Baiju Bhatt (right) and Vlad Tenev, founders of internet brokerage Robinhood. (Photo from Spencer … [+]
Robinhood revolutionized the investment by attracting a new wave of retail-many traders drawn for high-risk options and meme shares like gamestop. Vlad Tenev and Baiju Bhatt’s bold strategy to aim for an undeserved segment with bold, high -risk investment, not only pushed Robinhod to billions of dollars, but also pressured to traditional financial firms to fit .
Here are the 5 main lessons that entrepreneurs can learn from Robinhood and his co -founder, Vlad Tenev.
#1. Product strategy.
Robinhood did not invent online trading. E-Trade and others had already done it. On the contrary, its success stemmed from a strategic change than from a new product. The company focused on:
- High -risk financial instruments -It are options in meme shares that attract risk tolerant traders.
- A new demographic segment -The first, first mobile users looking for a “cost -free” approach, where the fees were hidden rather than they were ahead. This strategy utilizes large protective funds to facilitate trade, benefiting both protective funds and Robinhood.
- An overlooked possibility -The traditional competitors were focused on other products and markets and still did not have to embrace trading without commissions.
#2. Check the technology
Unlike many Fintech beginnings that rely on third party providers, Robinhood built and controlled its own trading infrastructure. This independence and expertise allowed it to:
- The speed without being limited by vendors’ restrictions.
- Save the control of the owner on the main functions that reduce confidence in external partners.
- Reduce costs and increases skillallowing for the fastest development and innovation of the product.
3. Make the Addictive platform
Robinhood prompted engagement tactics from Amazon and Las Vegas casinos to keep the user fixed. The company hired strategies such as:
- Creating climbing Presenting supplementary products and services making it harder for users to leave paving benefits such as credit cards and IRRA to provide a complete set of financial services adapted for its target demographics.
- Imitation of Las Vegas and Promotion ”gambling“Also known as gamification-designation of the app to provide small pleasure rivets and kept users returning by creating a dopamine-driven experience that imitated gambling.
- Capture of vulnerable segments -Incurraging high frequency trading and hazardous betting by making complex financial instruments such as trading options feel accessible and exciting.
Robinhood cultivated strategic relations with the highest VC funds such as Sequoia and Andreessen Horowitz, exploiting their deep pockets. These elite VCs can be very useful when an enterprise needs access to emergency capital and should raise $ 3 billion in a few days to satisfy regulatory requirements. This is the main advantage for a unicorn Silicon Valley with VC connections – they can collect billions of “overnight”. Vcs also did well. They received favorable terms-a deduction before 30%-strengthening the power of investor strategic relations.
#5. Hype the unicorn myth.
Unicorns Silicon Valley bloom on the myth of the myth because QV needs a compelling story of hype. Robinhood was no exception. Despite the two co -founders who have grown up in the US since childhood, the company bowed to a narrative of “Riches for Wealth” immigrants, positioning as a sharp beginning breaking down Wall Street – Although he was heavily supported by Elite Vcs. Key Receipts for Entrepreneurs:
- Hype directs the rating. A well -created story attracts media attention, investors and users, increasing the perceived value.
- Perception is important. Even established founders can frame their journey as a success against ODDD for fuel growth and investment. By mastering the narrative of stories, beginnings can form the public’s perception, create buzzing and gain a competitive advantage – whether the myth matches reality or not.
My intake: Robinhood’s growth highlights repetitive principles after starting billions of dollars-strategic training, technology control and adhesive customers. And the main lesson of funding is that if you think VC, time is essential. Wait until you have lever to keep control and avoid excessive thinning. Robinhood’s main lesson is not about trading – it is about the starting game in your conditions and mastering the rules before others dictate them to you.