The Easiest Way to Start Investing Today— No Experience Needed (You Just Need $1!) with Robinhood CEO

Summary

Podcast Summary: On Purpose with Jay Shetty

Episode Title: The Easiest Way to Start Investing Today— No Experience Needed (You Just Need $1!) with Robinhood CEO
Release Date: May 21, 2025

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Introduction to Vlad Tenev and Robinhood

In this episode of On Purpose, host Jay Shetty welcomes Vlad Tenev, the CEO and co-founder of Robinhood, the pioneering commission-free investing platform. Jay highlights Vlad's unique journey from a first-generation immigrant from Bulgaria to leading a company with over 23 million funded customers and $119 billion in assets under custody.

Early Life and Influences

Childhood Challenges and Resilience
Vlad shares poignant childhood memories that shaped his approach to business and finance. At [04:19], he recounts the trauma of his father moving to the U.S. alone to study during Bulgaria's hyperinflation years, leaving Vlad to adapt without his father for two years. This experience instilled in him a deep understanding of the importance of money and resilience.

Memorable Firsts
At [08:51], Vlad describes reuniting with his father at JFK Airport after two years, a moment marked by intense emotions and his first airplane experience. These early experiences of separation and financial instability profoundly influenced his drive to succeed and build secure financial systems for others.

Educational Journey and Shift to Entrepreneurship

Academic Excellence and Pressure
Vlad attended Stanford University, initially aiming to study theoretical physics. He discusses the immense academic pressure he faced, driven by his parents' fear of deportation and the necessity of excelling to secure a future in the U.S. [16:30] He highlights his early aptitude in mathematics, which his father, an economist, fervently supported.

From Physics to Finance
While at UCLA pursuing math, Vlad's interests shifted following the global financial crisis in 2008 [35:32]. Witnessing friends lose jobs and the collapse of Lehman Brothers pushed him to explore entrepreneurship. This pivot led to the founding of Robinhood with his college friend Baiju Bhatt.

Founding Robinhood: Mission and Innovations

Name and Vision
At [26:18], Vlad explains the origin of the name "Robinhood," inspired by the animated character he watched growing up. The name was chosen to reflect the company's mission to democratize finance, making investing accessible to everyone, not just the wealthy.

Breakthrough Innovations
Vlad identifies three key innovations that fueled Robinhood's success:

1. Zero Commissions: Eliminating trading fees made investing feasible for individuals with limited capital [43:51].
2. No Account Minimums: Allowing users to start investing with as little as $10 removed significant barriers [43:52].
3. Fractional Shares: Enabling the purchase of partial shares of expensive stocks democratized access to high-value investments [43:47].

Notable Quote:
"We wanted to make investing accessible, so we eliminated commissions and account minimums, allowing anyone to start with as little as $10." – Vlad Tenev [43:52]

Challenges and Growth

GameStop Saga and Public Scrutiny
Vlad addresses the highly publicized GameStop incident, where Robinhood faced significant backlash for restricting trades. He discusses the intense scrutiny and negative press that followed, emphasizing the emotional toll it took on him personally and professionally [73:23]. Vlad notes how this event propelled Robinhood into the public eye, forcing him to become more authentic and empathetic in his communications [76:12].

Adapting to Market Changes
In 2022, Robinhood's business model was challenged by rising interest rates and a market downturn. Vlad explains how the company had to pivot quickly, diversifying revenue streams and focusing on customer satisfaction to navigate the turbulent economic environment [86:01]. This strategic shift led to profitability by 2023 and the establishment of multiple revenue-generating business lines [89:23].

Notable Quote:
"Designing our infrastructure with scalability in mind from day one would have saved us quite a bit of grief." – Vlad Tenev [84:49]

Product Expansion and Future Plans

Robinhood's Credit Card
Vlad introduces Robinhood's innovative credit card, designed to simplify rewards and provide equal benefits to all users, regardless of their credit history [109:03]. Features include virtual cards for enhanced security and a straightforward rewards system offering 3% cash back on all categories.

Retirement Products
Robinhood has expanded its offerings to include Individual Retirement Accounts (IRAs) with competitive matching and no reliance on employers, addressing the modern landscape where job mobility is high and traditional 401(k)s may not suffice [67:01].

Leadership and Personal Growth

Authenticity in Leadership
Vlad reflects on his growth as a CEO, transitioning from a stoic, script-based communicator to a more authentic and empathetic leader [74:07]. He emphasizes the importance of understanding customer pain points and maintaining resilience through public challenges.

Work-Life Balance and Personal Well-being
Balancing the demands of leading a high-profile company, Vlad discusses his commitment to personal wellness. He employs strategies like rigorous fitness routines, journaling, and digital detoxes to maintain mental and physical health [103:30]. His supportive marriage and family life are also highlighted as crucial elements that help him stay grounded [106:51].

Notable Quote:
"If you could create one law that everyone in the world had to follow, it would be to delete existing laws before adding new ones." – Vlad Tenev [115:37]

Key Takeaways and Lessons Learned

Invest Early and Educate Yourself
Vlad advocates for starting small with investments, emphasizing that even $1 can be a powerful starting point thanks to Robinhood's fractional shares and zero commissions [43:03]. He encourages new investors to educate themselves through available resources and to build investment habits early.

Customer-Centric Approach
A significant lesson Vlad shares is the importance of focusing on the needs of the most active and sophisticated users. By addressing their dissatisfaction, Robinhood was able to enhance the overall user experience and drive company growth [94:30].

Scalability and Adaptability
Vlad underscores the necessity of designing scalable infrastructure and being adaptable to market changes. This foresight enabled Robinhood to navigate economic downturns and maintain profitability [84:49].

Notable Quote:
"The biggest mistake new investors make is buying something just because someone on the Internet says to. Think for yourself and make informed decisions." – Vlad Tenev [45:36]

Conclusion

Jay Shetty and Vlad Tenev wrap up the conversation by delving into Vlad's personal philosophies and final insights. Vlad shares his definitions of truth, the importance of seeking it, and his thoughts on the Lindy effect—how the longevity of something contributes to its perceived truth [112:50]. He concludes with a reflection on eliminating unnecessary laws to foster innovation and efficiency [115:38].

Final Quote:
"Be honest, don't lie to others, but most of all, don't lie to yourself." – Vlad Tenev [111:27]

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This episode provides an in-depth look into Vlad Tenev's journey, the founding and evolution of Robinhood, and the personal and professional lessons he's learned along the way. Listeners gain valuable insights into democratizing finance, overcoming challenges, and maintaining personal well-being amidst leadership pressures.

Transcript

[Jay Shetty]

You're listening to an iHeart podcast.

[Vlad Tenev]

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Robinhood is a very controversial name and I think that's what made it powerful because you either love it or you're kind of like repulsed by it to some degree. But it doesn't sound like a finance company. The name itself sounds tells you a lot about what the company stands for and what the products help you achieve. The Number one Health and Wellness Podcast Jay Shetty Jay Shetty the one, the.

[Jay Shetty]

Only Jay Shetty.

[Vlad Tenev]

Hey everyone.

[Jay Shetty]

Welcome back to On Purpose, the place you come to listen, learn and grow about how you can become happier, healthier and more healed. We talk about everything from Personal growth.

[Vlad Tenev]

To finance, relationships to business.

[Jay Shetty]

And today's guest is someone who has built something truly culturally phenomenal. And I think a lot of you may be using the product already, a lot of you definitely have heard about.

[Vlad Tenev]

It and a lot of you may.

[Jay Shetty]

Have a lot of questions like I do. And so I'm so excited to have on On Purpose Vlad Tenev, the CEO and co founder of Robinhood. Vlad is a first generation immigrant from Bulgaria. In 2013, Vlad co founded Robinhood and pioneered commission free investing with an intuitive mobile first interface. And today Robinhood has more than 23 million funded customers and over 119 billion assets under custody. Please welcome to On Purpose Vlad Tene. Vlad, it's great to have you here.

[Vlad Tenev]

Thanks for having me Jay.

[Jay Shetty]

Yeah, really, really fascinating journey you've been on, personal and professional and I think our audience and community are going to get a lot of value to understand more about the investing world from you.

[Vlad Tenev]

But I wanted to start off with.

[Jay Shetty]

A question because your pre founder life is actually fascinating in terms of how you even got involved. And I wanted to ask you what's a childhood memory that you have that you feel has impacted the work you do today?

[Vlad Tenev]

If I think about the childhood memories that I have that stick out, they're all kind of like somewhat traumatic I would say. But I think I had a very happy childhood by and large. Like I wouldn't trade anything but my childhood was full of significant change. So a couple of the memories that stick out was going to the airport for the first time. I grew up in Bulgaria, very small country in Eastern Europe. I was born in the 80s which was a time of communism. So it was sort of like there was the west and then the Iron Curtain and not a lot of back and forth travel. My first time to the airport was actually after the Berlin Wall fell. Communism in Bulgaria had kind of collapsed or was on the verge of collapsing. My father was given an opportunity to go to the US to study, which was the events that kind of conspired to allow that to happen. Could not have conspired at an earlier time. Right. But you know, he had to go by himself because we just didn't have the money to like send even my mom with him, much less my mom and me. So he kind of went off by himself to see if he could make it and make a new life for us and in kind of this new land. And I think I, you know, they.

Were trying to prepare me for this because I was an only child.

And the weeks leading up to it, my Parents were like, your dad's going to America. You're not gonna see him for a long time. And it ended up being, I think, about two years before I saw him again. I'm not a very emotional person. I've kind of been described as stoic. I wasn't a very emotional child. And I just remember when we got to the gate and I and my dad kind of like, went to the other side, and I wasn't, like, allowed to cross because of course, I didn't have a ticket. I just, like, cried and bawled my guts out because it kind of sank in that I wasn't going to see him for a very long time. That's probably one of the biggest memories.

Another memory, you know, perhaps a little.

Bit more relevant to Robinhood was after.

I had moved from Bulgaria to the.

US and we had gotten enough money.

To have a vacation.

And of course, the only place to go back on vacation was to see my grandparents back in the home country. So we'd gone back.

And I remember the exchange rate of the currency, right?

It used to be sort of like.

Two Bulgarian leva for $1. But I came back and it was 2000.

So Bulgaria had gone through this incredible period of hyperinflation where the inflation of the Bulgarian lev was the highest in the world. This was 1996, and I think 1997 as well.

I think there were two years.

And so my grandparents pensions were just worthless.

Everyone in the country was struggling.

And I think those early moments were when I developed this visceral understanding of how important money was. Because I think to a kid, money is maybe not so important, but to me, my parents were new in the country. They were just getting started from scratch.

Basically starting from zero.

And I always felt like every decision, every family decision, had this layer of how much money is going to be spent on this, how important is it? We have to choose the budget potato chips or shop at Shoppers Food Warehouse rather than Safeway, because they have the dented cans and stuff like that. So I think from very early on, I got this understanding of the importance of money and saving it and protecting it. And that that was just like driving so many of the decisions that my parents were making on a daily basis.

[Jay Shetty]

Yeah, thanks for sharing both of those, actually. They're such unique perspectives. With the first one, what was it like when you reunited with your dad after two years and the last time you saw him, you were absolutely in tears.

[Vlad Tenev]

I remember that very vividly too, actually.

Yeah. Because I landed in JFK airport. I was 5 years old, and it was my first airplane flight. And I remember I was just like, puking my guts out that entire flight because, you know, they. They had some.

They were serving some food on the plane.

And I was traveling with my aunt, who was like, 15 years old at the time, and she was like a punk rock teenager.

Like, she loved American music.

She had her Walkman on. She liked, you know, Nirvana and grunge.

She later settled in Seattle, which. Which I think made a lot of sense.

But anyway, they.

They brought us the food and the plane.

And, you know, it's funny, you think plane food was like, just this trash. You don't want to eat it.

But I thought it was.

It looked amazing. So I just kind of, like, engulfed all of it. And then, of course, that led to me puking my guts out. And so I didn't have a very fun plane ride. So I felt a little off coming. Coming out on jfk, and I hadn't seen my. My parents in a long time. It was like I spent the.

The majority of the past year living with my grandparents.

My dad first went, then my mom joined him later, and then I joined with my aunt. And so I was very shy. It was almost like meeting strangers, you know. Of course I knew they were my parents, but after not having seen them for a while, I was, like, kind of hiding behind my aunt's leg, and I would stick one eye out and get a look at them. And there's this picture of me in the parking lot of JFK airport when they kind of, like, showed me the family car for the first time. And it was this, like, Plymouth duster from the 80s. I don't know if you know the car, but I don't. It had a mask.

So back in the 80s, cars would.

Have masks out front, and that was kind of the style. And I could tell, you could tell by looking at me that I was, like, this shy kid, very, very nervous. Didn't really know what was going on, you know, landed in a new place.

Skyscrapers everywhere.

You know, there was just. I remember the skyscrapers, you know, just nothing prepares you for that when you're coming from a very, very small country. It took me a little bit of.

Time to, like, get reacquainted with my parents.

You would think I would just, like, jump into their arms, and it would be like we didn't miss a moment. But there was definitely a little bit.

Of hesitancy and shyness before I kind.

Of warmed up and realized who they were.

[Jay Shetty]

Yeah, I mean, it makes sense. Because you had separated so young that it's almost like you maybe haven't even had an opportunity to even build a relationship at that age.

[Vlad Tenev]

Yeah, I mean, when my dad left.

I must have been three.

[Jay Shetty]

That's what I mean.

[Vlad Tenev]

Yeah.

[Jay Shetty]

I can't even remember being three.

[Vlad Tenev]

Yeah. I mean, I have very few memories from before then.

It was, it was basically saying bye to my dad at, at the airport.

Maybe my third birthday party.

I vaguely remember through pictures maybe. Yeah. The first snowfall. But yeah, it's like three or four memories. And that's basically it.

[Jay Shetty]

Yeah. And with that, with the second short story you shared about the financial situation and seeing the inflation in Bulgaria and coming back to that world when you, when you went back, how did someone like that, how did a kid like you, shy, separated from parents, seeing that in Bulgaria, get to Stanford? Like, what does that journey look like? Because I can imagine that that wasn't a simple or easy journey. That doesn't seem like a natural.

[Vlad Tenev]

Yeah.

[Jay Shetty]

Natural progression.

[Vlad Tenev]

So when I got to the US.

I didn't know how to speak English.

[Jay Shetty]

That's what I was. I was going to ask that, Was that your first language?

[Vlad Tenev]

Yeah. And Bulgarian was my first language. I think it kind of became clear, you know, once my dad went to the US Then my mom tried to teach me English, but it doesn't really work unless you're kind of talking to kids and doing it on a daily basis. I was three anyway, so it would have been tough going. So when I first got to the US And I went to school in Bulgaria, and I never really.

Found a good group of friends in school either.

I was kind of a. A lonely kid. I mean, it was preschool and kindergarten, so I don't have too many memories of it. But I would always switch schools, too. Like when I moved in with my grandparents, they obviously lived in a different part of town, so I would go in a different school. So I never really, like.

I didn't like the idea of school.

And I remember kind of dreading having to go in this new country. And even more so I didn't speak the language. I remember just like kindergarten was.

Was really hard.

There were all kinds of different types of kids I couldn't really, like, navigate my way around. I didn't know who was who. I couldn't even tell the teacher that I needed to go to the bathroom. So I would kind of hold it in all day.

And then I remember first grade. I have this, like, one memory from.

First grade, which was I was in a little reading circle and you Know, you know, like, the kids do these reading circles, and you're reading, like, these basic books, and I still remember this first grade reading circle, and I was like, man, I can read. And not only can I read, but I'm reading better than all these American kids. So I think that's when I kind of had the realization that maybe I was, like, intelligent or I identified as a smart person. And I think my parents did this really valuable thing in hindsight, which was they kind of advocated for me. So they never got into, like, the PTA or school activities or volunteering. They just didn't have time because my dad was in grad school and working. My mom was working as well just to try to supplement. And they were like, you know, our kid is smart.

He should be in the accelerated, like, math.

Can he skip grades? They're always trying to, like, push the teachers to put me in. In another grade. And the teachers were like, well, he's small, and he doesn't really have that many friends. We don't really think it's a great.

Idea to have him skip a whole bunch of grades.

But they kept pushing, and eventually I was given an opportunity to skip a grade. And I did very, very well at school. But I kind of had this fairly early realization that I was smart and.

Kind of good at math and sciences.

And then my parents also had this way of applying pressure, which I think was kind of honest from their perspective, but also might have been a little bit strategic, which was, we're new to this country. We're immigrants. We're not citizens.

We could sort of get kicked out at any time.

There was this fear of deportation always. And so it was kind of like, you got to do well in school because otherwise we might get deported. And for sure you're gonna have to get a scholarship, because we're not making any money in this family. So you're gonna have to, like, if you want to go to college and make it in this country and get an education, it's kind of on you.

I would kind of hear this and.

Really internalize it at an early age.

But it was quite intense.

I was like, all right, well, I better just, like, always, ace all my exams and do well. Because there was, like, all this pressure of the family making it in this.

Country that I felt a big part.

Yeah, that I felt a big part of.

[Jay Shetty]

Did it ever feel like too much or. It felt like it just got you to perform and you locked in. Like, did you find pressure to be your friend, or did you find pressure.

[Vlad Tenev]

Overwhelming Yeah, I don't think that it.

Ever felt like too much.

I think school felt. School, at least kind of in the early days, was relatively easy for me. Yeah, I mean, I kind of, like sailed through elementary school. By the time I got to middle school, I was probably, like, four years ahead of my classmates. Three or four years ahead in mathematics, for example. Um, my dad always emphasized mathematics, too. You know, he was.

He was an economist in Bulgaria.

And he was always like, well, you know, if you're good at math, you can kind of do anything. So all of this other stuff, like, you know, language arts, you know, you'll. You'll figure that out. Math is, like, the thing. And there was also a little bit of a competitive element because I would be like, oh, dad, you know, how old were you when you figured out, like, this type of math? Like, when did you learn calculus? And he was like, oh, I learned calculus when I was in graduate school. I was like, all right, I'm going to do it in seventh grade.

[Jay Shetty]

Did you succeed?

[Vlad Tenev]

No.

Maybe it was like, 11th grade or something. Pre calculus, maybe. Then I started doing it outside of school. I started doing all of these camps. There was this one camp called cty.

I don't know if you've heard of it. I did that in middle school.

And basically the way it worked was you take the sat. So the SAT is the. For any listener who was not American College entrance exam here, I think it's required again now.

For a while it wasn't required, but.

Basically you have to take it to get into a good college.

And for this camp, cty.

You basically.

Took it as a middle schooler.

And then depending on how well you did on this test, you could qualify for certain classes. In eighth grade, I got a pretty good score. I think I got a 1370, and.

I'd skipped a grade.

So I was a younger eighth grader, too. And at that point, I had this math teacher in my middle school, and he had to sign some stuff to have me go to this camp.

He's like, 770 on the math and the SAT.

Like, that's higher than I ever got.

When I was in college.

So I think at that point I kept getting this reinforcement that I was really great at math, I should keep doing it. And I guess Stanford.

How I came to Stanford was an interesting story. The second vacation that my family took.

After we moved to America, they took me to California. And my dad was like, reading all these travel books, and he had this book, like, the Thousand and One Places to see before you Die. And a lot of them were on the west coast, so, like the Grand Canyon and Sequoia national park, where you.

Could drive your car through this big tree.

I don't know if you've seen pictures of that. We drove through the tree, and we kind of did this road trip through California, and there was this one day.

Where we drove through San Francisco and.

We spent the night there. And it was the middle of summer, and it was raining. It was like, close to zero degrees Celsius, so I had to actually buy a jacket because I was just unprepared for this.

So kind of this miserable day.

And then we drove down to Stanford.

Which was in Palo Alto, about 45.

Minutes south of the city, and. And everything cleared up. The sky was blue. Not a single cloud in the sky. It was sunny.

There were, like.

I think summer school was in session, so kids were, like, throwing Frisbee at the Oval, and there were, like, kids picnicking in the main quad. And I just remember it felt so idyllic, particularly juxtaposed against how horrible San Francisco was that day that I was like, this is where I want to go. Like, my parents have been spending all this time talking about college. This seems like a fantastic college.

So back then, I wanted to be a lawyer.

So there's this photo of me on.

That road trip in front of the.

Law school at Stanford, and I'm like, yeah, this is where I'm gonna. I'm gonna go and be a lawyer.

I had seen A Few Good Men.

You know, the Tom Cruise movie.

[Jay Shetty]

Yeah.

[Vlad Tenev]

I thought being a lawyer was so cool because you get to, like, really get the people with, like, these intense arguments. I think I. I always remembered that even when I applied for college, I applied early to Stanford as a result. But the. The lawyer thing I kind of grew out of.

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[Jay Shetty]

Was Robin the story ever a part of your early life, or was that just a name that stuck out as a name in and of itself?

[Vlad Tenev]

Yeah.

[Jay Shetty]

Did you watch the cartoon when you grew up or did you read the book?

[Vlad Tenev]

I did, yeah. Yeah, yeah.

No, I watched the cartoon.

I was a big fan of that.

And of course, Men in Tights was another great one.

Yeah, the origin of Robinhood. The name was. You know, the finance industry had a bad rap in the.

In the early part of the last decade. Still does, really.

Still does. So, you know, my. My girlfriend Selena, my wife now, but my girlfriend at the time, she was kind of like, she started dating me.

I was this entrepreneur.

I had this idea and she had.

To kind of explain to her friends.

What I was doing. And she was like a doctor and medical researcher at the time. So it's a very concrete thing. You know, her friends were Mostly researchers and doctors. So she was like, well, Vlad, you know, he's in finance. But then there'd be like this groan, like, oh, they thought I was some kind of investment banker or something. She's like, no, no, no. But not that kind of finance. They're like the Robin Hood of finance. They're trying to help the little guy, giving them tools and manage their money. And so when we were kind of coming up with the name, that was a name that we got excited by.

And there were a couple of other names too.

Like, we thought about naming the company Omaha, actually, and we got pretty close to that one. And in hindsight, Warren Buffett and Charlie Munger were never big fans of Robinhood. They were kind of like, crapping on us from time to time publicly. So sometimes I think if we had named the company Omaha, maybe we wouldn't have had that element. I'd also never been to Omaha, so that kind of, like, that sealed it for me. So Robinhood was a very controversial name, and I think that's what made it powerful, because you either love it or you're kind of, like, repulsed by it to some degree. But it's not boring.

[Jay Shetty]

It doesn't sound like a normal finance company.

[Vlad Tenev]

It doesn't sound like a finance company. And I think in hindsight, that was a really good thing because it's just memorable and it's, like, emotionally gripping. And the name itself kind of tells you a lot about what the company stands for and what the products should help you achieve.

[Jay Shetty]

Yeah. How old were you when you first started investing?

[Vlad Tenev]

Yeah, it ties into what we were talking about earlier.

I was at home during the summer.

Because my parents were working and I spent a lot of time with computers. And one of the early things I discovered was like building a portfolio on Yahoo Finance, actually. And this was 1997, late 90s.

[Jay Shetty]

Wow. Yeah.

[Vlad Tenev]

So during the dot com boom, when somehow I don't even know how I came across this, but I was building a portfolio of companies that I recognized, like Yahoo3Com, which made the Palm Pilot one of the first consumer PDAs at the time.

[Jay Shetty]

PDAs? Oh, my gosh.

[Vlad Tenev]

Yeah, yeah, yeah. I remember PDA well.

Ahead of their time, right?

[Jay Shetty]

Yeah, very.

[Vlad Tenev]

I did decently well in hindsight.

Everyone was doing well on all those.

Stocks for quite a long time because it was the dot com bubble. But my parents basically saw an opportunity to motivate me to do well on the sat to qualify for this camp that we were talking about earlier. So basically, they were like, if you get above, I think it was like 1300 on the SAT. We will let you invest with the dollar amount of your score. It was something like that. And so I was very motivated by this. And so when I got my 1370 and my dad and I kind of, he funded an E trade account for me and I started investing.

[Jay Shetty]

No way. Do you remember your first investment?

[Vlad Tenev]

Yep.

Yeah, I bought 3Com, the company that made the PalmPilot. My feeling was that this device was so interesting and they had started giving them out to my parents who by that point were working at the World Bank. And I was like, all right, well, if the World bank is using them, this must be a company that is growing and they'll probably be around for a while.

And plus, the device was just super cool.

Pretty soon after my dad brought it home, he didn't know how to use it. So I just took it and started playing with it.

And actually through that I learned a.

Lot about investing because what happened was there was a spinoff. So first it started as 3Com, but then this Palm Pilot business was growing and they spun it off. So then I had two stocks and then I started getting the prospectuses in the mail and the voting documents and I learned all about like shareholder proxy voting and, and all of the stuff that a normal 12 year old probably wouldn't. Wouldn't have occasion to learn about. But because I was invested, I actually like felt compelled to learn more. So, yeah, I think that really set me off on a lifetime of learning about investing in finance.

[Jay Shetty]

Yeah. How much? How did you make or lose?

[Vlad Tenev]

At first I was, I was up quite a bit.

Then in 2000, I think my portfolio dropped to maybe like 20, 30% of what I started with. And then I think it probably took another 10 years beyond that for that portfolio to be in the green again.

[Jay Shetty]

Oh, wow.

[Vlad Tenev]

But I mean, I would say it's the great thing about getting started young in general, not just for me. You have plenty of time to actually make up for the mistakes and, you know, compounding over a long period of time corrects a lot of mistakes. So I think generally speaking, the earlier you can get started the investing, the better.

[Jay Shetty]

Yeah. It's fascinating hearing about your own investing journey. And starting at 12 is pretty young. I mean, that's pretty impressive that you were able to compute and factor that in. Have you ever taken an IQ test? Do you know your iq?

[Vlad Tenev]

I have not.

[Jay Shetty]

Okay. I'm just, I was intrigued. Yeah.

[Vlad Tenev]

Yeah.

[Jay Shetty]

Just based on everything you've been saying, I'm just like, it's rare that I've. I've met someone who's, who's felt that they've always excelled since an early age. Like that's not as common an experience anymore. Yeah, I don't know if you meet people like that.

[Vlad Tenev]

I mean, I do think that Stanford in particular is kind of an interesting amalgamation of people. So you have a lot of people from diverse, modest backgrounds that come to Stanford and usually those people have excelled academically, which is pretty amazing. And then you also have people that come from wealthy families from all over the world. Yeah, I think some people consider that to be not ideal. Maybe it should all be merit based and everything. But I think it actually has worked fairly well because what happens is the folks from modest means that have really high horsepower get to make connections and you make connections with all these people and it kind of unlocks business opportunities for you. So a lot of the folks that I met in my undergrad and the different types of people, I think at the time I kind of didn't recognize this. But they ended up helping me in my business career either because they became journalists that like helped tell the story of Robinhood, or they joined venture capital firms and they became indirectly or directly investors in Robinhood, or they advised us with certain things. I think everyone is so diffuse in general because people, people grow up in different places. But like, college is one of those moments people get brought together and you do, in a place like Stanford in particular, get to encounter a lot of really special people. And when I came to Stanford, I.

Actually had no conception of going into business.

I kind of stumbled into that later. By the time I got to college.

I was interested in theoretical physics. That was my passion because I was consumed by this question of why are the laws of the universe the way they are?

I had read about relativity when I was in high school and it was just like the first time I read like the, you know, Einstein's book of special relativity, it just blew my mind.

And I had to read it like.

Six or seven times to figure out what was going on, you know. And then, you know, you try to.

Understand more and deeper.

And the question that really motivated me was like.

Why do the laws of.

Gravity look like this, but all the subatomic particles, all the laws around particle physics look different? And is there one theory that is basic that unifies both of them? This sort of unification of quantum gravity.

Was this topic that really interested me.

So I came to Stanford to study that. And that's kind of what pushed me into, into eventually doing Math and going to UCLA to study math with a professor named Terry Tao. But if you think about that group of people, the folks at Stanford who come to study theoretical physics, and you don't do that because there's very little money in it. Particularly back then, this was like pre data science and applied machine learning. So, yeah, actually, by the time I got to that point, I was looking around and I'm like, wow, I'm the dumbest person here.

These are just.

I'm surrounded by some of the smartest people I've ever met.

[Jay Shetty]

Wow. And how did you get distracted from that pursuit?

[Vlad Tenev]

I was here at UCLA studying math, and two things happened. The number one thing was when I.

Decided to go to graduate school.

And I think my bubble of the academic world kind of burst a little bit because I had this romantic notion that you would kind of spend all of your time thinking about difficult problems and just, like, being creative, it's almost.

Like being an artist.

Like, maybe there's not much money in it, but you spend a lot of your time just like, practicing your craft. Right. But then I was given this book. It was called the Mathematician's Survival Guide. And it was like, chapters about how.

To deal with the administration and the bureaucracy of the graduate department, how to.

Advocate yourself for yourself with the department chair, how to make sure that you get a good research fellowship so you don't have to spend all of your.

Time teaching undergraduate classes.

And I think at that point I was like, oh, man, this is a career, and it's not the career that I wanted.

Another thing happened at the same time.

So my first month in grad school was September of 2008, and Lehman Brothers went under that month. It was the start of the global financial crisis. You and I are basically the same age, I think born in 87.

[Jay Shetty]

Amazing. Yeah. 87. Yeah.

[Vlad Tenev]

This was kind of like.

Maybe for you.

For me, certainly, like my. The folks that graduated my year of college, some of them went to finance, and some of them even went to work at Lehman Brothers. And it was sort of like one month after they joined, you know, there was like, photographs of them carrying their stuff out of the offices and boxes. Right. So, yeah, that was a tough time for a lot of people. A lot of my friends, parents lost their jobs that year. So it was the global financial crisis. And yes, somewhat oddly, my good friend from college, whose name was Baiju Bad, who I ended up starting Robinhood with.

He had gotten a job in finance.

Kind of on a whim, and he.

Managed to convince me that this time.

Was the best time to start a finance company. And of course, I wasn't, like, super committed to my PhD path because of all the other stuff I mentioned. So I was like, you know what? This sounds like an interesting problem. Let's see if we can do something here. So we rented a little house in.

South San Francisco in the South Mission.

Where we were paying, like, $300 a month in rent. We were all living together. I had to take care of this.

Lady'S cats, which was why the rent was so cheap. That was kind of my first experience with entrepreneurship. What attracted me to it was kind.

Of the same thing that attracted me about math and physics. It was the act of creating something with. You didn't really have to listen to anyone telling you what to do. You could use your entire mental faculties and your creativity to determine your own.

Success and your outcomes. Just a couple of people who are.

Really passionate and committed could build something and actually use it as a vehicle to sustain themselves economically. So that idea, when I kind of discovered it, and I never really thought of myself as an entrepreneur before, I mean, it wasn't really something that was.

Common in the east coast, to be.

Honest, or in Bulgaria. I mean, you had some. But not technology. Entrepreneurship, really. And then when I kind of started doing it, I started, like, programming and writing code. Then I just found the whole thing really intoxicating. So even though we didn't have success.

Basically, our first idea failed within a year.

I just kind of knew that I wanted to do it. So that gave me the confidence to drop out of ucla, start something a little bit different. And it was the third idea that we had that led to Robinhood, and that was kind of the one that really worked. I think that the actual experience and the mindset of an entrepreneur just resonated.

With me very, very deeply.

And I was having so much fun, unlike anything else that I had done, that I just knew I had to keep doing it.

[Jay Shetty]

Yeah, I mean, democratizing investing is such a. At least at the time as well, was such an ambitious goal to think about trying to get the average person to be able to have access to something that wasn't accessible to them just a few years before, Especially in a place that seemed volatile, you needed a lot of capital to get started. I want to do a bit of investing basics for people who are listening, who may or may not be using your platform already and want to understand a bit more about it. If someone's sitting there going, and I remember being this person, So I remember 2013, I just left the monastery that I lived in for three years and I'd gone back into the world of work and I had a mentor who told me exactly which crypto to invest in in 2013.

[Vlad Tenev]

Which one did he say?

[Jay Shetty]

Well, at the time he was like dogecoin. No, no, definitely wasn't at the time it was like ethereum, lithium, like, oh, yeah, litecoin. Yeah, yeah. And so he was mentioning all these places and I remember in 2013, with very little capital, very little investment knowledge.

[Vlad Tenev]

You see now if someone said my mentor and what did you call him?

Yeah, mentor.

[Jay Shetty]

Yeah, yeah, mentor, yeah.

[Vlad Tenev]

If now someone's like, oh, my guru told me the, which cryptocurrency to invest in, I would be like, hey, you should be a little skeptical of this mentor. But in 2013, that was actually like.

[Jay Shetty]

I should have listened.

[Vlad Tenev]

That was before the space got. Got a little, a little corrupted. Before the, the Pretenders came in.

[Jay Shetty]

Yeah, no, he'd been successful in tech investing and things for years. And yeah, I'd met him. He was, I was what, 26 at the time? He was 55.

[Vlad Tenev]

Oh, wow.

[Jay Shetty]

And so he, you know, he'd been around. He was, he was a very smart, thoughtful, thoughtful person. I didn't really understand anything about investing and I grew up in a family where we didn't have a lot. Growing up there wasn't. I didn't see my parents invest, I didn't, I didn't see them have that. And so I remember being like, he was just like, just put $1,000, put $100 into each of the hundred pounds. I was in London. So he goes, just put £1,000 into, £100 into each and just see how it goes. And I remember being so risk averse that I didn't even want to put £1,000 into it. And that's probably all I had at that time. I was working a job where I made £31,500 a year at Accenture and I could.

[Vlad Tenev]

You were in the uk?

[Jay Shetty]

I was in the uk, yeah. I could have put a thousand pounds in. I didn't. If I did, it would have been a great investment. But the question I'm asking is a lot of people don't invest because they don't have enough knowledge, but they also feel they don't have enough money. At what point should you feel confident and comfortable to start investing? What amount? And. Yeah, let's start there.

[Vlad Tenev]

Yeah.

I mean, a lot of Robinhood customers.

Start with as little as $10.

And I think that was actually the innovation that Robinhood unlocked.

So before we came into the mix, you used to have to pay a trading fee. And if you started in the UK, you probably paid a trading fee at 2013 as well. I mean, still do the.

That market hasn't gone 0 commission yet.

Let's say you have to pay $10 per. Per trade. Well, that's, you know, if you make $100 investment, that's 10% of the, of.

The actual value in the investment.

And if you want to sell it, you know, then that gets to 20% for the round trip. And so it doesn't really make sense to start with $100 in that sense because you have to count on many years of appreciation to just pay for your transaction fee.

But if you lower the fees to.

Zero, you could start with any amount.

[Jay Shetty]

Which is what you did.

[Vlad Tenev]

Exactly. And that was kind of our big. That was sort of one of the three big innovations that I think made Robinhood possible and really made it take off. It's eliminating the commissions and lowering the.

Account minimums to zero. Because a lot of brokers also had account minimums.

You couldn't even open an account unless.

You had $2,000 or sometimes more in there.

And we said, you know, what we really wanted and the reason, by the way, that they had these account minimums was these companies were not automated enough to service small accounts. They would just lose money on them. And so we said to ourselves, well.

It would not really uphold the mission.

Of a company named Robinhood to have an arbitrary account minimum.

We should make it zero.

We should hold ourselves to that standard and we just should incent ourselves to make the business as efficient as possible. Because I think that would be the long term correct way to build the business. Let's point everything towards creating a forcing.

Function for us to be more efficient.

And more automated and adopt technology more.

Aggressively and be the first to do.

It relative to the market. And, you know, a company where everything is pointed towards using technology to lower the cost of things, make things as usable as possible and as automated as possible, that seems like a long term.

Robust structure for a company.

So we kind of like that. But yeah, a lot of customers start.

With just $10 or even less.

[Jay Shetty]

And what would you say are the three biggest mistakes new investors make when they don't know what they're doing?

[Vlad Tenev]

I think this is a little bit strange given so much of Robinhood, at least in the public realm, is meme stocks and meme trading. But I think probably the biggest mistake one can make is buying something just because someone on The Internet thinks that you should buy it and is posting it. I'm personally a big believer in thinking for yourself and like buying something because people on social media are saying it's a good idea. It's just like kind of anathema to me.

Like, sure, use it as a signal.

But like make your own decision and kind of think through it yourself. And don't just rely on the opinions and commentary of others, any others.

[Jay Shetty]

Big mistakes that people make, I think.

[Vlad Tenev]

Just like waiting to get started, you know, now, particularly with the tools there's, you know, with, with Robinhood kind of entering the market. Not just Robinhood, but most of the.

Competitors that at least survive in the space.

There's no maintenance fees, no kind of onboarding fees, keeping money in the savings account where in particular now with high rates, you know, a lot of the banks are offering you 0%. So your, your money is just losing money sitting in savings, not, not doing the simple things to optimize, I think are mistakes. And there is so much free content.

Out there on the Internet, on YouTube.

And you know, that just spending even 30 minutes to, to get educated and actually just like getting started and opening an account and creating the habit of investing, even if you don't think you have much money, the technology is there so that you could actually do the exact same things with $1 as you can with thousands of dollars. And you know, through another thing Robinhood pioneered fractional shares. You can invest any dollar amount in pretty much any stock. You don't need a whole share. So one of the first things that.

We did, which we thought was very.

Cool, was you have, for example, companies whose share prices are hundreds of thousands of dollars per share, like Berkshire Hathaway A shares, for example. And they would almost pride themselves on having this share price that's inaccessible to normal people. And not everyone could be invited to this club of shareholders and they have.

The annual shareholder meeting with.

But, you know, Robinhood figured out how to break up these stocks into pieces and you can buy a dollar of it. And, you know, then you had all.

Of these retail investors showing up at the shareholder meetings.

And I think that made those guys very angry, actually, in hindsight.

But how did you even.

[Jay Shetty]

How did you even pull that off? Like, how. How's that even possible?

[Vlad Tenev]

Yeah, it was a big technical challenge. Yeah, big technical challenge.

Basically what happens is the company has to keep inventory in all of these names. And you imagine, like, let's say, I mean, the way that this works is probably a little bit more complicated. But to simplify it. Let's say you want to buy a dollar of Berkshire Hathaway. Well, then we would essentially have to keep inventory of a whole share and then allocate internally different pieces of it. And then, you know, when the total sum exceeds one share, then we go out and buy another one. So we're kind of like managing this portfolio of right around 1 share in every instrument. And then we can just do that through technology.

We have great engineers and data scientists.

And brokerage experts that can manage the system.

[Jay Shetty]

If you were to say that for a new investor, there's certain factors they should understand about a stock before investing, what would you say are the three key things that they should know? An amount of information they should have before they go in and put any amount in.

[Vlad Tenev]

I guess without giving people too specific investment advice. Because I, yeah, I'm kind of not, not really allowed to do that. I'm a big proponent in investing in companies that create products that you like and, and use. If you use the product, if you think that the company that's making those products is improving the products, and if you're bullish on it continuing to be.

Useful and you think it's trending in.

The right direction, that's been sort of my philosophy. It's how I got started too. And I think that's why if you look at the Robinhood customer base and we're now publishing the stocks that our customers are investing in, most, we call.

It the Robinhood Investors Index.

It tends to be consumer companies that make products. They're sort of like heavy in innovation. So for example, Nvidia, Tesla, Apple, these are some of the most commonly invested stocks. And it's because our customers are younger.

They believe in the future. They tend to be early adopters of technology and innovation. They believe in artificial intelligence, clean energy, electric vehicles.

So yeah, those tend to be like both sort of like some of the most held instruments and some of the first instruments that, that people kind of buy into. We also have a product first trade recommendations.

And it's difficult for the service to recommend individual stocks.

But for someone that actually comes in and they say, I just want to invest, I don't really know, I don't want to pick my own stocks. Over time, we're increasingly getting better and better equipped to serve that customer. So now you can just answer a couple of questions and we'll recommend a diversified portfolio of ETFs, explain to you what all the pieces are, and then you'll kind of see how it all works mechanically. And I think Sometimes just going through the process of making a trade, it's much simpler than reading a book on it. I like to say that it's like playing a violin. You're not going to learn to play a violin really well by reading a book on how to play the violin.

Maybe if you're already really, really good.

And you're trying to get a little bit better, understanding the theory behind it is going to help.

But otherwise it's just sort of like.

Pick up the thing and start practicing and you'll get better the, the more you do it. One of the things I became interested.

In when I was an undergrad is options trading.

A lot of my students my year were applying to be options traders. That was like a, before I went fully electronic, that was a job that people had.

Right.

And there was this book, like Options Futures and Derivatives, it was called something like that by Hull.

And it was like this thick dictionary.

Explaining how all these options strategies worked. And I just kind of imagine, you know, if someone had to understand that book before, kind of like going into.

Options trading or discovering it for the.

First time, I think that would be just like an incomprehensible barrier.

But like you build up some intuition.

For these things by doing it and it sort of like makes you more motivated to read the literature and it also sort of like gives you more real world knowledge than, than you could.

Ever get from just reading.

So I think just like getting started and doing it is, is the most important thing. It's, it's a skill like playing a sport or, or playing a music instrument more than just like an academic pursuit.

[Jay Shetty]

Yeah. How many of you users do you find going beyond just that first trade? Do you have a percentage of users that, you know, go beyond their first or second trade and kind of continue on and build and grow versus like they tried something out and kind of just said, oh, it's not for me, I don't know what I'm doing.

[Vlad Tenev]

With consumer technology, there's sort of a funnel for everything.

You know, there's people downloading the app. Not everyone who downloads the app actually ends up creating an account. Not everyone that creates an account funds it. And, you know, we're definitely focused on making sure that we have a really good funnel, that it's clean, that people who, you know, enter are getting exactly what they want. I'd venture to say that our funnel is probably much more efficient than those of our competitors. That said, there are things that certain customers want that we're not like, ideal at offering now. So for Example, if you want an advisor, a lot of people want a financial advisor.

They want someone to manage their money.

For them, tell them exactly what to do.

We don't have a great comprehensive solution for that yet.

Although we're working on it, I think.

We will get there eventually.

[Jay Shetty]

Would it be AI advisors or.

[Vlad Tenev]

I think AI certainly will be involved, if not replacing the advisor, certainly augmenting and giving them kind of superhuman capabilities.

And the ability to service more customers.

But yeah, I think that's certainly one of the most interesting applications of AI in financial services. But yeah, right now the platform is like very self directed. It's for folks that want to be.

In control of their money and like.

You know, like the, the most hardcore Robinhood users are the ones that really are just kind of like optimizing everything. You know, they're optimizing their taxes, they're optimizing all of their fees and commissions. And we do attract some of those people that are really want to be hands on with everything because it's a.

Very easy to use tool.

We have. We tend to have the lowest pricing across all services that we offer. We sort of like from the very.

Beginning have.

Built with like the self.

Directed retail customer in mind.

So I think for that customer there's probably no better fit if you want to be in control over every aspect of your finances and you actually in.

Some cases are openly distrustful of other.

People telling you what to do. And there's a lot of people like that. They're like, I don't even want to listen to a financial advisor because I feel like they're just going to talk down on me in a, in a.

Good scenario or rip me off in.

Like a bad scenario. And those people are like, yeah, like.

They tend to gravitate toward Robinhood.

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[Jay Shetty]

At a time when investing's becoming more talked about, more diverse, there's more options. I want to get your personal opinion on people thinking about stocks versus people thinking about property, for example, which of course is far more expensive. But I feel like we've seen a generational shift from people wanting to own their homes, purchase their homes, get a mortgage versus now people moving towards renting more. Are you seeing that trend and are you seeing people move towards stocks? Are you still what's your personal take on people choosing between buying and renting versus using that capital elsewhere?

[Vlad Tenev]

For a while, the American Dream involved homeownership, right?

And I have mixed feelings about it, to be honest, because there's a lot of like corporate interests that are pushing.

For more home ownership.

I mean, if you're a bank and you're giving people mortgages, you know A lot of people criticize leverage in the stock market, but if you think about the amount of leverage in a 30 year fixed mortgage. Right. It's like ungodly.

Right.

You end up paying much more in interest than, you know, even the principal sometimes. Yeah. I mean, again, without, without getting into investing advice. Real estate, I think has been tempting for people because like you can see it, you can touch it. It's sort of like this thing that you can use and it feels like an investment even though it really isn't. Especially when you give, when you take.

Into account all the fees, like the brokering fees on either side of the.

Transaction, property taxes, maintenance. Meanwhile, you know, in the stock market, you have it on your phone now, commission free, some of the lowest fees, access to the widest variety of companies that are really. Even though it's the US Market, by.

And large, the US Market's increasingly global.

I think, and I wrote this article back in 2021. Investing in the global markets is really.

The new American dream.

And actually during the hyperinflation episode in Bulgaria in the 90s, my grandparents didn't have access to any tools that allowed them to invest in equities. So my grandfather, who was a medical doctor on Navy vessels in Bulgaria, he had like a contact on the port side who would basically give him access to copper cookware. So he would take his Bulgarian lives from his pension and get copper cookware. We had this closet, they had their.

This closet in their apartment that was.

Just full of copper cookware. And that was like, that was their Robinhood app. Like that's where they would self custody their wealth. I mean, right now you can buy any stock. You can buy crypto. We started offering crypto in 2018 for.

The lowest fees in the industry.

And you can get, you know, you can get access to ETFs. You can have gold ETFs. So really in your pocket you can diversify and hold pretty much any asset.

And you can even do real estate.

Through the form of REITs and other publicly traded ETFs. Yeah, you can get exposure to that asset class. But like real estate investing in terms of buying a primary home? Yeah, I think the story behind that is, is difficult. It's like very illiquid, high transaction fees. You're kind of like picking a particular neighborhood. So even if the global real estate market does well, something could happen to that neighborhood. You know, they build a power plant next door and you're kind of in, in big trouble. So even though I'm not making any investment Recommendations. I think it's. Yeah, it's hard to kind of like equate those two. And I think really the future is going much more toward investing in publicly traded stocks and cryptocurrencies.

[Jay Shetty]

Yeah. Yeah, that's what I wanted to ask your opinion. So, yeah, definitely not official advice. I read an amazing stat that said the next generation is set to inherit an estimated $72 trillion over the next 20 years, with 27 trillion going to millennials alone.

[Vlad Tenev]

Yes.

[Jay Shetty]

And that blows my mind because first of all, I'm like, who are those millennials?

[Vlad Tenev]

That's a big wealth transfer.

[Jay Shetty]

It's a big wealth transfer. When someone like you hears that, what goes through your mind?

[Vlad Tenev]

What goes through my mind is there's a big opportunity for Robinhood.

There's a big opportunity for us because we've got more millennial app users than.

Basically all the incumbent brokerage competitors put together.

Even more so Gen Z. I think.

If you look at gen Z, over.

60% of our competitive set just uses Robinhood.

And so we already have relationships with.

These folks and we're offering more. Like, we don't just offer stocks. We have an awesome credit card. We have among the best retirement products, an amazing retirement product with the first built in match in an ira. We have a high yield product, and.

We'Re adding just more and more over time.

And we're making it really easy to transfer your account if you're a customer.

Of a legacy brokerage, to Robinhood, so you can take advantage of all these.

Amazing offers and rates and the user experience. So, yeah, I think that we'd like.

To put ourselves in the position where.

Robinhood is like the home for all of these assets. And I think we're rapidly getting there.

[Jay Shetty]

What do you think you've done differently to attract those groups and those communities into your space? Like, what, what, what's been the big difference?

[Vlad Tenev]

I'd like to say that the, the way we communicate and the marketing is a big part of it, but I think the biggest thing is like, the, the economics, getting rid of account minimums.

And trading commissions, removing the friction.

These are all barriers that.

Prevented people.

Yeah. I think I mentioned to you earlier that, you know, before Robinhood, if you had $100, it would have just been nonsensical to invest. The fees would have just ripped apart your portfolio. And, you know, a lot of times there were barriers that prevented you from getting started in the form of minimum account balance requirements as well. So we got rid of all of those and basically that allowed a whole bunch of customers that were previously underserved to be able to open accounts. And you know, unfortunately a lot of those customers were from disadvantaged historical demographics. And you know, I think it's a great thing that we've now kind of opened the doors to basically everyone to.

Open up an account and become an investor.

[Jay Shetty]

Yeah. Similar to the, to the property question, I wanted to know your take on traditional retirement accounts like the 401k, like in comparison to the more aggressive growth strategies in stocks. What's your take there again from an opinion base?

[Vlad Tenev]

Yeah, so 401s are fantastic for those that are privileged to have an employer that offers one. And in particular, if an employer offers a 401 with a built in match and they're matching your contributions, you know that that's free money. So that that value prop is very, very strong. But you know, not everyone has access to that. And so what we've done is, and actually I think over time users and kind of end consumers can be less.

Reliant on individual employers.

And it used to be that you would have a job and you could like count on that employer's pension to.

Take care of you.

Maybe you'd work at the same employer for 20, 30 years, then you'd retire and you would kind of subsist on the pension plan. And then of course Social Security kind of filled in some of the gaps. But I'd say the future of Social Security is very much shrouded in a cloud of uncertainty. Right. So I think the upshot is people have to take it upon themselves to, to be responsible for their own finances.

And their own retirement.

I don't think that you can rely on the government. I don't think you can rely on any one employer. Many people aren't sticking around at a single employer for very long now.

Right.

And so what's important is having these.

Investment accounts not tied to the employer.

And actually tied to the user.

You're kind of carrying around your, your retirement with you.

That's why we launched our IRA products.

Your Individual Retirement Accounts. So we offer Roths and Individual Retirement Accounts.

If you're a Robinhood Gold subscriber, you.

Get a 3% match on contributions.

So basically you might not have an employer matching you, but Robinhood will match out of our own economics. In a world where you can't rely on a single employer and you have.

These accounts that should travel with you.

I think that it's much more future proof and the product's really been resonating. We had end of 2023, which was.

The first year that we launched our retirement products.

We had about 1.7 billion in assets under custody and that's gone up more than 6x since the beginning of the year. So now we have close to 10 billion in assets in retirement accounts at Robinhood.

[Jay Shetty]

Was that a more recent development or was that something that was always part of the plan?

[Vlad Tenev]

We had always talked about offering retirement products. There's just, I mean, the financial space is so big and there's so much that we want to do that the order of things becomes important and which what's first? And you know, there's sort of like always a balancing act between innovative new features that you don't find anywhere else but Robinhood. And those are things like our 24.

Hour market offering, which allows you to trade stocks 24 hours a day.

And we were the first to market with that for individual stocks like Tesla and Nvidia and Apple.

Things like retirement accounts that others offer.

But you know, we'd have to kind of like catch up and add them. And of course we try to put our innovative twist like the matches onto them. And then there's just like scaling the infrastructure and that includes things like customer support and just making sure that the infrastructure gets more reliable and sophisticated to handle more. Which, you know, as we're expanding globally and servicing other customers in different countries is also a giant area of investment for us.

[Jay Shetty]

It's so interesting, isn't it? Because I feel like you're seeing all these new disruptive platforms. Technologies give people so much opportunity that wasn't accessible before. But often they come under even more scrutiny and challenge than banks or anything anything else did in previous years. I was wondering what your take on the Gamestop movie was. I don't know if you saw it. Did you get to see it or.

[Vlad Tenev]

I saw some clips of it.

[Jay Shetty]

Okay. You haven't watched the full thing?

[Vlad Tenev]

No, I mean, I saw the clips that I was in. Of course I wanted to see how I was portrayed. Certainly not out of vanity or anything like that.

[Jay Shetty]

Did they have to ask permission for that?

[Vlad Tenev]

No, it was kind of the weirdest thing.

Your likeness and name can just be kind of taken and monetized. And I don't think the movie made very much money. But yeah, they certainly didn't ask for permission.

[Jay Shetty]

Right. And then when you saw the clips of you and how did you feel like how did that.

[Vlad Tenev]

I thought they kind of got my mannerisms right. I mean, it made sense because I think they probably looked at interviews that I'd done and you know, they, they basically had figured out sort of like my way of speaking. And you know, the actor that played me was very good looking guy, you.

Know, the winter soldier.

I think they had to kind of make him look a little uglier so he could, he could more accurately portray me. But hey, I'm not complaining. The plot was obviously like complete fabrication. I think people really like this whole conspiracy theory thing. And you know, there was this like.

Conspiracy theory of collusion floating, floating around.

Particularly at that time. So I don't think they could actually like explicitly say the conspiracy theory, but they were just evoking it in all sorts of ways. So those parts were fictional, but I.

Think they got my mannerisms right.

[Jay Shetty]

And then, I mean, I saw you do, at the time you did tons of interviews. I think you did a clubhouse with Elon. And there were a bunch of different things that I saw that you did at the time. What does it feel now reflecting back on that time? Because I imagine that there was so much scrutiny, there was so much conspiracy. There was. How have you felt about it since then? Like now you can look backwards, eye on it, I guess, as opposed to that time where you were looking right at it. What's changed over the last three years?

[Vlad Tenev]

Yeah, you know, from time to time.

I do look at like some old clips of my interviews back then and you know, I kind of feel bad for myself because I was like a little kid, you know, it just. The company was private. I was always, particularly at that time, I was just very focused on getting.

The technology to work.

And I didn't really want to be in the public eye. And I certainly didn't see myself as some kind of political figure wrapped up in some kind of political quarrel over investing or regulation. I think what happened was.

Gamestop, for.

Better or worse, put Robinhood sort of like firmly into the zeitgeist. Before it was a little fringe. I mean, we still had a lot of customers, but we weren't like a politicized brand. And I think at that point I really had to learn really quickly not just how to build technology and lead.

Teams to do it, but also how.

To represent the company. And you know, it's like you can.

See in those interviews I'm kind of like reading a script.

And that was my approach to interviews for a while. It was like reading my points and trying to communicate the facts of the message. But now I know now that I'm much more wise and mature and still not nearly as experienced as you. You've probably done thousands of these right but it doesn't really resonate with our audience to just, like, read the facts. You have to give some emotion and some feeling and have some empathy. And, you know, there has to be a little bit more. So I've had to kind of learn all that stuff. And now they just look incredibly inauthentic and robotic. And I think the more time has passed, the more I'm kind of trying to be as authentic as possible in my appearances. And I think that had to be. Had to be something that I learned and doing so, especially in that time where the stakes were super high and we were about to go public and, you know, you have, like, all sorts of advisors and lawyers and, you know, professionals that are trying to protect me and the firm. Say, don't say this. Be careful not to say this. Be careful when you're kind of making this point that you don't make people think that you're actually meaning this. So if you're kind of running the algorithm through your head of what you can't say and what you should say and how what you're saying could be kind of, like, interpreted.

[Jay Shetty]

It's exhausting hearing.

[Vlad Tenev]

Exactly. Yeah. Eventually, to some degree, you practice enough, and it becomes second nature, and you can kind of rip up all the guidelines and be pretty confident that you're doing the right thing. But I think it has to be authentic. And back then, I was just, like, very inexperienced at all of this stuff. I sort of undervalued it, and I.

Think it took a while for me.

To get to, like, a basic level of competency.

[Jay Shetty]

Yeah, no, I mean, I think it's fair. I think that every founder goes through that journey of, like, you've been building something in private, in a room or an office for so many years, and all of a sudden, your company gets notoriety in mainstream culture.

[Vlad Tenev]

Yeah.

[Jay Shetty]

And then all of a sudden, you're having to do things that you don't necessarily set out to do. As a founder, I feel like even actors go through that, where you're just working on a movie on a set.

[Vlad Tenev]

Yeah.

[Jay Shetty]

And then you have to go promote the movie, but. Or you're seen in public and something impacts the movie, and that wasn't necessarily what you signed up for. What were the actual ramifications or consequences of all of that? Like, what actually. How did that actually affect Robinhood, apart from the cultural propelling?

[Vlad Tenev]

Well, I think a lot of people who were just, like, looking at me at the time and maybe were not Robinhood users themselves.

Maybe some of them were Robinhood users.

But others were kind of thinking about it and were aware of it. I think some people got the impression that I just like, maybe didn't care about our customers. I think that was the part that actually pained me and kind of stayed.

With me over time.

They're like, oh, look at him. He doesn't have any emotions and he's just like talking about these clearinghouse regulatory requirements, but he doesn't understand the pain that kind of customers went through who wanted to buy GameStop or AMC or all these other things. I mean, I definitely understood the pain.

Those were some of the most painful, sleepless nights for me going through that whole ordeal. But yeah, my approach was always just.

I don't want to like talk about doing stuff. I like to do stuff. So I'm not going to like, maybe, maybe I'm not going to be like super emotive with my customers, but I'm just going to build them great products that save them tons of money and give them a great experience so that.

They can learn to invest and manage their money.

I think that was painful. Obviously the collusion narrative was painful because it was like.

[Jay Shetty]

But it was never proven. There was no, there's no, like, it was disproven.

[Vlad Tenev]

I mean, learning how to communicate and actually like to some degree, like going through a crisis and then surviving and then sort of like learning from it and building, building back better so that you don't actually repeat the same thing again. I mean, Robinhood's had our share of.

Issues over the years.

We definitely haven't been perfect, but one thing I'm proud of is they're all like, we've made mistakes, but they're a.

Series of original mistakes.

So we tend not to make the same mistake twice. And so throughout all of these, we've just built up a ton of scar tissue and learnings and have been a much stronger company. And I think all of the crises I remember the dates of, you know, it's like, you know, it's like January 28, 2021, or December 12, 2018 or March 2, 2020, right at the beginning.

Of COVID when we had a day long trading outage.

So you kind of remember all of these events and kind of take different things away from them. But I mean, at the end of the day, we've been a company for 10 years and you're gonna, if, if you're in a disruptive space where you're kind of challenging the status quo and, and trying to change things, some people are, yeah, if some people are gonna be unhappy.

Right.

And you have to have thick skin to kind of get through that.

[Jay Shetty]

Yeah, it's, it's an interesting dynamic, isn't it, when, when companies are doing something for the first time, it's, it's inevitable that there's going to be mistakes and mismanagement and challenges. And I think.

[Vlad Tenev]

And it's almost like, you know, if.

You'Re being too careful, if you actually.

Make zero mistakes, you might not be successful. You're probably not going to be successful because you're just like, not pushing hard enough. Like, it's like he, at some point, not, not taking any risk is like the biggest risk of all, particularly in like a hot competitive market. So you just, you have to know the right amount. I think it's a, it's somewhat of a fine dance, but it's certainly not acceptable to play everything super safe in.

The world of business.

[Jay Shetty]

And I guess the challenge is because it's dealing with people's money, it's even a more heightened.

[Vlad Tenev]

There's a heightened sense of safety.

Absolutely.

And people can be very emotional about their money.

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[Jay Shetty]

What were some of the biggest mistakes that you felt and the lessons you learned from them that were so pivotal that you think would be useful for other founders, for customers to hear, for other people to just be aware of? Like, this is how you now look at it versus at the time when you're like, well, we need to be risk pro risk, try things out.

[Vlad Tenev]

Designing our infrastructure with scalability in mind from day one probably would have saved us quite a bit of grief because we've, we've had to like rewrite and.

Like redo multiple times. The conventional wisdom is you don't want.

To prematurely optimize anything.

The Silicon Valley, sort of like tombs, are littered with corpses of startups that.

Had perfect infrastructure and no users, you know?

[Jay Shetty]

Yeah, yeah.

[Vlad Tenev]

So it's always hard to do the counterfactual on these things because like, you know, if we had, if we had overinvested in those things, maybe we like wouldn't have customers and then no problems, but no customers. Right. I think we can end up being like tormented by our past too much so I don't even, I don't know how helpful it is.

[Jay Shetty]

Yeah, that's an interesting take. I can see why. I can definitely see why. I mean, the only thing that stood out to me was you saying that your most difficult period was in 2022 when Robinhood's business took a hit amid the market downturn.

[Vlad Tenev]

Yeah, that's true.

[Jay Shetty]

And I feel like.

[Vlad Tenev]

What was so.

[Jay Shetty]

Tough for you personally about that? I mean you've.

[Vlad Tenev]

Yeah, some people might hear that and be like, that's crazy. Like, how can that compare to GameStop, right. I think the thing about GameStop was, is like very acute difficulty, you know, and it was like almost like a roller coaster ride, you know, it's like intense, but it's over in three minutes. And it's kind of clear what you have to do to get out of that difficult situation. And you know, we navigated it. We became a stronger company. 2022 was like a slower burn, right. And we had just gone public in middle of 2021, kind of @ the.

End of the window.

The window has kind of been basically shut since then for IPOs, right. And we kind of squeezed in right before things got really bad. And so what happened was you had this period where it became clear that.

Inflation was getting completely out of hand.

And that freaked everyone out. And then it became clear that the.

Fed was going to hike rates.

And we had kind of like everyone was prepared for a multi year period of like zero rates. And you know, to tame inflation.

The Fed, who hadn't really dealt with inflation for 30 years, had to hike.

Rates up at the fastest pace in the past several decades. And what happens was when rates go up, people typically invest less. Because you imagine if you can get 5% on your cash just sitting there and the stock market appreciates 7 to 10% each year pre tax, and you can get that 5% rate without taking on market risk, that becomes much more compelling, relatively. So you'll have less investing. And then that's what we saw. Less people were interested in opening up brokerage accounts and investing for the first time. And that was like our whole business.

That was the core of our business.

And we didn't really have anything for a high rate environment at that time. And there was some criticism of this when we went public and some questions the analysts and investors would be like, well, Robinhood, you've done really well during COVID and during this extended period of.

Zero rates, the company has gone to.

20 million users in that time. But how are you guys going to do in a environment where the interest rates are higher? You know, is it, is this just. Is Robinhood a zero interest rate phenomenon? Of course, you know, we had answers to that, but until you prove that, people don't really believe you.

And so we actually had to like.

Go through an incredibly challenging process of like changing the strategy of the company, effectively refounding the company in 2022 when, you know, the, the entire Macro environment shifted and I think we, we did a really good job. I mean, within six months after that.

We had gone adjusted ebitda positive.

In 2023, we had GAAP profitability at the first time. We now have eight business lines that are generating 100 million in revenue or more.

So the business is very diversified.

More than half of the rent revenue is interest rather than transactions. And now we're starting to get the question, wow, Robinhood is doing so well.

In this high interest rate environment.

The Fed's going to cut rates. What are you guys going to do when the Fed cuts the rates? And you can't have these high interest rate revenue streams firing on all cylinders now. So now we have to go backwards and prove that customers still would want to trade options and crypto and equities.

[Jay Shetty]

Yeah, it was, I think it's been interesting. Yeah, it's funny how it just keeps oscillating between. Or cycling, I guess.

[Vlad Tenev]

Well, the more times you do that cycle, I always felt like when we were private, every time we raised a new round of funding, we had to kind of like reprove ourselves to these new investors that came in and just.

Didn'T understand the company. But then, you know, the longer we.

Lasted as we got up to like series H, I think, in private funding, and by that point the series A.

B, C investors had developed such a.

Deep understanding of the company, they had so much trust. And I think it's the same with a public company, or at least I'd like to think so.

You pick your investors, your investors pick.

You, and the more cycles we go.

Through, we are building institutional knowledge as a public company.

And I do think that, you know, the market is starting to, to recognize that, hey, maybe this founding team, the management team of this company knows what they're doing. And the more cycles we go through, I think the more we'll prove that out.

[Jay Shetty]

Yeah. And I think I read somewhere where you were saying that that time really changed how you looked at being a CEO and a leader and reprioritizing the company was what was you. You just talked there about almost what you did in terms of building product, diversifying income streams, you know, having all of the portfolio of how people could use Robinhood. But what was that like for you internally from a leadership perspective? What changed as how you, about how you led?

[Vlad Tenev]

Yeah, so there was this exercise that I would go through with some of my team where I would imagine if.

A new person came into the role.

As CEO, and I've told this story a couple of times and it's not like I imagined myself being fired or I was worried about that or anything like that, but it was almost like, okay, this thought exercise of, let's say I didn't come with any of the baggage of having founded the company and made all the decisions to get us to this point. If I could look at it from, with a beginner's mind and just say, hey, I'm here, I'm seeing this company, this is kind of the state of affairs. What would I do differently? And you know, I came up with a bunch of things that like a stereotypical like top CEO coming in would do differently. They would pull back on remote first and get people in the office so they could collaborate and work together in person. And even though I had turned Robinhood into a remote first company not too long before I reversed my own decision there, which was kind of tough from a self consistency standpoint, People have a very hard time being inconsistent with their prior selves. So I think that's like one mental barrier to get past.

Another one was I just made this realization that, you know, if you look.

At our business, a lot of our revenue is generated by, you know, relatively small component of very active traders. And we actually weren't building products specifically for them. And as a matter of fact, we looked at kind of this customer base.

Very deeply in 2022 and these folks tend to be more sophisticated.

So actually when, when the markets are crashing or moving sideways, they tend to actually be more resilient because they can.

Deploy more sophisticated strategies that can take advantage of all sorts of market environments.

And what we saw was the more active someone traded, ergo, the more revenue they generated for us, the less happy they were with Robinhood. So actually our most active customers had the least customer satisfaction with the platform. So then when we kind of groked this, we were like, this is a five alarm fire. Any healthy business, like, you know, you don't have to be an MBA from Wharton to realize that your most valuable customers being like unhappy with you is a big problem. So. But what was remarkable was when we.

Kind of like shifted focus towards making.

These active Traeger traders really, really happy. We fixed it like that, like much faster than I thought possible.

I think within six months we had.

Basically like solved the problem. Yeah, it was kind of interesting. A lot of introspection to how we ended up sort of like ignoring the active trader audience for so long. I think once we sort of like refocused on that and really started treating them like the important constituent part of the user base that they are, the company just started doing much better. I think by and large that was the biggest part of our, of our.

Turnaround as a company since going public.

[Jay Shetty]

That's fascinating. I mean, to discover that your deepest users are unhappy must be like such a. Yeah.

[Vlad Tenev]

And part of it was like Robinhood was historically very targeted, very focused on the first timers. We want to be someone's first brokerage account. We want to make it as easy as possible to get started with $5.

Right.

But what happened was one, a lot of the people that got started with us then became really sophisticated and wanted more advanced tools and had more specialized.

Needs, but still loved Robinhood and loved.

The simplicity and the ease of use of the interface. But the other part was, if you think about our options trading platform, for example, we're one of the few, very few that offer options trading for no contract fees. Most of our competitors charge 65 cents per options contract. So if you trade 100 contracts, that's $65. That's real money. And there's some active traders that spend thousands of dollars a month on other platforms paying these contract fees. So even if the platform's not really built for you, there's like a really strong economic incentive to use it. So you had a lot of these like super active options traders that were.

Using Schwab or E Trade or others. Maybe they're using their charting from their.

Other platform, but they're putting the trades in via Robinhood and just to save fees. So, you know, we grew active traders. We also had some using us because the economics were so good.

[Jay Shetty]

Yeah.

[Vlad Tenev]

And that way we sort of like built up this large active trader business incidentally, while building products for first time novice investors.

[Jay Shetty]

Yeah. I mean, it's so interesting that since the beginning, everything, everything you talked about from the name, there's always been people who've been disgruntled, slightly angry, as you said earlier, like this feeling of like these guys are doing something, you know. Yeah.

[Vlad Tenev]

Has that kind of like, has that kind of changed now as a company.

[Jay Shetty]

Matures and like people see you become established and, and not obviously competitors. But when you look at the people who felt that way initially, do you find that founders are reaching out, you're more connected to people and as you've become more established as well, or does it get lonelier as things go on?

[Vlad Tenev]

Well, I think in different ways it does get lonelier, but I would say in general, I think in the past couple of years especially, we've like fixed more problems than we've Created, hopefully. And so our customers generally have been getting happier and happier. Not just the active traders, but you know, the great thing when you fix things for active traders, they're like power users of the platform. So the customer experience for a more.

Casual user improves as well.

So yeah, fortunately, you know, again, knock on wood. We, we've been like, we, we've been avoiding like major catastrophes in the last few years, which the last few years have been hard just with standard business.

Challenges to work through.

So that's been really nice. I think to some degree I don't expect Robinhood to ever be perfectly understood and non controversial. So it just comes with the territory, I guess.

[Jay Shetty]

What's made you comfortable with that? I feel like that's obviously always hard. We always want to be liked. We want what we create to be overall seen in a certain way. What's made you comfortable with that?

[Vlad Tenev]

Well, I think the first time that, for example, I saw negative press about Robinhood probably was like 2018, 2019.

So for the first four to five.

Years of the company's existence, it felt like everyone was kind of rooting for us. Like the regulators were fans, right? I remember our first FINRA examination. Um, we, we had, you know, someone kind of looking at what we were doing. FINRA is our primary regulator. And you know, this was a young guy, he's like, hey, there's never any like new brokerages filing. This is like super interesting. I wish you guys luck. It gave me this feeling of like, wow. I. Every investor and person I talked to is like, run as far away from regulation as possible. You don't want to be a regulated business. It's going to just grind the company to a slow death. So find some way to do it via partnerships or something. When we got started, it was unheard.

Of.

To be a financially regulated startup. It was really before the word fintech existed. For example, Robinhood predated that, probably created it to some degree. And then the press was always telling this David and Goliath tale where we were these little guys that were going after the, you know, big established, gigantic competitors and you know, we had the millennials on our side. And so it was just like very, very positive always. And it kind of, I was like, I don't really get what all of.

The fuss is about.

Like all of the negative press and all this stuff that people are talking about that's happening to other companies, maybe not us. Eventually I would get like the comms and marketing people that they would come and show me the clock of like Company perception. Have you seen this?

[Jay Shetty]

I have not, no. It's fascinating.

[Vlad Tenev]

It's like this clock. And basically, when you're kind of here, everyone loves you. And when you're kind of here, everyone hears you.

[Jay Shetty]

I need to see that.

[Vlad Tenev]

And they were like, so you're here at, like, 4 o' clock, but you should get ready. In the next six to 12 months, you'll be here and everyone's going to hate you. And you just haven't seen it.

[Jay Shetty]

And then it keeps going around.

[Vlad Tenev]

Yeah, and then it keeps going around. And they were like, look, Facebook is here. They're, like, a little ahead of you. Everyone hates them now. They ended up being exactly right.

Six to 12 months later, it was.

Like, all negative press. But I guess, like, the way I.

Got used to it was just going through that, right?

It's like the first time a negative article hits, you're like, holy shit, it's negative press. I've never seen it before. You kind of feel like it's the.

End of the world.

And then after the 600th one, you're just kind of like, okay, that's another one of these things. I'm just going to move on and run my business. And then when the press turns positive, you're positively surprised and you're not expecting it. So I think that's how I got through it. You just get punched in the face enough and your face contorts to the.

Shape of the fist. Right.

[Jay Shetty]

How have you managed your personal life through all this? Because I feel like when we started the interview today, you talked so much about your personal life and how you came to this country and the build, and I feel like as you're an entrepreneur and your professional and personal life almost become one, and, you know, when you're building something that's growing as fast as you are, you get absorbed and you have to be like, you know, you sleep and dream and eat Robin Hood. Like, that's how it has to work. That's how it goes. What's been powerful for you in your personal life that you think has allowed you to reinvent, reboot, Stay renewed. Stay, re. Enthusiastic. Like, you seem as excited about Robinhood today as I imagine you would have been in 2013, if not more, and what's been allowed you to renew your enthusiasm so consistently?

[Vlad Tenev]

My kind of sort of like, analogy of so many things, my mental model for so many things that I use in business and in life is kind of the barbell. Like, I like to get things on.

Opposite sides of the barbell, right?

And I tend to ignore the things in the middle.

Right.

So basically for me personally, my work is highly intellectual, and that's maybe on one extreme. And what's the opposite of intellectual? Just sort of like the physical. So I really focus on that and it's just super basic. And when I started, I would kind of not really spend too much time.

And effort on my health.

But as I've gotten older and the job's gotten more stressful, I noticed that effort I put in here pays off multiples. So now my wellness routine and my training, I spend more time just dialing it in. So making sure I get the right amount of sleep, that I have an awesome mattress, that I keep my bed at the right temperature. I like to journal before bed and I like to shut off the devices.

The devices, by the way, has been.

The hard part for me. You know, I like, try really hard. I have to do unnatural things to like, stop from looking at my phone like. Like my phone's not with me right now, for example, because, you know, I would just. It's hard to avoid looking at it and if I know it's in my pocket, you know, then it's almost like too close. So, I mean, actually, during the whole GameStop stuff, it was particularly acute for me because I was at home, so there was no boundary between work and personal, and I was going a little bit crazy. And so I had this thing where I would try to sleep with my phone in a different room. So I'm not always just tempted to check out what emergency is happening. Which ended up being a big problem the morning of GameStop because it took forever for my team to get a hold of me. And then for a while I slept with three phones next to me, which it really backfired. But yeah, my health. I work out a lot. I've gotten into hot cold therapy. At first I was doing cryo, but then I got a cold plunge at my house and that really helped. And yeah, just the basics of sleep and diet I think has made a world of difference. And just trying to, like, I don't think I've figured out the device thing and sort of like my rhythm of the day perfectly. But that's a.

That's a work in progress.

[Jay Shetty]

And you're married. You're married too, right? You mentioned. Yeah, yeah. What's. How's. How's it been like dealing with all of this? But it sounds like you've been together for quite some time. Like, it's.

[Vlad Tenev]

Yeah, I've been married for almost 10 years. Now. Yeah. Got a. Got a bunch of kids, Great kids, and they don't really know what I do.

[Jay Shetty]

Same back to how your wife didn't know what you did either.

[Vlad Tenev]

Yeah, well, she did, but. Yeah.

[Jay Shetty]

Show them Robin Hood, the cartoon, and they'll get it.

[Vlad Tenev]

Oh, yeah, they love that cartoon.

I think, like, the credit card, they.

Kind of get a little bit because they know they can use it to buy toys. Yeah. My wife is a great compliment to me. She's very patient. She's very empathetic, all the things that I'm not. And so she's just been an amazing partner through all the crises. And she sort of, like, knew me before Robin Hood. Right.

I mean, she.

She kind of helped come up with the name. So I think. I think she feels like Robin Hood's like one of the children, just kind of like I do.

[Jay Shetty]

Yeah. That's beautiful, man.

[Vlad Tenev]

I wanted to.

[Jay Shetty]

This I'll probably cut and put back in. I was. You mentioned the credit card there.

[Vlad Tenev]

I'm intrigued as to product you created.

[Jay Shetty]

Because you saw the traditional versions of them being ineffective.

[Vlad Tenev]

Yeah.

[Jay Shetty]

So when you go build a credit card, what's. What's wrong with a traditional credit card that you can get from anywhere else? Like, what. What are you doing differently?

[Vlad Tenev]

I think there are a couple of problems with traditional credit cards. One is that basically the rewards are kind of incomprehensible. I think that anytime there's, like, websites devoted to exactly how you should kind of work through your points to optimize the value you get from all the points. Media empires, like the points guy, were created on the back of this. Right. It's like, yeah, if you want to spend 10 hours a week optimizing your points and maximizing the rewards, I think that's pretty good. But we wanted to create something that simplifies all of that and basically just by, like, using it for the vast majority of people, you know, you get the best rewards. So simple, clear reward structure that you don't have to be, like, a PhD to decipher people building their credit. If you're a student and you are, you know, you don't have a credit history, typically you have to start out with, like, a really crappy card. You have to sort of, like, upgrade your way to a nicer card once.

You prove that you're worthy.

And you know there's a crappy starter.

Card for people with no credit history.

And, like, the premium card for folks that have the means, we ask, can we. Can we fix that?

Can we actually have a starter card?

That has the same economics, the same rewards, the same design for as like a highly premium card and then the digital experience. You know, most cards don't really think through how to take all of the things that technology and you know, fintech has given us and sort of like.

Give them to you in the same package.

And those are things like virtual cards. I don't know if you've been to.

A restaurant, you probably go to restaurants.

Where you have to give your credit card to lock down the reservation. Imagine you could create a virtual card so that not every restaurant has your actual card number. And if you want to cancel the reservation, you don't have to call the restaurant, you could just disappear that virtual card.

Right?

Or you know, if you want to sign up for a free trial, you can create a virtual card seamlessly and that can be your free trial card. But you don't have to give them your, your real phone number helps maintain people's privacy and in fact there are great innovative businesses privacy.com created with this notion. We put all three of these things in one package, one card for everyone.

The best rewards in the industry.

3% cash back on all categories. A beautiful physical card, including the solid gold variant which I have in my wallet, I can show you, and a digital experience that's like world class. And we put all these together and it's definitely the best reviewed, most popular product that we've ever rolled out. Even more popular than free trading. So it's been quite amazing and now it's just like people want to rolled out faster. That's the one limitation. We had over a million people join the wait list for it within a month of announcement. And the bet was that if we.

Make the rewards and the product so.

Good, we wouldn't have to spend the typical like $500 to acquire a credit card user that the, the big banks spend. We could get it just organically and that seems to have proven out.

[Jay Shetty]

Wow.

[Vlad Tenev]

Now it's just about getting it into.

Everyone'S hands while also validating the economics.

And the underwriting of a new credit model.

[Jay Shetty]

Vlad, it's been fascinating talking to you. You're truly extremely unique individual in a positive sense.

[Vlad Tenev]

Thank you.

[Jay Shetty]

It's really brilliant.

[Vlad Tenev]

Maybe some negative too, you know, brilliant.

[Jay Shetty]

To dive into your mind. Honestly, it's been really fascinating for me. We end every episode of On Purpose with a final five. So these questions have to be answered in one word to one sentence maximum. So Vlad Tenev, these are your final five. The first question is what is the best advice you've ever heard or received.

[Vlad Tenev]

Be honest, don't lie to others, but.

Most of all, don't lie to yourself.

[Jay Shetty]

Good advice. Question number two. What is the worst advice you've ever heard or received?

[Vlad Tenev]

I think in the context of the company.

Trusting experts who have done it.

Before is bad advice. Generally speaking, I think you have to listen to experts and understand, but I don't think people should blindly trust anything.

Question number three.

[Jay Shetty]

If we saw one of your evening journal entries, what would we learn about you that we haven't learned today?

[Vlad Tenev]

I still really love math and I spend a non trivial amount of times trying to solve basic math problems.

[Jay Shetty]

Really?

[Vlad Tenev]

Yeah.

[Jay Shetty]

Oh, wow. That's cool. In your journal?

[Vlad Tenev]

In my journal, yeah. You'll see pictures of triangles and spheres and stuff in there.

[Jay Shetty]

That's cool. How would you define your current purpose?

[Vlad Tenev]

I think it's to seek truth. I think if I had to find a personal. I think a lot about what are my personal values? What do I care the most about? And I think my top value is truth. Actually I care about truth and I.

Mean in terms of purpose.

I really want to understand how the universe works. Mathematically or mathematically?

Physically.

Yeah, I mean, we can start with that. But of course, psychologically is good too.

[Jay Shetty]

Oh, cool.

[Vlad Tenev]

Financially, I think we're closest to that one. Pretty close to understanding how it works financially.

[Jay Shetty]

And how do you define truth? That's a sub question to that, not the fifth.

[Vlad Tenev]

I think that's a really good question.

How is truth defined? I think that truth is something that.

Multiple observers will simultaneously agree on.

Yeah. So if you had like multiple independent intelligent observers observing an event with like.

The same information, they should agree on it.

And if, if they agree on it.

Then.

You have like high confidence if it's true. Now, of course, if it's something that's like fact based, it's even easier because you can just like prove that it's true if it follows from axioms. But probably the more interesting one is if.

If there's some ambiguity.

[Jay Shetty]

Yeah. I also find it.

[Vlad Tenev]

But I think you need a notion.

Of verification and also some notion of like independence.

[Jay Shetty]

Yeah. One of my favorite verifications of truth, I feel in my definition is timelessness. That something being timeless, I. E. It was as true a thousand years ago as it is today.

[Vlad Tenev]

Yeah. Something powerful about that Lindy effect, right?

[Jay Shetty]

Tell me about it.

[Vlad Tenev]

Yeah, Basically like I think it was. I read about it from Nassim Taleb.

[Jay Shetty]

Okay. Yes, yes, yes, yes.

[Vlad Tenev]

Yeah. So basically, like he says, a good approximation for how long something's likely to be relevant is how long it's already been relevant. So I think the way he kind of describes it is the New York Times bestseller list. If a book sort of like hits the bestseller list and is a bestseller for one week, you can basically assume that it's going to be irrelevant in.

A couple of weeks.

But if the Holy Bible, people have been reading it for 2000 years, you have pretty high confidence that it's going to be relevant 2000 years from now in a way that you wouldn't with what's on the bestseller list now.

[Jay Shetty]

Absolutely. Fifth and final question. We ask this to every guest who's ever been on the show. If you could create one law that everyone in the world had to follow, what would it be?

[Vlad Tenev]

I think there's too many laws. Yeah. I think deleting laws is the more interesting thing. If there was a law where in.

Order to create a new law, you.

Had to delete at least one existing law, I would feel much better about it.

[Jay Shetty]

That's a good law.

[Vlad Tenev]

If you think about overregulation, which I.

Think is a big problem, it's really, really easy for new laws to be created. It's easy for, like, organizations and the government to get bigger, and that creates all sorts of problems. Like it's. It's impossible to get, you know, high speed rail in California. Right.

We need a force to counteract that.

And right now it's very easy for these things to get bigger and more laws. But, like, periodically we've got to go.

In there and slash laws and make.

Things smaller and there's. There's a lot of pressure against this.

[Jay Shetty]

Well said, Vlad. I look forward to many more conversations with you. Philosophical seeking of the truth. Psychological. Truly, truly wonderful to get to know you today. And thank you for being so honest. Thank you for being so open and vulnerable. And even though you described yourself as stoic at the start, I definitely feel you shared a lot of emotion in what you shared. So thank you so much for, for doing that. I really appreciate it.

[Vlad Tenev]

Thank you for taking the time. No, it's been, it's been a lot of fun. You know, I don't usually do. I don't do too many podcasts in general, but this was a unique experience.

[Jay Shetty]

Yeah, I'm very grateful. Grateful for your time. Thank you so much.

[Vlad Tenev]

Likewise.

[Jay Shetty]

Thank you.

[Vlad Tenev]

Thank you so much for listening to this conversation. If you enjoyed it, you'll love my chat with Adam Grant on why discomfort.

[Jay Shetty]

Is the key to growth.

[Vlad Tenev]

Growth and the strategies for unlocking your hidden potential. If you know you want to be more and achieve more this year, go check it out right now.

You set a goal today, you achieve it in six months and then by the time it happens, it's almost a relief. There's no sense of meaning and purpose. You sort of expected it and you would have been disappointed if it didn't happen.

[E]

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[Vlad Tenev]

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[Jay Shetty]

You're listening to an iHeart podcast.