In an exclusive interview with Coinbase Chief Product Officer Surojit Chatterjee, Forbes talks about how Coinbase designs its products and touches on a number of important topics, such as how the company decides between centralization and decentralization, how it is preparing for the crypto winter, and what he has learned from the recent launch of its NFT platform. The future of Web3 is also talked about, and Chatterjee emphasizes how a new Web3 development platform built on top of Coinbase Cloud fits into this vision.
What would Coinbase’s process for making new products look like?
Surojit Chatterjee says that they think Coinbase is the most reliable and easiest to use. All of the things they do are based on these rules. The best way to build something that will last is to plan it out carefully, follow the rules, and follow the rules.” We have hired the best researchers and designers not just in crypto, but probably in tech as well. The simplest test I have is asking “Can my dad use this product?” The third thing is asking how do we create a bridge? And this is very important for us. If we look back, Coinbase started as a bridge from fiat to crypto, but now I think we are building a bigger and more beautiful bridge to Web3. Getting a billion users to cross over to Web3 is built into everything we do,” replied Surojit.
Has the crypto winter would have any effect on how new products are made?
Chatterjee thinks it would be a lie to say that it didn’t do anything. Coinbase’s staff and resources could not keep growing like they did in the summer. So, it needs to be more focused and disciplined on the inside. That has not been done by the team. Adds Surojit: “But at the same time, I find crypto winter is a great time to build because there is not the same kind of craziness of things just popping every single week. And you’re looking at all these different ideas, different companies, you don’t know which one is good. I think now the companies that are working in the crypto winter are building for the long term. This is a great time to build. I do a post every month on everything we launched in the last 30 days. And it’s been amazing just to see what the team has accomplished in the last few months, and how many very significant products we have launched.”
In the product development roadmap, it is talked about how something goes from a whiteboard to a real feature
Often, the first thing they do is try to picture what the future could be like. For example, they have a plan that says they want to connect Web3 to the rest of the world. The next step is to get specific ideas. These can come from anywhere. Every few quarters, Coinbase has an internal pitch day competition that is similar to Y Combinator. It accepts pitches from its own employees and puts a small amount of money into each one. They don’t know what good ideas are, so it’s hard. So, they like to try out many different ideas as long as they are in line with their main goals, which are to promote more economic freedom and connect to Web3. Because your customers are always talking to you, we get more feedback from them.
” Regarding resource allocation, we use a 70/20/10 framework for prioritization. Seventy percent of our resources go into core products–for example ones that are already generating revenue or have good traction; 20% goes to improvements and extensions of our core products, imagine drawing a concentric circle around the 70% allocation for a frame of reference. The final 10% is what we call venture,” “Surojit told Forbes.
But how does CoinBase really test products? During the process, a prototype is made, which may just be mockups, and users are asked for feedback. Surojit sometimes takes part in these conversations himself. After that, they will give it to every Coinbase employee, ask for their feedback, put the product through a beta test, and then launch it. We keep using them in beta mode even after they’ve been released, because they’re still improving and figuring out the best product-market fit. Their market for non-fungible tokens (NFTs) is a good example of this.
What Web3 uses get you most excited, and how does Coinbase Cloud fit into those?
In 2020, Coinbase had the DeFi summer, and in 2021, the NFT boom happened. The next one you’ll see is the Web3 spring or summer cycle. “Since the first time cryptocurrency was used, it was only for money, I get very excited when it is used for something other than money. I think that cryptocurrency will be used for everything, from social messaging to games and entertainment. NFTs could be included in this group, but they will be bigger. There could be audio or video in NFTs. Web3 apps could change everything about the internet as it is now. All of the biggest services, such as social media, video, streaming, and other platforms, are centralized “Surojit was added.
If you’re a game developer on Web3, what do you need to do? You need to first build a node. So that’s the initial step and that’s where Node, our Web3 app developer platform, comes in. Then you need to figure out okay, how do I access your currency? Or how do I help users to move their money from fiat to crypto–they need to buy something inside the game. They need to then store the game widgets they need so users can receive awards. That’s how I think about what we are going to be building as part of Node on Coinbase Cloud in the future.
the Web3 spectrum of centralization and decentralization
Chatterjee says that at their core level, blockchains still use decentralized compute data security models. None of those is going to be changed. They are making it easy to use blockchain. If every developer had to write their own node infrastructure, Web3 would never have grown as fast as it has. He thinks that 5 million developers are already using it, and that 20,000 of them use it every month. Last but not least, the Coinbase team wants to keep the Web3 infrastructure as a business from being centralized. And that is a key thing that sets them apart. So, they want to make product staking even more competitive. You could, for example, tell them to make sure that their share of the stakes never goes over a certain percentage. And that was a deliberate choice.
who is Brian Armstrong, the CEO?
Chatterjee says that Brian is a very good product thinker. Brian made it clear right from the start that their main goal was to be the most reliable and easy to use. One good thing about founder-led businesses is that the founders usually have good instincts and new ideas. Brian brings that energy; he learns a lot about each product and plays with them all. He has been known to make a short video and send it to the product manager of something he is testing to say that it needs to be changed or that he didn’t like a certain part. So, he has a big part in making new products, which Surojit thinks is a strength of Coinbase and many other founder-led businesses.
What are one or two of the most important things you’ve done as CPO? Or, maybe you’re most proud of one or two of Coinbase’s products.
Here’s what Chatterjee said in answer to the question: “When I joined the company in early 2020, we mostly worked with simple retail customers. We also had an exchange where people could buy and sell a small number of tokens—I think there were about 20 at the time. One of the first things we did was start to think about institutional users and more advanced trading. We saw a lot of interest from institutional users and more experienced customers, but we didn’t have the right skills in-house. We went out and bought a company called Tagomi, which had some of the best financial professionals working for it. This group helped Coinbase make a prime broker, which was made by Coinbase on its own. We also made Coinbase advanced trading, which uses the prime broker as its back end. So, we paid for only one product but got two.”
The other big one was Coinbase Cloud, which was made possible by the purchase of Bison Trails. We are, however, adding to the Bison Trails core offering in order to give developers everything they need to make Web3 apps in the cloud. Surojit has one more thing to say. For example, our mobile app has a multi-party computation wallet that lets users access all of Web3 without having to worry about self-custody or passphrases. Also, they made a token for liquid staking. Also, even though it is still very early, they have started a subscription service for their main retail item. For a flat monthly fee, you can trade as much as you want, get customer service at any time, and have your account guaranteed for up to $1,000,000. They are getting a lot of traction on this one.
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