00:12:40 · Trae Stephens
[00:12:40] S0: No. And I think that actually, like, we should talk about this in this conversation, like, the difference between Facebook and Palantir. Because like at Facebook, things just worked. Like, you know, users are coming on. The company always had a lot of money. Yeah. Palantir was not like this at all. Like, you know, it took us five years to get our first 10,000,000 in revenue. It took us ten years to get to a billion. You know, the company is accelerating now that it's kind of been figured out, but we needed cultural change with our customer in order to win, which is not a great place to start a business. Like, if you're requiring on something that you can't control for the company to work, like, it's gonna take a long time. And so we tried everything. We hired retired generals. We hired former ambassadors. We brought on consultants in Washington DC who were supposed to be able to do this for us. I spent a lot of time with SpaceX, like, sharing notes about what was working, what wasn't working. We tried to do partnerships with the big primes. Like, you know, we had a partnership agreement thing with Boeing and Booz Allen and Deloitte and Accenture and SAP and none of the... Nothing worked. I mean, it was like death by a thousand cuts. We were sure that it just was gonna die. And I was exhausted after six years. And so it's, like, easy to look back in hindsight and be like, wow. Like, you know, when I left, we had a billion dollars of revenue. And, like, gosh, that probably says something about Trae and Shyam figuring this out. Actually, like, no. It was bad. We sucked. We were terrible at this. And you could maybe blame the customer for some of that as well, but, like, it was really hard. And there were moments where, like, I would leave a meeting with doctor Karp, and doctor Karp would be like, wow. You are bad. Like, is not working at all. And so I was constantly talking to Peter where I would have, like, these biweekly calls where we would catch up, and he'd like, okay. What is the what is the thing that we're running into now? How do we get through this hurdle? And so I I played ultimate Frisbee at Georgetown, and we had this alumni ultimate Frisbee game. And I kept getting calls from Peter during the ultimate Frisbee game, and I was like, oh, I'll talk to him after. But he kept calling. So finally, I answered the phone.
00:14:52 · Trae Stephens, Aditya Agarwal
I was like, is there a problem? Do we need to solve something? And he's like, I would like for you to leave Palantir and come join me at Founders Fund. I'm like, I don't know anything about venture capital. I don't know anything about finance. Like, I haven't taken a math class since high school. I do not understand why you think this is a good idea. Am I being fired? Like, technically, you're my boss at Palantir, but you [00:15:16] S1: want me to leave Is this a soft landing?
00:15:16 · Aditya Agarwal, Trae Stephens
[00:15:16] S1: want me to leave Is this a soft landing? [00:15:18] S0: Or Yeah. I'm like I'm like, I'm pretty sure I'm being fired. This is really weird. And he's like, just meet the team. And so a couple weeks later, I went up to New York. For some reason, the Founders Fund team was there, and I I sat down with Lauren Gross, who's the CEO. She runs... COO. She runs Founders Fund. And she's like, why am I talking to you? And I'm like, I I don't know. Peter asked me to talk to you. And she was like, why are you interested in venture capital? And I'm like, you misunderstand. I am not interested in venture capital. And so I had, like, this nine month process where everyone was just confused. And then on Thanksgiving Day of twenty thirteen, Peter called me, and he was like, okay. You're gonna join Founders Fund. And I'm like, I don't understand. There's no offer. I haven't agreed to leave my job to join Founders Fund. And he's like, no. You're gonna join January first of the year. You're gonna move to San Francisco and work at Founders Fund. I'm like Great. Alright. I guess that's what I'm doing. So it was not it was not the good decision that you made it sound like.
00:16:21 · Aditya Agarwal
[00:16:21] S1: I mean, nine months is a long time. I mean, I I wanna get back to what the first, you know, four or five years I found this one were like before you also did enter. But coming back to your point about Zuck, you are right that Facebook led a charmed life in the beginning. However, internally, Zuck always kept on raising the bar. We never felt like we were winning. It was always like, why are we not winning more? Right? Like, why... Like, every... Like, there would be either some fucking competitor that we needed to crush or some metric that, like, was the next... Like, you if can get to a 100,000,000 users, why can't we go a billion? If it's a million mile... If it's a billion miles, why can't it be a billion DAOs? Right? And so it was always a case of our ambitions grew faster than I think our success. And so my my almost, like, visceral memory of Facebook is always like, we can do more. We must do more because it's almost... It would be a shame to not capitalize on this opportunity that we have because it's a... Know, these opportunities don't come around very often. So I think Mark is just like... I mean, Mark is still pushing the company super hard today, I and think this is one of his best qualities. You come to Founders Fund. What is the biggest kind of, like, culture shock that you have relative to being an operator?
00:17:31 · Trae Stephens
[00:17:31] S0: I I think I come in... Again, not knowing anything about venture. I come in thinking there are probably, like, hundreds of startups, and we're gonna spend a bunch of time, like, learning about these companies. And we're gonna sit around a table, and we're gonna make really hard decisions about which companies we're gonna deploy capital into. That was totally wrong. It turns out there are thousands of companies. As I said before, you generally know pretty quickly whether or not it's gonna be one that you're going to back. And it wasn't really about the decision making. It was really more about, like, having an understanding and an opinion on what was likely to work and what what wasn't likely to work. And so, you know, in the first couple weeks, Brian Singerman, was one of the GP at that time, he's he's now running his own fund, he sat me down and he said, your only goal for the first year, your goal is not to make investments. Your goal is to take as many pitch meetings as you can. And he was like, I'm going to challenge you to take 500 pitch meetings in your first year, which is A lot? A lot. Without making any investments? That's just Right. Right. And I didn't really understand why he wanted me to do this. But after like 200 pitch meetings, I was like, oh, man. He's trying to show me this critically important lesson about investing, which is that almost all these companies are completely uninvestable. And you only get to get that knowledge if you lower your bar and you have a lot less discrimination, which you can do when it's your first year in venture capital. I can't do this today. This would be an incredibly poor use of my time. But it was really important for me to see everything in the market Mhmm. So that I I was able to tighten it up so that I could make much more efficient use of, you know, what a good intro looks like, what a good founding team looks like, what, you know, types of companies have the potential to return the fund rather than just be, like, good acquisition targets, which for a billion plus dollar venture fund
00:19:27 · Aditya Agarwal
[00:19:27] S1: doesn't move a needle. Yeah. But you said something earlier, which is interesting, which is that you said that it's you expected venture capital to be surveying the landscape and then kind of making decisions, but instead it was about coming to a shared understanding of what good looks like. So is it... Is that what you were trying to... Like, is... Do you think that one of the key aspects of Founders Fund's success is that as a partnership, have a very strong point of view, a shared point of view on what great looks like?