Robinhood CEO talks about stock tokenization: What people want is "capital as a service"

Recently, Robinhood founder and CEO Vlad Tenev appeared on Harry Stebbings' well-known podcast "The Twenty Minute VC," where he outlined a blueprint for redefining the boundaries of financial services, including AI-driven operational efficiency, disruptive stock tokenization, private banking services, and cash delivery services. After the launch of the stock tokenization service, both OpenAI and SpaceX expressed dissatisfaction, issuing statements warning investors to "be cautious." However, Tenev revealed that he believes this reaction is understandable but unfair. He used a vivid introduction: It's like "digital NIMBYism"—in principle, everyone supports tokenization, but when it actually happens to them, the appeal isn't as strong. More importantly, Tenev pointed out the fundamental issue in the private equity market: the best companies have too many options and do not actively consider retail investors, leading to the "adverse selection problem." The key innovation of tokenization is that it "works without needing to be chosen by the tokenized company," which is precisely the breakthrough that Robinhood can drive. This resistance reflects the fundamental problem of the traditional private equity market—adverse selection. The best companies have ample financing options and therefore do not consider retail investors. This is exactly why Tenev believes tokenization must "not require companies to choose to participate." Robinhood's business model has far surpassed the initial concept of zero-commission trading. Tenev revealed that the company now has nine product lines with annual revenues reaching hundreds of millions, ranging from options trading to cash management, from cryptocurrency to the upcoming private banking services: AI-driven efficiency improvements are also key to this transformation. Tenev disclosed that Robinhood's AI applications in customer support "are actually even more powerful than those of dedicated customer support AI companies," with the engineering department's AI adoption rate approaching 100%. This mindset reflects Tenev's core philosophy: democratizing high-end financial services. Whether it's a civilian version of cash transport services or allowing retail investors to access SpaceX equity, it points to the same goal—eliminating artificial barriers in financial services. In terms of customer strategy, Robinhood is also undergoing a fundamental shift. From initially focusing on the simple investment needs of millennials to now serving "active traders of the digital native generation"—these individuals "have some similarities to gamers... locked into their own systems and have very specific needs." Vlad Tenev 00:00 In principle, everyone likes tokenization, but when it actually happens to you, the appeal isn't as strong. I believe that the tokenization mechanism must work without needing to be chosen by the tokenized company, and this is crucial. I do think that retail investors not being able to access Stripe's stock is a big problem. I shared this view with Patrick and John, and their response was something like, "Oh, well, we're just a small family business in Ireland." "Please don't tokenize my stocks." Harry Stebbings 00:28 Are you ready? Man, it's great to have you back. You know, interestingly, the last time you sat in that chair, the market cap was $35 billion, and today it's about $85 billion. So, it's been quite a good eight months. Vlad Tenev 00:56 Was that eight months ago? Really? That's incredible. I felt pretty good back then. You know, an increase in market cap is always a good thing. Things get easier. You walk taller. People listen to you. So we won't look at—of course, that's what they tell you; you can't help but notice—but... Harry Stebbings 01:14 Is this the most exaggerated nonsense in the company? You know, I'm friends with Daniel from Spotify, and Spotify's market cap is $145.4 billion, and I think he felt a lot better when it was at $14.8 billion. Vlad Tenev 01:22 Yeah, he did. I find it hard. I don't know if it's easier for other companies, but my product pushes stock price information into your brain, and once you use it, it's hard to ignore. So I think it's especially difficult for companies like ours. Harry Stebbings 01:40 That's the most abstract thing, isn't it? You're all looking at Robinhood's stock price, so what I'm saying is—doing a podcast about podcasts. I just wanted to start with this because it's so crazy. I tweeted last night that it's a bit like a funny story from Wall Street, which is Robinhood's crazy rise last year. If you had to attribute it to one or two things, what do you think Wall Street has realized now that it didn't before? Vlad Tenev 02:03 I think we've been saying the same thing for the past two years and clearly articulating the strategy; it just takes time to validate whether it works. In a way, we've been lucky that many things have gone well. Harry Stebbings 02:22 When you consider cost stabilization / reduction, to what extent is this management efficient and just becoming more streamlined rather than introducing artificial intelligence, which is the driving force behind it? Vlad Tenev 02:32 AI is a significant part of it, but I think we've been quite secretive about our internal use of AI. We've been discussing it in general terms and have started rolling out AI products. In fact, our AI system Robinhood Cortex was just launched to customers earlier today. But its impact on internal teams—from software engineering to customer support—really large internal teams—is enormous. Harry Stebbings 03:06 In the field of software engineering, Benioff asked, what percentage of new code at Salesforce today is generated? What do you think your code percentage is? Vlad Tenev 03:12 I think that sounds good. I mean, it's hard to say for these agent systems, right? We've transitioned from GitHub Copilot (an autocomplete system) to Cursor, and now we have things like WindSurf—what I mean is, almost all the code is written by AI, and the adoption rate in our engineering department is close to 100%. It's even hard to determine what code is human-generated. If I had to guess, it should be a minority. Harry Stebbings 03:51 Yes. You mentioned that customer support is another important pillar. Vlad Tenev 03:54 In terms of the work we do, we are the best at this—actually even stronger than dedicated customer support AI companies. Harry Stebbings 04:04 Built in-house, or using off-the-shelf? Vlad Tenev 04:06 We have built our own. Harry Stebbings 04:07 Why did you decide to do that instead of using an off-the-shelf product? Vlad Tenev 04:10 Well, when we first started, off-the-shelf companies like Sierra were just getting started. Big companies—we are a major customer of Salesforce—were not that mature yet. So we developed a lot of things. Then, for companies like Robinhood, a lot of the complex work lies in system integration. That is, we need to pull all the data to answer customer queries. And we also started taking actions—like, based on your query, we need to take some action. This requires deep integration with our backend systems, and I think most vendors haven't really figured out how to do that yet. Harry Stebbings 05:00 Why have you remained silent on Wall Street's clear appreciation for the AI efficiency stories of public companies? Vlad Tenev 05:08 Yes, I mean, we've been thinking about how to better tell that story. One thing we've been considering is: should we hold an event, like a product launch, similar to the one we just had in the south of France? Harry Stebbings 05:22 That's the structure; geographically, dude, why did we choose it? Let's just go with the south of France. Vlad Tenev 05:26 Yeah, well, we might still go to the south of France because we've been there before. But there are a lot of great places to hold events there. Yes, and I think there are enough topics and content to discuss now that it should be a really cool event Harry Stebbings 05:41 Will you turn your customer support tool into a SaaS product and then open source it for everyone? Revolut's human resources tool has already done this. Vlad Tenev 05:48 We've discussed this internally. I think the challenge is that its value lies in the deep integration with our proprietary data, and I'm not sure we want to go into enterprises and deeply integrate with their proprietary data. But overall, I always ask one question when doing anything: If we developed a great tool internally, could we really offer it as a service to others? Because that's the way to ensure it stays excellent—external pressure comes from customers, not just the internal team. So I am very supportive of this platformization. Harry Stebbings 06:26 In what areas do you think artificial intelligence has not yet reached the level you hope it would? Vlad Tenev 06:30 I mean, I think hallucinations are still a problem, and there's a lot of work to be done to address this. This is actually one of the reasons I serve as chairman of Harmonic. The question is: Can we design a system that inherently prevents hallucinations and ensures that every step of reasoning is logical and resonates with the previous step? So I think this requires a different approach to generating AI outputs—every output needs to be checked before it is produced, and there should be a very clear measure of correctness. I think this will be an interesting system that will change everything. Harry Stebbings 07:25 We will discuss Harmonic because it’s super exciting—congratulations on the Series B, super exciting. The product expansion is absolutely crazy. I previously spoke specifically with Neil Mather. He talked about the speed of product development. From our perspective, you started with young first-time traders, added options and cryptocurrencies, attracting potentially higher-risk investors, then speculative traders and high-volume onlookers. Robinhood Gold and cash management brought more... Harry Stebbings 07:51 I guess my question is: How do you view the different types of customers you serve today? Given the recent massive product expansion, how have your thoughts changed over time? Vlad Tenev 08:02 I think there’s been a significant shift, which is that recently we’ve started to consider not just millennials and the new generation Z customers, but also active traders—yes, like the digitally native active traders. This is a very different type of customer. I mean, these people—you can almost imagine they have some similarities with gamers. They have screens, headsets, fancy keyboards, but they are locked in. They are locked into their systems and have very specific needs. They need to be at the forefront of technology and innovation. They care about speed; they care about latency. We really need to understand what these customers are thinking in order to design products like our futures ladder and Robinhood Legend Harry Stebbings 08:50 Why did you decide to enter this market? Vlad Tenev 08:53 Back in 2019, we realized that this market was important to us, but we didn't really invest in it at that time. So we developed a strategy: to create an extremely simple and easy-to-use commission-free mobile app. Our target was first-time users because our argument was: first-time users would benefit from it—they like ease of use, and if you're just starting with a hundred dollars, commissions are indeed a significant barrier. This was not possible before. As a result, after launch, we started to attract some active traders, by the way, they had a large trading volume, but we didn't really go after that customer base. This is because the value proposition of commission-free trading is so strong that if you're paying a thousand dollars in commissions each month, you would do all the cumbersome research on Robinhood. Although Robinhood was not designed for that purpose, its value proposition remains very strong. So, we inadvertently built an active trader business without even trying, and we realized this. At that time, we thought a significant portion of our revenue—far exceeding our expectations when modeling for the first-time investor business—was driven by a clearly defined, limited customer group. We had overlooked this because our previous approach was very effective. But by 2022, we found that we were not treating this customer group well; they were even more important because they were actually very resilient. Because they were active, they had bearish strategies: when the market was down, they stayed active; when the market was sideways, they could do long leg options. From that point on, we realized that we were not serving them well. They turned to other platforms; their growth outpaced ours. Therefore, we arranged for some of our core employees to focus on making Robinhood the best platform for active traders—not just to provide them with a perfunctory service. I think this was actually the primary reason for our business transformation. We realized that this was actually at the core of our business, and we needed to invest in it to have the resources to do other things well. Harry Stebbings 11:21 Do you think stock meme-ification is a good thing or a bad thing? Vlad Tenev 11:27 What does stock meme-ification mean? Harry Stebbings 11:29 When you have something that directly grabs public attention and really captures the spirit of the times—like, I think you're directly putting CoreWeaves and Circles in the mix now, but the GameStops of the world— is this a good thing? Because it actually brings more people into the market—they can learn; they are entering the market for the first time—or is it fundamentally a bad thing because, frankly, it is exaggerated; it is small-scale, artificially inflated—because it is real, but it is not based on fundamentals? Vlad Tenev 11:59 I think the reasons people are buying these stocks are often quite different from what you know about meme coins, or even the GameStop situation in 2021. I believe they have reason to believe these stocks will become huge industries. For example, CoreWeave is one of the few opportunities for public market investors to really invest in artificial intelligence—the growth of the AI industry. I mean, if you want to invest in AI as a retail investor, what options do you have? You have Nvidia— Harry Stebbings 12:35 AMD. Vlad Tenev 12:36 Yes, I mean AMD, but actually Nvidia's market cap is $4 trillion, right? Tesla, AI might be, I don't know, 10, 20 percent of that story. So, in areas with valuations below a trillion, you won't have many opportunities. So when CoreWeave came along, it was just touching AI at a lower level, and people were very interested in that. Then there's Circle—you have the stablecoin industry, right? People are betting it will become a big deal, which can be seen as a direct exposure to stablecoins. Harry Stebbings 13:10 In terms of exposure, you guys have created a very compelling new product, which can be said to be the tokenization of private companies. Tell me about the decision-making process for this new product. Take me into that room—how was the discussion at that time? How did you decide to create this product? Vlad Tenev 13:30 Yes, I mean, it was clear from the very beginning. In fact, I wrote an article in The Washington Post in January advocating for tokenization. Harry Stebbings 13:41 You said tokenization would be the biggest innovation in finance over the past decade. Vlad Tenev 13:46 When I published the column, it might not have been that clear yet. But I think tokenization has two very significant benefits. One is like stablecoins: if you're outside the U.S., this will be the easiest way to access U.S. assets, so stablecoins—very popular for those wanting to get dollars outside the U.S. Similarly, I think stock tokens will become the best way to invest in U.S. stocks and other assets. That's the use case outside the U.S. Even within the U.S.—we can actually easily invest in U.S. stocks through Robinhood and other platforms—there will also be very strong use cases, which are those illiquid assets that have not yet successfully achieved trading or allowed retail access, such as private companies, as well as real estate and even artwork. So I think this makes a lot of sense in the U.S. We want to prove we have the technology to achieve this. Outside the U.S., it will work—it really does work—the rest is just a matter of details, and in the U.S., it requires regulatory transparency. We want to start with two companies that I think are significant, hard to access, challenging but in high demand, which are SpaceX and OpenAI Coincidentally, when I was writing a commentary on this issue, I used these two companies as examples. Harry Stebbings 15:30 Absolutely correct. More and more LPs are calling me now, asking if they can get these two tokens. Yes, so I completely agree with your point about the demand side. My question is, to help me understand—if it’s a token, it’s not equity, or it’s a representation of equity. What exactly am I buying to get it? Vlad Tenev 15:48 Yes, what I want to say is, it’s analogous to stablecoins. Basically, if you think about it, we put some traditional assets in a box; we tokenize them one-to-one, and then these tokens are actually placed on a tradable blockchain. So for stablecoins, for example, Circle has wrapped some U.S. Treasury bonds and cash in a box to support freely tradable tokens. In this way, we can gain access to private company stocks or other types of investment opportunities, because OpenAI doesn’t have stock—they are a nonprofit organization—so they have profit-sharing units and convertible interest securities, which will provide stock once successfully converted into a for-profit entity. OpenAI is particularly complex, but you can think of it as an investment opportunity in an SPV, like a traditional tool, and then held by Robinhood, tokenized, and sold to retail investors. Harry Stebbings 16:50 They are a bit unhappy about this. Are you surprised by their dissatisfaction? Do you think it’s unfair? Vlad Tenev 16:58 I think that part is unfair. They issued a statement saying “please be careful,” which I think is a bit excessive, but I think it could be worse. I mean, from OpenAI’s perspective, I understand they have a lot to do—they are trying to transition into a for-profit entity. The last thing they want is for someone to tokenize their stock. They don’t even understand what this is all about, but at best, it’s just a confusing distraction. Vlad Tenev 17:33 But I want to say, this aligns with their mission. Their stated mission is to create general artificial intelligence and ensure it benefits all of humanity. Therefore, one way to ensure it benefits all of humanity (and not just executives and wealthy investors) is to give humanity ownership of it, which has yet to be achieved. Some of the most important companies of our time have not yet been accepted by retail channels, and I think that’s a huge problem. Harry Stebbings 18:05 Do you have anything different you want to do regarding release or information dissemination? Vlad Tenev 18:09 I think there’s always something to learn. For example, I think this notion of “it’s somewhat unsafe” is not very positive for us. I mean, if you look at the Twitter feed of OpenAI’s newsroom, that tweet is actually their most popular tweet ever. It received the most likes and retweets, which surprised me So I didn't expect it to resonate so much. I don't know—it's too new, and I don't know if I would make different choices. Vlad Tenev 18:47 I think the issue is that, in principle, everyone likes tokenization, right? But when it actually happens to you, it's not as appealing. It's a bit like digital NIMBYism, right? Everyone will say: "Oh, great, tokenization—let's implement that there." Yes, the general problem in the private market is that the best companies have many options. They can raise funds from anywhere, so they don't consider retail investors. This leads to the problem of adverse selection, where basically only those companies that have no other options will consider retail investors. That's why all the initiatives so far to give retail investors access to these opportunities have failed. So I think it's crucial for the tokenization mechanism to work without the tokenized companies having to choose to participate, and I think that's actually the innovation we can drive: we found a way to make it work without companies having to choose to participate. Harry Stebbings 19:56 Are you worried that regulation will block this model? Because if this model works, it could be your biggest source of revenue in your current business. Vlad Tenev 20:03 I think this could bring about huge changes. I want to say that in the EU, this is very clear—I mean, the EU has established clear regulations for crypto assets in the form of MiCA. In the U.S., there's definitely more work to be done. This involves two elements: the accredited investor law and the cryptocurrency law, both of which need to be enacted to truly realize this. I believe—one of the reasons we showcase this in the EU, besides allowing our EU customers to access all these amazing products—is that it can demonstrate the real value of this to other countries around the world. You hear SEC Commissioner Hester Peirce say that tokenization is an innovation, and the SEC must stop setting barriers and start embracing these innovative technologies. So I think we actually have support from both sides to improve this. Harry Stebbings 21:05 How do you view inventory? I mean—you mentioned before that inventory is the gold standard. Can you minimize inventory down to the series level? B? You know, looking at Harmonic's situation—I know you announced a round of financing today, and Perkins was involved; you're the chairman—if you put Harmonic's token on Robinhood, a lot of people would want to buy it. Would the price be that low? Where do you think the accessibility limit for Harmonic is? Vlad Tenev 21:32 That's a good question. My goal is to minimize costs as much as possible. It's interesting because we are somewhat straddling cryptocurrency and traditional finance. If you talk to people in the cryptocurrency industry, they will tell you: "Well, the future is on-chain issuance. What you're doing now is not ideal compared to on-chain issuance because equity is on-chain from the very beginning." "And I tell them: nobody really cares about on-chain issuance. The only place people will consider on-chain issuance is in your mind. What people want is capital as a service. If you are an entrepreneur, you want funds to enter your bank account quickly and with as little friction as possible, and I think that is ultimately the end result. You should be able to use Robinhood—or other services—perhaps upload some information, and in fact, you will be competing in the market, so the market will force you to provide the clearest and most engaging information possible. You press a button, the funds enter your bank account, and you can go back to running your business. I think this is a logical conclusion: capital is needed at all stages, but perhaps the most interesting stage is the early stage. I believe if we succeed in doing this, there will be more startups—like, creating a startup will become easier. Harry Stebbings 23:06 I mean, this is incredible, it’s actually paying homage to the promise of crowdfunding that has never really been realized. So I completely understand. So, what will the tokenization phase look like from 6 to 12 months? What assets will you tokenize? When will you do it? And how will you do it? Vlad Tenev 23:21 Well, currently in Europe, the publicly listed stocks are fully listed, and we have about 200 of them—all the large stocks are listed. So we will continue to promote until we reach thousands. We will also make private equity tradable, so we— Harry Stebbings 23:37 Inventory—sorry, pause for a second—when you really focus on trading volume and see where the trading volume is concentrated among which companies, why is the inventory of thousands of companies so important? Do you need more than 200? Vlad Tenev 23:50 I think you never know what will become popular. The market always has a long tail effect, you know, something interesting can happen with a random company, and we really don’t want to be in the business of picking winners and losers and deciding what stocks you want to buy. We want to keep it simple, generally speaking, if it’s listed—I mean, we really want to offer it to all listed companies. Unfortunately, there are some issues, stocks with earnings per share below a certain level have a long listing time, and some of them have turned into scams, and I think we want the listing exchanges to address this issue. So we have to deviate from this model to some extent. But ideally, if it’s listed, we just want to open it up, and that’s it. Harry Stebbings 24:42 So from 200 to 1000, that’s amazing. What else? Vlad Tenev 24:46 So there are a few things. In terms of tokenizing publicly listed stocks, the product will be rolled out in several phases. We are currently in the first phase, and every time we mint or burn a new token, we will release it to the market—Nasdaq or the New York Stock Exchange, that is, the physical exchanges—for trading. So, every time you buy a token, a new token will be minted The second phase is that we will put these tokens on our exchange Bitstamp, so you can trade directly with these tokens against other cryptocurrencies and USD. This requires phase 1 because we need to mint a large number of tokens to achieve liquidity. So phase 2 unlocks 24/7 trading. Then comes phase 3: you can interact directly with the blockchain for self-custody; you can do all the lending and borrowing—everything DeFi, self-custody—and that's when things really start to get interesting. I think crypto wallets will provide a top-notch experience for all these tokenized assets. Harry Stebbings 25:55 Is this a billion-dollar revenue line for you? Because now you have nine products that have reached the billion-dollar revenue line. Vlad Tenev 26:01 Crypto wallets have only recently started to monetize. I think we are just beginning to monetize. Harry Stebbings 26:09 When you look at these nine, which one do you think is the most undervalued? Vlad Tenev 26:14 Yeah, I don't think I've even thought about that. I mean, we break it down into nine revenue streams, but I just think, you know, customers will become subscribers of Robinhood Gold, and once you become a subscriber of Robinhood Gold, we will encourage you to use all of our products and increase your average revenue per user on the platform. So, you know, we do break it down into business lines—we've considered that—it’s like a world map, right? What I really care about is how many customers we have, how much money they are putting on the platform, and whether we are meeting all their financial needs? I think you can segment it in many different ways, but if they put all their money into Robinhood, I think we would be very happy. Harry Stebbings 27:12 Five years from now, which do you think will be the biggest revenue source? Vlad Tenev 27:17 I think cryptocurrency is interesting because, at the moment, cryptocurrency is somewhat of a separate part of the business. The way we look at it, the outside world sees it as a different asset, right? It’s like: how big is your cryptocurrency business compared to your options business or stock business? It’s like: you are trading an independent asset. But what we are starting to see is that cryptocurrency will become the underlying layer behind everything, right? In some way, everything will be driven by cryptocurrency. Harry Stebbings 27:58 What do you mean by that? Did I get it? Vlad Tenev 28:00 Well, let me give you an example. Right now, Robinhood Gold has an interest component where you can earn interest on cash. Once we stabilize the stablecoin, cryptocurrency will also have this feature—you will be able to earn interest on your stable assets, which will be a significant business, and you might think of it as part of cryptocurrency But this is similar to a savings account. Prediction markets—over time, you will see overseas companies like Polymarket—this is a prediction market business, but it is also driven by cryptocurrency. Harry Stebbings 28:40 My pleasure is that I have no ego, so I'm not afraid to ask very stupid questions. I went out with Jack from Airwallex—I don't know if you know him, but he's smart and one of the most underrated founders. He is very pessimistic about the future of stablecoins. How do you view the stablecoin market in the next three years? Would you share his negative sentiment? Vlad Tenev 29:01 I don't know if I would say it that far. There are definitely use cases. I mean, just to give an example. Robinhood uses stablecoins; our company would use Bitcoin. So we have this use case where we trade a lot of cryptocurrencies, which requires settlement with counterparties. I mean, if our customers buy a large amount of Bitcoin, we need to remit dollars to the counterparty, and then they will send the cryptocurrency back to us. Everything goes smoothly during the trading hours from Monday to Friday because we can settle intraday—we can send them dollars, and they will send the cryptocurrency to our wallet, and everything goes smoothly. But what happens on the weekend? If the banks are closed, and something goes wrong in the cryptocurrency market, and our retail customers want to buy billions of dollars worth of cryptocurrency, what do we do? Vlad Tenev 30:00 So you might find yourself in a difficult situation because we can't move funds. So the next situation is either you have to take on counterparty risk—that means you have to trust that one party will ultimately deliver the dollars when they are able and send the cryptocurrency to them in advance—this is tricky because if you have a lot of counterparties, the counterparty risk multiplies; or you have to have credit lines, right—credit line costs with counterparties are high; or you have to pre-fund in your bank accounts, which may be different—you know, unless you force them to centralize, all counterparties tend to have different bank accounts—so you have to pre-fund and plan for potentially huge transaction volumes, which is very capital inefficient. But stablecoins— Harry Stebbings 30:52 Hearing these different options gives me goosebumps— Vlad Tenev 30:56 These are not good options. You know, we had to deal with this issue back in 2021, and our solution was to raise a lot of funds and pre-fund, hoping that the funds would be enough, right? But now with stablecoins, we can send you dollars over the weekend—they arrive at our counterparties immediately; they can send the cryptocurrency back—problem solved. So this is a real use case that has prompted us to adopt it. So, the 24/7 real-time flow of dollars is real, and I think you can't deny that outside of the U.S.—especially in developing countries—stablecoins have become the most convenient way for retail to access dollars I believe this is real. They have basically replaced American Express traveler's checks, and foreigners living in countries with currency depreciation hoard dollars to keep their money safe. Harry Stebbings 31:52 Are you ready for a truly unfair trial? Let's wait and see. Out of nine products, there are 100% millions of dollars in revenue. If I forced you to shut down one today because of focus, which one would you shut down? Vlad Tenev 32:02 Oh, good question. Well, let me tell you one that I wouldn't mind — even if it fades away over time, I wouldn't mind: instant withdrawal revenue. So we make money by allowing customers to instantly withdraw Robinhood's funds to their bank accounts. You know, it's a good business for us. Harry Stebbings 32:28 How big is that business? Vlad Tenev 32:30 I would say it's nine figures. Yes, I mean, we can verify that, but I think it's one of those — whether realized individually or combined with other related factors. But yes, it's a big business. You know, our general manager over there is very proud of this business, he hates me saying this, but I tell him, "Hey, if your business goes to zero, I won't be sad," because that means no one is withdrawing from Robinhood. If everyone just keeps their money in Robinhood, we would feel great. So one of our goals is to eliminate all the reasons people want to transfer money to external bank accounts. Harry Stebbings 33:10 Good answer! What a brilliant answer. It's like being asked in an interview what your biggest weakness is, and you say, "I just work too hard." Well, I'm with you on the whiteboard — we're planning a new product. Vlad Tenev 33:24 Blackboard. Harry Stebbings 33:25 Come on — oh my god, I hate your store, just near the school. What is the product you most want to do but haven't done yet? Vlad Tenev 33:33 In the financial services space? I mean, the private market is an area I've always been very interested in. I think we already have plans, and the time gap between conception and launching new products has shrunk a lot. I mean, if you told me six months ago that I would be embroiled in controversy over tokenizing the private market and delivering it to customers, I would have been surprised, but our team executed very well. I think what we talked about before — this is still a future thing — providing this capital as a service: as long as you press a button, the money will be deposited into your account, whether it's a business account or a personal account, I think that would make a lot of sense. Harry Stebbings 34:34 A market that no one can conquer, but everyone wants to conquer — many have tried; Nick, what Revolut wants is this market — that is, those ultra-high-net-worth individuals and super high-net-worth individuals working at Goldman Sachs, BlackRock, or JP Morgan Do you want this market? Vlad Tenev 34:49 Yes, I think—yes, we are interested in that market. Harry Stebbings 34:55 How do you win when no one else has? Vlad Tenev 34:57 Well, to be honest, I don't know if many people are really working very hard. I mean, I think those who earn $100,000 a year—it's also a very good market. And I feel like you might want to say, "Well, why don't we serve those who earn a million, five million—a super high net worth individuals?" For example, if you could really become my family office, I think that's a very attractive proposition, and that's actually my goal: I want to put all my personal assets under Robinhood. And I think we are not far from being able to fully meet my needs—probably a few years away. Harry Stebbings 35:42 What are we missing today, but what do we need to meet your needs? Vlad Tenev 35:46 Yes, private banking—by the way, we are promoting this business; it is progressing very quickly. As far as I know, this is the first truly digital private banking product designed for... I mean, private banking has always been a very physical experience. All the functions require branches; no one has been able to figure out how to provide this service without branches. Let me give you an example. Vlad Tenev 36:11 Cash delivery—I don't know if you've heard of this cash delivery innovation, but I'm very excited about it. Harry Stebbings 36:11 Please tell me. Vlad Tenev 36:11 One service that high net worth individuals can enjoy in private banking is cash delivery. I was really a bit shocked, but First Republic Bank (which unfortunately has now collapsed) had this service where they could deliver cash to your home. You don't have to go to an ATM; they provide this service for withdrawing large amounts of cash, and the cash is delivered in an armored vehicle. Harry Stebbings 36:47 I haven't heard of anyone using an armored vehicle to deliver thousands of dollars in cash. I'm from Goldman Sachs—I don't think you do armored vehicles. Does this really exist? Vlad Tenev 36:59 It's a big deal. That's why we liked First Republic Bank; you know, going to the bank and using an ATM is annoying—it's much more convenient to have the bank deliver cash to you. Harry Stebbings 37:11 Do you still use cash? Vlad Tenev 37:17 For tips. Harry Stebbings 37:19 Oh, you're American—this is an American thing. Why do you need $50 in cash? Vlad Tenev 37:26 You have to tip. A lot of people provide me services—you know, you have to tip each of them. Harry Stebbings 37:32 That's amazing. Vlad Tenev 37:33 My employees also use my services, and they need to tip people too, so it's like a complete operation process. Harry Stebbings 37:40 So are you going to participate in cash delivery? Vlad Tenev 37:43 So we ask ourselves— Harry Stebbings 37:45 Brand—can you imagine a cash delivery truck for a dollar a ride? Vlad Tenev 37:50 What would a mass-market product look like? Well, not everyone needs a cash delivery truck—it's expensive—but everyone would have DoorDash or Deliveroo, right? So, can we solve the problem of needing to go to an ATM for cash, so that whether you're at home or out, cash can be delivered directly to your home? I've encountered this situation many times—my wife goes to the hairdresser, she wants to pay in cash, and then I have to find an ATM. It's annoying. So yes, we will solve this problem by combining on-demand delivery logistics with all our work in the financial sector, so you can have cash delivered to your home. Vlad Tenev 38:42 Yes, actually—first of all, for digital banks without branches—nothing disrupts the private banking atmosphere more than having to go to a 7-11 convenience store or CVS to get cash. It's not a premium experience. You also don't want to send customers to other banks—like, I'm sure Citibank is great, but if my clients are private banking clients, I don't want them going to Citibank. Vlad Tenev 39:16 When people still have needs, and you usually go to a branch to handle them, how do you implement a branchless model? Well, you should bring the branch to the customer. That's exactly what we want to emphasize—high-net-worth individuals also have such services—they have people come to meet all their needs. If you need notarization, they come to you. If you need to buy a watch, they come to you. That's our goal—I think that's also how we serve our clients. Harry Stebbings 39:44 The most interesting part of your business is that different participants will take different entry points. If you look back at your business, you'll find that commission-free trading was your entry point to the first batch of customers. Harry Stebbings 39:55 Look at Revolut, foreign exchange is core. Then look at Monzo, which actually started with just a checking account that was hard to obtain, but that was core, and then every project expanded from there Harry Stebbings 40:05 To be honest—I wish I could say this, after all, I've learned quite a bit about you over the years—I used to think your commission-free trading mechanism was the most lenient. It felt relatively relaxed and youthful—but I was clearly wrong. Looking at your approach, why is commission-free trading the best entry point? Or rather, is it not—just because of execution? Vlad Tenev 40:32 Yes, that's a good question. I think you can build a big business through any entry point, and Monzo and Revolut have done very well, achieving impressive results. I do believe that ultimately... Harry Stebbings 40:49 Are you more impressed by Revolut or Chime? Vlad Tenev 40:51 I think Revolut impresses me more. Revolut's product speed is fast, its international scale is large, and the founders are quite impressive. I feel there won't be too much conflict between us. The same goes for Chime; there won't be too much conflict because their target customers are those who live paycheck to paycheck—they actually don't invest. But we also want to enter this space; we want to continue to delve into the lower-end market and ultimately serve those who have no money to invest. Vlad Tenev 41:26 I do believe that Robinhood's ultimate goal also involves checking accounts—we need to get people's paychecks. If everything goes through Robinhood, it becomes easier. Harry Stebbings 41:37 What's the timeline like? Vlad Tenev 41:39 The private banking business will soon be launched to the first batch of customers—what I mean is, it's about to launch, depending on when it rolls out. Harry Stebbings 41:47 What are your thoughts on the regulatory strategies that companies like Monzo, Revolut, and Starling are taking to compete for banking licenses? What do you think when you sit down and analyze these strategies? Vlad Tenev 41:59 I think it depends on different jurisdictions. In the U.S., the approval process for banking licenses has traditionally been very cumbersome—your board members must approve new products, so it’s tricky. Harry Stebbings 42:13 In the UK, Monzo— Vlad Tenev 42:17 As far as I know, Revolut does not have a full banking license here, but they haven't been affected. Harry Stebbings 42:23 Well, frankly, that's an advantage—it allows for product speed that Monzo cannot achieve because they have regulatory capital requirements, which means they can't act as quickly. Vlad Tenev 42:32 Yes, but you know, on the other hand, there are certain advantages—if you want to be someone's bank, you can say, "We are a bank, 100 percent insured," and some people do care about that. Harry Stebbings 42:43 I completely understand. Behind all this, there is actually a machine at work—you know, Neil—I think it is this machine that makes us completely different from you. When I asked him, he replied in capital letters: "I love Vlad," which made me very happy. He asked very specifically: How did Vlad go from a culture and company that hardly shipped anything to—sorry, as he said himself—shipping at an incredible pace today? He asked as specifically as possible. Vlad Tenev 43:13 In 2020 and 2021, we were busy expanding and a bit overwhelmed. At the end of 2019, we had 800 employees, and now we have about 200 million dollars in annual revenue—that's still a big business—but by the end of 2020, our annual revenue was close to 1 billion dollars, so our business grew about four times. It was tough because all this happened while we were working remotely in response to the pandemic. We hired all these people, and in hindsight, we brought in too many—operations became difficult. These were all newcomers who didn’t know how to work with us; we were all remote; we had to scale customer support—this was before AI emerged—so if we quadrupled our customer base, we had to scale support by more than four times. This was to ensure we had truly excellent talent, involving some cultural changes to reposition the company in the post-pandemic era, bringing employees back to the office so we could integrate better. Harry Stebbings 44:37 How important is it to be present in person? I make sure everyone in the company is present in person. Vlad Tenev 44:42 I am someone who values face-to-face communication very much. I feel our operations have improved a lot since then—in fact, it was very painful for us because we started out working remotely, so I had to completely eliminate remote work, which annoyed a lot of people. Harry Stebbings 45:00 Is it really as bad as you think? Many people would say, "You can't bring them back." I think few doors are one-way. Vlad Tenev 45:06 Not at all, I haven't encountered a one-way street. It is doable, and we have done it, and I think this is a great example. Harry Stebbings 45:16 Okay, we are back in the office, we have new employees—what did you do to really enhance product delivery, iteration, and shipping? Vlad Tenev 45:25 It is crucial to ensure that everyone is accountable for their business outcomes. This may involve a dozen small things—you just have to do it—if you really want to deliver quickly, you have to adjust your corporate culture to develop towards optimization goals In the financial services sector, it's difficult because you also have to protect people's funds. The key is not to oppose speed and security: I want you to do your work in a high-quality (that is, secure) way—but once you know what to do, you must execute relentlessly. Harry Stebbings 46:19 Steve Jobs: "No, I want it to be beautiful—and today." I completely understand. What is the framework for deciding which new products to pursue and which not to? Vlad Tenev 46:29 I think I follow my intuition quite a bit. Harry Stebbings 46:34 The future—I agree with this—will be characterized by dictatorial and solid leadership. Vlad Tenev 46:36 It definitely has to be top-down—the vision must come from the top. Harry Stebbings 46:50 How many direct reports do you have? Vlad Tenev 46:53 I think it's about 15 to 20. You know when it's necessary, and it's very clear when you need to be top-down: people disagree, they disagree with each other, and if that goes on for too long and it's not intentional, it can be a sign of dysfunction—that's when you need to be top-down. Vlad Tenev 47:17 But I don't think it has to be extremely top-down. I will strive to clarify our goals and ultimate objectives and give a lot of autonomy to those who are detail-oriented and can focus on their work, allowing them to decide how to achieve those goals. This way, they become the owners of the projects and take responsibility. So I won't micromanage everything. For some things, I will have some opinions—like products I'm familiar with, how events are held, how launches are done—but I make it clear that my general managers, product leads, and those close to me can veto my opinions if they feel I'm wrong, and I encourage them to call me out loudly and say I'm an idiot. Harry Stebbings 48:16 Are there aspects of your leadership style that you know are not good but you continue to do anyway? Vlad Tenev 48:23 I feel like I'm criticized for having low emotional intelligence. Harry Stebbings 48:30 Do you work on that, or do you just accept it as part of who you are? Vlad Tenev 48:36 I try to improve a little. Maybe I'm not good enough, but I think my emotional intelligence is decent. Harry Stebbings 48:46 Do you tie your happiness to the company's performance? Vlad Tenev 48:50 I try not to think about it, but sometimes it's really hard to avoid. I'm pretty happy right now—I was a bit down in 2022 and it took a lot of effort to get out of that state Harry Stebbings 49:02 Have you ever felt frustrated, thinking this just doesn't work? Vlad Tenev 49:08 It just doesn't work relatively speaking. I never really felt that the company was in danger of bankruptcy—we raised $6 billion in 2021, which could be a good thing or a bad thing. Harry Stebbings 49:32 Before you went public? Vlad Tenev 49:33 This was after the IPO, we raised a large amount of money, about $1.5 billion to $2 billion, and during the GameStop period, we raised $4 billion. So we had a lot of cash, but that time was painful, and I did ask myself if I was suited to do this. I went from leading a growing startup to going public—a lot of people think that's the pinnacle of a company's development—to managing layoffs and leading the company back to profitability. Harry Stebbings 50:11 Do you enjoy being in the public eye? I've never seen a CEO in the public eye who really enjoys it. Vlad Tenev 50:15 In fact, I enjoy being in the public eye. Harry Stebbings 50:16 You do? Why? Vlad Tenev 50:18 I think it's great because at least from my perspective, we've turned what used to be a hassle—like earnings for all public companies—into a fun opportunity to connect with shareholders and the retail investor community. Our recent earnings call—we had a lot of fun. Our vision is to make it like a post-game press conference: I have the Robinhood logo behind me—just like after a game, whether the team wins or loses, it's fun. Harry Stebbings 51:44 Really? Do you think Stripe should go public? Vlad Tenev 51:46 There are two points: I think Stripe can do whatever it wants—they can raise unlimited amounts of money privately. I do think it's a big problem that retail investors can't get access to Stripe's stock, and Stripe has always been a defining company in the industry. I shared this view with Patrick and John, and they gave me the feeling of, "Oh, we're just a small family business in Ireland—please don't tokenize my stock." Harry Stebbings 52:21 I love it. Man, I would love to chat with you quickly—I could talk to you all day. What's the biggest thing you've changed your mind about in the past 12 years? A few months? Vlad Tenev 52:31 In the past 12 years, the market predictions have sparked a lot of thought. Some people see it as gambling, while others see it as investing—we're dealing with those challenges. There's also the issue of national regulation, regulated by the Commodity Futures Trading Commission (CFTC), independent applications, independent brands, fully integrated—we've basically fully integrated This is a cutting-edge field. The private equity market will be very tough; some people don't like what we're doing, but I'm motivated to make it work and believe we will succeed. Harry Stebbings 53:47 Which competitor do you respect the most? Why? Vlad Tenev 53:50 I think Revolut is a good choice—you can see that their culture is very victory-oriented, and I respect them a lot. I respect Coinbase—led by its founders, it's a tech company in our field. Of course, there are also some smaller companies that are eager for success and are doing very well. Harry Stebbings 54:30 Are there any other less obvious but super interesting ones? Vlad Tenev 54:33 I find Altruist very interesting. They are our competitors in the RIA custody business (we provide products to advisors). Their tagline is "We are the Robinhood of the advisory world." We believe we can also become the Robinhood of the advisory world. Their CEO is a nice person and often attends various advisory meetings. A few months ago, we entered this field through an acquisition, so it should be very interesting. Harry Stebbings 55:29 We put this up yesterday, right? I must have driven you crazy—your level must be impressive. I heard you have a personal trainer now, after many years without one; you used to train by yourself. Vlad Tenev 55:43 Well, you didn't see my article in Men's Health, did you? I was in Men's Health about a year and a half ago—but I didn't make the cover, and I was pretty disappointed; I felt that cover was mine to have. Harry Stebbings 55:56 If you want, I can order an armored car for you. Vlad Tenev 56:04 Anyway, there was an issue of Men's Health where I trained with my coach. In that episode, I deadlifted nearly 400 pounds. But for some reason, they showed a picture of me deadlifting 135 pounds. Harry Stebbings 56:18 We'll publish it—it will be made into a video with beautiful visuals. Wow, great job! What changes have you made to your training? Vlad Tenev 56:28 I started training with a coach. When I had my first child, I injured my back—I was lifting very heavy weights, and my disc herniated. I had planned for surgery but backed out at the last minute; it took me two years to get rid of the pain. During the COVID-19 pandemic, I trained with a coach—the first year was remote training, just bodyweight and dumbbell exercises, and then gradually resumed weightlifting, completely restructuring my training approach from scratch. Harry Stebbings 57:41 Yes, when I heard you were on "Men's Health," I was hooked—that's the coolest thing you've said in the past hour. What purchase under $500 has had the biggest impact on your life? Vlad Tenev 57:53 TOTO Washlet smart toilet seat. Harry Stebbings 57:54 What is that? Vlad Tenev 57:55 It's a toilet seat—if you need to poop, just press a button, and it will clean you up without needing toilet paper, very eco-friendly. Harry Stebbings 58:12 You don't need toilet paper? Vlad Tenev 58:14 Yes, but just to dry off. Harry Stebbings 58:18 You must feel disappointed when you go somewhere and don't have it; you must say, "I have to go back home." Vlad Tenev 58:24 It's really disappointing. Harry Stebbings 58:26 We'll get you one next time you come. Vlad Tenev 58:30 You should buy one. I just try to avoid using the bathroom elsewhere. Harry Stebbings 58:36 You've shown me armored trucks and Japanese toilets. Vlad Tenev 58:43 There are even portable ones—if you don't want to spend $500, you can get a battery-powered gadget for around $30. If you're willing to spend $10,000, you can get a fully functional toilet. Harry Stebbings 58:56 Well, okay— Vlad Tenev 58:56 —yes, it has some nice features. Harry Stebbings 58:58 Make sure to ask about it at Christmas. What’s the most important advice about marriage? Vlad Tenev 59:04 I've only been married once, so I don't have much advice. Harry Stebbings 59:09 But you've been through the towns—Christ, Vlad—and you're still together. Vlad Tenev 59:16 My wife and I have different opinions on this: she prefers to come home after work like in the TV show "The Office," strictly separating work and life. I prefer to fully integrate—colleagues at my home, meetings during holidays, kids coming to work. It can't be just one way; both must be balanced. Also, you have to be fully and unconditionally committed—believe you can solve any problem. Harry Stebbings 01:00:11 Second to last question: what difficulties turned into good things? For example, I was expelled from school when I was 17... Vlad Tenev 01:00:26 By 2022, seeing our stock price drop from irrational highs to below cash levels was disheartening, but it prompted us to make some decisions and investments, and now we are benefiting from them. Harry Stebbings 01:01:13 Last question: Where will Robinhood be in five or ten years? Vlad Tenev 01:01:24 Our vision is to enable everyone—whether individuals or businesses—to buy, sell, or hold any financial asset or conduct any financial transaction. This means moving from being U.S.-centric to global, and from only serving retail institutions to serving businesses and institutions. Harry Stebbings 01:01:51 Man, I really appreciate you. You've always been so good to me—thank you for playing along; it's been a lot of fun. Vlad Tenev 01:01:59 Always a pleasure—thank you for the invitation. Harry Stebbings 01:02:01 I'm now looking forward to buying this toilet seat. The market is risky, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Invest at your own risk