Ashlee Vance, one of my favorite business journalists, has a cover story on Palantir Technologies in the latest Bloomberg Businessweek. I first learned about Palantir shortly after its founding, when an early investor suggested that it might one day be “as big as Facebook.” At the time, no one had anticipated Facebook’s extraordinary growth and it seems unlikely that Palantir will match it. Yet the idea behind it is compelling. The national security space isn’t exactly defined by the efficient deployment of resources, it part because it is hard to measure success. The absence of a major terrorist attack could be understood as success, but of course everyone will claim credit for said success. One of Palantir’s goals it to bring a more rigorous, results-oriented frame of mind to this space, and to “disrupt” incumbent providers by offering high-quality analytical capability at much lower cost.
And I was surprised to learn from Vance’s article that Palantir has a highly unusual culture, which might impact its ability to win over public sector clients. After noting that Palantir salaries are capped at $127,000, Vance offers a window into the self-perception of Palantir’s team:
Instead of traditional salespeople, Palantir has what it calls forward deployed engineers. These are the sometimes awkward computer scientists most companies avoid putting in front of customers. Karp figures that engineers will always tell the truth about the pros and cons of a product, know how to solve problems, and build up a strong reputation with customers over time. “If your life or your economic future is on the line,” he says, “and there is one company where people are maybe kind of suffering from Asperger’s syndrome, but they have always been accurate, you end up trusting them.”
The director of these forward deployed engineers is Shyam Sankar, a Palantir veteran. In his corner office there’s a Shamu stuffed animal, an antique Afghan rifle hanging overhead, and a 150-year-old bed frame decorated with a wild, multicolored comforter. The bed comes in handy during an annual team-building exercise: For one week, employees live in the Palantir offices; the bedless make shantytown houses out of cardboard boxes. Sankar celebrates Palantir’s mix of office frivolity and low salaries. “We will feed you, clothe you, let you have slumber parties, and nourish your soul,” he says. “But this is not a place to come to get cash compensation.”
Like many of the young engineers, Sankar recounts a personal tale that explains his patriotic zeal. When he was young, his parents moved from India to Nigeria, where Sankar’s father ran a pharmaceutical plant. One night, burglars broke into their home, pistol-whipped his dad, and stole some valuables. After that traumatic event, the family moved to Florida and started over, selling T-shirts to theme parks. “To come to a place and not have to worry about such bad things instilled a sense of being grateful to America,” Sankar says. “I know it sounds corny, but the idea here is to save the Shire.”
Karp acknowledges that to outsiders, Palantir’s Middle-earth-meets-National Security Agency culture can seem a bit much. “One of my investors asked me, ‘Is this a company or a cult?’ ” he says. “Well, I don’t seem to be living like a cult leader.” Then he begins a discourse on how Palantir’s unusual ways serve the business. “I tend to think the critiques are true,” Karp says. “To make something work, it cannot be about the money. I would like to believe we have built a culture that is about a higher purpose that takes the form of a company. I think the deep character anomalies of the company are the reasons why the numbers are so strong.”
Alex Karp, the CEO, sounds like a fascinating, idiosyncratic character. One of the things that impressed me most was Chris Soghoian’s contribution at the end of the piece. Soghoian is a privacy expert who has been unusually entrepreneurial and active in his efforts to combat abuses of power in the public and private sector. And he has a nuanced take on Palantir:
Using Palantir technology, the FBI can now instantly compile thorough dossiers on U.S. citizens, tying together surveillance video outside a drugstore with credit-card transactions, cell-phone call records, e-mails, airplane travel records, and Web search information. Christopher Soghoian, a graduate fellow at the Center for Applied Cybersecurity in the School of Informatics and Computing at Indiana University, worries that Palantir will make these agencies ever hungrier consumers of every piece of personal data. “I don’t think Palantir the firm is evil,” he says. “I think their clients could be using it for evil things.”
Soghoian points out that Palantir’s senior legal adviser, Bryan Cunningham, authored an amicus brief three years ago supporting the Bush Administration’s position in the infamous warrantless wiretapping case and defended its monitoring domestic communication without search warrants. Another event that got critics exercised: A Palantir engineer, exposed by the hacker collective Anonymous earlier this year for participating in a plot to break into the PCs of WikiLeaks supporters, was quietly rehired by the company after being placed on leave.
Karp stresses that Palantir has developed some of the most sophisticated privacy protection technology on the market. Its software creates audit trails, detailing who has seen certain pieces of information and what they’ve done with it. Palantir also has a permission system to make sure that workers in agencies using its software can access only the data that their clearance levels allow. “In the pre-Palantir days, analysts could go into file cabinets and read whatever they want,” says former NCTC director Leiter. “Nobody had any idea what they had seen.” Soghoian scoffs at the privacy-protecting features Palantir builds into its software. “If you don’t think the NSA can disable the piece of auditing functionality, you have to be kidding me,” he says. “They can do whatever they want, so it’s ridiculous to assume that this audit trail is sufficient.”
But I find Peter Thiel’s rejoinder to these concerns at least somewhat convincing:
Thiel, who sits on the board and is an avowed libertarian, says civil liberties advocates should welcome Palantir. “We cannot afford to have another 9/11 event in the U.S. or anything bigger than that,” he says. “That day opened the doors to all sorts of crazy abuses and draconian policies.” In his view, the best way to avoid such scenarios in the future would be to provide the government the most cutting-edge technology possible and build in policing systems to make sure investigators use it lawfully.
I was also pleased to see that Palantir has ambitions beyond national security and combating financial fraud:
After Washington and Wall Street, Karp says the company may turn its attention to health care, retail, insurance, and biotech. The thinking is that Palantir’s technology can illuminate health insurance scams just as well as it might be able to trace the origin of a virus outbreak. Despite all this opportunity, and revenue that is tripling every year, Karp insists that Palantir will remain grounded. An IPO, while not out of the question, “dilutes nonmonetary motivation,” he says.
One higher purpose in the coming year will be rescuing strapped companies and government bodies from the brink of financial ruin. Karp lists fraud, Internet security issues, Europe’s financial woes, and privacy concerns as possible drivers for Palantir’s business. For anyone in peril, the message is clear: Give us a signal and a forward deployed engineer will be at your doorstep. “There are some people out there that don’t think to pick up the phone and call us,” Karp says. “By next year, many of those people will.”
What a wonderful idea for a business: to profit from anxiety is to profit from a nearly bottomless resource. (Note: I don’t actually think it is wonderful that anxiety is omnipresent.) Palantir-like technologies will, I suspect, have an increasingly pervasive reach. Some societies will presumably limit its reach and pay some cost in convenience and in tolerating a somewhat higher level of fraud. Others will embrace it and reap the economic and security benefits while empowering the state and private firms with access to sensitive private information. One potential concern is that states and private institutions that collect this data might themselves prove vulnerable to criminals or hostile foreign governments. Creating an informational honeypot might backfire.
Regardless, Palantir’s role is in a sense much narrower: it builds the tools that others deploy for a wide range of purposes, and, as Soghoian suggests, the ethical sensibility of Palantir’s engineers is in no sense embedded in the technology itself.