Updated: Sep 1, 2021
Sounds impossible, right? How can a referral program get 1 million users waiting to try your app even before launch?
Acquiring users for an app is hard, but it’s even harder when the app doesn’t exist yet. This is the story of Robinhood, a US-based commission-free stock trading and investment app which is now valued at $11.7 billion.
As of today, the app is used by 13mn+ users across multiple countries. It was founded in 2013 with the aim to democratize finance for all.
The founding story
Before starting Robinhood, the founders were running an enterprise startup that used to sell trading software to hedge funds. During this time, they realized that the big Wallstreet firms pay nothing to trade stocks, while most Americans were charged hefty commissions for every trade.
This compelled them to do something about it and that’s how the idea of the Robinhood app was born.
In every country, anything related to stocks or investments requires a lot of regulatory approvals and they can eat up a lot of time. The founders needed to test the market, so they decided to go ahead with a pre-launch campaign similar to Mailbox.
Mailbox after its launch was rolling out access to users gradually to ensure that the service works seamlessly for everyone. The difference with Mailbox’s waitlist was that you had to download the app to get on the waitlist and not the other way round.
Keeping it Super Simple
Robinhood founders chose to create a simple website that had a description in very simple language saying “Robinhood $0 commission stock trading Stop paying up to $10 every trade”, an email input box, and a CTA button — “Get Early Access”
Unlike Mailbox, you didn’t have to download an app just to get on the waitlist. I really liked their super simple landing page. It immediately tells the value proposition of their service and compels me to take action by just giving an email address.
There was also a subtle option to Watch the video, in case someone wanted to know more about them before giving the email to get early access.
Robinhood’s referral solution to a unique challenge with waitlists
In Mailbox’s case, most people got tired of seeing so many people ahead of them on the waitlist week after week.
Mathematically, they were making progress by moving ahead 40,000+ positions in a week at a time. However, psychologically they felt that there are still zillion people ahead of them and started deleting the app.
Robinhood took a very interesting approach to tackle this problem. They gamified it by giving users an option to get priority access by referring their friends and family.
People love playing games, especially when those games are tied to rewards they actually want.
Look at the screenshot above, there are options to refer friends via Twitter, Facebook, Email, LinkedIn. The more people join using a user’s referral link, the sooner she will get access.
Giving users an option to control their position on the waitlist gives them a sense of autonomy — the feeling of controlling their own destiny. It’s one of the most important ingredient of intrinsic motivation.
This played a very important role in the exponential growth of their waitlist.
Launch before launch
It was a Friday night, Robinhood team had been working on the waitlist in preparation for their press launch, which was on the following Wednesday or Thursday.
The very next morning, founder Vlad Tenev opens up Google Analytics and surprisingly sees 600 active people on their site. It wasn’t normal for them as only a handful of their friends and family knew about it.
Looking closely at the analytics — he saw a lot of traffic coming from Hacker News — A very popular site among the tech community all over the world. When he opened up Hacker News, he sees the post: “Robinhood: Free Stock Trading.” trending in the number 3 position.
The challenge for them was that the waitlist system wasn’t ready and emails weren’t getting captured. So, the entire team rushed to the office to get everything up and running.
With the semi-broken system, they ended up getting 10,000 signups that first day and over 50,000 on the first week — which is something they had never even dreamt of.
Within a year, more than 1 million people joined the waitlist to use their service. The app was officially launched after getting all the regulatory approvals in March 2015, almost 2 years later.
Just yesterday, the app closed a $660 million funding round.
There is a lot to learn from other’s success as well as failures.
Below are a few articles that I have written on the topic of growth using the referral program.
Do read them to get interesting insights.
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