Faced with the legitimacy challenge they currently face, companies are often tempted to react defensively, bow to the zeitgeist, and hope for the best. Often, the only solution is to build a mask to protect themselves. The problem is that it creates a chasm between who they really are and who they pretend to be, which only increases suspicion. The story of Coinbase, a U.S. startup that found itself in the spotlight, shows that a radically opposite approach of asserting one’s uniqueness is not only possible, but pays off.
In September 2020, Brian Armstrong, the high-profile CEO and founder of Coinbase, a bitcoin exchange platform founded in 2012, published a blog post defining Coinbase as a mission-driven company that discourages employee activism and internal discussions about political and social issues. In a key sentence, he wrote: “We don’t get involved here when issues don’t relate to our core mission because we believe that impact only comes with focus.”
The post was very poorly received. Sixty employees left the company in protest, and Armstrong was attacked in the press and on social networks for his lack of interest in political and social issues in the midst of the case of George Floyd, a black man killed by police a few months earlier. With corporate social responsibility (CSR) seen as an imperative for businesses, Armstrong’s decision was scandalous, and many analysts and pundits predicted he would go bankrupt. He didn’t. The storm didn’t blow over, and the company continued to grow. A year later, in a series of tweets, Armstrong looked back on what had happened and concluded that taking politics out of his company was the best decision he had made in his career.
The decision, however, was not an obvious one. In fact, it was a reversal. Armstrong had long believed that an entrepreneur should be involved in societal issues. After Floyd’s death, he publicly supported the Black Lives Matter movement and encouraged political and social discussion within the company. But the consequences quickly became apparent: divisiveness, tension and, most importantly, distraction for employees who spent more energy discussing politics than doing their jobs. And for what effect? None, Armstrong concluded. Realizing the danger and futility of the exercise, he had a complete change of heart. He concluded his blog post by writing: “In short, I want Coinbase to focus on fulfilling its mission because I believe that’s how we can have the greatest impact on the world. We will do this by playing like a championship team, focusing on building, and being transparent about what our mission is and isn’t.”
There are four lessons from this story.
1. Focus – Focus on what really matters to the business. Armstrong made it clear that Coinbase would focus on what it could have a real impact on and ignore the rest. It wouldn’t pretend. “Focus on building,” he insisted. Coinbase is a startup, a small, fragile company, and what it really cares about is establishing its solution in a sustainable way and building the best company it can. That’s what strategy is all about: identifying your company’s core challenge, focusing on it, coming up with a uniquely creative answer to that challenge, and ignoring everything else, no matter how important it seems. Steve Jobs emphasized this in a famous speech shortly after saving Apple from bankruptcy in 1997: “Focus means saying no. And you’ve got to to say no, no, no, no.”
2. Discipline – Stay focused on your response to the core challenge. Responding to the core challenge takes time and requires an iron discipline not to be distracted. Don’t jump at everything that moves, resist the sirens of the media, and speak out on issues where you can.
3. Determination – Don’t give in to attacks, especially public ones. By banning politics from the workplace, Armstrong went against the current doxa, the false evidence that a company must be politically and socially engaged. Ignoring the outraged reactions, he focused on his mission and drew energy from the many messages of support, including from his own employees, which he received mostly in private for fear of retribution from their activist colleagues. Indeed, in the speech quoted above, Jobs crudely observed, “If you say no, you piss people off, and they’re going to write s*** articles about you”. Armstrong offered generous severance packages to employees who were uncomfortable with his decision, but he stood firm. Interestingly, while some employees left, he was able to recruit many others who were tired of the politics, infighting, and distractions of other companies and were looking for a place to work in peace. Determination, then, means not confusing what is visible and noisy – a few activist employees who are spread by journalists and social networks – with what is not – all those who, on the contrary, don’t want to mix the two, but who keep a low profile because, by definition, they are not activists.
4. Authenticity – Be fully yourself. To work, the focus must be based on a clear awareness of the organization’s identity. This identity was determined by the unique creative responses to the successive challenges the organization faced in its early life. But awareness is not enough. Identity must also be clearly stated and embraced so that each stakeholder (founders, employees, and partners) knows where to stand. Implicitly, Armstrong’s message was: “There is no politics in the Coinbase workplace because it’s not who we are; get over it!” Everyone wins: activist employees can go elsewhere and be more effective, and non-activists can get on with their jobs. By asserting and embracing its identity, the organization drops the mask; it becomes fully itself, and thus can make a real impact on the world through its success, in Coinbase’s case by building a bitcoin payment platform.
Being Yourself: The Key to Competitive Advantage
The story of Coinbase offers valuable insights into strategic principles that resonate in a landscape marked by challenges to corporate responsibility. Brian Armstrong’s resolute decision to assert the company’s unique mission in the face of significant criticism highlights the importance of maintaining integrity and clarity in organizational identity. As Armstrong observes: “The biggest lesson I’ve learned from this ordeal is that if you think something is the right way to go, it’s worth talking about, even if it’s controversial.” By sticking to its core challenge and staying focused on its mission, Coinbase defied prevailing norms with fruitful results. Armstrong’s journey underscores the notion that embracing authenticity and challenging convention can lead to competitive advantage and meaningful impact. This narrative reinforces the concept that strategic success depends on the courage to stand out, assert identity, and unwaveringly pursue the organization’s core mission, even in the midst of contentious debates and shifting societal dynamics.
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🇫🇷 French version of this article here.