Humanising Newsletter #011 - Robinhood & Gamestop

Newsletter • 8 min read

A brand new newsletter format, how to use JTBD to increase conversion on your website and why Robinhood is the new Facebook.

Humanising Newsletter #011 - Robinhood & Gamestop

It's the end of a long cold January of lockdown and this is my first newsletter of the year. It's a fair question: what have I been doing with all my spare time? Homeschooling and a busy start to the year with work were all easier than rethinking how best to write this newsletter.

I got a lot out writing this last year and I've had lots of amazing feedback so thank you to those who reached out and to those who have helped me think about what they want from this newsletter. Yes, that's right, I've been practising what I preach and I've spoken with some of my readers to find out why they "hire" this newsletter.

Last year, I was just writing stuff I found interesting and hoped others would find it interesting too. Some of it, like the "Customer Value Stack" and "How to ask the right questions in Jobs to be Done interviews," seemed to be of great value to people, others less so.

What I've learned is that readers of this newsletter, and the blog more generally, have three key desired outcomes:

1. Discover smarter ways of working.

I found that many of the people reading this are product managers, designers, marketers and researchers. You’re pioneering new paths and creating new things so you need tools, tips and frameworks to help you optimise and succeed.

2. A different perspective on the news.

News. There's loads of it. Everyone knows that the world is changing rapidly. Living through a pandemic has flipped our context and made us think carefully about the new reality we create for ourselves as we re-emerge from lockdown. How do we view the news through a new lens? One that's commercially driven but also more socially responsible and culturally aware.

3. Discover things to get excited about.

Who's building the next generation of services that live up to their purpose? Products that are designed to create value for real people, not just profits for their shareholders. Which brands are nurturing communities, participating in culture and helping people navigate the complexities of modern life? We're all looking for inspiration and reasons to get excited.

So there we are. My new newsletter structure. It's so easy when you get out there and speak to people, they do the hard work for you! Each week I'll cover these three things. I will continue to write long-form articles which I'll post on Humanising. I'll link to it in this weekly newsletter. This means I can continue the weekly newsletter but spend more time producing better long-form content around my workload.

Okay, enough of the chitter-chatter. Here's the new newsletter in all its glory.

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Smarter ways of working

This week I had the pleasure of speaking with Nopadon Wongpakdee, a highly experienced, award-winning growth marketer who has worked with 100s of startups helping them find product market fit.

Nopadon's super-power is taking the seed of an idea and turning it into a proposition with extreme clarity and 10x better customer conversion. He blends the Four Forces Jobs to be Done framework with creating powerful landing pages that write themselves

I spent Thursday evening alongside the JTBD meetup community digging deep into Nopadon's bag of tricks. The conversation was recorded and I've posted the video and a write up on Humanising.

👉👉👉 READ IT HERE 👈👈👈

Humanising the news

This week's news story has to be Gamestop and Robinhood. If you missed it, my colleagues in the 11FS marketing team wrote this in their newsletter (which is totally worth subscribing to if you want to stay on top of your fintech news):

"Millions of people learnt more about the stock market this week than they’ve done in a lifetime - and that’s thanks to the GameStop duel that’s taken Twitter by storm 🌪️ Long story short: a few weeks ago, one beady eyed Redditor spotted that a hedge fund had taken a load of short trades against GameStop. They then persuaded everyone on the thread to buy up as much stock as they could. This set the price soaring and the hedge funds lost billions, resulting in them having to buy back the stock at much higher prices. This put the price up again. Having realised their ability to put one hedge fund into bankruptcy, this savvy bunch of Redditors then plotted to short squeeze others in the same way. Unsurprisingly, Wall Street investors were having none of it - they’ve even said these kind of tactics should be illegal. Sour grapes, anyone? 🍇 We’re betting GameStop’s shareholders disagree, since this ongoing stock battle has made them $2 billion richer! But the story continues 🧐 Yesterday, Robinhood stopped its users from investing in GameStop, putting a stop to the price surge and fuelling theories that big investment firms have had an influence over Robinhood."

This story is fascinating, but what interests me the most is the conditions that led to Robinhood becoming the centre of this storm. Its founders claim to have been inspired by Occupy Wall Street and the accelerating wealth inequalities that the 2008 Great Recession opened up. They believe that one of the reasons why wealth inequality is so wide is because it's only the rich that have access to investment tools. They called the business Robinhood with a lofty mission statement: "Democratise finance for all."

Their strong purpose was never going to result in a business that could fulfil it for one simple reason: it made its customers the product. Any business whose own incentives are misaligned with its customers' expected outcomes becomes socially and economically extractive.

The classic example of this is Facebook. Users of Facebook are the product. Facebook sells them to advertisers so the value chain is stacked against the end-user, which is why Facebook's decisions have had such negative consequences on people and society over the years. Robinhood is the new Facebook. Look at the similarities:

  • The product is free to use. No trading fees and no minimum balance. If you are not paying, you are the product.
  • Robinhood's business model is based on selling your data. They sell it in the form of "order flows". What that means is Wall Street firms buy that data and then buy the shares you ordered at a lower price before you do. Your initial order through Robinhood get's fulfilled but at a higher price. It's arbitrage in its simplest form. Robinhood has other revenue streams but this makes up the majority of its income.
  • A highly gamified and addictive user experience. Facebook has been compared to slot machines and Robinhood isn't much different. If you've not used the app you'll get a good idea of what it's like from this advert. The behavioural mechanics they use in their user experience borrow from betting apps and casinos rather than honest, responsible investing tools. The more their customers spin the wheel, the more money Robinhood makes.
  • Zero-accountability platform. Robinhood has focused on scaling customer growth above everything else and they have been extremely successful at it. When they last reported their customer numbers in May 2020, they had 13 million customers. According to the NYT, the average age is 31 and half of its customers have never invested before. With an addictive user experience encouraging people to trade more, very little education baked into the service and very little friction in using "options" and leveraging your position... very bad things are going to happen. Towards the end of last year, Alex Kearns committed suicide after seeing -$730,000 dollar balance. So tragic, but no change at Robinhood.

Even though their mission sounds like it's fighting for the people, it's nothing more than cultural appropriation. They tried to tap into the zeitgeist (mood of the time) but instead used it as a tool to acquire unsuspecting amateur investors they could turn into profit. In the cold light of day, Robinhood's business model and design ethics are destructive.

Back to the Gamestop story, it's easy to see how the situation escalated the way it did. And it's not over. The battle between Wall Street hedge funds and activist investors will continue. Gamestop soared another 67% on Friday. What's going to be hard to read is the personal stories that emerge from this mess. In highly volatile markets, with lots of people highly leveraged and with little experience in investing, there's likely to be many people in seriously precarious financial positions.

What does this mean for people designing the future?

  • When designing a new product or business we need to stop purpose washing. As we emerge from this pandemic, people will demand much more social responsibility and sustainability agendas built into a brand's business model, not just their brand purpose. This applies to all types of brands, not just tech and finance.
  • One of the trends I noticed last year when speaking to people all over the world about their finances was a need for more friction. Digital services are great at removing friction, but sometimes friction can be positive. It acts as a buffer for impulse decisions, something Robinhood users could really benefit from right now. Ana Andjelic, in her book "The Business of Aspiration," talked about consumers' aspirations for restraint and self-control as opposed to conspicuous consumption. Pre-pandemic Patagonia famously advertised on Black Friday not to buy their products. Now, during the pandemic, everyone around the world is practising social distancing and for many their personal financial situation has deteriorated. This macro shift changes the context of jobs people are trying to get done everyday.  The result is a tension between a desire for convenience and an aspiration for restraint and greater self-control over what they spend. The brands that balance the two will appeal to the post-pandemic mindset.
  • Those people designing and building the businesses of the future have to take responsibility for what they build. Design ethics should be central to your team culture. The use of social sciences like psychology, sociology, anthropology and cultural studies are increasingly being baked into business practices. Approaches like JTBD, UX design and growth marketing are grounded in what they teach us about human and group behaviour. As we get better at using them, we become better at building products. We have to ensure they're used to benefit people and society, not just shareholders.

On this final point, progress is being made. Towards the end of last year workers at Google unionised to increase their collective power to challenge ethical business issues. The union is largely led by engineers, one of them Auni Ahsan said in the FT:

“This is a company that has a history of workers speaking up when the company isn’t living up to its values, but what we’ve found over the last couple of years is that the normal cycle of petitions and press coverage is no longer enough... The company was no longer listening, so we thought it was really important to come together and organise this union so we could have sustained structure and build a movement for building power in our workplace.”

In the Digital Economy, it's fascinating how the role of unions has shifted from collective power for better pay and working conditions to holding powerful businesses to account for their values and impact on society. A clear sign of the times.

Things to get excited about

On a more positive note, I genuinely believe there's a huge opportunity for new types of digital services to emerge in the wake of the pandemic this year. We've all thought hard about the balance between work and life and how we want to shape this in a post-pandemic world. The general sense is that work needs to fit around life more than it has done in the past.

This is why Daybridge caught my eye this week. Daybridge claims to be "a calendar built for people, not companies," clearly tapping into an emergent Job to be Done for people that will be coming out of lockdown soon. The landing page is pretty decent too, stating the job as the benefit, "Manage your time, not your calendar," and clearly stating what it is and who it's for. This is key information as per Nopadon's crash course of using JTBD to create landing pages that convert.

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That's all for this week. I'll be back again next week when we'll be one week closer to spring. For anyone homeschooling kids during a cold winter of lockdown will understand why this is something to look forward to.

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