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Crypto Custody Built for Speed w/ Bryce Ferguson · The Stable Pulse

• 0:00
  Intro: Passage of the stable coin legislation drafted by the Senate, dubbed the Genius Act.
• 0:04
  Intro: Because analysts say a wave of competition could complicate things.
• 0:13
  Bam Azizi: Hi everyone.
• 0:14
  Bam Azizi: Thank you for joining today.
• 0:17
  Bam Azizi: We have our guest, Bryce Ferguson from Turnkey, co-founder and CEO.
• 0:23
  Bam Azizi: Bryce, welcome to our show.
• 0:24
  Bryce Ferguson: Thanks so much for having me.
• 0:25
  Bryce Ferguson: This has been a long time in the making, bam, so excited to be here.
• 0:29
  Bam Azizi: Super excited to have you.
• 0:30
  Bam Azizi: And I'm sure a lot of uh founders listening and tuning in, excited to learn more about you and Turnkey specifically.
• 0:38
  Bam Azizi: But before we talk about Turnkey, I would love to know your background.
• 0:43
  Bam Azizi: Where did you born and grow up?
• 0:45
  Bam Azizi: Where did you go to school?
• 0:47
  Bam Azizi: Your journey to uh entrepreneurship, anything that you can tell us that would be helpful.
• 0:52
  Bryce Ferguson: Yeah.
• 0:53
  Bryce Ferguson: I grew up in a college town in central Pennsylvania called State College, actually.
• 0:59
  Bryce Ferguson: It's a very confusing town name.
• 1:00
  Bryce Ferguson: Um so it's where Penn State is.
• 1:02
  Bryce Ferguson: And my dad was an analytical chemist.
• 1:06
  Bryce Ferguson: Uh he was a very nerdy guy that was always in the laboratory doing chemistry.
• 1:13
  Bryce Ferguson: My mom was retired military.
• 1:15
  Bryce Ferguson: She was in the army for many years and then was working with ROTC programs.
• 1:20
  Bryce Ferguson: Um it was an interesting upbringing because uh my mom was very intense ducks in a row.
• 1:27
  Bryce Ferguson: My dad was much more cerebral and um kind of a very math and science guy.
• 1:35
  Bryce Ferguson: Um when I was 16, my family moved to Savannah, Georgia.
• 1:40
  Bryce Ferguson: And I went from this big all-American high school in Pennsylvania to a very small arts school in Savannah for my last two years of high school.
• 1:49
  Bryce Ferguson: Uh kind of a weird time to move, as you can imagine.
• 1:53
  Bryce Ferguson: It was like as I was thinking about college in the last couple of years, um, I moved to a completely new city.
• 2:01
  Bryce Ferguson: Um so I think it was pretty definitional for me.
• 2:04
  Bryce Ferguson: Uh I uh, you know, kind of started over after being in the same place my entire life.
• 2:10
  Bryce Ferguson: Um and I also just got to interact with a very different slice of people.
• 2:15
  Bryce Ferguson: It was like much more of a creative school where one of my close friends there, she was interning for Oscar De Lorenta as a 14-year-old.
• 2:24
  Bryce Ferguson: You know, she she was a super talented fashion designer.
• 2:28
  Bryce Ferguson: Um and so I don't know, I I think um growing up with all those things around me, I uh there was these creative juices that were flowing a little bit.
• 2:38
  Bryce Ferguson: There was the this part of me that was seeing what creation was um in an art school and starting to think about what I wanted to do.
• 2:47
  Bryce Ferguson: Um but I I think I was also in a very small bubble.
• 2:51
  Bryce Ferguson: Um and so ended up going to Georgia Tech to get my engineering degree.
• 2:57
  Bryce Ferguson: And um that was the the beginning of kind of like seeing what was out there.
• 3:02
  Bam Azizi: Um what what what was your major?
• 3:05
  Bryce Ferguson: I I was studying industrial engineering, um, which is again kind of this combination of business, engineering, math, science, statistics.
• 3:14
  Bryce Ferguson: Um it was a this cool more generalist, more generalist degree.
• 3:18
  Bryce Ferguson: Um But anyways, I I I ended college, um, still didn't know what I wanted to do, and I ended up at Bain uh to do management consulting.
• 3:30
  Bryce Ferguson: Um it was really cool.
• 3:32
  Bryce Ferguson: We we worked with some of the biggest brands in the world.
• 3:36
  Bryce Ferguson: Uh uh my first case was with Red Lobster, and I worked with Coca-Cola and Walmart and all of these other big, big players.
• 3:43
  Bryce Ferguson: Um but it was never real.
• 3:46
  Bryce Ferguson: It was always throwing around um slide decks and uh kind of being at arm's length.
• 3:53
  Bryce Ferguson: You would give a recommendation and then you would walk away and hope for the best as they put the recommendation in place.
• 4:00
  Bryce Ferguson: Um and so I think when I found myself uh coming out of consulting, I just wanted to dig into something real.
• 4:06
  Bryce Ferguson: I I wanted to be an operator, I wanted to work in tech, and I was also falling down the crypto rabbit hole at that time.
• 4:13
  Bam Azizi: What year was that?
• 4:15
  Bryce Ferguson: This was 2017, going into 2018.
• 4:18
  Bryce Ferguson: And so I joined Coinbase in 2018.
• 4:21
  Bam Azizi: Joined a small startup called Coinbase.
• 4:24
  Bryce Ferguson: It was funny because everybody looked at me.
• 4:26
  Bryce Ferguson: It was a bunch of ex-consultants who were going into private equity or into a hedge fund, and they looked at me going to Coinbase and they were like, that's crazy.
• 4:34
  Bryce Ferguson: Like that they're probably doing criminal activity on crypto, and like that that's not a real company.
• 4:41
  Bryce Ferguson: Um but yeah, it was a great experience.
• 4:45
  Bam Azizi: And then you joined so you what was your first job?
• 4:48
  Bam Azizi: Was it at Bain, right out of the university?
• 4:51
  Bam Azizi: And then after that, after consulting, you went to Coinbase.
• 4:55
  Bam Azizi: So what what was the reason?
• 4:58
  Bam Azizi: Like when was your first interaction with crypto, like in as an individual?
• 5:03
  Bryce Ferguson: Yeah.
• 5:04
  Bryce Ferguson: Um crypto kind of became a a side topic amongst a lot of my friends at Bayne.
• 5:12
  Bryce Ferguson: It was just this interesting thing that uh folks were seeing in the news.
• 5:16
  Bryce Ferguson: And I had one friend in particular that that was just really excited about it and talking to me about it in 2016, 2017.
• 5:24
  Bryce Ferguson: Um did you buy a Bitcoin back then?
• 5:26
  Bryce Ferguson: I bought a little Bitcoin, I bought a little Ethereum.
• 5:29
  Bryce Ferguson: And I think it's a common story.
• 5:31
  Bryce Ferguson: Like you see people who they buy a little bit, they see the price move, and then the intellectual curiosity.
• 5:37
  Bryce Ferguson: Yeah.
• 5:39
  Bam Azizi: Yeah.
• 5:40
  Bam Azizi: Makes sense, makes sense.
• 5:41
  Bam Azizi: And then what was your role at Coinbase when you joined?
• 5:45
  Bryce Ferguson: So I started off on the BizOps team, um, which was a bunch of ex-consultants uh who were just working on the most strategic projects for the company.
• 5:55
  Bryce Ferguson: Um my very first project was launching the staking business.
• 6:00
  Bryce Ferguson: Uh so is it um at a time when staking.
• 6:04
  Bam Azizi: Was it called a staking back then?
• 6:06
  Bam Azizi: Or was a different name?
• 6:08
  Bryce Ferguson: It was getting defined then.
• 6:09
  Bryce Ferguson: So we we first launched with um Tezos, actually, which was called baking.
• 6:15
  Bryce Ferguson: Uh it wasn't even staking.
• 6:17
  Bryce Ferguson: And um it was this cool thing because it was very multifaceted.
• 6:22
  Bryce Ferguson: It was this question of, hey, can we even offer this from a legal perspective?
• 6:26
  Bryce Ferguson: Like let's go figure out what the analysis is around staking, uh, whether it should be considered a security or not.
• 6:33
  Bryce Ferguson: Um let's figure out the technical side of it.
• 6:36
  Bryce Ferguson: There's a lot of downside in staking if you do things wrong.
• 6:40
  Bryce Ferguson: Um, and then figure out the business sides of it.
• 6:42
  Bryce Ferguson: It was really this cool zero-to-one project for us.
• 6:46
  Bam Azizi: Nice.
• 6:46
  Bam Azizi: And then when did you get into the beats of like all the technicality of it and building the actual product and launching it?
• 6:52
  Bam Azizi: Where was what year was the like you were closer to one when you start at zero?
• 6:58
  Bryce Ferguson: Yeah, I think we ended up launching it end of 2018.
• 7:03
  Bryce Ferguson: So I joined Coinbase beginning of 2018, and I think we launched staking end of 2018.
• 7:08
  Bryce Ferguson: So it was a a big project for us.
• 7:10
  Bryce Ferguson: Um and during that time as well, um, I started getting really involved in the early days of the custody business as Coinbase was starting to get that off the ground.
• 7:21
  Bam Azizi: Right.
• 7:21
  Bam Azizi: And when you launched it, what was the then the reality hits, right?
• 7:26
  Bam Azizi: So you think like this is the product everyone loves, and then what happened next?
• 7:30
  Bam Azizi: Was it like a I know like it's still a staking in the product you built with your bare hands, it still exists at Coinbase.
• 7:36
  Bam Azizi: But what was like initially, was it successful, or it took time to kind of scale it within Coinbase?
• 7:43
  Bryce Ferguson: Um pretty quickly after we launched, we had the number one validator um in the world for Tezos, which was cool to see.
• 7:52
  Bryce Ferguson: Um I think from there we had big plans to expand to these other chains.
• 7:58
  Bryce Ferguson: We launched Cosmos staking and Solana staking.
• 8:02
  Bryce Ferguson: Um but there were some aspects of just like how was Coinbase able to be focused on specific things.
• 8:10
  Bryce Ferguson: Uh and there were startups that came in and they were more focused on staking like um bison trails and figment that ended up eating Coinbase's lunch at the time.
• 8:21
  Bryce Ferguson: Um and I had kind of shifted my attention over to Coinbase custody more fully at that point.
• 8:27
  Bryce Ferguson: Um but was interesting to see the advantage of being a startup versus these big enterprises.
• 8:34
  Bryce Ferguson: Uh you can be a little bit more nimble than a company like Coinbase.
• 8:38
  Bryce Ferguson: Makes sense.
• 8:40
  Bam Azizi: And then what was what was next for you within Coinbase, or that was that was the whole project you worked on?
• 8:46
  Bryce Ferguson: Yeah.
• 8:46
  Bryce Ferguson: So um I ended up coming on full-time to Coinbase Custody as the very first product manager.
• 8:54
  Bryce Ferguson: Um during the staking project and Coinbase Custody, I was working really closely with Jack, who is now my co-founder.
• 9:02
  Bryce Ferguson: Um so it was really nice to you know make that connection that many years later has turned into a bit of a marriage around turnkey.
• 9:12
  Bryce Ferguson: Um and Jack, he was the first engineer, he built the whole cold storage system at Coinbase.
• 9:19
  Bryce Ferguson: Um and I was really thinking more holistically, how how do we think about the evolution of this product?
• 9:24
  Bryce Ferguson: How do we think about the commercialization of it?
• 9:27
  Bryce Ferguson: Um, really the the higher level strategic aspects of building the business.
• 9:32
  Bam Azizi: Makes sense.
• 9:32
  Bam Azizi: And um then this was institutional custody or it was self-custody?
• 9:37
  Bam Azizi: Was it Coinbase wallet?
• 9:38
  Bam Azizi: What was it?
• 9:39
  Bryce Ferguson: It was institutional custody.
• 9:41
  Bryce Ferguson: So it basically Coinbase custody came about because a lot of institutional investors who were early in crypto saw that Coinbase had built a lot of security expertise around this.
• 9:52
  Bryce Ferguson: And they said, hey, how can we use your security infrastructure to protect the the $100 million of Bitcoin that we have?
• 9:59
  Bryce Ferguson: Um and so we built out this very secure, regulated offering that was qualified custody, kind of first of its kind.
• 10:08
  Bryce Ferguson: Um and the product market fit was insane.
• 10:12
  Bryce Ferguson: We went from zero to a hundred billion dollars of assets in two and a half years.
• 10:18
  Bryce Ferguson: Yeah, I I mean uh especially because uh I started at Coinbase um in the beginning of a bear market.
• 10:26
  Bryce Ferguson: Uh 2017 into 2018 was kind of just like downhill for many, many years.
• 10:31
  Bryce Ferguson: Um but as that flywheel started going, as the market picked back up, um the balances on on Coinbase custody just exploded, uh, which was was cool to see.
• 10:43
  Bryce Ferguson: The impact of building during a bear market can put you in the exact right position when the market picks back up again.
• 10:51
  Bam Azizi: Yeah.
• 10:51
  Bam Azizi: And so you basically caught your teeth at Coinbase.
• 10:55
  Bam Azizi: You learn crypto, you learn custody, you learn about regulations and compliance, what it takes to build something that is enterprise ready and bulletproof.
• 11:05
  Bam Azizi: Um, and then you felt like, okay, now like you're ready to kind of start your own journey with your co-founder.
• 11:12
  Bam Azizi: Um and what year did you think of like leaving Coinbase and leaving your comfort zone and start like being an entrepreneur, pay the bills and do all the things that uh are kind of hidden and invisible uh from outside world?
• 11:28
  Bryce Ferguson: So I actually had one more stop before starting Turnkey, where I um in 2021 moved to Berlin to join Trade Republic, which is Oh, I know that.
• 11:40
  Bryce Ferguson: I know a big neobroker out of Berlin.
• 11:44
  Bryce Ferguson: Um so I uh was building out their crypto trading offering.
• 11:50
  Bryce Ferguson: And the cool thing about this actually is that I went from building infrastructure to using a lot of these different infrastructure providers.
• 11:57
  Bryce Ferguson: We integrated with every infrastructure provider under the sun.
• 12:00
  Bryce Ferguson: Um and so near the end of my time at Trade Republic, I had just seen this problem from every single angle and seen every frustration that you might have and all of the challenges that come from building in crypto.
• 12:15
  Bryce Ferguson: Um and Jack, my co-founder, he and I were catching up about it, and it actually all happened really naturally.
• 12:21
  Bam Azizi: He didn't join Trade Republic.
• 12:23
  Bam Azizi: You went alone, and then you just reunite- Okay, you reunited.
• 12:27
  Bryce Ferguson: Yeah.
• 12:27
  Bryce Ferguson: And Jack Jack, he was at Polychhain um as their CTO.
• 12:31
  Bryce Ferguson: So he was having similar experiences using a lot of these infrastructure providers.
• 12:36
  Bryce Ferguson: Um the fun thing here is it just happened so naturally.
• 12:42
  Bryce Ferguson: Like I think I always had a little bit of a chip on my shoulder.
• 12:45
  Bryce Ferguson: I always looked at people who were more senior than me and I was like, I could do that better.
• 12:50
  Bryce Ferguson: Um and I think many, many good career choices are are started with a chip on your shoulder.
• 12:56
  Bryce Ferguson: Um but I um got back together with Jack and we put together a memo about what we thought should change in custody.
• 13:05
  Bryce Ferguson: And we shared it with a VC friend, and a week later we had a term sheet.
• 13:11
  Bryce Ferguson: Um and from there we raised $7.5 million from Sequoia.
• 13:14
  Bryce Ferguson: We pulled together a lot of the early Coinbase custody folks who just had really deep experience in what we were building.
• 13:21
  Bryce Ferguson: Um from there, turnkey was born.
• 13:23
  Bryce Ferguson: It was really it happened in a matter of weeks um versus being this like super intentional um you know business plan.
• 13:32
  Bam Azizi: Aaron Powell And it's it's funny that basically what you experienced at Coinbase and Trade Republic, you felt like there would be thousands of other people they will have the same problem.
• 13:40
  Bam Azizi: So I built this turnkey solution that they can just plug in and turn it on, right?
• 13:46
  Bam Azizi: So that and that's where the name turnkey came from.
• 13:49
  Bryce Ferguson: Yeah, the the initial memo is we kept writing we're gonna build a turnkey solution for DeFi, we're gonna build a turnkey solution for all these different things.
• 13:57
  Bryce Ferguson: Um and after a while we said that that's the Okay, that's the name.
• 14:02
  Bam Azizi: And initially when when you were early days, I remember like, I don't know, like it was 2023 or four, um when we started chatting, you said like you built this generic platform of uh managing private keys that could have multiple applications, could be applied in identity, in AI, in crypto, but you kind of honed in and and basically started thinking more about crypto.
• 14:28
  Bam Azizi: Was it like initially wanted to be as general as possible, or you always had this mission uh and vision in your mind that it needs to be only for crypto?
• 14:39
  Bryce Ferguson: We really wanted to be more general.
• 14:42
  Bryce Ferguson: Um and that was one of the the founding principles of Turnkey.
• 14:48
  Bryce Ferguson: We wanted to build true infrastructure, give people access to the tools that they could build whatever they wanted on.
• 14:57
  Bryce Ferguson: Um And I think the entry point from a go-to-market perspective has always been crypto.
• 15:03
  Bryce Ferguson: I I think we have built a lot to make it easier and easier to build in crypto.
• 15:07
  Bryce Ferguson: Um, but because we've taken this more infrastructure approach, we're often surprised by what people are building on top of Turnkey.
• 15:14
  Bryce Ferguson: Um so they might use turnkey for generic encryption and decryption, or they might use it for agentic secret management or other non-crypto use cases.
• 15:24
  Bryce Ferguson: Um but the vast majority of our use cases today are crypto.
• 15:28
  Bam Azizi: And because you're both you and Jack are coming from crypto background, you have a lot of people and you know a lot of founders in crypto.
• 15:34
  Bam Azizi: So uh and it's easier to kind of build a solution that you know everything, every angle of it, versus just being uh generalist, right?
• 15:42
  Bam Azizi: Um So um and then you raised money like uh almost 95% of companies, they don't even get to that stage.
• 15:51
  Bam Azizi: Five percent get there, uh or even maybe less.
• 15:55
  Bam Azizi: And not only you raised money, you raised from Sequoia.
• 15:58
  Bam Azizi: Um was was them they they were the first investor you chatted, or were you chatted with a bunch of people and then they reached out and they gave you the term sheet?
• 16:07
  Bryce Ferguson: We chatted with a bunch of people, but Sequoia was always um one of the folks that we were most excited about.
• 16:14
  Bryce Ferguson: Um we uh I was a Sequoia Scout uh previously and had you know built a relationship with them because Trade Republic was also a Sequoia company.
• 16:24
  Bryce Ferguson: Um and I think as we had conversations with them, we just saw they knew how to build a generational company.
• 16:31
  Bryce Ferguson: They they knew how to lean in hard.
• 16:33
  Bryce Ferguson: Um and I think um our partner there is Alfred Lynn, and he's just been awesome to have alongside us in the good moments and the the hard moments.
• 16:44
  Bryce Ferguson: Yes.
• 16:45
  Bam Azizi: And this was post-FTX?
• 16:48
  Bryce Ferguson: This was pre-FTX.
• 16:49
  Bryce Ferguson: Pre-FTX.
• 16:50
  Bam Azizi: Right before FTX, and then FTX happened.
• 16:53
  Bryce Ferguson: It was like uh kind of an interesting timing.
• 16:56
  Bryce Ferguson: Yeah, we we were at the end of the bull market in 2022, and we were just like riding high.
• 17:02
  Bryce Ferguson: We raised this big round, and everyone was so excited about what we were building, and then it was FTX and Celsius and BlockFi and Silicon Valley Bank into the coldest, darkest winter ever, where we were like, are we?
• 17:14
  Bam Azizi: And the government is cracking down on crypto, like all the regulators are yeah, good good or maybe bad old days.
• 17:22
  Bam Azizi: But you s you survived.
• 17:24
  Bam Azizi: Um, so you basically you were a little bit lucky also from timing perspective because you cannot control the macro, so you raise your money so you could weather the storm and then um basically continue building.
• 17:36
  Bam Azizi: And I think winter is the best time to build, um, for especially for for crypto that everyone is kind of distracted doing all sorts of other things, and then your focus on building, uh, as you mentioned, a gener generational business.
• 17:49
  Bam Azizi: And then you um and then what happened after that?
• 17:53
  Bam Azizi: When was when was your uh when was the first customer signed?
• 17:58
  Bam Azizi: When did you launch?
• 17:59
  Bryce Ferguson: Yeah.
• 18:00
  Bryce Ferguson: So we came out of stealth.
• 18:02
  Bryce Ferguson: We it was about 12 months from our fundraise.
• 18:06
  Bryce Ferguson: We we raised in March of 2022 and then came out of stealth in March of 2023.
• 18:11
  Bryce Ferguson: Um we were really in a cave for most of that building.
• 18:17
  Bryce Ferguson: We we had a pretty opinionated view of what needed to be built.
• 18:20
  Bryce Ferguson: And Turnkey has just built a a shit ton of very complex technical security infrastructure under the hood.
• 18:28
  Bryce Ferguson: Um we were taking bets on trusted execution environments before anyone else on the market.
• 18:33
  Bryce Ferguson: We um built a lot around verifiability um and the ability to just have a trust layer in everything that we do.
• 18:43
  Bryce Ferguson: Um and our first client then came in March of 2023, where um we started to scale from there.
• 18:51
  Bryce Ferguson: And I think one of the interesting things about our infrastructure approach is there's just such a wide array of ways people are using wallets on Turnkey.
• 19:00
  Bryce Ferguson: Um so it's everything from stablecoin payments to on-chain issuance and RWAs to consumer wallets and even white-labeled SDKs.
• 19:10
  Bryce Ferguson: Um so navigating that and seeing all the different ways that Turnkey could be used was uh a really important part of that early journey.
• 19:17
  Bam Azizi: Right.
• 19:18
  Bam Azizi: And then who was the first customer or first set of customers?
• 19:22
  Bam Azizi: What type of customers were going after?
• 19:24
  Bam Azizi: Was it enterprise?
• 19:24
  Bam Azizi: Was it smaller like Vebree companies?
• 19:27
  Bryce Ferguson: We were talking to whoever would talk to us at that point.
• 19:30
  Bryce Ferguson: Um we we were uh digging in with a lot of X Coinbase founders um with like early stage consumer applications.
• 19:42
  Bryce Ferguson: Um and I think those early customers, um, a lot of them were building more um more consumer embedded wallet use cases.
• 19:53
  Bryce Ferguson: Uh and so we ended up investing pretty heavily there.
• 19:56
  Bryce Ferguson: But it it was teams like Heron Finance, um NiftyKit was one of the first folks that that we worked with.
• 20:04
  Bryce Ferguson: Um yeah.
• 20:05
  Bam Azizi: Nice.
• 20:06
  Bam Azizi: And then you went from this like hack product and then evolved to like enterprise ready product pretty quick.
• 20:13
  Bam Azizi: And now we have like you're generating millions of dollars in revenue and probably billions of dollars in volume.
• 20:19
  Bam Azizi: What was the most challenging moment for you as you scaled um turnkey?
• 20:25
  Bryce Ferguson: Yeah.
• 20:26
  Bryce Ferguson: Um I think a lot of it has just been weathering the storm of the broader macro.
• 20:36
  Bryce Ferguson: Um there were definitely times where you know funding dried up in crypto and there were a lot fewer startups to work with, and companies were um dying and running out of funding.
• 20:51
  Bryce Ferguson: And I think we we had seen these um ups and downs in the market before, having been at Coinbase and been in crypto for a while.
• 20:59
  Bryce Ferguson: So we were pretty thoughtful and conservative with how we scaled the business.
• 21:04
  Bryce Ferguson: Um but that doesn't make it any easier to weather that.
• 21:08
  Bryce Ferguson: And I think a lot of it's a mental game.
• 21:10
  Bryce Ferguson: Like it there have definitely been moments where it feels like the sky is falling and like crypto is not going to become a thing anymore.
• 21:17
  Bryce Ferguson: And you kind of have to step back and take a deep breath and just remind yourself this happens over and over in this market.
• 21:24
  Bryce Ferguson: And um, you know, we're building something that just inherently has value here.
• 21:29
  Bryce Ferguson: Uh it's faster, cheaper, easier ways to move money and move mount move value.
• 21:35
  Bryce Ferguson: Um and so you just have to kind of have that long-term belief in what you're building.
• 21:40
  Bam Azizi: Makes sense.
• 21:41
  Bam Azizi: And um so when at what a scale you started thinking about like now I need this is the right time to raise your next round, which is your series A.
• 21:51
  Bam Azizi: That was your last round?
• 21:53
  Bryce Ferguson: Um we've raised a couple times since then.
• 21:55
  Bryce Ferguson: So we we raised our series A in 2023.
• 21:59
  Bryce Ferguson: Um About 18 months after we raised our seed.
• 22:04
  Bryce Ferguson: And I think there it was just this moment where we were starting to see early traction and we saw that we could double down and be more aggressive with what we were building.
• 22:17
  Bryce Ferguson: We then did our series B uh in 2025, and it was another similar thing.
• 22:24
  Bryce Ferguson: We were bringing on bigger and bigger clients.
• 22:28
  Bryce Ferguson: And we actually ended up getting preempted and pulled into a round, which is you always want that to happen.
• 22:38
  Bryce Ferguson: And then we raised a small strategic round with Circle earlier this year, again, just to be more aggressive.
• 22:47
  Bryce Ferguson: And so I think a lot of it has been just thinking about how do we make sure that we're growing conservatively when there's uncertainty in the broader market.
• 23:01
  Bryce Ferguson: And then how do we lean in and be more aggressive when we have the opportunity to?
• 23:07
  Bam Azizi: Makes sense.
• 23:08
  Bam Azizi: And then it's kind of funny that Brian Armstrong was at Airbnb and then they started Coinbase.
• 23:16
  Bam Azizi: So there were a lot of Airbnb mafia that they started their own company.
• 23:19
  Bam Azizi: And they started this platform that you and Jack, Zach at Bridge, like a lot of founders got out of Coinbase and started their own business.
• 23:29
  Bam Azizi: What would be like how hard it is to hire talents now that the market is not dry anymore?
• 23:38
  Bam Azizi: Everyone wanna build their own company.
• 23:40
  Bam Azizi: How do you build this culture that people feel like they're a stakeholder and then you can glue them to the team and align them in the vision and mission and keep them around?
• 23:49
  Bam Azizi: And because it's very deceiving to kind of start your own company, especially if someone gives you like $10 million check, day one.
• 23:59
  Bryce Ferguson: Right I think we have um been able to build a culture of people who are really passionate about the impact that crypto can have on the world.
• 24:11
  Bryce Ferguson: And they um are excited by the technical vision of Turnkey.
• 24:18
  Bryce Ferguson: Um a lot of engineers, I would say our infrastructure approach is engineering catnip.
• 24:24
  Bryce Ferguson: Um and they learn more about what we've done with trusted execution environments and verifiability and our custom operating system and all these things.
• 24:31
  Bryce Ferguson: And they're just really excited about all those aspects.
• 24:36
  Bryce Ferguson: Um there's definitely a talent war with AI, and I think um that that's a hard thing to go up against at times.
• 24:45
  Bryce Ferguson: But I think you you want you want to find people that are excited by what you're building, not just excited by whoever is gonna give the biggest paycheck.
• 24:53
  Bam Azizi: That's right.
• 24:54
  Bam Azizi: Um and then um you kind of build this team, now you're scaling, and at the same time, stable coin and payment started to form and happen.
• 25:04
  Bam Azizi: That's another another tailwind.
• 25:06
  Bam Azizi: Um Genius Act is another um yeah tailwind.
• 25:11
  Bam Azizi: Hopefully Clarity Act is the third one that brings more institutional adoption.
• 25:16
  Bam Azizi: That means more companies need turnkey.
• 25:19
  Bam Azizi: Um how do you man how do you manage the demand?
• 25:24
  Bam Azizi: And um what do you see as like as single like killer use case for turnkey?
• 25:31
  Bam Azizi: Is it a stable coin?
• 25:32
  Bam Azizi: Is it broader crypto?
• 25:34
  Bam Azizi: Um like what what is it that takes you to the next level?
• 25:39
  Bryce Ferguson: Um I I think people are who are too deep in the crypto industry sometimes forget how much there is to do and how uh much payments volume and broader value movement is happening off of crypto rails.
• 25:55
  Bryce Ferguson: I think we're at like 0.1% penetration in terms of total payment volume, something like that.
• 26:01
  Bryce Ferguson: Um what Turnkey is really building for is this world where the friction of money is zero, where money is moving much more effortlessly across all of these different use cases from consumer to B2B to broader infrastructure.
• 26:18
  Bryce Ferguson: Um I think I I'm excited about how this collides with AI and AgenTic.
• 26:24
  Bryce Ferguson: Um agents are looking for low-friction ways to accomplish tasks, and and crypto is just the obvious way to do that.
• 26:32
  Bryce Ferguson: And so uh it feels like money is going to start moving in very different ways than what we're used to.
• 26:39
  Bryce Ferguson: Um and as we have the ability to monetize every digital good and service, um, turnkey can be that underpinning uh infrastructure to enable that.
• 26:51
  Bam Azizi: And and so there are agenda commerce is a big topic.
• 26:55
  Bam Azizi: We are not quite there yet, but after like instinct and muse, and like now agents are doing shot, like they're not just chatting with you, they're like acting on your behalf.
• 27:06
  Bam Azizi: And they all need a wallet.
• 27:08
  Bam Azizi: That's kind of where you guys can come and shine and help the agenda commerce to take the next next turn.
• 27:14
  Bam Azizi: Uh, but there is a massive amount of competition out there too, right?
• 27:19
  Bam Azizi: So there is a Stripe, there's fire blocks.
• 27:21
  Bam Azizi: How do you see yourself in the competition landscape?
• 27:24
  Bryce Ferguson: Yeah.
• 27:25
  Bryce Ferguson: Turnkey we have always built true infrastructure around managing transactions.
• 27:33
  Bryce Ferguson: We we've thought about this as a very modular stack from identity and authentication to policies and authorization to execution and even broader verifiable workloads.
• 27:45
  Bryce Ferguson: And the combination of those really modular pieces allows you to build more interesting products.
• 27:53
  Bryce Ferguson: So something we really commonly hear from our customers is I can build things on turnkey that I just can't build on any other platform because we're exposing more flexibility at the policy layer, at the authentication layer, and so forth.
• 28:06
  Bryce Ferguson: Um and agents need that flexibility.
• 28:10
  Bryce Ferguson: Agents to have the appropriate guardrails and controls around how they're transacting, um, you need to be able to have that bare metal infrastructure.
• 28:19
  Bryce Ferguson: Um so that that's really the direction that we're pointing is how do we offer maximal flexibility?
• 28:25
  Bryce Ferguson: Because we actually haven't figured out exactly how agents are gonna be using crypto yet.
• 28:30
  Bryce Ferguson: And so that flexibility is important in the experimentation phase.
• 28:34
  Bam Azizi: Makes sense.
• 28:34
  Bam Azizi: And do you do you think your like relatively smaller company compared to incumbents?
• 28:42
  Bam Azizi: Why turnkey is going to kind of win that?
• 28:45
  Bam Azizi: Or it would be like an award that you have multiple winners.
• 28:47
  Bam Azizi: How do you see like the competition forms around this?
• 28:52
  Bam Azizi: And what's your unique proposition?
• 28:55
  Bryce Ferguson: I think that there will be wallets for different segments that might win.
• 29:00
  Bryce Ferguson: Um, but ultimately us being a broad infrastructure product and having the flexibility of an independent startup and having the focus of an independent startup allows us to be really aggressive here uh and and go for all the marbles.
• 29:17
  Bryce Ferguson: Um so I think um being able to have that differentiated technical view, being able to adapt to the market more quickly to take away.
• 29:27
  Bam Azizi: You don't have anything to lose, right?
• 29:29
  Bam Azizi: So you can move from like from one angle to another.
• 29:32
  Bam Azizi: You you have the agility and you're very versatile, right?
• 29:36
  Bam Azizi: So you can apply, you can move fast compared to incumbents.
• 29:39
  Bryce Ferguson: Exactly.
• 29:39
  Bryce Ferguson: Yeah.
• 29:40
  Bryce Ferguson: And I mean that we experienced that at Coinbase.
• 29:42
  Bryce Ferguson: So there were times where we were building things and startups just move more quickly.
• 29:47
  Bam Azizi: Yeah.
• 29:47
  Bam Azizi: Yeah.
• 29:48
  Bam Azizi: And then you had Coinbase, there's a lot of red tapes.
• 29:50
  Bam Azizi: You can do this, you can do that, because like a random company regulators don't care about that, but Coinbase is kind of um like uh within within the wretch of the regulators, and then they would they would show up at the Coinbase door.
• 30:03
  Bam Azizi: Anything goes wrong in crypto, whether Coinbase was in charge or not.
• 30:07
  Bam Azizi: Um that's that's very interesting.
• 30:09
  Bam Azizi: So you think agenda commerce would be the next big thing for you guys, and you have the tools and the basically the shovels to kind of belt for that era.
• 30:18
  Bam Azizi: Um so where where do you see Turnkey will be in in five years?
• 30:24
  Bam Azizi: Would would it be would you want to be the next stripe, the next visa, the next bank, banking as a service?
• 30:31
  Bam Azizi: What's what's your vision like five years, ten years from now?
• 30:35
  Bryce Ferguson: Yeah, I I think we're the full stack solution for broader programmatic money movement.
• 30:41
  Bryce Ferguson: Um and that includes a lot of different guardrails around our policies and verifiable compute.
• 30:49
  Bryce Ferguson: It includes execution, it includes authorization, all of these different different aspects.
• 30:54
  Bryce Ferguson: Um and I think that is going to be largely agents, uh, but there will also be other types of programmatic money movement that are happening behind the scenes.
• 31:04
  Bam Azizi: Yeah, like the the thing I say about agents is like we have five billion people connected to internet.
• 31:13
  Bam Azizi: Typically they do two transactions per day on average.
• 31:17
  Bam Azizi: We will have 500 billion agents connected to internet and they do thousands of transactions.
• 31:22
  Bam Azizi: And uh exactly what you mentioned, that the way we the money was defined and worked is going to be different for agents.
• 31:29
  Bam Azizi: So the traditional networks um really doesn't work here because, like, how can an agent pay another agent 0.00005 cents?
• 31:38
  Bam Azizi: You definitely need something like blockchain that can move money and move value uh globally and instantly using internet uh from point A to point B.
• 31:48
  Bam Azizi: So I totally agree with you that that would be the defining moment uh for combination of AI and crypto or blockchain.
• 31:57
  Bam Azizi: So I'm like really interested to see what type of companies are going to build at.
• 32:00
  Bam Azizi: And it seems like turnkey is going to be one of the centerpieces here.
• 32:04
  Bryce Ferguson: Yeah.
• 32:04
  Bryce Ferguson: No, we're we're super excited about it.
• 32:06
  Bryce Ferguson: And I I think um sometimes people are looking at Muse and Instinct and how you can book a flight really easily, and they're saying, okay, where does crypto fit into this?
• 32:17
  Bryce Ferguson: Yeah.
• 32:17
  Bryce Ferguson: I don't think credit cards are going away.
• 32:19
  Bryce Ferguson: I think credit cards are still going to be used for these big consumer purchases.
• 32:23
  Bryce Ferguson: Um but where this gets really interesting is where, like you said, you're doing microtransactions for things that were previously not able to be monetized, whether it's access to a single piece of data or an article or access to a single API call.
• 32:39
  Bryce Ferguson: Um we're we're excited for how that is going to rewire the economy and how agents that are fully autonomous are going to be able to be meaningful economic actors and have the right uh guardrails in place to do that.
• 32:53
  Bam Azizi: Are you worried about agents going rogue?
• 32:56
  Bryce Ferguson: Definitely.
• 32:56
  Bryce Ferguson: Uh uh I think this could really become Skynet.
• 33:00
  Bryce Ferguson: If we give agents economic access and just let them run free, we'll have agents paying for God knows what.
• 33:08
  Bryce Ferguson: Um and it could be scary very quickly.
• 33:11
  Bryce Ferguson: Um so part of that is you just need to make sure that you have the right guardrails installed, that you're thinking deeply about what are the policies and controls that you have around how agents can spend.
• 33:23
  Bryce Ferguson: Um, just like you you wouldn't give an employee access to the full corporate bank account.
• 33:29
  Bryce Ferguson: You give them a credit card with limits, you need to do the same thing with an agent.
• 33:34
  Bam Azizi: Makes sense.
• 33:35
  Bam Azizi: Um so this this was a fascinating conversation.
• 33:38
  Bam Azizi: I'm sure a lot of founders in the audience uh really like to know how you grow your business from zero to where you are now.
• 33:45
  Bam Azizi: Um you should definitely be proud of yourself and your team, what you guys have built.
• 33:49
  Bam Azizi: It's one of the one of the leading products in the market.
• 33:53
  Bam Azizi: Um what would be your one recommendation to younger price or the next generation of founders that they want to start building business today?
• 34:01
  Bryce Ferguson: Yeah.
• 34:01
  Bryce Ferguson: I think I always had it in my head that you needed to come up with this crazy idea of how you're gonna build a business and write out your business plan and talk to 100 customers.
• 34:14
  Bryce Ferguson: And um over time, I think I've realized that starting a company teaches you what you need to know when you need to know it.
• 34:22
  Bryce Ferguson: You're gonna be put in really uncomfortable situations.
• 34:25
  Bryce Ferguson: Like I had never sold before, and now I'm in all these sales conversations.
• 34:30
  Bryce Ferguson: I I had um you know less experience on the people management side, and now we have a big team.
• 34:37
  Bryce Ferguson: And you learn these things as you go along.
• 34:40
  Bryce Ferguson: Um and so I think the biggest piece of advice is just do it.
• 34:44
  Bryce Ferguson: Um but the other side of that is before you start a company, go explore, find things that you're passionate about.
• 34:51
  Bryce Ferguson: And I think often ideas will present themselves that you could start a company in.
• 34:56
  Bam Azizi: Excellent.
• 34:56
  Bam Azizi: This definitely uh um something that I would also tell all all the like first-time founders that this is going to be a long, long journey.
• 35:08
  Bam Azizi: There would be a lot of ups and downs.
• 35:10
  Bam Azizi: And you wanna you wanna work on an idea that you don't give it up, right?
• 35:13
  Bam Azizi: So it's like you're so passionate about it that you you will be there uh dark days and also light days.
• 35:21
  Bam Azizi: So you so I totally agree with you on that.
• 35:23
  Bam Azizi: Um with with this question, it's uh it's a wrap, but I have one last question, which could be a little bit personal.
• 35:29
  Bam Azizi: What's your favorite restaurant, Bryce?
• 35:33
  Bryce Ferguson: So the one that I go to most often is a Vietnamese place in New York called LaDong.
• 35:38
  Bryce Ferguson: Um incredible.
• 35:41
  Bryce Ferguson: That they do this wagyu pho.
• 35:43
  Bryce Ferguson: It's so so good.
• 35:44
  Bryce Ferguson: Especially it's starting to get cold in New York and it's rainy.
• 35:47
  Bryce Ferguson: So if you want some good soup, go to LaDong.
• 35:50
  Bam Azizi: I will I'll be in New York in November, so let's go there together.
• 35:54
  Bam Azizi: That's perfect.
• 35:55
  Bam Azizi: Let's do it.
• 35:55
  Bam Azizi: Thank you, Bryce.
• 35:56
  Bam Azizi: I appreciate your time.
• 35:57
  Bam Azizi: Cool.
• 35:58
  Bam Azizi: Thanks so much, fam.
• 35:59
  Bam Azizi: Thank you.
• 36:00
  Bam Azizi: Thanks for watching COB.
• 36:02
  Bam Azizi: Like and subscribe to stay up to date with the latest conversations.