Invest Like the Best with Patrick O'Shaughnessy
· Patrick O'Shaughnessy
[00:00:00] S0: You mentioned the notion that we are crazy and can pivot and attack opportunity is an amazing part of the U.S. culture. What do you think is the other side of that coin? What are the negative aspects of U.S. culture in your view? And I'm gonna ask the same question zoomed in on Palantir specifically of how to cultivate the culture that you want. Palantir seems to have an incredibly distinctive culture. I'm gonna ask about Shyam bombs and things like this inside the company. But first at the U.S. level, what are the things that you wish were different here about our culture?
· Shyam Sankar
[00:00:00] S1: Some problems required sustained effort. So if you can pivot really quickly, maybe you pivot it to solving the problem, but that means you can pivot away from solving the problem, and get distracted and lose sight of what you're trying to accomplish here. It's like a feature-bug. It's not an unequivocal feature, but if you're in a competition, you want to play to your strengths. And that usually involves things that the adversary is unable to do. It helps that with the nature of populating the U.S. was that all the heretics from the old world came here. So we have an unfair advantage on that. In terms of maintaining a culture, the critical lesson I've learned over and over again is the entropy of the universe is against you. If you don't invest in your culture every single day, you will lose it. There's nothing about culture that is self-sustaining. That's as true for America, the country, as it is for your company. And then, the best cultures are really almost cult-like. Your culture is highly differentiated. It should actually kind of be hard for someone to inorganically insert into your culture, otherwise it's not a very differentiated culture whatsoever. That requires flag bearers. It requires people who are true believers. So it starts with recruiting. Not every human has a disposition that they want to be part of a cult, essentially. Some of them are just structurally mercenaries and they're evaluating everything in life really through the lens of "what's my next job." You want to try to build your company with people who really think of the present job as the calling. That engenders the primacy of winning. They're always thinking about how to win today because that's the whole game. And if you win today, you have the right to win tomorrow, rather than – the other side of that is getting lost and I wish the world could be this. I wish the company could be this way or that way or something, which is unmoored. It's an aesthetic of how you wish the world would work rather than both how the world does work and what is required to win today.
· Patrick O'Shaughnessy, Shyam Sankar
[00:00:00] S0: In a company like Palantir, what do you personally wrestle with the most? What are the trade-offs that – I'm always fascinated by trade-offs. It just seems like so much of what happens hinges on a couple of key choices. Can't do everything for everyone. What do you personally wrestle with the most? [00:00:00] S1: The most important decisions for my seat is really, what projects are worth outsized investment that we think are gonna define the future of what our customers need and therefore the future of the business over the next five years. So then how do you get the right talent on those projects? How do you discover what those projects are? I like to think about it, it's like my backlog is something I reprioritize dynamically relative to reality. Here's my roadmap. Here's all the things I want. It's like an approximation at a point in time of what I think are the most valuable things to build. The second some new data comes in, I'm going to rip that up and reprioritize it. Having a culture that lets you do that – because that is really fucking painful, people don't like it, their world is shaken up. It generates a lot of chaos, but it's the right thing to do. So then managing that so that your culture enables you to do that, the cost of doing it is worth it because the return is so outsized. That's the whole business.
· Shyam Sankar, Patrick O'Shaughnessy
[00:00:00] S1: The most important decisions for my seat is really, what projects are worth outsized investment that we think are gonna define the future of what our customers need and therefore the future of the business over the next five years. So then how do you get the right talent on those projects? How do you discover what those projects are? I like to think about it, it's like my backlog is something I reprioritize dynamically relative to reality. Here's my roadmap. Here's all the things I want. It's like an approximation at a point in time of what I think are the most valuable things to build. The second some new data comes in, I'm going to rip that up and reprioritize it. Having a culture that lets you do that – because that is really fucking painful, people don't like it, their world is shaken up. It generates a lot of chaos, but it's the right thing to do. So then managing that so that your culture enables you to do that, the cost of doing it is worth it because the return is so outsized. That's the whole business. [00:00:00] S0: I'm extremely sympathetic to that point of view of changing plans very quickly. I've also experienced the whiplash that it creates in a business. How would you coach someone that believes this, but understands it's really hard on a business if you're constantly changing your mind and pivoting your resources around? What have you learned about the ways to talk about that with your team, of implementing it, of communicating around it? I'm curious how you do it.
· Shyam Sankar
[00:00:00] S1: There are always degrees of these things, but the first order issue I'd say – is it hard because you want to exist in a business that isn't painful. There's a great Greg LeMond quote who's a world championship cyclist. And someone was asking him about a championship performance, and he almost looked incredulous, and he was like, "You know, it doesn't get easier. You just go faster." And so what do you think a championship performance feels like? It feels shitty. It's really painful. It's really hard. And your ability to win is basically, can you survive more pain than your competitors can? So there's this weird phenomenon where if you're doing something world-class, it's really painful. Also, if you're totally failing, it's really painful. So then having some discrimination to know which of these two worlds am I in. And the worst world to be in is where you have no signals, you're just plodding along. But it's managed decline, is really what's happening. So then, is the pain we're experiencing generating results or not, And orienting people to that. The other part I'd say is, you can't move the whole company at once. Even a company as small as ours – there's only 4,500 people – every change is itself a mini insurgency inside the company. I would think about it like you're campaigning. Who are the people who already believe what you're saying? How do you add incremental weight behind what they're doing? How do you help them succeed more? Are you trying to generate momentum or are you trying to deal with the drag of bringing everyone along? My experience has been momentum is the thing that aligns the whole company. And so you should be waking up every day in the midst of these pivots, just working on momentum. People will catch up.
· Patrick O'Shaughnessy
[00:00:00] S0: What are your favorite ways to do that? This is like a communication question. Palantir gets so much attention now from public markets and everywhere. It's one of these exciting places. So there's more scrutiny on the company, its choices, what it does. You don't get to operate in obscurity like you did in the first batch of time. What are your favorite methods for that internally, very tactically?