Startups and Corporate Culture

There's a few stories I've been hearing about from a variety of sources recently about Coinbase's dual nature. On one hand, we have Brian Armstrong on X talking about how Coinbase is building a startup culture - on the other, we have many employees who feel undervalued, underappreciated, and not excited about their work looking to leave Coinbase.

In small orgs, “fun” hacks/sideprojects for devs shape large parts of the organizations future. In large orgs, often these devs aren’t even allowed to build these “fun” hacks.

Coinbase - on one hand - has a generally positive sentiment now on CT when looked at from the outside - largely in part because of #StandWithCrypto and folks like Jesse Pollak and their work around Base. Internally, however, exists a very different sentiment.

Some examples of things I've heard:

"I interviewed at Coinbase because I've been full-time Web3 for a couple years now and love everything Coinbase has been doing these days. My interviewers knew absolutely nothing about crypto - they did not understand the difference between a normal wallet and a smart wallet. Eventually I was rejected for not having the skillset for the job."
"I've been building in crypto for 5 years, and joined Coinbase 3 years ago. They asked me for my team preferences and I listed a few that work directly on crypto stuff. When I joined, I was placed into a random team that does absolutely nothing related to web3 or crypto. My peers don't understand crypto at all. My manager told me I'll be able to shift teams - but after 3 years of asking different managers to let me shift, my requests keep getting denied because "the company needs me here". I'm actively interviewing looking to leave Coinbase now - I just cannot do this anymore."
"My team manages some major internal tooling for Coinbase. Without it, the company becomes open to massive lawsuits and our product is crucial to legally keep the company running smoothly. After the layoffs, I was the only person left on my team and every other engineer was fired - and all their work was put on me. My work increased to 70-80 hours per week - and Coinbase doesn't pay overtime. After a few weeks of that I obviously started getting burnt out - but we had a promotion cycle coming up and thought I'd at least be considered for that and get a pay bump. I did not end up getting a promotion citing "there is no business need for people higher than your level here". I spoke to my division head about this saying if I'm being forced to work 70-80 hours per week, for something as crucial as our project, that is proof there is a business requirement to either have more people on the team or at least give me more money. The division head straight up said "You need to think for yourself. The company thinks for itself. I would recommend you to look for opportunities outside Coinbase". They are not even trying to retain talent anymore.
"I've been at Coinbase for 7-8 years now. I joined Coinbase thinking I'll learn about Web3 - but I didn't really learn anything. Recently I've been spending some time building projects on the side after office hours to teach myself, and that ended with middle management putting me on a PIP, when I told my manager about the cool new things I've been learning about and building, saying I should use that time to work more on my assigned tasks and get them done quicker."
"It's so weird seeing Base and Coinbase on my CT timeline all day. There is so much politics and so many people feel underappreciated. Folks who lucked into the "right" team, regardless of their past experience, are so egoistical now, when I or other people I knew who WANTED to actually work in those web3 teams just had bad luck and got placed into shitty teams where we don't work on anything exciting."

On the flip side, I've heard from people who had no web3/crypto background got placed into heavy web3/crypto teams, moved up the ladder a bit, and then quit Coinbase to go join exciting startups.

This isn't a problem that only happens at Coinbase - most big tech companies struggle with this. Internal talent has to go through a ton of barriers to try and change teams so they can work on what they actually care about, and actually good talent often just ends up leaving instead since that is easier.

A large part of which team you end up at in all big tech orgs is so heavily luck based. If you don't luck into joining a team that shares your values - you get rekt.

Outside Coinbase as well - another very relevant example these days is Arbitrum.

Arbitrum Nitro - their rollup stack - was initially a weekend project for a dev on the team. It was so impactful it ended up changing the entire direction of the entire company - and is now a massive focus of the entire organization.

Stylus, the WASM execution environment that enables EVM+, was an internal hackathon project at Arbitrum - and is again now a crucial part of Arbitrum’s strategy long-term.

But now Arbitrum is growing. They’re already over 100 people, and hiring for a lot more positions. Been hearing from folks who’ve been there a while talking about how they’re seeing the company culture shift. Middle management is coming in, and they don’t really understand, or appreciate, what these devs are building in their free time. It hasn’t started happening yet but I wouldn’t be surprised if a couple years from now we hear Arbitrum devs getting put on PIP because they were hacking on the next Nitro or Stylus instead of their Agile Scrum Board Tasks.

Shopify's Toby said that the Shop App - an app with hundreds of millions of users today - was an internal hackathon project as well.

Smaller companies with tight-knit engineering teams and a heavy building culture can knock these successes in the early days - but then grow, add middle management, add layers of abstraction, and then wonder why they cannot recreate that startup culture.

Seeing Brian tweet about how Coinbase is building a cracked crypto-native dev team and improving the internal startup culture seems a bit sad. I think before trying to hire a bunch of Solidity devs externally now, at least look for people they already have in the org with those skillsets. The company gets what they want, and the employee finally feels valued and excited to work.

I believe both Brian and Jesse have good intentions. They’re both doing as much as they can in terms of getting builders, helping the company culture transform, actually being more onchain than ever in Coinbase’s history. I don’t think they intentionally are not looking to get employees with the proper skillset over to the Base teams - but imagine the layers of abstraction an L4/L5/L6 engineer at coinbase has between them and speaking to Jesse - at least 5 levels deep. Long before Jesse even hears about them, middle management has already shut them down.

The division head story where they said “you must think about yourself” rings so true here. The middle managers who don’t understand web3 don’t want to seem like engineers are leaving their team. If they put people on PIPs or fire part of their team without promoting people - they just saved the company money! That’s awesome! Maybe the manager gets a promotion next cycle!

But all of this hurts the org overall. Good talent gets frustrated and leaves. These discussions happen behind closed doors, and friends of those employees get turned off from ever wanting to join Coinbase either.

I want to see Coinbase succeed, I want to see the culture shift to being more onchain, and I want to see many current employees who are planning on leaving Coinbase right now because they feel like they aren’t appreciated actually feel appreciated and assigned to teams where they actually want to work instead of being forced into teams they don’t care about.

But - wishing is easy. I don’t think this happens without a major re-org of the employee hierarchy within Coinbase - and I don’t think that’s a major priority for them right now.

At the end of the day, it’s just sad to see. I have a hard time recommending devs with a lot of passion looking for full-time jobs to apply for orgs like Coinbase today because the chances of them actually ending up in a team relevant to their passion is so small. This is also why I don't recommend high potential young devs with a lot of passion to go for FAANG - they become bitter when they spend years building shitty internal tools with no impact.

You either die early or live long enough to become the dragon you set out to replace.