Relentless
00:30:27 · Brian Armstrong, Ty Morse
So you have to reframe it in their mind of like, you're not just mitigating these risks. You're actually creating risks. Like there is a risk that this company becomes irrelevant and dies because we're being too conservative, right? So you have to balance all the risks, not just looking myopically at one set of risks. And this is actually a rare thing. A lot of lawyers aren't good at this. The best ones are. A lot of lawyers, they actually only think their job is to protect the company from some kind of case coming against them. Like, believe me, there... There's worse things in the world than having, like, some litigation happen, like, which is the whole company dying or becoming irrelevant or just never mattering. Like, that's... That is worse than getting a lot... And and, you know... So, you you know, litigation is just like a part of business. Like, you have to sometimes go to the courts to figure out what the rule is because the law is not clear and that you create... You need to create legal precedent through litigation. Like, that is actually an important part of how our system works. So I think some people don't quite get that sometimes, and they think their job is to mitigate litigation. And I actually think it's to take intelligent risks that create the outcomes you want and look at the ROI. It's almost like being [00:31:36] S1: a forcing function for clarity. [00:31:38] S0: Yeah. And there's times where if we're not getting clarity from the law or congress, it's important to go to the courts. Like, that is, you know, checks and balances.
00:31:38 · Brian Armstrong, Ty Morse
[00:31:38] S0: Yeah. And there's times where if we're not getting clarity from the law or congress, it's important to go to the courts. Like, that is, you know, checks and balances. [00:31:46] S1: This almost kinda reminds me of the Uber Lyft scenario where, like, initially, Uber was just doing, like, limos and black car service, all this, and then Lyft comes along and just opens it up to basically everyone. And then Uber for a while doesn't copy. And just because of that, they could get litigated, all that. They don't copy, and they just lose market share and lose market share. And eventually they just say, Fuck it. We have to do this or else we're gonna lose. And then only then, like, the courts start working through. What was it kinda like seeing that play out since this is very... It feels kind of similar to the situation that you've experienced?
00:32:20 · Brian Armstrong
[00:32:20] S0: A lot of the crypto companies got traction being outside The US. And in some ways that was a huge advantage for them, right, because they did feel like they could take more liberties, not follow US law, even though sometimes oftentimes US customers were actually using them through VPNs or otherwise. And so that was a pretty valid strategy, I would say, to get big fast. And then now the question is, can they try to clean it up later? Just because we were based in The US and I didn't want to live outside The US or go to jail, I was like, let's do it the legitimate way. That was also a valid approach, and it allowed us to land many of the largest institutions and be the trusted provider. So we consistently see our brand as the most trusted in crypto. That allows people to store more crypto with us, and we plug more products into that. It's a nice flywheel that's very defensible. I think the trend that we're seeing now is toward regulatory clarity in The US, in Europe, in Asia, everywhere, really. And so in that environment, I think Coinbase wins. Right? Like, in a regulatory clarity environment, we are the trusted option. It doesn't mean we don't have competition. They're gonna... Others that did more of a get rich or die trying approach are now gonna try to clean it up. And so we are, you just like any industry, we're in competition with them. Competition makes us better, actually. And as regulatory clarity has emerged, we're seeing lots of other fintechs and traditional financial service companies that are not in crypto now enter into crypto and start to use crypto rails. So that's definitely increased the amount of competition, but the TAM is also just getting much, much bigger. So our goal is stay the most trusted crypto brand, store more crypto than any other company in the world, which we currently do today, plug more products into those deposits, which makes it sticky, and use the proceeds of that to reinvest in trust and growing.
00:33:59 · Brian Armstrong, Ty Morse
If if we see, as I believe is gonna happen, like, the financial system continues this transformation to running more and more on crypto rails because they're faster and cheaper, more global, I I don't see a reason why we shouldn't be the leading company in the world doing that, but it's gonna be thousands of companies coming in and doing that, which is why we provide kind of products and services for them as well, like, through Coinbase developer platform and etcetera, etcetera. How do you [00:34:24] S1: think about, like, building a very trusted brand over time while maybe short term taking a bunch of decisions that could potentially increase growth, but because you don't take that action, you will be trusted in the long run?
00:34:39 · Brian Armstrong, Ty Morse
[00:34:39] S0: So trust can come from a lot of different things. Right? It can come from having great design. It can have customer support. It can come from being based in The US and being a public company. It can... With public company standards. It can come from people knowing who the CEO is or feeling like they know who it is by listening to podcasts or whatever, like, where people are relatively open and transparent like this as opposed to hiding behind, like, corporate speak or traditional comms. So there... There's, like, a personality marketing aspect of companies now where people want to know who the CEO is. What do they stand for? What do they like? What do they do in their free time? Trust can come from all of those things. Now there are times where we're very tempted to... Our competitors are listing something that's, like, illegal or highly risky, and it's a revenue opportunity. Like you said, like... It's like, okay. We're watching these things grow, and our regulators are saying, you can't do it, or maybe we do, like, a cybersecurity audit, and we're like, this thing could blow up at any moment. Do we really wanna expose our customers to it? And there's a lot of hard calls like that that we've had to make. And so... You know, meanwhile, our customers are often kinda yelling at us saying, like, oh, you guys are so slow. Like, how could you be the last one, you know, to list this? And so sometimes I think we get it wrong, and sometimes we get it right. You know? [00:35:51] S1: Is it like a damned if you do, damned if you don't situation?
00:35:51 · Ty Morse, Brian Armstrong
[00:35:51] S1: Is it like a damned if you do, damned if you don't situation? [00:35:54] S0: Sure. I mean, yeah. If you if you lean in too early and the thing blows up and customers lose money, like, a 100% they're gonna be suing us, not that other thing that just blew up because, you know, we have deeper pockets, then maybe that thing's bankrupt. Right? So that... You have to always look at that from a, like, a like, a litigation point of view. But they're also gonna say, you know, if if we wait too long and it didn't blow up, like, okay. And it got more legitimized over time, why were you so late? And so... But that's that's fine. I... We we... I'm not complaining. I mean, we we... That's what it means to be in the arena, like, you know, leading companies. You gotta take preponderance of input from all parties, make the tough calls, live with it. [00:36:30] S1: You've got this line that I heard in the David interview where you said, if something is critical to furthering the mission of the company, you can get excited about almost anything, whatever that thing is. What have been the things that most people would never get excited by, but that you have and gotten really good at to further the mission of Coinbase?