The Political Corporation

The Political Corporation

Being non-consensus and right is the only way to generate extraordinary results. Howard Marks knows this. Warren Buffet knows this. Andy Rachleff knows this. And I think Brian Armstrong, CEO of Coinbase, knows this.

Armstrong made a non-consensus move this week, particularly for a Silicon Valley tech company, by announcing his intention to create an apolitical culture at Coinbase that would avoid engaging in “broader societal issues.” As with any statement that touches politics, even when the statement’s intent is to be neutral, there was both approval and disdain levied toward Armstrong’s words. In tech, any lean away from the left can only be seen as a lean to the right for all involved.

Instead of denouncing or defending the morality of his statement, I want to explore why I think this strategy will work for Armstrong’s business, and why I think we’re going to see more non-consensus political movement in corporate America.

Why it’s going to work

Consensus operates on the ideas of likelihood and acceptability. Whatever is likely and acceptable is consensus. Armstrong’s stance against his company engaging in broader social issues is seen as unacceptable by those who stand with the Silicon Valley corporate consensus that companies must engage in those issues, but is his strategy likely to work? Just because consensus finds something unacceptable doesn’t mean it’s unlikely to work, although consensus will naturally hope it so. Unacceptability is always a window into the non-consensus.

I think Armstrong’s apolitical stance is likely to work for Coinbase because it is the only strategy the company can take to achieve its mission of creating an open financial system for the world built on crypto. The core feature of the cryptoeconomy is the freedom created by its decentralized network structure; however, Coinbase represents a centralized entry point for many of the people who will ultimately participate in the cryptoeconomy. The desirable features of a decentralized cryptoeconomy can be blunted by a central entry point, which is why it is important for Coinbase to attempt to create political neutrality as a company.

Strict political ideology is anathema to freedom because it necessitates adherence to dogmatic opinions about how freedom should work. Dogmatic opinions about freedom do not equate to freedom. If you aren’t truly free when you enter the network, the network cannot truly be free. In many ways, Armstrong is staking his version of the US Constitution. He has established principles he feels crucial to creating truly free and democratic access to the cryptoeconomy.

The second reason I think Armstrong’s strategy will work is a simple one that ties to what Silicon Valley consensus doesn’t want to believe: some great programmers and tech talent are not progressives. Although there is a natural correlation to progressivism and technology — technology represents progress, after all — I think it is also true that there are many freethinking programmers and technologists that do not align with the ideologies of the left. I would also argue this is particularly true in the domain of crypto, which is more libertarian in nature.

Non-progressive talent does not have an obvious political home amongst Silicon Valley companies that adhere to consensus tech politics. While detractors may argue that no great talent will ever work at a company without stated political intentions and values, this seems to be an unfair generalization. I believe that disaffected great tech talent exists in the world, and that talent is just as likely to seek out Coinbase because they find Armstrong’s statement refreshing, as other great talent is to avoid it.

Why we’re going to see more of this

I suspect this is only the beginning of a small trend toward non-consensus corporate politics. Why? Because smart entrepreneurs and investors know that being non-consensus is the path to the extraordinary.

To be apolitical, as Armstrong attempts, is non-consensus in the face of a highly politicized environment. Apoliticism is political because it doesn’t adhere to the left lean embraced by some major corporations today. It’s possible that other companies see an opportunity to attempt an apolitical stance to appeal to the previously described talent pool that isn’t progressive, as well as customers who are not progressive.

There’s also a more radical potential non-consensus act for corporations: to embrace outwardly right-leaning views.

Such a stance makes obvious sense for a defense company like Palantir, whose CEO has been vocal about the company’s politics. Even when it’s powered by technology, defense is a conservative industry, although the customer set is limited and specific. For consumer-facing companies, there may be opportunity to align with customers who don’t resonate with the current consensus corporate messaging.

According to Gallup, 29% of Americans consider themselves Republicans vs 30% who consider themselves Democrats. Of the 40% who identify as Independents, the group splits 45/50 in leaning Republican vs Democrat. Demographics may explain some of the rationale for companies to lean left vs right from a purely business perspective. Millennials lean more heavily toward Democrat than Republican (59% vs 32%), as does Gen X (48% vs 43%).

However, political demographics still reveal a large conservative customer base largely ignored by the trend toward more progressive ideals in corporate America. I expect startups and emerging growth companies to recognize this market dynamic and test non-consensus cultural strategies. This may mean supporting right-leaning ideals like religion or capitalism or traditional law and order. The market, not moral consensus, would decide if the move ends up being good business. The same will hold true for Coinbase.

If you’re uncomfortable with the suggestion of stronger political stances in companies, whether apolitical or right-leaning, that’s intentional. The idea is meant to be non-consensus. Consensus is always comfortable; the opposite can never be. Discomfort is the cost of attempting the extraordinary. Good luck, Brian.


Cryptocurrency, Philosophy