Interview with Dan Romero, Employee #20 at Coinbase

This interview is part of a series revealing the stories of early employees from the most successful tech companies of the past few years. You’ll walk away having learned about what these individuals experienced, what they wish they knew, and the advice they’d give to others joining high-growth startups. Key takeaways are at the top and you can find the full interview below.

This interview is with Dan Romero who joined Coinbase in 2014 as the 20th employee and spent over 5 years leading functions including customer support, partnerships, operations, and consumer. 

Note: If you’re looking for an all-in-one solution to manage your personal finances, Compound can help. We can help you diversify concentrated stock positions, optimize company equity, plan asset allocation, and more. Sign up here and we’ll be in touch. 

Key Takeaways

• On building a skillset even if the product failed – “When I started at Coinbase my job was to find use cases for Bitcoin. For example, I tried to get merchants like Dell.com and Expedia.com to accept Bitcoin as a payment method. That use case didn’t end up working and I spent my first year not moving the needle at all. It was pretty frustrating. But as part of working on that, I happened to fall into a role that ended up being important: managing bank relationships for a crypto company.”
• On willingness to solve problems – “You want to be a weapon that your CEO can point at a problem and you get it done. I tried being as high leverage as possible and believed no work was "beneath me.”
• On leveraging resources – “In that first year, I probably had 50-100 meetings with different banks all over the world in order to get us 3-4 that were actually willing to work with us. A big part of how I got all these meetings was leveraging all the resources at my disposal. Some of it was through cold outbound, either through LinkedIn or via email. I went to conferences and met people there. And I also made sure to leverage our investors… I even took a crash course in fiat payments and spoke with various experts to understand the lingo.”
• On putting the company first – “If you actually just approach it from what benefits the business long term, it was pretty obvious that we needed to peel off responsibility from me and hire more executives. After all, you are an equity holder in the company. The startup's success should come first, not your personal ego.”
• Advice for other early employees at startups – “People overrate their title and sense of responsibility, especially when the startup they work for has experienced high growth. What you should really think about is how to build relationships with your colleagues. Be team-oriented and committed to winning for the greater benefit of the company. If you do that, your references will be stellar (for your next job, to be a founder, etc.).”

How did you discover Coinbase? 

I first met Fred Ehrsam (one of the co-founders of Coinbase) in college. Even though we ended up going on different paths right out of school, we both had an interest in technology. 

Fred first offered me a job at Coinbase in 2013. At the time, they had more demand than they could handle and needed help with customer support. While I hate to admit it, I didn’t do much research on crypto at the time and decided not to get involved with this “magic internet money.” I declined the offer and instead chose to work at a SaaS startup.

Over the next year, I started to become more intrigued by Bitcoin. I got so obsessed with it that I reached back out to Fred (a year later after he had offered me that first role) and told him that I wanted to quit the SaaS company and join in whatever role I could take. That’s how I started working at Coinbase as employee #20.

Did you ever work on something that didn’t work? What happened?

When I started at Coinbase my job was to find use cases for Bitcoin. For example, I tried to get merchants like Dell.com and Expedia.com to accept Bitcoin as a payment method. That use case didn’t end up working and I spent my first year not moving the needle at all. It was pretty frustrating.

But as part of working on that, I happened to fall into a role that ended up being important: managing bank relationships for a crypto company.

If you think about a business like Coinbase, it's an on-ramp from fiat currency into cryptocurrency. To do that, you need to do a bunch of things:

• Partner with traditional financial institutions and card processing companies to accept fiat payments
• Make sure that the transactions aren’t fraudulent 
• Give people cryptocurrency in exchange for their fiat current 
• (And hopefully, you don't have more fraud than what you’re giving out in crypto)

My job was to find the few banks in the world that were willing to work with cryptocurrency companies, but also have the ability to scale with Coinbase as trading volumes grew over the next few years. 

In order to develop these banking relationships, I had to develop a strong baseline knowledge of the industry that I didn’t have before working at Coinbase. 

In fact, having a baseline knowledge of industry jargon was one of the ways banks evaluated you to see how sophisticated the company was. They would ask things like, “How do you guys think about your BSA program?” and purposefully not mention that it was referring to the Bank Secrecy Act. 

It took me a lot of trial and error to learn about this. I’d go into the meeting and the compliance team would ask a bunch of questions that I didn’t have good answers to. I’d take notes, then go to the next meeting with another bank. After each meeting, I got a bit more educated to the point that I became enough of an expert myself. I think part of a steep learning curve is taking it on the nose a few times. Then, over time, you can execute these meetings effectively, communicate what you want to get across, and answer any questions precisely.

What’s a time that you had to hustle and utilize all of your resources?

In that first year, I probably had 50-100 meetings with different banks all over the world in order to get us 3-4 that were actually willing to work with us. A big part of how I got all these meetings was leveraging all the resources at my disposal. 

Some of it was through cold outbound, either through LinkedIn or via email. I went to conferences and met people there. And I also made sure to leverage our investors. I was able to get plugged in with Ribbit Capital – one of the first pure fintech VCs and an early investor in Coinbase. They introduced me to people in their network—other companies, nascent fintech companies, etc. and I even took a crash course in fiat payments and spoke with various experts to understand the lingo. 

How did you deal with rapid growth in the 2017 crypto boom?

Crypto had a big runup in 2017 and it turned out to be one of our highest growth years at Coinbase. Along with the growth came breaking points in the business. The two biggest problems – customer support and keeping the website up – were both very public and very embarrassing. I’d go on Twitter and all I’d see is people complaining about Coinbase. 

The thing I managed best during this time was stepping back and focusing on what mattered most. For example, if there are 5 things on fire right now, what’s the most important to focus on and how can we fix it as quickly as possible? The key to finding the solution was not thinking in multi-month timelines but instead making progress each week.

You want to be a weapon that your CEO can point at a problem and you get it done. I tried being as high leverage as possible and believed no work was "beneath me."

How did your role change as the business grew? Did you manage large teams or stick to being an individual contributor?

Part of the problem was that I had six or seven functions reporting to me during 2017, none of which I had any meaningful experience managing. I just knew a lot about how the Coinbase business worked. It felt good on a personal level – I was young and had a meaningful amount of responsibility. But the reality was that senior executives don’t want to come in and work for someone who got field-promoted into that position.

It's one thing to work for a founder. It's another thing to work for an early employee. So Brian and I had a reasonable conversation and it was mutual: we were going to hire executives to actually help build the machine—which meant me replacing myself and giving up a bunch of responsibility. If you actually just approach it from what benefits the business long term, it was pretty obvious that we needed to peel off responsibility from me and hire more executives. After all, you are an equity holder in the company. The startup's success should come first, not your personal ego.

By the next year, we had six or seven executives on the exec team that each represented one function. As an example, we hired an experienced operations team leader, Tina Bhatnagar, who had previously led large teams at Twitter and Salesforce. She was able to come in and build a world-class customer support organization in a short period of time. Her ability to translate her previous experience into a scalable organization was invaluable.

The sooner you can get on board with the fact that you will get layered by an executive as an early employee, the better. Demonstrate to the founder that you have a level of maturity where they will say, “okay, well this person clearly has the right approach to scaling. I'm going to continue to try to shift this person into the hardest problems.” This helps put you in the right position as the company scales versus fighting with the changes and being left behind.

What advice would you give to other early employees at high-growth startups?

People overrate their title and sense of responsibility, especially when the startup they work for has experienced high growth. What you should really think about is how to build relationships with your colleagues. Be team-oriented and committed to winning for the greater benefit of the company. If you do that, your references will be stellar (for your next job, to be a founder, etc.). 

You also should consider the brand halo you’ll earn by being at a successful startup. It’s a career accelerator. 

You have to think of your long-term reputation if you want to continue to play these games in startups. If you go to work for a really large company, that's a completely different strategy of how to move up the ladder. At a startup, you're not hoping to move up the ladder. You're just hoping that there's a giant tsunami that's lifting the entire startup along. Instead of making marginal gains, because the tsunami is so large, you end up way farther ahead in your career at a faster pace than you would ever have expected. You’ll have a brand halo from that early career win that will reap benefits for your entire career. 

Dan’s next startup, Farcaster

After working five years in crypto, I ended up developing a unique set of expertise at one of the most successful companies in a growing industry. This allowed me and my co-founder Varun (who also worked at Coinbase) to launch Farcaster, a decentralized social network, built with Ethereum. It's the best of both web2 and web3: it has the usability and speed of a web2 app with the strong ownership guarantees and permissionless innovation of a web3 app. We're building it as a protocol, just raised a round of venture capital, and are hoping to scale it over the next few years.

Final note: If you’re looking for an all-in-one solution to manage your finances, Compound can help. We can help you diversify concentrated stock positions, optimize company equity, plan asset allocation, and more. Sign up here and we’ll be in touch.