Palantir Technologies Inc updates
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Palantir isn’t your traditional Silicon Valley company. Or so it’ll tell you.
In early 2020, at capitalism’s very own Zauberberg, chief executive Alex Karp went after what he characterised as the ridiculous “Palo Alto island” deregulatory attitude of big tech executives. Then, in Palantir’s IPO prospectus, Karp claimed that while the business “was founded in Silicon Valley . . . we seem to share fewer and fewer of the technology sector’s values and commitments.”
Following Thursday’s earnings release and ensuing conference call, FT Alphaville is not so convinced.
For one, the $47bn data analytics company and part-time Spac investor, spent $233m in non-cash stock-based compensation alone in the quarter — 10 times its operating cash flow.
But cash flow boosting stock compensation is not the only thing Palantir has in common with its Bay Area compatriots. Reading through its conference call, it also seems to enjoy the same ocean-wide, puddle-deep philosophy that many Silicon Valley executives seem to mistake for profundity.
Just cop these lines from chief operating officer Shyam Sankar in his opening statement (transcript via Sentieo):
The big ideas aren’t always on the road map, that term of false comfort and polished lies that big tech companies provide as architecture. No, the big ideas, they come out of inspiration and perspiration. And I am keenly aware as management that the very best ideas, the most profound ideas, they start as heresy, as heterodoxies that a hierarchical structural will snuff out.
We at Palantir, we’re an artist colony, extraordinarily and exquisitely flat. And that is kept alive by organising and reorganising around our customers’ problems, often with great volatility, not by gazing at our navels or calcifying road maps. We do the hard thing and the brave thing because that’s the right thing for our customers.
Later on in the call, after fielding an analyst’s question on how Palantir will continue to attract talent, he added:
I mean we have such a unique culture. And I think I can’t really tell you about culture. Management can’t explain our culture, it’s something that has to be experienced and emanates from every pore of the institution. And that culture is fueled by our mission. We have slept on concrete floors in Baghdad. We have been on the front lines of fighting HIV, TB, Malaria and Ebola in Africa. We have coded from the factory floors from Duluth to Detroit.
I can’t describe the culture, but I can tell you the fundamental tenet that the culture is symptomatic of. We are an artist colony, we’re not a factory. People don’t come to Palantir. Don’t come to Palantir if you want a predictable career trajectory or some sort of methodical ladder to climb. We don’t have that.
Some companies are factories. You start out as a software Engineer 1, and if you work your way up, you can be a software Engineer 1.5 or something like that. But we’re an artist colony. It makes no sense to tell Dali to paint more like Monet. We are looking for unique and extraordinary people, who by definition, are going to be uneven and spiky. And we are committed to going on a journey with them, to build a bespoke role around who they are as humans.
We spend so much time thinking critically about our people. Who are they? Who can they be? How do we maximise them and their potential. We spend time thinking about exactly what gamma radiation your incoming Bruce Banner needs to turn into the Incredible Hulk. And then we irradiate them.
Working at Palantir isn’t for everyone. But if it is for you, the fellowship is charismatic beyond compare. And you don’t get this culture for free. The entropy of the universe is against you, you have to wake up every day and fight for it.
Quite an answer after initially stating, “I think I can’t really tell you about the culture”, we think you’ll agree.
(FT Alphaville sincerely hopes that Palantir isn’t literally irradiating its employees with gamma radiation. But, if it is, that its healthcare and home insurance plans cover being turned into a several hundred pound green-skinned rage monster.)
Nevertheless, the market seems happy enough with the cut of Sankar’s, and Palantir’s, jib. After beating on revenues and re-committing to its long-term growth targets, its stock is up 13 per cent to $25.17 in early-trading.