Robinhood CEO Vlad Tenev knows that the company’s name is somewhat controversial — but that’s part of the point.
Tenev said in an episode of “The Logan Bartlett Show” posted on Friday that he wanted the name to be disruptive and go against the traditional norm of other financial companies.
The CEO said the origin of the name comes from when the company was just starting and he was dating his now-wife. At the time, when she introduced him to her friends and said he worked in finance, there would be “a little bit of a groan,” Tenev said.
“They thought I was some kind of investment banker or venture capitalist,” Tenev said.
Tenev’s wife would counter the reaction by saying he was the “Robinhood of finance” and “trying to help the little guy.”
Tenev said that he liked the sound of that.
“Our thoughts were that if the name elicited strong reactions, even if they weren’t all positive, at least it would be memorable and that would be better than kind of a name that everyone was okay with,” he said.
While Tenev and fellow cofounder Baiju Bhatt both loved the concept, the company had about 10 employees at the time and reactions were split, Tenev said. Half of the company loved the name and the other half hated it.
With many financial services companies serving a base of wealthier people, there was a fear that the name would scare off those customers, Tenev said.
Ultimately, they decided to go with Robinhood, and it’s become a big part of the brand and its messaging, Tenev said. But years later, he wonders if the company would have received less criticism if it had gone with a different name.
“If we named the company Omaha, would Warren Buffett be criticizing it as aggressively?” Tenev said, referring to the billionaire’s birthplace. “Because he, you know, he can’t criticize Omaha. I think we could’ve avoided that.”
Billionaire Warren Buffet and his longtime business partner Charlie Munger, who died last year, both vocally criticized the company, accusing it of treating the stock market like a casino and encouraging short-term trading.
Tenev also said that there’s also been some backlash of the brand’s message, like with the meme stock situation a few years ago.
The meme stock trading frenzy in 2021 involved a wave of new and inexperienced investors to the investment platform, interested in specific stocks like GameStop and AMC Entertainment. Following the surge, Robinhood faced criticism for restricting trading on certain meme stocks during the peak of that period.
But overall, Tenev said it’s tried to be consistent from the beginning about its messaging and separating itself from other financial companies — and if they chose a name that was more positive, maybe it wouldn’t have been as memorable.
