20VC Robinhood Founder Vlad Tenev on The Single Most Important Thing Leadership is Responsible For, How To Manage Fear and SelfDoubt as a Leader & The Future of Fintech; Bundled or Unbundled

In this episode of "20 minutes VC," Harry Stebbings interviews Vlad Tenev, co-founder and CEO of the revolutionary trading platform Robinhood, which has democratized investing with its commission-free model. Tenev shares his journey from studying physics at Stanford to navigating the financial crisis with entrepreneurial spirit, leading to the inception of Robinhood. He highlights the company's mission to make investing accessible and culturally relevant to all, aiming to shift societal focus from consumerism to long-term investing. Tenev also discusses leadership, the importance of adapting to company growth, and his personal management style, which includes direct mentorship and fostering a sense of urgency within the team. Furthermore, he touches on the evolving Silicon Valley landscape, the impact of technology on the financial industry, and his vision for Robinhood's global expansion and influence over the next five years.

• Harry Stebbings hosts the 20 minutes VC podcast, expressing excitement about the current lineup of guests.
• Vlad Tenev, the co-founder and CEO of Robinhood, is introduced as a guest who has significantly impacted the industry with simple, user-friendly consumer products.
• Robinhood is known for commission-free investing and providing tools for users to manage their finances.
• Vlad Tenev has raised over $2.2 billion for Robinhood from prestigious investors.
• Prior to Robinhood, Vlad founded two finance companies in New York City.
• Harry thanks various individuals for their introductions and question suggestions.

"This is the 20 minutes VC with me, Harry Stebbings, and I know what you're thinking. My word, 20 VC is on fire with its guests at the moment. But I can tell you it gets even better today, being joined by a guest who's reshaped their industry with beautiful, simplistic consumer products."

This quote introduces the podcast and sets the stage for the interview with Vlad Tenev, highlighting the quality of guests on the show.

• Harry Stebbings mentions Hellosign, an e-signature solution that was acquired by Dropbox for $230 million.
• Affinity is promoted as a venture capital CRM used by several top firms.
• Zoom is endorsed for its communication platform, integrating video conferencing, phone calls, group chats, webinars, and more.

"And speaking of beautiful products there, and honestly cutting the crap, there are a few products I truly could not live without and use ten plus times a day."

Harry Stebbings transitions from discussing Robinhood to endorsing various products that focus on user experience and efficiency.

• Vlad Tenev met his co-founder Baiju Bhatt at Stanford University while studying physics.
• They founded two financial companies in New York during the global financial crisis of 2008.
• Vlad and Baiju moved back to California in 2011 to be closer to Silicon Valley's talent pool and considered it their home after Stanford.
• The Occupy Wall Street movement and the rise of mobile technology influenced the idea for Robinhood.
• Vlad saw the potential for mobile technology to transform finance, similar to its impact on photography and transportation.
• Robinhood was conceived as a mobile-first, commission-free investing platform designed to be user-friendly and accessible to a new generation.

"And so we moved to New York, founded a couple of companies in the financial software space in 2011, realized that we were transitioning more to software, and we really didn't need to be in New York and yearned to go back to California, where we could hire more software engineers, and where we just generally considered home after being at Stanford."

Vlad explains the journey from founding companies in New York to moving back to California, which set the stage for the creation of Robinhood.

• Vlad moved to the US from Bulgaria at the age of five during the early 1990s.
• The fall of communism in Eastern Europe and the subsequent economic instability in Bulgaria highlighted the importance of democracy and capitalism.
• Attending Stanford in Silicon Valley exposed Vlad to innovation, combining his appreciation for democracy and capitalism with the spirit of innovation.
• Vlad attributes the success of Robinhood to the principles of democracy, capitalism, and innovation, which are rooted in his personal history and experiences.

"It gave me an appreciation for a couple of things, democracy and capitalism being two. And I think when I got older and through very much of a stroke of luck, my parents raised me and I grew up on the east coast of the US. But I had the opportunity to go to Stanford and be an undergrad there, which is in Silicon Valley, the center of innovation in the US and arguably the world."

This quote reflects on Vlad's personal journey from Bulgaria to the US, his upbringing, and how his experiences shaped the vision behind Robinhood.

• Vlad Tenev co-founded Robinhood in the aftermath of the financial crisis, which seemed risky but felt natural to him at the time.
• He had just graduated as a math major, which in 2008 had limited career paths primarily leading to academia.
• The competitive nature of academia and the poorly funded math programs made the risk of starting a business seem less daunting.
• Vlad's grad student experience, characterized by hard work and little success, prepared him for the entrepreneurial journey.

"It was 2008. I had just graduated from college. I was a math major, which nowadays is probably a gateway to lots of career opportunities. But back in 2008, it was a gateway to potentially becoming a math professor after ten years of grueling competition over a limited number of graduate student slots, and consequently a limited number of postdoctoral fellowships and a limited number of tenure track positions."

This quote explains Vlad's perspective on risk-taking when he started Robinhood, highlighting the limited career prospects for math majors at the time and the competitive nature of academic paths.

• Vlad believes in leading from the front and getting into the details by talking to individual contributors.
• He spends time with people doing the work, especially those straight out of college, believing they can do extraordinary things with proper mentorship.
• Vlad values maintaining high standards and quality while increasing the tempo of the company.
• He emphasizes the importance of a sense of urgency and instilling this mindset throughout the organization.
• Vlad and his co-founder Beiju aim for Robinhood to be a legacy that survives them, focusing on systems that compound advantages over multiple decades.

"The more I find myself getting experience and sort of going through the various stages of Robinhood and my life, the more I kind of recognize that the thing leadership is most responsible for, aside from maintaining high standards and a high quality bar, is the tempo of the company and the organization."

This quote reflects Vlad's view on the critical role of leadership in setting the pace and maintaining quality within a company, which he sees as essential for long-term success.

• Vlad discusses the evolution of leadership roles as a company grows, using Robinhood's transition from a startup to a 1000+ employee organization as an example.
• In the early days, Vlad and his co-founder did everything themselves due to necessity, learning from first principles.
• As Robinhood grew, the leadership focus shifted from filling functions with first-timers to hiring experienced leaders.
• The shift required moving from a scarcity mindset to one of abundance, seeking the best people for each position.

"Now, as Robinhood is over a thousand people, we're in sort of an interesting position where we have a lot more options for leaders we can hire and individuals we can hire."

This quote describes the change in hiring strategy as Robinhood scaled, moving from a small team where the founders did everything to a large organization capable of attracting experienced talent.

• Vlad acknowledges the need for leaders to adapt their strengths to the company's current needs and to be willing to change focus and approach.
• He shares his experience of learning iOS development and UI design from scratch alongside his co-founder Beiju.
• The early days required a scrappy mentality due to lack of resources and experience.
• As the company grew, the challenge became integrating new, experienced hires into the existing culture and learning from them.

"It's required a shift in the way that I think about it as well, because you have to kind of get out of the scarcity mindset a little bit."

This quote highlights the mental shift Vlad underwent as a leader, moving from doing more with less to aiming for the best possible team members as Robinhood expanded.

• Vlad Tenev emphasizes the significance of sleep for functioning effectively, especially in challenging business environments.
• He actively avoids engaging with potentially disruptive technology like Twitter and Slack before bedtime.
• Tenev has implemented systems to ensure he is not tempted by his smartphone late at night, aiming to be at the top of his game.

"I actually really try to make sure I get enough sleep. I'm a person that functions a little bit better when I get more sleep."

This quote highlights the recognition of sleep as a critical factor in personal performance and effectiveness in a leadership role.

"I really try to make sure I get good sleep so I'm available and I can be at the top of my game."

Tenev acknowledges the direct link between quality sleep and his ability to perform optimally in his role.

• Vlad Tenev discusses his personal strategies to manage anxiety and fear, which include physical separation from his smartphone.
• He uses an old school alarm clock and a 'dumb phone' to minimize nighttime distractions and the temptation to engage with social media or work communication tools.

"One thing that I do whenever possible is literally sleep with my smartphone in a different room."

By keeping the smartphone in a different room, Tenev reduces the likelihood of late-night distractions that could impair his sleep and increase anxiety.

• Vlad Tenev reflects on the fintech ecosystem's growth and the evolution of companies within it, noting how Robinhood started before the term became popular.
• He discusses the trend of companies starting with a narrow focus and then potentially bundling services as they grow and meet customer demands.

"I think the most successful companies start by being very narrow and doing one thing very, very well because it's just hard."

This quote emphasizes the importance of focus for startups, suggesting that success often stems from doing one thing exceptionally well before expanding.

"There's a bit of bundling happening as well."

Tenev observes that while new companies may still be in the unbundling phase, established companies like Robinhood are beginning to bundle services to meet broader customer needs.

• Vlad Tenev explains Robinhood's approach to ancillary products, focusing on access and promoting long-term investing habits.
• He mentions specific features like recurring deposits and fractional shares that encourage habitual investing.

"If we can turn new investors and first time investors into long term investors, we have the opportunity to fundamentally change the lives of our customers and financial system as well."

Tenev suggests that Robinhood's goal is to transform new investors into long-term investors, which could have a significant positive impact on society.

• Vlad Tenev discusses the behavioral trends that might indicate a new investor's transition to a long-term investor.
• He highlights the need for Robinhood to adapt to customers' goals and provide an experience that facilitates their investment journey.

"Robinhood has to do a better job of actually adapting to the use case that customers have and giving them a really good experience and really good onboarding and a path towards achieving their goals."

This quote underscores the importance of tailoring investment tools and experiences to individual customer needs, facilitating their transition to long-term investing.

• Vlad Tenev expresses his hope that his children will become interested in investing at a young age.
• He discusses the broader cultural relevance of investing and the debate on accessibility and limitations for investors.

"I hope that my children become interested in it at young ages as well."

Tenev shares his personal desire for his children to develop an interest in investing, reflecting a broader goal of financial literacy for the next generation.

"It's in response to sort of the increasing cultural relevance of investing."

This quote acknowledges the growing cultural discussion around investment accessibility and the impact of platforms like Robinhood on this discourse.

• American consumers have traditionally prioritized spending and consumerism, with investing taking a secondary role.
• There is a cultural acceptance of easy credit purchases, such as buying a flat-screen TV online with one click.
• Investing is becoming more culturally relevant and mainstream, similar to music and the arts.
• The diversity of investors is increasing, and the investing gap among underrepresented minorities is shrinking.
• There is a shift in mindset from spending to investing, which is expected to accelerate in the coming years.

"If you look at what american consumers do with their money, investing has sort of had a secondary place for quite a while."

This quote highlights the traditional secondary status of investing in American financial behavior, compared to spending.

"I think this year especially has been a year where investing has become much more mainstream."

Vlad Tenev notes the increased mainstream acceptance of investing within the current year, indicating a shift in cultural attitudes toward personal finance.

• Vlad Tenev recently read "The Mars Project" by Werner von Braun, a German rocket scientist.
• The book details the logistics of a potential Mars mission using technology available 70 years ago.
• It discusses the number of ships, type of fuel, landing strategies, and cost estimates.
• The book's ideas, such as reusability of rocket launch systems, have been considered for a long time and can be compared to modern efforts like SpaceX.

"He wrote this book in the what it would take to get to Mars, how many ships we would need, what kind of fuel, how they would land, how much everything would cost."

This quote summarizes the content of "The Mars Project," which breaks down the components needed for a Mars mission.

• The COVID-19 pandemic has changed the dynamics of Silicon Valley.
• The network effect of proximity to venture capital and talent has been strong but is now being unbundled.
• Companies no longer need to be near venture capitalists or other companies for funding or hiring talent.
• Vlad Tenev would like to see the geographic expansion of Silicon Valley's network effect.

"I think that network effect has been very, very powerful, and expanding it geographically to the rest of the country, and really, the world is a trend that I'd like to see accelerate."

This quote reflects Vlad Tenev's desire to see the influence of Silicon Valley spread more broadly, both nationally and globally.

• When asked about success, Vlad Tenev immediately thinks of Elon Musk.
• Elon Musk's long-term focus and impact on society with SpaceX and Tesla are highlighted.
• Financial success is seen as one of the lesser motivations for Musk.

"Probably Elon Musk. I think it's very clear when you look at how he's operating, the types of projects that he's pursuing."

The quote identifies Elon Musk as a paragon of success due to his ambitious projects and societal impact.

• Vlad Tenev values the straightforward and blunt communication style of Mickey Malka.
• He appreciates board members and observers who are direct and do not sugarcoat their feedback.

"Mickey's blunt style and the fact that he doesn't sugarcoat things and he gives it to you straight, I think that really has resonated with me."

This quote emphasizes the importance of direct and honest communication in professional relationships, as exemplified by Mickey Malka.

• Vlad Tenev wants employees to find their time at Robinhood both challenging and rewarding.
• The company's ambitious mission should make employees feel they are contributing to a broader purpose.
• Success at Robinhood is tied to making long-term investing culturally relevant and accessible.

"I would like them to remember Robinhood as one of the most challenging and rewarding times of their lives."

The quote conveys Vlad Tenev's aspiration for employees to look back on their tenure at Robinhood as a significant and fulfilling period.

• The goal is to educate first-time investors about the benefits of diversification and long-term compounding.
• Robinhood aims to be a global presence and to break down taboos around finance and financial services.
• The vision for the next five years includes making finance relevant for everyone, akin to music and the arts.

"If we can help make a first time investor, a long term investor, take someone from not having invested before to someone that is educated and understands the benefits of diversification and long term habitual compounding."

This quote outlines Robinhood's objective to transform first-time investors into educated, long-term investors as part of their broader societal impact.