Coinbase Founder: The Crazy Journey Of Building A $100 Billion Company: Brian Armstrong

Brian is the co-founder and CEO of Coinbase, a company thats reached highs of a valuation of $100 billion. After an adolescence and youth searching for independence where no one could be his boss, he’s come a long way, but he’s realised he’s had to change a lot too. Before anyone had heard of Bitcoin, there was Coinbase. Taking a punt on an industry no one knew and no one understood, Brian quit his lucrative career to be his own man. No one encouraged him. No one. He’d told the idea to hundreds of people before someone told him it could work. In this conversation, Brian brought a wisdom and a nuance about how to run and build a business like very few conversations we’ve had on this podcast. If you want to know how the best in the world take an idea from drawboard to $100 billion, this is the story of how it happened. Follow Brian: Twitter - https://twitter.com/brian_armstrong Follow me: https://beacons.ai/diaryofaceo Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Everybody I talked to actually thought it was a bad idea. Like, any reasonable person would have quit. I was filled with self doubt. And then Coinbase was valued at a billion dollars. Brian Armstrong, CEO, co-founder of Coinbase. The largest US cryptocurrency exchange. I 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 was like fear, like fear of never being important, or fear of never feeling fulfilled, you're just gonna give up.

• 0:25Speaker 01

  Cryptocurrency is the biggest transformation of money since the invention of paper.

• 0:29Speaker 02

  Coinbase was being deemed the most trustworthy brand in crypto.

• 0:33Speaker 00

  It tipped at a certain point from like, oh, this growth is really good to, okay, things are getting a little crazy here. If you kind of more than double a company in a year, you're really gonna start to see a lot of stuff break.

• 0:43Speaker 03

  This morning Coinbase just telling employees in an email that it plans to lay off 18% of its workforce.

• 0:49Speaker 00

  We had never done a layoff before. I had never done one. And I remember I went up in front of the company and my voice cracked. I mean, it was awful. Oh, man. I actually think Coinbase is in deep trouble here. And let me tell you why.

• 1:04Steven Bartlett?

  The pressure and the scrutiny and the headlines. How are you dealing with your emotions?

• 1:11Speaker 00

  This is getting very personal.

• 1:15Speaker 00

  It's a real superpower to like care less what other people think.

• 1:18Steven Bartlett?

  So without further ado, I'm Steven Bartlett and this is the Diary of a CEO. I hope nobody's listening, but if you are, then please keep this to yourself.

• 1:34Steven Bartlett?

  Brian, when I read through people's stories, there's sometimes really obvious causal factors that led them to become the people they are today.

• 1:44Steven Bartlett?

  But with you, I'm more compelled by the less obvious factors. If we go back to your early years when you were a young man on the West Coast of the United States. What are the less obvious reasons as to why you've ended up where you are today and achieved what you've achieved in your life?

• 2:01Speaker 00

  Great question. 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, I was quite shy. 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, you know, in our technological age, I suppose, some of the people who got excited about computers early on and just found a love of building things have now become, you know, CEOs of companies, which is kind 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 like these military generals who barked orders at people and they were these like strong charismatic leaders.

• 2:46Speaker 00

  And 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 over time is now, reading enough books and things historically, you know, introverts can make actually really good CEOs. Of course, by the way, there's lots of different types of CEOs. There's not just one mold. There's people who love marketing, people of operations, people who love sales, people, and then there are engineer CEOs. So that's one reason that I think it's maybe a little bit less known why I'm here. Another, another reason is that I just became very passionate about this idea of trying to have an impact on the world. And I think, again, it may have come from that, that introversion as a kid. And I, and I felt like, hey, I have good ideas, but it's hard for me to get them out there and for people to listen to them.

• 3:31Speaker 00

  And I didn't feel confident, like, you know, speaking in some public setting or whatever. I have lots of practice doing it now, so I can, I'm a well-trained introvert. But, 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 scalable way, even if I felt like maybe I couldn't. And so, I don't know, maybe that's another. Unlikely reason.

• 3:55Steven Bartlett?

  In hindsight, then, going back to those early years as well, what was your luck or privilege? Or the fact is that were out of your control that happened to be the case that also aided to that trajectory?

• 4:06Speaker 00

  Yeah, I mean, there was a lot of things that went right. So I was in a home with loving parents that were very supportive of education and my passions and interests, including, you know, my mother worked at IBM. And so we had like an early computer in our home. She was kind of an early programmer there. You know, we had early access to internet, things like that. I also had, you know, I graduated, I studied computer science and economics and I had enough.

• 4:35Speaker 00

  This was a very important thing. I was not afraid to go try starting companies because I knew that if I failed, I could actually go back and still get a job. And it wasn't, people always think of entrepreneurs, oh, they're such risk takers and all this stuff. You know, honestly, it's not, it's not that risky. Like if you're a young person and you get a little bit of money to go start a company, like in Silicon Valley, people will write you angel checks for these things. And you can pay yourself a salary, go try it for a couple of years. And if it doesn't work, you go back to a company and you'll, it's often viewed as a badge of honor. That you've tried to start up, you have this entrepreneurial DNA, you're somehow more valuable inside a company now, if it doesn't work and you go back.

• 5:14Speaker 00

  In many places in the world, that's not the case, you know, failure of a company is considered a badge, a mark of shame, not a badge of honor. And then I think many people don't have the 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 the way, but in Silicon Valley, you can get angel checks for things. And so I tried starting many different things over the years and it's kind of as side projects, but with Coinbase specifically, I didn't really, I didn't even quit my 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 myself something and de-risk it.

• 5:51Steven Bartlett?

  If I'd asked you then, say 10 years old, what you, what you wanted to be when you grew up, what would you have told me?

• 5:57Speaker 00

  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 had started building some websites. And I remember as a senior in high school, I went on this retreat. And I had, I do remember having this thought, like, the thing that has excited me the most in my life so far was, I had built this kind of simple website or app and it felt like it was this really incredible feeling. I went to sleep and I woke up in the morning and I checked the stats and like, you know, 200 people or something had visited the website while 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 build something that could be working and helping people while I was sleeping.

• 6:39Speaker 00

  You know, if not, if not 200 people, why 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 the things I've tried in my life, you know, sports and reading and science and the, in school and whatever, as a high schooler, that was the thing that really got me excited in a way that nothing else had at that point. So I was probably in the very early stages of discovering my passion at that point.

• 7:01Steven Bartlett?

  Just, just listening to you speak there, 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 sort of desire to have impact. But it sounds like there, technology allowed you to be, be an introvert and have impact because it was the, the bridge between the, the outside world.

• 7:18Speaker 00

  Yeah.

• 7:19Steven Bartlett?

  So when that website goes live, you don't have to see these people or persuade them.

• 7:23Speaker 00

  Yeah.

• 7:24Steven Bartlett?

  But you can have your impact by, by a piece of technology that's enabling something in their lives.

• 7:28Speaker 00

  Exactly.

• 7:29Steven Bartlett?

  You go off and study economics in university in college?

• 7:33Speaker 00

  Yeah. So I had been taking some programming classes on the side in high school.

• 7:38Steven Bartlett?

  Why?

• 7:40Speaker 00

  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 morning. I was like dead tired at school every day because I was like wide awake at night, like playing with computers, learning about Linux and like all these things. And, um, school was a little bit boring in some ways. So, yeah, I, I basically decided, okay, if I'm this interested in computers, my, my parents 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, I 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. 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, that seems like the closest thing to what I'm interested in.

• 8:25Speaker 00

  I was also interested in business and they didn't offer a business degree. So I studied economics instead. That was like the closest thing to a business degree they offered. And that was literally my, my thinking. Now, of course, I had no idea later I'd start a crypto company, which was literally the intersection of computer science and economics. But yeah, at the time I just thought, I wanna, I wanna write software and I wanna learn, wanna learn how to start a business.

• 8:45Steven Bartlett?

  And at some point during college, you start your first, I guess, real company.

• 8:51Speaker 00

  Yep.

• 8:51Steven Bartlett?

  Which is a tutoring business.

• 8:53Speaker 00

  Yeah.

• 8:54Steven Bartlett?

  Was that, did, did you have grand plans of turning that into a, a, a, was that, or did you stumble into that?

• 9:01Speaker 00

  More like stumbled into it. Yeah, I mean, so as a college student, uh, my roommates and I were always trying to think about how to 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 like a coffee shop and you know, they paid like ten, fifteen dollars an hour or something like that. And one of the upperclassmen, um, I remember he told me, you know, I'm tutoring this high school kid and they're paying me sixty dollars an hour. I was like, wow, sixty dollars an hour is, it's just, it was like three or four X what you could make at these other on-campus jobs. So I decided to try doing it myself. 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 roommate and I at the time, we were, we were starting to just brainstorm like,

• 9:43Speaker 00

  why don't we start a little tutoring company and help high school kids and their parents match with the, you know, tutors at the, basically university students at the university where I was going to school. And so we got that going, we got maybe ten, twenty of our, of our fellow students kind of connected in. And then we said, all right, let's make a website for this to connect even more people, maybe to try to expand it to other schools. You know, eventually, over a period of a couple of years, this, this idea just kept evolving and we 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 for tutoring. And, um, yeah, I got to practice like building web applications. There was payroll and incorporation and sales and marketing and taxes and.

• 10:29Speaker 00

  I could never really get it to grow enormous and to become like a really big business, which we can talk about if you want, but that was the seed of it that later became a little bit more of a company.

• 10:40Steven Bartlett?

  Why then? Why couldn't you make it become a big business? What was the, in hindsight, the lesson?

• 10:45Speaker 00

  Yeah.

• 10:45Steven Bartlett?

  The barrier?

• 10:47Speaker 00

  Okay, so we learned this sort of the hard way about creating a marketplace, which was that in this particular industry, in tutoring, a lot of times you would introduce a student and a tutor and they would sort of, our business, we were trying to take like a 10% fee by matching these people and we were basically trying to do all the payments through our website, like billing and, you know, with a 10% fee. And what would happen often is they would meet the tutor and they'd do initially the first payment, but then afterwards they'd start paying them under the table. And so we were, I realized at a certain point, we were basically just getting in the way. They wanted us to just match them, but they didn't want us to be the whole billing apparatus. It was a much more of like a local repeat business, in-person business. And so for years and years, I struggled with that.

• 11:30Speaker 00

  There was a counterintuitive moment which allowed me to kind of pivot away from that. So I eventually realized this thing isn't working. I need to go get a quote unquote "real job." And as I was going to start my, the real job, this was at 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 lot of pain about that because like, well, I don't know, there are still like 5, 10,000 people every month who are 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 if, what if I were to just put everything on autopilot? You know, we're not going to be involved in any of the payments. There's no customer support. This is literally just going to be a directory, like a tutoring directory and you can contact

• 12:15Speaker 00

  these tutors, you can pay them however you want. And I'm just going to try to make it like a free thing. Maybe I'll put up some 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 all the people using it as like you can paint out people directly. And I was gonna put up some ads and I did one more thing at the last hour, which is I said, if you want to have like a featured profile as a tutor, with like a little badge on, a featured badge and come up first in search results, then you can just pay $10 a month and that was it. And I basically stopped looking at the website and I went to go focus on my new job. And every year thereafter, the site doubled after I made that change. And so basically, I guess the lesson was, you know,

• 12:59Speaker 00

  stop trying to extract value and start trying to create more value. And at that point, I think that was only the, the only tutoring directory online that had free profiles and you could just contact the tutors. And so it actually started to grow. Later, later, somebody ended up acquiring it for maybe like $2 million or something. So to me, that was like, it was like a seven or eight year base hit, the outcome. Where for years, like, you know, five, six years, I was struggling to get anything to work.

• 13:26Steven Bartlett?

  But the, the truth is, okay, they paid $2 million for it. Yeah. But the lessons you learn, many of those translate into the business that you went on to build in Coinbase. What, is there anything else? Because I look at my first startup that I made out of, you know, dropping out of university then started.

• 13:42Speaker 00

  Yeah.

• 13:42Steven Bartlett?

  And there's so many lessons. One of them is what you've said is, I was, I was so romantic about my hypothesis about what this business should be, that I got in the way of what customers wanted to do.

• 13:50Speaker 00

  Yeah.

• 13:50Steven Bartlett?

  So hearing you say that really relates. But is there anything else that you learned from that seven year first, you know, kind of messy startup that are key philosophies for you today in Coinbase?

• 14:03Speaker 00

  I mean, I think one of the big realizations I had in starting that tutoring company, which again, you can, you 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. 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 wanted to be an entrepreneur. It basically wasn't working. But looking back with hindsight, 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, not only in the US, but in various places around the world. And I remember going through this like incredibly onerous process to like set up credit card processing and then payments that I was sending out. And I remember the bank called me one day and they were like,

• 14:49Speaker 00

  You know, are you an aggregator of funds? 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 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 payments and distributing payments to the tutors as a marketplace. And so that gave me sort of a real insight later. When I saw the Bitcoin white paper years later, I was like, that system is broken. And this could be an opportunity to fix it. So that was one thing.

• 15:17Steven Bartlett?

  What about Airbnb? So you went and worked as a, in the product team at Airbnb?

• 15:20Speaker 00

  Yeah, yeah, I was a technical product manager, which basically meant I wrote some code and I tried to be a product manager. Yeah.

• 15:27Speaker 00

  Yeah, so I think I was the 40th employee at Airbnb. And I basically moved back to Silicon Valley from, I was living in Buenos Aires, Argentina for, for a year or so, trying to figure out what I wanted to do with my life.

• 15:37Steven Bartlett?

  Okay, I'm gonna have to talk about that.

• 15:40Speaker 00

  Sure, yeah.

• 15:41Steven Bartlett?

  What did that give you, that experience of travel and going to Argentina and living there for how many years?

• 15:47Speaker 00

  A little less than a year, yeah.

• 15:49Steven Bartlett?

  What did that give you?

• 15:51Speaker 00

  Well, it gave me a few things. I mean, one was that I got to see what a hyperinflation economy looked like, you know? A lot of people who've only grown up, grown up in a developed country, they've never experienced hyperinflation and they've never felt firsthand what that can really do for a population and people. So I would, it really deeply affects the culture of places like Argentina. There's just, there's kind of this deep distrust of the government and there's a pessimism about, about the future. There, there's kind of, you know, in, in countries that I think are the most forward thinking, they, there's a sense of optimism about the future. Hey, we can build a better future. And there's, you know, in places like Argentina, my, you know, people may disagree. My impression was that people felt like the best days are behind us and live every day like it's your last because hey, it could all disappear tomorrow, meaning your wealth

• 16:36Speaker 00

  and everything, which has happened many times in their history. Also, just little things like you'd go to 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, it really harms like the poorest people in, in society too, because they, they're the ones holding their wealth in cash as opposed to wealthy people can hold real estate, things that adjust for inflation. Now they can hold Bitcoin. So anyway, it gave me a front row seat into that. It probably gave me a little bit of a sense of confidence too, because I had never studied abroad or really.

• 17:10Speaker 00

  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 and stuff like that.

• 17:17Steven Bartlett?

  You were running the tutoring business at this point.

• 17:20Speaker 00

  Yeah, I mean, I was doing a lot of things. So I was running the tutoring business. I was doing some contract software development, just kind of while traveling. I was trying to build some real estate investments in the in the US. I was basically trying to figure out what I want to do with my life. And there was a whole process I went through to try to figure that out, if you're curious to.

• 17:40Steven Bartlett?

  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 us to work more remotely. And just generally, people were choosing that lifestyle. When I did that, when I was 21, in the gap between my startup failing and then me pivoting into a new business, I found it quite lonely. And there was, I remember being actually on a plane flying from one country to another, Brazil to Thailand or something, and seeing this. I think it was textiles or something, San Francisco incubator or New York based incubator 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. But something inside me was like missing.

• 18:20Speaker 00

  Yeah.

• 18:21Steven Bartlett?

  Community, a sense of shared mission, whatever it is. I wondered, I wondered if you can relate to that in any way or.

• 18:28Speaker 00

  Totally. I found it actually quite lonely as well. So in some ways, that was the point, which was to step outside my comfort zone, feel like I had to make new friends in a new city. But yeah, I mean, there was a good, you know, maybe five, six months there in Buenos Aires where I felt like I didn't really know that many people. I was feeling kind of homesick. Yeah, eventually I tried to, you know, go meet some local people, like expats, like various hostels and like, you know. By the 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.

• 19:01Steven Bartlett?

  You said you use that time to figure out what you want us to do with your life, as if there's some kind of system there.

• 19:06Speaker 00

  Yeah, I don't know if there's a perfect system, but I mean, I read this book by Seth Godin called The Dip. 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 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 simple idea, which is that, you know, what's the thing that you would still want to be doing 10 years from now, even 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 fast pace of learning, it's kind of fun, but then after you're a beginner, there's this dip in the middle where you're not an expert. You're not 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 through the middle, you know, put in your 10,000 hours.

• 19:51Speaker 00

  There's lots of various people have talked about this. So 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 martial arts and like all the various things, traveling in Argentina. And I, and I basically sat down one day, I 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. 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 really write on my list was tech entrepreneurship. And so part, part of the point of that book is if, if you're not willing to go through the dip, then, then quit now. Because it's, you know, and so I was like, do I really want to be like doing, you know, great real estate investments 10 years from now?

• 20:36Speaker 00

  I was like, I don't actually love real estate investing. So maybe I should just stop doing that, maybe I should stop doing this and maybe. So it was this very clarifying moment. Okay, if I want to be a tech entrepreneur, because I had been doing that in some way, shape or form for, you know, five, 10 years. I was pretty sure I'd be wanting to do it 10 years from now. I was like, why do I live in Buenos Aires? I should go to where the the center of tech entrepreneurship is Silicon Valley. You know, that's happening all over the world now. Silicon Valley is kind of decentralized, but at that time especially. So I kind of stopped doing everything else, moved to Silicon Valley and went all in on that. And then I think within maybe seven years of making that decision, Coinbase was valued at a billion dollars.

• 21:17Steven Bartlett?

  Crazy.

• 21:18Speaker 00

  So it did really help clarify my ambitions and I just put it all into one thing.

• 21:24Steven Bartlett?

  That is atypical.

• 21:27Steven Bartlett?

  Yeah, there's going to be entrepreneurs in Buenos Aires listening to this, bringing flights to San Francisco.

• 21:32Speaker 00

  But it could, it could be any, 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 anyway, I think it's not so. I don't want to say like, there's one geography for everything, but there is a clarifying thing that happens. If you just say, this is what is the most important thing to me. And I'm just going to try to make luck, my own luck around that.

• 21:55Steven Bartlett?

  It's so true. It's something that I don't think, especially young people, think about when they're deciding, making career choices. They don't, where to live is sometimes not as prioritized as much as like, which university has the best partying? Or who's offering me a job right now as 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? And inspiration and enablers for this long term vision I have. And I spent some time in San Francisco myself about three 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 how much of a disadvantage we have in philosophy, in ambition, in funding, in talent.

• 22:35Steven Bartlett?

  And it's no surprise that most of the, the great unicorns are emerging out of one city in, in the world. That then leads you to Airbnb somehow through, I think you take a job first, then eventually you take a job at Airbnb.

• 22:48Speaker 00

  Yes, exactly.

• 22:49Steven Bartlett?

  Yeah.

• 22:49Speaker 00

  Yeah, I joined a Y Combinator startup that was really cool, but it didn't really work out. There was a brief interlude there, but basically I decided, okay, my tutoring company is not really working. I need to, and that's when I pivoted to that thing which had a base hit. But what I decided, all right, I want to go to, I need to go to Silicon Valley. I kind of want to apply to Y Combinator. It's a startup incubator.

• 23:11Speaker 00

  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. And I needed, by the way, I also just needed to recharge a little bit because the tutoring company, I'd been living abroad. The tutoring company wasn't working. I was barely paying myself anything. So I was kind of broke. I was also just exhausted from the tutoring company just not working after so many years of trying to get it to work. And it hadn't seen it double every year after that. That happened on the side.

• 23:41Speaker 00

  And so I was like, great, let me take a job at a high growth company 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's just, it had a really magnetic culture, even at 40 people, they had, they were clearly on to something. It had, they had found product market fit. It was growing quickly. And I learned a lot there. They had a really unique culture. They, they were hiring differently. 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, the way that they just did product reviews was really interesting. They had an important design component to it.

• 24:17Steven Bartlett?

  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.

• 24:27Speaker 00

  Yeah.

• 24:28Steven Bartlett?

  But what else would you say?

• 24:30Speaker 00

  Well, the main thing, and I think that, by the way, this is true of not just Airbnb, but a lot of startups, was determination. They went through a period, everybody always looks back at these startups and they think, oh, it was a unicorn, like it just, they found the thing and it worked. Airbnb is actually somewhat typical in this regard, which was, there was, I think at least, I think like a three year period where they were just wandering in the desert. Any reasonable person would have stopped working on this idea. It was, it was a crazy idea, like you're, it was like couch surfing, you're going to let strangers stay on my couch. Like, that's not a business. It's like, just ripe for lawsuits and, you know. And they were in like tons of credit card debt because they had like been trying to self fund it, you know, they had launched several times and nobody was using it.

• 25:16Speaker 00

  Yeah, they should have quit. Like, any reasonable person would have quit. But they didn't. They kept going and they were just because getting marketplaces off the ground is very hard. You have this chicken and egg problem, supply and demand. And so I actually think that's a common element in a lot of like, successful companies. You go back, there was a period where a normal person just would have quit and they went from setback to setback to setback with enthusiasm, you know, somehow powering through it. So I learned that, too.

• 25:44Steven Bartlett?

  I hear a lot of entrepreneurs who have your same enthusiasm to be an entrepreneur. The enthusiasm you've expressed there when you leave Argentina and you come back, you just want to be an entrepreneur. You don't necessarily know what or what industry, what problem you want to solve. And 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 think of an idea. You took a time to go and get inspired, I guess, and to let the inspiration come to 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 have an idea.

• 26:15Speaker 00

  Yeah. Okay. Well, I mean, I was probably guilty of that, too, where there was definitely a period in my life where I was like, I just want to be an entrepreneur. And I don't know. You know, honestly, it was probably partly ego driven. It was partly 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 can get into all the psychology of it, right? It's a kind of a crazy thing, actually, to go say like, I have to be an entrepreneur because, you know, from if you just want to make money or something like it's from an expected value outcome, it's probably better just to like, go to some early stage companies, invest some equity and like, or join Goldman Sachs or something, right? Like, so to be truly want to be an entrepreneur,

• 26:57Speaker 00

  I guess, you have to be, well, sometimes it's ego driven, but I think it's your chances of success go up dramatically if you're doing something because you're actually super passionate about it. And so for me, reading the Bitcoin White Paper was kind of a lucky moment because I'd found it tapped into something that I was really passionate about, which was basically freedom, you know, economic freedom and just like, how do we empower people all over the world to, you know, have access to sound money and a decentralized, open system where anybody can get access to the global financial system. That really just like resonated with me. And so I think that really helped Coinbase be successful because there were many times

• 27:39Speaker 00

  in our history as a company where, you know, like 2015, 2016, like the whole industry was down for three years. Everybody was pivoting to do blockchain, not Bitcoin, if you remember that. Like a lot of the competitors in space pivoted to make software for banks and stuff. And everybody looks back at that and like, wow, you know, Brian, you never lost faith and everything. 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, if that's what this is all about now, I'm pretty much just going to shut it down and give the money back to investors. So I was just too stubborn. I was like, I got into this because I feel like this is the way to create more freedom in the world. So that's what I'm going to keep doing, whether it works or not. So I think there is a really

• 28:20Speaker 00

  important element there. You have to be super into it for some reason that's bigger than just ego or trying to make money or whatever, because every company is just filled with setback after setback after setback. And you think you can power through it, but believe me, when you're like three years in and like your co-founder quit and you got sued and you're broke and like, the first three times you launched the product, nobody wants to use it and like everything sucks and you're feeling like a failure and you're, you know, you're just going to give up because you're not actually doing it for like some bigger purpose. You're doing it because you wanted to feel important or something. So it actually is important to pick the thing that you're passionate about. Yeah.

• 29:00Steven Bartlett?

  You're doing it because you want to feel important or something. We were talking about how part of this sort of introvert's dilemma is you can feel significant, personal significance by creating something that has significance in the world. Zooming right to the end of the story, has that impact you've had on the world made you feel more personally significant?

• 29:18Speaker 00

  Yeah, totally. Okay. So I think this is a really important topic because a lot of founders, it's stressful to run a company, right? So a lot of founders, if they do get to some level of success, they will often burn out, right?

• 29:31Speaker 00

  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 deal with stress in all kinds of ways. There's like founders I've met that get like addicted to prescription drugs or like, you know, all kinds of unhealthy things you can imagine, right?

• 29:47Speaker 00

  I mean, you have to find a way to shift from like if the thing that got you started in the first place was like fear, like fear of never being important or fear of never feeling fulfilled, you have to at some point transition it. Once that hole is filled in your heart, I guess, you have to transition to being motivated out of like joy or love or something more positive, not like running away from fear and anger. Or you're like, you're really angry at this, you know, your father or like the person who, you know, broke like the co-founder who you almost was gonna found with who decided they didn't want to and you're pissed at them, so you're trying to show them up or whatever. Those aren't relevant to me, but I've heard other examples. Anyway, long way of saying you have to transition away from fear and anger as your motivator

• 30:32Speaker 00

  to like joy and love and just find the thing you actually love doing in life. So for me, you know, that was like figuring out what is the kind of CEO role that I really want to have. What's the thing that brings me joy? For me, it's like, I love building things with with technology. I love learning new things. 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 best people manager in the world, right? Like, I used to have like 12 direct reports at the company and I was like 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 there was a lot of things, ideas that I had in my head.

• 31:16Speaker 00

  I was like, well, the CEO has to do that. Obviously, the CEO has to do that. And I sort of let go of some of those things over time when, and I said, you know what? I'm actually gonna focus on the things that I'm better at because they bring me joy. And I'm gonna delegate a lot of the stuff which I thought I had to do. And that's actually made the company run a lot better and it's, and it's kept me engaged in the job. Like I'm been doing it 10 years and I hope I can do it another 10. It's, and it's still fun because I've been able to delegate.

• 31:40Steven Bartlett?

  Why do you have to make that transition away from fear and maybe insecurity being the motivator towards it being about joy and love? What's the cost if you don't?

• 31:49Speaker 00

  Well, I think if you don't, then once you hit some kind of level of success, whatever, however people count that, then you're not gonna feel motivated anymore. And so you're just, you're gonna be done. And

• 32:04Speaker 00

  You know, you're gonna go do whatever else you're gonna do next. Like, I guess, become an investor or sit on the board, which there's nothing wrong with that either. But I just, I do, part of me does wish that more founders were able to continue being founders and build the next thing and the next thing.

• 32:19Speaker 00

  I mean, we just met each other, barely know each other, but I'm guessing that you're finding a lot of fulfillment out of like, running this podcast. And you sort of, you've, you've found some new level of joy in doing that.

• 32:30Steven Bartlett?

  Hundred percent.

• 32:31Speaker 00

  So this is like your next founding moment. But yeah, I, I think if you don't do it, then you're just gonna burn out. And a lot of people, I think, who had some level of success as a founder, they look back on it and they're like, well, man, I finally got that thing to some level of success and I sold the company or whatever, but I never want to do that again. Like, cause that, it damn near killed me and I was so stressed all the time. And so I've tried to make it, I need, 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, hopefully. At least that's my goal.

• 33:00Steven Bartlett?

  You're describing me when you say that. So, yeah, the company for seven years, but it felt like I was doing it involun, it wasn't, it wasn't voluntary, meaningful struggle. It was, I can't let this thing 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, I did immediately. In hindsight, the way around that would be to do a bunch of things involving the, you know, the, how the company structured and who owns it and who has control and all those things, but really trying to build a sustainable, as you describe it, like a sustainable life for me as a founder and for my team members.

• 33:31Speaker 00

  Yeah.

• 33:32Steven Bartlett?

  And that often in Silicon Valley, when, especially 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 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 a hundred?

• 33:48Speaker 00

  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, let's talk about that first. And then I'll come to like repeatable innovation. So from a burnout point of view, I mean, a few things that I do, for instance, because obviously there's days where you have to like go hard and sprint and then, but for instance, like every quarter, I take a week off, right? And I just have that pre-scheduled for the year. Cause if you just kind of wait, there's never a good time to do it. We actually tried an experiment this year where we're having, we call them recharge weeks. Everybody in the company is like taking a week off every quarter and they're doing it at the same time because. 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 doing it or not. It's an experiment,

• 34:31Speaker 00

  but by taking a week off every quarter, it allows me to kind of make sure that I recharge. I have time to go learn new things and it often like sometime, you know, I'm thinking about 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 a lot 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 with their advice, like they're former CEOs. Others are basically therapists and like, you know, both are good and important versions to have. 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 found

• 35:10Speaker 00

  the therapist part is almost even more valuable. Let's see what else. I mean, like I have, I have this kind of like morning routine where like I've noticed that my days go, I'm a lot more stressed. If I just like wake up, I look at my phone, you know, I haven't really like had any breakfast or exercised or anything and like, you know, I'm like low blood sugar. I just, everything's pissing me off. I'm like irritable. 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 like do the morning routine, you know, exercise, like eat some breakfast, meditate, whatever. And then, okay, now I'll start my day and like try to, all these kinds of things help. And I think this is important for the whole company

• 35:52Speaker 00

  to some degree because a lot of new employees, especially like new grads or younger folks, like they, they actually don't know about burnout. They'll, they'll actually, you can have unlimited vacation policy and tell 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, sometimes I've seen, especially high achieving people, they push themselves like too hard and they'll actually quit. And I'm like, why are you quitting? And they're like, I'm burned out. And I was like, well, why didn't you take any vacation the last two years? And they're like, I don't know. And they didn't feel like they had permission because everything was so important. And so 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 environment at Coinbase. I'm trying to like, you know, amp it up, like we should, we should be going hard,

• 36:36Speaker 00

  but then take periods of rest and renewal and take rest like renewal very seriously. It's actually an important skill to learn. So, okay, there's, so that's kind of how to like, You know, go hard for the long term, but don't burn out. Then I think companies also need to have repeatable innovation. So what that, to me, what that means is you can't just be have like one product that finally works and then you scale it and it kind of the S curve tapers off. And then what do you do? I think companies need to continually have like a next act, you know, and a port ideally, like a portfolio of products or different revenue lines. So that while something is going down, another thing's going up. And we do, we do this thing at Coinbase called 70 2010 resource allocation.

• 37:19Speaker 00

  So like 70% 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 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 putting 10% of our resources towards crazy, you know, potentially big things that 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 sustainability of companies because it always maintains this, this startup culture, this founder mindset of like, it, you know, it's, it's always day one, you know, never let us become complacent.

• 38:04Speaker 00

  Try to disrupt ourselves before somebody else does, and just keep building the next thing and the next thing and the next thing. Like that's, that's what keeps a company exciting. That's how you extend the founding moment, right? Like, like Zuckerberg is trying to do that now with, with the metaverse instead of just being a social media company. And so if a company doesn't have like those continually stretch and try to build the next thing, I think it just becomes a little more complacent and like good people eventually leave and stuff like that.

• 38:31Steven Bartlett?

  Every company wants that. At least they say they do.

• 38:33Speaker 00

  Yeah.

• 38:34Steven Bartlett?

  But then they, they set up incentive structures and policies that actually act as a deterrent for innovation. They disincentivize people to innovate.

• 38:42Speaker 00

  Yeah.

• 38:42Steven Bartlett?

  So a question I get asked a lot when I'm on stage is, you know, you've ran an 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 your teams to, and how do you align incentives? And how do you really make that philosophy and culture real where people are actually incentivized to take risks and to do those, those 10% bets that might end up being the next AWS or the next, you know, Kindle or whatever, in the case of Amazon?

• 39:13Speaker 00

  Yeah, you're right. So I think that it's a, the natural tendency of most orgs is to not allow that. And so you have to actively fight against it as a founder or CEO. If you have somebody within the org who is kind of entrepreneurial and they try something new and it doesn't work, you know, you have to make sure that that's not like a black mark on their, their career advancement, right? There's a difference between they had good execution towards the wrong idea, or they had the right idea, but bad execution, right? If, like, I think, you know, Amazon, that Amazon example, right, is like, they tried to launch their own phone at Amazon, right? Yeah. The Fire Phone, and it was this big failure.

• 39:54Speaker 00

  But my understanding internally was like, they basically pushed, 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 phone failed. They said, okay, the execution was good. You shipped a phone in a pretty small amount of time. 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 very successful product. So it's a tolerance for failure, recognize good execution, even if it's toward the wrong idea.

• 40:28Speaker 00

  You know, I think some of this has to come from the founder. I don't know. I don't know if there's any other way. Like, the problem is, if you look at public companies that have, that are founder-led, they actually like outperform the, the rest of the S and P 500. And one theory for why that is, is that the, like, the scariest thing inside big companies is actually risk tolerance.

• 40:52Speaker 00

  And so founders can kind of provide that. Now, you can, if you can go too far with this, right? You, we know of founders who have too much risk tolerance and have kind of blown the place up, right? We work. Yeah, exactly. And then we also know of companies that had, you know, like, not enough risk tolerance. They had a professional CEO 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 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 CEO at this point is to ensure we have enough risk tolerance to try new ideas. And then I, and then I also want to pair myself with

• 41:32Speaker 00

  great operators like, like Emily Choi, our CEO and president, right? And we have a really amazing executive team. So it's the combination of like great operator, but also great founder energy, 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 doesn't work as well.

• 41:51Steven Bartlett?

  You read this, the white paper, Satoshi's famous Bitcoin white paper, pivotal moment for you, sparks interest and intrigue while you're at Airbnb. You do something which a lot of people ask me about as well, which is when 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 you want to pursue this idea. How did you do both? Cause you stayed at Airbnb while you started developing what became Coinbase?

• 42:16Speaker 00

  Yeah. So basically I did it on nights and weekends.

• 42:19Steven Bartlett?

  People don't like that answer. It sounds toxic.

• 42:21Speaker 00

  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 and don't build it on the company laptop. There's a lot of IP litigation that has ended, you know, for some people has ended badly because the company actually owns it typically, at least in the US. I don't know what the rules are in other countries. If you build it on employee, on company time, on the company hardware, the company probably owns the IP. So you need to make sure you're doing it on your own computer, not during hours. So anyway, I would often work till like 7:00 PM or something like that. I'd come home, eat dinner or something like that. And then I would work from like 8:00 PM to midnight.

• 43:03Speaker 00

  I would do that maybe three or four days a week on weekdays. And then on the weekend, I'd work maybe like Sunday afternoon for like seven, eight hours. So I was, I was probably doing like 20 hours a week or something like that on what would eventually become Coinbase in my personal time. And it was, and it was hard. It sucked. I mean, I was like tired after the full day of work. It's like 7:00 PM. But this is where that, some of that determination comes in, right? And I was like, okay, well, my coworkers like going out drinking or whatever. And in, nothing wrong with that. I did a lot, plenty of that. But like in my time, at that moment, in that time, I was, I was, you know, my late twenties, I was like, I really want to try to build something important in the world. Like I'm going to have to take like my own determination and turn that into this fuel to go try to build this thing. So.

• 43:50Speaker 00

  I probably did that for like a year, year and a half to try to build the prototype of what would become Coinbase. And then I applied to Y Combinator. They eventually accepted me and wrote me the initial seed check. That's what gave me the confidence to quit my job and go full time on it.

• 44:03Steven Bartlett?

  How did you maintain friendships and those kind of meaningful, personal relationships at that, in that time when you're working full time during the day and then coming home and writing code? Where's the, you know, where's the time for friends and girlfriends?

• 44:18Speaker 00

  Yeah, I was pretty intense about it. I would say I sacrificed friendships for it. I mean, it's not like I wasn't like, you know, just like never responding to people, but people would ping me and like, hey, can you 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 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, I literally wrote back to 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. So, you know, I was joking or whatever.

• 44:54Steven Bartlett?

  I never tried that with my mom.

• 44:57Speaker 00

  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, I'm gonna, fuck, can I swear on this program?

• 45:06Steven Bartlett?

  Of course you can.

• 45:07Speaker 00

  Okay. 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, 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, 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. And something happens where they're like, I'm not gonna fuck around anymore. Like, I'm gonna get this done, what, no matter the cost. And they just start really buckling down. They find this source of energy. And so, you know, find whatever that is for, for you, like the listener out there and. And then go hard at it, you know, finish your book, like launch your, launch your thing, whatever it is, the app, the startup, just, just start doing stuff like, and even if you

• 45:50Speaker 00

  don't even know what to do, just do anything because, you know, action will produce information. I actually, so you just reminded me, there was a precursor to Coinbase, which was this app that I built with my friend, which we were trying to 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. 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.

• 46:18Steven Bartlett?

  Action leads to information.

• 46:20Speaker 00

  Yeah, action produces information.

• 46:21Steven Bartlett?

  Actually, never heard that before.

• 46:22Speaker 00

  I stole that from Paul Graham, I think, who started Y Combinator. It's so true.

• 46:27Steven Bartlett?

  And I will steal that from you. So if you hear that in the future without credit, then you know where it's come from. At that time, what were you trying to build? You'd read that white paper, you launched that first app. Then after that first app you launched, what were you trying to build? What was the vision?

• 46:42Speaker 00

  Yeah, so this was 2000, I guess it was like 2010 timeframe.

• 46:46Steven Bartlett?

  And you howled?

• 46:48Speaker 00

  I guess I was like 29, yeah, something like that. So what I was trying to do, I had read the Bitcoin white paper. And I was like, 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, you know, Git is a tool that developers use for version control. And so for email, people didn't really run their own email servers. They'd use a hosted email service like Gmail. Or for Git, they'd use a hosted service like GitHub, right? So my thought was, okay, here's a new decentralized protocol. People are going to need like a GitHub or a Gmail type thing that's does all the security and the backups for you. And it works on mobile and the web. And I was like, someone's going to build a company doing that. That would

• 47:31Speaker 00

  be a 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 weekend project. That's like a really serious responsibility. And I was, had that idea in the back of my head. Somehow I couldn't get it out of my head. And so I just sort of like started tinkering with, I wasn't even really just saying I was going to build a company yet. I was more like, I don't know, let me just try building a prototype of this to see what if, again, action produces information. And so that was the original idea. It was like a hosted Bitcoin wallet instead of like running your own one on your on your own computer.

• 48:05Steven Bartlett?

  With a node and everything, which was 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 that you were building this thing with this thing called Bitcoin on a other thing which they wouldn't have understood either.

• 48:17Speaker 00

  Yeah. So people didn't get it at all. I talked to some of my smartest friends 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 was not reassuring. And then I went to a couple Bitcoin meetups, people who were really into Bitcoin. And I was like, yeah, I'm building like a hosted Bitcoin wallet like Gmail for email. But and I remember one of these people was like, that's a terrible idea because,

• 48:41Speaker 00

  you know, all the, all the people who've tried to do that, they get hacked and they lose, they lose all the customer funds. And so like, that's, you should never do that. Right? So I didn't get a lot of positive feedback. Everybody I talked to actually thought the idea was a bad idea.

• 48:55Speaker 00

  Even when I was, I had gone through Y Combinator, I was trying to raise money.

• 49:01Speaker 00

  You know, I would say like, for every 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 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, that's like, that's like the best case scenario in my experience.

• 49:28Speaker 00

  You know, the worst case scenario is 100% of them tell you no. So, but either way, it's like 90, 90% of the people telling you no, you have to be really kind of willing to not get discouraged by that.

• 49:39Steven Bartlett?

  You had a co-founder for a couple of weeks during that Y Combinator process, right?

• 49:43Speaker 00

  Yeah.

• 49:44Steven Bartlett?

  I heard that you, 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?

• 49:52Speaker 00

  Yeah, exactly. Yeah, so I was looking for a co-founder at that time and Ben Reeves had created this really good app called blockchain.info at the time, now it's blockchain.com. But so I reached out to him, we didn't really know each other that well, ended up applying to Y Combinator and sort of did this like shotgun wedding thing, but it didn't, it didn't work out. And it was like, we were about to start the program and we basically decided to part ways. So it's funny, in an alternate universe, blockchain.com and Coinbase would have been the same company.

• 50:27Steven Bartlett?

  That's funny.

• 50:27Speaker 00

  But anyway, it all obviously worked out well for both of us.

• 50:31Steven Bartlett?

  Did you have self doubt at that point?

• 50:34Speaker 00

  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, I thought it was a bad idea. The thing that gave me a glimmer of hope was that Y Combinator decided to give me this 150K seed check. And I really respected Y Combinator. So that gave me the big shot of confidence. But, you know, before that, it was like, it was very touch and go. I mean, I was like, well, my co-founder thing didn't work out. I don't know, like, I'm just going to try my best here. But like this, I was like, this has like a pretty high chance of failure.

• 51:11Steven Bartlett?

  What did your parents think?

• 51:15Speaker 00

  Okay, so my parents have always, have people who worked at like big companies like their whole life. And I don't know if they ever really got the whole entrepreneurship thing that I was so into. When I called to tell them that I was quitting Airbnb to go start this company. There was kind of like, okay, well, we support you, we love you. Like, are you gonna have any health insurance? That's what my mom asked, I think. And so I think there was, they were kind of afraid that I was doing something really stupid and reckless, is my guess. But they ultimately trusted me and supported it, probably with a lot of doubts, is my guess.

• 51:54Steven Bartlett?

  On that point of co-founders, I read that you eventually sort of interviewed 50-odd co-founders to try and find the right one for what would become Queenbase. What were you looking for? And what was in hindsight, what advice would you give me? Because that's another question I get asked a lot, is how do you find a co-founder?

• 52:09Speaker 00

  Yeah. So yeah, I was looking for a co-founder at that time desperately. And I was, I'd go on these like co-founder dates, you know, we'd meet somebody, see how it goes. They'd pitch you their startup idea, I'd tell them about mine, and maybe go on a second date or third date. So none of these seemed to like really click. And I guess I was looking for someone to get really excited about my idea, but also somebody who I felt was really complimentary to me in terms of like, pushed me to think bigger and stuff like that I hadn't thought about before. And, you know, I wanted to leave feeling energized and that I'd learned something, and they were a good compliment. And so I got kind of disillusioned because a number of these went on and on and on, and I couldn't find anybody that I really liked to join this thing.

• 52:52Speaker 00

  So eventually I just got fed up, and I was like, alright, you know what, I'm just gonna do this thing on my own and like, and get it off the ground. And low and behold, once I started to show some signs of progress, you know, like getting through Y Combinator, raising a seed check, getting the, I put the prototype out there on Reddit, and the right person reached out to me. And so anyway, I tell people that story because I think it's an important lesson, which is basically, if you don't have the right co-founder, just keep making progress, and signs of success may cause the right person to find you. It needs to be public signs of success. It's almost like putting out the bat signal. Like, if you have like half of an idea, you can't just like be talking to your friends about it.

• 53:36Speaker 00

  You gotta put it out on a blog post, or like a prototype, or get something out there in the world on Twitter or whatever, because then the other person may be out there and they, they won't know to find you and reach out unless you put out the bat signal.

• 53:46Steven Bartlett?

  That's also really good dating advice.

• 53:50Steven Bartlett?

  You said if you don't have a co-founder, just keep making progress and putting it out there.

• 53:54Speaker 00

  I guess it's true, like in terms of people.

• 53:56Steven Bartlett?

  Fitness and, you know, health and self-development.

• 53:58Speaker 00

  Find, figure out yourself, yeah.

• 53:59Steven Bartlett?

  Exactly.

• 54:00Speaker 00

  Yeah.

• 54:00Steven Bartlett?

  And you become a magnet as opposed to having to be a peacock.

• 54:03Speaker 00

  That's true.

• 54:03Steven Bartlett?

  So, and that's much more valuable. When I think about your first tutoring company, 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.

• 54:13Speaker 00

  Yeah.

• 54:14Steven Bartlett?

  When you think about those early years, what was the significant step that unlocked the growth in your view?

• 54:21Speaker 00

  Yeah, so there was a significant moment like that with Coinbase too, because oftentimes, by the way, 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 startup that the very first version of their product actually worked. Sometimes in hindsight, people like to tell that story, but I think in reality, it's very rare. So for us, or for, really, it was just me initially, and then it was Fred Ursim and I co-founding it. The first version was this hosted Bitcoin wallet. And so we had, I posted on Reddit, some people would sign up, but nobody would stick around and use the product. So in Y Combinator, they teach you this great thing, which is don't spend your time, you know, like going to conferences and like trying to raise money.

• 55:03Speaker 00

  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 then talk to your customers and improve the product, talk to customers and improve the product. There's really only two things you should be doing in the early stage, talking to your customers and improving the product. Sounds like simple advice, but people spend so much time doing other stuff. That's actually not real work. So, taking this advice, I emailed, you know, 10 of the people or so who had signed up for the product and never come back. 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 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 it, but I don't have any Bitcoin, so I just didn't come back.

• 55:43Speaker 00

  And I remember thinking, well, if there had been 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. 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 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 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 Fred Ursim had just joined. We launched that that buy button. It started to grow every day organically with no marketing or anything. And that was the minute I felt like we finally had product market fit.

• 56:27Steven Bartlett?

  Over the next, let's say five, so that's 2012 roughly.

• 56:30Speaker 00

  Yeah.

• 56:31Steven Bartlett?

  2012, over the next five years up until the point where Fred departs. That growth is pretty crazy, right? For Coinbase?

• 56:38Speaker 00

  Yeah, I mean, it started growing organically. And we had a very good problem at that point, which was that we were basically every time someone clicked the buy button. We had to use our own capital to acquire the Bitcoin at that right at that price. So we didn't have some exposure to it going up or down. And then we would initiate a debit to their bank account. And two or three business days later, we'd get the funds. So we had basically had a working capital issue. Like we were using our own corporate funds to buy the crypto and then getting their money, the payment from the customer. And the numbers started to go up and up and up. And I think we had raised like 600K at that time. And we were using like 550K to service the day to day buying on the site.

• 57:18Speaker 00

  And so we realized quite quickly, we're like, okay, we need to go out and raise money. 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 business. If we don't raise some money, that's a good story to go raise money. As opposed to, you know, ah, the numbers are kind 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 when we couldn't scale, then we went out to raise capital.

• 57:44Steven Bartlett?

  What mistakes did you make as a company in those first five years that you in hindsight go, damn, that's a, that's a key learning?

• 57:51Speaker 00

  Yeah, so I think if I were to go back and do 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 mean, one is that we actually never wrote down like the mission of the company or the values of the company early on. And we were doing it all organically. We were basically just hiring, interviewing every single person who would join. And we managed to create this really interesting culture, but it was a little bit, it wasn't very deliberate. It was just, it happened kind of accidentally because we were just choosing the people that we wanted to work with and we really surprised us and were really bright.

• 58:23Steven Bartlett?

  In those high growth moments, there's so, things keep breaking.

• 58:26Speaker 00

  Yeah.

• 58:27Steven Bartlett?

  And processes actually need to adopt when you go, as you'll know, from when you go from a couple of people to then 50, to then 100, to then. So I was just thinking if there's any advice you have for me, someone that I've grown a business, but not in, not in such a, a high growth way, and not in such an interesting, uncharted industry.

• 58:46Steven Bartlett?

  Eventually, your, your co-founder Fred departs. What was that like emotionally? Because I can't imagine the thought of my co-founder parting in year five, it would almost make me feel, honestly, it would have made me feel like they were part of the reason I was doing this.

• 59:01Speaker 00

  Yeah.

• 59:02Steven Bartlett?

  You know, that bond and that we're in this together. So how did that feel emotionally?

• 59:06Speaker 00

  I mean, it was awful. I cried, you know? So, yeah, so I think here, here's the whole story. So I think really Fred, Fred was an amazing co-founder and we were building all this great stuff together. He's really a natural leader, right? And so 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 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. 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 stuff? And what's the thing that would really excite you? Like, you know, he, he did a lot of the fundraising, like, he was really representing

• 59:46Speaker 00

  the company in the way, you know, the, the titles didn't matter. But ultimately, I think he really did want to run his own thing. And so he was very clear with me. He, he, we talked about it basically over the period of like a year or so, with an exec coach and all this. And 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. Whereas a lot of co-founders, when someone does leave, there's a, there's a blow up. And it's like, I think we both realized at a 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 to make sure the company is in a good place. It doesn't need to happen. And there's nothing soon here happening, but I do eventually want to transition. So over a period of a year, we talked about it. And then when he finally told me he was ready, I cried.

• 1:00:32Speaker 00

  It did feel like, you know, I was losing kind of half the company, the founding moment of it. And I remember, so then we had to go in front of the company and tell, deliver the news. Oh, man. So we talked to the board and everything like that first, but we went, I remember the day we had to go tell the company. And, you know, I wasn't, normally I wasn't getting nervous talking to the company. Like, you know, first the 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 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 tell them the co-founder was leaving. And I remember I went up in front of the company and my voice cracked like I was like a 14 year old, 13 year old, whatever.

• 1:01:16Speaker 00

  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 I had to like walk behind the podium. So nobody could see my leg shaking and my voice is cracking. And I'm like, God, I'm fucking, I'm messing this up, you know, like, cause I'm supposed to be projecting confidence. And like, no, it's not a big deal. We're going to get through this. And I'm just like coming across like this prepubescent kid, you know?

• 1:01:42Speaker 00

  So everybody of course is like, kind of shocked and they could, people were like, I could tell you were really scared, Brian. I was like, shit, okay. I didn't really announce that very well. And of course, like, you know, 48 hours went by, like, everybody freaked out. And then it was like 48 hours later, it was like, all right, let's get back to work, you know? And of course it wasn't as bad as I thought, but yeah, that was a really scary moment. And then basically I had to transition from running the company with like, all right, Fred and I, let's get in a room and decide it. To, okay, let's actually build an executive team around me. To have a more like professionally run company, if you will. So it ended up being like sort of a second founding moment of the company.

• 1:02:24Speaker 00

  And I realized this later, actually companies have many founding moments and you can just keep building.

• 1:02:29Steven Bartlett?

  What situation was the company in now again, in hindsight?

• 1:02:32Speaker 00

  Yeah.

• 1:02:32Steven Bartlett?

  At that stage, because I heard in 2017, things were a little bit messy. And you'd brought in this executive team to kind of help you, you know, solve some of those problems. But when, at the point when Fred left, what was the state of the company?

• 1:02:47Speaker 00

  So he left it as this market was swinging up and that was conscious on his part. He wanted to make sure the company didn't harm the company as he left.

• 1:02:57Speaker 00

  So yeah, the challenge after that was like, okay, go build an exec team. And a lot of founders have gone through this. It's, it's quite hard. So if the company is growing, you know, 50% a year or something, you can oftentimes promote people from within who are kind of learning on the job and just take on more and more responsibility. We, in these, crypto is so volatile to go through like 500% growth in one year and then negative 100% the next year. And it's like, so I felt like I was in over my head, like all these junior people who had joined early on, we were all in over our head. We were like, so we basically went out to seek more experienced executives to come in. And 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?

• 1:03:42Speaker 00

  And it's hard, like taking a new team, they have to build trust and oftentimes the team is often like kind of dysfunctional until like they go through enough together. So we had some good blowups there. There was some executives like left or were fired and like,

• 1:04:01Speaker 00

  you know, I had to like basically learn how to work with, with more seasoned executives. And people who had run massive things before and, you know, I guess one lesson I learned from that, and this is kind of personal to me, there's different people find different things that work for them, but

• 1:04:19Speaker 00

  you know, I realized I wanted to work with people who were not just really brilliant, but like also really humble. Because I'm not really like a combative person by nature, like some people. Some companies have this culture where they love to hash things out and debate it. And like, that's, that's like a really good conversation. Like you kind of get into it and you're like, you know, but I'm, I'm more of like, I want to think about what you said and like come back and more collaborative. So I'm not really, I'm a little bit conflict diverse. So, um, anyway, I started hiring more for like people who are bright, but humble, collaborative. I mean, the risk of that, by the way, is you can get into a little bit of like a yes person culture where every, everyone's afraid to disagree or something. That's also not good, but it took me a couple of iterations

• 1:04:59Speaker 00

  to kind of find my style there. And, uh, now it's working great. Like the exec team is super competent and high trust and collaborative. Um, and I think it's like, it gives us a 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 and have each other's back. And we have, you have to constantly tend that and nurture it, like with these exec offsites and stuff. But yeah, there were some learning pains there.

• 1:05:25Steven Bartlett?

  When, when crypto went through that first, well, not the first, but that real, that sort of 2017 bull run where everything was going up. How were you feeling as the CEO of Coinbase? Coinbase is exploding. I remember that's, that's when I, I first downloaded Coinbase and became a Coinbase customer. How were you feeling as 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?

• 1:05:53Speaker 00

  Yeah, I didn't know when it would happen, but there was definitely, it tipped at a certain point from like, oh, this growth is really good to, okay, things are getting a little crazy here. Like there was, yeah, I remember I'd go to some events and it's like, everybody was coming in, launching some ICO and, um, people would like come over and like, want to take selfies with me and then like, post the stuff on Twitter and like, almost implying I was like endorsing the project. And then, um, I remember like weird stuff happened. Like I was living in this apartment building in San Francisco and this guy who like worked in the building. Came to me one day and he's like, this package arrived for you, sir. And sir, I just have this question, like which crypto should I buy? And I was like, I don't, I don't, this is getting really weird.

• 1:06:37Speaker 00

  Like, I don't, I don't give any investment advice or whatever. And yeah, so basically it started attracting in like people who are just trying to get rich quick or scams and all this stuff. And so, yeah, we started, I started walking around with like a security guard. We had like some over exuberant customers. It was, it was weird.

• 1:06:56Steven Bartlett?

  Tell me about that because I was, I was thinking we've had some fintech CEOs here.

• 1:07:01Speaker 00

  Yeah.

• 1:07:02Steven Bartlett?

  That have built disruptor banks out in Europe. So Monzo, Starling Bank, et cetera, even Clana, I guess that's not a bank, but Clana, the CEO Sebastian here as well. Security is not something that most CEOs have to think about. But when you're dealing with money, as Tom told me from Monzo, you get a lot of unhappy people because you're, you know, sometimes you have to freeze funds and things like that.

• 1:07:28Speaker 00

  Yeah, well, okay. So I think, 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. But I do think that we probably started a little earlier because, because it was crypto is money.

• 1:07:44Speaker 00

  And yeah, I mean, it's also just a law of numbers. Like if you're running an enterprise, a SaaS, a B to B business, something like that, you might have thousands of customers or maybe a hundred thousand or something. But if you're running a very popular consumer app and you get into the millions or, you know, Coinbase has like maybe like a hundred million ish verified users now. If you just think about it statistically, I mean, you know, like, like one in a hundred people in society has some form of schizophrenia, right? Maybe one, one out of 10 of those, like, so one out of a thousand people in society has a form of mental illness that's just like. You know, it could be potentially dangerous or they can become obsessed with things irrationally

• 1:08:26Speaker 00

  or whatever. And so if you have a hundred million customers, like there's going to be enough people. It's part of this, just like a law of large numbers. But, um, you know, I don't want to overstate it. Like, it's not, I don't, it's not like a huge burden on my life. I feel, I feel safe and I'm able to keep functioning and stuff like that. Um, yeah.

• 1:08:45Steven Bartlett?

  Another thing most CEOs don't have to contend with is building a business in such a volatile market. So when in 2018, the market comes crashing down, the crypto market comes crashing down.

• 1:08:56Steven Bartlett?

  Talk to me about what leadership lessons you learned through that, what would, I can only imagine as being a pretty awful period.

• 1:09:04Speaker 00

  Yeah. So 2018, everything was coming down off that high of 2017. And, you know, I had been through a couple of cycles like this, but each one was getting bigger and bigger. And, um,

• 1:09:16Speaker 00

  it was tough. I mean, I, in the following, I think, year or so after that crash, I think we might've had like 25% of the company leave or something, right?

• 1:09:24Steven Bartlett?

  Really?

• 1:09:24Speaker 00

  Yeah. So there was a lot of attrition. Um, there were people who had joined and they thought, hey, this is a rocket ship. It's only going one way. And then when it was down and lots of negative 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 up, they're like, this is, they're a genius and they're a future, everything's a future. And then when it's down, they're like, this is never gonna, it's failed. And neither one is true, right? Like reality, you have to zoom out to kind of look at reality.

• 1:09:52Speaker 00

  But one thing I realized was that I felt this overwhelming pressure as CEOs, like, oh, shoot, like every, every week I've got to get in front of the company and like put on a good face and like create some sense of optimism, right?

• 1:10:05Speaker 00

  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 try to just be super positive or something. And so one leadership lesson I learned during that moment is that, um, 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 go up there and say something like, I feel like shit today. You know, like this thing's down, like this person quit, um, whatever it is.

• 1:10:39Speaker 00

  Now it helps if you can then use that as a moment to like 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 like, I don't know how you're feeling. I feel like this, that that's going to take a little bit of the tension out of the room because they're all probably feeling it too. And they're like, okay, great. This guy's like, not a robot. He like, kind of gets it too. And it's like, okay, 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 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 bring your best ideas about how we're going to solve X. We're going to pick one and we're going to go double down on it. Right? So now, now it's like you're turning this authenticity, this candor in, and you're, and you're banking everybody a part of this solution.

• 1:11:23Speaker 00

  It's not like, hey, everybody look to Brian, like, he's got all the answers. You know, this like Messiah complex or whatever, like, no, 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 on my shoulders or something. So that, that was a good leadership lesson for me.

• 1:11:40Steven Bartlett?

  How do you do, you've been through, you know, these crypto winters and your company got so big that, you know, went public. And then when you become a public company and you're almost seen as the 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 exchanges, but the, the number one one, the one that's the famous one, the, the poster child is Coinbase. The pressure and the scrutiny and the headlines and the, and the fake news and all of it, that you must be, have thrown at you. And then all the, you know, the internal problems of just running a business anyway. How are you dealing with your emotions?

• 1:12:18Speaker 00

  Yeah, okay. Wow. Deep question. So, um, let's see, I think.

• 1:12:24Steven Bartlett?

  Cause you're a human.

• 1:12:25Speaker 00

  Yeah, of course. Okay. So I think one of the most important things, I totally didn't realize this before starting a company, but it turns out, one of the most important things, um, skillsets to kind of develop as a CEO of startup is that. You have to be willing to ignore a lot of noise, 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 going to the speaker circuit and like, you know, then you're gonna fall even harder when they turn on you and then everybody either gets built up or taken down and it's just driving headlines, right? So you kind of can't believe it on the way up because then you won't believe it on the way down either. I totally didn't realize

• 1:13:10Speaker 00

  that by starting a company, I thought most people would generally be rooting for you and you know, but there's people out there rooting for you to fail, which is a weird thing. They're kind of dealing with their own maybe stuff about success, right? I don't know what it is. But you have to learn how to just tune all that out. So I mean, like,

• 1:13:30Speaker 00

  frankly, I just don't, don't read like a lot of news anymore. I kind of think of it like sugar. It's addictive and can you consume it in small quantities responsibly and like eat a couple bites of dessert or something like, yes. But you have to be really careful because basically the kind of anger, fear, outrage, whatever, you know, is an addictive thing. By the way, it's not just mainstream media, like social media has some challenges with this too, right? I, I think it's actually a little hypocritical, like mainstream media is always criticizing social media for misinformation and it's like, it's pot calling the kettle black or whatever. It's like the same thing happening there. So I literally try not to read a lot of this stuff. So once, then, once you developed your own sort of psychology

• 1:14:13Speaker 00

  about it, now you have to insulate the team from it because they'll, they'll go after your team. And so you need to kind of continually be preaching this to the team about like, you know, be an independent thinker, right? Go develop your own source of truth, like, by going to the root of it, like, don't, don't be listening to 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 sugar or something. It's not actually, they're, they're trying to sell their own product and they're, and one of my friends has this great saying, it's like, only a half-truth can go viral. Like, if it's, you know, that

• 1:14:56Speaker 00

  triggering or whatever, that's like, ah, like it goes all around the world, it's, it's half true at best. And so you have to remember that whenever you see anything out there.

• 1:15:04Steven Bartlett?

  What are the things that still penetrate all of that resilience, though? There's, because there's things in even me that I, I, I understand all of that. As I was saying to you before we started recording, I became a dragon in dragon's den. So I got much more scrutiny than I've ever got from headlines. I'd read about my family that I don't have, my girlfriend, I'd done this, that. You'd think I was running Guantanamo Bay, the way that they described my former business, all these things. And although I knew I was resilient and 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 doesn't come up.

• 1:15:36Speaker 00

  Never read the replies.

• 1:15:37Steven Bartlett?

  Yeah, I don't have them on.

• 1:15:38Speaker 00

  I turned off all notifications too. That's, that's a really good one, like.

• 1:15:41Steven Bartlett?

  But what pierces you still?

• 1:15:43Speaker 00

  Yeah.

• 1:15:43Steven Bartlett?

  What still moves your mood?

• 1:15:45Speaker 00

  So there's definitely, there's something every 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 was like, I don't even know if this was real or if this was like short sellers, like putting fake information out there, but there was some like petition that some employees put together or something and like.

• 1:16:08Steven Bartlett?

  I saw your response to it.

• 1:16:09Speaker 00

  Yeah, I got irritated by it and I like wrote some stuff on Twitter about it, but that, that, that bugged me for a bit because it was like, um, okay, like you're gonna attack the executives, like it's not even their fault, like, you know, whatever, blame me. So, um, I'm trying to 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 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 your first like negative article, like that has false information in it in the New York Times. And then you're like, well, that just shattered my reality of like, even that could happen.

• 1:16:50Speaker 00

  Like, so, and there's like, what else is like not accurate in the New York Times? Or pick, pick any other, you know, Fox News, like whatever. You know, even, one of the ones that 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 is one team, like we're all, and then when I started to see like, sometimes there were people in the company kind of turning on each other, I was like, man, that, that one really bugged me, right? So, think about, um, if you think about companies that have gotten to really big scale. Makes all your problems look small by comparison. Okay, like, like, look at Mark Zuckerberg, right? I mean, the amount of negative news coming out on that guy on a daily basis. Right?

• 1:17:34Speaker 00

  I think that, I think like the Russian government like just put him on some like

• 1:17:40Speaker 00

  list of like sanctioned people or something like there's people of tons of death threats. You know, like, um, there's, there's always another level it can get to. That's just like, ah, anyway, I, I, what I've realized about a lot of people who I think are building important things in the world is that 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,

• 1:18:12Speaker 00

  whether I do the thing that I think everyone's going to like, or everything that I is more authentic to me, someone's going 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, they've leaned more into authenticity instead of trying to say what they think people want to hear. And that does require you to have some amount of thick skin, some kind of high disagreeableness. And then they can actually do even more interesting stuff because they're, they're being themselves instead of trying to be liked.

• 1:18:39Steven Bartlett?

  My success and my building my personal brand and getting millions of followers online, it scratched that itch in an unhealthy way that we described earlier. It kind of made me feel, it gave me external validation, which felt like it was filling me up. It's probably sugar or something. But, 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 public scrutiny. It matters more to you because validation was your driving force this whole time.

• 1:19:02Speaker 00

  Yeah.

• 1:19:03Steven Bartlett?

  So is there an element of that with you? Because, because you are an introvert that wanted to have significant, be significant because of that early upbringing, that it might be psychologically more difficult to deal with because significance and fitting in, I guess, was so paramount to your initial motivation.

• 1:19:21Speaker 00

  Totally. Yeah. I mean, it can be very, it can be very addictive also just to be liked and the adulation and everything. So.

• 1:19:30Speaker 00

  The minute something starts to happen that you realize people aren't going to like you for, your temptation is to try to preserve it. Now you have something to lose. You're like, oh, I'm gonna lose these followers, or I'm gonna, you know, whatever. It doesn't even matter. But it always feels serious at the time. So I definitely had to grow through that. I don't know. I think I'm still growing through that. I would like to get to a place where, you know, you don't want to, you don't want to become like, isolated to a place where you're not listening to anybody, because that's also really bad. So you do want to, you need people who can keep you grounded, like your, your family, like your friends, whatever. And people who are around you who will tell you when you're being an idiot, or you're just wrong. And so like, you don't ever want to get to a place where I listen to nobody, right? But a lot of people, you want to be around people

• 1:20:13Speaker 00

  who have your best interests at heart, that listen to them. Or people who have already done what you're trying to do. And like, listen, that's good advice. But a lot of the people who are just trying to take shots at you to build their own whatever in life, you need to build the ability to ignore them. And it's a real superpower to like, care less what other people think. At least people who don't have your best interests at heart.

• 1:20:37Steven Bartlett?

  Having worked in social media over the last 10 years, I, maybe in my seventh, eighth year, noticed a really interesting thing that happened. Organizations, as endleman say in their trust reports, were once 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 or PR. We moved into this world where then our glass boxes, the world can see inside. All of your employees have smartphones, and they can take pictures and write reviews. And so organizations now had to adapt. And one of the things that I've seen, just as an observation, is CEOs being out there in the public eye, overly out there in the public eye. I'm thinking Elon.

• 1:21:12Speaker 00

  Yeah.

• 1:21:13Steven Bartlett?

  And the antithesis of that might be Zuckerberg, who basically hid for 10 years. And the media shaped him as a soulless data stealing robot. And then you've got Elon, because he's smoking weed on Joe Rogan's podcast, you can say whatever you like about him, I think I know him.

• 1:21:27Speaker 00

  Right.

• 1:21:28Steven Bartlett?

  I have my own reference point. And my point here is about transparency. And even doing things like this, for me, I don't know how you feel about this, but for me, if I was running a big organization, I'd be doing a lot to make sure that the 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 against the media writing your narrative.

• 1:21:49Speaker 00

  Yeah, so I've thought about this a lot and I'm not 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 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 think, you know, right on Twitter.

• 1:22:15Steven Bartlett?

  Did you see Zuckerberg's 2019 Facebook post?

• 1:22:17Speaker 00

  Which one?

• 1:22:18Steven Bartlett?

  He did the post, I think it was 2019, maybe 2017, that sounds better. 2017, he did a post saying that he's basically hidden away for that whole period of time and his New Year's resolution was to come out of his bunker.

• 1:22:28Speaker 00

  So he did a period of hiding out and like, yeah, yeah. So I mean, I think a lot of CEOs struggle with this because, you know, I think a lot of people realize 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 I'd be like, yeah, whatever, easier for you to say. But um, there's a lot of downsides, right? I mean, people and the media or publicity can be like this, this cruel beast, right? If you feed it, it just wants more and more and more. So um, I think there are advantages to having a public profile, like it helps you recruit people. If someone attacks the company, you have your own direct audience to like get the, the message out, the truth. So there's definitely like benefits. And then there's drawbacks because now, you know, maybe your kids need

• 1:23:13Speaker 00

  security or whatever, or just, um, you know, someone's going to come up to you in a restaurant when you're trying to have a thing with your family or whatever. So there's real downsides to it. Um, I think for me, I'm trying to find this reasonable middle ground where like I, I turned down 95% of media. I, I really want to talk to people like that are doing what I, new media, right? Like, like this, like podcasts or, or YouTube, or really just have conversations with people that I think are interesting and I like, that get messages out in sort of unique ways. And I, I do, I like having some amount of 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 could avoid

• 1:23:56Speaker 00

  that, I would prefer it. Um, 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.

• 1:24:07Steven Bartlett?

  Interesting. And one of the things you talked about was that, who knows whether it was real or not. 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, something written up that said internally, an employee was petitioning to have someone else removed internally. Whether it's true or not, we don't know. It was taken down. You responded to that on Twitter.

• 1:24:31Speaker 00

  Yeah.

• 1:24:31Steven Bartlett?

  You also said to me that you were in a bit of a bad mood when you responded to that on Twitter.

• 1:24:35Speaker 00

  Yeah.

• 1:24:35Steven Bartlett?

  How do you feel in hindsight about all of that? And did you, did you learn anything about company culture or changes that needed to be made? Or give me your reflections on that.

• 1:24:47Speaker 00

  Yeah. So you never know if you're doing the right thing, right? One argument would be that it's just unnecessary. I could have ignored it. And there was people who never even saw it and there was, and they read my tweets and they're like, oh, what's going on? And now I gave even more attention to it, right?

• 1:25:03Steven Bartlett?

  Yeah.

• 1:25:04Speaker 00

  On the flip side, there was a bunch of 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. It's like, it shows who you really, what you really care about. And you're basically communicating to the rest of employees, like if you're unhappy about something, like there's a right forum to do that internally. It's not, this is harming the company. And so 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 go. And I kind of, I kind of like try things and I see how they go. One thing I will say is that something that's polarizing is not, that doesn't make it the wrong thing to do. What makes it to me the right thing to do, the wrong thing to do is whether it was authentically true.

• 1:25:47Speaker 00

  So I don't know how I would do it again next time. I guess I, maybe I would do it with a cool head and see if it still felt authentic and then go from there.

• 1:25:56Steven Bartlett?

  Polarizing. Another thing that when people talk about company culture, people give, people that I've been around point to Coinbase as an example of is you coming out and saying that Coinbase wouldn't tolerate politics and other divisive topics being discussed on company channels in the workplace. This is a big, I've had conversations this week with my 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 politics around in, in America.

• 1:26:29Steven Bartlett?

  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. And I actually regret that because a week later, an employee pulled me aside and said, I'm actually pro Brexit. And the whole week, I felt like the office wasn't a safe place for me to.

• 1:26:45Speaker 00

  Yeah, yeah.

• 1:26:47Steven Bartlett?

  So you set out a stance, which I've not, I saw you do it first. I'm not sure if any of the companies have done it, but publicly, you were the first to say, no politics at work.

• 1:26:55Speaker 00

  Yeah. Yeah, I mean, I think other companies are doing variations of that. So it's not entirely original. But yeah, I did put it out in a way that was public and got a lot of attention. So I don't know what to say about it. I think it started, it starts from a very good place, which is people want to have a safe space at work. They want to have a place where they can just be themselves authentically. Like, all these things actually start from a very good place. What's unfortunate is that it can get to a place where the office is actually 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, they're actually just upset with each other and arguing over things which we don't really have very

• 1:27:36Speaker 00

  much impact over, like bigger, broader societal issues outside of our mission. This, not just Coinbase, this is happening broadly across a lot of 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 broad thing geographically. It's, it's very pronounced in some cities, especially in the US, but I guess probably somewhat here as well. So.

• 1:28:00Steven Bartlett?

  Not as much.

• 1:28:01Speaker 00

  Yeah. I remember our Ireland office, like there were some people who messaged me during all of that. And they're like, what is, you just said, like, we're going to work on work, do work at work? Like, what's, what is so controversial? They didn't, it didn't make any sense. So it was, it was largely a thing that happened, I think, in the Bay Area, in the, in the US and a couple other cities, like maybe Brooklyn, Portland, places like that. But.

• 1:28:21Speaker 00

  Look, I don't, you know, in some ways, I'd rather Coinbase was like known for our product innovation and stuff. This is a weird one because like we've actually been pretty become kind of well-known for this stance. And others have emulated it, but the thing that really made me finally get the courage to do it because 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 I felt like I had been a bad leader. Basically, I had let this kind of misunderstanding accumulate inside the organization where people thought that it was okay to like come to work and just debate endlessly these things or like at the Q and A that we would host every week or two. There would be a lot of questions that were not about our product or the regulators or the future of the company. It would be about like these broader societal issues.

• 1:29:05Speaker 00

  And these kind of, these brush fires kept erupting in Slack channels and things. And so, and I think I reached a place where I was like, I don't think I really want to be the CEO of this company if like this is what the CEO job entails is kind of like getting put on the spot with like these crazy difficult societal questions every week. I kind of want to just build cool stuff with technology and work on our mission. And so I actually contemplated briefly, I was like, am I the one who's like just not suited for this job? And maybe this is how 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, there's probably a bunch of other people at the company who also feel that way. And like you started this company, you don't need to go, they need to go.

• 1:29:47Speaker 00

  And so it was, if I realized I was like, either I'm going to resign or they're going to need 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 company. 5% of the employees opted into that package and left. And then after that, it felt like the company was much more aligned and we were all able to move towards the mission. So it was cool to see some companies emulate it afterwards. And there's probably a less dramatic way to do it, you know, if you kind of said it that way from the beginning, but yeah, that's where we are.

• 1:30:18Steven Bartlett?

  One of the things that I really wanted to ask you about, because from reading your blog posts, you have a very clear strategy and perspective on this. And I also see this in hindsight as being the single most important thing that I ever had the responsibility of doing and getting right, which is hiring people. I fucked up for the first three years. I hired inexperienced people that were cheap and that I felt I could manage because I was 21 or 20. So I hired a bunch of you like, you want a job? You want a job? You want a job? You can be director, director of this?

• 1:30:45Speaker 00

  Yeah.

• 1:30:46Steven Bartlett?

  My biggest mistake. I only learned when I hired someone good and I saw the net impact they had and the fact that good people then hired good people. What advice would you give to people that are hiring now? And how important do you consider hiring to be?

• 1:30:59Speaker 00

  Super important. I mean, actually, in Coinbase's values, the number one value is top talent in every seat because it really, everything in the company comes back to people. Like, if you want to have a big impact, you need to have, generate a bunch of revenue and profit. If you want good revenue and profit, you need to make good products. If you make good products, you have to have good people and build them. So it's actually, everything comes back to people. So yeah, I mean, it's interesting to hear that you learned that lesson the hard way. I've, hiring is super hard. Sometimes the only way to learn a lesson is to actually go make the mistake and do it. But the mistake that a lot of startups 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,

• 1:31:44Speaker 00

  meaning like, I learned something from this person. They, they're way better than me at something, at least. You know, I left the interview with more energy than when I went in. 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. Interviews are actually really kind of a low signal thing. You have to get real, some people are great interviewers, like maybe 5% of people can really assess someone in an interview. Most people aren't that good at it naturally. And so you can basically use references 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 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 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.

• 1:32:30Speaker 00

  Or they didn't like it needed me, it needed me or someone else to come in and edit their work or curated and like it's not to oversimplify it, but basically like if the person can get a lot of stuff done that's advances the mission, then you want them on the team. And if they can't, you shouldn't have them on the team. And that's basically what makes great companies is like you have a bunch of people aligned toward a big impactful mission who can actually get a lot of stuff done every week. And you know, you share some values in common and then everything else, they can be quirky and weird and different and like from every background and walk of life and like everything else can be different. But if you have those pieces right, they get a lot of stuff done towards the mission and they're aligned, then you got a good company.

• 1:33:14Steven Bartlett?

  You said about growing too fast. I saw you post recently that you'd grown the company too fast over the last couple of years and that you were having to cut back about 18% of the workforce.

• 1:33:23Speaker 00

  Yeah.

• 1:33:23Steven Bartlett?

  Emotionally, in those moments, you know, the statements, you were very transparent, you were very honest, you didn't have to publish that to the entire world, but you did.

• 1:33:31Speaker 00

  Yeah.

• 1:33:31Steven Bartlett?

  Emotionally, what are those moments like? Does it get any easier for you to, to, to cut back the workforce? When you signaled in the memo that you take responsibility for that as well? Like, you weren't skirting blame or anything. So.

• 1:33:44Speaker 00

  Yeah. So there's always something challenging every year that like really puts you outside, puts 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 this year, that was one of the things was like, we had never done a layoff before. I had never done one. And yeah, it did kind of suck to look back and say, I actually made a mistake. You know, we were everything, everything in crypto was so up and up and up last year that it felt irresponsible not to keep hiring more people because we had like lines out our door, you know, virtually of like customers trying to sign up like institutional clients and new products and competitors in all these different markets. And we were like, we're just being reckless and irrational not to keep building the company with all this revenue

• 1:34:27Speaker 00

  we're generating. And so, but I 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 break. The culture erodes, decision making is unclear, communication channels break down. And so we, we definitely like exceeded that threshold last year in 2021. And early this year, we were on a pace to kind of keep growing too quickly. So.

• 1:34:51Speaker 00

  You know, it really, it really kind of is a bad feeling to look at a problem and say, oh, I made a mistake. 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. And so facing reality, while it was deeply unpleasant and it was really unpleasant for the people that parted ways with the company, it was the right thing to do that now we have the ability to kind of learn how to operate really efficiently at this new size, 5,000 people, still a lot, and get a ton done with that. And we got the cost structure to a place where we know that we can not only have enough cash, but like really thrive in this, in this recession we're all going through at this point. And whether that lasts one year or

• 1:35:33Speaker 00

  three years or four years, whatever, we're now, we've set the company up to ensure that it has a 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 people involved, it made me feel good that we did the right thing.

• 1:35:46Steven Bartlett?

  This is an interesting question that I just had when I was just, I was just thinking then. Yeah. And because, because of this, you know, from my perspective, I'd call that stress. Sometimes stress is great, but there's a lot of volatility in the markets and those tough decisions. If you view happiness as like a concoction of, as like a recipe, and there's lots of ingredients that going and go into making us happy. What ingredients in your happiness recipe do you think you need more of?

• 1:36:12Speaker 00

  Like today, personally, for me? Um, oh, wow. I mean,

• 1:36:21Speaker 00

  so I think this is getting very personal. I think, you know, people are get, they're basically happy with like health, wealth, relationships, things like that. If you don't have your health, it's hard to really be happy. Can't really do anything. You don't need to be wealthy, but you need to have some level of security where you're like, I'm not worried about like being hungry tomorrow or something, right? And then relationships account for a lot of happiness, I think. Family, like romantically, personal friendships. So, um, I mean, it's kind of, it's, I'm like almost 40 and I think, I'm thinking at some point I might want to have kids. So that's probably like, that's probably. Area. But otherwise, I think, yeah, I feel quite happy about relationships in my life.

• 1:37:08Speaker 00

  Personally, professionally, romantically, all that stuff. So, yeah, I didn't think you were going to go there.

• 1:37:12Steven Bartlett?

  But yeah, there you go. No, I feel the same way. I've had, I've not had enough balance in my life. So my big next chapter is allocating enough time to my girlfriend. And being, I said it on stage today, being a dad and those things and prioritizing that, knowing the importance of it, even 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 a question for the next guest. They don't know who they're writing it for.

• 1:37:36Speaker 00

  Okay.

• 1:37:37Steven Bartlett?

  Their question was, what is the belief that you hold that most people disagree with you on? Give you some time.

• 1:37:45Speaker 00

  Well, I mean, one kind of contrarian view that I have that I think most people would disagree with is that.

• 1:37:53Speaker 00

  I think a lot of regulation is well intentioned and it actually causes more harm than good.