Coinbase is a trading platform that facilitates buying, selling and storing digital currencies such as bitcoin, ethereum and litecoin.
Brain Armstrong founded Coinbase in 2012 with the mission to create an open financial system for the world.
Having a keen interest in technology and computer science from a young age, Brian Armstrong holds three degrees from RICE University, including bachelors and masters degrees in computer science and bachelors in economics. Following his graduation from RICE, Armstrong set about his first entrepreneurial venture founding Universitytutor.com in 2003. Building a business from his laptop whilst back-packing around the world, Armstrong’s goal was to build a real online business that had long-term prospects. Despite earning less than he would be through a full time job in the corporate world, Armstrong understood that it would take time for his business to grow but was focused on creating something of real value rather than following the trend of trying to make quick money through creating online businesses.
Returning to the US following a number of years travelling the world and working on his first business venture Universitytutor.com, Armstrong took a software engineer job at AirBnB in 2011. However, Armstrong only spent one year at AirBnB before leaving to concentrate solely on a new business venture, Coinbase.
Coinbase was initially created with purpose of being a Bitcoin wallet service that helped customers store their digital wallet. The rapid rise in interest in cryptocurrencies resulted in Coinbase adapting its offerings from just a wallet service into a trading platform where you can buy and sell a variety of cryptocurrencies through the company’s secure online platform, thus making digital currencies widely accessible.
Coinbase is considered as one of the pioneers within the cryptocurrency space, with the growth of the company following that of the crypto market.
Alongside the rapid growth, Coinbase has completed numerous rounds of funding with their most recent round of $100 million valuing the company at $1.6 billion and therefore becoming the blockchain industries first unicorn.
Coinbase is a platform business that connects users to digital currencies.
Coinbase currently generates revenue through charging users a 1% fee when depositing or withdrawing from their platform. Similar to the brokerage model on the stock market, in that Coinbase allows traders to easily buy and sell a variety of digital currencies and in return takes a commission for using their platform.
Being a digital currency exchange allows the company to have a clear business model to achieve their goal and provides a sustainable growth strategy through making the platform the easiest place to buy and sell digital currencies.
In order to accommodate for the increasing interest in the crypto market, Coinbase developed an easy-to-use, secure, trusted platform.
1) Building tangible and intangible assets
Coinbase has been able to develop a number of intangible assets such as customer’s trust and a reputation for providing an easy to use service. These assets are major factors in why it will be very difficult for a competitor to challenge the company’s position as the market leader.
2) Take a risk- be a visionary
A key factor of Coinbase’s is success is the ability of Armstrong to recognise a highly disruptive market and ride that wave in order to build a hugely successful company. Taking the decision to build your own business comes with high risk on its own, but a key learning point to take from Armstrong-as a founder-is his ability to be at the forefront of innovation and willingness to take a risk with a market that has huge risk attached to it.
3) Having a long term business strategy
A key learning point to take from Coinbase’s business strategy is the ability to constantly innovate and adapt your business strategy to the future trends.