All right, hello everybody to episode number three of Basis Points. We are very, very honored to have the CEO and co-founder of Robinhood with us here today, Mr. Vlad Tenev. Vlad, thank you for being here.
Oh, thank you. Hello Vlad. What a welcome. So, this is pretty cool because two years ago, March of 2024 is when you and I did our first podcast. And the interesting thing about that podcast is that basically for a couple of years you kind of stayed out of the public eye and that podcast was kind of like your first reinitiation to social media and saying, hey, I'm here, I'm a CEO of a company. And for me, everyone was like, who the hell is this kid interviewing the CEO of Robinhood? Like, how is this happening? Past two years have been absolutely crazy. The company has innovated in so many different levels and quite frankly, to just be honest, you have become a rock star of a CEO. What has the past two years been like for you?
It's been a lot of work. Like, it's just, you think you maybe would think it would get easier, but you're always trying to, at least I'm always trying to put together new things, which means the events that we do like Take Flight last night. We spend more time just working out every detail of them, making them better and better. Of course that means, and then we also have more events which means that we have to ship more products and then we have to have, the real product is really the factory, the business that makes these products. So you have to refine that. So it's been challenging. I don't get much sleep still. And if anything, the sort of like objectively better that we've done as a company, the more work goes into actually trying to improve that and go even further. So, it's not easy. I don't know if it looks easy but I think it's just a lot of work not just from me but from thousands of people at the company that, you know, it's like an orchestra that comes together. So it's pretty amazing.
So you mentioned the past two years have been really, really hard. It's been a fun journey but it's also been, you know, one of those things where what's the next thing? What's the next product? What's the next rollout? What's the next event? You had your first real public event two years ago March of 2024. I think it's like seven, eight events later. What has that been like mentally? Because, you know, now you have the eyeballs on you. People care. Traditional media and new social media is engaged in like the story of Robinhood. They want to understand what the company is as the company's transforming into a more mature company. They want to understand who actually is the founder and CEO and like what is he really trying to build here? And then you have investors that are like, you know, how big can the company become? So I mean on a day-by-day basis, how are you navigating all different types of stakeholders and actually executing for all them which you've, you know, been able to do over the past two years?
Yeah, I mean I think that the one fundamental challenge we have with the vision of becoming a financial super app is we sort of have multiple groups of customers that we build products for, right? And some of them might appear very opposed, right? So you have the active traders and for the active traders we build, you know, we improve our options trading products where actually if you looked at the latest 606 filings, I think this is the first time that we've been number one overall in options trading.
Which is amazing, right? And our competitors got to where they are by acquisition. You know, Schwab gobbled up TD Ameritrade which gave them a big options business. So, you know, it's gotten harder for us, not easier over time with all these, with the industry consolidation. But we have our active trading business where you have prediction markets, options, futures. We have like margin where we compete aggressively on offering the best margin rates for margin traders. And then we have the very different sort of some would call them more boring products, but very important products which are all about long-term wealth accumulation. And that's our retirement business. We've got the card which most would consider the card a typical boring product although, you know, we try to make it very exciting. We've got custodial accounts, trusts coming, our advisory services, both digital advisor, Robinhood Strategies, and Trade PMR. And, you know, there's a lot of, I think our competitors sort of like attack us on this vector because they look at the active trading stuff and they're like, 'Oh, you're just trying to, you know, convince these investors to be trading,' right? When the way we think about it is no, there's a competitive market in there that we want to win. People trade. A lot of these people also, it's not two different people. Some people have a trading account, they also have a retirement account, and we'd like to serve all of that business. And it's also I think that's the most challenging kind of messaging challenge we have.
Why do you think, how do we do that? Why do you think they keep characterizing you guys as a degenerate trading app? Like why is that the incentive that they want to mask Robinhood with? Because you guys are doing a lot more than options.
Well, I think it's difficult to paint with a broad brush everyone's intentions. Of course, some of it's probably our competitors that are, you know, our competitors have machinery to discredit what we're doing, right? Of course. I don't even mean it to sound nefarious, but like once you become a big company and incumbent, then you have PR teams and strategy teams and they're having meetings about how to deal with this like Robinhood thing. And of course, one way to deal with it is just to compete by offering products. The other way is just to, you know, either while you're trying to do that and it can take them many, many years to actually launch products that are good enough to compete openly is to try to like throw shade on the products we roll out. So there's that element of it. The other one is we're kind of the first place to combine all these things into one place. And the canonical criticism is probably, well, you got prediction markets, you've got retirement. Should they be so close to each other in the app? And I just think whenever you're the first to do something, some people look at it and they're like, does that make sense? Why hasn't it been done before? Should it be like that or should it be different? And there's a little bit of like the Overton window is shifting before it becomes normal. And as the first people doing these things, we sort of like take the brunt of the criticism. And I think that's part of the job. So not all of it is nefarious just corporate attacks, but I think some of it is people are trying to figure out what they want, what they like. And when you put a new product in the market that does things, some people aren't going to like it, at least at first. And it's just different enough that there's an adjustment period.
So, take us back to the very beginning. Forget 2020 and when everything blew up and Robinhood became a huge company. I'm sure that there was a lot of people that told you you were crazy and that why would you try going up against Schwab, Fidelity, JP Morgan? You built basically a unicorn of a company. How did you get through the mindset of just trying to do what a lot of people probably thought was impossible?
Well, our expectations were very low at the beginning. And I remember our first office was in Manhattan in our apartment in the East Village. And I remember one late night conversation. We really didn't know what we were doing. This was 2010 before even Robinhood became an idea. We were working on algorithmic trading. My co-founder and I were talking about how, you know, maybe one day we would build a company that would be worth $100 million. And I remember thinking how insane that was, right? And then fast forward a couple of years and we were raising our seed round for what would become Robinhood. And there were a lot of people who were very skeptical. We had to talk to 75 plus investors to raise our first million dollars. So one million, and we had to do that because FINRA needed to see from us that we had enough capital to survive for a year. They didn't want just a retail brokerage opening up without the capital to support customers. And we had worked it out that we could at least make the argument that $1 million would get us through. So we had to raise a million dollars. It was very, very hard. We had people that were very skeptical. The average person we talked to just immediately laughed us out of the room. But then we had some investors that were very passionate and they would even talk to other investors. They were like, 'Okay, we could tell these guys really need money.' And one of these guys was like, 'Yeah, I laid out the case. I had the spreadsheet. He showed me the spreadsheet. Robinhood could be a $2 billion company one day.' And remember this was, we ended up raising $3 million at a $10 million valuation cap.
Wow. So at that point that just kind of blew my mind.
So, I think the way I think about it was I'm not really dwelling on like these massive outcomes or how big the company could be or even a goal like disrupting Schwab or TD Ameritrade or all these companies. I certainly wasn't thinking about it in the beginning. I was thinking about smaller things. Okay, what's something that's achievable in a year or a month and what's that next milestone? So in the beginning it was really just we had a vision for the product and the app and we thought it would be really, really cool to build this simple thing and put it out in the world and a lot of people didn't think it was possible. You know, not just raising the money was one obstacle, but then the other one was are you actually going to bring something that charges zero dollars for trades to the market as a small company? Or because nobody's done that before or is there some other hurdle between, you know, getting your funding, getting your license and doing that that's just going to be impenetrable. So yeah, it was always just what's the next thing? And then you do that a couple thousand times. It's like investment. It compounds, right? And then eventually you start talking about these big lofty goals. But yeah, we didn't really set out thinking that we would be, you know, disrupting Schwab or anything like that.
So there's always going to be criticism with new products and you introduced several last night. Take us through the process of actually mapping out where you want to go, how you want to get there, and how the development happens.
Oh, yeah. So, I think at a high level, the way we think about it is we want to be your financial super app. And what that means is all of your money and all of your assets are best served at Robinhood. And we should make it really, really easy to get money in. We should also make it really easy to get money out. And in fact, I think we're the best in the business at if someone actually wants to leave Robinhood and go to another broker for reasons that I maybe, well, I know there are some legitimate reasons, but not a lot of people want to do that. We've been net positive against all brokers for something like 12 quarters running. We want to make that very, very easy. But really anytime someone leaves Robinhood and moves their assets somewhere else, we treat that as we're doing something wrong, right? Like even if they're going to a bank account and they're spending that money now, we don't have an excuse to allow that and to be comfortable with it because we have our own banking products. We have our own spending products. So, we ask ourselves, well, why can't they just use us? We have a bank account that has industry-leading APY on checking and savings. We deliver cash to your door. We have, which by the way is live in New York. So, if you never want to go to an ATM, cash to your door.
Yes. They announced that last year and now it's like scaling. Any limitations on that or?
Well, I don't think, there's always some limitations but for the vast majority of people I think it just meets your needs.
Okay. You heard it here first. It's cool. See, people would never think you guys would do that and they never think you guys would do prediction markets and bank and everything together. That financial super app thesis seems to me what a lot of the industry can't comprehend existing in one thing and you're just like, nope, that's how we're going to play this. You know what? Cash to your door makes a lot of sense because without having physical branches now that takes the excuse of I need to have access to a physical location.
And that was the thesis for it. So when we thought about banking, we asked ourselves, okay, what can we do that hasn't been done before that's out in the, that if you look out in the marketplace is differentiated because I think differentiation is actually the key to survival in the business world. Jeff Bezos wrote about this in his shareholder letter. It was a very good one a couple years ago because everything around you wants to make you like your environment. So you want to enter into a state of equilibrium, homeostasis. Low entropy, right? Entropy decreases over time. And what that means is what's a state of zero entropy? Death. Right. So eventually life is born. But the state is for it to die. Same with business. So I think you have to always push hard against the environment. And for banking, we looked at the landscape. So you have the brick-and-mortar physical banks and then you have these digital banks. All the neobanks, the digital banks tend to target a lower income customer, right? And the reason they do that is if you think about all the products and services, there's some limitations with the digital bank. You know, if you want to go get money, they don't have physical branches. So, if you want to go to an ATM, you have to go to a 7-Eleven or ATM down the street or, you know, you partner with some other bank, but you don't really own the experience. You can't, you know, it's hard to get like a cashier's check. There's still things that you need to do and those are things that higher net worth customers actually use quite a bit. So, and I had this bank called First Republic.
I don't know if it was as popular out here. Now it's owned by JP Morgan. They unfortunately didn't make the banking crisis. They didn't survive the banking crisis of 2023. But they had this great feature of delivering cash to your door. And they kind of prided themselves on having the best service and just like handling all of the banking needs of these like Silicon Valley entrepreneur, high net worth people. They would give you a good mortgage. So it's really service-oriented, very good experience. Cash truck to your house. You don't have to go to an ATM, but not a great digital experience. It's brick and mortar. So you had like high-end banks that didn't use technology, technology-enabled banks that didn't really serve upmarket and you look at our customer base. Our customer base is a little bit more affluent than your typical neobank because in order to have enough money to start thinking about investing, generally speaking, you have all your basic needs taken care of. So you're not like living paycheck to paycheck. So our customers also were a little bit more higher-end than these typical neobanks. So what we created was, okay, the thesis was can we do a digital banking product that's high-end so can it go at the top of the market with no compromises and you end up having to deal with this branch office problem. Well we don't want branches but branches provide valuable services. How can we close that gap? Well we bring the branch to you. And the most important feature there is how do we get the cash to you so you don't go to a 7-Eleven. Nothing kills the private banking vibe like sending your customers to 7-Eleven. Not that there's anything wrong with that. You know, love the 7-Eleven hot dogs, but if you want cash, you're not private banking at your 7-Eleven.
Yeah. And a lot of people don't want to take out a large sum of cash in public either. And you can't.
And that's great. Yeah. You can't. And you know, we think about these. And I'll talk a little bit about the platinum card. I was actually a little bit surprised. Let's see this bad boy.
I got to tell you, I'm still surprised at how heavy this thing is. I believe I looked into this last night. I asked. So, here's the gold card, which is also fun. You can compare.
This is solid gold, folks.
We'll see. All right. So, this is gold. This is platinum.
Would you say it's annoyingly heavy, the platinum card?
Yes. But that's also what makes it cool. Well, so here's the thing. Nobody really needs a physical card for purposes of practicality anymore. Everyone's got Apple Pay. So I think the physical card is actually, it's more of a style. It's like a fashion accessory at this point.
So I think it's no longer important.
It's a brand statement for people.
Yeah. People are, a lot of people say, 'Well, why don't you just have a little plastic card? I want it to be as lightweight as possible.' That's not the purpose of the card. It's like the watches, right? Nobody buys these things because they tell accurate time. There's way better ways to tell accurate time. Your cell phone is there. So, your watch is a piece of jewelry. It's a statement piece. I think in the same way, the credit card has become a piece of jewelry, a fashion accessory. And I think that's why we spend so much time competing in a category that others don't really compete in, which is who has the heaviest card. So I looked this up. What's the heaviest credit card on the market right now? And what it told me is it's actually this card.
37 grams. So it hasn't been retrained yet, but this is 50 grams. So, twice as heavy as the next heaviest non-Robinhood card.
Okay, so let's get into the credit card part. That was the biggest thing, or one of the biggest things that was announced last night. We'll talk about some of the family stuff. Social media is going kind of crazy about it. A lot of people love it. A lot of people hate it. It seems obvious you guys are going for the AMEXes of the world and you're really trying to be that premier destination. What was the product philosophy on this is the new addition to the Robinhood family?
Very simple. We started with this idea that if you have this platinum card, you should feel like James Bond. If literally James Bond had a credit card and used a credit card, it would be this one. So, and hopefully you see that reflected not just in the design of the card, but everything around it. The product experience is like very cool and sort of has these bluish hues. We've got the scuba diver, right? You're adventure travel. James Bond, as you know, he's a physical specimen, so we really wanted to lean in on the health and wellness benefits. So yeah, I don't think anyone else has really thought about it, but you know, I kind of looked up to James Bond growing up. I watched all the movies. I thought it was very, very cool. And so I want to those movies.
So which one's the best? All right. Who's the best James Bond and what's the best movie?
Sean Connery for sure. I don't know. I like all the Connery Bonds. Yeah, from Russia with Love, obviously a classic. Goldfinger, the beginning of Goldfinger I think is just, and then even You Only Live Twice, I think is an underrated good Connery Bond where he goes to Japan.
You've never seen it. It's classic.
You've never, trust a lad that he says it's a classic. It's classic.
Yeah. Yeah. I remember I gave you the Back to the Future tip.
And then you interviewed Chamath and you asked him what his favorite movie was and he said Back to the Future, too.
Yeah. I watched Back to the Future because I was like, 'That's my favorite movie.' I was like, 'Yeah, it's a great movie.' And I was like so bad that I said that and I didn't watch it. And so two weeks later I'm like, 'This is a damn good movie.'
Yeah. He's not the only one you've done that to. I think it's frankly, I don't know. I grew up watching it. You know, I started watching Back to the Future. I've probably seen it 10 or 20 times, maybe more when I was like seven years old. So, I think it's also a little bit different if it's a movie you've seen so many times since you were a kid. You don't have that. But I'm actually curious when you watched it. Does it hit the same? Are you like, 'Oh, that's an amazing movie. I want to watch it again.' Or is it a little different?
Yeah, I watched it twice. I did and then I watched the second one. I never watched Back to the Future 3, but I watched the first and second. To me, it was, you know, I like stuff where Snapchat doesn't exist.
And you have to pick up an actual phone, you know. So, it was pretty cool to witness that as well.
Yeah. It's funny how these movies had this vision of the future.
And they all got it wrong because basically their vision was there would be massive screens everywhere, right? So, you'd go into the train and the train would have holographic TV screens, but everyone missed smartphones. Like in none of these movies do they have everyone on their phones all the time.
So, let's stick with Vision of the Future for a moment. So, we're about to see one of the greatest wealth transfers in history. There's a lot of people that will be inheriting a significant amount of money, whether it's six, seven, eight, maybe even nine figures or more. How do you feel Robinhood is positioned to really take the fight to all the competitors and provide a better value proposition? Because a lot of these individuals that will be inheriting money, that capital is more likely in a Vanguard, in a JP Morgan Chase, Morgan Stanley because the older generation probably has not changed their accounts as frequently as the younger generation. So, how is Robinhood positioned to really benefit from this and create value for the younger generation who now is coming into a large sum of money through inheritance and now they have the ability to choose where that money sits.
I think we're increasingly better positioned. You know, I think we're well positioned to begin with because we're already a place where people are moving assets. We've got net inflows from the other brokers. They have outflows for us and we have all of the young people, right? So the people that are having kids and, you know, thinking about finances for their future, their own retirement, they're already on Robinhood. And, you know, the question is the money is with people that are silent generation, baby boomers. How do we get all those folks on Robinhood too? Because it becomes easier. We don't just want to wait for an inheritance event. We want to make it so that we serve the whole family. So, your parents should have Robinhood accounts, your siblings, your kids, of course, and we're kind of working our way through the process. So, up until yesterday, we didn't have custodial accounts. A lot of our customers are having kids right now, and they have to open accounts at other brokerages. Now, I think where we're going to see, we've already started seeing it, people opening those accounts, moving them over here. Trusts are a big thing when we talk to, especially our high net worth customers, they usually have revocable and some have irrevocable trusts. So we have to bring that in. And that's coming very, very soon as well. And then asset coverage, you know, a lot of these legacy assets are in mutual funds and are in bonds. So, we've gotten quite far. I mean, you look two years ago or, I guess, the last two years have been a blur. So, I still think I'm in 2024. In 2022, we didn't even have ACATs. So, you couldn't move your money into Robinhood back then. You could only take your money out. And a lot of our competitors would like go on earnings calls and say, 'Well, you know, we've never lost an account to Robinhood. I looked at the number. It's literally zero.' What they didn't mention is of course we hadn't launched that piece of functionality and then right after we launched it they stopped talking about it which was kind of funny but yeah we've gone from single account like Robinhood individual taxable brokerage account with no ability to move outside assets to now I think I'd have to imagine we're the number one ACAT destination certainly by volume. I mean, I can't think of the amount of people. I can't imagine that there's one bigger.
People transfer every day and they have a screenshot of it. Just got 2%, just got 3%. And you know, the first time we had a podcast, my biggest question to you was, how can you afford to give people 2 or 3%? And everyone that I talked to was like, they're going to go bankrupt doing this. They can't do it.
Well, you see, the financial profile of the company has gotten better as we've done that, right? Yeah. And it's because we've gotten smarter about it. Like we, and at first it was, well, how are you going to do this? This doesn't make sense. And then the economics at surface level are pretty simple, right? We've got a certain monetization that we earn per dollar of AUM. So you think to get that one-year payback, you should be able to offer a match that's equal to that monetization. So, you know, at the time I think it was we had about $100 billion of assets. We made about $2 billion in annual revenue. So, 2%. Yeah, it's just, you can think of it as a marketing expense. We keep our costs low as well. So yeah, I think that, I think that, you know, there's so many ways in which we feel well positioned, but I keep thinking about all the things that are missing and there's ways to make us even better positioned. So expanding asset coverage, expanding account coverage, expanding our service model. You know, we introduced Robinhood Concierge. We really weren't doing a great job with customers that had lots of money in Robinhood up until fairly recently. And, you know, we talked to these customers, their needs are very different. And, you know, a lot of them have already started thinking about, okay, how am I going to do my estate planning? How am I gonna, you know, set things up for inheritance in the future? And we started helping people with that. So, we rolled out an offering for our concierge customers where we handle your taxes and your estate plan for free if you have a certain amount of assets in Robinhood. And that's been like very successful, surprisingly successful. So, and then, you know, not to mention AI. So, right now, the biggest blocker is that it's just a lot of paperwork and manual process to move accounts over. And that's why, you know, financial services have been considered so sticky because it's really a pain in the ass to move things to Robinhood. Some people give up because it's so cumbersome even after they've made the decision. And I think one of the less appreciated AI disruptions is eventually the AI is going to do all this for you. Yeah. Like we're probably pretty close to having that technology where you can just say move my bank account to Robinhood or my brokerage account and then it just goes and takes all the stuff, writes all the emails, makes phone calls if it has to and then it ends up in Robinhood.
How do you see AI changing the financial service industry going forward?
Well, it's a big question. Yeah. I mean, I think that, also, by the way, for those that don't know, Vlad is not just the CEO of Robinhood, he's also co-founded an entire AI startup, Aristotle, that, or Harmonic with their language models called Aristotle. And it just got valued at over a billion dollars. I mean, so you are deep in this AI world. You are not some stranger to what's happening in AI.
Yeah, I know. I know enough to be dangerous about model training and all those things. How to prevent hallucinations is something that we care a lot about and I think we've got the best way to do it. So we could spend a lot of time talking about that, but I think that I've lived through, I guess, two technology revolutions. I kind of missed the computer revolution because I was born in the late 80s. Although that one I regret. I almost wish I was born a little earlier so I could see, you know, the first Macintosh coming out. Which coincidentally was how E*TRADE started. E*TRADE started with a guy named Bill Porter and Bernie New who were in Palo Alto and Bill Porter had gotten an Apple II computer and he was like, 'Can we plug this thing into a modem and trade stocks with it?' Wow. So, pretty amazing origin story. And Schwab actually started after the deregulation of commissions in the early '70s. You know, it was an event called Mayday where commissions were deregulated. And so, Schwab and his partner found an opportunity to be the low-cost provider, take their commissions down while everyone else was still, you know, Merrill was still charging, I don't know, $75 to $100 plus. And their first genesis was kind of similar to Robinhood. It's like, we'll take your order, we'll process your order, we're not going to try to upsell or cross-sell you anything. We'll pick up the phone. It was of course before mainframe. So we would pick up the phone, take your order and process it as cheaply as possible. So anyway, I missed out on the computer revolution. I was a child during the internet revolution. So, but I caught mobile and mobile was a big one. In fact, it really created the conditions for Robinhood to succeed and take market share because every time there's one of these revolutions, things get reshuffled. Consumer preferences change really rapidly and there's kind of an opportunity for a new product to come in. So I think this is like that but much bigger.
So why is it much bigger?
Because actually the means of production so to speak are getting automated. And if you think about all of these things, what do they have in common? All these technology revolutions, they're driven by people building software, right? To a large degree. You know, you're building consumer computer software, you're building software on the internet, you're building software for mobile phones. Well, now the biggest thing that's happening is software creation is being automated. I mean, the most direct consequence of the AI revolution thus far is it's much easier to become a software engineer that's being democratized. You could write your own software. You guys maybe have, he's upgraded to cloud. He's, have the enterprise version. I'm building a cloud that are working right now.
I showed admit what I built. I have a team of like eight agents in the same program working on something whenever I hit launch. And it's amazing because I've never coded a line of code in my life. And I can prompt it to tell exactly how I want it. I want a team of eight agents, each one doing a very specific thing, sending it to a fact
checker, and then sending it somewhere else to have the final product come out to me. It's absolutely insane what you can do just by typing in a prompt.
Yeah. And so I think we have to contend with the world where we've got agents doing things on our behalf, right? And there's lots of open questions about how in control will we be ultimately.
And there's multiple layers of this. On an individual level, am I going to be directing the agent and telling him what to do and the agent is just acting on things, or is the agent going to be giving me the ideas? And eventually, is it going to be clear that the agent has better ideas than me and am I just going to like hand things off completely? I think there's a version of that question that's happening on a societal level too, which is okay, we're giving these tools and we're improving them and we have Claude Code and Aristotle. Aristotle I would put in the pantheon of greats for mathematical use cases.
I love the name too, such a great name.
It's great, isn't it? Yeah, because we want everyone to be Alexander the Great. What did Alexander the Great have? His genius mentor and philosopher who was guiding him through his life. And then he became a great military leader, you know, but with a grounding of philosophy. So, yeah, on a societal level, is the world going to look like these AI companies making all these inventions and discoveries in their giant data centers and keeping it for themselves? Or are they going to release tools and create like an explosion of entrepreneurship and creation by people? And I'm betting on the latter outcome actually. I think it's the more optimistic scenario where we don't have to worry as much about negative side effects.
Are you being optimistic for the sake of being optimistic or you genuinely think it'll be a better outcome for the world?
Well, I'm kind of in the arena, you know, with Harmonic trying to drive for that outcome and you can see the difference, right? So, Harmonic, for if the viewers don't know, building what we call mathematical superintelligence. So, this is AI for mathematics and the first use case for it is research mathematicians accelerating their own work. So solving open problems, formalizing big results in a language called Lean. And we have some competitors in the space. We're not the only ones because this is a big opportunity, right? Others recognize it, but we're the only company that actually has a product.
So basically what everyone else is doing is they're trying to solve the math problems in-house and they're being very secretive about it. They're like, 'Okay, well, we'll just go out and find, you know, mathematicians and groups that are working on interesting stuff. Send us all your data.' They're getting the data and then they're just like cranking on it in-house. Our approach was very different. Our approach was, let's roll out the product. And maybe, you know, the thing that's available to the public will never be as powerful as what we can control and run in-house, but people will do all kinds of cool stuff that we never thought of, right?
Yeah. And so I just, I believe that's more interesting business, right? If you have everyone using your product, even if maybe running in-house you can do more impressive things because you can point all of the computational resources of it, the flurry and the diaspora, the creation is going to lead to much more interesting results. And I think you're starting to see that now. I mean, you're using Claude Code. You're probably playing around with this stuff, too. It looks like it's playing out to these tools being more democratized than people think, right? And if you had guessed 5 years ago that you'd have this AI and it would be a little subscription that you're paying 20 bucks a month for, people would say that's great. So I actually think the incentives for what makes a great business point towards these tools being broadly democratized and being imbued in every company.
Can we talk about this idea of investing for a living because it's something you mentioned that is a bit controversial and I think it makes a lot of sense but I can understand the skepticism around it which is kind of this idea that work as it becomes commoditized by agents means play will become work and the things we do for fun or the things that we do as a hobby like learning about options in the stock market might become a full-time job. So there's kind of two layers to this question. Number one, do you think people actually can invest for a living and do you think Robinhood can contribute to that? And then B, a bit more technical. If everyone's using advanced agents to trade, the edge in a stock market is someone knowing something that someone else doesn't or quite frankly human emotion stopping someone from selling or stopping someone from buying. If all the agents know exactly what to do, how do you think agents can actually meaningfully trade?
Yeah. Well, I'll answer both of those. You know, the second question, everyone thinks that this is going to be all great and my agent's going to be trading for me. And I think what happens with all technology is the early adopters do have an easier time. So, you know, you're going to get some early wins possibly if you're doing some kind of agentic trading because not a lot of people are doing it. At some point, if everyone's doing it, it becomes almost like if you're not doing it, you're at a disadvantage.
It's kind of like when you're the first accountant that used a spreadsheet in the 80s. It's like, oh man, I can get all of my work done for my business in one hour a day and it used to be 10 hours a day.
So, wow, maybe I can just like take the entire week off. I have this huge advantage over everyone else, right? And you know, if some people don't do that, some people probably worked less. Other people are like, I'll just have 10 times as much business and I'll have an advantage that way. But eventually, everyone kind of figures it out and then you're back to a level playing field. So I think that, you know, we'll reach an equilibrium for sure. For sure. There's no free lunch forever, right, for everyone. So I think you're right with that. And your first question, do I think people will actually invest for a living? I mean, this is one that I thought would be more controversial, but whenever I go on a podcast, people kind of agree with it.
And maybe the reason is you kind of have one of these jobs, right? Like, how do you make a living? You create content, right? And you invest.
Right. And 50 years ago, if your great-grandparents were imagining your life and someone were to tell them, well, you know, Amit is podcasting here and there and he trades and invests, they'd be like, oh my gosh, you're telling me our great grandchild is unemployed. He doesn't have a real job.
My dad still says that today.
What we're doing right now would not appear like real work to our ancestors. They would say, 'Oh my god, technology is having this terrible effect of nobody works.'
It would either be utopian or dystopian kind of depending on how you look at it. So, it is a real thing because it's already happening. We're here doing it, right?
I mean, even my job, technology CEO, didn't really exist 50 years ago. They'll be like, 'If they had a peek into my life, what does it look like?' Oh, you're just in a meeting room. You have your chalkboard. You're drawing pictures from time to time. Sometimes things get heated and you bang on the gavel or you ring that little bell. There's a little bell on your desk that you're ringing. Yeah. So, yeah, it wouldn't look like real work and I think in the future that's going to continue.
So, AI should just accelerate that in your opinion. It shouldn't change the potential for people to invest for a living.
No. I think that'll accelerate for multiple reasons. And actually it kind of regardless of whether you believe in the dystopian or utopian outcome, dystopian outcome being it takes everyone's jobs and we need like massive government redistribution and assistance and UBI. So in that outcome investing is very important because and we kind of saw a preview of that during COVID, right, where we had lots and lots of government assistance and people just entered the markets like we have never seen before, right? And I think you should expect that to accelerate in that scenario. You'll have UBI machinery, you'll have the government working really hard to fill in the gaps. You'll also have productivity. So actually there is a realistic scenario that people are talking about where productivity and GDP growth increases but it's just highly concentrated and in that case the government will probably step in and find solutions like they did during COVID, right? And we can talk about how effective, maybe they won't be effective at first but I think eventually we'll find something that works. In the scenario where it creates a flurry of entrepreneurial activity, which I think is more likely and you're starting to see it. So I gave a TED talk on this, I don't know if you saw it.
It got a little bit of heat for oh is it too optimistic or you don't consider enough this dystopian scenario. But I think what'll happen is you'll have a lot more people becoming entrepreneurs because the way entrepreneurship has scaled in the past 20 years has been through software. Now it's becoming easier to write software. So you'll have more entrepreneurs. In my hot take, my prediction if I had to make one is that there will be more software engineers in 10 years than there are today.
