It’s not the first time we are in what the media called a “crypto winter”. In the last crypto winter of 2018, Emilie, the guest of today’s show, made the unconventional choice to join Coinbase from her senior role at LinkedIn. She is now the President and Chief Operating Officer of Coinbase. What was her journey like? How do you navigate through a crypto winter? You’ll hear it from her in today’s episode. The episode is recorded in July 2022. Enjoy!
SPEAKERS
Rita Yang, Hans Tung, Emilie Choi
Hans Tung 01:18
Today on the show, we have my longtime friend, Emilie Choi. Emilie is the President and Chief Operating Officer of Coinbase. Coinbase, the world’s most trusted and secure platform to interact with crypto economy, and Web3. Cryptos are also GGV’s portfolio. Before joining Coinbase in 2018, Emilie served as Vice President of Corporate Development for eight years at LinkedIn, where she oversaw more than 40 transactions, including an acquisition of Lynda, Bright, Newsle, Connectifier, Slideshare, and Fliptop. She also worked at CorpDev roles in Warner Bros. and Yahoo. It was at LinkedIn when I had the fortune of meeting her, that’s like 12 years ago now.
Rita Yang 01:56
Coinbase is a GGV portfolio. Besides running Coinbase, on a day-to-day basis, Emilie also funded Coinbase ventures and made it one of the most active corporate venture funds in the world. Emilie received her BA in economics from Johns Hopkins University and an MBA from the Wharton School. Welcome to the show. Emilie,
Emilie Choi 02:14
Thank you so much for having me, Hans, and Rita. By the way, as I was remembering our first meetings with you Hans, and I think it was in China, Reid Hoffman and I connected with you when we were looking to expand LinkedIn and choose China. And that was before you were ever a part of GGV, so it has been quite a long time.
Hans Tung 02:33
Yes, that was back in 2011. I’ll never forget that trip. It was you guys met who’s who in Beijing. And everyone was very interested to talk to you and Reid. I enjoyed the conversations very much. Yeah. And what has impressed me is that you had an amazing, amazing career, extremely smooth on paper. But I’m sure you went through quite a bit of interesting twists and turns along the way, with stops in amazing education institutions like Johns Hopkins, and then UPenn Wharton, and then investment banking, Yahoo and LinkedIn and Coinbase. Can you kind of take us through your career? And what were some of the interesting things that you did? Or you saw what you overcame to get you where you are today, at this amazing position?
Emilie Choi 03:14
Yeah. I think the big story of my life is that I have been drawn to smart people. That’s the thing that’s been steady in everything I’ve ever worked in. Because I’m drawn to incredible people, especially great founders and operators, I key off of their energy, I derive a lot of incredible insights and learnings from them. And then hopefully, that helped me be better and better at what I do. So when I first came to Silicon Valley in 2003, I joined Yahoo, which I tell younger people I swear was the epicenter of all consumer tech. And there were so many incredible people there, whether it was folks who were hired there, like Jeff Weiner, or acquired people like Stewart Butterfield, and so on, people that I’ve learned from throughout my career, and I just learned so much from them, I would naturally gravitate to these people that I just knew were going to be killers, I would learn how they did things. And I would imitate those things if I thought they were going to be effective in my own career. And so, after Yahoo, I went to business school, then went to LA to go to Warner Brothers and had a great experience there. I had the desire to go back to Silicon Valley. And because I had worked with Jeff before, and I love LinkedIn, I joined at the end of 2009. And that was an incredible journey because I got to be part of something that was private and public and acquired by Microsoft, you know, 400 employees to 13,000 employees. And that was just an incredible place for me to learn from the best of the best. And, Reid Hoffman, Jeff Weiner, and Kevin Scott, who is now the CTO of Microsoft. You asked me before like what are some of the key kind of hardships I’ve ever been through in my career, I think the biggest thing for me is that historically, I’ve always been a very sensitive person. I remember as a child, if like an adult said something to me the wrong way I would kind of tear up and just get, I was so upset. I just overreacted to things sometimes. I remember once I was in Kevin Scott’s office getting some mentoring from him. I was upset about the way another executive talked to me. And he was like, what are you upset about? I was like, well, I’m upset that he’s mad at me. And he’s like, do you think you did the right thing? Do you think you did the right work? Did you think you offered the right piece of work? And I said, yeah, and he said then that doesn’t matter, just move on. This was somebody who, himself was very sensitive, but you would never have known it. I know that sounds so weird, but there was something snapped on for me at that moment. Similarly, Jeff Weiner, I remember there was another time where this exec was saying something similar to me. And Jeff said be a spectator to yourself in these rooms, where you’re slumping, having passive aggressive and reacting in a bad way, because you’re upset, and you don’t know how to actually stand up for yourself. And so all of these things that I’ve derived from these people, who have been incredibly important, and so generous, and just giving me super, super candid feedback, that has helped me be stronger and better, every step.
Hans Tung 06:22
Two take away, one is to always optimize for the quality of people you work with, sometimes even rather than their position, and then to develop a very thick skin. Exactly.
Emilie Choi 06:35
It’s not about you. It’s not about you. It’s about the work, right. And one more thing on that I took a lateral move to go from LinkedIn to Coinbase, which I think many people thought was absolutely insane. But that ended up…You know, Reid Hoffman talks about career paths are not linear. They’re not like this nice, straight up into the right. Usually what happens is, there’s some like little thing, then there’s a plateau. And then if you really crush it at that plateau, you can go even higher. So people should think about that when they’re making these career decisions.
Hans Tung 07:04
Excellent lesson.
Rita Yang 07:06
Yeah. You just mentioned so many exceptional business leaders along your journey. And you will also once say one of your talents is to spot leaders in two seconds. So, when you first met Brian, what about him or what he was doing that really excited you or you spotted him?
Emilie Choi 07:22
Yeah, I had heard about Coinbase. I wasn’t really into crypto, but I thought it was interesting. I thought the company was interesting. And I met Brian and I had tingles down my spine. He was talking about what crypto was like in the future. Crypto is a new form of investment. Crypto is a new form of financial system. Crypto is a new form of technology platform. And I just feel like I have to be a part of this. I’m scared. I’m intimidated. This is really fricking hard. But I want to work with this person, and I want to work with this company.
Hans Tung 07:55
Well, that would have changed a lot from your days at Warner Brothers. I remember meeting you in Beijing in 2011, this will go ahead, poker face on the whole time. I’ve told everyone to see like what I said or not. But you told me afterwards how you felt. You took me by surprise. I couldn’t have told from your poker face.
Emilie Choi 08:12
I hope I still have that, Hans.
Hans Tung 08:16
Did that you once told Brian that Coinbase should do venture. How long did that happen? Have you joined Coinbase? And how has that decision unfolded within Coinbase. And in the new environment that we’re in? How do you feel now? It’s now a shopping spree for you?
Emilie Choi 08:32
Yeah. So I joined in March 2018. And in April, I talked to Brian about doing venture and you have also remember I signed my offer letter in December 2017, at the peak of crypto and then I joined the company and promptly crypto started crashing. I was like, oh my gosh, what did I just do. But I did realize that we were in a very unique position because crypto is an emerging category. We had all the best experts at the company in terms of both relationships and insights about companies, founders, technologies. And we had cash on the balance sheet. So I talked to him: “I think we should do ventures.” And he thinks it sounds great: “Write up the press release in the Amazon style. Tell me what you want to do in the press release. And we’ll go for it.” So I write up this thing about what I think we want to do for the Coinbase blog. I sent it to him, he thinks this looks good. And I said: “Now what?” And he said: “Ship it.” And I was like, “Do you really mean ship it?” And he said: “Yes, ship it.” He meant not only ship this blog post, but ship the actual venture’s thing. So we started investing off the balance sheet. And if you look at the portfolio we have, we are seed investors in some of the most amazing companies in this space, you know, Opensea and others in the earliest kind of stages. If you look at the performance of the portfolio, it’s just outrageous. It’s amazing.
And Shan Aggarwal who runs it now he’s phenomenal. The team is phenomenal. This is a team that this is nights and weekends for them. There’s no dedicated venture people on our team, they’re doing it out of love of what they do, for Coinbase, and just out of passion for the ecosystem. Our first goal is for the ecosystem, we believe that it’s a very healthy thing for us to have a healthy ecosystem of incredible players. We want to see those. We also want to get incredible insights from being a part of those companies, because then we can see what’s popping, what’s interesting, what technology trends are emerging, all that kind of stuff. ROI, IRR is a third goal. It’s definitely not the first goal. But it’s something that has obviously been very successful as a result of this.
The next evolution of ventures-now that everybody’s into Web3, and crypto and you have these huge funds popping up-is how can we double down on known investments that we have? So how can we do more and more growth stage when we have just clear winners? How can we expand even further into incredible international Web3 opportunities given the tentacles we have globally, and so on. So I think we’ll continue to evolve. We’ll think about different structures as well, because the nights and weekends model might not work, as you know, these halftime gigs for folks who are already doing full time jobs with the company. But we couldn’t be more convicted that this is an even more interesting time in many ways given the crypto winter.
Hans Tung 11:24
Right? I mean, you went through two winters in crypto already. But I also remember what happened in 2000. Lots of great companies come out of that era, today, Amazon and Google all have thrived since then. And then Facebook started shortly thereafter. How do you view now as a critical moment for crypto in some of your earlier lessons from being in Silicon Valley and seeing some of the great companies like LinkedIn getting built, impact your decision on who you back today?
Emilie Choi 11:55
So this would apply to organic ventures and M&A. I think it’s that in a crypto winter, you get a little bit more disciplined, you get a little bit more focused on known revenue drivers for the core business. But you also take on opportunities where others are fearful. And so a great example of this is in the last crypto winter, we doubled down on Xapo, which helped catapult us to be the number one regulated crypto custodian in the world, we double down on Tagomi, which helped us launch a prime brokerage. It’s a great time to take advantage of each other’s fear, and depress valuation, and capitalize on those opportunities strategically. So I think that we were really excited about getting ahead of these opportunities and making sure we were well positioned for the next growth spurt.
Hans Tung 12:48
And for the people who sold their companies, are willing to take Coinbase stock and be patient with it, is a huge whirlwind. A lot of young people haven’t gone through that and feel like, “Oh, I’m a massive fail that I had to sell my company.” But it’s not, it’s usually that winter is a great time for industry consolidation. And the ones that can emerge well afterwards, just have huge growth.
Emilie Choi 13:07
It’s a natural part of cycles. It is just that, consolidation is a reality. And if you do it the right way, everybody wins. Yep. Especially to customers.
Rita Yang 13:18
Yes one of the interesting things for Web3 startups is that they tend to fund each other. So, they actually started investing as they were building their own product. So for those Web3 startups, what would be your advice when they’re building that venture arm within the team?
Emilie Choi 13:35
Rita, I think that’s an incredible point. And I’m gonna expand on it a little bit, because it’s such an unnatural inclination from the Web 2.0 world. In the Web 2.0 world, everything is existential, your user, I want them to be my user, because it’s a zero sum game. Crypto and Web3 is just a completely different mindset. Like Brian taught me this, which was so odd to me, it’s a theory of abundance. It’s a theory that the TAM is not even knowable, because it’s going to be so large, and everyone can grow together. And it’s better that there’s multiple players in the arena and not just one monopoly, because it’s a decentralization, right. And so I remember like us investing in competitive wallet products, and we’re super super doubled down on wallet generally as a company, and Brian was like great, let the best product win, maybe they’re gonna have some aspects that we didn’t think of and vice versa. And let’s just see this whole ecosystem thrive, because we want the best wallets to win for customer. So it’s a different mindset and I think it’s an incredibly healthy environment for entrepreneurs to operate if they can think that way.
Hans Tung 14:51
I’m gonna sound like a broken record because Rita’s excellent point here reminds me of internet 1.0 in the mid 90s, where a lot of companies own stakes in each other and VC invested in Karatsu in multiple companies in the same ecosystem to grow the ecosystem, and it just feels like right now for crypto, there’s gonna be a lot of that, as already happening, in the more will be coming as well.
Emilie Choi 15:11
Yeah. And I mean, I’ve certainly seen what the Web3 VCs. Hans, I don’t know if this is happening with your other investments, but you know how it used to just be, completely not kosher to invest in anything that whiffed of being a competitive investment. Like Web3 that just doesn’t exist, like the VCs invest in, it’s all fair play.
Rita Yang 15:31
Yeah, I just want to share an anecdote when I was hanging out with some Web3 folks in Singapore, they actually labeled me as the try-fi person, which makes traditional finance person. I find that a little bit offensive, but I thought it’s a very interesting way how the Web3 folks are thinking. So this is a question, I guess, first Hans, how do you think about the role that VC plays in this new Web3 world where founders fund each other?
Hans Tung 16:03
Yeah, I mean, in between the two winters there was a huge bull market. And as market was growing, there was a lot of interesting what the traditional VC had to say. But I think over the last two, three months, some of the experiences that we had going through 2000, 2008 become relevant for some of the crypto founders or teams going through that, as they worry about what’s going to happen next. Some of the lessons that Emilie shared and I shared is don’t sweat about stuff that don’t matter, figure out how to survive, but your team, if you have to sell your team, and what you’re offering will get stronger through this period, if we’re willing to persevere and not freak out. Because there’s still a lot of business to be built. You gotta navigate through this thoughtfully and carefully. And there’s no shame in selling, if you will figure out a way to result in win-win combination. And I think there’s plenty opportunity to do that for the next 6 to 12 months. And we’re happy to work with founders to achieve that kind of outcome. Because, you know, Google, I remember its valuation back in 2000, was around 10s of billions. But today, before the correction, it was a 2 trillion, so there was a huge growth ahead, that you are now worrying about getting sold to Google, but focus on the value you can you can create with Google, the sky’s limit. And so the team should think hard about that and make the right decision for themselves, for the customers and pick the right path from the joint if needed.
Rita Yang 17:29
Emilie, do you have anything to add on that in terms of you know, VCs role in this Web3 world?
Emilie Choi 17:35
I mean, I agree with Hans, I don’t have much to add, he was pretty eloquent there.
Hans Tung 17:39
I mean, a lot of them should be sold to Coinbase. Coinbase, FTX and a bunch of others are going to be acquiring and it’s the right time to join the platform that you can find and kind of cultural fit that you think these are the people you want to spend time with. Emilie picks those company extremely well along the way. And what more founders should do, you should think hard about that. It’s not about the price is not about the terms is really about the people. Totally.
Rita Yang 18:03
Yeah. So Emilie, you’re a veteran in corp dev, and for the other corporate professionals out there, what would be your advice for them? If they’re thinking about joining a startup? What should they look for in founders? And how can they find their Brian Armstrong?
Emilie Choi 18:18
The reason I’ve done corp dev for virtually all of my career, I looked back and I realized it’s because I love to be around founders. I’m like the straight-laced business operational person, and I’m just super enamored of the risk-taking, the fearlessness, the boldness of vision that founders have. It’s just exciting to me. So whenever I can get exposed to that, learn from those people, and then hopefully benefit them with whatever I can offer. That’s great. For Brian, I think the thing that’s interesting is, we work well together, because of our complementary skill sets, personalities, and so on. So that’s what each person who wants to have this type of role-like a COO president role, complementing the founder CEO role-is, you have to find that chemistry with that person.
And for Brian,and I, it’s just been years and years of trust building. The reason that he originally gave me this role is because I was grinding it out during the last winter. And he saw that work. And he was willing to take a bet on me when there was the COO opportunity. He didn’t have to do that, but I think those are the types of things where you see one another during wartime, peacetime, and you’re like, oh, I trust that person, and I want to work with them again and again. That’s so, for any person like that, they have to find their own combination.
Hans Tung 19:38
If there wasn’t the winter back then, do you think Brian would have a chance to get to know you in that kind of context now and give this to now?
Emilie Choi 19:46
We had a crazy thing where there were just probably 15 new leaders at the company when I joined, including myself. None of us had worked with one another before. It’s kind of a case study and what not to do. People who don’t know each other just hope they’re gonna work well together. And then add in the huge pressure of a crypto winter and the tension that exists with that. It’s just implosion. There were a few people, including myself, who made it through that. And just, those are the journeys you have where you’re like, oh, my gosh, we have these reps together, we trust each other, we get each other. We’ve been through this, we can get through anything.
Hans Tung 20:23
I mean, a lot of people treat crisis as OMG, this is it. But as you know, from looking at Asian cultures, the word crisis in Mandarin is also opportunities as well, and is those that can take advantage of those opportunities and shine, and be able to go through a tough time. That’s how you win the trust, how these founders give you this type of operating role, because not many corp dev has become president, or a COO. So without this kind of test through fire, founders wouldn’t know.
Emilie Choi 20:53
And Hans, I think you’re also just keying into something that’s important for Coinbase and just for this space, because of its volatility is we’re starting more and more to test for resilience. So we actually have a presentation component of the final interview for most kind of senior folks in the company. We’re asking them to come up with their stories of grit, resilience, and so on. Because you’re frankly just not going to make it, here or in this category if you don’t have it. It’s just you have to be able to kind of not care that your category is not cool that year. And people are texting you and saying like, I hope you’re okay, how are things going?
We’re so focused on the future. I mean, this is Brian, Brian loves a winter, because it just helps you focus. And he doesn’t like all the hype and exuberance, over exuberance sometimes, of these categories. I think it’s just this funny thing, where there’s a huge disconnect sometimes from like the public perception and how we actually feel inside about the business and the opportunity. So it’s just one of those funny things. Those are the texts I hate the most, by the way.
Hans Tung 22:06
I know a lot of what I mean, but well, when you’re focused on execution. It just like, yeah, he just don’t know what’s going on. But I’m not gonna have time to do, I’m gonna focus on the work I need to do.
Rita Yang 22:20
You’re saying cryptos are not just one thing. It’s three things. It’s a new kind of investment, a financial system and an app store. For people who are completely new, or just know a little bit of crypto from the headline news, can you elaborate on each one of them and help us understand a little bit more?
Emilie Choi 22:40
Yeah, and just for context, I think this analogy helps as well. I think for people who know, Web 1.0, Web 2.0, or 3.0, Web 1.0 was about read only, it was the original instantiation of the internet. And it was like I would read a static webpage about the weather or sports. Web 2.0, as we know with the social web, it was about the social connection, social networking, the interactions we have. So it’s read and write.
The way that we think about Web3 is that it’s read, write and own. So it’s all the components of Web 2.0, but it’s also that, the user has a stake in the future of the Internet, right. So we talked about the decentralized web and how crypto can make this possible. An example of this is just tokens that you’re not necessarily contributing all of your content to Facebook, without getting some ownership in the next media platform, or whatever it is, like you’re also benefiting from the upside of that. And then I think, just to your point about the Coinbase product strategy, so we have cryptos as investment. And so we think about that as like the top of funnel and the bridge from fiat to the crypto economy. That’s our core bread and butter.
We think about crypto as a new financial system about financial tools and services with crypto that are just done way better and Coinbase is the center of this primary financial account in the crypto economy. We want to let our customers access DeFi protocols. We have first party financial use cases like Earn, Spend, Stake and Borrow. This is also where we’ve made kind of early investments in companies such as Compound, Celo and others.
And then the third pillar of this, which is the future kind of outlook for crypto is a new form of technology platform, is an app platform. This is about the whole ecosystem. So it’s how can we serve as third party apps inside of our products? We know that digital tokens are going to make it easy for people to create and share NFTs and earn income and carry everything with them across different apps and digital worlds.
One thing that Brian’s very excited about is decentralized identity. You can sign into any app and actually own your identity and port it. And then we most recently launched our DAPP marketplace and this is like a DAPP – decentralized application browser with the goal of enabling participation in Web3. So we have a lot of opportunities. And I think that the challenge of our businesses is we have no dearth of opportunity. So we have to just think about how do we have the 70/20/10 model where we invest 70% of our resources against for 20% against strategic adjacencies and 10% across venture bets that we think and I don’t mean by Coinbase ventures, I mean, venture bets organically, that we think are the next big ideas in crypto, but we want to be careful about them, because they’re not proven yet.
Hans Tung 25:21
Yeah, I mean, it is becoming a center or a centralized exchange within the increasingly decentralized world, that people need to find home or ecosystem restructures kind of navigate it makes sense and feel secure in the process. Is that an oxymoron as being a center of increasing distance, right, a world for those on the outside looking in? How would you describe the increasing relevance and importance of Coinbase in this world?
Emilie Choi 25:52
Well, I think if you think back to the core kind of value props that we offer, which is like trust, safety, ease of use, we were always the kind of bridge from fiat to crypto for the world. And I think that our core bread and butter is that retail use case where you have a customer who comes in and their initial use case might be something like they want to buy and sell Bitcoin and Ethereum. Over time, what we want them to get exposed to is all the other interesting features, assets that might exist. Maybe they want to own another asset and learn about it through earn, perhaps they want to start staking their assets to earn some type of return on their, on their assets, and so on. And so, you can see that being that primary account in the center of the crypto economy, and then exposing them to more and more is how we kind of build this interesting suite of products around them.
Hans Tung 26:51
I feel it’s a little bit of Netscape, a little bit of Android and this little bit of different things, and also Web3 with token.
Emilie Choi 26:58
And I think the other part of this is, there’s always these funny religious debates in crypto about centralization and decentralization, like, you can’t get to this utopian decentralization unless you have a path to it over some navigation, like your first experience with Coinbase, for the first few years might be the standard, retail brokerage, but over time, perhaps you become more empowered by the Coinbase wallet, because you want to own your private keys and you become more sophisticated. And you want to have more autonomy over that. And so I think that’s why we’re trying to kind of make sure people understand that full use case.
Rita Yang 27:35
And Emilie, you’ve done a lot of M&A, both at LinkedIn and Coinbase. Had the deals in the crypto world slightly different? Is there any burden of success you have to shake off from your previous success?
Emilie Choi 27:48
I mean, I think that one of the biggest interesting differences when I look at like acquisition now. When I used to look at acquisitions ever before in my career, I would be like, go to their LinkedIn profile of the founders, look and see that, okay, Stanford CS, like there were these parameters. Okay, check the box, oh, they’re connected these people like I can, I can ping them and ask them for… A lot of crypto is decentralized, and you have these brilliant, brilliant people. That’s part of the reason that we went remote first, because we wanted to be able to access the best talent in the world, regardless of where they were, or where they went to school or anything like that. And so you just have these incredible founders, they can be very young, they don’t necessarily have the same, you’re looking at the GitHub repositories, you’re tapping into other different data sets that help you hone in on how successful you think their company is going to be, and how great they are and how they work. So it’s a new learning. And I think it’s an exciting one, just to go out of the box thinking.
Hans Tung 28:50
Yeah, you’re someone who are both inside in Silicon Valley and at same time a globalist. How do you see Coinbase eventually expand more globally, going off to other markets, big emerging markets as well?
Emilie Choi 29:01
Yeah. So we have a three-pronged strategy with building buying and investing. Sometimes those are not mutually exclusive in certain markets. For example, in India, we have an organic offering. We have some regulatory overhang that we’re dealing with because there hasn’t yet been total clarity from the Indian government. We’re also investors in the two biggest Indian exchanges and brokerages, and we’ll continue to forge a path there. We have a great strong business in the EU today. We want to continue to expand that with more products and services there. And then we want to go big in Asia, we think that there’s a huge opportunity there and a huge propensity towards crypto. And I think that one of the things that we’ve talked about historically as a company is just that we really want the US government to embrace crypto, because we think they’re just similar to the entrepreneurship and innovation that has happened in Silicon Valley. Like we want the US to be a crypto hub, there’s a huge opportunity A lot of the activity, however, is happening offshore because of the lack of regulatory clarity. So we’re also going to want to take advantage of that without having that substantive kind of clarity from the government. I guess, crypto to me at the highest level is a global phenomenon. Our mission is to increase economic freedom in the world. And we can’t do that without being expansive across the globe.
Hans Tung 30:24
Yep, completely.
Rita Yang 30:26
That’s a very important role that crypto plays in the global developing world as well. Would Coinbase ever launch its own public chain? That’s a question that a lot of people have been asking.
Emilie Choi 30:38
You know, I never say never. I think that the reason that I joined Coinbase is I love that it was a platform. And I think that whether it’s things that we own, or things that others build, we are the platform for. I think we could be agnostic to that. I do think there’s an interesting question about a company owning a chain. And like the centralization or decentralization question, they’re like, how did that all manifest? It’s too early days to figure out the right way to do that. So I guess the answer is never say never. But it’s not something that’s kind of a priority for us at this moment.
Hans Tung 31:12
And you mentioned regulation earlier, obviously, this is a big topic. There’s still a lot of skeptics out there who feel that how can central banks allow the value of their currency to be impacted in a way that they cannot control? In some of the governments in Asia, as you know, have shut down on crypto, unfortunately drive a lot of talent out of those places to other regions around the world that’s more friendly. It feels like not all government are lined up on this, there’s always gonna be governments who are willing to be more open and allow innovation to happen. How do you see the regular environment evolve over the next five to 10 years? Yeah, maybe too far down. But you know, next five years, for example.
Emilie Choi 31:54
Yeah, I think that it’s hard to say with certainty what’s going to happen. I think, ultimately, we’re going to support very smart Web3 regulation. And we’ve been talking about it with government leaders for a very long time. One of the things that I would say is, in general, if you’re fearful, it’s kind of like the Steve Jobs thing where he was like, cannibalize or be cannibalized. It’s like, you can try to clamp down on it. But it’s funny how these things find a way of propagating in other ways or other regions, if you try to over constrain it. Instead, look to where the positives could come where the where the win wins could come. The simplest version to me is like, okay, we have an incredible fiat-backed stable coin, in USDC, that Coinbase and circle partnered on with, you know, within our entity called Center, that to me is actually safe, it’s backing the US dollar. So I don’t see that there’d be any kind of concern with that kind of a thing. I think that they should be focused on things that have proven to be very difficult, bad experiences for customers, making sure we’re protecting customers. But that feels like we’re all aligned on, we’re all aligned on making sure we offer the best products for customers and are driving innovation on Web3 globally.
What’s interesting is that the UK and EU have been working on the most comprehensive regulatory framework in the world right now. It’s called the markets and crypto assets regulation. And we think that’s going to provide important legal and regulatory clarity across 27 countries. So we’re actually very excited about this harmonized single set of rules that the EU will have. My guess is the US will follow that in some way. And we’re working very hard to make sure that happens. But you have to realize, for Coinbase, we can deal with all of this crazy kind of loopholes and stuff. We have a large regulatory team, we have a large policy team, we have a large legal team, we’ll navigate through this, we’ll push through it, we’ll deal with it, but it harms the whole ecosystem when we have to do this, they can’t afford to navigate this. So we want this to be a great grounds for innovation and entrepreneurship and sandboxes that we can plan. Otherwise, you would have seen other equivalents in other categories, like self-driving cars and stuff never have ever taken shape if they had been overregulated from the beginning, we just have to think about the analogies
Hans Tung 34:25
And where some governments retract or stay back, those are willing to do it like the EU is doing. They’ll have much bigger role, how this part of groundwork will shape up how the future will unfold. I just think this smart government should be more active in doing this and be able to help to shape of what it will become.
Emilie Choi 34:48
Yeah, one more point on this, like Sam Bankman-Fried recently testified that I think 95% of FTX activities is happening offshore. You want some taxpayer money, just think about infrastructure to optimize. It just feels like very short sighted in terms of those regulators who want to clamp down.
Hans Tung 35:10
Yeah, if given the volatility in the world, more people will want to have asset diversification. So the need for more of this is definitely there. And you might want to tax them and get some additional revenue stream for yourself and play a role in shaping this.
Rita Yang 35:28
Yeah, you can’t put it back. So for that 10%, Coinbase, or you are investing in looking at the more innovative things that are happening within the ecosystem, What are some of the most exciting businesses or Web3 projects you are looking at?
Emilie Choi 35:44
We’re excited across the whole suite of Web3, I would say that DeFi is a very big opportunity for Coinbase and for the whole industry, it’s just the total market for the DeFi space is now I think, more than 128 billion, we’ll have to check that given the volatility of the markets. There still, though, as we’ve talked about, just lots of challenges in terms of usability and ease for developers to participate in building DAPPs. And our whole goal at Coinbase is to bring DeFi to the mainstream and to integrate DeFi more closely into the Coinbase wallet and main app. So we’re just trying to identify some of the absolute best founders and companies in those spaces. Then I think, infrastructure in general is just gonna be super important. Fred Ehrsam, our co-founder, and he’s at Paradigm now, he recently did this incredible tweet storm about how back in the days of the Internet building like it was just a different era. So nobody’s talking about TCP IP on like social media channels, and going through the trials and tribulations of like, what, what was working and what wasn’t, and what was scaling and what wasn’t, and so on. It was just so interesting how this is happening, infrastructure is being built, and it’s all being kind of broadcast. And so there’s this excitement and enthusiasm and sometimes overhype. And then there’s also this, like, gleeful battering of it as it’s going through its development and so like, again, but we’ll take advantage of those opportunities when others are haters and think that nothing is here. .
Rita Yang 37:14
So DeFi and infrastructure. Yeah, same question for Hans obviously GGV have made a few more bets in the Web3 space now. And how have you seen us evolve since the last time we talk about this? It’s in January of this year, right.
Hans Tung 37:33
Well, even early on when we first met Brian, it was 2016 through Semil Shah at Haystack, you know, huge shout out to him for bringing this to our attention. We missed on Brian at YC it was good to pick up a couple years later in the batteries was already a billion. Internally, he’s like, Oh, my God, you know, two years, 1 billion has high valuation. But we just thought, hey, it’s something’s happening. And we liked his Airbnb pedigree in we’re investing Airbnb. So as Hey, that’s, that’s continue investing in smart people. So Jeff, Glenn and myself thought it would be smart for us to even write a small check that to learn and grow. And just seeing what Coinbase has become is amazing. And then when they’ve done a lot more made more bets in this area. And during the winter, it’s the best time a lot of other companies in this space that Emilie mentioned, got funded there in the last winter for crypto. So I think in this crypto winter, a lot more will be funded, there’s still gonna be a lot of people being skeptical, and so forth out there, I get that. But now with the lower valuation and more, we are seeing more experienced operators doing startups now in crypto space than before. 2016,17,18 didn’t have the kind of talent that we see today. So I’m very hopeful that during this winter, a lot more companies will get funded and built, and just can’t wait to see that happen. Yeah.
Emilie Choi 38:50
And I think like when you look at Brian and Fred and the bravery and courage they had when the crypto winters were just so much worse back in the day when they found it and we’re building the company and it was just an super unproven category and lots of haters and like bank relationships being shut down and stuff, the persistence they had and like the belief in their idea, you want to look for that in any of these types of founders. Like I remember talking to Devin Finzer at Opensea about. I was like, how did you push through building Opensea when there were years where, you know, I saw your user numbers, they sucked. And he was like, honestly, I could have kept going forever. Like, he was like, I just knew that this was going to be important. And I knew that it was going to come to fruition at some time. So I didn’t care nobody cared. I just believed in it. And that’s it’s just such a unique that’s why I love founders.
Rita Yang 39:48
So fascinating. Founders some sometimes strike me as artists, they have this unique vision of the world. Just that conviction. It’s very invigorating.
Emilie Choi 39:57
At Warner Brothers, they call the talent, it’s like the talent, it’s like, they’re just going to have these creative differences. They’re going to have certain personalities that are different, but they’re the ones that bring the magic to the whole thing.
Rita Yang 40:10
Yeah, absolutely. And that’s why we love what we do as venture capitalist. Emilie, you mentioned a lot about the very, very important lessons you learned along your career. I want to get a little sneak peek into your daily life, how do you manage your time and energy?
Emilie Choi 40:29
In general, this is like 10,000-foot level, I do things that I love to do. So I can be tired beyond belief, just because I haven’t gotten a lot of sleep, or I’m just working around the clock. But ultimately, I’m very motivated by what I do. And so that naturally drives me and excites me to be doing what I’m doing. The most important job I have is to just make sure that we are hiring the absolute best people to lead the company. So a very large portion of my time is spent on recruiting and managing people. So one on ones with the folks that report to me or even don’t report to me, and checking in with them. And then also just recruiting top talent. Even if it’s top talent that I know, we might not get for a year or two, I want to spend my time in cycles with them so that we build rapport and overtime at the right time I can get those people here. And then Brian and I spent a lot of time thinking in the exact time and I. Team and I spent a lot of time thinking about how we can just work more effectively together, we have a very large suite of products, which is very different from most companies at this scale. And so making sure that we have the right frameworks, and whether we’re thinking about things to get that things done as efficiently and effectively as possible is, is where a lot of my energy is spent.
Hans Tung 41:42
I can’t help but feel like Coinbase is like where Facebook was in its development cycle back in 2008 2009, kind of in that time, when they’re like, Ah, well, why is Facebook worth 20 billion or 10 billion, that’s nuts. And then obviously, the rest is history. It’s just the parallel that kind of similarity, it’s just, they’re about an ecosystem that’s going to get bigger and bigger.
Emilie Choi 42:05
And that’s exactly how we feel, Hans. Like the company that Brian and Fred built, and that I’m hopefully carrying on with Brian is a technology company. It’s a technology company of the future and it’s okay, if 99% of people don’t fully get that right now. It’s okay if people don’t believe in our category and don’t get it, because it actually helps us to have our heads down and build and build and build. I still remember, I was at a dinner with JP Morgan after the Facebook IPO bombed. And I remember Jimmy Lee, one of the senior execs at the time, he was like, we’re gonna look back in five years and be like, oh my gosh, like, wow, what we didn’t know about Facebook at that time. And I totally agree with that. These are great opportunities for us to just build, build, build.
Rita Yang 42:54
Last question. And before we go into the quickfire round, will you share a time when you showed grit or resiliency in your career or life? This is the same question you asked during the Coinbase interview, right?
Emilie Choi 43:09
I think that this is just a general thing. I took the lessons given to me generously by people, like Jeff, Reid and Kevin, and I internalize them, and I implemented them. So it would be that maybe I didn’t necessarily feel like I should have a seat at the table for certain conversations. I remember once I was sitting in the back of the room, and Jeff came up to me later, and he was like, I never want to see you sitting in the back of the room again. So it was forcing myself to push myself beyond my comfort zone. Honestly, joining Coinbase was really pushing myself out of my comfort zone. I knew LinkedIn so well, I had been there for nine years, I knew everybody, I knew how to operate, whatever, I could have stayed there forever. Or I could have taken a very commensurate type of job and done the same thing and another company and another company. I feel like taking this, this lateral move in a new category and a new company that I thought was doing something interesting was pushing myself way out of my comfort zone.
Hans Tung 44:11
Yeah, I know that was the last question, but I can’t help asking one more, which is as a both as a women and also as an Asian American, how do you overcome those challenges inherent that are sometimes not even be out there, just kind of bias. So you know, it’s in there, even though people are not conscious of it. It’s so hard for minorities to succeed in Silicon Valley, just very easy to sit in the back room and just crunch my numbers analysis is great. You take it, you present it, you run with it. And I don’t want to drama that comes with talking about something that’s too controversial, and just want to kind of do my work. Help people break through that. How do you break through that?
Emilie Choi 44:49
You just don’t even think. This is there’s a Stewart Butterfield thing and this is about performance reviews, but I applied to everything I do. So he said about performance reviews managers hate getting performance reviews. And so what happens, you go into the room and you start with, I’m gonna give you the three things that you’re doing really well. And like everybody’s waiting for the constructive feedback. But we all play this stupid game where we’re like building up to the other side, because we don’t actually want to get to it. And thing was that people are like horses, they smell fear. So just fricking move forward. And I always just start with the constructive feedback, like, I’m just like, just rip the band aid off, give the constructive feedback, and then you’re good. And similarly, it’s just like, maybe I dread a talk, I’m going to have to go to or whatever. Maybe I dread having to be the primary face of something that I don’t feel comfortable, don’t even worry about it, just push forward.
Hans Tung 45:42
Yeah, I tried to give some advice, people said, well it helps that you’re six feet four. You know, you must be showering me that’s how you can say that. I’m stuck here. I’m a great engineer. How do I break through that? I don’t know how to respond to that. So I’m always looking for advice for others who have gone through some experience to figure out how to help others who have that fear, but just uncomfortable at breaking it.
Rita Yang 46:06
A leap of faith. Okay, we got two minutes. So we’re gonna run through the quickfire question really quickly. What’s something you read recently you would recommend?
Emilie Choi 46:16
I was just on vacation and read Crying in H Mart, which is, it’s a memoir of a woman who’s half Korean half white, whose mother passed away and I’m half Korean, half white, my father passed away one year ago, and just the observations of somebody who’s grown up in like two different cultures. It was just very touching to me. So, I was very moved by that I would recommend it.
Hans Tung 46:43
Now you make me want to read it myself.
Rita Yang 46:47
Okay, what’s a habit that you’ve had that changed your life?
Emilie Choi 46:51
This is one that I learned from Jeff Weiner, which is make sure you block out time, dedicated time that nobody can touch unless it’s an emergency. And the reason that I do is I have a little bit at the beginning of the day and a little at the end of the day, is, in general, I’m switching contexts 100 times a day, going from a product meeting to an operational meeting to an interview to a one on one, it’s too much for somebody to consume, and then not take a step back and think about how do we get the work done. So I highly recommend that for somebody just make sure that you think about the appropriate amount of time you want to block per week for yourself to be able to get work done in a much more productive way.
Hans Tung 47:30
You’re better than me, I need another half an hour, sometimes during the day, even early afternoon. That’s actually the weakest, even a catnap, even just 15 minutes makes a huge difference.
Emilie Choi 47:41
Oh my god, it’s a game changer.
Rita Yang 47:43
If you could spend one day in someone else’s shoes, who would that person be and why?
Emilie Choi 47:48
It would be Elon Musk. And I think there’s so much just interesting stuff about him. I’ve told you that I love founders. But there’s parts of it where I just wouldn’t want to understand how he took the risks he did in these incredibly difficult, thorny, thorny industries where no rational person would have ever tried to build a business around them. What keeps him going every day, even in the face of just a lot of noise, how he thinks about his interactions publicly and privately, and all that kind stuff, like so many interesting things. So I would love to walk in his shoes. That would be cool.
Rita Yang 48:27
So cool. Thank you so much, Emilie.
Emilie Choi:
Thank you, Rita. Thank you, Hans.
Hans Tung 48:35
Super fun. Thank you.
Rita Yang 48:37
Thank you. Bye bye.
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