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> I always find surprising that Robinhood was able to build such a large business with such mediocre customer support You must be new to the tech industry. :-)

TeMPOraL 5y ago
Yup. The playbook of modern tech companies seems to be: 1. Solve the easy 80% of the problem. 2. Deploy that "solution" - which would not be considered acceptable in just about any other industry - as widely as possible. Do not offer proper customer support. 3. Take the money you save on not solving the hard parts and not having customer support, and funnel it into marketing, to stimulate growth. 4. Continue until you fail, get acquired, or dominate the market. 5. If anyone asks what kind of outfit you're running, make a sad puppy face and say "scaling is hard!".
- giantg2 5y ago
  It's too bad sad puppy face doesn't work in year end reviews
  - phone8675309 5y ago
    Depends on how close to the C-suite you are
    - fumar 5y ago
      Exactly, sad puppy face because my personal growth is my career growth and my career growth is my financial growth. So please more money.
    - giantg2 5y ago
      I'm about as far away as one can be.
- quacked 5y ago
  You must work for my company! The primary issue is that these 5 steps work.
  - hef19898 5y ago
    They do. Until VC money dries up. But even then it might go on...
    - jandrese 5y ago
      VC money is top 1%er money. Because they are so overloaded with cash even really hairbrained stuff gets funded by someone looking for something, anything, that can beat the market. The VC market is basically medieval patronage with a capitalistic flair. Now the patrons are expected to bring you in massive returns instead of just producing culture.
      - mixmastamyk 5y ago
        Especially when money is so cheap and has been for a decade, and getting cheaper.
    - staticassertion 5y ago
      VC money is unfathomable. It's not drying up any time soon. They may choose to shift it if there's some kind of crash, but it's too much money to just run out.
- navierstokes 5y ago
  You left out "after you get big, hire a senior regulator from the Obama era to leverage personal connections in Washington." It's so depressing. It's probably better to not know how this stuff works.
  - mkr-hn 5y ago
    The government->business pipeline is older than any living president. It's not like all the companies who founded Silicon Valley on government contracts lucked into it.
    - chickenpotpie 5y ago
      https://en.wikipedia.org/wiki/1954_Guatemalan_coup_d%27%C3%A9tat https://en.wikipedia.org/wiki/1954_Guatemalan_coup_d%27%C3%A... and the business->government pipeline when Eisenhower's advisors all used to work/currently work for The United Fruit Company
      - mkr-hn 5y ago
        It seems like any sufficiently advanced business is indistinguishable from government.
        TeMPOraL 5y ago
        That's true, and IMO, it's pretty much entirely the function of size. Modern governments are what you get when you try to organize millions of people - so it's not really surprising that, as a company grows, it starts to look like a government from the inside. It couldn't be any other way.
        dane-pgp 5y ago
        In particular, a sufficiently advanced business looks like an undemocratic, authoritarian, central-planning government. Basically, the problem with large corporations is that they are communist dictatorships.
- MangoCoffee 5y ago
  use the VC money to provide free service or subsidies the cost
- IMTDb 5y ago
  > Solve the easy 80% of the problem. The issue is that the current players are unable to solve that part properly. In my country, it was impossible to book a cab with an app before uber came. Yesterday, I tried knowing if my insurance covered some dental cost, and I was unable to sign up or login on the website, I had to call a human to book an appointment to a brick and mortar store. This is the biggest insurance provider in a western european country. I'll take the new "startup" as soon as it comes, just because they make 80% of what I need convenient enough. They can deal with the remaining 20% later, currently my 80% needs are not served.
  - bobthepanda 5y ago
    The problem with this is that if you hive off the 80 percent that is easy and profitable you may also end up binning the competitors and then there is nothing for the 20 percent if the new competitor decides to do absolutely nothing. This is what happened when Craiglist and later Facebook cannibalized classified ads in the US; many local and hyperlocal newspapers disappeared because they were not big enough to attract major advertisers, but all the local ones left. Yet Craiglist provides no news at all and Facebook aggregates news but certainly doesn't produce any, and especially not at the local or hyperlocal level.
    - Camas 5y ago
      I can follow a few people on fb to get the same content that local newspapers provided. For free. Where's the downside?
      - bobthepanda 5y ago
        Does your circle of friends on FB actually go to every county, water board, school board, etc. meeting and take notes? Because that was the old role of the local paper, which could often get scoops from a reporter whose job it was to go to those.
        Camas 5y ago
- gip 5y ago
  While that's true, it may only be part of the story. There is a clear tension between "democratize X" (for Robinhood X is "finance for all") and offering a white glove service, including stellar support for everyone. It simply won't scale. Democratizing X also means commoditizing X by offering a minimum acceptable solution that will become what people are taught to expect. I am not sure there is a way around this to be honest.
  - stouset 5y ago
    Schwab and Vanguard are completely free if you're not trading individual stocks, which in complete bluntness virtually no retail consumers should be doing. Robinhood has gotten their position by invisibly and dramatically increasing the amount of risk assumed by their customers' life savings. Everybody's a savvy investor in a record-breaking bull market.
    - smabie 5y ago
      Saying no retail investor should be buying stocks is like saying no one should ever start a company.
      - stouset 5y ago
        The level of effort and personal commitment necessary to commit your life savings toward starting your own business vs. putting it all into meme stocks isn’t even remotely comparable. One of these can be done in ten minutes from your couch while stoned with a handful of clicks. I’ll leave you to guess which of the two it is, but suffice it to say that’s the one I think should have some additional guard rails.
        TeMPOraL 5y ago
        Agreed. And perhaps it's getting too philosophical, but one could argue that a big role of a government is to protect its citizens from everything that has a high risk of incurring sudden and effectively unbounded losses. Whether it's mandating installation of actual guard rails through health and safety regulations, or regulating away business models that tend to make regular people broke by accident.
mbesto 5y ago
Honestly this is varied. I've seen a bunch of (usually smaller or just starting) tech companies win out business because of how responsive their customer support even though their product was inferior. Robinhood won because it saw an opening in changes in market demands: - Increasingly lax SEC rules for retail traders. - Increases in income inequality whereby the poor side of the spectrum has been told they can't have access to the rich's set of investment tools (i.e. millennials with varying degrees) - Per transaction fees that made day trading appear less lucrative (see point before) - Competitors with terrible UIs for non professional traders Part of the reason the ETrade/Schwabs/TD's of the world didn't do what RH did was because it meant deliberately making creating a trading account more difficult. For example - Vanguard almost deliberately makes their service hard to day trader because they don't want to carry that risk profile. So, this was not a market that was crying for better customer service but one that wanted cheap, easy to use access to investments that were seemingly unattainable previously. I'm actually more surprised the SEC (or a class action lawsuit) didn't thwart RH turning into a large business when it was much smaller...not the competition.
fleddr 5y ago
I do want to add some nuance to the salty and cynical takes here, even though I share the overall conclusion that tech support is terrible across the board. You can't compare a service like Robinhood (or Coinbase, the like) with a product like Google or Facebook: 1. Unlike these free services, at an exchange, you really are a customer. The business model is that you pay fees for transactions. That's not the same as a free "take it or leave it" situation. As a paying customer, it is far more reasonable and expected to get support. 2. The nature of the support queries are far more serious. This isn't about your Instagram app glitching, this is about money. People unable to access it, transactions not coming through, withdrawal errors, fiat/banking errors. All very serious matters where not only you expect support, you expect urgent support and typically human support. Now combine the above issues (true support needed, and much of it human support), we add the third and fatal ingredient: user growth. These services grow by at least a few million users per month. I don't know how many require support, but even a small percentage means you're on a constant hiring spree. Google and Facebook scale up by just not giving any support. How do you scale up this fast giving real support, so not just an FAQ or chat bot?
- ditonal 5y ago
  You are totally confused. Robinhood is free trading and you are not a paying customer. Robinhood’s incredibly sketchy business model is being paid by Citadel for order flow. So it’s very similar to Facebook in that the consumer is the product, not the customer. Robinhood is an awful company that’s a net negative on the world. Their biggest innovation is creating a Candy Crush UI for complex derivatives trading and making it accessible to people who failed high school math. Their CEO has been consistently dishonest and fraudulent. If you want a solid mobile trading app for stocks and options Thinkorswim is light years superior in every dimension but looking like a Vegas slot machine.

TeMPOraL 5y ago

Yup. The playbook of modern tech companies seems to be: 1. Solve the easy 80% of the problem. 2. Deploy that "solution" - which would not be considered acceptable in just about any other industry - as widely as possible. Do not offer proper customer support. 3. Take the money you save on not solving the hard parts and not having customer support, and funnel it into marketing, to stimulate growth. 4. Continue until you fail, get acquired, or dominate the market. 5. If anyone asks what kind of outfit you're running, make a sad puppy face and say "scaling is hard!".

giantg2 5y ago
It's too bad sad puppy face doesn't work in year end reviews
- phone8675309 5y ago
  Depends on how close to the C-suite you are
  - fumar 5y ago
    Exactly, sad puppy face because my personal growth is my career growth and my career growth is my financial growth. So please more money.
  - giantg2 5y ago
    I'm about as far away as one can be.
quacked 5y ago
You must work for my company! The primary issue is that these 5 steps work.
- hef19898 5y ago
  They do. Until VC money dries up. But even then it might go on...
  - jandrese 5y ago
    VC money is top 1%er money. Because they are so overloaded with cash even really hairbrained stuff gets funded by someone looking for something, anything, that can beat the market. The VC market is basically medieval patronage with a capitalistic flair. Now the patrons are expected to bring you in massive returns instead of just producing culture.
    - mixmastamyk 5y ago
      Especially when money is so cheap and has been for a decade, and getting cheaper.
  - staticassertion 5y ago
    VC money is unfathomable. It's not drying up any time soon. They may choose to shift it if there's some kind of crash, but it's too much money to just run out.
navierstokes 5y ago
You left out "after you get big, hire a senior regulator from the Obama era to leverage personal connections in Washington." It's so depressing. It's probably better to not know how this stuff works.
- mkr-hn 5y ago
  The government->business pipeline is older than any living president. It's not like all the companies who founded Silicon Valley on government contracts lucked into it.
  - chickenpotpie 5y ago
    https://en.wikipedia.org/wiki/1954_Guatemalan_coup_d%27%C3%A9tat https://en.wikipedia.org/wiki/1954_Guatemalan_coup_d%27%C3%A... and the business->government pipeline when Eisenhower's advisors all used to work/currently work for The United Fruit Company
    - mkr-hn 5y ago
      It seems like any sufficiently advanced business is indistinguishable from government.
      - TeMPOraL 5y ago
        That's true, and IMO, it's pretty much entirely the function of size. Modern governments are what you get when you try to organize millions of people - so it's not really surprising that, as a company grows, it starts to look like a government from the inside. It couldn't be any other way.
      - dane-pgp 5y ago
        In particular, a sufficiently advanced business looks like an undemocratic, authoritarian, central-planning government. Basically, the problem with large corporations is that they are communist dictatorships.
MangoCoffee 5y ago
use the VC money to provide free service or subsidies the cost
IMTDb 5y ago
> Solve the easy 80% of the problem. The issue is that the current players are unable to solve that part properly. In my country, it was impossible to book a cab with an app before uber came. Yesterday, I tried knowing if my insurance covered some dental cost, and I was unable to sign up or login on the website, I had to call a human to book an appointment to a brick and mortar store. This is the biggest insurance provider in a western european country. I'll take the new "startup" as soon as it comes, just because they make 80% of what I need convenient enough. They can deal with the remaining 20% later, currently my 80% needs are not served.
- bobthepanda 5y ago
  The problem with this is that if you hive off the 80 percent that is easy and profitable you may also end up binning the competitors and then there is nothing for the 20 percent if the new competitor decides to do absolutely nothing. This is what happened when Craiglist and later Facebook cannibalized classified ads in the US; many local and hyperlocal newspapers disappeared because they were not big enough to attract major advertisers, but all the local ones left. Yet Craiglist provides no news at all and Facebook aggregates news but certainly doesn't produce any, and especially not at the local or hyperlocal level.
  - Camas 5y ago
    I can follow a few people on fb to get the same content that local newspapers provided. For free. Where's the downside?
    - bobthepanda 5y ago
      Does your circle of friends on FB actually go to every county, water board, school board, etc. meeting and take notes? Because that was the old role of the local paper, which could often get scoops from a reporter whose job it was to go to those.
      - Camas 5y ago
gip 5y ago
While that's true, it may only be part of the story. There is a clear tension between "democratize X" (for Robinhood X is "finance for all") and offering a white glove service, including stellar support for everyone. It simply won't scale. Democratizing X also means commoditizing X by offering a minimum acceptable solution that will become what people are taught to expect. I am not sure there is a way around this to be honest.
- stouset 5y ago
  Schwab and Vanguard are completely free if you're not trading individual stocks, which in complete bluntness virtually no retail consumers should be doing. Robinhood has gotten their position by invisibly and dramatically increasing the amount of risk assumed by their customers' life savings. Everybody's a savvy investor in a record-breaking bull market.
  - smabie 5y ago
    Saying no retail investor should be buying stocks is like saying no one should ever start a company.
    - stouset 5y ago
      The level of effort and personal commitment necessary to commit your life savings toward starting your own business vs. putting it all into meme stocks isn’t even remotely comparable. One of these can be done in ten minutes from your couch while stoned with a handful of clicks. I’ll leave you to guess which of the two it is, but suffice it to say that’s the one I think should have some additional guard rails.
      - TeMPOraL 5y ago
        Agreed. And perhaps it's getting too philosophical, but one could argue that a big role of a government is to protect its citizens from everything that has a high risk of incurring sudden and effectively unbounded losses. Whether it's mandating installation of actual guard rails through health and safety regulations, or regulating away business models that tend to make regular people broke by accident.

mbesto 5y ago

Honestly this is varied. I've seen a bunch of (usually smaller or just starting) tech companies win out business because of how responsive their customer support even though their product was inferior. Robinhood won because it saw an opening in changes in market demands: - Increasingly lax SEC rules for retail traders. - Increases in income inequality whereby the poor side of the spectrum has been told they can't have access to the rich's set of investment tools (i.e. millennials with varying degrees) - Per transaction fees that made day trading appear less lucrative (see point before) - Competitors with terrible UIs for non professional traders Part of the reason the ETrade/Schwabs/TD's of the world didn't do what RH did was because it meant deliberately making creating a trading account more difficult. For example - Vanguard almost deliberately makes their service hard to day trader because they don't want to carry that risk profile. So, this was not a market that was crying for better customer service but one that wanted cheap, easy to use access to investments that were seemingly unattainable previously. I'm actually more surprised the SEC (or a class action lawsuit) didn't thwart RH turning into a large business when it was much smaller...not the competition.

fleddr 5y ago

I do want to add some nuance to the salty and cynical takes here, even though I share the overall conclusion that tech support is terrible across the board. You can't compare a service like Robinhood (or Coinbase, the like) with a product like Google or Facebook: 1. Unlike these free services, at an exchange, you really are a customer. The business model is that you pay fees for transactions. That's not the same as a free "take it or leave it" situation. As a paying customer, it is far more reasonable and expected to get support. 2. The nature of the support queries are far more serious. This isn't about your Instagram app glitching, this is about money. People unable to access it, transactions not coming through, withdrawal errors, fiat/banking errors. All very serious matters where not only you expect support, you expect urgent support and typically human support. Now combine the above issues (true support needed, and much of it human support), we add the third and fatal ingredient: user growth. These services grow by at least a few million users per month. I don't know how many require support, but even a small percentage means you're on a constant hiring spree. Google and Facebook scale up by just not giving any support. How do you scale up this fast giving real support, so not just an FAQ or chat bot?

ditonal 5y ago
You are totally confused. Robinhood is free trading and you are not a paying customer. Robinhood’s incredibly sketchy business model is being paid by Citadel for order flow. So it’s very similar to Facebook in that the consumer is the product, not the customer. Robinhood is an awful company that’s a net negative on the world. Their biggest innovation is creating a Candy Crush UI for complex derivatives trading and making it accessible to people who failed high school math. Their CEO has been consistently dishonest and fraudulent. If you want a solid mobile trading app for stocks and options Thinkorswim is light years superior in every dimension but looking like a Vegas slot machine.