From Airbnb Employee to YC
Armstrong: Back in 2010, I read the Bitcoin white paper. I had tried doing a startup in the tutoring and education space. It was kind of like a base hit, didn't really go very well. I joined Airbnb as an early employee to try to learn more about how to do a startup.
Nights and weekends I was working on a prototype. I wasn't sure about myself. I didn't really know if this was the thing I wanted to go do. I applied to Y Combinator and that's the first time somebody told me maybe you're not crazy. This whole Bitcoin thing is not completely nuts.
I applied to Y Combinator and that's the first time somebody told me maybe you're not crazy.
Everything Was Chaos
Armstrong: I was struggling to find anybody who would join my team. The early stages, it's impossible to find people to join you on these crazy journeys. I almost co-founded it with one person and that all exploded in dramatic fashion.
Finally found the right co-founder, Fred Ehrsam. We got off to the races. Someone sued us like three months later. Startups are moving from one setback to the next with enthusiasm. If it's a complete show and chaos and nothing is working, that's kind of the default state. You're doing it right if it feels like that.
Startups are moving from one setback to the next with enthusiasm. If it feels like chaos, you're doing it right.
The Phone Call
Armstrong: There was no way to buy and sell crypto in the first version of Coinbase. It was just a hosted Bitcoin wallet. I put it on Reddit. We got a couple hundred people who came in and used it. Then they would all leave. Nobody was using it.
Following YC's advice, I emailed five of the people who'd signed up. I got on the phone with three or four of them. I asked — I noticed you didn't come back, why? The guy was like, I thought the app was pretty cool but I don't actually even really have any Bitcoin. I just wanted to check it out.
This light bulb went off. I asked — if there was a simple way to buy it in the app, would you have done that? He said yeah, probably. I hung up. The next few months I had to figure out how to build a simple buy button. That's when we finally got product-market fit.
If there was a simple way to buy it in the app, would you have done that? He said yeah, probably. That's when we got product-market fit.
Don't Give Up
Armstrong: There's no idea that works on the first try. You have to put something out there and then grind it out like 2 or 3 years. Talk to your customers, improve the product, talk to your customers, improve the product.
If you look at almost every successful startup, it feels like an overnight success. But really, that's just how history gets written in hindsight. In the early days there was a period where any reasonable person would have quit. Nothing was working. They were in credit card debt. They were being sued. All of them somehow persevered.
If you look at almost every successful startup, in the early days there was a period where any reasonable person would have quit.