On December 17 Coinbase announced it had confidentially filed the paperwork to start its IPO process. The following report on his leadership style and company culture was originally published on October 25.
On a weekend in 2014, Tracy Chou was working out of her favorite coffee shop in San Francisco’s Mission District. The star Pinterest engineer had agreed to meet with Brian Armstrong, the founder of a fast-growing digital-currency startup called Coinbase. Armstrong hoped Chou might become his new director of engineering.
Instead of a typical coffee meeting, Armstrong asked Chou to leave the cafe and walk with him through the neighborhood, filled with busy eateries and vibrant murals. Then, Armstrong invited Chou to drinks at a pizzeria where the pair grabbed outdoor seats.
Chou left the encounter knowing two things: Armstrong was a self-assured founder, and she would not be working for him.
Despite the two-hour meeting, Chou said she learned little about the job or Coinbase. Instead, it felt like a date she did not ask for or want to go on — not because Armstrong came on to her but because of the way it dragged on with seemingly little professional substance.
“It reminded me very much of these interactions with Silicon Valley men who don’t really know how to behave appropriately [in professional situations],” Chou told Business Insider — an “ambiguidate,” she said, referring to an “ambiguous date.”
A lack of awareness from Armstrong for Chou’s discomfort would not be surprising to Coinbase employees. Multiple people who have worked closely with Armstrong say his obliviousness to social cues is one of his leadership flaws.
They described him as focused, goal-oriented, and devoted to his company. But his intensity can also border on tone-deaf, which sometimes lands him in hot water, they said.
The biggest example occurred last month.
On September 27, Armstrong published a blog that declared his startup would not take a stand on politics or social causes moving forward. Employees would not be allowed to engage in activism at work. Two days later all employees were given one week to either agree or take a generous severance package. More than 60 employees — about 5% of the company — left.
As Coinbase reportedly readies itself for an IPO, fallout from the memo has put the startup at the center of a heated debate on the role of politics and social causes in the workplace. Some Silicon Valley leaders have applauded Armstrong for his strict focus on the company mission.
“Yet again, Brian Armstrong leads the way,” Y Combinator cofounder Paul Graham tweeted with a link to the memo. “I predict most successful companies will follow Coinbase’s lead. If only because those who don’t are less likely to succeed.”
Others were aghast. “This isn’t great leadership,” former Twitter CEO and investor Dick Costolo replied. “It’s the abdication of leadership. It’s the equivalent of telling your employees to ‘shut up and dribble.'”
Coinbase employees have had similarly heated debates. “It has been very contentious inside the company for the past couple of weeks,” one person who took the severance package said. “It wasn’t like that before he did this.”
Yet, despite all that, on Friday, Armstrong waded into controversy again, by retweeting an article from Soylent founder Rob Rhinehart entitled, “Why I am Voting for Kanye West.” Armstrong called the article an “Epic post.”
People piled on to criticize Armstrong for violating his own policy and question his judgement. For instance, Venture Capitalist Josh Elman replied, “Calling this ‘epic’ shows very poor judgment. It is filled with propaganda, false claims, and nonsense. Having trust in the judgment of our leaders (even if we don’t agree with their decisions) is important in a CEO as well as president. This undermines trust in you.”
Business Insider spoke with eight former Coinbase employees — four of whom departed in 2020 — and three people who have interacted directly with Armstrong in other capacities to learn more about the CEO’s leadership style. Most of them spoke on the condition of anonymity because of restrictions in severance agreements or for fear of professional consequences. Business Insider verified their identities.
Coinbase declined to comment or make Armstrong available for an interview.
Born to be an entrepreneur
Armstrong grew up in tech’s heartland, San Jose, California, and is the son of two engineers. He attended Rice University to study computer science and economics.
His first entrepreneurial venture was on the playground, where he set up a candy-selling operation for classmates. In college, he built an online marketplace to connect tutors and students, which was later acquired.
Airbnb gave him his first taste of a fast-growing startup. He joined the company in 2011 as a software engineer and saw the pains of making payments to hosts in other countries who used different currencies. Armstrong believed a digital currency, such as Bitcoin, could solve that problem if there were mainstream adoption.
In 2012, Armstrong connected with a British programmer, Ben Reeves, to discuss an easy-to-use application to buy and sell cryptocurrency. The pair got accepted into Y Combinator, a prestigious Silicon Valley startup accelerator.
It quickly became clear that they were not suited to be business partners. After a disagreement over how to store passwords for users, Armstrong cut off the relationship, according to a 2014 Wired article. Armstrong emailed Reeves two days before they were set to meet in California to attend Y Combinator and told him he wanted to part ways.
“Cofounding is really like a marriage,” Armstrong wrote. “And even though I think we have mutual respect for each other, we don’t work together extremely well.”
Armstrong has helmed Coinbase ever since, for eight years.
‘Clear communication’ is of the highest priority
One story Armstrong tells about himself shows how focused he can be.
Shortly after Coinbase was founded, the company faced a small crisis. As an expert programmer, Armstrong fired up his computer and dove in to solve it. People in Armstrong’s orbit told other employees to leave him undisturbed unless they had highly relevant information. If they did, they could leave it on a Post-it note on Armstrong’s monitor.
Armstrong worked until he had to sleep. But when he got home, he found fire trucks outside his apartment building. His apartment had flooded and many of his belongings were ruined.
Instead of dealing with the crises at home, Armstrong booked a hotel room to catch up on sleep, then immediately return to work. His first instinct was to complete the task at work, not fix his soggy household.
Communicating with someone who is one-track-minded can prove difficult. And employees said they had developed best practices for how to talk to their CEO.
Before meeting Armstrong for the first time, one former colleague said they were warned by several peers not to engage the CEO in small talk. Employees said they learned to include little text and many charts when giving presentations to Armstrong, a preference he adopted from management consultants.
The company has four core values, the first of which is “clear communication.” The others are “positive energy,” “continuous learning,” and “efficient execution.”
Former employees say Armstrong is most accessible when he’s relaxed.
Before the pandemic shut down Coinbase’s office, Armstrong ate lunch at a long cafeteria table almost every day with a mix of employees. Meal conversations would stray from cryptocurrency to foreign policy to the history of money. Open debate flourished.
“He has a certain appealing demeanor and he listens in conversations. He always seems interested in hearing what you have to say,” a former employee who accepted the recent severance package said.
Armstrong’s writing is another source of tension
While he may not always be the best conversationalist, Armstrong is a prolific writer. He has posted dozens of essays on Medium, including hiring guides and a 1,900-word manuscript on decision-making at Coinbase.
“If you’re not a hell yes, you’re a no,” he wrote in an essay on hiring after Coinbase introduced its “bar-raiser program,” which gives high performers the power to veto candidates.
He reads about 25 books every year and tries to pull lessons from everyday experiences, one former employee said. His goal, the former associates said, is to be viewed as an inspiring, thought-leading executive.
Sometimes, his writing is poorly received.
Aside from the September memo, Armstrong’s former staffers pointed to a 2019 tweet, in which Armstrong wrote of a request from an old friend asking for help paying down credit-card and student-loan debt.
Armstrong declined and wrote a public rejection, which many in and outside of Coinbase said they felt was in poor taste. After all, their boss had enough equity in Coinbase to make him a billionaire, according to Forbes.
Armstrong later deleted the tweet:
ok here’s the promised content from that deleted tweet
founder of a billion-dollar startup gets an email from an old friend facing bankruptcy & asking for help. not only does the founder refuse, he takes the time to lecture him on financial responsibility and posts it on twitter pic.twitter.com/4SPvdF4TE3
— citizen of hellworld (@dellsystem) June 11, 2019
The boiling point over Black Lives Matter
One instance where Armstrong’s communication and leadership style led to backlash was shortly after George Floyd’s killing in June.
During a company wide meeting, employees asked Armstrong to say the words: “Black lives matter.”
Armstrong acknowledged the challenges that Black employees were facing but said making a public statement would be divisive.
An internal Slack channel flooded with hundreds of “Black Lives Matter” messages from employees during the meeting. Later that day, workers from across the customer-success and engineering departments staged a virtual walkout, closing their laptops and refusing to work.
In response, Armstrong wrote a Twitter thread saying “Black Lives Matter” to settle the matter.
A small number of employees left Coinbase as a result, but internal debate eventually died down and people returned to focusing on their work.
The June events made Armstrong’s September memo feel like even more of a blow, former employees said.
During an all-hands meeting after the post, Armstrong said many people had reached out to him in support of his message, citing support from a “silent majority,” one recently departed employee said.
But others said they believed he created division where very little had actually existed before.
“There were more divisive conversations happening than I think I’ve ever seen at Coinbase because of this,” the person said.
Among the 60 employees who took the severance and left were some senior leaders, including John Russ, the global head of marketing; Dan Yoo, the vice president of business and data; and Nina Willdorf, the director of content strategy and creative services. Russ, Yoo, and Willdorf all declined or did not return requests for comment.
In a follow-up post, Armstrong seemed to realize that he could have communicated the policy internally better before releasing it publicly.
“It’s been a massive distraction. Ironically, the idea was to avoid distraction in the workplace,” said a former employee who had frequent interactions with Armstrong before leaving in 2019.
“It will take the company months, if not years, to heal,” they added.
Fallout continues as candidates pull out
Thanks to the memo, candidates are dropping out of the recruiting process, former employees who chat with current Coinbase employees said.
Some see the memo as a red flag for those who are underrepresented in the industry, especially those who are Black.
“The essence of CEO Brian’s note regarding severances is that Coinbase does not care about those experiencing racial bias, those suffering from gender bias, or anyone dealing with any bias, and if you don’t agree with the company’s standpoint, you can leave,” said Marco Lindsey, the associate director of diversity, equity, and inclusion at the Haas School of Business at the University of California, Berkeley, who was a panelist for a Black History Month event at Coinbase in February.
Lindsey said he feared that many tech companies would follow this lead despite making Black Lives Matter statements. “Now they may feel like there’s no longer a need for the facade,” he said.
It’s already happening. On Monday, an activist campaign called Mission Protocol debuted with a website and a Twitter account. It outlines a “code of conduct” for companies that want to focus on their goals and “set aside divisive discourse.”
The campaign’s anonymous creators said they were inspired by Armstrong.
We started this project because existing codes of conduct, and conversations around social responsibility didn’t have a voice for what is most important: staying focused on the good we actually deliver for society through our missions.
— Mission Protocol (@MissionProtocol) October 20, 2020
Armstrong acknowledged the group with a tweet from his personal account.
“Will be cool to see if more companies adopt a mission-focused approach,” he wrote.
Can a fumbling communicator be a strong CEO of a publicly traded company?
Despite his new role as the face of anti-activism in the workplace, Armstrong isn’t all money and business for his own profit.
In 2018, Armstrong signed Warren Buffett’s Giving Pledge, in which the ultrawealthy commit to donating the vast majority of their net worth over time.
“Once a certain level of wealth is reached, there is little additional utility from spending more on yourself. One’s ambition begins to move outwards,” Armstrong wrote at the time. “I’ve always admired founders and leaders whose ambition to improve the world supersedes any goal related to personal wealth.”
That year he also created GiveCrypto.org, a nonprofit that directly transfers cryptocurrency to those living in poverty.
Armstrong clearly has bigger ambitions for Coinbase, too. The company is reportedly readying itself to become a public company perhaps later this year or early next, three sources told Reuters.
An IPO would be a monumental step, not only for Coinbase but for the entire cryptocurrency community. No major US-based cryptocurrency exchange is publicly traded.
But the role of a public-company CEO involves being a competent communicator. A poorly framed tweet or carelessly delivered policy change can affect a company’s stock or even cause regulatory trouble, as Elon Musk has experienced with Tesla.
Insiders are already asking if Armstrong is the right person to lead a publicly traded Coinbase.
“Working for Brian is not easy. You see it in the turnover of leaders. What Brian says goes,” one former employee said. “If Brian stepped aside, I think that Coinbase would be a very different place.”