From Robinhood To Rockets: Baiju Bhatt’s New Innovation Frontier

Pleasure to be here.

Yeah, so I started out my entrepreneurship journey after I graduated from Stanford, actually.

Literally did. I actually came out here originally because I was studying physics and math. I was not interested in starting a business back then. I was pretty squarely focused on understanding the mysteries of the universe. And then I ended up graduating, stayed for a little bit longer, did my master's in math also at Stanford. And within about a year or so, I had a job for a little while, decided I wanted to start a company.

It really is. And I teamed up with my college roommate and best friend through most of college, Vlad, to start a company which didn't do so well. And started another one along the way that didn't do so great. And then had the idea for Robinhood. And actually, it's kind of interesting, one of our first offices was right down the street on High Street, I believe, and also was a garage.

That's a polite way of saying we didn't really have a good chance of succeeding. And we were reminded of this early and often, like what is a couple of scraggly-haired college kids? At the time, people kind of viewed us as programmers. What do you guys know about finance? What makes you think that you can build a finance company that's going to be durable or have this really audacious goal of building a 100-year brand? And I think that the insight that led to a lot of Robinhood was fundamentally a viewpoint on this generation of now, I guess, 10 to 15 years ago, young people then, and on the relationship of the market, with the capital markets, with the people that live here. So a little more specific. The backdrop when we had the idea for Robinhood was Occupy Wall Street. And it was a time when a generation of young people kind of looked at the markets, they looked at the capital market system, and they said this is broken. This is not for us and it favors the very few. And there was a sentiment around the time of literally occupying Wall Street. Tear the system down. Come up with something new.

2011, 2012. Exactly. And I remember at the time the insight that the two of us had was fundamentally one of outsiders looking in. Because both for me and my co-founder, our families moved to the US so that our fathers could pursue higher education and so that we would have, you know, at least the opportunity to have a better outcome and to be a part of the capitalist system in America. And this is kind of my viewpoint on this also, is like as an outsider looking in, this system is the envy of everybody in the world. And how could we be growing up in a generation where our peers fundamentally rejected this? It was kind of in dissonance with our lived experience where so many of our peers were not going to be part of the system, right? And we thought if they could be a part of the system and share in the outcomes, whether good or bad, would be another way of addressing the same frustrations that led to that sentiment. Lo and behold, the idea for Robinhood started taking shape. And we viewed access to markets as kind of a microcosm of what people are frustrated about. So if we, as technologists with some insight into how this younger generation of people feel, could address even this problem around the cost and the accessibility of the markets, then we could actually have a real impact on that feeling, even if in a kind of smaller microcosm of what the bigger sentiment was. And I tell you, looking back on it now after all these years, this is the one insight that kind of rings true because the mission of the company has been around democratizing finance for all. If you look back at that generation, if you were to ask a young person, how do you feel about your finances? Do you care about this? A lot of young people would have been like, oh man, that's not for me, you know? I don't care about that stuff. Which I think is ridiculous. Of course, right? It's like you should care about it because it's your own future. You need it. Of course. Right. It's not for anybody else. It's for you. Where I think if you look and you were to talk to an average young person today, they would say, oh, yeah. Of course I do. And I think if even if we played a small part in that sentiment change, then I think we did something impactful.

It's always a little bit of both and which one kind of was driving. So I'll tell you, this is one thing that I think I felt very strongly about and I think was one of the differentiators at least in the early days of the company is we would spend an inordinate amount of time talking to our customers even before they were using the product, even when it was kind of in development. We would actually come up with an idea for what the new thing we were working on was, whether we were introducing the product or working on some screen here or there in the app. And what we would do is we would take a small team, usually on the weekends, right down the street to the Stanford coffee shop. And it would usually be like a couple of engineers, maybe a designer, maybe somebody on the compliance team or just random people within the company. And we'd go and recruit people that were just in school and be like, hey, look at our product. What do you think? Right? Or if there was, you know, just it was a way of taking people throughout different parts of our company and just being like, let's not guess how people are using our product. Let's actually have them look at it, tell it to us. And we learned so much in doing that.

Yeah, I think it was the very first time we released the product into the wild. And I remember we had originally had a waitlist. And you don't know how the people are going to use it, it's out there and you're just, yeah, here we go. We kind of assumed at some level because it's like, well, we'll put a waitlist out there. People give us their email address and then we'll see what happens. Maybe we'll get a couple thousand people, maybe a couple hundred people. And we were shocked with the number of people that wanted early access to what would become Robinhood. Yeah. And I think that was the first time in my life I'd ever seen product-market fit. And man, it left an impression on me because I was like, aha, like this is what it looks like. And I think one of the hallmarks of, at least for consumer product, product-market fit is that whatever you kind of expect to see in terms of people signing up, if it does better than that. And the reason, and this may be a little bit of a tangent, but one of the reasons is that I think as humans it's really difficult to understand how a group of 100,000 people behaves. Like our little brains are not wired, you know, to comprehend groups of people that big. And the first time when you see something that really resonates with people. Not a person that I've ever met or person that I've met has ever met, but people that are degrees and degrees of freedom removed and they see this idea and they're like, oh, I could see how that could fit into my life.

I think it's quantitative and qualitative, right? They're two sides of the same coin. So, the simplest way is you use, or at least I, we would use the qualitative side for hypothesis generation. We interviewed 10 people, one-on-one interviews, and we kept hearing this thing. And then you say, hey, maybe a large portion of our customers feel this way. So the qualitative insights would oftentimes be the place where you get a lot of the ideas and then use data to see if this is a phenomenon that a lot of people really care about. One final thing on this, I think the reason I think this was such a differentiator for our company was it was fundamentally about this generation of people, right? Like young people when we started the company we felt were fundamentally underserved. Their finances were different than what the products that were out there were built for. You know, if you talk to somebody that's in their 20s, the legacy banks took it for granted that they'd have to use them and eventually it'd get interesting to them, but they weren't that interested in small little accounts or... Yeah. Well, if you're in your 20s and you're talking about, you know, this is a product for somebody that's five years plus or minus from retirement, like those are just totally different needs. Right. And the thing there was we kind of believed it was important for people to start caring about their finances even if retirement was decades away. Because you got to understand how this stuff works and you got to invest in yourself. Of course, the easiest way to retire is to start early. Start early and you're not going to have a problem. It's the people who start late that have a problem.

Right. And I'm kind of living that again right now with my new company, Cowboy Space Corporation. Yeah, the kind of people that are innovative, that really thrive in that early environment, they've got a certain sense of, as I think we as the entrepreneurs did, the sense of you don't know what you don't know and you're willing to try stuff, right? And you're willing to fail. Exactly.

US controversy. What are you talking about? Never heard it. Never experienced that. I mean, look, it was one of the defining challenges of the early days, right? It was a very disruptive company and we did the hard work. We did the investment in actually building the company out, making our systems reliable, staffing up with the regulatory officials, compliance folks, all those sides of the business to make it the durable company that it is, right? And it's work that we continue to invest in and view as very important. But yeah, as an early stage company, we had to grow it pretty quickly.

Yeah, it's really important, right? I mean, this is why we invested in... But you got to move, you know, your company needs to move fast. So yeah, I mean moving fast is just a byproduct of the company culture, right? I think the emphasis on moving with safety, making that one of our core values was something that we invested in pretty substantially throughout the history of the company. And look, there were times that we obviously could have done better, but we continue to improve on all the stuff that we could have. It is very tricky as a small company because a lot of the times, you know, the size of the company kind of always felt a little too small for what you're trying to do. And you have this like catch-up game of hiring people, building the company as it's getting bigger.

Couple.

Yeah, I mean I think this is different enough that I...

Absolutely. So, new company I started about two years ago. Recently renamed it to the Cowboy Space Corporation. Yes. It's on a mission.

It's called Aether Flux.

Yeah. That tells you exactly what it's about can work. So, Cowboy Space Corp. Got it. Exactly. We're on a mission now to power humanity from the high frontier. So, what does that mean? We're actually building, we're solving the biggest, we think one of the biggest problems for scaling AI, which is access to energy infrastructure. And the way that we think that this problem is going to be solved is not on Earth. We think that space is kind of an inevitable destination for powering the growing and growing needs of AI. And so we're building both a fully integrated rocket launch program. We're going to be launching our own satellites to space along with a novel architecture for this concept of data centers in space where the simplest version of it is rather than having the upper stage of the rocket filled with satellites, in our case we actually use the full volume and mass of the upper stage as the satellite. So the upper stage of the rocket unfolds and the actual fairing of the rocket becomes a giant radiator in space. You have large solar panels that deploy out to power what will be, you know, a megawatt class data center satellite in space. And like I said we're doing the fully vertically integrated solution so a bold and ambitious goal I guess some would even say fitting of a name like Cowboy Space Corporation. Yes, yes, I'd say so. But yeah we're trailblazing our own path to outer space.

Yeah. It's a very different thing from the substance of it, right? And first chapter of my life was building finance products on mobile phones. Now I'm building rockets and satellites for outer space. So what could possibly be related between the two of these? I think in both cases my journey at least individually as an entrepreneur was a novice to both fields coming in with some would say even an outlandish goal of trying to change them and revolutionize them. So I think in both cases there's the way of approaching it where you're a learner as you're building along the way. Things that translate over: building teams, raising capital, having a mission that drives people towards doing great, excellent work. Having a constant eye towards kind of the stuff you don't know and constantly trying to derisk it or trying to address the problem. So kind of a lot of these are even lessons that I feel like I'm relearning as I'm going through the motions. But one of the hallmarks I think is like whatever the problem is at hand at a startup, you've got so many different things to solve simultaneously. It's like pick the most important one, have an algorithm to figure out the most important one is. Try to address it. Try to address it relatively quickly and then move on to the next one. Move on to the next one. Move on to the next one. Just a series of problems to be solved and next thing you know you got a unicorn.

A platform. Yeah.

Correct.

Yeah, I mean I got to say this one is, it feels incredibly competitive. And the wave feels bigger too, and that last wave was big, but this thing is a monster. Yeah. I mean I don't think that in the last wave there was talks of nation states being as deeply involved to just power the technology to make it happen, right? It kind of speaks to the scale of this being a lot bigger. Yeah, I mean I think in both cases these were, I mean I think as much as it is an AI revolution that we're a part of, it's also the space revolution, right? And my thesis was that space was going to be a natural place for commerce and that there were verticals of the economy that were going to natively exist on this new platform, in this case lower orbit. And my thesis has been from the beginning of the company that energy would be one of those next industries and that there would be a company built that would be an energy grid for humanity in outer space. So again sort of emerging platform and looking for how verticals of the economy natively exist on this new platform. Now, that's actually pretty similar to, you know, our original thesis for Robinhood, which is mobile is this emerging platform. And our viewpoint at the time was that there wasn't a finance product on that platform that was truly natively built, at least in the brokerage space. And so that was kind of, you know, again, thesis have a little rhyme to them.

Yeah, don't wait. I think this is the thing that I oftentimes get approached by people that want to be entrepreneurs and they're like, well, I've thought about it, you know, and like whatever the idea is. Well, I've been tinkering on it and I think this is the right idea and I'm just waiting for the right time to do it and I just want to be like it's never going to be easier than it is literally right now. Like stop talking to me and go work on your idea. Like right now go do it. Stop talking to me. Ask me for a seed check and go do it right now. And I think there's a couple of things there. One is I fundamentally think that it's never easier, like as a young person, right, you have the advantage of having youth and the sort of energy to run down corridors that may not be the right one in order to find the right one, right? So use that to your advantage number one. Number two, the idea as you formulate it in the beginning probably is not the idea that you're going to end up with. And you should approach it as such. Like people approach entrepreneurship as like, what am I saying, that there's one way of doing it, right? Like once you have the idea then you move on to execution. And I find that oftentimes the right idea comes along the way. Right, could be a byproduct. Yeah, so I actually have a mental algorithm where I try to get to failure as quickly as possible and it's usually, ideally that you don't fail, but it's usually when you take the first idea and run it to its logical conclusion that maybe 80% along the way you're like, you know what, I don't know if this is the right idea, but I'm pretty sure that after doing this, like this is the real insight and you would never get there unless you just stop the conversation and literally go work on it right now.