I'm Matt Eert. I turned one collision repair shop into a multi-billion dollar business called Crash Champions. Now I'm sitting down with people who have also built great things so you can build something of your own.
Hey Matt, thanks for having me on the podcast today.
Yeah, excited to be here. What do we got going on?
Well, every industry has a gatekeeper as you know and today's guest actually broke through an entire industry to allow anyone to invest in the stock market.
Today's guest is Baiju Bhatt. He's the co-founder of the app Robinhood which basically changed how an entire generation thinks about investing.
I mean you think about my kids today. So my kids are what 18, 19 years old and they're already utilizing the Robinhood app to invest. I mean when you were that age were you investing?
Yeah. Wouldn't knowing where to look or anything about it.
Same here. But it's good, right? It gives them experience in the stock market. Gets them to lose, you know, tens of dollars here and there. But okay, so jumping back on this. So today Baiju is the CEO of a new company called Aether Flux.
So if things weren't hard enough here on Earth, he's actually taking it to space. So what they're trying to do is build satellites that beam solar energy down from space back here in Earth. I guess in a more efficient matter. It's really no big deal.
According to example of thinking big, right? So I always talk about thinking bigger is great and now he's thinking about going outside of Earth in orbit. So definitely space is a big thing.
Yeah. And speaking of like outside of Earth, right, or your environment, a person like Baiju who went from building a company in the finance realm, right, and investing and then now is moving to space, the space realm, if you had to build an additional company tomorrow, let's say, what traits do you think are the most important thing to take with you? Things that you maybe didn't learn or didn't have building Crash Champions that you would definitely take into building your next organization.
Well, yeah, definitely. You get the experience of everything. So I had no experience, right? Starting from kind of from scratch. So can't help but think that those experience, the experience gained applied over something else is much better. And would have a little bit of capital now where before it didn't have any. So maybe that helps it go faster.
Yeah. And if you had to choose from these three, and there's no silver bullet obviously to building a company, but if you could choose one of these three, so people over resources over cash, which one matters the most?
Oh man, I still go with people because I think getting good people is so important, harder to do maybe even than finding cash. So I think great people doing the right stuff can attract the resources and the money.
Like it. Well, I'm looking forward to your conversation with you and Baiju. It'll be good.
Yeah, it's going to be exciting. Okay, everyone. This is Pod Crash.
So excited to talk to you today both about, you know, maybe we spend a few minutes on your history and past, which I think is pretty well known, and then can't wait to talk about what you're up to today. You know, the thing for me is seeing something that you did not much different than me grinding it out as an entrepreneur bootstrapping something only you thought way bigger about what you were building. I got to say I was more a needs-based business and you built something that consumers could all take advantage of on their phone which is pretty cool. But did you always intend to own your own business and start your own thing? Does that go all the way back to childhood, too?
I don't think so. I mean, I kind of like to make a joke that I was probably not terribly employable coming out of college because I was just like I kind of look at where my life is now and I realize that I'm like a bit of a caricature of an entrepreneur. Like I was the person that was probably not going to be able to sit still at a job working for somebody else for too terribly long.
Yep. Worked in finance for a little less than a year after I graduated from college at an investment firm and that was just like it was cool. I enjoyed it. But like I knew pretty early on that if I was not going to be in academia, I was going to be an entrepreneur. And it's kind of interesting because looking back on it, obviously, you know, Robinhood was a very big idea.
And I talk to a lot of entrepreneurs these days or people that want to be entrepreneurs and people like, 'Well, what do you think? Is this the right time? Should I try it? Should I not try it?' And my message is pretty much always the same, which is like literally if you're thinking about this, like stop talking to me, leave and go get started right now because it will never ever ever be easier than it is right now. Like just if you think you want to do it, just try. Like there's no right or wrong answer to this stuff. And if you overthink it, you know, that's not really what being an entrepreneur is about. You know, it's about gumption and just like going for it and not being right always and kind of iterating through it.
Yeah. I thought it would be good to ask you about that because there were some not so great successes ahead of Robinhood, right? Like it wasn't just Robinhood out of the gate.
No, no, no it wasn't. There were a couple of ideas before that that frankly were like smaller ideas in the grand scheme of things and kind of didn't have the same sort of breath to them as Robinhood did because yeah like when I was starting out doing Robinhood with my co-founder, we were very young like I was in my early mid-20s.
It's kind of interesting because like a lot of people if they want to be entrepreneurs, they end up kind of finding an idea and wanting to do a thing, but the dividing line between where is the product and kind of where's the sort of service that you're providing, I think is kind of an interesting one because the thing about Robinhood was we kind of had a full idea. It's like if we can make this work and we can make that work and we can make that work and all these pieces come together, then this idea is going to come to life. Whereas I think a lot of people when they start out as entrepreneurs, it's a little bit of like consulting basically. It's like you have somebody that wants some version of what you're doing and you spend a lot of time kind of making that version of it where when you have a really clear idea of what the product is is when you kind of take the full agency for what the thing that you're building is.
Yeah. But yeah, the first couple of years were a bunch of failures and frankly even getting started with Robinhood, like we heard no from like countless investors and people just didn't believe that that was going to be a thing.
So that takes a special kind of belief in yourself to hear no that many times and keep going.
Yeah. I think the best entrepreneurs or the people that really make it. It's interesting. There's like how to say it like you have to have like almost an irrational belief in yourself and an irrational belief in your ability to do whatever the heck it is you're trying to do because generally speaking if you look at the set of circumstances when you're trying out to do something new like the odds are like not, you know, if you looked at it very dispassionately you're like yeah you're probably not going to succeed at this but the people that push through just do exactly that. They're like, 'It doesn't matter if the odds don't look good right now. I'm going to put one foot in front of the other. I'm going to iterate and I'm going to keep working until I can make the thing happen.'
Did your friends and family, did you have their support or were they doubters, too?
Oh, I had the support of my friends and family. I think my dad has kind of always been like, you know, Baiju you need to go and get a PhD, you need to go finish your education and there was definitely that backdrop when I was getting started as an entrepreneur it's like ah you know when are you going to go back and get your PhD when are you going to go back and finish your education and besides that I mean my parents were pretty supportive and obviously my girlfriend then wife now has also been kind of the wind at my back through a lot of it, right? Having the people around you that it's probably worth saying, right, as like I speak today as somebody that's created valuable companies before, has done this before, but there's a journey to getting there, right? And like nobody, the self-doubt is definitely there along the way and just the simple things that your friends and family do where it's like oh you know I knew you were going to be able to figure this out like I kind of knew you were going to be able to figure this out. You're like wow you believed in me in that way like that's awesome because you don't when you're in it you're not always thinking about like you know you're kind of living in your head in the process.
And having that sort of support from a place of love is very cool.
What I'm curious about is for me, you know, I wanted to own my own business and it started you know with really just the goal first of just making a living being able to pay the bills and the scale ideas came later. Were you intentional in I want to do something really big as you were trying your first couple ideas and Robinhood? Were you thinking big out of the gate as opposed to again for me it was just let me try to make a paycheck which took a long long time by the way and then came the idea of scaling it.
I think there's a progression that kind of comes as an entrepreneur. Like step one is as you start out as an entrepreneur, you just want to control your own destiny, right? Like there's the I think the first year or two where there's just a real excitement that comes from being like I'm doing it. I'm an entrepreneur. Like I'm making it happen. And then you kind of get to the point where you were able to pay for your own living and you have like a small team or whatever.
But I think for me at that point the next step kind of unlocked which was it's not just enough to be an entrepreneur. I want to do something that's really successful, right? I want to do something that creates something really valuable that is more than just a lifestyle business. This is kind of for me the way I thought about it. And then I feel like the next step after that is like not only do I want to be an entrepreneur and kind of pave my own path, not only do I want to be successful, but I want to do something that has this very bold vision for how the thing I'm doing is going to leave a mark on the world and ideally a positive mark on the world. And I think for me that version was like I want to build something that millions of people use and that millions of people find useful. That's kind of the way it progressed for me.
Did you have people that you looked up to that kind of help? I think maybe the difference in the time frame for me too. So I grew up in a real small town in Illinois and kind of graduated from a high school without computers. So, a little bit of how big things can get because of technology wasn't on my radar in my teens because that just didn't exist. You had the chance maybe to see others doing things through technology that had global reach actually. Did that help you? Did you see others like Steve Jobs and those type of people that maybe motivated you?
Very much. I mean, I really really looked up to Steve Jobs. If there is an entrepreneur that was very much my idol, it was Steve. And it's because he made these things that millions of people found useful and frankly created products that inspired this level of curiosity and sort of creativity in people because I remember the first time I used a Mac. I remember very distinctly what that experience was like because I remember I turned the thing on and I was like this thing is really quiet. Wow. Like how do they beat the like I remember feeling it's like this thing is super sturdy. It's really quiet. And I turned it on and I remember going through the screens and being like man all the icons are really nicely designed. And I remember finding myself going and scrolling through all the little menus and being like wow this is really well considered. And just kind of realizing that this thing that felt like it was in a final state of design almost was the byproduct of people having thought it through and then obviously this was like mid-2000s I think was when I got my first Mac and then obviously the creation of the iPhone, the iPad and just being like oh my god people made this like a person conceived this idea and brought it into reality.
And I think actually kind of makes me come back to a question that I feel kind of answered a couple of minutes ago, which is like what is the difference between a big idea and a small idea? And like what you know, because people often times were like, well, that was a really big idea that you created. And I wouldn't necessarily say that's how I thought about it. The way I kind of thought about it was in order for this idea that I had to happen, it had all of these constituent pieces, each of which was really hard. And I think it sort of necessarily makes you think it's like well you know if I want to build a consumer product in financial services that millions of people use and that eventually has this broad mission of democratizing finance for all like connecting a new generation of people to view the stock market as something that's useful and for them and that they can make a part of their lives. Then you kind of think about it and you're like, that's not something you're doing in a year. You know what I mean? Like that ain't happening quickly.
And no matter how hard you want to try to do it quickly, it's because there's all these constituent pieces that have to happen. And when you kind of put all these things together, you realize that the idea was like so multifaceted that it kind of was going to take nearly a decade to kind of breathe into reality. And from a certain point of view, it's like, well, that's a really big idea. And I would say from a more humble point of view, it's like, man, that's a really complicated idea that like, you know, 10 things have to break correctly over the course of a decade for the thing to happen, right?
When it works out, you look back and you're like, 'Wow, that was, you know, such a big idea.' But when you look at it and you're in the middle of it, you're like, you know, this is like almost unrealistically ambitious, right? And you kind of hear very rational, smart people be like, 'Well, how the heck are you ever going to pull that off?'
And you kind of realize that like the really bold, ambitious ideas when you look at them at the early stages look borderline irrational. It's like what makes you think you could, you know, have all these things break right over the course of a decade? And you're like, well, that's the only way my idea makes sense. So like I have to think about it over the course of a decade.
Do you think there's a lot of misconceptions? I feel like your success story and others like it which are awesome. I feel like sometimes people misconceive how hard it was especially as like what because once it takes off it does go pretty quick. So would you or maybe it wasn't hard. I don't know. I didn't live it with you, but I feel like people will see it and say, 'I could do that.' And I kind of feel like lightning strikes every now and then, and there's probably way harder work that went into it than we can see.
Yeah. I mean, first things first, it was really hard. It was not easy.
I not to discourage people, but I just feel like there's always work behind it. Like I don't know that anything that becomes great was easy.
Yeah, I think there's a pretty interesting thought here that I kind of ruminate over. And again, like we haven't gotten to this yet, but I'm back at it, you know, like I'm an entrepreneur again, like pushing a really big idea up the hill where, you know, it's like how the heck are you ever going to make this work? And, you know, realizing again in order for this idea to work, which is new company I'm building, which called Aether Flux. We'll talk about that in a minute. You know, again, everything has to break right for the course of a decade. But I kind of have this view on entrepreneurship which is that like the difference between working on something really hard versus working on something that feels easy. Or I guess to be more precise where you can wrap your head around it early on in the conception of the idea.
Okay, these aren't that different actually because whether you're trying to, you know, build gigantic orbital data centers that you'll need to sort of put pieces together over the course of a decade to do or you're building, you know, a mom and pop shop or you're building an enterprise technology platform or whatever, right? These things are all hard and oftentimes if you're working on something that you can kind of wrap your head around where it's like we're building this idea which works over here but for this other market over here. The reality is like somebody might have thought about that already, right? And so where the idea seems like more tractable or easier to do, you kind of quickly realize that other people saw it and as a result the idea is easier to understand but the competition is going to be way harder.
Whereas if you think of something that not a lot of people are working on that's kind of far field, the idea might be pretty hard to wrap your head around. But if you actually pull it off, like other parts of it might be a little bit easier or they might also just be really hard. And so the upshot of this that I kind of think about is like easy ideas versus hard ideas. There's like a baseline level of hard that everything has.
And I feel like a consequence of that line of thinking is you might as well dream big. And this is like one of my mantras in life is like if you dream small, guess what? Get ready to live small, right? If you dream big, you have a chance of making something big happen. So you might as well dream big because whether it's an easy idea, quote unquote, or a hard idea, quote unquote, they're all got a certain level of hard to them. And the related thoughts here are right like there's nobody on this planet that is going to believe in you more than you believe in yourself. And if you think other people should believe in you more than you believe in yourself, it's just wrong. Like that's not how the world works, right? So you got to bet on your own ideas, your own ability to do stuff, your conviction and stuff and you might as well dream big because at least then you have a chance of hitting it big. Like I've never in my life encountered somebody who dreams small and they're like, 'Holy, this turned out to be, you know, look at how successful I am right now.' You know what I mean?
Like you got it. Just smiling because I feel like I'm talking to myself because I spend all day every day getting people to think bigger and if you shoot for the stars you might hit the moon but you sure can't hit the stars by only aiming at the moon. It just doesn't work that way.
Bingo bingo. Pardon my language. Naysayers are a dime a dozen. You know what I mean?
Oh yeah. For every one person that's in the arena and getting it done, there's going to be a chorus of people that will opine on it, but won't lift a finger to make something big happen themselves.
I guess like a byproduct of that is like if you're dreaming big or you're trying to make something big happen, it's way easier to be a critic than the person doing the thing.
For sure. The way to not get criticized is don't do anything. Like if you're trying to do something, somebody's going to criticize you. You're dead right. So, a little bit on the whole you pitched Robinhood dozens and dozens of times before you got to a yes. Maybe what changed in the pitch do you think from the beginning to the end to where you finally got a yes? Because I look at things where I'm trying to get people's buy in or get, you know, go to my board and try to get them to say yes or get investors to invest. And if I get a no, I basically have and I didn't used to be this way, but now I look in the mirror and I say, 'Well, I didn't sell it good enough because it's a great idea. They said no. So, I got to look at what I did from my sales pitch point.' Like I just look at it like they're not getting it like I get it. So, I didn't sell it well enough. I got to go to work on that. Did your pitch evolve? Is that why it finally got a yes?
Yeah, it did. And I think there's a broader thought here which is actually at the early stages of an idea or a company like if you're putting something together, pitching and talking to investors is actually good insight, right? It's putting your idea in a place that's not very comfortable where people are going to be like, 'No, it's dumb. I don't believe in it. I don't believe in this. I don't believe in that. I don't believe in the way that you're pitching it. I don't believe in you. You know, like maybe I think the idea is great, but I think you're an incompetent fool that's not going to accomplish it.' I think I've received all versions of this, by the way.
Sounds like they made it personal sometimes.
I mean, look, when I was starting Robinhood, people would look at me and my co-founder and be like, you don't know how to build consumer products you've never done before. Never. I don't see any track record at like major tech company on your resumes. Also you're a couple of math and physics kids. Also the idea doesn't make any sense and you're like so you go through that and you realize that like one you can iterate on the way that you're pitching as you do it. But also at the early stages of a company. And this is kind of how I think about entrepreneurs when I meet them, when I back them, is fundamentally until you've got traction with your business when you're getting started. It's way more about the entrepreneur, right? And whether when you're talking to investors, like a lot of the times investors are looking to see if you've got that dog at you, you know, because whether the idea is right or not, like it's great if your idea is right on the first pass, but it generally if it doesn't evolve, you're not doing anything, right? So like whatever you think you're doing at like the seed stage or the series A stage is probably going to change and that's a good thing because that means you're being attentive to what the market's telling you. So it's not as much about the specific exact plan necessarily, but it's also about like who are you as an entrepreneur and why are you going to be the successful one at doing it, right? Like why do you have that dog in you? And this kind of connects with the point I made earlier, right? It's like when you're trying to start something new as an entrepreneur, it's not about the idea being perfect. It's about trying and it's about iterating through the parts of it you don't understand and trying to get to failure pretty quickly and then when you get to failure being like okay well at least I took the core idea that I had in the beginning and I saw it through from start to finish and when I got to finish I was like okay well that clearly wasn't the right thing but now I definitely have that insight like I got it. The reason it didn't work wasn't any of the things that I thought might not be the reason in the beginning, but it was that little insight that I figured out at the very end and I'm going to do it again. I'm going to get it right this time. Does that make sense?
It does. It resonates very very very well with me. I know just from my experience that they're investing in the jockey just as much as the idea. Like I couldn't imagine bringing some idea that's like ridiculous and having them want to invest just because the jockey is great, but they very much the entrepreneur the jockey matters and whether or not they believe in him for sure. So same experience.
I've never referred to myself as the jockey. I like that.
That's good, man. That's good. And you know, moving on to Aether Flux a little bit. Which I want to do. But I imagine now that you've kind of got the street cred of hey, I've done it before, it's probably a little easier than unproven the first time.
