Coinbase CEO Brian Armstrong says the exchange is now facing the unwanted consequences of growing its workforce too fast.
In a new statement, Armstrong says companies tend to become less efficient when they scale up, affecting their ability to focus on customers.
“While this trajectory is natural, it is not inevitable. Every great company, from Amazon to Meta to Tesla, found ways to retain their founding energy in conjunction with appropriate controls, even as they scaled to be much larger than COINBASE is today. Great companies maintain their insurgent mindset, for fear of becoming complacent and irrelevant over time.”
Armstrong says Coinbase will have to adapt aside from slowing growth and reducing employee numbers.
“That’s why we’re focusing on driving more efficiency at Coinbase. After 18 months of ~200% year-over-year employee growth, many of our internal tools and organizing principles have started to strain or break. So we’ve been digging in to identify the set of changes we need to make to help us succeed at this new scale.”
To remain efficient, the CEO says Coinbase will change the decision-making process of the company, incentivize product leaders, address inconsistencies and duplications in shared services, and reduce the maximum size of teams to 10 people.
Coinbase will also ban slide decks in product and engineering reviews as well as give preference to publishing product and engineering teams’ application programming interfaces (APIs) over conducting meetings.
“Coinbase’s success has always been rooted in an ability to operate efficiently with a startup mindset. Now, as we adjust to our new scale, we need to get back to the things that made us successful — to drive more efficiency and shake off the complacency that can creep into a bigger company.”
