How we make decisions at Coinbase

  • Whether to hire a candidate
  • What to prioritize next in a product roadmap
  • Whether to buy or sell a company
  • A new name for a product or team
  • And more…
The Coinbase Decision Making Framework
  1. Set the parameters
  2. Deliberate
  3. Decide

What does good decision making look like?

When is a decision making framework needed?

The Coinbase decision making framework

1. Set the parameters

Setting the parameters of a decision up front
  • The decision date
    Choose a deadline in advance to help avoid analysis paralysis (waiting too long for more information to arrive). It also gives surety to any parties who are blocked waiting for this decision to be made.
  • The revisit date
    Ask the group to agree in advance how long they will commit to this decision. This helps avoid revisiting the decision prematurely. No decision is set in stone, you just want a clear agreement about how and when it will be revisited. The decision maker also has the right to push the “emergency button” in the event a decision is going wrong, to revisit it sooner.
  • Decision maker(s) — those making the decision.
  • Input providers — those influencing the decision.
  • Affected parties — those affected by the decision.
  • Binary — yes/no decision such as hiring someone or buying a company.
  • Prioritization — force rank a number of options, such as choosing the next five features to build out of one hundred possible options.
  • Choice — choosing a single option among many possibilities, such as a name for a new product.

“A good plan, violently executed now, is better than a perfect plan next week.”

-Gen. George S. Patton

Should there be one decision maker or multiple?

2. Deliberate

Sample deliberation step where you capture votes, and pros/cons of each option.
  • Enumerate the options
    Do a mini brainstorm here of options. Go for quantity first, and defer judgement. Get everyone to think creatively. Once you’re done, see if you can consolidate any of the options which are duplicates. Note: you can skip this if you’re making a binary decision because you already know the options: yes and no.
  • Present data
    If there is any data gathered from customers, split tests, the legal team, outside consultants, etc, now is the time to present it the group. Ideally these are shared as pre-reads in advance of the meeting to deliberate.
  • Voting round one (blind)
    Capture the first round of votes (from input providers) to take the temperature of the room, ideally without anyone seeing others votes in advance. For a binary decision, have everyone do thumbs up or down on the count of three in the room. For a prioritization or choice decision, have everyone assign votes in a spreadsheet (encourage them not to look at the other columns).
  • Discussion of Pros and Cons
    Go around the room, from least senior person to most, and have everyone share why they voted the way they did. Allow a freeform but timeboxed discussion to follow. Capture the pros and cons discussed in the notes field of each option. Encourage everyone to speak up, get curious, and learn something new. You will frequently find at this stage that there are shades of grey between the options you enumerated, and no clearly “best” option. You can continue updating the list, adding or consolidating options.
  • Voting round two
    Finally, after each input provider has heard what the others think (fully connected information sharing) ask for a second round of voting, and see if anyone’s votes have changed. Capture the second round of votes in the spreadsheet for record keeping.

3. Decide

Memorialize the decision for later view.
  • Make the decision
    The decision maker(s) can now take a day or two to deliberate on the input, and make a final call. Even if there is no clear “best” option, they will still need to decide by the decision date.
  • Communicate it
    Email the decision out to all those who are affected by it. Include a list of input providers, options considered, a brief rationale (pros and cons), and the revisit date. You don’t need to include who voted which way, since you are all moving forward as one unified team at this point.
  • Memorialize the decision
    Finally, save the spreadsheet in a permanent place (like Google Docs) where it can be reviewed at a later date. You may want to schedule a reminder on the revisit date to pull the input providers back together as a learning exercise. These can be fun to review how wrong decisions got made (post mortems) and to guard against history revisionists (I knew it wouldn’t work!).

Conclusion

  • Lots of chatter
    A bunch of one-off conversations happen instead of getting all input providers in a room to share knowledge together (fully connected information sharing).
  • Lord of the flies
    No clear decision maker chosen until after battle lines have been drawn.
  • Last minute addition
    Realizing that someone should have been an input provider late in the process, and trying to sneak them in.
  • Conflict of interest
    A biased decision maker is chosen instead of a neutral one.
  • In the weeds
    A manager chooses them self as the decision maker when it could have been delegated to someone on their team.
  • Pulling rank
    A manager chooses someone else as the decision maker, then overrules them at the last minute! (you have to genuinely be ok with whatever the decision maker decides if you’re going to delegate)
  • Yes people
    Letting the most senior/privileged voices in the room sway a conversation, before hearing what others think.
  • Accidental yes
    The discussion happens over email (generating momentum of +1s), one-off conversations, or a rushed meeting with busy people. There appears to be consensus, but the input providers haven’t given the decision due consideration.
  • Analysis paralysis
    The decision is delayed past the decision date in the hopes of receiving more data. (“Let’s split test it!” can be a form of this if taken too far.)
  • Creativity killer
    Failing to separate enumeration of options from evaluation of options.
  • Tearing off the bandaid
    Letting “there are no good options!” prevent you from choosing the “least bad” option.
  • Too much process
    Using the decision making process on a low-risk decision when the manager could have unilaterally, and more quickly, made it in the moment.
  • Unintentional democracy
    The decision maker feels pressured to choose the option with the most votes, abdicating their responsibility to choose what they feel is really the best option.

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Co-Founder and CEO at @Coinbase. Increasing economic freedom in the world. Join us: https://www.coinbase.com/careers

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Brian Armstrong

Brian Armstrong

Co-Founder and CEO at @Coinbase. Increasing economic freedom in the world. Join us: https://www.coinbase.com/careers

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