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For Brian Armstrong, CEO of Coinbase, the most critical thing a startup founder can do is to understand product-market fit. Reflecting on his experience at Y Combinator, Armstrong emphasizes simplicity: in the early days, don’t chase conferences or funding; just talk to your customers and improve the product. It sounds basic, but it’s easy to get sidetracked with distractions that aren’t adding value or moving the business forward.
Photo: Winni Wintermeyer for Fortune
Customer Feedback Over Flashy Networking
In Coinbase’s early days, Armstrong didn’t rely on buzz or marketing gimmicks. Instead, he went straight to the people using the product. He recalls how his first version, a hosted Bitcoin wallet, didn’t quite catch on. People would sign up, but they weren’t sticking around. Curious to understand why, Armstrong reached out directly to users who left, jumping on calls to get a raw sense of what wasn’t working. One user admitted they simply didn’t have Bitcoin, leading Armstrong to realize that he needed an easy way for users to buy Bitcoin in-app.
Building the Solution: The Buy Button
With this insight, Armstrong set out to create a “buy button,” allowing users to easily buy Bitcoin directly within the wallet. However, he quickly discovered that this was no small task. Making it work meant navigating bank partnerships, regulatory complexities, and money transmission licenses. But Armstrong’s persistence paid off. Once they launched the buy button, Coinbase started growing organically without any extra marketing – a clear sign of product-market fit.
The Lesson: Build What People Need
The journey of Coinbase’s buy button teaches an essential lesson: effective products are built on real user needs. Rather than getting lost in grand visions or endless pitches, Armstrong emphasizes the value of speaking to customers and iterating based on feedback. His story highlights that real growth often comes from straightforward conversations with users and a relentless focus on solving their most pressing needs.
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