From Rebellion to Reformation: Binance's Quest for Efficiency and Growth
From zero to three trillion dollars, the journey might just hinge on the simplicity of Telegram chats and Google Docs.
In less than 200 days from its launch, Binance dominated as the world's largest crypto exchange. This rise challenges conventional startup wisdom, where an organization itself is often treated as a product, meticulously iterated and polished. Binance, however, bypassed this gradual evolution and surged in growth while still in its formative phase.
Picture this: you’re steering Binance's ship, expanding from a modest crew to a massive 1,000-person workforce, all coordinated remotely. The key question then becomes: what's the secret to effective collaboration in such a fast-scaling, decentralized setup?
Conventionally, one might look to GitLab, the open-source software giant with over 2,000 remote workers and the author of GitLab’s Guide to All-Remote (probably the most comprehensive remote work guide out there), delineating strategies from non-linear working to assessing remote work outcomes. It's an obvious benchmark.
But the post-pandemic landscape offers a broader perspective. The remote work wave has buoyed a plethora of collaboration tools: Zoom with its 800 million monthly visitors, Microsoft Teams nearly doubling its daily usage in a year, and Linear, securing a significant Series B round of 33 million USD led by Accel in 2023. The consensus among these tech leaders is clear: if you desire efficiency in remote work, never scrimp on collaboration tools.
However, Binance's story diverges. It stands as a stark example that hyper-growth doesn’t correlate with the use of sophisticated collaboration tools. For a significant period, Binance’s operations hinged on something as simple as group chat. The mantra was straightforward: if you have something to say, drop it in the chat; otherwise, get back to work. Urgent matters? Just spin off a new chat group. All pertinent information was funnelled straight into online docs. During explosive growth, formalities were discarded. By 2020, with this no-frills approach of group chats and online documentation, Binance recorded a staggering three trillion dollars in trading volume.
The takeaway is almost counterintuitive: From zero to three trillion dollars, the journey might just hinge on the simplicity of Telegram chats and Google Docs.
Disruptive Collaboration
Our previous article delved into Binance's globally dispersed workforce, naturally leading us to an intriguing question: How do they collaborate? Is there a unique Binance method powering its rapid ascent?
The answer is layered. Binance does possess a distinct work style, but it's less about meticulous people management and more about a free-for-all approach during its growth zenith. Imagine building a car from assorted parts, not caring much about the design as long as it races through uncharted terrain at breakneck speed.
In Binance's early days, a company-wide Telegram group chat was the communication linchpin. It was remarkably flat in structure. Take, for example, co-founder He Yi needing a poster designed — she’d simply tag the relevant person in the group, who'd then post the finished work there. Almost everyone's input and output were visible in this all-staff group, with Google Docs being the go-to for document sharing. Emulating Amazon's Jeff Bezos' disdain for slides, CZ has, since 2019, been advocating the use of Google Docs for internal collaboration, reserving slides only for conference presentations.
An anecdote also echoes Binance's pragmatism: when jokingly asked about fears of potential surveillance through Google Docs, given US’s attention on Binance, a respondent quipped that Binance runs on AWS, so if someone wanted to, dismantling them would be straightforward.
Beyond the main group, Binance hosts numerous others, including language-specific and functional ones. Despite a significant Chinese-speaking contingent, English dominates the main groups, with WeChat reserved for more private, native conversations. However, WeChat isn't without risks, given its stricter surveillance and regulations on blockchain discussions.
For urgent matters, Binance forms ad-hoc groups, roping in relevant teams, including developers and legal, to synchronize and strategize. The "Telegram group collaboration model" is hailed internally for its efficiency. The ethos was simple: air your disagreements openly in the group, fostering a culture of transparency and directness.
During the interviews, an employee who joined Binance in 2019 was struck by this transparency and universal trust. From day one, they were privy to all departmental progress and unrestricted access to files. This open environment meant that once a directive from CZ or He Yi was issued, action was immediate.
This transparency is fascinating when viewed through Binance's dual identity: a two-year-old startup, yet by 2019, the world's largest blockchain exchange, with a presence in over 40 countries and serving 15 million users. This dichotomy reflects Binance's chaotic nature: part burgeoning giant, part evolving startup.
Despite its seemingly primitive group chat-centric model, this didn't equate to laxity. Employees often clocked 12-14 hour days, with the expectation of availability extending into late hours. This intense work ethic, coupled with a transparent and immediate execution culture, underpins Binance's unconventional yet effective approach to remote collaboration and rapid growth.
Across Time Zones
At Binance, the relentless pace of a fast-growing company means work schedules are heavily dictated by the demands of a global, decentralized operation. Employees’ wake-up times hinge on their first meeting of the day, which in turn is influenced by a complex web of time zones.
Consider the fluidity of their schedules: some start with meetings at 10:30 a.m. Chinese Standard Time (UTC+8), only to see this shift to 9:30 a.m. due to daylight saving changes, and then to 2 p.m. when managers travel to Dubai. Others might find themselves in cross-continental collaborations, necessitating a start at the crack of dawn. While daily meetings are typically brief for about half an hour, the workday stretches long, often concluding with the issuance of the daily report at 11 p.m. In this global setup, Europe and Dubai emerge as strategic time zone hubs, optimally positioned to bridge the gap between Chinese Standard Time and Pacific Standard Time, where Binance has a significant presence.
Remote work, devoid of commutes and with meals often reduced to quick deliveries, transforms almost every waking hour into potential work time. The infamous “996” schedule (9 a.m. to 9 p.m., six days a week) doesn’t seem like an overstatement here. However, despite the efficiency of their group chat collaboration model, the reality of a large, scattered workforce is a calendar crowded with meetings. Some employees recall days filled with up to ten meetings, jokingly lamenting a whole day spent in discussion without tangible work done. Efforts to limit meeting frequency are in place for some teams, but they are exceptions rather than the rule.
Recognizing the potential productivity pitfalls of excessive meetings, CZ and He Yi, were very strict with meeting efficiency. CZ, in 2018, began instructing employees on streamlined reporting: key points should be succinctly listed in text, and meetings with him are capped at 30 minutes unless extenuating circumstances arise. His Quarterly Business Reviews (QBWs) with business unit heads are crisp, focused on results, progress, challenges, and high-level support needs. His approach is direct: if you don't get to the point immediately, expect interruption.
He Yi's leadership in marketing, known for its global reach, focused early on streamlining efficiency. They tackled the challenge of synchronizing information across a vast, international team with a disciplined approach to their weekly meetings. Held every Wednesday night at 10:00 pm, these sessions gathered over a hundred core members, with every project leader getting a moment in the spotlight. The rule was strict but effective: one slide, one minute. This slide was the essence of simplicity, detailing key achievements from the past week and outlining the next week's goals. Critical here was the emphasis on collaborative needs, flagging any upcoming tasks requiring cross-departmental support. Efficiency was paramount, with the entire meeting wrapping up in just 40 minutes – a brisk pace for a gathering of this scale.
Cross-cultural dynamics add another layer of complexity. Asian teams, typically less concerned about distinguishing between work and break times, contrast with European teams where such boundaries are more clearly defined. Remote work blurs these differences further, but there’s also a cultural exchange happening, a mutual adaptation of work styles. Employee development at Binance takes a backseat, with the company focusing less on training and more on deliverables. However, they do invest in their staff’s language skills, offering a $100 monthly stipend for English learning through a platform named “italki”. CZ's personal passion for reading has also significantly influenced Binance's corporate culture. In celebration of Binance's second anniversary, the company gifted each employee a Kindle, custom-designed with a Binance case, and a book allowance, encouraging employees to cultivate their reading habits. CZ even initiated reading group meetings for the leadership team.
An under-discussed challenge of this remote work paradigm is the lack of physical connection. The absence of face-to-face interactions, initially a non-issue for many, gradually manifests as a longing for real human contact. This sentiment underscores a growing realization in the remote workforce: digital connectivity doesn’t always fulfill the innate human need for physical presence and interaction.
Binance’s Way of Work
However, despite the intense work environment, Binance's impressive growth trajectory continues to draw talent.
In its early stages, the company offered a unique opportunity for candidates to secure interviews directly with the founders, a window that many aspirants leveraged. The interview process at that time was a four-stage affair. Candidates would go through rounds with their prospective direct supervisor, a peer, and HR, in addition to either CZ or He Yi. Notably, HR at Binance didn’t wield veto power over hiring decisions, a policy very likely welcomed by many seasoned developers. In such a scenario, initial interviews with top executives like CZ or He Yi often set the tone for the subsequent rounds, which could sometimes feel more like formalities.
A fascinating aspect of these early interviews was their focus. Many who joined during this period recall that conversations with CZ or He Yi often steered away from work-specific topics. Instead, discussions revolved around life, ideals, patterns, or visions - topics that might seem abstract or vague in a traditional job interview context. Post-interview, CZ was known to passionately share his perspectives on blockchain technology. Their approach suggests a hiring philosophy that may resonate with that of Sam Altman: Value first, aptitude second, specific skill third.
By focusing on broader life views and visions, CZ and He Yi seemed to be seeking individuals who shared their ethos and enthusiasm for the blockchain space, rather than just those with a certain set of technical skills. This strategy, while unconventional, appears to have contributed to building a team that's deeply aligned with Binance's core values and vision, a crucial factor in its rapid growth and success.
Upon being hired, new recruits at Binance are equipped with a 13-inch MacBook Pro and offered a salary package that's generally more competitive than what they might find elsewhere under similar conditions. Many employees acknowledge that without Binance, their educational and professional backgrounds might not have landed them in such lucrative roles. The allure of Dubai is even greater, with higher salaries and additional monthly subsidies for those willing to relocate. However, there's a notable disparity in pay across different departments, with smart contract roles being the most lucrative, followed by technical teams, and marketing positions at the lower end.
Binance conducts a biannual review process. Performing well can lead to a bonus of four to six months' salary, while average performance might yield a two-month bonus. Consequently, many employees effectively earn the equivalent of a 20-month salary in a year, a significantly generous offering compared to the 14-16 month annual salary packages of rapidly growing companies like Temu. However, Binance later transitioned to an annual review and reduced the bonus size.
Performance at Binance is graded on a scale of 1-6, with 1-1.5 representing the 'superstar' tier, a rare accolade awarded to at most one individual per team. A score below 5 triggers a Performance Improvement Plan (PIP) with a one-month probation. Failure to improve results in termination, though such occurrences were rare for a long time.
Managers are responsible for evaluating performance, but in the early days, convincing higher-ups, including CZ or He Yi, was part of the process. He Yi used to personally oversee bonus allocations, and in a rather humane approach, bonuses weren't strictly tied to scores. Lower base salaries were often compensated with larger bonuses.
New hires undergo a probation period of 3-6 months, with longer tenures for executives. A unique onboarding practice at Binance is the requirement for those in leadership roles to spend two hours doing customer service every day for a period of time, reflecting a Chinese tech company management style akin to Jingdong's practice of having executives work as delivery drivers.
Once on board, employees are thrust into the whirlwind of Binance's rapid expansion. Unlike many startups that hemorrhage cash for market share, Binance stands out as a profit-generating juggernaut even during aggressive growth. In departments like marketing, strict ROI control is applied primarily to acquisition, not to branding, publicity, or community. Management isn't KPI-driven; rather, it mirrors the OKR (Objectives and Key Results) approach favored by Silicon Valley giants, focusing on broader goals and outcomes.
Beyond the Rulebook
Binance's approach to business growth suggests a bold deviation from conventional wisdom. For many companies, especially startups, management is often seen as the cornerstone of success. This emphasis on management has spurred the creation and adoption of various collaboration tools like Linear, Notion, Lark, and Slack, becoming a universal topic of discussion among entrepreneurs from Silicon Valley to Beijing to Bangalore. The quest for the optimal management model (and programming language) is a frequent subject in entrepreneurial circles, and management books prominently line airport bookstores worldwide.
However, Binance’s trajectory poses a provocative question: during times of rapid, almost epic growth, how crucial is the traditional emphasis on management? Binance’s reliance on a simple, Telegram-based group chat model challenges the perceived necessity of sophisticated management tools in driving company growth. The message seems clear: if such an approach does not impede growth, why not embrace it?
This perspective isn't unique to Binance. Pinduoduo (also known as PDD, parent company of Temu), a Chinese e-commerce giant and Temu’s parent company, also exemplifies rapid growth without the reliance on advanced management tools. A report from LatePost highlights that Pinduoduo, in its nascent stages, relied heavily on a company-wide group chat on QQ for internal communication. QQ, an instant messaging software by Tencent, is often regarded as China's copy of ICQ, which was initially developed and launched in 1996 by Mirabilis. This large-scale QQ group, encompassing several thousand employees, served as the primary conduit for information sharing and task assignment within Pinduoduo. Also, even at a staggering market capitalization of $30 to $40 billion post-IPO in 2018, Pinduoduo managed attendance records through a seemingly archaic process of manual data transfer from punch card machines to Excel sheets. This method, while primitive, was driven by a singular focus on survival and growth.
For both Binance and Pinduoduo, the prevailing attitude is that in the race to outpace competitors and navigate regulatory hurdles, survival and growth trump all else, including management sophistication. In an environment where staying afloat and thriving is challenging enough, the choice of management tools becomes secondary.
From Rebel to Ruler
The evolution of Binance's management style, as it scaled up, reveals the limitations of a highly informal and flat organizational structure.
When Binance's workforce neared the 1,000-employee mark in the latter half of the year, the company embarked on a significant transition. It moved away from using Telegram, initially switching to Cisco's WebEx as a transition. However, this was only a stepping stone towards adopting Binance's proprietary internal software, Wea.
Wea bears a resemblance to Lark (the global version of Feishu developed by ByteDance), in terms of both user interface and logo. A key difference from the Telegram era is that Wea is exclusive to teams at Binance. Acquired entities, like Coinmarketcap, do not have access to it. This marks a shift in Binance's operational model, becoming less flat and transparent.
In prioritizing security and information control, Binance started phasing out company-wide group chats with the adoption of WebEx. CZ, the company's CEO, enforced a policy against large coworker group chats. Interest and hobby groups still exist,, but they are limited to small sizes. Meanwhile, larger WeChat groups among Binance employees were disbanded. This change meant that Binance employees could no longer freely communicate with each other, leading to instances where employees working together virtually would meet each other in person for the first time under the introduction of someone outside Binance at external events, like blockchain conferences.
Pinduoduo, similarly, underwent a transformation. Once reliant on a massive QQ group chat, it evolved into a company that tightly controls information. Employees are restricted from viewing the organizational structure outside their departments and are prohibited from forming WeChat groups.
This period also marked a shift in Binance's growth strategy. The company, previously known for its rapid and somewhat uncontrolled expansion, started to confront issues related to regulation and compliance.
As Binance matures, it's increasingly resembling other large corporations, marking a departure from its early, more unconventional days. The era when aspirants could directly contact the founders for job opportunities has faded. Now, Binance places greater emphasis on formal education and professional experience, making it challenging for those outside the major tech and finance firms to secure a position.
Within the company, employees have started to distinguish between two types of colleagues: the “Binance veterans'' and the ‘big tech people.'
Binance veterans are primarily early joiners, often with grassroots backgrounds, who embraced the cryptocurrency community and Binance from its inception. Many in this group hold substantial amounts of Binance Coins. In contrast, “big tech” individuals resemble the polished professionals seen in Silicon Valley and Zhongguancun, who had some years of experience at some tech giants. They typically don't engage in crypto and are quick to sell any crypto the moment they receive.
However, these corporate types, despite not being crypto natives, might now be more suitable for Binance's evolving needs. As the company faces challenges common to large corporations, hiring individuals with experiences in handling such issues seems prudent. These “big tech people”, with backgrounds in large companies and even government, bring valuable expertise. Their contributions have been instrumental in Binance's sustained success amidst the rapid rise and fall of many blockchain exchanges.
A Chinese proverb aptly describes this transition: You can fight and conquer on horseback, but ruling requires a different approach. Since the second half of 2020, Binance has been shifting from explosive growth to more sustainable development.
Binance’s current situation mirrors the trajectory of other fast-growing internet companies. ByteDance, for example, initially thrived with young, motivated employees from non-corporate or non-big-tech backgrounds. Post-2020, however, it began to recruit experienced managers, like Kevin Chen Xi (the former executive president of ridesharing at Didi) and Shou Zi Chew (the former global business president at Xiaomi), to bring more seasoned leadership.
This shift towards recruiting from big techs is seen as necessary but has caused some friction among the original Binance staff. Complaints have arisen about the new need for upward management, a concept previously alien to Binance's culture. In the beginning, under CZ and He Yi, the focus was solely on the user's perspective. Now, there's an added layer of considering how actions align with leadership goals and personal advancement.
CZ, known for advocating a no-politics, conflict-free, and open communication culture, might not have envisioned these changes. However, the evolution into a large company inevitably brings with it the challenges typical of such entities. The phenomenon, often classified as the “Big Company Disease” or “Big Company Syndrome”, is seen as an unavoidable destiny for any growing giant, a challenge Binance now faces as it continues to evolve.
At the Crossroads of Change
The trajectory of Binance mirrors a common cycle observed in the tech industry: a period of rapid expansion and massive hiring, followed by a phase of contraction and layoffs. This pattern, which Binance experienced mid-year with a significant layoff, often serves as a critical juncture. The real test for a company's longevity lies in how it reflects and rebuilds post-contraction.
Rapid company growth often outpaces the learning curve of its founders. The extent and future of a company are significantly influenced by the speed at which founders adapt and evolve. Some founders, like Zeng Yuchun of CATL (Contemporary Amperex Technology Co. Limited, a Chinese battery giant), bring a wealth of experience from previous ventures, shaping their approach without heavily relying on external models. Others, such as Li Auto’s Li Xiang, actively seek wisdom from experienced industry figures, like Zeng Ming, Chairman of the Academic Council of Alibaba, to understand organizational building and strategic planning.
CZ falls into the latter category, continuously learning from various sources, though he tends towards solitary learning through extensive reading. Following Binance's layoffs, he showed keen interest in Walter Isaacson's biography of Elon Musk, sharing his insights and encouraging others to read it. CZ resonated with Musk’s values and approach, particularly in driving teams efficiently, which seemed even more pertinent post-layoffs.
Yet, the challenges faced by CZ, He Yi, the new CEO Richard Teng and the rest of management at Binance are unprecedented: navigating regulatory scrutiny across multiple regions, maintaining the world’s largest exchange in a rule-deficient market, and managing a large remote workforce. These are unique problems that Binance must solve independently, as no ready playbook exists for such scenarios.
In a significant move on November 22, 2023, CZ stepped down as CEO of Binance. This decision aligns with a trend observed in Chinese tech firms, where founders often step back from primary roles during pivotal moments. Examples include Pinduoduo’s Huang Zheng retiring prior to the launch of Temu, Zhang Yiming stepping back from ByteDance as TikTok gained momentum, and Jack Ma famously exiting Alibaba. Such departures signal a new phase and set of challenges for a company, and Binance, already grappling with numerous complex issues, faces yet another.
This is not just the end of an era; it's probably the dawning of a new legacy. The questions Binance faces and the answers it seeks hold the potential to redefine the landscape of global tech leadership. Whether these answers will script success or lessons for posterity, Binance’s story is sure to be etched into the textbooks of future innovators, a narrative of ambition, adaptation, and the unyielding spirit of human enterprise.
Stay tuned for our following pieces on Binance as well as anything tech. If there's a topic you want us to explore, don't hesitate to DM @MornMushroom or ask me anything on AAAny. Cover Photo by Huan.
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Hanyang Wang (aka. MornMushroom), wearing more hats than there are in a hat shop. Serial entrepreneur, contributing writer at LatePost and host at LateTalk, host and producer of two other Chinese podcasts - MonsLog and techreview.social. Part-time photographer and hobbist herpetologist. At PicaPica, Hanyang interviews, probes, and tell stories in Mandarin.
Mavis Wang (aka. Huhu/糊糊), crafting lemonade from life's unexpected lemons after relocating to Toronto from Beijing. Growth and innovation strategist, content creator, MBA new grad. Host and producer of Casticle and one English show in the works. At PicaPica, Mavis edits, pivots, and channels thoughts in English.
Great article!