Hey this is tom and in this video i want to do something unique. I want to confront alex carp with alex carp, the well-known ceo of palantir, confronted against himself. Now i got to say yeah yesterday i was watching an old will smith movie, not that old. I mean well not the movie, and in that movie will smith was playing a character that was battling against a younger version of himself, and i was like that would be really interesting with a lebron or an mj or even any other sports character.

We know, but we can't ever do it. However, since we don't need alex carp to physically go at alex harp, i mean that would be a mera. Why would you say something like that, because i'm starting to love it, however, since we cannot do a physical cage match for one simple reason by the way, because the old alex carp didn't have that long hair, so obviously, he'd have a huge advantage against the new Alex carpe he could just pull his hair. The all the other scarf really has nothing to grab.

I mean it's not going to be fair, but what we can do is have an intellectual face-off sort of a test. Essentially, what we're going to do is we're going to take an old interview from 10 years ago and we're going to compare it with reality to see whether he was right, whether he changed his mind. You know when you take something that you said 10 years ago and compared today, most likely it's going to be a weird experience. I'm sure the same will be for alice carp, but it's really interesting to hear what he said 10 years ago and compare it to what we have going on today.

I think it's going to be fascinating. Let's jump into it. Palantir is a company that's valued at nearly a billion dollars, but not that many people, including those inside of silicon valley, know what it is. What is talent here so, first of all, we got to talk about the hair that hair versus 20 here definitely 2021 version over this one now jokes, aside, look at this nine years ago.

Alex carp is getting asked about a very high valuation. One billion dollars very high. Now we're talking about nine years, a decade later, the company 40x its valuation. So now we have people today saying well: 40 billion that is so expensive.

I remind you that people in 2009 said that one billion was too expensive, so i'm not here to tell you what to do. I'm not a financial advisor. This is not financial advice. Just a guy with an opinion which might be an accurate might be wrong.

Maybe the ramblings of an admin you got to do it in research, but i'm just saying people were saying 10 years ago that this company was expensive at 1 billion well in every large scale enterprise. You essentially have this problem that you have data in different databases and it's very hard for humans to actually interact with that data. Now this sounds like an incredibly boring problem, but actually it's the core issue you have. If you want to do things like prevent cyber attacks, enforce civil liberties, enforce standards on privacy, on data or instead, when some of our work actually stop terror attacks, so the core of it.

It's amusing to see this, because this is very different than what's going on. Today, nine years ago, people weren't saying what he's saying here, and it wasn't that acceptable to say that data is the new king, the importance of privacy, all these discussions we're having on today nine years ago. This was innovative. Nobody was saying this nine years.

The dna, though, of pounds here, is tied to paypal. One of your co-founders is peter thiel. Can you talk about the beginning of the company how you were able to grow this product from something that was created in paypal? That's a great question. I don't know who this lady is, but it's a really good question, so the key they're two key components to that one: what the methodology that was developed at paypal, which was basically the use of human analysis to reduce fraud.

So they had this massive problem of essentially cyber fraud that was putting them out of business. They tried algorithmic approaches, so they you go and you get algorithms you try to reduce the fraud by applying those algorithms to large data sets. One of the interesting things about that is. It doesn't work out very well, because the the the opponent is highly adaptive.

You have an algorithm that finds this behavior. They figure it out. They change. What you need is a human mind.

That's adaptive against an adaptive enemy or adaptive opponent so having the human mind, apply its own version of algorithms to data and that actually was very, very powerful in reducing fraud. So since we knew that worked, we marched off kind of naively to the intelligence community and said: look we'll build this into a product now again to a lot of your questions. The key moment here is: we didn't want to do this as a service. You could say we have a methodology, we'll build every time we sit down we'll do this one we'll do it each time and we'll charge.

You we'll charge you, but we had this idea. That is run through our whole company that we will try to get this into a product. This is very important. This is very important for all those idiots who are saying that palantir is a service company, another software company.

This is nine years ago. I lost karma saying specifically: we have no interest in building a service company. We want to build a platform on a stand-alone basis. This was said nine years ago completely.

That was the whole idea of palantiya, meaning that we would solve the underlying issues that would work in energy enterprise and again, that's also very important in any enterprise that would work in any enterprise industry agnostic. It's really important. This man was saying this nine years ago. Now what we found when we went to the intelligence community is unlike paypal.

They had lots of unstructured data. The data stores were much larger. They weren't built to communicate. You had very very technical users and non-technical users, and you had this massive issue of privacy protection.

So and collaboration so in the paypal context, you allow any user to see all the data, but in the governmental or even consumer context. You can't allow end users to see every bit of data. They only get to see the subset they're allowed to see so to take the paypal model, which would have been a one-off approach that would require lots of services hours and turn into a product. You had to productize the ability to integrate the data and productizability but integrate the data, meaning any kind of data, not just simple structure data and that took us three years and a very, very strong engineering team.

Incredible look at what he's saying here again, not a service, a platform platform that the client can operate on its own, also look at the time gaps here, three years, just to get this thing off the ground. It's a marathon play! I've been saying this for so long he's talking about it nine years ago. It's a fairly complicated product and that's its strength, but early on you must have had some doubts when you're creating this product. Would it work? Would it you know actually be used in the market? When was your aha moment when you felt like okay, we have something: that's scalable, that the government that other private institutions are really going to want to use.

Well, of course, it was very scary, since you know doing enterprise software 2005 to 2009 was a little bit like you know, starting a circus yeah. You know in the middle of palo alto with engineers it was not popular or it was popular with the wrong people. Mainly, which was us and a couple investors like you, know peter who was a co-founder, and so we didn't know it would actually work for 2008 and we didn't know anyone would buy it to really mid 2008. So third quarter 2008, and until then we were just operating on the faith that we had something really important.

Now the real proof was. We saw massive adoption without a sales force, critical critical. Unless you haven't seen the interview that alex carve just did in french talking to the former executive, airbus in fluent french talking about some french comics, that is proof why they never needed the sales force. This guy was the best salesman they ever needed and the only one for 17 years they did need a sales force from day one.

What he's about to tell you is that basically, this product sells itself, so this is how we knew it was working because one person would email another in their. They have classified networks and say this is awesome. You have to get that, and so one of the reasons to actually be very focused on the engineering team, as opposed to a sales team, is, you really need to know, is the delta between what they have with us and what they could have really significant. How difficult was it to break into dc to get the first government contract when you stepped into that first meeting? What was it like, and how did you make your case uh? We did a very bad job making our case.

It was very difficult uh. We didn't understand what they were saying. They didn't understand what we were saying: uh um, i you know, i think the first 100 meetings or so were fought with misunderstandings and uh. You know we basically went in and said we have this tool.

We didn't understand their data sets. We really didn't understand their problems. We didn't understand their language, they didn't understand ours. We said from the beginning: we're not hiring any people just because they're from government we're just hiring engineers.

Many of the people in our company - don't own, suits still don't, but the thing that resonated with them was. We said we are not selling you a service. We are not going to come and sell you engineers. We are going to sell you a finished product and we are going to show you.

It demonstrate its value against your data. How many government contracts do you currently hold today? Well, most of our contracts have massive clauses in them saying we can't we can't disclose, but i think uh. The way you could think of it is uh if we uh, we have 280 people to really deal with the footprint of where, where we're at now would be much better if we had 450 or 500. So that gives you a sense of the scale.

Do you think you're always going to stay true to that engineering is at the core philosophy? I think it's a really great discussion here, because it actually gives you a lot of insight again referring back to that airbus interview he just did with the former executive, airbus in french. I think the path of the company really comes clear from this interview. They started off with a government-focused product, then in 2015 they went to a quasi-governmental agency such as the airbus company right. Airbus is basically a quasi-governmental agency, but essentially it's very, very similar to government, but with completely civilian applications, nothing in security, just specifically in business.

They went and they started building this product in 2015 with airbus, and i think they saw how good it was how easy it was now 2021 they're, actually starting to launch the full-scale business solution for all these other actual businesses. The b2b business next step is the way to medium b. Essentially, the medium-sized businesses next step is the b2c eventually pallet here is going to offer b2c services. I have no doubt that's the path to the 1 trillion valuation.

I think it's going to take at least 9 to 12 years to see that happen, i'm patient, i don't know what about you. The link to the full interview is going to be below in the description. You can go ahead and watch it. I think it's phenomenal.

Also go watch the new interview he just did in french, so there you have it. Ladies and gentlemen, i hope you enjoy this. As always, i do want you to do your own research, because this is not financial advice. I'm not a financial advisor everything you hear and see in this video is just my opinion, which means, by definition it might be inaccurate.

It might be wrong might be the ramblings of a madman. You have to do your research, i'm not just saying this everything you hear see and actually watch on youtube. You have to validate this information, including things i say, i'm not an exception. You got ta, be the master of your domain.

Every information you store in your brain has to be vetted by you. Don't trust anybody do the legwork for yourself, as always a huge shout out for the channel members and the patrons for making this amazing ride with us. Thank you. So much we'll see you guys in the next video.