Move over, PayPal Mafia. Meet the Palantir Pack.

Meet the Palantir Pack

Tonight, a bunch of PayPal alumni will be gathering at Peter Thiel’s mansion in LA to celebrate the 20th anniversary of its IPO. It’s a well-known group thanks to an infamous Fortune magazine photo shoot of the PayPal Mafia and the network of startups and venture firms that have come from its founders and employees.

But PayPal isn’t the only mafia that Thiel is a part of. Thiel was one of the founders of Palantir, the data company that quietly (and sometimes controversially) built itself into a multibillion-dollar business. It’s been a shining example of the PayPal Mafia, but it’s spawned a network of its own thanks to the unique culture that contributed to the many successful startups and venture funds that emerged from it.

I’m calling it the Palantir Pack.

To be a successful “mafia” by tech standards, Keith Rabois once suggested to me that you need at least three unicorns to come out of it along with a distinct culture. Palantir meets those requirements and then some, and has several more potentially very valuable companies in the pipeline.

• The big companies in the Palantir Pack that would meet Rabois’ definition include startups like defense tech platform Anduril, NFT marketplace OpenSea, developer tool Sourcegraph and wealth manager Addepar. Other companies like Amplitude and Blend went public in the billion-dollar-plus range (although they haven’t been spared in the market correction).
• There’s also waves of startups in the middle who are working on unicorn status, like AI startup Arena, Web3 developer tool Kurtosis and data science company Hex — all of which announced funding within the last year. In the summer 2022 Y Combinator batch, there’s at least four startups that are from former Palantir alumni: Ilumadata, Moonshot, Medplum and Windmill.
• There’s also the funders ready to back the next generation. Venture capitalists like Initialized’s Garry Tan, Founders Fund’s Trae’ Stephens and 8VC’s Joe Lonsdale and Alex Moore were all early employees of Palantir. Others like Accel’s Steve Loughlin and XYZ Ventures’ Ross Fubini were advisers to Palantir. Goldcrest’s Adam Ross, who was on Palantir’s board, is also a key investing link between many of the companies.

The Palantir Pack has followed a similar playbook to Palantir. The main twist is that Pack members have rethought Palantir’s trademark secrecy.

• The Palantir playbook started by going after big, ambitious, mission-driven problems, hiring the best talent out of universities to do it, building an engineering-first culture and not being afraid to work hard and do unscalable things like deploying engineers out to customers to customize the product to solve the problems.
• “One of the most pathetic versions of Silicon Valley is what I would call whiteboard founders. There are people that are like, ‘I want to start a company because it's the fastest path to making a ton of money, so I’m gonna stand in front of a whiteboard, I'm gonna write every idea I can come up with, and then pick the least bad one,’” said Stephens, who is also co-founder and executive chairman of Anduril. “I don't think Palantir alumni companies start that way.”

Unlike PayPal’s “mafia,” it’s still expanding. PayPal went public but then got acquired quickly, which caused an exodus of talent. Palantir still operates much like an engineering institute or SEAL Team Six for technical talent, said 8VC’s Moore. “Our group is more like the military or something where you give your tour of duty, now you’re really, really tired and need recuperation, and then you’re ready to ramp back up,” Moore said of alumni. “They need a year or two off and then they sort of wake up and call us back.”

• Former head of investor relations Luba Lesiva launched the Palantir Alumni syndicate on AngelList in late 2020. Her idea initially was that there might be a few dozen alumni companies and interest from maybe 60 LPs or so. “I was massively, massively, massively wrong,” she says now with a laugh. The Palumni VC group now stands at 700 LPs and over 200 have made an investment. By Lesiva’s count, there’s roughly 170 startups that have founders or executives with Palantir ties.

Peter Thiel might be busy with his PayPal reunion tonight, but perhaps the next group to meet up will be the Palantir Pack. Just don’t underestimate the size of a party needed to cater to the founders and VCs that have spun out of it. Perhaps Palantir’s own software could measure the true scale of the network.

Overheard

“The biggest issue and my biggest regret is that it became a company,”Jack Dorsey said of Twitter this week. Not many founders would say this after building a billion-dollar business, but Dorsey wishes Twitter was instead a protocol not owned by the state or a company. (We like the idea of a Protocol, too!)

“This amount of capital feels like Quibi,” a Flow competitor told me. It was just one of the many things I heard this week from VCs and founders since Adam Neumann’s next act is still all anyone can talk about. Whether it was this week’s suggestion that Neumann could have a conflict of interest after backing a startup in a similar space or the fact that the check size felt like a slap in the face to DEI progress in tech, people are still outraged about the deal. “I was furious that time and time again, VCs invested in the same pattern that rewards toxic, growth-at-all-cost behavior and ineffective stewardship of capital," Pepper co-founder Jaclyn Fu told NPR. "It's wild that safe bets for VCs look more like Neumann with fanciful 'vision' versus founders who can actually prove product-market fit and real customer opportunity." Although two people I talked to this week wish they could’ve seen the deal. (If you’ve seen the term sheet, send it my way.)

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Inside track

This week was a big one for advice on data rooms. A16z’s Justine Moorepublished a guide for founders on what they need to know to include before going out to fundraise. Venture capitalists also have to fundraise, but obviously their needs are a bit different. Paige Finn Doherty of Behind Genius published a Twitter thread on what her firm needed to raise its first fund.

A16z has Future. Redpoint now has Start. The firm launched its own content play, which is more about how to build companies (think MasterClass meets TikTok) but gives founders that advice via videos and not just long-form articles.

Female founders already carry a heavy burden, and the negative press coverage against some female CEOs can feel like an extra target, Coalition’s Ashley Mayer told Homebrew’s Hunter Walk. In an interview on her career in comms, she advises founders to navigate it. “I guess we’ll know we’ve made it when a woman can get away with behaving like Elon Musk,” she said.

Need to know

The real unicorn in Silicon Valley: a startup considering an IPO. The WSJ reported that Instacart is still charting a path toward the public markets, and revenue has been growing (although it's nowhere near pandemic levels).

RIP Tiger Management founder Julian Robertson. The hedge fund pioneer was known not only for his own firm but also for mentoring the “Tiger Cubs” who came after him, like Tiger Global, Coatue, Lone Pine Capital and Maverick Capital.

Better.com hasn’t gotten better at layoffs. The company did a fourth round of layoffs after a list of employees who were going to be laid off leaked a few days early, according to TechCrunch.

Pivots: Speaking of pivots, Marc Bodnick’s Telepath is shutting down after attempting a kinder, interest-based social network. An email alerted me this week that the team is now building Wavelength, an encrypted group messaging app in private beta.

Next month’s hot ticket: a GOP fundraiser in Florida. Puck News was first to report that VCs Keith Rabois and David Sacks are going to host a “Take Back the Senate” event. On the invite list: Mehmet Oz, J.D. Vance, Blake Masters and Marco Rubio.

From Protocol: Pinterest is facing a civil rights investigation in California — and it’s not the only one under scrutiny, according to the company.

Also from Protocol: The biggest news of the week came from Twitter whistleblower Mudge. The 84-page complaint will not only throw a wrench in Twitter’s legal battle with Elon Musk, but it’s also a siren call for Washington to look much more closely at the company.

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