Invest Like the Best with Patrick O'Shaughnessy
· Shyam Sankar, Patrick O'Shaughnessy
Hopefully you learn from that mistake. It may take more than one time to get there, but you don't wanna create a culture which is like – you fucked this up, I gotta fire you. Oh, I'm so glad you learned that this is not what you do for a living. [00:00:00] S0: I'm so glad you fucked this up. [00:00:00] S1: Yeah, exactly. I remember doing something that I really screwed up once that had consequences for the company. And I sheepishly went into Alex, and was just completely honest. And I didn't realize at the time there was no grand strategy behind this other than my commitment to just always being honest. He was very appreciative. He was also in pain as he internalized what this was gonna mean. But he valued the fact that I wouldn't try to hide it. And I took away from that, how important that environment was gonna be, and how do I scale that to the organization? [00:00:00] S0: What do you think your superpower is? [00:00:00] S1: I think there's actually a narrow sliver. If you thought about it in the Palantir context, the intersection of forward deployed engineering and product – there's an interface there. One inch on both sides of that interface, owning that almost as a dictator, that's my superpower.
· Patrick O'Shaughnessy
[00:00:00] S0: I'm gonna come back to forward deployed engineering, but I wanna ask one or two more questions about the creation of an environment for the discovery of superpower and kryptonite, and doing one's best work and unlocking the talent. I heard a story once, which maybe I wasn't supposed to hear. So I won't say what the exact story was or who the person was at Palantir, but this person joined Palantir and was very quickly given an extraordinarily difficult project, around which this person had no relevant experience and was given relatively limited resources to solve a problem which was truly global in scale, meaning the impact if this person didn't solve the problem would have been bad. And they described it as the most formative and important, and most stressful professional experience that they had had. But on the one hand, I loved hearing this story because wow, you can learn so much when there's high stakes and lots of autonomy, but it also struck me as quite scary that someone with this person's experience was given this high stakes opportunity slash responsibility. And I'm sure that happens all the time in Palantir. So some of it seems like going straight into the deep end is key part of this. In such a high stakes business with militaries and governments and people's lives and things, how do you balance how much leash to give someone like that?
· Shyam Sankar
[00:00:00] S1: Let me start with an analogy. How did Bruce Banner become the Incredible Hulk? It wasn't progressive overload. It's not like he lifted a little bit more weight every week. It was a near fatal dose of gamma rays. 50% chance he died, 50% chance he turns into the big green monster. And there's absolutely an element where we're taking people and just irradiating them. Prospectively, you're not sure if they're going to come out the other end, but you have some belief that they have the raw talent and potential. And then you want to create an environment that has enough transparency and flow of information and exhaust, that if you see that this thing is really going off the rails, without them having to seek you out, you're able to push in and help them. A lot of environments don't have that by default actually. You would have to like manage them. You have them do reports or check-ins or whatever. You gotta create an environment where it's okay to ask for help. The reason this model is really valuable is that I think the alternative model – you have to judge it by the counterfactual – the alternative model doesn't actually work. So this structured career ladder with progressions, it's perfectly designed to make you feel comfortable that you are growing. It gives you some belief that there's a linear path to follow and you'll learn these things, but actually it's all fake. On the other hand, if you're willing to just suspend disbelief, throw yourself off the deep end, the maximal rate of learning will be coincident with your maximum ability to tolerate pain. So now you're in over your head, you're working on a problem you don't even know. This is the environment that you're gonna learn at the fastest possible rate. You're only limited by your motivation and ability to endure through the discomfort of getting there. Then you will find that if you look back retrospectively, you're like, "Holy shit, I grew in all these ways, I learned all these things." None of which you could have predicted specifically ex-ante. And then if you just are willing to do that serially, just keep jumping off the deep end, go after problems you're frankly not qualified to go after, but there is some belief you have the raw potential to do, you turn into a superhero. I think that's actually why Palantir is a founder factory.
· Patrick O'Shaughnessy, Shyam Sankar
[00:00:00] S0: Did you have your own gamma ray moment? Was there an original moment like that for you where you discovered your own potential? [00:00:00] S1: The article talks about the deployment at the COIC. I think that was a seminal one where I was leading the deployment, it was all on me. And it was never obvious until basically the last second whether it was going to work or not. And it allowed me to learn a lot of lessons along the way, which is really where I internalized, "Oh, success looks like a lot of pain." That instinct to figure out how to reduce the pain, like how do I do this the next time with less pain, is exactly the wrong instinct. [00:00:00] S0: If you were giving a commencement speech to a group of people that heard this conversation, how would you urge people to seek that out? Like if someone is pre-gamma exposure and they're interested in that test for themselves, how can people expose themselves to that test?
· Patrick O'Shaughnessy, Shyam Sankar
[00:00:00] S0: If you were giving a commencement speech to a group of people that heard this conversation, how would you urge people to seek that out? Like if someone is pre-gamma exposure and they're interested in that test for themselves, how can people expose themselves to that test? [00:00:00] S1: I think this is the conspiracy of the people around you who give you that chance. I don't know why Kevin Hartz hired me as some Stanford grad student coming to talk to him, but the fact that he took the bet and just threw me out there, that was the first time I got to jump off the deep end in many ways. So I really think, how can you find it? You're assessing the people who are hiring you as much as they're assessing you. Is this an environment that I think is going to bet on me or is this an environment that wants me to be a veal cow? Are they going to be able to tolerate my eccentricities or are they going to try to squash that? [00:00:00] S0: How do you know someone's worth betting on? The other side of that equation. New unproven talent, how do you know? [00:00:00] S1: At some point, it becomes lizard brain. You get enough reps in doing it, but early on, I think the early indicators would be first derivative, proof of some sort of sui generis. Did they create anything from zero to one? And then expression of agency and initiative. Here's the simplest way I'd say it. If I give this person an inch, can they turn it into a mile? And the worst sort of bet to make is I gave this person a mile and somehow they turned it into an inch.
· Shyam Sankar, Patrick O'Shaughnessy
[00:00:00] S1: At some point, it becomes lizard brain. You get enough reps in doing it, but early on, I think the early indicators would be first derivative, proof of some sort of sui generis. Did they create anything from zero to one? And then expression of agency and initiative. Here's the simplest way I'd say it. If I give this person an inch, can they turn it into a mile? And the worst sort of bet to make is I gave this person a mile and somehow they turned it into an inch. [00:00:00] S0: Yeah, it's an incredibly powerful idea and it seems like the culture of Palantir – I mean, obviously there's tons of founders that have come out of this that have mega agency or something like this. If you think about Palantir's future for the next 10 years, now 19 years in, what do you hope changes most in the next 10? Obviously, it's now a huge company, it's one of the bigger companies by market cap in the country and in the world, doing lots of really interesting work with lots of interesting customers. But generally speaking, what are your hopes for it over the next five to 10 years?