Coinbase is the world’s 2nd largest crypto exchange. But in 2012, the company was barely getting off the ground. Let’s dig into the deck they used to pitch investors at YC Demo Day…
Explaining What Coinbase Does
Right on slide #1, founder Brian Armstrong makes clear what Coinbase does: it holds your bitcoin.
He also explains what Bitcoin is. Remember, this was 2012, and Bitcoin was just 3 years old.
It’s so critical to clearly explain what you do. You’d be amazed how many decks I see where 28 slides in, I’m still not sure what the company does.
Who Would Use Coinbase?
This part of the deck isn’t as strong.
Brian doesn’t identify a single type of customer he’s going after. Instead, he mentions many possibilities, from e-commerce to remittances.
I’d prefer to see a founder pick one type of customer who really needs his product and go after them hard. But keep in mind, this was a very early stage company in 2012. We can’t expect them to have everything figured out!
Why Coinbase Will Win
For me, this was the most persuasive slide in the deck.
Brian shows us how people held their Bitcoin without Coinbase. The alternative is ugly software full of long cryptographic keys.
Would I want to use that? Heck no.
Getting Investors Excited About the Bitcoin Market
One of the first things I look for in a startup is whether it’s addressing a big market.
Brian shows us the kind of chart that gets VC’s excited: very uppy and to-the-righty. Check out this growth of Bitcoin transaction volume:
It was still small in 2012, about $2 million a day. But any VC would recognize exponential growth.
Showing Traction
Brian gives us strong evidence that Coinbase is catching on in that market.
Signups are increasing 20% a day. Transactions too are going through the roof.
Ideally, I’d like to see revenue here. Coinbase doesn’t appear to have that, but it does have the next best thing: strong adoption from customers.
What Brian Missed
Brian did miss one very important thing: the team! A bet on Coinbase at this point was above all a bet on the founders behind it.
It turns out Brian had worked on Airbnb’s payment systems before founding Coinbase. He was extremely well qualified to build a payments business — he had handled payments to 190 countries.
But unfortunately, we would not know that from his deck!
Also, I would’ve liked to hear about Coinbase’s revenue model. Is it a take rate of transactions? If so, how much?
Wrap-Up
Brian hit nearly all the important points with this deck. He explained what he does, why it’s important, and how it’s going.
To any investor at YC Demo Day that year, it would’ve been clear that Coinbase was one of the strongest companies. Increasing sign-ups by 20% a day is unheard-of.
I wasn’t there, but if I had to guess, Brian had VC’s running up to him after this pitch.
What do you struggle with in building a deck? Leave a comment and let us know!
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P.S: Here’s an awesome video of Brian practicing his pitch before demo day!
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