E25: Blockchain.com Co-Founder: Building a $14Bn Crypto Empire

0:00The whole work yourself and death culture is stupid. But if you're dead, you can't work on your project. No one's going to care. Nicholas Carey. The visionary behind the$14 billion blockchain.com revolution. From revolutionizing digital payments to shaping the future of decentralized finance. I think one of the most controversial ideas in the world is that we can build a better form of money. When you start a business, you already have pretty much all odds stacked against you. What does it take to not only start, but succeed against all odds? The only way to know whether or not your idea is going to work is...

0:38There's no such thing as a school of entrepreneurship. Most people will never start a company, you know, too much work, too much risk, etc. If you're someone that is very prone to extraordinary anxiety or stress, there's so many things that are going to happen that you're not going to be prepared for. Entrepreneurship is going to be particularly taxing for you. How much of an impact does your entrepreneurial life have on your mental health? It took me a long time to develop a healthy relationship with my work. It was completely all-consuming, and that has consequences. On a personal level, I've had huge challenges sleeping.

1:11I have a sleeping condition that prevents me from basically resting. I had a sleep study done, and I was able to resolve this issue on a health perspective. And some of the things that I've done over the past that helped me a lot are...

1:29Nick, someone would define you as a young, successful, yet pretty laid-back entrepreneur. So why don't we start with some context about your background? What are the key turning points in your life that define who you are today? One of the first questions I ask almost everyone that we bring on board at blockchain.com, but it's also an icebreaker, is how did you earn your first buck? and I'd actually pose a question to you at the beginning of this interview for you to share with the audience. How did you earn your first dollar, calendar, euro quickly? So I went on the construction field in Switzerland because I wanted to buy DJ decks because I wanted to become a DJ and in Switzerland, actually working on the construction fields when you're 14 years old is actually well-paid.

2:10So it's a tough job, but it's well-paid. So that's what I did. Nice. All right. So proof of work. I get it. So what happens is that everyone starts off as an entrepreneur, whether it's mowing lawns or setting up a lemonade stand or working on a construction site or a field or a farm or whatever it is. And my story is not that dissimilar. One of the first ways I learned about the importance of money was by finding clams in the ocean and then selling those to my neighbors in bundles. And I wanted a music boombox, which was before DJ sets were really popular. This was an even earlier way of listening to tunes and music.

2:47And so I worked all summer long finding slams out of the ocean, selling them to my neighbors, and then earning enough income to basically set up my first boombox. And that sort of experience taught me a little bit about everything from inventory management to pricing to customer service. And that was sort of a very formidable early experience in learning a little bit about how to create a business. So the spirit of entrepreneurship is very much alive in a lot of people. And that's how it kind of got sparked in my journey. After that, in high school, I started building websites. So it's one of my best.

3:21And this is when we learned about user experience design, doing things like setting up e-commerce platforms. We built some custom software to do things like sending messages with a corporate intranet. So early types of tools that would later go on to be charted into SaaS products. And then after university, I briefly became a teacher in India, working with young adults, teaching computer science and creative writing. And then I got sort of my real foray into tech entrepreneurship. That's one of the early partners of Pipeline CRM, which was a customer relationship management software. So I was a second teammate on that group as a paid employee.

4:02And I had to do all kinds of different things from building desks to doing sales, to doing mock-ups for product designs, to customers, to negotiating with vendors, and much more. And so that was like a crash course in learning a lot about how to build the componentry of a company. And at the same time, there were all these new tools coming out that made it easier and faster to launch web businesses. And so what happens ultimately in people's careers is a lot of the things that make you ready for the next stage are built on all the things that you've learned about in your time so far. And so in 2011, I learned about the cryptocurrency called Bitcoin.

4:40I'm fascinated by the intersection of money and politics and how to help build a better financial future for everybody. and the financial system at the time was still sort of dealing with all of these big questions about what had happened in 2008. How could this type of thing be prevented? Why were the incentives so poorly aligned? Was anyone going to be held accountable? And could we build a better, more resilient financial system for the future? And I think Satoshi came around at just the right moment to sort of inspire this conversation and provide an alternative that has ultimately now been worked on by thousands and thousands of people all over the world.

5:17So those sort of moments across my career and the opportunities I've had made me sort of ready to always sort of take on the next step and sort of build up almost like a seashell does calcification to grow and get bigger. And it's sort of true, at least in my experience in my career. So then in 2013, I started meaningfully working on blockchain.com. And since then, over a decade working in the cryptocurrency industry. So when you start a business, you already have pretty much all odds stacked against you. And when you start a company in the very early innings of a new trend, such as crypto in the early 2010s, 2013, it's even more complicated.

5:59So what does it take to not only start but succeed against all odds? So entrepreneurship is a path that a lot of people choose not to take. They think it's going to be extraordinarily difficult, that they're likely to fail. And a lot of the reasons why people don't go down that path is they don't have role models or they're lacking maybe mentors and advisors to coach them through that path. There's no such thing in the real world as a school of entrepreneurship. You can't go get a degree in that. And if there are degrees out there, I assure you that is a waste of time and money. The only way to know whether or not your idea is going to work is if you go out and try.

6:43And the truth of that is everyone can get better at things as long as they practice. Kevin, if you want to become a figure skater, you might be terrible at that today. But if you go out and practice every single day for the next year, two, three years, you'll get much better at it. And the truth is that you can get better at building businesses, too. And so when you start out, it may be scary. You're going to not know all the answers to many things, but there are a few things that are going to probably help you along the way. And one is to find some people you can talk to about your business idea.

7:14You should get very candid feedback about what's smart and what's not going to work about that. You should be open-minded and listen. But ultimately, it's your customers that are going to give you the best feedback. You need to build something that people find useful and that they're willing to pay you for. That's a business model. And once you find something that works, then you can expand on that idea. You can invest more in it. You can grow your market share. And it can be anything from starting off really small with an idea to maybe build a construction company in Switzerland or a seafood business on the East Coast or a technology company that has grand ambitions.

7:51And a lot of things that are important are really what are you trying to achieve with building a business? Is it that you want to have a lot of clients and customers and a huge amount of responsibility? Or are you trying to earn a little extra incremental income? Is it a hobby activity that helps you basically pay for things that you love doing on the side? So a lot of different ways to approach going into the business world. And you just need to do one that makes sense for what you want to achieve. Yeah. So you mentioned the reason why most people will never start a company. Too much work, too much risk, etc.

8:27And then you have these people who just take the leap and start. So what are the biggest risks that founders don't think about when they start a company? So what are the biggest things and risks that founders don't think about? I think, you know, speaking from personal experience, there's so many things that are going to happen that you're not going to be prepared for and that you're going to have to adapt to. And if you're someone that is very prone to extraordinary anxiety or stress, entrepreneurship is going to be particularly taxing for you because there's all kinds of new things that are going to happen.

9:08Now, certain amounts of stress are super important. They're going to motivate you to achieve better results, to address the right prioritized problem. But then you've got that balance between becoming so overwhelmed by the aggravation, the stress, what seems like an impossible task that you fail to achieve it because you just get so much in your head. So part of the mindset that sort of helps navigate that is to approach it from a learning perspective. You shouldn't see all the problems in the world as being things that are personally attacking you. These problems are just opportunities that are presenting themselves for you to learn about, overcome.

9:46And so these things are being presented to you almost as gifts, despite how much that may suck at the time or how much it may be an adversary to you. You need to sort of think about them as ways to learn and then put those things behind you. And then you've got that in your vocabulary and in your library of lessons to apply the next thing that looks like that. You'll listen to historians talk a lot about how grand themes of history, history doesn't exactly repeat, but it rhymes. And in the same as true in the business world, if you've accumulated lessons, you can use those learnings to approach similar problems and avoid exactly the same mistakes.

10:29And so a lot of that comes down to just appreciating the journey and then taking stock of those lessons as they happen. There are many ways of doing that. You can journal, you can podcast, you can tell stories to your friends and make sure that they're holding you accountable to the challenges you're experiencing. Do you have some examples of the most spectacular setbacks for learnings, as you would call them, that you guys experienced early on at blockchain.com? So it's an old history now, but very early on in blockchain comms experience, we had built the first block explorer. It's made it possible for people to look at what was happening on the Bitcoin network at the time.

11:08We create all these charts and it was a very popular way to basically get a sense for how much economics either was happening or people really adopting this new technology. And one of the first things we did to help accelerate that was build a wallet. And it was our view that wallets were going to make or break the sort of crypto space, and they had to get a lot easier to use. So we went down the path of building a non-custodial wallet and also building a mobile version of that. And at the time, you really needed to have approval from the App Store, specifically Apple and Android, in order to publish your product.

11:43And Apple had an intolerant policy at the beginning, in the very early stages, while the stuff was extremely nascent. There were just a few users in the world. And then crypto started to gain some mainstream adoption. And maybe a few hundred thousand people were starting to use it. And I use mainstream as in mainstream nerds, not probably mainstream adopters as we say. And then all of a sudden, Apple removed all of the apps from the store. And this was a huge challenge in a very frightening moment for the company because we really needed access to the Apple App Store in order to grow our audience.

12:20and have people recommend us. And this wasn't a unique challenge specifically to our company. There were other crypto companies that were also caught up in this challenge. But at the time, it seemed almost insurmountable. How could a tiny little startup possibly persuade the largest tech platform and company in the world to take them seriously, to listen to their concerns about how to build resilient software and to address the concerns they had about cryptocurrency? They had sort of a blanket ban and a policy against crypto apps for a brief period of time. Fortunately, they reversed that decision.

12:52But for a period of time there, it was not clear that would be the case. So I would probably say that was one of the more stressful early episodes, especially when a company is young and fragile. You know, you need a lot of things to go well in order to break through the early challenges. And so I would probably describe that one as one of the most episodes. Have you ever been, I mean, would you say that that moment we were almost on the brink of failure in terms of company or have you ever been in that situation? And if yes, how did you manage to survive and thrive? Steve? Across my career, there have certainly been moments where you don't know long-term whether or not something is going to work out.

13:34And there was an example in my previous business where we had one customer that was like 50 % of all the revenue for the company. This was not a blockchain account in a previous business, but it's illustrative of this challenge where you're so excited to have a really big client. It's like your first big deal and they're bringing in all this revenue, but then you have what's called revenue concentration risk. And that client can bully you around. They can ask for better terms. They can say they want a specific feature designed, et cetera. And then instead of serving everybody equally, you're unfairly biased towards serving one customer.

14:06And then if that client decides to leave or do the same thing with a different vendor and switch, you have so much baggage to deal with. One, you've lost your biggest client. Two, they left you with a product that's different and was only purposeful for them for a temporary period of time. So all these weird challenges that you kind of need to navigate, you need to stand up for your vision, for your product. And the same has been true at blockchain.com, but sort of for different reasons. There's sort of a famous cycle in crypto, which is there's eras of bull runs and then bear markets. In my 10-year history working in this space, I've seen over seven eras where the price of crypto dropped by over 80%.

14:42And that was especially true in the early years. That's why having built previous businesses and having been kind of very challenged already before is already certainly like a huge advantage because you already built the necessary resilience to go through this crazy market as a builder. That's correct. What are your biggest learnings in these 10 plus years of entrepreneurship? I think I've been an entrepreneur since I was a little kid. So a little bit more than that. You know, the big lessons are ultimately, I think entrepreneurship is such an exciting and powerful vehicle for changing and improving the state of the world and society.

15:21And so, you know, if you're born in the wrong postal code or zip code or due to circumstances of your birth, there's a completely different set of opportunities in the world for people out there. And ultimately, we need a lot more entrepreneurs building services and goods and challenging the status quo. And so I really would encourage people to explore seeking out entrepreneurship as a path for themselves, if it makes sense. And there are certain things that will help with that. There are a lot of service providers that do everything from entrepreneurship coaches to mentorship to pitch contests to teaching people how to build decks for investment and more.

16:00You can start to build up your own capabilities in practicing entrepreneurship without having to risk everything. And I'd highly encourage that. ultimately, the biggest lessons I think I've learned are to keep an optimistic and open mindset about the whole journey itself. And again, if you treat it as the obstacles are the path and you see that the challenges in the world are being sort of presented to you as opportunities, then you can kind of move from one problem to the next and get better at solving bigger and bigger problems. And if you do that, then you solve enough problems and you can ultimately build a resilient, successful, sustainable business.

16:39And this is true, by the way, for small business owners to medium-sized business owners, to ones doing really, really big businesses. And that's why business owners and entrepreneurs can relate to each other, regardless whether they've built a unicorn business or if they're a small pizza shop owner. The problems are really very similar. It's just that the scale and scope of those problems just differs a little bit. Great. So talking about scale, you've raised about$500 million so far. So what happens in a founder's or co-founder's mind when you raise so much money? I have a question. So blockchain has been very fortunate to have been capitalized by some of the greatest partners in both the venture and institutional investor space, meaning that we've raised money from venture capital firms, from private equity firms, from crossover institutional investors, and many other people.

17:34And when you raise money, you're ultimately bringing down capital and resources to execute on ideas that you've shared with your potential shareholders. And what we're trying to do here with that money is grow the scope of the business's opportunity set, return some of that investment capital back to those shareholders in the long run. And so what happens is it basically just grows your responsibility envelope. And in our space, we really see a huge opportunity being presented to cryptocurrency specifically, but also especially blockchain.com. We've been a long-term chitner to the cryptocurrency industry as one of the first wallets in the world with over 86 million people have signed up for our service.

18:15We've helped users in over 200 countries get introduced to crypto. But we really see our work is beginning. There may be 200 to 300 million people in the world that own some cryptocurrency today. And we need to get that number into the billions. And so to do that, we're going to need to add a lot of muscle to our organization across all of the functions that we have as an international large scale business now. And so we take that capital and make investments primarily in people. And the people help us grow the product, improve the business, and add organizational capacity so that we can achieve our mission of helping billions of people have a better tool set for doing things like sending, receiving, securing, and trading digital forms of wealth.

18:56And for us, our mission here is to build a more fair and equitable financial system using software. So we have a long way to go to achieving that vision. And I think it's honestly going to take another five to 10 years for us to attack that opportunity, which is why I personally want to bring in more resources to do that, to help accelerate the opportunity set. As you said, you're spending a lot of this money to hire a lot of people. What are the key challenges of growing so quickly? Yeah, hiring is a challenge to all small businesses, maybe big businesses have. And ultimately, you want to find the best people in the world to help you on your mission.

19:32that are passionate about the specific work. There are many ways for people to earn an income in a job they may not ultimately care that much about. And sometimes in your career, you may have to do something you don't love in order to buy some time to get the opportunity to do something you will love. But as a business owner, every dollar you spend is so precious and you want to get as much of a return on that dollar invested as possible. That's a huge responsibility. So if you think about even just being a homeowner or if you buy something from a store, if it doesn't work the way you want, it's really frustrating.

20:05If you try to get something fixed in your house and a vendor comes and they don't do a good job, it can be aggravating. And so when you hire people for your company, you want to find people that are both equally passionate about the work and very capable of achieving things. They're better at doing it than you would be. And so it's a monstrous effort to go through an extensive recruitment process and then properly onboard people and nurture that talent to ultimately have them achieve their potential. And so blockchain.com, we've had over 100 ,000 people apply for roles in the past 12 months to work for a company that gives some of the world's best people to help us work on this firm.

20:45And so we're lucky because we get all kinds of candidates that are leaving some of the most famous companies in the world, whether that's large financial services firms or companies like Facebook and Snapchat and others that want to go work on the opportunity set here at blockchain.com because the challenges are very novel and the opportunity is very grand. And so that helps us a lot too. But for anyone who's recruiting out there, I mean, I think you got to find someone that's got value fit, someone that has a significant amount of moral caliber and someone you can diligence and reference very well.

21:21And so one of the caveats and the things I always tell teammates is, you know, one, if you've ever worked with someone that you would enthusiastically, you know, hire again, that's sort of like a good sort of internal bar for maybe that person could be a good candidate for a role at your company. And so, and that's sort of one of the ways I think about that. So you're hiring a lot of amazing people. You're working together to achieve these goals. And then you have these crazy cycles and then you have these, these bear markets and then you have to let people go. And recently, we have pretty much every company in the crypto space that had to let go at least 30 % of their stuff.

22:02What goes on in your mind when you have to let so many people go at once that even people were great and were doing a really great job? Yeah, so the tech sector and the entire world economy is basically at the beginning of a recession. So you have periods of time where the pie gets bigger and here's a time where the economic pie shrinks. And on a macro level, we're certainly in a period of time where the pie is shrinking. You have increased interest rates, which means that everyone needs to actually earn more money in order just to pay, sort of keep their cost of living at the same rate as it was the previous year.

22:41This puts extraordinary pressures on companies. And one of the first things they do is try and change the composition of their cost structures. You need to make sure that you have a sustainable cost structure for the future market that you're entering in. And so whether it's Meta or Apple or Microsoft or Wall Street, most businesses right now are all in the process of changing the composition of their cost structures. Letting go of teammates is one of the hardest things a founder can ever do, especially considering what I just described as being such a colossal effort and energy and and soulful search to find the right people to work with you in the first place.

23:19And ultimately, you want to hope that you've built such a successful company that anyone that has spent time here from will quickly be hired by a rival, competitive, or contemporary firm that is also seeking to bring on professionalized and highly experienced personnel. And I think in our space and the crypto space, you've seen these sort of big waves of adoption, which bring a huge amount of pressure. And then everyone's trying to expand their services. And then these periods of contraction as well. And it's just in the crypto space, they happen a little bit faster than they do in the macro economy.

23:54And it's just something that companies in our space have to get right-sized. Let's talk about mental health, the cost of entrepreneurship, because it's something that a lot of people who start businesses don't even think about. How much of an impact does your entrepreneurial life have on your mental health? Yeah, I know this is a really important theme for you, Kevin. And it should be something that is talked about more openly. I think there's too much idolization of these grandiose characters. Like they have some sort of superpower and it doesn't have consequences in their lives. You know, they spend all this time working and they must have some secret recipe for doing it.

24:32And ultimately, I think you have to have a program that works for you and it's really individualized. And so this will be a little bit of an annoying answer because I can talk about what works for me, but what might work for you or might work for your listeners may be a bit different. But on an individual basis, it took me a long time to develop a healthy relationship with my work. And a lot of the times it's because I was so overwhelmingly stressed out by the responsibility. I had trouble sleeping. It was completely all-consuming, and that has consequences. If you're not taking care of yourself, you're not going to be able to rest.