The ‘Cannibalize to Win’ Method
Article source, here.
TL;DR
Robinhood just released its 'Connect' feature, which allows users can connect their Robinhood crypto wallets to trade on select decentralized exchanges.
...but why would the folks at Robinhood allow this? They run a trading platform. They're literally making it easier for users to support their competitors.
By allowing integration to third-party exchanges, via the Connect feature - Robinhood is able to insert its own technology into its competitor's user experience.
Robinhood Connect will mean all paths lead back to Robinhood's trading platform.
Full Story
This is like 'Login with Facebook,' but for crypto trading...
Robinhood, the stock and crypto trading app, just released its 'Connect' feature.
Basically, users can connect their Robinhood crypto wallets to trade on select decentralized exchanges.
...but why would the folks at Robinhood allow this?
They run a trading platform. They're literally making it easier for users to support their competitors.
It's actually a level-12-big-brain-move on Robinhood's part.
It's the ol' "cannibalize to win" method - here's how it works:
Decentralized exchanges let you trade crypto to your hearts content - but cashing out to a bank account? That's another story.
Robinhood, on the other hand, does support crypto-to-fiat transfers (aka moving from crypto to cash).
So by allowing integration to third-party exchanges, via the Connect feature - Robinhood is able to insert its own technology into its competitor's user experience.
(The Connect feature will be the 'off-ramp' for traders).
It's the same reason Facebook lets you sign-in to a range of third party apps using the 'Login with Facebook' feature.
Why does Zuck want you to set up your Tinder profile using Facebook?
(No surprise here) that sweet sweet data baaaby!
The more you use Facebook for other web products - the less likely you are to delete the app.
It's the same for Robinhood Connect - using the feature will mean all paths lead back to Robinhood's trading platform.
Smart!