Is The Palantir Pack The New PayPal Mafia?

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The PayPal Mafia is a common term given to the group of men who graduated from working at PayPal after the company was acquired and went on to build some of the most transformational technology companies in the world.

A lot of companies were formed via these men in some capacity...

A recent article came out highlighting the "Palantir Pack," a play on the PayPal Mafia given so many Palantir alumni are now building or have built amazing startups.

From the article,

"Often their work at Palantir informed their next company. Peregrine Technologies’ Nick No one worked on law enforcement during his tenure at Palantir before starting a company focused on using data for public safety. The co-founders of Blend had worked on commercial lending projects at Palantir before starting their digital mortgage provider, which went public last year at a nearly $4 billion valuation. Mosaic’s co-founders all worked together on Palantir’s finance team before leaving to build better software for CFOs, recently raising $25 million from Founders Fund. Vontive’s Shreyas Vijaykumar spent seven years at Palantir and worked on a partnership with Freddie Mac, where he met his co-founder. The pair raised $135 million from Palantir-linked firms like Goldcrest Capital, 8VC and XYZ Venture Capital and emerged from stealth earlier this year with a data-focused approach to investment real estate mortgages.

Health care, an emerging focus in Palantir’s business, has seen a similar rise in startup interest from alumni. There’s companies like Little Otter focused on pediatric mental health and Kranus Health, which is working on digital erectile dysfunction therapy. In Australia, Michael Winlo is working on Emyria, a drug development biotech focused on psychedelics.

There’s even a handful of Web3 companies like unicorn OpenSea, which was co-founded by Alex Atallah, and consumer companies like Partiful, described as Eventbrite but for Gen Z."

Palantir Gets The Best People

After reading this article, it reinforced to me that Palantir's stock based compensation is justified due to the talent they are able to recruit.

The alumni of Palantir have gone on to build really interesting and unique technology companies. Giving them stock as an incentive to get the smartest people in the world isn't just a buzz line they say to explain SBC, it is empirically proven that they are getting the strongest talent and SBC simply is an incentive structure to recruit those people.

Here are some of the Palantir alumni and companies they have gone on to start:

Given the current depressed share price, one could argue that for the level of talent they are getting, SBC simply is not a current concern.

Employees will only get any value out of SBC if the share price goes up. In order for it to go up, the company has to grow, which means employees have to perform. There is a direct incentive for them to grow the company - and when you give that incentive to some of the smartest people on the planet, it becomes exciting to see what they can do.

Many employees join Palantir and do a tour of duty before taking some time off and starting their next thing, says 8VC’s Moore, who is still on the board of Palantir. The intensity of the company and its culture makes it feel like the engineering equivalent of wanting to join SEAL Team Six. “Instead of going to grad school, they go to Palantir,” Moore said. “They do their tour of duty and they make the company a little bigger, better, but it's not a short-term optimization where you're making a fortune. It’s not like crypto last year. There's no tricks to it. It's just hard work.”

But just like pressure can turn carbon into diamonds, it can turn engineers into founders and Palantir alumni into the next generation of startup founders. Palantir used to be a footnote to the PayPal story, but through their distinct experiences, unique culture and refined playbook, its offspring have built out their own network in the valley. One extensive enough that it might take Palantir software and a forward-deployed engineer to analyze its true extent and scale.

If Palantir is going to keep producing all star alumni, it would indicate the talent they recruit is beyond exceptional, which now means that the growth of the company simply has to catch up to the talent actually building it. While the product is growing and only getting stronger, the sales team is where the core focus is, and over time we will see how that is able to grow to match the level of the product and engineering team.

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