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The thing I don't see mentioned in this thread is how incongruous Robinhood's image is (a professed goal of fighting inequality by giving the working classes ac
by md_ 5y ago
The thing I don't see mentioned in this thread is how incongruous Robinhood's image is (a professed goal of fighting inequality by giving the working classes access to the same return on capital as the wealthy enjoy) in relation to their business model.
Say what you will about Wall St, but customers of traditional brokers tend to know what the brokers are in it for: the money. Robinhood's big product innovation might be zero-commission trades and a gamified UX, but their big marketing innovation is to wrap themselves in the ever-dingier cloak of Silicon Valley "changing the world".
I can't help but think of this absolutely spot-on parody from "Silicon Valley": https://www.youtube.com/watch?v=B8C5sjjhsso https://www.youtube.com/watch?v=B8C5sjjhsso.
- fullshark 5y agoIf you throw away all the pretense is it just the case that RH has a better business model compared to etrade, Schwab etc? They recognized that consumers prefer zero commission trades, a good UX smartphone app, and don't care about the fact that RH sells order flow? All that other stuff is noise.
- md_ 5y agoIf I'm being candid, what bugs me about this kind of marketing is that I work for a Silicon Valley company which spends a lot of hot air on "doing what's right"—and I want it to be true. So, for {altruistic, self-interested} reasons, I want to push back on the dilution of "doing good by doing well." To directly answer your questions on Robinhood, though: I believe (with low confidence) that the big innovation is gamification. That's it. And I have trouble feeling like that's beneficial. If Robinhood had gamified saving for retirement in a boring 3-fund portfolio with zero commission trades, I don't think we'd be having this conversation. But PFOF on once-a-month 401k inputs wouldn't be very good for their investors.