want more of that throughout everywhere. And then I also want it so that I could send individual shares from one person to another. So if I want to give Jack one share of Robin Hood, I'm able to transfer it like I would have Venmo. And then lastly, is I think no one has been able to truly get real estate in such a way that you could like swipe up and buy something or cut out all the middleman involved in real estate or somehow securitize a property. And every platform that I've seen, I would never put my money in these things. But I think there's a way where you could turn a house. into some sort of like a swipe-up or co-ownership with people.

That third one I'm very interested in. Yeah. Yeah. So, big opportunity. I want to see a place where if real estate continues going at the same pace, that I could own a house with like three other people equally in a way that just works online. I don't know how that would work logistically.

But I think that's the direction things are at least heading. Yeah, and real estate's a big market. So it's a big potential. And if you look at high net worth individual, 10% of your portfolio is real estate. So, yeah, I think that's one that I care about. What are your plans to get into real estate? Well, we have mortgages now through a partnership with Sage Home Loans. And I think that's been a good use case.

Proves to us that our customers care about homeownership. They care about real estate, both in terms of like buying a home themselves. but also they think about it as an investment. So I think we'd get into it in two ways, and I'll speak to it generally. I think there's one viewpoint where it's an investment and it's part of a diversified portfolio. And I think over time, as with any investment

that's a part of your portfolio, we'll want to have access to the highest quality assets and make them available to retail. the other thing is there are certain investments and people think about them as investments, but they're like physical things that people own. I mean, like watch is a good example. A lot of people invest in watches. They collect them.

You invest in art, but maybe you don't really want 164th of a painting. You actually want to take custody of your art and hang it up on your house. Or you invest in classic cars, right? I mean, classic car market, collectibles market has been a very active market. And I think we'll want to open up access to that too, because there's a whole realm of investments that you think of as investments, but you want to hold it in your hand. I think we're starting to explore that a little bit in our banking product and with the credit card. Right now, you can redeem your rewards points into physical gold bars. And that's actually a very attractive offering to people, believe it or not.

And of course, you can buy gold ETFs and get exposure. But there's something about holding a piece of gold in your hand and putting it in your safe that people really, really love. They like to touch and look at their investments. So we'll get into that as well. Okay. But from mortgages, why not do that yourself? Why not do everything in house? Yeah, I mean, there's different parts of a mortgage, right?

There's the servicing and the user experience, which actually means, you know, selling you the mortgage, communicating the value of it, taking, doing the billing and, you know, putting it in your budget. And I think that's integral to the customer experience in many ways. So I think over time, you'll see us get deeper and deeper there and we'll probably own the customer experience and the servicing. Then there's the actual loan itself, you know, giving someone the money and taking that risk. And I just think, like, that's more of a utility product. There's thousands of banks and different types of lenders in the U.S.

that would be willing to compete for the actual economics of that. And I just think we might do some of it in the future, but Robin Hood is less differentiated in providing the utility loan service. But why not then allow other users to fund loans? I mean, that's – Peer to peer lending of some sorts. That's been tried before, for sure. I mean, you know, lending club started with that model.

And I think what they find over time is the peer-to-peer aspect becomes a little bit more of a gimmick. And the people that are like driving the volume tend to be sort of like institutional lenders and players that have large amounts of money. I think individuals are less interested in these types of loans as sort of like investment opportunities. I mean, we don't hear them being in high demand. They'd prefer to invest in other things. But if it changes and suddenly, you know, we have all these assets and we want to give customers the option to, you know, invest in loans or fund them, the philosophy is like go where customers are demanding. And if they want that type of selection, we would certainly consider it. And what about with tokenization and the future of that?

So tokenization is very interesting. I think it's the biggest innovation in capital markets in well over a decade. And there's two ways to think about it. One is for outside the U.S., I think tokenization will be the best and simplest mechanism to get exposure to U.S. stocks and other assets. So in the same way that Stablecoin has become the best way to get access to U.S. dollars if you're outside the U.S. U.S. tokenization of equities will be the best mechanism to get exposure to U.S. equities and other assets outside the U.S. will become the best platform for U.S. stocks. It will become sort of a global unified platform where you can invest in stocks. Inside the U.S., you get 24-7 trading, you get instant settlement, you get a lot of back office improvements to how a company like Robin Hood can operate that lead to lower costs, which eventually will be passed on to consumers in different ways. And you also get the capability to take any asset, no matter how illiquid or scarce, to be tradable 24-7, just like a stock or crypto asset. And so I think the biggest opportunity

in the U.S. would be tokenizing private companies and actually making them tradable real time, just like public stocks and making them understandable, easy to use liquid. So, yeah, we're excited about that. And we've built the technology. We have a working tokenization of U.S. equities in the form of stock tokens is live in the EU right now. And you saw we demonstrated tokenization with private companies as well with the SpaceX and Open AI tokens. What's the risk of that? Is there a risk that the tokenization price?

just goes up so high that it's worth fundamentally way more than the underlying company? Yeah, there's certainly that risk for privates. And, you know, in some places for publics where it's completely untethered from the real market, there's that risk as well. But for our stock tokens in the EU, the two are tethered. So right now, we call it phase one of our stock tokens. offering, every trade actually is backed by a one-for-one trade that happens in the traditional market. So if you buy, for example, an Apple token in the EU, will go out and actually

buy a real share and then mint the token. So then you know you're getting a good price because it's the price that's available on the best of the exchanges. Now, the downside is there's no 24-7. But what will happen in phase two when we list the tokens on BitStamp is you'll basically get the best of both worlds. If the traditional markets are open, you'll get the best price available on the traditional markets if it's better than, you know, the price on the secondary token markets. And if the traditional markets are closed, you'll be able to trade. So I think that's how the problem will be solved. Who thinks of these ideas? Is this you or is it a team? we have an amazing crypto team.

A lot of great engineers. Johan, who's the GM of our crypto business, started off as an engineer here. So the team is very, very good. And back in the depths of the crypto winter, I think it was 2022, when we were talking about tokenization, we actually said, you guys remember Defy Summer in 2020? So this was like when defy became popular and it was the kickstart of the crypto bull run in end of 2020 and 2021. So they called it DeFi Summer and it kicked off the broader resurgence of the crypto market around that time. So we said to ourselves, okay, what would it take to actually get out of this bare market and get a new crypto bull market? And wouldn't it be cool if Robin Hood actually instigated that?

So we called the project Robin Hood Summer internally. And then, you know, I think it's early, it's a little bit early to tell. But like tokenization is definitely becoming a bigger thing. I wrote a, I wrote an opinion piece in the Washington Post. And gosh, the number of questions I got about that opinion piece and the number of our competitors that suddenly made tokenization a top business priority after that was, was staggering. So I do think the next crypto summer will be by and large driven by real world assets tokenized on blockchains. I think you're starting to see that with the stable coins too. Stable coins like a tokenization primitive.

What about the increase in prominence of AI? How do you expect that to affect the overall stock market? Do you think that a few companies are going to be massive winners? or do you think that the broad access to AI is going to lift a lot of the smaller companies that now can do things at a low cost like the big companies used to use economies of scale? Now everyone has access to AI, which just decreases the cost of labor and production. I think thus far, what seems to be happening in public markets is the gains seem to be accruing to a relatively small portion of companies, you know, Mag 7, the companies that are leaders in AI,

are definitely getting it. Those are like the data centers ones, though. You write, typically the ones that own the centers themselves? Yeah. I mean, you have the infrastructure layer for sure. And also the chip makers, Nvidia. I mean, all these companies that are training models are by and large doing it on Nvidia chips.

Now, Nvidia is the world's most valuable company. But yeah, it's still, if you, I'm sure you guys have looked at this chart, if you look at the S&P 500 and compare the returns of Mag 7 over the past year to everyone else. It's like Mag 7 is huge. Everyone else is kind of flat, which indicates to me that there's sort of like a centralizing effect to this. Now, I don't know if that's going to be indefinite. I would think as the AI tools get better, you'll have more, my prediction over the long run is you'll have more single person companies. Like one individual will be able to use AI as a huge accelerant to starting a business. And in the same way that, you know,

if you wanted to start a software company in the 90s, you'd have to like manage your own data center. But, you know, AWS came along. The cloud software providers came along. Suddenly you don't longer, you no longer need those 50 people to like buy servers and rack and stack if you want to start an internet company. I think you can think of AI as fulfilling a lot of these specialized functions that you would have had to spend a lot of your time. I'm thinking about. And then, you know, if Robin Hood gets in and you have something close to capital as a service where you can press a button and get money in your bank account for starting your venture, I think we'll have a lot more companies. And really quick, let's talk about something

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a concern of many people is that AI is going to be taken everyone's jobs. Do you notice this to be somewhat the case? Like if you don't replace some labor with AI, you're just going to lose out to competitors. And do you think that that's a valid fear? Or how do you, as someone with many employees, see AI competing with the labor force? How do you see that relationship? Jobs certainly will change over time. Some things that you can now do entirely with AI should be done entirely with AI. I think we have to shift as a society

and not artificially protect those jobs, but work on making sure the people that are on that path are able to pivot and do something that is more valuable to society in the same way that you know, you wouldn't protect lamp lighters, right? And it was funny. It's very romantic in a way people used to come with those torches and light all the lamps.

I think I was in London last Thanksgiving, and they have one part of the city where they're still like protecting the lamp lighters. I do think humans will still be at the center of things and there will be lots of opportunities for human ingenuity, at least for the foreseeable future. I think the jobs will change and nobody can think about, you know, you've heard this term, the singularity, right? The singularity, Ray Kurzweil, intelligence explosion. I think it's inherent in singularities that they're hard to think about.

But I think we have a pretty good clarity over what the next two to three years at least is going to look like, probably five to ten. I think we're still far away from, you know, humanoid robots coming into our houses and, you know, burping our children or putting them to sleep. So, yeah, I think humans are going to be calling the shots for a while, which means that there will be new and more interesting human jobs. and in the same way that those of us that were early adopters of smartphone technology in the 2000s, or early adopters of the Internet or early adopters of like spreadsheets in the 80s, if you were an accountant, for instance, you have a huge advantage. And what I've been telling folks here is at some point it's going to go from being an advantage, which I think we're in now, if you really use these AI tools, you're at advantage to everyone else.

And at some point, probably rather quickly, I mean, we, we, probably don't have five years. I'd say we have two or three to a point where if you're not AI native and if you're not conversant in these tools, you'll be at a disadvantage relative to anyone else. So I don't think people should worry about AI taking their jobs. I think people should worry about someone that's AI conversant, you know, being more valuable than them in the market. And you should prepare yourself for that scenario. How should someone prepare themselves for that? What should they learn or what do you recommend people do? I mean, think about it like a child, right um i think like you look at children using computers in the 80s and 90s and they would just

like play with them right they'd like play with it uh it takes time it takes interest i think the problem with with uh that a lot of adults have in the workforce are they're very busy they have existing tasks and you know sometimes when you get those tasks done you're just tired and you don't have time and you know we have other things going on we have families but at the end of the day it just takes dedicated time to play with these new technologies and if you can integrate that play with your work if you can actually like figure out how to use it while you're working i'm a huge proponent of integrating work and play in your personal life and i think having them be separate worlds is not a long-term sustainable strategy um but yeah you just have to like play with it

and tinker. I think that's the best way. Do you ever feel misunderstood by the public, just being who you are and running the company that you do? Yeah, I mean, I've gone through the game stop stuff, so definitely used to it. But how tired are you of talking about it? It's okay. You can be honest. It's just such a complicated thing. Yeah, so sometimes I just don't know what aspect of it to discuss. But that's the thing is when all of that went down. I remember Graham and I were talking.

and he was making videos on it, covering it. Yes. I defended, right. And Graham, he came to me and he was like, he was like, do I defend them? Like, how, what kind of a position do I take on this? Because unfortunately, the way that YouTube works, the way that if you're making videos to appeal to the masses, you need to have a villain, especially when people are hurting. Totally. And so you can either choose that route, the politically expedient route, of making a villain, getting everyone to love that.

or you could choose sometimes the hard truth, which is the more nuanced approach of like, hey, these things aren't as cut and dry as you guys may think of them to be. Totally. Yeah, that's what sucked back then because I remembered, I think we had a call and you had done a few podcasts at the time.

Yeah. And everybody hated those podcasts. Because you're like, oh, you're just a paid shill for Robin Hood, even though you were never paying anybody. It was just, I'm happy to go on and talk about it if you want to hear me out. Right.

I'm sure even this. Some people will think, oh, they must have been paid or something. No, it's just like, this is an honor to be here. We've been trying to do this for years. Like, we're just excited about it genuinely. But I remember at that time, and it's still to this day, if you go and defend Robin Hood over GameStop, you're just shit on. And if you go and say, oh, Robin Hood disabled the buy button because they're in bed with Citadel and all this. Everyone's like, oh, yeah, thank you.

Thank you for the little. Yeah. Yeah. And, you know, if you say, oh, that's bullshit or that's just a conspiracy theory or that's totally wrong, then they're like, oh, of course he would say that. Yeah. What do you think he's going to admit to colluding with Citadel on a podcast? But I think I've gotten some advice from some people who have unfortunately been through some, like, crisis comm situations, right? some crisis comm situations.

Daniel Leck from Spotify has been through some shit as well. And we had this conversation where he was like, there's like various stages to a communications crisis. There's like when you see a little bit of smoke happening and then there's like a brush fire is kind of the middle stage. And at some point it becomes an inferno, a conflagration. And you've completely lost. control and you can't put out the inferno you kind of just have to like get out of the way

because you're not going to control the message and I think the unfortunate thing with GameStop is the time where it was a small brush fryer or like a smoke was very short and it it actually ended and it turned into an inferno before I woke up so I was I woke up and my phone was unusable because I was getting so many like text messages and tweets it was like if you've seen that video I think Kim Kardashian posted it at some point where she turned off do not disturb on her phone and this thing was just like it was just unusable yeah so it was like that was like that and what Daniel said is the conventional wisdom is you kind of just have to hide during the inferno And then when everything is rubble and everything is a mess, then you kind of like poke your head out and do an Oprah interview.

So I didn't do that. I actually got out right in the middle of it. And I did a bunch of interviews, right? Sorkin, Cuomo, I had the congressional hearing. I did the Elon Clubhouse. And, you know, sometimes I think about what if I had just, it was very hard at the time. time because everyone's like, oh, we need to hear from V'lad and we need to talk. But in hindsight, I probably should have like let the dust settle a bit and then did one big interview.

I think it's ready for nuance. Like, I heard you and it's hard for me to understand because you explained it in such a way that was complicated. It was way too high level. Your explanations of what actually went down. When you could break it down, if you just made your own piece of media and you were like, this is exactly what happened, this is, you know, they requested this amount of liquid capital to back these things and then and then this is when I got the text and this is how long we've been a company this is how much capital we have what am I supposed like there's no option for the company 100% like if you controlled everything and put that out there instead of more candidly trying to hope that you're able to relay a very nuanced and hard to articulate perspective

like live that's that made it a lot more difficult you explained it like an engineer 100% For me, I was like, I have to go and listen to this like twice, just to, okay, that happened, this happened. Okay. And you have to know how it actually works. Yeah. How the system works. I think I botched the communications on that to some degree for sure. It was obviously not fatal for the company, but I think I could have done a much better job. I think there were two issues. One of which you point out, I just got out there too early without actually even knowing the full information. of exactly what happened, who the players were involved, who was talking to who. There was like a cloud of uncertainty and there was just, we needed to say something. And we were getting roasted for like not communicating fully and properly, right? Which I would say we communicated properly, but certainly we didn't communicate with the full. There were more details that were released as soon as we got them and were confident in them. And actually you get in a lot of trouble for both communicating wrong things that you then have to correct, right?

Because that just feeds the trolls even more if they're like, oh, we'll see. Yeah, yeah. They were lying. They changed the story. So something, something. So you have to be accurate and truthful. And we have to make sure everything is like correct. And, you know, so you saw our communications got more detailed over time.

But in hindsight, we probably should have just chilled out. and like come up with something comprehensive and full as our first thing. The second thing was just sleep deprivation. And it was like I was on these interviews after pulling many all-nighters because it was all hands on deck during that time. Because Robin was a small startup and we were dealing with not just this like issue, but also historic volumes. We were the number one app on the app store. It was very rare for a finance app ahead of like Instagram and TikTok, right? And all kinds of things get strained when you grow too fast as a financial app.

So we were dealing with that. And so, you know, I came on these podcasts and these interviews. And by the way, everyone was remote. So it was actually hard to coordinate. And my face was kind of pale. And they're like, oh, he looks kind of like a vampire. That's not very confidence inspiring. And, you know, it was, yeah, all conspired to make that not ideal, I guess.

So if you were to answer the not so simple question of why did you disable GameStop Buy button, how would you now answer it? Oh, I mean, it was just to comply with regulatory requirements. Yeah, basically, if you don't comply with regulatory requirements, they can come in and shut down your business. And then what happens is it's not just the people that traded GameStop that can't trade, but nobody can trade. All of the buy and hold investors. that are just holding, you know, shares in their accounts, they, they get hurt. So people are going to ask then who's in charge of the regulation? Yeah. So the tricky part is regulations have multiplied over time. A lot of these things date back to Dodd-Frank, which was created in the wake of the global financial crisis. And, you know, Lehman went belly up. You had bare sterns. And they were like, okay, how do we protect this from happening? We just have to make sure the capital requirements go up early so that we prevent a huge systemic issue from crashing the market. And I don't think they anticipated that a lot of those capital requirements would just get triggered by retail investors, you know, buying up meme stocks.

Why couldn't the price just continue going higher indefinitely? Like, wouldn't you think that at a certain price, there's going to be a seller? on the other end, and if there's not, the prices goes higher, and the retail investors just figure it out amongst themselves? Why does there need to be a capital requirement behind that? Yeah. I mean, I think part of the reason is that a lot of trades happen on credit effectively. So you buy the stock and you have to deliver the shares a couple of days later. You have to pay for them a couple of days later. And I think what's happened a lot in the past, when you have these short squeezes and some stock goes up, it then goes down. And then if, you know, you have that two-day period where people have to pay for the cash, sometimes they don't show up with the cash. And they're like, oh, I made a mistake.

Or, yeah, someone else made that trade. It wasn't me. So you have reversals. And I think that's a big problem. So now, of course, if there's real-time settlement and the cash and the shares exchange hands right away, there's less of an issue. But, yeah, I mean, there's good reasons for these things. I think that you do see a lot of strange behavior when there's market euphoria or strange things happening. And a lot of people are, like, looking out for their best interest as well.

the other thing that's interesting is if you look at actually what happened trading volume was very, very high in those mean stocks during that entire week. And January 28th was a Thursday. And then the weekend came. And then we had like the Super Bowl. So a lot of people, I think, blamed Robin Hood for, you know, the subsequent collapses in some of these stocks. but I think a big part of it was it was just the weekend and people moved on to something else. You know how an internet mob doesn't usually hold their attention on one thing. I think they just, you know, markets were closed.

They moved on to something else. And then there was the Super Bowl and so many other things. Yeah. Plus there were other brokerages platforms that disabled the buy button. So you saw a huge just like when the market opened on Monday, there was just like a big difference. Do you think something like that could ever happen again with GameStop? Because I feel like that was such a once-in-a-lifetime opportunity that I don't- So which stock is it?

Actually, now there's this thing about how people are asking Chad GPT for what stock to buy, right? And, you know, what happens if it just has a billion users and it tells everyone the same stock? Yeah. Yeah, I mean, I don't think it's going to be exactly like GameStop. It's rarely the same exact thing, but I think something analogous could happen. And, you know, I think this thing of like, let's say the same AI model develops a very, very deep relationship with, you know, all of the users. Chad GPT might get to a billion weekly active users before the end of the year. And what if that gets them to all buy the same stock?

See, I'm thinking, why is it or not? Or maybe this is highly illegal. What's to stop somebody from making an AI company that just recommends at the same time every day one stock to buy? And that's it. And people could just choose to buy that stock. That's probably highly illegal.

That's like market regulation. I don't know. If it's AI and it's random and you're not trading ahead of everyone else, who's to say that I can't post once a day? Open source anonymous? I'm just saying who's to say I can't post every morning. I'm buying this share.

I am buying this share. I am buying this share. I mean, if you think about it, that's some of the concern around copy trading, which, you know, not very popular in the U.S., but like, you know, in Europe, copy trading has become a thing. And I think that's the criticism about it hurting. It's called. Graham and I have this idea and we honestly, it wasn't in our outline to bring up, but I just thought of it right now. I wanted to run this by you. So we were thinking, what if every single day there is one coin.

flip. And you can either, on a prediction market, bet heads or tails. That's it. And you have to bet on a certain side for every like dollar you put up on heads. There has to be a dollar put up on tails. I don't know, you know, however, that would be figured out how that middle amount would be figured out. But basically, you could bet heads or tails. One coin is flipped every single day. It's a massive cultural moment for the coin flip. Everyone tunes in 12 PT or something like that. And then it's 50-50. And you can do it. Yeah. Know how to do. No, how so you know, Robin Hood could do this and take, tokenize it, and take point, you know, 01%. And the only overhead, the only overhead is one quarter.

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And that could happen every single day. That should exist. I think that's an interesting idea. Yeah, I mean, that could be a prediction market, right? The daily flip. Just the one quarter flip. And that's such like a free marketing opportunity because I just know for a fact that would go viral. Oh, I know.

So simple. We just don't have the infrastructure to be able to make that happen. I would love that. 6 p.m. every day. But we want to do it. And I would participate. You know, and I would be like today heads. Who's like part of the heads gang?

Yeah. And just cap it. Like 100 bucks maximum. I think there will be a nice novelty effect for that. But I would be surprised if it has a lot of longevity. I think it's kind of like HQ trivia. Like it's very nice for a little bit. But then there's so many interesting prediction markets.

that are now available on Robin Hood. I mean, we keep adding more and more varieties. You can look at Best AI model at the end of 2025. That's an interesting one to me, right? Because I think right now I was looking Gemini's like 53%. Chad GPT, I think, was below 20%. So I think there's lots of interesting things you can do that would probably eventually take people's attention away from the coin flip.

And I think a lot of people like track, these things. So, you know, you can do the Emmys now. Emmys are interesting. So I could, I could put money on the Fed rate decision. Fed rate decision. The economic ones have been, have been, have been cool. The sports, like there's a pro baseball. So there's a wide variety of things to choose from, which make me think it's interesting, but probably something that would have a short-lived. It would be really cool if you forced it so people could only put in one dollar, and you can cash out at any time but it does 10 days in a row

and it caps at 10 days because, you know, one to the power of 10 or whatever the thing is, it's like, it's like a million dollars. And so you can try to turn $1 million,

but you could only ever put in $1 and you can like parlay it into the next one and you could cash out anytime and you maybe in the beginning select heads, heads, heads, heads, heads, heads, heads. And then somebody, if 100,000 people do it, there's going to be, you know,

people that make million, become millionaires off of one. $1. That would be the coolest marketing offer. I'm telling you. I would love that, actually. Yeah. Just put them a dollar and then after 10 days it resets.

Yeah. Well, you know, if the folks said Cal She are watching, that's true. Yeah. It might be interesting. Yeah, because then at that point, when do you turn from investing just to straight up gambling? It's a dollar at that point. Yeah. Investing.

I think, yeah, I think with this particular one, it'd be hard to argue that there's a particular predictive skill involved. Is that how the predictive markets are able to operate in such a way that's not considered gambling? Because there is, it's not random chance that you could have specific knowledge on something and feel like you have more experience to bet on that outcome. Yeah, or a hedging benefit. Yes.

Right. So could there be knowledge or skill involved? Or is there a hedging benefit or a speculation? benefit to these markets. I mean, if you think about it, if you're trading futures, and these are prediction markets are by the same regime, the CFTC that regulates futures, do you know, do you have a deep understanding of like the price of copper or corn, you know, some people do? Some people actually study this. A lot of people have some dependency elsewhere in their life on the price of copper and they're hedging against it. And so what makes a vibrant derivatives market

is three different market participants in equilibrium. You have the speculators who have a point of view on what the price should be and they're speculating. And some people call speculators gamblers. But if the technical derivatives parlance, it's speculators. But you need them also because you also have the hedgers. And the hedgers are trying to offload risk. But Not everyone can be hedging because then the price gets out of whack. So you need the speculators to actually bring the hedgers and take equilibrium. And then you have the third group, which is the arbitrageurs. The arbitrageurs are basically playing a low risk, low latency game.

They're connected to every market. And they're like, oh, corn's at a dollar here and it's at $2 here. I'm going to buy up all the corn for a dollar and sell it at the same time for two. And they provide a valuable service too because. You want to make sure that if you're hedging or speculating, you don't really care about which market you're going into because there's overhead in that. So they make sure the prices are uniform across everything. So there's a lot of people that just think trading in general is gambling. I reject that premise.

I think that these are useful markets and people are providing valuable services and kind of hedging their risks, speculating or sharing of one of you. And how does your own personal portfolio look today and how do you allocate across public markets, private markets, stocks, bonds, crypto, real estate? Yeah. Yeah, the vast majority of my portfolio is Robin Hood. So I'm highly concentrated. I do have some public markets exposure. But basically when we went public, I had to lose discretion over all of that. So I, Yeah, I don't have discretion over, you know, the lion's share of my trades, meaning they happen in a trust that other people kind of decide and manage for me. And I think the idea behind that is because I run Robin Hood, Robin is a big company, even the perception of like somehow being exposed to data and using that to make trades could be risky. So we just decided to handle that by me not having discretion over any trading. That's interesting. Yeah.

But you get reports, you know, every month or two from your wealth managers that say, okay, you know, we put some money into this, we did this. But you don't have any discretion over that because you're worried people would paint it in some sort of a picture of like, oh, you're using user data. Exactly. To make trades. Yeah. Yeah. Yeah.

Yeah. So, yeah, that could be like a distraction at best. That's interesting. And, you know, it's relatively small because I'm, you know, 90 plus percent Robin Hood anyway. Speaking of Robin Hood, why does Robin Hood focus more on live customer service reps where you could just easily one number like MX Platinum where they pick up on like the first ring and you talk to a person? We actually do have that. We recently rolled out something called Robin Hood Concierge where, you know, if you if you have a lot of money, in Robin Hood or your trading activity is high, you can be eligible for Robin Hood concierge,

and you have a person that you can actually text with. And then, so it's kind of like barbell strategy. I don't think we can give every person Robin Hood concierge, but we can do it to a small portion of people. And usually those are people that have needs. I mean, if you have a large Robin Hood portfolio, if you can't get a hold of a person, that becomes a problem for you. So we do that offering.

And actually, more and more people are in that category. So we're going to have to continue to scale that and make that better. And then for everyone else, we've been making huge investments in our AI customer support, where I actually think we're best in class. And we've been making lots and lots of innovations. And the goal would be to get the best customer support experience delivered to the mass market with AI. And eventually it won't just be chat in email, but you'll be able to call our AI. And, you know, some people actually don't like it.

You know, they immediately, when they figure out they're dealing with an AI, they want human, human, human. But the AI is getting very good. And even now it'll probably, I think we should probably do a better job of the AI convincing people that it can be helpful. I just say, are you sure? I can really help you solve your problem. I think over time the percentage of people that don't want to. want to deal with AI as they get confidence that it's that it's actually going to solve your problem is going to go down.

I think once your account gets beyond a certain point, it should unlock automatically a live rep where it just goes to a cell phone or something like that, just immediate pickup like MX Platinum. That's essentially what Robin Hood Concierge is. And what's the dollar amount that you have to have? I don't know if we've publicly shared it. If it is, it's on our website. But, and if we haven't, I think it's still early, so we're kind of like tweaking it.

But it's not just a dollar amount. It's also, you can have a low dollar amount, but be a very active trader. Yeah. And that qualifies you as well. What would you say the biggest levers Robin Hood has pulled to get ahead of the competitors? For example, obviously initially offering the free trading and setting that standard, the 3% cash back and the credit card, the 2% of, A-CAT's match.

That was a massive one. That was huge. What would you say are the biggest levers that Robin Hood has pulled and how are you going to stay ahead of the competition from here on now?

Yeah. I mean, I think at the, and it's funny that you mentioned the ACATs match, that's gotten more and more sophisticated over time. And now we actually have personalized matches.

So if you look, you know, on social media, sometimes there's confusion about this because people post things and they're like, well, I got this match. Well, I got this other one. I think we'll still run our broad marketing matches around events and certain product rollouts. But yeah, they're personalized. And I think that takes a lot of technology sophistication to actually deliver people personalization in a safe way. So I think we're investing a lot there. But I think the underlying thing is just technology. Like we want to be at the forefront of technology

innovation, I think compared to the incumbents, that gives us a big advantage because we can just be more efficient, roll out products faster, learn from our customers, learn from, you know, what's worked and what hasn't worked for us in the past and iterate more quickly. So I think that's been a big advantage. And, you know, relative to the smaller startups, which do tend to move faster than big companies, I think the scale and the reach and the fact that we have so many customers and so many assets is an advantage as well. So we want to do a lightning round. And we're going to mention a few different offerings.

And then you can say if you plan on implementing them soon, if they're plans far out in the future, and we're just going to go through a list. Yeah. Solo 401K. Solo 401K is interesting. So we've done a lot on the retirement side. I think the IRA covers a lot of needs. And then there's a big business opportunity, which is slightly different of 401Ks,

which is essentially a B-to-B offering. I think that one we've been thinking a lot about. And we know that we want to do one, we want to expand our offerings to serve businesses as well. But our first bet there is registered investment advisors. I think that's more interesting. So registered investment advisors is the near, near term opportunity that we're tackling their business accounts.

Business accounts is on our radar. Yeah, yeah. And I think there's a lot of things that a business account could be. But yeah, we're definitely, we're definitely looking at it. I wouldn't say near term, but on the radar. Trusts. Big request. Big request.

Yeah. we've been hearing a lot about trusts. I think that for a while, Robin Hood was just one account. Big focus has been on making it so that people get the benefits of retirement accounts and all the different things. So it fits into the multi-generational strategy I was telling you about. So I can't give you a specific date, but definitely on our radar. Yeah, that, to me, is the biggest one, and you'll get huge account sizes doing that. For sure. Yeah. Insurance. Not in your term. HSAs. I think that, yeah, not a huge request.

Long term, yes, but not, not, I wouldn't expect it very, very soon. Some sort of a social platform. Well, you know, I talked a lot about how the origins of Robin Hood were as a social network. I think that you'll see elements of that that are useful to customers. But in terms of full, full-fledged social platform, I think you'll have to be in suspense. Yeah. I think that one, if it comes, you know, it'll surprise you guys. Robin Hood dating.

Account size matching, portfolio strategy matching. that would be dependent on social, I think. That would have to be a fast follow to the social network. So you could have two high-risk individuals, you know, or two low-risk individuals with covered calls? Anything with messaging, I think, eventually evolves into a data. Wealth management. We already offer it.

There you go. Yeah. Financial education. Already offer it. But I'm talking like a YouTube channel sort of thing. We have a couple of YouTube shows. We have like options content that I think OB is still doing. And then a podcast called The Week That Was, which is Market Commentary with Steph Guild.

And then we also have Sherwood Media, which is our media company. Fixed income products. So you can trade and buy fixed income ETFs. What about like annuities or like you could buy a certain fixed income product? Yeah, bonds don't currently offer, but yeah, on our radar for sure. What ideas have you shot down recently? I think there's a lot of great ideas that just with minimal, with relatively few resources and the ability to focus, it's more of like do it later sort of thing. So I think we've looked at things like 401Ks.

We've looked at employee stock purchase plans. So if you're an employee of a company and you want to buy that stock, could we be the platform that offers that? I think that's an opportunity. I mean, a lot of people get accounts in business that way. But it's just our focus from B to B standpoint has been RIA custody. And I think that's such a big opportunity that we want to make sure we feel good about nailing that before we expand to us. other businesses. What ideas do you want to do, but regulation blocks it?

I think right now in the U.S. tokenization and private markets are the big ones. Like accredited investor rules prevent clear and simple access to private markets. And I think eventually we'll have to get there. So that's far in a way the biggest. I mean, there's probably little things here and there, but I don't think that. they're as meaningful as private markets access and tokenization. One of the things that I found most interesting about the Robin Hood story, because I went and did copious amounts of research, I listened to all of your podcasts, all of your interviews.

And it seems as though the strategy of Robin Hood was to simply take less profit than competitors. That was basically what you guys did with like, you know, free trades, with a bunch of different things with the credit card, the 3%. It's just like do what the other people are doing, but just have less fat. in the process. I think that's certainly a part of it. I'd say the user experience and just building great products is the core. But in financial services, the pricing model is a key part of the customer experience.

It's not like, you know, selling iPhones, for example, where the price point of the iPhone, whether it's $1,000 or $500 is a big driver to your decision to purchase because I think people are less sensitive. That's more of like luxury product and the pricing is further away from the value prop. But in financial services, the user experience and the price are very, very tightly coupled. So, you know, conventional wisdom is you don't want to compete on price. You want to compete on value. but in financial services, I think prices is really intricately tied to value. So I don't think for commission-free trading or for a first product, it was solely offering it a

lower price. I think that was a part of it. But it was also having a really nice mobile app. Yeah, I agree. I agree. But still to instant onboarding. Oh, my gosh. Being able to like onboard and buy your first stock in one session rather than having to like fax documents.

Dude, for me to go from Scott Trade to then taking a bit of a break to Robin Hood, because I believe Robin Hood is the first stock trading app I downloaded. I think was Robin Hood. And I remember it being so incredible that like, oh my gosh, I could buy a stock for free. Like that was for me at the time, life changing. There were other apps, but they were mostly like scrunched down versions of their websites and web views. So they didn't work particularly well. Yeah. And for a while we were getting questions. How did you guys do your onboarding so good? Like even things as simple as onboarding, I think we put a lot of craft and care into the design. And, you know, you mentioned the credit card. There's lots of ways that you could work with the economics of the credit card. I mean, some people look at APRs. Should we adjust the APRs? There's the annual subscription fee.

There's, you know, the cash back. And so even, like, making the pricing really good is non-obvious because you have to figure out what the levers that were. well for your particular customer is. You would be so disappointed to see my Robin Hood portfolio. So disappointed. Like I'm such a better investor than what my Robin Hood portfolio indicates. Well, I mean, I don't know. I think, yeah, I wish I could become an investment advisor that now I can, now I would

be able to talk to you about the stuff. But I have a feeling that you'll do fine. It was funny, though. It was the exact next day as soon as he sold it. It's actually uncanny. Uncanny. I had so much, I had a lot of Robin Hood stock. I had a lot of Robin Hood and I have a ton of Palantir.

And I had long calls on all of it. And then, you know, this is, I like went all in right at the peak. I remember it was December of 2020, whichever 2020 the December peak was. And then everything started going down. Someone got margin called. They lost, I'm not going to say who. They lost all of their Robert Hood. long calls, Robin Hood Equity, as well as Palantir stocks and calls.

Also, I do want to mention since we're wrapping this up, we are going to be donating to Team Water. Mr. Beast is raising $40 million this month, and it's something that would mean a lot to us if you're willing to help out down below in the description. Come join us. We even have Jeff behind the camera helping us out the winner of Beast games. So given that, it would be really neat if you donated. And, Vlad, we really appreciate your time on this.

Thank you guys. Thank you for coming on the podcast. Thank you so much. Join us for Hood Summit in a couple of weeks where we're going to announce some new stuff that I think you'll really enjoy. Deal. Thanks for watching. Until next time.