Why Alex Karp is a Genius

Alex is awesome, a co-founder from Palantir. You know, you have to understand his background. He was like the star philosophy student to like the top philosopher in Germany. And it's very funny if you have him explain this to you because it's like in America if you're like in on the MBA, like all these women will follow you around. He claims anyway that in Europe that's what happens in philosophy.

Philosophers. And so because of that, all the billionaires want to be philosophers in Europe. So he's like this super cool kid that all the billionaires want to hang out with. And he just somehow through this whole thing, like within like a minute or two, he'll know all these things about someone. It's like a magic trick actually. It's like there's a weird form of wisdom where he'll just interact with you and he'll know tons of things about you and know if he wants to hire you or not, know how you fit in. I'm sure there's tons of stereotypes being involved there that are inappropriate, but it's okay because he's black and Jewish, so he gets to do what he wants. But it's like, no, he's just a genius about people and institutions. He really is.

I think he voted for Biden. It's unclear who he voted for in this last election. We can't say for sure. Yeah. Okay. So maybe I'm wrong on that. We tried to do a little... he may have given some money. So leftist... I mean listen, either way doesn't specifically...

Alex is one of my very favorite people. He's a philosopher king. He actually was the top philosophy student of the person who was a top philosopher of the world when he got his PhD. Right. So he's a genius about like very, very high-level abstract ways the world works. He deeply cares about Jewish people in Israel as his... you know, his mother is African-American, his father's Jewish. And if you come from that background, I think you kind of grow up as part of like the people on the left. That's just the culture that he came from very much, especially the culture that his parents were immersed in. And deeply cares about that. At the same time, I think he's been brought around to see that there are a lot of people who are not very nice to Israel and the Jews and others on the left and who are not necessarily doing the right things for America. That's why I consider him a moderate and I consider him someone who, as you've heard, I think he adds to the conversation very well because he is pushing back on a lot of this nonsense from the far left that all of us need to fight from every direction.

Yeah. Well, and just to say on Alex, you know, he was a very important mentor to me and he's one of those people who just deeply, deeply cares about our civilization and what's right and like helping people around him. And he was the only non-technical person, you know, when we started the company. Everyone assumes he's like an amazing computer scientist, but he actually really is a philosopher who understands and cares about people.

So the actual story, which we've only told a couple times a long time ago, was that my roommate Stephen and I were the full-time founders along with someone named Nathan who's in the background who was helping us, who was an older programmer who's really smart. And Peter was a co-founder but not working at it. He was more backing us and giving us advice and stuff. And we were building these things, flying back and forth to DC. And Alex at the time had just finished being the philosophy student. And a lot of the philosophers in Europe like to pretend... like a lot of the billionaires in Europe like to pretend they're philosophers, which is kind of funny. It's like a high-status thing to be. And so he was like... he said it's like being a basketball star in the US, you know, all these women and everyone interested in him. It's very funny for Europe. And so he's helping raise money for interesting causes, running around the world, and he gets to know all these powerful people. So he started to advise us. I met him through Peter. They'd gone to law school together and he was helping Peter raise money for the fund I was helping Peter with. And he started to advise me for Palantir, like, oh, here's how you meet these people. And I'm 21 at the time, so he says, Joe, if you want to come across the right way, don't get the introduction that way, get it this way. And here's what you say and do so you're taken seriously by the institution because if you say it this way, they'll know you're a kid. And just stuff like that. At the time, Peter was trying to get an adult to come into Palantir and there'd been a bunch of military guys, generals, he kept introducing Stephen and I to. And Stephen's like, no, these generals just don't get it at all. They're going to ruin the company because it's such a different culture than our tech culture. And we were talking to Alex about this and I flew out to London at one point and I said, Alex, Peter was trying to get these other people in. He's right that Stephen and I are 21. We're not the right people to go talk to senators and sell this. Can you come pretend to be CEO for a few years and just like... there'll be no more pressure to have an adult and you can kind of advise us on these things and then you figure it out. And he said, Sure, I'll do it. And so, I'm interested. And he came and at first like he didn't really know what was going on in the tech world at all. It's like an anthropological experience to come to this different place. But he learned really quickly and he started helping, he started advising. And it was first called the triumvirate with Stephen and Karp and I for a long time, but he just very quickly became this wise leader who was able to figure out how to make things work for the company. And it turned out he's just an amazing CEO. We figured out how to do the job and he's still doing it 20 years later.

Our times getting Palantir off the ground were just crazy, magical, dangerous, scary. We almost went out of business a lot of times. And in fact, except for the fact that we were so maniacally focused on getting this thing to work, it would never have worked because no one wanted to invest in us. All the top VCs were like, this is a crazy idea to be interested in data working with large institutions. We did have a little bit of an attitude that I think you and I shared, which was like the famous, you know, 'Cuius Caesar, eius' which is, you know, why are you afraid? You're carrying the people who are going to be successful, right? To the famous boatman with Julius Caesar. There's something like that, which I don't think it was necessarily arrogance. It was just a sense that we had to win.

Well, I mean, we had so many, but obviously the most famous is we're at like the most famous VC and like we're, you know, in the last round and they're pretty... and the most important partner just like spent his time doodling. My fantasy of it is he was doodling some erotic little picture that he was, you know, fixated on. But in fairness to that person, I think if we had stood up and walked out, we're like, this... you guys are wasting our time, chances of them investing would have been much higher. One of the things that entrepreneurs or builders need to understand about the Valley is if you're not overtly aggressive about representing yourself, they'll just assume that, you know, it's not real. And we were ironically too modest with those people. However, and then sometimes too arrogant with like government people and others where we're like...

Me as a 22-year-old was probably not the right person to sell to the government. That was complicated. But yeah, but in fairness to us, the government has changed a lot. I mean, there's a lot of problems and I have some ideas of how to fix them, but we were the first to break in. And it's like a lot of other companies have now come in and some are doing very well.

I'm able to do a lot in defense now thanks to Palantir, then SpaceX and others, right? Well, we showed up. We succeeded, which again, none of this matters if you're like some academic project, you don't succeed. We sued the government not to buy our product, but to ensure that people bought products that worked. Because the most important thing in my view that can happen for the preservation of the West and its values is for the US military to be by far the best in the world.

They've changed, they've improved. There's just, you know, in business, it's really important to go back to things that are kind of obvious. But one of the obvious things that's not part of every structure of the US government is almost all enterprise software that works in America or in the world has two characteristics. It's built in America and it's built as a product. And it has a third characteristic quite frankly, that it's sold commercially. So if you just say the rebuttable presumption is if a product is world-class, it is built in America. Again, rebuttable, doesn't always mean, but very likely it is. You could drill down on that, it's built by this... but just it is a product and somebody commercially has bought that product.

Yeah, it is very non-plausible that you would have the best software product in the world and you've never sold it commercially. Oh, because you don't have time to make your company be worth $50 billion. It is not a product. Okay, so that means you will never scale it. And by the way, that also... there's a lot there because you want the world's best engineers to work on something, the ones that can do things no one else can. Tell them you want to not build products and see how far that goes. And again, for reasons that are complicated and hard to understand, it almost invariably is built in America, most likely on the West Coast, but not exclusively on the West Coast anymore.

Okay, we know this to be true. The US government should have a policy where a small percent of all, especially the DoD, a small percent of its spend has to go to products built in the... software built in the United States. That is a product that has been proven both on the battlefield and has been in some derivative sold commercially.

If you want to reform an institution, you've got to start by reforming parts of it. So I would just say starting now, 1% has to go for this. 1% of $900 billion is roughly the budget. It's like... and then every six months it goes up by a percent, or you could even say every year, because in the end...

And by the way, that would change the number of people selling to the DoD because even now, I'm sure there are a lot more people. When we were building Palantir... I'm glad the VCs have changed. I'm glad the culture in Silicon Valley now can either be interested in helping the DoD or as likely pretend they're interested.

But in fairness, one of the things that stops even more investment is there's these long time cycles and it's not clear that your product isn't going to be out-bought by someone providing a service. By the way, services things tend not to work. Early on when we were trying to sell the government, the services things would capture like the vast majority of the revenue and they'd toss us like a really tiny piece and that was the only way you get in. And you know, I was talking to people today and obviously people in the government have realized that we work. Some of the services companies just seem extremely jealous of Palantir. It's like we thought they were dumb and apparently they think we're bad or something like that. And I'm wondering if it's because they're jealous. Like, there's I think there's some huge jealousy with... I shouldn't mention the names of these companies, but these big companies who do all the ontologies, you know, and get paid tens of millions of dollars for something useless. And I think there seems like extreme jealousy or something from the outsiders. We... you know, you're a warrior for justice and I am in a different way a fighter for Western values. If you want to reform these institutions, the best thing is to not engage in why they may like us, we may not like them, but to say it is clearly in the best interest for the country that produces this unique thing. By the way, the thing that is the most valuable thing in the world that no other country is producing...

That there should just be a minimal part of the budget. And it's minimal. It's 1%. By the way, the other thing we need to do is every single thing that is not... being presented to people at any level that is not actually running on real data, there should be a flag. This is a video.

They're... well maybe someday they'll work, but it's very... purely intuitively it's very hard. It does not correspond to anything that people believe because you would think 5,000 people being paid a billion dollars would produce something more valuable than five people working for equity just purely intuitively. But it's not true. So it used to be true with like maybe tanks or something, but it's not true with software. Well, one of the things, one of our advantages in software is that we... like the hardware cultures really struggle with software because these things are true for tanks and they're true for other things and big metal things. They're not true for software. But again, it's also true that software is the most important asset and our adversaries are going to be much better at building these big metal things than they are software. To this point, the way to reform the system is say a certain percentage that's small must go to these things.

And then the second thing is just as an addendum, when you show off if the products are working, the financing should be triggered at some point with like, oh, it worked. And last but not least, there should just be a minor thing in every bill. Oh, by the way, we are going to flag every time something is a video and not working. So that every senior leader and by the way, every institution, not just every institution in the world, should have a mandate. It's like, it's okay to do things that are notionalized because some are things you're going to build in the future. That's part of innovation. Be honest about it, but you have to force honesty on your institution because otherwise, again, to the beginning of this, people will buy from the people that they like that are like them. And sometimes that's valuable. But in software, a lot of times you're buying something from the freak show and it works. And the future of the West depends on buying things from people that are sometimes, not always, outside the norm, unlikable to you, are not going to conform to your thing, are not going to the right.

I'm not calling... I like myself. I'm just saying otherwise the insiders always win every time. But and look, the thing about reform is that you're going to blow up the institution doesn't work either. You've got to say we're going to pick here and then the institution, especially in America, will adapt because once you see a tiny sliver is going to this thing...

People are like, but it not only works, it's the best in the world. This thing is scaring our enemies.

You know, Americans right now are very motivated inside the DoD to scare our enemies. And I'll tell you what scares our enemies: using software that is actually a product that's almost invariably built here and that someone on this planet has actually paid for commercially.

So he didn't think it was a good idea to...

They're telling us, you guys are crazy. No one does this. Why are you doing this? It's not possible. It doesn't make any sense.

These are the big names. We got turned down by everyone. Turned down by Excel, by Sequoia. The guy at Kleiner Perkins at the time, and they're a great firm, I admire them very much. But the guy at the time who's no longer there, he started laughing at us on the phone because Alex didn't have a technical degree. He's like, you guys don't even know what you're doing. It's a doctorate, but it's not even a relevant doctorate. Like he's laughing us out of the room, basically.

Oh, we were... we were not happy with these people. Peter Thiel told me it was probably really good for me because it gave me like an even bigger chip on my shoulder to make sure we succeeded after being mocked and turned down by like 30 of these guys. And Peter couldn't just only fund it himself. He needed other people to fund these things. So when we got In-Q-Tel, which is the CIA's venture capital arm at the time, to give us a little bit of money and Peter gave us even more, that was really critical.

I think we bought it for a much higher amount. We had some option. I forget. It must have been five or six years later.

Oh, they made plenty of money on it. And more importantly, we saved the government billions of dollars versus what they were doing. I mean, you literally had things going on, the DHS guys. I remember there was some thing where it was like $3 billion to integrate all the data and we came and we showed them we could have done the same thing for them out of the box in a month. Like, don't waste billions of dollars. So it turns out confidence saves the government lots of money and protects civil liberties. People don't realize it's both of those things.

That's what we were supposed to do. We needed the money, man. I didn't know what you're supposed to do.

Well, yeah. At the same time, I think both of us are not the kind of people... We're probably a little more arrogant now that we've done more than... we didn't know for sure we knew what we were doing. We felt we were doing something smart, but it was our first time.

That's well said. You know, it was interesting when you're creating our company. We kind of reinvented a lot of things from scratch. And in some cases, it was probably frankly genius. In other cases, we could have just hired someone who knew what they were doing. And it's like when you're building a company, I talk about having adults in the room. There's certain types of adults you don't want to bring into a startup because you don't want people running a machine in a standard way. You want to be creative, but there's certain parts that once you get there, you probably do want the adults to show you how it's done. So there's some things we maybe could have learned from others.

I was really good at recruiting the first few hundred people and kind of pushing forward on kind of like the product strategy and whatnot. Alex was really intuitive about institutions, about how the world works, about how we come across, about how to get into certain places, about how to make deals happen, about how to communicate in the right way that you're coming across to create value for the other person in a way they understand, the way they can get it done. Alex is a philosopher and he understands how people and organizations work and how to navigate the world.

No, I think recruiting is a lot about selling vision as well. When we gave people their offers initially, this is really early on, beginning, and we give them three options of like higher salary, middle, or lower salary and higher upside, middle, lower upside. And I'd put on the sheet of paper, the lawyers hated this, but I'd put an asterisk, it might not be exactly right. I'd say, okay, if the company's worth $5 billion and this much dilution, here's what your shares might be worth. And it'd be like five... or you know, here the company is worth a billion dollars. Here's what it might be worth. And people would say, Joe, you can't show people if it's worth $5 billion. That's totally unrealistic.

Yeah. Save the Shire, we used to put it, because this comes from the Lord of the Rings, but your save the Shire is this Western civilization is protecting the innocent. Should a tech company stop helping the government when it disagrees with it? And I think Alex Karp has spoken really well on this. And I know, listen, Alex Karp comes from, you know, he had an African-American mother, he had a kind of Jewish professorial father. He comes from the left, obviously. Peter Thiel obviously is more on the right. And, you know, so we come from different political sides here, but they both agree that it's better for the world to make American government and America more efficient and work better and not throw sand in the gears, not break things. And so the question is like, should Silicon Valley get to decide policy or should the government get to decide policy? And our view is we want to watch the watchers, but the government should get to decide policy. Our public has a mechanism for deciding it and we should follow that mechanism versus being in charge ourselves.

Well, see, that's not what's scary. What's scary to me is if a society, republic, elects a really, really bad person and they try to get around things and use technology and power in ways they shouldn't. Palantir...

That is scary to me. That's why we all have to fight to be part of the political process for our views there. And to make sure we have checks on power, which is core of the US Constitution. What Alex is doing, he doesn't get the data himself. Alex is running a company that builds technology for our clients, right? I should say our clients. I'm an adviser still. I'm a proud founder. I'm not running Palantir these days. But Palantir is helping them use their data. We're not data ourselves. You see what I'm saying? Like you're helping them see things and do things they couldn't do otherwise with their information. It's not like Palantir itself has all the information.

In some places we were too arrogant. In some places we weren't arrogant enough. Like, you know, if we had gone into the VCs and been like, we're going to win, they probably would have given us money. Do you have any favorite stories from some of those VC meetings that...

Well, I mean, we had so many, but obviously the most famous is we're at like the most famous VC and like we're, you know, in the last round and they're pretty... and the most important partner just like spent his time doodling. My fantasy of it is he was doodling some erotic little picture that he was, you know, fixated on. But in fairness to that person, I think if we had stood up and walked out, we're like, this... you guys are wasting our time, chances of them investing would have been much higher. One of the things that entrepreneurs or builders need to understand about the Valley is if you're not overtly aggressive about representing yourself, they'll just assume that, you know, it's not real. And we were ironically too modest with those people. However, and then sometimes too arrogant with like government people and others where we're like...

Me as a 22-year-old was probably not the right person to sell to the government. That was complicated. But yeah, but in fairness to us, the government has changed a lot. I mean, there's a lot of problems and I have some ideas of how to fix them, but we were the first to break in. And it's like a lot of other companies have now come in and some are doing very well.

I'm able to do a lot in defense now thanks to Palantir, then SpaceX and others, right? Well, we showed up. We succeeded, which again, none of this matters if you're like some academic project, you don't succeed. We sued the government not to buy our product, but to ensure that people bought products that worked. Because the most important thing in my view that can happen for the preservation of the West and its values is for the US military to be by far the best in the world.

They've changed, they've improved. There's just, you know, in business, it's really important to go back to things that are kind of obvious. But one of the obvious things that's not part of every structure of the US government is almost all enterprise software that works in America or in the world has two characteristics. It's built in America and it's built as a product. And it has a third characteristic quite frankly, that it's sold commercially. So if you just say the rebuttable presumption is if a product is world-class, it is built in America. Again, rebuttable, doesn't always mean, but very likely it is. You could drill down on that, it's built by this... but just it is a product and somebody commercially has bought that product.

It is very non-plausible that you would have the best software product in the world and you've never sold it commercially. Oh, because you don't have time to make your company be worth $50 billion. It is not a product. Okay, so that means you will never scale it. And by the way, that also... there's a lot there because you want the world's best engineers to work on something, the ones that can do things no one else can. Tell them you want to not build products and see how far that goes. And again, for reasons that are complicated and hard to understand, it almost invariably is built in America, most likely on the West Coast, but not exclusively on the West Coast anymore.

Okay, we know this to be true. The US government should have a policy where a small percent of all, especially the DoD, a small percent of its spend has to go to products built in the... software built in the United States. That is a product that has been proven both on the battlefield and has been in some derivative sold commercially.

If you want to reform an institution, you've got to start by reforming parts of it. So I would just say starting now, 1% has to go for this. 1% of $900 billion was roughly the budget. It's like... and then every six months it goes up by a percent, or you could even say every year, because in the end...

And by the way, that would change the number of people selling to the DoD because even now, I'm sure there are a lot more people. When we were building Palantir... I'm glad the VCs have changed. I'm glad the culture in Silicon Valley now can either be interested in helping the DoD or as likely pretend they're interested.

But in fairness, one of the things that stops even more investment is there's these long time cycles and it's not clear that your product isn't going to be out-bought by someone providing a service. By the way, services things tend not to work. Early on when we were trying to sell the government, the services things would capture like the vast majority of the revenue and they'd toss us like a really tiny piece and that was the only way you get in. And you know, I was talking to people today and obviously people in the government have realized that we work. Some of the services companies just seem extremely jealous of Palantir. It's like we thought they were dumb and apparently they think we're bad or something like that. And I'm wondering if it's because they're jealous. Like, there's I think there's some huge jealousy with... I shouldn't mention the names of these companies, but these big companies that do all the ontologies, you know, and get paid tens of millions of dollars for something useless. And I think there seems like extreme jealousy or something from the outsiders. We... you know, you're a warrior for justice and I am in a different way a fighter for Western values. If you want to reform these institutions, the best thing is to not engage in why they may like us, we may not like them, but to say it is clearly in the best interest for the country that produces this unique thing. By the way, the thing that is the most valuable thing in the world that no other country is producing...

That there should just be a minimal part of the budget and it's minimal. It's 1%. By the way, the other thing we need to do is every single thing that is not... being presented to people at any level that is not actually running on real data, there should be a flag. This is a video.

They're... well maybe someday they'll work, but it's very... purely intuitively it's very hard. It does not correspond to anything that people believe because you would think 5,000 people being paid a billion dollars would produce something more valuable than five people working for equity just purely intuitively. But it's not true. So it used to be true with like maybe tanks or something, but it's not true with software. Well, one of the things, one of our advantages in software is that we... like the hardware cultures really struggle with software because these things are true for tanks and they're true for other things and big metal things. They're not true for software. But again, it's also true that software is the most important asset and our adversaries are going to be much better at building these big metal things than they are software. To this point, the way to reform the system is say a certain percentage that's small must go to these things.

And then the second thing is just as an addendum, when you show off if the products are working, the financing should be triggered at some point with like, oh, it worked. And last but not least, there should just be a minor thing in every bill. Oh, by the way, we are going to flag every time something is a video and not working. So that every senior leader and by the way, every institution, not just every institution in the world, should have a mandate. It's like, it's okay to do things that are notionalized because some are things you're going to build in the future. That's part of innovation. Be honest about it, but you have to force honesty on your institution because otherwise, again, to the beginning of this, people will buy from the people that they like that are like them. And sometimes that's valuable. But in software, a lot of times you're buying something from the freak show and it works. And the future of the West depends on buying things from people that are sometimes, not always, outside the norm, unlikable to you, are not going to conform to your thing, are not going to the right.

I'm not calling... I like myself. I'm just saying otherwise the insiders always win every time. But and look, the thing about reform is that you're going to blow up the institution doesn't work either. You've got to say we're going to pick here and then the institution, especially in America, will adapt because once you see a tiny sliver is going to this thing...

People are like, but it not only works, it's the best in the world. This thing is scaring our enemies.

You know, Americans right now are very motivated inside the DoD to scare our enemies. And I'll tell you what scares our enemies: using software that is actually a product that's almost invariably built here and that someone on this planet has actually paid for. So we started Palantir 21 years ago. I think a lot of you were mentioning you loved Alex Karp's clip at the Reagan Library this weekend. I'm very proud to be his co-founder. He's an amazing guy. As someone mentioned, his hair keeps getting crazier as he gets richer. So he's a character.