What a difference a year makes.
In October 2020, Brian Armstrong, CEO and founder of the cryptocurrency brokerage Coinbase, was facing a barrage of bad press.
The New York Times accused him of “tokenizing” black employees. CNN claimed he feared a “reckoning around racial and social justice.” And his highest-profile colleagues made public statements not-so-subtly implying he was blinkered by white privilege at best and an outright racist at worst.
All because Armstrong decided the workplace, or, at least, his workplace, was not the appropriate venue for political debates or pushing social agendas.
The firestorm started during the summer madness of the 2020 race riots, when mayors were inviting left-wing activists to burn down their cities and every blue-chip on the NASDAQ from Apple to Pepsi was rushing to post Black Lives Matter boilerplate to their corporate social media accounts.
All except Coinbase.
While Armstrong did send an email to employees expressing support for those who were “hurting” over the death of George Floyd, he stopped short of voicing support for BLM. This sparked a spiral of internal Slack carping that led Armstrong to call an all-hands meeting where he encouraged the disgruntled to “ask [him] anything.”
Mostly what they asked was why he couldn’t just make a public proclamation of allegiance that included those three little social justice buzzwords: Black Lives Matter.
Armstrong demurred, insisting that while he did care about black lives, he worried that making a statement explicitly tied to a political movement would be bad for the company. Furious, a group of employees organized a walkout, much to the delight of the establishment press, which covered their protest in breathless terms. Later that day, presumably in a bid to stop the bleeding and avoid throwing any further grist to the media mill, Armstrong did, at last, post a generic BLM-branded message to Twitter, saying “police brutality, and unequal justice are unequivocally wrong, and we need to all work to eliminate them from society.”
But upon a few weeks’ reflection, he appeared to think better of his capitulation. He deleted the tepid BLM tweets and instead issued a thought-out, deeply considered new plan. In a company-wide memo that was published on Medium for the world to evaluate, he officially declared Coinbase a no-politics zone.
While the 38-year-old billionaire acknowledged that “it has become common for Silicon Valley companies to engage in a wide variety of social activism,” he said he didn’t want his team preoccupied with “broader societal issues” while at work. Instead, he wanted them “laser focused” on achieving the company mission of creating an open financial system for the world.
Armstrong’s reason was simple. He felt such politicking, while “well intentioned,” created divisions and distractions that had the potential to destroy much of the value of his business. He argued that companies that “dabble in unrelated efforts” often fail to stand the test of time.
“We’ve seen what internal strife at companies like Google and Facebook can do to productivity,” he stressed, “I believe most employees don’t want to work in these divisive environments.” Then he outlined how Coinbase’s new apolitical strategy would work.
Three things the new policy banned explicitly flew in the face of what the Left now demands from the corporate world: advocating for political causes, expecting Coinbase to represent political beliefs on the public stage, and assuming negative intent of coworkers who view social issues differently.
Yet part of Armstrong’s reasoning was the very diversity for which many of his social justice employees were agitating. The only difference was, they cared only about outward diversity based on skin color, he acknowledged diversity of thought, and wanted to protect the ideological outsiders as well. “We have people with many different backgrounds and viewpoints at Coinbase,” he said, “and even if we all agree that something is a problem, we may not agree on how to actually go solve it.”
Thus, protest for black lives or against masks on your own time, not the company’s.
Armstrong sweetened the offer for those who weren’t willing to leave the agenda-grinding at home — they could resign with a generous four-to-six months of severance. “Life is too short to work at a company that you aren’t excited about,” he granted magnanimously. “Hopefully, this package helps create a win-win outcome for those who choose to opt out.”
The internal fallout from this policy turned out to be relatively trivial. Only about five percent of employees took the severance. Of that five percent, Coinbase reported that minority staffers weren’t over-represented, suggesting they didn’t take more offense at the activism ban than non-minorities. And that should have been the end of it.
Except, the Left, which has been tightening its hold on Silicon Valley through a bit of Marxist sleight-of-hand known as “stakeholder capitalism” (the idea companies have an obligation to serve the “interests” of society as defined by progressives), can’t abide an abstainer.
The media’s retaliation for Armstrong’s rebellion was uniform and intense.
TechCrunch, arguably the most influential publication in Silicon Valley, ran multiple op-eds against the move, with one claiming all Armstrong had done was “highlight his tremendous position of privilege.”
“It means he doesn’t wake up worrying about how institutional racism or systemic oppression might affect him,” the essay opined.
In the “silence is violence” school of thought, Fortune’s senior tech editor insisted that Armstrong’s disinclination to make political statements is “a political statement all its own.”
Yahoo Finance’s editor-at-large said, “The rise of “stakeholder capitalism” and ESG [environmental, social, governance] investing makes Armstrong’s longing to keep Coinbase apolitical look clumsy.”
Finally, despite the fact that the vast majority of Coinbase employees stuck with the company, The New York Times ran a one-sided hit piece that failed to find even one staffer happy with or simply ambivalent toward the no-politics decision. Instead, every source the Times quoted hurled veiled accusations of bigotry.
“[Working at Coinbase] was the first time I realized what racism felt like in the modern world,” said one former employee, “I felt like I was being bullied every day at work.” A diversity officer in the story dinged Armstrong for failing to provide an atmosphere of “psychological safety.” The report also accused the company of institutional prejudice, editorializing that “[Crypto companies like Coinbase] have propagated a brash male-dominated way of life, facing criticism for sowing racism and sexism.”
But if the tech world’s condemnation of Armstrong was fierce, it was nothing to that of his peers, all of whom had recklessly dived into the very type of politicking Armstrong was banning. Just a sampling of the reactions:
- Twitter CEO Jack Dorsey publicly rebuked him, saying that cryptocurrency itself is a form of activism and Armstrong owed it to his customer base to “acknowledge” the “related societal issues.” He also accused Coinbase’s politics ban of “leaving people behind.”
- Dorsey’s predecessor at the top of the Twitter heap, Dick Costolo, went far more nuclear, saying, “Me-first capitalists who think you can separate society from business are going to be the first people lined up against the wall and shot in the revolution. I’ll happily provide video commentary.”
- Aaron White, founder and chief technology officer of software management company Blissfully Tech told The Hill Armstrong was indulging an “isolationist fantasy” that would guarantee his company would end up “on the wrong side of history for absolutely every issue.”
- Jill Carlson of venture capitalist firm Slow Venture, mocked Armstrong’s goal of keeping employee attention on company business while at the office, tweeting, “Have you ever thought about what a privilege it is to be able to NARROWLY FOCUS at work?”
- Jessica Alter, founder of Tech Campaigns, scolded, “Stating out loud that you think economic freedom and social justice can be conveniently disconnected is the epitome of why [Silicon Valley] has a bad reputation.”
Nearly everyone predicted Coinbase would experience dire outcomes.
Which brings us to today. Over the last year, despite the pressure of a multi-sided PR onslaught, Coinbase stuck to its guns. No corporate statements about voting rights, election results, abortion legislation, or any other social causes were forthcoming from Coinbase leadership. The company quietly went about its crypto business. Until, two weeks ago, that is, when Armstrong broke his silence to update the world on how the company’s no-politics experiment was going.
In a word: swimmingly.
On October 1, Armstrong posted a tweet thread revealing that, contra prophecies that his company would face a mass exodus and public shunning over the ban, Coinbase has instead gained new staff comprised of professionals eager to work in an environment dedicated to clear corporate goals rather than murky outside social agendas.
“We have a much more aligned company now, where we can focus on getting work done toward our mission,” Armstrong shared, adding, “it has allowed us to hire some of the best talent from organizations where employees are fed up with politics, infighting, and distraction.”
Nor, he revealed, was this growth limited to white applicants. “Since my post,” he said, “we’ve grown our headcount about 110%, while our diversity numbers have remained the same, or even improved on some metrics…It turns out that there are people from every background who want to work at a mission focused company.”
Perhaps the best service the Coinbase CEO rendered to the world in his update was highlighting the difference between reality and media perception when it comes to the average worker’s feelings on politics in the workplace.
What was amazing was the contrast between the news following my post, and the reaction from employees and people who spoke to me in private. While the media reports were mostly negative, and it even spawned some retaliatory and intellectually dishonest hit pieces, the reaction both from employees and people I spoke to in private was overwhelmingly positive.
In fact, I would say it was probably the most positive reaction I’ve gotten from any change I’ve made in the history of the company, which is saying something. How could something be so negative in the press, but turn out to be incredibly positive with every stakeholder.
The only sense I can make of it, is that there is a huge mismatch between peoples stated and revealed preferences right now, and we’re operating in an environment of virtue signaling and fear of speaking up.
Put simply, Armstrong concluded that he would “recommend the change to others.”
Given the intense interest the media and tech world showed in Armstrong’s original memo, you might think they would be equally interested in the follow-up on how the policy played out on the ground. You would be wrong. To date, since Armstrong issued his update two weeks ago, not one of the major outlets who gnashed their teeth at his initial announcement has covered Coinbase’s positive results. Not a single one.
But that’s because the backlash against Coinbase was never really about Coinbase.
The media and tech world’s fierce reaction was intended as a warning to other independent-minded companies that neutrality will not be tolerated. If Coinbase is allowed to courageously abstain from pushing the progressive agenda, other corporate leaders might be inspired to think they can just get back to business as well. A Leftist project decades in the making, to co-opt corporate America for political purposes, would risk being squandered.
After all, a crack in the dam as big as Brian Armstrong could eventually lead to a flood of CEOs looking for off-ramps. Only months after Armstrong’s memo, for example, business software company Basecamp instituted a similar policy with similar language to a similar rending of media garments.
As Paypal co-founder David Sacks observed there’s a lesson for the tech industry, and really all industries, in Coinbase’s experience. “Companies can choose to be Coinbase or Apple,” he said. “They can leave politics at the door and have a happy productive workplace like Coinbase. Or they can give in to boycotting mobs and be constantly roiled like Apple.”
It’s a message Armstrong echoed.
The biggest lesson he says he took away from the backlash his company experienced is that “if you believe something is the right path, it’s worth speaking up about it, even if it’s controversial.”
What he’s learned is that while social media mobs seem intimidating at the time, in reality, their impact is negligible and their bullying tactics the weapons of paper tigers. Real leadership resists the urge to appease troublemakers by mouthing the slogans they demand.
“You will get lots of attacks online, and not everyone will agree, but ultimately people want clarity and authenticity from leaders, not platitudes,” Armstrong said. “It will come back to you tenfold.”
He then advised executives to “think about any area where you aren’t being 100% authentic, and instead are trying to keep the peace, or say what you think people want to hear.”
The entire business world from the NFL to fast food has been taken hostage by the outsized influence of a few angry activist staffers. Armstrong’s message to them could not be more timely: “It’s incredibly difficult to do, but if you stand up and say what you really think, it may turn out better than you thought.”
The views expressed in this opinion piece are the author’s own and do not necessarily represent those of The Daily Wire.
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