Brian Armstrong, CEO of Coinbase — The Art of Relentless Focus, Preparing for Full-Contact Entrepreneurship, Critical Forks in the Path, Handling Haters, The Wisdom of Paul Graham, Epigenetic Reprogramming | Tim Ferriss Show #627

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Check out Tim Ferriss’s Episode Page and Show Notes

Key Takeaways

  • Brian Armstrong doesn’t believe that America is in rapid decline, but it may be in slow decline
  • “Over 10-20 years, the crypto economy will become ‘the main thing’ in the same way that e-commerce was a sideshow 20 years ago and now it’s the main thing.” – Brian Armstrong 
  • The hardest part of a video game is also probably the most interesting part; Treating life like a video game can be an effective perspective shift
  • “Action produces information” is a Paul Graham-ism, and one of Brian’s core principles
  • Value is not zero-sum; value can be added to society without taking it from somewhere else 
  • Brian wrote a blog post that announced Coinbase’s decision to become a mission-focused company, which basically meant the company would be apolitical and would not be focused on solving broader societal issues in the workplace that took time away from the core mission: bringing economic freedom to the world 
  • Your focus is your most valuable and scarce resource; you must intentionally take steps to protect and preserve your focus 
  • Ensure that you get input from people that have your best interest at heart and will tell you when you’re being an idiot, but tune out the critics who do not have your best interest at heart 
  • Companies typically die because of some type of internal dysfunction, not because some competitor killed them 
    • A Paul Graham-ism Brian likes: startups die by suicide, not by homicide
  • Crypto adoption is following a similar trajectory that internet adoption followed 
  • Users taking self-custody of their bitcoin increases decentralization and makes the network more resilient against potential coordinated seizures from governments
  • Brian Armstrong’s best motivation hack is to type “David Goggins” into YouTube
  • Brian Armstrong believes that the most effective way to impact the world is to build a company that is based on science and technology, instead of trying to impact the world through activism or policy change 
  • The most valuable companies in the world come from the cross-pollination of true scientific innovation with someone who can go commercialize it 
  • Brian’s billboard message to a billion people: “Action Produces Information” and “The Greatest Risk Is Not Taking One”

Intro

  • Brian Armstrong (@brian_armstrong) is the co-founder and CEO of Coinbase, a leading cryptocurrency company on a mission to bring economic freedom to individuals around the globe. He is also an investor in NewLimit, ResearchHub, and stars in the new documentary about Coinbase and cryptocurrency Coin.  
  • In this conversation, Brian Armstrong and Tim Ferriss discuss the art of relentless focus, how to prepare for entrepreneurship, taking risks, handling criticism, the wisdom of Paul Graham, longevity, health, crypto, biology, and more
  • Check out these Podcast Notes from Brian Armstrong’s conversation on Pod of Jake
  • Host – Tim Ferriss (@tferriss), writer of 5-Bullet Friday and author of The 4-Hour Workweek, Tools of Titans, The 4-Hour Body, and more

Living in Buenos Aires 

  • Brian wrote a book called Breaking Free in 2007 and has several blog posts on it
  • Brian decided to live in Buenos Aires after graduating college in an effort to experience the world and learn how to do a startup in a different way 
    • The tutor company he founded wasn’t growing
    • Consulting at Deloitte wasn’t rewarding to him 
  • “I was kind of doing a vision quest to figure out what to do with my life.” Brian Armstrong on living in Buenos Aires in his late 20s
  • The main difference between Buenos Aires and the United States was that there was no optimism about the future in Buenos Aires 
  • In 1900, Argentina was the 8th largest economy in the world; Brian watched what 100 years of mismanagement, corruption, poor government, and endless protests could do to a country
  • Brian saw first-hand what hyperinflation does to a country 

Present-Day Economic Warning Signs 

  • Ray Dalio’s book The Changing World Order identifies historical patterns that tend to play out in markets and society time and time again
  • Brian doesn’t believe that America is in rapid decline, but it may be in slow decline
    • This begs the question of what will be the next world order? China? A network state that Balaji Srinivasan talks about? 
  • Brian Armstrong predicts that Bitcoin will trade less like a tech stock and more like a gold equivalent in the next 5-10 years 
  • “Over 10-20 years, the crypto economy will become ‘the main thing’ in the same way that e-commerce was a sideshow 20 years ago and now it’s the main thing.”Brian Armstrong

Coinbase Beginnings 

  • Coinbase had no traction prior to adding a “Buy Bitcoin” button in 2012
  • Brian followed Y Combinator’s advice to aggressively seek user feedback and then iterate, which led to the light-bulb moment of adding the Buy button on the app
  • Coinbase was the first company that allowed users to connect their bank account to an app that enabled them to buy bitcoin 
    • This zero-to-one moment is what gave Coinbase product-market-fit  
  • Brian Armstrong gave an interview with Kevin Rose around this time, a neat time capsule to check out

Influential Human Beings, Books, & Documentaries 

  • Surely You’re Joking Mr. Feynman!
    • Feynman had a curiosity for life and boundless energy to try different things, which was inspiring for Brian (and Tim) 
    • Never stop learning, and always be curious 
  • Treating life like a video game can be an effective perspective shift 
  • The hardest part of a video game is also probably the most interesting part
  • Free to Choose: A Personal Statement by Milton Friedman 

Core Principles Learned from the Early Startup Days 

  • Brian was employee 40 at Airbnb, a place where he learned a lot about perseverance and how to run a business 
  • “Action produces information” 
    • A Paul Graham-ism (@paulg) that is a core principle of Brian’s 
  • Taking steps into the unknown might reveal the actions that you should be taking instead 

Favorite Paul Graham Essays 

  • Value is not zero-sum; value can be added to society without taking it from somewhere else 
  • Brian reads “Haters” (2020) when he accidentally reads the comments online, which is not something he suggests people do too often 

The Controversy over Coinbase Becoming a Mission-Focused Company 

  • Brian wrote a blog post that announced Coinbase’s decision to become a mission-focused company, which basically meant the company would be apolitical and would not be focused on solving broader societal issues in the workplace 
  • Brian observed an increase in activism inside the company over the years leading up to the blog post that detracted Coinbase from its core mission of building more economic freedom in the world 
  • The questions at Coinbase’s weekly town halls were increasingly unrelated to Coinbase’s mission, and more related to broader societal issues 
    • The town halls became a competition about who could make the Coinbase executive team squirm the most on stage 
  • Coinbase employees staged a walk-out over the company’s ambiguous stance on certain political and social movements, such as BLM 
  • Brian noticed that there was not a clear agreement within the company on whether or not Coinbase should commit itself to solve broader societal issues, or exclusively commit itself to the company’s mission 
  • Brian knew that his mission-focused blog post would cause controversy, but he was willing to sacrifice short-term discomfort for long-term course-correction
  • Following the blog post, 5% of the company left and were awarded generous severance packages
  • “It was one of the best things I’ve ever done for the company because now we’re fully aligned, making faster progress, and everybody who joins the company knows what they’re signing up for.”Brian Armstrong 

Cultivating Resilience as a Leader 

  • Resiliency is a muscle that you can make stronger 
  • It is uncomfortable to receive criticism, especially from thousands of people at one time, but over time you discover how to learn from criticism 
  • Brian takes a page from Lex Fridman and Joe Rogan and tries not to read the comments
  • Your focus is your most valuable and scarce resource; you must intentionally take steps to preserve your focus 
  • Ensure that you get input from people that have your best interest in mind and will tell you when you’re being an idiot 
  • Tune out the critics that do not have your best interest at heart 
  • You should celebrate if the New York Times writes a hit piece on you; it is a rite of passage 

Brian Armstrong on Competition 

  • It’s beneficial for a company to have an external competitor; if there isn’t an external competitor, it’s common for internal conflict to arise 
  • A Paul Graham-ism Brian likes: startups die by suicide, not by homicide
  • Companies typically die because of some type of internal dysfunction, not because some competitor killed them 
  • Brian Armstrong tries to be friendly with the other CEOs in the crypto space and grow the pie of the industry instead of trying to steal a few percentages of market share from them 

Crypto Skepticism 

  • Crypto skeptics miss the fact that we’re still in the early days 
  • People once criticized the internet when it was new and they missed the potential of it 
  • The crypto bulls are too into the get-rich-quickness of it 
  • Skeptics tend to dismiss the present-day use cases of various cryptocurrencies and only discuss the future, potential use cases of it 

Why Crypto Adoption is Still in Its Early Days

  • Crypto adoption is following a similar trajectory that internet adoption followed 
  • About 90% of the wealth in the world is held by institutions
  • Sovereign wealth funds have started to add Bitcoin to their fund
  • More regulatory clarity for institutions will increase adoption in the next few years 
  • Blockchain scalability will need to improve to accommodate more adoption
  • Layer two solutions like the Lightning Network will contribute to more adoption  

The Main Use Cases for Crypto 

  • Brian names the following main use cases for crypto:
    • Ability to earn a yield on assets
    • Commerce
    • Minting NFTs
    • DeFi
    • Coinbase Card 
    • Coinbase Earn
    • Peer-to-peer payments
  • The idea of NFTs is much bigger than art
  • Things like concert tickets and citizenship can be improved with NFTs

Novel Crypto Ideas that Brian Likes

  • Brian thinks that decentralized identity is “really cool”
    • Canonical identities will make things like payments and decentralized social media easier 
  • ENS is the best-known standard for decentralized identity today 
  • Decentralized media could be a big use case for crypto
  • Having a currency that is not linked to fiat should exist in the crypto economy 
    • Brian thinks it would be nice to have a stablecoin that is linked to purchasing power, i.e. if one coin buys you a hamburger today, one coin should buy you a hamburger five years from now
  • There’s an opportunity to create a crypto-enabled media company, possibly with its own coin that can be used to enforce “truthiness” of articles 

Lessons Learned from Launching Coinbase’s NFT Marketplace  

  • Coinbase tries to make crypto more trusted and easier to use
  • Coinbase NFT Marketplace isn’t trying to compete with other marketplaces, it is an attempt to connect the vast network of open protocols into one interface 

NFT Security 

  • User can store their NFTs in the main Coinbase retail app
  • Coinbase will store your NFTs for you on your behalf 

Not Your Keys, Not Your Coins 

  • Coinbase is very much aligned with the not your keys, not your coins crowd
  • Brian Armstrong believes that self-custody is an important aspect of crypto 
  • Users taking self-custody makes bitcoin less centralized, and more resilient to potential coordinated seizures from governments
  • Coinbase has a wallet where users hold their own keys
  • Brian observes that institutions aren’t interested in self-custody 
  • Self-custody is evolving; there are new ways for people to store large amounts of wealth more safely, such as multi-sig custody  
  • Multisig wallets create redundancy that minimizes single points of failure and removes the threat of a $5 wrench attack 
  • Brian mentions Jameson Lopp’s GitHub page that tracks the known physical bitcoin attacks 
    • Jameson Lopp is the founder and CTO of Casa, a multi-sig wallet provider 

Self-Improvement 

  • Brian Armstrong’s best motivation hack is to type “David Goggins” into YouTube and watch a random video
  • Brian feels like he’s getting older as he reflects on the last ten years of his life
  • He’s starting to notice the side effects of aging: minor decline in short-term memory, taking longer to recover, jet lag affects him more, etc. 
  • He is increasingly focused on longevity and health 
  • Generally, Brian likes to learn new things and build things with technology 

Learning Biology Basics from a Tutor as an Adult 

  • Brian never had the chance to study biology in college because he didn’t have a reason to 
  • His newfound interest in longevity and health has caused him to explore biology 
  • Brian hired a biology tutor because the textbooks were not working for him 

The Goal of NewLimit 

  • Brian Armstrong asked himself “What do I want to do” following his liquidity event of Coinbase going public
    • Side note: a thousand millionaires were created from Coinbase’s IPO
  • He wanted to put some of his liquidity to work, and was attracted to the biotechnology field
  • When discussing biotech with friends in the field, the subfield of epigenetics kept coming up 
  • Brian decided to invest in NewLimit, a longevity company inventing medicines composed of epigenetic reprogramming factors that restore youthful function in old cells 
  • NewLimit leverages functional assays, single-cell multinomics, and machine learning to reveal epigenetic features of aging and discover rejuvenating interventions 
  • The company has about 9 employees and is based in San Francisco 
  • The moon shot goal of the company is to radically expand the human healthspan 
  • The intermediate milestone for the company are to rejuvenate specific kinds of cells  
  • NewLimit’s platform will hopefully find “hits” of therapies for certain types of cells 

What is ResearchHub? 

  • ResearchHub is another project that Brian is working on, and it is basically “Github for science”  
  • The throughline between Coinbase, NewLimit, and ResearchHub is improving the world  with science and technology 
  • Brian Armstrong believes that the most effective way to impact the world is to build a company that is based on science and technology, instead of trying to impact the world through activism or policy 
  • ResearchHub tries to simplify the scientific research process 
  • There are too many barriers in science, and ResearchHub is an attempt to remove some of those barriers  

How Open Bounties Work 

  • ResearchHub uses bounties enabled by a native coin of the platform 
  • Contributors earn Research Coin and can post bounties for people to research a given topic to earn Research Coin

What Excites Brian Most About Science Today 

  • Using science and technology is the best way to address the problem in our world
  • The most promising solutions we have are leveraged by technology
    • Brian mentions Elon Musk’s contributions to society, all from technology 
  • There should be financial infrastructure for every country around the world  
    • It shouldn’t cost 2-3% every time you swipe your credit card
    • It shouldn’t be as hard as it is to move money around the world
  • The scientific community does not intersect with the entrepreneurial community as much as it should, and vice-versa 
  • The most valuable companies in the world come from the cross-pollination of true scientific innovation with someone who can go commercialize it 
    • Examples: Genentech, SpaceX, Google, and even Coinbase

Brian’s Billboard

  • Tim’s famous Billboard question: If Brian Armstrong could put any non-commercial message on a billboard for billions of people to see, what would that message be?
  • Brian’s first answer “Action Produces Information”
  • Brian’s second answer: “The Greatest Risk Is Not Taking One” 
  • He notices that people have a lot of ideas, but they scarcely act on them 
  • There is a scarcity of risk tolerance in the entrepreneur-curious community
  • Fears are often greater in your mind than they are in reality 

Parting Thoughts from Brian Armstrong 

  • Brian thanks Tim for celebrating builders
  • Too many people out there want to be a critic and poke holes in people and things
  • It’s easy to be a critic; being a critic is an easy way to sound smart
  • Brian is grateful that there is “new media” out there that wants to celebrate builders 
  • Brian Armstrong encourages people to check out his new documentary called Coin, which is available on Amazon Prime Video and other streaming platforms 

Books Mentioned

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