Invest Like the Best with Patrick O'Shaughnessy
· Patrick O'Shaughnessy
[00:00:00] S0: My guest today is Shyam Sankar, the CTO of Palantir Technologies. I think you'll find by listening to Shyam that the business itself, their mission and how they built it, and indeed him and his life, are completely fascinating. We talk about his entire worldview, which I find personally the most interesting. This need to reindustrialize the United States after decades of moving so much of our production and as he would argue, therefore our learning of how to innovate and make things, off of our own shores. We talk about the history of heretics, people who have against the odds designed solutions that have driven so much of our success around the world. Please enjoy my conversation with Shyam Sankar. Shyam, I think the most fun place for me to begin, because it's an area that you're interested in that I'm fascinated by, is a history of people in American military lore who you call heretics. You refer to them as heretics, people like Hyman Rickover and Andrew Higgins, who designed 90% of the boats that landed at Normandy. John Boyd, who invented the OODA loop, which is one of the great biographies of a military figure that I've ever read. Talk to us a little bit about how you would define a heretic in your use of that term, and why you're so interested in that group of people in US history.
· Shyam Sankar, Patrick O'Shaughnessy
[00:00:00] S1: Well, I think they're really founders. They're founder figures. They get obsessed with delivering something that, it makes no sense because they're fighting, particularly in the military context, you're like fighting the bureaucracy. You're going to end your career. You pay extreme prices for it. So there's almost like a pathological obsession with winning, which I really relate to both personally, but also that's what I see in great founders. In the present moment, it's really important to encourage the hidden heretics who are in the military today to recognize your heresy matters. And frankly, if you look back at history, the only shit that ever worked, the things that helped us win all the wars, were the things that the heretics actually did. Nothing that went through the machine delivered anything. I think all change comes from these heretics. And they only later become heroes. If you think about Billy Mitchell, who invented the Air Force, he was court-martialed and died penniless and depressed. And only after his death did we invent the Air Force based on his original heresy. I'm just fascinated with what motivates these folks to keep doing this. And I guess I relish a little bit in their rebellion and the victory that the rebellion brings about. [00:00:00] S0: If you could have people study any one heretic story to understand this general idea, is it his story? Is it someone else's? Which one would you pick?
· Shyam Sankar
[00:00:00] S1: I'd probably pick Rickover’s. So Hyman Rickover, born in a shtetl in Poland, came to the U.S. when he was six, had one of these near-miss moments where, in those days when you landed at Ellis Island, you had 10 days for someone to come pick you up. His mother gave someone money to go send a telegram to the father who'd already been here. And that guy just pocketed the money. On the 10th day, there was another guy who arrived at Ellis Island who bought them one more day, who knew them. And then he ran out, got the father, because it was this near-miss where this guy almost didn't even end up here, he would have been sent back to Poland. But he was this feisty character. I think he was five foot two, very short. He went to the Naval Academy. He was so unlikable that in the yearbook in the Naval Academy, they had torn out his picture. He's just one of these difficult people. In World War II, he drove a coal ship. He was not some exceptionally high-performing senior military officer commanding a destroyer or a carrier or anything like that. But after the war, he went to Oak Ridge, and he observed the vestiges of the Manhattan Project. And he had this idea. We could build nuclear-powered submarines. And he'd had this experience on diesel-powered submarines, which suck. They're basically surface ships that happen to go underwater for like an hour. This became this thing he was obsessed with. Talk about chutzpah. Oppenheimer himself thought this idea was going to fail. So you have Oppie telling you you're stupid and this isn't going to work, and you're just going to go for it. So he started on this project. And he built the first nuclear submarine in seven years, start to finish. The Navy hated him so much that his first office for this project was literally the women's restroom. They're like, what can we do to humiliate this guy into quitting? But he just kept going. And if you actually look at his personal memoirs, you can see that the humiliation got to him, but in a way that he could channel it to be motivating. It wasn't like he was somehow inured to the pain of it all, but he could push through it. And I think recognizing every major project you do is going to push you in these sorts of ways. How do you dig deep? How do you grind through the pain? And he created a really unique culture in naval reactors, which is alive today.
· Shyam Sankar
So I think part of what's really cool is that our nuclear submarine force is one of our last remaining asymmetric advantages against the Chinese, and we built it in the fifties. What a legacy for this guy to have built. And then the engineering culture that he created, he was in this unique role of both being a human who would invent the technology and therefore was qualified to think about how to regulate it. So whereas the Russian submariners, they would spend roughly six months at sea and then six months in Sochi recovering so their white blood cells could regenerate because the radiation shielding sucked. We've had no deaths due to nuclear incidents in our submarine force. And he designed it to a standard. He's like, I'm designing this thing so my son could be in it. It's a hundred times safer than what we believe the minimum standard to be. And that obsession, it's not a manager's view of the world. It is a founder's view of the world – one of his legacies, he was an admiral for 30 years. And even as an admiral, he was very difficult. Zumwalt, who was the chief of naval operations for a while, he said "The Navy has three enemies, the Soviet Union, the Air Force, and Hyman Rickover."
· Patrick O'Shaughnessy
[00:00:00] S0: I remember reading the book about John Boyd, who – three times, he was the best fighter pilot. Then he helped develop the F-16, and then he came up with the military strategy concept that was instrumental in some of the U.S. wars in the nineties. And he was sort of a bastard as well. Highly disliked, really bad father, highly disagreeable, but incredibly important in U.S. military history. You don't seem to have that kind of personality. You seem, by all accounts, very likable within Palantir and outside of Palantir. Say a bit about your own disagreeableness. Where does it surface? It seems like this is a field in which you have to have a very clear view of how things should be, which we'll talk a lot about in a few minutes. And then this disagreeableness and resilience and persistence to make it happen. And that seems a little bit at odds with your personality, from what I can tell. Curious how you think about that.
· Shyam Sankar
[00:00:00] S1: It surfaces in certain ways. As Karp would say, I'm not everyone's cup of tea. Where you can very clearly see it is in the early days of Palantir, you'd be dealing with the government. And it's easy to think of that as a monolith, but you have operators who want to use your software, but are not in charge of buying it. And you have the IT people, or the program who's in charge of building what you would be building. So you're a structural threat to them. The advice is to go along and get along. Those guys are the people paying you. Why don't you just do what they want? The problem is, if I did what they want, it wouldn't work. And so that's where the disagreeableness comes in. It's being ornery about, "No, I'm going to deliver the thing that actually works for the operator." I'm going to piss off literally everyone along the way. They are knives out, going to try to kill you. We had to sue the army to compete at some point. And I think in that vein of being truly committed to, is the product excellent? What else could it be doing? You can think about the whole OODA Loop of forward deployed engineering is that, it's this continuously solving through back propagation of what should the product be? That's like the motor of innovation.