Category: entrepreneurship

Inside the Palantir Mafia: Secrets to Succeeding in the Tech Industry

Inside the Palantir Mafia: Secrets to Succeeding in the Tech Industry

In the world of technology, engineers are not just cogs in a machine; they are the builders, the dreamers, and the ones who solve the problems they see in the world. And sometimes, those solutions turn into billion-dollar businesses. This is the story of the “Palantir Mafia,” a group of former Palantir employees who have left the data analytics giant to found their own startups, just like the famed “PayPal Mafia” that produced companies like SpaceX, YouTube, LinkedIn, Palantir Technologies, Affirm, Slide, Kiva, and Yelp.

1. Introducing the Amazing People from Palantir

The “Palantir Mafia,” akin to the renowned “PayPal Mafia,” comprises former Palantir engineers and executives who left to tackle meaningful problems with technological innovation, creating substantial impact and wealth. Unlike ex-consultants from firms like McKinsey, BCG, or Bain, these tech leaders leverage their deep technical expertise to solve complex issues directly, resulting in profound advancements and successful ventures.

Key Figures and Their Ventures

  1. Alex Karp – Palantir Technologies
    • Former Role: Co-Founder and CEO
    • Company: Palantir Technologies
    • Focus: Data analytics
    • Market Penetration: Widely used across government and commercial sectors
    • Revenue: $1.5 billion annually
    • Capital Raised: $3 billion​ (Wikipedia)​​ (Business Insider)​
  2. Max Levchin – Affirm
    • Former Role: Co-Founder (PayPal, associated with Palantir founders)
    • Company: Affirm
    • Focus: Buy now, pay later financial services
    • Market Penetration: Significant presence in the consumer finance market
    • Revenue: $870 million in fiscal 2021
    • Capital Raised: $1.5 billion
  3. Joe Lonsdale – 8VC
    • Former Role: Co-Founder
    • Company: 8VC
    • Focus: Venture capital firm
    • Market Penetration: Diverse portfolio, influential in tech sectors
    • Assets Under Management: $3.6 billion
  4. Palmer Luckey – Anduril Industries ( could be the blue blooded Musk of 2020-2030s)
    • Former Role: Founder of Oculus VR, associated with Palantir through ventures
    • Company: Anduril Industries
    • Focus: Defense technology
    • Innovation: Developed the Lattice AI platform for autonomous border surveillance and defense applications
    • Market Penetration: Contracts with U.S. Department of Defense and border security agencies
    • Revenue: $200 million annually
    • Capital Raised: $700 million
  5. Garrett Smallwood – Wag!
    • Former Role: Executive roles at other startups before Wag!
    • Company: Wag!
    • Focus: On-demand pet care services
    • Market Penetration: Operates in over 100 cities
    • Revenue: $100 million annually
    • Capital Raised: $361.5 million
  6. Nima Ghamsari – Blend
    • Former Role: Product Manager at Palantir
    • Company: Blend
    • Focus: Mortgage and lending software
    • Market Penetration: Partners with major financial institutions
    • Revenue: Estimated $100 million+ annually
    • Capital Raised: $665 million
  7. Stephen Cohen – Quantifind
    • Former Role: Co-Founder of Palantir
    • Company: Quantifind
    • Focus: Risk and fraud detection using data science
    • Market Penetration: Used by financial services and government sectors
    • Capital Raised: $8.7 million
  8. Vibhu Norby – B8ta
    • Former Role: Engineer at Palantir
    • Company: B8ta
    • Focus: Retail-as-a-service platform
    • Market Penetration: Transforming in-store retail experiences
    • Capital Raised: $113 million
  9. Joe Lonsdale – Addepar
    • Former Role: Co-Founder of Palantir
    • Company: Addepar
    • Focus: Wealth management technology
    • Market Penetration: Manages over $2 trillion in assets
    • Capital Raised: $325 million
  10. Raman Narayanan – SigOpt
    • Former Role: Data Scientist at Palantir
    • Company: SigOpt (acquired by Intel)
    • Focus: Machine learning optimization
    • Market Penetration: Utilized by top tech companies
    • Capital Raised: $8.7 million (before acquisition)

2. Engineers Make Better Founders in the Tech Industry

Unlike ex-consultants from big 3 who may excel in strategy and communication but often lack the technical depth to truly understand the intricacies of building a tech product, these ex-Palantir engineers come armed with both the vision and the technical chops to bring their ideas to life. They’ve spent years wrestling with complex data problems at Palantir, and they’re now taking those hard-won lessons to solve new challenges across a wide range of industries.

Engineers bring a problem-solving mindset that focuses on creating practical, scalable solutions. This technical acumen has allowed former Palantir employees to launch transformative companies that push the boundaries of what’s possible in various industries.

3. Market Penetration and Success of Palantir Alumni

The success of these Palantir alumni is evident through their market penetration and revenue. For instance, Palantir Technologies itself is a major player in the data analytics field, with a revenue of $1.5 billion annually. Affirm, led by Max Levchin, has made significant inroads in the consumer finance market, generating $870 million in revenue in fiscal 2021. Anduril Industries, founded by Palmer Luckey, has secured substantial contracts with the U.S. Department of Defense, contributing to its $200 million annual revenue.

Other successful ventures include Blend, with its deep partnerships with major financial institutions, and Addepar, managing over $2 trillion in assets. These companies not only showcase the technical expertise of their founders but also highlight their ability to penetrate markets and achieve substantial financial success.

4. Engineers vs. Consultants: A Compelling Argument

The technical depth and problem-solving mindset of engineers make them particularly suited for founding and leading tech startups. Their ability to directly tackle complex problems contrasts with the approach of ex-consultants from firms like McKinsey, BCG, or Bain, who often focus more on financial and operational efficiencies.

While consultants excel in operations-heavy startups, where strategic planning, financial management, and operational efficiency are paramount, engineers thrive in tech startups that require innovative solutions and deep technical expertise. The success stories of the Palantir alumni underscore this distinction, demonstrating how their engineering backgrounds have enabled them to drive significant technological advancements and build successful companies.

Conclusion

The Palantir Mafia’s engineers have leveraged their technical expertise to create innovative solutions and successful ventures, driving significant impact across various industries. Their ability to tackle complex problems directly contrasts with the approach of ex-consultants from firms like McKinsey, BCG, or Bain, who often focus more on financial and operational efficiencies. This technical depth has enabled these former Palantir employees to become influential leaders, pushing the boundaries of technology and innovation.

References & Further Reading:

  1. https://www.getpin.xyz/post/the-palantir-mafia
  2. https://www.8vc.com/resources/silicon-valleys-newest-mafia-the-palantir-pack
  3. https://www.youtube.com/watch?v=a_nO6RW7ddQ
  4. https://www.businessinsider.in/the-life-and-career-of-alex-karp-the-billionaire-ceo-whos-taking-palantir-public-in-what-could-be-one-of-the-biggest-tech-ipos-of-the-year/articleshow/78198300.cms
  5. https://en.wikipedia.org/wiki/Alex_Karp
The Paradox of Superhero Leadership

The Paradox of Superhero Leadership

Disclaimer: I have immense regard for Elon Musk, so much so, I have gifted Ashlee Vance’s book on the Paypal Mafia boss to multiple people. I have even compared him to the fictional Peter Weyland in my discussions with fellow nerds. But this article is not about the trailblazing leader who sows the seeds of interplanetary exploration/colonisation. It is more about the God Complex and a reflection of multiple things that come with it which may or may not be positive. I have written about the superhero style of leadership earlier as well and briefly, touched on it in a previous article, albeit on a much smaller scale.

Introduction:

Off lately, there is a view, it is called the “superhero” theory of leadership. In which, the individual vision, charisma, and brilliance of a CEO “makes or breaks” a company.  This view is absolutely dangerous — not because CEOs don’t matter or that smarts and vision don’t help. It’s dangerous because of what it ignores. Great leadership takes both mundane “management”  skills and highly specialised “Domain-specific”  ones. The most effective leaders have the knowledge and softer aspects that are specific to their company and industry that allow them to not just motivate, but also drive other people in the organization to do what’s necessary to succeed. 

It’s been a hell of a time for the last two or three months, for news reporters, management consultants, professors in Ivy league & Red Bricks and the new age “gurus” and “influencers”. The fiasco with FTX is an unbelievable story of lapse of controls, comparable to Enron, Daewoo and Satyam. Which supposedly is an understatement as per the new executive appointed to steward it through bankruptcy. Elon Musk’s bid to takeover Twitter and the ensuing drama is equally newsworthy, not sure how much popcorn was sold to watch this drama. And finally, the end arrived for the Theranos story, with Elizabeth Holmes and Sunny Balwani sentenced to 11 years in prison.   

All of these stories have something in common, they combine a very flashy leadership style with a blatant disregard for actual management practices.

The issues at FTX are too numerous to even list as a bullet point in this article, but the crux of the problem is simple. It is a complete lack of checks and balances. Plain vanilla management or accounting is not something that gets you on the cover of Fortune or The Economist or Economic Times,  but oversight of a company’s activities and checking on finances is the trait of good management and leadership. At FTX, it seems to have been completely ignored. How could the company grow so much in the absence of any basic management systems? The sad part is investors and customers were also fooled by those flamboyant “leadership” (remember Nikola ?)

The trajectory of Musk’s Twitter takeover is even more disturbing. Again, it is a story of a CEO who is proud of his blatant disregard for the basics of management and an almost untainted faith in his “superpowers” and the unchallenged position of his leadership and intellect, also called The God Complex

At the reinvented Twitter under Musk, there seems to be no regard for basic HR practices as well. Musk has massive challenges to rally and retain his employees; even assuming he wants to “rightsize” by encouraging resignations, his eccentrics may have pushed even the folks whom he intended to retain.  

What can we learn from these companies? They are both ongoing, but thus far it seems that these firms have fallen victim to an all too popular belief that “superhero” leadership trumps boring management.

This is wrong, in at least two ways. 

First, there is enough evidence that boring management matters and it is a source of competitive advantage for companies that take it seriously. A 2012 research by HBR has shown that management practices vary quite a lot within industries and around the world — and that companies with good management are significantly more profitable. Secondary research has confirmed that good management improves firms’ performance.  

What is good management? There’s no single, comprehensive answer. But it looks like this in practice, target-setting, rewards, and monitoring. Well-managed companies set reasonable, strategic goals; set their staff up to contribute to them; and measure their progress. 

Call it boring or mundane if you like — it is good business.

A major gap in the superhero theory is that it super simplifies what good leadership is. Consider the current debate over Elon Musk. To his fans, Musk’s success at Tesla, SpaceX and PayPal makes him a great leader. To his critics, the maelstrom at Twitter proves the opposite.

A major gap in the superhero theory is that it super simplifies what good leadership is. Consider the current debate over Elon Musk. To his fans, Musk’s success at Tesla, SpaceX and PayPal makes him a great leader. To his critics, the maelstrom at Twitter proves the opposite. That’s too binary, black or white. The reality is a million shades of Grey in between Black and White! Prior research does show that CEOs do matter to a company’s success, but their contribution is about more than just grand vision and raw intellect. And how much of what depends very much on the organisational backdrop.

We think of a leader’s contribution to a company along three dimensions.

Leadership Facets

The superhero narrative simplifies the entire facet of leadership on vertical differentiation, because it’s fun & easy to argue over and write cover stories about.  The other two factors — Horizontal differentiation and Force Multiplier (ability to influence an organization) — are much harder to discuss and not that fun to write about.

But, when an entire generation has grown upon SuperHero movies where it is the Vision, Grit and perseverance of the Hero that saves the day, it is too hard to think in other ways. Even in pop culture, I come from a generation, where the hero gets battered and relies on the collaboration and cooperation of his friends and partners to make it out. Then, there are the “Wise old men” or the occasional woman, who gives some much-needed advice and insights.

How would this three-dimensional assessment differ from the superhero story when it comes to Elon Musk and Twitter? It would complicate the debate that both his fans and his critics seem to be having and instead would go through the three factors mentioned above. Rather than arguing solely about whether Musk is a good CEO in general, we can ask whether he has the skills and experience necessary for running a social media platform — and whether he’ll be able to motivate and manage the team that’s in place.

It’s perfectly reasonable to think, for example, that Musk is an above-average CEO, not particularly well suited to running a social media platform, whose behaviour in the run-up to his Twitter takeover ensured he would not be able to influence the people that he needed to in order to succeed. 

This view of leadership is harder to put on magazine covers, and it is therefore often forgotten. But ignoring the complex relationship between leaders and their organizations is bad for investors, consumers, and ultimately for managers and CEOs, too.

References:

1,  Super Hero Leadership – https://www.linkedin.com/pulse/superhero-syndrome-leadership-what-good-thing-luke-lynch/?trk=public_profile_article_view

https://www.kingsfund.org.uk/publications/heroic-leadership

https://www.fearlessculture.design/blog-posts/leaders-must-stop-being-superheroes

2, Martyr Syndrome – https://nocturnalknight.co/2022/08/a-tech-lead-writing-code-is-a-disservice-to-the-company/ 

http://deeelliottconsulting.com/system/files/Leadership%20and%20Martyrs%20in%20the%20Workplace.pdf 

3, FTX fiasco – https://www.forbes.com/sites/amyfeldman/2022/11/22/with-a-new-ceo-an-adult-has-arrived-to-clean-up-the-ftx-mess/ 

https://www.thestreet.com/investing/cryptocurrency/timeline-of-cryptocurrency-exchange-ftxs-epic-collapse

4, Theranos Collapse- https://www.theguardian.com/technology/2022/dec/07/former-theranos-exec-sunny-balwani-prison-sentence 

5, Does Management really work – https://hbr.org/2012/11/does-management-really-work 

6, The effect of Managers in a Firm – https://academic.oup.com/qje/article-abstract/118/4/1169/1925095?redirectedFrom=fulltext

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