How this Californian startup managed to grow so quickly without even launching
Robinhood has been the poster child for all retail investing during 2020 and 2021. Founded in 2013, this financial services company is headquartered in Menlo Park in California.
Many people, especially millennials, started paying more attention to the stock markets since people were confined at homes and had money to spend from government cheques. It especially received heat after it froze trading for 'meme' stocks (Gamestop, AMC, etc.), and many took it to the headquarters to vandalize and complain.
However, the reason for its popularity in the first place was because Robinhood was attractive, especially for millennials, with its “no commission fee” structure, which has generally put the younger audiences off trading.
This influx has seen certain stocks gain huge retail investing exposure, such as Musk’s Tesla, and Robinhood’s valuation has since soared to $30 billion, just before their incoming IPO.
“The company added 3 million new customer accounts in the beginning of 2020 and most recently said that it saw 4.3 million daily average revenue trades (DARTs) in June, outperforming all of the other publicly traded brokers” — Forbes
However, how did Robinhood soar to these incredible numbers with the company only launching in 2012, just shy of a decade of operating? Although it had tremendous growth recently, the startup itself employed a few growth marketing tactics before launching to the public.
Referral strategy and FOMO
For those that remember the early days of Robinhood (before it even launched), it all started with a simple idea that focused on exploiting retail investing growth and the fact people hated paying fees for every trade.
So when Robinhood came out with their idea, it attracted a lot of attention. $0 commission fee stock trading sounded like a dream, and everyone wanted in.
However, it was only available to friends and family of Robinhood’s inner circle at the time. They knew that they had an idea that could be viral, so they decided to opt into a referral waitlist strategy. But they didn't come up with a complicated landing page with a tonne of pages. It was simply a one-pager website with a simple call to action and one message.
To get access was simple — invite others to move up your place up the list.
People love simplicity, and their strategy was easy and not complicated.
It worked like a charm, and Robinhood gained more than 1 million subscribers before they even launched through people simply sharing one landing page around.
This gave it a unique position where they had product-market fit even before launching it into the market. When they finally launched, it became one of the hottest trading applications in the US.
Since then, it has grown huge with multiple funding rounds and has grown into the millennial investing application. All of this began with one simple landing page intending to get people to share the website around.
It proves you don't have to have a complicated growth strategy to grow a startup if you know your audience well and your product even better.