Robinhood is an app that aims to crowdsource investment advice.

It turns stock tips into something resembling a Twitter feed.

Based upon how well you prognosticate stock prices, you’ll be recommended as someone to follow.

Here, we’re in the opening tutorial, to teach you how to get started.

Note their explanation of the app’s brilliant gesture--you name a stock price by drawing on a graph with your finger…

…rather than filling out lots of fields with numbers.

There’s a lot of focus on user profiles. And while they can be faked, every pick you make is built into your history.

Of course, the app has all of your normal stock information.

And right from their info page, you can get ratings.

Here’s that pricing interface we mentioned earlier. Approximate controls are okay, the team found in testing, as no one predicts a stock to gain 4.97% anyway.

This pricing graphic is then translated into words for others to skim.

The cream will float to the top, not just for bragging rights, but so you can follow their practices and make some money, too.

Eventually, the team plans to build brokerage options right into the app.

So rather than just getting stock news and advice, you can make all of those fun, impulse purchases, too.

Co.Design

Robinhood Taps Social Networks For Stock Tips

Backed by Google Ventures, Robinhood aims to be the next, best investment app. But it needs to solve problems behind real-world investing to pull it off.

It’s rare that I hear something like this from an entrepreneur:

“When we go live, we can really test to see if it works.”

But that’s exactly what co-founder Vladimir Tenev tells me while we talk about his startup’s upcoming iOS app, Robinhood. The best way to describe his software might be one-part Twitter, one-part Yelp, and one-part Mad Money. It’s a social network for investors, in which users prognosticate stock prices and the most successful users float to the top. Theoretically, all of us who are less financially inclined can learn from those with great track records, so that in the future maybe we can make some dough, too.

Theoretically. Because while social networks are pretty well understood, fraud still runs rampant. And fraud mixed with investment advice is an inevitable disaster.

“There are already social finance networks, like StockTwits,” Tenev explains. “One of the complaints people have is, there are some people telling me what they’re buying, selling, and thinking, but generally I have no idea if this person is full of shit.”

In response, the Robinhood team designed the app for as much profile transparency as possible. While you can technically invent a fake persona, all of your predictions are recorded along the way. So your score card becomes part of your identity, and while your name might not be real, that doesn’t really matter, because your predictions were right or wrong, period.

But there’s another problem. Consider when a link goes viral on Twitter and there’s exponential attention on a single story. Generally, that’s a pretty neat by-product of the Internet, and it means your grandma eventually watches the same video that you just did. But when you mix that idea with the possibility of pump-and-run stocks (artificially inflated stocks destined to plummet) or just very quick bubbles, you have to wonder, isn’t Robinhood designed at its core for disaster?

“It can be very dangerous when combining social networking with finance,” Tenev admits. “[Viral investments] can be very good for the first people to hop on, but the people in the end just get destroyed.”

So that brings us to the “when we go live, we can really test to see if this works” point. Tenev acknowledges that Robinhood’s Stanford-based algorithms might have to be tweaked, that they may have to develop strategies to recommend investors to follow for reasons beyond profitability (and in worst cases, that may even lead to a manual intervention). In short, the app may have to throttle the excitement of its own product for the health of its own financial ecosystem.

Then again, the app does have a pretty smart ace in the hole. While Robinhood will eventually allow you to buy and sell stocks from within the app, it’s launching with a natural limiter: It’s an advice-only social network for now.

Download it here.

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