The Safest Dollar on the Internet | Circle CEO Jeremy Allaire

31:11This whole space is a mess. Like we like what you're doing here. We don't understand what you're doing here. This looks like it's like, you know, you've got all this regulatory heat around you. Like no one would invest. And we were hemorrhaging cash. Because you had expanded so much. Because we had expanded so much and products that had been generating material revenue stopped, basically. Yeah. And we're just creating losses. And so in September of that year, the board had a fiduciary duty to determine whether or not the company should be wound up and put into bankruptcy. And so the board hired bankruptcy advisors who had to attend all the board sessions, which were frequent, you know, because you're like literally like you're you're you're looking at potentially like three or four weeks and you have to declare bankruptcy.

32:03How frequent? I don't remember. It felt like every week calls, at least. Right. It was very, very frequent. And, you know, at that point, I think for a lot of people, including people who were at the time on my executive leadership team, they're not with the company anymore. I think, you know, people sitting around the table were like, like, this thing is done. It's done. And, you know, and I looked at that and, you know, in my mind, you know, like there had to be a way. And what was so interesting is that the kind of founding vision of the company, which was really ultimately then expressed and launched in USDC, like, you know, one to two years or over the prior two years, like that had like really achieved product market fit.

33:07And I was like, this is what we came here for. This is what we came here to build this. Like we're right on the cusp of this, the vision materializing in a big way. We're right on the cusp. And we actually had started to invest in behind that more, like building a bigger platform around USDC. We had a whole platform initiative around it that had started in the summer. And I was like, there has to be a way. no one else saw a way and so i with with my own inspiration and and and and i think conviction i went into one of the most insane couple months where i basically figured out how to sell the exchange we had how to sell a brokerage product we had to wind down another set of products restructure the company.

34:01We went from about 450 people in 2019 to January of 2020, we had 59 employees. And so some of those people went with spin outs or other things. We actually had to lay off a lot of people. And I, through selling assets, generated cash, like a big chunk of cash and like enough cash to like keep going and not need to raise equity. And we doubled down hard on USDC because it was the actual vision of the company. And a lot of people bailed out. A lot of people said, I've had enough. This is done. I don't believe in this anymore. A lot of people. But the people who stuck it out have been rewarded really well.

34:51Um, but you know, that was a, that was a dark moment and, and I never lost faith. I, I, the conviction was there. I think, I think as a, as a human, I had to, um, I had to accept the possibility that I couldn't get all these things done. And that if that happens, like, that's like, I'm okay. I'm like, I'm, I'm, I'm, I'm okay. But like, that was not like, I never resigned myself to that. It was just like, you kind of, I believe in kind of mentally, it's really dangerous to get into catastrophic thinking. And that just feeds on itself. And so you have to decatastrophize. You have to say, okay, what if the worst thing happens?

35:38Like, what are you going to do the next day? and what does that mean for you? And I kind of did that process for myself. And that actually gave me the freedom to be like, okay, I know what I need to do. And yeah, and I think what's amazing is, we went from that moment, which kind of culminated in early January 2020, we completely had 100 % of the focus on scaling out the stablecoin network. And in like by March 2020, we were launching all these new products. Three months. Yeah, well, we had been working on them since the prior year, but we were like launching these new products around it. And basically like PM Fit just like totally started cranking and we just saw this extraordinary growth.

36:31We had a thousand percent growth in 2020, another 1 ,000 % growth in 2021. And USDC just became this huge platform. You know, some of the things that we had done in selling other assets actually turned into equity that turned into more realized cash. And so we were able to like actually fuel some of our own growth. And we went from, you know, essentially like$8.5 million of revenue to$83 million in revenue to$722 million in revenue to$1.4 billion of revenue, just like extraordinary growth and just started generating material cash flows. And we had, you know, we had, you know, BlackRock and Fidelity and some of the greatest investors in the world coming and writing, you know, $300,$400 million checks into the company.

37:24And it was like a totally different world. And literally that changed in effectively just over one year. And during that, I have a bunch of questions around this. One, you mentioned. It's actually more the way you said it about the executives on your team that didn't believe are no longer there. Maybe I'm reading into something that doesn't exist, but like it still feels salty to you. No. I mean, my view is if someone doesn't believe in what the company is trying to do and doesn't believe with all their heart that there's a way to get to achieve things, they shouldn't be in the company. They just shouldn't.

38:06Like, you know, and or if it's become too difficult for you and your career or you're afraid of your career's reputation or all this sort of stuff and like that's what's important, then you should leave. right and then there's obviously like legitimate risk appetite issues like you know someone joins a company because it's this big or this size and this and that and they're like crap i gotta feed my family right i'm gonna leave because i have to go get a job where i know i'm gonna be able to feed my family totally legitimate so there's a lot of different you know reasons for people to um either be asked to leave or leave themselves and all this sort of stuff but at the core though if you don't have people that believe in what you're trying to do, like, you can, you know, part of your job is to keep people educated, inspired, you know, informed, like, to, like, be aligned and understand strategy and mission.

39:08Bring them along. Bring them along. That's a huge part of the job of a leader. It's a huge part of the job. But, like, if that doesn't motivate people, then they should do something that is more motivating to them. I cannot imagine how gnarly it was to recruit for this company. Like, I cannot imagine somebody explaining to their family. Yeah. Like, you have to, like, what are you going to go into? like the whole financial system and talk you know it's like well you know i think that um and you can you can you know you can validate this do your channel checks as it were but like you know whether it's at an executive level or kind of key individuals that have been brought in you know obviously i i play a role in recruiting a lot of people and um i think people understand that Circle is a deeply mission-driven company, that we really, really believe that there's a major transformation that can happen that can actually contribute to an increase in global economic prosperity, that, like, the wood's worth a chop, and that, you know, I always tell people, this is going to be the hardest job we've ever done.

40:31Like, this is going to be really hard. You tell them? Absolutely. Because it is. like now you could argue whether it's as hard now as it was then and all that kind of thing but it's hard right hard because of the doubt cast on them it's it's it's hard it's hard for a bunch yes it's hard because the world doesn't believe in it and like that's uncomfortable for people you get there's a cognitive dissonance from that it's hard because what we're trying to do is hard We need to change laws. We need to manage extraordinary types of risks. There's constant macro shocks. There's constant other shocks.

41:09There's like crazy ass shit that goes on. And that's hard. It's hard because it's just unrelenting, constantly changing, like the fierce dynamics that are there. And so it's just like, wow, it's hard because the surface area of what you actually need to understand is really broad, which is also compelling for people. Like, I want a big surface area. I want to be interdisciplinary and so on. And that's, I try and attract people who that's a plus as well. But it's also hard, right? I need to understand legal and regulatory, and I need to understand a whole bunch of different technology areas, economics, cryptography.

41:55I mean, not everyone has to understand each of those, but like on the whole, you have to get your head wrapped around a lot of concepts. And so that's hard. Um, so I, I always have the, the phrase I've used for a long time that like if you're recruiting, uh, a key person, uh, or an executive or whatever, like the most important thing is, is the spouse acceptance factor. Right. So you really got, you got to make sure that the spouse, if they're, if they have a spouse, right. Uh, uh, is, is on board. Doesn't think you're a loony. Yeah. Yeah. So I always offer to meet with the spouse. Do you? Of course.

42:30How often do they take you up on it? I mean, in the early days, more, right. because it's like, it's a startup, right? And stuff. And some people, they're like, I can manage that, right? But yeah, yeah. And what's your tactic with them? I talk about a lot of things. I talk about what we're trying to accomplish. I talk about the values that I have, that the company has. I talk about how much, how positively I think about their spouse and why I think they could be an amazing person in the company and to work with. And I talk about, you know, our, our kind of general philosophy in terms of people and their families.

43:12Do you do it in front of their partner? Like, uh, do you want it one-on-one or do you want their partner there with them? Yeah. It's whatever people are comfortable with. Do you invite them over to your house? Do you take them to dinner? Do you have like a, I have had a couple of things where it was sort of a, uh, uh, kind of come to the house thing and and um you know actually i recruited we grew massively during covid uh which was you know its own thing and we're we're remote first company and and so um you know but like there were people who i needed to hire who were like top executives as we were in scale out mode and like they all i i made sure they came to my house like and you know it was safe yeah i take my tests and all that stuff right uh so it was you know really important during those phases too um And you have, are you married?

44:00I'm married. Yep. Kids? I have four kids. Four kids. Yeah. And you've been building companies for how long? So I've been building companies for over 30 years now. This is your third company? It's the fourth. It's the third, my third company. I co-founded each and it's my third IPO as well. You did two public companies. Okay. Like, let's just assume money is not an issue anymore. You know? Yeah, yeah. You have kids at home, partner. Like, you go for another bout. The third one is the most ambitious. Yeah. You decide to take on, like, the most regulatory, gross space that you possibly could. You know, like I would say, as you were describing the why this would suck for a potential person to join Circle thing.

44:58I'm like, well, those all those things suck for you, too. Like every day, something bottoms out on the macro, crypto. Yeah. The stablecoin network. I mean, the list goes on. Like SEC, SEC like comes down all of your competitors streets. I mean, it's like every day. I, and you know, um, you're, you weren't a spring chicken at that point after the first couple of companies and you knew what company building actually meant. And you knew the personal sacrifice that comes with that at home with your family and you still did it. Yeah. Well, look, I mean, so I think like I'm on the planet to, to, I believe, uh, uh, to obviously help improve the world.

45:54And that's in my moral philosophy. And I think, you know, I had been, I was running a public company when I kind of went down the rabbit hole in this technology space. And at that time, I kind of knew that I didn't want to continue. I had been building that company for almost, Yeah. Yeah. For almost 10 years. And I was like, I knew like that wasn't how I wanted to spend the rest of my my career. And but I wasn't like I'm going to put I'm going to get out the golf clubs person. Like I'm like, I want to I want to keep working on things. And I think what was interesting is that in 2012, when I first started going down the rabbit hole and then in early 2013, as I really crystallized the ideas of Circle, like it, it was, it grabbed me in a way that nothing had ever grabbed me.

46:52And I've had multiple like major moments that inspired other companies as well. And it was it was almost like like a project made for me. Like it was a kind of this emerging Internet infrastructure. I'd worked on Internet infrastructure for 20 years. I I sort of studied poli sci philosophy economics. And so I was sort of interested in kind of global political economic systems, how they work. I had become obsessed with that even more after the great financial crisis. And all of a sudden, I saw a project where my skills, my interests and the problem space was one that could could actually change the structure of like global political economic systems over like 20 years.

47:42I was like, that's worth doing. Like that's worth doing. And what was interesting is that at that stage in my career, I wanted something that was going to stretch me. Like when, when we take on new jobs, like we want things that stretch us. Right. And so I, it was like, wow, that's incredibly hard to most people. They were like, you're totally insane. I don't even know what the fuck you're talking about. Like, um, but to me, it was crystal clear. And my view is like over 10 or 20 years, like it could really, it could have a bigger impact than the web. And not just circle, but like the whole space and what that is.

48:17And obviously I believe that more than ever now, but, you know, I joke like, you know, in order to be this company to be successful with the vision that we have, we're going to have to basically operate at the G20 and establish new global policy that promulgates its way through the major economies of the world and beyond. And that's actually like a goal of the company. And like most people say, that's not what startups are designed to do. But I was like, that's like a pretty interesting challenge. Like, I want to work on that. And so, you know, yes, it was going to be really hard, but like the hard things and if you can get through them are incredibly rewarding.

49:03And I think we've gone into this era as well where, you know, deep tech or whatever you want to call it, like there's major technical disruptions that change societal norms, expectations, risks and other things. And the intersection with complexity is just different than building a SaaS app or building a social media app or other things. And so it was compelling from that perspective as well. So that was like a source of energy for me and has been. The complexity is a source of energy for me.

49:37But I would also say, it was taking a toll on me. Those years were taking a toll on me. And that actually led me to kind of recalibrate my own health and wellness and really evolve. The early years, you're saying? The early years were hard. Taking a toll on you physically? Yeah, yeah. Take a look. I mean, if you go and look at pictures from 2016 or 2015 or 2017, I look very different and my health is very different. And I really sort of, I became very focused on wellness, on longevity, on other things. And it was really with the recognition both to be a good husband and father, but also to absorb the incredible complexity of the work I'm doing.

50:34I have to practice mindfulness. I have to be incredibly healthy and fit and have great sleep. And like all that stuff matters to how we access our energy and utilize that energy. And so, you know, it's been the complexity of circle has has been really positive for me in terms of adaptations of of kind of how I, you know, how I am in the world. It's interesting you use the word absorb like it's like punches from the company that your body like quite literally has to take. Like, yeah, I mean, yeah, I mean, stress is degenerative neurophysiologically, right? And physiologically. So, you know, it's like it is, it's not a physical punch, but it is actually a physical punch.

51:25Yeah. And what did you, well, like what changed you or what bigger I imagine? And then. Yeah. Yeah. So, yeah. I mean, basically, you know, my, my, what I put in my body was not great. And like my weight was not great. I wasn't like exercising. So you know you work out every day? I work out basically every day. Sleep better? I sleep, I sleep every night and I, and I sleep seven hours, but it's like, I'm, it's doctrine. I practice mindfulness and meditation. Every day. I practice some version of it. I don't go and necessarily do a whole sit every day, but I have some version of accessing that. And the practice allows me to even practice it in the real world, which is sort of the point, right?

52:16Is that when you adopt a mindfulness kind of capability, like you bring it into situational stuff as well. And, you know, I stopped drinking. uh i you know really focused on you know a lot of health vectors that were just like very clear like gonna like not not they're gonna take away energy versus give energy um yeah it's been it's been um that's been really positive do you do things for fun outside of work absolutely okay yeah yeah i mean mostly i would say it's it's overwhelmingly just nice things with my family um like that's like trips or something yeah certainly travel but also just like in everyday in everyday life um nice things with family and and um and some you know i have friends as well and try and do stuff take a ski trip or whatever you know yeah definitely uh definitely do you feel like you still um how old are you do you mind if i ask how i'm 54 do you feel like at 54 you know you have the energy that you did at, I don't know, 24 and 34.

53:23More energy. Come on. More energy. Come on. Very much so. Are you serious? Absolutely. Yeah. And the energy is far more productive energy, right? The energy of a 24 year old is like a ball bouncing around. Doesn't actually, there's no wisdom. They're, they're, they're, they're, you know, you tend to be more reactionary. you know, you're not disciplined. And so not only do I have more energy, but it's more productive energy. That gives me hope. Yeah, absolutely. Do you feel like you have an unusually high pain tolerance? I don't really know. I don't know. Maybe do you seek hard things outside of work?

54:07I mean, not really. Like it's all channeled through. Yeah, I would say, I mean, I like the challenge of skiing. Like, that's probably the one thing that, like, where I, you know, I seek the, you know, incrementally more challenging things, et cetera. Can I ask you kind of a weird question? Feel free to answer it or not. Do you feel like you're in New York, right? like um that's where all the institutions of wall street are yeah do you feel like the jamie diamonds like do you feel like they were probably like you're probably the the runt like the joke of the town for a while if you will i don't mean that disrespect no no i understand yeah um do you feel like you have a seat at that table do you give a shit about that table you know um so uh does that question makes sense?

55:02Yeah, it totally makes sense. Yeah. I mean, look, I, you know, I, you know, I'll just give you an example. I started showing up at Davos saying like, this is the future of the financial system. Here's all this stuff. And like trying to connect with, with people who are actually the leaders of the financial system, whether in government or, or, or, or private. And, um, I think like, uh, you know, there was sort of curiosity, but basically totally dismissive. Right. And what's interesting is that, you know, even then, like, I knew I was right. I knew I was right that this was going to be how things worked in the future.

55:38And so it didn't it didn't bother me that much. But but, you know, now, you know, we work with some of the biggest all these major companies. We work with so many of these major, major companies that are actually at the core of the way the existing financial system works in the US. in Europe, in Asia, and other places. And so I think, yeah, I mean, it has garnered the respect of a lot of leaders. And that feels good. I think it feels good. And I think whether people like it or not, like this is now a thing that everyone has to deal with. Um, and, uh, and, and, you know, I think I'm, um, I believe that some of these incredible financial firms, right.

56:36Are, are going to be incredible financial firms in the future. And so there's tremendous avenues for us to work with so many of these companies as well. So I'm building, I think, very good relationships with the leaders, not just in the U S or New York, but like leaders around the world who are kind of constructively engaging, want to learn, want to figure it out. Their teams are now working on product. It's a different world now. I'm sure, yeah, I'm sure there are some people who like still are dismissive or want it to die or whatever, but that doesn't concern me very much. Yeah, I mean, the stable coin space is obviously getting quite hot right now.

57:18You see companies like Stripe buying, it's getting hot. Yeah. I mean, there's an incredible amount of activity. And, and I think that's great. And, you know, for, you know, from our perspective, I talk about this publicly often is like, you know, really over the, over the past six months, like we've seen this extraordinary, you know, kind of growth in, in interest in, in working in this. Right. And so there's just so many amazing companies and governments and others that like really want to work on stuff. And so that's been really rewarding. And so, you know, if this is a multi-trillion dollar market, you know, there's been a lot of people who are building products for that, for sure.

58:07And we, you know, I think we're in a great place. We can continue to build durable network effects and expand out our platforms and do more and more for this kind of Internet financial system. There's a little party you want to build like a nice skyscraper on Wall Street just as like, hey, I'm here. Well, so we kind of did. So we had a vision for kind of how we could place ourselves at the very center of the financial system, become a public company, et cetera. And so we took over the 87th floor of One World Trade Center. Actually didn't notice. Yeah. And I personally got heavily involved in designing a new global headquarters on the 87th floor of One World Trade Center.

58:59And it's actually as a I think I think technically we might be the highest financial institution in the Western Hemisphere. But it's really symbolic, right? It's the very heart of the dollar system. The Fed, New York Fed, which manages the dollar infrastructures there. The New York Stock Exchange, which manages capital, the DTCC, which manages all equity infrastructure for capital markets. It's all there. And we've built a space that really is we've arrived. And it's a wonderful, wonderful statement as well to American values, to the preeminence of the dollar, to all of that. And we designed it as a space to convene people.

59:42And so that's exactly what we did. And I think it's accomplished a lot of what we wanted it to. it's pretty cool yeah i gotta come check it out you should absolutely check it out it's a it's it's it's we've sort of designed it as a convening space so it's really designed to bring people together to run programming to do events whether it's all like people cross-functioning across the company but many many other things and it's designed to host i think um all the different stakeholders that are involved in in what we do and so it's it's pretty unique i think it's amazing yeah as i like to say i think we have the best views in the western hemisphere i was just I was just thinking, I can imagine the views are probably insane.

1:00:25Yeah, they're really incredible. And we've thoughtfully kind of designed the way that the space flows and the way it's used with all of the different types of views that we have there in mind. Yeah, next time I'm in New York, I'll show you a note. Yeah, ping me. Your days today, how do you organize them? Has it changed in how you literally run a day? Like, I'm really curious from wake up to go to sleep, what a day looks like. Yeah. I mean, look, I mean, there's sort of like when I'm at home and then when I'm traveling and - Can you give me both? Yeah, at a high level. Like when I'm home, like I like to wake up early.

1:01:04I like to exercise. I like to be with my kids and help them. What's early? Like 5.15. Yeah. Yeah. And then you first thing, exercise. No, I like to have like my own kind of quiet moments, um, reflective moments, caffeine moments. Um, and then, yeah, and then I'll, uh, you know, usually 30, 45 minutes later, we'll, we'll, we'll go work out. Um, and then I want to have time with my family. I want to help everyone kind of orient, um, you know, make sure my kids get to school and, and then I'll, and then I'll, um, and then I'll go to, uh, to work or other, whatever is, is happening. Is it even possible for you to bunch certain types of things in a day?

1:01:50Because like the amount of context switching that you have to do is obscene. Yeah. So does your brain, can your brain just go back and forth to all these things? Yeah. So I, you have to be able to context switch and compartmentalize in a massive way. Any given day, I might have 15 engagements. Um, and, and that, that could be like, you know, uh, I'm recruiting someone, I'm doing a media interview. I'm like doing a deep dive on a major strategic issue. I'm meeting a senator. I'm, you know, whatever. It's like context switching is like constant. And so, you know, to try and create little like mental buffer spaces where I could do some breathing meditation or I can like orient myself or whatever.

1:02:35But sometimes you don't have that luxury. So I think I'm just very good at context switching. um, at, at, at, in, in, in the workplace personally, other things. Um, yeah. Crazy. Yeah. Yeah. Busy, busy. You can do this for a while longer. I do. Yeah. I mean, you can keep this up. I do. Yeah, I do. I, I think, um, right, right now is, um, I think we started the conversation a little bit about this. Like it's, it's a really exciting time. And, you know, I say this a lot, but like Circle's still a really early stage company. Like we've barely started delivering on what we think can happen. And so when I think about the growth of an internet financial system, the evolution of the economic system into the on-chain system, and really what that portends and what that can look like and the impact that can have on the world, I see another 10 to 20 years of major, major transformation.

1:03:38And I want, I believe Circle can be a really important company in that. And so I'm energized and see so much there. And so it's super motivating. I wish one of our early stage companies had a$20 billion market cap. Thank you for doing this. You're welcome. This is a real pleasure. Yeah, enjoy the conversation very much. Are you hiring? We are, absolutely. Anything in particular, everything? Across the board, yeah. And you'll give them the spiel? Across the world, across the board. And you give them the spiel of like, this will be the hardest thing you've ever done? If I'm directly involved in hiring them, yeah, I will.

1:04:19Otherwise, somebody else may. Someone else may. It's part of the dogma. When you hear the word grit, what do you think of? When I hear the word grit, I think about kind of tenaciousness. I think about like just dealing with hard things in the details. like like and and and you know i think just like dealing with you know even the the really tough shitty stuff right it's just like grit is is is like it's getting deep in it and it's it's tenacity and it's um and it's uh you know just powering through the hard stuff i mean that's what it is yeah i appreciate you thank you That's it for now. If you liked the episode, please leave us a review or go back into the archives where we've done more than 200 episodes with some fantastic folks.

1:05:20This podcast is a Kleiner Perkins production, and I'm Juven. Thanks for listening.