Culture fit, culture add, value-based hiring. What do we really mean by these phrases and how can you transform them from theory in practice, especially at scale?
My guest this week is Nathalie McGrath, VP of People for Coinbase. Coinbase prides itself on having an intentional and thoughtful culture which they have managed to maintain and develop through a period of hyper-growth.
In the interview we discuss:
• How Coinbase has scaled their recruiting operation
• Recruiting for culture add and keeping the hiring bar hire
• The anatomy of a value based interview
• Maintaining a quality candidate experience while moving at pace
• The importance of understanding funnel metrics
• A unique approach to voluntary attrition
Nathalie also share her thoughts on what the future might look like
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Transcript:
Matt Alder [00:00:00]:
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Matt Alder [00:01:18]:
Hi everyone, this is Matt Alder. Welcome to episode 151 of the Recruiting Future podcast. Culture, fit culture, add value based hiring. What do we really mean by these phrases and how can you transform them from theory into practice? My guest this week is Nathalie McGrath, VP of People at Coinbase. Coinbase prides itself on having an intentional and thoughtful culture, which they’ve managed to maintain and develop through a period of hyper growth. In the interview, Nathalie shares some excellent and practical insights into value based hiring. Enjoy.
Matt Alder [00:02:05]:
Hi, Nathalie and welcome to the podcast.
Nathalie McGrath [00:02:07]:
Hi Matt, thank you so much.
Matt Alder [00:02:09]:
My absolute pleasure to have you on the show. Could you just introduce yourself and tell everyone what you do?
Nathalie McGrath [00:02:14]:
Great. So my name is Nathalie McGrath and I manage and head of people at Coinbase.
Matt Alder [00:02:20]:
So before we sort of talk more about your role at Coinbase, could you sort of give us a little bit of a, of yourself and tell us kind of how you, how you got here?
Nathalie McGrath [00:02:31]:
Yeah, no, I’m happy to. So I started actually before coming to Coinbase, I was working at Stanford at the Graduate School of Business and I worked with MBA students and really worked with them in terms of what was their career in life vision and how did their career play a role in that. And then I worked with connecting them to jobs and opportunities as part of that. And so I was there for about seven years and not to after that seven years I thought, okay, it’s time to do something new. I’d love to get into for profit. I’d love to look at what that would look like. And I, I talked to so many students about their careers and how excited they were to go back into the workforce after being in grad school, but many of them were hesitant about doing that because they didn’t, they weren’t excited about going and Working in a place where they were working more for the work and less for them or for their impact that they wanted to have on the world. So I was thinking a lot about that as I started to look and explore various opportunities. And I had a few conversations with a lot of different organizations. But I met Fred and Brian, who are the founders of Coinbase. And at the time they were about six or seven people and they had just received some funding and so knew that they were going to grow significantly over the next year and were willing to invest in some kind of people type function, although they had really no idea what that meant at the time. And so we had a conversation and I knew very little about crypto. I knew very little about the financial institution as a whole. However, I like to tease them that I know people. And I thought, well, if anybody is going to make an impact on this industry, a brand new industry that barely existed, it would be these people. Not only Fred and Brian, but the rest of the team. And so I was really excited to work with them. They were very passionate, genuine leaders who I thought would make a really positive impact. And so I joined Coinbase when we were about 10 people.
Matt Alder [00:04:23]:
So for people who are listening, who might not be sort of fully up to speed with cryptocurrency and everything that’s going on, could you sort of tell us a little bit about what Coinbase actually does?
Nathalie McGrath [00:04:34]:
Yeah, I’m happy to. Coinbase is a very mission and values driven company. We’re working to create an equitable and open financial system for the world. So there’s around 1.7 billion people who are locked out of the financial system. And by locking them out of the financial system, we’re locking them in poverty. So unfortunately, this disproportionately impacts women and minorities around the world. So what we believe is that crypto can unlock the power of cryptocurrency and can be a great equalizer that lifts billions of people out of poverty while accelerating the pace of global innovation. So what we are really focused on is making Coinbase the easiest and the most trusted place to buy and sell cryptocurrency. And we do that a number of the way, a number of ways. We do that through our consumer, which is, you know, you as a user can go on on our platform and buy and sell crypto. And we also do it for institutions as well.
Matt Alder [00:05:28]:
So you mentioned that when you joined the company, coinbase was just 10 people. And I know that you have substantially scaled up since then. How many are there currently and what Sort of kind of challenges have you faced in scaling up so quickly?
Nathalie McGrath [00:05:46]:
Yeah, no. So we’re really excited because on Monday, yesterday, we actually hit our 500 mark. So we now have 512 employees. And that’s roughly. I joined in early 2014. So that’s, you know, in the rough four years, we’ve scaled significantly. And I would say that during that time, we’ve had a lot of different types of challenges. You know, there was a point where our first year we were hiring a person a week and we thought that was really fast. And that made sense given that at the time we had absolutely no infrastructure. So things putting in payroll and benefits and even figuring out what our interview process should be and how do we measure and value what a successful candidate would be at Coinbase? And then we had a little bit of a flatter time period. And that was roughly 2015, 2016, where the macro environment wasn’t too hot. And as such, it was a really difficult time for us to recruit. And so at that time, we really focused on how do you motivate and retain and keep folks engaged in a mission that really in the mission and less about the excitement of hyper growth of the rocket ship. And then we had another. Another kind of segment in our history, which is around about a year ago, and the beginning of 2018 was when we went through massive hyper growth. And so we are now averaging 50 hires a month. And the challenges that we have with that are, again, how do we ensure that we keep our hiring bar really high? How do we make sure that we’re assessing for things like culture, ad, how are we being really thoughtful and intentional about the culture that we’re creating? And then how do we ensure that once they come on board, they’re onboarded properly, they get a good idea of who we are and what we value?
Matt Alder [00:07:23]:
So obviously, you know, you’re now. You’re now doing 50, 50 hires a month, which is, you know, radically different to where you were four years ago. How have you sort of scaled your recru infrastructure to do that? Is it a question of hiring recruiters or using technology? How have you sort of. How have you managed that particular challenge?
Nathalie McGrath [00:07:45]:
Yeah, it’s a great question. So we’ve done a little bit of both. So the first thing that we did was we have an amazing recruiting team and Aurora is our head of recruiting and she’s been here also since I’ve been here. So she joined about a week before I did. And I think that that was really key in being able to continue to hire Amazing talent. So the thing about that was that Aurora was here at the very, very beginning, and so she worked really closely with myself and the founders on how do we, how do we assess a good hire and how do we ensure that this is somebody that is going to be very, like, add a lot of the cultural values as well as the skill set that we needed. And so we’ve gone through, just like our hiring growth, we’ve gone through various stages around our interview process. In the most recent burst, which is when we went from essentially, you know, 200 people to 500 people, and a little less than, or a little more than eight months, we really focused on, we threw in a lot of recruiters. So we hired a bunch of recruiters and they helped us scale pretty significantly. So almost a little more than, I guess, a year and a half ago, we only had three recruiters, and now we have something like 30. And that was kind of our first phase in terms of, okay, we need to make sure that we have enough people to solve this problem. So we hired recruiters, we hired sourcers, we hired coordinators to help with the interviews. And that was kind of phase one. We’re now in phase two, which is really about implementing the infrastructure, so using technology, things like greenhouse and tableau server, for us to be able to understand our funnel, to be able to understand our metrics. And that takes longer, that technology takes longer to implement and really ensure that we have clean data. But that’s where we’re in right now. I think the other thing that we’re doing a lot of is really fine tuning our interview process. So we’ve done a number of things. When we evaluate any candidate, we look at three things. We look at, do they have the skill set they need to do the job, do they live and breathe our values? And we have our four values that we use as part of our interview process and our performance review process and everything else. And the third is, are they mission focused? And so this is aligned with, are they coinbase first? Are they thinking about who we are as a company and what it means to move our mission forward? So we evaluate all candidates on that and we have a scorecard that everyone who interviews them fills out. We then use that and we track the metrics from IT just to understand, okay, how are those metrics trending? Are we seeing any change in that over time? We also have a bar raiser program, and our bar raiser program is essentially a group of employees across all functions within the organization that are trained on our values and they all have a set of questions that ask questions that relate to our values. And then they use that to help us determine are these folks who live and breathe the same values that we do and can they contribute and operate in the same in that same way. And then we have a very intense process around that. So if the bar raiser is not a yes on this candidate, then they are the only individual who can actually veto a hire during the hiring process. And we have a whole process behind that to help support them and ensure that that’s in fact the case. It contributed to us ensuring that we have a very intentional and thoughtful culture here at coinb.
Matt Alder [00:11:05]:
I mean, that’s sort of fascinating stuff. Could you sort of maybe tell us a little bit more about that interview process? I mean, how do you actually, you know, assess that someone sort of shares those values?
Nathalie McGrath [00:11:19]:
Yeah, so we about, I think, I want to say about three years ago, we went through a process where we looked at our mission, our vision and our values. And Brian and Fred, our founders, led that process, which I think is really a testament to them as leaders, but also to how important the culture aspect is to coinbase and the mission. But what it did was by them leading it if it was really true to who we are as an organization. So we have four values. They are efficient execution, clear communication, continuous learning, and positive energy. And then with each of those values we have sub bullets. So for example, in clear communication, we are clear, direct and kind. In add positive energy, we come to the table with solutions. In continuous learning, we are more committed to learning than being right. So each of those values have four bullet points that kind of fall into those. That example that I just said, we then as part of the interview process, we train a group that is really focused on those values. So Brian spends time with them, Aurora HEAD of Recruiting spend time with them and really talk about like when that comes to life, what do those values look like? And then what we do is during the interview process, we have a set question that all the value interviewers ask. They all ask the same question and they have examples of what a good, bad and amazing answer look like. And these are pretty much, these are a lot of experiential things. So things that they’ve already done, like tell us about a time where you’ve overcome an obstacle or teach me something. And those type of questions we’re evaluating for a number of things that actually tie back into our values.
Matt Alder [00:12:58]:
What challenges have you faced? Sort of building this people operations kind of mindset and strategy in a, in a Kind of a scaling. A scaling startup. Because I could imagine that would. That would sort of throw up some. Some unique challenges, particularly early on.
Nathalie McGrath [00:13:14]:
Yeah, I mean, I think the cool part about Coinbase and about the founders, I mean, the thing I really applaud both Fred and Brian is at that time hiring people who are really capable in that function. And to actually invest in the people function so early has made it so that culture and the people and the employee experience has been pretty essential to Coinbase this entire time. So since we were roughly 10 employees to now that we’re 500, and I think that is a testament. I think if you talk to employees here today, you will say that this is a group of very talented, motivated, passionate, genuine, kind employees, and it makes it a really amazing place to work. In terms of some of the challenges we faced, I think we faced a lot of the similar things that a lot of hyper growth or scaling organizations have gone through, which is the things like, okay, how do you make sure that all the systems are in place? Things like benefits and payroll, all that jazz, especially because most of us haven’t necessarily gone through this type of skill and implementing these type of processes before. But then what happened is when we went through hyper growth, the real challenge that we ended up facing was how do you be thoughtful and intentional about culture and the employee experience or the candidate experience as they’re going through recruiting, moving really quickly, and making decisions very fast. And so one of the challenges that we came up a little while ago, especially as we started to hit these numbers, was how do we maintain the culture that we had when we were 50 people and we had to be really explicit with our team around. We’re not here to maintain the culture. The culture is going to change. That happens no matter what when you scale and grow. But instead, what our promise is is to be thoughtful and intentional about what we’re doing and the type of policies and the type of programs that we put in place. And that’s really played true through the recruiting process. So when we were really small, we did what was called a work trial. And that meant that almost the first I would say 50 to 100 or 100 to 150 hires went through a work trial. So they would go through a normal interview process, and then they would come on site and they would do a project, and that project was anywhere from two days to a full week, and they would do some kind of work that was actually really meaningful for us at the time. So I can’t remember some of the projects that we had, but sometimes it was build something, sometimes it was present on a policy that we need to implement or a legal regulation. And when we found that this was beneficial for two ways. One, it helped us really understand how did they operate, like, what kind of, how did they actually get work done and how did they think about problems. And the second was that it gave them a really great insight into the type of work that we were doing and the type of, of culture that we had or the way that we experienced, the way we thought about the work that we were doing. So we did that till we were about 150 employees. And that was obviously a really large time commitment from any candidate. But we did find that that really added a lot of value. Then when we hit 150, it was just no longer scalable, especially as we were doing more and more interviews and we needed more folks in the door. And so we had to adjust again. And when we adjusted again, it was thinking through, okay, so what is the intention here? What are we trying to accomplish by this? And how do we make sure that we do in a more efficient and effective way, given that the organization has changed? And so I would say that those are the type of challenges we have faced as we’ve gone through scaling and growing.
Matt Alder [00:16:41]:
Now you’ve got quite an interesting approach to voluntary attrition. Talk us through that.
Nathalie McGrath [00:16:48]:
Yeah. So this is, this is one of those things that I feel like is kind of different from a lot of HR thought processes. But here at Coinbase, we are in an. We are in an industry like by nature, the industry that we’re in is very innovative, it’s very fast paced. It’s a lot of, it’s in the early stages. And so as such, we want employees who can handle and operate and thrive in that type of environment. Now what we find is that those are often, not all the time, but those are often individuals who are founders or who love being at early stage organizations or who are just really creative and like to have a lot of autonomy. Now, as we think about that from an organization, what our job and what our philosophy has been as we grow Coinbase, is that we want to provide the best place to work. We want to provide a place where you are treated like an adult, where you have a lot of autonomy, where you can actually have a major impact and you feel as though you are really empowered to do your job and you have personal growth and development. Now, that is the baseline. That’s what we need to provide. In addition to that, what we say is that we want Employees, you know, to come in and they have that experience. And after, if they feel as though they want to go and start an organization, they want to, that Coinbase is no longer a fit for them. Whether it’s based on growth or size or any other kind of complexities, we want to be able to celebrate that and to say, you know what, this has been a really amazing time. We hope that you had a great experience here. We really appreciate the work that you did, but we also acknowledge that people, individuals and organizations change, and as such, there might be something new. And we still embrace you and say that you are part of our community, you will always be alumni of Coinbase, and that we want to continue to help promote you in whatever way that would be. And so we have, like, attrition or turnover is something that we obviously keep an eye on and we want to make sure that that’s within the right scope and that we’re providing a great experience. But it’s also something that we are fully excited about and we believe that, that Coinbase can have a really positive impact on the industry as a whole. And having our employees go into the industry after they’ve come from Coinbase is something we celebrate and are excited about.
Matt Alder [00:19:02]:
That’s brilliant stuff and it makes perfect sense. And, you know, I kind of think. I wish that more companies, more companies sort of thought like that. So where. What’s next for Coinbase? Where, you know, what are the. What, you know, what are you, you know, what are you sort of planning for the next 18 months or so, and what are you sort of looking forward to within the next stages?
Matt Alder [00:19:23]:
Development.
Nathalie McGrath [00:19:24]:
Yeah, I love that question. Thank you for asking it. So we obviously have a lot of product things that we’re working on and a lot of really cool technology that there are people in this organization who are far more skilled at talking about than I. But for me, within the people operations organization, there’s a lot of stuff I’m really excited about. So one of the things is that we’re really kind of wrapping our arms around this idea that we are crypto grad school or the place that you can come and get your, you know, MBA or, I don’t know, grad school certificate, whatever that might look like from Coinbase. So the idea here is that we provide you with any employee comes in, they become a crypto expert. We do that through a lot of the education we provide. You get experiential learning, you get on the job learning about how to operate in a crypto organization, you get connected to alums. You get mentorship from within the organization and outside of the organization. You get exposure to leaders in the tech space and the crypto space and the financial space through our speaker series and through a number of other kind of activities that we have. And then from there to the point I made earlier, it’s around you can either continue at Coinbase, you can go and start something in the space, you can go to a larger organization or another organization and bring in that crypto expertise. But this idea that we are actually a place where folks can come in, they can learn, they can have a really powerful experience, and they can go and do something else because this is one part of their overall journey. So I’m really excited about that. Within our space, we’re also continuing to do things like ramping up our manager training, our learning development team. We’re thinking about creative ways in which crypto can impact everything across the entire organization. And it’s kind of a fun, exciting time where we get to try stuff, stuff, try some new things.
Matt Alder [00:21:17]:
Fantastic stuff. Nathalie, thank you very much for talking to me.
Nathalie McGrath [00:21:20]:
Thank you, Matt, so much. I really appreciate it.
Matt Alder [00:21:23]:
My thanks to Nathalie McGrath. You can subscribe to this podcast in Apple Podcasts or via your podcasting app of choice. The show also has its own dedicated app, which you can find by searching for Recruiting Future in your App Store. If you’re a Spotify user, you could also find the show there. You can find all the past episodes@www.rfpodcast.com. on that site, you can subscribe to the mailing list and find out more about working with me. Thanks very much for listening. I’ll be back next week and I hope you’ll join me.
