Brian Armstrong: Setting Up and Scaling a Crypto Company

[Music] excited talk to everybody today about crypto startups so to start off I just want to make an analogy here back in the late 90s people got really excited about a new thing the dot-com startups and today I think we're at the precipice of a new trend it's very similar and just gonna be just as impactful if not more the crypto startup and so you know if you look back at the late 90s here the internet was just getting going there was this surge of investment activity which resulted in this big you know dot-com boom and eventually bust and over the coming 20 years really we slowly saw the reality of what everybody hoped was gonna happen in the late 90s come to fruition to the point where many of the top most valuable companies in the world today came out of that era you know Amazon Facebook and Google and I think what's happening now is we're at the very beginning of a similar phase for a new type of startup called a crypto startup instead of being based on you know another global decentralized protocol basically tcp/ip which was good for sharing information globally it's gonna be based on a new decentralized global protocol Bitcoin on all the cryptocurrencies that have come along with it which is for sharing value instead of sharing information so I think in 2018 2017 timeframe we saw that similar bubble just like we saw with the dot-com in 2001 and we're now at the very beginning of that that phase of these really big most valuable companies in the world they're gonna be built on this new decentralized protocol all right so today we're gonna cover a handful of things let's talk about what actually is a crypto startup we're gonna talk about some of the advantages and disadvantages that they have over traditional startups we're gonna talk about some of the legal challenges because it is still pretty there's a lot of legal uncertainty out there with all these things people are trying to create and I'll go through an actual case study of a specific crypto startup that's being built now called research hub and then hopefully at the end we can open it up to any questions ok so what is a crypto start well for me it's really any startup that is gonna use cryptocurrency to either raise money acquire their early customers or to build a global audience and it turns out these are actually three really big problems in traditional startups a lot of traditional startups actually die encountering one of these problems and I think crypto is a offers a unique and novel solution to each of these which we're going to talk about so for raising money you know it's really difficult to raise money even if you're in Silicon Valley but imagine if you don't live in Silicon Valley and you don't really you're a normal person you don't know any angel investors you know any venture capitalists you know I remember I went to school in Houston Texas and I went out and tried to raise a little bit of money for my early startup idea in college and the only people in Houston they had made all their money in oil and gas or in health care like they didn't know what my crazy new internet startup was doing they didn't want to write me any checks and imagine if you're a poor kid somewhere in the world who doesn't have access to this so crypto really has the potential to kind of democratize fundraising and make it available this alone could actually probably increase the number of startups in the world by an order of magnitude which would be really good for the world I guess one other point I would make quickly is that a lot of startups they're contrarian by nature right if it was obvious that it was such a good idea somebody would have already done it and so you need people who are willing to take a bet on something that's early and probably contrarian you know even coinbase which I tried to raise money for in Silicon Valley a lot of the during my seed round I tried to raise a million dollars and I could only get 600k barely and it was from a couple of angels it was like people who'd made money at Google and wealthy individuals a lot of the VCS I talked to at that time this was like 2012 they're like I don't know what this Bitcoin thing is it sounds like scam you know so it was really hard to raise money and even for me in Silicon Valley and I think it's just ten hundred times harder if you're not here so the other big problem that startups running into is acquiring their early customers right and I think crypto offers some unique advantages here as well sometimes we call this the cold start problem especially if you're a startup that has some kind of a network effect to it like it's a marketplace or it has some kind of community aspect like like reddit or it needs user-generated content like YouTube or Twitter or social media really hard to get those early users on your products there even Airbnb or uber right were these marketplaces and so what we often do in startups is we try to get early people to come join our company and we give them stock options to join this crazy new thing I mean how cool would that be if we could actually give a little piece of ownership to the early customers who came and helped us build that early community on the product so for you know if this was her being created again it's like the early drivers on uber who signed up when it was tiny they would get a little bit of uber token or something maybe be able to participate in the outside or the early hosts on Airbnb and you know I I think it's interesting to look at the way the traditional startups have done this just to give you a sense of how hard this problem is like Facebook you know they literally you know the story goes I guess they hacked like the mail servers or whatever it's at Harvard to like blast out an email to everybody or I read it you know Steve Huffman Alexis Ohanian they were just they were just cranking out the posts themselves like at the beginning to try to get the first two or three ten people to come join these things Airbnb you know they were like going to the public parks to try to beg people hey will you sign up list your home on our site or you know even scraping craigslist ads and so sometimes there's there's this clever you know feat or hack literally in some senses that has to happen to get these things off the ground without crypto it's a small miracle whenever it does actually happen and the other way that this happens is you have you have to piggyback on an existing network effect to get going right so PayPal they managed to get their their payment buttons put in people's eBay listings and so that was like piggybacking off an existing thing or Stack Overflow they had Joel Spolsky blog readership which was you know probably hundreds of thousands and why commenter had Paul Graham's essays which we're getting a lot of traffic so traditional startups have to solve this in some kind of really clever way leveraging some existing thing but a crypto startup I think can actually offer that token to the early customers to align incentives just almost almost like if they were early employees joining the company and then the last thing the last kind of thing that crypto startups can do here I think is they can help with international expansion so it's very costly and difficult to expand internationally both because of the payment integration that you need to get working in each country especially if you're a marketplace you need to get pans and payouts working but it's also different regulatory environments you have to get local bank accounts open you have to figure out exchanges to the local currencies which which high exchange rates right and so you know it's almost like sometimes people you have to build your products for like iOS Android and web like multiple platforms it's a lot of work well expanding geographically is almost like having to build on 190 different platforms because each country has its own proprietary fiat currency so you know crypto enables a global user base from day one and if you look at companies like uber everybody even coin based you know it's it's it's a really amazing we've spent millions and millions of dollars and many many years trying to get each additional country live with the regulations and local bank accounts local payment options that we integrate with one by one and you even get funny things that happen because this this the internet doesn't didn't have a native currency until recently Mechanical Turk is a marketplace where they want to pay out the people who are doing these tasks somewhere in the world often in developing countries and the payment systems don't the payout systems just don't work there so they often get paid in Amazon credit and these weird kind of like shadow economies have developed in some of these countries where people are trading around Amazon store credit to like buy food and go to these crazy links because they can't they don't have a global currency that's in native to the internet and then you know sites like Reddit and sack overflow since they don't have these international currencies they use what I refer to as like karma points right a fake points where you just upload something and it's not even really worth something it's not like you're getting equity the company or monetary value of that but people are doing it just kind of for the love of the game so there's been all these kind of weird things people have had to do because the internet didn't have a native currency previously but now it does and so I think you'll see these marketplaces these communities come together in you know in a way that's just faster than it's ever happened before because now crypto can actually start to give real crypto tokens real it has some real value to it as opposed to just these fake internet points okay so these are the three things that are kind of unlocks for crypto startups and you know I think it's just going to make it a lot easier for the next generation of startups to succeed over the next 10 years and you know it's sort of like when comm started this first came out it you had to sort of say it hayward.com startup and some of them even put like calm at the end of their name but eventually it's like every startup uses the internet right like it's hard to imagine going and pitching a Y Combinator or something and saying we don't use the Internet and now you know I think the same thing is gonna happen with cryptocurrency we're in five or ten years pretty much every startup that gets created it's gonna use the internet it's gonna use AI and it's also gonna use some form of cryptocurrencies somewhere in that product so you could imagine a whole new wave of startups being built where every vote like button star follower etc is powered by some underlying token not some fake karma points and early customers who helped build those products are actually gonna be able to participate in the upside so those are some of the advantages that criminal startups have to offer but there's also some drawbacks so there certainly is a lot of legal risk this is a new area where people are still trying to figure out how to work with securities laws we're gonna talk about that in a minute and the developer tools around this are getting better but they're still nascent about how you actually create these tokens how you manage them almost like instead of a cap table you're managing a coin table and lock-up periods and all these things need to be developed so just a quick disclaimer I'm not a lawyer so none of the things you're here here today are legal advice but Brian Brooks who's also giving an a 16-2 crypto started school talk is a lawyer so we'll cover a little bit more of this in detail a little history on this so I mentioned back in 2017 2018 we saw the first wave of this kind of like the dot-com boom bust cycle of 2001 and ICO is were the first version of that or initial coin offerings which sounds strangely like initial public offerings and I think this was largely not a good thing for the industry like the dot-com boom and bust there was a lot of scammy stuff there was a lot of people raising at crazy valuations who never actually ended up shipping a useful product and so it was a bit of a setback and recently we've seen people move to ayios where charges will exchange offerings it's kind of a slightly better more mature version of this still being run largely on unregulated exchanges that are abroad as opposed to an a regulated way in the United States but more of a step in the right direction and then we've also seen something called saps which are instead of it's a sort of a play on the word safe which was a simple agreement for equity now it's a simple agreement for tokens and we've seen some companies begin to try out this path as well so a lot of this when you're making a new token and you want to use it in some way inside your startup you're oftentimes asking yourself this question like am i making us security or is it something that's not a security which people refer to as a utility token and to figure that out people were going and looking at this thing called the Howey test which described what a security took was and they said it's a contract transaction or scheme whereby a person invest his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party so you know that had a lot of pieces to it which people broke down into these prongs I guess if it's a security you needed to have some invest somebody had to buy something they had to be believing that there was a common enterprise a group of people working on this they had some expectation they were gonna make more money in the future and they were relying on other people to make go and do this work and this was just really difficult to understand people went through and I've been trying a lot of different ways to go figure out this fundraising problem a lot of crypto startups still do more of the traditional route which traditional equity raises with VCS and accredited investors some have gone and tried doing a saft which is a new method foul coin orchid and even telegram has most recently done it and run into a little bit of trouble with the sec and so the sec it and that that case that's happening now is actually kind of a landmark case where a lot of people in industry are watching it and seeing is this a Bible passed forward or can we make a couple of tweaks to the saft to do it in a way that could be a more viable well paved road if you will and similarly some other startups are doing what's called a reggae offering which is something that came through the JOBS Act back around 2015 that lets you raise money from retail investors so some blocks tack and you now are taking this approach so again I'll let Brian Brooks and his talk get into this a little bit more but suffice to say there's still a lot of innovation happening in this space the what the industry really needs to do and hopefully we along with everybody can help this happen is create a well paved road that's that is tried and true for startups to go out there and raise a little bit of money whether it's from accredited investors or through a reggae offering and do it do it in a legal and responsible wet one good piece of news is that we have started to find a good solution to this problem for this question of is it a security or is it not and the way that we've done that is through something called the crypto rating Council which a number of businesses crypto companies out there have come together to form this consortium and they actually look at a rating scale and they have like a 36 point questionnaire legal analysis they'll go through on each coin and come back with a one to five score five being very very likely to be a security one being very unlikely to be a security and like many things it's not a binary it's actually a spectrum and so you'll come back and get these scores on different crypto assets that are out there so we'll talk about this in a minute but to me this has been a big unlock because it allows startups to actually who are developing a token and writing a white paper to submit it to the crypto reading council to come get some feedback almost like the Motion Picture Association of America will come back and say hey this is a pg-13 or our rating as you're getting ready to go to theaters okay so let's talk about well what do you what do you actually need to go do maybe we'll break it down and hopefully this will give people a way to go create more crypto startups in the world because that's that's what I really want to see you in the next five years as thousands of crypto startups to be created so we're gonna go through each of these steps first you're going to start off by incorporating and for right now you still need to incorporate we recommend you know I were to do it today I probably go create a Delaware Sea Court use something like stripe Atlas which makes the incorporation process a bit easier there may be a version of this in the future that is actually incorporating it more like an online jurisdiction than the DAO but I don't think those are quite ready yet the next thing you're enough to do is go out and actually fundraise so we talked about this a little bit but you know you're gonna have to figure out which securities offering makes sense for you so maybe do it like a traditional startup would do a safe if you have access to regular accredited investors if you want to try to raise from retail you might be able to do a reggae offering my honestly this is probably still the most difficult piece and we're hoping that in the coming you know months and years that the industry and Columbia is included it can help sort of create a paved road for this but this is still the most difficult part and you know we do have to say work with work with counsel what you want to make sure you don't do is go raise as much money from unaccredited investors don't market your security to retail people and get yourself in trouble with with the SEC that'll put your startup at risk next thing you got to go do is actually build a good product so this is what people in the ico boom sort of forgot and there's really no shortcut on this step you know crypto startup can help you hopefully at some point raise money more easily get your early customers expand globally but you know the hard thing in startups is you got to make something people want and that's the part where you have to go actually and build your product hopefully with a little bit that seed capital that you've raised but as you're building your product you can now start think about issuing your token to give some of these advantages around acquiring your early customers there's some tools out there one of them is called Eragon which I'll which I like I think it has a pretty simple interface to create an ERC 20 token and set some of the parameters around it and then of course you can submit your token to the crypto rating council to start to get or go to the white paper around it to start to get their you know guidance about what that score on it might be how likely is it to be a security next you're gonna have to actually integrate your token into your app as you're building it so it might look like like reddit like up and down points that you're that people are doing to earn stuff by contributing user-generated content to your site or it might be some kind of rewards program or it might be some kind of governance that people are baking into your app so there's many different ways that people are going to integrate these tokens but that's the next step and then you're gonna have to go out there and launch it and then only once your product is live and customers are starting to use it then I would think about actually submitting it to somewhere to actually get it listed on an exchange somewhere like coinbase or any exchange out there because you're not gonna want to try to list it until the functionality is actually out there you've delivered what you said you would and a bunch of people are out there actually earning and really using the token then it's now live when you do want to go list it you can listing document comm is a little page we've set up for asset issuers and startups to come get there to enlist it but again this is kind of like the last step in the process alright so I just want to run through a quick case study here and then I'll open it up for questions so as you know I was learning more about this I decided to go try to help this startup research tribe get off the ground and there's about 2.5 million academic papers that are published every year but people only read a couple thousand of them that really matter and there's kind of tons of papers but it's difficult to prioritize and read them because they're they're not in plain English and there's probably a version of the world where academic research looks more like github or open source software that's kind of the vision of research hub so you know a similar story when outraised a little bit of seed capital started building a v1 of this product which lets people submit papers upload them have discussion forums kind of like an online journal club and you know the there's a number of features here just helping distill research into key parts and the users can kind of use a token behind-the-scenes research coin to they earn them every time they get enough vote for something that they submitted and they also build reputation on the site which helps them kind of do peer reviews and act as sort of an authority over and helping curate this kind of research and make it more collaborative so that coin you know got integrated into this product hopefully in the next couple of months you know so it's been submitted to the crypto rating Council hopefully in the next couple months it'll come out live and help attract some of those early customers to research hub to help solve the cold start problem if you will to start getting more of that content and community coming and generating together and of course those will be people from all over the world academic scientific research is a very global phenomenon it wouldn't make sense to use the currency of one particular country if we want collaboration to happen globally so that's an example of the kind of startup that I think could benefit from being a crypto startup and I just want to say there's there's I think there's thousands of ideas like this out there I mean you could imagine any kind of startup where you're trying to build some kind of community have some kind of a marketplace like you could imagine and play a lot people are talking about news right now and you know the truth the truthfulness of it or what's the highest quality news sources you could imagine a community coming around form a product around that or maybe collaborating to create music online work I'll do the vocals and you do the guitar track or whatever in some kind of clatter environment or reimagining the social media apps that are done basically how to use these ad based business models because the internet didn't have a native currency what if every upload are like that you got on Twitter or Facebook or YouTube was real currency or some kind of equivalent like that that allows you to participate in the upside of these startups or marketplaces or maybe even Wi-Fi access points that you wanted to incentivize a bunch of people to put out there in the world so my hope is that many people will go take this talk see some of these nascent tools that are coming together around fundraising and acquiring early customers and issuing tokens and go use it to build that next generation of crypto startups over the next five or ten years and if you're if you're interested in pursuing one of these I we put a link here where we'd love to collect a little bit information from people we're trying to think about how we can be helpful in the ecosystem to get more and more startups like this launched so you can check out that link if you want to get more information and updates so with that let's open it up to questions and I hope you found the talk useful sweet thanks Brian give a we've been doing this virtual round of a pause so we'll we'll get all of everyone clapping there thank you cool so we have a bunch of questions coming in on the QA Channel and guys keep posting we're gonna go until I think until we run out of questions or until the top of the hour so the first question is from Aria and it is his question is clearly cryptic Upsilon incentives for users and products and creates transparency to the system while providing individual private individuals privacy however general consumer usage has just not taken off yet so what do you think is the biggest blocker for adoption is a ui/ux barriers to entry or is it technical or is it just there's not a killer app yet yeah so I think about this a lot as well and again I'll make an analogy to the internet rights if you go back to 1998 and the internet was there it was just starting to become usable so a lot of people were using dial-up modems right there was no broadband the web browser had just started to get good enough where there was security and privacy and cookies and HTML and CSS tags and even a little bit of JavaScript it was starting to be created you know I forget the exact year that came out but didn't really get popular like Ajax and all that and still maybe early 2000s so it's very similar the similarities are striking in crypto so I think one of the big things needs to get solved is scalability so it's kind of like going from dial-up to broadband right now the crypto blockchains Bitcoin can do about seven transactions per second in theory one can do 25 per second you know but PayPal is doing 500 a second and Vista's doing 4,000 a second so we need to get a couple orders of magnitude improvement and scalability there's a bunch of really great teams working on these next-generation protocols in Lightning Network and layer two solutions and so I that's gonna be like broadband as an unlock the second one is volatility so crypto has generally been super volatile which is great for people who want to trade a speculative asset but it's not great as a medium of change and so luckily we're seeing stable coins come out I think that's another one of the big ones and then the third one is exactly what you said it's it's UX you know if you look at the internet early days you had just IP addresses that you typed in and we need a human readable naming system like domain names that resolve to IP addresses and you're seeing that same thing in crypto today where traditionally people are sending to Bitcoin addresses which are these kind of long things that look like passwords they're not human readable but we're seeing things like the etherium name system and human readable names to send to which i think is a huge unlock as well and when I say you X that's that's one example but really everything about it like the wallets need to be much easier the like reputation systems knowing the recipient you're sending too is it a high quality recipient or not so these are all the you know there's a technology called wallet link that we've worked on that allows you just to like scan a QR and be signed in to adapt you know so there's things like that that are getting unlocked totally yeah I think I think product is on you know over the last you know 10 15 years of web 2 services has learned so many best practices that are just sort of starting to emerge in crypto today and you know great product designers can apply their expertise but there's a lot of uh new behaviors that need to be designed for and I think you know getting up to speed is one of the big unlocks ok next question is from Stefan we've seen Network effects give monopoly power to companies like Facebook Crippler Networks accrue value from Network effects why is this better hmm well I'm not sure we're gonna get rid of network effects with crypto I you know there's there's some really good books on this the name of it is escaping at the moment but a lot of technology trends work like this you look at like radio and The Telegraph and you know television and the Internet is just kind of the latest example of that where you have some kind of new technology there's a Cambrian explosion of a whole bunch of ideas and eventually industry is kind of consolidate a little bit more so you know I think that is going to happen in crypto but what's really important about it is that you know coinbase is not like look at visa right so the only company that can grant you access to the visa network is is visa itself whereas if you take an open protocol like SMTP for email you know if you don't like Gmail anymore you can move to yahoo mail and Outlook and all these other options right so that interoperability that forced interoperability if you will is actually a really big it's a big win for consumers because what it means is that it's gonna keep all the players honest you're not they're not gonna build too much of a proprietary system where you're locked into their network and that's where you see the really bad behavior so you know that's I think that's a big win as a global open standard for crypto by the way I think the book that you mentioned it's Tim Wu's master switch right and I don't think something like that yeah between open networks and closed networks yeah and yeah just just to add to one point that you're making I think one thing that happened kind of recently I think this past week that that I think gets this question a little bit is there's a spark change steam blockchain and it was acquired by by Justin Stone and the Tron octane which was interesting because you know first big high-profile case of M&A of public networks and and that was announced a few weeks back but what happened this week was a bunch of community members from you know from the steam community decided hey you know what we actually we don't want to go along with this acquisition we want to have we want to continue on our own chain and and so they've always sort of grouped together and are now forking off of the sort of canonical steam bar training and creating their own so I think that's one other way in which you know these these networks being open sort of empower communities maybe even in spite of network effects or it allows the community to serve respondent and try to tackle the network attacks that are out playing play yeah I agree that's a really good example of well it's both what happens if you really centralized ownership of your app you know you're not in full control of it anymore right so you a bunch of people couldn't vote against you you could lose control but it also gives power as you pointed out like people can fork you know biology Srinivas and has a great talk from start why comment or started school a long time ago called voice versus exit and I would encourage anybody to watch that and there is a lot of power if if there is an option to exit your voice is amplified a lot in the network itself ok great and so next one is from James and Sivan I mean he says I think coinbase is one of the few companies that have grown to the point that not every employee needs to know or care about the current crypto landscape maybe they're just focused on internal security marketing or design for example how do you think how do you think about hiring and company culture to make sure that you're hiring the best people whether they are crypto natives or not and how do you keep culture at scale mm-hmm yeah it's a great question you know we used to use this word at coinbase crypto native but we actually switched and we started saying crypto full word and it sounds like a simple semantics thing but I think it actually matters because if you think about it how many people were really crypto native you know I mean Satoshi it was and there was a bunch of people very early on like I was kind of early to crypto I'm there I started looking at it in like 2011 but I remember coming into there and thinking oh my gosh like there's all these people who've been here since 2009 or something I'm so late to the game so it's kind of an exclusionary thing and for crypto to get to be used by a hundred million and a billion people in the world like we need to have a lot more people come in we can't have this moniker of like oh I was crypto native or I was I was crypto og or something so we like to use crypto for word what just means like I'm interested in crypto I believe in the ethos of it like I want to see it grow in the future and the other thing that we just obviously we hire based on other qualities that we look for claim base clear communication you know positive energy people who are optimistic about the future people who are interested in continuous learning like they're really curious instead of committed to being right and they're humble and people who exhibit efficient execution so those are the four values that we really look for and everybody that we hire to create some kind of consistency to the culture now that we have more than a thousand employees cool and of course I think I think it's safe to assume a lot of those folks are coming in from other technology jobs right and and I'm curious maybe there's a follow-up question do you have some sort of like onboarding program that gets folks up to speed on crypto yeah we do so we have it we have an onboarding program for all employees that covers a whole bunch of things including you know why we take security so seriously how to make our products easier to use to get the next hundred million billion people it goes through our company culture our company values sort of like the cadence of what you can expect how to do remote meetings like this and we also have separate on boardings for certain functions when the company like engineering we have a boot camp that most people go through where they just learn how we ship code and run tests and do security tests and things like that so they get you know they hit the ground running and they can ship code from day one great okay next question is from Paul yes do any crypto startups come to mind that have done a good job of attracting new users by rewarding them with the token mmm so I think there's been a lot of early examples of this I don't know if I would say that they're perfectly executed right like Steam it I think was a good idea I think it didn't maybe hit the kind of critical mass that they were hoping for and a lot of these things come down to execution right like if you go back and look at the history of startups like there was probably 10 or 20 companies that could have been YouTube but YouTube ended up being the one that is YouTube today there's you know I'd have to think more about that there's certainly the early like Bitcoin and aetherium and things like that were were incredible at that and there is kind of like the genius of Bitcoin was that it was released you know anonymously with like basically some working source code right there in the in the paper so people in the community could go implement it and that sort of helped ensure that it was never considered to be a security but because it was you know you weren't relying on the efforts of others there wasn't other it was it was just people all over the world we're running their own node and it was completely decentralized so I don't think that's a practical way to launch for most startups which is why we need to think of this new path that's why that's why I want to kind of help push this idea of let's go do a crypto startup in a more in this new way because I don't think it's actually been done super successfully today there's probably some examples I'll think of later so yeah yeah I think I think I would agree with what you said which is I think the developer facing platforms or those that start a developer facing have done it best Bitcoin etherium being the most prominent examples but but I do think it's only a matter of time until again maybe it's a product design issue or problem space where sort of ownership of the product or service or network ends up being the part of the product experience in a really intuitive way as opposed to purely a fundraising event right and we haven't always seen yeah that's right I agree with that and actually I mean the ones that really deserve mention here are some of the recent defy apps like compound and maker like I think those have seen a lot of success in the last year there's there's real traction there are a lot of money flowing into it and they've helped you know decentralized ownership of those of those coins yeah those those are both great examples okay cool so the next one also from Paul what would have to be true for you to want to incorporate your next company digitally so or in a crypto native way rather than as a Delaware C Corp that's a good question so I actually I'm very bullish on this vision behind dows long term I do think the idea of a Delaware C Corp though it has such trust cuz it's been around for so long is it's kind of an old-fashioned idea like in on the on the internet something should be inherently global from day one right so I actually I very much believe in that vision of the Dow or Dow is generally and Oregon and apps like that have started to make it much much easier now the question is you still need to probably hire some people and they are gonna live somewhere in the physical world and so you need to make sure that you're following all the local laws around in payroll taxes and things like that so I think there could be today I think we're still seeing it's like Delaware C Corp you will and you know let's also make our product with a Dow that can kind of have some decentralized governance and whatnot what we're seeing people create these foundations you know in Switzerland or in Singapore or like jurisdictions that are really reaching out to be favorable towards crypto companies I think that's that's great there could be a moment where that actually flips and like the parent so to speak is the Dow and well we the Dow is gonna vote to put a little bit of a money into this subsidiary which is the Delaware c-corporation centralized workforce or something like that or you know even better maybe would be just not have that sub and everybody gets paid in the token I mean that's probably the direction that it's going longer-term but there's so many you know the regulatory environment is just so not set up to even contemplate something something like that that is going to be a little risky I'm just I'm super glad that companies are pushing the boundaries on that so this week actually we had Robert leshner from compound on and we talked a bit about progressively D centralizing and how they're going through this right now right whether they're they have the company doe or C Corp us-based but they're starting to transition to a community on networks the Dow is going to become primary yeah okay cool next question is from Luca and it is the u.s. DS current primary use case is to bridge fiat and crypto however you were working with center to create this monetization layer for the web which is this interoperable network of wallets that allows money to flow can you discuss the status of the project in this feature yeah sure so Center is one of the consortiums out there it's working on a stable coin we're a member of center we remember of Libre we'd be open to looking at others so just generally coinbase wants to be supportive of any crypto token or project out there we try to really remain agnostic since there's so many great projects out there I think just as a side on the side there's too much you know tribalism right now in crypto or people are like this thing is the one true religion you know versus this and we all just need to kind of help each other out to grow this ecosystem even if we have our own preferences so that's that's kind of an aside is a status update on center it's going pretty well so today it's the second largest stable coin by market cap it's over 600 million now the number one stable coin by market cap is tethered by the way which you know I think most people are aware has some kind of reputation or challenges associated with it so if you think of it that way USD coin is probably the most successful you know stable coin out there today and it's very simple it's just backed by a dollar in a US bank account I am also a big fan by the way of the more decentralized approaches to stable coins like like Dai which we also have support or on coin days I think in some ways that's actually a really elegant solution because it's it's more like Bitcoin it's totally decentralized it's been really awesome to see even with all the volatility and crypto prices in the last few weeks the stability of Dai has been pretty good I think maybe it peaked it like $1 o 6 or something on coin base so it's actually been really stable despite all that but yeah Center is in the process of adding more consortium members it's um in some ways it's kind of the opposite of Libre because Libre has a bunch of amazing consortium members but the Libre token is not out there live yet and Center has the token out there live USD coin which has 600 million market caps very successful but it only has a couple of consortium members so we're looking to have more consortium members and again we're agnostic as to which of these ultimately get used by the community out there yeah but I would add I think it's a really exciting on-ramp and that you can sort of start to use crypto in a familiar currency but then potentially transition so this this world of new tokens that exists out there okay cool alright so I think we have time for one more and there's there's a ton more questions but we'll try to get answers in the slack later on asynchronously so this one's from Tina and it is how does product market fit for curricula startups different than what - point of startups hmm interesting question I mean my first reaction is I'm not sure it is different the way I define product market fit for any startup really whether it's correct or not is are you seeing organic growth you know day every day or week over week without doing any kind of paid marketing or anything like that and what I usually like to do when creating new products is you know you put your first version out there it's not very good it's you know people some people look at it and most of them turn out and then you you go talk to your customers you see what feedback they're giving you and you come and prove the product and you basically have to do this cycle where you talk to customers improve the product talk to customers improve the product talk and it basically you just keep doing that cycle usually it takes years honestly most people try it for a couple months and they give up which never has helped any startup get off the ground in my experience so you have to do that for a long time longer than you would think and eventually with that those improvements and talking to your customers and iterating towards the right option you'll hit a threshold usability where like the number of people who come in every day you'll retain some of them and you'll see the number of active users start to go up instead of just being flat or down so that's when you know you've got product market fit and I don't think it's different in crypto I mean the only thing that might be different is what I talked about here in the talk which is it you can help it can help you get those early people to come in and even if the app is not perfect but they believe in the vision of it or the the potential of it they can see the potential in it even if part of the functionality is there today they may stick around because they feel like they're there helping build it with you and earning a little bit of the upside with you all right okay great Brian it's it's top of the hour and I know it's Friday and so thank you again for joining us and for the presentation and for all the QA we'll let you go and drive the rest of the weekend but so again you know round of applause for Brian for joining us on on this Friday session 5 thanks John I appreciate it bye [Music] you