Kind: captions
Language: en
the following is a conversation with
brian armstrong co-founder and ceo of
coinbase the largest cryptocurrency
exchange platform with 98 million users
in 100 countries listing bitcoin
ethereum cardano and over 100 popular
cryptocurrencies
i recorded this conversation with brian
before this week's sec probe into
whether some of the crypto listings are
securities and thus need to be regulated
as such
as always with conversations that
involve cryptocurrency i try to make it
timeless so that the price soaring high
or crashing down low doesn't distract
from the fundamental
technological economic social and
philosophical ideas underlying this new
form of money energy and information
our world runs on money
the exchange and store of value
and cryptocurrency seeks to build the
next chapter of how money works and what
it can do
coinbase and brian are trying to do this
by working together with regulators and
governments which is a long and
difficult road
bureaucracies resist change for better
and for worse
the latest sec probe is a good
representation of this
it is a serious attempt to limit fraud
but one that also runs the risk of
limiting innovation
and limiting financial freedom of
individuals
this is a complicated mess and i applaud
everyone involved for trying to work
through it
i hope in the end the interest of the
individual wins
decentralization after all is a hedge
against the corrupting nature of
centralized power
this is the lex friedman podcast to
support it please check out our sponsors
in the description and now dear friends
here's brian
armstrong
let's start with the fact that you're a
programmer what was the first program
you've ever written or the first one
that you remember
the first memory i have of programming
was probably in middle school and i
remember it was recess
and they had this like this time period
where you could read books and the other
kids were like reading comic books and
stuff and for some reason i had gotten
into decide yet i wanted to get into
computers and i was playing with
computers at home
and so i got this book i think from the
library it was called like how to learn
java in 30 days
so i was
i was reading this book at like you know
the recess
and i didn't understand anything and i
remember i went home and i tried to get
this
thing working and you know if you've
ever written a java program the first
lines are like public static void main
string args or whatever and it's just
like it's so foreign and it's so
difficult to get started and so i was
kind of frustrated i was like i don't
understand anything that's happening in
this book so the first the first thing i
wrote was probably just like a hello
world app in java
but it was so i felt like i was so
confused about what was actually
happening that i later
learned a bit of php and php was like
more fun for me because it was like oh
just print out what you want you know it
didn't have all this complexity around
it so then i got more into php i started
building like some simple websites i
think
learned some html so i think that was my
introduction to programming at least the
very beginning part yeah
you know java has a lot of uh
out of all the hello worlds you can
possibly write java is the one where i
think it's the longest yeah it's just
which is quite interesting because java
is often at least for a long time was
used as the primary programming language
to teach people how to program or at
least about object-oriented programming
i think most universities have now
switched in high school switched to
python
i'm not sure if that's the case probably
better it's easier to learn it lowers
the it makes it less scary there's like
less of a hurdle and certainly none of
them use php i love php and i feel like
it's a dirty secret i have to keep
private to myself like it's somebody i'm
seeing on the side or something like
that because uh it's just not a
respected programming language because i
think there's so many ways you can write
poor code with php yeah which is why
it's not respected yeah it's a scripting
language more so although of course
facebook built like a huge stack on top
of it and valuable company but
i still love ruby to this day ruby is
probably my favorite language python is
great too but i just love
the idea behind ruby that it's like
let's make it easier for the human
harder for the computer and make it a
joy to be expressive and all these
things so
i was never the best computer scientist
but i was a good i was good hacker i
could rapidly prototype products and
using languages like ruby do a lot of
computer science programs still use like
lisp and scheme and things like that no
no they do for that's like that's if
you're hardcore if you're legit you're
gonna do some of the functional
languages yeah i think there's a there's
a few others that popped up but
lisp is a distant memory for a lot of
people that's like somebody has to like
you go to library
you dust off the book yeah but uh scheme
a little bit i think if you're starting
i mean there's courses about languages
themselves like programming languages
yeah this might be one of those you know
how there's languages that nobody uses
anymore like ancient languages yeah
you might have to go to school in that
same way for programming languages yeah
back in the day we used to use
parentheses i of course still use emacs
as the editor for most things that i do
and emacs is is um you know a lot of the
customization you can do is in lisp
and that's the language probably when i
first
really fell in love with programming is
lisp because for
a long time throughout the earlier
history of artificial intelligence list
was the primary language but
it still had a life
in the 90s and the arts where some
people would use it
such a beautiful functional language
but it just somehow didn't pick up
um
that said i should say sort of push back
php i feel like
it's still true that most of the
web runs on php most of the back end is
still is still php
so if you look at
you know it's like the stuff that people
don't talk about it's like what what
runs most systems in the world what runs
the most
uh back end what runs most front end
yeah javascript
you know html script i think the stack
exchange surveys show javascript's most
popular language in the world i think
right oh yeah in terms of programmers
and numbers of i wonder
by survey of number of programmers on
stack
stack overflow yeah but that's also the
cutting edge right those are the people
that are just like excitedly writing
code i wonder if there's
there's people that are just like
maintaining gigantic code bases yeah
i feel like the amount of java out there
just running industrial systems has got
to be enormous and then of course in the
banking industry
finance it's like
even older stuff cobalt and whatnot but
i've been actually looking for somebody
uh to interview
who who represents uh cobalt
unfortunately like who's the figure
still
still there that holds the flag i did
you know with java founder of java
creator of java creator python creator
of c plus plus but nobody wants to hold
the flag for cobalt unfortunately even
though some of the most important
systems in the world still run on those
yeah uh like power systems and
infrastructure systems which is
fascinating which and atms and stuff
like that like a lot of stuff
that we rely on that just works and the
reason we don't change it because it
works well yeah it's written in
languages that people don't use anymore
yeah
that'd be a cool series of interviews
get get the stuff that's like tech that
was invented
40 50 years ago but still is being used
widely i mean emacs is an example of
that let me ask the big question of uh
what are cryptocurrency exchanges and
what's coinbase how does it work before
i'll ask even bigger questions but it's
just a nice kind of
pilot cleansing question of what is
coinbase
coinbase is a cryptocurrency exchange
brokerage custodian basically
we're the primary financial account for
people in the crypto economy
how they buy crypto how they store it
how they use it increasingly in
different ways we can talk about that
um so yeah we want to be the way that a
billion people hopefully access the open
financial system globally how does it
work
what uh
what's cryptocurrency
you know there's uh there's bitcoin
there's ethereum
um what does it mean to be an exchange
what does it mean to store what does it
mean to transact how does it what does
coinbase actually do
okay so you know basically in any given
market there's some people want to buy
some people who want to sell
and there's you keep an order book of
all those prices
and then um
you know if someone's willing to buy for
more than the lowest price someone's
willing to sell then you know you get a
trade to execute that's kind of how an
exchange works underneath and a
brokerage is kind of simpler than that
even you don't have to know look at the
whole order book and everything but you
just go in there and you say i want to
buy 100 of bitcoin or whatever
cryptocurrency you get a quote and if
you like it you can hit accept and you
know
the core things that we do to make all
that kind of just work make it seamless
it sounds simple on the surface
is we gotta we have to do payment
integrations you know in a variety of
places around the world to make it easy
for people to get fiat currency into
this ecosystem
we have to work on cyber security a lot
there's lots of hackers out there trying
to break into our systems and steal
crypto or to put stolen credit cards and
bank accounts and things like that into
these systems
um we have to integrate with the
blockchains themselves right which are
periodically getting updated and
having various airdrops and all kinds of
things so we're integrated with lots of
different blockchains and then we have
to store the crypto that people buy
securely as well so crypto is kind of
like storing
you store the private keys essentially
and we've invented a lot of cool
technology about how to do that securely
that helps me sleep at night
as one of the largest crypto custodians
out there
so those are some of the pieces that had
to come together to get that early
simple buy sell experience to work
and
yeah i mean coinbase actually has a lot
of different products now so we have
like an institutional product uh we we
have coinbase commerce which is like
merchant payments like stripe for crypto
we've got a self-custodial wallet which
we can talk about there's all kinds of
cool applications people are building
with web3 and they can access it through
that we just just launched an nft
product
um i've gone down the list we have we so
we're sort of like a portfolio of crypto
products now we're big enough where we
can do multiple things but yeah the core
thing we got started with and still the
majority of our revenue today is people
just want to come in and buy and sell
some crypto and we help them do that
make it simple and easy to use uh and
i'll ask you about wallet nft is about
what is it called the stripe type
coinbase commerce coinbase commerce yeah
i'll ask about all that but uh order
books and exchange what's the difference
between
that and stocks for example which
there's also order books yes i mean
stocks trade through order books too uh
sort of commodities it's all similar
type of situation so when i want to buy
one bitcoin and i see coinbase say the
price of that bitcoin
is say forty thousand dollars
and i
press buy what happens
um yeah okay so you've gotten a lot
like
you know when you press the button on
your keyboard like the electrical signal
goes up the wire on your keyboard
well that's also important the timing
right because it's not pricing
yeah it's true it's giving you a quote
right that's that's um you know some
there's a whole concept of like slippage
and like by the time the quote is
executed
um if the price has moved too much like
we may reject it and you know there's
there's various things like that but how
do i i mean what's the simple version i
can give you so we you know we'll we'll
basically check the order book give you
a quote
it's good for some period of time or for
some amount of slippage and then
what's happening is we're initiating a
debit to your payment method whether
that's a credit card or a bank account
or
you know you're storing dollars or euros
or something on our platform there's
various payment methods so we're
basically debiting that and then we're
crediting you the crypto and uh we're
taking a fee for it too so um
that's fundamentally what's happening
underneath and then there's some
interesting slippage how do you how do
you calculate the uh how much slippage
is allowed like how do you how do you
know these things
you know because order books are
fascinating
you know the dynamics of that is pretty
interesting yeah and the little i know
about it yeah so
there's a lot of people like traders who
get super into this and like high
frequency traders and arbitrage and all
kinds of interesting topics flash boys
was like an interesting book on this
whole thing you want like access to
information the fastest sometimes even
putting your
you know your thing in the data center
right next to the thing we don't allow
that colo stuff because we want it to be
more democratized
but you know basically you give a let's
say we wanted to just keep it math
simple we want to charge a one percent
fee so if you're buying a hundred
dollars of bitcoin and we'll charge you
you know we've presented you the amount
of bitcoin you're going to get for 100
now let's say 10 seconds later you hit
accept we go to we go to fill the order
so it's going to be
some error bound around that one percent
fee right and if we think we're actually
losing money on the trade i think we'll
often reject it so some part of the fee
the slippage is incorporated into that
averaged over
a large number of people they just just
it's fascinating because like even just
like that little detail probably
requires a lot of experimentation yeah
and it's kind of like a giant bug bounty
out there because if you get it wrong
there's people who are going to
arbitrage that and we've we've had
people sort of pen test our systems in
you know really creative ways where like
um
they'll just fire like programmatically
with apis they'll fire off like a
million different quotes and look for
one of them that's out of bounds and
then actually take that money right
there and you know we get people doing
all kinds of crazy stuff but so how do
you protect against that how do you
protect so we'll talk about cyber
security in interesting ways but there's
a lot of clever people
trying to do clever things to earn
not even just to break into the system
but to earn an edge of some kind yeah in
the system
how do you uh how do you stay one step
ahead there's no silver bullet there's a
bunch of lead bullets right so it's it's
like
you know one thing we do is we just have
good test suites right so you're testing
every piece of code that goes out that's
like just common good best practice but
it's particularly important in financial
services
another thing we do is we hire
third-party firms to try to audit this
stuff and break in another one we do is
we have a bug bounty program
so
we
basically pay white hat hackers to find
this stuff before the black hats do and
we've paid out lots of good bug bounties
so
you know
try all the above and occasionally you
don't get it right you lose some money
and then you fix it and you keep going
so
yeah let's talk about sebastian security
a little bit more yeah you mentioned
using stolen bank accounts
yeah so that's another one that's
another interesting one how do you
protect against that
okay so fraud prevention
yeah is a big topic so one of the
there's a lot of things people do but
one of the things they do is that
you use machine learning right so you
look at
protector to attack to protect against
it so
um what you want to do is kind of build
up a labeled data set of
all the different people who have turned
out to be fraudulent and good good
actors and hopefully collect as much
data as you can and then you'll you know
you might feed hundreds or thousands of
these factors into your machine learning
model it'll come back with a risk score
so you know an example of like the kinds
of factors people create or put in there
you know obviously i don't want to
disclose too many of them because it's
it's it's a cat and mouse game but just
kind of i don't know relatively well
known stuff might be
um
you know you have device fingerprints
right so like what kind of device are
you on and what fonts do you have
installed a lot of people who are
farming lots of these accounts they're
using emulators and like virtual
machines and stuff they're not like you
know an average person on that device
um and then you'll see sometimes like
one of my favorite metrics we tracked
for for this was called like improbable
travel velocity so we would we're
tracking people's ips right and you
might see someone um
who was one day in austin texas and then
like an hour later they were in london
or something it's like well that's very
improbable i mean sometimes people are
using vpns so you got to be careful with
that because like there's legitimate
people who use vpns too but
if it's not possible for them to have
gotten on a plane and gotten there that
quickly then that's usually they're like
spoofing a device or ip sometimes those
are interesting factors but yeah if you
feed enough of these in um
you will oh oh the another fun one is
like
you know real users will type their
credit card like one number at a time
yeah scammers have a list of them and
they'll just paste in a whole a whole
number
um so you can look at like the the
number of milliseconds between
keystrokes like there's all kinds of
stuff people have come up with you for
travel velocity you could probably
incorporate vpns too because there's
probably
a
travel velocity for vpn switching too
that's human-like like if you're using
legitimately vpn for something else yeah
um that that might be there's like
legitimate uses too actually you know i
feel embarrassed that i don't know this
probably should but the i'm not a robot
capture thing capture thing yeah so that
probably works in the same way like how
do you move your mouse maybe or how the
dynamics of the clicking totally
but how does that even work that well
then and why can't it be fake i need to
look into this because it's it's such a
trivial captcha it feels like should be
very crackable and yet a lot of high
security places use that yeah it's
really interesting it's another cat and
mouse game so i think they've yeah but
it's using a lot of similar signals like
mouse movements um keystrokes and then
obviously all the stuff that comes over
the
the wire with your browser so like
what operating system what fonts you
know what headers are being sent over
and yeah um there's actually there's an
old website a camera was called it was
kind of like panoptix click or
panopticon or something but it basically
was like a proof of concept site that um
they would just show you all the data
that was kind of getting sent over with
your your request and like
say that there's only one person in the
world who has this exact set of data
it's you and so it's almost like um
a work around a clever workaround to
track somebody
um make identify a unique person even if
like there wasn't a cookie involved or
something yeah this is a fascinating
world where you can't see anybody you're
in the dark
and yet you have a lot of signal you
have to figure out who's the real person
who's not who's a robot who's not yeah
uh let me step back we're gonna jump
around all over the place step back
that's why i like your interviews you
get into like technical topics
so so uh just let's use bitcoin as a
measure of time
you started coinbase when bitcoin was
ten dollars
yeah um
and you just mentioned an incredible
system with security with transactions
everything is thought through there's a
lot going on but what was version one
back in those early days the first
prototype of coinbase what did that look
like yeah like what what did it take to
write it
to think through it
and and uh make it work enough to at
least make you believe that it's gonna
work
well i definitely didn't know if it was
gonna work i mean it was kind of i felt
like i was just
following my gut so
i mean i was working at airbnb i was a
software engineer there
project manager i was working on some
fraud prevention stuff for instance
and um i read the bitcoin white paper in
kind of december of 2010
i started going to some bitcoin meetups
in the bay area
met lots of interesting people there
like crazy people anarchists you know
like really brilliant people all the
above and
so i started nights and weekends trying
to hack put together a prototype and my
initial thought was
well you know smtp is a protocol that
runs email and
you know git is is a protocol for
version control that and but people made
like gmail and github they don't most
people don't want to run their own email
server or even their own git server they
just want to like use a hosted thing
that you know will do all the security
and backups for them
so the thought in my head at that time
was bitcoin's this new protocol there's
probably going to be somebody who makes
a hosted service that does all the
security and backups for you makes
bitcoin as a protocol easy to use
so maybe i should
maybe i should make like a hosted
bitcoin wallet or something that would
that was my it was going to make gmail
for bitcoin or something
and a bunch of people told me that was a
bad idea like bunch most of my smart
friends who i told about it they were
like
well first of all i don't really get
what you're doing at all like bitcoin
sounds like a scam or something you got
you've gotten involved in um
but then other people who understood
what bitcoin was told me i thought it
was a dumb idea because they're like
dude if you store all this bitcoin
you're just gonna get hacked like nobody
you know
why would you why would you do that and
so i i kind of had this thought like you
know what i'm not gonna go all in and
like make a story everyone's bitcoin
that would be too much right now i have
a job i have a day job you know um but
let me just make a prototype and i'll
tell people this is like a beta thing
like don't put any real money in it and
just see if there's interest and if i
feel like i'm onto something maybe i'll
go do this as a company because i did i
really wanted to be an entrepreneur at
that time i was like
i was 29 i was almost turning 30 and i
was i always wanted to like start a
company but
i was
i was you know i wasn't yet i was an
employee at a company that was great but
so anyway i had this prototype i was
hacking together nice and weekends i
actually wrote a whole bitcoin node in
ruby which turned out to be a maybe a
weird decision in hindsight because ruby
wasn't the most performant language
we've subsequently had to rebuild that
many times but
yeah i had this hosted bitcoin wallet
and the thing that i didn't have any
users for it by the way i applied to y
combinator because i was like maybe if
somebody there writes me a check this
will like make it feel like a real
company and i was trying to find i was
trying to find a co-founder at that time
unsuccessfully
so i was basically just wandering in the
desert i had a lot of self-doubt about
this because i i was like i don't know
all my friends don't think's just kind
of dumb and
maybe bitcoin is just going to get shut
down and like this all be some stupid
thing so
there was definitely a feeling of just
wandering lost in the desert lots of
self-doubt
um paul graham and the y combinator
group kind of wrote me the first check
after i went and interviewed and stuff
and they they wrote me a check for like
150k and that was the first time
somebody who i really looked up to kind
of said this is this is worth pursuing
like maybe maybe you're onto something
maybe or not but like let's at least try
it
and so i that was kind of what gave me
the confidence to quit my job and try it
and
um i'll wrap the story here by saying
that like we i you know i found the
right co-founder after y combinator
we still didn't have any customers the
thing that you know i basically launched
the hosted bitcoin wallet
there were people signing up um i just
posted on reddit and places like that
and you know maybe like 100 people would
sign up and then nobody would come back
and so i was like i just in y comment do
they often tell you like
you know talk to your customers and
improve your product talk to your
customers improve your product that's
all you're supposed to be doing try to
find product market fit so i emailed
like five of the users that had signed
up
and i was like hey i worked on this app
i saw you signed up can i get on the
phone with you i get on the phone with
like five of these folks
and i was like you know why didn't you
come back and the guy was like well the
app was okay for a for a beta but um
like i don't have any bitcoins so i
didn't really know what to do with it
and i remember this light bulb kind of
went off my head i was like well if i
put a buy bitcoin button in there
uh would you have used it and he was
like yeah maybe
so then i had this we went about the
process my co-founder at that time we
like got
basically had to get like a bank
partnership payment rails you know an
exchange basic exchange functionality
all that stuff i was mentioning earlier
in place
and the minute we launched that feature
where you could just click buy put in
your bank counter credit card buy it buy
bitcoin it showed up in your account
from that day forward like the number of
users started go up like this and so we
finally had found product market fit
after two years of laundering in the
desert so you weren't even thinking
about to buy the
on-ramps you would think it would be
just a wall a place to store bitcoin
you've already gotten
yeah okay this is i mean uh because
that's such a pain to do
to have to work with others
to convert dollars of any fiat currency
into
into bitcoin yeah so did you
i mean were you uh
overwhelmed by the immensity of the task
here or were you just
um
sort of not allowing yourself to think
too deeply through this whole thing and
just letting the optimism take over here
you know i was really looking forward to
like doing something crazy and like a
big challenge and um i wanted to
i i love kind of
crisis moments like that where you know
i'm very determined right especially
when i i get like very set on something
and i'm just like you know what i'm
gonna figure out a way to make this
fucking thing work like no matter what
and so
i i reveled in that i i was sort of i
had i had read all these books about
startups and like every startup has
these like you know major setbacks and
just like nothing works and so
that was a sign that you're doing
something right i had no idea if i was
doing anything right at all but i was
like i was kind of loving the experience
of it in a weird way it felt
it felt stressful at the time like you
know nothing was working and
but i was just i felt like i was
on the right path somehow and so i just
kept going i don't know
um
what was the darkest moment that you've
gone to in your mind during that time
what was what were some of the tougher
moments you said self-doubt
yeah
have you uh yeah where where'd you go
where'd you go in your mind
[Laughter]
is there a moment where you're just like
laying there this is this is hopeless
well
there's a couple moments i'm remembering
i mean
so
for whatever reason i had this like big
chip on my shoulder at that time and i
was like
i really want to do something important
in the world like
you know i could have a good life and
like work for some good companies and
write some software and i'm
for some reason i never wanted that for
myself that probably would have been
healthier honestly just to like that as
an expected value outcome that's
probably
a better thing in life but i was like
i was like man i really want to do
something important and have a bigger
impact and i was like
i was willing to sacrifice a lot for
that i was like
sleep and not going out with friends and
stuff i remember one of the just for
like years working on this stuff
remember
one of the darker moments was um
we probably had like maybe five
employees at that time
and
i remember like a bunch of bad things
happened like all at once and it was so
first of all
you have to remember at this time
we were all very sleep deprived which
kind of exacerbates everything if you
look at like the exxon valdez spell
spill and all these like natural
disasters like sleep deprivation is
often involved
so because the reason why we're so sleep
deprived is not just because we were
working so much but
like the site would go offline in the
middle of the night and we'd get i get
paged i was like on pager duty so i'd
get woken up sometimes like two or three
times a night like have to try to fix
something go back to sleep
so
in that environment you can kind of get
you can get discouraged
so one bad thing that happened was
we had a bug on the website and
there were thousands of people on reddit
and twitter who were all
like pissed at coinbase because like the
balances were showing wrong and they
were just like
you know fuck this company it's over
like i hate these guys and so
that was i'd never had this feeling of a
thousand people mad at me at the same
time you know i feel like i'm a pretty
chill guy like most time people don't
get mad at me so that was one another
one was that um can we pause on that
that's so interesting so you you were
saying like here's a dream i'm trying to
create something and now forever the
reputation of this dream is ruined
it will never it's irrecoverable it's
over that kind of feeling yeah well i
didn't you're right i didn't know at
that time i was like is this is this the
end like
everybody we're so we're so tiny now
everybody hates us so is it over yeah um
yeah nobody told me this before starting
a company that like you're a bunch of
people hate you for this which is like a
very counterintuitive thing because
you know if most companies i think are
doing good things in the world at least
you're trying right and so even if
someone's like trying but they're not
they're failing i'm generally rooting
for them at least you're trying right
yeah but
that's not the case at all and most
founders i've known
have gone through this too where um
they're very surprised at the amount of
hate that they get and if it's i think
it's actually like a muscle you can
build your tolerance to it like
because
you know you go talk to somebody who's
like for you it feels terrible because
you're at the center of this storm and
like but if you go then you go talk to
like you know your family or some other
person like dude i didn't even hear
about that like my they're just busy in
their own life and so they
they have no idea that you had all this
negative press or like whatever it was
can i
once again put lingard on that yeah
there's an interesting
person i'd like to bring up just as an
example
uh bill gates yeah
so he gets a very large amount of hate
on the internet yeah and
there's something about him this is me
talking that you that he seems out of
touch about that hate
he i i believe at least in my
understanding that uh with the resources
he has
he's trying and is actually doing a lot
of good
and yet there's a gigantic amount of
hate conspiracy theories and stuff like
that right and it feels like that's the
case
because he's somehow out of touch
with with people so i wonder how you
stay in touch with the voice of the
people without being destroyed
by the outrage is there is there any
wisdom you have to that or not
i don't know about wisdom but i've
thought about this too because
yeah you want to always be
open to feedback especially from people
who have like your best interests at
heart right and if you can become
isolated from it and just like you know
surrounded by yes people and um
i mean who knows maybe maybe like
she and putin and people like that are
in situations i have no idea
but if you listen to too much of it and
you just try to please everyone you'll
never get anything done and i mean most
of the best leaders
are people
who
they can act when they believe that they
they're doing something net positive for
the world and humanity and they actually
don't really care if they piss off some
proportion of the people
almost anything you're going to do of
significance in the world today is going
to piss off five percent of people maybe
maybe 49 of people or whatever maybe 60
i don't know so
you never want to become so surrounded
by people who just work for you and will
say yes and then you think like well i'm
a genius and i'm like i'm a that's how
you become a dictator or whatever
um but you also can't care so much about
what people think because then you'll
never do anything that's truly authentic
to yourself
one other thought on that by the way i
think it's a really good question
so i've thought about this a lot like
why
you know people generally kind of hate
on zuck and they hate on bill gates and
they hate on um
they don't really hate on elon actually
has a lot of haters too but it's a
different thing this is measured this is
measured i was looking at some surveys
so i think
uh zuck is the most so loved and hated
right yeah uh zuckerberg is the most
both uh loved and hated he's the most
hated and then i think it's bill gates
and elon is down there i think it's like
uh 40 percent
hey zuck people asked and then elon is
in the double digits but low double
digits and so it's interesting you you
just look at this ask yourself why
right so i ask myself this sometimes too
because
i don't claim to know any of these
people well but like i've i've met them
briefly and i my impression is that
they're actually all smart people trying
to do good things in the world so
there's not too much difference there
despite public presumption perception so
why is it that some are really hated
some aren't i mean
it's a complicated question um obviously
you know zuck and his facebook got
blamed for the whole election thing and
all that didn't help um social media has
gotten a lot of pressure just from like
you know hey why aren't you solving all
of society's tough problems it's like
well they're just one company
but one thing i've noticed is that
you know a lot of these people they're a
little they have like asperger's right a
little bit and um sometimes
you know people with aspergers don't
really emote in the same way and so i
think it's almost a form of like um
um
like
bias against um
their cognitive
type or something which is like that
person doesn't emote right i don't trust
their in their intentions
and um
the other thing i've thought about too
is that sometimes i think some leaders
you know um like maybe zak or bill gates
they can come across as like a little
bit
pr rehearsed like they're basically um
they're giving the pr approved answers
as where elon just says whatever he
thinks like to a fault so even if people
hate what he says they're like at least
i believe it's authentic
so i've always thought about that too
for myself i'm like how do i
you can you can fuck it up on both sides
right like if you just come out and
you're like saying whatever's stream of
consciousness
you'll often end up like pissing off
people on your team or like saying
tripping over some like regulation that
you you know
um there's all kinds of things about
running a public company you know you
can't say certain stuff
but if you're too pr approved and your
answer is like nobody trusts you what
you're saying and so anyway this is
something i think about a lot i don't
think i have the right answer but i'm
trying to i'm trying to find that yeah
and more and more with the internet
there's a premium on authenticity just
like you're saying yeah people really
really appreciate that so for leaders
it's a challenge to be how do i
uh make sure i'm authentic but also
um don't say stupid shit yeah and so
that's an interesting thing i've noticed
that um just having interacted with the
with a bunch of leaders
that
you have to be careful how much you
surround yourself with pr folks
because the best i would say let me just
say a nice thing about marketing and pr
folks the best
marketing folks are extremely good yeah
so they understand exactly what great
marketing is and get great pr it's
authenticity it's showing revealing the
beauty as opposed to uh pr and marketing
out of fear oh don't say that don't say
this don't that
because then you you start living in
this kind of that pushes you towards a
bubble where you can't express the we
your your beautiful quirks and weirdness
and all that kind of stuff and also
the cool the beautiful things about what
you're doing i find like um especially
with the tech thing like even like
coinbase
the way to reveal the beauty of it
is not only by showing all the things
you could do with it but showing that
there's great engineering going on
underneath so letting the nerds shine
too it doesn't have to be like
uh
these kind of commercials where it's
like uh
a happy family using uh coinbase to send
a transaction about uh flowers for mom
or something like that like it could be
also like gritty stuff and real stuff so
um
that's a general just observation i made
but you said you were talking about dark
moments and that there's people on the
internet yeah they were pissed off that
the site was down and you said there
might be something else
yeah so sleep deprived like a bunch of
people on the internet were pissed at me
the balances were fucked up like people
were tweeting the company's over just
give the money back
whatever
and then um
oh yeah somebody posted
so we had all this we didn't we started
all these customer support inquiries and
like we only had
like a few people at the company and so
we were backed up maybe like 20 20 000
support requests so people couldn't get
a hold of us
so somebody posted my cell phone number
on
reddit and they were like they're like
if you need to get a hold of the ceo
whatever because everyone's upset about
where their money is
so i remember we're in the office it's
like it's like late at night we've been
working like 12 hours we're all sleep
deprived i'm trying to i'm trying to
hack and like get this bug fixed
and we all need like food at the office
and so my phone my phone has been
blowing up all day because someone
posted my phone number on the internet
and there's like a guy um
there was a guy like trying to deliver
food and i needed to answer my phone to
like get the food from downstairs so i
was like shit i gotta just see who if
that's him so i start answering the call
and it's like
is this brian i'm like no wrong number
click you know and i you know i the next
i pick up the next call it's like every
every when i finish the call another
call is like coming in so i was like
this i'm a reporter from japan like
asking about a security nope wrong
number click and i like finally get the
delivery guy downstairs bring the food
up we were all like you know surviving
to like fix this bug
um
i remember there was just basically a
point that night where i was like fuck i
need to just i basically just curled up
on a and like a ball on the floor
and i i just like cried for a little bit
um i think i let myself just kind of
wallow and self-pity kind of took a nap
for about five minutes and i was like
let's fucking solve this and i like you
know stop being like a little whatever
and like got back up
deprivation combined with just the
stress and the pressure of the site
going down and everybody wants you the
site to be up just the pressure from
people and the number of users is
growing and growing and growing so that
pressure is just mentally mentally tough
yeah
what was your source of strength during
that time
like what like uh
somebody that patted you on the back and
said we got this yeah well it definitely
helped to have a co-founder so
you know there's like that old saying
about it's better to be in a great
relationship than to be single but it's
better to be single than a bad
relationship so
co-founders actually blow up a lot of
companies too but when you find the
right co-founder which i was lucky to
find with with fred ursum
that was very important there was
definitely moments where
you know i was like
kind of you know
at the wit's end or whatever and he was
like
it's like dude let's rally like and he
basically carried the team you know a
couple times like in really key moments
what advice would you give to startup
founders about this particular stage
about surviving it
to the five and through the five
employee stage where you yeah well if
your pre-product market fit
the best advice that i have from that
period is
um action produces information so just
just like keep doing stuff you know i
remember like um
paul
is a good life yeah paul graham had this
great line like that i think that's his
line and he he was like startups are
like sharks if they stop swimming
swimming they die you know so even if
you're like not sure what to do like
just do anything because when you do it
it'll like it'll produce some
information like people liked it they
didn't this was very true for me there
was times where
i just did something
um
instead of debating it endlessly and
like just try it you know like all right
so we shipped it and like there was a
couple times where like the minute i
shipped it
and i was like i knew i know we we built
this wrong but now i have an idea of
what to do next and it wasn't i only
would have had that idea if we had
actually gone through the exercise of
going to build it it's like
my other favorite analogy for this is
that
you're like at the base of a mountain
that's shrouded in fog
and you're looking up at the mountain
and you're trying to think like okay how
do i get up there but you can only see
like three or four steps ahead because
the fog is so thick
so you have to just take steps into the
unknown
and
when you take three steps another three
steps will be revealed ahead of you and
sometimes you'll end up on some local
maximum you'll have to retrace your
steps or whatever but or come up to a
cliff you know but um
most people in life don't take the steps
into the fog into the unknown because
it's scary or they're like i don't know
what if i fail or like i don't know how
that's gonna work or i might run out of
money or i won't be able to get a job
after or
i don't know whatever reason but that
that is like one of the things that
separates i think entrepreneurial people
with that kind of inclination is that
they have sort of a comfort with this
risk tolerance but it's actually not
really risky if you think about it it's
not like
you know in at least in most um places
like you know if you go to if you go to
a startup and it fails like you're gonna
you're even more valuable to your next
employer right or you can go raise a
seed round pay yourself a salary
try it for like two years or three years
if it doesn't work go get another job
it's not like you're you weren't paying
yourself a salary during that time so i
think i think people overestimate the
risk of doing a startup and they just
never they never start because
it seems crazy and all your friends
think it's silly like that's sort of the
default nature of every big startup idea
it's just basic fear it's the same kind
of fear that if you see a if you're a
guy see a cute girl at a bar it's the
fear associated with coming up to her
yeah you like her asking her it's like
what's the actual risk exactly right um
she'll say i'm no thanks i'm not no
thanks and i i guess the risk is like
that's going to be mentally difficult
to deal with rejection so just like it's
mentally difficult to deal with failure
if you if you had a bunch of ideas and
you were excited about them and you
implement them and you realize
they're not good that could be difficult
to to keep pushing through that but i
suppose that's life you're supposed to
you know perseverance through the
failures yeah and then the risk is low
so that's and then the whole time
through the fog up the mountain you're
looking for product market fit yeah
that's right so you know you have it
when the usage of your product keeps
growing without any marketing dollars or
anything like that it's just like more
people keep coming back every week or
month so you're kind of keep you're
basically watching your stats
nothing is working
you see these little wiggles of false
hope in your metrics
and you basically just keep talking to
customers fixing the improving the
product talk to customers improve the
product talk to customers
you know and trying to run out of money
so be really scrappy
and then if you're lucky you hit some
kind of threshold where like okay the
thing is good enough now or we hit on
some use case and then it'll
organically start to grow a bit
and then then you have a whole different
set of problems once you hit product
market fit which is
how do we scale this thing how do we
hire people
how do we
you know
hire an executive team or raise more
money and like so the problems totally
change but um
you're
there through the whole thing so that's
the other question that's fascinating
again back to the girl at the bar how do
you hire people it's like
how do you find good friends
how do you find good relationships
and in this specific case how do you
hire good people engineers
executive
all of it one thing is i've done a lot
of reps on hiring at this point so um
coinbase has about 5 000 people
um probably the first 500 people or
something maybe in that range um you
know i i interviewed every single one of
those but you have to remember there's
probably like
i don't know on average maybe 10 people
that we
went in the process for every one we
hired or something so it was like
by the time that we had 500 employees i
had done like 5 000 interviews or
something i was like very burned out in
interviews i had been doing
i had some days i did like seven
interviews in a day or maybe um
you know you've been you would do lots
of interviews maybe you wouldn't get
burned out but different kind of
interviews uh very different very
different yeah very different because
you're
uh
so first of all most of your interviews
lead to rejection yeah
which is also exhausting
yeah and there's a whole there's a whole
part of the interview which is about
candidate experience right sometimes you
know it's not the right person but you
want to make sure they have a good
experience like if you're just exhausted
and you're on your sixth interview and
you're like well thanks for coming in
and you wrap and you just and then like
you're gonna create a detractor someone
is out there like fuck that company or
brian was rude to me or whatever so i
had to honestly i had to work on that a
little bit in the early days i was doing
so many interviews like i needed to make
sure that
um when people came in i was like you
know made them feel comfortable
um
asked him a couple of like warm-up
questions just like how how was it
getting in the office like did you find
it okay and like what have you been up
to this week and not just like
you know like a factory assembly line
like boom boom boom like
yeah but also there's a moment because
i've interviewed a bunch of people for
like teams and stuff yeah there's also a
moment when you early on no it's not
gonna be a good fit yeah and you still
have to land that plane and yeah and all
that kind of stuff and that could get
really really really exhausting so yeah
anyway sorry so
yeah so basically we tried all we've
tried so many things over the years to
make interviews more efficient because
it's a huge time sync for um the team
so
you know we we basically will usually
get them down to like 25 minutes
i've seen if you're trying to hire like
a big team let's say
um
you know of people who are like
contractors or something not necessarily
full-time employees i've seen people
actually do 10-minute interviews
you can even interview like a thousand
people almost like in a week or
something i'm not sure if that quite
works out but let me a little less than
that but you can basically get six and
six done in an hour if you're just i
need to get a team of 30 contractors for
whatever purpose but if you're talking
about full-time employees i usually do
like 25 minute
you know you're oftentimes like
one one thing we've done is we'll put
like a
um
like a google form online and it's like
put some basic hurdles in there like you
know ask them
um
to put in an answer which you can check
in a spreadsheet if it was correct or
not and like there were some funny
examples in the early days of coinbase
where we put in like brain teasers and
stuff but we don't do that anymore we do
like normal interviews we do references
the kinds of things i ask in interviews
um
you know it's usually like
i like to think about what what do we
need this person to accomplish in this
role right
and
get really specific about that it's like
usually something pretty hard and then
i'll ask them a question it's like tell
me about a time you did x
and um
or tell me about the hardest the hardest
kind of problem you've had to solve in
why
and what did you do specifically to
overcome it right
so i'm asking to see if they can
actually do the stuff we need to get
done but then i'm also kind of asking
inter like culture questions if i'm
interviewing for that
and so i'm trying to see like are they
concise communicators can they just give
me a clear
answer
and stop talking some people like ramble
on for like five ten minutes if you ask
the first question some people are you
know their interrupter like church of
interruption so like they won't stop
talking until you interrupt them which
for me i know i'm always patient and i
wait so yeah that's weird
i'm looking to see for humility