Every Startup Leader Should Emulate Coinbase (But Not In The Way You Think)
In late September 2020, Coinbase CEO Brian Armstrong published a manifesto entitled “Coinbase is a mission-focused company.” In that manifesto, he said, among other things, that Coinbase will not engage in any broader societal issue not directly tied to the company’s mission nor will the company advocate for any political causes not directly tied to the mission.
As a recruiter for years and now a workplace design consultant with my company Bloom, I think every startup leader should emulate Brian Armstrong’s manifesto. Just not in the way you might think.
Let us see your true colours
When Armstrong published that manifesto, the company received huge blowback, particularly around Armstrong’s earlier statements about Black Lives Matter and how the manifesto seems incongruent: right before the part about all-but banning political speech at work, he wrote about wanting to create a great working environment “regardless of background, sexual orientation, race, gender, age, etc.”
However, the recruiter in me breathed a sigh of relief reading this. Not because I think you shouldn’t engage in political discussion at work (quite the opposite), but because Armstrong showed his true colours. He made it clear that while his intention is to create an inclusive company — an intention I believe he holds sincerely — his actions will head in a different direction.
Finally, leaders at the company can stop pretending the company is willing to take action on issues that affect their employees beyond the narrow scope of a crypto mission. Since so many rights, for instance around police brutality or the SCOTUS brief suggesting marriage equality should be rescinded, have nothing to directly do with crypto, Brian Armstrong won’t do or say anything about it, regardless of his stated intention to create an inclusive working environment.
At least now we know.
The startup talent conundrum
Startups have limited resources. Recruiters have limited time. All of this means your employment brand — and the stand you do (or don’t) take on societal issues — does a lot of employment marketing for you. With that in mind, it’s strategically smart, to be honest about what actions you’re willing to take as a company. That way, talent can self-select in or out of the process.
In fairness to Armstrong, he followed up on his words with human-focused action. He offered a fairly generous severance package to any employee who felt the new direction of the company was not what they signed up for, and 60 employees took it (about 5% of the workforce) at the time of me writing this blog. Again, I think all startup leaders should emulate this.
The company made a stance but also recognized it may not have been the stance that employees signed up for. He gave a way out and made it clear you could take it or stay and “disagree and commit” to the new direction. Given limited resources at a startup, you don’t want to spend a dollar of salary paying for someone who isn’t committed to your mission. With that in mind, generous severance is well worth it in the long run for the goodwill you create as people walk out the door if nothing else.
Don’t get me wrong, I don’t think Armstrong made the right decision with his manifesto. But now I — along with others who might have considered working with Coinbase — don’t have to worry about it. This move may also bring new people into Coinbase’s candidate fold, as Armstrong was equally lauded and attacked for his stance. Whether the people coming into his candidate fold are the candidates he wants is another story, but at the very least everyone is going in eyes wide open.
Don’t build a fallacy
While some CEOs get some good social vibes and a lot of retweets with a bold pronouncement, it’s ultimately a net negative for everyone — the company, employees, and the CEO themselves — if they don’t follow up their words with actions. Being upfront with what you’re willing to do will not just help you with the talent side of the equation but also help you avoid the tension, attrition, and bad community reputation you’ll build if you lie.
That’s not to say you won’t face those issues for your stance anyway, as is somewhat happening to Coinbase. Being upfront about what actions you’re willing to take is not a silver bullet for business success, and you’re not entitled to success just because you were honest.
As a DEI practitioner with years of experience, I’ve seen first hand that banning political discussion will not help Coinbase create the inclusive environment Armstrong said he wants to create. That said, I respect him for being clear on the actions he’s willing to take. It means that I — along with many people — will likely choose not to work with him because we aren’t values aligned. But when everyone can make their own choice based on honesty and clear information, the startup world runs much more efficiently.