As a not-so-typical startup in the Valley, Coinbase is exploding with customer growth. The exchange now manages over 20 million customer accounts, which is nearly as many as Fidelity Investments and twice as many as Charles Schwab, according to a report by the Washington Post.
Also, in much the same manner that has spanned the history of traditional asset managers, Coinbase is spanning the entire vertical of investor types, from average retail customers to large hedge funds. As evidenced in a CCN report last week, Coinbase announced the launch of several software and custodial tools for institutional investors like hedge funds.
Principled Growth under Brian Armstrong
Much of Coinbase’s growth comes from steady leadership principles that CEO Brian Armstrong has put in place. He has been candid on his blog about the struggles he has faced running the company, with a recent post on hiring.
“Focusing on people is arguably the highest leverage activity to spend time on as CEO, since great people build great products, which leads to great profits (in that order),” he writes.
And since software is at the core of Coinbase’s business, Armstrong has principles for technology that are paying off. While other startups heed the principle of “ship fast, break things,” which has lately haunted Facebook, Coinbase believes in building software that performs key tasks with stability and scale.
The spike in cryptocurrency interest in late 2017, and thus the surging account registrations and transaction volume, put these principles to the test with strains on Coinbase’s infrastructure.
Armstrong highlighted the recent work of Tina Bhatnagar, VP of Operations and Technology, for taking action to support increased demand. A May 18 blog update outlines the work put in place over the past 90 days:
- Increased our support team by over 150%
- Decreased our average time to first response to < 10 hours for 95% of incoming volume today
- Because of these measures, we are able to resolve issues faster and have decreased the backlog by 95%
To cement Armstrong’s efforts for hiring and retaining good employees, Coinbase made the list of the Bay Area’s top places to work.
Despite criticism for being slow to list new coins and tokens, difficulties keeping the platform online during periods of market volatility, and allegations of insider trading with the launch of bitcoin cash on the platform, Armstrong hasn’t shunned the responsibilities of correcting the course.
The company’s success also comes from tackling the complexity of US trading and banking regulations. As CCN reported last week, Coinbase is rumored to be in talks with regulators to apply for a banking license. The end result Coinbase may seek is a national banking charter, which would preempt state-level financial regulations.
The product of the company’s efforts is that Coinbase has firmed up the legitimacy of not just itself but also the blockchain industry as a whole.
Images from Shutterstock