Aparna Chennapragada is the chief product officer at Robinhood, the popular stock and crypto trading app. And we have some news to discuss: Robinhood is launching a new cash card today that allows people to spend money directly out of their Robinhood account and set up various plans to automatically invest by rounding up purchase amounts to the nearest dollar and putting the difference in various investments.
Robinhood attracted a ton of mainstream attention last year when a subreddit called WallStreetBets bought up a lot of GameStop stock in an attempt to drive the price up — a lot of people were using Robinhood to do that because it doesn’t charge any commission for trades. How does Aparna think about what features to put in the app to balance things like ease of use and engagement for first-time investors against things like the danger of making it too easy for people to lose money on risky trades? After all, the data says the more often people trade, the more likely they are to lose money. I was curious how Aparna approaches that from a product and design perspective — something she’s clearly thinking about.
And, of course, I wanted to talk about crypto. Robinhood lets people buy and sell various cryptocurrencies, and the company has said it wants to be a crypto-first company. I was curious how Aparna is thinking about designing a product for that world, where she sees the real promise in crypto and what’s just hype, and whether she thinks Robinhood is part of Web3 or not. And I’ll tell you — she got a little spicy on that.
This one runs a little long, but I think it’s worth the time. OK, Aparna Chennapragada. Here we go.
This transcript has been lightly edited for clarity.
Aparna Chennapragada, you are the chief product officer at Robinhood after a long and sterling career at Google. Your work is all over The Verge.
Indeed. Nilay, I have to say, one of my favorite parts of my job at Google — especially post-Google IO — was just going through the hilarious live blog on The Verge with a cup of coffee the next day. That was one of my favorite parts.
At this point, I think we do the live blogs mostly for the executives of the company. We get a lot of that feedback. It’s a good time. But you’re at Robinhood now, and you’ve been there almost exactly a year. You joined the company before it was public and went through the process of going public. I’ve yet to say welcome to Decoder, so welcome to Decoder.
Thanks for having me.
I have a lot of questions; there’s a lot of news. I want to talk about crypto. You have a new cash card that I want to talk about, but it’s Decoder, so we’re going to start at the beginning. I think a lot of people are familiar with Robinhood as a trading app. It burst into the mainstream consciousness last year with meme stocks and all of that, but the ambition for Robinhood is to do more than just buy and sell stocks, right? How would you describe Robinhood?
The thing that got me into the company, and just really excited, is the bold mission of democratizing finance for all. A singular, key operative word here is “access.” Traditionally, I think it started with trading, but there’s a whole bunch of financial services that are just for the ultra-wealthy. There are walls all over the place.
I think the first place that the company started, Robinhood 1.0, had been about starting with trading and investing and saying, “How can you get started with as little as a dollar? How can you own a fraction of a stock that you admire, the company that you believe in?” Then go from there. And, “How can you actually do that in an intuitive, mobile-first way?” Which wasn’t happening before.
As I said, you were at Google for a long time and had many roles there. At one point you were a technical advisor to the CEO at Google. Google is a large company and it’s very stable, while Robinhood is a startup. What led you to jump from Google to the startup world?
I did have a foray into financial services because I was on the board of Capital One, bridging these worlds of tech and finance. It’s something that intrigues me, and I think it’s a really big opportunity for core tech product builders to make a difference. If you think about it, finance and health are the most important things that people have. Money is the fuel for life. And yet I think that tech — and this idea of consumer product thinking — hasn’t really changed finance dramatically. I saw Robinhood as a prime example of what it can do to make people more confident and give access to financial services like trading and investing.
And I think that Google is a fantastic place. I cut my teeth in Google Search, worked on many different things, but the steel thread running through all of it is this idea of “access,” right? But for me, that mission really resonated when Robinhood and the founders talked about it. I was like, “Sign me up.”
How big is Robinhood now?
It’s a few thousand people. There is a core product and engineering team of under 1,000. There is an operational team as well, with about 3,000-plus people. So it’s not just startup-startup anymore.
When you think of finance, those are big companies, right?
Those are big companies. The thing is, when you think about what I said earlier, “democratizing finance for all” — if you look at where money goes — it’s of course helping people to invest in their future. But I think for a lot of people, spending, where your day-to-day cash flows, is a big part of it. Today, most of the products just dig you deeper into the hole. There’s loans. There’s retirement. There’s a whole bunch of places where I feel like the problem has been cast as a finance problem and not as a consumer problem. Those are all opportunities for a consumer tech company like Robinhood to rethink and help.
You said around 3,000 people, with less than 1,000 people on the product team. How is the company structured overall? How is Robinhood organized?
Because it is at the intersection of finance and tech, we have very clear, separate regulatory entities for the overall parent company, Robinhood Markets. You have specific entities that focus on brokerage, specific entities focused on crypto, for example. Then, of course, there are functions that spike across them. There is G&A, there is finance, and so on.
Within the product organization, there are really three big areas. One is of course this core business, like the Google Search equivalent, right? The core business is investing and brokerage. Then there is crypto, which I think is growing much faster than even in the last few years. Then there are ideas around this one-minus investing. What are emerging products that we are building around? What is the step before investing? How do we help people save and spend better?
So there’s a parent company, then there are individual companies that do brokerage and crypto?
And that is all expressed in a single app. Are you saying that depending on what screen of the app you’re on, you’re interacting with a different company?
I think it’s more about the regulatory entity. We are pretty well-organized in terms of having the controls in place as a public company. We make sure there are clear risk committees. There is a board that is associated with each of these entities so that the committees can make those decisions. You’re right. All of it, for the customer, needs to be expressed in a single app. Interestingly, that is actually one of the things I was going to say; that’s a departure from a traditional consumer internet company. I think when you go into regulated spaces — financial services is one — you do have to make sure that safety and access are both present. I think that’s one of the things that the company is doing a great job of now.
I just want to drill on that for one more second. So when I click the button to buy and sell stocks — on that screen in Robinhood — that is one company that has the risk and the regulation? Then when I click the tab to go buy and sell crypto, I am now interacting with another company within the Robinhood app?
Yes. The reason is that there are very clear regulatory requirements and boundaries for a brokerage dealer — for an introducing broker dealer like Robinhood that allows for equities. Then, as you know, there are emerging discussions around regulation with multiple regulatory bodies on crypto. We want to make sure that the customers are kept safe and that there is clarity and transparency on what they are interacting with and what the specific contracts are, if you will.
You are correct that most companies that have that kind of structure will ship multiple apps. Here, you have a product that is just one app, that’s Robinhood. People think they are dealing with Robinhood as one single company. It’s fascinating to see the corporate structure reflect the product design. Are there moments where you say, “Oh, there’s a feature I can’t put in the brokerage screen because that’s actually the crypto company’s remit?”
Look, this is a muscle group that the company has to build and is building. I’ve been really impressed with the cross-functional team. The legal team is actually very clear about, “Hey, what are the customer benefits and where do the regulatory lines lie?” The product team is as well. There’s a very tight cross-functional team that looks at, for example, “If we want to provide this kind of customer benefit, what kind of disclosures do we need to make?” So that the customers themselves are not confused about what is happening, and at the same time they…