Good example, so let's say I started there 5 years ago and received a $100k salary, hit the pay cap last year and took a thousand shares in options. And then tomorrow somebody bought them for whatever their current valuation is, what would that be worth? After 7 rounds of funding, I gotta say, probably not much (especially after I divide it by my number of years).
But that should be an easy thing to compute for any employee there and for them to decide if that's worth it.
Perks: Free food and laundry service is cool, but I'd rather make more money that covers the food and laundry with some leftover.
Right, but if they never exit, or keep taking funding rounds, the equity the employees have becomes either worth nothing, or worth not a hell of a lot. Again, divide the money they might see by the number of years and add it the base to see if it was worth it.
There's a couple others I know that went public, but still have pay caps, but implemented a preferred stock option system for bonuses and such that works out very well for many of the employees.
It's difficult to get a handle on the real business value of Palantir: homeland security bubble has burst (sequester and US govt debt); big fight against DCGS for Army procurement; high cost of doing business overseas; financial product line is a drag; low cost competitors building product from OSS/COTS components (e.g. Hive/Hadoop, graph DBs, HTML5 front end) ....
The strangest thing is that Palantir is almost 10 years old, but it still prides itself on behaving like a startup. The flat all-for-one structure means there's no specialization of labor, so over-qualified CS wizards work as Forward Deployed Engineers, building servers and doing post-sales support. Imagine how much fragile spaghetti code 100s of really smart hackers can produce in 10 years - it's a lot. But Palantir is not an algorithms and data mining play, it also prides itself on having a human-in-the-loop, so there's no real underlying IPR value or barriers-to-entry either. That prejudice also inclines them against a real-time (CEP) front-end: you can't squeeze the human into streaming algorithms. Where's the enterprise platform? The elegant API and the end-to-end SDK? The vision for a strategic data processing and BI pipeline?
Palantir's principal asset is its collection of amazing employees. The biggest benefit to workers is not $$, but toiling alongside other great people. These are strong, creative and independent minds, any IPO or acquisition will disperse many of them to the four winds, to create a future networked diaspora of Palantir Mafia, building the next generation of great Valley companies.
The one area that Palantir does not behave like a startup is frugality. Where has all the money gone? We know it's expensive to build fabs in Asia, but Palantir doesn't have any. We know that companies sometimes acquire their way to a customer base, but Palantir hasn't. Series G for a software company!
Palantir is not a spartan ramen noodle kinda place. There is free food, but most of the over-catered lobster dinners are donated to homeless people. Seven rounds of VC money buying lobster dinners for tramps. Only in Palo Alto.
It's funny, they were not originally who I was thinking of when I brought up pay-capped Valley companies, but the more I think of it, the more they seem like the perfect template of a place not to work for.
Imagine being a smart kid who just spent 5 years surrounded by smart people working on nothing that's actually interesting, but the cult-like environment makes you think it is. Now suppose they sell and you go elsewhere only to find that the echo chamber you've been working in and the field engineer time you've spent has rotted away your previously top-notch CS skills, and you're coming out of it with a salary far below market norm. It's going to be a tough position for lots of their engineering staff.
It's also funny how they seem to have backed off quite a bit from the "we don't have a sales force/marketing staff" message.
* financial product line is a drag*
I was not aware of that. I would have assumed it was going like gang busters in a vertical with tons of money to put against tools. I wonder why?
Their other product seems like a fancy visio-clone tied to a database. Watching some videos makes me think that their message is "yay! Everybody is now a data-entry specialist!" Doesn't look like a fun or interesting product as a user.
having a human-in-the-loop
You'd think that with all the smart engineering talent they have, that there'd be more concentration on automating away lots of the drudgery I see in the videos. But they seem entirely uninterested in it. Videos on youtube from 5 years ago look almost identical to those released today. I'm not really sure where the engineering talent is focusing.
Where has all the money gone?
On a whim I took a look at their glassdoor profile, by the looks of it I'd wager they spend millions per year on useless cattle-call hiring. Some of the interview experiences are downright ghastly. And from the looks of the number of negative reviews, they're pissing off their future customers. Somebody they screwed around with and aren't hiring today is going to become a purchasing decision maker tomorrow.
To be fair, they appear to be pushing out internationally quite a bit, and that's hideously expensive, trying to replicate and size other markets they can get into. There's probably not much of a reason they couldn't find some penetration in other OECD countries.
But that should be an easy thing to compute for any employee there and for them to decide if that's worth it.
Perks: Free food and laundry service is cool, but I'd rather make more money that covers the food and laundry with some leftover.