Joe Lonsdale

Because Palantir went through that and because SpaceX went through something similar with their whole competition, we've paved the way now where a lot of the generals and admirals in Congress is more on the side of new innovation. They're more open to it. They're more willing to let it compete, which is important because that's a much better place we're in now than we were 15 years ago.

First of all, I come from this background in Silicon Valley with these tech cultures. First of all, to build the really top companies, you need a really great technology culture. You need a place where the very best engineers, they're fighting to come in. So I think a typical company is like, you're looking for engineers.

Like, oh, I have this idea, I got to find these people, I got to find who's going to help. And what you want is you want the very most talented technologists in the world It's there, and you want people lining up from the top places to try to come in. That's a very hard thing to build, but to me, that's number one, if you want to build a multi-billion dollar company.

There's absolutely A++ tech culture, because what you could do with a really great tech culture is you can try 10 things or 100 things at a time that the other guy is still building their thing. You impress people, you make it work, you iterate. With Palantir, We'd be back and forth every couple weeks to DC. They'd have all these objections. We'd come back two weeks later.

We would have done the equivalent of six months of work for a typical contractor in the two weeks. We showed them, look, it's ready now. We did what you said. And we'd do that over two years, 50 times. Eventually, you get somewhere really fast. So I said, tech culture is number one. I'd say number two is you have to have a vision about this is a gap in the world that you're really confident in.

Because building companies is really hard. Things go against you. Things take a long time. No one else actually believes in you and believes you're going to make it. So you've got to be really sure there's this gap that you're going after and really sure you're right. It takes a certain overconfidence on us to be willing to go after that and do it. You'd be a little bit crazy, maybe. Yeah.

I'd say more middle class. One of the most obnoxious stories I remember is when I was like four and a half and we were flying on a plane economy. And I asked my dad, I said, dad, why aren't we in the front? And he said, well, you know, this costs a lot more money and we're comfortable here. I said, dad, but you're really smart. You're smarter than all those people.

Why don't you have enough money to be in the front of the plane? Super obnoxious kid. My dad, it was really smart. And he just prioritized spending a hell of a lot more time with family. He was one of eight. He brought, I'm the oldest and 19 cousins. So he brought them all out to the Bay Area from Massachusetts. And he did a great work, but he never really, he grew up lower middle class.

So for him being middle class, And having enough money was fine. You didn't care. Which I admire, by the way. As a kid, I was obnoxious. But there's a lot of lessons in that. It was really cool.

That's a good question. At Palantir and also at Adapar and my other companies, we actually usually try to pay lower salary, higher equity. So you give them more upside in the company. So they had to believe in the company. And it was interesting, whenever we gave someone an offer, we'd give them three choices for the offer. You could say you take more cash, but they get a little bit less.

Medium cash, medium, or take less cash and take more, take more upside. And the very best people, the ones who are the really best, they always wanted even less cash and even more upside. It's like they're just confident, we're just going to fricking win. And it was fun. I used to give them a table. Here's what their shares would be worth if we had a certain level of success.

And we'd give them the different types of options. And the biggest option was if we make this company worth $5 billion, here's what your shares are going to be worth. And everyone says, Joe, you can't say $5 billion. That's too high. That's ridiculous. So that was kind of fun. It's 160 now, but that took 20 years.

I mean, so for an early, really strong engineer, they might get, depending on where we are, you might get a really strong one early on, you might get 1%, but it gets diluted over time, so you get those down. But later on, people get a half percent, a quarter percent. And dilution is when you raise more money, so you go in a little bit less than that.

But let's say you started with a quarter percent, you get diluted down to... 0.1%, but 0.1% of a few billion is still a really big number, and 0.1% of 100 billion is a lot. So a lot of these guys did really well.

Oh, yeah. Oh, yeah. Actually, three years into Palantir, we were building this off reiterating. A few of the top guys for the engineering side are basically ready to quit. They're like, Joe, this is just not working out. We haven't got enough contracts. It seems like it's really unlikely it's going to be there.

I found this in life is oftentimes right before the breakthroughs, you get this really hard time where people are just giving up. I convinced a couple of them, let's just push for six more months because we have these other things coming. Alex Karp did a really great job of figuring it out. how to get both the FBI and CIA to move on something.

And all of a sudden we had these bigger contracts and it was good that we were building. But it came really close to dying early on. This stuff takes a long time to build, right? And like I said, you got to be a little bit crazy because you just got to push really hard. You're building a bridge and you don't know if the island's there or not that you're building it to, you know.

I was helping Peter with the hedge funds, my other passion, and I did a lot of finance and was mapping that world out. It was after the financial crisis in 2008. We were thinking, there's a lot of things that are not organized in this space and they're messy.

We realized one of the ways to really make things work better in finance would be to have a platform with root access to everyone's wealth and organize those problems, organize better from there. I also just made some money myself. I had what's called a little bit of a family office, a small one. And I was talking to people, how do you run your family office?

I was talking to what are called REAs, the registered investment advisors, and it was a mess. They all hated their technology. So I was pretty arrogant at the time, having just had some success, and Palantir was starting to grow really well. I said, I'm going to build a company that fixes this space.