The unconventional Palantir principles that catalyzed a generation of startups
The unconventional Palantir principles that catalyzed a generation of startups
How the principles we learned at Palantir spawned nine unicorns and 100+ venture-backed companies
The CTO of Palantir Technologies, Shyam Sankar, in April 2023 testified before the U.S. Senate that “we must spend at least 5% of our [defense] budget on capabilities that will terrify our adversaries.”1 Shyam and CEO Alex Karp’s unwavering commitment to strengthening our country motivated me to resign from the civil service and permanently defer attending a top law school so I could join what was then Palantir’s small band of engineering mavericks. Our mission was simple: revolutionize the way the world’s largest and most important organizations answer their hardest questions. Fast-forward a decade, and Palantir is a public company whose alumni have gone on to build nine unicorns, from Anduril to Handshake to Amplitude, and over 100 additional venture-backed companies.2
At Palantir, we didn’t believe in heavy processes, because we felt that formulas and playbooks tacitly give people permission to stop thinking for themselves. Nonetheless, as I reflect on the experiences we had together and as I now partner with new startups looking to learn from Palantir’s experience, I feel compelled to compile and share my unofficial list of learnings.3 While the company has at times been a lightning rod for public speculation, the secrecy and misinformation surrounding its missions often prevent the amazing product lessons it forged from spreading the way they deserve. Not every lesson will work for every startup or innovation team, but I hope these ideas will catalyze others to consider unconventional approaches to doing the impossible and encourage the creation of more world-changing technologies.
A playbook of first principles: To disrupt an industry. . .
1. Forward-deploy your engineering
Product thought leaders tend to extol the value of talking to users, but most are barely scratching the surface. At Palantir, one of the largest teams was called Forward Deployed Engineering.4 This is the team I joined when I first got hired, and we were responsible for making our early product live up to the vision. Our main goal was creating product solutions for issues blocking customer adoption, or that could unlock new growth. The golden nugget in this philosophy is that you don’t worry about how to ask users the right questions or obsess over “interviewing” them. Instead, you are literally there, in the shit with them, getting involved in what is happening. In the early days at Palantir, this meant flying to war zones carrying a bunch of laptops to where U.S. forces actually engaged the enemy. In a commercial context, it didn’t mean jumping on the phone with the fraud specialists at a major bank. It meant going and spending the next three months in customer operations centers, working the same leads as the customer. Anduril, where many Palantir alumni have gone next, continues a similar practice, and I’ve met numerous excellent PMs who work this way even when it’s not a part of the company culture.5
It’s not just getting downrange that matters. You have to be the user to unlock this concept. I don’t mean that spiritually as in “think like the user”; I mean literally do their same job with your product as an extended member of their team and see what you learn. You don’t embed for 20 minutes, either. A lot of the real aha moments come after you’ve been in the customer’s shoes for an extended period of time. Work with your product long enough that the customer is impressed that you’ve accomplished something real for their business that they couldn’t. In the early days of one of our most successful engagements that led to an over $100 million deal, the customer had no users of our product for the first 6 to 12 months. We formed a small team that was given direct access, integrated their data into our existing product, built prototype solutions for the unique problems this engagement taught us about, and then performed the analysis and briefed it directly to a top worldwide CEO.
Some financial market analysts have judged Palantir harshly for this sort of embedded dedication, attempting to cast the company as a services organization or consultancy. They completely miss the point that this process is how to learn which problems matter the most and how to build compelling solutions; it is not a permanent state but rather a tool for the vanguard as it approaches a new use case. Further, when innovating in emerging technology applications, often the customer doesn’t yet have a conceptualization of how they will work in the future, so by being one of them, you can establish the first patterns for doing that work excellently. Instead of spending years iterating based on a loose understanding of the customer, we completely understood what mattered and executed immediately, driving real value an order of magnitude faster with superior results.
Lessons:
Go fully inside the customer’s environment.
Don’t just empathize with the user; be the user.
Do real customer work long enough to have full empathy and inspire.
2. Hire the best absolute greatest people who exist
Everyone says “talent is everything” and “it’s all about the people,” but many executives who I’ve encountered have never worked with the absolute best on the planet. As a result, it’s not obvious to them when they have hired someone who is decent, pretty good, or even downright average. Just because someone saves your butt doesn’t mean they are “amazing” or a “rock star.” Sure, we say that and are appreciative, but that’s not what we mean. We aren’t talking about “the top 1%.” We are talking about the literal one best person for the job who exists on Planet Earth. I cannot stress this difference enough. FAANG companies are the backup plan for this cohort.
Early in our days engaging with military customers at Palantir, we hired directly from special forces, for example ex-Navy SEALs. The SEALs are the créme de la créme in a military context, but we didn’t stop there. We hired some of the most decorated and well-known Navy SEAL commanders alive today. I distinctly recall telling customers who I was bringing to the meetings, and people who had never met either of us would instantly know that individual’s reputation and nickname, and what he was known for. Last year, a space and AI startup I was advising set a great example for this lesson. They wanted to build a first-of-its-kind satellite fabrication facility. The person they hired for the job is an engineer who has built more satellites that are in the sky today than any other human. That’s hiring the absolute best.
Hiring this way is crucial for two reasons. First, the best are, well, better, at the specific work they’ve been asked to tackle. But the less-understood reason why this is so high-leverage is because the world opens doors for people at the very top of their respective fields. The best AI engineers in the world, for example, attract media attention, top VC attention, and top founder attention. As a result, they are better connected and have disproportionately more access to the other best people in the world. This accelerates their learning and dramatically improves their ability to make the impossible happen. The difference between the #1 and the #50 in the world in terms of skills is practically indistinguishable, but as a result of being #1, that individual likely has access to an order of magnitude more knowledge, opportunity, and talent. This problem cascades down the organization through hiring generations, which is one of the reasons why the best startups are orders of magnitude better than the next tier down.
Prof. Lambeau: “You’re right, Will. I can’t do this proof. But you can, and when it comes to that, it’s only about. . . it’s just a handful of people in the world who can tell the difference between you and me. But I’m one of them.”
—Good Will Hunting, 1997
But the top people aren’t always obvious or famous, so that cannot be our only means for identifying them. One of my favorite new startups is Quindar Space. The Quindar team is easily one of the best teams in the world for the problem they are solving. They focus on every piece of software technology required for satellite spaceflight that is not directly a part of the satellite—for example, software for determining when to maneuver, tracking onboard issues, and finding ground stations on Earth that satellites can beam data down to. The founders all built this type of software together at multiple prolific satellite companies, including OneWeb (the company with the second-most satellites in orbit after SpaceX), before they became founders at Quindar. Almost no one has more experience or skill in standing up these systems, giving them an enormous advantage. Sometimes these individuals are well known and other times they have been buried in a bureaucracy, and sometimes they don’t even know that they are the world’s best at a particular problem.
Lessons:
For each discipline on the critical path to success, hire the world’s #1.
To be sure, ask others in the community if those people are the best.
Look in unexpected places for the talent—it’s the experience, not the fame.
Remaining Lessons
To read the remaining five lessons, please visit the original article hosted on Lenny's Newsletter which was published on June 13, 2023.
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https://www.armed-services.senate.gov/hearings/to-receive-testimony-on-the-state-of-artificial-intelligence-and-machine-learning-applications-to-improve-department-of-defense-operations
https://www.protocol.com/newsletters/pipeline/palantir-pack-mafia and https://seekingalpha.com/article/4601938-why-palantir-is-my-top-holding
These are my views about what made Palantir tick, and my views alone. Palantir did not review any drafts, nor was it involved in the production of this article.
To learn more about the role of a Forward Deployed Engineer, see https://blog.palantir.com/a-day-in-the-life-of-a-palantir-forward-deployed-software-engineer-45ef2de257b1
https://blog.anduril.com/the-problem-solver-lindsay-trice-85c4fdb6437d