And Google, too.
It’s my understanding that Brin and Page had created a new share class for themselves: 1 Share = 10 Votes.
Later they began to issue/sell non-voting shares: 1 Share = 0 Votes
So unlike Zuck’s FB dictatorship, Alphabet (with Google being the largest computing power/infrastructure in f’n history) is thankfully more democratic… two people.
And for some reason they’ve decided 98% of efforts should focus on advertising, via secret, nondisclosed, nonconsensual surveillance. Weird.
The thing is it’s the fundamental distinction for Palantir. Theranos could run blood tests, but they couldn’t run them automatically on single drop of blood. If Palantir can provide the service they claim to provide but still needs lots of people to clean the data first then they’re going to face a reckoning once they’re done burning through investors’ money (with this IPO that day may be coming soon).
In Palantir’s letter to investors, the CEO wrote,
"Our customers come to us because their technological infrastructure has failed them. The enterprise software industry’s focus on custom software tools and applications is misplaced. Those approaches often only work briefly, if at all. The problems and needs of an organization often change before the software can even be deployed.
“Our partners require something more. They need generalizable platforms for modeling the world and making decisions. And that is what we have built.”
Given that they’ve never been profitable (per this same prospectus) and lose hundreds of millions of dollars a year, it is this claim that their valuation is built on.
I think there are serious reasons to believe that this claim is false.
I would say that founders have a better track record than hedge funds and investment bankers. Palantir’s business model and founder are pretty bad, but you get what it says on the tin. This type of governance structure is popular in 2nd wave dot com stocks because of the incredible amount of damage private equity, venture capitalists, and hedge funds did to the first wave as well as plenty of other companies over the past few decades. Also because they were lucky enough to be in a situation where they could dictate those terms to their initial investors which is a luxury most companies seeking venture capital don’t have. As a “small” investor with less than a billion dollars it isn’t like you can kick the management out anyway – its just a question of whether you want the people who build the company or bankers to be in charge. Neither of them particularly have your best interests at heart, but one of them has a track record of understanding the business.
Likewise, be warned when you hear news in the financial press about an IPO flopping. This is often an agenda pushed by the financial industry that if the share price doesn’t go up by 20%-50% on day 1 it was a failure – which is the exact opposite of true. A share price that skyrockets on day 1 means that the bankers who facilitated the IPO made out like bandits while the company and its other investors undervalued the company and got ripped off.
not complaining about this particular case (fuck thiel), but i think intuitive user interfaces are vastly undervalued relative to teh magic neural net sauce, especially in analytics fields.
So any pretense of being a stock offering is a fake. Probably a major SEC violation right there.
i’ve known two rank-and-file palantir employees; they were both doing basically consulting work (setting up dashboards, quantifying things, etc.) just not called that.
That sounds great. If I wanted to buy a corporate bond with no guaranteed rate of return.
I would agree about intuitive UIs in general. In this case, though, Thiel and his bunch are making it all about algorithmic magic when they apparently have nothing superior to the competition in that department.
See this is the part that I really don’t get. From what I’ve seen they don’t even make any particular claims to doing something with AI except providing a coherent pipeline to your Hadoop or whatever. Admittedly I haven’t actually seen any of the demos but every time someone comes to us (University at Buffalo, Department of Biomedical Informatics) with a Palantir kind of application, it doesn’t seem like the AI is anything other than off-the-shelf.
There is definite value in being the owner of these kinds of standards. Think of Microsoft in the 2000s being able to push everyone around with html extensions. But I’m not sure that Palantir has much of a technical game plan so much as a marketing gimmick.
That’s what it comes down to, in this case with the marketing aimed at investors who just need to hear the terms “AI” or “machine learning” or “big data” coming out of the mouth of a billionaire before they throw money at his company – even better if he’s managed to convince the government to give the company contract work (ironic, considering Thiel’s extreme Libertarianism).
There is a large class of tech consumers out there, especially governments, that are desperately looking to pay for stuff that they could get for free. There isn’t any reason why state governments should be using SqlServer or Word when they could be using MySQL or LibreOffice, except that they feel really insecure about using free stuff. I’m sure that is a chunk of what is expected to happen here too. The police department could easily put all of its reports in Solr themselves but if they get Palantir they get to say that they spent money to use Evil Robot Tech to have an internal search engine. The hype is the value.
Yes, but I think pretty much everyone in Silly Con Valley is literally doing the same thing.
At some point, superiority begets itself. Microsoft Word isn’t that great (but it’s also not that bad, given what it’s tasked with doing), but the lock-in was a gold mine and is still significant.
I’m confused at the line about Shareworks having problems, preventing current and former employees from accessing/selling their shares.
Shouldn’t many/most current employees have a circa-6-month lockdown period after the IPO before they can transact at all?
That’s probably also where the shiny and intuitive UI design helps Palantir’s pitch. As big a proponent of FOSS as I am, their UIs tend to be a bit clunky and unpolished (obviously they get more polished with more mature and widely adapted products). That’s not to say they’re not workable to a trained operator (allowing for a lot more flexibility as a result), but showing off the pretty front end to the government buyer or to investors helps mask the fact that the guts of the thing are pretty much off-the-shelf components.
Maria DB please. MySQL is now Oracle controlled and that is not a good thing.
They actually go for the non-evil uses as well – they tried to get the National Cancer Institute to sign up for a license for their tools, but I don’t think it was picked up – both from the ick factor of working with Palantir as well as the general concerns working with closed-source tools in science.
Huh, that’s really weird. Palantir locks all user data into a custom locker that only the company holds the keys to - when you stop paying Palantir you kiss all your data goodbye.
So, it’s really werid to see big words like “focus on custom software tools and applications is misplaced” and “need generalizable platforms”. I mean, they aren’t necessarily wrong, but the implication that Palantir will deliver that seems … disingenuous.
Honestly, both options sound like shit to me: either founder control or shareholder control. Both should probably be banned and corporations should just be moved to worker-owned cooperative models. As a way of getting rid of the worst incentives for wealth concentration, labor exploitation, pay discrimination and the like.
I could see using the loophole that leaves the founder in control to accomplish this in a company: eg, give all the voting rights to employees who are given shares on joining the company. But this is just a re-invention of a cooperative.
As I recall one problem that they had was a lot of data bleed, where people were getting stuff in their queries that they shouldn’t have access to. (No doubt Palantir has the keys to everything as it is.)
