Decoding Digital

Decoding Hype Cycles: Brad Garlinghouse on Crypto and Tech

By Ideas @ AppDirect / June 8, 2021

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Brad Garlinghouse is CEO of the global payment solution, Ripple. Under Brad’s leadership, Ripple has become an industry leader with widespread recognition. Ripple has been named to the CNBC Disruptor 50, and a “technology pioneer” by the World Economic Forum.

Brad has had an impressive career with executive positions spanning across companies such as Hightail, Yahoo, and AOL. He also sits on the board of several companies, such as and Tonic Health.

In this episode of Decoding Digital, Brad speaks with Daniel Saks about his experience at pioneering internet companies in the early 2000s, and what he’s learned from his roles at Yahoo and AOL. He also talks about the importance of innovation, new technology, and cryptocurrency.

Hit play to hear the podcast episode or read on to find out more.

The early internet powerhouses

Brad has a unique perspective on some of the big technology companies from the 2000s. He worked with early internet powerhouses, Yahoo and AOL. At the time, these companies were defining how the world experienced the internet.

Brad joined Yahoo in the early 2000s, not long after the dot-com crash. However, Brad believed that Yahoo had the opportunity to become one of the most substantial internet companies.

He joined AOL several years later in 2009, just as its user base was picking up a hundred million active monthly users. He later decided it wasn’t for him and sought out other opportunities. However, he learned a lot about how big businesses deal with popularity and ultimately a massive decline in users.

Why consumer brands struggle to turn things around

It seemed to everyone that Yahoo and AOL were in it for the long haul. Yet neither company managed to turn it around as Google’s popularity was picking up steam.

Brad likes the Warren Buffet quote: “most turnarounds don’t turn” and believes this applies especially to consumer businesses. As he put it, “I think it’s particularly difficult in a consumer business because I think consumer sentiment starts to shift, and getting that back is really hard. Consumers are finicky.”

He also said that the main problem with growing companies is they stop taking risks and trying new things. When companies grow, they put more risk mitigation efforts in place to protect what they have built. Of course, the more you have to lose, the harder you will fight to protect it. However, Brad suggests this can actually dampen further growth.

“A lot of these companies, they grow and stop innovating. They stop taking risks. I think it really comes down to the culture of an organization. If you create a culture at a company that is tolerant and encourages risk, is tolerant to failure, the outcome you’ll get from that is innovation.”

The importance of focus and clarity for growing businesses

With companies moving towards digital innovation for the first time, Brad has two pieces of advice: One, be clear on what you’re trying to achieve, and two, focus on specific goals. “Understanding where you’re going and what you seek will help enable a robust digital transformation.”

A lot of companies get it wrong because they try to do everything to appeal to everyone. This leads to a very unfocused brand identity.

Brad suggests that part of Yahoo’s problem was trying to be everything to everyone, which caused it to lack focus. When he asked people to think of one word they identified with Yahoo, everyone gave a different answer. People struggled to identify exactly what the Yahoo brand represented.

“If we aren’t focused on some specific thing, we’re not going to be successful at anything. We’re going to be very average at everything.”

At Ripple, Brad is focused on key strategies that are reviewed regularly. Ripple tries to limit the number of objectives to focus on what’s really important. He says a company needs to pick the right objectives and key results (OKRs) to ensure they’re on track to achieving its goals. “If you don’t pick the right OKRs, you need to be careful because if you have the whole organization pushing for an OKR that ends up being wrong, you won’t get the outcomes you want.”

The origins of cryptocurrency

As the leader of a global payment solution, Brad is fascinated by cryptocurrency. While he didn’t have a background in it until he joined Ripple, he did have some interest and investment in Bitcoin. Brad explains that the origins of cryptocurrency were born out of an idea during the financial crisis of 2010. This idea was that banks are bad for society, and the government shouldn’t be trusted.

However, Ripple’s approach to payments and cryptocurrency has always been different. They wanted to work with the banks and the government to use these technologies to impact more people. As he put it:

“If you want to impact the most people and really put a dent in the universe, you have to think about how you reach 99 percent, not the one percent.”

He continued: “It shouldn’t be, ‘how do we get the one percent using Bitcoin for payments to two percent, three percent?’ It's like, look, no, I'm going to go work with the major institutions, the major governments. I'm going to introduce these technologies in such a way that they can have a broad impact on the population—including the unbanked and the underbanked – in ways that are pretty profound.”

While cryptocurrency is here to stay, Ripple focuses on using these technologies to solve real problems for real customers. “It's not about the speculation and net price speculation of where is the price of Bitcoin going? It's about how do we use these technologies to solve real problems for real customers? And to the extent that is delivering utility, then there is value in those underlying technologies and underlying assets.”

How cryptocurrency affects transactions

In today’s world, whenever you need to send money, there has to be a middleman involved. This could be your credit card company or payment processor. Brad says that this technology was essentially developed 50 years ago, and yet not a lot has changed in the way transactions are processed.

“It's amazing to me that you can stream video from the space station, but if you want to send money to me in London, that's going to take days to get there, and it's going to cost you a fair number.”

Brad goes on: “It's kind of like, wait, how did we end up here? Where I can do all these things on an almost instantaneous basis, but I can't move my own money from point A to point B?” He believes that cryptocurrency will continue to impact many industries in the next ten years because it essentially cuts out the middleman.

This is what Ripple decided to focus on. They wanted to improve speed and cost-efficiency, embracing the lessons and technology behind cryptocurrency.

Why technology companies need to take ownership

New technology and innovation have the potential to change so much in society. With that in mind, Brad believes that technology companies need to take more ownership over how they affect the world.

For example, blockchain technologies are still in the early innings. But Brad believes a lot of industries will be affected by this, which we’ll have to watch out for. “Tech needs to take ownership for both how it has positively contributed to the evolution of society and how we interact together. We also need to take responsibility for some of the unintended negative consequences.”

To listen to Brad's full talk and to learn more about his thoughts on technology and cryptocurrency, tune into this Decoding Digital interview.

Check out more episodes of the Decoding Digital podcast series for more insights from inspirational thought leaders and digital innovators. You can listen to the podcast on your favorite podcast app, including Apple Podcasts and Spotify.