| 1 min read
How Robinhood Makes Money
I don't imagine during their early conversations about building the product, the Robinhood founders said things like "let's build an addictive platform to encourage novices to overtrade at bad prices so we can profitably route their order flow to large financial firms like Citadel Securities whose founder bought the most expensive home in the US”.
Maybe they really did want to introduce investing to a whole new generation and make it easier to access. But they also likely never thought through the consequences of how they were going about it. Just like Mark Zuckerberg wasn't anticipating a genocide in Myanmar, I'm sure the founders in no way imagined the suicide of a twenty-year old.
The hypergrowth is not the means, but the end in itself. There was no consideration about the impact of the user behaviors they encouraged because everything was just a number on a dashboard.
I used Robinhood briefly a couple years ago, but I’d fallen off. This article reminded me why I really don’t intend on jumping in again anytime soon.