"We’re Building an Energy Grid in Space" - Robinhood Co-Founder

Yeah, it's actually really nice in here. It's really nice in here.

So, the goal is to like get objects from people as we go and keep decorating this back wall. But there's So, you're going to be haunted by my metal face. Oh, and

I'm great, man. How are you?

I love this neighborhood. We talked about this a little bit before you started.

Okay. So, this was like right after I think we launched the product out of that office. And I'm saying it's like literally on the corner of this building. We launched the product out of that office. We did the big public release there and I was like four or five years there. It was like all like I remember that was like the really fun exciting time. We did options there. We launched crypto out of that building. Yeah, we did a bunch of stuff out of there. I have like such warm memories of this. I remember like we moved into that building and when we first moved in, they were still doing construction on it. And so this building used to be the Fry's building.

Yeah. Yeah. And so I remember when we first moved in, we didn't have bathrooms. So if you had to go to the bathroom, you'd have to go run over to Fry's there.

It evaporated. Yeah. Yeah. They shut them all, man. It's very sad.

Yeah.

Yeah.

It is. I mean, my dad has been like a pretty central figure in my life. So, he had this dream of always wanting to study theoretical physics like he was always very interested in quantum gravity and grand unification, which I think continues to be like the holy grail of intellectual endeavors in my humble opinion. But my dad, his dad in India was one of the first western trained eye doctors in India. So he had like an optometry practice and he was like all of my children are going to be doctors, right. And this is in Bhavnagar in India. This episode is brought to you by Brex. At Core Memory, we spend tons of time with companies that are trying to build fast and they often run into similar problems. Their corporate spend either spins out of control or slows them down. Brex was built to break that trade-off. It is the intelligent finance platform that helps you move faster and spend smarter. Cards, banking, expenses, all in one place with AI agents working in the background to handle annoying tasks like collecting receipts and enforcing corporate policies. This is a massive timesaver for us. More than 35,000 companies use Brex from early-stage startups to giants like Anthropic and Zoom and soon-to-be giants like Core Memory. We run on Brex. So should you. Go to brex.com/corememory to learn more. And my dad was the youngest of all of his brothers and sisters and he always wanted to study physics. So the story he tells me is, you know, he starts out undergrad doing biology and sort of creeps his way towards chemistry and then starts a PhD in chemistry and then sort of transitions to physical chemistry and then leaves that to go and join my grandfather's optometry business to do contact lenses. And then he's applying to PhD programs in the US to study physics and he's applying and he's applying and he's applying and the story he tells me is he's like, you know, he's like I decided that I was going to devote myself to science. I was going to be a bachelor. And so he puts Kumar at the end of his name. So Prafulkumar, which apparently means that you're going to be a bachelor. And then I think he was applying and applying and applying and kind of was like, I don't know if this is going to happen or not. Ends up getting married to my mom. And then the rapid sequence of events, as he's told me, is like they get married. He gets into the University of Huntsville, Alabama. My mom is pregnant with me, like kind of all in rapid succession. And my mom had like no interest in coming to America. She didn't speak English. She was also the youngest of all of her siblings and she was very very family oriented. She wanted to stay and like you know be with the family in India. And she kind of got thrust into coming to America because what she tells me she goes to the embassy and they're like oh yeah you have a little boy in there. They just like stamp the visa. It's like the little boy is going to be an American. And my mom tells me she like leaves the embassy in tears like doesn't want to do this.

And yeah, so I end up in Alabama and the way my parents described those first couple of years like woof, rough.

Yeah. Yeah. Yeah. It was a very different time.

Yeah. They had a couple of Indian friends around. I remember the way the story my mom tells me as I was born. They knew one Indian family that were doctors in Warrensburg, Missouri. So, right outside of Kansas City. And my mom was about to give birth to me. And so, she just goes there because I don't know if they could really afford medical treatment. And so, they're like, 'Okay, we're just going to go. You're going to give birth and just stay with the doctors that we know in America.' And so, yeah. And it was pretty crazy because like within the first couple of years of them coming to the US, my dad's kidneys failed.

Yeah. He was on dialysis my whole childhood. And it was like, yeah. It was I didn't like I mean I was a little kid, right? And so I kind of was like insulated from it in many ways. And my parents were this was like kind of the thing, right? It was like my dad was very adamant. He's like education is the way forward. He's like education, education, education. That's your path forward in life. And all you know kind of that plus like they would tell me it's like look we're making great sacrifices to be in this country. And because they you know they had all this family in India obviously you know they're better well to do in America but like they had like such a rich life in India and they're like we're you know kind of making a sacrifice to be here. And so that was like kind of as I got a little bit older you know because education was kind of like the thing that I kind of anchored myself. So, I do really well in school. That's kind of like my path.

Oh, yeah. We're going to get right into it. Right. So, this was like it's a pretty it's like probably one of the defining moments of my life. So my dad his kidneys fail pretty soon after come to the US and he gets a job at Langley NASA Langley working as a scientist and it was really good because that was like how they were paying for all the medical bills. And my dad was on dialysis my entire childhood. So I remember there's like the big dialysis machine that my dad would have to you know use every night. And then when I was in 8th grade my dad's kidney disease kind of took a turn for the worse. So he had some sort of infection of his inner stomach cavity which just kept getting worse and worse and worse and then at some point you know he had stopped working and then he just went to the hospital. He was in the hospital for a long time and had like multiple medical procedures where they kind of like, you know, did big surgeries on him to try to save him from this. And I remember thinking to myself, I'm like, 'Holy [ __ ] like, you know, I'm only child, like I, you know, god forbid the worst happens. Like what the heck am I going to do?' And like even as such like we were pretty poor family in southern Virginia which is to say we you know like it's not the wealthiest part of the world to begin with. And I'm like I kind of convinced myself during this period of time that I'm like if I do really really well in school like that'll be like my path to stay you know even if the worst happens to my dad which by the way he's healthy and happy and I'm going to see him probably 2 days from now. So just want to I don't want to make it sound too grim, but like I remember during that time I was like kind of flipped the switch where I'm like I have to do really well in school because that's how I get to stay in America basically.

You know I did okay in school before that. I remember I took the one thing that felt like kind of a gut punch to me right before that and was like sixth or seventh grade I took the PSATs and I remember I did not do very well on that and that was like the first time where it was like Baiju you are not growing up in an English-speaking family like your vocabulary is like super super set back.

Because I didn't learn English until I was like four or five years old. Like I learned Gujarati with my mom and the two of us learned English together watching TV.

So I remember before that kind of just like not having a ton of confidence in my academic abilities. And then when I entered high school like right as my dad, you know, that really bad turn in his health kind of takes he ends up recovering from that and he recovers from that. And I remember he gets a kidney transplant within a few months of that. They were like give this man a kidney.

And then when I get to high school, the switch flipped where I'm like, I'm going to be very very very dedicated to school work. And I remember thinking math was math and math in particular was like very challenging. And at some point it stopped being challenging. I kept like doing it enough where it started coming naturally to me. And it kind of taught me this thing where if you don't understand something very well the first time, you can just try to learn it again. And like every time you learn a difficult concept, like you learn it once, you put it down, you learn it again, you put it down, you learn it again. Every time you learn it again, there's like some part of the thing you didn't understand that starts to feel intuitive. So the next time you go back to it, you're like, 'Okay, I kind of believe my understanding of that thing.' And you can kind of build and build and build on top of that.

You don't want to make it fake hard for them.

Have you figured it out?

Yeah. I mean, I think that's at least for me, right? It's like the biggest challenge like the biggest sort of the biggest competition, the biggest sort of like struggle that I'm over trying to overcome is usually internal, right? It's like me versus my own perception of what I think I can do or what's possible.

And I've kind of So, on the kids side, I don't know that I've got an answer to that. But I think that the place that I've kind of landed is like my kids are going to have totally different upbringing than me. And rather than trying to pattern match to something that I went through, it's like be honest with the situation, right? They're well-to-do kids, they're going to have access to a lot of opportunities and kind of tell them like whatever you do in life, I wonder if they'll listen to this someday. Whatever they do in life, right? Like just make sure you try to be the best at it. Doesn't matter what you do, just try to strive for the best that you can possibly be at it. And I think that that's, you know, you can do that without a ton of struggle, too, right? Like there's a lot of examples of like lots of scientists that are like the children of successful people, right? So like you can I don't think you have to go through trial by fire to end up with the drive.

No, no. I think there's you don't have to have just like a shitload of tragedy in life to

Oh, is he? Yeah. Yeah.

Fascinating. Look this up.

Yeah. Yeah. It's wild. This family is incredible. I recommend people at least go to Wikipedia. You can just by clicking on their names, you can keep going down this rabbit hole for hours.

I mean, it goes back to the mathematician Bernoulli, right? I mean, it's like we're talking 300 years or so, I think. Yeah.

Yeah, that's right.

That was my optimistic list. I applied early to all of those.

Stanford was the one that if I got in was binding.

Yeah, I was really into science. So, I worked a couple of summers at this place called Jefferson Lab. You know about this a particle accelerator.

I worked there. I did some research. Published that sort of like was on the science talent search sort of track. I was also very driven at math and physics. Very very very driven at math and physics. And I knew when I kind of discovered that love, when I kind of realized that I could do that if I just tried really hard, I could do well at math and physics and that it was actually kind of hard for everybody, but if you just kept trying, you would get better and better at it. That was kind of the thing that motivated me to go down that path. And also growing up around my dad's love of it was like very infectious, right? So like he was very interested in the idea of grand unification, the idea of quantum gravity and had his own sort of take on like why others might have been wrong about their take on quantum gravity. And kind of growing up around that, I was like I remember the first time I kind of thought about this, I was like is there a theory of everything? Like could that actually be a thing? And if that is like what else in this world could possibly be worth understanding if not that like that seems like the most interesting thing you could possibly study. And so that was kind of like the passion that took me to physics. But like what gave me the confidence to do that? I did really well in school in high school, right? And I was like, 'Okay, actually, this is I think one of the first examples of like a thing that as I reflect back now, this is actually one of the first examples of a thing that I learned about myself that if you just set the goalpost like arbitrarily ambitious, right?'

You might you probably end up doing it like if you just want to do the really really really ambitious thing which in that case was like why can't I get into one of the best schools like why not I'm like very good at school already like why can't I go to Stanford. And granted in the high school that I went to I don't think that anybody had ever gotten into Stanford little town a little high school called Powhatan High School to have extremely fond memories of but I'm like why can't I do this.

Well, I was going to apply to a ton of schools if I didn't get in. Yeah. And so I got I think I got waitlisted at Harvard. I think I got waitlisted at MIT, which means basically just chuck you back into the general pool. And I got into Caltech and Stanford. And Stanford was binding. And I'd never been out here before. I was like, 'All right, here we go. Let me go on, you know, the website and buy a hoodie.'

I mean, at some level, yeah. Right. I mean, my love of physics and math is like it, you know, that's been like the intellectual north star my whole life. And I remember when I first when I was graduating from Stanford with my masters in math, I was like, am I going to apply to PhD programs? Like, what am I going to do? And this was right before the 2008 sort of like collapse. And I remember around that time my dad was like, you know, like you should start looking for a job. Like you have, you know, like a big student debt situation, like you know, we, you know, and like you should start making some money. And I was like, frankly, I was like, [ __ ] like I want to be an academic. And so I started applying for jobs and I'm like, well, I'll apply for jobs and maybe I'll do that for a year. And there was just a lot of economic uncertainty. And my dad was kind of like, you should take a serious look at getting a job because there was a chance that he was going to lose his job. So I think I went into the idea of getting a job very begrudgingly. And I also pretty quickly realized that I had basically no marketable skills, which was

Yeah. I remember like I interviewed at like Apple. I interviewed at Google and I just got the door [ __ ] slammed into my face like we're not hiring you. Like and the big thing then was I was like well I'm a mathematician and I know physics but they're like these are software jobs and I'm like I probably should have taken some software classes at Stanford. And I just remember when I was applying to these jobs like I did not know how to write code. Like I just never really studied it. And I was the kid at Stanford. I was like, I'm here to study physics and math and I'm pretty sure that I can learn the rest of the stuff on the job or at later point in life, but I'm not going to get a chance to learn foundational physics and math, but from like the greatest sort of students of this in the world, which are at Stanford, the professors at Stanford. And so I was like I feel like I was a bit of an intellectual snob in that regard and I probably should have like applied for more jobs. But yeah, so that's kind of how I ended up applying to a bunch of jobs. I was like getting turned down a bunch. I ended up getting a job in finance in Marin. And I remember I was like, okay, like how do I feel about this? Like do I care about this? Do I not care about this? And I remember pretty early on it did capture my imagination. And I'll try to explain why I found it intellectually interesting. A part of studying math and physics is the number of people that understand what you're doing, the number of people that care. As you get deeper and deeper down the research rabbit hole, it gets smaller and smaller and smaller. And so there was the distinct feeling that I was kind of wrestling with which was like I don't know that I'm doing something that's super relevant for the world if I'm going to go down the academic route because if you're studying I was like very interested in this topic called algebraic geometry and in particular like the zero sets of complex polynomial equations like what higher dimensional sort of shapes look like and stuff like that. But I was like, who the [ __ ] knows what this is or cares or like kind of thinking to myself like is this ever going to be relevant for humanity? Like might this be relevant in 100 years, 200 years? Like what is the point of this? And I remember getting into finance and kind of doing that in the beginning and realizing that I kind of saw the parallels between concepts that I'd learned in physics and these concepts in the markets and the one that I think really was the first one that captured my imagination was the idea of degrees of freedom. Okay? Right? Because if you think about the idea of like the stock market as emergent phenomenon versus the sort of primordial interactions, right? The primordial interactions are like buy and sell orders, right? And you put a market order, a limit order, a buy replace, cancel orders, right? And you have each individual market participant which, you know, has its own set of agendas. Like some people are doing arbitrage, other people are sort of doing long-term investing, other people are doing statistical arbitrage, so on and so on, right? And each market participant is doing these like little primordial interactions with it. But the emergent phenomenon is the stock price. The emergent phenomenon is like the market as a whole. And as you have more and more people doing it like you stop being able to draw a direct through line between the emergent phenomenon and these individual interactions which is very similar to statistical mechanics, right? Like the obvious one is like grains of sand falling down from like an hourglass, right? Like how do you explain that shape of like the way the sand slides down?

And so kind of that was I think one of the first times where I was like, 'Oh, interesting.' Like this is I can kind of use the physics brain that I have to think about this. On top of that, this is relevant for people. And I kind of realized that that was like this thing that I was really craving and that I didn't feel like I had really any exposure to academically. And so I think that was the thing that sparked my love of it.

My journey through building Robinhood was very focused around the products, right? And like why do people use these? Like why is this useful for people? Like what is the how do you build something that and this is kind of like the big intellectual question, right? It's like how do you as a person come up with something that millions of people find useful like that as an intellectual challenge felt utterly insurmountable. Like because if you think about that right it's like the world is a very efficient place and we all have things that we're doing in our lives and use cases and the way technology fits in and like how the heck are you ever going to find something that like is a big missing need for tons and tons of people.

Very proud of the company.

You and me both at this point.

Yeah. I mean I

Yeah.

It was a very different take on what

Are these questions offensive?

I'm just kind of gathering my thoughts here a little bit. The thing that was, this kind of comes back to what I was saying a second ago, like my love of doing that fundamentally was about a love of understanding how people think about these things. And so in the process of kind of figuring out this idea of product market fit, like how do you build something that people find useful, right? Like how do you do that? Because is it just like, oh, I had a good idea and because I think it's a good idea other people are going to think it's a good idea? I never found that it really worked.

And what was a pretty early lesson for me was because when we started the company, one of our first investors was Google Ventures. And I remember early on I was very interested in design. That was the part of it that I wanted to get good at because I had a huge love of Steve Jobs. Steve Jobs was my idol as an entrepreneur. And I'm like, man, that guy did amazing stuff with design. How did he come up with these products that people loved? And in those early conversations with Google Ventures, they were like, 'You should talk to customers. You should interview the people that are going to use your products because there might be a pretty big gap between how you think people are going to use it and how other people are actually going to use it.'

And I think finance is this thing that really puts that in utter and complete focus because the way that people use financial products, if you've got a lot of money, totally different than how the ordinary person does it. I contrast that with something like Google Maps, right? If you're Bill Gates and you're using Google Maps, probably the same as you or I or the average person on the street, right? You have to figure out where you're trying to go, type in the name of the place, and you just go there. Or Gmail, right? If you're a super wealthy person, you might have more emails in your inbox, but you're still using Gmail probably or Apple Mail or one of these things. The product doesn't look and feel fundamentally different based on your life circumstances.

Finance, totally different. And what I remember thinking was, and using all the products around the time, is like these are really targeted for people that are at or around retirement age. That's kind of what the value proposition of these were. I remember looking at the kind of people that used the stock market before Robinhood and it was an older demographic of Americans and it was usually sort of upper middle class, like kind of not quite the people that were using the wealth management high net worth people but the upper middle class people. That's kind of who was targeted at. And I remember thinking to myself, there's a reason young people don't use this stuff. It doesn't really fit the needs that young people have.

So what we did early on, and this was the part that I really loved, is we would take the prototypes of the products that we build and we would go and interview an audience of people that were just not really spoken to by the financial markets. We would actually go to Stanford campus on Saturday mornings and go hang out outside of the coffee shop and recruit college students and be like, how would you use this? What part of this is useful for you? And the stuff that kind of came through that was, in retrospect, a very big deal was like when you had an account minimum, right? It's like you had to have $5,000 to get started. That was a pretty huge intellectual burden for people because it's the idea of like they don't really even know if they want to do this or not. And then you make the gravity of the decision of whether you should invest in the stock market get that much heavier by being like you have a minimum before you get started.

Or the idea of having to pay a commission every time you trade, which was actually a pretty big deal for people. Even if you look at it, it's like, well, what's $5 or $10 here or there, which is kind of what the commissions were back then. It was a big deal for people and it was the thing that made them think twice about whether they wanted to do it or not. And so kind of systematically understanding the sort of preferences and how younger people or the younger generation of people would think about this and building the product for that audience of people with the kind of thesis that if you can make something culturally relevant for young people, this was my viewpoint. If you can make something culturally relevant for young people, it's actually the burden of the rest of society to understand why it's cool.

Right? Like young people are the ones that are the taste makers in our society. And so really focusing on that as the product was emerging from nothing was what the strategy was.

And also that was a fundamentally underserved audience and one that we were like, if we want to change the trajectory of how people on the whole think about money, which was another big part of this, was like young people. I remember at the time it was not cool to be on top of your finances. There was a sort of, you know, it's like, well, I don't care about that stuff was kind of like a badge of pride. I remember thinking to myself, 'What the [ __ ] is that about?' Like, it's not cool to not know what you're doing, especially when it's about you. You got to take care of yourself, right?

Oh, did he?

So those are some of the thoughts going into it. My mom actually was the one that got me into investing.

Uh, no. A little bit older, like in college.

Yeah, I mean, that's very cool. Kind of looking back on where the impact of the thing that created today, it's like there's a complete vibe shift amongst the younger demographic, right? Like people care about their finances. And I think that's a good thing.

Dude, I've gotten way more hostile questions than that.

I don't have to sugar coat that at all.

Yeah. Like a month or two before. Yeah. Right before.

Yeah. Yeah. Really rough.

Well, I mean looking back on it now, which luckily we can look back, I think it was like 5 years ago, a couple of days ago. You know, we had spent the better part of our adult lives at this point on this mission to democratize finance for people and to end up in that situation where as we had kind of brought this thing to the mainstream, this once in a generation event happens where the way I kind of reflect on it looking back is like there was a few forces that were on an absolute collision course, right? One was like internet meme culture which we can't control. That's like a thing that's happening on Reddit. There's no way you can put any kind of bounds on that. And we're not running Reddit, right? It's like another platform that that's happening. And at the same time there was like all of, people were in a shoe box for the better part of a year at that point with COVID and just sort of like everything that was happening on the internet was just getting exploded up.

Yeah. And that all that stuff on a collision course with like capitalism basically and we were unfortunately right at the center of that. And I remember when it was happening, our focus was on how do we do the right thing here and how do we survive this situation because it was extremely taxing on, you know, from the financial side of the business to the technology side of the business.

And there were all these conspiracy theories that were happening and at some point it was like the conspiracy theories have kind of cemented themselves in reality and the number of, like regardless of how much we push back on it, people just don't believe us. We're like, well, what do you do in that situation? Right? And there was kind of the realization that it was going to be a long slog to get back, right? It was going to be a long time before this thing turned around. Which I mean as a person that was one of the two creators of this thing, right? It was brutal personally. But it was also one of those moments where it's like we have to fix this. We have to bring this thing back. We have to do what it takes even if it takes a long time to do it. And I remember I was like, 'All right, like I just stepped back, but there's no way in the world that I can't not be spending 100% of my time focused on this thing. This is my life's work at this point, right? It's incredibly important that we get this thing back and make sure people understand we're doing this again.' That was like the north star for us always. It's like why does this company exist? It's the mission to democratize finance for people, right? And it was a very simple and kind of pure thing, right? It's like, as long as we're doing that and we're giving people access to it, over time, people are going to realize that that's the real reason that we're doing this stuff. There's not other reasons behind this.

No, I don't really care. I mean, look, it happened. It was, at the time it was, I mean it was just like overwhelming, like the amount of negativity was overwhelming and I remember thinking to myself, I'm like, do you use the product? Do you realize you're not paying commissions anymore? Like how do you think that happened? Like who do you think did that?

Right. It's like, yeah, we're not perfect, but like, how can you not look at the volume of what we've done and just think we're horrible because of this one day?

Yeah. But it was, yeah, it's kind of wild. It's 5 years ago at this point, right? To my perspective, it both feels like yesterday and 20 years ago at the same time.

None of it. Nope. Nope. I have no interest in that. I live the real version of it. I don't need to see the fictitious versions of it. But I remember as this was happening afterwards, various people on our team are like there's a book being written, there's a movie being written, there's another book being written. The first couple of times you just get like heart palpitations like holy [ __ ] what are they going to, like what fictitious version of this is going to show up and are we going to have to defend ourselves against some fictitious version of what happened here. And then at some point you're like, you know what, you can't control the internet, people are going to do what they're going to do. We're going to control what we can control and at some level I feel like I kind of left that situation with a level of zen.

I mean, we...