Coinbase Chief Product Officer Surojit Chatterjee is preparing to accelerate the launch of new products as the crypto winter deepens
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 is preparing for the crypto winter and what he learned from the recent launch of its NFT platform. Chatterjee also discusses his thoughts for the future of Web3 and highlights how a new Web3 development platform on top of 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 trusted and being easiest to use. Those principles are at the core of everything we do. The most trusted means being built with a lot of thought, compliance and regulation. 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.
Forbes: Has the crypto winter had any effect on product development?
Chatterjee: I’d be lying if I said it had no impact. We could not keep expanding our resources or workforce like we did in the summer. So we have to be more disciplined and prioritize more crisply internally. And we have done that. 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.
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 conceptualizing a vision of the future. For instance, we have painted this vision that we want to be the bridge to Web3. The next step is getting specific ideas, which can come from anywhere. We have an internal Y Combinator-type pitch day competition every couple of 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 great. So we like to try lots of different things as long as they’re aligned with our overall mission of creating more economic freedom and building a bridge to Web3. Another set of feedback comes from our customers, because the 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.
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.
Now how do we actually test products? Throughout the process, we build a prototype, maybe just mockups, and take it to users and get their feedback. Sometimes I’ll personally join in those conversations. Then we’ll launch it to all Coinbase employees, get their feedback, do a beta test and then eventually launch the product. However, 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 it in?
Chatterjee: We have seen the DeFi summer in 2020, then we had the NFT surge in 2021. I think the next cycle you’ll see is the Web3 spring or summer. I get very excited about use cases that are not just purely financial use cases, because that was the first phase of crypto. I think crypto will power any application from gaming to social messaging and entertainment. NFTs can come under that category, but they will be bigger. NFTs could be music or videos. Web3 apps have the potential to disrupt everything that exists on the internet today. Some of the largest services you can imagine today are all centralized, like all the social media, video, streaming platforms, and so on.
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.
Forbes: How do you draw the line between centralization and decentralization in Web3?
Chatterjee: I think at the core level, the compute data security models of blockchains are still decentralized. We are not changing any of those. We are creating easy access to blockchain. If we had a situation where we asked every developer to code their own node infrastructure, we would never see the kind of growth in Web3 that we have already seen. I think that it already has 5 million developers, 20,000 of which are active on a monthly basis. Lastly, we want to make sure as a company that the Web3 infrastructure remains decentralized. And that’s a key differentiating factor. So we want to make sure that there’s more competition, even in product staking. For example, you may be asking that we make sure that our share of staking is never more than a certain percentage. And that’s a deliberate choice.
Forbes: It’s pretty well known in the industry that CEO Brian Armstrong sees himself as a product guy. What role, if at all, does he play in product development now that he’s the CEO of a multibillion-dollar public company?
Chatterjee: Brian is first a very good product thinker. Our core DNA of being the most trusted and easiest to use is something that Brian anchored early on. One of the good things about founder-led companies is that founders have great intuition and great ideas. Brian brings that energy; he goes very deep into products and he plays with all our products. He’s been known to record a short video and send it to the product manager of something that he’s trialing saying, “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 of Coinbase and many other founder-led companies.
Forbes: What would you say are your one or two biggest successes as CPO? Or are there one or two products at Coinbase that you are most proud of?
Chatterjee: When I joined in early 2020, we were a company mostly focusing on simple retail users and we had an exchange and we allowed users to buy and sell a few tokens, I think 20 at that 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 skill set. We went and bought a company called Tagomi, which brought in some of the best experts in the finance industry. That team helped build a prime broker, which was designed completely organically inside Coinbase. We also built Coinbase advanced trading with the prime broker as the backend. So we got two products at the cost of one.
The other big one has been Coinbase Cloud, the root of which was the Bison Trails acquisition. But we are building around the core Bison Trails offering and creating a full 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 computation wallet built inside our mobile app that lets users access all of Web3 without worrying about self-custody or passphrases. We also built a liquid staking token. And although it’s still very early days, we’ve launched a subscription service on our core retail product. You pay a flat fee every month and you get unlimited trading, 24-hour customer service 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’ll first take a step back and talk about NFTs as a whole, because I think there is a little bit of misunderstanding on our NFT strategy and how that fits in here. Our NFT strategy has always been to get users, creators and buyers together. So if you look at our product strategy and our product services portfolio today, we will see this strategy manifesting. On our Coinbase main app we have integrated a Web3 browser. I talked about the MPC based app wallets–what that wallet does now is you can actually go and buy an NFT without needing a self-custody wallet right inside the Coinbase app. I think it’s the best NFT wallet out there, because you can access NFT keys not just on Ethereum but also on Solana and other chains. You can then store and view all those NFTs. The latest feature is that you can see in real time bids from multiple marketplaces. It’s still early days, 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 become even bigger than where it was at its peak. So 99% of users who will come and use NFT in the future probably have not come to the market yet. So very, very early days. And we are seeing a lot of late in demand.
Forbes: Thanks, Surojit
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