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everybody i talked to actually thought it's a bad idea like any reasonable person would have quit i was filled with self-doubt and then coinbase was valued
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at a billion dollars crazy brian armstrong ceo co-founder of coinbase largest u.s cryptocurrency exchange i
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saw technology as a way to try to have a big impact on the world if the thing that got you started in the first place
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was like fear like fear of never being important or fear of never feeling fulfilled you're just gonna give up
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cryptocurrency is the biggest transformation of money since the invention of paper coinbase was being
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deemed the most trustworthy brand in crypto it tipped at a certain point from like oh this growth is really good to
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okay things are getting a little crazy here if you kind of more than double a company in a year you're really going to start to see a lot of stuff break
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this morning coinbase just telling employees in an email that it plans to lay off 18 of its workforce we had never
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done a layoff before i had never done one i remember i went up in for the company and my voice
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cracked i mean it was awful oh man i actually think coinbase is in deep trouble here and let me tell you why the pressure and the scrutiny and the headlines how
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are you dealing with your emotions this is getting very personal it's a real superpower to like care less what other people think so without further ado i'm stephen
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bartlett and this is the diary of a ceo i hope nobody's listening but if you are
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then please keep this to yourself [Music] brian i when i read through people's people's stories they're sometimes really obvious um causal factors that led them to
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become the people they are today but with you i'm i'm more compelled by the less obvious factors if we go back
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to your early years when you're a young man on the west coast yeah of the united states what are the the less obvious reasons as
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to why you've ended up where you are today and achieved what you've achieved in your life
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great question um one of the less obvious reasons probably is that i was an introvert i just wasn't really very good with people i didn't really have that many friends you know as a young person
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i was quite shy um i really found a love of computers and i liked just being by myself and playing with computers learning about how they worked programming and
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you know in our technological age i suppose um some of the people who got excited about
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computers early on and just have found a love of building things have now become you know ceos of companies which is kind
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of a strange thing for a long time i didn't think i could be a ceo because i envisioned ceos of companies as being
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like these military generals who barked orders at people and they were these like strong charismatic leaders and
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i always felt like well that's not me i'm kind of like an engineer i'm kind of a nerd you know and what i've learned
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over time is now reading enough books and things historically you know introverts can make actually
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really good ceos um of course by the way there's lots of different types of ceos there's not just one mold there's people
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who love marketing people have operations people who love sales people and then there are engineer ceos
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um so that's one reason that i think it's maybe a little bit less known why i'm here
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another another reason is that i just became very passionate about this idea of trying to have an impact on the
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world and i think it again may have come from that that introversion as a kid and i felt like hey i have good ideas but
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it's hard for me to get them out there and for people to listen to them and i didn't feel confident like you know speaking in some public setting or
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whatever i have lots of practice doing it now so i can i'm a well-trained introvert but um
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you know i saw technology as a way to try to have a big impact on the world and it could get my ideas out there in a
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scalable way even if i felt like maybe i couldn't and so i don't know maybe that's another un unlikely reason in hindsight then
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going back to those early years as well what was your luck or privilege what were the factors that were out of your control that
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happened to be the case that also aided to that um trajectory yeah i mean there was a lot of things that went right so i
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was in a home with loving parents that were very supportive of education and my passions and interests including you
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know my mother worked at ibm and so we had like an early computer in our home um she was kind of an early programmer
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there you know we had early access to internet things like that i also had you know i graduated studied i studied computer science and economics and i had um enough
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this was a very important thing i was not afraid to go try starting companies because i knew that if i failed i could
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actually go back and still get a job and it wasn't people always think of you know entrepreneurs oh they're such risk
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takers and all the stuff you know honestly it's not it's not that risky like if you're a young person and
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you get a little bit of money to go start a company like in in silicon valley people write you angel checks for these things
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and you can pay yourself a salary go try it for a couple years and it doesn't work you go back to a company and you it's often viewed as a badge of honor um
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that you've tried to start up you have this entrepreneurial dna you're somehow more valuable inside a company now if it
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doesn't work and you go back in many places in the world that's not the case you know failure of a company
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is considered a badge a mark of shame not a badge of honor and then i think many people don't have the
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luxury of being able to kind of raise these seed rounds and things like that which many places in the world you can't do that crypto is trying to help that by
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the way but in silicon valley you can get angel checks for things and so i tried starting many different things over the years as kind of as side projects but with coinbase specifically i didn't really i didn't even quit my
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job to try it full time until i had gotten sort of an angel investment so i was able to pay myself something it wasn't a lot but i was able to pay
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myself something and de-risk it um yeah if i'd asked you then at say 10 years old what you what you wanted to be when
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you grew up what would you have told me at 10 years old i mean i really i really had no idea i think the first glimmer of it that i had was in high school and i i had started building some
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websites and i remember as a senior in high school i went on this retreat and uh i had i do remember having this
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thought like the thing that has excited me the most in my life so far was i had built this
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kind of simple website or app and it felt like it was this really incredible feeling i went to sleep and i
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woke up in the morning and i checked the stats and like you know 200 people or something had visited the website while
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i was sleeping and i was like wow that was so cool i don't know who these people are they're all over the world it felt like a superpower like if i could
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build something that could be working and helping people while i was sleeping you know if not if not 200 people why
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not 2 000 2 million whatever and so i do remember having sort of a it's stuck in my memory like that of all
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the things i've tried in my life you know sports and reading and science and in school and whatever as a high
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schooler that was the thing that really got me excited in a way that nothing else had at that point so i was probably
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in the very early stages of discovering my passion at that point just just listening to you speak there
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my my brain was telling me that because i was trying to make this link between why being an introvert led you to technology and then also having this
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sort of desire to have impact but it sounds like there technology allowed you to be be an introvert and have impact
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because it was the the bridge between the the outside world yeah so when that website goes live you don't have to see
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these people or persuade them yeah but you can have your impact by by a piece of technology that's enabling something
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in their lives exactly you go off and study economics in university and yeah college yeah so i
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had been taking some programming classes um on the side in high school i couldn't help it i i i like in my free time i would just play with computers until like two in the morning three in the
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morning i was like dead tired at school every day because i was like wide awake at night like playing with computers
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learning about linux and like all these things and um school was a little bit boring in some
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ways so yeah i basically decided okay if i'm in this interested in computers my parents
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were supportive of this of course there was like community college classes and i went to go try to take some of those classes to learn programming there was i
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got some books from the library about like how to program java and things like that and i couldn't i couldn't understand any of it
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but i was trying to work my way through it so then when it came time to go to college i was basically like okay computer science
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that seems like the closest thing to what i'm interested in i was also interested in business and they didn't offer a business degree so i studied
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economics instead that was like the closest thing to a business degree they offered and that was literally my my thinking now of
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course i had no idea later i'd started crypto company which was literally the intersection of computer science and economics but yeah at the time i just
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thought i want to i want to write software and i want to learn how to start a business and at some point during college you
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start your first i guess real company yeah which is a tutoring business yeah was that did you have grand plans of turning that into a a mega was that or did you stumble into that
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more like stumbled into it yeah i mean so as a college student my roommates and i were always trying to think about how to
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make extra money and i went around and i was looking at these on-campus jobs so you could work at the library there was
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like a coffee shop and you know they paid like 10 15 an hour or something like that
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and one of the upper classmen i remember he told me you know i'm tutoring this high school kid and
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they're paying me 60 an hour i was like wow 60 an hour is it just it was like three
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or four x what you could make at these other on-campus jobs so i decided to try doing it myself
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i got in touch with some people i started tutoring high school kids just in like math and science and things like that and it paid really well and so my
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roommate and i at the time we were starting to just brainstorm like why don't we start a little tutoring company and help high school kids and their
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parents match with you know the you know tutors at the basically university students at the university where i was
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going to school and so we got that going we got maybe 10 20 of our of our fellow students kind of
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connected in and then we said all right let's make a website for this to connect even more people maybe try to expand it to other
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schools you know eventually over a period of a couple years this this idea just kept evolving and we
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started to think about it as we didn't really know this at the time but it was we were kind of making an online marketplace like airbnb for but but for
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tutoring and um yeah i got to practice like building web applications um there was
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payroll and incorporation and sales and marketing and taxes and um it i could never really get it to grow enormous and to make it become like a really big business which we can talk
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about if you want but that was the seed of it that later became a little bit more of a company
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why then why couldn't you make it become a big business what was the in hindsight the lesson yeah the barrier
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okay so we learned this sort of the hard way about creating a marketplace which was that in this particular industry in
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tutoring a lot of times uh you would introduce a student and a tutor and they would sort of we our business we were trying to take like a 10 fee by matching these people and we were
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basically trying to do all the payments through our website like billing and you know with a 10 fee and what would happen
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often is they would meet the tutor if and they'd do initially the first payment but then afterwards they'd start paying them under the table and so um
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we were i realized at a certain point we were basically just getting in the way they they wanted us to just match them but they didn't want us to be the whole
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billing apparatus it was a much more like a local repeat business in-person business and
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so for years and years i struggled with that there was a counterintuitive moment which allowed me to kind of pivot away
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from that so i eventually realized this thing isn't working i need to go get a quote-unquote real job
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and as i was going to start my the real job this was at um basically airbnb where i became an early employee i was i was about to shut down the tutoring site and i was like feeling a
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lot of pain about that because like well i don't know there are still like five ten thousand people every month who are
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kind of looking at this thing and using it it feels like such a pain to shut it down or such a bad thing so i was like what
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if what if i were just to put everything on autopilot you know we're not gonna be involved in any of the payments there's
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no customer support this is literally just going to be a directory like a tutoring directory and you can contact
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these tutors you can pay them however you want um and i'm just going to try to make it like a free thing maybe i'll put up some
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ads and so i basically had like a week before i was starting my my new job i got rid of all the payments i messaged
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all the people using it i was like you can pay now people directly and um i was gonna put up some ads and i
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did one more thing at the last hour which is i said if you want to have like a featured profile as a tutor
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with like a little badge on a featured badge and come up first in search results then you can just pay 10 a month
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and that was it and i basically stopped looking at the website and i went to go focus on my new job
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and every year thereafter the site doubled after i made that change um and so basically i guess the lesson was you know stop trying to extract value and start
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trying to create more value and at that point i think that was only the the only tutoring directory online that had free
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profiles and you could just contact the tutors and so it actually started to grow later later uh um somebody ended up
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acquiring it for maybe like two million dollars or something so to me that was like it was like a seven or eight year
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base hit the outcome yeah where for years you know five six years i was struggling to get anything to work but
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the the truth is okay they paid two million dollars for it yeah but the lessons you learn
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uh many of those translate into the business that you went on to build in coinbase what is there anything else
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because i look at my first startup that i made out of you know dropping out of university then started yeah and there's
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so many lessons one of them is what you said is i was i was so romantic about my hypothesis about what this business
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should be that i got in the way of what customers wanted to do yeah so hearing you say that really relates but is there anything else that you learned from that
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seven-year first you know kind of messy startup that of key philosophies for you today in
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coinbase i mean i think one of the big realizations i had in starting that tutoring company which again you can you
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can always look back and see how the the pieces connect but at the time you're just wandering in the desert you're lost
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like i felt i felt like i was a failure i felt like i had no idea what i even wanted to do i didn't even know if i
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wanted to be an entrepreneur it basically wasn't working but looking back with hindsight
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one thing i realized was how broken the global financial system was because it was incredibly difficult to collect money from all these students and pay these tutors
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not only in the us but in various places around the world and i remember um going through this pro like incredibly onerous
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process to like set up credit card processing and then payments that i was sending out and i
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remember the bank called me one day and they were like you know are you an aggregator of funds
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and i was like i don't even know what that is and they were basically like treating me like almost like i was a criminal and what are your licenses to
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do all this stuff and i was like this is crazy it was the hardest one of the hardest things about that business was just to get the payments like collecting
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payments and distributing payments to the tutors as a marketplace and so that gave me sort of a real
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insight later when i saw the bitcoin white paper years later i was like that system is broken um and this could
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be an opportunity to fix it so that was one thing what about airbnb so you went and worked as a in the product team at airbnb yeah yeah i was a technical
00:15:22
product manager which basically meant i wrote some code and i tried to be a product manager yeah um
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yeah so i think i was the 40th employee at airbnb and i basically moved back to silicon valley from i was
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living in buenos aires argentina for a year or so trying to figure out what i wanted to do with my life okay i'm gonna
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have to talk about that sure yeah what did that give you that experience of travel and
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going to argentina and living there for how many years a little less than a year yeah what did
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that give you well it gave me a few things i mean one was that i got to see what a
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hyperinflation economy looked like you know a lot of people have only grown up grown up in a developed country they've never
00:16:00
experienced hyperinflation and they've never felt firsthand what that can really do for a population and
00:16:06
people so i would it really deeply affects the culture of places like argentina there's just there's kind of this
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deep distrust of um the government and there's a pessimism about about the future there's
00:16:17
kind of you know in countries that i think are the most forward thinking there's a sense of optimism about the future hey we can build a better future
00:16:24
and there's you know in places like argentina might you know people may disagree my impression was that people
00:16:29
felt like the best days are behind us and live every day like it's your last because hey it could all disappear
00:16:35
tomorrow meaning your wealth and everything which has happened many times in their history also just little things like you'd go to
00:16:41
the restaurant the next week and the prices are higher and they put a sticker on top of the menu because the prices keep changing so so frequently it really
00:16:47
it really harms like the poorest people in in society too because they they're the ones holding their wealth in cash as
00:16:53
opposed to wealthy people can hold real estate things that adjust for inflation now they can hold bitcoin um so anyway it gave me a front row seat
00:17:00
into that it probably gave me a little bit of a sense of confidence too because i had never
00:17:06
studied abroad or really um lived in a foreign country by myself where i didn't really speak the language very well so there was things like that i think i was just trying to learn how to become more independent and grow up
00:17:16
and stuff like that you were running the tutoring business at this point yeah i mean i was doing a lot of things so i was running the tutoring business i was
00:17:23
um doing some contract software development just kind of while traveling i was trying to build some real estate
00:17:29
investments in the in the us i i was basically trying to figure what i want to do with
00:17:34
my life and there was a whole process i went through to try to figure that out if you're curious too
00:17:39
the digital nomad piece which is becoming much more common these days because we've had this pandemic and we've kind of built systems which allow
00:17:46
us to work more remotely and but just generally people were were choosing that lifestyle when i did that when i was 21
00:17:52
in the gap between my startup failing and then me pivoting into a new business i found it quite lonely
00:17:58
and there was i remember being actually on a plane flying from one country to another brazil to thailand or something
00:18:04
and seeing this um i think it was textiles or something like this san francisco incubator or new
00:18:11
york-based incubate where they were building companies and i was i was living the dream in many people's eyes in these hot countries with my laptop
00:18:17
but something inside me was like missing yeah um community a sense of shared mission whatever it is i wonder i wonder if you you can relate to that in any way or totally i i found it actually quite
00:18:29
lonely as well so in in some ways that was the point which was to step outside my comfort zone feel like i had to make
00:18:36
new friends in new city but yeah i mean there was a good you know maybe five six months there in buenos aires
00:18:42
where i felt like i didn't really know that many people um i was feeling kind of homesick yeah
00:18:48
eventually i tried to you know go meet some local people like expats like various hostels and like you know event by the
00:18:55
time i left i felt like i had a budding friend group and i liked it more but it was lonely there for a while
00:19:00
you said you used that time to figure out what you wanted to do with your life as if there's some kind of system there
00:19:05
yeah i don't know if there's a perfect system but i mean i read this book by seth godin called the dip
00:19:12
yeah i don't know if you've read it but and it's funny i went back to read it like many years later and it's actually a
00:19:18
relatively simple book but in that moment in that time that's what i needed to hear and it's kind of a very fairly
00:19:24
simple idea um which is that you know what's the thing that you would still want to be doing 10 years from now even
00:19:30
if you hadn't seen a lot of success because most things in life you know you start off you're a beginner you have a
00:19:36
fast pace of learning it's kind of fun but then after you after you're a beginner there's this dip in the middle where you're not an expert you're not
00:19:43
one of the best people in the world you're probably not making money from it but you're not a beginner anymore and there's like this long slog to go
00:19:48
through the middle you know put in your 10 000 hours there's lots of various people have talked about this so
00:19:54
i was doing a variety of things at that time i was i was as i mentioned running that tutoring company doing some real estate investing i was like learning
00:20:01
martial arts and like all the various things traveling in argentina and i and i basically sat down one day i
00:20:06
was like what's this what is the thing that i 10 years from now i'm still going to want to do this and be passionate about it
00:20:12
and even if i'm not successful at it you know because i just love doing it and like the only thing i could like
00:20:18
really write on my list was tech entrepreneurship and so par part of the point of that
00:20:24
book is if if you're not willing to go through the dip then then quit now because it's
00:20:30
you know and so i was like do i really want to be like doing you know great real estate investments
00:20:36
10 years from i was like i don't actually love real estate investing so maybe i should have stopped doing that maybe i should stop doing this and
00:20:41
maybe so it was this very clarifying moment okay if i want to be a tech entrepreneur because i had been doing
00:20:46
that in some way shape or form for you know five ten years i was pretty sure i'd be wanting to do it ten years from now
00:20:52
i was like why do i live in buenos aires i should go to where the the center of tech entrepreneurship of silicon valley you know that's happening
00:20:59
all over the world now silicon valley is kind of decentralized but at that time especially so i kind of stopped doing everything
00:21:05
else moved to silicon valley and went all in on that and then i think within maybe seven years of making that decision um coinbase was
00:21:16
valued at a billion dollars crazy so it did really help clarify my ambitions and i just put it all into one thing that is atypical pointless yeah there's going to be
00:21:27
entrepreneurs in bruenesaras listening to this that are bringing flights to san francisco but it could it could be any
00:21:33
like if you really want to be an actor you should probably go to hollywood or something or if you really want to be in finance maybe go to london new york or
00:21:39
anyway i think it's not so i don't want to say like there's one geography for everything but um
00:21:46
there is a clarifying thing what happens if you just say this is what is the most important thing to me and i'm just gonna
00:21:52
try to make luck my own luck around that it's so true it's something that i don't
00:21:57
think especially young people think about when they're deciding making career choices they where to live is sometimes not um as
00:22:04
prioritized as much as like which university has the best partying or who's offering me a job right now as
00:22:09
opposed to that long-term horizon of like how do i surround myself with the most talent and opportunity and funding in the case of business um and
00:22:16
inspiration and enablers um for this long-term vision i have and i spent some time in san francisco myself about three
00:22:23
years and when i come back to the uk and when i go to other cities in the uk i i've never said this before but i see
00:22:28
how much of a disadvantage we have in philosophy in ambition in funding in talent
00:22:34
and um it's no surprise that most of the great unicorns that are emerging out of one
00:22:40
city and in the world that then leads you to airbnb somehow through i think you take a job first
00:22:46
then eventually take a job at airbnb yes exactly yeah i joined a y commenter startup that was really cool but it
00:22:52
didn't really work out there was a brief interlude there but basically i i decided okay my tutoring
00:22:58
company is not really working i need to and that's that's when i pivoted to that thing which had a base hit but what i
00:23:04
decided all right i want to go to i want you to go to silicon valley i kind of want to apply to y combinator it's a startup incubator
00:23:10
um but i wasn't able to get in and so i was like let me go work at a y combinator company to sort of learn
00:23:17
and i need it by the way i also just needed to recharge a little bit because the tutoring company i've been living abroad the shooting company wasn't
00:23:22
working i was barely paying myself anything so i was kind of broke i was i was also just exhausted um
00:23:30
from the the tutoring company just not working after so many years of trying to get it to work um and you know it hadn't seen it double
00:23:38
every year after that that happened on the side um and so i was like great let me take a job at a high growth company
00:23:43
that seems to be well run actually make some money for a little bit here save some money and that's how i got to airbnb it just
00:23:50
it had a really magnetic culture even at 40 people they had they were clearly onto something it had they had found product market fit it
00:23:56
was growing quickly um and i learned a lot there they had a really unique culture um they they were hiring differently
00:24:04
they were really like trying to raise the bar with every hire you know if it's not a hell yes it's a no they were um
00:24:10
the way that they just did product reviews was really interesting they had an important design component to it
00:24:16
if you think about now why airbnb won in their market from what you got to see inside their walls what would you say so you've talked about their hiring philosophy which is very very clear yeah but what else would
00:24:28
you say well the main thing and i think that by the way this is true of not just airbnb a lot of startups was determination
00:24:35
um they went through a period everybody always looks back to these startups and they think oh it was a unicorn like it
00:24:41
just they found the thing and it worked airbnb is actually somewhat typical in this regard which was there was i think
00:24:47
at least um i think like a three-year period where they were just wandering in the desert any reasonable person would have stopped
00:24:53
working on this idea it was it was a crazy idea like it was like couchsurfing you're gonna let strangers stay on my
00:24:59
couch like that's not a business it's like just ripe for lawsuits and you know um and they were in like tons of credit card debt because they had like been trying to sell fund it you know they had
00:25:11
launched several times and nobody was using it um yeah they should have quit like any
00:25:17
reasonable person would have quit um but they didn't they kept going and they were just because getting
00:25:22
marketplaces off the ground is very hard you have to check an egg problem supply and demand and so i actually think
00:25:29
that's a common element um in a lot of like successful companies you go back there there was a period where a normal
00:25:35
person just would have quit and they they went from setback to setback to setback with enthusiasm you know somehow
00:25:40
powering through it so i learned that too i hear a lot of um entrepreneurs who have your same
00:25:46
enthusiasm to be an entrepreneur the enthusiasm you've expressed there when you leave um argentina and you come
00:25:52
back you just want to be an entrepreneur you don't necessarily know what or industry what problem you want to solve
00:25:57
and what what always makes me feel a little bit concerned is when an entrepreneur is so keen to be an entrepreneur that they'll just try and
00:26:02
think of an idea you took a time to go and get inspired i guess and to let the inspiration come to
00:26:08
you what's your view on that there'll be people listening to this now that want to be an entrepreneur but they don't
00:26:14
have an idea yeah okay well i mean i i was probably guilty of that too where there was definitely a
00:26:19
period in my life where i was like um i just want to be an entrepreneur and i don't know honestly it was probably
00:26:24
partly ego driven it was partly um my own like introvert way of saying like i just want to be able to have an impact i wanted to feel like i had done something valuable because i didn't feel like valuable as a human myself like you
00:26:36
get into all the psychology of it right it's kind of a crazy thing actually to go say like i have to be an entrepreneur
00:26:42
because you know from an if you just want to make money or something like it's from an expected value outcome it's probably
00:26:48
better just to like go to some early stage companies invest some equity and like or join goldman sachs or something
00:26:53
right like so to be truly want to be an entrepreneur i guess you have to be well sometimes it's ego driven but i think it's your your chances of success go up dramatically if you're doing
00:27:05
something because you're actually super passionate about it and so for me reading the bitcoin white paper was kind
00:27:11
of a lucky moment because i found it tapped into something that i was really passionate about which was
00:27:17
basically freedom you know um economic freedom and just like how do we empower people all over the world to you know
00:27:23
have access to sound money and um like a decentralized open permit system where anybody can get access to the global financial system that really just like resonated with me and so
00:27:35
i think that really helped coinbase be successful because there were many times in our history as a company where you
00:27:40
know like 20 2015 2016 like the whole industry was down for three years everybody was
00:27:46
pivoting to do blockchain not bitcoin if you remember that every like a lot of the competitors in space pivoted to make software for banks
00:27:53
and stuff and everybody looks back at that and like wow you know brian you never lost faith and everything
00:27:58
for me it was more it was simple than that i was just like well i don't really want to make software for banks so like
00:28:03
if that's what this is all about now i'd pretty much just gonna shut it down and give the money back uh to investors um
00:28:09
so i was just too stubborn i was like i i got into this because i feel like this is the way to create more freedom in the
00:28:15
world so that's what i'm going to keep doing whether it works or not so i think there is a really important element there you
00:28:21
have to be super into it for some reason that's bigger than just ego or trying to make money or whatever because
00:28:28
every company is just filled with setback after setback or setback and you think you can power through it
00:28:33
but believe me when you're like three years in and like your co-founder quit and you
00:28:38
you got sued and you're broke and like um the first three times you launch the product nobody wants to use it and like everything sucks and you're feeling like a failure and you're you know
00:28:49
you're just gonna give up because you're not actually doing it for like some bigger purpose you're doing it because
00:28:54
you wanted to feel important or something so it actually is important to pick the thing that you're passionate about yeah you're doing it because you
00:29:00
want to feel important or something we're talking about um how part of this sort of introverts dilemma
00:29:05
is you can feel significant personal significance by creating something that has significance in the world
00:29:11
zooming right to the end of the story has has that impact you've had on the world made you feel more personally significant
00:29:18
yeah totally okay so i think this is a really important topic because a lot of founder it's stressful to run a company
00:29:23
right so a lot of founders if they do get to some level of success they will often burn out right
00:29:29
um it shows up in weird ways by the way some people gain a ton of weight some people lose a lot of weight some people
00:29:35
deal with stress in all kinds of ways i've there's like founders i've met that get like addicted to prescription drugs or
00:29:41
like you know all kinds of unhealthy things you can imagine right so um i mean you have to find a way to shift from like if the thing that got you started in the first
00:29:53
place was like fear like fear of never being important or fear of never feeling fulfilled you have to at some point
00:29:59
transition it once that hole is filled in your heart i guess you have to transition to being
00:30:06
motivated out of like joy or love or something more positive not like running away from fear and anger or you're like
00:30:12
you're really angry at this you know your father or like the person who um you know broke
00:30:19
like the co-founder who you almost was going to found with who decided they didn't want to and you're pissed at them so you're trying to show them up or
00:30:25
whatever those aren't relevant to me but i've heard other examples anyway long way of saying you have to
00:30:30
transition away from fear and anger as your motivator to like joy and love and just find the thing you actually love doing in life so for me you know that
00:30:37
was like figuring out what is the kind of ceo role that i really want to have um
00:30:43
what's the thing that brings me joy for me it's like i love building things with with technology i love learning new
00:30:49
things um there are some parts of the ceo job the typical ceo job which you know lower my energy they don't give me as much energy right there's like you know frankly like people i'm not the
00:31:00
best people manager in the world right like um i used to have like 12 direct reports um at the company and i was like
00:31:06
so stressed and then now you know now i have like four right and it's like it's actually much easier for me to run the company with that so
00:31:13
um there was a lot of things ideas that i had in my head i was like well the ceo has to do that obviously the ceo has to
00:31:19
do that and i sort of let go of some of those things over time and i said you know what i'm actually going to focus on
00:31:24
the things that i'm better at because they bring me joy and i'm going to delegate a lot of the stuff which i thought i had to do
00:31:30
and that's actually made the company run a lot better and it's kept me engaged in the job like i'm been doing it 10 years
00:31:36
and i hope i can do it another 10 it's and it's still fun because i've been able to delegate
00:31:41
why do you have to make that transition away from fear and maybe insecurity being the motivator towards it being
00:31:46
about joy and love what what's the cost if you don't well i think if you don't then once you
00:31:52
hit some kind of level of success whatever however people count that then you're not going to feel motivated
00:31:59
anymore and so you're just you're going to be done and uh you know you're going to go
00:32:06
do whatever else you're going to do next like i guess become an investor or sit on the board which is nothing wrong with that either but i just i d part of me
00:32:12
does wish that more founders were able to continue being founders and build the next thing and the next thing
00:32:17
um i mean we just met each other barely know each other but i'm guessing that you're
00:32:23
finding a lot of fulfillment out of like running this podcast and you sort of you've you've found some
00:32:28
new level of joy in doing that so this is like your next founding moment but yeah i i think if you don't do it then you're just going to burn out it and a lot of people i think who had some level of success as
00:32:40
a founder they look back on it and they like well man i finally got that thing to some level of success and i sold the company
00:32:46
or whatever but i never want to do that again like because that it damn near killed me and i was so stressed all the time and so
00:32:53
i've tried to make it i need to get it to a place where it's fun to run the company so that i can keep building companies for many many decades
00:32:59
hopefully that's my goal you're describing me when you say that so yeah the company for seven years but it felt
00:33:04
like i was doing it um involved it wasn't it wasn't voluntary meaningful struggle it was i can't let this thing
00:33:11
go down yeah it's not i'm not enjoying it anymore but i can't stop and then at the point where i realized i could stop
00:33:16
i did immediately in hindsight the way around that would be to do a bunch of things involving the you
00:33:22
know how the company's structured and who owns it who has control and all those things but really trying to build a sustainable as you describe it like a
00:33:28
sustainable life for me as a founder and for my team members yeah and that often in silicon valley when especially
00:33:35
when you're in high growth companies sustainability in terms of culture is the last thing how have you done that then how have you
00:33:41
tried to make it sustainable you've talked about yourself but how have you how do you create a sustainable company one that's built for 50 years or 100
00:33:48
well okay so there's a lot of different elements to that i mean one of them is just the burnout factor with people let's talk about that first
00:33:55
um and then i'll come to like repeatable innovation um so from a burnout point of view i mean a
00:34:00
few things that i do for instance um because obviously there's days where you have to like go hard and sprint and then
00:34:06
um but for instance like every quarter i take a week off right i just have that prescheduled for the year because if you
00:34:12
just kind of wait there's never a good time to do it um we actually tried an experiment this year where we're having we call them
00:34:18
recharge weeks everybody in the company is like taking a week off every quarter and they're doing it at the same time because
00:34:24
sometimes if you're off you're the only one who's taking a week off and then people are pinging you the whole time and whatever i don't know if we'll keep
00:34:30
doing it or not it's an experiment but by taking a week off every quarter it allows me to kind of
00:34:35
make sure that i recharge i have time to go um learn new things and it often like sometimes you know i'm thinking about
00:34:41
the business in some way shape or form but it's like yeah that's helped make it sustainable other things i've done i've had um a lot
00:34:48
of executive coaches different executive coaches i have one now you know it's there's different kinds of executive coaches some of them are very tactical
00:34:55
with their advice like they're former ceos others are basically therapists and like you know both are good and
00:35:01
important versions to have um when i first heard that i was like oh i don't want the therapist i want like the tactical ceo coach but you know i've
00:35:10
found the therapist part's almost even more valuable um let's see what else i mean
00:35:15
like i have um i have this kind of like morning routine where like i've noticed that my days go i'm a lot more stressed
00:35:21
if i just like wake up i look at my phone you know i haven't really like had any breakfast or exercise or
00:35:27
anything and like you know i'm like low blood sugar i just everything's pissing me off i'm like irritable
00:35:33
um and so that's just a bad way to wake up since now when i wake up i basically don't look at my phone you know i try to
00:35:38
like do the morning routine you know exercise like eat some breakfast meditate whatever and
00:35:45
then okay now i'll start my day and like try to that all these kind of things help and i think this is important for the
00:35:51
whole company to some degree because a lot of new employees especially like new grads or younger folks like
00:35:57
they they actually don't know about burnout they'll they'll actually you can have unlimited vacation policy and tell
00:36:03
people at the all hands meetings whatever like don't wait until it's too late you know take time off but they won't do it like
00:36:09
sometimes i've seen especially high achieving people they push himself like too hard and they'll actually quit and i'm like
00:36:14
why are you quitting and like i'm burned out and i was like why didn't you take any vacation the last two years and they're like
00:36:20
i don't know and they they didn't feel like they had permission because everything was so important and so
00:36:25
we're almost like trying to force people to take a little bit of time off here and there but we still have a pretty intense work
00:36:30
environment at coinbase i'm trying to like you know amp it up like we we should we should be going hard but then take
00:36:36
periods of rest and renewal and take rest like renewal very seriously it's actually an important skill to learn
00:36:43
so okay so that's kind of how to like you know go hard for the long term but don't burn out
00:36:48
um then i think companies also need to have repeatable innovation so what that to me
00:36:55
what that means is you can't just be have like one product that finally works and then you scale it
00:37:00
and it kind of the s-curve tapers off and then what do you do i think companies need to continually have like
00:37:06
a next act you know and a port ideally like a portfolio of products or different revenue lines um so that while
00:37:12
something is going down another thing is going up and we we do this thing in coinbase called 70 2010 resource allocation so like 70
00:37:20
of our resources go to the core business today that's making most of the money and it's at scale 20 of our resources go
00:37:27
towards these adjacent bets that are like an extension of the core and 10 go to these venture bets which are basically like kind of crazy ideas that have a higher chance of failure but it's so even in up markets down markets we're
00:37:39
putting 10 percent of our resources towards crazy you know potentially big things that
00:37:44
could work they don't and some of them don't and that's allowed us to build this portfolio of products and i think that's important for the long-term
00:37:52
sustainability of companies because it always maintains this um this startup culture this founder
00:37:57
mindset of like it you know it's it's always day one you know never let us become complacent try to
00:38:04
disrupt ourselves before somebody else does and just keep building the next thing the next thing the next thing like that's that's what keeps a company
00:38:10
exciting that's how you extend the founding moment right like like zuckerberg is trying to do that now with
00:38:15
with the metaverse instead of just being a social media company and so if a company doesn't have like those
00:38:22
continually stretch and try to build the next thing i think it just becomes a little more complacent
00:38:28
and like good people eventually leave and stuff like that every company wants that at least they say they do yeah but
00:38:34
then they they set up incentive structures and policies that actually act as a deterrent for innovation they
00:38:40
disincentivize people to innovate yeah so a question i get asked a lot when i'm on stage is you know you've ran an
00:38:47
innovative company in an in an industry like social media which is changing all the time and the tricks and tips and algorithms are adjusting how do you get
00:38:53
your teams to and how do you align incentives and how do you really make that philosophy and culture real where
00:38:59
people are actually incentivized to take risks and to do those those 10 bets that might end up being the the next aws or the next you know
00:39:10
kindle or whatever in the case of amazon yeah you're right so i think that it's a the natural tendency of most orgs is to
00:39:17
not allow that and so you have to actually fight against it as a founder or ceo if you have somebody within the
00:39:23
org who is kind of entrepreneurial and they try something new and it doesn't work
00:39:29
you know you have to make sure that that's not like a black mark on their their career
00:39:34
advancement right there's a difference between they had good execution towards the wrong idea or they had the right idea
00:39:41
but bad execution right if um like i think uh you know amazon amazon example right is
00:39:48
like they tried to launch their own phone at amazon right near the fire phone and it
00:39:53
was this big failure but my understanding internally was like they basically pushed
00:40:00
it was the wrong idea but they had good execution and so they didn't they didn't like fire that team because the amazon
00:40:05
phone failed they said okay the execution was good you shipped a phone in a pretty small amount of time
00:40:11
it was toward the wrong idea let's what next and that i think my understanding is that team actually became the kindle team which then was a
00:40:18
very successful product so um it's a tolerance for failure recognize good execution even toward the wrong idea um you know i think some of this has to
00:40:29
come from the founder i don't know i don't know if there's any other way like the problem is um
00:40:35
if you look at public companies that have that are founder-led they actually like outperform the the rest of the s p
00:40:40
500 and one theory for why that is is that this like the scarcest thing inside big
00:40:48
companies is actually risk tolerance um and so founders can kind of provide that now you can you if you can go too far with this right you we know of founders who have
00:40:59
too much risk tolerance and have kind of blown the place up right we work yeah exactly
00:41:05
and then we also know of companies that had you know like not enough risk tolerance they had a professional ceo
00:41:11
come in you know i don't want to criticize anybody but like like steve ballmer or someone would be a classic example i'm sure he's a smart
00:41:17
guy right but something happened there where they didn't have the risk tolerance so i kind of view my job as like a founder
00:41:24
ceo at this point is to ensure we have um enough risk tolerance to try new ideas and then i and then i also want to
00:41:31
pair myself with great operators like like emily choi our ceo and president right and we have a
00:41:37
really amazing executive team so it's the combination of like great operator but also great founder energy
00:41:44
which i think is a nice combination that creates good outcomes if you do if you're too heavy on one or the other sometimes it
00:41:50
doesn't work as well there's something a lot of you don't know about me last year i co-founded a company called third web and most of my
00:41:57
available time right now is spent building third web so what is third web third web makes it
00:42:03
really really easy to build web through applications and today's guest is one of the most famous ceos and founders in
00:42:10
web3 and we actually have a really strong relationship with his company coinbase so it felt somewhat fitting to
00:42:16
introduce third web to you in this episode just for a couple of seconds since we launched third web the growth
00:42:22
has been insane the world's biggest brands sports teams creators gaming studios and hundreds of funded web3
00:42:29
startups have all used third web to power everything that they want to do in web 3. nft drops packs dowels you name
00:42:36
it third web powers it in the last two months alone the number of active projects using third web tools has
00:42:43
doubled despite the bear market so if you're an entrepreneur if you're a brand owner if you're a web 3 developer or
00:42:49
just someone that's interested in web 3 which is in my opinion the next major technological shift that will impact all
00:42:55
of our lives kind of like social media and web 2 did then you can start building that future today using third
00:43:02
web check out thirdweb.com for more the link is in the description below let's get back to the episode
00:43:08
you read this um the white paper satoshi's famous bitcoin white paper pivotal moment for you sparks interest
00:43:14
and intrigue while you're at um airbnb you do something which a lot of people ask me about as well which is when
00:43:20
you're in a job and you have a spark of inspiration how do you do both you've got to pay the bills on one end but then
00:43:25
you want to pursue this idea how did you do both because you stayed at airbnb while you started developing yeah what
00:43:31
became coinbase yeah so basically i did it on nights and weekends people didn't like that answer
00:43:37
yeah it sounds toxic it required a lot of energy i mean i basically so so first of all you need to make sure that if you are currently employed like don't build it you know on company hours
00:43:47
and don't build it on the company laptop there's a lot of um ip litigation that has ended you know
00:43:53
for some people has ended badly because the company actually owns it typically at least in the us i don't know what the
00:43:58
rules are in other countries um if you build it on employ on company time on the company hardware the company
00:44:04
probably owns the ip so you need to make sure you're doing it on your own computer not during hours so anyway i i would often work till like 7
00:44:11
p.m or something like that i'd come home eat dinner or something like that and then i would work from like 8 p.m to
00:44:17
midnight um i would do that maybe three or four days a week on weekdays and then on the
00:44:22
weekend i'd work maybe like sunday afternoon for like seven or eight hours so i was i was
00:44:28
probably doing like 20 hours a week or something like that on what would eventually become coinbase in
00:44:34
my personal time and it was hard it sucked i mean i was like tired after a full day of work it's like 7 p.m but
00:44:40
this is where that some of that determination comes in right and i was like okay well my co-workers like going out
00:44:46
drinking or whatever and nothing wrong with that i did a lot plenty of that but like in my time at
00:44:52
that moment in that time i was i was you know my late 20s i was like i really want to try to build something important in the world like i'm going to have to
00:44:58
take like my own determination and turn that into this fuel to go try to build this thing so
00:45:06
i probably did that for like a year year and a half to try to build the prototype of what would become coinbase
00:45:11
um and then i applied to y combinator they they eventually accepted me and wrote me the initial seed check that's
00:45:17
what gave me the confidence to quit my job and go full time on it how did you maintain friendships and those kind of
00:45:22
meaningful personal relationships at that in that time when you're working full-time during the day and then coming home and writing
00:45:28
code where's the you know where's the time for friends and girlfriends and yeah i was pretty intense about it i i would say i sacrificed uh friendships for it i mean it's not like
00:45:43
i wasn't like you know um just like never responding to people but people would ping me like hey can you
00:45:49
come out and this thing and i was like actually i remember it's a funny memory one time this guy who i really like um
00:45:54
from work he was he's like come out to this thing we're going to this club or something and i think i literally wrote back to
00:46:00
him i'm changing the world one line of code at a time can't hang out he's like rock on i love it um so you know i was joking or whatever
00:46:11
with my mom yeah so you know i think i've seen this happen to various people like they they get to a certain point in their life and like god damn it i'm gonna [ __ ] can i swear on this program of course you can okay
00:46:23
so anyway there's a there comes a time i've seen this happen to various people in their life it's something triggers it sometimes it's like
00:46:30
it's an age thing they're like turning a certain age where they always thought they would have more done by then or they
00:46:35
you know a certain maybe someone in their family passes away and they're like oh my god like time is finite it's precious
00:46:41
and something happens where they're like i'm not gonna [ __ ] around anymore like i'm gonna get this done
00:46:46
no matter the cost and they just start really buckling down they find this source of energy and so
00:46:52
you know find whatever that is for for you like the listener out there and um and then go hard at it you know finish your book like launch your launcher thing whatever it is the app
00:47:03
the startup just just start doing stuff like and even if you don't even know what to do just do anything because you
00:47:09
know action will produce information um i i actually so that you just reminded me there was a precursor to the coinbase which was um this app that i built with my friend uh which we were trying to
00:47:21
figure out how bitcoin worked and we built that and the minute we shipped it i was like it's built wrong and i knew the architecture was wrong
00:47:27
and then i knew what to do next and so oftentimes you don't even know what to do just do anything and you'll find it'll help you get to the right thing
00:47:34
action leads to information yeah action produces information never heard that before i i i stole that
00:47:40
from uh paul graham i think who started white commentators yeah it's so true and i will steal that from you so again can
00:47:45
you hear that in the future without credit then you know where it's come from at that time what were you trying
00:47:50
to build you'd read that white paper you launched that first step then after that first app you launched what were you
00:47:55
trying to build what was the vision yeah so this was 2000 um i guess it was like 2010 time frame and you howled i guess i was like 29 yeah something like
00:48:06
that um so what i was trying to do i had read the bitcoin white paper and i was like
00:48:11
okay this is a decentralized protocol for money or something and my thought in my head at that time was well there's been other decentralized protocols like email is a decentralized protocol
00:48:22
you know git is a tool that developers used for version control and so for email people didn't really run their own
00:48:29
email servers they'd use a hosted email service like gmail or forget they'd use a hosted service like github right so my
00:48:35
thought was okay here's a new decentralized protocol people are going to need like a github or a gmail type thing that does all the security in the
00:48:41
backups for you and it works on mobile and the web and i was like someone's going to build a company doing that
00:48:47
would be kind of a hard company to run because you're going to be storing all this bitcoin people are going to want to hack it and like that's not like a
00:48:53
weekend project that's like a really serious responsibility and i was had that idea in the back of my head and somehow i couldn't get it out of my head and so i just sort of like started
00:49:03
tinkering with i i wasn't even really just saying i was going to build a company yet i was more like um
00:49:10
i don't know let me just try building a prototype of this to see what if again action produces information and so
00:49:16
that was the original idea it was it was like a hosted bitcoin wallet instead of like running your own one on your on your own computer with a node and
00:49:22
everything was just complicated at the time and when you told people this idea what was their reaction because you would have had to tell a lot of people
00:49:28
that you were building this thing with this thing called bitcoin on a other thing which they wouldn't have
00:49:33
understood either yeah so people didn't get it at all i talked to some of my smartest friends
00:49:38
about it and they were like i don't really get this bitcoin thing it sounds like a scam honestly right so that they didn't that
00:49:44
was not reassuring um and then i went to a couple bitcoin meetups people who were really into bitcoin and i was like yeah i'm building
00:49:50
like a hosted bitcoin well like gmail for email but and i remember one of these people was like that's a terrible idea because
00:49:56
um you know all the people try to do that they get hacked and they lose they lose all the customer funds and so like
00:50:03
that's you should never do that right so i didn't get a lot of positive feedback everybody i talked to actually thought
00:50:08
that audio was a bad idea um even when i was i had gone through y combinator i was trying to raise money um you know i would say like for every
00:50:21
10 meetings i did with investors i got nine no's and one kind of i guess like small yes so and that's always tough like fundraising
00:50:33
is always tough but you know if you go to these people who you believe are like really smart people and 90 of them are telling you no
00:50:40
that's like that's like the best case scenario in my experience um you know the the worst case scenario is
00:50:46
100 of them tell you no so but either way it's like 90 90 of people telling you you have to be really
00:50:51
kind of willing to um not get discouraged by that you had a co-founder for a couple of
00:50:57
weeks during that y combinator process right yeah i heard that you um in in applying for y combinator you wanted to have a co-founder you met someone quickly and then it didn't last more than like four weeks or something
00:51:09
yeah exactly um yeah so i was looking for a co-founder at that time and um ben reeves had created this really good
00:51:16
app called blockchain.info at the time now it's blockchain.com but um so i reached out to him we didn't really
00:51:22
know each other that well we ended up applying to white combinator and uh sort of did this like shotgun wedding
00:51:27
thing but it didn't it didn't work out and it was like we were about to start the program and
00:51:33
um we basically decided to part ways so it's funny in an alternate universe um blockchain.com and coinbase would have been the same company but anyway
00:51:45
it all obviously worked out well for both of us did you have self-doubt at that point
00:51:50
for sure oh man i was filled with self-doubt yeah i i thought that first of all i thought maybe i was crazy because all my friends who i talked about this idea thought it was a bad idea
00:52:02
um the thing that gave me a glimmer of hope was that y combinator decided to give me this 150k seed check and i
00:52:09
really respected y combinator um so that gave me a big shot of confidence but you know before that it was like it was very touch and go i mean i i was like well my co-founder thing didn't
00:52:20
work out um i don't know like i'm just going to try my best here but like this i was like
00:52:26
this has like a pretty high chance of failure what did your parents think um okay so my parents have always have
00:52:33
people who worked at like big companies like their whole life and um i don't know if they ever really got the
00:52:39
whole entrepreneurship thing that i was so into the when i called to tell them that i was quitting airbnb to go start this company
00:52:47
there was kind of like okay well we we support you we love you like are you gonna have any health insurance that's what my mom asked i think um and so i think there was
00:52:58
they were kind of afraid that i was doing something really stupid and reckless is my guess
00:53:04
but they ultimately trusted me and supported it probably probably with a lot of doubts
00:53:09
is my guess on that point of co-founders yeah um i read that you eventually sort of interviewed 50 odd co-founders to try
00:53:16
and find the right one for what would become coinbase what were you looking for and what was in hindsight what advice
00:53:22
would you give me because that's another question i get asked a lot is how did you find a co-founder and yeah
00:53:27
so yeah i was looking for a co-founder at that time desperately and i was i'd go on these like co-founders dates you know we'd meet somebody see how it goes
00:53:33
they'd pitch you your their startup idea i'd tell them about mine and maybe go on a second date or third date so
00:53:39
none of these seem to like really click and i guess i was looking for someone to get really excited about my idea
00:53:46
um but also somebody who i felt was really complementary to me in terms of like um it pushed me to think bigger and
00:53:53
stuff like that i hadn't thought about before and you know i wanted to leave feeling energized and that i'd learned
00:53:58
something and they were good compliment and so i got kind of disillusioned because a
00:54:03
number of these went on and on and on and i could i couldn't find anybody like that i really liked to join this thing
00:54:08
so eventually i just got fed up and i was like all right you know what i'm just gonna do this thing on my own and like
00:54:14
and get it off the ground and lo and behold once i started to show some signs of progress you know like
00:54:21
getting through y combinator raising a seed check getting the product i put the prototype out there on like reddit and
00:54:27
the right person reached out to me and so anyway i tell people that story because i think it's an important lesson
00:54:32
which is basically if you don't have the right co-founder just keep making progress and signs of
00:54:39
success may cause the right person to find you it needs to be public signs of success it's almost like putting out the
00:54:45
bat signal like um if you have like half of an idea you can't just like be talking to your friends about it you got to put it out on a blog post or like a prototype or get something out there
00:54:56
in the world on twitter or whatever because then the other person might be out there and they won't know to find you and reach out unless you put out the
00:55:02
bat signal so that's also really good dating advice it's like you said if you don't have a
00:55:08
co-founder just keep making progress and putting it out there i guess it's true like in terms of people fitness and you know health and
00:55:14
development fine figure out yourself yeah exactly yeah and you become a magnet as opposed to having to be a peacock
00:55:19
that's true so and that's much more valuable when i think about your first tutoring company
00:55:24
there was that pivotal moment where you removed the payment and just kind of got out the way and that was pivotal to the company exploding yeah when you think
00:55:31
about those early years what what was the significant step that unlocked the the growth in your view
00:55:37
yeah so there was a significant moment like that with coinbase too because oftentimes by the way
00:55:43
the first version of a product you put out it doesn't work in fact that's the only thing i've ever seen happen in startups i've never i've never seen a
00:55:49
startup there the very first version of their product actually worked sometimes in hindsight people like to tell that story but
00:55:56
i think in reality it's very rare so for us or for really it was just me initially then that was fred ursum and i
00:56:02
co-founding it um the first version was this hosted bitcoin wallet and so we had i i posted
00:56:08
on reddit some people would sign up but nobody would stick around and use the product so in y commentary they teach you this
00:56:13
great thing which is don't spend your time you know like going to conferences and like trying to
00:56:19
raise money it's like if you don't have product market fit yet talk to your customers and then improve the product based on their feedback and
00:56:25
then talk to your customers and improve the product talk to customers improve the product there's really only two things you should be doing in the early stage talking to your customers and
00:56:30
improving the product sounds like simple advice but people spend so much time doing other stuff that's actually not real work so
00:56:37
taking this advice i emailed you know 10 of the people or so who had signed up for the product and never come back
00:56:44
and i said hey i created this app like i'd love to get on the phone with you and just talk to you about it for a minute so i remember i got on the phone
00:56:50
with some of these people and one of them one of them was like you know what do you think about the app he's like well i kind of i kind of like
00:56:56
it but i don't have any bitcoin so i just didn't come back and i remember thinking well if there had been
00:57:02
an easy way to get bitcoin into your wallet like a buy button or something like would you have stuck around and used it he's like yeah probably
00:57:09
and so i was like okay let me go try to make a simple buy button so when people sign up they can actually get some bitcoin into their wallet and it turned
00:57:16
out that was a very hard thing to do you had to get these bank partnerships i had to figure out money transmission licenses and i won't bore you with all
00:57:22
the details there was a lot of you know making things work somehow behind the scenes but the minute that we that we launched at that time i think frederson had just joined we launched that um that buy
00:57:35
button it started to grow every day organically with no marketing or anything and that
00:57:40
was the minute i felt like we finally had private market fit over the next let's say five so that's
00:57:45
2012 roughly 2012. over the next five years up until the point where fred departs that growth is
00:57:52
pretty crazy right for coinbase yeah i mean it started growing organically um and we had a very good problem at that point which was that um we were basically every time someone clicked the buy
00:58:04
button we had to use our own capital to acquire the bitcoin at that right at that price so we didn't have some
00:58:09
exposure to it going up or down and then we would initiate a debit to their bank account and two or three business days
00:58:15
later we'd get the funds so we had basically had a working capital issue like we were using our own corporate
00:58:20
funds to buy the crypto and then getting their money the payment from the customer and the numbers started to go up and up
00:58:27
and up and um i think it raised like 600k at that time and we were using like 550k to service the day-to-day buying on
00:58:34
the site and so we realized quite quickly we're like okay we need to go out and raise money
00:58:40
and that was a good a good a good story to raise money was hey this thing is growing so fast that we we're going to be turning away
00:58:46
business if we don't raise money that's a good story to go raise money as opposed to you know the numbers are kind
00:58:52
of flat we haven't really got it working yet so i think it was very important that we we found product market fit only
00:58:57
when we couldn't scale then we went out to raise capital what mistakes did you make as a company in those first five
00:59:03
years that you in hindsight go damn that's a that's a key learning yes i think if i were to go back and do
00:59:09
it again there's a few things i might have done that would have helped it be more get to get there even more efficiently i
00:59:14
mean one is that we actually never wrote down like the mission of the company or the value of the company early on
00:59:21
and we were doing it all organically we were basically just hiring interviewing every single person who would join and
00:59:26
we managed to create this really interesting culture but it was a little bit it wasn't very deliberate it was just it
00:59:32
happened kind of accidentally because we were just choosing the people that we wanted to work with and we really surprised us and we're really bright
00:59:40
in those high growth moments there's so things keep breaking yeah and processors actually need to adopt when you get as
00:59:45
you'll know from when you go from a couple of people to them 50 to 100 to them so just thinking if there's any
00:59:50
advice you have for me someone i've grown a business but not in not in such a a high growth way and not in such an
00:59:56
interesting um uncharted industry um eventually your co-founder fred departs what was that like emotionally because i
01:00:08
can't imagine the thought of my co-founder parting in e5 it would almost make me feel honestly it would have made
01:00:14
me feel like they were part of the reason i was doing this yeah you know that bond and that we're in this together so how did that
01:00:20
feel emotionally i mean it was awful um i cried you know um so yeah so i think here's the whole story so i think really
01:00:31
fred um president was an amazing co-founder and we were building all this great stuff together he's really a natural leader right and so
01:00:38
um i was the ceo of the company but there was times where you know i i think he felt like he was being held back he
01:00:44
really kind of wanted to run his own thing at a certain point and we were almost kind of like running it jointly at various places and at various times
01:00:51
and so i tried my best to like keep him engaged and i was like all right why don't you go do all the external facing
01:00:56
stuff and what's the thing that would really excite you like you know he did a lot of the fundraising like he
01:01:02
was really representing the company in the way you know the the titles didn't matter um
01:01:08
but ultimately i think he really did want to run his own thing and so he was very clear with me he we talked about it
01:01:13
basically over the period of like a year or so um with an exec coach and all this and
01:01:18
one of the things that i think i'm most proud of is that he and i are still like really good friends probably best friends to this day
01:01:25
um whereas a lot of co-founders when someone does leave there's a blow up and it's like i think we both realized at a
01:01:30
certain point it was like actually the more important thing to preserve here is the friendship and so he was great about it he was like i want
01:01:36
to make sure the company's in a good place it doesn't need to happen any there's nothing soon here happening but i do eventually want to transition so
01:01:42
over a period of a year we talked about it and then when he finally told me he was ready i cried
01:01:48
um it did feel like you know it was losing kind of half the company the the s founding moment of it and i remember so then we had to go in front of the company and tell deliver the news
01:01:59
oh man so um we talked to the board and everything like that too first but we went i remember the day we had to go
01:02:05
tell the company and you know i i wasn't normally i wasn't getting nervous talking to the company like you
01:02:12
know first company's two people and then it's five then it's 10 and then it's 50 then it's 100 200 so you sort of get to
01:02:17
build up your tolerance and like okay i could go talk to the company of 150 people or something but this time i had to go up there and
01:02:23
tell them the co-founder was leaving and i remember i went up in for the company and my voice cracked like i was like a
01:02:30
14 year old 13 year old whatever and then my my leg was like shaking you know sometimes you get like enough adrenaline if you're like you're nervous that you're just like you're anyway i was like oh my god it's so embarrassing like
01:02:41
i had to like walk behind the podium so nobody could see my leg shaking and my voice is cracking
01:02:46
and i'm like god i'm [ __ ] i'm messing this up you know like because i'm supposed to be projecting confidence and
01:02:52
like no it's not a big deal we're gonna get through this and i'm just like coming across like this pre-pubescent kid you know
01:02:57
um so everybody of course is like kind of shocked and they could people were like i could tell you were
01:03:03
really scared brian i was like [ __ ] okay i didn't really announce that very well um and of course like you know
01:03:10
48 hours went by like everybody freaked out and then it was like 40 hours later it was like all right let's
01:03:16
get back to work you know and and of course it wasn't as bad as i thought but yeah that was a really scary moment and
01:03:21
then and basically i had to transition from running the company with like all right fred and i let's get in the room and
01:03:27
decide it to okay let's actually build an executive team around me um to have a more like professionally run company if you will so it ended up being
01:03:38
like sort of a second founding moment of the company and i realized this later actually companies have many founding
01:03:43
moments and you can just keep building what situation was the company and now again in hindsight yeah at that stage because
01:03:50
i heard in 2017 things were a little bit messy and and you brought in this executive
01:03:55
team to kind of help you you know solve some of those problems but when at the point when fred left
01:04:02
what was the state of the company so he he left it as this market was swinging up and that was conscious on
01:04:08
his part he wanted to make sure the company didn't harm the company as he left um and so yeah the challenge after that was
01:04:14
like okay go build an exec team and a lot of founders have gotten through this it's it's quite hard so
01:04:21
if the company is growing you know 50 a year or something you can oftentimes promote people from within who are kind
01:04:26
of learning on the job and just take on more and more responsibility we in the in these cryptos so volatile
01:04:31
to go through like 500 growth in one year and then negative 100 the next year and it's like
01:04:37
so i felt like i was in over my head like all these junior people who had joined
01:04:42
early on we were all in over our head we were like so we basically went out to seek more experienced executives to come
01:04:48
in and um that was in itself its own crazy process with lots of learnings because whenever you bring in a bunch of high-powered executives you know sometimes you get people who butt heads right and um it's hard when like taking
01:05:01
a new team they have to build trust and oftentimes the team is often like kind of
01:05:07
dysfunctional until like they go through enough together so we had some good blow-ups there um there
01:05:13
was some executives like left or were fired and like um you know i had to like basically learn
01:05:18
how to work with with more seasoned executives and people who had run massive things before and um you know i i guess one lesson i learned
01:05:30
from that and this is kind of personal to me there's different people find different things that work for them but
01:05:35
you know i realized i wanted to work with people who were not just really brilliant but like also really humble
01:05:41
because i'm not really like a combative person by nature like some people some companies have this culture where
01:05:46
they love to hash things out and debate it and like that's that's like a really good conversation or like you kind of get into it you're like
01:05:52
you know but i'm i'm more of like i want to think about what you said and like come back and and more collaborative so
01:05:57
i'm not really i'm a little bit conflict diverse so um anyway i started hiring more for
01:06:02
like people who are bright but humble collab collaborative i mean the risk of that by the way is you can get into a
01:06:08
little bit of like a yes person culture where every everyone's afraid to disagree or something that's also not good but
01:06:14
it took me a couple iterations to kind of find my style there and now it's working great like the exec
01:06:20
team is super competent and high trust and collaborative and i think it's like a it gives us a
01:06:26
lot of benefits as a company because there's like basically no bs politics stuff it's just like we're just getting work done
01:06:32
have each other's back and we have you have to constantly tend that and nurture it like with these exec offsides and stuff but
01:06:39
yeah there were some learning pains there when when crypto went through that first well not the first but that real
01:06:45
that sort of 2017 bull run where everything was going up how were you feeling as the ceo of coinbase coinbase
01:06:51
is exploding i remember that that's when i i first downloaded coinbase and became a coinbase customer how were you feeling
01:06:57
a ceo in terms of optimism for how long that moment was going to last did you did you have a suspicion that it that in 2018 i believe it was that the market would come crashing down
01:07:10
yeah i didn't know when it would happen but there was definitely it it tipped at a certain point from like oh this growth is really good too
01:07:17
okay things are getting a little crazy here like there was yeah i remember i'd go to some events
01:07:23
and i was like everybody was coming in launching some ico and um people would like come over and
01:07:28
like want to take selfies with me and then like post the stuff on twitter and like almost implying i was like
01:07:34
endorsing the project and then um i remember like weird stuff happened like i was living in this apartment building
01:07:39
in san francisco and this guy who like worked in the building came to me one day and he's like this
01:07:45
package arrived for you sir and uh sir i just have this question like which crypto should i buy and i was like i
01:07:51
don't know this is getting really weird like i don't i don't give any investment advice or whatever and
01:07:57
um yeah so basically it started attracting in like people who are just trying to get rich quick or scams and all this
01:08:02
stuff and so yeah we started i started walking around with like a security guard um
01:08:09
we had like some over exuberant customers it was it was weird tell me about that because
01:08:14
i was i was thinking we've had some um fintech ceos here yeah that have built disruptive banks out in europe so monzo
01:08:20
starling bank et cetera even clark you know klan i guess that's not a bank but kleiner the ceo sebastian here as well
01:08:26
security is not something that most ceos have to think about but when you're dealing with money
01:08:32
as tom told me from monzo you get a lot of unhappy people because you're you know you sometimes you have to freeze funds and things like that yeah well okay so i think
01:08:46
i mean if at a certain size of company it's almost inevitable for every ceo it's not just it's just not just money
01:08:52
but i do think that we probably started a little earlier because um because it was crypto is
01:08:58
money um and yeah i mean it's it's also just a law of numbers like if you're running an enterprise a sas a b2b business something like that you might have
01:09:09
thousands of customers or maybe 100 000 or something but if you're running a very popular consumer app
01:09:15
um and you get into the millions or you know coinbase has like maybe like 100 million ish verified users now
01:09:21
um if you just think about it statistically i mean you know like what like one in a hundred people
01:09:27
in society has some form of schizophrenia right maybe one one out of ten of those like
01:09:32
so one out of a thousand people in society has a form of mental illness that just like
01:09:38
you know could be potentially dangerous or they can become obsessed with things irrationally or whatever and so if you
01:09:44
have 100 million customers like there's going to be enough people as part of it is just like a law of large numbers
01:09:50
but um you know i i don't want to overstate it like it's not i don't it's not like a
01:09:55
huge burden on my life i i feel i feel safe and i'm able to keep functioning and stuff like that um
01:10:01
yeah another thing most ceos don't have to contend with is building a business in such a volatile market so when in
01:10:07
2018 the market comes crashing down the crypto market comes crashing down talk to me about what leadership lessons you learned through that what would what i can only imagine
01:10:18
as being a pretty awful period yeah so 2018 everything was coming down off that high of 2017
01:10:25
and you know i had been through a couple cycles like this but each one was getting bigger and bigger and
01:10:32
it was tough i mean i in the following i think year or so after that crash i think we might have had like 25 of the
01:10:38
company leave or something right really yeah so there is a lot of attrition there were people who had joined and
01:10:45
they thought hey this is a rocket ship it's only going one way and then when it was down and lots of negative
01:10:50
news headlines come along you know the news always focuses on things that are not always but often focuses on things that are too short-term when it's going
01:10:56
up they're like this is they're genius and their future everything's future and then when it's down they're like this is
01:11:02
never gonna it's failed and neither one is true right like reality you have to zoom out to kind of look at reality
01:11:08
but one thing i realized um was that i felt this overwhelming pressure as ceo was like oh shoot like every every week
01:11:15
i've got to get in from the company and like put on a good face and like create some sense of optimism right
01:11:21
the reality was i was kind of feeling shitty about it too and so it was a little inauthentic for me to go up there and
01:11:28
try to just be super positive or something and so one leadership lesson i learned during that moment is that
01:11:35
great leaders are often vulnerable and so it's actually a much more powerful leadership uh style i think to just go up there and say how you actually feel which you might be able to go you might
01:11:47
go up there and say something like i feel like [ __ ] today you know like this thing's down like this person quit
01:11:52
um whatever it is now it helps if you if you can then use that to as a moment to like
01:11:59
bring the team together and it's not like you have to solve all the problems as ceo it's like we you use a lot of we language right it's
01:12:05
like i don't know how you're feeling i feel like this that that's going to take a little bit of attention out of the room because they're all probably
01:12:11
feeling it too and they're like okay great this guy's like not a robot he like kind of gets it too it's like okay
01:12:17
so what can we do about it like well we all need to figure out how to solve x x is a pretty big problem right now we all need to figure out how to solve y so
01:12:23
what do w what are we going to do like this week i'm going to host this meeting with so and so in this group and like we're going to come i want you to all
01:12:29
bring your best ideas about how we're going to solve x we're going to pick one and we're going to double down on it right so now now it's like you're
01:12:34
turning this authenticity this candor in and you're and you're making everybody a part of the solution it's
01:12:40
not like hey everybody look to brian like he's got all the answers you know this like messiah complex or whatever like no
01:12:47
it's like the strength is comes from the team it's not just like me trying to carry the whole weight of the world in my shoulders or something
01:12:53
so that that was a good leadership lesson for me how did you do you've been through you know these crypto winters and your
01:13:00
company got so big that you know it went public and then when you become a public company and you're almost seen as the
01:13:07
poster child of this space in many respects at least that's that's always been my view of coinbase there's been many many
01:13:12
exchanges but the the number one one the one that's the famous one the the poster child is coinbase
01:13:18
the pressure and the scrutiny and the headlines and the f and the the fake news and all of
01:13:24
it yeah that you must be have thrown at you and then all the you know the internal problems of just running a
01:13:30
business anyway how are you dealing with your emotions yeah okay wow deep question so um
01:13:38
let's see i think because you're human yeah of course okay so i think one of the most important things i i totally didn't realize this before starting a company but it turns out
01:13:50
one of the most important things um skill sets to kind of develop as a ceo of a startup is that
01:13:58
you have to be willing to ignore a lot of noise um both positive and negative right because if people on the way up are telling you how brilliant you are and you kind of get caught up in like
01:14:09
going to the speaker circuit and like you know um then you're going to fall even harder when
01:14:14
they turn on you and then everybody either gets built up or taken down and it's just driving headlines right so
01:14:21
you kind of can't believe it on the way up because then you won't believe it on the way down either um i totally didn't realize that by
01:14:27
starting a company i thought most people would generally be rooting for you and you know um but there's people out there rooting
01:14:33
for you to fail which is a weird thing um they're kind of dealing with their own maybe stuff about success right i
01:14:39
don't know what it is um but you have to learn how to just tune all that out so i mean like
01:14:46
frankly i just don't don't read like a lot of news anymore i kind of think of it like sugar it's it's addictive
01:14:52
and can you consume it in small quantities responsibly and like eat a couple bites of dessert or something like yes
01:14:57
but um you have to be really careful because basically the kind of um anger fear
01:15:03
outrage whatever you know is an addictive thing by the way it's not just mainstream media like social media has
01:15:08
some challenges with this too right i i think it's actually a little hypocritical like mainstream media is always criticizing social media for
01:15:15
misinformation and it's like it's pot calling the kiddo black or whatever it's like the same thing happening there
01:15:21
so i literally try not to read a lot of this stuff so once then once you developed
01:15:28
your own sort of psychology about it now you have to insulate the team from it because they'll go after your team
01:15:34
and um so you need to kind of continually be preaching this to the team about like
01:15:39
you know be an independent thinker right go develop your own source of truth like
01:15:45
um by going to the root of it like um don't don't be listening to um mainstream media or social media whatever when things are up or down you have to curate you have to use that stuff in moderation like like
01:15:58
sugar or something it's not actually they're they're trying to sell their own product and they're and
01:16:04
one of my friends has this great saying um it's like only a half truth can go viral
01:16:09
like if it's you know that triggering or whatever that's like ah like it goes all around the world it's
01:16:16
it's half true at best and so you have to remember that whenever you see anything out there what are the things that still penetrate
01:16:22
all of that resilience though there's because there's things in even me that i i i understand all of that um as i was
01:16:28
saying to you before we start recording i became a dragon dragon's den so i got much more scrutiny than i've ever got from headlines i'd read about my family
01:16:34
that i don't have my girlfriend i'd done this that you'd think i was running guantanamo bay
01:16:39
the way that right they described my former business all these things um and although i knew i was resilient and
01:16:45
although i knew everything you've said and i put these processes in place where i don't see notifications someone tweets me i probably don't even see it it
01:16:51
doesn't come up never read the replies yeah i don't have that i turned off all notifications too that's that's a really
01:16:57
good one like but what pierces you still yeah what still moves your mood so there's def there's something every
01:17:03
year at least that like it's the next level that it's gonna test you right and um you know oh man what was most recently um there
01:17:14
was like i don't even know if this was real or if this was like short sellers like putting fake information out there
01:17:21
but there was some like petition that um some employees put together or something and like i saw your response to yeah i
01:17:26
got irritated by it and like wrote some stuff on twitter about it but that that bugged me for a bit because it was like
01:17:31
um okay like you're going to attack the executives like it's not even their fault like you you know whatever blame
01:17:37
me so um i think what there's always something new it's like you know a lot of people probably would be okay with oh there's some somebody saying something stupid on twitter or
01:17:48
whatever but they really respect x you know maybe it's like um the new york times or something or whatever right and they're like oh that's that's like a and so then you get
01:17:58
your first like negative article like that has false information in it in the new york times and then you're like well
01:18:04
that just shattered my reality of like even that could happen like so man and there's like what else is
01:18:11
like not accurate in the new york times or pic pick any other you know fox news like whatever you know even one of the ones that
01:18:17
really got to me was um i always felt like okay we have these kind of people who are upset with us outside of the company but the company
01:18:23
is one team like we're all and then when i started to see like sometimes there were people in the company kind of
01:18:28
turning on each other i was like man that one really bugged me right so think about um
01:18:35
if you think about companies that have gotten to really big scale it makes all your problems look small by
01:18:41
comparison okay like like look at mark zuckerberg right i mean the amount of negative news coming out on that guy on
01:18:47
a daily basis right um i think that like the russian government like just put him on some like um list of like sanctioned people or
01:18:58
something like there's people of tons of death threats you know like um there's there's always another level i can get to you know that's just like anyway i i
01:19:10
what i've realized about a lot of people who i think are building important things in the world is that
01:19:16
they've developed this like high disagreeableness muscle where they've recognized like they're not going to make everybody happy and they've made peace with it right so they realize at a certain point like
01:19:28
whether i do the thing that i think everyone's going to like or everything that is more authentic to me someone's going
01:19:34
to be pissed no matter what so at the end of the day i'm just going to do the thing that i think is the right thing and they they've leaned more into
01:19:40
authenticity instead of trying to say what they think people want to hear and that does require you to have some
01:19:45
amount of thick skin some kind of high disagreeableness and then they can actually do even more interesting stuff because
01:19:52
they're they're being themselves instead of trying to be liked my success and my building my personal
01:19:58
brand and getting millions of followers online it scratched that itch in an unhealthy way that we described earlier it kind of
01:20:04
made me feel it gave me external validation which felt like it was filling me up it's probably sugar or something
01:20:09
and then the problem is if you if you were that type of person when you when you do reach that height you get more
01:20:14
public scrutiny it matters more to you because validation was your driving force this whole time yeah so is there
01:20:20
an element of that with you because because you were an introvert that wanted to have significant be significant because of that early
01:20:26
upbringing that it might be psychologically more difficult to deal with because significance and fitting in
01:20:32
i guess was so paramount to your initial motivation totally yeah i mean it can be very
01:20:40
it can be very addictive also just to be liked and and the adulation and everything so
01:20:46
the minute something starts to happen that you realize people aren't going to like you for your temptation is to try
01:20:51
to preserve it now you have something to lose you're like i'm going to lose these followers or i'm going to you know um
01:20:57
whatever it does it doesn't even matter but it always feels serious at the time so
01:21:03
i i definitely had to grow through that i i don't know i think i'm still growing through that to i i would like to get to
01:21:08
a place where you know you don't want you don't want to become like isolated to a place where
01:21:14
you're not listening to anybody because that's also really bad so you you do wanna you need people who can keep you grounded like your family like your
01:21:20
friends whatever and people who around you who will tell you when you're being an idiot or you're just wrong so like you don't ever wanna get to a place
01:21:25
where i listen to nobody right but a lot of people you want to be around people who have your best interests at
01:21:31
heart and then listen to them or people have already done what you're trying to do it like listen that's good advice but
01:21:37
a lot of the people who are just trying to take shots at you to build their own whatever in life
01:21:42
you need to build the ability to ignore them and um it's a real superpower to like care less
01:21:49
what other people think um at least people who don't have your best interests at heart having worked in social media over the last 10 years i
01:21:56
maybe in my seventh or eighth year noticed a really interesting thing that happened um organizations as end women say in their trust reports were once
01:22:02
black boxes which is the reputation of the organization the image was written on the outside of the black box of the organization by the marketing department
01:22:09
of pr we moved into this world where they're now glass boxes the world can see inside all of your employees have
01:22:14
smartphones and they can take pictures and write reviews and so organizations now um had to adapt and one of the
01:22:20
things that i've seen just as an observation is ceos being out there in the public eye
01:22:26
overly out there in the public eye i'm thinking elon yeah and the antithesis of that might be zuckerberg who basically
01:22:32
hid for 10 years and the media shaped him as a soulless data stealing robot and then
01:22:38
you've got elon because he's smoking weed on durogan's podcast you can say whatever you like about him i think i
01:22:43
know him right i have my own reference point and my point here is about transparency and even doing things like this
01:22:50
for me i don't i don't know how you feel about this but for me the if i was running a big organization i'd be doing a lot to make sure that the
01:22:56
public had their own reference point of who i am how does that all sit with you because that seems to be the only defense
01:23:02
against the media writing your narrative yeah so i've thought about this a lot and i'm not
01:23:08
sure i have the perfect answer but um so i think there's a spectrum so on one side of the spectrum like you said you can actually zuckerberg is somewhere in the middle to me but to be truly isolated i think like larry
01:23:19
page for instance he was very reclusive almost never gave interviews right elon is kind of out there doing a lot more interviews and he's just like literally says whatever he thinks i
01:23:30
think you know right on twitter did you see zuckerberg's 2019 facebook post which one he did the post i think was
01:23:35
2019 maybe 2017 that sounds better 2017 he did a post saying that he's basically hidden away for that whole period of
01:23:41
time his new year's resolution was to come out of his bunker so he did a period of um hiding out and like yeah
01:23:47
yeah so i mean i think a lot of ceos struggle with this because you know i think a lot of people realize
01:23:54
like it sucks to be famous so you know when i was a kid i would you'd hear people say that or something and
01:23:59
i'd be like yeah whatever for you to say but um there's a lot of downsides right i mean
01:24:04
people in the the media or publicity can be like this this cruel beast right if you
01:24:10
feed it it just wants more and more and more so um i think there are advantages to having a public
01:24:16
profile like it helps you recruit people if someone attacks the company you have your own direct audience to like get the
01:24:24
the message out the truth so there's definitely like benefits and then there's drawbacks because now
01:24:29
you know maybe your kids need security or whatever or just um you know someone's gonna come up to your
01:24:34
restaurant when you're trying to have a thing with your family or whatever so there's real downsides to it um
01:24:41
i think for me i'm trying to find this reasonable middle ground where like i i turn down 95 of media
01:24:48
um i i really want to talk to people like that are doing what new media right like
01:24:53
like this like podcasts or um or youtube or really just have conversations with people that i think are interesting and
01:24:59
i like um that get messages out in sort of unique ways and i i do i like having some amount of
01:25:06
following if i ever need to set the record on something but i don't want to become famous actually i'd rather if i
01:25:12
could avoid that i would prefer it i think it's it's sort of a acceptable negative of building something interesting in the world but it's not it's not actually a positive
01:25:24
interesting and one of the things you talked about was that um who knows whether it was real or not
01:25:30
there was a i want to give context to the listeners who don't who don't follow you and might not have seen that there was a uh
01:25:37
something written up that said internally an employee was petitioning to have someone else removed internally
01:25:42
yeah whether it's true or not we don't know it was taken down um you responded to that on twitter yeah you also said to
01:25:48
me that you were in a bit of a bad mood when you responded to that twitter yeah how do you feel in hindsight about all of that
01:25:54
and did you did you learn anything about company culture or changes that needed to be
01:25:59
made or give me your reflections on that yeah so you never know if you're doing the right
01:26:05
thing right um one argument would be that this is just unnecessary i could have ignored it and
01:26:12
um there was people who never even saw it and there was and they read my tweets and they were like oh what's going on
01:26:17
and now i gave even more attention to it right yeah um on the flip side there was a bunch of
01:26:22
people who reached out to me that was very positive it was like i'm glad you're just you know saying it like it is like it shows who you really what you really
01:26:28
care about and um you're basically communicating to the rest of employees like if you're
01:26:33
unhappy about something like there's a right forum to do that internally it's not this is harming the company and so
01:26:39
you're anyway a lot of people liked it some people didn't like it at all so did i do the right thing i have no idea i'm just like making this up as i
01:26:46
go and i kind of i kind of like try things and i see how they go one thing i will say is that
01:26:52
something that's polarizing is not that doesn't make it the wrong thing to do it what makes it
01:26:58
to me the right thing to do the wrong thing to do is whether it was authentically true um so i don't know how i would do it
01:27:05
again next time i guess i maybe i would do it with a cool head and um see if it still felt authentic and then go from there polarizing another thing that when people talk about company culture people give
01:27:17
um people that i've been around point to coinbase as an example of is you coming out and saying that coinbase wouldn't
01:27:24
uh tolerate politics um and other divisive topics being discussed on company channels in the workplace yeah this is a big conv i've had conversations this week with my
01:27:36
companies where they've talked about coinbase and the example you've set because of things that have happened over the last couple of weeks in
01:27:41
politics around in america um tell me why you made that decision because i once upon a time when we had brexit in this company allowed my office to get overrun with anti-brexit flags
01:27:52
and i actually regret that because a week later an employee pulled me aside and said i'm actually pro-brexit and the
01:27:59
whole week i felt like the office wasn't a safe place for me to yeah yeah um so you you set out a stance which i've not
01:28:05
i saw you do it first i'm not sure if any other companies have done it but publicly you were the first to say no
01:28:10
politics at work yeah yeah i mean i think other companies are doing variations of that um so it's not
01:28:17
entirely original but yeah i did put it out in a way that was public and got a lot of attention so look i don't know i don't know what to
01:28:22
say about it i think it's it started it starts from a very good place which is people want to have
01:28:29
a safe space at work they want to have a place where they can just be themselves authentically like these all these things actually start from a very good
01:28:35
place what's unfortunate is that it can get to a place where the office is actually um
01:28:42
just very divided and people are upset with each other all day instead of like working towards the common mission that we all kind of signed up for
01:28:49
um they're actually just upset with each other and arguing over things which we don't really have very much impact over like bigger broader societal issues
01:28:55
outside of our mission um this not just coinbase this is happening broadly across a lot of
01:29:00
tech and all companies really it's not just even a tech thing it is it is more pronounced certain places in the world it's not it's not a
01:29:07
broad thing geographically it's it's very pronounced in some cities um especially in the us but i guess probably somewhat here as well so notice much
01:29:17
yeah i i i remember our ireland office like there were some people who messaged me during all that and they're like what
01:29:22
is you just said like we're gonna work on work do work at work like what's what's so controversial they didn't it didn't make any sense um so it was it
01:29:29
was largely a thing that happened i think in the bay area in the us and a couple other cities like maybe brooklyn portland places like that but
01:29:36
um look i i don't you know in some ways i'd rather coinbase was like known for our product innovation and stuff this is
01:29:43
a weird one because like we've actually been pretty become kind of well known for this stance and others have emulated
01:29:48
it but the thing that really made me finally get the courage to do it because i i i didn't really want to make a public stance about this or whatever i just want everybody to get back to work but the reason i did it was that
01:30:00
i felt like i had been a bad leader basically i had let this kind of misunderstanding accumulate inside the
01:30:07
organization where people thought that it was okay to like come to work and just debate endlessly these things or like at the q a that we
01:30:13
would host every week or two there would be a lot of questions that were not about our product or the regulators or the the future it would be about like
01:30:20
these broader societal issues and these kind of these brush fires kept erupting in in slack channels and things
01:30:27
and so oh and there and i think i reached a place where i was like i don't think i really want to be the
01:30:33
ceo of this company if like this is what the ceo job entails is kind of like getting put on the spot with like um
01:30:39
these crazy difficult societal questions every week i kind of want to just build cool stuff with technology and work on
01:30:44
our mission and so i actually contemplated briefly i was like am i the one who's like just not sued for this job and maybe this is how
01:30:50
companies are run now and a bunch of i talked to a bunch of friends of mine and people and they were like no like if if that's how you feel
01:30:57
there's probably a bunch of other people the company who also feel that way and like you started this company
01:31:02
you don't need to go they need to go and so it was if i realized i was like either i'm gonna resign or they're gonna need
01:31:08
to resign and so at that point i was like all right they need to resign so we made we made an exit package available like i clarified the stance of the
01:31:14
company five percent of the employees opted into that package and left and then after that it felt like the company
01:31:20
was much more aligned and we were all able to move towards the mission um so it was cool to see some companies
01:31:26
emulate it afterwards and there's probably a less dramatic way to do it you know if you kind of said it that way
01:31:31
from the beginning but um yeah that's where we are one of the things that i really wanted to ask you about because from reading your blog
01:31:37
post you have a very clear strategy and perspective on this and i also see this in hindsight as being the
01:31:43
single most important thing that i ever had the responsibility of doing and getting right which is hiring people
01:31:48
um i i [ __ ] up for the first three years i hired inexperienced people that were cheap and that i felt i could manage
01:31:55
because i was 21 or 20. so i had a bunch of you like you want a job you want a job you want a job you can be director
01:32:01
director of this yeah my biggest mistake i only learned when i hired someone good and i saw the net impact they had and
01:32:06
the fact that good people then hired good people what advice would you give to people that are hiring now and how important
01:32:13
do you consider hiring to be super important i mean actually in coinbase's values the number one
01:32:20
value is top talent in every seat because it really everything in the company comes back to people like if you want to
01:32:26
have a big impact you need to have generate a bunch of revenue and profit if you want good revenue property and
01:32:32
you make good products if you make good products you have to have good people build them so it's actually everything comes back to people
01:32:38
um so yeah i mean it's interesting to hear that you learned that lesson the hard way i've
01:32:44
hiring is super hard sometimes the only way to learn a lesson is to actually go make the mistake and and do it but the mistake that a lot of startups
01:32:50
make i think is that they hire too fast they treat the absence of any negatives as a reason to hire whereas it should be not just the absence of negatives but hell yes meaning like
01:33:02
i learned something from this person they they're way better than me at something at least
01:33:07
you know i left the interview with more energy than when i went in um i you know you can de-risk a lot of early hiring also by just having people come in and like try working together for a week or two
01:33:19
interviews are actually really kind of a low signal thing you have to get real some people are great interviewers like maybe five percent of people can really
01:33:25
assess someone in an interview most people aren't that good at it naturally and so you can basically use references
01:33:30
or what we did in early days of coinbase we actually just had people try working with us for like a week or two a lot of
01:33:36
people can't do that because they have an existing job but some people can and we you'll know you'll know within a
01:33:41
week or two like this person basically delivered a bunch of stuff they got a bunch of stuff done that was useful and helped move the ball forward
01:33:47
or they didn't like it needed me it needed me or someone else to come in and edit their work or curate it and like
01:33:53
it's not to oversimplify it but basically like if the person can get a lot of stuff done
01:33:58
that's advanced is the mission then you want them on the team and if they can't you shouldn't have them on the team and
01:34:03
that's basically what makes great companies is like you have a bunch of people aligned toward a big impactful mission
01:34:09
who can actually get a lot of stuff done every week and um you know you share some values in common
01:34:15
and then everything else they can be quirky and weird and different and like from every background and walk of life and like everything
01:34:22
else can be different but if you have those pieces right they get a lot of stuff done towards the mission
01:34:28
and they're aligned then you got a good company you said about growing too fast i i saw you post recently that you
01:34:34
you've grown the company too fast over the last couple of years and that you were having to cut back about 18 of the workforce yeah
01:34:40
emotionally in those moments you know the statements were you were very transparent you were very honest you
01:34:45
didn't have to publish that to the entire world but you did yeah emotionally what are those moments like does it get any easier for you to
01:34:51
to to cut back the workforce when you you signaled in the memo that you take responsibility for that as well like
01:34:58
you weren't skirting blame or anything so yeah so there's always something challenging every year that like really
01:35:03
puts you out put you outside of your comfort zone and that's part of what i like about running a company is like you're constantly learning so so this
01:35:10
year that was one of the things was like we had never done a layoff before i had never done one and um
01:35:15
yeah i did kind of suck to look back and say um ah i actually made them stick you know we were everything everything crypto was
01:35:22
so up and up and up last year that it it felt irresponsible not to keep hiring more people because
01:35:28
we had like lines out our door you know virtually of like customers trying to sign up like institutional clients and
01:35:34
new products and competitors and all these different markets and we were like we're just being
01:35:40
reckless and irrational not to keep building the company with all this revenue we're generating and so but i
01:35:45
think we found the breaking point and basically if you kind of more than double a company in a year you're really going to start to see a lot of stuff
01:35:51
break the culture erodes um decision making is unclear communication channels break down and so we we definitely like exceeded that threshold last year in 2021 and earlier this year we were on a
01:36:02
pace to kind of keep going too quickly so you know it really it really kind of is a bad feeling to look at a problem and say oop i made a mistake
01:36:13
but the only worst thing that is to like bury your head in the sand and pretend that you didn't make a mistake because you don't want to admit it or whatever
01:36:19
and so um facing reality while it was deeply unpleasant and it was really unpleasant for the people that parted ways with the company um it was the right thing to do that now we
01:36:31
have the ability to kind of learn how to operate really efficiently at this new size 5000 people still a lot and get a
01:36:37
ton done with that and we got the cost structure to a place where we know that we can
01:36:42
not only um have enough cash but like really thrive in this in this recession we're all going
01:36:48
through at this point and whether that lasts one year or three years or four years whatever we're now we've set the company up to ensure that it has a
01:36:53
better chance of accomplishing the mission long term so in a way although it was a super hard decision and it was tough for a lot of
01:36:59
people involved it made me feel good that we did the right thing i am so excited to announce our new sponsor for this podcast and that is
01:37:05
blue jeans by verizon for any of you that aren't already familiar with blue jeans they are a video conferencing and
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01:37:16
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blue jeans a couple of months ago and we have not looked back the best thing for us has been the totally frictionless
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really frustrating we use blue jeans anywhere on any device at any time and it's perfect for my small businesses
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that just have 10 or 20 people to some of my bigger businesses that have hundreds of people i'm a big fan as you
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can probably tell so i've been quite excited for for some time to announce this partnership and in the coming weeks
01:37:51
i'll explain the features and really why it's perfect for you if you haven't considered using or switching over to
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bluejeans yet but if you can't wait head over to bluejeans.com to learn more honestly it's been one of the real sort
01:38:02
of game changers in my business this is an interesting question that i just had when i was just just thinking then yeah and because because of this you know from my perspective i'd
01:38:12
call that stress sometimes stress is great but there's a lot of volatility in the markets and those tough decisions
01:38:17
if you view happiness as like a concoction of as like a recipe and there's lots of ingredients that go and
01:38:23
go into making us happy um what ingredients in your happiness recipe do you think you need more of like today personally um
01:38:35
oh wow i mean so i think it's getting very personal i think you know people are get they're basically happy
01:38:46
with like health wealth relationships things like that if you don't have your health it's hard to really be happy you can't
01:38:52
really do anything you don't need to be wealthy but you need to have some level of security
01:38:58
where you're like i'm not worried about like being hungry tomorrow or something right and then relationships account for a lot
01:39:03
of happiness i think um family like romantic leave personal friendships so um i mean it's kind of it's i'm like almost
01:39:14
40 and i think i'm thinking at some point i won't have kids so that's probably like that's
01:39:19
probably an area but otherwise i think yeah i feel quite happy about relationships in my life um personally professionally romantically all that stuff so yeah i
01:39:31
didn't think you were gonna go there but yeah yeah yeah there you go no i agree i feel the same way i've had i've not had
01:39:36
enough balance in my life so my big next chapter is um allocating enough time to my girlfriend
01:39:41
and being i said it on stage today being a dad and those things and prioritizing that knowing the importance of it even
01:39:47
though i can't track it it's not revenue so yeah we have a closing tradition on this podcast where the last guest leaves
01:39:53
a question for the next guest they don't know who they're writing it for okay um their question was
01:39:58
what is the belief that you hold that most people disagree with you on hmm give you some time well i mean one kind of um contrarian view that i have that i think most people would disagree with is
01:40:10
that um i think a lot of regulation is well intentioned and it actually causes more harm than good um you know
01:40:22
it's not really probably a commonly held view in our society because a lot of people haven't tried to build something but if you've
01:40:30
just only been an employee to company or you know consumed goods um when something bad happens in society
01:40:37
people want to say what can we do to make sure that never happens again and so you create a rule it's sort of human nature right um but
01:40:44
every rule has kind of these unintended consequences down the road um you know for instance uh in the cryptocurrency industry right like we're using kind of money
01:40:54
transmission laws that were originated when there was like stage coaches moving cash between states and so in the united
01:41:00
states we need to have 50 state licenses plus multiple federal licenses and that's just one small example you could actually go down many many many rules that are there in society
01:41:12
they were created for a good reason at the time but they they've now accumulated so many of them that it makes it harder to get um to get
01:41:19
innovation you know another good example just randomly is like in the us there's a the federal aviation
01:41:25
administration regulates like airplane travel and things like that they've been incredibly successful at making airplane travel safe and so the
01:41:32
fatality rates in air traffic and everything like that are airplane flights are very low
01:41:38
but there's been an enormous cost to society as well around the lack of innovation so for instance
01:41:44
like the boeing jets that we fly today they're very similar almost to the ones that were in like the 1960s that jfk
01:41:50
flew on like you can't go faster because it's they they haven't allowed like people to
01:41:55
break the sound barrier over over land um basically the things they're innovating on are like fuel economy and
01:42:01
stuff like that and so it it does stifle a lot of innovation and so people don't think about that cost because they're more thinking about the acute short-term problem
01:42:12
so i think it's a real risk that in society basically enough rules accumulate over time where it creates it
01:42:17
throws sand in the gears of progress and um a lot of new innovation is harmed by um by
01:42:24
regulation unfortunately even with good intentions brian thank you thank you for your time i realize you don't do things
01:42:30
like this very often so it feels like even more of an honor for you to come here today and coinbase as i said i'm a customer of um it's it's always felt
01:42:38
like the most trusted the safest way to involve myself in crypto and that's why i've always stayed with with coinbase and you as the ceo have a very um innovative approach to building a
01:42:49
company in a new time in a new industry which i've learned from as a business owner myself so thank you for the
01:42:54
inspiration thank you for your blog post as well i've sent many of them around to my company i think i sent two to all of my team today
01:43:00
around hiring and your 36 sort of principles for retaining staff and things like that so i implore people to check out your blog post as well because
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your blog as well because it's a source of inspiration and knowledge and um yeah thank you so much for being here it
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truly truly is an honor and the conversation has been inspiring to me so thank you brian thank you i can see why your podcast is so successful you're
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really unique and amazing interviewers so um i really enjoyed the conversation that was great thank you
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i had a few words to say about one of my sponsors on this podcast my girlfriend came upstairs yesterday when i was having a shower and she said to me that
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she tried the heel protein shake which lives on my fridge over there and she said it's amazing low calories you get
01:43:35
your 20 odd grams of protein you get your 26 vitamins and minerals and it's nutritionally complete in the protein
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space there's lots of things but it's hard to find something that is nice especially when consumed just with water
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and that is nutritionally complete the salted caramel one if you put some ice cubes in it and you put it in a blender
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and you try it is as good as pretty much any milkshake on the market just mixed with water it's been a game changer for
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me because i'm trying to drop my calorie intake and i'm trying to be a little bit more healthy with my diet so this is
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where heel fits in my life thank you for making a product that i actually like as you might know crafted are one of the
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sponsors of this podcast and crafted are a jewelry brand and they make really meaningful pieces of jewelry and this
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piece by crafted when i put it on for me it represents courage it represents ambition it represents being calm and
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loving and respectful and nurturing while also being the antithesis of that seemingly the antithesis of that which
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is sometimes a little bit aggressive with my goals and determined and courageous and brave the really wonderful thing
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about crafty jewelry is it's super affordable it looks amazing the pieces hold tremendous meaning and they are
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really well made [Music] [Music] you