After 60 people quit, Coinbase is in the midst of a hiring frenzy. Insiders say the $8 billion startup is still attracting plenty of candidates despite the CEO's ban on activism.
Summary List PlacementCoinbase CEO Brian Armstrong created a firestorm in September when he announced that his company will not engage in politics or social causes and told employees not on board with that decision that they should leave. The policy, coming right before the highly charged US elections, looked like a whistle call which planted Coinbase not on neutral ground, but in conservative territory. Some felt the CEO was telling the liberal-leaning tech community that their social causes were not welcome at the company. When 60 employees took the generous severance package and resigned, outsiders speculated that Coinbase would have trouble wooing top talent to take their places. But the startup, valued at $8 billion and expected to go public sooner rather than later, has not been hurting for job candidates, according to two sources familiar with the company's recruiting efforts. Business Insider spoke to 10 recruiters, tech investors, and Coinbase competitors to get their observations on the memo. The company has since hired engineers, a director of HR, and two senior attorneys from the legal departments of Google (which had its own issues with employee activism) and Dyson (which faced political storms in 2019 when its founder advocated in favor of Brexit), according to company releases and the LinkedIn profiles of those hires.
There was an initial swell of people dropping out of the recruiting process, former employees previously told Business Insider. Other potential candidates passed on interviews at Coinbase because they said they disagreed with the company's new priorities, according to a source with knowledge of Coinbase's hiring process. But those consequences might not matter. "I think it will limit Coinbase's talent pool, but it won't stop them from growing and it won't stop them from being successful in the long run, assuming (Armstrong) doesn't do anything asinine," said one venture capitalist, who asked not to be named. And that's because there are plenty of candidates out there who are fine with the policy, or they are simply more interested in helping Coinbase build its cryptocurrency brokerage business, sources say. One tech recruiter, who requested anonymity in order to speak freely, said that candidates are "interested in the technology and the challenges that it brings" and not the "political aspects." Coinbase only needs 'enough' great talent Tech recruiters who work in venture capital, without direct knowledge of Coinbase's hiring pipeline, shrugged off the impact. They told us that clarity on the company's position is good for Coinbase employees and managers who can then respond to any potential violations. Armstrong's memo made his values clear, and his offer to employees that they either agree or resign with a generous severance allowed them to "opt in in accordance with their own values," said the tech investor.
In light of the decision @coinbase employees were asked to make by October 7th, I have decided to leave Coinbase. In my time leading Global Marketing, I have been fortunate to work alongside many great people and teams, especially our Global Marketing team. I wish all well! — John Russ (@JRussII) October 14, 2020
That kind of opt-in tactic has been successful before, a talent partner at a venture capital firm who spoke on a condition of anonymity, said. Five years ago, Zappos decided to flatten the hierarchy, eliminating job titles and chains of command. Employees could commit or take a severance and leave. "Two hundred employees opted to leave under that offer. Yet the company has now been around 20 years and has done well," the talent partner said. "One could argue that to have great attraction and retention, you only need enough great people who are drawn to your distinctive employee value prop." But companies that have done the reverse, and embraced social activism in these divisive political times, have found those values to be a powerful recruitment tool, too. Expensify, for instance, also faced backlash when its CEO sent an email to the company's 10 million customers in October urging them to vote for Joe Biden. The company lost a handful of contracts as a result. But the next day Expensify saw an 183% increase in job applications over the previous Friday, a company spokesman told Business Insider. Forty-three percent of candidates referenced CEO David Barrett's email. "I can't express how invested and locked in I feel working at a company that has the courage to speak out, regardless of the bottom line," Greg Schroeder, an Expensify employee, told us. The candidate pool is widening A company spokeswoman said Coinbase has around 150 to 200 job postings at any given time. The current crop includes several dozen openings across back-office functions like HR, legal, and financial reporting.
Coinbase is in a fortunate hiring position because of the coronavirus outbreak, Brad Warga, a partner-in-charge at executive search firm Heidrick & Struggles in San Francisco, points out. The company has said it will give job candidates the option of working remotely even after its offices reopen. That means it can replace the recently departed employees with cheaper talent in other parts of the country, who may feel less "entitled" to talk politics at work, Warga said.
Tech company: "Bring your whole self to work every day."[employees bring whole self to work]Tech company: "WHOA, we just meant your whole free time not your politics." — Chris Albon (@chrisalbon) September 30, 2020
Plus, while startups are hiring again, the economic havoc and layoffs at the start of the year means that there are more people searching for work than in past years. The Coinbase diaspora is headed to other crypto firms Meanwhile, many of the 60 employees who left are highly sought after, said one tech recruiter. One has joined crypto-backed marketplace Zora, founded by former Coinbase employees.
Next week will be my last @coinbase. It’s been a wild ride for the last 2 years, but it’s time for my next adventure.I will be joining some friends to help build @ourZORA. Stay tuned 🌜🌞🌛 — ʞɔǝɹq (@bstodghill2) October 9, 2020
A source at a US-based crypto exchange said it's seen an uptick in applications and referrals for current Coinbase employees over the last five months, compared to the same period last year. Traditional finance companies also want to glean talent from the crypto giant, said one tech recruiter because Coinbase is known for having a high bar for hiring. Plus, there are a lot of companies who want to bring in people who understand crypto and have established networks in the young field. Some finance companies are talking to former Coinbase employees even if they don't have a role open for a crypto expert yet, to "understand the market a little bit more and then see if they can build something out, maybe around them," the recruiter said. It's not just those who have left that are in demand. Employees who haven chosen to stay at Coinbase through the controversy are viewed as even more valuable, the recruiter said. Those who have remained at Coinbase have shown they "aren't going to jump ship for anything that happens." Other companies are looking at the ranks of those current Coinbase employees hoping to find people who "are sticking around, continue to get the job done, but feel a little bit uncertain maybe about how the business is operating," the recruiter added. Are you a Coinbase insider with insight to share? Contact Dan DeFrancesco via email at email@example.com or on encrypted chat app Signal at (646-768-1650). Melia Russell can be reached via email at firstname.lastname@example.org or on Signal at (603) 913-3085. Open DMs on Twitter @dandefrancesco and @meliarobin.
Read more: Coinbase wants to go public. Its CEO needs to change his leadership style first, insiders say. The CEO of Expensify sent an email to 10 million customers urging them to vote for Biden. Then his employees took the brunt of the backlash. SEE ALSO: Startup job candidates that are 'recession-proof' have a big advantage, according to the people who are hiring Join the conversation about this story » NOW WATCH: Why it's okay to eat the brown part of an avocado
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