David Senra｜Brian Armstrong, Coinbase

How much of your job is building political power as an advocate for the crypto industry?

I don't have to go, but I think it's worth it for the business.

I don't mind going.

In some ways, I like doing it.

There's some pretty interesting people there.

I go about once a quarter, maybe once or twice a quarter recently, because we're right at the crux of this key moment for market structure legislation.

I'd say over the last few years, yeah, about once a quarter.

What's the key moment for the market structure?

Well, the crypto industry has been working for a long time on getting in the Senate.

A whole bunch of people have been trying to get this piece of legislation passed.

In the House, it was called the Clarity Act.

In the Senate, they're drafting their own version of it.

But it's essentially clarifying this question about which of these crypto assets are commodities versus securities.

And someone might say, well, why does it matter?

It matters because in the United States we have two different federal regulators the CFTC and the SEC.

The CFTC regulates commodities.

The SEC regulates securities.

And so it turns out in the past, this ambiguity about where cryptoassets set between the two federal regulators, that lack of clarity was really weaponized by Gary Gensler, the former SEC chair, and Elizabeth Warren and people like that who tried to, in my view, unlawfully kill the industry in the United States.

In other countries where we operate, like in the UK or in Singapore, they only have one federal regulator for financial services, so they actually don't care whether these are commodities or securities.

Parochial issue in the United States that's kind of like this turf war between two federal agencies in the past.

So anyway, we just decided we need to get legislation passed by Congress to clarify once and for all which of them go in which bucket, so that a future Gary Gansler couldn't come in and try to kill the industry.

So what was the lawfare they were trying to do?

Well, okay.

So long story, but, you know, essentially this was around like the 2020, 2021 timeframe.

Coinbase, we decided we wanted to become a public company.

We had been operating for about nine years at that point.

And we went in and went through the normal process with the SEC.

You have to describe your entire company, how it works.

You know, how do we decide which assets to list?

Which do we not list?

At that time, we wanted there to be a path to have crypto securities be traded.

Simply to think of it as a security is like a way to raise money for a company that you want to start.

A commodity is something that's decentralized, kind of like oil or gold or copper or something like that right.

So Bitcoin is decentralized.

Nobody controls it.

Everyone pretty much agrees Bitcoin is a commodity.

But there were people issuing tokens which were raising money for different projects they were doing.

That were in various stages of decentralization.

So was it a commodity?

Was it a security?

And then Gary Gensler, the SEC chair at that time.

My understanding is that he and Elizabeth Warren essentially decided they wanted to use this to curtail the crypto industry.

And if you want to know why-

Well, okay, so Elizabeth Warren is, you know, in my view, she's a socialist.

She believes the government should be running all financial services.

And she had essentially found a way to bypass Congress and have a lot of influence over financial institutions like big banks.

How would she get that influence?

Well, she would appoint regulators that could essentially go in and pressure the banks to do things that Congress had not necessarily authorized.

So under the Constitution only Congress is allowed to make laws, but the regulator is given some discretion about how they implement those laws.

So you can imagine, let's say you're a bank and you have your bank regulator and they come in.

They can choose to lose your paperwork and not approve something for 90 days or two years or five years, or you can have a good relationship with them and they can approve things.

Let's say they come in and they start to ask you, hey, are you guys serving crypto companies?

And you say, well, yes.

And they say well, that's not illegal per se, but we're going to have a lot of questions about that in the next exam that we do of your bank.

We have deep concerns about the risk that this might introduce.

Suddenly, everyone inside the bank is getting the message real loud and clear like ooh, maybe they don't like us doing this.

Now, is it illegal?

No.

But the bank's regulators, if they say jump, you sometimes want to say how high, right?

And this was the kind of extrajudicial pressure that Elizabeth Warren was able to create on banks.

She did it, by the way, in a bunch of other industries too.

Like she got them to stop giving loans to like oil and gas and firearms industry and some things that she is like her own political agenda basically.

So she got kind of her hooks into these banks, had a lot of influence over them.

Suddenly crypto comes along, which is a new system operating outside of that.

And she didn't like it too much.

And so she asked.

My understanding this is kind of what other people in the Congress told me is that she asked Gary Gensler to go hard on crypto and try to really curtail it in the United States.

And that's what he did.

He created a bunch of lawfare, essentially.

We'd go in to meet with him.

We did maybe 30 times.

We met with the SEC after becoming a public company, where they allowed us to become a public company.

And we'd say, hey, we're here.

We'll tell you anything you'd like to know.

Just tell us, what are the rules?

We're here to like, we're trying to build this industry in America.

You tell us the rules, we follow the rules.

That's how it's supposed to work.

And they would say, we're not gonna give you any advice.

Go talk to your lawyer.

And then the next day, like a enforcement action would arrive.

And we'd say, well, how?

What can you show us in the law?

What you think we've done that's wrong?

Like, no, we're not gonna do that.

Like you need to comply, like basically delist all these assets or we're gonna sue you.

And so at a certain point we just said, okay, let's go to the courts and find out.

Who initiated the legal action then were you?

It was actually both.

They created an enforcement action and initiated a lawsuit against us.

We actually sued them proactively because they had violated another part of the law called the Administrative Procedures Act, where they're required actually by law to engage with the industry to promulgate rules, and they had failed to do that.

Wait, how many companies sue their regulator?

Very few.

This actually gets into like one of the big themes of you know, I don't know like me as a CEO, like I want to try to always do the right thing.

And I have a very long term perspective.

Like I'm trying to create an important outcome here in the world, which is around increasing economic freedom in the world.

So, you know, in the short term, I knew this was going to hurt our company.

A lot of public market investors, they just know this company is suing its regulator.

I'll just wait and see.

I'm not going to buy that stock.

You know actually a lot of people I talked to at that time.

They were like, do not sue the SEC, like this is a bad idea.

But I actually talked to a couple other financial services CEOs who had sued the SEC and won.

And so I knew it was possible.

It's a little bit like you remember when SpaceX was trying to get that contract with the government.

NASA.

Yeah.

And they didn't think it was fair how it was awarded and they sued and they won.

Like Palantir had to do something similar.

So you don't want to do these things haphazardly or-

You know, but you do.

There are moments where you have to stand up and sue the regulator or the government, and they'll actually get the right outcome.

Okay.

So when you're deliberating on whether to do this or not.

Yeah.

What's the timeframe?

Is this a couple of days, a few weeks?

Like how fast do you have to make this decision?

Well, I would say that was probably over a period of like three or four months.

We could tell the temperature was rising where they were like, you're about to get sued.

And we...

And we were like, well, what have we done that's wrong?

You haven't proposed any rules that we can actually adhere to.

And we knew the temperature was rising and then we sued them and they sued us.

And yeah, we made a call.

Yeah, the reason I ask is because there's a great story in one of the biographies of Elon, when you just mentioned this.

Yeah.

And in that case it's even crazier because you're almost like suing your customer because Elon wanted money from NASA.

Yeah.

And they wind up – there was all kinds of you know, essentially corruption, where it's just like – I can't remember the amount.

It was $250 million or whatever the case was.

And they gave it to this other guy's company, even though – and essentially to save this guy who used to be either a former astronaut or in like working for NASA.

And it's like, well, his company will go out of business if we don't give him the money.

And Elon's like, this is insane.

Yeah.

That can't be the way we're making decisions.

Yeah.

And so they tell a story where he's sitting there and they're like, what are we going to do, Elon?

He like closes his eyes and he's thinking for a little bit.

He's like, we have to sit in there.

And they wind up, you know, winning.

Founder mode, I guess, you know.

Well, you just said like mission driven.

Like this is what's very fascinating about you, where it's just like well, I have a mission that I'm on.

And so if you're looking at your decisions through that lens, it kind of simplifies like what you're doing.

Yeah.

I have a long-term perspective on it too.

If it's going to be short-term pain for a few years while we're going through this, but it allows the industry to actually be built in the United States and help create more economic freedom, which is the mission of the company, then I'm fine with that.

I feel like personally, I'm well off.

I don't have to work a day of my life.

I'm doing this because I actually want to achieve the outcome at this point.

It wouldn't have helped me achieve the outcome if we'd let this regulator unlawfully kill the whole industry in the United States.

That would have just been a setback from my point of view.

This happened after your republic?

Yeah.

So you accumulated resources.

Your company has a lot more resources.

Yeah.

If this would have occurred before, would you have had the money to fight it?

Probably not.

In fact, a lot of startups did die as a result of that lawfare.

I mean, he didn't just sue us, he sued a whole bunch of crypto companies, and a lot of them folded.

So in many ways he actually did a lot for the economic development of places like the UAE and the Bahamas and places like that, because a lot of the industry moved offshore.

But it was incredibly damaging to America.

I think the total amount we spent on legal and all that was maybe in the 50 to 100 million range as a result of that lawfare.

On that one thing.

Yeah, but the damage to the stock was probably, I don't know, 10, 20 billion, maybe more.

It was a massive downward pressure on the stock for a period of a couple of years.

Oh, and I should mention we won that case.

So we didn't pay a single dollar in fines.

We didn't have to change a single thing about the company.

Actually, the SEC withdrew it under this new administration and several judges actually published opinions saying that the SEC behaved in an arbitrary and capricious manner.

So I have a nice little... being in my office commemorating that, winning our case, suing the SEC.

That's incredible.

One of the things I love most about the conversations I have with Brian Armstrong is how focused he is on making the best possible product he can for his customers.

Obsess over customers is a maxim that is repeated by Jeff Bezos, and you definitely see that with Brian.

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Where did you get this long-term perspective from?

I think it was from trying a bunch of short-term things and then realizing that I started some companies like in college and

I realized that everything is difficult, right?

And it doesn't, even if you're running like a sandwich shop or something, like it's difficult.

Like you have to find people who you know, employees don't show up on time and the food and the vendors and the margin compression because there's like a million other sandwich shops.

Like, And so if you're going to do something, you might as well it's going to take you like a decade or two or three like to really start to have an impact.

You might as well pick something that you care about.

That's like the really big thing.

You know, it always bothers me a little bit when I talk to entrepreneurs and they tell me the thing that they're working on and I'm like okay, what do you really want to do?

Like, well, my big thing is I really want to do this.

In their mind, it's like a little too ambitious.

It's a little too difficult.

They need more capital.

Part of me is thinking like, man, you should just go for that now.

Because you could spend the next two decades of your life working on this thing you're just talking about now.

And you might as well work on the thing that will actually have a major impact if it works.

So are you optimizing for impact?

I think so.

Yeah.

I mean I think early on in my career, Like I was kind of shy and introverted as a kid and I was like a little on the autism spectrum and stuff.

So I think I was just trying.

You keep saying that.

Yeah.

We've talked enough.

You're not autistic to me.

Well, I mask it well.

There's like a whole masking thing.

Let's talk about this.

Yeah.

How do you mask your autism?

Are you just saying you're autistic because it's like... Because trendy and cool now?

No, it's actually like you know.

That's a good way to get a venture.

Check is like to be on the spectrum.

I mean, we're not raising money, but... Introverted for sure, but I'm introverted too.

Yeah.

I hate when people in the comments think I'm autistic because I read all the time.

I'm like, I'm not autistic, man.

I think I'm somewhere on the spectrum.

You know, I've taken some online tests and things like that.

And there are things like where I have difficulty like reading people's faces and emotions sometimes.

And, you know, I kind of can get overstimulated by like loud sounds and lights and, you know.

So there's kind of classic signs like that, but it's not debilitating at all.

And I actually find it to be.

Like it's a strength in the sense that, like I can just endlessly like focus on interesting work, almost

Like for 12 hours a day, I just find it to be – I wouldn't say like effortless.

It depends on what kind of work I'm doing.

Like if I have to just do a bunch of like 12 hours of people management hard conversations, like that's pretty taxing.

But if I'm just – like writing code or reading things on my computer, or just like digesting cool content on the internet?

I can just do that endlessly.

So there is like I wouldn't say you have to be autistic to have that, but there's certain things like that.

I just find it endlessly fascinating.

Well, you definitely have the ability to sit with like a non-consensus opinion for a long period of time.

Yes.

So that's the other thing, which I don't know if this is an autism spectrum thing.

But yeah, I think some people are like a little more concerned with social cohesion or what other people think.

And so there is a part of me that's just like if I see something that's just wrong and not in line with what I want to accomplish long-term around, you know, civilizational progress and these things it's.

I don't care being disliked.

I don't really care that much about being disliked for it.

And I know that it'll piss people off.

So there are a handful of things like this that I've done in Coinbase which I think people consistently remarked to me like wow, that was really unique.

And to me, it didn't seem that unique.

But, like this mission, first blog post I put out where we said the company is going to be apolitical during 2021.

All that madness, or suing your regulator, right.

These are things which most people probably wouldn't do because they're They're afraid of being disliked.

And it's not that I like being disliked.

It actually causes me a fair amount of stress too.

But I don't let that stop me from doing what I think is the right thing.

So I recently reread that blog post.

Can you remember the context of what you were thinking when you were writing it?

Because you look back now and a lot of people are like, of course, like you would just focus on the mission of the company.

What is the point of having a company if you don't have a mission?

Right.

You read it today, it's like fairly innocuous.

Right.

But back then, I remember the response.

People were going crazy.

Yeah, it's really funny.

If you look at it now, it's like, what's the big deal?

I mean, it's kind of a boring blog post in some ways, right?

But yeah, at that time I feel like there was this mass hysteria or something that had taken over the country.

I mean, the George Floyd thing had happened.

COVID had happened.

So people were isolated.

They weren't getting in person as much with folks and feeling a sense of hey, we're all on the same team.

We trust each other.

And You know increasingly at these town halls that we would host as a company, usually people would ask questions about like our products and our competitors and regulators.

And then we increasingly would be getting these questions about social issues happening in the world.

In this case like police brutality with George Floyd, but all kinds of things like, you know, Middle East or whatever gun control you know.

And it became almost like I realized there was this element within the company that really wanted to get in front of the company with a microphone and like see if they could make the executive team squirm somehow.

And we had this culture of this open mic thing.

But I realized that later we actually don't really do that.

We just have people pre-submit questions.

And if we think we take hard questions, but if they're like just way off topic or someone's pet issue, we just don't entertain that.

We don't allow one person to kind of derail 3,000 other people.

So it was in that context that the company was going through this and somebody at a town hall asked the question like are we going to support Black Lives Matter at Coinbase?

I basically said I don't know enough about it, but I'll look into it, like move on to the next question.

And they kind of held the mic and they said, like, that's not good enough.

I need to know if we at this company are going to stand for this or not.

And I said...

I don't know, I haven't looked into it, right?

And this erupted in Slack and basically 300 employees did a walkout in protest.

If you remember at this time, like every company in America was posting pro BLM statements.

So I never had a walkout of employees at the company before.

I didn't even know what that meant.

They all just kind of closed their laptop in a remote environment, I guess.

Okay, so wait, are these, this is not in person?

This was all remote during COVID, yeah.

Okay, so the walkout is close my laptop.

Yeah, but we were like- Go from my bedroom to my living room now.

Yeah, yeah.

And I was like, okay, this is weird.

I mean, as a CEO, I'd never had, I felt like I had the confidence of the company or whatever.

And now people are saying they don't, they refuse to work at this company based on my comment.

And I found this very confusing, actually, maybe a little of that autism spectrum.

I was like, I'm confused.

Like this company has nothing to do with police brutality or anything.

You know what is going on here.

And We got in the room as an executive team and I asked them a few questions like hey, people are very sensitive in this moment.

They need to feel reassured about where their leaders stand.

I was like, what does BLM even stand for?

We went and looked into that.

Later, I found out, by the way, that they support defunding the police and all these other things.

It was not a very simple answer.

And so, you know, I didn't really know what to do.

So after about 48 hours or so, we put out a statement and we said okay, I guess we support equality for all people and all these things.

And people came back to work.

But I felt something was deeply wrong.

I felt like I had compromised something about myself and I didn't understand what was happening.

And so I started to go talk to a bunch of employees in the company and read a bunch of these books, like Jonathan Haidt's book and others.

Which is the Jonathan Haidt book?

Something of the American Mind, The Coddling of the American Mind, I think.

He basically talks about how in these college campuses there's, like these, training activists in these college campuses and it's now spilling into the workforce.

And they feel that their job is not to like join a company and advance its mission.

They felt like their job was to join a company and hold it, hold truth to power and hold it to account for these broader societal issues and actually reform the company as an activist.

I essentially started drafting this blog post and I said, we're not going to do that here.

We're not going to be a company that just tries to jump into whatever the current hot social issue is and make a bunch of feel good statements without actually doing anything.

We already have an important mission, which is increasing economic freedom.

And it takes decades of work to try to make an impact on something that big.

So let's stick to the thing that we think is important in the world.

Outside of work, people can do whatever they want.

You can go protest.

You can be left or right or whatever.

But just inside the workplace, we're not going to be political.

Unless it has to do with our mission crypto and economic freedom then we'll be very political and engaging for litigation and things like that.

So I knew it was going to piss some people off.

And I actually some people when they read the draft post before I sent it, they said like, do not post this.

They like begged me not to post it.

People inside your company or you sent it to like other founders?

Inside the company.

Okay.

Yeah.

Did you send it to anybody outside Coinbase?

I might've sent it to the board or something like that.

I'm not sure if I sent it to anybody out.

I think I might've told a few of my friends what I was up to, but they didn't read the post.

Okay.

Yeah.

And yeah.

And so, I decided to do it anyway, and I knew people were going to upset.

We put out this, we said, anybody who's not okay with this new direction.

I had failed to create alignment in the company about where we were going.

I was walking on eggshells around whenever people had asked me this.

People were confused about where we stood.

It felt like 50 of the company was against this, but I think in reality it was a very vocal 1 minority and there was other people who were sympathetic to that cause.

Anyway, we put out the post and I said anybody who's not aligned with this new direction, we'll give you a good severance package.

You can fill out this form and accept it by Friday or something.

And 5% of the company took the exit package.

We were having bets beforehand.

We didn't know.

We thought maybe 50% of the company would resign or something.

It felt like that was- What would have happened at that time if 50% resigned?

We would have built it all back.

And this is actually a very important point because-

I think that there's a big difference between like a founder and a presider of a company, right?

Like I know that I could build it back because I started it when it was just me on a laptop, right?

And I was there when it was 10 people and a hundred people and a thousand people.

And if we need to go from 2000 to 1000, that's not a big deal to me.

You know, I could go back to being on my laptop again if I had to, right?

And there's actually there's this great Lee Kuan Yew speech that he gave.

He's the founder of Singapore, you know, And I guess he was dealing with a strike that was happening, I think, from the air traffic controllers or the airline or something like that.

But there's this great speech.

If you Google Lee Kuan Yew, iron in veins, you know which one I'm talking about?

And he, basically he says like in this speech it kind of gives me chills every time where he's like.

You know, I sat across the table from them and they were threatening to like shut down the airline and everything.

And he said, get back to work.

And-

You know, and like, I will not allow you to bring this country down.

And if you don't do it, I'm prepared to rebuild it all from scratch again.

And he said anyone who rules Singapore, you know, has to look at me and know that I have iron in my veins.

Like, I will rebuild it all from scratch, right?

And so I was watching like videos like that.

And I was like, this is what I need to do as a leader.

Like, it was very inspiring.

So yeah.

There are moments like that, that you have to stand up and say, we're going in this direction.

And if you're not on board with it, it's okay, you can leave.

But we're going this way, that's leadership.

There's two interesting things that popped out in what you just said.

I want to go to the long-term.

Again, you have this long-term orientation.

You mentioned multiple times in the blog post.

You're like we're trying to change literally change the world, and that's going to take multiple decades.

I want to go to that in one second.

But I like how you said it.

I was confused.

Like, what is going on here?

So your first instinct when you're confused, you start reading books, you start talking to people.

What do you do to try to essentially alleviate the confusion?

Because you're like, oh, I don't know what's going on.

I'm going to read Jonathan Haidt's part, for example.

Yeah, all the above.

I mean, I read books and books are amazing.

I think sometimes it can take reading, like you know.

As you know, it's like read for eight hours to get to that one part.

Oh, that's the key insight, you know?

So actually calling people, I think it's faster if you have access to them, especially.

Earlier in my career, I didn't have access, but now I feel like I can get access to more people.

And it's often just a shortcut.

Like, if you know the right person to call, who's been thinking about that or working on that for 10 years, they can explain to you in 30 seconds what you need.

Oh my gosh.

Like that's the connection, of course.

Like, so yeah, that's exactly what I do.

And I just am following my instinct a lot of the time.

Like a lot of, a lot of your job as CEO is, you know your day can just get infinitely scheduled and you're just like trying to hire the right people and go talk to investors and build, you know, go to product reviews and stuff.

But once in a while, you just need to follow your nose.

If you're like something's bothering me.

You know it's like I bet you're kind of always ingesting information.

And once in a while, you're just like, something feels really off over here.

Like this team doesn't, this team is rudderless, like going in no direction.

Or I don't trust what's going on with over here, like, you know, in this policy thing.

And you can just go digging, you know, and occasionally you find things and you can add a lot of value.

When you say follow your nose, is this intuition?

Yeah, it's intuition, it's pattern matching.

I mean.

A lot of times you're just absorbing information, like in documents, people are writing up and Slack channels and reports and like a lot of information is just being ingested.

And once in a while you start to you're like that's the third time I've heard something weird about that.

Like I need to go dig into it.

I was actually surprised.

One of my favorite conversations I've had so far for the show was with Toby Luque.

Yeah.

Me and you talked about him at lunch.

And like I always say, he's like your favorite founder's favorite founder.

Like the amount of people that really admire the way he thinks and the way he's building his company.

And you would think like this German engineer, you know, is going to be all data driven.

And like he just talked about like... visualization and like- Affirmations.

Affirmations.

Yeah, exactly.

All intuition.

It was actually surprising.

It's one of the most fascinating things about this conversation.

So explain the difference you thought about when you were starting the companies before Coinbase.

Because you had this long-term orientation almost from the beginning of Coinbase, but you lacked that in the other businesses that you were starting before that.

It was really just by trying enough projects that either didn't work at all or were base hits that I realized everything was difficult.

My mentality in college and coming out of college, I knew that I wanted to be an entrepreneur.

I was trying different ideas.

My view was okay, if I can get something to be paying me I don't know 100000 a year passively, That would be incredible, because I could somehow free up all my time, and then I don't know what.

I'd be able to, be like passive income wealthy, and I could then go build something else or I don't know.

I didn't really have a plan after that.

What year was this?

Oh, I mean, this was like I graduated in 2005.

Were you reading Tim Ferriss?

Yeah, so Tim Ferriss had a big thing on this, yes.

There was the four hour work week, like that whole thing.

I was kind of thinking about it even before that, but the four hour work week was definitely that.

The first company I really started in college was this tutoring company, because I had been tutoring high school kids while I was in college to make extra money.

And working at the library, you got paid, I forget, it was like $7 or $8 an hour.

But if you were tutoring high school kids, you could make like $60 an hour.

I was like, this is crazy.

So I was tutoring kids for a while.

And then...

And then I realized I could match my other college students with other high school kids.

And so I built like this simple web app which was like a tutor finding tutor matching service, called University Tutor.

And I was basically building this in college with like another friend of mine, a roommate.

I didn't think about it from first principles.

I wasn't particularly passionate about tutoring or education.

I was just trying to make some passive income essentially and scale it, right?

And so it would have never occurred to me at that moment to I didn't have the wherewithal to zoom out and say you know what.

We need to become an interplanetary species.

I should make rockets or, you know, or like, I was like, what are you talking about?

Like I've never.

You know, I'm just trying to make like go from 60 an hour to like have 10 of my friends be hired by their.

You know, get jobs too.

So, you know, I went through that process.

The tutoring company has its own little story.

And then you know, I tried a couple of other ideas like that after college too.

Like I had a couple of like.

I got like these rental houses in Houston and I was like refurbishing them.

And I was trying to do like a little real estate investment thing.

I was doing a bunch of stuff.

And at some point, I actually, I remember I read this book by Seth Godin called The Dip.

I don't know if you've ever seen that book.

Yeah, I read it a long time ago.

Yeah, it's actually like pretty simple book.

I don't know if it would do anything for me today, but at the time when I read it, It was a pretty powerful idea.

And he basically was just saying you know, there's a big dip between being a beginner and like the top of your field where you make you know the top 1.

And like most people quit in the middle because it's not fun after you're a beginner.

There's just like 10,000 hours and all these kinds of things.

And I remember thinking, do I really want to be doing real estate in like 10, 20 years?

I was like, no.

Do I care enough about education?

Or, you know, I was like, I don't think that either.

So I literally had like a piece of paper I was writing.

What are the things I am passionate enough about where I would do it for the next 20 years, even if I saw a little or no success?

And the only thing I could think of was like, tech entrepreneurship.

That was like the only thing I could really think of.

And so that was a very clarifying decision where I decided all right, I need to move to Silicon Valley because that's where tech entrepreneurship happens.

I need to shut down all the other stuff I'm doing because those are just little short-term games.

I sold off to all these little rental properties.

You know, within a few years of that decision, moving to Silicon Valley, Coinbase had been founded.

And I think within seven years of that decision, Coinbase had a billion dollar valuation.

It was like a huge direction and change in my life.

I was just like, I know what the big thing is long term, and I'm going to just go all in on it.

And all the decisions led to that.

At the time you started Coinbase, did you think, if it succeeds, this is something I'm going to dedicate a few decades of my life to doing?

Even at that point,

I remember I did think that yeah, because I tried a couple of these other ideas that were kind of, they were difficult and I wasn't actually passionate about it.

And so a lot of entrepreneurship.

You're just like moving from one setback to the next with enthusiasm whatever.

There's that Winston Churchill quote.

So I was like, okay, if I'm, I realized how hard it was to do those businesses.

So I was like the next thing I try, I need to make sure it's something that I'm really into for a lifetime, right?

And I had been reading a lot of books like Milton Friedman about economics and like Ayn Rand stuff.

And I was like, okay, I was getting kind of into these like free market, like libertarian ideas.

And I was also living in Argentina for a year.

That was a whole piece of the story where I got to see like a hyperinflation country.

Why did you go to Argentina?

Women?

No.

No, sadly, no.

But it was, I needed some adventure.

I didn't know what I wanted to do with my life.

And so I just, I had never traveled alone.

And so I basically just went abroad and like tried to put myself outside my comfort zone.

I had never been in the military.

I'd never traveled, I'd never like traveled abroad by myself.

I was kind of just reading a bunch of books and like I mean I need to travel the world and like see, find what I'm trying to do with my life.

You went to Buenos Aires?

Yeah.

It's beautiful.

Argentina is a beautiful country.

Yeah.

Well, I learned from an economics point of view.

Not like that.

I meant the physical beauty.

Well, so it ties together because my understanding is actually around the year 1900 or so, like more than 100 years ago.

I think 1908 it was like one of the top 10 economies in the whole world.

It was called the Paris of South America.

Yeah.

It was like the first Latin American country that had a train station.

You can see it in these historic buildings.

They had like massive wealth, right, from- beef and copper and all these things.

Then, over a period of 100 years of bad economic policy, of essentially socialist policies, of the government stealing wealth from the people while claiming to help them, it's now the 100th richest economy in the world.

It went from top 10 to 100th.

I was down there reading Ayn Rand, Milton Friedman and seeing how hyperinflation had decimated this entire country and everyone was pessimistic about the future.

These once grand government buildings were just in these like states of decay, you know, with like cracks and ivy and graffiti on it and stuff.

And you know, this was like around that moment where I was like okay, the next thing I do, it needs to be something I'm passionate about for the long term.

And within a year or two of that, I read the Bitcoin white paper.

That captivated my attention.

And then I think this is around, so Bitcoin white paper published end of 2008.

Yeah.

December 2010.

I had just come back from Argentina.

I was in the Bay Area deciding I wanted to be in tech entrepreneurship.

I read the Bitcoin white paper December 2010.

I'd gotten a job at Airbnb actually and I was seeing how money movement was happening with them all in these different countries.

That's when I started working on the prototype for Coinbase, nights and weekends.

Wait, how did they move money to all these different countries back then then? legacy payment rails.

So in the US and Europe, it was a little simpler.

You could use bank transfers, and so they were accepting payments in and then they had to pay out to the host.

In many of the countries where they operated, like in Latin America, there would be some local cash pickup service, Kind of like a Western Union.

But it was different ones in different countries.

And they typically had very high fees, like 7% to 12%.

I remember we were trying to send payouts into I think it was ecuador or um one of these countries, and we were reading that it's like there's like a little oligopoly of like two or two companies that do this and that you know in the region, and we were like how much money shows up on the other side, like what are your fees?

And then we were reading through their documentation.

We're like we have no idea how it's basically like a borderline corrupt thing and We basically just decided to send 100 and we found somebody there.

How much money showed up on the other side?

Just to give us some rough sense so we could tell the customer how much their payout was going to be.

I mean, it gave me such a visceral sense of how broken the global financial system is.

It's like each country has its own little proprietary set of oligopolies.

And imagine if the internet worked like this, right?

It's like, oh, I want to load a web page from... you know, another country.

And they're like you pay a high exchange fee and it comes in like a different language you know, and you have to wait seven days or whatever.

I realized, and due to a couple of these experiences, like the Argentina experience with hyperinflation, the Airbnb experience, and reading some of these books that, like the world, would benefit from a global financial system that was, you know fast cheap permissionless, decentralized.

So there was no small group of people who could who could uh, corrupt or like, put their fingers on the dials to manipulate it.

And so that was what I was thinking about as I read the Bitcoin white paper for the first time.

Okay, so you're building your personal philosophy about economics and what's important there.

You know that you want to dedicate yourself to tech entrepreneurship as far as what your career is, because you're going to be passionate about that.

You want to do something for the long term.

And then you're also seeing this real life problem of trying to send money into all these disparate economies and countries.

Yes.

And then you start working on Coinbase nights and weekends?

Yeah, great summary, by the way.

Yeah, so- I can't do that for a living.

Yeah, so this is where a little bit of that hustle and drive came in.

Because I was working long hours at Airbnb.

They were like rocket ship company.

I was learning a lot, really amazing team.

But I really wanted to build something new for my next company.

I still wanted to be an entrepreneur.

And so I'd work till like 7 p.m. at Airbnb, come home, eat a little dinner.

And then- from like 830 to midnight, or something like five days a week I would work on my startup.

And you always have to be very careful.

You have to do it on your own separate laptop.

Don't do it on company time or company property.

Make sure it's separate.

But I use my own laptop.

And sometimes on Sundays, I'd work as well.

I'd sort of take one day off.

But I was just grinding and I was like, okay, well, I don't, I didn't know where to start.

So you kind of just have to start with anything, right?

So first I went and talked to a friend of mine I went to college with.

We built this little Android app for Bitcoin, a Bitcoin wallet.

I realized once we shipped that we had done it the wrong way.

I tried to, I tried to recruit him to like leave Google and be co-found with me.

He wasn't ready to do that.

So I started working on another prototype that was more of a cloud-based Bitcoin wallet, which eventually became Coinbase.

And I had to reimplement like a whole Bitcoin node in Ruby just to try to get it to hook up to my database, you know, and all these things.

So I was just doing this like nights and weekends, while occasionally trying to find a co-founder, you know, and going on these co-founder dates.

Why did you think you needed a co-founder?

Well, the main reason was that I had read a lot of Paul Graham essays from Y Combinator.

And, you know, I really wanted to get accepted into Y Combinator.

It was like the top incubator.

It still is in Silicon Valley.

And Paul had these great essays.

And one of them had talked about how you know if you look at Hewlett and Packard and you know Larry and Sergei and –.

You know there are exceptions, but more often than not, like great founders, building a company is just so difficult.

It helps to have people with some complimentary skill sets.

So just to improve my chances of like getting into Y Combinator, if nothing else and the company eventually succeeding, I was trying to find the right person.

Yeah, it's interesting because I feel like there's always.

Even if you have co-founders, it's like one, it's actually one founder.

Like you can start out with two or three or four.

And I know YC is like, you need a co-founder.

And like, that's like something that's repeated.

But if you read the history of entrepreneurship it's like yo, we start out with three or four or five.

There's always one.

Like there's one person that's going, that's actually driving the company.

Well, you know, long, like it's like Wozniak and Jobs, right?

Like Jobs, was clearly the one that had more impact over a long period of time, but there probably wouldn't have been an Apple without Woz in the early days.

Yeah.

You know, you never know exactly.

And you know, like I will say in my case, like I tried to find a co-founder for about like a year and a half and failed.

And so eventually- got the app live and got into Y Combinator and there's a whole story there.

Did you get into Y Combinator as a solo founder?

So this is another interesting story, but I actually applied with this guy, Ben Reeve, who had created blockchaininfo, which is now blockchaincom.

And we sort of, he had never heard of Y Combinator, but I convinced him to fly from the UK.

We met, had a coffee, and then we went into the interview, which by the way is a bad idea.

You should really co-found with people you've known for a long time.

So anyway, that we got accepted somehow under that premise.

I don't think we mentioned about probably that we didn't know each other that long or didn't come up in the interview or something.

We didn't hide anything, but yeah.

Anyway, it became clear within like three months that it was not going to work.

And so with the help of YC, I kind of went, you know, I had a hard conversation with him about that.

And I went through the program solo.

Anyway, long story short, we went through Y Combinator, raised the seed round at the end of it.

I was lucky enough to have Fred Ursham reach out to me, and he became the first person who I really started working with on it, unofficially.

And then it just started going really well, very complimentary skill sets.

And I asked him to co-found.

And so he became the co-founder of Coinbase.

And I actually don't think Coinbase would have succeeded without Fred.

Like.

If you look at the subsequent three, four or five years, there was a lot of like near death experiences and he was just an absolute killer.

And so it was that pairing that allowed us to really get to product market fit and like off the launch pad into orbit, if you will.

Brad Jacobs has started eight separate billion dollar companies.

He said, I've come to know a lot of extremely successful people in my life and they all have one thing in common

They think differently than most people.

All of them to a person have rearranged their brains to prevail at achieving big goals in turbulent environments where conventional thinking often fails.

What Brad noticed is that great business leaders are pattern spotters, but you can't spot patterns if you can't see all of your data.

Most businesses only use 20% of their data.

Why?

Because 80% of customer intelligence is invisible.

It's hidden in emails, transcripts and conversations.

That's where HubSpot comes in.

With HubSpot, all of your data comes together so you can see the patterns that matter.

This is important because when you know more, you grow more.

And that is a pattern that never fails.

There were some funny stories from the early days of Coinbase I've heard.

Like Fred identified that you guys were losing money on every single Bitcoin transaction.

Yes, that is true.

How did that happen?

I mean, the simple version of it is that I was a computer science major.

And I studied economics and computer science.

Fred studied the same thing.

But he had gone into work in finance after college.

He went to go work at Goldman Sachs as an FX trader.

And I was working as a software engineer slash entrepreneur, failing entrepreneur.

So I had more of like that engineering brain.

He had more like that finance trader brain.

And so when he came in and started to analyze all of the flow of funds on every trade, he was able to map that out and, due to, like certain time, risks and things, he actually was correct that he mapped that out.

And it was just a set of conditions which I was not as familiar with.

So that was a great example of just him adding value in the first probably three weeks we worked together.

But that wasn't like, it wasn't like a near-death experience.

No, that one wasn't near-death.

It was just getting the right business model and fee structure.

What was an example of a near-death experience?

Well, okay, so an example of a near-death experience was...

I think we had raised maybe the Series A or something like that.

Yeah.

And we had found Product Market Fit.

So there were a lot of people using the site every day.

And, you know, we were having this huge backlog of customer support inquiries.

Like it would be like every night from like 9 p.m. to midnight, we would just try to answer support queries because we didn't have a customer support team.

And, well, we were slowly trying to build it, I should say.

Anyway, so we had like 1,000, 2,000, 5,000, 10,000 backlog of these customer support tickets.

And people were getting very angry about all of this.

Because you couldn't respond?

Yeah.

I was one of those people.

Okay.

You were early on Coinbase?

Yeah.

Okay.

Well, apologies for the lack of customer support.

To the point where I was like looking up, like I had a bunch of Bitcoin on there.

It was like there was an issue.

And I was like, what is the address?

Like I'm going to have to fly to San Francisco because these people won't respond to my email.

Yeah.

Well, this is exactly what happened is people started showing up at the office.

And we didn't really even have the address published, but there was a photo of the office.

And you could see in the background a couple of these buildings.

And some people found that and they started showing up at the office at all these odd hours.

Oh, and back there, they had to be weirdos.

Like the people that were into crypto back then were not your normal people, i don't know.

I mean, it was once in a while fred would actually go answer the door, holding like a golf club, and you know like usually it was somebody who was like man, why didn't my crypto hit my wall?

And then we were like sometimes we'd write people like a physical check and like okay, you need to leave the office.

Anyway, that was the first time I'd really experienced having tens of thousands of people angry at you at the same time.

Because back then, it was the only place where you could buy Bitcoin with a credit card, right?

Like you could use- Yeah, or a bank transfer.

Or a bank transfer, right?

Once we managed to get that bank partnership set up and an easy way to buy, sell in the US, I mean we had instant product market fit and it was just like trying to keep up with the demand.

Were you the first crypto company to do that?

In the US?

Yes.

Yeah.

Yeah, exactly.

How did you get the bank partnership?

So that's its own whole story.

I mean, by the way, there was other near-death experiences around cyber events and things like that we can talk about if you want.

But on the bank side, yeah.

So okay, there's another interesting story where we okay believe it or not, the first version of the Coinbase app.

Actually, you couldn't buy or sell Bitcoin.

I thought we were making a wallet for payments on the internet.

And so you could store Bitcoin, you could make Bitcoin payments.

And this prototype went out and I remember like a couple hundred people signed up off of Reddit or something like that.

But the app was not retaining users, right?

And what they teach you in Y Combinator is like go talk to customers, give feedback and then build the product.

And talk to customers and build the product and just do that on repeat.

And don't get distracted by any other bullshit like going to conferences or whatever.

So I remember I emailed like three of these people had signed up and I was like hey, I built this app.

Can I get on the phone with you?

And in the first few conversations, I was like, I noticed you didn't come back to the app.

And the guy was like yeah, I mean, the app was pretty cool, but like I just don't have any Bitcoin.

And I remember something kind of clicked in my head and I was like well, if there was like a buy button in the app, would you have bought it here?

And it sounds like ridiculous in hindsight, but at the time this was like market research, right?

And he's like, yeah, probably.

And so I was like, okay, we got to make a simple way for people to just buy it here.

It's not like you go to a separate exchange and then put it in your wallet for actually daily utility or something.

And So then I was like okay, we've got to make it possible to get bank transfers hooked up, kind of like PayPal or debit cards.

And I remember calling like these different banks and saying hey, I want to get integrated into the bank network in the ACH.

It's called ACH in the US.

And these banks were either like, what the heck are you talking about?

Like, I've never heard of this thing.

It sounds like a scam.

Or some of them who had heard about Bitcoin, I remember, like, hung up on me.

You know, they were like, they're like, we do not work with Bitcoin companies.

Like, bam, slamming the phone down, right?

And...

So I went to the partners at Y Combinator.

Actually, one of them was like Sam Altman at the time.

He was running Y Combinator and like Gary Tan was there.

He was helping me and Paul Buchheit and these various folks.

And I remember they said, well, why don't you go talk to Silicon Valley Bank?

Silicon Valley Bank opens bank accounts for lots of Y Combinator companies.

We have a good relationship there.

So they kind of warmly introduced me to the right person.

And they were kind of like these guys are probably crazy, but we like to help Y Combinator, so let's see what we can do.

And they ran it through their compliance team and their compliance team came back and said we think you might be what's called a money transmitter, which means you need to have a license in the United States.

And I remember getting on the phone with them and they were like well, we can't open this account for you unless you can prove to us that you're not a money transmitter or you have to get a money transmission license.

And the money transmission license I researched was like it was gonna cost five or 10 million and take about three or four years.

And I'd only raised about 600K right now.

So I was like, that's not good.

But they also said well, if you have some legal argument that you're not a money transmitter, Maybe we would allow you to get started.

And I remember going to a couple of law firms and one of them agreed.

He's like, there are some arguments that you could make that you're not a money transmitter.

It's a little bit of a gray area.

And he was like I'll write you a legal opinion saying, subject to the following terms, that you may not be a money transmitter, but it's going to cost 30000 for this like five page piece of paper.

And I thought at the time, I thought this was crazy.

We'd raised like $600,000.

I was like $30,000 for a piece of paper.

But I was talking with my advisors at Y Combinator and they were like well, if this allows you to get the bank account open and you can start to test your product idea like, do it?

So I paid this guy the 30 grand.

We got the account open.

I wrote all the code myself to do like ACH integrations and you have to FTP these files to the bank.

And it's like this kind of antiquated system.

And it launched and it had product market fit.

And it just was.

Then it was like, instead of pushing a boulder uphill every day, it was like the boulder was rolling down the hill and you're just chasing it as fast as you could.

So you could buy Bitcoin through ACH, through a bank transfer?

Yeah.

Could you use credit cards back then or no?

No, I think debit card came a year or two after that.

Yeah.

Okay.

So even that with just the bank transfer.

Yeah.

Flooded with customers.

Yeah, and started to get some very anxious calls from the bank at certain points too because, as they were like, you guys have raised 600000.

And they're like every day.

There's like 550000 because we debit these customer accounts to get the money, but we had to pre-buy the Bitcoin.

And so we had this cashflow issue where we were basically using our entire balance every day just to service the current demand.

And I remember the guy from the bank called me kind of frantic and he's like If you just have one error like your whole, you're insolvent.

And by the way, they might be on the hook for it too.

We might be like negative a million dollars and just be insolvent.

And then the bank's on the hook for it.

And I remember the guy told me on the phone he's like you need to go raise money, like right now, and get more money in your account.

Or like, we're not going to be able to continue to serve you on this ACH network transfers.

Like you were in this tiny little sandbox, but now you're suddenly growing like a weed.

And...

And I remember we took this graph of like the daily buys.

We didn't even have a pitch deck or anything.

And we just went out in like a week, raised the next round and got like 25 million deposited in the account.

With a graph.

Yeah.

Because ordinarily, I wouldn't recommend that.

But we were sleep deprived and depressed.

It was, that's all we had time to do.

So we just went and we yeah, we showed them a few pieces of data and we're like this isn't up in the right graph of demand.

And the bank's going to close our account in like two weeks if we don't get some.

That 25 million was from A16 and Ribbit?

The Series A was from Union Square Ventures and Ribbit.

Okay.

Yeah.

And then A16Z was the B. Okay.

Yeah.

So who was doing the graph then?

Was it Union Square and Ribbit?

That was, that was, yeah.

Okay.

Union Square Ventures and Ribbit.

Was it Mickey?

Yeah.

Yeah, I spent some time with him.

I like him a lot.

He's great.

Yep.

That sounds like something he would do.

Yeah.

Well, he was a Bitcoin believer for a long time before that.

Because he came, he spent the first 36 or 37 years of his life living in South America.

Yep.

Venezuela.

Yeah, exactly.

The people who had seen hyperinflation countries kind of got it right away.

The people who had only spent time in the United States were like why would anyone use a new kind of money?

So, from your perspective as a founder, you thought your product at that point was a wallet and an exchange to buy Bitcoin.

Yeah.

And how long did you think that was going to be the totality of the business?

Were you already thinking about product extension back then or no?

First, I knew there was a lot of ways to die along the way.

So I was just trying to get the simple thing working.

I mean, we had hackers trying to break into our systems.

We had engineers quitting because it was just overwhelming and there was too much stuff.

They were getting paged in the middle of the night like three times every night trying to keep the website up.

These banks might just turn us off and we go out.

So there was all kinds of just, I was just trying to survive like the next few months often.

In the back of my mind.

I knew that if we could get this thing to scale just on the first product, there's all kinds of things that this could disrupt.

I mean, that's what I got excited about when I first read the Bitcoin white paper.

It was like this could be a new financial system for the world that's global and fair decentralized, more free market oriented.

Anybody with a cell phone could have access to good financial services, participate in a global economy.

The government couldn't erode all their wealth via inflation like what happened in Argentina.

I knew that there was high potential for this eventually, but there wasn't too much time to think about that.

There was a lot of sleep deprivation and long hours and just trying to survive to the next three months.

And how long did that period last?

Was this a couple of years?

Yeah.

I mean, I'd say like four or five years in we were at a place where I felt like I could take a week off and the place wouldn't blow up or something.

Who's influencing your thinking in terms of like, the kind of company that you want to build and the way you want to build it back then?

There was a book called PayPal Wars, which talked about the early days of PayPal.

And it's actually pretty remarkable.

You go back and look at what Peter Thiel and Elon Max Levchin all these guys were doing.

David Sachs, they actually had many similar ideas to Bitcoin.

They were trying to create a decentralized form of money that could be permissionless, global on the internet.

Because of the history of the company and how it got acquired by eBay and a lot of the people left, it ended up being more just like a checkout alternative with credit cards and stuff.

But actually having worked at Airbnb, that actually gave me a good picture into what was possible as well.

In college, I went to school at Rice University in Houston, amazing school, I loved it.

But it didn't really have like a startup environment.

It wasn't like Stanford or something.

And so I had never really seen a successful startup from the inside.

I had tried doing my own startup, which didn't go super well.

And inside Airbnb, it was like some magic was happening.

Like they'd caught lightning in a bottle and thing was growing like wildfire.

The way that they hired people and had this really high bar for excellence and design, the way they did decision-making like a lot of things I got to see working there.

And then I kind of said, okay, before in my mind, I had it kind of put on a pedestal.

I was like, wow, these are like some crazy geniuses that are doing all this kind of stuff.

And there's something amazing about working with getting in the room just so you can see how people work.

And it doesn't mean that they're not geniuses.

I think those guys are brilliant.

It means like I got to see it and it demystified it and it made it feel possible that I could try to do something a little bit similar, right?

And So there's a couple of companies like that.

I mean nowadays, I would say, you know, certainly like the level of ambition, like that Elon has, and these things are very inspiring.

I've tried to take bits and like parts from Google, Amazon.

I've sort of been a student of lots of these companies and tried to take the best.

Anything from history?

Yeah.

I mean, I really like the Wright brothers.

They're cool.

Have you ever done an episode on it?

Yeah, episode 228.

You remember that?

Wow, okay.

The book by David McCullough.

Yeah, I think that's the one I read too.

It's an incredible biography.

Incredible, yeah.

I love these kind of just like big problems like that, that humanity.

You know that it's kind of crazy, but it's possible.

And someone's going to do it, maybe in the next hundred years.

And there's a few things like that.

Yeah.

We can talk about that like in the biotech space, you know, fusion energy, strong AI.

The Wright brothers is crazy because that was like a centuries-old problem.

Yeah.

Like humans, have been trying to figure out how to fly for centuries before these two brothers in Dayton Ohio, if I remember correctly, that essentially saw a centuries-old problem with the modest profits of a bicycle shop.

And what was fascinating about them is, like most of the I mean, they had a ton of competitors that had more credentials, more financial backing.

And I think in David McCullough's book, if I remember correctly, like they solved human powered flight with like 1500.

Yeah.

It was some really tiny amount of money.

And there was people funded with like 200x as much money.

But yeah, I mean, I get very passionate about like going after.

What are the big ideas like that that people could go after?

And I think it's actually worth everybody writing some of those down periodically and then see which one grabs you and you think you have something unique to contribute and just like go for it.

Those are the big exciting ideas.

So going back to where we were in the story, you're like, okay, I just need to not die.

I have something working and if I just don't die I can figure out other products or a way to grow the business in the future.

Were you thinking of any other specific way about, like, I want to build a company this way?

Well, there was a few things I was thinking about.

One was articulating a mission that could be bigger, writing down the values of the company which we can talk about.

Actually, we didn't do this maybe until we were a couple hundred people, because this all happened organically in the beginning.

It was just who we were hiring, and the culture sort of formed organically.

But after we got a little bigger, we started to think about, all right, let's formalize it.

I wasn't going to be able to be in every single interview indefinitely.

So, okay, the values, the mission.

When did you arrive at the mission?

I don't remember the exact year, but it was at least a few years in.

We started to really think about it and you know, For me it was not just like getting people to use crypto or something.

It was like, well, why do we want that?

And it was because it was enabling everybody to own their own wealth in a way that couldn't be taken from them.

Go try to attempt more ambitious things in life.

It was kind of like a foundation, basic property rights is what they'd call it in economics, right?

And if you had sound money, basic property rights, low friction to try new things in the world that might benefit people and actually be able to keep the upside of it, you'd have more people trying attempting this.

That very much appealed to me.

We sort of take this for granted in the United States that usually the money is just not going to get taken out of your bank account or something like that.

But in many places of the world, that's not true.

There's people where the government will actually do seizures.

Cyprus actually did this recently in the past, where they took a bunch of money out of everyone's bank accounts to cover debt.

There's refugees that have to flee borders in various times in history where all their wealth gets confiscated.

There is so much bureaucracy and corruption in places like Argentina to even start a company.

It's a huge black market.

By the way, people, they can't get access to loans or anything like that.

One of the major ways people build wealth in the United States is you buy a home, you get a mortgage.

Only wealthy people can really buy real estate in Argentina, because you can't get a mortgage and you have to pay cash.

There's all kinds of ways that this is just pernicious and it decelerates progress, essentially.

So I was trying to think of a pithy way to articulate that.

And I wrote down this increased economic freedom in the world mission.

And it's a little wonky.

Sometimes people don't know what exactly it means and they have to go read about it.

But it does encompass what we're trying to do.

And I think crypto is the best technology to increase economic freedom.

How were you recruiting talent back then?

And were you sitting in on every single interview?

Yeah.

So I mean the very early days.

It was just like me cold, like going to meetups and trying to get anybody interested and come and interview.

It was like cold messaging people off LinkedIn.

It was reaching out to people who I had worked with in various contexts.

Why did it have to be outbound at that point?

Well, first of all, crypto was like a very niche thing.

Like we were not a hot company at Y Combinator.

We went to the demo day that they do where we raised the 600K seed round.

But there was lots of companies that raised like multimillion dollar rounds and beyond.

Like we were kind of middle of the pack somewhere, maybe a little below in terms of how hot the company was.

So the only people we managed to actually convince to invest or to join the company were people who had already gotten excited about crypto for some reason.

And then they met us and they're like, okay, this is semi-legit at least.

Like they've gone through Y Combinator.

They have this product that's working.

They've had some early investors like Union Square Ventures.

And so we got some of these, like the first five or 10 people who joined were like crypto zealots who just thought we might be a good company to bet on.

As the company got bigger, you know, we hired recruiting teams and the whole thing.

We were competing with big tech in San Francisco, which was, you know, during the zero interest rate phenomenon.

It was like fiercely competitive.

We eventually opened other offices, hired some remote workers.

Hiring is its own whole topic.

Yeah, well, I'm curious, like, have you found any other...

I talked to my friend Kareem, founder of Ramp about this, Daniel, Eric, founder of Spotify.

They both think about it in the same exact way where they hire for spikes.

One of the benefits of being a founder-led company is, you know, big companies try to manage the middle.

They don't want the high highs or the low lows.

And Daniel and Kareem are both like.

No, I want the best, the person that is the best in the world at this one tiny little thing.

And that's all I want them to do.

And I'll deal with their usually, you know, excessive or extreme personality traits.

On the other side of that,

Yeah, I totally agree with that.

I mean like we were looking at people's past work and not necessarily like their resume, or you know, if they showed up in the interview and it was like wow, I learned something.

I left the interview with more energy than I went in.

They're like a very efficient communicator.

And then they can point to things that they've done, which are like real outliers of success.

We're like, oh, that's awesome.

Or maybe we've seen their work previously.

These are people who we would hire.

I mean, there's many examples of this.

Like you know, you talk about some of their personality quirks and like apologies for the Boston is like this genius guy who was our CTO for a while.

And he, he like did so many amazing things and he's like very eccentric.

Um, actually the very first hire at Coinbase was this guy, Olaf Carlson.

We, outside of Fred and I as the co-founders, and we were trying to hire this customer, someone to come in to run customer support, because of the backlog I mentioned.

And I remember it came down, there was two finalists.

One of them was this guy who had run a team at Google AdSense.

And on paper, he was like, this guy had worked at Google.

He's like, he'd run a big team of like 20 or 30 people.

I was like, very credentialed.

But you just in the interview it was just like it was kind of low energy and like not exciting for some reason, even though on paper he was like super qualified.

And Olaf came in and his prior job was, he was a lumberjack.

Literally.

He had just graduated college.

He wrote his thesis in college on Bitcoin and then he did this walkabout spirit quest thing where he went for a summer and he was a lumberjack.

He came in and he looked like super disheveled.

And he like threw on some like ill-fitting suit he'd bought like on the way to the interview or something.

Cause he only owned like lumberjack clothing.

But the guy was just like super bright, super passionate, super young, super hungry.

And we're like, screw it.

Like, let's just give this guy a shot.

Like it's going to be, it was just exciting to like talk to him about crypto and he crushed it.

So he, by the way, he went on and founded like a, he's like a billionaire.

He's created like a crypto venture fund.

So like these were the kinds of bets that we wanted to make.

They were people who were entrepreneurial.

We've had a lot of good success with that.

I know Toby talked about that recently on the podcast too.

And they were people that were just like, High agency, smart, get shit done.

And even if they were totally unqualified on paper.

And those were some of our best hires.

So I was reading a ton of the Bitcoin subreddit back then.

Yeah.

Like around this time.

And am I wrong?

Weren't you getting like a lot of shit because, you know, everybody's like, this is decentralized.

And you're like, well, no, I'm like actually trying to build like a real business here.

Yeah.

Did you have an issue getting talented people to work for you?

Like because you were kind of – this is – you might be autistic.

You might be right, because now you're interested in this like weird Bitcoin thing way before other people are.

And then not only that, you're like bucking the trend in this weird subculture too.

Yeah.

I mean so –

People did often ask that.

They're like, well, isn't the whole point of Bitcoin to be decentralized?

And I was like, yeah, it uses a decentralized protocol.

We just want to make it easy for people to access it.

So you can choose to use our company, but you could use any company.

As opposed to, let's say, Visa.

The only way to access the Visa network is through one company, Visa.

But email is a better analogy.

Email is a decentralized protocol, but you can use Gmail or Outlook or whatever.

So at least there's choice.

But even going beyond that, Because for years we heard that as a criticism.

So we said, all right, let's make a self custodial wallet too.

Like, if you want to custody your own crypto and not have to trust us at all, we're going to put out a wallet for that.

And so we have a successful product now too on our self custodial wallet.

I think both are important.

The centralized product gives people a lot of ease of use.

Like if you forget your password, your money's not gone, that kind of stuff.

And it also allowed a lot of big institutions.

Like most of the money in the world is that like something like 80 or 90 of it's all tied up in financial institutions.

It's not retail people.

And so-

When we went and met with institutions, they were like, self-custodial wallets.

They're like, that sounds super scary.

We're not going to do that.

So they wanted these kind of enterprise-grade custody solutions.

And we've been very successful building those kind of things for banks.

That decision was based on the response of the market?

Or is that a decision you made before and then brought that decision to the market?

The one around institutions specifically was based on conversations with them.

Yeah.

And the retail customer though, I would say that was made prior to customer.

That was like my intuition.

So we've got to make this simple and easy to use and trusted.

And the average person is not going to know how to run like a self custodial wallet on their laptop.

The tech has gotten better and better where like account recovery and these things are now possible.

But at the time it was very scary.

Like if you lost, many people had this happen, sadly.

Like if they lost their password or something, trying to custody their own Bitcoin, it was gone.

There's many, many, many sob stories about that.

Yeah, it's funny, because there's a parallel here.

When Steve Jobs had that observation he's like well, the first things we're making at Apple, they're for hobbyists.

But he's like if the amount of people that want to put together their own computer as opposed to the ones that want to go to the store.

If you just treat it, he called it the appliance.

He's wanting to make a personal computer as an appliance.

That market is 1,000 times bigger, and wind up being millions of times bigger, actually.

But his idea was the easier I make it, the bigger the market gets.

I think that's right.

And it's fine.

Like a lot of these products, start off with hobbyists who love the tech for the tech's sake and they want to take it apart.

But ultimately what crypto is going to do is just going to update the financial system so people have better financial services.

Many people are going to use it without even knowing they're using crypto.

They're just going to say, I don't know.

I just want to send money to my family abroad, or whatever, and instead of paying 11 at Western Union, I just wanted to arrive instantly for free, or whatever.

They're going to use stablecoins for that.

Or if they want to get a loan and it's just using DeFi.

It's like cheaper, lower rate, and they can get approved in 30 seconds.

That's easier than calling a bank and filling out all these forms.

Coinbase's app actually has evolved.

I mean fast forwarding to modern day we are.

Now You can trade any type of asset, not just crypto assets.

You can trade stocks and commodities and prediction markets.

Then you can get a loan.

You have a Coinbase card.

You can spend.

We're just trying to build better financial services now.

Actually, that's where you start to get into multi-trillion dollar market.

You call it what?

The everything app?

The everything exchange.

Everything exchange.

Yeah.

And a super app, maybe that's, yeah, you combine the two.

Okay.

This is not like a plan from the beginning.

Like Bezos had the everything store.

That was the code name of Amazon in D.E.

Shaw, like in the hedge fund that spun out.

So he kind of had that master plan at the beginning, even though he started with books.

But that was not the case with Coinbase, correct?

I felt like more and more of the economy was going to run on Bitcoin, because it was just faster cheaper, more global.

I couldn't have foreseen all of the things that happened.

I didn't foresee stablecoins.

I didn't foresee prediction markets.

I just knew that We had a foothold with something everybody really like.

Bitcoin turned out to be the best performing asset class of the last decade.

And so a lot of people wanted to buy it and hold it.

We were the easiest way to do that.

That was a wedge into the market to start to then update all kinds of financial services.

And that's how you got it.

I didn't have a complete picture of that from day one.

I think that would be intellectually dishonest for me to say that I knew exactly how that was going to play out.

But I knew that the potential of it went way beyond just like buying Bitcoin or something.

I was like this could power the global economy, because it's just better than having certain countries printing their own money or super high fees in each country.

We need a native financial layer to the internet that's truly global and decentralized and a bigger and bigger share of GDP could run on that over time.

I knew it was massive.

I just didn't know exactly how it would play out.

So how do you think about running the company now?

How is it organized?

Well, there's lots of ways you can answer that question.

So I have a really amazing president and COO, Emily Choi.

She really is an amazing operator.

Allows me to focus on a lot of the managing the product groups.

Like I would say I'm pretty product focused CEO.

She's operationally focused and it's an amazing combo of skillsets.

I actually think the lot of enterprise value can get generated when you pair like a technical founder with a great operator right.

Because if you have just an operator, they can make the company very efficient.

This sort of stereotypically everyone's different, right?

But if you imagine like only an operational leader, The company will run very efficiently, but they'll miss their next wave of innovation or something right.

And if you have only a founder, sometimes they blow the place up because they're always trying to do some crazy new thing, right?

And so I think there's a really healthy balance of those two things.

And there are other companies where traditionally like Zuckerberg and Sherrill or Sandberg or whatever kind of classic thing you want to look at.

I'd say even at Google, probably Eric Schmidt and Larry kind of played that role, right?

And with Sergey.

So there's examples like that in history.

I think, anyway, it's generated a lot of value for Coinbase to have Emily and I both there.

And you get the most energy when you're working on product.

Yeah.

And I don't mind going and doing some policy, you know, try to get legislation passed.

You don't mind it?

Yeah.

There was times where I felt like...

Man, it's like draining to like go to D.C. and I have to go meet with all these politicians.

I actually don't mind it now in a weird way.

There's so many interesting people in D.C.

There's like big personalities.

Okay, hold on.

We got to go into that because you said that earlier and I was like I got to ask him about this.

Yeah, yeah.

That is shocking to me.

Yeah.

That you find them interesting.

Well, here's –

One thing I learned about my motivation is that I can get excited about anything that helps advance the mission of the company forward right

Like there's times where if you look at what I'm actually doing, it's like really not fun, like grind stuff.

It's just like, oh like review 300 resumes or something.

There was a moment where we like we didn't have the right finance leader.

And I was like going to all these meetings with accountants and stuff.

And I was like I took a class in college on accounting, but I'm like, not an accountant by any stretch of the imagination.

And you know I was like, if this is what is necessary at this moment to get the financial statements to a state where we can close this round, or whatever it's generating value in the company.

So I try to derive my sense of motivation from that.

And a lot of times the thing I'm doing is like actually the gnarliest problem in the company.

It's like oh, these two teams are super pissed at each other and both the leaders are threatening to quit.

Or I have to go shut down this whole thing and we're going to lay people off or whatever.

Usually it's the worst thing you're trying to cycle.

You don't want to wake up and do.

But I find a sense of, I'm not a masochist about it.

A lot of times it's draining, but I derive a sense of fulfillment from it, of like okay, this is moving the ball forward.

At least I did something useful today.

I like that idea of like you're essentially searching for bottlenecks in the company.

Yeah, like that's a great... Actually, Elon frames what is the limiting factor at any given time.

And go dive deep on that.

That is a very great principle.

I'd say the last thing is just we try to push down decision-making in the org, right?

It's hard to do, but that's like make clear DRIs of each of these different things.

And just try to amp up the pace of execution, right?

Of just...

It's hard to do as the company gets bigger because you have more stakeholders and all this, but it's like okay, single decision maker, push it down and just give people short timeframes like knock out a decision, unblock this go, go go.

And I try to be a little bit of like the pace car for that and provide risk tolerance to the organization when needed.

Like, let's say somebody comes and says, hey, I think we should try this thing.

And it's a kind of a crazy idea, but if it worked, it'd be amazing.

Like it'd be like a 20X outcome, but it has like a 20 chance of success which you should take that bet all day long.

But most companies are risk averse.

They won't do something that has a 20% chance of success.

And I'm like, go for it.

If it fails, it's on me, you know?

And I try to just give people like air cover for those things.

So that's a little bit of like the decision-making, how we do that.

What other elements of the company you think are like a reflection of your personality as the founder?

Yeah.

I mean just the fact that we have, like you know, four or five product groups like.

That's probably a little bit of the reflection of my like I always want to build new things almost to a fault.

And I actually.

We have a lot of good systems in place to be rigorous about.

Okay, let's resource allocation is very important that you don't want to get too spread, too thin.

But I keep having like ambition to go build new things in new categories.

In the age of AI, that actually might be like more valuable.

How so?

What do you think?

Because if you have lower cost to try it?

Yeah, if you have all these ideas and usually you'd be constrained, you know, by time or resources or actual physical people to go and implement all these ideas coming out of your head.

Yeah.

And now you have, you know, on tap, on demand, intelligent, like coworkers.

Yeah, that's true.

The cost to get a V1 running is now much, much lower.

And we are seeing that internally.

Now to see something through is still intense amounts of work.

But yeah, we think a lot about resource allocation, where you can have like a two or three person team.

Try these ideas internally.

And then only if it starts to work and hits key milestones.

Like then do you do the series A internally?

So we try to treat it a little bit like venture capital.

And the hard part- Is this the language you use inside the company?

Yeah.

Really?

Yeah.

Like.

One of the key things we did actually was that twice a year, any employees can come pitch and say hey, I think we should be doing this and I have the team to go do it.

And in most companies you have to get your boss to say yes, your boss's boss, your boss's boss all the way up to the CEO.

So you have to get like five yeses in a row, which is basically a committee.

And if one person says no, it won't happen, which means the company's risk averse.

What we've tried to set up internally is we call these next bets, but you can come in and pitch.

So each of the product group leaders has their own budget.

You know I'm there CFO.

Is there like Emily, maybe one or two like really talented young engineers?

And if you get any one of us to say yes and fund it out of your budget, you're greenlit.

So it's kind of like coming in and pitching it like 10 venture capitalists.

So you almost inverted it.

Yeah.

So you only need to get one yes if someone wants to fund it out of their budget, which is, yeah.

And there's actually been examples where I voted no on something and turned out to be a massive success.

And an example of that is like USDC, which is the stable coin.

I actually embarrassed to admit I voted no on that idea.

Luckily, somebody else funded it out of their budget.

And it's, I think in 2025, we did like 800 million revenue off it or something.

So it tells you, you know, sometimes good ideas can come from anywhere.

It's like actually you know, reading about Steve Jobs and Wozniak, that Wozniak whatever he went to his employer HP and told him hey, I think we should make a personal computer.

They said no.

And then he left to found Apple.

So many such cases.

Yeah.

I always have a little bit.

Sam Walton tried to give away the idea for Walmart.

They said no.

Yeah.

So I always have a little bit of that fear in the back of my mind of, like there's brilliant young engineers inside Coinbase.

I want to make sure they can come pitch and somebody, even if it's not me, funds it.

How much time do you spend on Coinbase marketing?

Are you interested in it at all?

You guys are doing very unique things around marketing.

Yeah, thanks for noticing that.

I mean, I wish I could take more credit for that.

I actually think it's the team entirely.

You know, they come and show me the things that they're doing.

And I definitely The only thing I'm doing is I'm trying to give them air cover to try crazy stuff.

And basically... whenever they show me something like, that's awesome, like run with it, you know?

And whereas I think most organizations, some organizations would be like a little too cautious or hesitant.

But yeah, what they're doing with like, putting QR codes in the Super Bowl, or they just did this karaoke thing at the Super Bowl, or I don't know they're trying more ambitious ideas, which I like.

It's also a lot of marketing now is It's actually more like content on the internet than like your typical brand ad running on TV?

And...

You know, just like a very simple thing actually was.

I remember we were putting our earnings calls.

You know, as a public company, you put out your earnings.

They're usually kind of dry and boring.

Like these analysts tune in, listen to these calls.

You're on like a conference call.

It was using this like really ancient technology and this ancient vendor that we were using.

And I remember I was always so bored on these earnings calls.

I was like, man, how do we spice these things up?

Just do something more interesting.

And I remember...

Some of the people on the finance team were like, Brian, just stay on script.

It's supposed to be boring.

Just report the numbers.

That's all we're doing here.

And I was like, no, this is a marketing moment.

We're supposed to be selling some stock.

Let's go out and tell the story of the company.

And so anyway, just in this recent earnings we put together like a pitch deck, kind of like we were going and pitching when we were a private company.

And I was like, I want to just like run through the deck and like make a video of me.

And then we put it on the website and one of the guys on our marketing team paired it.

Have you seen those videos, like vertical video where- I saw this.

Like the guys running through the game, collecting coins.

So they realized on short form- that you can have somebody speaking, but then if you put something somebody like playing a video game or whatever the case is, or going through a maze, their attention goes through the roof.

Yeah.

And so that's like, we have these like young internet native marketing people.

They're not like, you know, people who made ads for Coca-Cola or something.

They're just like.

They're just like people who lived their whole life on the internet and like meme culture and all this kind of stuff, right.

And I mean somebody could reasonably say well Brian, are you trying to turn the company into a meme stock or something?

And I'm like, no, not really.

I think we're building something very serious and important as like an institution that's going to stand the test of time.

But we do need to get the word out in the way that people actually consume content today.

And frankly, I think our shareholder letter is brilliant.

I get a like the biggest funds at Fidelity and all these kinds of folks.

So I'm glad we're putting out a shareholder letter, but 99 of people aren't going to read our shareholder letter.

They're going to see some clip on social media about the company and that's kind of how they're ingesting their information.

So how do we... speak in an internet native way.

And that is marketing.

Everything is marketing.

Yeah.

Content.

I mean, everything's- I like that you had this, I'm going to do, I have to do the calls anyways.

Like, why don't you actually make them interesting?

You said, you know, you have to get attention.

People have to pay attention to like what we're doing or they're not going to like.

It kind of serves the mission too.

There's a great maxim from David Ogilvie about this.

He says, you can't save souls in an empty church.

Yeah.

It's like, you got to like, you want to save their soul, you got to get their attention first.

You got to get them in the door first.

Yeah.

Well said.

How do you compose your shareholder letters?

Because I'm going through this right now.

I just reread Warren Buffett's shareholder letters since the last one is out.

But that... was the best marketing that he ever did.

And the amount every year.

Each year took them about seven months of him and I think her name's Carol Loomis, going back and forth.

And you read them, and they're technically about a public company, but they're fascinating.

He's essentially, he thought of it as like he's just teaching.

How do you compose your shareholders?

Yeah, so that's a great point.

Actually, Bezos did that too, right?

He's got some bangers.

Buffett.

Bezos is, see, Buffett's different because it's like 70 years or whatever.

Bezos, I think, did it for 21 years.

He distilled it onto Maximus.

His last shareholder letter was like, differentiation is survival.

But I think those are probably the best technology company shareholder letters that I've ever seen, ever read.

Yeah.

Yeah, I mean, I think that those guys are putting in a level of craft into those like and you know, probably was a product of their time.

I think the way people consume this has changed as we talked about.

Our shareholder letters are good.

I think they're like really just reporting the numbers primarily right now.

So they're kind of written for analysts.

Whereas I think the Bezos and the Buffett one might've been written for more like teaching people about business.

I think Bezos was teaching his very interesting philosophy.

Yeah.

And searching, essentially using that as like almost like a tuning fork to like I'm putting this out and the right shareholders for me in this weird strategy I have will respond to this information.

Yeah.

I wonder if you could do the same though.

It's a great point.

I hadn't thought about it.

I mean, we could put more of like, I don't know, my philosophy in it.

I think what I want to try is actually going through.

For me, the medium of just talking through a deck and like getting me talking about it can be a little bit easier.

There is something powerful about forcing yourself to sit down and really distill it to like in writing which can be clarifying.

So I'll say about that.

You said do you prefer being prompted, like when you said it's better if I said like we put a deck, but let me just film.

Just film me going through the deck.

Yeah.

Like I don't want to just like read I'm not reading the deck, but I want to tell you it'll help me clarify my thinking like okay, here's the mission of the company.

What are we building?

We're just building better financial services with crypto.

How do we measure our progress on that?

Here's our key metrics.

You know it's growing trading volume, market share and it's like the transaction volume and the assets on the platform.

We have a whole theory about how we're growing that as the most trusted brand.

And then okay, you can also just go through a bunch of objections people commonly would bring up, right?

And like, okay, let's have a slide and address that and that and that.

And then you can take submitted questions too and you can kind of riff on those.

I think that that's a good format for us to play with, but I hadn't really thought about the Buffett and the

Bezos analogy on the shareholders.

Those guys went deep.

That was very atypical.

Yeah, I would argue that the Buffett shareholders is the most successful example of content marketing in history.

If you think about, like what it did for his reputation, the fact that then he got access to proprietary deal flow as a result of that.

So if you don't feel people are reading the shareholder letters, how do you think they're consuming information about public companies?

Then

Well, I think there are a number of analysts that are reading the show letter, so I don't want to say there's none.

But I think most people like retail investors, even people who aren't specifically tracking public company stocks like in that level of detail, they're consuming podcasts.

They're probably listening to your podcast.

They're reading social media like X. They're reading blog posts, Substack.

I think some of them still read traditional media, but that's dwindling, especially amongst people under say, 65 or something.

Every company is a media company now.

You should be publishing your own content direct to your own blog, social media.

Some companies have their own podcast.

You never should be going through –

I really don't like this idea of putting information out of the company through a traditional journalist who's going to bring their own bias and filter to it.

You know how many founders have been telling me that recently?

Yeah.

Why do you arrive at that conclusion?

Well, part of it was just having – I mean, we talked about the mission first blog post.

You know, one of the like formative experiences I would say as a CEO was that – like after that happened several traditional media organizations wrote just very negative and false stories about us.

And it just made me really appreciate like, how they're not doing journalism like in the traditional sense of the word that I think of it, which is to go report the facts and investigate things which need uncovering in the world, which is a very important thing.

They're actually more like political propaganda machines.

And if it doesn't fit their narrative, then they'll put out stories which are fake, misleading.

I shouldn't have been surprised.

There's like a long history of this, going back to, like you know, yellow journalism and Joseph Pulitzer.

Yeah, yeah, exactly.

Because people give me shit because I don't read the news at all.

Yeah.

Like I just read old books and then talk to founders now.

Like that's essentially my entire media diet.

And then like talking to LLMs.

Yeah.

And they're like, you're not informed.

I was like, have you read William Randolph Hearst's biography?

Yeah.

Did you read Joseph, like who invented yellow journalism?

Just read.

Anything that's happening now derived from those two, especially in America.

Those are the two most influential and powerful, you know, people media.

And they literally changed the way that newspapers and the written text came out, to make it intentionally more salacious.

Yeah.

And more exaggerated.

Yeah.

What did Hearst say?

Like, you provide the photos, I'll provide the war or something?

Yeah.

And so anyway, I think most people have become aware of this now, like the trust in traditional media is kind of at all time lows.

So, you know, luckily things have moved on.

I, you know anyway, I think it's.

Social media has its own challenges too, about misinformation and whatnot.

But at least, like you can just go direct and put out whatever you want to say and people like it or don't, it's fine.

And then, you know, I think it's good to talk to new media as well.

And Anyway, that was a formative experience.

And I actually think it was very liberating in a way.

I actually I think everybody at some point in their life should get the New York Times to write a hit piece on them, because you stop fearing it and you start realizing okay, I'm just going to do whatever I think is the right thing to do now, because there's not like some terrible thing that could happen to me anymore.

It doesn't matter.

Once they try to do it and it doesn't do anything, you realize?

Oh okay, I'm not trying to optimize for optics here or doing something that looks good.

Why don't I actually just do the thing that I think is good? regardless of how people perceive it.

And that's very liberating.

I hope more people experience that.

When did you go through that?

It happened in many small ways as Coinbase was growing.

Like we'd see articles come out that was like, what?

That's not right.

What are they talking about?

And they wouldn't post a correction.

It was just like sometimes you get these calls from journalists that were like I'm posting this in four hours.

Will you comment?

They were like, what?

This is totally false information.

What are you talking about?

So it was just this kind of annoying tax that was always happening on the company.

But what really, I think, radicalized me on it was post that Mission First blog post.

Like several organizations, but the New York Times in particular.

I remember they basically put a team of people.

I was later told by insiders

They're like, go just go dig up dirt on this company and write negative articles about them.

They had the headline written before they even had found anything.

And they wrote articles kind of implying that we were like racist and we were, like you know, underpaying certain minorities and things.

It was false information.

And, you know, that just like, this basically was like pissed me off.

And I was like, okay.

I don't really wanna, they're not engaging in good faith.

Like these are, they're so biased.

They don't even realize it.

And they have some political agenda.

It's not really, it's not really journalism.

It's like a political propaganda company or something.

So that was frustrating.

And yeah, it shifted my point of view to go direct.

You had a unique experience because you're building a company, but you're also starting at the very beginning of an industry.

I was thinking about you earlier today.

I was like, the analogy that sticks in my mind is like the early American automobile founders.

It's like I have to learn how to build a car company, but we're building an industry simultaneously.

We're like, if you start a software company today, you're not building the software industry.

The software has been around.

What was that experience like?

It's a really good point.

I mean, Henry Ford, you probably know about it, right?

It's like when the cars came out and then people were like freaked out about your cars are going to scare the horses, you know.

And like wasn't there some law that I remember Mark Andreessen told me about this where, like when automobiles first came out in cities, there's somebody passed a law?

You had to like, run in front of the car with a flag.

Yes.

So as not to like scare the horses.

So yeah, inherently, if you are, Crypto is a brand new industry.

It's updating all financial services.

And it's like that Gandhi quote.

You know, like first they ignore you and they laugh at you and they fight you.

And then they confront you at Davos and wave their finger.

And then you win.

So we're at stage three.

There's a little bit of fighting happening, but actually honestly, most of the big banks and financial institutions are embracing crypto and like

Five of the G-SIB banks in the world the largest banks are working with us now on crypto integrations.

If you look at their LinkedIn posts, they're all hiring crypto people, product managers and engineers.

So it's working.

And we want to work with all of them.

This is like a little blip on the policy radar that's just a little negotiation happening.

Peter Thiel says you have to be contrarian but right to be an entrepreneur.

So you have to be comfortable looking stupid for like a long time when I was calling those banks and saying Hey, we want to.

We're a crypto company.

We want to do this.

And they would hang up on me, or you know, I'd go pitch the 30th venture investor and get a no, or the you know the thousandth employee we tried to hire, or whatever.

Like you were willing to be misunderstood for a long time.

And then you slowly start to have these breakthroughs and all a lot of the best you know.

If you look at like Uber, you know they were fighting for a decade to just be like yeah, it's actually better and safer than a cab and the entrenched interests were fighting them right.

Or Airbnb with the hotels, you know, self-driving cars, like everything that's truly innovative and breakthrough is going to upset an entrenched incumbent, eventually intersect with the government and just piss off some, some segment of the population, who kind of are like how dare you question the status quo?

You know.

And, um, The Wright brothers.

I mean, when they came out with the airplane, nobody believed that for like for years.

I mean, you know, you read the biography.

They went to the United States government and were like, we have this, we've created flight.

You know, they thought it'd be celebrated.

And they were like.

They had to go to Europe.

Yeah.

They went to Europe.

They were doing these demonstrations on like this guy's field in Ohio.

And almost, there'd be like three people watching them.

Yeah.

It wasn't that famous quote from the War Department.

They said, we see no military application for the airplane.

And 40 years later, it won World War II.

If I remember correctly, I haven't read the book in probably six years.

I should reread it again and do another episode on it.

But I think it was like the French government was the first person to actually buy it for the military.

Yeah.

So it.

That's the nature of innovation is like you have to be willing to be misunderstood.

And then the key part is you have to also be right, which is you can't just be throwing out crazy ideas which are wrong.

Yeah, but for them, so they're creating an industry and a company.

Yeah.

But they actually didn't create the most successful company.

That's true.

In that industry where you did.

It's true.

Well, I think Orville and Wilbur were more like— Well, Wilbur died prematurely, I think, from like I forgot consumption, or maybe tuberculosis.

I forgot what it was.

He died like 45.

Orville lived for a lot longer.

But there was—basically, they created the industry and one of the first few companies, but then they were overtaken in a way that you have not been.

Yeah, so not to torture this analogy too much, but I think of Wilbur and Orville as kind of like inventors.

The equivalent in this case would be like Satoshi Nakamoto or someone like that.

Brilliant, you know, whoever they are.

There's an interesting documentary coming out on this soon.

You know, whoever... those people are, they're probably like innovators, scientists.

I don't consider myself really a scientist.

I'm more of like an engineer and entrepreneur.

So I recognized early what was happening with the invention of Bitcoin, but I didn't invent Bitcoin myself.

You know, I did not discover flight like the Wright brothers.

I always had a lot of respect for people that are like, you know, Edison and these people, right?

Because they're actually on the frontier of making scientific breakthroughs.

Who knows?

Maybe this would happen at some point, but I don't think I'm going to be the person to make a scientific breakthrough.

What I am going to do is have an instinct or a nose that like something interesting is happening here and it's created an opportunity and I can go commercialize it with a really successful company.

Yeah.

I mean, Edison was obsessed with commercialization though.

He said that he didn't want to invent anything that didn't sell and that sale is proof of utility.

He has a great line on that.

So you have your mission at Coinbase, but you said your natural inclination is to work on multiple things, right?

Yeah.

You started another company.

Yeah.

You want to talk about this?

Yeah, sure.

So, I mean, broadly, I want to accelerate civilizational progress in the world.

That's kind of my personal mission.

So I think economic freedom is foundational to that with crypto.

When Coinbase went public and I got some liquidity from that, I was also just thinking like okay, what are the other big problems in the world?

Like in hard tech, not just software that might require more capital that I could try to help with.

And I started thinking you know so the big ones that in my mind were like AI and crypto are probably the two biggest right now.

Then of course there's fusion energy, brain machine interfaces, space.

And I felt like okay, there's good teams working on all of these and I'm not sure what unique I have to add.

The other biggest one I thought of was longevity.

Like how do we start to reprogram our own biology to enhance what it means to be human at some point?

So I started hosting these dinners.

I didn't see teams working on that that I thought were credible.

In fact, you know, the longevity spaces had like a lot of snake oil type stuff.

It's like pretty, you know, attracting some unsavory characters, a little bit like crypto.

For centuries.

Yeah.

For centuries.

For sure.

I reached out to a couple of friends of mine who had done they were biotech CEOs or PhDs and started to host some dinners.

And this is a good way just to learn too is like try to see if you can convene some of the top people in the room and just go around the table and ask them what's the most interesting thing on the horizon that's underfunded or under invested in.

We have hosted a couple of these dinners.

I was lucky enough to do this with a friend of mine, Blake Byers, who eventually we co-founded this company with

And one of the topics they told us about was epigenetic reprogramming, which is the ability to reprogram cells and you can restore function they had when they were younger.

There were some early breakthroughs that had happened in different labs.

One example of this was Shinya Yamanaka, who won the Nobel Prize for reprogramming skin cells into stem cells.

I think he got that in 2005, if I'm not mistaken.

I started to feel a little bit about epigenetic reprogramming, like I did about Bitcoin when I first read about the Bitcoin white paper.

And I was like, hey, how deep does this rabbit hole go?

And if you can actually reprogram cells, it turns out our cells are much more plastic than people realized.

What could be possible with that?

And so, through a series of these dinners, we met the other co-founder, Jacob Kimmel, and Greg Johnson created this company.

It's called New Limit and it's a longevity company searching for novel therapies that can reprogram your cells to restore function they had when they were younger.

So it's been going about three or four years now.

We've demonstrated successfully reprogramming human cells for the first time to restore function.

It's a discovery platform that's testing tens of thousands, eventually millions, of hypotheses in high throughput screens across lots of different cell types.

It's using AI to prioritize those screens and um, the first drug candidates going to go into clinical trials, probably next year.

So it's gone faster than i thought actually.

I i um committed 100 million of my own money to it, um to hope, to help it get off the ground, and it subsequently raised more money from others as well, and i thought it was going to be like a pure research thing for maybe five, six years, or who knows.

It turned out.

The scientific progress happened a bit faster than we thought and we're ready to go to clinical trials now with the first drug candidate.

Hopefully they'll be three four, five drug candidates over the next five years.

Do you think you'll continue to start more companies?

I do.

Yeah.

I mean, both within Coinbase, there's lots of these product groups.

And I think it's fun.

That's the most fun thing in the world is building companies that try to have positive impacts in the world, try to be useful.

And I'm getting slowly better at it over the decades hopefully, and learning a lot of painful lessons along the way.

And so, yeah, I

I don't want to get distracted and have too many things.

Each one of these is really difficult, but I do think over the coming decades that hopefully I'll start more companies.

Do you think Coinbase is the last company you'll be CEO of?

Ooh, that's a tough question.

Let me tell you why you think about it.

Let me tell you why I asked, because I was shocked when I was talking to Toby.

He said something I think it was on the episode that if the advancements in AI weren't happening right now, he thinks he wouldn't be the CEO of Shopify anymore.

Yeah, I was surprised to hear him say that, too.

I heard him say that.

I don't feel the same way he does about that.

I think I mean AI is changing everything about how we work and lots of things in financial services.

We haven't talked about that.

We need to talk about this.

Sure, yeah.

After, let's go there next.

Yeah, yeah.

So let me forget.

I want to continue being Coinbase CEO for a long time.

Do you like being CEO?

Yeah, I find it, I always clarify, I find it very fulfilling, which means that...

It's sometimes very stressful.

Sometimes it's super fun.

Sometimes I just get my ass kicked.

Like, and I'm, you know, I'm like, oh man, that was a rough day, right?

You're just going and doing like the hardest things that get escalated to you because nobody else in the company you know.

But that's what creates fulfillment, right?

It's a little bit like playing a video game or something.

It needs to be a really hard level.

It's a little outside your comfort zone for you to feel like whoa okay, I was right at the limit of my ability.

When you're having these very stressful times in your life based on work, what do you do to decompress or to take time away?

I think it's a very important topic because a lot of founders like the other founders that were in my YC batch that I went through, I saw many of them like burn out within three, four years.

They would either, it manifested in lots of different ways.

Some of them would gain a bunch of weight.

Some would lose a bunch of weight. one of them had hair falling out.

I was bald before starting company.

But they were literally, clumps of hair were falling out because of the stress.

Some of them got addicted to prescription drugs.

So dealing with stress as a founder is actually a very important topic because you need to eventually.

You can burn the candle at both ends for a period of years, but Eventually you'll burn out and you need to make it sustainable to have the impact you want to have over a period of many decades, hopefully.

And so yeah, the kinds of things that I baked in as a routine and there were, I'd say, every couple of years I felt like I hit a patch of burnout, right.

And I had to change something up.

So I either have to like delegate more, stop doing some piece of what I was doing right, having fewer direct reports and then have a routine around like sleep, exercise and nutrition basically.

And some form of like.

You can call it meditation or prayer, whatever you want, but in the evening you can go to the sauna right.

Or in the morning you can just sit there and meditate for one minute or whatever it is.

And I have a pretty strict routine when I'm in work mode around like sleep, exercise what I eat and then sleep, just like wind down time in the evening.

And then you know, on the weekends I mix it up and I'm like not so strict about things, but I even just wear the same thing every day, right?

So I'm pretty rigorous about that.

And I mean, I basically am just in this routine of get enough sleep, wake up, lift heavy things and do zone two cardio and like Meditate for a few minutes and then get after it.

What's your wind down time at night though?

It's basically like- Wine and lovemaking?

No.

Don't look at screens would be the main thing, right?

Like if you're looking at work stuff on your laptop or your phone and like even something you just glance at for a second, it can like piss you off.

And then-

If I try to just go right to sleep after working, I have like stressful dreams about work and I just don't get well rested.

So there does have to be like I think a period of time.

How long is this wind down time?

Oh, like an hour.

Okay.

Yeah.

Before bed?

Yeah.

Okay.

Yeah.

And you can read, watch stuff, sauna, whatever.

Yeah.

Before we go to how AI is changing the way you're working inside Coinbase question I was thinking about was what's the distribution of time between Coinbase and your other company?

Well, Coinbase is my full-time job, so it's like 99%.

Yeah.

I mean, if you looked at how you're spending time between the two companies, Yeah.

Well, when New Limit was just getting started, I was spending more time with them, like 5 10 of my time.

And I'll jump in whenever I'm needed.

But I'm primarily an investor and a board member there.

And I'm helping with some of the operational pieces and helping them raise money and things like that.

But yeah, Jacob Kimmel is the president operating that company day to day.

And he's crushing it.

He's incredibly uh talented ceo and business person.

I talked to sorry, i should say scientist and uh business person.

Yeah, i talked to palmer lucky about this, because that's something i asked him.

It's like we have three companies.

He's like no, i really have like one.

He's like 99 of my time is on android.

Yeah, and then he said something fascinating.

He just like wakes up every day and tries to think of like the highest leverage thing he can do for that company yeah, even if it's stuff he doesn't want to do which is very, uh interesting.

That's exactly right.

It's like It's so easy to get caught up in just doing short-term things, but you have to start your day usually with the thing that sucks.

It's the most important thing and usually it sucks.

Yeah.

So how is AI changing the way that you're working in Coinbase?

Well, lots of ways.

So some of it is similar to other companies and some is different.

The parts that's similar is like.

More and more code is being written by these agents more than 50 now.

Customer support inquiries, I think is about 60% answered by agents now.

Are you building your own tools or you're using other people's tools?

Both.

We're using vendors.

We have a lot of custom models internally as well.

We're testing different use cases.

For instance, around compliance automation, we're building a lot of stuff in-house.

Design, you can really quickly, rapidly prototype stuff and get it out there.

We're even using it within our finance function and, like you know, to do FPA and build models and things like that.

So it's widely even like decision-making in the company.

He was getting a lot of our data ingested, like all the Google Docs and the Slack messages and the GitHub commits and the Salesforce.

And now like you can ask it really, great questions like, what should I be more aware of as CEO?

And it's like, did you know this team is not aligned on the strategy?

I was like, actually, I didn't know that.

So this is something you build yourself.

There's a team internally working on this and there's a couple of vendors.

So there's one called LibraChat that's open source.

You can connect all your internal data to.

There's other vendors out there like Glean and Slackbot and different.

We're testing three of them or so right now.

Gemini is doing a bunch of stuff with Google.

So we're testing all of them to see which ones employees gravitate towards basically.

That's, I would say, current best practice amongst a lot of tech companies, not super unique to crypto.

The thing that's more unique to crypto is that these ai agents are increasingly needing to do payments to get work done and we're giving them all stablecoin wallets.

So you can imagine, like in the traditional financial world, like you and i can go get a credit card or something where we have to be identified as a human, but if you're an agent trying to get work done, you either have to bug your human every time to like will you approve this purchase Or, if you want to, increasingly these agents, you can tell them to go do this, like overnight or the next two, you know, the next hour week, whatever and get work done.

Like they might need to spin up AWS resources or get through a paywall on the internet to read some research paper or, you know, buy a domain name or whatever.

Spin up a marketing program.

Like, if you really want to treat them like almost like their own digital employees, they need to have like a corporate card kind of thing.

And traditional corporate cards can't be issued to non-human entities.

And so we're giving them stablecoin wallets.

They're doing a lot of machine-to-machine payments.

This is all very new in the last few months, but it's been getting a lot of traction.

So that's pretty exciting.

We built a couple of tools that allow any agent to get a stablecoin wallet inside it.

How are you using them personally?

AI agents?

Yeah, agents, any kind of tools.

Well, I've been using Cloud and Codex a little bit just to learn the current development tools.

I've been spinning that up locally on my laptop just to make sure I understand the current best tools that developers are using.

Toby actually writes a lot of code still in production.

It just came.

Did you see the tweet today?

Yeah, yeah.

I dabble, but I do not write that much code in production.

I have to admire him for that.

As a CEO, the main thing I use it for is research, essentially of just like okay, help me understand this and this, how this works.

And then... draft this for me.

And internally.

With these data report repositories now connected in, I can use it for decision making.

And we actually like.

We use a decision making framework and there's a row now for the AI agent to write in their input.

And it's like kind of nice to compare it to the other people on the team.

Those are the primary ways I'll use it today.

I'm still a little confused.

Tell me about the base app.

Yeah.

I've watched the presentations.

I've talked to you about it.

I'm still confused.

Yeah.

Okay.

Well, the simple way to think of it is the base app is the self-custodial version of Coinbase.

We launched a new version of it recently, which frankly, it was kind of polarizing.

Like we put it out and it was trying to do something kind of novel on the social front.

And I don't think it quite worked.

We got like a bunch of feedback from the community about that.

Was this the tap thing thing?

Well, you could double tap to buy any post.

Yeah.

I understand that, but then each post almost had its own market cap, but then what happens?

Well, it was interesting.

Every post had its own coin and also every creator had its own coin.

It was optional for the creator.

But what happened is if you bought a post, some of the economics would flow back to the creator.

We thought maybe each post would have like this up and down, like it would have residual zero value.

It turned out like many of the posts had a couple thousand dollars of value or something at the terminal end of it.

And people were thinking of it as a way to, I guess, reward and thank the creator.

But they also own some of the creator coin.

Long way of saying I think something is going to work in this space around.

They call it social fi or, like you know, these kinds of social media tokens.

I don't think that the tokenomics has not quite been figured out yet where it needs for the people you know investing in them.

It needs to have some sort of like durability to like the you know they have to believe.

Okay, David Senra is going to continue to make great content into the future.

And he's relatively undiscovered now, but he's going to be much bigger.

And it's kind of like, you know, a company or something.

And they would want to own your creator token and there'd be some value.

And maybe like a revenue stream would accrue to them over time, depending on your ad revenue.

You'd have to come up with something like that, that I think it's a little bit more durable.

In the current incarnation, it wasn't quite there in my view.

So we tried it as an experiment.

Didn't quite work.

The app is since pivoted to really just be more focused on like trading and being like a self-custodial version of the Coinbase app.

So we're starting with that for now.

But I do think something in the social token space will eventually work.

What else has been on your mind outside of Coinbase and is it New Limit?

Yeah, New Limit.

Yeah.

Well...

You know, there's another project that I invested in and helped get off the ground, called Research Hub, which is trying to accelerate scientific research.

They're trying to find novel ways for people to raise, like the funding problems in science are like a whole thing and replication is an issue.

I can talk about that if you want.

I think you know I'm making through my family office.

I'm making various investments in like companies that I think are doing innovative stuff on the frontier.

I think sometimes about What are the other big ideas that could really unlock progress, right?

One other idea I'm interested in is actually like special economic zones in the US or elsewhere, where there's such a morass of red tape, both federally and state and local, to try to innovate sometimes that it's hard to get off the ground.

Like that money transmitter license thing is an example that I mentioned where you needed like five or 10 million just to get the licenses.

And sometimes entrepreneurs can find a creative way around these things in the early days.

But for instance, like look at like, I don't know, nuclear energy, right?

It's basically impossible to get like a nuclear power plant.

I shouldn't say impossible, very difficult right now.

And if you had these special economic zones, like actually China has been very successful at this.

They have like Shenzhen is a special economic zone essentially, right?

Or like Hong Kong or in the UAE, they have these.

And there's been examples of these around the world.

They've been unlocked a ton of value.

My ideal world.

You'd have like 10 plots of land like take federal land in the US and designate them as special zones.

So you could have one that's, hey, in this sandbox, you can iterate on nuclear reactor design in this one little area.

Okay, maybe something bad will happen, but it's contained in this area.

We need to be on our front foot and innovate there.

Or have another one for for biotech, like accelerated trials, or another one for crypto, or another one for drones.

They're just like drones flying all over within this zone, outside of traditional FAA rules, and allow people to really innovate and build startups.

And if they get a product working through that rapid innovation in a regulatory sandbox, they can then go apply for the license federally and then serve the rest of the US market.

But the problem is it's such a high barrier to entry to even try to get started in some of these markets with these new technologies.

Anyway, I think special economic zones could be cool.

I might work on that at some point.

I love the idea of just lowering the barrier of entry to innovation and entrepreneurship.

Brian, this is awesome, man.

Thanks for taking the time to do it.

Thank you.

I appreciate it.

Most of the guests you hear on this show first found me through Founders.

[布莱恩·阿姆斯特朗：以长期主义对抗监管不确定性，用使命驱动重塑金融自由]-[Brian Armstrong, Coinbase]

📋 Summary

Coinbase 的崛起：在监管风暴中捍卫加密行业的生存权

监管困局与“法律战”的反击

使命至上：从“政治中立”到组织文化重塑

长期主义视角下的创业哲学

未来愿景：从加密交易所到“万物交易所”

🎯Key Sentences

📝Key Phrases

📖 Transcript

[布莱恩·阿姆斯特朗：以长期主义对抗监管不确定性，用使命驱动重塑金融自由]-[Brian Armstrong, Coinbase]

📋 Summary

Coinbase 的崛起：在监管风暴中捍卫加密行业的生存权

监管困局与“法律战”的反击

使命至上：从“政治中立”到组织文化重塑

长期主义视角下的创业哲学

未来愿景：从加密交易所到“万物交易所”

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