Baiju Bhatt

Founder of Robinhood

THIS CHAT HAPPENED ON February 18, 2016

Discussion

Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
Hi! I'm Baiju Bhatt, co-founder of Robinhood, a zero-commission stock trading app and winner of Product Hunt's “Sexiest Product of the Year.” I'm a proud Stanford alum. Ask me anything!
Niv Dror@nivo0o0 · VC at Shrug Capital
@bprafulkumar Hey Baiju, thanks for joining us! Would love to learn more about the original waiting list before Robinhood launched. I read that it grew to more than 700,000 people? How did you make that happen?
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@nivo0o0 hey! we had no idea it was going to get that big when we first released the waitlist. The thought at the time was that we wanted to create an ability for us to be able to allow the people most excited about robinhood to get it first, especially since we knew there were so many third parties we would be integrating with (and we had no idea how they would respond to lots of signups).
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@nivo0o0 funny story: I remember sitting the conference room at our old office in redwood city the day before we released the waitlist wondering if we should even show a number, because we were worried only a few hundred people would sign up ;)
howardlindzon@howardlindzon · stocktwits, Social Leverage
@nivo0o0 @bprafulkumar is Howard Lindzon at Stocktwits the handsomest person in fintech after you and Vlad?
Asis Panda@asispanda · User Experience Designer
@bprafulkumar Rodinhood has removed the entry barrier to stock trading and exponentially increased my trade learning...very altruistic, thank you. But how do you guys plan to stay alive or more frankly how do you make or plan to make money?
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@asispanda we make money the exact same way all other financial services companies make the majority of their revenue: monetizing assets (interest on cash deposits) and offering lines of credit (margin trading).
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@asispanda when we first came up with the idea for Robinhood we were curious exactly how big brokerage houses--- etrade, ameritrade, etc-- monetized. we researched their public filings -- 10k annual reports -- and we were surprised to find that commissions accounted for a minority of their overall revenue. the number that comes to mind is ~20-30% of annual revenue, though those numbers change every year. that helped focus our thinking: if we could operate our business 20-30% more efficiently, we could eliminate the most annoying cost of using an online brokerage.
Do you have plans to educate people in the stock market?
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@pmigueli yes. it's something I think about often. the biggest challenge, in my opinion, is educating newcomers about investing and the stock market in a new, engaging, interactive way
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@pmigueli so much of the rhetoric from the talking heads on wall street is about how complicated the stock market is and how average people should become experts before they get started. I wholeheartedly disagree with this, it's borderline fear mongering and has resulted in so many Americans instead just not investing our public markets
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@pmigueli the answer instead is to allow new comers to get started in a way that lowers the stakes, so they can invest what they feel comfortable investing. from my observation, a very significant part of a new comer educating him/herself is about actually buying a stock (usually 1 share), and observing what happens.
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@pmigueli the big surprise for most people is that they won't make or lose a fortune in a day (or a week or a mont), and that a big part of investing is about taking the long view
@bprafulkumar For one investing long-term via Robinhood who seeks advice is there a referral program to a large FA firm or is there a possibility of an advisory branch in the future?
Stuart Sim@stusim · Student
I love how the product has taken down the barriers to entry for investing and is disrupting the industry; its beautifully designed aswell. However, I'm somewhat concerned that people will jump into trading without educating themselves on basic market principles/investing ideas now that there is no (upfront) "costs" to trading. The risk will increase with the availability of margin lending through the app. How are you going to balance this great advancement of introducing new people to stock markets while managing reasonable investing decisions by these green investors/users?
Alex Kim@ajk1000
When will RobinHood Instant be available?
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@ajk1000 our PR team would have my head if I told you ;)
Morgan@plastictrees16
@bprafulkumar @ajk1000 Some people have had the beta however I've only seen it on Android, is it available on iOS?
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@plastictrees16 @ajk1000 yup there's a beta for iOS too, though I think it's smaller
Morgan@plastictrees16
@bprafulkumar @ajk1000 Any word on how we can join the beta?
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@ajk1000 we'll have a major update coming in the next few weeks, not months. it's our biggest focus right now, and something we've been working on getting just right since early q4 2015. I'm excited to see how you like it :)
David Flatow@flatowpotato · @Stanford Statistics Data Science
Zero-commission trades and a integration with Quantopian is a powerful combo. Where do you see this side of the business going and would there be limits placed on algorithmic trading via RH? Also, The Martian the Book or the Movie?
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@flatowpotato I think it's a very powerful combo, and I think there's huge potential there. we're working actively with quantopian to make it more awesome, adding features like margin trading will make it even more useful. so, more details on that to come.
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@flatowpotato also, definitely the book. I thought the movie was not very good, it was like saving private ryan... in space.
David Flatow@flatowpotato · @Stanford Statistics Data Science
hahaha couldn't agree more
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@flatowpotato it's like matt damon didn't even read the book. I was pissed when I watched the movie. also I am a shameless space nerd
David Flatow@flatowpotato · @Stanford Statistics Data Science
Me too. Sometimes I tweet at Neil Degrasse Tyson
Mohit@mohitify · Developer - Product - UX - Mobile - SF
Hi Baiju, Any plans on releasing web based trading website or gonna stick with mobile app for now?
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@mphreak we are actively working on it. hey web engineers: please join us and help make this happen sooner!
Brian M@brianmrtz · Day Trader
@bprafulkumar @mphreak I would love to contribute to the design of the web platform :D
Jay Tong@jaytongsays · Product at General Assembly
@bprafulkumar @mphreak been wishing this forever. got bored for a few nights and made this to start (jaytongsays.com/stocktracker)
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
"The Intelligent Investor" by Ben Graham and "One Up On Wall Street" by Peter Lynch are some of the most popular classics on stock picking/investing. What are you favorite books/blogs on stock trading/investing?
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
What were the biggest legal and regulatory obstacles you were facing when building up Robinhood?
Tim Edwards@tim_edwards1
Will there be IPOs on Robinhood?
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@tim_edwards1 none planned, but that would be dope.
Victor Tucker@victortucker01 · I love apps that make me happy.
hi @bprafulkumar so can you give a some tips or tricks im just love the learning love to do new things that is why im asking you to some hints about promote to apps ??? thanks im wait for your replay i hope you are answering me @victortucker01
Mohit@mohitify · Developer - Product - UX - Mobile - SF
When is your app gonna have more historical data about stocks and some more tools to research stocks?
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@mphreak I think you'll see Robinhood become a much more serious tool for research through our integration partners (stocktwits, etc) and when we launch our web app. In my opinion there's a hard limit on how much data we can cram into our mobile app before it starts to suck for newbies, and that's something we are careful about
Andrew Ettinger@andrewett · 👟 @wearAtoms // ex @Twitter @ProductHunt
What % of users are trading on margin? How does that compare to what was expected?
Jonathan Friesen@jonfriesen · Software Engineer
@bprafulkumar Two years ago you mentioned you didn't have any plans to open up to Canada, is this still the case?
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@jonfriesen yes. it's more complicated from a regulatory perspective than we had initially anticipated, but something we very much plan to offer
Jonathan Friesen@jonfriesen · Software Engineer
@bprafulkumar Darn! Thanks for the response :)
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
Have you had any serious acquisition offers from any of the major banks/financial services institutions? Are you planning on taking Robinhood public/growing it into a large private company?
Hi Baiju. Are you thinking to add pro (paid) features to Robinhood? In this case, which ones?
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@pmigueli yup, margin.
Mordechai@mordyny
Can you please gives us some info. on the future of cash transfers, or as called on Twitter "Robinhood Instant"?
Renee Leibler@renee_leibler · US Operating Partner, VOCO
How did you get traction pre-launch?
Anvesh Junnuthula@anveshreddyj · Product @Roku
Hi Baiju. Any plans of introducing a way to short stocks, buying options, trading after market hours ? Thanks.
Baiju Bhatt@bprafulkumar · Chief Mouser, Robinhood
@anveshreddyj all things we are working on currently or plan to work on in the not too distant future. we are a small team ~40 humans & house cats, but we are growing and hopefully will be able to add features faster as the year goes on