20VC: The Robinhood Memo: The Early Metrics That Showed Robinhood was a Breakout Company, The Cost Structure of Robinhood in the Early Days and Why it is a More Efficient Business than eTrade & How Vlad Has Developed as a Leader Over Time with Rick Yang a
In this engaging discussion, Scott Sandell, Managing General Partner at NEA, and Rick Yang, Head of Consumer Investing at NEA, share insights about their investment in Robinhood. They recount the pivotal moments that led to backing the startup, highlighting early metrics indicating product-market fit. The duo compares Robinhood's innovative cost structure with E-Trade's, revealing how automation drives efficiency. They also delve into Vlad's evolution as a leader and the company's mission to democratize finance, keeping user engagement at the forefront.
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First Meeting
Rick Yang's first meeting with Vlad Tenev was at a dive bar in Palo Alto called Antonio's Nuthouse.
This unconventional setting reflected the unique and mission-driven nature of Robinhood's founders.
insights INSIGHT
Disruption Thesis
NEA viewed Robinhood as the next disruptor in the brokerage market, following the trajectory of firms like E-Trade and Charles Schwab.
They saw a $70B market cap ripe for disruption due to evolving technology and consumer internet trends.
insights INSIGHT
Targeting Underserved Demographics
Scott Sandell saw Robinhood's potential to be the next Charles Schwab by targeting an underserved younger demographic.
The "free" model for stock trading was a key differentiator and disruptive force, aligning with NEA's investment theme.
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Shoe Dog is a memoir that chronicles the journey of Phil Knight as he builds Nike from its humble beginnings as Blue Ribbon Sports. The book is a personal and detailed account of Knight's experiences, from his early days selling Japanese running shoes out of the trunk of his car to the global brand Nike is today. It highlights his relentless work ethic, the challenges he faced, and the key relationships with his partners and employees that were crucial to the company's success. The memoir also touches on Knight's personal life, including his family and the emotional struggles he encountered along the way[1][3][4].
Scott Sandell is the Managing General Partner of NEA, one of the leading firms of the last 3 decades with now close to $24Bn under management and a portfolio including Salesforce, Robinhood, Plaid, Databricks and more. As for Scott, since joining the firm in 1996 he has led investments in Salesforce.com, Tableau Software, WebEx and Workday and serves on the board of Robinhood, Cloudflare, Coursera and Divvy to name a few.
Rick Yang is a General Partner and Head of Consumer Investing @ NEA, since joining in 2007 he has led investments in the likes of Masterclass, Plaid, Robinhood and many more.
In Today’s Episode with Scott Sandell and Rick Yang You Will Learn:
1.) How Rick came to meet Vlad, Robinhood Founder, for the first time? What impressed Rick most in that first meeting? How did the internal discussions proceed at NEA? Was it a unanimous decision to make the investment?
2.) The Market:
How did Rick and Scott evaluate the market at the time? Bottoms up, top down?
How did the market change and evolve both in ways they did and did not expect?
How do Rick and Scott evaluate market timing risk today when investing?
How did Rick and Scott approach outcome scenario planning with Robinhood?
3.) The Traction:
What core signals and datapoints made Rick realise Robinhood had product-market-fit?
How did Rick and NEA analyse Robinhood's early organic customer acquisition? How did the board advise on how to spend their first marketing dollars?
How does the cost structure of the business compare to Charles Swaab and eTrade? Why is Robinhood such a superior model?
4.) The Team:
How has Vlad evolved and developed as a leader over time?
How did Vlad handle the 36 hours in Feb 2021 when he had to go and raise $3BN+?
Who is the unsung hero of the Robinhood team? What have they done to deserve this?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 
