Dealing with Employees and Politics: A Response to Brian Armstrong

I’m writing in response to this blog post written by Brian Armstrong as CEO of Coinbase. I’m not sure why it touched such a nerve with me but, particularly in light of the many supportive posts praising Brian’s position, I felt inclined to try to organize my thoughts in writing.

Before jumping in a few quick caveats: First, I wrote this in my personal capacity and this is not intended to reflect the views of my employer. Second, I don’t know Brian personally. I met him only once when interviewing for a job with Coinbase in 2014 (that I did not get). I don’t have any reason to assume ill intent from him and generally have found him and Coinbase to not be deserving of excessive scorn.. Third, I’m admittedly under-qualified to talk about what is the best way to run a company. I have never been in Brian’s position, I don’t study these types of things, and admittedly, I may be completely wrong on everything below.

First, let me start by saying, I agree that it is challenging to keep an organization focused in the current political and social environment. However, I think Brian’s post was misguided because it failed to consider certain aspects of this moment that, in my opinion, should have led him to a different outcome than the one he laid out. I have dug into those misunderstandings in more detail below but to summarize what I think someone in Brian’s position should be doing to build a healthy successful company, it would be:

  1. Do not impose your desired mission as an ultimatum on your employees but instead engage with your employees as important stakeholders in the company who should have a voice in refining the company’s mission over time.
  2. Recognize that as a high growth crypto/software company, your business is inherently political and will necessarily involve difficult decisions on political topics that will impact employees, customers, and others. Suggesting there is some way to be “apolitical” or to simply ignore “unrelated” political issues is disingenuous.
  3. Realize that your employees are living through a moment in which politics have a deeply personal impact on their lives and the country more broadly. Considering the workplace is often a place where they come out of necessity to make money and not some place they come to volunteer for a mission, you can help them thrive by listening (rather than asking them to ignore) the current political reality or their individual experiences.

I come back to three basic misunderstandings that I think Brian makes, which led me to the points above.

Misunderstanding the current power dynamic between management/capital and labor

I think it is uncontroversial to say that Silicon Valley tech founders and CEOs are extremely powerful right now regardless of whether we are talking about their power within their own companies or their powerful influence on the public more broadly. Internally, the trend is for founders to give themselves large ownership shares, super voting powers, and pretty openly attempt to mold their companies in their own images. Externally, investors flock to founder-first companies, founders are lauded as geniuses (and sometimes vilified), they testify in front of congress, and generally demand a huge amount of the public’s attention.

This is occurring during a broader environment in which capital is so dominant over labor in our economy that it possibly threatens some of the foundations of our democracy. That may sound extreme but I highly recommend this podcast episode touching on this topic, which really helped shape my thinking.

As a founder during this time, one has the choice of leaning into this existing paradigm or questioning whether the apparent cult of the founder is a positive development.

It really comes down to “what is a company?”

Is it just a vehicle for making money based on the vision of the founders, investors, and other control persons, or does it represent something more, such as a vehicle for coordinating some broader societal change, which reflects the collective visions of the employees and other stakeholders as well.

Legally, I know the answer, but personally, I think that with SV tech companies, it is unhealthy to take the former approach. It is one thing for a local coffee shop to be solely profit motivated at the behest of the owner. But if your goal is to have thousands of employees and fundamentally change the world with your products, as most lofty tech companies aspire to do, the idea that the company should be solely profit motivated based on the mission set almost exclusively by the founder results in a world that gives an extreme amount of (undemocratic) power to those founders that who successful. We can clearly see that at play today as founders like Mark Zuckerberg and Jack Dorsey have ascended to positions where their decisions on behalf of their companies have immense political consequences for broader society. I personally would rather see a world in which those companies are accountable beyond just the bottom line for capital investors.

Up to this point, I have been focusing on founders, but what I’m really advocating for is to look at Brian’s statement from the perspective of an employee. For most people, your job is where you spend most of your life. It’s where you meet friends and develop professional connections. It is also where you are exposed to a broad array of different people that you may not otherwise choose to interact with but for your job. As a result, we must understand that someone’s employment plays a huge role in their life beyond just income and mission. And like any person, employees want to feel respected, safe, and empowered in an environment that is at the core of their lives.

With that backdrop, here is my problem with Brian’s statement. First, there is a question of why he even needed to post this in the first place. My strong assumption is that this stems from internal strife with his employees. It’s not like before this, the public was demanding to know where Coinbase sat on political and social issues. The only logical way this issue bubbled up to the point where the CEO is writing a public post is internal pressure. I would think that if you are having internal issues with your employees, you would want to sit down and hear from them, collectively decide on the path for the company to the best extent you can, and then clearly communicate that path internally. Writing a public blog post in which you restrict people’s ability to publicly respond indicates that you are not concerned about your employees views on these issues. Instead, you indicate that you are more interested in publicly signaling your own views to investors and customers in hopes of exerting your power over employees.

Second, Brian delivers his message in a way that emphasizes how Coinbase will essentially always be a reflection of his values over the values of his employees. He starts off with phrases like “I decided to share publicly how I’m addressing this” and “I believe that this is the way that we can have the biggest impact on the world,” which clearly reflects this vision is coming from him personally. But then he states that employees of Coinbase must necessarily share this vision by using phrases such as “We act as #OneCoinbase, putting the company’s goals ahead of any particular team or individual goals” and “every teammate is willing to make sacrifices to achieve that.”

Instead of trying to form a company that reflects the values of multiple stakeholders, including employees, he basically says you can leave if you don’t like my vision. “Life is too short to work somewhere that you aren’t excited about, and we’re happy to make that a win-win conversation.” Brian doesn’t attempt to grapple with the likely fact that many of his employees probably don’t feel like they have the luxury of popping around jobs just to find one they are excited about or aligned with the mission, particularly during a global pandemic. And even if they do find such a job, there must be some assumption that there will inevitably be disagreements, and the right way to handle that is not for an employer to simply show them the door.

Here is also something I firmly believe: most employees at large companies do not care about their employer’s mission. Of course, the early team is 100% on board, and there is a time when employees are drawn in by the mission of the company. But at a certain stage, the next marginal software developer or cafeteria worker or HR rep is joining the company because it’s a source of income that helps them pay for the things they personally value in their life — family, political causes, or whatever. Indeed, tech companies recognize this by giving later employees less stake in the company to align interests.

Understanding that dynamic is key to building a great environment for employees. A great employer is one who understands that their employees have a diverse set of goals and values and that fosters and supports that to the best extent they can while still maintaining focus on the parts of the business that allow everyone to be prosperous. Brian seems instead to suggest that the system at Coinbase is one where your personal goals and values must be sacrificed for the good of his vision as the founder. Or in his words: “Put the company goals ahead of our teams or individual goals”

To summarize this section: My view is that high growth tech companies that seek to change the world should be more open to being complex entities that reflect the diverse views of numerous stakeholders, including employees, and not just a narrow reflection of a single founder’s vision. Otherwise, the success of the company will continue to perpetuate undemocratic values that elevate founders and capital over labor. Right now, Brian’s company is relatively small at ~1,000 employees whereas Google, a place he criticizes, has over 100,000 employees. If Coinbase gets to the size of Google, I believe Brian will quickly learn that demanding loyalty to the mission becomes nearly impossible and is not actually a positive outcome.

Misunderstanding the nature of the industry we work in

Software in general, and crypto in particular, are inherently political.

If software is eating the world, then the judgments incorporated into software development necessarily impact how the world operates. A widely used social media platform that elevates conspiracy theories over more rigorously researched pieces is making a decision that impacts politics by elevating engagement over fact and nuance. A financial software platform that agrees to allow a country to censor access to its service in a way that may oppress a targeted group is making a decision that impacts politics by elevating the demands of a ruling party over the interests of certain people in that country.

In many ways, crypto was a response to the political status quo of the financial technology system. Satoshi proposed decentralization of software infrastructure as a way of undermining the immense power of governments and intermediaries by instead giving that power back to the individual user. That was a political statement.

And the modern decentralized finance system, which pushes the edges of regulations and aggressively seeks to reform finance in a new image, is similarly just as political in its goals.

Brian implicitly recognizes in his post that Coinbase’s mission is inherently political. He talks about changing the world by building an open financial system. At a time when economic nationalism is on the rise, Brian must recognize that Coinbase’s mission is counter to that current political trend, and his success in achieving that mission may not reflect the political wishes of the countries where Coinbase operates. So even if we can agree that this is a laudable mission, it is ridiculous for him to say that Coinbase has an “apolitical culture.”

More importantly, I believe Brian fails to recognize how important the political views of Coinbase might be in the future. His statement reads much like past statements from Zuckerberg about issues such as privacy and political neutrality, in which he downplayed the potential impact of his platform on the broader political system and conversation. But just as Jack’s decisions on what to do with Trump’s twitter account and Zuckerberg’s decision with how Facebook is offered in Myanmar clearly have very real political consequences in the current moment, it is not crazy to think Brian may be in a similar position in the future.

For example, what will be Brian’s guiding principle when it comes to something like allowing undocumented immigrants to open an account to obtain bitcoin as a way of avoiding potential US political action that may seek to sanction or punish those individuals through the financial system? Does the answer to that question depend on his political views on issues such as illegal immigration, which may not at first blush seem like a policy issue core to Coinbase’s mission? Isn’t deciding which issues are and are not related to the Company’s mission an inherently political act, particularly when you are operating a company that seeks to change the very foundation of our financial system, which impacts nearly every political issue. In my view, it is naive to suggest that there should not be a forum within companies where employees feel empowered to discuss what the company’s views on difficult political issues are when you are necessarily building a company that seeks to inject its views into the political system.

What worries me more is that in many places in his statement, he makes clear that the mission above all others is making money.

“We shouldn’t ever shy away from making profit, because with more resources we can have a greater impact on the world.”

“The reason is that while I think these efforts are well intentioned, they have the potential to destroy a lot of value at most companies, both by being a distraction, and by creating internal division. We’ve seen what internal strife at companies like Google and Facebook can do to productivity, and there are many smaller companies who have had their own challenges here.”

As someone who thinks that giant tech companies can have broad societal impact (both positive and negative) and inevitably imbed political judgments into their products, I think there is a huge need to recognize how purely profit-driven motives may lead to bad societal outcomes even if it means success for the company.

To summarize this section: Coinbase’s products and overarching mission have the potential to touch on virtually every political issue in our society as has been proven with other large software companies recently. To suggest there is some way to run Coinbase as apolitical or in a manner that doesn’t have to worry about broader political issues downplays the political nature of crypto and software and dooms you to the same mistakes made by large tech companies before Coinbase. Instead, tech companies seeking to change the world should recognize at the outset that they are embarking on a path that will demand engagement with difficult political issues, both those that may seem core to its mission as well as those that might seem more tangential in the near future but have proven to arise with similar companies as they grow and become successful.

Misunderstanding the time that we live in

Although I left this point to the last, in some ways, I think it is the most important. We must recognize that many issues Brian sees as “political” in the current environment are actually deeply personal. At this moment, there is simply no way of telling employees to leave their politics at the door.

To make this point clear, let’s think of some pretty relatable examples. (1) An employee who is a Mexican immigrant must submit to a work visa reauthorization that requires her employer to provide detailed proof of why there are not US citizens that would be equally qualified to perform her job or else face deportation by an administration openly hostile to Mexican immigrants. (2) Trump calls those who attended a particular Black Lives Movement rally anarchists and dangerous to the country, and that group includes a black employee who works at a company where the vast majority of the other employees are young white men. (3) An employee who is set to handle an important project for work has an unplanned pregnancy that she is no longer legally able to terminate because of a recent Supreme Court decision and must instead hand over responsibility of that project to a male colleague.

Regardless of your politics on each of these circumstances, Brian’s post essentially suggests that each of these employees must compartmentalize their experiences (or “make sacrifices” in his words) rather than discuss those issues at work because they are political. However, we can see from the scenarios that, to the individual employees, these events are extremely personal and have a direct impact on their jobs.

Moreover, despite the hypothetical direct impact these political events have on the livelihood and well-being of his employees, Brian’s post states that it should not be the company’s responsibility to take any public position on the issues. I agree that a company is not equipped to respond to every conceivable political or social situation, but that does not mean it should not be flexible to recognize that the company exists in a broader societal structure that directly impacts the lives of its employees.

More directly, what I have learned during this current political climate is that many people do not feel that our institutions respect their needs and wishes. Whether it’s politicians or corporate CEOs, many people are tired of having policies imposed on them that they view as preserving the inequity of the status quo or directly targeting them as an unpopular group. And it’s true that, as Brian points out in his post, the policy solutions to these apparent problems are not easy and there is unlikely to be agreement across a group like Coinbase. But his solution that Coinbase should, as a result, not even engage on the issues completely misses what people (particularly people of color or other underrepresented groups) are asking for at this time, which is: shut up, sit down, and listen.

I don’t know Brian well enough to know the exact perspective he brings to Coinbase, but looking at his background and how closely it matches the typical successful SV founder as well as my own, I would have to imagine that (much like me) there is much he can learn by actually listening to the experience of those who are underrepresented in our industry (and who very rarely seem get the same opportunity to be the CEO of a billion dollar company). Failing to foster such conversations in the pursuit of a hyper-focus on corporate “mission” with the idea that it will somehow help “avoid distractions,” in my opinion, is more likely to lead to considerable strife with employees at this time and likely will only cause greater distraction as employees feel unsupported.

Finally, I find it strains credulity to see some of what is happening in this country right now as purely “political” and somehow put to the side as something that two sides are destined to disagree about. I’ve tried to not make this response specifically about Trump but for anyone spending any amount of time just listening to the words he says, it is very hard for me to believe that he can be viewed as reflecting some definable political viewpoint as opposed to the ramblings of a purely self-interested actor who likes wielding power even if it comes at the expense of the wellbeing of large groups of individuals and the institutions of this country. It is not political to want to see powerful entities like billion-dollar companies call out behavior that has such a potential deleterious effect on all of us. This is why you see pressure from employees in nearly every industry, whether its tech, sports, or even just the local coffee shop, calling for action. And Brian’s apparent admiration for championship teams must recognize what those teams are saying and doing in this current environment.

I can only hypothesize about what I would do as a founder or CEO so I may be wrong about this closing point but will put myself out there anyway. As someone who likes history, I know that many injustices that we now think are so obvious (e.g., slavery, denial of women’s rights to vote, exploitation of child labor) were once merely “political” issues that we are shocked so many ignored or tolerated at the time. I tend to think it is incumbent on all of us to question our current political reality and ask what injustices we are perpetuating through ignorance or tolerance. And in a hypothetical world in which investors are willing to entrust me with millions of dollars and thousands of employees are willing to entrust me with their careers, I hope I could be humble enough to listen to them when they ask me to help use our collective power to take a stand for something other than just making them money. And by truly listening, they would also trust me (as much as possible) to make the final decision on whether to inject the company in something that may seem political. And even if that was a distraction that led to the failure of the company, I’d hope they would prefer that to a CEO who instead said to them “well, I’m just here to make money and not be political.” I know I would.

Strategic Legal Counsel @