Coinbase’s Chief Product Officer’s plan to build through the crypto winter

In an exclusive interview with Coinbase Chief Product Officer Surojit Chatterjee, we cover Coinbase’s approach to product design and touch on many key issues, including how the company draws a line between centralization and decentralization, how it’s preparing for crypto winter, and what he learned. from the recent launch of the NFT platform. Chatterjee also discusses his thoughts for the future of Web3 and highlights how a new Web3 development platform on top of the Coinbase Cloud fits into this vision.

Forbes: How would you characterize Coinbase’s approach to product development?

Surojit Chatterjee: We think about being the most reliable and being the easiest to use. These principles are at the heart of everything we do. The most reliable means being built with a lot of thought, compliance and regulation. We have hired the best researchers and designers, not only in crypto, but probably in technology as well. The simplest test I have is to ask “Can dad use this product?” The third thing is to ask how do we create a bridge? And this is very important to 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 move to Web3 is built into everything we do.

Forbes: Has the crypto winter had any effect on product development?

Chatterjee: I’d be lying if I said it didn’t have an impact. We could not continue to expand our resources or workforce as we did this summer. So we have to be more disciplined and prioritize more sharply internally. And we have done that. But at the same time, I think crypto winter is a great time to build because it’s not the same craziness with stuff that just pops up every single week. And you look at all these different ideas, different companies, you don’t know which one is good. I now think the companies working in the crypto winter are building for the long term. This is a great time to build. I do a post every month about everything we’ve launched in the last 30 days. And it’s been amazing just to see what the team has achieved in the last few months, and how many very important products we’ve launched.

Forbes: At a high level, can you walk me through the product development roadmap? How does something go from a whiteboard to a live feature?

Chatterjee: Our first step is often to conceptualize a vision of the future. For example, we have painted this vision that we want to be the bridge to Web3. The next step is to get specific ideas, which can come from anywhere. We have an internal Y Combinator-type pitch day competition every two quarters where we accept pitches from our own employees and invest a small seed amount in them. It’s an adventure because we don’t know which ideas are good. So we like to try a lot of different things as long as they align with our overall mission of creating more financial freedom and building a bridge to Web3. Another set of feedback comes from our customers, because customers are so engaged with you all the time. My Twitter account lights up every time we launch a new product. This is where crypto is unique; people care so much.

When it comes to resource allocation, we use a 70/20/10 framework for prioritization. Seventy percent of our resources go into core products – for example, those that are already generating revenue or have good traction; 20% goes to improvements and extensions to our core products, imagine drawing a concentric circle around the 70% allocation for a frame of reference. The last 10% is what we call venture.

How do we actually test the products? Throughout the process, we build a prototype, maybe just models, and take it to the users and get their feedback. Sometimes I personally join these conversations. Then we launch it to all Coinbase employees, get their feedback, do a beta test, and then finally launch the product. But even after launch, we keep them in beta for many months because we’re still iterating and figuring out the right product-market fit. One such example is our non-fungible token (NFT) marketplace.

Forbes: What use cases are you most excited about in Web3 and how does Coinbase Cloud work in it?

Chatterjee: We’ve seen the DeFi summer of 2020, then we had the NFT surge in 2021. I think the next cycle you’ll see is Web3 in the spring or summer. I get really excited about use cases that aren’t just pure financial use cases, because that was the first phase of crypto. I believe crypto will power any application from gaming to social messaging and entertainment. NFTs may fall under that category, but they will be larger. NFTs can be music or videos. Web3 apps have the potential to disrupt everything that exists on the internet today. Some of the biggest services you can imagine today are all centralized, like all social media, video, streaming platforms and so on.

If you are a game developer on Web3, what do you need to do? You must first build a node. So that’s the first step, and that’s where Node, our Web3 app development platform, comes in. Then you need to figure out how do I access your currency? Or how do I help users move their money from fiat to crypto – they have to buy something in-game. They then need to save the game widgets they need so that users can receive prizes. That’s how I think about what we’re going to build as part of Node on Coinbase Cloud in the future.

Forbes: How do you draw the line between centralization and decentralization in Web3?

Chatterjee: I think at the core level, the data security models of blockchains are still decentralized. We are not changing any of these. We create easy access to the blockchain. If we had a situation where we asked all developers to code their own node infrastructure, we would never see the kind of growth in Web3 that we have already seen. I believe it already has 5 million developers, 20,000 of which are active on a monthly basis. Finally, as a company we want to ensure that the Web3 infrastructure remains decentralized. And that is an important differentiating factor. So we want to make sure that there is more competition, even in terms of product effort. For example, you may request that we ensure that our share of the effort is never more than a certain percentage. And it is a conscious choice.

Forbes: It’s pretty well known in the industry that CEO Brian Armstrong sees himself as a product guy. What role, if any, does he play in product development now that he’s the CEO of a multi-billion dollar public company?

Chatterjee: Brian is first a very good product thinker. Our core DNA of being the most reliable and easiest to use is something Brian instilled early on. One of the good things about founder-led companies is that founders have good intuition and good ideas. Brian brings that energy; he goes very deep into products and he plays with all our products. He’s been known to shoot a short video and send it to the product manager for something where he’s trying to say, “Hey, I think this should change this, or I didn’t like this part.” So he’s very involved in product development, which I think is a strength for Coinbase and many other founder-led companies.

Forbes: What would you say are your one or two greatest successes as a CPO? Or are there one or two products at Coinbase that you are most proud of?

Chatterjee: When I started in early 2020, we were a company that mostly focused on simple retail users and we had an exchange and we allowed users to buy and sell a few tokens, I think 20 at the time. One of the first things we started doing was thinking about institutional users and advanced trading. We saw a lot of demand from institutional users and more sophisticated customers, but we didn’t have the right internal expertise. We went and bought a company called Tagomi, which brought in some of the best experts in the financial industry. That team helped build a prime broker, which was designed entirely organically inside Coinbase. We also built Coinbase advanced trading with the main broker as the backend. So we got two products for the price of one.

The other big one has been Coinbase Cloud, the root of which was the Bison Trails acquisition. But we’re building around Bison Trail’s core offering and creating a complete cloud offering for developers to build Web3 apps. I’ll just mention one last thing. I’m also proud of how we embraced decentralization as a company on our way to building a bridge to Web3. One example is a multi-party computational wallet built inside our mobile app that allows users to access the entire Web3 without worrying about self-storage or passphrases. We also built a floating staking token. And while it’s still very early days, we’ve launched a subscription service to our core product. You pay a flat fee every month and you get unlimited trading, 24-hour customer support and an account guarantee in case you get hacked up to $1,000,000. We’re seeing really good traction for this one.

Forbes: What did you learn from the Coinbase NFT launch?

Chatterjee: I want to take a step back first and talk about NFTs as a whole, because I think there’s a bit of a misunderstanding about our NFT strategy and how it fits in here. Our NFT strategy has always been to bring users, creators and buyers together. So if you look at our product strategy and our product service portfolio today, we will see this strategy manifest. On our main Coinbase app, we have integrated a Web3 browser. I was talking about MPC based app wallets – what that wallet does now is you can actually go and buy an NFT without needing a self-storage wallet right inside the Coinbase app. I think it is the best NFT wallet out there because you can access NFT keys not only on Ethereum but also on Solana and other chains. You can then save and view all these NFTs. The last feature is that you can see bids in real time from multiple marketplaces. It’s still early, as you can see the NFT market is much smaller than what it used to be a few months back, but I think it will grow again. In the next half cycle, it will be even bigger than where it was at its peak. So 99% of the users who will come and use NFT in the future probably haven’t come to the market yet. So very, very early days. And we see a lot of late demand.

Forbes: Thank you, Surojit