00:00:00
I am Vlad Tennv, the founder of Robin Hood. We're talking about Robin Hood. The stock's more than doubled since its last
00:00:10
report. It stock surged 180% this year after nearly doubling in 2024. The shares of the trading platform now up
00:00:17
more than 400% in the last year. Glad your presence there speaks volumes. Robin Hood Gold, which hit a record 3.5
00:00:24
million subscribers. Most financial services get worse the more money you have, but we wanted to kind of invert
00:00:31
that. Ladies and gentlemen, please welcome Robin Hood CEO Vlad Tenner, my guy. Good to see you, brother.
00:00:50
Good to see you. Good to see you. You're the reason Jake Health's here. I mean I mean it is a great story.
00:00:57
It's so true. Jake Cal bumbles into eight shares of Robin Hood. Lad builds a hundred billion dollar companies. It's
00:01:04
unbelievable. I mean people know me for the Uber investment which four or $5 million
00:01:09
valuation. But there's When do I flip that? Well, yeah, it's going to take a little
00:01:13
more. I think you got 20x left to go. But wait, was JL the third or fourth investor in Robin Hood? It was $20
00:01:20
million valuation, but it's a good story, I think, because you hadn't launched. And we're at Antonio's
00:01:26
Nutouse. I went for a drink with my friend Ado. He brought his college roommate, Elon. We're hanging out at
00:01:32
Antonio's Nut House in Palo Alto. Rest in peace, Antonio. Keep dropping these names. One second.
00:01:36
So Vlad comes over. We we Vlad and I knew each other a little bit. And Vlad pitches me on this idea and he says,
00:01:43
"Um, I'm a quant." I said, "What's a quant?" He said, "Quant analysis." I said, "Yeah, I heard of it. Um, hit me
00:01:50
with the idea." And then he goes, "Is that Elon Musk?" I said, "Yeah, just hit me with the idea. I know you got a
00:01:55
startup." He says, "Well, I I want to get uh this generation, these millennials,
00:02:01
these Gen Z's. I want to get them to trade stocks." I said, "Love it. They don't care about like getting a driver's
00:02:08
license. They they don't they're still on their mom and dad's Netflix. You're going to try to get people who don't
00:02:13
care about the future to trade stocks?" He says, "Yeah." I said, "What's the business model?" I said, "This is the
00:02:18
best part. We're going to let him trade for free." So I said, "Okay, let me repeat this back to you, kid. You want
00:02:23
to get a group of people who don't have any interest in the future to trade stocks and then
00:02:30
we have 30 seconds. You're going to make money. You're going to make money. Thank you, Vlad."
00:02:35
I said, "I'm in. I'm in." Not only that, but he said, "This is probably the best idea you'll ever
00:02:40
have." I did say that to him, too. I was like, "This is the best idea. What if it
00:02:44
works?" And here we are 10 years later. what's worked. And last week you were added to the S&P
00:02:48
500. I was last week or yesterday? Two days ago. It was Friday. I mean, what a huge accomplishment.
00:02:54
Thank you. I mean, I think I think it was cuz I rejected you for a job, right? It you heard about that.
00:02:59
This is a series. Thank you guys for upgrading me, by the way. I guess that that's been the best
00:03:04
part of being added to the S&P going from just a Jason interview to to the whole squad.
00:03:09
We were doing the rehearsal yesterday and everyone wanted to do the the interview, so we said, "Let's all do it
00:03:13
together." Why don't we all get in here? Can I uh let's let's maybe start. So look, you've
00:03:17
built an incredible business. Um there's a part of it that looks like the you know what comes after the Erades of the
00:03:24
world etc. But there's an enormous other part of your business and there's all these emergent paths. I want to just
00:03:30
start by double clicking in something that you announced a few months ago in France and maybe you want to talk us
00:03:36
through it what the goal was. You got a lot of support but you got a lot of blowback as well. There was a lot of
00:03:42
people that were like, "Wow, this is a little too disruptive tokenizing these stocks, putting them on the blockchain."
00:03:47
Maybe talk us through the business and then just double click on that narrow thing so we can understand what you're
00:03:52
up to. Yeah. So, we had an event in in the south of France that we called to catch
00:03:57
a token. And the idea behind that event was we wanted to show what Robin Hood, the app, the platform would look like if
00:04:06
it was built from the ground up on crypto technology. So what that looked like was stocks on blockchains. Uh
00:04:14
obviously we added a bunch of cryptonnative features like pers. Um we launched in now 31 countries. And then
00:04:23
uh we also wanted to demonstrate to the US what the power of putting traditional
00:04:28
financial services on blockchains was. And to me, I think a lot of people talk about 24/7 stock trading, instant
00:04:37
settlement, these things that do have real value, but I think the most powerful thing is taking inaccessible,
00:04:44
illlquid assets and making them available. And and so we we were actually, I think, the first to tokenize
00:04:51
OpenAI and SpaceX and we made that available to our retail customers in Europe in the form of a giveaway. and
00:04:58
and that was very very exciting, you know, not not without its controversy, but I felt like it was such a powerful
00:05:05
thing. How do you do it? How did you enable that? It's actually very similar to uh
00:05:10
stablecoin in a way. So, if you're a stable coin issuer, and this it's a little bit oversimplifying, but you can
00:05:17
think of it as we keep some dollars or treasuries in a bucket over here. uh we mint and burn tokens against that bucket
00:05:26
but back at one to one and the tokens can actually trade publicly on a variety of of blockchains. So it's just
00:05:34
extending that token that that tokenization concept from stable coins to uh public and and private.
00:05:42
So you had to go and secure your own block of SpaceX and OpenAI stock and and then put it somewhere. Were the
00:05:49
companies okay with it? Um, it depends. Uh, I think I think that, uh, I'll say a
00:05:57
couple of things. Um, I think a lot of people are okay with it in principle, but if you're a company and you're
00:06:05
focused on your mission like OpenAI is, and you hear about some new thing, uh, it's kind of a distraction. So, I I
00:06:13
don't really blame them for tokeniz tokenization or private access not being their their top priority, but I did want
00:06:20
to be the first to tokenize open AI. So, uh did Sam give you a call? Uh I have had a couple conversations
00:06:27
with with Sam before and after. Um cuz yeah, he's a spicy individual. What was his take? Did he tell you to
00:06:32
stop? Um I think that actually uh I I'd like to think we get along quite well. I
00:06:39
think he understood why we were doing it. Again, the distraction aspect when they have so much going on uh is is a
00:06:47
real thing. But at the end of the day, where do you take it from here? Are you going to go and get 50, 100 of these
00:06:54
well-known private companies? Is that the goal? Is it every private company? How like what do you do from here to
00:06:59
build on top of it? Yeah. So, we we've been hard at work trying to figure out how to do it in the
00:07:05
US. I think that's that's uh everyone's interested in that since the France announcement. obviously expanding what
00:07:12
we do in Europe as well and there will probably be different mechanisms in the US and and in Europe at least for some
00:07:20
time but uh yeah you you should expect that we go bigger and deeper into the space and have plenty of things to do in
00:07:28
the future. I'm curious what the relationship has been with the new administration. the
00:07:33
last administration, you know, was not very pro- innovation, crypto, and now you got David uh running that
00:07:40
specifically. How has the change in the administration changed how you look at innovation at Robin Hood? And then Sax,
00:07:47
I'm sure you have some follow-up questions here. Yeah, it's been very positive. I mean,
00:07:51
just uh by nature of how many times I've been to Washington, uh the last administration
00:07:58
didn't invite me to the White House once. Uh, I asked for meetings and they wouldn't even meet in person. They were
00:08:04
all working remotely uh until I think 2023, early 2024. Um, it was funny how remote work kind of
00:08:13
broke down along political lines. It's sort of like the the Republicans wanted to get back into the office.
00:08:18
I think you're referring to remote work as not working. I mean, that is uh I wasn't going to say
00:08:24
it, but uh yeah. Um, yeah, it was funny how that works out, but it's it's been very positive. I
00:08:30
mean, last administration, we were playing a lot of defense. It was just sort of like one enforcement action
00:08:38
and we had a wells notice and all aspects of our business were sort of under assault. So I think the most
00:08:47
direct thing was when that went away, we had to think, okay, well there the administration now wants to work with us
00:08:54
rather than just trying to attack us from all these angles. And for a while we didn't even know how to operate in
00:09:00
that environment because we were just completely not used to it. Yeah, you were on your
00:09:04
Have you met with Elizabeth Warren? Uh I have not. No, I just receive letters from time to time. But
00:09:12
she really But she hates you. Well, I told me personally, she really can't take it.
00:09:16
No, the reason the reason I asked is what is the core motivation of the idea of we need to enforce, we need to kind
00:09:24
of restrict, we need to prohibit. Is it consumer protection that the belief is that systems like yours that are more
00:09:30
open, more accessible, more usable, more consumers will trade more and potentially lose money and therefore
00:09:37
they have to try and play a role in restricting consumer access to these markets and these marketplaces. and
00:09:42
that's what they're mo ultimately kind of driving towards or do you think that there's something more vested
00:09:47
interestwise that's motivating? I mean I think I think there's probably both. Certainly consumer protection is
00:09:54
the stated reason but obviously these folks have funders and backers and lots of interests. I mean there's powerful
00:10:02
there's powerful financial services companies in the state of Massachusetts. So, I don't know what's happening behind
00:10:08
the scenes, but you know, I do think the consumer protection angle is what they're kind of
00:10:15
pulling out. How do you Yeah. How do you look at this type of innovation and your
00:10:20
role at the White House to support it and to foster it while still, you know, having some rules on the field?
00:10:28
Well, I think Vlad's uh vision around tokenization is very exciting. I like you wrote a oped I think it's in the
00:10:34
Washington Post that I thought was very good on this this topic. We now have a regulatory framework in place the Genius
00:10:40
Act which the president signed in July that creates um the the the the set of rules for stable coins which are just
00:10:47
tokenized dollars. And like Vlad's saying if you can tokenize a dollar you can tokenize anything. You just
00:10:52
basically create a reserve of that asset in a secure account at a bank somewhere
00:10:57
or a broker and then you mint tokens on a onetoone basis. So I think it's very exciting is there's no reason why we
00:11:03
can't tokenize. Let's start with public securities. I think that's the easy case
00:11:09
because with public companies there's already disclosure requirements. There's an abundance of information and anybody
00:11:15
can buy a public security, right? Because of those disclosure requirements. Um and the companies don't
00:11:22
really care who their stockholders are, right? I mean because they know that the
00:11:26
public owns these securities. So what we could get right away with tokenized securities, public securities is like
00:11:33
you were saying a 24/7 global marketplace uh with instantaneous blockchain based settlement and that
00:11:40
could be really exciting. There's no reason why trading has to be on this like 9-to-F5 exchange with all this, you
00:11:47
know, we could enable stocks to trade as easily as you, you know, transfer a a stable coin. Now the private security
00:11:55
part is interesting that that is I think more complicated because first of all the companies like you're saying they do
00:12:03
care who their shareholders are and they do generally restrict those things and that's why you probably got the phone
00:12:08
call from Sam and then the regulators care also because there's not as much public disclosure. So they there's more
00:12:16
uh of an impetus to protect the public. By the way I'm not saying we can't get there on private securities. Um about a
00:12:22
decade ago a ago I founded a startup to tokenize uh real estate called Harbor and we were just way too
00:12:29
far ahead of the curve but that that was basically to to um tokenize uh private real estate securities. So I think we
00:12:36
can get there but I think the place to start that would be really exciting would just be like let's do the public
00:12:41
securities first because it's easy or easier from a regulatory standpoint and then we can work our way into private.
00:12:47
Yeah, it's certainly easier technologically. I mean, we we've we've made both uh available to some extent in
00:12:53
the EU. Um I think private could be more meaningful long term and I I'll I'll tell you why I think so. If you look at
00:13:02
the technologies that are transforming society right now and that we feel so optimistic about over the next 5 years,
00:13:11
it's AI and to some extent, you know, space exploration. And I think with AI in particular, there's a lot of fear
00:13:19
right now. I mean, you talk to a random person on the street, more than half the
00:13:23
time, they're a little bit nervous about what AI is going to do to them. Now, imagine the scenario if you know 20 to
00:13:32
30% of someone's net worth is in AI companies. Now, suddenly they're not fighting against this thing. They want
00:13:39
it to succeed because if AI succeeds entrepreneurship as a way to let more people participate in the boom.
00:13:47
Yeah. Because I worry about the status quo. I mean these AI companies in particular are getting into valuations
00:13:52
of hundreds and hundreds of billions with zero retail ownership. And that technology could completely disrupt you
00:14:02
know how normal people live their lives. And we actually expect it to drive that
00:14:06
sort of disruption because if if you look at Cathy's presentation, you know, you're talking about negative inflation,
00:14:13
high GDP growth rates, giant productivity improvements. I don't think you're going to get there without some
00:14:19
significant labor force disruption. Okay. So what do you need from let's say the US government broadly whether it's
00:14:26
the SEC or whether it's maybe new legislation on Capitol Hill what what exactly do you need to bring about this
00:14:33
revolution? I think I think uh relaxation of accreditation uh standards towards more
00:14:40
self-certification. you you mentioned uh a test. Um I think a test I consider to
00:14:47
be one form of self-certification, but the simplest form is just someone saying, "I understand the risks. I
00:14:54
understand I could lose 100% of what I put in this investment." You could even put like a skull and crossbones.
00:15:00
No crying in the casino. Yeah, exactly. You could put somebody crying in the casino. Yes.
00:15:05
Yeah. Literally in the app. No crying in the casino. I think I guess I mean the point you're making
00:15:11
is you can't on the one hand cry for access and on the other hand cry in the casino.
00:15:16
Exactly. Can't do that. But the executive order on 401k access I think was a step in the right direction.
00:15:23
So we could also ease into it by extending that to individual retirement accounts which are great short-term
00:15:30
vehicles and then give it to you need a secured interest. Why can't you just create a synthetic or like a
00:15:36
fast contract saying if and when open AI goes public cuz you can see how many shares there are. You know what the
00:15:42
legal registration of the corporation is. Can't you create like a synthetic contract that just trades the value of
00:15:47
the stock and ultimately needs to settle at some point after the company goes public?
00:15:51
We can't do that currently. Uh and and OpenAI in particular is a tricky one because yeah, pick any other LLC or C or
00:16:00
something, right? Um but yeah, we're we're continuing to look at all angles, but I I think some clarity would be
00:16:07
helpful because this is the whole value of of like sorry Chimat, but like futures
00:16:11
markets and prediction markets is you can effectively create a synthetic on some underlying without actually having
00:16:16
ownership or a secured interest in the underlying or delivery of the commodity. You could basically just say when this
00:16:21
thing goes public, it's above 20 bucks a share, below 20 bucks a share on some number of days after something like
00:16:27
that. But I mean I guess one one question for you is is that where prediction markets can take us?
00:16:31
So um the the difference within with prediction markets is you can create a prediction market but it has to have an
00:16:38
expiry date for the contract. So for example we have a prediction market live on the platform now about which
00:16:45
companies are going to IPO. You could do something like that. There have been prediction markets uh in the past, not
00:16:52
on our platform, but some other platforms that make a market around the IPO price, but if you just want exposure
00:16:59
to underlying equity in a private, I I don't think we can do that. How do you think about, you know, the
00:17:05
one criticism people have had, which is, hey, we have got a young generation. They're frisky. They want to take all
00:17:12
this risk. They want to bet. and your responsibility as a platform that is giving that access if you're the on-ramp
00:17:20
the education you give and and I remember with the options and people being able to short you you came up with
00:17:27
an incredibly elegant solution when you try to short something you give people a
00:17:31
test you give them education in that moment before they do it so so how do you think broadly about young people
00:17:39
getting into wagering they're playing cards you know they're they're betting on fantasy football and doing sports
00:17:45
betting, but they also want to, you know, have their hand in crypto and in puts and calls and and and pretty
00:17:51
sophisticated stuff. So, what's your responsibility as a platform then in introducing them to those sophisticated
00:17:58
um ways of betting and investing? I have a lot of thoughts actually when uh you interviewed me for a job in uh
00:18:06
2008, which by the way was the only it was one of two like final job interviews that I got. Most people just rejected
00:18:14
me. I never even got a call from from uh from Google or any of the others, but uh
00:18:19
it was either Weather Bill, later Climate Corp, uh or Optiver, where I interviewed to be an options trader. Um
00:18:27
so I got very very close. We had a math team. Yeah, I got very close. Was he like in the interview?
00:18:34
He you probably don't even remember. You remember Alex Machulka? Yeah, I think he was uh he
00:18:42
um I forget my recruiter's name, but that guy was great. Anyway, um and then I became an entrepreneur. So uh it might
00:18:51
not surprise you to know that me personally uh I'm I'm sort of like adverse to control on the level
00:19:00
of risk that I would take because my entire career path was sort of like maximally levered bet on one company
00:19:07
which is the one that I started. Um so I would be reluctant to discourage people from being entrepreneurs to doing
00:19:14
what they want to do with their money or time. Of course, I'm I'm in favor of like reasonable things like you should
00:19:21
it should be clear to you what you're investing in. Um but yeah, generally speaking, I think if it's available to
00:19:28
wealthy people, high netw worth individuals, it should be made available to retail as well.
00:19:33
Let me broaden the conversation. Um it used to be historically we would have banks, we would have brokerages, we'd
00:19:39
have payment processors, we'd have merchant acquirers. They were all disagregated. They could all be public.
00:19:45
they could all build thriving companies. Now with stable coins and everything else, there's this creeping convergence.
00:19:53
You're issuing a credit card. Coinbase has a credit card. SoFi has a federal banking license. Stripe just launched a
00:20:00
new L1 called Tempo. Everybody's competing with everybody. Tell us the scope of where you think
00:20:06
Robin Hood goes in the next four or five years and what the financial landscape and infrastructure looks like. The
00:20:15
Visas, the Mastercards, the JP Morgans, what roles do these companies play as you guys just become more and more
00:20:22
ambitious and girthy and big and you know market cap and all that stuff. Yeah, I think the industry goes through
00:20:28
periods of consolidation and then divergence. I think Robin Hood has a unique advantage which is that our
00:20:38
customers put an increasing amount of their dollars into Robin Hood. So what we're thinking about and and it became
00:20:44
pretty clear to us as soon as we rolled out our second product. We kind of saw what happened. Customers spent more time
00:20:50
on Robin Hood. The two products help each other. So for example with retirement we noticed you know the big
00:20:58
question was well if we launch retirement is it going to cannibalize the core brokerage business but what we
00:21:03
saw was the opposite. If someone opens up a retirement account they they tend to actually increase the amount they put
00:21:10
in their individual account and we saw that again with the credit card. If they're a credit card primary user top
00:21:16
of wallet they actually put more money into into Robin Hood. So then that gets us to a future where we ask ourselves,
00:21:24
can we be your comprehensive financial platform? Can you put your direct deposit into Robin Hood? Can you put all
00:21:31
of your money into Robin Hood? Can you get to gold subscriber premium status as soon as possible? And then can we get
00:21:38
all of your family members onto Robin Hood as well and your kids? So yeah, I don't think anyone's really thinking
00:21:46
about it from that angle, but I think that there's going to be over 130 trillion that changes hands from silent
00:21:54
generation and baby boomers to younger people. And and I think Robin Hood's actually very well positioned to be one
00:22:02
of the, if not the number one primary institution that benefits from that transfer. We've got over a quarter
00:22:10
trillion assets on the platform already, which seems like a a big number, but it's actually just a drop in the bucket
00:22:16
compared to what's going to happen. Where do you see the JP Morgans and the V Mastercards and Visas? How do they
00:22:21
compete with an elegant product with hundreds of millions of users that just, you know, the product velocity that you
00:22:28
have, the risk you're willing to take? Yeah. I mean, I think that uh if if you think about an incumbent, they have
00:22:35
certain benefits. They're like very muscular from a regulatory standpoint. Like they know how to deal with
00:22:41
regulators. They've got global scale. They've got, you know, tens, hundreds of millions of customers, lots of assets.
00:22:48
But the disadvantage is that they're sometimes slow to adopt new technologies. They don't have the best
00:22:54
engineering teams. They can't move very fast. Um, and they they can't hire the best talent. And and so I think that we
00:23:04
don't have those downsides. We have great talent. We move really quickly. We use the best technology. We haven't been
00:23:10
super acquisitive historically, even though we're doing more. And that prevents us from being bogged down by
00:23:16
these like massive integration things that take multiple years. Um, and so it's a question of can we get the
00:23:24
benefits of scale while also maintaining the nimleness of a technology startup. Do you want to give the audience before
00:23:31
we run out of time, maybe last question, but tell them about the LLM you guys are
00:23:36
building? This is a different project for you. Oh yeah. Um and the goal of that and why you
00:23:40
decided to fund that sort of outside the scope of Robin Hood. Yeah. So uh he's talking about Harmonic,
00:23:47
which is a company that I started two years ago and I'm chairman of and uh completely separate from Robin Hood. and
00:23:55
and basically the goal there is to build what we call mathematical super intell intelligence. So this is um mathematical
00:24:03
reasoning that is uh exceeding the capability of any individual human researcher. And we we had a pretty cool
00:24:12
result a couple weeks ago where we announced gold medal level performance at the international math olympiad which
00:24:19
is the biggest uh mathematics competition in the world. And and I think to my knowledge we were the only
00:24:25
formal model. You're the only formal one that got IMO gold. Yeah. Yeah. So open eye and Gemini. Open eye
00:24:30
Gemini uh did it with informal uh Gemini's in formal model got a silver last year.
00:24:38
Explain why it's going to be so critical to have a a mathematical super intelligence model.
00:24:43
Yeah. So two reasons. Um one that has to do with how these models are trained and
00:24:48
the other which is more of a consumer painoint. The thing that we've figured out with formal is how to verify that a
00:24:55
statement is true very precisely. And when you're doing reinforcement learning of these models, having a strong reward
00:25:02
signal is very helpful because you can just discard all the data that's not helpful and train on the high quality
00:25:10
like correct data. And when you're a user of these AI models, sometimes they hallucinate. Uh and and this is actually
00:25:17
not just a consumer problem, but also an enterprise problem because basically if
00:25:22
you're a software engineer using a coding model, your job has has become over the past couple of years, it it's
00:25:29
turned from writing a whole bunch of high-quality code to reviewing LLM generated code and making sure that
00:25:36
that's correct. So in a world where you've got, you know, LLMs producing thousands and thousands of pages of
00:25:43
code, human verification just doesn't scale, particularly for backend. So we want to solve that problem.
00:25:49
Okay, give it up for David Sax's second favorite. Good to see you guys. Thank you. Thanks, brother.
00:26:01
I'll see you in Vegas.