How the Coinbase CEO Sees The Future | Boardroom Talks

0:28Young people think of it very differently. with founder and CEO Brian Armstrong of Coinbase. Brian, welcome to the boardroom. Yeah, thanks for having me. For you, when you look back at not just the last seven years, but the whole 10-year run, I think it's been for Coinbase and all the wins and all the losses and all the great successes, do you ever have a chance yourself as a founder to step back and just look at what you've built and created? Well, yeah. I mean, first of all, I want to thank you guys for taking a bet on us early you know we were scrappy little company in san francisco and it was kind of incredible to get support from big names you know famous people that uh at that time so appreciate the support yeah i mean there are definitely moments a lot of a lot of building a company is just being in the daily grind of things you know and you're trying to solve whatever the biggest problem is and it can kind of get you down sometimes because you know your job as a manager or a leader or ceo So usually like 80 % of stuff's going pretty well.

1:25And then some stuff's going okay. And then there's like the 5 % of things which are on fire, their crises, their problems, people aren't getting along, whatever regulatory compliance issue, whatever it is. And that's the kind of thing you have to deal with every week. And so sometimes you get to the end of the week and you're like, oh my God, like this, the whole thing is not working. There's everything, everything's broken. And then you go hang out with your friends on the weekend. They're like, oh, I heard about all this cool stuff Coinbase is doing. You're like, really? You have to kind of remind yourself of it sometimes.

1:52So it's kind of like that cliche, people overestimate how much they can get done in a year and underestimate how much they can get done in a decade. But if you zoom out, you've made incredible progress over the longterm. And if you just work really hard for a couple of years, you'll barely make a dent in anything. I know you worked early on in your career at IBM, at Airbnb. Was the goal always to start your own business in some way? I remember I was graduating from college and I asked my advisors like, you know what do you think i should do i kind of thinking maybe i want to start start a business and and they were like well you know the best way to start a business you got to go join a company that's successful and get some experience and so they they suggested i go join a few companies and you know certainly working at airbnb helped a ton um some of the other big companies i joined didn't really teach me that much about startups at all but it took me a while to kind of build the confidence and realize that all right actually i do want to run a company i think that would be the most fun thing.

2:44And then once you figure that out, it's a whole other challenge to figure out what is the right idea. And most people have to try five, 10, 15 different ideas to see if something finally works. And so just like anything, it's hard to get really good at it. You got to try a lot of things that don't work to figure out what does. And was discovering crypto the thing that sparked the idea that maybe this was the direction to go in and building your own business? And when did you first discover crypto? I think I first read the Bitcoin white paper in December of 2010. I just kind of couldn't stop thinking about it for six months.

3:15So I started going to these early Bitcoin meetups in San Francisco. And all the people there were kind of crazy, you know, like some of them were like anarchists and some of them were these brilliant computer scientists. And it was a really kind of motley crew of strange people early on. And I still didn't, I wasn't even really thinking about starting a company necessarily at that time. But I just kind of, I started tinkering with stuff like nights and weekends, like maybe this is kind of a cool technology. how might people actually make it easy to use or safe and trusted. And I was sort of working on some prototypes nights and weekends and stuff like that.

3:46So that it was, there was a moment that kind of actually gave me the courage to take the leap. And it was really applying to Y Combinator, which is this startup incubator in the Bay Area. And they were the ones who wrote me the first check. I think it was like 150K or something like that. And that kind of was like, all right, maybe I'm not crazy, you know, because I would tell my friends about this idea, like, I think this crypto thing is kind of cool. All my, all my friends were like, nah, this sounds really dumb. So I had a lot of self doubt, but there's somebody who I respected giving me that first angel check.

4:17You know, that's what gave me the confidence to actually quit my job and really go for it. Crypto really started for a lot of people as something that it was an investment or an asset class that they just thought very simply, you know, if I buy it, maybe it's scarce, maybe it'll go up in value. Let's let me, I want to try to make some money. Right. And that, so that investing or speculation thing was like the early use case for a lot of people. Now we're seeing kind of this second phase of utility where people are starting to use it for payments. And they're doing that in a bunch of places. They're doing it in emerging markets where the payment systems are even worse.

4:49They're doing it kind of cross-border payments. There's a lot of people in, I don't know, like Latin America or Africa, they're trying to just run their local shop. They need to buy goods from Asia or Europe to import. They need to send money home to their family in another country. the fees for these kinds of things are just crazy, right? So you'll often see people adopting, the early adopters of products will be the people who have the biggest pain point around it, right? And then it'll kind of go into the next category in the next category. So we're starting to see payments really, really start to work.

5:19The first use case, which is really like crypto as an investment and crypto as money are also gonna be really big around the world, I think. I remember the trajectory in 16, 17, 18 and watching as it became more like of a common understanding amongst the NBA culture and amongst the music business. And people were talking about it. And then you guys were all striking relationships with interesting partners. And you could see the conversation growing. You could see the value of the asset growing. But right around the pandemic, it felt like it became a way different conversation. Do you think at times that it all happened faster than it was supposed to?

5:57that the kind of trajectory that you were on, that you were predicting and preparing for was in some ways uprooted by that time? Totally. I mean, like the world would be a lot simpler, actually, if a good idea comes and it just kind of gradually grows in adoption, right? And I think when we look back at history, if you look at whatever, radio or television or the steam engine or something, you'll look back in history as it's just a smooth curve, adoption. But the reality is most of these things in the early stages, they go through bubbles and crashes, right? People most recently probably remember the internet one, like in 2001, there was a big internet bubble and crash.

6:40And, you know, arguably, we're going through one of those in AI right now, right? Where AI going back to the 60s has had periods of like a surge of interest, and then a decade will go by where everyone's like, oh, it'll never happen. You know, you know, if you study history, this is true of a lot of important inventions, the airplane or the railroads or whatever there, you know, there was an, there was like a big over investment in railroads. And then a bunch of those companies went bust because there was like too much, too much railroad capacity, not enough demand for passenger trains or whatever.

7:08So anyway, crypto went, has got definitely gone through its own journey on this, where there's times where it felt like, you know, we were just trying to stay up. We were getting woken up like three times a night because the site would go down and we were just, it was like all hands on deck just to try to keep up with the demand and then there'd be like two or three years would go by where everyone's like oh crypto's over and you know and you know in 2020 um during the pandemic this was one of those hype moments people were just at home i think they had too much time on their hands they were getting you know stimulate uh stimmy checks or whatever and um crypto went on this crazy bull run and unfortunately like a lot of bad activity happened in the space too whenever crypto has a big uptick it it draws in a lot of people who are kind of in it for the wrong reasons they're trying to do a cash grab or, you know, in the case of FTX or whatever, like there's just illegal activity and the CEOs go to jail.

7:58And so, you know, we've always kind of had this saying internally, which is like, it's never as good as it seems. It's never as bad as it seems. And so when the press is kind of putting out all this stuff about, oh, these crypto is the future of everything. And these guys are geniuses. You can't believe any of that, right? And don't get caught up in your own hype. And then at the same time, when the press is saying, oh, these guys are all idiots and it's all over, like you don't believe that either. There's a funny phenomenon too, like where when crypto is hot, you know, suddenly like I'd be getting invited to all these cool parties or whatever.

8:28And then suddenly crypto is not hot and I get uninvited from all. So at a certain point, you know, I had to just kind of like ignore all that stuff and be like, all right, what do I like doing? You know, I'm like, whether it's other people think it's cool or not, you kind of have to just go for what you think is good for the world and what you enjoy doing every day. Do young people see crypto differently than you think an older demo that is probably still investing in it as an asset class? And is that where a lot of the opportunity lies in being able to really educate that younger consumer on what the real utility is outside of investing in it as an asset class?

9:03Young people think of it very differently. They're thinking like, I may never have a bank account like in the way that my parents did. Who wants to go to like some bank branch on the corner and have like a paper checkbook and all this kind of, it just feels so antiquated. Like your phone is your, is your, your wallet. Um, that's where I want to make payments and just, you know, um, earn a living. And like, if I want to put out cool content, like get paid for it. And, um, so I think there's a future here where crypto is actually going to become people's, like Coinbase could be people's default, their primary financial account essentially, and, and use it to just run their lives.

9:39And so that's definitely a younger person's game. I think the average age in Congress is like 65 or something. It just keeps going up and up and up. And what's funny is that some of the people who are most skeptical of crypto, they're like over 70 years old, you know, and they've never used it, but like their kids use it or their staffers use it. All these people are frustrated with like overdraft fees and like, you know, your card gets declined and then your card gets stolen and it's like somewhere leaking on the internet. And it does really feel like our financial system is in need of an update.

10:11And so I think young people just kind of get that intuitively. And that's why they're excited about crypto. As AI has become so prevalent in conversation the last few years, and you guys are a tech company, what is the kind of thought process around AI as it relates to Coinbase? You know, AI is definitely, we're going through like a kind of a golden age of AI innovation right now, which is really cool. and coinbase uses ai in a lot of ways that a lot of tech companies do you know like our software engineers use copilot so it helps them write code which is really great we use ai in fraud prevention as well so we have people coming and trying to put in stolen credit cards and all this stuff and we use ai to detect that and flag it um you know we use chatbots like in customer support you know you can still reach a human being if you want to if you have a problem you don't we don't want to force people to do that but if people have basic questions sometimes the chatbot will answer for them.

11:01In AI, you have this issue of creating fake content. A lot of politicians are worried about this, actually, that someone's going to make a fake video of them saying something terrible. And how do we know if it's real? And so crypto actually gives you a way to cryptographically sign every piece of content, whether that's an image, a video, or text, and say, hey, this actually came from me, Rich, or it came from CNN or whatever. So it allows you to cryptographically prove the authenticity of stuff. A lot of people are interested in that. I also think, hey, if we end up in a world where we have these AI agents just amongst us, whether on our computer or walking in robots, walking down the street like C-3PO or whatever, they're going to need to have money and the ability to go get things done.

11:49Imagine if you had an AI assistant and you're like, hey, can you book me this trip or this? They need to be able to go buy the plane ticket or book the hotel or whatever. And so I think our financial system today is not set up to open bank accounts for robots and AI. The whole system is based on, show me your government ID. And so to open an account for an AI, it blows their mind. I think a lot of AI agents are going to probably end up using crypto to pay for things, which is kind of cool. Who do you lean to or lean on when you're in the middle of the storm or when you just have to figure out how to manage the thousands of employees you have?

12:28Is there a Mark Zuckerberg or somebody that has been in your ear at times? I've definitely built a great friend group of other founders. There's a group of founders I meet with every month that's been a great set of mentors and friends. And then obviously the board of directors is great too. They're some of the early investors and they've seen lots of companies. So it's like anything in life. You kind of want to find people who've done what you're trying to do. I think it's important to take, because everybody has an opinion, right? But I always try to filter that through the lens of, well, have they done what I'm trying to do?

13:00You've had such incredible success, incredible wealth over eight, nine years. And knowing you, you've just been working hard. You didn't set out to have great wealth. You set out to innovate and build something that was special. Do you ever have to just step back and remember what you are and who you are and what you've built? Or is part of like the allure to not focus on that and to just keep your head down and keep building? I did just want to build something cool and innovate. I will tell you, I also wanted to build wealth. That was appealing to me. I wanted to have capital to try to do more things in the world.

13:30This happens once in a while to me, more like in a crypto context, somebody will come with me and I can tell they're nervous asking me a question. And of course, for me, I'm just like, I'm just like a normal guy, right? But I get it because the same thing happened to me when I tried to go ask people who I looked up to. So I don't know. I think that's just part of human nature. and I don't think too much about it. I, whether I try to just, you know, this is a hard thing to do, but everybody who I'm around, I try to just see what can I learn from them, right? Like in my family and like my partner just kind of keep me grounded on this stuff, right?

14:03Like they're, you know, my mom will be like, you know, hey, like go wash the dishes or whatever after dinner. I'm like, you know, I'm a billionaire. Why do I need to, she's like, shut up, wash the dishes, right? It's good to have people keep you grounded because I do think there are people, you probably know some of them too. Kevin seems like super humble and introverted, which is one thing I admire about him. But I think we've all probably met people who got a little too full of themselves and then you can come crashing down. You embody somebody that went from founder to CEO, in my opinion, very seamlessly.

14:38A lot of times founders are not always the best CEOs. But being now that you're running a public company, I know you invest and you probably have a lot of other things that you're developing, but do you miss the startup founder phase of building something? And do you still love the idea of running a public company every day, being that this came from building something? This is a big question a lot of people have is, do you want to run a public company? Because it's a bit different. Some public company CEOs, they spend a third of their time just going and meeting with public market investors. That didn't sound super appealing to me when I was thinking about doing it, but I realized that doesn't mean you have to do that.

15:13Like you can put a budget, you know, all right, I wanna spend six hours or 10 hours every quarter doing that. But the rest of the time, you should play to your strengths, right? Do the things that you're good at, that you're passionate about, and then hire a team to fill in the gaps, right? So for me, the stuff I like doing that, I think I'm good at is like building products, working with the engineering team. I do some external facing stuff, go talk to DC and Wall Street. But there's so many other parts of running the company. and that's just kind of you got to build out the team to fill in the gaps about the things that you're not good at um and are you still investing and exploring new innovations and businesses to start while you're running the company yeah totally and actually before i touch on that you something you said earlier i thought was you very kind kindly said it felt like i had a smooth transition from founder to ceo i can tell you it did not feel smooth from my point of view um and i agree with you by the way a lot of founders are you know they're they're kind a crazy bunch like they don't always make the best ceos but um for me it was it was definitely hard i had never managed anybody before starting coinbase i was basically an engineer you know and then i i had a series of like um executive coaches over the years that taught me like how to do management and leadership and how do you raise money how do you fire somebody like these were all things i was not very naturally good at even just like speaking in front of the team um like i was you know back when you met me maybe i don't know if you remember i felt like i was kind of more shy introverted too.

16:38And so I really had to just work on that. And you can get better at anything if you do it a thousand times, right? When I remember when I was, before I started Coinbase, I would see CEOs that I looked up to and they'd go do an interview like this or something. And I'd be like, man, they're so articulate. How did they do that? I don't think I could ever do that. Right. And then, you know, you have 10 years of whatever, if anything, you'll get much better at it. And you don't have to start with going on, you know, Stephen Colbert and some like high TV, high stress you can start with just you know do something and like go talk to the company like 10 people and you'll get better at this with with practice over time um but yeah you were asking about if i'm investing in other companies and stuff i yeah i have had a chance to do that um there's a couple other projects that i'm excited about i mean one is i've been getting excited about um longevity and biotech and like how do we extend people's health span so we can all live healthier longer lives there there is a company that i invested in and i'm helping out with called new limit.

17:35Um, if people want to check that out and there's also another company that, um, I got excited about that was trying to help accelerate the pace of scientific research really. And a lot of stuff that happens in science is kind of inefficient. It's like, you have to get published in these journals. It takes forever. And like, how do you get funded and the act, the whole, like, if you, you know, if you want to get funded at, um, Stanford or Harvard is like 50 % of the funding just goes to overhead in the administration, all these things. So, uh, research hub.com is like another company I've been trying to help out.

18:06And that's been a cool way to try to accelerate scientific research. So yeah, I don't know. I'm always, I'm keeping Coinbase the main thing. And I think we've got a lot of scale now. So the problems keep getting bigger and more interesting. But I want to try to help a bunch of startups get off the ground in some way, shape or form over time. That's very cool. When you think about the next 10 years for you and the next 10 years for Coinbase, obviously you couldn't have imagined or predicted what's gone on the last 10, but But how would you like to see the platform evolve? What could we potentially see in the future as a service of the platform?

18:43And what else exciting do you guys have down the road right now? Yeah, well, it touches on what you said earlier, which is how do we really drive utility in crypto? So it's great that it's an asset class. We've got all these hundreds of millions of people using it. We've started to see payments start to work, some of this content creator stuff. But I think we're just scratching the surface on that. So we're trying to get that really dialed up. And then international expansion as well. I think there's a lot of people in the world that don't have any good financial infrastructure at all, and they would really benefit from this.

19:16And ultimately, that's the mission of Coinbase is to increase economic freedom in the world. So I mean, my goal, and hopefully we can get like a billion people using crypto every day through our products and really increase economic freedom for the world. So that'd be the long term goal. Amazing. Well, I appreciate the conversation. I do appreciate our partnership. Seven years running now. We got to get you out to a few of our Boardroom Coinbase events. They've become quite infamous in the culture. So I hope to see you out there soon. And I appreciate the education today. Thanks, Rich. It was great chatting.

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