Source Code: Your daily look at what matters in tech.

pipelinepipelineauthorBiz CarsonNoneDo you know what's going on in the venture capital and startup world? Get the Pipeline newsletter every Saturday.021fce003e

Get access to Protocol

Your information will be used in accordance with our Privacy Policy

I’m already a subscriber

Tech companies normally rally behind social and political causes. Now one CEO is pushing back.

Will others follow Coinbase's lead?

Coinbase CEO Brian Armstrong

"We could use our workday debating what to do about various unrelated challenges in the world, but that would not be in service of the company or our own interests as employees and shareholders," writes Coinbase CEO Brian Armstrong.

Photo: Michael Short/Bloomberg via Getty Images

In 2017, Sergey Brin attended rallies at the San Francisco Airport to challenge Trump's immigration order. In 2018, Microsoft employees protested their company's work with ICE. In 2019, Google, Microsoft and Amazon employees all walked off the job to urge climate change action. It's fair to say that during a divisive presidency, the tech industry — and business leaders writ large — has become much more comfortable speaking out on societal and political issues.

But in 2020, Coinbase's CEO Brian Armstrong said enough is enough.

On Sunday, Armstrong laid out how his company was no longer going to take activist stances on anything outside a narrowly defined mission of advancing cryptocurrency. "We focus minimally on causes not directly related to the mission," he wrote. Societal issues unassociated with its mission are a no-go because "impact only comes with focus." Political issues are only worth weighing in on if they directly affect the business.

"We could use our workday debating what to do about various unrelated challenges in the world, but that would not be in service of the company or our own interests as employees and shareholders," Armstrong wrote.

But for a CEO whose stance was to make his company staunchly apolitical, he's done a surprisingly effective job of sparking what may be the next culture war to consume the tech industry.

Bring your true self

The technology industry has long prided itself on giving employees a voice. It's the spirit behind everyone getting equity, frequent town hall meetings and even the message boards that are still hugely popular inside large companies like Google and Facebook. Startup company culture only further compounds it, with co-workers spending long hours together, eating catered lunches and dinners at the office, and bonding over elaborate offsites from escape rooms to cooking classes. In return for long hours and proud allegiance, tech companies have encouraged staff to show up as their authentic selves to work and consider teammates as close friends or even like family.

Salesforce literally defines its company culture as Ohana, which means family in Hawaiian, and hasn't been afraid to stand up for it. When Indiana introduced an anti-LBTQ bill in 2015, Salesforce's, CEO Marc Benioff, was among the first to condemn it and threaten economic sanctions. He told Harvard Business Review that it was about standing up for his employees and the company's core value of equality.

"CEO activism is not a leadership choice, but a modern — and an evolving — expectation," Benioff said in 2018. "CEOs have to realize that millennials are coming into the organization and expecting the CEO to [publicly] represent the values of that organization."

Americans are also getting more comfortable with corporations speaking out on political issues — even if they are outside the realm of what directly affects their company. In Global Strategy Group's 2020 Business and Politics survey, 84% of Americans surveyed said they believed companies should take a stand on issues that directly affect their company. The majority (62%) also think it's OK for companies to take a stance in general.

Most employees also said they talk about politics at work and aren't afraid to put pressure on their companies to take action that represents them. 57% of people surveyed said they would sign a petition asking their employer to take action on an issue, and 41% said they would attend a boycott or rally with their colleagues to put pressure on their company to speak out.

One of the draws of working at these tech companies has been the idea of working at a "mission-driven" company. While the lofty platitudes may often be mocked, companies draw in employees with the allure of being focused on changing the world and whatever mission they stand for. More often than not, that empathy is viewed as a positive and even a competitive advantage.

And over the last four years, as the political climate in the U.S. has become more divisive than it has been in decades, many people in tech have had a realization: that tech companies don't operate in a silo. Companies no longer have the excuse to have their heads in the sand and not realize how their products are interacting in the real world. Facebook had to change its tune in the wake of the 2016 election from "we're just a platform, we didn't have much of a role" to understanding and strategizing the pitfalls of how its tech could be used in the upcoming elections.

At the same time, workers have found their own voice to push back and challenge their companies. As a result, tech worker action has soared exponentially in the last few years, with over 100 different worker actions in 2019 alone, according to Collective Action in Tech, which tracks events. In August alone, the site catalogued worker protests outside of Jeff Bezos' NYC home, a virtual walk out at Pinterest to protest racial and gender discrimination, two weeks of strikes at Deliveroo for better worker's rights, and a salary spreadsheet circulating inside Microsoft where over 300 employees shared their salary and pay bonus data.

Value destruction

Armstrong has clearly been watching this situation with growing concern.

"It has become common for Silicon Valley companies to engage in a wide variety of social activism, even those unrelated to what the company does, and there are certainly employees who really want this in the company they work for," Armstrong wrote, adding emphasis. "While I think these efforts are well intentioned, they have the potential to destroy a lot of value at most companies, both by being a distraction, and by creating internal division."

To some, it was a watershed moment for the industry and a path for other companies to follow. "I predict most successful companies will follow Coinbase's lead. If only because those who don't are less likely to succeed," Y Combinator founder Paul Graham said. "Coinbase appears to be taking the unpopular position of allowing (even encouraging) diversity of thought in the workplace. Good for them," investor Michael Arrington said. Craft Ventures' David Sacks viewed it as a way to build a movement: "Focusing and keeping the team united around why they wanted to join in the first place is how you build a movement and change the world."

But to many, the post seemed like an abdication of leadership and putting money-making capitalism first and foremost before fighting for employees' rights and building an inclusive environment. Sleeping Giants co-founder Nandini Jammi tweeted that Armstrong's post was essentially a commitment to being a white supremacist organization. "Really brave of @brian_armstrong to buck the growing trend towards 'inclusivity' & invest in a safe space for white tech bros," she added. Fellow crypto enthusiast Jack Dorsey, who serves as CEO of Square and Twitter, also criticized Coinbase for its decision not to acknowledge the connected social issues, saying it "leaves people behind."

Former Twitter CEO Dick Costolo escalated it even higher in a since-deleted tweet. "Me-first capitalists who think you can separate society from business are going to be the first people lined up against the wall and shot in the revolution," he tweeted. "I'll happily provide video commentary."

One concern some people have with Coinbase's stance is that it could use it to shield itself from the hard work of building a more diverse and inclusive environment. "The Coinbase drama is showing us how many folks in tech believe that growing a business that is respectful & aligned with your diverse team members' well-being is a 'left vs. right' or 'libs vs conservative' issue rather than a business challenge," Jammi later added.

The company has reportedly had a few instances of division in its ranks. In an incident known as "bathroomgate," Business Insider reported that the company had hung up signs on gendered bathrooms saying that the company recognizes gender is not binary and people are welcome to use the bathroom most comfortable to them. Those were reportedly removed after some employees saw it as political.

Armstrong's blog post may have originated when the CEO reportedly did not immediately agree to making a public statement in support of Black Lives Matter, which many tech companies from Apple to Airbnb were quick to do. According to Axios, Armstrong was asked to make a public statement, but he wouldn't commit to it during an all-hands meeting. Several employees participated in a walkout as the result, and Armstrong ultimately tweeted in support of Black Lives Matter.

Coinbase declined to comment.

In his blog post, Armstrong argued that being an activist company outside of its core mission would "go against our principles of inclusion and belonging."

We have people with many different backgrounds and viewpoints at Coinbase, and even if we all agree that something is a problem, we may not agree on how to actually go solve it," Armstrong wrote (emphasis his own). "This is where there is a blurry line between moral statements and politics. We could use our work day debating what to do about various unrelated challenges in the world, but that would not be in service of the company or our own interests as employees and shareholders."

Angel investor Susan Kimberlin said there's nothing wrong with putting the business first, but what was missing was any clarity around what the company's values are and how that goes hand-in-hand with the mission. A former Salesforce employee, she said one reason the company has been so successful is that Salesforce has been able to clearly communicate and articulate what its mission and shared value system is, so employees join knowing what the company stands for. Articulated clearly, it shouldn't even be a question of whether a company will stand for a cause like Black Lives Matter, she said.

Instead, while Coinbase says it is mission-first, there's still a gray area and question on what that will mean in practice and what its values will be. And without that clarity, employees may feel stifled from talking about issues that are important to them personally.

"I believe it's really important to let people bring their whole selves to whatever they're doing," she said. "This clearly kind of discourages people from reacting to and living with what we all have to right now, which is this incredible amount of ambient stress, an enormous amount of social upheaval, and really concerning and upsetting events that are affecting large groups of people."

Being business-focused isn't an excuse. "Those things don't go away because you're working on something," she said.

The fear spreads?

But despite the fierce criticism, there have been other signs that tech might be starting to feel uncomfortable about how loudly and openly employees are discussing and protesting political and societal issues. In 2019, Wayfair's CEO said he preferred "non-political" employees just a few months after employees had walked out to protest the sale of furniture to migrant detention camps. Google even curtailed its famous weekly TGIF company meetings last year after CEO Sundar Pichai said they were "not working" in their current form.

One prime example: The internal message boards that have historically been such a big part of Big Tech culture, allowing people to share everything from code and snack tips to political opinions and thoughts about the future of their company. But recently, both Google and Facebook are said to have increased their moderation of internal content, cracking down on conversations about politics, race and more.

Facebook, for instance, is doing more to keep contentious subjects out of people's Workplace feeds. Per Facebook spokesperson Joe Osborne speaking to Fox Business: "What we've heard from our employees is that they want the option to join debates on social and political issues rather than see them unexpectedly in their work feed. We're updating our employee policies and work tools to ensure our culture remains respectful and inclusive."

And CNBC reported that something similar was happening at Google, citing the following message allegedly posted on an internal company blog: "Our world is going to get more complicated as the year continues. Tensions continue specifically for our Black+ community with Black Lives Matter, and our Asian Googlers with coronavirus and China/Hong Kong. All of this is compounded by the additional stress of working from home, social isolation, and caregiver responsibilities — to name a few. This new world creates urgency to keep work a welcoming place."

In other words, there's evidence that Armstrong might not be alone in his view: Maybe other CEOs also think that workplace activism might be too big a distraction to leave totally unfettered. And now, there's a real possibility that, despite trying to not wade into a political fight, Coinbase has only inflamed one.

For its part, Coinbase has doubled down on its approach: It's now offering between four and six months of severance to employees who want to leave the company. Some predict there will be an exodus, others argue that it will make Coinbase all that more attractive to potential recruits.

Over the coming weeks, any CEOs who have had similar thoughts to Armstrong's but have chosen to remain silent so far will be watching that staffing situation play out. Depending on what happens, workplace activism in Silicon Valley could be in for a reboot.

The metaverse is coming, and Robinhood's IPO is here

Plus, what we learned from Big Tech's big quarter.

Image: Roblox

On this episode of the Source Code podcast: First, a few takeaways from another blockbuster quarter in the tech industry. Then, Janko Roettgers joins the show to discuss Big Tech's obsession with the metaverse and the platform war that seems inevitable. Finally, Ben Pimentel talks about Robinhood's IPO, and the company's crazy route to the public markets.

For more on the topics in this episode:

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

After a year and a half of living and working through a pandemic, it's no surprise that employees are sending out stress signals at record rates. According to a 2021 study by Indeed, 52% of employees today say they feel burnt out. Over half of employees report working longer hours, and a quarter say they're unable to unplug from work.

The continued swell of reported burnout is a concerning trend for employers everywhere. Not only does it harm mental health and well-being, but it can also impact absenteeism, employee retention and — between the drain on morale and high turnover — your company culture.

Crisis management is one thing, but how do you permanently lower the temperature so your teams can recover sustainably? Companies around the world are now taking larger steps to curb burnout, with industry leaders like LinkedIn, Hootsuite and Bumble shutting down their offices for a full week to allow all employees extra time off. The CEO of Okta, worried about burnout, asked all employees to email him their vacation plans in 2021.

Keep Reading Show less
Stella Garber
Stella Garber is Trello's Head of Marketing. Stella has led Marketing at Trello for the last seven years from early stage startup all the way through its acquisition by Atlassian in 2017 and beyond. Stella was an early champion of remote work, having led remote teams for the last decade plus.

Facebook wants to be like Snapchat

Facebook is looking to make posts disappear, Google wants to make traffic reports more accurate, and more patents from Big Tech.

Facebook has ephemeral posts on its mind.

Image: Protocol

Welcome to another week of Big Tech patents. Google wants to make traffic reports more accurate, Amazon wants to make voice assistants more intelligent, Microsoft wants to make scheduling meetings more convenient, and a ton more.

As always, remember that the big tech companies file all kinds of crazy patents for things, and though most never amount to anything, some end up defining the future

Keep Reading Show less
Karyne Levy

Karyne Levy ( @karynelevy) is the West Coast editor at Protocol. Before joining Protocol, Karyne was a senior producer at Scribd, helping to create the original content program. Prior to that she was an assigning editor at NerdWallet, a senior tech editor at Business Insider, and the assistant managing editor at CNET, where she also hosted Rumor Has It for CNET TV. She lives outside San Francisco with her wife, son and lots of pets.

Protocol | China

China’s edtech crackdown isn’t what you think. Here’s why.

It's part of an attempt to fix education inequality and address a looming demographic crisis.

In the past decade, China's private tutoring market has expanded rapidly as it's been digitized and bolstered by capital.

Photo: Getty Images

Beijing's strike against the private tutoring and ed tech industry has rattled the market and led observers to try to answer one big question: What is Beijing trying to achieve?

Sweeping policy guidelines issued by the Central Committee of the Chinese Communist Party on July 24 and the State Council now mandate that existing private tutoring companies register as nonprofit organizations. Extracurricular tutoring companies will be banned from going public. Online tutoring agencies will be subject to regulatory approval.

Keep Reading Show less
Shen Lu

Shen Lu is a reporter with Protocol | China. She has spent six years covering China from inside and outside its borders. Previously, she was a fellow at Asia Society's ChinaFile and a Beijing-based producer for CNN. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. Shen Lu is a founding member of Chinese Storytellers, a community serving and elevating Chinese professionals in the global media industry.

It’s soul-destroying and it uses DRM, therefore Peloton is tech

"I mean, the pedals go around if you turn off all the tech, but Peloton isn't selling a pedaling product."

Is this tech? Or is it just a bike with a screen?

Image: Peloton and Protocol

One of the breakout hits from the pandemic, besides Taylor Swift's "Folklore," has been Peloton. With upwards of 5.4 million members as of March and nearly $1.3 billion in revenue that quarter, a lot of people are turning in their gym memberships for a bike or a treadmill and a slick-looking app.

But here at Protocol, it's that slick-looking app, plus all the tech that goes into it, that matters. And that's where things got really heated during our chat this week. Is Peloton tech? Or is it just a bike with a giant tablet on it? Can all bikes be tech with a little elbow grease?

Keep Reading Show less
Karyne Levy

Karyne Levy ( @karynelevy) is the West Coast editor at Protocol. Before joining Protocol, Karyne was a senior producer at Scribd, helping to create the original content program. Prior to that she was an assigning editor at NerdWallet, a senior tech editor at Business Insider, and the assistant managing editor at CNET, where she also hosted Rumor Has It for CNET TV. She lives outside San Francisco with her wife, son and lots of pets.

Latest Stories