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Palantir cofounder fires back at recent report of company struggles
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Palantir cofounder Joe Lonsdale.
Palantir cofounder Joe Lonsdale responded over the weekend to a recent BuzzFeed report that claims the notoriously secretive data-mining startup has struggled with high turnover and big-name customer cancellations throughout the last year.
The report, based on confidential information and interviews with six past and current employees, says that Palantir's CEO offered substantial raises for employees staying longer than 18 months while doing away with performance reviews, and that its high-priced software — which could cost as much as $1 million per month — was responsible for driving away high-profile clients including Coca-Cola, Nasdaq, and American Express.
Lonsdale, who is no longer involved in the day-to-day of Palantir but has stayed on as an advisor, wrote in a Quora post that the report makes "false implications about customer traction" and presents cherry-picked facts without context.
In response to the report's claim that Palantir has raised $2.42 billion to date but spent over $500 million in 2015 without making a profit, Lonsdale points out that "it has spent far less than half of it and is sitting on a huge war chest and growing at an amazing pace."
Lonsdale also argues that reported client cancellations are to be expected and come from the company's exploration into new industries, writing that "it's astonishing they are doing so well that [the BuzzFeed reporter] only found three names in the last 13 months with which to claim they had issues."
While highly critical of the BuzzFeed article overall, Lonsdale ceded that turnover had "temporarily gone up to SV norms."
The one fair point the article made that Palantir probably wanted to address in private was that its employee turnover rate had temporarily gone up to SV norms versus the amazingly low rate of the past (context the article failed to give). We almost never lost any key people historically as the company was growing, and the under 10% turnover rates the article cites even from the last few years is amazingly low.
I think people are often there for "mission-driven reasons" as we say, and to be part of a great team doing important work -- but the financial equation matters a lot twelve years into any company.
You can read Lonsdale's entire response over at Quora.
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