The Pomp Podcast - #1384 Johann Kerbrat | Robinhood's Crypto Strategy Revealed

Episode Date: July 22, 2024

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

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

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

Here is my conversation with Johan. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Today's episode is brought to you by iTrust Capital. Are you buying crypto on an exchange because you're excited about the bull run? Well, I hope you're reporting your crypto gains to the IRS because they want you to pay your taxes. That's right. When you buy and sell crypto on

an exchange, you need to pay the government taxes when you make profits. That sounds pretty taxing. There's another way you can buy and sell crypto without worrying about taxes. At iTrust Capital, you can buy and sell crypto inside of a tax-advantaged crypto IRA. Crypto IRAs are retirement accounts that work similarly to an exchange, but with tax benefits. Let me give you an example. If you can buy and sell crypto on an exchange and you make a $20,000 profit, you have to pay the government taxes. However, if you do the same thing in your Roth IRA and you make a $20,000 profit, you don't need to pay any taxes. That's right. You get to keep all the profits and not have to pay taxes because it's in a tax advantaged account. So opening a tax

advantaged IRA at iTrust Capital only takes a few minutes. You have 24-7 access to the markets with some of the lowest fees in the industry. The bull run has begun and people are starting to see their accounts go up. So start taking advantage of tax benefits with an IRA at iTrust Capital. You can start maximizing your crypto investment today. Go to iTrustCapital.com. That's iTrustCapital.com. Today's episode is brought to you by Espresso, the maker of the world's thinnest portable display. Now listen up. If you're like me, you feel like you are at a command center when you sit down at your desk. I got a gazillion tabs open and different windows for different activities. There's my web browser, my text messages, I've Slack open, and I got a notes app. I normally

work on a desktop and it can be very, very productive, but everything falls apart the second I leave my desk. If I'm traveling, if I go to a coffee shop to do some work or just want to work from the kitchen table, my laptop doesn't have enough screen space. I lose my command center and my productivity falls off a cliff. It's a major problem, but this is where Espresso comes in. They have a portable screen that is so beautiful that you think Steve Jobs came back from the dead to create it. The thing is incredibly light. It comes with a nice stand and the user interface is so easy that I figured it out how to do it in less than three minutes. If you listen to this podcast, you know, that's not an easy feat. So the Espresso team and I, we became friends. I

got to know them because I really liked the product and those screens. They now want to offer them to any fan of the podcast. So we struck a little deal. Here's how it works. Anyone who listen to this podcast can go to us.espres.so. Or, if that's too confusing, just go click the link in the description. If you go to Espresso's website, they've got a brand new offer there sitting for you. You get a little discount, and you'll get a beautiful screen. Trust me, I use mine every day. You'll love the Espresso screen, and I think it'll make you more productive. Go check them out today by clicking on the link in the description. Today's episode is brought to you by Meanwhile.

Meanwhile is the world's first licensed and regulated life insurance company built for the Bitcoin economy. Operating on the Bitcoin standard, they do everything in Bitcoin. You pay in Bitcoin. They pay claims to your family in Bitcoin. You take out policy loans entirely in Bitcoin when you need liquidity. Meanwhile, Bitcoin life insurance has redefined what it means to hodl. Protect your family from life's uncertainty and a broken financial system.

Build intergenerational Bitcoin wealth while the cost of living skyrockets in dollar terms. Get all the tax and legal benefits of life insurance now in Bitcoin. They are actively binding policies today. Whether you are a long-term Bitcoiner or are just considering it for the first time, a Bitcoin whole life policy could make sense for your wealth plan. Visit their website, meanwhile.bm, to join the waitlist and to learn more about the world's first Bitcoin life insurer. Again, that's meanwhile.bm.

Go check them out today. Now, you're from France. And as an American, my evaluation of France, which is obviously uneducated, is it is a developed nation that seems to have a lot of maybe political unrest where there's a lot of protests. We see the yellow vest and a lot of this stuff. And I think most Americans probably don't even understand what are the intricacies of these things, et cetera. But when you see some of this more political disagreements, et cetera, in other countries that are not developed, you see a lot of crypto use. what is it in France? Is it a lot of crypto use, not as much? How do you kind of evaluate it maybe versus the United States and maybe a developing nation? Yeah, I think that's something that

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

politics have been driven crypto out of the US. And when I came from France to the US, because I felt like I could come into a country that was embracing like new technology. So, you know, definitely interested to see how things developed and how the elections are going to go around the crypto world. But hopefully what we see is that, you know, the U.S. embraces innovation again. Yeah. So in the United States, definitely now it's become an issue, right? It looks like kind of the conservative movement is leaning into it, saying, hey, we're going to be a pro-crypto, pro-Bitcoin candidate and party. I think Democrats maybe are like a little bit more split, right?

So, like, there's definitely some that are very pro the technology and not just crypto, I think, pro AI, et cetera. And then obviously there's some that aren't. In France, has crypto become kind of a political topic yet? And what I'm trying to measure really is, like, I think people in the United States are a little surprised at how quickly it's become, you know, one of the big topics in the United States. What is it in maybe France and kind of the broader European? Yeah, I think one thing that we've seen in the EU is that they actually adopt a new framework called MICA. It's coming into effect in January of next year. And, you know, the framework as every regulation is not completely perfect.

There is a lot of things that we could improve or not. But at least there was a framework that was allowing companies to execute on crypto in a in a way that was regulated and working with regulator. I think France in particular has a very good regulator called the MF, and they've been embracing crypto and helping companies to get up to speed with the market. So, yeah, I think, you know, what we've seen in the U.S. also is that there's a lot more discussion around how do we regulate it. We saw a few bills going through in the past six months.

And, you know, hopefully we can start this debate again and finally have a system where companies like us have a way to operate safely. Now, I think most people look at kind of the Robinhood user base, whether it's in the United States or internationally. And if you're a sophisticated kind of traditional player, you almost kind of like thumb your nose. You're like, look, these people, they don't know what they're doing, right? I know a lot of people who use the product, right? I know a lot of people in crypto who allocate much more money than you would think that they have and allocate on the platform.

How do you guys think about when building the product? You know, so much of crypto, I always joke, like we just need better designers, you know, and some of this user experience stuff, like the Bitcoin wallet address, the fact that A lot of people still type in the full string of letters and numbers. It's kind of crazy. But also there's like an actual aesthetic, right? And if there's one thing that my friends would say about something like Robinhood, they're like, it's just beautiful. It's very intuitive. It's very easy. And so are you building that for everybody or do you have to build it specifically for somebody who maybe isn't as sophisticated to use kind of one of these more traditional

kind of investing interfaces? Yeah. I think there's a few things there. So one on crypto, I definitely agree. You know, I always say I'm an ex-engineer and as an engineer, I feel like we lost ourselves in crypto. We, you know, always talk about protocol and how things are working, transaction, all these things. At the end of the day, what the user want is the thing to work. You know, they want to be able to send a message

and not think about what blockchain is going under the hood. But at Rabbithood, we are trying to build product for everybody. So, you know, you can be first time an investor. We have a lot of our customers are first time investor, never traded stock or equities or crypto before, and we also have very advanced trader. And I think, you know, when we build our product, we try to think about this this different segment. And so for the new investor, we try to invest a lot in educational content.

So we have learned program learning module where you can, you know, access the module, learn about something, maybe about crypto, maybe about how to use a specific order type. And at the end, we will maybe also give you a reward to encourage you to do more of this. And for the advanced trader, we actually invest a lot in new features. For example, on Robinhood, we launched new order types for crypto, so you can do stop loss.

We also have advanced charts and things like this that not the everyday user is going to use, but the more advanced investor will actually be excited about it. Now, in crypto, there's a couple of different things you can do. you can come in, you can buy and hold an asset. You can obviously sell. There's staking, there's kind of sending or receiving crypto, et cetera. How deep into maybe the crypto native use cases do you want to get or do you think you need to get? And part of that to me is really you can just buy, sell, or hold a stock, right? There's not much you can do. Part of the promise of why

these assets are valuable is because you can do more with them. And so as what started as a brokerage, like how far down that crypto native path do you think the product can get? We went already pretty deep in the past. So now on Robinhood in the US, you can buy and sell 15 cryptocurrency. You can also transfer if you're eligible. So you can deposit or transfer out of the platform. We also launched a self-custody wallet that is available in 140 plus countries. So using the wallet, you can access all the dApps that exist currently. You can go on social network. work, you can do all the things that Web3 has to offer, and it's quite a big space. And then in the EU, we also started to incrementally build new features like staking.

For example, we launched staking on Solana a month ago, and it's been something that people are interested in. The main thing we are doing before deciding to build a future is really discussing with customers and getting user feedback. we talk to them, we ask them like, what do you want to see on Robinhood? And then, you know, we try to build it in a way that they will actually use. And when you're talking to those users, what are they saying? Like, why are they buying these assets? Are they speculating? Which like a lot of people don't like that, but that is a huge use case for all financial assets,

not just crypto, but all financial assets. Are they doing it from like an inflation hedge standpoint? Are they doing it to like, they want to do NFTs or just like, what are the users actually telling you on the platform? We have all of it. You know, a lot of people are actually using Robinhood as what we call an on-ramp. So they buy on Robinhood, transfer right away on their self-custody wallet, and then they are going to participate to NFT marketplace, they are going to go on social network, these kind of things. Gaming is also one that has been taking off more and more, that we see a lot more people buying on Robinhood and going to play games on Web3. We see a lot of people doing it as a hedge, like Bitcoin is one of our top recurring

investments. So people that are doing DCAs, they can place order on a recurring basis on Robinhood. So yeah, we have a bit of everything and that's really the beauty of Robinhood and the complexity also when you build product is you have to kind of think about all these types of customers and and all in their use case. Now, you said gaming is taking off. I used to play a lot of video games when I'm younger. Now, not so much. So I'm kind of out of touch with maybe the gaming thing.

What is it that people are doing in the Web3 gaming that maybe they can't do in kind of Web2 world? And what specifically are they doing from Robinhood? Are they just buying ETH or Slon or whatever and pulling that over or are they doing something else? Yeah, that's right. So they buy ETH or any other asset on the platform and then they transfer and then on their wallet,

They can buy things for their games. They can also contribute to some video games. Like some have a subscription to be able to access it. So it's all of this kind of thing that, you know, it's a very specific segment of our customers, but it's still something that we want to make sure that they can do. Yeah. Now, you guys recently announced a pretty large acquisition of Bitstamp.

I think it was $200 million US. That's right. And my understanding is this is part of like a broader European and kind of focus and roll out. When I worked at Facebook on the day I left, I remember somebody had told me that 87% of the users of Facebook were outside the United States. And we had a lot of US users, right? So it's just like the world is this huge place. I think that America is probably the capital of kind of the crypto industry and definitely of traditional finance. Is this just a, how do we grow users as we go elsewhere? Or is there

something else about Europe that is pushing you guys to make a big acquisition and kind of push and focus on that part of the world? Yeah, so I think on the EU side, what we were excited about is this MICA framework that I mentioned. So really gives one regime that we can follow and have access to the entire EU market. And in terms of population,

it will be something comparable to the US population. So a large market, one regime, and we can be in business. For the acquisition, there was really three big points. So one, the expansion, like you mentioned, And Bitstamp has over 50 licenses across the globe. They also have UK, Singapore, on top of the EU licenses. So, you know, this is a big step forward for us

on top of the launch that we did in December in the EU. The second thing was expanding into a global cryptocurrency exchange. So Robinhood is a marketplace. We send the order of customers to MarketMaker. We act as an agent. With Bitstamp, like, this is an exchange. So things can be very different and we can offer a different type of product thanks to having an exchange connected.

And the third thing was diversification of revenue. We will be able to now offer a suite of product to institutional customers. And that's something that, you know, we have not done at all at Robinhood. Like we are purely retail application and Bitstamp has this relationship with institution for the past ten years plus. And so, you know, we are going to have an established business already up and running and we'll be able to really capitalize on that. Now, speaking of licenses, you guys through this acquisition get licenses all over the world that

are obviously valuable. That also is coupled with, my understanding is that you have a bunch of licenses now in the United States, maybe even all of the licenses, if I'm not mistaken. And it seems like maybe that's actually a Herculean effort, right? Like getting the licenses in the U.S. is maybe harder than people who have never gone through the process would realize. Yeah. We don't have all the licenses, but we are available in every state of the US. A few weeks ago, I think we announced that we were available in Hawaii, Puerto Rico, and the US Virgin Islands. At this point, Robinhood is available everywhere in the US. It is a lot of work because every state has a different regime. For example,

we are licensed with the New York DFS and we have the BitLicense. On some other states, you need a money transmitting license. So it's a lot of work, but we are happy to finally be available everywhere. Yeah, that makes sense. What's most surprising to you when you look at the stats? So you said earlier, you talked to a lot of the users. I assume most teams talk and people say stuff. But whenever I look at survey data that's self-reported, I always say to myself, like, do they really believe that? Or are they just kind of saying that because they want somebody to kind of perceive them a certain way. But you guys also have the benefit, you have user data. Like, are most purchases recurring? Are there certain assets that maybe would surprise us that

that people are buying that we don't know about? Are there certain regions where it's very, very popular that we wouldn't think about? Just what are some of those data points that you could share? I don't think there's anything really surprising. I think recurring is one of our big items where sometimes to see that people are really interested to dollar cost average and make sure that they are taking advantage

of this type of product has been interesting. I will say the most surprising stats for me was always like the number of new investors that we have. And that's something that really gets me excited to work at Robinhood, like knowing that we are helping a lot of people that didn't necessarily have the financial education that I think we should all have,

or didn't necessarily have the financial background, never wanted to get into the space of investing, of buying stocks. And I was one of them to be completely frank. So seeing that Robinhood has been helping all these people is something that makes me really happy. Now, there's a lot of other exchanges that might be jealous of you all. And let me explain. It seems like the very large New York Stock Exchange, NASDAQ, et cetera, some of their leadership has started to talk about, well,

like, hey, these ETF things seem to be working. Maybe we should start thinking about listing the assets directly, right? So we could go by spot Bitcoin, spot ETH, et cetera. CBOE, I think is another one that this kind of thing. Then there are maybe what I'll call kind of the startup or incumbent type exchanges. And historically, they have tried to be very specific, right? So they've been a stock portfolio type exchange, or they've been a crypto exchange, etc. You all are one of the first, if not kind of definitely the leader, I think, in trying to build, you know, we're going to serve multiple markets on one exchange from the kind of challenger seat. Seeing these other people start to change their mind or kind of, you know, push

as competition towards you. Is that validating what you guys are doing? Or is that like a concern where you guys are saying, Hey, this is a big risk to our business, we got to go and try to mitigate it? No, I think it's a good validation. I think, you know, we've seen it from the beginning of Robinhood. Initially, when Robinhood launched commission free, every competitor were like, this is never gonna work. And now, you know, it's it's

hard to find a broker that offer commission or doesn't offer at least a commission-free product. So I think, you know, for us, it's been a good validation that when people are trying to do the same thing that you're doing, it's you're going in the right direction. But I also think it's a very tough product to launch. You know, it took us a long time for us to be able to support the tens of millions of customers that we have. And for crypto in particular, there is a lot of work in terms of custody, supporting transfer in and out, you know, That's a very big platform and it took us many years to get where we are. But I think for us, we're also not stopping here.

I think we are at the very beginning of a new world. I think blockchain and crypto in general can help bridge the gap between traditional finance and the future. And we really think that with tokenization and things like this, we'll be able to actually improve all these systems. Now, as you see that competition happening and they kind of creep into, you know, you mentioned no commissions. Payment for order flow, obviously, has become this hot topic. Everyone wants to talk about it, et cetera. Crypto is a little bit different. Like there may not be as many of those opportunities from what I understand in terms of kind of alternative, you know, revenue generation for exchanges. So how do you balance, hey, we're known for, you know,

in the stock world, kind of zero commission, but you still got to make money, right? You guys aren't running a charity so how do you think about you know kind of monetization opportunities in the crypto world so we took a place where we decided to be absolutely transparent um so started last year we started to show on the order flow exactly how much the spread is on an order and how much rebate and revenue we are making from the order and we thought that was a very interesting thing because we saw a competitor doing the opposite um so if you look at some of our competitors they will charge a fee but they will also charge a markup on the spread and at the end of the day it's very hard for a customer to see how much they are paying uh to to the merchant so what i

recommend customer in general is to look at the quantity that they will receive like how many bitcoins are you buying at the end of the day don't look just at the the dollar amount and compare between the platform and you will see that in average robin crypto offers the lowest cost to buy a Bitcoin and all the other crypto we offer. When you look at that low cost, is that a big selling point? Like, you know, I always say to myself, I care about fees, but I don't know if everyone cares about fees. Like, you know, or how many people are just saying, hey, I'm putting 20 bucks in, you

know, every week and whatever the fees are. If fees were 20%, they probably would still buy, right? Like they're kind of fee insensitive. What do you guys see on the platform? I think it depends on the customer. So, you know, we have some customers that are very active traders and they want to be on the platform and just trade a lot of time. For them, the fees are very important. And we have the traders that are a bit less active, to your point, that just want exposure.

And they will be less convinced that this is a key feature. But for me, it's also important because we want to open, you know, access to cryptocurrency to everybody. And I think that we cannot do that if we just keep charging here and there. And I think the recurring is a very good example. If you look at some platform, they're actually charging you more on smaller size of your orders than on the bigger size.

So basically, if you're doing a recurring order every week, you will pay a lot more than if you were doing one order of, I don't know, $1,000. So that's the kind of thing that doesn't sit super well with me. Like if we really want to make crypto accessible to everybody,

you cannot penalize them at the same time for smaller orders. I guess kind of what's interesting to me is like, okay so you get these people coming in there's kind of a very diversified set of group you guys built this beautiful product easy to use kind of very intuitive i think you have this brand um and maybe what is unique is that like you've got the backing of a much larger organization uh but also in a weird way kind of robinhood crypto is a startup like within the company is that maybe like a accurate characterization i think that's a that's like something like that i think that's

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

On our side, we are regulated by the New York DFS. And so we have to find ways on how to all work together and cohabit in one app. Now, you work with a very talented team. How do you guys make decisions? If you're the startup and they're kind of like the mothership, right, and you've got to build this, how do you make decisions? How do you think about, like, we should go get net new, you know, crypto users versus, like, let's go knock on the door of the, you know, the brokerage account users and get them to start using crypto? Like, just talk through some of these nuances where, you know, there's obviously a lot of benefits to being a startup inside of this kind of bigger thing.

But there's also probably some, maybe not impossible questions, but, like, things you have to navigate, right, as you kind of build a product. Yeah, I think we really navigated that well. So we have this general manager structure now that basically you have a general manager for the equity business, one for the crypto business, and we have many, many other businesses. And so, you know, when there are discussions to have, like it's usually like a small group that goes together and we decide on prioritization. Like, you know, what is going to bring the most return on investment or what is advancing the mission the most, like these kind of things. But overall, you know, we are a large company now. We have a lot of resources, so we're able to attack the different problems on different fronts, and we can not always have to choose one or the other. So that's why you saw a lot of the work that we've been doing on the brokerage side, for example, has been very successful in the past few quarters.

And on our side, we've been also attacking a different front with the EU expansion or with the Bitstamp acquisition. And as you're doing that, can you keep just going through acquisition or do you have to push into these countries and kind of run big marketing campaigns? One of the things crypto is not shy of is marketing. And there have been some amazing global campaigns and there's been ones where they looked amazing and they ended up not being amazing for one reason or another. So how do you think about like user acquisition, M&A, and then just kind of like word of mouth, you know, spreading without you guys really spending money? Yeah, I think it's a combination of the three. So M&A makes sense for us when we really feel like there's an acceleration that comes from it, or if there is, you know, very strong tech that we can get, or, you know, licenses, you know, a combination of the three. But it's not something that we necessarily want to do for every single country.

I think the marketing campaign is also something that it will really depend. I think, you know, to do that at scale, you have to know the market. You have to really understand how the competition is working as well. So I think it's a bit difficult. But for us, like the word of mouth is always something that has been working very well since, you know, the beginning of Robinhood Crypto or Robinhood in general. Referral, word of mouth, people just seeing the product and seeing how much better it and the other product out there.

And then they are sharing it with their friends and this kind of things. When I think of Robinhood, I think again, kind of the startup taking on the giant. You guys have self-directed, I'm going to call them wealthy investors, just in if you're investing, you probably have more money than that,

obviously, if you weren't investing. But this idea of a self-directed investor, for those that aren't familiar, is you're not going through an RIA. You're not going through, you know, kind of these traditional channels. Just go download Robinhood and you can start, you know, buying, selling, whatever.

You all have that user base for sure. the incumbents, the Black Rocks, the JP Morgans, they're all now saying, wait a second, we want to focus on self-directed wealthy investors. As they are trying to come after kind of your user base, are you all trying to go after their user base of institutions and large financial organizations and kind of the larger pools of capital? And so it's kind of this race as to like who can hold on to their existing user base, but also get some of the market share from the other? Yeah. I think there's always a bit of a game of trying to attract new investor, new investor type we've done a lot of campaign also where we we give like for example a bonus

if you're bringing uh accounts from outside of robinhood so you know we've been trying to to attract this uh this investor but i think at the end of the day our main focus for us is to build a product that people want i think you know you can try to do whatever you want in terms of marketing campaign or anything like that if the product at the end is not what they are looking for it's not going to work so for us a lot of our work is to make sure that any missing features that we have that are preventing customers to join robinhood we are going to build them as soon as possible and make sure that they can come in what is the hardest part of your job um that's a good question i think really you want to build everything possible um you know

you you look at everything happening in the in the space in crypto in general for example is is it's every day there is something new, every day something exciting. And so you want to build everything. And so prioritizing and making sure that you're making the right decision is probably the hardest part. Now, in this job, what is unique is that there's some things that you can control, right? You guys may spend a certain amount of money. You may do certain things to drive user base or assets you list, licenses you go after, et cetera. And then sometimes just the gods smile down on finance platforms and kind of the reaction to COVID happens. COVID obviously a horrible situation, but then the government steps in, prints all this money, people are locked in their

homes and like, here we go. Everyone wants to gamble in financial markets. Robinhood, a huge winner there, many other things as well. Are there other events maybe that are coming up like US election or others that you guys say, hey, we actually think that this could be a big accelerator and you will either try to do marketing stuff or product things around those events really to kind capitalize um we tend not to to look too much at this kind of events because i think uh once it's very hard to predict you you never really know what's going to happen like you've seen it in 2021 2022 like catalysts can just change and it's really hard to to predict so for us the main focus that we have is that we want the platform to work and work well no matter what so uh you know if we

have millions of customers suddenly waking up and wanting to trade something we want to make sure that we can uh be here and available for them that's been the main focus at this point and you can see it on how we built robinhood crypto for example we launched it in 2018 in january or february of 2018 so the the dead of the winter of crypto you know a lot of people were saying that crypto was dead at the time like one of his cycle and robinhood still decided to launch crypto because they were like you know this is something for the future this is something that is going to to be important. And so we want to make sure that this platform is available to the customer. So yeah, looking forward, for sure, there are some events like the political election and more

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

for example. So we look at CX tickets and we see how people are satisfied with the answer that got we look at market share wallet share uh we also look at uh you know people engaging with the platform are they coming back or are they um removing their funds from the platform and leaving uh writing on the platform you know on the apple store on play store like how people are reading robin hood there is like a variation of metrics that we look at and we want to make sure that you know everything goes uh to the north to make sure that people are happy with the product do people on Robinhood make money? And obviously everyone's different, whatever. But what I mean by that is like the United States is very unique in that we have the

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

maybe like the truth in terms of the the general user kind of behavior on the platform i i think really hard to say like it will really depends on the type of user to your point um if you look at some of the features that we have for example we if you're a gold customer we give you a very high yield on on your cash which is something that you will not get at your normal bank or something that you can just put the cash on the platform and completely forget about it for for the next six months and we will give you the yield so it's not necessarily like a real situation of on Robinhood, they are only active trader. If you also look at the type of account that we have now, we also added IRA. So people can actually contribute for their retirement. And then

there is the suite of products that we have from ETF to any type of financial instrument. And so that's something also interesting for crypto, right? If you want to get exposure to Bitcoin, for example, you can go on Robinhood crypto, get the actual underlying assets, and you can transfer in and out. You can also go out on your retirement account and buy one of the ETF or get into your stock account and also buy one of the ETF.

So we give you the choice. We don't necessarily push you one way or the other. What we try to do is we give you the content and the learnings for you to make the right decision for what's right for you as a customer. And then one of the things that I always talk to startups about is sometimes you have to fire customers.

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

let our clients pick. Obviously, they got blasted by the Bitcoin world and people saying, why don't you let your customers pick? But what are some of the things that you guys are actively not doing or types of activities that you want to avoid on the platform? Yeah, I think it's what it's all to say, because for us, really, the goal is to give the choice to the customer. I don't think Robinhood wants to make the decision like, hey, you should buy Bitcoin on spot instead of the ETF. If you look at when the Bitcoin ETF got approved, we actually had added like the 11 ETF the next day on the platform. So, you know, we were on the principle that more access is better for customer. I think the only type of, you know, restriction that we

will put on customer is a thing that will not comply with regulation. So if you're trying to transfer crypto to a forbidden country or something like that. That's really the only case where I can think of something like that. Is it public who is the most famous Robinhood user? I don't think we have a top

user at this point. Yeah. No, I just like, I'm assuming that there's people who are celebrities or whatever who have Robinhood accounts. I just don't know if they're public or not. I'm sure there are some, but I couldn't tell you. Yeah, it's top of mind because recently

um, the, uh, Republican vice president, uh, nominee, uh, JD Vance, there was this article that came out and they were like, they looked at his public Venmo, uh, like history. Oh, that's right. And so, uh, some platforms have the ability, you know, you can communicate or whatever. Um, but, but, uh, I do think people would be surprised, right. You know, when, uh, um, when I worked at Facebook, you would be like, oh yeah, like there are people using the products that you're building every day. Um, and it's one rewarding, but also two is you realize like, Hey, this having a massive

impact on, uh, on people. So I didn't know if there's anybody who sticks out, uh, you know, if, if there was, it will be them like actually saying it, like we, we take privacy pretty, pretty seriously. So I don't think, but the, the social aspect is something that is always interesting for sure for Venmo. I didn't think about that. I remember also at some point, uh, it was Bill Gates or something that was found on Venmo. So that's definitely interesting. I mean, if you get a Venmo, uh, if you get paid on Venmo from Bill Gates and you can, screenshot that or something. I'll take a screenshot of it. Yeah. So pretty helpful. Maybe one of the last things we can talk about is as the GM of crypto,

I would assume that you have to look at this as the CEO of the crypto business. So product is one piece of it, strategy, things like that, but also talent. Who are you hiring? Where are you finding these people? What is the pitch as to why they should work at Robinhood on crypto? You just walk through a little bit as to how do you figure out who's on that team and ultimately gets to work in the business? Yeah, we actually hire a lot of people in the past few years. We grew our team quite a bit. I think for us, what we try to find is a combination on if it's an engineer, we want, of course, technical expertise, technical talent. If it's on the product side, we want also a bit of an entrepreneurial spirit because a lot of these products are brand new in the world. And

So we want to make sure that they can think of that. But really, we have some core values that probably one of them is customer focus. And that's really what I look at the most. You know, when I interview somebody is how do they think about product? How do they think about the person who is actually going to use a product at the end of the day? But yeah, we have a fairly distributed team. We have a team in New York.

We have teams in Menlo Park as well. So, you know, trying to find all the places where we can get talent. and then we try to make it work. At the end of the day, the most important thing, I think, for us is to make sure that people are excited about the mission and that they want to work towards it. People working in the office, remote, mix?

We have an hybrid system. So a lot of people are in the office and we also have a few people that are hybrid and kind of distributed towards the United States. At some point, you just have enough people where you're going to have people doing different things. Definitely, yeah. Okay.

where can we send people to find you on the internet and if they want to go check out the crypto products on Robinhood

I mean Robinhood.com you know that's the easiest you can also download the app and you will find the crypto as

it's on tab and so you can find everything crypto on the tab amazing thank you so much for doing this thank you so

much