The Exchanges

Q also always lows with addiction and kind of rock bottom. When you look back on the Coinbase journey, we see the documentary now, you know, we see it on Hulu, we see it on Amazon prime. I think it's often humanizing for entrepreneurs to also hear like not so easy times applying that to addiction. What were the rock bottom times in the journey with Coinbase that you viscerally remember?

A Yeah. So, I mean, I'm glad you mentioned the documentary. We can chat more about it later, but, um, I do think it does, the documentary does a good job of highlighting the ups and downs of what it's actually like to build a company and to run a company. And so part of the reason why I wanted to create that documentary was to sort of pull back the curtain and show people the good, bad, and the ugly and show that it's not like we're not geniuses and we're not bad people. We're just regular people trying to build something good in the world. And, you know, you can have quirky characters and you have flaws and you make mistakes. You know, some of those that were, we talked about in the documentary a little bit, um, but some of the ones that come to mind there was, um, you know, there was, uh, the neutrino acquisition we did, which was, um, a complete, you know, it, it, it basically created this whole social media campaign to delete Coinbase. There was like a hashtag trending. Um, and we talk about that stressful moment there. Um, that was actually a moment where I happened to be in Hawaii trying to have a vacation. And what was funny, the whole thing blew up and. Everybody started calling me like, Brian, you need to get home. You need to fly back here. Like, you know, later today, like this is an emergency. Anyway, that was like a kind of a comical thing. Whenever you go on vacatio…

AI assessment note: “there was, um, the neutrino acquisition we did, which was, um, a complete”

Q You mentioned kind of regulation that Mickey Malkaros, what are your biggest mistakes or regrets in communicating with regulators?

A Um, you know, I can't think of too many. I, I do think Coinbase in the early days, um, You know, we decided to reach out to regulators and just proactively be a, um, a friend to them and, you know, try to be helpful and then like follow their, their instruction, things like that, which was a unique thing at the time. I feel really good about that decision. I think it's created, um, it's definitely caused us to be able to operate slower at times, I would say, which has been unfortunate for customers in certain cases. There's no doubt that like going that path takes longer and it's more work, but I, I think, and I hope that it'll be a competitive differentiator long-term Um, believe me, there's, there's some moments where we're frustrated about that. We're like, okay, we're the, you know, the regulated public company here, like following all the rules, but why, why are we getting the scrutiny for this when there's like crazy stuff happening out there in the world? But, um, you know, that's, I don't think anything's like we're getting is that unfair. Um, I, I don't know. There was, there was a little like tweet storm I got into with Gary Gensler and like, look, I'm, I'm not like happy with how he's, um, You know, doing things in the U S right now. I think that he had a major opportunity to come in and actually like clearly regulate the industry and publish clear rules and say, thi…

AI assessment note: “I can't think of too many.”

Q What is bad government? That's when it's like their actions don't produce good results for consumers.

A Yeah. I mean, ultimately in a democracy, right? The government reports to the people. Like we are, the people are the, the electorate, the board who elects these people. And, you know, and by the way, the elected officials sometimes appoint these, these heads of regulators, because the regulators are not elected themselves. Um, but yeah, sometimes we see bad policy come out of the government that, um, look, I don't think that's the majority case, right? Like I said, 90, I'd say 90, 95% of the time, this is not a US thing, by the way, all over the world. We generally get to reasonable answers with regulators and policy makers, and I think those are really strong relationships we have. But five, 10% of the time we see something come out that is, it's actually harming crypto, it's not, In a way that doesn't protect consumers. It's treating, um, crypto on an unlevel playing field with traditional financial services. We see sometimes overreach. You know, there's people who somehow get the idea in their head that crypto is only being used by bad people, and they don't realize a lot of the facts. And so, um, yeah, we've seen, we see bad policy proposed, and in that case, I think we have an obligation to push back.

AI assessment note: “five, 10% of the time we see something come out that is, it's actually harming crypto”

Q Um, do you feel you're thinking ambitiously enough with Coinbase today?

A So, you know, look, 10 years ago, um, when I started the company, I, I remember thinking about this. I was like, what? Cause I had tried a bunch of startup ideas and most of them didn't work. And I was like, what's the thing that I'm so passionate about? So it's so crazy. That I will in 10 years, I'll still be like super fired up to be working on it. And so, you know, obviously creating an entirely new economy for the whole world is a pretty ambitious thing. Um, you know, one that's more free and fair and global. And, um, and so, you know, look, that's a, that's a, that's a hundred year mission. Um, and we're going to keep doing that for a long time. And the mission of Coinbase is to increase economic freedom in the world. And that's something I'm really passionate about. I have a whole spiel on that about why economic freedom is so important. You know, one thing we've thought about, I actually haven't shared this before, is that if somehow we feel like we're starting to make a real dent in economic freedom, would we expand the mission of the company at some point to just be about increasing freedom in the world? Period. All kinds of freedom, right? And you could imagine there's many types of freedom that are under threat today, right? Um, there's, you know, people, I feel like a lot of their, the tools and the apps that we use, they're being, you know, basically Run by like bi…

AI assessment note: “creating an entirely new economy for the whole world is a pretty ambitious thing”

Q How did you deal with that as a leader? That is really stressful when you see delete Coinbase. It's, uh, you know, I just had Emil Michael on from Uber and obviously that was delete Uber. This is not an easy time. How did you deal with that as a leader?

A Yeah. Um, okay. Well, you know, one thing I've tried to figure out over time is that there's real emergencies and then there's a lot of fake emergencies. And so a lot of times people will be calling you, you know, and, or they want to meet with you and a CEO, and they're really spun up on something and they're like, this is an emergency. Right. And you have to kind of get good at determining what's a real emergency. What's a fake emergency. Um, I'm Probably a little bit too calm in these moments, almost to a fault. Like there's certainly times where, um, this is actually probably one of my weaknesses, like the, you know, conventional CEO advice is like, you know, if there's ever some thing that's going viral and it's like scaring everyone and, um, you need to be out there immediately in front of, you know, the public and go on CNBC or like whatever, you know, the news show is and restore confidence. Right. And my, what's weird is that I, in these moments, you know, there's that old saying about like a lie can get halfway around the truth or halfway around the world before the truth has a chance to put their shoes on. Um, sometimes I see these things like, you know, you're just going about your regular day. You're trying to build things. You're trying to meet with people. You're trying to hire people. And then like some misinformation or whatever, we'll just like go viral around…

AI assessment note: “determining what's a real emergency. What's a fake emergency. Um, I'm Probably a little bit too calm”

Q also, you know, you said post 500, obviously Coinbase much larger, but you're also a public company now. And I speak to a lot of your investors before the show and they, they, they mentioned this and I wanted to ask Do you enjoy being a public company CEO? Um, don't worry, it's just us. Um, and, uh, and is there any elements that are, like, super surprising about it?

A Yeah. Okay. So this was a big question for me before Coinbase went public and I wanted to go figure out, do I even want to be a public company CEO? Because I had sort of heard rumors about this, but it was never the highest priority for me as I was trying to build. First, you have to make a company that, you know, even has the potential to go public. So what I did was I went and I talked to a bunch of CEOs before, uh, going public about some of them were people who had gone public and they were public company CEOs, uh, founder CEOs. Others were people who decided to hand off the company and, you know, have a professional CEO come in or something like that. Or, or just to stay private indefinitely. Um, and so I kind of got a good, you know, different set of options and I, and I personally decided I wanted to become a public CEO. Sorry, you want to say something?

AI assessment note: “I personally decided I wanted to become a public CEO.”

Q Brian, what do you make of FTX? Many of your investors asked me to ask this. What do you, what do you make?

A Like, so let's see lots of things. I mean, I think Sam is a brilliant guy. I've gotten a chance to talk to him on a number of occasions. I think he's done a really good job of kind of generating interest in the company with his public persona, which is something that, you know, as more of an introvert, I, I don't love doing that as much. I, I think it's, you know, look, the press can be fickle too, right? They can build you up and tear you down. And so I think it's, it's, it's a little dangerous, but, um, I think he's done incredibly effective at getting more interest on the company there. They've moved very quick. I give them a lot of points for execution, speed of execution. I think, um, especially with a small team. I mean, frankly, this is a little bit what Coinbase was like in the early days, maybe 20, 1415, when we had, you know, 305 hundred people, it was easy to just know what everyone was doing. We all were in one location. We were executing super quick, right? And so part of this transition, you know, I could have basically decided to keep the company that size and, and focus on our core product of retail trading. But I really decided, you know what, I want Coinbase to be, A multiproduct company. Um, I want us to grow into these different customer segments. You know, we have like this massive, um, business for institutions now, and we have Coinbase cloud and we have, …

AI assessment note: “frankly, this is a little bit what Coinbase was like in the early days”

Q How did you deal with that as a leader? That is really stressful when you see delete Coinbase. It's, uh, you know, I just had Emil Michael on from Uber and obviously that was delete Uber. This is not an easy time. How did you deal with that as a leader?

A Yeah. Um, okay. Well, you know, one thing I've tried to figure out over time is that there's real emergencies and then there's a lot of fake emergencies. And so a lot of times people will be calling you, you know, and, or they want to meet with you and a CEO, and they're really spun up on something and they're like, this is an emergency. Right. And you have to kind of get good at determining what's a real emergency. What's a fake emergency. Um, I'm Probably a little bit too calm in these moments, almost to a fault. Like there's certainly times where, um, this is actually probably one of my weaknesses, like the, you know, conventional CEO advice is like, you know, if there's ever some thing that's going viral and it's like scaring everyone and, um, you need to be out there immediately in front of, you know, the public and go on CNBC or like whatever, you know, the news show is and restore confidence. Right. And my, what's weird is that I, in these moments, you know, there's that old saying about like a lie can get halfway around the truth or halfway around the world before the truth has a chance to put their shoes on. Um, sometimes I see these things like, you know, you're just going about your regular day. You're trying to build things. You're trying to meet with people. You're trying to hire people. And then like some misinformation or whatever, we'll just like go viral around…

AI assessment note: “I'm Probably a little bit too calm in these moments, almost to a fault.”

Q Can I ask, why is this crypto winter different to ones that have come before? I mean, the thing with, you know, crashes is, you know, You always go, it's never been this bad. And the truth is, everything, this too shall pass. Um, and we just live in a continuously cyclical game too. What's different and what's the same?

A Yeah, I would say, so mostly, um, it's the same. I, it's, so I can tell you what we do in every cycle, right? When things are up, we basically are, everyone's focused on scaling. We're going through hyper growth. You know, we try, we're trying to capitalize on big opportunities, just throwing money at any problem because like the biggest issue we have is just how to keep everything up and running. In down markets, you know, obviously we have to focus on, you know, managing costs rigorously, driving revenue where we can. We sometimes go clean up a lot of the stuff that we just threw money at in the crazy upcycle, and we're like, oh, that's, that thing is over-provisioned, or there's tech debt, or whatever. We also make sure we invest in the future. Like, we need to be able to plant the seeds and do innovation in a down market. You have more time to build and innovate the things that could be really big in the next upcycle. So, you know, there's a little bit of, that's how we kind of think about up and down cycles. Um, but sorry, I'm missing, I'm missing the core of your question, which was what?

AI assessment note: “I'm missing the core of your question, which was what?”

Q Um, Do you blame yourself for that? I mean, the numbers were so stratospheric. You kind of had to, to serve the demand.

A Yeah. I mean, look, I don't really like blame as like a thing. Um, I think there's just a learning opportunity in, in everything. You know, you have to have accountability of course, but I don't, it doesn't really accomplish anything to like dwell on it or like self-flatulate or whatever. Um, so, I think, you know, look, if you put our, you put our mindset back in that timeframe, we, you know, we were on track. We did do, we did seven billion in revenue, three billion in profit. Um, we literally had a line out the door. The biggest problem the company had was we couldn't onboard customers fast enough. And customers were super upset that they, it was taking them so long to be to onboard. This was on more like the institutional business. And then our retail customers were just like, We want all these things that you don't have and just take our money if you have them. But if you don't like, we're going to go somewhere else. So it made total sense. I mean, we knew if you, if you more than double head count in a year, you're really flirting with danger in terms of like communication might break down, you know, um, culture could break down. This is a common thing. And we knew, and we sort of consciously took that bet and we said, well, we don't know when this is going to end, but it would be irresponsible to like limit growth in this moment and not higher. Now, I think in the, in th…

AI assessment note: “I don't really like blame as like a thing.”

Q also, you know, you said post 500, obviously Coinbase much larger, but you're also a public company now. And I speak to a lot of your investors before the show and they, they, they mentioned this and I wanted to ask Do you enjoy being a public company CEO? Um, don't worry, it's just us. Um, and, uh, and is there any elements that are, like, super surprising about it?

A Yeah. Okay. So this was a big question for me before Coinbase went public and I wanted to go figure out, do I even want to be a public company CEO? Because I had sort of heard rumors about this, but it was never the highest priority for me as I was trying to build. First, you have to make a company that, you know, even has the potential to go public. So what I did was I went and I talked to a bunch of CEOs before, uh, going public about some of them were people who had gone public and they were public company CEOs, uh, founder CEOs. Others were people who decided to hand off the company and, you know, have a professional CEO come in or something like that. Or, or just to stay private indefinitely. Um, and so I kind of got a good, you know, different set of options and I, and I personally decided I wanted to become a public CEO. Sorry, you want to say something?

AI assessment note: “I personally decided I wanted to become a public CEO”

Q Can I ask, why is this crypto winter different to ones that have come before? I mean, the thing with, you know, crashes is, you know, You always go, it's never been this bad. And the truth is, everything, this too shall pass. Um, and we just live in a continuously cyclical game too. What's different and what's the same?

A Yeah, I would say, so mostly, um, it's the same. I, it's, so I can tell you what we do in every cycle, right? When things are up, we basically are, everyone's focused on scaling. We're going through hyper growth. You know, we try, we're trying to capitalize on big opportunities, just throwing money at any problem because like the biggest issue we have is just how to keep everything up and running. In down markets, you know, obviously we have to focus on, you know, managing costs rigorously, driving revenue where we can. We sometimes go clean up a lot of the stuff that we just threw money at in the crazy upcycle, and we're like, oh, that's, that thing is over-provisioned, or there's tech debt, or whatever. We also make sure we invest in the future. Like, we need to be able to plant the seeds and do innovation in a down market. You have more time to build and innovate the things that could be really big in the next upcycle. So, you know, there's a little bit of, that's how we kind of think about up and down cycles. Um, but sorry, I'm missing, I'm missing the core of your question, which was what?

AI assessment note: “sorry, I'm missing, I'm missing the core of your question, which was what?”

Q Brian, what do you make of FTX? Many of your investors asked me to ask this. What do you, what do you make?

A Like, so let's see lots of things. I mean, I think Sam is a brilliant guy. I've gotten a chance to talk to him on a number of occasions. I think he's done a really good job of kind of generating interest in the company with his public persona, which is something that, you know, as more of an introvert, I, I don't love doing that as much. I, I think it's, you know, look, the press can be fickle too, right? They can build you up and tear you down. And so I think it's, it's, it's a little dangerous, but, um, I think he's done incredibly effective at getting more interest on the company there. They've moved very quick. I give them a lot of points for execution, speed of execution. I think, um, especially with a small team. I mean, frankly, this is a little bit what Coinbase was like in the early days, maybe 20, 1415, when we had, you know, 305 hundred people, it was easy to just know what everyone was doing. We all were in one location. We were executing super quick, right? And so part of this transition, you know, I could have basically decided to keep the company that size and, and focus on our core product of retail trading. But I really decided, you know what, I want Coinbase to be, A multiproduct company. Um, I want us to grow into these different customer segments. You know, we have like this massive, um, business for institutions now, and we have Coinbase cloud and we have, …

AI assessment note: “frankly, this is a little bit what Coinbase was like in the early days”