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Comment by whack | Hacker News Reader

I'm not a Robinhood user, so correct me if I'm wrong. But as someone who's used ~5 different online brokerages, I'm having a hard time understanding what innovation they brought to the table. Buying/selling stocks online is already pretty damn simple, and takes 1-2 minutes tops. Where exactly is the innovation here? "We're going to undercut the competition and save users a couple clicks" is now a $5B business idea? Kudos to the founders, but this hardly seems like the stuff movies are made of.

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No commissions on any stocks or ETFs. No commissions is huge when you want to create a diversified portfolio, buying only a few shares of each at a time. No other brokerage has even come close to trying to provide this. Robinhood earned a lot of brand reputation with this move.

UX. Try out a few other brokerage experiences, and then try Robinhood, and you’ll see that the market was ripe for the taking for a team with design sensibilities.

I have been using interactice brokers, it is oretty slick. Never used robinhood but will give it a try.

Using a broker because they have $0 commissions seems to me like going to a car dealer because they don't charge a $50 doc fee when you buy a car.

Robinhood has multiple (perceived or real) advantages: there are no trading fees or minimums; you can trade equities, options, and cryto-currencies; the app's UI is simple and intuitive; etcetera. Robinhood is doing the most to make trading accessible to masses, and from what I've read online, they're quite successful at doing so. Robinhood is the defacto trading platform for the younger generation.

Any broker can reduce trading fees to zero. How does Robinhood afford it?

>> Robinhood rockets to a $5.6B valuation with a massive new funding round

Other brokers don't want to hurt their margins.

Etrade made 614 million in profit in 2017. 19% of revenue was from order commissions, or roughly 449 million. So Etrade could eliminate commissions and still remain profitable. https://en.wikipedia.org/wiki/E-Trade

They understand the mobile experience better than most brokerages, and they understand that mobile is where most users are spending their time.

IMO Interactive Brokers has a good mobile experience.

However, IB is decidedly not meant for the young, millennial, small amount of investment principal, getting started with investing/trading segment that Robinhood has carved out for itself.

So Robinhood's angle isn't just mobile first, it's mobile first for the segment of the population that expects such a product experience, who are going to grow their portfolios and trading activity in the coming decades.

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