Building and Overcoming the Hard Things - web3 with a16z crypto  ## Metadata - Author: **web3 with a16z crypto** - Full Title: Building and Overcoming the Hard Things - Category: #podcasts - URL: https://share.snipd.com/episode/4c3d249c-f0e4-44a9-bc5f-8710be6ce2a6 ## Highlights - The Crypto Winter: How the Macro Economy Affects Crypto Key takeaways: (* Crypto winters are common, and they are easier for crypto investors because they have more money now., * The current crypto winter is different because the broader macro economy has gone down, which has created an environment that is more difficult for crypto investors.) Transcript: Speaker 2 Really interesting. Let's kind of take a step back and say, we're in a kind of rough time for crypto over the last year. You know, it's been not easy for Coinbase either. You've had layoffs, the stock price has gone down a lot. But this isn't your first crypto winter. And in fact, it's not your first set of layoffs or your first kind of crisis. In fact, in some ways, it's easier in that you have a lot more money now than you had then. So how is this crypto winter the same or different than the prior ones? Yeah. Speaker 1 Well, I think in terms of people's psychology, it's similar, you know, there's despair, there's some bad stuff happening. People get a little disillusioned. The people who are in it for a quick buck kind of get distracted and go somewhere else. The part that's different is this time the broader macro economy obviously went down along with it. And you know, that's created an environment that just, it's not so much about is crypto going to be still be a thing. ([Time 0:10:37](https://share.snipd.com/snip/1cc34867-4605-4b19-9ed9-b2752c18aa99)) - How to Overcome the Efficiency Woes of a Large Company Key takeaways: • Coinbase over hired in 2021 and this caused many problems within the organization. • Now, the company is trying to operate like a startup again in order to improve efficiency. Transcript: Speaker 1 Well, so I mean, I think Coinbase, we probably, I mean, we did. We over hired in 2021, right? This was an example where, you know, I was probably got caught up in it as well a little bit and was like, okay, we have a huge line of customers out the door. We can't even onboard them fast enough. FTX is coming at you. Yeah, there was, you know, a new competitor getting a billion dollar valuation, like every week. Yeah. It was like, okay, we just got to, we got a higher, higher, but of course, anytime you do that, you know, a lot of efficiency just breaks down in the organization. You have too many layers of management, decision making gets broken, communication channels get broken. You have people who have barely been there hiring the next people. And so, you know, we, we ran into a lot of this where I'm now in a place where I'm like trying to get the company to operate like a startup again, right? And okay, let's, if we, why do we have like four layers of management to get to somebody who's actually writing the code, you know, like, we don't need that flatten, flatten the org and Like, let's actually divide these, these into different almost like startups and give them more autonomy and, you know, coordinate them offs to get rid of these coordination headwinds. So that, you know, I think everybody, every company can do that in its own way to sort of who, in any company, there's a, there's a, there's a power law distribution of employees who are Adding the most value, right? And if you're going to say cut 30% of employees or something like that, you don't have to do 30% less stuff. ([Time 0:13:44](https://share.snipd.com/snip/ed15e0c0-8274-4cb0-94eb-d3fe5d6c5b21)) - The Importance of Being Clear and Consistent Key takeaways: (* The leader should be clear about their goals and expectations from their team from the beginning, rather than waiting until there is a problem to address it., * It is better to be right than consistent, as inconsistency can be forgiven if the goal is achieved.) Transcript: Speaker 1 I mean, I think the thing that I messed up in hindsight was that I was not clear up front. So I was sort of walking on eggshells because I had never encountered this before. So whenever somebody brought up something like this to me, I was like, okay, I just didn't know what to say. And so what it did was it allowed a schism to develop inside the organization by just my lack of leadership, lack of clarity. So I think if I were to do it again, I would just be more clear up front with people that we're not going to do like a we're not going to have a political company. We're going to just focus on this mission. And so try to put that in the hiring letters, put it on the values of the company. Even today with Coinbase, when people join, we have them sign an offer letter. It describes all of the values, including this kind of mission first thing in there. So nobody can say, oh, I didn't know when I joined. So I would have just done it up front. And then there wouldn't have been this big drama when I later tried to clarify it that we're all going to go in this direction. Speaker 2 Yeah, it's interesting because that also does highlight, though, an important thing that you did, which a lot of leaders are afraid to do, which is, look, it's better to be right than consistent. And you had to be inconsistent because you didn't say it up front. But having the courage to do that actually got you to where you needed to be, which is a great tribute to your leadership. ([Time 0:23:16](https://share.snipd.com/snip/0ef51661-2140-4688-9685-82337c554503)) - How Coinbase is Trying to Make Self-Custody a Better Option for Crypto Investors Key takeaways: • Self custody, or keeping your own assets in a decentralized manner, is becoming more popular as people become more distrustful of centralized exchanges. • There is a lot of work being done by Coinbase to make self custody easier and more secure, including MPC (multiparty computation) and social recovery. • It is important for companies to create a good UX around self custody so that average people can understand it and use it. Transcript: Speaker 1 Well, so I think everyone is a little divided right now. They're thinking, okay, I can't trust the centralized exchanges. Let me do self custody. But people have lost a lot of money with self custody too, right? It just, it doesn't happen in a big blow up all at once, but there's, you know, every week there's somebody losing some money out there that doesn't make headlines, but you know, as a percentage It may be similar. I actually don't know. I've never run the data on it. So I think we as an industry and this is something Coinbase is trying to help with, we can try to make self custody, the UX around it and the security architecture around it essentially Make it harder and harder for people to do something accidentally to lose funds, right? So MPC or multi-party computation is a big piece of this. We've invested a lot in that at Coinbase and we're trying to bring elements of that in where, you know, you can essentially have a quorum of keys, right? So if you lose one of those or two of those, depending on how you architect it, like maybe you lose your phone, right? Or maybe you forget your password. But there's a quorum of it that you can reassemble from various pieces. You can do that with social recovery. You know, Vitalik is kind of hot on that idea. I think the UX around that is an opportunity for innovation. And then the question is, once you've created that really great architecture underneath, how do you then market it to the average person to help them understand that it's actually Better? You know, I think Apple is actually an interesting example here. You know, I'm not super happy with Apple for other reasons. Just they've been blocking a bunch of features in the app store, but put that aside for a minute, what they did with Face ID, I think that was a good example of taking a really hard computer Science problem. You know, it used like LIDAR and all these live-ness detection. ([Time 0:31:18](https://share.snipd.com/snip/bb56d413-d657-4e73-9871-e07c3bdffd05))