Describe your favorite product and how would you improve it.
I want to review my favorite stock trading app – Robinhood.
To develop enhancements to Robinhood, I want to take the following approach:
1. Review the application, the company, and the competition
2. Describe company users and needs
3. Define how the app is solving these needs, and what are the potential /improvements
It is a mobile app & website that allows people to invest in stocks, ETFs, options, as well as perform crypto trading. It operates completely online and without any fees. The app is very easy to use and puts the ability to perform simple trades up and center in the user experience. Moreover, it has revolutionized the trading by introducing the concept of free stock trades.
Robinhood gains revenue from the interest on customers’ cash balances, margin lending, as well as selling order information to high-frequency traders. Also, a growing source of revenue is Robinhood Gold service, that provides Morningstar research information for stocks.
Robinhood’s biggest competitors are larger banks and brokerage companies, that offer more complete financial services. Traditionally, brokerage companies were charging fees per each trade, and had required account minimums. It has been changing recently, but still the largest players have additional advantages to bigger accounts. Also, most brokerage companies have user interfaces that feel like mid-augts.
To discuss Robinhood users: the target audience are people with limited funds that are willing to participate in the stock market and grow their investment portfolio (desired outcome). To confirm, based on the information available online https://www.cnbc.com/2020/06/17/robinhood-drives-retail-trading-renaissance-during-markets-wild-ride.html) , Robinhood has over 10 million customers, and most of them are millennials and new entrants to the stock market, with the average account size of $2k.
Desired outcome for Robinhood users: trade stocks and other investment types and grow their portfolios with the certain goal. Robinhood’s interface is great for trading and placing orders, and it provides an industry-respected advice for investments (Morningstar Gold). Robinhood picks (email newsletter) provides updates on the top movers on the market, and makes it easy to select the next best trade. However, it does not provide the overall portfolio overview, and does not let users do a long-term planning for their investment goals.
To analyze the potential improvements, we should look at the data and our current goals.
· If the goal for the company is in increasing growth in the target market, we could continue building out features that are addressing the target market. Robinhood is addressing it with cash management account and could potentially add a credit/loan management account for this segment. Additional enhancement could be investment and rebalancing advice that will help with users in the upper range of the target segment.
· If there is a significant churn rate, we need to look at the reasons of this churn, and how to address it. Also, we could review the user segments that experience this churn for additional analysis.
· If the goal is to attract additional market segments, we could consider adding additional capabilities targeted for these segments, e.g. portfolio management features, automatic investment advice, or collaborate with other companies to offer related services (e.g. with RocketMortgage to offer mortgage solutions).