podcasts

Blitzscaling Web 3, Binance’s CZ

podcasts

Blitzscaling Web 3, Binance’s CZ

April 2020

Posted by

Charlotte Kapoor

Head of Strategic Partnerships

Prior to working at Outlier Ventures Charlotte worked at a range of different marketing agencies, ranging from large network agencies to growing start-ups. Charlotte is responsible for building the profile of Outlier Ventures by strengthening the connectedness in the community of participants in their ecosystem. ...read more

CZ Founder of Binance discusses the art of ‘blitzscaling’ to become the largest crypto exchange by trading volume in the world, with millions of users and billions of dollars in revenue.

 

Posted by Charlotte Kapoor - April 2020

April 2020

Posted by

Charlotte Kapoor

Head of Strategic Partnerships

Prior to working at Outlier Ventures Charlotte worked at a range of different marketing agencies, ranging from large network agencies to growing start-ups. Charlotte is responsible for building the profile of Outlier Ventures by strengthening the connectedness in the community of participants in their ecosystem. ...read more

He talks through how to spot and execute on a ‘10 x’ market improvement opportunity, the challenges of running a ‘public’ token backed company, the future for ICOs and IEOs, what it means to be a ‘internet native’ organisation and the growing importance of digital assets to the global economy.

Key themes:

  • CZ’s experiences as an entrepeneur
  • Acting as a native internet company
  • How to work with regulation not against it
  • The growth of wealth in digital assets
  • What being a Founder in Web 3 means: the pressures, the public exposure and the market volatility

Listen on iTunes 

 

Transcript:

Jamie: Welcome to the Founders of Web 3 series by Outlier Ventures and me your host Jamie Burke. Together, we’re going to meet the entrepreneurs, their backers, and the leading policymakers that are shaping Web 3. Together, we’re going to try to define what is Web 3, explore its nuances and understand the mission and purpose that drive its founders. If you enjoy what you hear, please do subscribe, rate and share your feedback to help us reach as many people as possible with the important mission that is Web 3.

So today, we’ve got a guest on that I’ve been really looking forward to speaking to, one of the few founders in Web 3 that could be said to have truly blitzscale and become hugely profitable. So I’m happy to welcome CZ, CEO and founder of Binance. The world’s largest cryptocurrency exchange by trading volume.

CZ: Thanks, Jamie. Thanks for having me here.

Jamie:  So maybe to just go summarise your background a little bit, at least as I understand it. So you majored in computer science at Montreal, Canada and McGill. You worked at Tokyo Stock Exchange on Bloomberg trade book, also developed futures trading software, obviously very relevant to one of the big growth areas of finance now. 2005 you moved to Shanghai, you founded fusion systems, high frequency trading software company. And then in 2013, you joined blockchain info. And in 2017, you launched Binance, you did a $15 million Ico. And in less than eight months, you grew that to the largest cryptocurrency exchange and leading to Forbes declaring you the third richest person in crypto. So that’s, that’s a hell of a lot that you managed to achieve in a relatively short period of time. But to be honest, as I, as I look at that background, compared to a lot of other founders in Web 3, it seems very logical, right? All the things that you have worked on in the past, very logically have led to what you’re doing at Binance now.

CZ: I wouldn’t actually want to use logical to, like, from my perspective. So yeah, yeah, I think that the summary is very accurate. So thank you for that summary. But from my perspective, from my personal perspective, it’s actually more is more uncertain. It feels to me. All the other entrepreneurs are much younger. If you look at Mark Zuckerberg, all this other really young entrepreneurs where it took me literally 20 years to have what people call an overnight success. So right now, looking back and we saw you did this, you did that that led to the success but while the good part of that 20 years when you’re, when you haven’t hit the success, it feels like very much like grinding etc. So, yeah, to me it wasn’t okay look, I do all those things are guaranteed success. So I think I got quite lucky the last two years especially in 2017. We so we did accumulate a lot of experience over the years and those experiences somehow came together into a good product and we had a good team and we got lucky with the market. The market timing was good. Cryptocurrency was growing like crazy 2017 and we caught that wave and we became the sort of number one cryptocurrency exchange. So yeah, it wasn’t  that logical to be honest.

Jamie:  Yeah, I mean, I’m a similar age to you so I can, I can appreciate that perspective. And I think it’s, it’s also, you know, whenever I’ve heard you speak on panels or another podcast, you’ve always been very humble. And again, I can hear you talking about look, I think maybe that’s something to do with age right that the older you get perhaps the more you appreciate luck, perhaps if you were to experience success overnight success, and when you’re very young, you might think it’s down to pure skill.

CZ: Yeah, I think well, I think what how you define luck, I think everyone has a different understanding or definition of it. I think everyone luck comfortable with the simple version of luck or opportunities come to everyone whether you can grab it or not. It’s really up to you. And the other phrase, I always say why sell less now is hard work creates luck. So there’s a lot of hard work that we put in, like very obviously, we I think we work harder than most other people in the industry even. And so the luck actually, the luck aspect of it is actually quite equal to everyone when we say we are lucky but all the other exchange or there’s plenty of other exchanges in the space in 2017. And in 2017, every single day, there’s 200, new exchanges. So the fact that we’re able to rise to the top also, we also worked really hard to sort of grab on to that luck. So but we needed a lot to do to get there. So I think there’s different definitions of luck. But I think chance is definitely a big factor. So a similar team working equally hard or even harder, equally smart. If they timing was a little bit off. If they were working on slightly different app opportunity, then maybe so there’s a little bit of a randomness, but just because there’s luck doesn’t mean it’s hundred percent luck. So I think this yes, but I do think luck is a big factor.

Jamie:  Yeah, I mean, it’s interesting, you saying in 2017, you know, there were hundreds of exchanges being launched. And it’s going to be really interesting to understand what the insight was that that led you to, to found by Nance and what you focused on as the edge. But I just want to kind of focus on that the hard work piece because I know it’s a bit of a cliche now, right, the idea that, obviously you’re Chinese Canadian, I don’t know, which you identify with more strongly, but there is this cliche that Chinese work ethic is kind of gonna outwork the West. But I, you know. I don’t know whether you see that as part of your identity and your drive or whether that’s just, that’s just innate to you as an would be applicable to anybody in Canada as well.

CZ: I think there’s a little bit of this a little bit of everything. So, let me explain this. This a couple of topics which are quite interesting there. I do think there is a difference in the working culture between Chinese and Western worlds. They are some I mean, generalisation is quite dangerous, but there are some, some general like sort of generalised differences. So, for example, most of the internet companies in Beijing, they work what we call 996. So 99 every day, six days a week, so they only take one day off, they work for 12 hours a day, and that’s standard, and there’s no overtime. There’s no discussion of overtime, overtime pay all these benefits is just, that’s what everybody do. And also, for example, the Chinese internet companies are quite famous for their lights on overnight. So if you look at the Baidu office in China, in Beijing, in their building, the lights are always bright throughout the night. So basically people stay overnight, every day. There’s people staying overnight. So there is that culture. There’s some other differences as well. The Chinese guys typically don’t argue, don’t debate, don’t talk that much. They just do whatever the boss say. And sometimes it’s wrong sometimes. So sometimes it’s good. Sometimes it’s bad, where’s usually. So basically, if you get a good boss, then it’s really great. If the boss is wrong, then the whole team is going like into the ditch, and then they have to climb out of it. So whereas in the Western cultures, people do have a much power, I would say a much balanced or healthier working style, the 996 style is really is really tough. And in the western, in the Western cultures, the team members will walk will voice their opinions quite strongly because they were taught with the freedom of speech, everyone’s equal, etc. So there’s this debating mentality that’s there. So the execution speed to be honest for some of the Western teams in general, are slower but they usually come up with a better polish products. So when the products from the western teams are out. The user experience is usually quite simple, it’s quite tested, is polished, whereas the Chinese guys work really hard work really fast, but they released stuff that’s less polished, less tested more bugs, the UI is typically a little bit more clump, sort of very packed a lot of information on one screen, etc. So this this like, but again, all of those, all of the all of these are generalisations, they are exceptions. They are exceptionally rare exceptions in every culture, I’m sure, but we do see those differences. One of the things we got very lucky on a given that I was born in China, but I grew up I grew up in Canada that worked in the United States, and then Japan, and then Hong Kong, Singapore. So I’ve been on both sides of both sides of the Pacific, on both sides of the world. So my personality is a little bit of a mix of both. So I recognise that very clearly. And I, we I tried to structure the team so that the team is kind of a hybrid between the Chinese as well as the Western culture interesting. They are, they are still a lot of problems, even without hybrid. But there’s quite a lot of advantages that we can achieve from that. So, yeah, so the bonus is very unique. And I think mine is probably the most unique company in that way, in the sense that if you look at all the Chinese internet companies, there’s probably only one company that’s more international than us. Well, their product reach is more international than us, which is Tick Tock. So Tick Tock is a Chinese internet company. They have a product that’s really, really International, but their team is all in China. Whereas Binance is one of the very few companies where we actually started in China. We moved out of China completely. And then we have teams all over the world and our product is product coverage is very, very is very easily spread around the world.

Jamie:  Yeah, that’s really interesting perspective. Actually, I hadn’t thought of it that way. And so how many people are you now? In terms of employees and contractors?

CZ: I think we are now 960. Today, and we’re Yeah, we’re growing. We’re adding like 100 people a month or so right now.

Jamie:  And, and as you say that they’re pretty distributed now. Right. So split between, I guess US, Europe and parts of Asia.

CZ: Yes. That seems very spread out. I think we can use 50 plus countries and they move around all the time as well. So no, not so much now, but they typically are fairly Nomad.

Jamie:  Right. I mean, there’s definitely a lot that I want to unpack a lot of founders that will be listening to this, you know, aspire to that level of scale, but obviously, I mean, to me who’s probably only ever managed Max 100 people that sounds like a big headache that many people to coordinate in such a distributed fashion, but clearly, it’s work to your benefit in allowing that reach. But I really want to kind of just step back a bit and go to that Genesis point. What was what was the insight that that made you decide that you were going to start the company at? What would have you been then 39 years of age, so relatively late as an entrepreneur?

CZ: Yeah. So I left my Bloomberg job in 2005. So I think I was 27 at the time. After working Bloomberg, I know I’m not a corporate guy, I got I got promoted pretty quickly in Bloomberg, like, I think I got promoted three times in less than 18 months, from a developer position to like the head of Bloomberg trade book futures. And as a young Asian guy in New York. So that was quite an interesting experience. But I knew that I’m not a corporate guy. I do enjoy my work experience in Bloomberg very much and Bloomberg is a very well rounded somebody, but there are still aspects of the corporate bureaucracies or structures that I know I’m not a fit for. So I knew then in my heart that I’m going to be a start-up entrepreneur, so laughing to other five I was like 27 and then doing start-upsand a struggling and like, when you just start off you always think I’m gonna hit it, and you’re gonna make millions of dollars and all this great stuff. Of course, real life is a lot harder. So struggled for quite a bit for like, almost 10, 15 years at different

Jamie:  Initial fusion systems was one of the one of the main ones, right, this high frequency trading software.

CZ: Yes. And fusion systems is also quite an interesting company. I partnered with five other guys so there’s six partners, I was the youngest one. The second youngest was seven years older than me. And all five of them are Caucasians. So like, like white blonde people, though I’ve always interacted with a multicultural as kind of teams, so and also a quite a lot of my work style are actually shaped by Western working cultures. So from then select from there and so the from 27 to 39 to 12 years, I was always doing start-ups trying one thing or another, I did join a bunch of other start-up companies. So I did that fusion for eight years. So from 2005 to 2013, I was doing fusion systems came across Bitcoin in 2013. And I asked my partners if they want to get into bitcoin because they are doing a crypto currency exchange. They said now this is going to take too long to do a new product. So okay, fine, I’m gonna leave and and do my own thing. That’s fine. Coincidentally, there are they’re now building cryptocurrency exchanges as well. So it’s kind of interesting. But anyway.

Jamie:  So in that journey, did you did you find the different experience. Being a sole founder versus a co founder. Obviously, you’ve had the whole spectrum there presumably of a couple of co founders all the way to five or six. That´s a lot of a lot of founders, I imagine a very different experience.

CZ: Yes, I think I think there is a quite a bit of difference. So I think the founder dynamic is really, really important for start-ups. Because one thing that we got away with in finance is that the decision times very, very quick. So there’s a very clear path into decisions. So I typically sort of, say we want to spend 2% of time on decisions, and 98% of the time on execution. Whereas in, in the previous start-up infusion systems, there were six partners. There’s a maximum we’re using email with a mailing list of partners, a fusion system, start something that would just get people just spending hours and hours a day on this other internal partners mailing list at the top debating about stuff. I thought that was number one that was unproductive. Most of the decisions require a sort of committee or it kind of ran a little bit like you ran a little bit like that communist regime to me like, nobody, nobody really got fired. And everyone shared it with everyone else brought in. So it wasn’t it wasn’t really capitalist internally assess. It’s good in some is very high psychological security, and it’s very high, relatively high cohesion. But there’s a lot of discussions, I thought that was very inefficient. So with Binary, I was very careful, especially in the early days to maintain. I told all my team Look, I’m gonna, I’m gonna reserve the final say, even if I don’t like it, even though in most cases, I don’t use it. But, but then that kind of goes down to the team. If a person is willing to make a decision and take accountability for it, they just make it and they execute. So I think that helps quite a lot in the efficiency. The problem is if you get an inexperienced founder or like, we basically you have to judge yourself. If you’re not able to make some of the really tricky decisions yourself, then it may be better to get a couple of

founders so that you can bounce ideas off and kind of discuss. So there’s there’s trade offs. So also my personality, even though I have the I have that authority in the early days in, in violence, but I, I’m always quite respectful of other people’s opinions. So I’m not really sort of a dictator in a bad way. So I was very cautious of that. So I think there are different structures that work for different styles. But if you are able to sort of make relatively good decisions and have a very clear path, and have the sort of what we saw called charisma to attract a strong team, then you can execute very quickly if you have a more for single founder structure. Well notice, I wasn’t every single founder, there’s like, there’s like five or six other guys that kind of, we did this together. But it was very clear that if there was a debate, I will hold the final the final say, I did not I didn’t use that power quite a lot. But that really simplified that decision, like the decision time and decision cycles.

Jamie:  Yeah, that makes sense. It would have been a benevolent dictatorship, right. And I think, you know, from the people that I’ve been exposed to in finance, they’re all highly competent, capable people. And so clearly, you know, you found a way that that manages to both attract and keep and retain good people, whilst at the same time reducing, as you said, that overhead of of decision making so So what was the what was the insight that led you specifically to found finance because I mean, you’ve clearly very much focused on product and executing and arguably, you’ve out executed everybody. That of course, is impart this, this managerial style, as you say, this heavy focus on execution, but specifically what was the insight that led you to think that Binance could have an edge.

CZ: So even back in 2013, when I first got into to the industry. The idea when I joined blockchain dot info, the idea of running a crypto to crypto exchange surface. So we’re kind of viewing look if you if you’re in the cryptocurrency world, you can just change different type of cryptocurrencies and then there’s Fiat exchanges, that change from Fiat to Bitcoin. And so that idea was, was there in 2013. But we’re looking at the market. The industry was caught the Bitcoin industry back then not the blockchain industry. So the market was too small. In 2015. We actually I, we actually looked at it again, we had there were discussions about again, whether we want to start a crypto to crypto exchange, but even in 2015 Polonia X was there and doing decent business but not super big. I think, I don’t remember Beatrix but I think Beatrix was around display, but they were just too small to be noticed by like an Asian sort of community. And then in 2017, they have we looked at the opportunity again, and Polo necks has huge volumes. And Beatrix is coming up very quickly. And we calculate each one of them. I probably like to show each one of them are doing like hundreds of millions of trades a day. Not quite even Billings, but their fees are quite high the charge like 2%, 2.5%. So effectively, they’re making like a couple million dollars a day in revenues, and that’s a large, that’s a pretty substantial business. So we felt that the market size is the market is there and then we sort of analyse the opportunity, both speed tracks and politics, the to crypto to crypto exchanges, the two largest crypto to crypto exchanges are larger than all the Fiat exchanges. And they’re only based in the US and they only have English interfaces. They only have web interfaces, and they don’t have, they don’t really have customer support like basically you submit a ticket to them. It takes two weeks to two months to get a response well while your account may be logged or your cryptocurrency may be sitting online count. So we felt that empty. When we looked at the products, the products are not well designed, like for example, the trading page, you have to scroll back up and down to place a trade. And the whole experience wasn’t that wasn’t as strong. Now, given the experience that we have in building trading products, we know that we can build a product with much faster matching engine so that the user experience is very smooth. We redesign the screen so that it fits on one page. People don’t have to scroll back and forth to trade and everybody copied us. And we were the first ones to say look, you will get a response within 24 hours for any ticket you raise. That was a big improvement. Now we moved it up and then everybody copied us. The service for the entire industry improved. And then we now we’re saying look, you’re gonna get a response within two hours. And we have when we launched we launched in four languages, we expanded the interface into 16 languages. We now offer customer support in about 10 languages as well. And we focused, we have a mobile app. Now everyone has one. And we also protect our users better. Some of the crypto assets you store on exchanges generates what we call gas or interest. And we were the first ones to split that interest or to give that will not split, just distribute, distribute that interest to the user so that they get it. Whereas before the exchange does not distribute that at all. So we, we analyse the opportunity there, we thought there’s quite a bit, quite a lot of room for improvements. And we said, let’s do all of those things. And we will have a pretty good shot at it at becoming a pretty significant exchange. Honestly, if you ask me in 2017, I will say two to three years to become the world’s number one exchange, if you’re lucky, but you happen in about six to seven months, so but when analysing the market, we saw there was clear room for improvement. I think pure Peter Thiel said like if you if you can tap, accept, then do it right. So thought it wasn’t may or may not be 10 x but certainly more than three to five x. So with that, let’s do it. Yeah.

Jamie:  So we were speaking to Kyle of multi coin on the podcast and I think he made a fair assessment, which was, you guys are probably released more FinTech products than any company on the planet, let alone crypto company, but any, any company. That so I can imagine that to be very, very true. So in that sense, obviously, innovating, being a founder and innovating in Web 3, is an order of magnitude more complex than a normal start-up for a number of reasons. The two most obvious ones for me, I would imagine in the context of finances, one, being a public company, day one, because of the Ico and I think a lot of projects have massively underestimated what’s involved in being a public company and probably finding out the hard way why many companies stay private for so long, and the second one is navigating the regulatory environment, which is still incredibly grey. So on that kind of on that second point, you know, how, as an innovator, how have you approached regulation? And I think in recent news, we’ve seen what’s happened when a company like Libra has, has taken a different approach. They’ve been severely restricted, and arguably that the project’s been potentially killed off forever.

CZ: Yeah, sure. I can I yeah. So I think there’s a lot of mis misunderstanding about Binary approach to regulation. I think fundamentally, there are some differences in how we operate or how we view a company or an organisation. I don’t even use the cup of the word company that often because I think that’s a relatively old concept that’s tied into a specific mindset, which we don’t really operate the same way. So most companies, the founder is studying some country and he’s usually thinking about his home country. And he’s gonna develop a product testing the home home city home state province and then sort of get a country first and then move into different geographic location and expand our market so and then go international kind of that way. Whereas the internet made that a lot easier to not not do that anymore. But if you so if you look at Tick tock, right, so now they can they have a very simple, not a very simple, they have a relatively simple product concept. They execute really well and everybody around the world had the same need to shoot a video about themselves and they can expand globally. But when he started charging money for it when you start have a business model, then you’re tied into Fiat on ramps like our current payment methods are different in each country. So this is probably why like lucky get bank accounts in different countries and then you credit some countries use credit cards, some countries use cash. Some countries use a mobile payments like WeChat or mobile money in Africa. So there’s a lot of differences. Whereas, but the internet already have allowed companies to be much more international, but with cryptocurrencies and blockchain, that easiness is increased by another tenfold. So, minus studied started as a crypto to crypto currency exchange and we didn’t touch Fiat. So, anybody around the world can do a blockchain transfer, deposit bitcoins and buy start buying bnb and or other cryptocurrencies. So, that actually allowed us to not operate in a specific country at all. So the concept of a country becomes much fuzzier and, and also given my personal experience of being moving around the different countries working in different countries before this, I like I’m pretty comfortable with picking up a suitcase and move to a different country. I can live in most countries for for a very extended extended period of time, I’m not. I’m not like, Okay, I have to be in the city all my contacts in here. So I don’t have that sort of tied down this where most other founders don’t have. So when we look at the business, we said, okay, so we this business can be we’re gonna do it around the world, we’re just not we’re not going to do it in one country, we’re going to do this around the world. And it happens that some countries have really high compliance and regulatory requirements, which are very expensive to do, because you need a bunch of lawyers to apply for a lot of things, but there’s a time opportunity cost to it. There’s a legal cost to it. There’s a compliance team cost to it. And to be honest, look, today if you want to start a cryptocurrency exchange in the United States, it’s probably gonna cost you $10 million to get all the licences so a start-up company then that’s not a really viable option. And it’s going to take a year. So unless you can raise quite a bit of money and and then do a bit of an approach that’s usually not a most entrepreneurs are not going to be rolled out. So when we started, we raised $50 million, but we didn’t want to spend $10 million on supplies for one country. We said, Well, this already be tracking Paul next in America, let them take that market. We’re gonna focus on Asia, Europe and other other places, Africa, other places. So and then if one country has small regulations, that’s prohibiting exchanges, like China was a fine, we’re going to leave the country, which is not going to touch that country. So we respect the rules, but we are very flexible in choosing which where we operate. So a lot of people miss understood that for regulatory arbitrage, or, or dodging regulation, we’re not talking to regulation. We’re just like a lot. Even United States is 20% of the global GDP. But they’re still 80% of the GDP outside of the United States. The market is bigger outside. So we said well, so let’s leave the United States alone for a while. And then. So we’ve grown, especially in that way, but in our, in our mind, we’re not avoiding regulation, we’re just going to the places, we’re looking at the whole world, we’re looking at which places have favourable regulations. So we went to the countries who have favourable regulations to our industry, and grown from there. And then once we reached a certain size, we said, well, US is a pretty big, big market, it’s going to cost $10 million to get all the licences, but we, we can now afford it. And we have a large team, we now can spend money to do that. And we find a partner who knows how to do that, and do that later. So the order of things are a little bit different given our mentality and approach. But there’s a lot of misunderstanding that we dodge regulation, but on the contrary, we are fully compliant in every place we operate. So we just view the world as many different choices in terms of countries that we could operate, and we’re pretty we’re pretty flexible to being any one of them. We’re not married to a state. No one, especially in the early days. So that’s really the difference where I think, given the sort of more than estimates of the internet and blockchain technologies and cryptocurrencies that’s going to that trend is going to be much, much more apparent in the next few years.

Jamie:  Yeah. So in a way you’re kind of like a Prato native internet organisation. So how far do you think that will go? So obviously now we’ve got all this new decentralised financial infrastructure, you now have an increasingly maturing stack around dows. Do you think what kind of time horizon or if at all, do you think it’s possible that there will be a generation that will own more wealth digitally than they ever will physically and you know, potentially will never work for a company in their entire life?

CZ: I absolutely thing so if you look at the sort of crypto Forbes or Rich List, all of them have more digital assets then they have in real life. If you look at guys like metallic, he’s very lean or his lifestyle, I’m relatively lean on my lifestyle, I don’t own anything, I don’t have a car, I don’t have a house, I don’t have boats. So I don’t need those things. I can rent them when I need when I need one and I don’t have to take care of it when I don’t need it. So I think why at least from my perspective, or the friends that I interact with, there’s a very high tendency towards not owning anything, especially anything physical. If you own anything physical it’s really hard to move around it´s really hard to take with you. And when you’ve got to sell it in a big hurry, you actually don’t if you own a house a house actually keep value pretty well but when you’ve got to sell it in big hurry the liquidity is very poor, it takes months to find a buyer and you got to pay a lot of taxes or goes through all the procedures. Whereas look if you have Bitcoin, you don’t have to carry anything. I think there’s that I definitely think there’s a much stronger tendency towards much less physical ownership and much more digital ownership. And I think given that I’m very confident in the cryptocurrency or blockchain industry.

Jamie:  So if we then go back to this other second challenge or or complexity of being a Web 3 start-up or a decentralised start-up that has raised money, not through equity, but through an Ico and that kind of making you a public company, you’re by far one of the more active responsive co founders in the space on Twitter, I see you personally responding to both requests complaints really quickly, but what is what is the unique requirement? What is different about being a founder in that context?

CZ: Yes, I think that this is a very good point. It’s very different. So this is Yeah, I think you understand this in a lot of depth already clear. Many other founders don’t understand this with when you raise money publicly. Doesn’t matter if you do it on the blockchain, Ico ieo, whatever. But when you raise money from a large number of people say a few hundred or a few thousand people, you are effectively a public company. Now I take the word public a little bit loosely, not a, not like a publicly listed traditional definition, like NASDAQ, but effectively you’re a public company, and given so for me, given such a high number of people who have invested in the US, I feel an obligation to let them know what’s going on is good and bad. So my personality before Binance was actually not such an I was, I would say, I’m more of an introvert. So and, and also, there are people who are hubs and the people who are spokes. The hubs usually do a lot of people, they interact with a lot of people, they’re very outgoing. And I’m definitely one of the spoke type person. So I actually don’t interact with that many people, etc. So I kind of view myself as an introvert to some extent. But from a CEO perspective, yes, I think I’m definitely more extrovert from the CEO job position compared to most other CEOs because as soon as we finished the Ico, I figured out, well, now I got to do weekly updates. Everyone’s curious about what’s going on everyone, and there’s a token that’s traded live. So the BMV tokens trading live our own exchange and also some other exchanges. So people need more information. And also, there is pressure when we after the Ico when we first launched bnb our own exchange on the first day, the first two weeks, the price actually dropped below Ico. And, of course, a lot of people are complaining, though there were enough threats. But regardless of those, I feel I that’s the highest pressure period of two weeks of my life because I felt very bad. The thousands of people believed in me, give me their money and suddenly they’re all they’re all in a loss. So that two weeks was really, really tough. So after that, or even in those two weeks, we would like to push out new features and try new things. But it took literally two and a half weeks to, to sort of push the product sort of to reverse. They’re sort of a drop train.

Jamie:  And how do you how do you emotionally and operationally detach from your wallet? One of the complaints about being a publicly listed company is is that everybody starts watching the share price, and they start having a much more short term thinking so how do you detach both as a as a human being emotionally from that and then operationally, from that pulling you away from more strategic decision making?

CZ: Yes. So the, there’s a couple of ways I do that. Luckily, two weeks after the Ico the price went up to about 10 X of the Ico price, so that that really removed a lot of pressure from a pricing perspective. Right now BMV is about it’s like $15. So it’s hot. Right now it’s 150 X, the Ico price of two and a half years ago. So that helps a little bit. So. So then, yes, the price fluctuates. But that’s, that’s just market fluctuation. If you if you buy it at a high point, and it fluctuates, there’s not a whole lot I can do. But I’m pretty confident I’m pretty comfortable to say, look, we raised $50 million for about half of the total token supply. And that $15 million is worth about a billion dollars right now. So I’m quite comfortable. So once we got out of that trench that pressures more or less gone. There’s still price fluctuations, but there’s some differences between having a token and an publicly listed company, like a NASDAQ or NYC type where they have quarterly earnings calls and that’s what everyone focuses up. They have a real coordinate pressure. Whereas in a more free market, yes, they are people, there’s a spectrum of people, some of them are very short term price driven. And if they buy yesterday at $15, and today 12 to 14, they, they’ll be really pissed. But there’s, there’s also a lot of long term holders, so and the after. So after, after 10 X, I started not focusing on the price I started, just focus on deliver more and more products, because I know that we really can’t control the price, but with the way we would influence it is just to build more products that people use. So I’ve been much more focused on that. So luckily for me, for us right now, the token price is so much higher than the Ico price that we don’t have that pressure. But the price still fluctuates, we still have a little bit of a psychological impact. But at the same time, I’m in this industry for the long term I want to build Binary into a company and the last 10, 50 or hundred years, way beyond when I before way beyond my retirement, etc. So I have a much longer term view for this. So I’m less concerned about the short term fluctuations we got out of the trench, most people who also early investors made money the lead investors will, will continue to work hard. So I focused and will continue to work hard and build out the product. So I can focus much more on those aspects. So that’s how I kind of deal with it. And a lot of other founders are too, especially the short term focus founders, they usually very affected by price. They’re thinking about how to cash out where do I when do I sell my bit of my own token or not? Where we don’t think about those kind of things. We, yeah, so. So I think those are the ways to just get away from that.

Jamie:  Yeah. So now your market leader, you’re the one with the target on your back, and you’ve reached a scale where. You know, you can’t help but be slowed down a little bit just by the sheer complexity of the business, the amount of people that you have going. How do you how do you manage that transition to avoid becoming the kind of slow and innovative incumbent?

CZ: Yes. So I don’t have a To be honest, we’re still trying to figure that one out. That is a very real problem we are facing today. I do feel the 1000 people organisations nowhere near 10 x faster than when we were 100 people, probably not even five x faster. So when we’re 100 people, we can do things a lot faster than we can do right now. So that’s a problem that as we’re growing, we are now we now have to solve. I wouldn’t say we definitely would not say we solved it already. We’re definitely struggling and fighting with it. There are problems internally there with less efficiencies, more company, sort of more discussions, more communications, more debates and less exclusion. And but one of the ways I do try to I’ve kept trying to push out in balance is that I want many smaller teams. So I want many small independent teams that can do this package do most of the stuff on their own.

So I want to I want each team to sort of have some clear, very high level metric for output targets, such as like number of users, market share, and revenue as the business generates revenue. So those are typically three numbers asked for the each independent sort of business units we call internally

Jamie:  Are they focused around a product. Those business units are normally forget. Yeah. Okay. So the kind of like a start-up within Binance?

CZ: Yes. So for example, so each team is relatively independent. So the future seems very independent from the spark team. They even have a different matching engine. And the margin team is different from that. The Academy team, the wallet team, was a Rax team, the Sims coin market cap team, they’re all very independent. So they’re the good part about this is they each have their own sort of their own thing. So they’re still operating like a mini start-up. They, at the same time, they try to collaborate with other people through like very clearly defined interfaces. To be honest, it’s not working too well right now to be to be very frank, what I find is, if there’s a project that requires cross business unit collaboration, then it kind of breaks down. So if we want to release a feature that’s common to spot futures margin and whatever else is much harder to push. Whereas if it’s just within futures, they want to launch a new feature. They do it very quickly. So we’re still struggling with different type of structures, but it’s very clear to me, I think the solution, even though we have not proven that it fully works, is that small independent business units around specific products, like high dependence, high power and high accountability.

Jamie:  Yeah, that makes sense. And I think, I mean, in a way you are, you are looking for entrepreneurs within the business. And this was actually going to be my next question. So I guess both internally, so the people that you’re, you’re hiring to build these businesses, these new product lines, and then also in the start-upsthat you’ve backed through IOZ on the on the platform, what is it that you look for in founders, you know, as a founder yourself? What is it that you look for in others?

CZ: Sure. I think I’ve developed so I think what was my strength? Probably is a good judge of character. I feel like I’m not young anymore. So over the years I’ve developed a set of methods to judge character. I look for people number one who share our vision who actually believes in cryptocurrency and believes in blockchain understands technology understands the economics in the world understands what kind of problems cryptocurrency solves. So that’s kind of the mission vision. Part of it. I look for people with similar values or what I call principles. So how do they make decisions in tough times? How do they balance the benefits or a conflict of benefits? You can make a decision that favours yourself very heavily by hurting while by are fairly unfair to others or you can do the reverse. How do they make decisions in this sort of tougher times? How do they celebrate successes and failures and, and how, like what kind of experiences they have as an entrepreneur? For the business we acquired our we have users that’s much easier because they already build some if somebody has a large number of users. Then they already build something that has value to a large number of people. And then the last thing is really actually like sort of technical expertise. Not all the business owners, business unit owners needs to be technical, but they need to know their stuff. So those are sort of the areas I really I look for. Yeah. So an ethics is really, really important. I think basically, we cannot say we operating a trustless society because of the blockchain, but actually, I think trust and credibility is super important. So yeah, those are the things I look for.

Jamie:  So it’s interesting. You mentioned M&A. Obviously, as you’re now looking to grow, you can do that through internal innovation, or acquisition. How do you strike that balance between deciding whether you acquire something and try to integrate it into the business or you try to develop it internally?

CZ: I think basically, what the preference usually is if we can do it internally and we have high confidence of doing it, then doing the internally is usually faster and cheaper and more manageable and the next thing would be to say, Okay, let’s acquire some, let’s acquire that in the M&A space, there’s a there’s a different spectrum as well. You can do Aqua hires of a younger, younger, less developed teams or less developed products or companies, and then such as bring them into the fold. How early like that that should be is very tricky, but kind of dependent on the on the, on their team as well. Some funders, they do start off because they want they don’t want to be part of a big organisation. And finance is not super big, but not super small. And some funders already have built out the product bit they have users etc. And then that that would be a more costlier or higher valued acquisition. So we do a bit of both. So we in that spectrum, we do everything, but fundamental is it worth it? Is it valuable? And can we do it ourselves or not? Can we sometimes we, we obviously always also, consider can we compete. For example, if there’s an if there’s another fee at local Fiat exchange in a certain country that we’re not we don’t have a strong presence in. And we will consider, Hey, can we can we hire a few guys put in, put them in that country and develop that local market? Or are they already so established that it’s better for us to hard to acquire them? So we do consider those factors. And we are pretty flexible in our approach. To be honest, we have done about 50, 60 acquisitions so far, many of them are small. CMC is by far the largest one. And so we’re still we’re kind of still learning the ropes to be honest.

Jamie:  Final question. I mean, I could, I could talk to you all day, but I want to be respectful of your time. So, the final question really is, where do you see the industry evolving? Next, a lot of people are saying, I suppose a dad. Obviously, the markets have had a pretty significant correction. And certainly, when I speak to the wider investor ecosystem, crypto projects have become a bit of a dirty word. have projects and are reverting to raising money through equity in the early stages. Do you see in the Firstly, do you believe is a dead? Do you see that they’re going to evolve into something else? How do you see that landscape evolving?

CZ: Sure. I don’t think I use a dead right now. My view is we are buyers will continue to do it. But I typically use a broader term. I will call blockchain phone raising. I think raising money on the blockchain is a killer app. This is this is a feature but this is one of the apps that blockchain cryptocurrencies bring to our civilization now. That we do not have before. So before, while like if you look 50 years ago, you have to if you want to start a business, you’ve got to borrow money from the bank, and the banks are very conservative, and then maybe 20 years ago, we have VCs and stuff like that. And but VCs have a specific structure that in a lot of times is detrimental to businesses, VCs. Devil sound the fund is usually a five year eight year term, they will need to raise a second term found they need to cash out they need to show returns. So most VCs, not all VCs, but most VCs are money driven, even though a lot of them claim some, some of them are real, like mission driven, they want to have entrepreneurs and stuff like that. But most VCs are not entrepreneurs, and they have a calculator in their head or in their pocket. So at different times, the founder gets overly diluted, and then they lose, they say, they so we don’t know the whole story. And the founders want to know what the VCs want successive rounds onto an IPO or etc, they want to cash out. So there’s a lot and as a founder, they actually spent a lot of time in those. Especially mostly you spent a lot of time dealing with those type of issues where they don’t those time could be spent on product. So as before we were discussing say look, after an IEO or ICO you’re running a somewhat of a public company, you have to you have to work you have to be more transparent. You have to spend more information. But I think that time is actually less like the amount of time I spent on Twitter is much less than what I would have to spend with investors etc. And, and also, more importantly, blockchain fundraising allows people to raise money from globally now. So if you have an idea that you want to do a business and you can find people who are interested in you, globally, and they are, they are mostly retail investors, to be honest, they could invest, I don’t know, $500, five bucks, or $5 million. So you have a spectrum of them. And this allows you to reach around the world and whereas the negotiation table is very much changed. I think market goes through cycles, right? So 2017 was too hot. Anybody with a piece of paper can raise millions of dollars. That’s not right. Now, maybe we’ll probably overcorrecting to the bottom of the too much. But we’ve seen this kind of cycles in the internet days. Well, like 98, 95, very easy to raise money because Yahoo, eBay, they all do really well. And then 98 is really easy to raise money to 2001 it’s very hard to make money to raise money. So we’ve seen those kind of cycles as well. So I think right now, we’re in the early days of this industry. So we see the cycles as well. But I think blockchain fundraising last day, and I believe this one, especially having gone through the cycle myself. And having gone through this process myself, I think raising money on the blockchain is so much better than raising money through VCs. It’s so much simpler, yet less legal work, you have less you have less restrictions on you. And if you’re a strong founder, then you can execute better if you’re a weak founder, then you need to structure to help you. But that’s your weakness. But if you’re a strong founder, I do believe that blockchain fundraising so much better And but blockchain fund raising over for the large industry blockchain fundraising is only one of the apps the cryptocurrency does so much more with the quantitative easing with a lot of money on limited amount of money being printed with restrictions on transferring money across borders or remittances, all of this problems can be solved by to a very large degree by with cryptocurrencies. So I think there’s so much more to grow. What if I don’t believe that I wouldn’t be spending my time in this industry?

Jamie:  Yeah, I mean, one of my big concerns is so I mean, I believe I also share that opinion, that’s the power of tokens and crypto is kind of an extension of the principles of crowdfunding. One of my big concerns is that for all the things that you could complain about ICOs, one of the things that they did do was finance a lot of open source technology that would have otherwise been proprietary. And that’s really allowed us to have this kind of public goods and infrastructure. That’s going to make lots more things possible. Looks easy. I want to thank you for your time, all the work you’re doing in driving forward the industry and I’d love to get you back on in a year’s time. I’m sure the world would have changed significantly and I’m sure finances is going to be going great guns even though.

CZ: Sure absolutely. I’ll be very happy to do that. I look forward to talking to you again soon. Yeah, perfect.

Jamie:  Thanks very much.

CZ: Thank you so much, Jamie.

Jamie: Thank you. If you enjoyed today’s podcast, please make sure you subscribe, rate and share your feedback to help us reach as many people as possible with important mission of Web 3.