My Conversation With Brian Armstrong, Co-founder & CEO of Coinbase

1. 0:00 – 0:25

   Crypto Power in DC

   1. DSDavid Senra0:00

      [camera clicking] How much of your job is building political power f- as an advocate for, like, the crypto industry?

   2. BABrian Armstrong0:08

      Yeah, I mean, I, I don't have to go, but I, I, I think it's worth it for the business. I don't mind going. I like doing... In some ways, I like doing it. There's some pretty interesting people there. Uh, so I go about once a quarter, um, maybe once or twice a quarter recently 'cause we're right at the, the crux of this, this key moment for market structure legislation. But I'd say over the last few years, yeah, about

2. 0:25 – 1:39

   Market Structure Clarity

   1. BABrian Armstrong0:25

      once a quarter.

   2. DSDavid Senra0:25

      What's the key moment for the market structure?

   3. BABrian Armstrong0:27

      Well, uh, 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, uh, piece of legislation passed, um, in the House. It was called the Clarity Act. In the Senate, um, they're drafting their own version of it, but it's, it's essentially clarifying this question about which of these crypto assets are commodities versus securities. And the... You know, someone might say, "Well, why does it matter?" It matters because in the United States, we have two different regul- federal regulators, the CFTC and the SEC. The CFTC regulates commodities. The SEC regulates securities. And so it turns out in the past, uh, this ambiguity about where crypto assets set, you know, sit between the two federal regulators, that lack of clarity was really weaponized and, uh, by Gary Gensler, the former SEC chair, and Elizabeth Warren, and some people like that who tried to, in my view, unlawfully kill the industry in the United States. So 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. It's a totally, uh, parochial issue in the United States that's kinda 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 Gensler couldn't come in and try to kill the industry.

3. 1:39 – 5:49

   SEC Lawfare Origins

   1. DSDavid Senra1:39

      So what was the lawfare they were trying to do?

   2. BABrian Armstrong1:41

      Well, okay, so s- long story, but, um, you know, essentially this was around, like, the twenty twenty, twenty twenty-one timeframe. Um, Coinbase, we decided we wanted to become, 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? Um, at that time, we, we wanted there to be a path to have crypto securities be traded. Simple way to think of it is a security is, like, a way to raise money for a company that you wanna start. A commodity is something that's d-decentralized, kinda 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, um, that were in various stage-stages of decentralization. So was it a commodity? Was it a security des- And then Gary Gensler, uh, the SEC chair at that time, um, my understanding is that, you know, he, he and Elizabeth Warren essentially, um, decided they wanted to use this to, uh, curtail the crypto industry. And if you wanna know why-

   3. DSDavid Senra2:45

      But why?

   4. BABrian Armstrong2:46

      Well, okay, so Elizabeth Warren is, um, you know, in my view, she's a socialist. She believes the government should be running all financial services. And, um, she had essentially found a way to, um, bypass Congress and have a lot of influence over financial institutions, big, like big banks. And she did-

   5. DSDavid Senra3:03

      How would she get that influence?

   6. BABrian Armstrong3:04

      Well, she would appoint, uh, regulators that could essentially go in and, uh, pressure the banks to do things that Congress had not necessarily authorized. So under the Constitution, you know, only Congress is allowed to make laws, um, 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 a f- uh, you know, your bank regulator, and they come in. This is... They, they can choose to, you know, lose your paperwork and not approve something for ninety days or two years or five years, or they can-- you can have a good relationship with them, and they can approve things. So let's say they, they come in and they start to ask you, "Hey, are you guys serving crypto companies?" And you say, "Well, yes." And, and they say, uh, "Well, you know, that's not illegal per se, but we're gonna have a lot of questions about that in the next exam that we do of your bank. We, we have deep concerns about the risk that this might introduce." You know, suddenly everyone inside the bank's getting the message real, real loud and clear, like, "Ooh, maybe they don't like us doing this." Now, is it illegal? No. Um, but the bank's regulators, if they say jump, you sometimes want to say how high, right? And, um, this was the kind of, uh, extrajudicial pressure that Elizabeth Warren was able to, 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, um, you know, firearms industry and some things that she... It was 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, um, she, she didn't like it too much. And so she asked, uh... M-my understanding, this is kind of what other people in the Congress told me, is that, uh, she asked Gary Gensler to go hard on crypto and, like, try to really, um, curtail it in the United States. And that's what he did. He created a bunch of lawfare, essentially. Like, we'd go in to meet with him. We did maybe thirty times. We met with the SEC, um, after becoming a public company, where they allowed us to become a public company, and, you know, 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, you tell us the rules. We follow the rules." Like, that's how it's supposed to work. And they would say, uh, "We're not gonna give you any, any advice. Go talk to your lawyer." And then the next day, like, a enforcement action would arrive. And, um, and we'd say, "Well, how... What, what... Can you show us in the law what, what you think we've done that's wrong?" They're like, "No, we're not gonna do that. Like, you need to comply, like, basically delist all these assets or, um, we're gonna sue you." And so at a certain point, we just said, "Okay, let's go to the courts and find out."

   7. DSDavid Senra5:32

      Who initiated the legal action, them or you?

   8. BABrian Armstrong5:34

      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, they're required actually by law to engage with the industry to promulgate rules, and they had failed to do that.

4. 5:49 – 9:09

   Suing the Regulator

   1. DSDavid Senra5:49

      Wait, how many-Companies sue their regulator?

   2. BABrian Armstrong5:53

      Very few. [both laughing] So this, this actually gets into, like, one of the big themes of, you know, um, I don't know, like me as a CEO, like, I, I wanna 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 gonna hurt our company. A lot of public market investors, they just-- "Oh, this company is suing its regulator? Eh, I'll just wait and see. I'm not gonna buy that stock." You know? [both laughing] Um, 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, but I did-- I actually talked to a couple other financial services CEOs who had sued the SEC and won, and so I k- I knew it was possible. You know, it's a little bit like, um, you remember when SpaceX was trying to get that contract with the government?

   3. DSDavid Senra6:35

      NASA.

   4. BABrian Armstrong6:35

      Yeah. And they, they, 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, you don't wanna do these things, um, haphazardly or, you know... But you, you do-- There are moments where you have to stand up and, and sue the regulator or the government, and they'll-- to actually get the right outcome.

   5. DSDavid Senra6:53

      Okay, so when you're deliberating on whether to do this or not-

   6. BABrian Armstrong6:56

      Yeah

   7. DSDavid Senra6:56

      ... what's the timeframe? Is this a couple days, a few weeks? Like, how fast do you have to make this decision?

   8. BABrian Armstrong7:01

      Well, I would say that was, 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." Um, and we, you know, and we were like, "Well, what have we done that's wrong? You haven't pu-published 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, uh, yeah, we made a, made a call.

   9. DSDavid Senra7:21

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

   10. BABrian Armstrong7:25

       Yeah.

   11. DSDavid Senra7:25

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

   12. BABrian Armstrong7:30

       Yeah, yeah.

   13. DSDavid Senra7:30

       And they wind up-- It-- There was all kinds of, you know, essentially corruption, where it's just like-- I f- I can't remember the amount. It was two hundred and fifty million or whatever the case was.

   14. BABrian Armstrong7:37

       Mm-hmm.

   15. DSDavid Senra7:37

       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." [laughs]

   16. BABrian Armstrong7:49

       Yeah.

   17. DSDavid Senra7:49

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

   18. BABrian Armstrong7:52

       Yeah, yeah.

   19. DSDavid Senra7:52

       And so they tell the story where he's sitting there, and they're like, "What are we gonna do, Elon?" He, like, closes his eyes, and he's thinking for a little bit. He's like, "We have to sue them," and they wind up, you know, winning.

   20. BABrian Armstrong7:59

       Founder mode, I guess, you know? [laughs]

   21. DSDavid Senra8:01

       Well, you ju- you just said, like, y- mission driven. Like-

   22. BABrian Armstrong8:04

       Yeah

   23. DSDavid Senra8:04

       ... 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.

   24. BABrian Armstrong8:13

       Yeah. And I have a long-term perspective on it too. Like, if it's gonna 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. You know, I feel like personally I'm well off. Like, I, I'm, I'm in this, at this-- I don't have to work a day of my life. I'm doing this 'cause I actually want to achieve the outcome at this point. And so it wouldn't have helped me achieve the outcome, uh, if we'd let this regulator unlawfully kill the whole industry in the United States. That would've just been a setback from my point of view.

   25. DSDavid Senra8:42

       This happened after Republic?

   26. BABrian Armstrong8:43

       Yeah.

   27. DSDavid Senra8:44

       So you, uh, accumulated resources. Your company has a lot more resources.

   28. BABrian Armstrong8:47

       Yeah.

   29. DSDavid Senra8:47

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

   30. BABrian Armstrong8:50

       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, he sued a whole bunch of crypto companies, and a lot of them folded. So, um, in many ways, he actually did a lot for the economic development of places like the UAE and the Bahamas and places like that 'cause a lot of the industry moved offshore, but it was incredibly damaging to America.

5. 9:09 – 11:11

   Winning the SEC Case

   1. BABrian Armstrong9:10

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

   2. DSDavid Senra9:16

      On that one thing?

   3. BABrian Armstrong9:17

      Yeah. But the damage to the stock was probably, I don't know, ten, twenty billion, maybe more. I-- You know, it was a, it was a massive, uh, downward pressure on the stock for a period of a couple years. Oh, and I should mention we, uh, we won that case. Uh, it was-- So we didn't, we didn't pay a single dollars, a single dollar in fines. We didn't have to change a single thing about the company. The judge, um, or actually, the SEC, uh, uh, withdrew it in the-- under this new administration, and, um, several judges actually, uh, published opinions saying that the SEC be-behaved in an arbitrary and capricious manner. So I have a nice little, um, uh, thing in my office, uh, commemorating that. W-winning, winning our case suing the SEC.

   4. DSDavid Senra9:57

      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. It also is the same trait that I see in my friend Kareem, who's the co-founder and CTO of Ramp. Ramp is the presenting sponsor of this podcast, and Kareem is one of the greatest technical minds working in finance today. Kareem is obsessed with crafting a high-quality product and using the latest technology to constantly create better experiences for his customers. Ramp has one of the most talented technical teams in finance, and they use rapid, relentless iteration to make their product better every day. In the last year, Ramp has shipped over three hundred new features. Ramp is completely committed to using AI to make a better experience for their customers and automate as much of your business's finances as possible. Many of the fastest-growing and most innovative companies in the world are running their business on Ramp. Make sure you go to ramp.com to learn how they can help your business save time and money today. Let AI chase your receipts and close your books so you can use your time and energy building great things for your customers. Get started today by going to ramp.com.

6. 11:11 – 12:20

   Long Term Founder Mindset

   1. DSDavid Senra11:11

      Where did you get this long-term perspective from?

   2. BABrian Armstrong11:14

      I think it was from com- trying a bunch of short-term things and then realizing that... You know, I started some companies, like, in college, and, um, I realized that everything's difficult, right? And it doesn't-- Even if you're running, like, a sa- a sandwich shop or something, like, it's, 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 'cause there's, like, a million other sandwich shops. Like... And so i-if you're gonna do something, you might as well-- It's gonna 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 al- it always bothers me a little bit when I talk to entrepreneursAnd, and they tell me the, the thing that they're working on, and I'm like, "Okay, what do you really wanna do? Like, well-" "My big thing is I really wanna do this." In their mind, it's like a little too ambitious, it's a little too difficult and they need more capital. Part of me is thinking like, "Man, you should just go for that now," 'cause it's gonna... 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'll actually have a major impact if it's actually, if it works.

   3. DSDavid Senra12:16

      So are you optimizing for impact?

   4. BABrian Armstrong12:19

      I think so.

7. 12:20 – 15:04

   Autism and Focus

   1. BABrian Armstrong12:20

      Yeah. I mean, I think early on in my... Uh, like I was, I s- I was kinda shy and introverted as a kid, and I was like a little on, on the autism spectrum and stuff, so I think I was just trying-

   2. DSDavid Senra12:31

      You keep saying that.

   3. BABrian Armstrong12:32

      Yeah, I know.

   4. DSDavid Senra12:33

      We've, we've talked enough. You're-

   5. BABrian Armstrong12:34

      [laughs]

   6. DSDavid Senra12:34

      You're not autistic to me. [laughs]

   7. BABrian Armstrong12:35

      Well, I have a... I mask it well. There's like a whole masking thing.

   8. DSDavid Senra12:40

      Well, let's talk about this.

   9. BABrian Armstrong12:41

      Yeah.

   10. DSDavid Senra12:42

       How do you mask your autism? Do you... Are you just saying you're autistic 'cause it's like-

   11. BABrian Armstrong12:45

       'Cause trendy and cool now?

   12. DSDavid Senra12:46

       [laughs]

   13. BABrian Armstrong12:47

       No, it's actually like, you know, that's the good way to get in ven- a venture check is like to be on the spectrum. Um, I mean, we're not raising money, but, uh-

   14. DSDavid Senra12:55

       Introverted for sure, but I'm introverted too.

   15. BABrian Armstrong12:58

       Yeah.

   16. DSDavid Senra12:58

       I hate when people in the comments think I'm autistic 'cause I read all the time. Like, I'm not autistic, man. [laughs]

   17. BABrian Armstrong13:02

       [laughs] Um, I think I'm somewhere on the spectrum.

   18. DSDavid Senra13:05

       Okay.

   19. BABrian Armstrong13:05

       You know, I've taken some online tests and things like that, and there, I, there are s- things like where you'll have difficulty like reading, uh, people's faces and emotions sometimes. And, you know, I kinda can get overstimulated by like loud sounds and lights and th- you know. And so there's cl- kind of classic signs like that, but it's not debilitating at all, and I actually find it to be like it is a str- it's a strength in a sense that like I can just endlessly fa- like, focus on, um, interesting work almost, like, uh, for 12 hours a day. I just find it to be... I don't, I wouldn't say like effortless. It depends, depends on what kind of work I'm doing. Like, if I'm, 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 cons- like writing code or write- reading things on my computer or just like digesting cool content on the internet, I can just do that end- endlessly. So there is like, um... And y- I, 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.

   20. DSDavid Senra14:02

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

   21. BABrian Armstrong14:07

       Yes. That... So that's the other thing, which I don't know if this is an autism spectrum thing, but it... Yeah. I, I think more... 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, uh, like, if I see something that's just wrong and, um, not in line with what I wanna accomplish long-term around, [laughs] you know, civilizational progress and these things, it's... I don't, I don't care being disliked. I don't really care that much about d- 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, in Coinbase, which I think people consistently remark 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's gonna be apolitical during, you know, 2021, all that madness, or suing your, your regulator, right? These are things which most people probably wouldn't do 'cause they're, they're afraid of being disliked, and I, uh... 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

8. 15:04 – 21:10

   Mission First Company Culture

   1. BABrian Armstrong15:04

      thing.

   2. DSDavid Senra15:04

      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-

   3. BABrian Armstrong15:11

      Yeah

   4. DSDavid Senra15:11

      ... and a lot of people are like, "Of course."

   5. BABrian Armstrong15:12

      Yeah.

   6. DSDavid Senra15:12

      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?

   7. BABrian Armstrong15:17

      Right.

   8. DSDavid Senra15:18

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

   9. BABrian Armstrong15:20

      Right.

   10. DSDavid Senra15:20

       But back then, I remember the response. People were going crazy.

   11. BABrian Armstrong15:24

       Yeah, it's really funny. If you go 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, um, I feel like there was this mass hysteria or something that had like taken over the country. I mean, the George Floyd thing had happened. People were... 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, and then we increasingly would be getting these questions about, um, social issues happening in the world. Um, in this case, like police brutality with George Floyd, but, uh, all kinds of things like, you know, Middle East or whatever, gun control, you know. And we'd... Uh, it became almo- like, almost like I realized there was this element within the s- in 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. Um, and, you know, 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, we don't entertain that. It's... We don't allow one person to kinda derail 3,000 other people. So it was in that context that the company was going through this, and somebody at a town hall, um, asked the question like, "Are we gonna support Black Lives Matter at Coinbase?" I basically said, "I, I don't know if abou- know enough about it, but I'll look into it. Like, move on to the next question." [laughs] And, and they kinda held the mic and they said like, "That's not good enough. I need to know if we at this company are gonna stand for this or not." And I said, "I don't know. I'm not... I, I haven't looked into it," right? And this erupted in Slack, and basically 300 employees did a walkout in protest. Um, if you remember at this time, like every company in America was posting pro-BLM-

   12. DSDavid Senra17:15

       Mm-hmm

   13. BABrian Armstrong17:16

       ... statements. So I'd never had a walkout of employees at the company before. I didn't even know what that meant. They all just kinda closed their laptop in a remote, in a remote environment, I guess.

   14. DSDavid Senra17:24

       Oh, it was-

   15. BABrian Armstrong17:24

       Yeah. [laughs]

   16. DSDavid Senra17:25

       Okay, so wait. Are these, are these... This is not in person?

   17. BABrian Armstrong17:28

       This was all remote during COVID. Yeah.

   18. DSDavid Senra17:29

       Okay, so the walkout is close my laptop [laughs]

   19. BABrian Armstrong17:31

       Yeah. But we were like-

   20. DSDavid Senra17:32

       Going, go from my bedroom to my living room now. [laughs]

   21. BABrian Armstrong17:34

       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, uh, they don't, they refuse to work at this company b- based on my comment. And I, 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 [laughs] anything, you know. What is going on here?" And-Uh, we kind of got in the room as an executive team, and, um, I asked them kind of a few questions like, "Hey, people are very sensitive in this moment. They need to feel reassured about where their leaders stand." And, and I was like, "What does BLM even stand for?" You know, I don't... And like, we went and looked into that. Um, later I found out, by the way, that they s- they support, uh, defunding the police and like, all these other things. It was not a very simple answer. Um, and so, you know, I, I didn't really know what to do. So after about forty-eight hours or so, we put out a statement, and we said, um, "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, um, and others. And-

   22. DSDavid Senra18:46

       Which is the Jonathan Haidt book?

   23. BABrian Armstrong18:48

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

   24. DSDavid Senra18:50

       Okay.

   25. BABrian Armstrong18:51

       Yeah, he was talking... He basically talks about how in these college campuses, there's like these... They're training activists in these college campuses, and, um, it's now spilling into the workforce. And they, 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, like, 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, "I don't... We're not gonna do that here." You know, like, "We're not gonna 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. And outside of work, people can do whatever they want. You can go protest, you can be left or right or whatever, um, but just inside the workplace, we're not gonna be political. We're just gonna foc- unless it has to do with our mission, crypto and economic freedom, then we'll be very political and c- you know, engaging for litigation and things like that." So I knew it was gonna piss some people off, um, 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.

   26. DSDavid Senra20:04

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

   27. BABrian Armstrong20:07

       Uh, inside the company.

   28. DSDavid Senra20:08

       Okay.

   29. BABrian Armstrong20:08

       Yeah.

   30. DSDavid Senra20:08

       Did you send it to anybody outside Coinbase for the-
9. 21:10 – 23:05

   Rebuilding From Scratch

   1. DSDavid Senra21:10

      at that time if fifty percent resigned?

   2. BABrian Armstrong21:12

      We would have built it all back, you know? And this, this is actually a very important point because I think that there's a big difference between, like, a founder and a, and a presider of a company, right? Like I, I know that I could build it back because I started it when it was just me on a laptop, right? And I, and I was there when it was ten people and a hundred people and a thousand people. And if we need to go from two thousand to one thousand, I, that's not a big deal to me. You know, I could go back to being on my laptop again [chuckles] if I had to, right? And there's actually, there's this great Lee Kuan Yew speech that he gave. He's, he's the founder of Singapore, you know. And I guess he, he was dealing with a s- uh, 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, if you Google Lee Kuan Yew, um, iron, iron in veins. You know which one I'm talking about?

   3. DSDavid Senra21:57

      [laughs]

   4. BABrian Armstrong21:58

      And he, he basically, he says, like, in this speech, it kind of gives me chills every time, where he's, he's like, "You know, I, 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, or, 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, 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, um, and I was like, "This is what I, this is what I need to do as a leader." Like, it was very, it was very inspiring. So there are moments like that, um, that, uh, you have to stand up and say, "We're going in this direction, and if you don't, if you're not on board with it, it's okay. You can leave. But we're going this way." That, that's leadership.

   5. DSDavid Senra22:52

      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 ment- 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."

   6. BABrian Armstrong23:03

      Mm-hmm.

   7. DSDavid Senra23:04

      I want to go to that one second.

10. 23:05 – 25:20

    Follow Your Nose

    1. DSDavid Senra23:05

       But I like how you said, like, "I was confused, like, what is going on here?" So you're not... Your first instinct when you're confused, you start reading books, you start talking to people. What do you do to try to, to like, to essentially alleviate the confusion?

    2. BABrian Armstrong23:16

       Yeah.

    3. DSDavid Senra23:16

       'Cause you're like, "Oh, I don't know what's going on. I'm gonna read Jonathan Haidt's part," for example.

    4. BABrian Armstrong23:20

       Yeah. All the above. I mean, it's... I, I read books and, uh, books are amazing. I, I think sometimes you 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 is faster if you have access to them, especially. Earlier in my career I didn't have access, but now I, 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 ten years, they can explain to you in thirty 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 fol- am following my instinct a lot of the time. Like, a lot of, a lot of your job as CEO isYou 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've been... Uh, you're kind of always ingesting information, and once in a while you're just like, "Something feels, like, 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, [chuckles] you know, in this policy thing. And you just, you can just go digging, you know. And occasionally you find things and, um, you can add a lot of value.

    5. DSDavid Senra24:30

       When you say follow your nose, is this intuition?

    6. BABrian Armstrong24:34

       Yeah. It's, it's intuition, it's pattern matching. Um, I mean, a lot of times you're just absorbing information, like in documents people are writing up, in Slack channels and reports, and, like, a lot of information's just being ingested, and, um, 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."

    7. DSDavid Senra24:52

       I was actually surprised. Um, one of my favorite conversations I've had so far for the show was with Tobi Lütke.

    8. BABrian Armstrong24:57

       Yeah.

    9. DSDavid Senra24:57

       Uh, me, me and you talked about him at lunch and, like, I always say he's, like, your favorite founder's favorite founder.

    10. BABrian Armstrong25:01

        Yeah.

    11. DSDavid Senra25:02

        Like, you know, people that really admire the way he thinks and the, the way he's building his company. And you would think, like, this German engineer-

    12. BABrian Armstrong25:07

        [laughs]

    13. DSDavid Senra25:08

        ... you know, is gonna be all data-driven, and, like, he just kept talking [laughs] about, like, visualization and, uh, like-

    14. BABrian Armstrong25:13

        Affirmations.

    15. DSDavid Senra25:14

        Affirmations.

    16. BABrian Armstrong25:15

        Yeah.

    17. DSDavid Senra25:15

        Yeah, exactly. All intuition. [laughs] It was actually surprising. It's one of the most fascinating things about this conversation.

11. 25:20 – 30:07

    From Side Hustles to Coinbase

    1. DSDavid Senra25:20

       So explain the difference you thought about, um, when you were starting the companies before Co-Coinbase.

    2. BABrian Armstrong25:26

       Yeah.

    3. DSDavid Senra25:26

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

    4. BABrian Armstrong25:32

       I... It was really just by trying enough projects that either didn't work at all or were base hits that I'd realized everything was difficult and I... I, I, I think... So 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, you know, I don't know, $100,000 a year passively, that would be incredible 'cause I could somehow free up all my time, and then I would... I don't, I don't know what. I'd be able to f- I'd be able to be, like, passive income, you know, uh, wealthy, and I could then go build something else or d- I don't know. I didn't, I didn't really have a plan after that.

    5. DSDavid Senra26:08

       What, what year was this?

    6. BABrian Armstrong26:10

       Oh, I mean, this was like, I think graduated in 2005. Um-

    7. DSDavid Senra26:14

       Were you reading Tim Ferriss?

    8. BABrian Armstrong26:15

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

    9. DSDavid Senra26:17

       [laughs]

    10. BABrian Armstrong26:17

        Yes. There was The 4-Hour Workweek, like that whole thing. I, I was kinda thinking about it even before that, but The 4-Hour Workweek was, was definitely that. The, the first company I really started, um, in college was this tutoring company because I had been tutoring, uh, high school kids while, while I was in college to make extra money, and, like, working at the, 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, um, high school kids, and I... So I built, 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. It wasn't like 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've never occurred to me at that moment to r- like, I, 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," [laughs] or, you know?

    11. DSDavid Senra27:22

        [laughs]

    12. BABrian Armstrong27:22

        Or, like, I was like, "What are you talking about?" Like, I've n- 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, get jobs too. So, you know, I went through that process. Um, the tutoring company is its own little story. And then, you know, I, I tried a couple of other d- ideas like that after college too. Like, I had a couple of, like... I, I got, like, these rental houses in Houston, and I was, like, re-refurbishing them, and I was trying to do... build, 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.

    13. DSDavid Senra27:57

        Yeah, I read it a long time ago.

    14. BABrian Armstrong27:58

        Yeah. It's, 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, he basically was just saying, you know, there's a big g- dip between being a beginner and, and at, and, like, the top of your field where you make, you know, the top 1%, and, like, most people quit in the middle 'cause it's not fun after you're a beginner. There's just, like, a s- 10,000 hours and all these kind of things. And I remember thinking, "Do I really wanna be doing real estate in, like, 10, 20 years?" I was like, "No." Do I b- do I m- do I care enough about education or, you know? I was like, "I don't think that either." So I, I was... 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, even if I saw little or no success?" And the only thing I could... the right... 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 'cause that's where tech entrepreneurship happens. I need to shut down all the other stuff I'm doing 'cause those are just little short-term games. I sold off all these little rental pr- ren- rental properties. And, 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. It was just like I know what's the big thing is long term, and I'm gonna just go all in on it, and all the decisions led to that.

    15. DSDavid Senra29:20

        At the time you started Coinbase, did you think, "If it succeeds, this is something I'm gonna dedicate a few decades of my life to doing," even at that point?

    16. BABrian Armstrong29:28

        I, I remember I did think that, yeah. Because I had tried a couple of these other ideas that were kind of, um, they were, they were difficult, and I wasn't actually passionate about it. And so y- a lot of entrepreneurship, you're just, like, moving from one setback to the next with enthusiasm or 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, like, I'm really into for the, for a lifetime, right? And I had been reading a lot of, um, books like, uh, like Milton Friedman about economics and, um, like Ayn Rand stuff, and I was like, okay. I was g- I was getting kind of into these, like, free market, like, libertarian ideas,

12. 30:07 – 32:33

    Argentina and Bitcoin Spark

    1. BABrian Armstrong30:07

       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. And-

    2. DSDavid Senra30:13

       Why'd you go to Argentina?

    3. BABrian Armstrong30:14

       Well-

    4. DSDavid Senra30:15

       Women?

    5. BABrian Armstrong30:16

       No. [laughs]

    6. DSDavid Senra30:17

       Okay. [laughs]

    7. BABrian Armstrong30:18

       No. Sadly, no. But it was, um, 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 had never, like, traveled a-broad by myself. Um, I was kind of just reading a bunch of books and, like, I, I mean, I need to go travel the world and, like, see, find, find what I'm trying to do with my life. And, uh-

    8. DSDavid Senra30:43

       You went to Buenos Aires?

    9. BABrian Armstrong30:44

       Yeah.

    10. DSDavid Senra30:45

        It's beautiful.

    11. BABrian Armstrong30:45

        Yeah.

    12. DSDavid Senra30:45

        Argentina is a beautiful country.

    13. BABrian Armstrong30:47

        Yeah. It's... Well, it's... It... I learned e- from an economics point of view, like, i-i-

    14. DSDavid Senra30:51

        Oh, not like that. [laughs] I meant the physical beauty.

    15. BABrian Armstrong30:54

        Well, so it ties together because, you know, my understanding is actually around the, the year 1900 or so, like, like, more than 100 years ago, I think 1908, it was, like, one of the top 10 e- economies in the whole world.

    16. DSDavid Senra31:04

        It was called the Paris of South America.

    17. BABrian Armstrong31:06

        Yeah. It was, like, the first Latin American country that had a, a train station. You can see it in, in these historic buildings. They had, like, massive wealth, right, from, uh, beef and copper and all these things. And then over a se- a period of, like, 100 years of bad economic policy, of essentially, like, socialist policies of the, the government, like, stealing wealth from the people while claiming to help them, um, it's now, like, the 100th richest economy in the world. It went from, like, top 10 to, to 100th. Um, and so I was down there kind of reading, you know, Ayn Rand, Milton Friedman, [laughs] and seeing how hyperinflation had, like, decimated this entire country and everyone was pessimistic about the future. And 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, I'm passionate about for the long term." And within a year or two of that, I had... I read the Bitcoin whitepaper. That captivated my attention. And then I think-

    18. DSDavid Senra32:07

        This is around... So Bitcoin whitepaper published end of 2008.

    19. BABrian Armstrong32:11

        Yeah. And I think I-

    20. DSDavid Senra32:12

        You read it-

    21. BABrian Armstrong32:12

        ... December 2010.

    22. DSDavid Senra32:13

        Okay.

    23. BABrian Armstrong32:14

        Yeah. I had just come back from Argentina, so I was in the Bay Area deciding I wanted to be in tech entrepreneurship. I read the Bitcoin whitepaper Dec-December 2010. I, um, I'd gotten a job at Airbnb, actually, and I was seeing how money movement had f- was happening with them all in these different countries. And that's when I started working on the prototype for Coinbase,

13. 32:33 – 36:25

    Airbnb to Coinbase Nights

    1. BABrian Armstrong32:33

       nights and weekends.

    2. DSDavid Senra32:33

       So wait, how did they move money to all these different countries back then, though?

    3. BABrian Armstrong32:37

       Legacy payment rails. So, um, in the US and Europe, it was a little simpler. You could use bank transfers and, um, so they were accepting payments in, 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 that you could s- like, kind of like a Western Union, but it was different ones in different countries, and they typically had very high fees, like seven to 12%. I remember we were trying to s-send payouts into, I think it was Ecuador or, um, one of these countries, and we were reading the... we... it's like there's, like, a little ol-oligopoly of, like, two, two companies that do this and that, you know, in the region. And we were, we were like, "How much money shows up on the other side?" Like, "What are your fees?" And the... And we we-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 lo- like, how much money showed up on the other side. Like, [laughs] you know? Just to, like, give us some rough sense so we could tell the customer how much their payout was gonna be. I mean, it was s- it gave me such a visceral sense of, like, how broken the global financial system is. It's like each country has its own little proprietary set of oligopolies. Um, and i-imagine if, like, the internet worked like this, right? It's like, oh, I want to load a webpage from, you know, another country, and they're like, "You pay a high exchange fee, and it comes in, like, a different language."

    4. DSDavid Senra33:58

       [laughs]

    5. BABrian Armstrong33:59

       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, um, and reading some of these books, that, like, the world would benefit from a global financial system that was, you know, fast, cheap, permissionless, uh, decentralized, so there was no small group of people who could, who could, uh, be 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 whitepaper for the first time.

    6. DSDavid Senra34:30

       Okay, so you have... You're, you're building, like, your personal philosophy about, like, economics-

    7. BABrian Armstrong34:35

       Mm-hmm

    8. DSDavid Senra34:35

       ... and what's important there. You know that you want to dedicate yourself to tech entrepreneurship as far as, like, what your career is, 'cause you're gonna be passionate about that, you wanna do something for a long term.

    9. BABrian Armstrong34:42

       Mm-hmm.

    10. DSDavid Senra34:42

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

    11. BABrian Armstrong34:50

        Yes.

    12. DSDavid Senra34:51

        And then you start working on Coinbase nights and weekends?

    13. BABrian Armstrong34:54

        Yeah.

    14. DSDavid Senra34:55

        Okay.

    15. BABrian Armstrong34:55

        Great, great summary, by the way. [laughs] Yeah, so-

    16. DSDavid Senra34:57

        I kind of do that for a living. [laughs]

    17. BABrian Armstrong35:00

        [laughs] Yeah, so this is where a little bit of that hustle and drive came in, 'cause, you know, I was working long hours at Airbnb. They were, like, rocket ship company. I was learning a lot. Really amazing team. And, 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, 7:00 PM at Airbnb, come home, eat a little dinner, and then from, like, 8:30 to midnight or something, like, five days a week, I would work on my startup. And, you know, you always have to be very careful. Uh, 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, you know, I, I used my own laptop and I... Sometimes on Sundays I'd work, um, yeah, as well, right? 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 kinda just have to start with anything, right? So first I went and talked to a friend of mine who 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 a co-founder 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 re-implement, like, a whole Bitcoin node in, um, 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

14. 36:25 – 37:35

    Finding a Co-founder

    1. BABrian Armstrong36:25

       dates.

    2. DSDavid Senra36:25

       Why did you think you needed a co-founder?

    3. BABrian Armstrong36:27

       Well, the main reason was that I had read a lot of Paul Graham essays from Y Combinator, and, you know, I was, I was-- I really re-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 Sergey, and, um, you know, there are exceptions, but m-more often than not, like, great founders... Like, running-- building a company is just so difficult, it helps to have people with some complementary 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.

    4. DSDavid Senra37:03

       Yeah, it's interesting 'cause I feel like there's always onl- even if you have co-founders, there's, like, one... It's actually one founder.

    5. BABrian Armstrong37:09

       Yeah.

    6. DSDavid Senra37:09

       Like, you could 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, well you start out with three or four or five.

    7. BABrian Armstrong37:18

       [chuckles]

    8. DSDavid Senra37:19

       There's always one. Like, there's that one person-

    9. BABrian Armstrong37:21

       Yeah

    10. DSDavid Senra37:21

        ... that's going, that's actually driving the company.

    11. BABrian Armstrong37:23

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

    12. DSDavid Senra37:27

        Yeah

    13. BABrian Armstrong37:27

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

    14. DSDavid Senra37:33

        Yeah.

    15. BABrian Armstrong37:34

        You know, you never know

15. 37:35 – 38:41

    YC Without a Co-founder

    1. BABrian Armstrong37:35

       exactly. And, um, you know, like I will say in, in our, in my case, like, I tried to find a co-founder for about, like, a year and a half and failed, and so eventually, um, got the app live and got into Y Combinator, and there's a whole story there.

    2. DSDavid Senra37:46

       Did you get into Y Combinator as a solo founder?

    3. BABrian Armstrong37:48

       So th-this is the [chuckles] this is another interesting story. But I actually applied with, um, this guy f- who... Ben Reeve, who had created blockchain.info, which is now blockchain.com. And we sort... He had never heard of Y Combinator, but I convinced him to fly from the UK. We met and had a coffee, and then we went and did the interview. Which, by the way, is a bad idea. Um, you should really co-found with people you've known for a long time. So anyway, that-- we got accepted somehow under that premise. Um, I don't think we mentioned about probably that we didn't know each other that long, or it didn't come up in the interview or something. We didn't hide anything, but, um, anyway, it became clear within, like, three months that it was not going to work. And, um, and so with the help of YC, I kind of went... I, you know, I had a hard conversation with him about that, and we, I, I went through the program solo. Um, anyway, long story short, [chuckles] we went through Y Combinator, raised a seed round at the end of it, and I,

16. 38:41 – 40:18

    Finding the Perfect Partner

    1. BABrian Armstrong38:41

       you know, I was lucky enough to have Fred Ehrsam reach out to me, and he became, uh, the first person who I really started working with on it, uh, unofficially, and then it just started going really well, very complementary skill sets, and I asked him to co-found, and so he became the co-founder of Coinbase. And I do- I actually don't think Coinbase would have succeeded without Fred. Like, if you look at the, 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 lanch-launch pad into orbit, if you will.

    2. DSDavid Senra39:18

       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 twenty percent of their data. Why? Because eighty percent 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. Visit hubspot.com today. That is hubspot.com.

17. 40:18 – 41:23

    Losing Money Per Trade

    1. DSDavid Senra40:18

       There are 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. [laughs]

    2. BABrian Armstrong40:25

       Yeah. [laughs] Yes. That is true. [laughs]

    3. DSDavid Senra40:27

       How did, how did that happen?

    4. BABrian Armstrong40:28

       I mean, the simple version of it is that, like, I, I was a computer science major, um, and I studied economics and computer science. Fred studied the same thing, but he had gone into work, uh, in, 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. Um, 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, um, on every trade, he was able to map that out, and due to, like, certain time risks and th-these things, he, he actually was correct that he'd map that out. And it was just a set of conditions which I was not as familiar with. So, um, that was a great example of just him adding value in the first probably three weeks we worked together.

    5. DSDavid Senra41:13

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

    6. BABrian Armstrong41:17

       No, that one wasn't near death. It was just getting the right, um, business model and fee structure set.

    7. DSDavid Senra41:21

       What was an example of a near-death experience?

18. 41:23 – 43:29

    Support Backlog Chaos

    1. BABrian Armstrong41:23

       Well, okay, so an example of a near-death experience was, um, I think we had ch- 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, we were having this huge backlog of customer support inquiries. Like, where, uh, it would be, like, every night from, like, nine PM to midnight, we would just try to answer support q-queries 'cause we hadn't, we didn't have a s-customer support team. And, um, well, we were slowly trying to build it, I should say. Anyway, so we had, like, a thousand, two thousand, five thousand, ten thousand backlog of these customer support tickets, and people were getting very angry about all this.

    2. DSDavid Senra42:08

       'Cause you couldn't respond?

    3. BABrian Armstrong42:09

       Yeah.

    4. DSDavid Senra42:10

       I was one of those people.

    5. BABrian Armstrong42:11

       Okay. [laughs]

    6. DSDavid Senra42:12

       [laughs]

    7. BABrian Armstrong42:12

       You were early, you were early on Coinbase?

    8. DSDavid Senra42:13

       Yeah.

    9. BABrian Armstrong42:14

       Okay. Well, apologies for the lack of, uh, customer support response.

    10. DSDavid Senra42:17

        To the point where I was, like, looking up... Like, I had a bunch of Bitcoin on there. I was, like, getting... There was an issue, and I was like, "What is the address?" Like, I'm gonna have to fly to San Francisco-

    11. BABrian Armstrong42:25

        [laughs]

    12. DSDavid Senra42:25

        ... 'cause these people won't respond to my email.

    13. BABrian Armstrong42:26

        Yeah. Well, this is exa-ex-exactly what happened, is people started showing up at the office. Like... 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. And, uh, I remember some-

    14. DSDavid Senra42:43

        Well, back there, they had to be weirdos. Like, the people that were into crypto back then [laughs] were not your normal people.

    15. BABrian Armstrong42:49

        I don't know. I mean, it was... Once in a while, Fred would actually go answer the door holding, like, a golf, a golf club. And, you know, like, [chuckles] usually it was somebody who was like, "Man, why didn't my crypto hit my wallet?" 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.

    16. DSDavid Senra43:08

        'Cause back then, it was the only place where you could buy Bitcoin with a credit card, right? Like, you could use-

    17. BABrian Armstrong43:14

        Yeah, or a bank transfer.

    18. DSDavid Senra43:15

        Or bank transfer, right?

    19. BABrian Armstrong43:15

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

    20. DSDavid Senra43:24

        Were you the first crypto company to do that?

    21. BABrian Armstrong43:26

        In the US, yeah.

    22. DSDavid Senra43:28

        In the US.

    23. BABrian Armstrong43:28

        Yeah.

19. 43:29 – 47:47

    Banking and Compliance Gauntlet

    1. DSDavid Senra43:29

       Yeah.

    2. BABrian Armstrong43:29

       Yeah, exactly.

    3. DSDavid Senra43:29

       How did you get the bank partnership?

    4. BABrian Armstrong43:31

       So that, that's its own whole story. I mean, um, by the way, there was other near-death experiences around cyber events and things like that we can talk about if you want.

    5. DSDavid Senra43:38

       Yeah, I would.

    6. BABrian Armstrong43:39

       But on the, um, on the bank side, yeah, so okay, this is another interesting story where we... [sighs] Okay, believe it or not, the first version of the Coinbase app, actually, you couldn't buy or sell Bitcoin. Um, I thought we were making, uh, 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, I remember, like, a couple hundred people signed up on... off of Reddit or something like that, but i- the app was not retaining users, right? And what they teach you in Y Combinator is, like, go talk to customers, get 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 who 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, uh, 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 kinda clicked in my head, and I was like, "Well, if there was... If I... If there was, like, a buy button in the app, would you have bought it here?" And I know it sounds, like, ridiculous in hindsight, but at the time, this was, like, m- market research, right? And he's like, "Yeah, probably." And so I was like, okay, we gotta 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, we've gotta make it possible to get bank transfers hooked up, kinda like PayPal or debit cards. And I remember calling, like, these different banks and saying, "Hey, I wanna get integrated into the, the bank network in the ACH." It's called ACH in the US. Um, 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, um, they're like, "We do not work with Bitcoin companies." Like, bam, s- slamming the phone down, right? And, um, so I went to the, the partners at Y Combinator. Actually, uh, one of them was, like, Sam Altman at the time. He was running, he was running, uh, Y Combinator, and, like, Gary Tan was there. He was helping me, and these... Paul, uh, Bucat and these various folks. And I remember they said, um, "Well, why don't you go talk to Silicon Valley Bank?" Like, we help... We... Silicon Valley Bank opens bank accounts for lots of Y, Y Combinator companies. We have a good relationship there. So they kinda warmly introduced me to the right person, and they were kinda like, "Eh, these guys are pr- you know, these guys are probably crazy, but we like to help Y Combinator, so let's, 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, 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 transmit-mission license I researched was like, it was like it was gonna cost $5 or $10 million and take about three or four years, and I'd only raised about 600K right now. So, so I was like, "That's not good." Um, but they also said, "Well, if you, 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 law firms, and, um, 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, a money transmitter, but it's gonna cost $30,000 for this, like, five-page piece of paper." And I thought... At the time, I thought this was crazy. You know, we'd, we'd raised, like, six, $600,000. I was like, "$30,000 for a piece of paper?" You know, um, but I was talking with the, my advisors at Y Combinator, and they were like, "Well, if this allows you to get the bank account open and you, you can start to test your i- your product idea, like, do it, you know?" So I paid this guy the 30 grand. We got the account open. I, 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 kinda antiquated system. And, uh, it launched, and it had product market fit, and it just w- 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.

    7. DSDavid Senra47:33

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

    8. BABrian Armstrong47:36

       Yeah.

    9. DSDavid Senra47:36

       Could you use credit cards back then or no?

    10. BABrian Armstrong47:38

        Um, no. I think debit card came a year or two after that. Yeah.

    11. DSDavid Senra47:42

        Okay, so even that, with just the bank transfer.

    12. BABrian Armstrong47:44

        Yeah.

    13. DSDavid Senra47:45

        Flooded with customers.

20. 47:47 – 51:36

    Raising Fast to Survive

    1. BABrian Armstrong47:47

       Yeah. And started to get some very anxious calls from the bank at c- at certain points too because as... They, they were like, "You guys have raised $600,000," and they were like, every day there was, like, $550,000, you know, because we'd, we'd debit these customer accounts to get the money, but we had to pre-buy the Bitcoin. And so we had this, um, cash flow issue where, like, we were basically using our entire balance every day just to service the current demand. And they, and they... 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 c- you're insolvent." And by the way, they're, they're... They might be on the hook for it too. We might be, like, at 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 gonna be able to continue to serve, serve you, uh, on this ACH network trans-trans-transfers." Like, you were in this tiny little sandbox, but now you're suddenly growing like a weed. And, um-And I remember we took this graph of, like, the daily buys. It was just an up, and we didn't even have a pitch deck or anything, and we just went out and in, like a week, raised, uh, the next round and got, um, like twenty-five million dollars deposited in the account.

    2. DSDavid Senra48:56

       With a graph.

    3. BABrian Armstrong48:57

       Yeah. 'Cause we... ordinarily, you w- I wouldn't recommend that, but we were sleep-deprived, and it, it, 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 is an up and to right graph of demand, and the bank's gonna close our account in, like, two weeks if we don't get some money."

    4. DSDavid Senra49:15

       That twenty-five million was from A sixteen and Ribbit?

    5. BABrian Armstrong49:18

       The Series A was from, uh, Union Square Ventures and Ribbit.

    6. DSDavid Senra49:21

       Okay.

    7. BABrian Armstrong49:22

       Yeah. And then, uh, A sixteen Z was the B series.

    8. DSDavid Senra49:24

       Okay.

    9. BABrian Armstrong49:25

       Yeah.

    10. DSDavid Senra49:25

        So who was doing the graph then? Was it Union Square and Ribbit on the graph?

    11. BABrian Armstrong49:28

        That was, that was it. Yeah.

    12. DSDavid Senra49:30

        Okay.

    13. BABrian Armstrong49:30

        Union Square Ventures and, and-

    14. DSDavid Senra49:31

        Was it Mickey?

    15. BABrian Armstrong49:32

        Yeah. [laughs]

    16. DSDavid Senra49:33

        You know him? Okay.

    17. BABrian Armstrong49:34

        Yeah, I spent some time with him. I like him a lot. He's great. [laughs] Yep.

    18. DSDavid Senra49:37

        That sounds like something he would do. [laughs]

    19. BABrian Armstrong49:38

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

    20. DSDavid Senra49:42

        Why? Because he came... He spent the first thirty-six or thirty-seven years of his life living in South America.

    21. BABrian Armstrong49:46

        Yep, Venezuela.

    22. DSDavid Senra49:47

        Yeah, exactly.

    23. BABrian Armstrong49:48

        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, a new kind of money," you know?

    24. DSDavid Senra49:57

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

    25. BABrian Armstrong50:03

        Yeah.

    26. DSDavid Senra50:04

        And how long did you, did you think that was going to be, like, the, the totality of the business? Were you already thinking about product extension back then or no?

    27. BABrian Armstrong50:13

        First, I, 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, like, engineers quitting because it was, like, just overwhelming and there was too much stuff. We had-- They were getting paged in the middle of the night, like three times every night, trying to keep the website up. Um, there, you know, these banks might just turn us off, and we got-- So there was all kinds of just... I was just trying to survive, like, the next few months [laughs] often. You know, in the back of my mind, I, 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, that's what I got excited about when I first read the Bitcoin white paper was like this could be a new kind of financial system for the world, um, that's global and fair, decentralized, more free market-oriented. Anybody with a s- with a cell phone could have access to good financial services, participate in a global economy. Like, the government couldn't erode all their wealth via inflation, like what happened in Argentina. So I, I knew that there was high potential for this eventually, but, like, there wasn't too much time to think about that. We were just... It was a lot of sleep deprivation and long hours and just trying to survive to the next three months. [laughs]

    28. DSDavid Senra51:20

        And how long did this, that period last? Was this a couple of years?

    29. BABrian Armstrong51:23

        Yeah. I mean, I'd say, like, uh, like four, like four or five years in, I, I got to... We were at a place where I felt like I could take, um... you know, I could take a week off and not, the place wouldn't blow up or something.

21. 51:36 – 57:54

    Mission Values and Inspiration

    1. BABrian Armstrong51:36

       Yeah.

    2. DSDavid Senra51:36

       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?

    3. BABrian Armstrong51:41

       There was a book called PayPal Wars, which talked about the early days of PayPal, and it's actually re- pretty remarkable. You go back and look at what, you know, Peter Thiel and Elon and Max Levchin, all these guys were doing, David Sacks. They actually had many similar ideas to Bitcoin. They were, they were trying to create a, a decentralized form of money that could be permissionless global on the internet. It, it... You know, because of the history of the company and how it got acquired by eBay and a lot of the people left, it, it ended up being more just like a checkout alternative with credit cards and stuff. But actually, having worked at Airbnb, it that, that g- that actually gave me a good picture into what was possible as well, because in college, you know, I went to school at Rice University in Houston. Amazing school, I loved it, and... but it, 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, it was like some magic was happening. Like they'd caught lightning in a bottle, and the thing was growing like wildfire. They were... 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, and then I kind of said, "Okay, um..." I-- Before in my mind I had it kind of put on a pedestal. I was like, "Wow, these are like some g- 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, 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, now- nowadays, I would say, you know, certainly, like the, 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. Um, I've, I've sort of been a student of lots of these companies and tried to take the best.

    4. DSDavid Senra53:30

       Anything from history?

    5. BABrian Armstrong53:32

       Yeah. I mean, I really like the Wright brothers. They're, they're cool. Um, you, you, have you ever done an episode on them?

    6. DSDavid Senra53:39

       Yeah, episode two twenty-eight.

    7. BABrian Armstrong53:40

       You remember that? Wow.

    8. DSDavid Senra53:41

       Yeah.

    9. BABrian Armstrong53:41

       Okay.

    10. DSDavid Senra53:42

        The book by David McCullough.

    11. BABrian Armstrong53:43

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

    12. DSDavid Senra53:45

        It's an incredible biography.

    13. BABrian Armstrong53:46

        Incredible. Yeah. I love these kind of just, like, big problems like that, that humanity... Y- y- you know, y- you know that it's kind of crazy, but it's possible, and someone's gonna do it maybe in the next hundred years, and there's a few, there's a few things like that, like, um, longevity. We can talk about that, like, in, in the biotech space, you know, fusion energy. Um, the-

    14. DSDavid Senra54:08

        The Wright brothers-

    15. BABrian Armstrong54:08

        ... strong AI.

    16. DSDavid Senra54:09

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

    17. BABrian Armstrong54:13

        Yeah.

    18. DSDavid Senra54:13

        Like, humans have been trying to figure out how to fly for centuries before-

    19. BABrian Armstrong54:16

        Yeah

    20. DSDavid Senra54:16

        ... these two brothers in Dayton, Ohio, if I remember correctly, that essentially solved a century-old pr- centuries-old problem with the modest profits of a bicycle shop.

    21. BABrian Armstrong54:25

        Yeah. [laughs]

    22. DSDavid Senra54:25

        And what was fascinating about them is, like, most of the... I mean, they, 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, fifteen hundred dollars. [laughs]

    23. BABrian Armstrong54:40

        Yeah. It was some really tiny amount of money.

    24. DSDavid Senra54:42

        Yeah. [laughs]

    25. BABrian Armstrong54:42

        And there was people funded with, like, two hundred X as much money. But yeah, I mean, I, I, I get very passionate about, like, going after what are the big ideas like that, that people could go after? And, um, I think it's actually worthEverybody 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, those are the, the big exciting ideas.

    26. DSDavid Senra55:02

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

    27. BABrian Armstrong55:06

        Yeah.

    28. DSDavid Senra55:06

        I have something working and if, if I just don't die-

    29. BABrian Armstrong55:08

        Yeah

    30. DSDavid Senra55:08

        ... I can figure out other products or, you know, a, a way to grow the business in the future. Were you thinking of any other, like, any other specific way about, like, I wanna build a, a company s- this way?
22. 57:54 – 1:02:14

    Hiring for Spikes

    1. DSDavid Senra57:54

       How were you recruiting talent back then? And were you sitting in on every single interview?

    2. BABrian Armstrong57:59

       Yeah. So I mean, the very early days, um, it was just, like, me cold, like, going to meetups and try- and trying to get anybody interested and come and interview. It was, like, cold messaging people off LinkedIn. Um, it was reaching out to people who I had worked with in various contexts.

    3. DSDavid Senra58:16

       Why did it have to be outbound at that point?

    4. BABrian Armstrong58:19

       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, like, the six... Uh, raised the six hundred K seed round, and, um, 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 c- 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 U- 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 me- we might be a good company to bet on. As the company got bigger, you know, we developed, we hired recruiting teams and the whole, 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. Um, we eventually, um, broadened out, opened other offices, so hired some remote workers. Hiring is its own whole topic.

    5. DSDavid Senra59:23

       Yeah. Well, I'm curious, like-

    6. BABrian Armstrong59:24

       Yeah

    7. DSDavid Senra59:24

       ... have you found any other, um... I talked to my friend Karim, founder of Ramp, about this.

    8. BABrian Armstrong59:29

       Mm-hmm.

    9. DSDavid Senra59:29

       Daniel Ek, founder of Spotify. They both think about it in the same exact way where they hire for spikes.

    10. BABrian Armstrong59:33

        Yeah.

    11. DSDavid Senra59:33

        One of the benefits of being a founder-led company is, you know, big companies try to manage to the middle. They don't want the high highs or the low lows and, uh, Daniel and Karim 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-

    12. BABrian Armstrong59:51

        Yeah

    13. DSDavid Senra59:51

        ... uh, or extreme personality traits on the other side of that."

    14. BABrian Armstrong59:54

        Yeah. I totally agree with that. I mean, that, that's, you know... Like, we were looking at people's past work-

    15. DSDavid Senra1:00:00

        Mm-hmm

    16. BABrian Armstrong1:00:00

        ... and not necessarily, like, their resume or, um... You know, if they just, 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," um, 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 they... Maybe we've seen their work previously. These are people who we would hire. I mean, there's many examples of this. Like, I... You know, you talk about s- some of their personality quirks and, like, Balaji Srinivasan 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 O- Olaf Carlson-Wee, o- outside of Fred and I as the co-founders, and we were trying to hire this customer s- someone to come in to run customer support 'cause of the backlog I mentioned. And I remember it came down... There were two finalists. One of them was this guy who had run a team at Google AdSense, and on paper, he was like, he's this guy who worked at Google. He's like, he'd run a big team of, like, 20 or 30 people, was, like, very credentialed. But you just, in the interview, it was just likeIt 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, he was a lumberjack. Literally. He had just graduated college. He had written his-- He wrote his thesis in college on Bitcoin, and then he did this kind of like walkabout sort of spirit quest thing where he went for, like, a, a summer, and it was like he was a lumberjack. So he came in, and he looked, like, super disheveled and, you know, he, he, like, threw on some, like, ill-fitting suit he'd bought, like, on the way to the interview or so- 'cause he only owned, like, lumberjack clothing. Um, but the guy was just, like, super bright, super passionate, super young, su-super hungry, and we're like, "Screw it. Like, let's just give this guy a shot." Like it's, it's, it's gonna be... It was just exciting to, like, talk to him about crypto, and he crushed it. So he-- By the way, he, he went on and founded like a... He's like a billionaire. He's created like a crypto, uh, v-venture fund. So [laughs] 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, I know Toby talked about that recently on, on the podcast too. Um, and they were people that were just like high agency, smart, get shit done, um, and they... even if they were totally unqualified on paper, and those were some of our best

23. 1:02:14 – 1:05:51

    Centralized vs Decentralized

    1. BABrian Armstrong1:02:14

       hires.

    2. DSDavid Senra1:02:14

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

    3. BABrian Armstrong1:02:19

       Yeah.

    4. DSDavid Senra1:02:19

       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, like..."

    5. BABrian Armstrong1:02:29

       Yeah.

    6. DSDavid Senra1:02:30

       Did you have an issue getting talented people to work for you? Like, because you were kinda... This is it. You might be autistic. You might be right, 'cause now you're, you're, you're in- 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. [laughs]

    7. BABrian Armstrong1:02:47

       Yeah. I mean, so, um, 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 wanna make it easier for people to access it, so you can choose to use our company, but there... you could use, use da- any company." Like, as opposed to, let's say, Visa. Like, the only way to access the Visa network is through one company, Visa, you know. But like email is a better analogy. Email's a decentralized protocol, but you can use Gmail or Outlook or whatever. So at least there's, like, choice. But g- even going beyond that, um, 'cause for years we heard that as a criticism, so we said, "All right, let's make a self-custodial wallet too. Like, if you wanna custody your own crypto and not have to trust us at all, we're gonna 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. Um, 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 inst- big institutions. Like, most of the money in the world is at, like, something like eighty or ninety percent of it's all tied up in inst- financial institutions. It's not retail people. And so when we went, went and met, went, met, met with institutions, and we're like, "Self-custodial wallets," they, they're like, "That, that sounds super scary. We're not gonna do that." So they wanted these kind of enterprise-grade custody solutions, um, and we, we've had-- we've been very successful building those kind of things for, like, banks.

    8. DSDavid Senra1:04:03

       That decision was based on the response from the market, or was that a decision you made before and then brought that decision to the market?

    9. BABrian Armstrong1:04:09

       The one around inst-institution specifically was based on conversations with them. Yeah. And the, 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, simple and easy to use and trusted. And, um, the average person is not gonna know how to run, like, a self-custodial wallet on their laptop. Um, 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, it was gone. There's many, many, many sad stories about that.

    10. DSDavid Senra1:04:45

        Yeah, it's funny 'cause there's an, uh, like a parallel here. When, um, Steve Jobs ha-had that observation, he's like, "Well, the first things we're making at Apple, they're for hobbyists." But he's like the, he's like the... if the amount of people that wanna, like, put together their own computer, it's like if, as opposed to the ones that wanna go to the store, like, if you just treat it, he called it, like, the appliance. He's like, wanted to make a personal computer as like appliance. It's like that market is a thousand times bigger.

    11. BABrian Armstrong1:05:08

        Yeah.

    12. DSDavid Senra1:05:08

        Wound up being millions of times bigger, actually.

    13. BABrian Armstrong1:05:11

        Yeah.

    14. DSDavid Senra1:05:11

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

    15. BABrian Armstrong1:05:14

        I think that's, 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 wanna take it apart. But ultimately, what crypto's gonna do is just gonna update the financial system so people have better financial services. M-many people are gonna use it without even knowing they're using crypto. They're just gonna say, "I don't know, I just wanna send money to my family abroad or whatever, and instead of paying eleven percent at Western Union, I just want it to arrive instantly for free or whatever." And, like, they're gonna use stable coins for that, right? Or if they wanna get, um, a loan, and it's just using DeFi, it's like cheaper, lower rate, and they can get approved in thirty seconds. It's like, that's easier than calling a bank and filling out all these forms, right?

24. 1:05:51 – 1:07:59

    From Bitcoin Wedge to Super App

    1. BABrian Armstrong1:05:51

       So Coinbase's app actually has evolved. I mean, fast-forwarding to modern day, like, we are now, um, you can trade any type of asset, not just crypto assets. You can trade stocks and commodities and prediction markets, and then you can get a loan. You have a Coinbase card you can spend. We're just trying to build better financial services now, and actually, like, that's where you start to get into, like, multi-trillion dollar market.

    2. DSDavid Senra1:06:12

       Yeah, you call it the what, the everything app?

    3. BABrian Armstrong1:06:13

       The Everything Exchange. Yeah.

    4. DSDavid Senra1:06:14

       The Everything Exchange.

    5. BABrian Armstrong1:06:15

       Yeah.

    6. DSDavid Senra1:06:16

       Yeah.

    7. BABrian Armstrong1:06:16

       And a super app. Maybe that's... Yeah, you com- [laughs] you combine the two.

    8. DSDavid Senra1:06:19

       Okay. This is not, like, a plan from the beginning. Like, Bezos had the everything store. That was the code name of Amazon in DE Shaw, like in the hedge fund that spun out. So he kinda had that master plan at the beginning, even though he started with books.

    9. BABrian Armstrong1:06:31

       Yeah.

    10. DSDavid Senra1:06:31

        But that was not the case with, y- uh, Coinbase, correct?

    11. BABrian Armstrong1:06:35

        I felt like more and more of the economy was gonna run on Bitcoin 'cause it was just faster, cheaper, more global. I didn't-- I couldn't have foreseen all of the things that happened. I didn't foresee stable coins. I didn't foresee prediction markets. Like, I, 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, and we were the easiest way to do that. That was a, a wedge into the market to start to then update all kinds of financial services.

    12. DSDavid Senra1:07:02

        And that's how you thought about it.

    13. BABrian Armstrong1:07:02

        I didn't, I didn't have a complete picture of that from day one. That, I think that would be intellectually dishonest for me to say that I knew exactly how that was gonna play out, but I had a...I knew that the potential of it went way beyond just like buying Bitcoin or something. I, I was like, "This could power the global economy e- 'cause it's just better than, like having certain countries printing their own money or, like super high fees in each country." Like, we need a, we need a, a native financial layer to the internet that's truly global and decentralized, and like a bigger and bigger share of GDP could run on that over time. I k- I knew it was massive, I just didn't know exactly how it'd play out.

    14. DSDavid Senra1:07:35

        Hey, real quick, I've started a newsletter for this podcast that you might find interesting. The newsletter shares five of my favorite quotes from each episode, along with behind-the-scenes photos with the guest. The first of these newsletters goes out next week. I'll share my five favorite quotes from the Daniel Ek episode, along with some of the photos with Daniel and I. To sign up, just go to davidsenra.com/newsletter. That's davidsenra.com/newsletter.

25. 1:07:59 – 1:11:00

    How Coinbase Runs Today

    1. DSDavid Senra1:08:00

       So how do you think about running the company now? How is it organized?

    2. BABrian Armstrong1:08:03

       Well, there's lots of ways you can answer that question. So I have a really amazing president and COO, Emily Choi. She, uh, really is a, an amazing operator, allows me to focus on a lot of the, the managing the product groups. Like I, I'd say I'm a pretty product-focused CEO. She's operationally focused, and it's an amazing combo of skill sets. I actually think that a lot of enterprise value can get generated when, when you pair, um, like a technical founder with a great operator, right? 'Cause if you have just an operator, they can, um, make the company very, very efficient. You know, this sort of stereotypically, everyone's different, right? But if you imagine like a, like only an operational leader, the company will run very efficiently, but they won't-- They'll miss their next wave of innovation or something, right? And if you have only a founder, sometimes they blow the place up 'cause they're like every, 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 you-- There are other companies where, like traditionally like M- Zuckerberg and Sheryl or Sandberg or, you know, whatever kind of classic thing you wanna look at. I'd say even at Google there, probably Eric Schmidt and, um, Larry kind of played that role, right? And with Sergey. So there's examples like that in history. I think, um, anyway, it's gener-generated a lot of value for Coinbase to have Emily and I both there.

    3. DSDavid Senra1:09:14

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

    4. BABrian Armstrong1:09:16

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

    5. DSDavid Senra1:09:22

       You don't mind it?

    6. BABrian Armstrong1:09:23

       Yeah. I-- There was times where I felt like, um, man, it's like draining to like go to, go to DC and I have to go meet with all these politicians. I actually don't mind it now in a weird way. It's-- there's so many interesting people in DC. There's like big, big personalities and [laughs]

    7. DSDavid Senra1:09:36

       Okay, hold on. We gotta, we gotta, we gotta go into that 'cause you said that earlier, and I was like, "I gotta ask him about this."

    8. BABrian Armstrong1:09:41

       Yeah, yeah.

    9. DSDavid Senra1:09:41

       That, that is shocking to me-

    10. BABrian Armstrong1:09:43

        Yeah

    11. DSDavid Senra1:09:43

        ... that you find them interesting.

    12. BABrian Armstrong1:09:44

        Well, here's one thing I learned about my mo- 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, ugh, like review three hundred resumes or something. Or, um, there, 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 [chuckles] 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 like 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 and, you know. Or I have to go shut down this whole thing and like we're gonna lay people off or whatever. Like, usually it's the, the worst thing you're trying to-- [chuckles] you don't wanna wake up and do. But I find a sense of, um, it's not-- I'm not a masochist about it. Like, 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, I did something useful today.

26. 1:11:00 – 1:12:43

    Decision Speed and Risk

    1. DSDavid Senra1:11:00

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

    2. BABrian Armstrong1:11:05

       Yeah. Like that's a great, um... Actually, Elon frames it, uh, what is the limiting factor at any given time? And I, I go dive deep on that. That, that is a very great principle. I'd say the last thing is just if we try to push down decision-making in the org, right? It's hard, it's hard to do, but that's like m-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 'cause you have more stakeholders and all this, but it's like a single decision maker, push it down, um, and just give people short time frames to like knock out a decision, unblock this, go, go, go. And I try to be a little bit of like, um, 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, um, like a twenty X outcome, but it has like a twenty percent chance of success, which you should take that bet all day long. But most companies are risk-averse. They won't, they won't do something that has a twenty percent 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. Um, so that's, that's a little bit of like the decision-making as to how we do that.

    3. DSDavid Senra1:12:15

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

    4. BABrian Armstrong1:12:20

       I mean, just the fact that we have like, you know, [chuckles] four or five product groups, like that's probably a little bit of the reflection of my... Like I, I always wanna 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... Re-resource allocation is very important, and you don't wanna get too spread too thin. But I, I keep having, like ambition to go build new things and new categories.

27. 1:12:43 – 1:14:46

    Internal Venture Bets

    1. DSDavid Senra1:12:43

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

    2. BABrian Armstrong1:12:49

       How so? What do you, what do you think? Because-

    3. DSDavid Senra1:12:50

       'Cause if you have automated agents-

    4. BABrian Armstrong1:12:51

       ... lower cost to try it.

    5. DSDavid Senra1:12:52

       Yeah, if you have all these ideas, and like 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.

    6. BABrian Armstrong1:13:01

       Yeah.

    7. DSDavid Senra1:13:01

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

    8. BABrian Armstrong1:13:06

       Yeah. Th-that's true. The cost to get a V one running is now much, much lower.

    9. DSDavid Senra1:13:10

       Yeah.

    10. BABrian Armstrong1:13:11

        And we are seeing that internally. Um, now to take some-- see something through to f- through is stillYou know, intense amounts of work. But yeah, we, we think a lot about resource allocation, where you can have, like, a two or three-person team just try these ideas internally, and then if it-- only if it starts to work and hits key milestones, like, then do you do the series A, you know, internally. So we try to treat it a little bit like venture capital, and the hard part-

    11. DSDavid Senra1:13:34

        Is this the language you use inside the company?

    12. BABrian Armstrong1:13:36

        Yeah.

    13. DSDavid Senra1:13:37

        Really?

    14. BABrian Armstrong1:13:37

        Yeah. Like, one of the key things we did actually was that twice a year, any employees can come pitch and s- 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, um, 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, um, CFO's there, like our pr- 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 green-lit. So, um, it's kind of like coming in and pitching at, like, ten venture capitalists.

    15. DSDavid Senra1:14:20

        So you almost inverted it.

    16. BABrian Armstrong1:14:22

        Yeah. So you only need to get one yes if someone fun- wants to fund it out of their budget, which is... Yeah, and there's actually been examples where I voted no on something, um, and it turned out to be a massive success. And an example of that is, like, USDC, the, which is the stablecoin. I actually am embarrassed to admit I voted no on that idea. Luckily, somebody else funded it out of their budget, and it's, I think in twenty twenty-five we did, like, eight hundred million revenue off it or something.

    17. DSDavid Senra1:14:45

        [laughs]

28. 1:14:46 – 1:15:18

    Funding Ideas Internally

    1. BABrian Armstrong1:14:46

       It was... So it tells you, you know, [laughs] 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 them, "Hey, I think we should make a personal computer."

    2. DSDavid Senra1:14:59

       Yeah.

    3. BABrian Armstrong1:14:59

       They said no, and then he left to found Apple. So-

    4. DSDavid Senra1:15:02

       Many such cases.

    5. BABrian Armstrong1:15:03

       Yeah. I always have a little bit-

    6. DSDavid Senra1:15:04

       Sam Walton tried to give away the idea for Walmart. [laughs]

    7. BABrian Armstrong1:15:06

       [laughs]

    8. DSDavid Senra1:15:06

       They said no.

    9. BABrian Armstrong1:15:07

       Yeah. So I always have a little bit of that fear in the back of my mind of, like, there's, there's brilliant young engineers inside Coinbase, um, I wanna make sure they can come and pitch, and some- somebody, even if it's not me, funds it.

29. 1:15:18 – 1:16:56

    Coinbase Marketing Experiments

    1. DSDavid Senra1:15:18

       How much pr- uh, time do you spend on Coinbase marketing?

    2. BABrian Armstrong1:15:21

       Um-

    3. DSDavid Senra1:15:22

       Are you interested in it at all? You guys are doing very unique things around marketing.

    4. BABrian Armstrong1:15:26

       Yeah. Uh, thanks for noticing that. I mean, I wish I could take more credit for that. I actually think it's, it's the team entirely. Um, you know, they, they come and show me the things they're doing, and I, 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 organiza- some, 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, they're trying more ambitious ideas, which, which I like. Um, it's also, a lot of marketing now is... It's actually more like content on the internet than, like, your tra- your typical brand ad running on TV. And, um, you know, just, like, a very simple thing actually was, I remember we were putting our, our earnings calls, you know, as a public company, you put out your earnings. They're usually kind of dry and boring, boring. Like, these analysts tune in, listen to these calls. You're on, like, a conference call. It's like, 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, I was like, "Man, how do we spice these things up, just do something more interesting?" And I remember some of, some of the people [laughs] on the finance team were c- like, "Brian," just like, "Stay on script. It's supposed, it's supposed to be boring."

    5. DSDavid Senra1:16:47

       [laughs]

    6. BABrian Armstrong1:16:47

       Like, "Just report the numbers. Like, that's all we're doing here." I was like, "No, like, this, this is a marketing moment. We're supposed to be selling some stock, right? Let's go out and tell the story, you know,

30. 1:16:56 – 1:21:58

    Internet Native Shareholder Updates

    1. BABrian Armstrong1:16:56

       of the company." And, um, so anyway, just in, like, this recent earnings, we put together, like, um, a pitch deck, kind of like we were going and pitching when we were a private company. And I was like, "I wanna r- I don't wanna ju- I wanna just, like, run through the deck and, like, make a video of me." And then, um, we put it on the website, and one of the guys on our marketing team paired it... Y- have you seen those videos, like vertical video where-

    2. DSDavid Senra1:17:17

       I saw this.

    3. BABrian Armstrong1:17:18

       The guy... Yeah. [laughs] Like, the guy's running through the game collecting coins. And-

    4. DSDavid Senra1:17:21

       S- so they realized on short form-

    5. BABrian Armstrong1:17:23

       Yeah

    6. DSDavid Senra1:17:23

       ... that you can have somebody speaking, but then if you put something, uh, somebody, like, playing a video game or whatever the case is, or going through a maze-

    7. BABrian Armstrong1:17:29

       Yeah

    8. DSDavid Senra1:17:29

       ... the retention goes through the roof.

    9. BABrian Armstrong1:17:30

       Yeah. And so th- that's like, we have these, like, ki- young Internet native marketing people. They're not like, you know, people who wri- made ads for Coca-Cola or something.

    10. DSDavid Senra1:17:39

        Yeah.

    11. BABrian Armstrong1:17:39

        They're just, like, they're, they're just, like, people who've lived their whole life on the Internet, and me- like, meme, 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 gonna 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, I, I think our shareholder lette- letter is brilliant. I get a lot of good feedback on it from, like, the biggest funds at Fidelity and all these kind of folks, so I'm glad we're putting out a shareholder letter, but ninety-nine percent of people aren't gonna read our shareholder letter. They're gonna 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, that is marketing.

    12. DSDavid Senra1:18:28

        Everything is marketing.

    13. BABrian Armstrong1:18:29

        Yeah. Content, I mean, everything's content.

    14. DSDavid Senra1:18:30

        I like that you had this, "Well, I'm, I'm gonna do, I have to do the calls anyways."

    15. BABrian Armstrong1:18:35

        Yeah.

    16. DSDavid Senra1:18:35

        Like, why don't you actually make them interesting? You said you, uh, you know, you have to get attention, people have to pay attention to, like, what we're doing, or they're not gonna... Like, it kind of serves the mission too. There's a great maxim from David Ogilvy about this. He says, "You can't save souls in an empty church."

    17. BABrian Armstrong1:18:47

        Yeah. [laughs]

    18. DSDavid Senra1:18:47

        It's like you gotta, like, if you wanna save their soul, you gotta get their attention first. You gotta get them in the door first.

    19. BABrian Armstrong1:18:51

        Yeah. Well said.

    20. DSDavid Senra1:18:53

        How do you compose your shareholder letters? 'Cause I'm going through this right now. I just reread Warren Buffett shareholder letters since the last one is out, but that was the best marketing-

    21. BABrian Armstrong1:19:03

        Mm-hmm

    22. DSDavid Senra1:19:03

        ... that he ever did.

    23. BABrian Armstrong1:19:04

        Mm-hmm.

    24. DSDavid Senra1:19:05

        And the amount, it, every year, each year took them about seven months of him, and I think her name's Carol Loomis, going back and forth.

    25. BABrian Armstrong1:19:13

        Mm.

    26. DSDavid Senra1:19:14

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

    27. BABrian Armstrong1:19:17

        Yeah.

    28. DSDavid Senra1:19:17

        He's essentially, he, he thought about it as, like, he's just teaching. How do youcompose your shareholders

    29. BABrian Armstrong1:19:23

        Yeah. So that's a great point. Actually, Bezos did that too, right? He's got some bangers. Um, Buffett-

    30. DSDavid Senra1:19:30

        Bezos is... See, Buffett's different 'cause it's like-
31. 1:21:58 – 1:26:47

    Media Diet and Going Direct

    1. DSDavid Senra1:21:58

       So if you don't feel people are reading the shareholder letters, how do you think they're consuming information about public companies then?

    2. BABrian Armstrong1:22:04

       Well, I think there are a number of analysts that are reading the shareholder letters. I don't want to say there's none.

    3. DSDavid Senra1:22:08

       Yeah.

    4. BABrian Armstrong1:22:09

       But, um, 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. Um, they're, they're reading social media like X. They're reading blog posts, Substack. Um, I think some of them still read traditional media, but that's dwindling, especially amongst people under, say, sixty-five or something. Every company is a media company now. You, you should be publishing your own content direct to your own blog, social media. Some companies have their own podcast. Um, I don't-- You never should be going, like, through... I, I ha- I, I really don't like this idea of putting information out of the company through, um, a traditional journalist who's gonna bring their own bias and filter to it. So-

    5. DSDavid Senra1:22:53

       You know how many founders have been telling me that recently?

    6. BABrian Armstrong1:22:55

       Yeah.

    7. DSDavid Senra1:22:55

       Why, why, why do you arrive at that conclusion?

    8. BABrian Armstrong1:22:57

       Well, um, part of it was just having, um... I mean, we talked about the mission first blog post.

    9. DSDavid Senra1:23:05

       Mm-hmm.

    10. BABrian Armstrong1:23:06

        You know, one of the, like, formative experiences, I would say, as a CEO was that, um, like, after that happened, I, like, several traditional media organizations wrote just very, uh, negative and false stories about us. Um, and it just made me really, um, 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're- 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-

    11. DSDavid Senra1:23:46

        Joseph Pulitzer.

    12. BABrian Armstrong1:23:47

        Yeah. Yeah, exactly.

    13. DSDavid Senra1:23:49

        Because people give me shit 'cause I don't read the news at all.

    14. BABrian Armstrong1:23:51

        Yeah.

    15. DSDavid Senra1:23:51

        Like, I just read old books and then talk to founders now.

    16. BABrian Armstrong1:23:54

        Yeah.

    17. DSDavid Senra1:23:54

        Like, that's essentially my entire media diet. And then LL, like talking to LLMs.

    18. BABrian Armstrong1:23:58

        Yeah.

    19. DSDavid Senra1:23:58

        Um, and they're like, "You're not informed." I was like, "Have you read William Randolph Hearst's biography?"

    20. BABrian Armstrong1:24:02

        [laughs] Yeah.

    21. DSDavid Senra1:24:03

        Did you read Joseph-- Like, who invented yellow journalism? Just read... Anything that's happening now-

    22. BABrian Armstrong1:24:07

        Yeah

    23. DSDavid Senra1:24:07

        ... derived from those two. Especially in America, those were the two most influential and powerful, you know, people in media. And they literally [laughs] changed the way that newspapers and the written text g- uh, came out to make it intentionally more salacious-

    24. BABrian Armstrong1:24:21

        Yeah

    25. DSDavid Senra1:24:22

        ... and more exaggerated.

    26. BABrian Armstrong1:24:23

        Yeah. What did, what did he, Hearst say? Like, "You provide the photos, I'll provide the war," or something.

    27. DSDavid Senra1:24:27

        [laughs] Yeah.

    28. BABrian Armstrong1:24:27

        Like, yeah. And so anyway, I, I think most people have become aware of this now, like the trust in traditional media is, is kind of at all-time lows. So, you know, luckily things have moved on. I, 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, um, you know, I think it's good to talk to new media as well. And, um, anyway, that, that was a formative experience. Um, 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 gonna do whatever I think is the right thing to do now because, um, there's not like some terrible thing that could happen to me anymore." Like, it doesn't matter. Like, once, once they try to, 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 like, 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.

    29. DSDavid Senra1:25:35

        When did you go through that?

    30. BABrian Armstrong1:25:37

        It happened in many small ways as Coinbase was growing. Like we'd see articles come out that was like, "What? That's not, 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. Like, will you comment?" And we're like, "What? This is totally false information. What are you talking about?" [chuckles] 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, um, like several organizations, but The New York Times in particular, I remember they, they basically put a team of people, I was later told by insiders, um, they're like, "Go just, go dig up dirt on this company and, um, write negative articles about them." What-- They had the, 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. False, it was false information. And, um, you know, that, 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, um, 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

32. 1:26:47 – 1:31:44

    Building a New Industry

    1. BABrian Armstrong1:26:47

       to go direct.

    2. DSDavid Senra1:26:48

       You had a unique experience because you're building a company, but you're also starting at the very beginning of an industry. I think like the ana-- I was thinking about you earlier today. I was like, the analogy is kind of, uh, that, that sticks in my mind is like the early, uh, American automobile founders.

    3. BABrian Armstrong1:27:01

       Mm-hmm.

    4. DSDavid Senra1:27:01

       It's like I have to learn how to build a car company, but we're building an industry simultaneously.

    5. BABrian Armstrong1:27:05

       Mm-hmm.

    6. DSDavid Senra1:27:05

       Where like if you start a software company today, like you're not building the software industry, the software's been around.

    7. BABrian Armstrong1:27:10

       Yeah.

    8. DSDavid Senra1:27:10

       What was that experience like?

    9. BABrian Armstrong1:27:12

       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 there-- people were like freaked out about, "Your cars are gonna scare the horses," you know? [chuckles]

    10. DSDavid Senra1:27:22

        Yeah.

    11. BABrian Armstrong1:27:22

        And like some... Wasn't there some law that... I remember Marc Andreessen told me about this, where like when automobiles first came out in cities, you had-- there somebody passed a law, you had to like run in front of the car with a flag.

    12. DSDavid Senra1:27:32

        Yes.

    13. BABrian Armstrong1:27:32

        So, [chuckles] so as not to-

    14. DSDavid Senra1:27:34

        Yeah

    15. BABrian Armstrong1:27:34

        ... like scare the horses. So yeah, th- inherently, if you are... Crypto is, 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.

    16. DSDavid Senra1:27:45

        And then they recruit you at Davos and wave their finger. [laughs]

    17. BABrian Armstrong1:27:49

        Yeah. [laughs] Then you win. So we're, we're at stage three. They're, they're now... So 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, five of the l- you know, GSIB 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 eng- uh, people, product managers and engineers. So it's working. It's up-- and we wanna 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 then saying, "Hey, we wanna-- We're a crypto company, we wanna do this," and they would hang up on me. Or, you know, I'd go pitch the thirtieth v- vice venture investor and get a no, um, or the, you know, the thousandth employee we tried to hire or whatever. Like y- you-- we're 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, when they came out with the airplane, nobody believed them for like, for years. I mean, you, you know, you read the biography. Um, 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-

    18. DSDavid Senra1:29:27

        They had to go to Europe.

    19. BABrian Armstrong1:29:29

        Yeah, they went to Europe.

    20. DSDavid Senra1:29:29

        They were doing these demonstrations on like this guy's field in Ohio, and almost there'd be like three people watching them.

    21. BABrian Armstrong1:29:35

        Yeah. And, uh, didn't... Wasn't there that for- famous quote from the War Department? They said, "We see new, no military application for the airplane." [both laughing] And forty years later, it won World War II.

    22. DSDavid Senra1:29:43

        And it was we-- If I remember correctly, I haven't read the book in probably six years. I n- I should reread it again and do another episode on it. But I think it was like the French government was their first-

    23. BABrian Armstrong1:29:51

        Yeah

    24. DSDavid Senra1:29:51

        ... the first person to, to actually buy it for the military.

    25. BABrian Armstrong1:29:54

        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, [chuckles] which is you can't just be throwing out crazy ideas which are wrong and incorrect.

    26. DSDavid Senra1:30:04

        Yeah, but for them, so they're, they're creating an industry and a company.

    27. BABrian Armstrong1:30:08

        Yeah.

    28. DSDavid Senra1:30:08

        But they actually didn't create the most successful company-

    29. BABrian Armstrong1:30:12

        That's true

    30. DSDavid Senra1:30:12

        ... in that industry, where you did.
33. 1:31:44 – 1:36:17

    Starting New Limit Longevity

    1. DSDavid Senra1:31:44

       line on that.

    2. BABrian Armstrong1:31:44

       Yeah.

    3. DSDavid Senra1:31:44

       So you have your mission at Coinbase, but you said your natural inclination is to work on multiple things, right?

    4. BABrian Armstrong1:31:50

       Yeah.

    5. DSDavid Senra1:31:51

       You started another company.

    6. BABrian Armstrong1:31:53

       Yeah.

    7. DSDavid Senra1:31:53

       You wanna talk about this?

    8. BABrian Armstrong1:31:55

       Yeah, sure. So I, I mean, broadly, I, I wanna, I wanna accelerate civilizational progress in the world. That's kinda my personal mission. So I think economic freedom is, is foundational to that with crypto. When Coinbase went public and, and, you know, 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, 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 on my mind were, like, AI and crypto are probably the two biggest right now. Then, of course, there's, um, fusion energy, brain machine interfaces, space, um, and I, I felt like, okay, there's good teams working on all of these, and I'm not sure what I... 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, I, I didn't see teams working on that that I thought were credible. In fact, you know, the longevity space has had, like, a lot of snake oil type stuff. It's, like, pretty, um... you know, attracted some unsavory characters, a little bit like cr- crypto. [laughs]

    9. DSDavid Senra1:32:55

       For centuries.

    10. BABrian Armstrong1:32:56

        Yeah, yeah.

    11. DSDavid Senra1:32:57

        For centuries.

    12. BABrian Armstrong1:32:58

        For sure. I reached out to a couple 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 in- invested in?" We had hosted a couple of these dinners, um, 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, um, epigenetic reprogramming, which is the ability to reprogram cells, and you can restore function they had when they were younger. There were some early, uh, breakthroughs that had happened in different labs. Uh, one example of this was Shinya Yamanaka, who won the Nobel Prize for reprogramming skin cells into stem cells. Um, I think he, he got that in 2005, if I'm not mistaken. And so w- I started to feel a little bit about epigenetic reprogramming like I did about Bitcoin when I first read about the, the Bitcoin whitepaper, and I was like, "How deep does this rabbit hole go? And if you can actually res- re- reprogram cells," turns out our cells are much more plastic than people realized, you know, what could be possible with that? And so through a series of these, these dinners, I met... We met the other co-founder, Jacob Kimmel and, um, Greg Johnson, and created this company. It's called New Limit, and it's a longevity company, uh, 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. Um, 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 t- cell types. It's using AI to prioritize those screens. And, um, the first, uh, drug candidate's gonna 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's subsequently raised more money from others as well. And I thought it was gonna 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, there'll be three, four, five drug candidates over the next five years.

    13. DSDavid Senra1:35:05

        Do you think you'll continue to start more companies?

    14. BABrian Armstrong1:35:08

        I do, yeah. I mean, both within Coinbase, like, there's lots of these product groups, and I think it's fun. Like, that's the most fun thing in the world is, like, is, um, is building companies that try to have a positive impact on the world, try to be useful, and I'm getting slowly better at it [laughs] you know, over the, over the decades, hopefully, and learning a lot of painful lessons along the way. And so, yeah, I, I, I, I don't wanna get distracted and have too many things. Each one of these is really difficult, but I do think over the coming decades, I'll hopefully I'll start more companies.

    15. DSDavid Senra1:35:37

        Do you think Coinbase is the last company you'll be CEO of?

    16. BABrian Armstrong1:35:41

        Oof, that's a tough question. Um...

    17. DSDavid Senra1:35:44

        Let me tell you why you think that.

    18. BABrian Armstrong1:35:45

        Yeah.

    19. DSDavid Senra1:35:45

        Let me tell you why I asked, 'cause I was shocked when I was talking to Toby.

    20. BABrian Armstrong1:35:48

        Yeah.

    21. DSDavid Senra1:35:48

        He's like... He, he said something, I think it was on the episode, that, um, if AI, like the advancements in AI, weren't happening right now, he thinks he wouldn't be the CEO of Shopify anymore.

    22. BABrian Armstrong1:35:58

        Yeah, I was surprised to hear him say that, too. I, I heard him-

    23. DSDavid Senra1:36:00

        Yeah

    24. BABrian Armstrong1:36:00

        ... say that. I don't feel the same way he does about that. I think, um... I mean, AI is changing everything about how we work and lots of things in financial services. Uh-

    25. DSDavid Senra1:36:10

        We haven't talked about that. We need to talk about this.

    26. BABrian Armstrong1:36:11

        Sure, yeah.

    27. DSDavid Senra1:36:12

        But after... Le- le- let's go there next.

    28. BABrian Armstrong1:36:14

        Yeah, yeah.

    29. DSDavid Senra1:36:14

        So let me forget.

    30. BABrian Armstrong1:36:15

        I, I wanna continue being Coinbase

34. 1:36:17 – 1:40:59

    CEO Stress and Routines

    1. BABrian Armstrong1:36:17

       CEO for a long time.

    2. DSDavid Senra1:36:18

       Do you like being CEO?

    3. BABrian Armstrong1:36:19

       Yeah. I find it... Well, I always clarify. I find it very fulfilling, which means that, um, 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, that was a rough day," [laughs] right?

    4. DSDavid Senra1:36:35

       [laughs]

    5. BABrian Armstrong1:36:35

       'Cause you're just going, you're just going, going and doing, like, the hardest things that get escalated to you 'cause n- nobody else in the company, you know? So... But that's what creates fulfillment, right? It's a little bit like playing a video game or something. Like, y- it needs to be a really hard level that's a little outside your comfort zone for you to feel like, "Whoa, okay, I, I beat like a... I was right at the limit of my ability."

    6. DSDavid Senra1:36:55

       When you're having these, like, very stressful times in your life based on work, what do you do to, like, decompress or to, like, take time away?

    7. BABrian Armstrong1:37:02

       I think it's a very important top- topic because a lot of founder... Like, the found- the other founders that were in my YC batch that I went through, um, I saw many of them, like, burn out within three, three, four years. They would either... Uh, it manifested in lots of different ways. Some of them would gain a bunch of weight, some of them would lose a bunch of weight. One of, like, had, like, had hair falling out. I was, like, bald before starting the company. [laughs]

    8. DSDavid Senra1:37:24

       [laughs]

    9. BABrian Armstrong1:37:25

       Um, but, like, they were, like, literally clumps of hair were falling out because, like, because of the stress. Um, some of them got, like, addicted to prescription drugs. Like, all... So you-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, 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, having fewer direct reports, and then have a routine around like sleep, exercise and nutrition, basically. And, and some form of, like, you can call it meditation or prayer or 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 tr-- I have a pretty strict routine when I'm in work mode around like sleep, exercise, um, what I eat and then, um, just a tr-- like wind down time in the evening. And then, you know, on the weekends I j- 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'm in-- I basically am just in this routine of get enough sleep, wake up, lift heavy things, and do q- zone two cardio. [chuckles]

    10. DSDavid Senra1:38:51

        Yeah.

    11. BABrian Armstrong1:38:51

        And like meditate for as, a few minutes and then get after it.

    12. DSDavid Senra1:38:55

        What, what's your wind down time at night, though?

    13. BABrian Armstrong1:38:57

        It's basically like, you know-

    14. DSDavid Senra1:38:58

        Wine and lovemaking? [laughing]

    15. BABrian Armstrong1:39:00

        [laughing] No. It's ba- don't look at screens-

    16. DSDavid Senra1:39:04

        [laughing]

    17. BABrian Armstrong1:39:04

        -would be the main, the main thing, right? Like you're, if you're, if you're, 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, well rested. So there does have to be like, I think a period of time to... [chuckles]

    18. DSDavid Senra1:39:24

        How long is this wind down time?

    19. BABrian Armstrong1:39:25

        Oh, like an hou- like an hour.

    20. DSDavid Senra1:39:27

        Okay.

    21. BABrian Armstrong1:39:28

        Yeah.

    22. DSDavid Senra1:39:28

        Before bed?

    23. BABrian Armstrong1:39:29

        Yeah.

    24. DSDavid Senra1:39:29

        Okay.

    25. BABrian Armstrong1:39:30

        Yeah. And you can read, watch stuff, sauna, um, whatever. Yeah.

    26. DSDavid Senra1:39:36

        Before we go to how AI is changing the way you're working inside Coinbase-

    27. BABrian Armstrong1:39:39

        Yeah.

    28. DSDavid Senra1:39:39

        -question for, I was thinking about was what's the distribution of time between Coinbase and your other company?

    29. BABrian Armstrong1:39:47

        Well, Coinbase is my full-time job, so it's like ninety-nine percent. [chuckles] Yeah. I mean-

    30. DSDavid Senra1:39:52

        If you looked at how you're spending time between the two companies.
35. 1:40:59 – 1:44:35

    AI Agents at Coinbase

    1. DSDavid Senra1:40:59

       So how or is AI changing the way that you're working in Coinbase?

    2. BABrian Armstrong1:41:02

       Well, lots of ways. So some of it is similar to other companies and some of it's different. The, the parts that's similar is like more and more of code is being written by these agents, more than fifty percent now. Um, customer support inquiries I think is about sixty percent answered by agents now.

    3. DSDavid Senra1:41:17

       Are you building your own tools or are you using other people's tools?

    4. BABrian Armstrong1:41:20

       Both. We're using vendors. We have a lot of custom models internally as well. For, we're testing different use cases. Um, for instance, around like compliance automation, we're building a lot of stuff in-house. Um, design, totally re- you can really quickly pro- rapidly prototype stuff and get it out there. Um, we're even using it in within our finance function and like, you know, all, all to do FP&A and build models and things like that. So it's widely... Even, even like decision-making in the company, the key 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, 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." You know? [chuckles] So-

    5. DSDavid Senra1:42:05

       This is something you built yourself?

    6. BABrian Armstrong1:42:06

       There's a team internally working on this, and, um, there's a couple of vendor- so there's one called Libra Chat that's open source, you can connect all your internal data to. There's other vendors out there, um, like Glean and Slack Bot and different, um... 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 why I would say current best practice amongst a lot of tech companies, not super unique to, to crypto. The thing that's more unique to crypto is that, um, these AI agents are increasingly needing to do payments to get work done, and we're giving them all stable coin 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, y-you either have to bug your human every time to like, "Will you approve this purchase?" Or if you wanna... Increasingly, these agents, you can tell them, "Just go do this like overnight or the next two we- you know, the next hours, 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, um, 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 [chuckles] entities. And so we're giving them stable coin wallets. Um, 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. Um, so that's, that's pretty exciting. We built a couple of, uh, tools that allow any a- any agent to get a stable coin wallet inside it.

    7. DSDavid Senra1:43:39

       How are you using them personally?

    8. BABrian Armstrong1:43:41

       Um, AI agents or-

    9. DSDavid Senra1:43:42

       Any kind, yeah, a-agents, any kind of tools.

    10. BABrian Armstrong1:43:44

        Well, I've been using Claude and Codex a little bit just to, like, learn the develop- 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, uh, still in production. Um-

    11. DSDavid Senra1:43:58

        It just came... Did you see the tweet today? [chuckles]

    12. BABrian Armstrong1:44:00

        Yeah. Yeah. I, 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, data report repositories now connected in, I can use it for, um, decision-making and, um, we actually-- like, we use a decision-making framework, and there's a row now for the AI agent to write, write in their input, and it's, like, kinda nice to compare it to the other people on the team. Those are the primary ways that I use it

36. 1:44:35 – 1:46:47

    Base App Explained

    1. BABrian Armstrong1:44:35

       today.

    2. DSDavid Senra1:44:35

       I'm still a little confused. Tell me about the Base app.

    3. BABrian Armstrong1:44:38

       Yeah. [chuckles]

    4. DSDavid Senra1:44:39

       I've watched the presentations.

    5. BABrian Armstrong1:44:40

       Yeah. [chuckles]

    6. DSDavid Senra1:44:40

       I've talked to you about it. I'm still confused. [chuckles]

    7. BABrian Armstrong1:44:43

       Yeah. Okay. Well, the simple way to think of it is the Base app is the, the self-custodial version of Coinbase. We launched a new version of it recently, which frankly was kind of polarizing. Like, we put it out, and it was trying to do something kind of novel on the social, uh, front, and I don't think it quite worked. We got, like, a bunch of feedback from the community about that.

    8. DSDavid Senra1:44:59

       Was this the tap thing thing?

    9. BABrian Armstrong1:45:01

       Well, you could double tap to buy any post.

    10. DSDavid Senra1:45:03

        Yeah.

    11. BABrian Armstrong1:45:04

        Yeah.

    12. DSDavid Senra1:45:04

        I understand that, but then, like, then each post almost, like, had, like, its own market cap, but then what happens?

    13. BABrian Armstrong1:45:10

        Yeah. Well, it was interesting. So there was also-- there-- every post had its own, um, coin, and also every creator had its own coin. Um, it was optional for the creator. Um, but what happened is, if you bought a post, some of the economics would flow back to the creator, and 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, um, a couple thousand dollars of value or something at the, at the terminal end of it, and people were thinking of it as a way to, I guess, re-reward and thank the creator, but they also own some of the creator coin. Long way of saying I think something is gonna work in this space around, um, they call it social fi or, like, you know, these kinda social media tokens. I don't think the, the tokenomics has not quite been figured out yet, where, um, it needs for, for the people, you know, investing in them, um, it needs to have some sort of, like, durability to, like, the... You know, they have to believe, okay, David Senra is gonna continue to make great content into the future, and he's relatively undiscovered now, but he's gonna be much bigger in the f- It's kind of like, you know, a company or something, and they would wanna 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 or s- You'd have to come up with something like that that I think is 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. Um, the app has since pivoted to really just be more focused on, like, trading and being a, like, a self-custodial version of the Coinbase app. So we're starting with that for now, but I, I do think something in the social, uh, token space will eventually work.

37. 1:46:47 – 1:49:21

    Other Bets and SEZs

    1. DSDavid Senra1:46:47

       What else has, has been on your mind outside of Coinbase and is it New Limit?

    2. BABrian Armstrong1:46:52

       Yeah, New Limit.

    3. DSDavid Senra1:46:53

       Yeah.

    4. BABrian Armstrong1:46:54

       Well, um, you know, there's another project that I invested in and helped get off the ground called, uh, ResearchHub, which is trying to accelerate scientific research. They're trying to find novel ways for people to raise, um, like, the funding problems in science are, like, a whole thing, and replication is an issue. We can talk about that if you want. I think, you know, I'm, 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, um, in the US or, or elsewhere, where there's such a, there's such a morass of red tape, uh, both federally and state and local, to try to innovate sometimes that it's hard to get off the ground, right? Like, the, the, that money transmitter license thing is an example that I mentioned where I-- you need, like, you needed, like, five or ten million dollars just to get the licenses, and I... You-- Sometimes entrepreneurs can find a creative way around these things in the early days. But for instance, like, look at, like, um, I don't know, nuclear energy, right? Um, it's, it's basically impossible to get, like, a nu-nuclear power plant... Oh, I shouldn't say impossible, but very difficult right now. And if you had these special economic zones, like, like, Ch- Actually, China's 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, um, there's been examples of these around the world that have been unlocked a ton of value. My ideal world, you'd have, like, ten plots of land, like, take federal land in the US and designate them as special zones. So you could have one that's, "Hey, this is, this-- In this sandbox, you can iterate on nuclear reactor design in this one little area." You know, we're g- Okay, maybe something bad will happen, but it's contained in this, in this area. We need to be on our front foot and, like, innovate there. Or have another one for, um, for biotech, like accelerated trials, or another one for crypto, or another one for drones. There's just, like, drones flying all over within this zone, you know, outside of traditional FAA rules and, like, allow people to really innovate and build startups. And if they get a product working through that rapid innovation in a sand- in a regulatory sandbox, they can then go apply for the, the license federally and then serve the rest of the US market. But the problem is it's like, it's such a high barrier to entry to even try to get started in some of these markets with these new technologies. Um, anyway, I think special economic zones could be cool. I might work on that at some point.

    5. DSDavid Senra1:49:17

       I love the idea of just lowering the barrier, barrier of entry to innovation entrepreneurship.

38. 1:49:21 – 1:49:44

    Closing Thanks

    1. DSDavid Senra1:49:21

       Brian, this is awesome, man. Thanks for taking the time to do it.

    2. BABrian Armstrong1:49:23

       Thank you. I appreciate it. [chuckles]

    3. DSDavid Senra1:49:25

       I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review and make sure you listen to my other podcast, Founders. For almost a decade, I've obsessively read over four hundred biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders. [upbeat music]

Episode duration: 1:49:44