Vol 38. Robinhood: Winning waitlist 📈

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Imagine you’re a founder who just launched your company’s website. You take one final look before closing up shop for the night, feeling accomplished. And when you wake up the next morning, there’s an unprecedented amount of traffic on your site. 

That’s exactly what happened to Robinhood founders Vladimir Tenev and Baiju Bhatt when they launched their website back in 2013… before their actual product even existed. 

This week, Case Studied explores how Robinhood got almost 1 million people on their waitlist at pre-launch. 

The Brief:

Robinhood is a first-of-its-kind commission-free stock trading app, perhaps you heard about them through your friend that kept buying Gamestop shares during the pandemic. Well before the meme stock phenomenon, Robinhood faced close to 75 rejections from investors, until finally closing their seed round—led by Index, Google Ventures, and Andreessen—with about $3 million. Once that funding round closed, their website was launched. 

Contrary to what you might assume, Tenev and Bhatt didn’t have formal engineering backgrounds. In fact, they had very little experience with mobile app development or consumer product development. But once they decided to get into the app space, they didn’t pour everything into one project—they learned by creating other apps, too.  

“We actually had a couple of experimental apps while waiting for the regulatory approval for Robinhood that we launched and we actually tried to get some traction on,” Tenev said. “And it was very difficult for us to get customers because, ultimately, we made a lot of mistakes that first-time developers of mobile products make, like packing a ton of features into apps and not really addressing a really deep customer pain point. So the last thing from our minds when we launched Robinhood, the initial website, was that it would blow up overnight.”

The Execution:

Robinhood’s website simply said, “Commission-free trading, stop paying up to $10 per trade.” There was a button that allowed you to sign up by putting in your email and joining the waitlist. 

There were a few key elements to their waitlist. One was that it actually showed you how many were ahead of you and how many people were behind you—an ideal feature for building hype without giving away too much. Another is that there was a referral program. If you invited a friend to join you in the waitlist, you would move up a few spots in line. The more folks you refer, the higher up in line you climb. 

And finally, the sign up process was simple—all people had to do was submit their email address. It was straightforward, fast, and made it easy for folks to sign up, which they did en masse.  

“I remember distinctly it was a Friday night,” Tenev said. “Everyone goes home, and I wake up Saturday morning, and I open up Google Analytics, and I see something like 600 concurrents visits 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.’”

Lucky for Tenev and his team, there wasn’t anything wrong. It turned out that most of the site’s traffic was coming from Hacker News, a popular source for finding the big stories that are breaking in tech (it’s particularly big within Silicon Valley). When Tenev checked Hacker’s site, he saw:

No. 1: Chinese Land Spaceship on the Moon

No. 2: Google acquires Boston Dynamics, the Robotics Company

No. 3: Robinhood: Free Stock Trading at the No. 3 spot on their site

Tenev said 20 minutes after he saw the news, they moved up to the No. 2 spot, and maybe 15 minutes after that, Robinhood was No. 1 on Hacker News. 

To this day, they have no idea who put Robinhood on Hacker News. They’ve never been able to identify anyone, meaning the company, in many ways, got lucky with some fortuitous news coverage. But they did plenty of things right on their end, too. 

By building FOMO, with the waitlist, gamifying the pre-launch with a referral program, and making it easy for people to sign up, they had all the right ingredients to take their overnight success and run with it.

The Results:

Robinhood ended up getting 10,000 waitlist sign-ups within the first day of their website being launched. That number grew to over 50,000 in the first week and reached nearly 1 million in the first year. 

The Robinhood app was launched on the App Store in March of 2015, after a pre-launch campaign that lasted about a year and a half. Since then, it’s grown its user base to 10.9 million as of Q4 2023. 

The company raised a total of $5.6 billion from investors over 24 funding rounds. It made its IPO in July of 2021 at $38 per share, putting its valuation at the time at about $32 billion.  As of 2023, Robinhood’s revenue was $19 billion, up 37% year-over-year. 

The Takeaways:

Pre-launch is a high-pressure time for any business but if done right, it can give you a leg up when bringing new products to market. Here are some takeaways from Robinhood’s campaign. 

1. Gamification works

Everyone has that aunt that is addicted to Candy Crush or can’t stop posting memes on Facebook. Why are these behaviors so universal? Because these products have been designed to provide incentives and cater to our various needs.

This is part of what made the Robinhood referral program work, the idea that you could ascend the leaderboard and get earlier access by referring more people. While not everyone would see this as valuable, for individuals with the time, network and reach to share their referral codes, this only fueled their sharing patterns.

When developing your marketing and specifically referral programs or other digital experiences, make sure to think about what gamification and other enticing components you can add.

2. Nail your value prop

As marketers, we have a tendency to obsess over the smallest details of our ads. Whether it’s T&C’s, 10-word headlines for a Google Ad or the extra 2px of padding for our latest TikTok creative. These things are important, but often, they don’t move the needle.

To generate transformative growth for your brand, consider the entirety of your messaging and more specifically your value proposition or, put differently, what it is you are offering of value to your customer.

Robinhood didn’t even have a product yet, but because their value prop of “Commission-free trading, stop paying up to $10 per trade” resonated so strongly with retail investors, they were able to get mass adoption quickly.

3. Capture demand early and often

The best brands in the world understand that owning the customer relationship is vital to sustainable growth. While Robinhood could have designed a referral program to generate Instagram Likes or Twitter Followers, building an email list of customers interested in their product allowed them to grow a list of prospects that they could leverage how they see fit.

Make sure your marketing and web experiences are considerate of how to capture intent. Whether it is at checkout or you leverage a pop-up modal, having a direct line of contact to your audience will enable you to grow long term.

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