All founders hope that people will actually use their product once it is created.
Vlad Tenev and Baiju Bhatt, the co-founders and co-CEOs of Robinhood, discovered that people wanted to use their product before it even existed.
After launching a website for the future product on a Friday night, the founders of the commission-free stock trading mobile app woke up on Saturday morning to find that the website had gone viral.
“The last thing from our minds when we launched Robinhood, the initial website, was that it would blow up overnight,” Tenev said in an interview for Business Insider’s podcast, Success! How I Did It. “Up until that point, we never really had an idea of what success, at least in the consumer space, was like. That was sort of the first moment where we built something that actually worked.”
Thanks to attention from an anonymous post on Hacker News, the yet-to-be-developed app had about 10,000 people sign up for a waitlist on that first day, 50,000 by the end of the first week, and almost one million in the first year.
Check out the episode with Tenev explaining how he built a $US1.3 billion company by age 30, or keep scrolling for a transcript of how he attracted ~ 1 million early users.
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Here’s the relevant part of the podcast, explaining how they did it:
Shontell: I want to go to you launching a website first before you even had an app. From what I understand, it was more or less an overnight success. You basically put up a website and then had all these people suddenly on a wait list when you woke up…What did the website say?
Tenev: It had a description in very simple language saying, “Commission-free trading, stop paying up to $US10 per trade.” And then there was a button that let you sign up, and then when you signed up, you put in your email, and you would join this wait list where we would actually show you: There’s this many people ahead of you, this many people behind you.
This has become a relatively common thing since then. I think a lot of that has to do with how well our wait list did, but we were actually inspired by this other product that launched about a year before called Mailbox.
I remember distinctly it was a Friday night. We had been working on the wait list in preparation for our press launch, which would have been, I think, the following Wednesday or Thursday. Everyone goes home, and I wake up Saturday morning, and I open up Google Analytics, and I see something like 600 concurrents on our site, which nobody knew about at that point. I was just like, “What’s going on? This is not normal. Something must be wrong.” Right?
And I’m looking at the analytics — I see a lot of traffic, or the majority of it, coming from Hacker News. And I open up Hacker News, and I see No. 1: “Chinese Land Spaceship on the Moon,” No. 2: “Google acquires Boston Dynamics, the Robotics Company,” and No. 3 was: “Robinhood: Free Stock Trading.” So, first of all, I was like, “Oh man, No. 3 on Hacker News? This is sort of like every engineer’s dream in the Valley, right?”
Shontell: Hacker News is really big, especially on the West Coast within the tech community. It’s kind of how you find cool things that are bubbling up, big stories that are breaking in tech. How did you get on Hacker News? Who put you there?
Tenev: We have absolutely no idea, and we’ve tried since then to get to No. 1 on Hacker News, and people at Robinhood I guess don’t have a ton of karma, which is your Hacker News cred that helps. But both times we’ve been to No. 1, it’s been a completely random person that we just have never been able to identify.
My second thought was there’s no way we’d get up to No. 1. I mean, the Chinese just landed on the moon and Google made a huge acquisition, so we probably have to settle at No. 3. But 20 minutes later we get up to No. 2. Maybe 15 minutes after that, we’re at No. 1 on Hacker News.
I’m just screenshotting the page; I’m calling my parents saying, “Oh, this is crazy. It might actually be working.” And up until that point, we never really had an idea of what success, at least in the consumer space, was like. That was sort of the first moment where we built something that actually worked.
Maybe about 20 minutes after that wore off, we realised, “Crap. None of the emails are wired up. The website’s broken.” And everyone just had to go to the office to staple everything together — make sure things were up, emails were getting sent. We ended up de facto doing our press launch on a Saturday, which every single person I’ve talked to in the PR world has told me was, like, the worst move you can possibly make.
Tenev: But we ended up getting 10,000 sign-ups that first day, over 50,000 the first week, and almost 1 million in the first year.
Shontell: And do you think it was just the idea was exciting? That’s been done before. Are there any other platforms that don’t charge you a commission other than yours?
Tenev: Not to my knowledge, and some people have promotions like your first five or 10 trades are free. That’s been tried before, but I think what allows us to offer unlimited commission-free trading was a technological step change and the ability to attract a customer base organically in a space where customer acquisition has been entirely paid-advertising-driven.
Shontell: …How many people did you get on this wait list before you actually revealed the app?
Tenev: We had almost 1 million.
Shontell: And how many months was that from the time the website went up to the app coming out?
Tenev: The app fully launched on the App Store in March of 2015, so about two and a half years ago. The time between announcement and public launch was almost a year and a half.