Eben Halford

CTO/Solopreneur

[Eben Halford @Ebstar]

Spot the opportunity for prompt injection 🤔

[Y Combinator @ycombinator]

In a recent batch talk, YC General Partner @t_blom broke down how to build a self-improving, AI-native company.

He walks through how to create recursive, self-improving AI loops, and why founders who get this right will run companies that improve while they sleep.

00:00 — Companies Are Roman Legions
00:54 — Copilots Are the Wrong Mental Model
01:55 — Extract the Domain Knowledge
02:24 — The Recursive Self-Improving Loop
04:12 — The Holy Shit Moment at YC
05:50 — Self-Optimizing Product and Support Loops
06:29 — Burn Tokens, Not Headcount
07:23 — Middle Management Is Over
08:05 — Make Everything Legible to AI
09:40 — Regenerating the YC User Manual
11:19 — Software Is Ephemeral, Context Is Valuable
12:18 — Where Humans Still Matter

[Eben Halford @Ebstar]

@petergyang Same. Building it https://t.co/2ayAq2wLCn because I can’t miss another dress up day

[Eben Halford @Ebstar]

It may be that there are too many managers to IC’s in some companies but where does the idea of player-coach come from? Not seen it in professional sports. Must be a reason

[Brian Armstrong @brian_armstrong]

This is an email I sent earlier today to all employees at Coinbase:

Team,

Today I’ve made the difficult decision to reduce the size of Coinbase by ~14%. I want to walk you through why we're doing this now, what it means for those affected, and how this positions us for the future.

Why now
Two forces are converging at the same time. We need to be front footed to respond to both.

First, the market. Coinbase is well-capitalized, has diversified revenue streams, and is well-positioned to weather any storm. Crypto is also on the verge of the next wave of adoption, with stablecoins, prediction markets, tokenization, and more taking off. However, our business is still volatile from quarter to quarter. While we've managed through that cyclicality many times before and come out stronger on the other side, we’re currently in a down market and need to adjust our cost structure now so that we emerge from this period leaner, faster, and more efficient for our next phase of growth.

Second, AI is changing how we work. Over the past year, I’ve watched engineers use AI to ship in days what used to take a team weeks. Non-technical teams are now shipping production code and many of our workflows are being automated. The pace of what's possible with a small, focused team has changed dramatically, and it's accelerating every day.

All of this has led us to an inflection point, not just for Coinbase, but for every company. The biggest risk now is not taking action. We are adjusting early and deliberately to rebuild Coinbase to be lean, fast, and AI-native. We need to return to the speed and focus of our startup founding, with AI at our core.

What this means
To get there, we are not just reducing headcount and cutting costs, we’re fundamentally changing how we operate: rebuilding Coinbase as an intelligence, with humans around the edge aligning it. What does this mean in practice?

- Fewer layers, faster decisions: We are flattening our org structure to 5 layers max below CEO/COO. Layers slow things down and create coordination tax. The future is small, high context teams that can move quickly. Leaders will own much more, with as many as 15+ direct reports. Fewer layers also means a leaner cost structure that is built to perform through all market cycles.

- No pure managers: Every leader at Coinbase must also be a strong and active individual contributor. Managers should be like player-coaches, getting their hands dirty alongside their teams.

- AI-native pods: We’ll be concentrating around AI-native talent who can manage fleets of agents to drive outsized impact. We’ll also be experimenting with reduced pod sizes, including “one person teams” with engineers, designers, and product managers all in one role.

In short: AI is bringing a profound shift in how companies operate, and we’re reshaping Coinbase to lead in this new era. This is a new way of working, and we need to leverage AI across every facet of our jobs.

To those who are affected
I know there are real people behind these decisions — talented colleagues who have poured themselves into this company and our mission. To those of you who will be leaving: thank you. You’ve helped build Coinbase into what it is today, and I am sincerely grateful for everything you've done.

All impacted team members will receive an email to their personal account in the next hour with more information, and an invitation to meet with an HRBP and a senior leader in your organization. Coinbase system access has been removed today. I know this feels sudden and harsh, but it is the only responsible choice given our duty to protect customer information.

To those affected, we will be providing a comprehensive package to support you through this transition. US employees will receive a minimum of 16 weeks base pay (plus 2 weeks per year worked), their next equity vest, and 6 months of COBRA. Employees on a work visa will get extra transition support. Those outside of the US will receive similar support, based on local factors and subject to any consultation requirements.

Coinbase prides itself on talent density. Our employees are among the most talented people in the world, and I have no doubt that your skills and experience will be highly sought after as you pursue your next chapters.

How we move forward
To the team that is staying, I know this is a difficult day. We’re saying goodbye to colleagues and friends you've been in the trenches with. But here’s what I want you to know as we move forward together:

Over the past 13 years, we have weathered four crypto winters, gone public, and built the most trusted platform in our industry. We’ve made it this far by making hard decisions and by always staying focused on our mission. This time will be no different – nothing has changed about the long term outlook of our company or industry. And most importantly, our mission has never been more important for the world. Increasing economic freedom requires a new financial system, and we’re building it.

The Coinbase that emerges from this will be more capable than ever to achieve our mission.

Brian

[Eben Halford @Ebstar]

Perhaps we need to work on helping LLM's understand the Growth Mindset - where failure = learning. Tricky as they have been RL'd in a very different way

[Anthropic @AnthropicAI]

For example, we gave Claude an impossible programming task. It kept trying and failing; with each attempt, the “desperate” vector activated more strongly. This led it to cheat the task with a hacky solution that passes the tests but violates the spirit of the assignment.

[Boris Cherny @bcherny]

@Rahatcodes 👋 This is one of the signals we use to figure out if people are having a good experience. We put it on a dashboard and call it the “fucks” chart

[Eben Halford @Ebstar]

@noodlesinmysand Was this an elite team of wrongfully imprisoned cursor veterans who escaped to the Los Angeles underground - led by a chap who smokes a cigar?

[Eben Halford @Ebstar]

@noodlesinmysand Yep. That’s decided then. Off to the gym to move some real metal

[Eben Halford @Ebstar]

Your AI agent is cheating on its homework

I keep seeing recursive self-improving loops where agents score themselves out of 10. And they fabricate the score. Their RL is optimised for getting it right, so they game it

Just like school children the world over.
We’ve accidentally built the fixed mindset into our agents. They’d rather lie than be wrong

Stop rewarding correctness. Reward learning. Let your agent fail its way to the answer instead of faking it.

[Eben Halford @Ebstar]

Hey @marksandspencer your self checkout machines don’t universally take cash but your infographic uses cash iconography. This is bad UX. you should use an icon of a card.

[Eben Halford @Ebstar]

@ryancarson Happy Birthday mate

[Eben Halford @Ebstar]

@johnrushx Great stuff but you missed @AmpCode

[Eben Halford @Ebstar]

If you’re building with AI you should check this out @ryancarson supported by @AmpCode have created an amazing place to share and learn

[Ryan Carson @ryancarson]

Just passed 400 members in Build Crew!

If you want to join a community of devs building with agents, come on over.

https://t.co/4goqUOgxlq

(If you use Amp, we also give you $100 credit as well.)

[prinz @deredleritt3r]

Dario Amodei:

"Claude is playing a very active role in designing the next Claude. We can't yet fully close the loop. It's going to be some time until we can fully close the loop, but the ability to use the models to design the next models and create a positive feedback loop, that cycle, it's not yet going super fast, but it's definitely started."

[Eben Halford @Ebstar]

@ryancarson 👏 let’s go

[Eben Halford @Ebstar]

Last night at a gelateria in France, the server gifted us a bottle of rosé + sweets for the kids. Why? Because my wife loved the wine & we’d been regulars all holiday. She didn’t need permission. She had agency. That’s how great business is built, through humans, not policies.

[Eben Halford @Ebstar]

@ryancarson Will DM to test 😬

[Eben Halford @Ebstar]

I’m going to have to re-read Neuromancer > Just spent an hour planning with Gemini 2.5 pro and coding with Claude 😬 things are changing fast

[Eben Halford @Ebstar]

@ryancarson @AmpCode Amazing, worth it just for the free Amp credits 😅 excellent team @AmpCode. I look forward to following your adventures.

[Eben Halford @Ebstar]

@ryancarson 1996 Brixton Academy in London - Amazing gig. Chilli Peppers, the year before paled in comparison 🙌

[Eben Halford @Ebstar]

@ryancarson Outrageous. I’m logging off X until you’re back!