New Robinhood app aims to bring out the best in finance and social media

Launched today is Robinhood, the part Silicon Valley, part Wall Street app for investors who are also interested in social networking.

The main idea behind this new venture is making information free and transparent to allow as much investment as possible. User profiles are made as transparent as possible and the app keeps scorecards of your predictions.

As mentioned by Fast Company “users prognosticate stock prices and the most successful users float to the top.”

For obvious reasons Robinhood steers away from fraud. As mentioned in this article, this is what, according to Vladimir Tenev, sets the company apart from the current competition such as StockTwits for example.

“Information wants to be free. Robinhood was built with one goal: to make sharing information between investors as frictional as possible.” The group argues that people need reassurance when dealing, buying and selling. They need to know who they are doing business with.

Combining two seemingly opposite concepts like social networking and investing, the company acknowledges the fact that their “Stanford-based algorithms” will probably have to be adjusted in order to be perfected. As discussed in this Forbes article though, having a massive following compared to IPO (Initial Public Offering), crowdfunding alone is very limited. Yes, we have all heard about the outstanding success of the Kickstarter-funded Pebble Watch, but that is just one out of tens-of-thousands which managed to gain viral attention. This gap between social and financial is what Robinhood attempts to secure by bringing the best of both worlds.

Good ideas (or potentially popular) ideas have snowball effects when they first gain momentum in social media. ‘Viral Investments’, or bubbles, Tenev says can become very dangerous and the platform still needs to be tested. The app will start out as being an advice-giving environment on stocks and the market and but will eventually allow users to trade stocks.

Image: Soerfm (via Wikimedia Commons)