00:08:49 · Aditya Agarwal
[00:08:49] S1: Yeah. Very interesting... Actually, I didn't realize that you were at Palantir in 2007. I have an interesting story, which is that in that time period, Facebook was scattered through a bunch of different offices in Downtown Palo Alto. And we would keep on, like, getting new office space and then kinda growing out of it. But then I got introduced to this guy from Palantir, Aki. And so Aki's strategy was basically like, I don't need to look for office space. I'm just gonna find somebody from Facebook. And as they keep on vacating office space, I will keep on kicking it. And so Aki and I would meet every three months. He's like, hey. Do you have any office space for me? I'm like, yeah. This is the one we're gonna be leaving soon. And he would just end up taking. He's a great guy.
00:09:28 · Trae Stephens, Aditya Agarwal
[00:09:28] S0: Well, you know, the the beautiful thing about that story actually is that Aki was the CTO Yeah. At the time. Yeah. And I think that the reason this is relevant in the context of hiring is that when you're building a startup, you have this idea, I think, that you should hire people for the specific skills or whatever. And the reality is no one at Palantir ended up doing the thing that they were hired to do. Like, did a lot of things. Like, did he write code? Yeah. Sure. Everyone was writing code. You know, I started writing code at Palantir too. And then in the first three weeks, I was dinking around with like an extra... A training exercise onboarding during onboarding. It's funny how, like, these people have come around to do crazy stuff. So Bob McGrew was the head of engineering. [00:10:09] S1: Yeah. Bob was here just a few months ago. [00:10:11] S0: Yeah. Bob is the... He was the head of research at OpenAI, and then he recently just started a company called Arda that's doing manufacturing automation. [00:10:19] S1: Think I they just kind of did a huge public thing today.
00:10:19 · Aditya Agarwal, Trae Stephens
[00:10:19] S1: Think I they just kind of did a huge public thing today. [00:10:22] S0: Yeah. They yesterday. They just launched publicly The actually on Monday. But yeah, this week. But Bob, who I never met before, walked up behind me. And he was like, hi, I'm Bob. Who are you? And I was like, Trae. And he's like, never touch my code base ever again. Your code is garbage. And I just kind of laughed. And within a week, I was running sales, which is exactly what I should have been doing, actually. Because a top 5% engineer working in the intelligence community is like a bottom 5% engineer working on a software company in Silicon Valley. So I think it's like that... Having that flexibility and awareness of how skills align was like a driving force at Palantir that worked for us really well.
00:11:11 · Aditya Agarwal, Trae Stephens
[00:11:11] S1: Yeah. One thing based on kind of the slight tangent that you took earlier that I wanna mention, I think this is really important advice for founders in this room, which is the longer your diligence process drags on with a venture capital firm, the less likely they are to invest. Right? I think that oftentimes founders think that it is an indication of a lot of interest when people take the fifth or the sixth meeting. It's actually a case of, like, they are struggling to find a reason to kind of invest because they generally know in the beginning. They generally know pretty quickly whether they love it or not. So, anyways, coming back to to your story, Trae here. Okay. So you were at Palantir for six years? Six years. Six years. That's right. And then you make your way over to Founders Fund. What made you transition kind of, like, from being an operator to kind of an investor? You did just kind of, like, hey. You wanted to work with Peter Thiel. Like, what was... Was there some underlying motivation or kind of thought process there? Or was it again, like, listen, went in, loved the team, loved the mission, and I kinda knew it within ten or fifteen minutes? [00:12:11] S0: Not at all. So, yeah, I was kind of laughing internally when you opened this up by saying that I had this very successful trajectory of good decisions. That was not the case at all. I was at Palantir, as I said, like kind of running the sales side of the business really for most of the time that I was there. It was really hard. Like, I I can't even begin to explain how hard it was.
00:12:11 · Trae Stephens, Aditya Agarwal
[00:12:11] S0: Not at all. So, yeah, I was kind of laughing internally when you opened this up by saying that I had this very successful trajectory of good decisions. That was not the case at all. I was at Palantir, as I said, like kind of running the sales side of the business really for most of the time that I was there. It was really hard. Like, I I can't even begin to explain how hard it was. [00:12:37] S1: You guys were not a cool or sexy company for a very long time.
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.