Robinhood: The Story of An $120 Billion Super App

**Wouter Teunissen** (0:03)
His parents were insanely worried about him only a year before. A PhD dropout is working on his second company called Kronos that is finally working. At least, that's what it looks like. Vlad Tenev and his small team have bootstrapped the business to several million in the early 20s. And Vlad's excited, as you would be. And he's at a party in San Francisco.

**SPEAKER_3** (0:24)
Hey, Vlad, come on in.

**Wouter Teunissen** (0:26)
To hang out, but also to try and recruit potential Stanford graduates to join him. And as he's explaining what his company does to someone at the party, something clicks.

**Vlad Tenev** (0:36)
So our customers are trading tens of billions of dollars a day, and it's only three people managing the software. It's very, very scalable, and we make money through a monthly subscription fee.

**Baiju Bhatt** (0:48)
Wow, well, can I use your software? And you're telling me that your customers can trade millions of times a day, and it's very, very cheap? Why am I paying $15 per trade at Schwab? I would love to not have to pay that fucking $15.

**Vlad Tenev** (1:02)
Well, no, that's a bit ridiculous. This is for sophisticated people. You have to be a hedge fund to use our software.

**Wouter Teunissen** (1:12)
Vlad didn't realize it yet, but at that moment, a key seed was planted for the company who would eventually start in 2012, that we now know today as Robinhood.

**Vlad Tenev** (1:21)
But it did kind of plant a seed, and we started digging into why retail didn't have access to this technology. And we thought there must be some reason. Maybe there were different regulations governing retail, but there was no fundamental reason.

**Wouter Teunissen** (1:36)
There may have been no fundamental reason, but that doesn't mean the journey to Robinhood today being worth over $100 billion was easy. They had to face immense headwinds in 2022 when interest rates rose the fastest they had in years. They lost 50% of their users and over $500 million in annual revenue. They had to navigate the game stock crisis. They introduced commission free trading to an industry that hadn't seen a new company started in 20 plus years. This is the 13 plus year story from idea to scaling the company, surviving an 80% drop in valuation and more. This is The Robin Hood Biographer.
Chapter 1 Coming to America Now to understand what happens next in the story, we actually need to go back to Bulgaria in the late 1980s. So before the Berlin Wall falls, Bulgaria is ruled by communists, and Vlad's father is actually a professor of economics. And at the time, his ideas are very westward leading, which of course is a weakness. But when the Berlin Wall falls in 1989, those weaknesses become strengths. And so his dad gets invited by a university on the East Coast in the US to come study. And eventually Vlad's father is joined by his wife and his five-year-old son, Vlad, in 1992 And so as Vlad's growing up, there's this constant fear that they're actually gonna have to go back to Bulgaria. I mean, his parents literally immigrate with no money, no safety net. It's a huge risk, right? And it's funny that they take this huge risk, but then actually they become very risk averse afterwards. Both of his parents end up working at the same job for over 20 years at the World Bank. And so Vlad doesn't really grow up with this idea of entrepreneurship. Instead, he feels this pressure to try and make it in the US through education.

**Vlad Tenev** (3:28)
I still remember seeing the photo album of my dad when he got his first paycheck in the US. Somehow he had gotten paid in coins, and he dumped the coins and a few bills on the bed. He was so proud to get some money in this new country, in the local currency, that we took one out of the 32 pictures on the camera roll dedicated to this moment.

**Wouter Teunissen** (3:49)
And so quite quickly, Vlad actually realizes he's very good at mathematics and physics at school, and he gets very interested in what are the rules of the universe? You know, what happened with the Big Bang? What are the fundamental theories? And you know, what happened before the Big Bang? And a bunch of other questions that are way over my head. But it's clear very early on, he's a smart guy, and he's able to get into Stanford to study physics in 2005 And his dream at the time is actually to become an academic, a professor, right? And it's not until the summer after his freshman year in 2005, where he meets his would-be partner in crime, Baiju Bhatt. And so that summer, there's a research program in the physics department. Now think about the type of person who's going to go to this summer program, right? First of all, you have to filter to everyone going to Stanford, probably a little bit nerdy and quite smart already. Then you filter to just the people in the physics department. Then you filter to people willing to do unpaid work over their summer. And you are left with the nerdiest of the nerds. And that's where Vlad actually meets his co-founder, right? And they become friends very quickly. They have a lot of parallels in their lives. They're both children of immigrants, have no siblings, actually both, funnily enough, grew up in Virginia, and they love physics, right? So over the next few years, they work intimately together at university. They work on problem sets together. They try and solve difficult problems. They disagree often. They socialize together. And if you look at interviews of both Vlad and Baiju, they're very social guys, which is quite unique for physics students. And this sort of camaraderie and partnership goes on for several years until 2008, when Vlad's about to graduate, and Baiju, because he's a year older, has just started his first job. Now, if you know anything about anything, you know that 2008 was probably a very bad time to be starting your career because of the great financial crisis.