Michael Lopp – Stables and Volatiles (9/24/2013)

Updated : Nov 06, 2019 in Articles

Michael Lopp – Stables and Volatiles (9/24/2013)

Ladies and gentlemen, please join me in welcoming
to the podium, Michael Lopp. Thank you.
Alright. Can I close this one here? Okay. Good. Because that always bugs me.
Hi everybody. Can you hear me in the back? Can you hear me in the back? Alright. I don’t
have any prizes. I’m sorry. This is, I did a lot of talks. I came from
Apple. I was there for 8 1/2 years and one of my crowning achievements of speaking as
a nerd was speaking at WWDCR Worldwide Developer Conference. And I do a lot of talking, but
this is the first time I’ve actually like felt like I’m back on a big huge stage.
It’s totally intimidating. This huge screen, this beautiful room. So, alright I’m going
to be a little nervous here right out of the gate. Umm. Got to have some water first. Then
I’m gonna start. How many designers in the audience, audience?
Okay. Two designers? Really? Interesting. How many engineers or to be engineers in the
audience? Okay. So no designer jokes. Got it. Or you guys won’t get em. That’s fine.
How many managers in the audience? How many leaders in the audience? Trick question. Alright.
Remind me after. I’ll explain why I did what I did there.
Okay. Here’s the talk. Another Steve note before I start. If you’re ever showing any
sort of wire when you’re giving a talk to anybody, he would’ve fired you. You think
I’m kidding. Okay. Humans are bad. What in the hell is
going on here? Now you’re looking at this and you know that these are plugs, but what
the heck were we thinking when we designed all these different kinds of plugs? What,
as a engineer, as a designer of things, I look at this and I just see someone lost their
mind. Now there’s a good reason behind each of these plugs. The reason the one from the
UK is shaped how it’s shaped is because they had a lack of some metal during World
War II so they had to have a certain shape of that plug. But this is a design nightmare.
This is an engineering nightmare. If you’ve ever traveled before you know part of your
stress is sitting there going like am I going to be able to plug into whatever the heck
is sitting there on the wall? What happened here? This is too big of a design problem.
It’s too big of an engineering problem. Let’s put on one of, let’s look at it
like this. Here’s how this plug situation plays out around the world. What you’re
seeing here is different kinds of plugs that I showed you and where they’re in use in
different parts of the country, in different parts of the world. (Unintelligible) well,
here’s the thing. If you’re in El Salvador, there are ten different types of plugs in
play. Ten different kinds, ten different kinds of plugs. So, you go over to Frank’s house
and then you’ve got a one in ten chance to be able to plug into the wall. Right? What
happened here? What was the design decisions that we ended up with all these different
plugs? When I travel, when I’m sitting there, I’m sitting there plugging in this adapter
into the wall which is one plug, and then I’ve got my plug going to the plug. So,
I’ve got a plug going into a plug, into a plug, into a plug. What happened here? There’s
too many stories there. I can’t tell them all to you. I actually don’t know em all.
I want to talk about just one plug. Good thing to know here right now. How many
of you have Macs? Okay. How many of you have an I-phone? Also good news. Okay. It’s actually
not this plug I want to talk about. The plug I want to talk about is this one. What happened
was, about a couple of years ago when Steve Jobs was still alive, he got up on stage and
he announced all of this new hardware. And he announced the fact, and what he did was
he said that phone by the way, this plug, this plug right here that we…How many, how
many of you have this plug on you right now? Okay, right. So a handful of you. There are
a lot of these plugs out there. Every Mac, every I-phone, every I-pod, has this sort
of plug. And Steve Jobs got up on stage and he said “We’re going to give you a brand
new plug.” And I was sitting there. And he also re-did the power plug. This one I
have right over here. And I was sitting there going oh my gosh. He’s just replaced every
single plug in my house. Why did he do this? Is he, is he greedy? Is he…what was his
reasoning about doing this? I want to talk a little bit about what the rationale about
disrupting something as simple as plugs, what he was doing there. I want to talk about the
people that are behind it. I want to talk about stables and volatiles. I’m Rans. I’m
the guy on Twitter that sounds like a fortune cookie. That’s what I do. I’m on there
getting a hundred and forty characters of wisdom.
We said a little bit about what I did. I was at Apple for 8 ½ years. I worked, I managed
the Mac OS10 Software Team, part of it. And then I ran the online store. store.apple.com
that’s me. If you want to know why the little yellow sticky note comes up, I can tell you
why. After I left that, I left there about 3 ½
years, I left there about 3 ½ years ago. I work at a company, which is probably…how
many people know about Palantir? Well, that’s really good news. How many of you are a little
bit nervous about what I do? That’s even better news. How many of you are lying to
me right now and just don’t want to get called on? I don’t believe you guys. Anyway,
I’m at Palantir. I’m one of the four executives, executives there. We don’t really have titles
there. I’m just one of the four directors that run the, run the place there. We’re
about 1300 people. We’re in (unintelligible). We’ll talk about in a little bit. But the
reason I’m here is about three years into my Apple career I started writing about a
space that I thought was under served, which was engineering leadership. A lot of the books
out there are trash. Actually they’re probably really good. It’s just engineers can’t
read them. We’re going, we were going like, this makes no sense to me. I don’t know
what this Drucker guy is talking about. Throw that away, pick up wire. So, I started writing
about what I thought was a opportunity, which was around how to talk about engineers, what
engineers think about. And ended up as I said writing two books. Managing Humans, which
is a great book for leaders or managers who are interested in the art of leadership. And
then Being Geek is more of a career handbook. It’s for those folks who are kind of figuring
out what they want to do with their career engineering wise.
There’s a couple of themes that I hit on a lot in these books and they are relevant
to the topic at hand. Number one, and this is something that was part of my intro is
this. How many of you have a job right now? Okay. Here’s the deal. I’ve seen a lot
of resume’s, like thousands of resume’s. You’re in a hurry. Right now I’m pretty
sure that whether or not you know it, you’re three years away from your next gig. You are
three years, and if you’re starting your first gig, you’re about three years away.
Now how do I know this? I know this for two reasons. I look at resume’s and I just see
this pattern on and on again where engineers, designers, we leave after about three years.
Why do we do that? What’s going on? I’ll tell you why. Well we get, we bore easily.
We bore super easily. Engineers are system thinkers. We think about it as the world is
a flow chart. We have this imag…we have this idea in our head that if we can design
the perfect flow chart, that’s going to explain everything. This is not true. But,
we get to the point after about three years where the flow chart is pretty built up. And
then we start getting bored. The other reason I know is because I have left my job consistently
or changed my job significantly every three years. But you say hey, Lopp, Rans, whatever
your name is, 8 ½ years at Apple. What happened there? Let me tell you. Three years, Mac OS10,
got bored. They said hey you should build a calendar server, a Wiki server. I’m like
that sounds interesting, let’s go do that. A year and a half got bored, moved onto the
store. Three years consistently. You are three years away from your next job. And you probably
love your job right now. If you just started it or you’re just about, whatever, you might
actually love it. Three years. You have an expiration date. Once you go into
the workforce you are going to have about a three year window until you are going to
be moving on to the next thing. The reason I left Apple was I couldn’t see a path forward.
And 3 ½ years ago Apple was doing pretty well. It’s actually still doing pretty well.
I was so bored that I left Apple. My wife is still angry with me. She’s like Panantir’s
doing really well. Why did you leave Apple? You idiot.
The other thing I know is that, how many of you build stuff? I think it’s more. Alright.
The other thing I know is this. How many of you have built a 1.0? Took something from
the beginning to the end, 1.0? Really? More of you. Like little thing. 1.0 doesn’t have
to mean you like invented Twitter, right? You know. It could be something smaller than
that. If you could imagine back to that 1.0 that creation of the brand new thing. The
thing about it is it’s awful. It’s really, really hard because you’re sitting there
making every decision for the first time, which framework am I going to use? (Unintelligible).
It goes on. It goes on, and it goes on. And you don’t know exactly what winning looks
like. You’re going to make all the decisions and you get done, and if you’re in the Silicon
Valley there’s a one in ten chance, a nine in ten chance you’re going to fail. But
it’s got; it’s really, really hard. But people keep on doing this. Why do they do
this? Why are we engineers doing this? I hate this word. This is an awful word. I have an
important question, MBA, MBA’s in the audience, show of hands. Oooh. Sorry. Can I make fun
of you a little bit? Okay. Good. So, you’re in good. So you can
play both sides of the fence. Good. Alright. Okay. That’s good. Alright. This word used
to mean something really, really interesting. Much (duchebags?) going into the MBA’s grabbed
it and they turned it into this sort of thing to kind of like talk about innovation, which
is another word we lost but this word really annoys me. But it seems very important word
inside of here. There’s an important idea inside of disruption, and it comes where I’m
from, which is the Silicon Valley. Silicon Valley used to look like this, poppies in
California, California poppies, big huge orchards and then something incredible happened and
it turned into this disaster, which isn’t a disaster. It’s a lovely place. It’s
got 1854 square miles and three million souls and incredible nerd density. A lot of folks
out there. Now the question is how did this happen. How did this happen? And when I was
preparing for a talk a while ago, I did some research. How many of you, I know who started
this. I know what he did, and I know how much of an effect it had on the Silicon Valley.
Excuse me. How many of you know who William Shockley is? Show of hands. If you’re not
part of the administration tell me who he is. And the guy who already won the prize,
you’re disqualified immediately. Someone else. William Shockley. Yes? Transistor. That’s
correct. William Shockley is a Nobel Prize winning inventor of the transistor. William
Shockley was also a jerk. This was actually a horrible human being. Now I’ll tell you
why. Now so what happened was is this guy who was really smart moved himself after he
got the Nobel Prize went out and…sorry. I’m a facetious guy when stuff’s on the
floor. I feel better now. I’m so obsessed about things. So, the, William Shockley got
his Nobel Prize. He was spending time polishing it. I don’t know if you polish a Nobel Prize,
but maybe you do. Anyway, and he moved out to California and set up a shop in Palalto
and shockingly an odd choice to do a technology startup, and he attracted all this talent.
He attracted all these amazing engineers who wanted to work with the guy who invented the
transistor. He had this amazing set of folks around him that he attracted, because they
wanted to be there with him and he was an awful human being. I can tell you stories
I knew about him. Trust me when this is…the least of which was he was a really bad manager.
He, what he did after about a year, the group that we now call the Traitorous 8 left this
garage or whatever was going on in Palalto and they went to go and form Fairchild Semiconductor,
which is where all this Silicon showed up from. As they Intel, they started Fairchild,
all these different companies and you think that’s the point of my story, and you think
that’s why it’s called the Silicon Valley. And that’s all true, but the thing that’s
more interesting to me was their reaction to this horrible human being is resulted in
a lot of engineering culture. When they went to Fairchild they designed a brand new working
culture. Remember we’re on the West Coast. We’re not on the East Coast. They got rid
of titles. They got rid of titles in the companies because titles create artificial hierarchies.
This is something in my company right now I’m wrestling with. I got 1300 people. The
people are like trying to figure out where they’re growing and what their path is.
And I will not let titles show up, because titles start to turn into this. Oh you’re
an Engineer II. Well, I’m an Engineer III. I said nothing. I said two, I said four words,
but there’s this, weights gets on this and it starts to turn into this political thing.
Well I’m an Engineering III and you’re an Engineering II. So, I obviously have more
power. This is a bad situation. They got rid of titles. They got rid of dress codes. They
said hey we’re not going to wear ties anymore. We’re just going to be here in whatever
outfits we want. They got rid of reserved parking lots. They intervented the concept
of stock options. Up until that point it was only executives who got the stock options,
not the entire company. Insane. They created this thing called an egalitarian workplace.
And it’s something that, it’s the reason you’re wearing flip flops right now. Who’s
wearing flip flops right now? Anyone? Show of hands. Right there. In back. Some flip
flops going on. There was a time this was really, really frowned upon.
I already alluded to some of these aspects of what I think of a healthy engineering culture
is. And then we’ll get to stables and volatiles. I swear, but it relates to this. They really
wanted to have a flat organization. Now there’s two, there’s two engineering models right
now. There’s the HP Apple model, which is leads have plus or minus three folks and that’s
about good team size. The other model is sort of the Google model where it’s like one
lead with like a hundred direct reports. Now the think about Google we happen to know is
they have these vents in the ceiling and outside of these vents pours money. And it just fills
the room. And it covers up for a lot of sins. Their model doesn’t really release scale.
What Apple did, which I would say is one of the smallest big companies out there is they
took this model of seven plus or minus three and what Steve Jobs did, this is going to
sound like a lot of hierarchy, but it’s really not is he said Ok for anything that
Steve cared about, I-tunes, hardware, whatever it is. There was him. There was a VP. There
was a director, lead, and that. So, three levels of leadership between Steve and the
team, the product that he was caring about, which sounds like a lot. But if you go to
Wells Fargo or these other big huge companies with business units, and directors, and senior
directors all this political junk, it’s really not that (unintelligible). And this
is something we’re doing at Palantir right now is we’re trying, how are we going to
keep it nice and flat. How are we going to scale it like this as opposed to like this?
Because once it gets like this the information gets lost and you don’t know what’s going
on anymore. And people start to make decisions base all, not based on data but do they know
(unintelligible) or do they know you, or this sort of thing. And that’s bad. And that’s
started here. They said we’re going to keep it flat. Everyone’s out in the open. There’s
not offices. Does this sound familiar? This is what they did. The thing you get out of
that is you get speed, less meetings, less of this alignment where you’re sitting there
and going like okay all of us have to get together, have a meeting to decide this thing
that we could have done just by standing up and walking over there and saying red or blue?
Red. Sounds good. Let’s go. They got speed out of this work in this environment. Collaboration,
the idea that people could just stumble on each other. I was just upstairs. You have
these big huge wide open spaces. This is new in the last ten years. We were all in offices
with doors for a long time now, but we’re going back to this model that was started
back here in the early Silicon Valley where everyone just collaborates. You can just sit
there and say hey what’s going on Frank. Tell me what’s your problem. What’s going
on here? You can see what’s going on. And then focus on results. The lack of a dress
code, the informal dress code as a byproduct of the values. Let’s pay some premium on
results. There’s two tests at Palantir. This is not
a recruiting pitch. I’m here as not representing, I am representing Palantir, but this is a
story about Palantir. Anyway there’s two tests to get into Palantir, and there’s
different sounds depending on where you’re standing. Test number one is really hard.
You have to get hired. They have the hardest interview in the valley right now. We have
the hardest interview. It’s really hard. We turn away a lot of people. And then you
get there and there’s that second test and it’s actually worse. The second test at
Palantir is the following and it comes with this focus on results orientation. You must
quickly in the first six months to a year identify a major problem in the company. You
must start to work on it. You must fix it and show that you can fix it. No one’s going
to tell you to do this. No one’s going to help you in identifying it. It’s just expected
that your’re going to take it and be a self started and go solve that problem. Until the
second test is passed and by the way, there’s no like ceremony when the second test is passed.
Everyone just goes oh Marie. She crushed that recruiting thing. This is hard, but it’s
this focus on the engineering mindset is what have you produced. I don’t care what you’re
wearing. I don’t care what your title is. I don’t care whether you’re wearing flip
flops or not. What is the value that you’re creating?
This is Zuckerberg era as we’re in right now. This is the hacker era, which is a great
word. It’s not a bad word. It’s the same thing. It was the same thing for Netscape
and for Palantir, and for Apple. As engineers if you go and look at a lot of the companies
in the Silicon Valley this is this fascinating thing has happened in the last fifteen years.
Google, Drop Box, Palantir, not Apple. I’m forgetting one. Cora. CEO’s are engineers.
This is a lovely time to be an engineer in the Silicon Valley.
Engineers are risk takers. Here’s the thing. You’ve heard this quote. I think this number’s
not valid anymore, but I’m still quoting it. If you have any other data to bet and
make it better, I’d love to hear it. The number right now is that one in ten startups
are successful. One in ten startups are successful. If I told you that there was a ninety percent
chance that you would walk out of this building, get hit by lightning, you would stay in the
building. We’d stay here a while. I’m sure there’s food. We would not leave. Why
in the world especially engineers, we’re fact finders. We’re data based decision
makers. Why in the world would you go do something when there’s a ninety percent chance you’re
going to fail? That, well first off the money’s really good right now. So, there’s a lot
of jobs. So, failing you can go to do something else. That’s not the issue. We know the
marketing version of this is fail fast and learn. But that is really actually true. Embrace
failure. We embrace failure because we like to learn. It’s this boredom thing again.
Anyone know who this is? Really? Okay. Thank you. Whew! You guys let me down. Gary Casperov,
playing speed chess against the entire Palantir engineering team. There’s this big table
that comes out here. It goes all the way over there, and it’s over there. And he is just
killing us. We are just getting waxed. I wasn’t here yet. Just boom dead, boom dead. Now the
thing I like though about this photo is not going to be about Gary Casperov playing against
the engineering team on speed, in speed chess. It’s the smiling faces behind it. You see
all the people. No one said cheese. That’s their natural, someone just took a shot. And
you just look across there. There’s people just smiling. Why are they smiling? Just got
waxed by Gary Casperov at chess. Why are they smiling? They’re smiling because they’re
learning. The master is sitting there killing them, but they know that they’re going to
learn more, because they’re going to see him and they are going to see how he played
and they’re going to say oh did you see how he… I know nothing about chess. Engineers
love to learn. We love to learn. We love the puzzle. All these things about games and puzzles
and Rubik Cube, these are all true because we’re stimulated by the idea of solving
the problem. We like to build things because building things are answers to problems.
However, in what is the longest intro to a talk ever, there is a spectrum to these (unintelligible)
forty-five minutes. There’s a spectrum to these builders. There’s stables and there’s
volatiles. Now, these are arcitypes. It’s not black and white. People are never black
and white. You are all beautiful snowflakes. So, I’m going to talk about em like they’re
black and white, but at the end of the day you’re a little bit of this and you’re
a little bit of that. You’re a mix of these things. But I like to speak in archetypes,
because it gets your attention. To give you the introduction to stables and volatiles
I’ll have to talk about my first startup, you’ve never heard of and I don’t ever
talk about. And what happened was about three months before I got there, the, there was
this guy named Stephon and he was hired to be like our contractor, database wrangler
and to come in and solve some Oracle stuff. And he walked in and Stephon in about a week
said “there is no way in the world that this team is ever going to ship a product.”
He could smell it. He was (unintelligible) got a PM a project manager out there saying
well about nine months out we’re…and he was like this is never going to happen. So,
he went and he grabbed Greg and he said “Greg, by the way we’re going to lock you in the
Ping Pong Room, I’m going to be in there as well. We’re not leaving the Ping Pong
Room until it’s done, until we can see the product that we don’t think, no one thinks
it’s going to be done for six months.” And Greg’s like hey this is interesting.
He’s new. He’s like “this sounds really entertaining. When’s done?” And Stephon
goes “I have no idea. Let’s just go.” So, he went in and he locked some folks in
the Ping Pong Room. He didn’t actually lock em of course. But several weeks later the
Ping Pong Room stunk. It reeked. And half of the engineering team had been in there
doing a bender for like three or four days. And Greg was sitting there and gave us a demo
of our product. This was about three weeks after they started. This is a thing that the
private managers on the team were saying was six months away. And we saw our product and
everyone just went hoora. And of course there was this building of it and people were like
what’s going on in the Ping Pong Room. Where’s Greg? What’s going on? And of course they
started to recruit people and they started to pull it together. But they sat there and
they built our product. And we were so happy. And everyone cheered. And they clapped. Not
everyone was clapping. Not everybody was clapping, because there was three folks over on that
side of the room kind of grizzled veterans of the Silicon Valley who were like oh crap,
because they had seen Stephon before. They knew that of course this project manager wasn’t
off by a factor of whatever to get down to six months. Of course corners were cut and
they were kind of half clapping because they knew that they were probably going to have
to clean it up when it fell over. Everyone thought he was a hero, but these three guys
knew that Stephon was a type, an archetype that they’d seen many times before. Stephon
was a volatile. Now I’m going to explain to you who these different types of folks
are. Volatiles we’ll talk about second. Stables,
we’ll talk about first. Archetypes. Remember that. Not generalizing here. Stables when
it comes to engineers, when it comes to folks that build stuff and then I want you to close
your eyes and imagine these folks who, because you’re going to start imagining someone.
Stables happily work with direction. They appreciate there appears to be a plan. Although
they may not know it. They just kind of assume it. They like schedules a lot. They’re really
good with schedules, dependencies. They love this stuff. They play nice with others. They
really, really run efficiently. They value efficiently run no drama teams. These are
team players. They commonly assess risk. They’re really good with dependency mapping. They
carefully work to mitigate failure, however distant or improbable it might seem. They
tend to generate process because they know process creates predictability and measurability.
How many of you like process? Show of hands. Four of you. Wait, wait. It keeps coming up
more. Interesting. Now process to engineers is usually something
we don’t like a lot because it gets in the way of us being creative, beautiful snowflakes.
Now the way to think about stables is I was trying, trying to figure out a way. It’s
kind of like this stable thinking if you will is, comes back to a some research regarding
consumer behavior. If I was to give you a choice between, and this is stables again
thinking a twenty dollar toaster and a slightly better, slightly better thirty dollar toaster
of course which one are you going to choose? I’m not big on toast. I’m just trying
to get it done. This is slightly better. You’d choose the twenty dollar toaster. Now here’s
what gets really interesting. If I go and I throw this, another toaster into the mix.
Nothing else changes. That’s why a twenty dollar or a thirty dollar model. If I gave
you three choices what the data shows is that you’ll, you the stable will tend to move
over to this one over here. There’s a thing called salience in decision making, which
is has a long Wikipedia page on it. But basically we make decisions based on the most recent
data that we have, which is a good thing if we’re constantly making up decisions based
on everything that ever happened in all these sort of things, you’d be kind of crazy.
But the idea is that we tend to make, this is a very, very stable decision. The unknown
isn’t scary, it’s just that there’s no reference point. So, we use the data that
we know. But there’s times where we want the decision
to be inventive and creative and disruptive if you will. There’s a time where we need
volatiles. They prefer to define strategy rather than follow it. They don’t even factor
failing into the math. This doesn’t even; they’re not even thinking that it could
ever happen. They find a thrill in risk, you the folks that just go charge at something.
Let’s go do it. Got a weekend. Make it happen. They don’t tend to build predictable or
stable things, but they sure generate a lot of products. You’re probably picturing some
now. There’s value to this myth. It’s true, uh maybe. It’s about the 10X engineer
this person who just seems to generate that 10X more so. They do exist. They’re not
always volatiles by the way. They are often only reliable if it’s in their best interest.
Trying to motivate these folks with schedules and the it’s the right thing to do for the
team, does not work. The way I usually get a volatile to do something with me, is I describe
it to em in a way like this. I say hey, I’ve got this really hard problem. I don’t want
you to work on it, because it’s impossible. There’s no way, and I, do you have any reccom…because
it’s really hard. We need this. There’s like a million dollars like on it, but you
can’t work on it. So, if you could think of anyone who can do this thing that’s really,
really hard, I’m getting a real hard algorism person and you’re not the person obviously.
This just gets these volatiles going, because then they get mad at you and they’re like
why do you mean I can’t do that sort of thing? So, that’s some weird passive aggressive
management technique that probably doesn’t work for everybody, but it works for me. They
see working with others as time consuming. Like onerous. They prefer to work in small
autonomous teams. And they could care less how you feel. And it’s not that these are
mean awful people, it’s just on their list of things that they care about, it’s like
27. Right? And all these other things up here are the things that are up there. It’s not;
they’re not trying to be mean. They’re just focused on these top ten things, whatever
those things are. If you go, if you go give these jerks this
test., the $20 toaster, the $30 toaster what they choose to do is they often choose to
do something like flying toasters. Great. How many of you know this screen saver? Show
of hands. Alright. Alright. Most of you don’t. I will explain to you this huge leap I just
made on the flying toasters. Flying toasters sometimes, isn’t it great? Sometimes you
want your toasters to fly and you stables are never ever going to do that for you.
The company developed flying toasters, a company out of Berkley California, called California
Afterdark. And this just goes on and on by the way. They’ve got a theme song. And when
I tell you what the program is, you’re going to start giggling even more. The idea behind
flying toasters was, it was a screensaver. Now to explain what a screensaver is, I know
you guys know what it is. But I wanted to describe it in terms of VC pitch. And who’s
going to be my lucky VC? I’m going to pick on you. Okay? Let me talk in to you. I want
to pitch you on this idea. What’s your name? No. You right there in the black. What’s
your name? What’s your name? Alice? Alexis. Alright Alexis, you’ve got ten million dollars
in VC money and this is my pitch. I’m going to do software and I’m a very qualified
software engineer. I’ve written a couple of books. What I want you to do. Here’s
the idea. I want to do a piece of software that’s going to, going to really only be
useful to users when they’re not there. That’s number one. So, it’s only going
to be useful when they’re not there. So, the only value that they’re going to get
is when they can’t see it. Now, how am I going to make this more entertaining? Hold
on. I know this is great. Calm down. Don’t start writing checks yet. How this is going
to be great is it’s going to bite the screen and there’s going to be things going on,
on the screen. Again you won’t be there. It’s only useful when you’re not there.
And we’re going to do flying toasters. I know. I’m excited too. Right? Flying toasters
are going to be on the screen when you’re not there, and by the way there’s going
to be preferences to adjust the toast color and to have the number of toast and you can
adjust the volume at the beginning. You won’t be there at all, but it’s, it’s an amazing
idea. I know. Stop writing the check. So, what we’re going to do, and it’s going
to be, it’s going to be forty dollars for each piece of software. Again it’s only
used for when you’re not there. It’s saving your screen, but it’s not there. So, what
do you, what do you think of this? Will you fund my amazing idea? Alexis? No? Really?
A ninety-nine cent app is what you’re going to sell me? You’re probably right. Thank
you. They made millions of dollars on this idea.
They made a million of millions of dollars. This is an absurd stupid idea. Yes, they were
saving screens back there and screens needed a lot of saving back then, but it’s only
useful when you’re not there. And it’s there with toasters. And it got lost in it.
Who in their right mind would have ever funded this idea? They didn’t fund it by the way.
I’m assuming they just, they pitched it to themselves. They did it on their own. It’s
amazing to me that this idea ever got out there. And of course Afterdark turned out
all these other screensavers and You Don’t Know Jack. And they eventually sold it to
Sierra years after. But I was really curious about who are the engineers behind this absurdly
brilliant business idea. And it was the folks who did moveon.org. After they left, after
they sold Afterdark, after they sold Berkley Systems west boy John Blazer the co-founders
and they went on clearly not leveraging a flying toasters or nothing, but they went
on to following this technology action, technology based action group that’s politically left.
And again I look at this and I’m like that’s crazy too. When MoveOn came out I was like
no way can they do anything there. And now it’s sort of a standard in terms of getting
involved in politics with technology. Volatiles. They come up with the craziest ideas.
Here’s the bad news. Here is a problem. You need both of these folks. These guys and
gals hate each other. They really just don’t get along. They, I’ve, most of my professional
career has been mediating battles between the stables and the volatiles who can’t
get along. Volatiles believe stables are slow, lazy, and political, and they’re bureaucratic.
Stables believe that volatiles hold nothing sacred, hold nothing sacred, do whatever the
hell they want, company team product be damned. Here’s the thing. Everyone’s right. They’re
actually right. Now I’m talking about archetypes again. But these are, this is, there’s a
spectrum of these. But they’re right. This is what volatile, volatiles crave chaos. They’re
not going to be measured. They’re not going to be motivated. They’re going to do what
they want. And when I describe it like that you say why in the world would you ever hire
these people. But there is a huge amount of innovations coming on this planet right now.
These folks who would think that 140 characters is a great way to convey information.
If you’re planning on building or growing a team you need both of these constituencies
to thrive. You’ve got to have your team, whether you’re a small team or a big huge
team. There’s this reward for shipping this 1.0 product that we talked about at the beginning
and it’s a bit of a curse. I have to look at my next slide because I don’t know which
part I’m missing. So, there’s this curse. Now if you go and you look at some of the
companies I’ve been at that’s Borlen. How many of you know…Borlen? Really? Huh.
That’s interesting. I’ve not pegged you as a Borden crowd. That’s great. I’m not
very old then. Alright, Netscape. Show of hands. Of course. I was there early on. And
then Apple? No one? Anyone? I get it. Now what’s interesting about each of these stories,
each of these is a story. There’s a 1.0 that happened at each of these companies.
And it took in my opinion a volatile to bring that thing into the world. At Borlen there
was a guy named Philippe Khan and he, he said listen, programming environments are awful.
There’s these terminals that are just incredibly (unintelligible). So, we’re going to invent
this concept we’re going to invent. We’re going to adapt and make this concept of the
integrated development environment. Eclipse folks here, Philippe Khan was the guy who
got that. And it turned into a behemoth in programming language, development productivity.
Interesting story about Philippe Khan just to prove that he is a volatile. After he got,
after he left Borlen he went on to invent a thing called the camera phone, I mean the
camera on the cameral phone. He’s the inventor of that little thing on the back of your thing
right here. Philippe Khan. This is what he did after he went and invented what I would
consider to be some of the best programming environments out there. Netscape, a bunch
of kids from NCSA under Mark Mandresson saying hey I have this idea where we’ve got this
thing called the web and I think it’s going to have all the information on the planet
and I want to develop the app to look at all the information, which sounds totally normal
right now, but back then we thought he was crazy. And of course PC or the Mac invented
well Apple too invented by Steve Jobs. Each of these companies had this significantly
huge 1.0. Is this the 7:00 crowd showing up? There’s some marketing (unintelligible).
They start at 7:00. They’re going to be disappointed. Alright. Each of these had a
story of their 1.0. That thing that defined the company. And the thing, it started with
a volatile as someone who’s going to mix things up and say that flying toasters are
important. But there’s this interesting thing that happens. And this happens in big
companies and it happens in little teams around a 1.0. There’s this transformation that
occurs. What happens is, these companies, these things that started out being very volatile
and being innovative and disruptive and (unintelligible) slowly become stables. What happens? What
goes on? Now what happens is the people, the volatiles who define this 1.0, whether it’s
an Apple 2 or a browser or whatever, its 1.0 sucks. It’s the worst part of your career
what we build in 1.0 because there’s so many questions. There’s so many things you
have to do. And it’s really, really hard. So, what happens is all these volatiles are
swirling around like is happening at Palantir right now and all these other volatiles show
up and say hey we want to disrupt and make things crazy, but there’s this interesting
thing that happens with the volatiles. We’ll call them the old guard volatiles, see these
other volatiles showing up and they start mixing stuff and rebuilding frameworks and
blowing stuff up and the volatiles who becomes, slowly become, the old guard volatiles become
stables. They say listen, listen to me. You don’t want to do this. You don’t want
to mix things up. 1.0 is awful. It’s hard. I have the scars, because you believe in 1.0
and you don’t want to do this. So, what happens is these new guard volatiles slowly
leave and the company becomes, what does a company become? The company slowly becomes
stable. This transformation from a volatile company to a stable company is really interesting
to me, because it’s a way to turn away some of your best talent.
Can I make fun of you guys? Is that cool? Not really. I would say, this is my own opinion,
not the opinion of this wonderful university. This is sort of a yard sale of mediocrity.
Now there’s, you cannot argue for a second that these companies are wildly successful.
These companies are doing amazingly well. A bit well sort of. Not really well. But there’s
hundreds of thousands of employees there and people that are working there and love their
jobs and they’re doing great work. But these companies I would argue have become to their
credit very stable. They’re doing amazing things. But here’s the thing. Is there,
name something that’s come out of one of these companies in the last five years you’ve
gone like wow. You’ve gone oh my gosh, they’ve totally changed x. Again making lots of money,
a lot of people gainfully employed and happy. But where’s the volatility? How do you create
that? How do you keep that? When you go and you look back at these companies I was all
at, each of these companies, there’s only one who actually made it through in my opinion.
Borland got, it’s still around by the way. It’s still in Scott’s Valley in California.
Borland was going toe to toe with Microsoft, which was sort of a monopoly at the time.
And they’re still around, but they’re doing awful business cycle blah, blah, blah
stuff. Netscape got bought by AOL. AOL that’s sort of a fate worse than death, getting bought
by them. And then there’s Apple, which I would argue was about to become irrelevant
in 97 and then what did they do? They brought the volatile back and he mixed everything
up. And he brought em back on the brink and did some crazy things. My question to you
here is, my question to you is not whether you want to work at IBM or Apple. My question
is I want you to think about, do you or do you not want flying toasters? I kind of want
flying toasters. Which brings us back to this. This plug, which is actually this plug.
What was going on here? Why did they choose to do this? Well, this side of the plug, not
the USB side, but the other side, thunderbolt, no it’s not thunderbolt. What’s it called?
Lightening, whatever it’s called it’s nice and two way. It goes in either way. It’s
thinner so they can have smaller devices. Is that the reasoning why they did it? Well
it’s actually; they still have the plug situation going on here. There’s more plugs
showing up. So, we’re getting into that weird plug situation again. But, why did they
do this? What was their, what was their design decision behind this? Or my question really
is when there’s a lot of reaction online when this plug came out, what was the actual
issue that people had with it? That’s what’s their name. They’re like hey, we’re going
(unintelligible). We’re a bunch of greedy bastards and we’re going to go have a bunch
of people buy some new software. We’re going to have a bunch of new hardware. This is not
what Apple was doing, and they have a long history of not doing this. Now throwing away
something that’s working just fine. How many of you remember this I-pod? This was
I think the pinnacle of I-pod design. This is the last one that had a hard, no it wasn’t
the last one. Classic still has it. This is the last one of the mini framework that had
the hard drive in it. It was this metal, had a great weight to it and on September 7, 2005
Steve Jobs got up on stage and he killed it. Now the MBA’s of the crowd would’ve looked
at this chart which is shown revenue over time in volume and in demand, all these interesting
things, which would have shown that what we knew which was he couldn’t keep it, we couldn’t
build em fast enough. We couldn’t keep em in the stores. It was at the time the most
popular consumer electronics device on the planet. But rather than, and he killed it.
Gone. We were just what. I mean it was still built. There were certain colors that you
just never even saw in the store. What he did during that time when he was announcing
the I-pod mini was he showed what MP3 players looked like at the time when it was released
and he also showed what they looked like now about a year or so later. And what do you
think happened? What happened was, and this is a battle Apple continues to fight is all
of the (unintelligible) MP3 players started to look like the mini. And he was tired of
playing this game of like waiting for them to catch up, finding patents, doing all of
this sort of stuff and he said “Okay, rather than that we are actually going to, we’re
just going to replace it.” So, rather than giving them time to catch up, what he decided
volatile wise was to change the game. This is clearly not a stable person at work. Now
to me that is the nicest compliment too. They did it before. It’s a wonder I-pod didn’t
just keep on doing this. The battery business. How many of you had a Mac Book Pro, the 17
inch one? Anyone in the room? One person here. Let me tell you. It’s a really big Mac Book
Pro. It’s was huge. It was like we call it the pizza box. And they, what they did
was I forget which version it is; they said the battery is no longer removable. And all
of us nerds lost our minds. We said you’re taking out the battery? What if I happen to
be on a seventeen hour flight and I need more batteries? It doesn’t make any sense. And
he said “calm down. Trust us. This lithium polymer batter is actually going to give you
plenty of time for your flight.” And we didn’t believe him. We got all foamy at
the mouth. And they were right. They were right. They said we almost, by the way this
was huge. A hundred million dollar business, this battery business of marking up batteries
and reselling them that they could do. But it was more important to them to actually
go and do the right thing. And also and they do this all over, you can see this all over
their technologies design, they learn as they build. This lithium ion battery is a cloth
battery, which means that you can fold it in all sorts of interesting ways, and you
can shove more of the battery in. Now why would this 17 inch Mac Book be a place to
do this? Well, good place to start. Lots of space. But what they were working on was what
we were all shocked by with the I-phone, which was how much; they were trying to figure out
how do we get the maximum amount of battery inside of that I-phone, which was their working.
They were monetizing their research. Volatiles at work.
The thing about Apple that you need to know is Apple desperately doesn’t want to become
stable. Now if you want to worry about Apple the question you have right now is whether
they’re becoming stable or not. That seems to be the meme on the street right now. I
don’t want you to become stable either by the way. You need both of these folks. You
need both of these whether you’re on a team of two or four or whatever, or a team of 40,000
you need both populations to be able to work together. Your stables are there to remind
you about reality (unintelligible) and to define process, whereby large groups of people,
very large groups of people can be coordinated to actually get work done. These are, this
guy is the world’s best project manager on the planet. Your stables bring predictability
and credibility and repeatability to your execution. And you need to build a world where
they can thrive. This guy is running one of the most important in my opinion companies
on the planet because he has the ability to make sure that come tomorrow we could all
have in all of our stores there’s an I-phone there for us to go buy or there’s just enough
to create demand and buzz, whatever. This person is a uber, major, and totally demeaningly
project manager. He’s an operational genius. And they gave him the whole company, which
I think is interesting. You need obviously volatiles as well. Your
volatiles are here to remind you that nothing lasts and they consider that their mission
in life to replace that which is inefficient, boring, and uninspiring. This is why I think
Steve was doing a lot of the hardware and software was like, you know I’m just not
feeling this anymore, and there’s no good business decision to define this, but we’re
going brush metal, because it feels great. Brush metal everywhere let’s go. Crazy.
You need to build a corner of the building where these two groups of people, where these
folks can disrupt and everyone is clear about the value of disruption. These folks tend
to get fired. He got fired. And there’s a lot of I think conventional wisdom that
says these folks that are sort of disrupting and they don’t seem to like people are need
to be let go, because they’re just pissing people off. You need to have these folks here
within reason. You need to build a world where these both groups, both of these constituencies,
these two archetypes can thrive. You need to have, they need to, you need to build an
appreciation of the other side of the fence, where, where the volatiles can go look over
the fence into the stables cubes or offices and look and go hey wow you’re stable. This
is so tiny in here. Everything is so, everything is clean. All your pencils and pens are in
sync. I can’t even think with this level of cleanliness. How do you get anything done?
And then the stables go over to the volatiles offices, cubes, whatever and they go like
what a horrible mess. Where’s your computer? How do you do anything? This is awful. I can’t
even think. It’s, I mean that’s like fourteen coffee cups in a row there. What do you do?
Is that a flying toaster? No way. You need to figure out, you need to explain
and I explain this a lot with folks these two battles that what is the relative value
of each of these folks? You need to figure out how to throw stuff away that you cherish.
This is something that Apple taught me and this is something that we continue here at
Palantir, is these things that we build can’t control us. We cannot sit here with our 1.0
and think that we’ve done it. Because all we’ve done is it for right now. This is
a great way to create volatility, is to say great, it’s good. We’re doing well. We
can do a lot better. We’re going to start over. It’s a hard decision to sell to your
board, but it’s something that we do a lot. We need to figure out how to give your team,
your co-workers, whatever, blank slates to think about the world.
There’s this thing at, when Steve came back in 97, they had a five year sabbatical program
at Apple, and what they found when they looked at the data was that when someone would get
to five years, which is two years too long, they would go and take their three, six months
sabbatical. They’d come back and they’d quit. So, what was the point of the whole
sabbatical? Now at Palantir we’re getting to people that are getting to three years
or so and we’re starting to get that itch because they’ve read my stuff and I’m
like I actually have a report that tells me when people get to 2 ½ years and what we
do is we go up and we say hey Frank, you’re at 2 ½ years. We’re putting you on a blitz.
I don’t know what’s going on here. I know you’ve got pain over here. I know it’s
important you support this customer. You’re going on a blitz. And you get three months
and you can pick a set of people that can join you, and you can build whatever you want.
You get three months. It’s Googled twenty percent time reimagined, because they actually
get to choose and do whatever they want. If they want to go build Angry Birds, no one’s
going to say no. Now I hope that they work within the Palantir space, and so far they
have. And here’s the thing. We did three different product lines have come out of people
being on a blitz. Choosing, not saying hey the right thing to do is cyber or this and
that. They chose it. They built something and it wasn’t done. It was a prototype after
three months. But we’ve gotten product out of this. And I’m not even worried about
product. All I’m trying to do is keep the talent in the house for as long as I can,
because I know this clock is ticking and in three years, especially in the Silicon Valley,
they’re probably going to go do something else. So, what, I’m giving them blank slates.
There needs to be equal representation in investment in stables and volatiles. You need
to have this balance between these two folks. The thing about that slide with Oracle, and
IBM, and HP, I’m sorry. I know they’re amazing companies, is there’s a smell to
it of stagnation. Right? And that scares the heck out of a lot of their volatile types.
You need these folks to disrupt things. When I look at this, humans, humans are bad
at making decisions individually. This here probably a function obviously of geography
to be ended up with this nasty plug situation. This is the end result of uncoordinated decision
making. No one’s project managing this at all, where the stables rule and the volatiles,
the person who can actually to come and say hey, I’m going to solve this plug thing
once and for all and I know there’s all of these economic issues and this sort of
thing. It’s some crazy idea that I can’t even conceive of, but there’s a volatile
out here who actually has a plan to solve this problem. I don’t know what it is. It
has, make it so we have a single plug. I’m not saying we have to go and do that, but
there’s someone who could actually put that together.
Builders, all of you, are in a unique position to change the world, to build things. And
its software, whether it’s hardware, whatever your engineering discipline is, you need to
figure out. You’re going to be working with other people. You need to figure out where
both sides are represented, whether you’re a stable, you’re a volatile. We need, we
need, we need more people building amazing things. I think we need, I think we need more
flying toasters. Thank you very much.
This just goes on and on. I can do Q&A. Is that right? I’m gonna stop this. It just
goes on. There’s actually so you know, there’s actually lyrics. There’s actually a song
that goes along with this. So, anyway, I’m happy to answer your questions about Apple,
Palantir, innovation, disruption, why I hate IBM apparently.
Hi. What’s your name? Dennis.
Hi Dennis. (Question being asked)
Wasniack totally stable, but very, very, very ah…well so, the thing that I don’t know
either, I mean I know Steve. I don’t know Wasniack at all. Should have just left it
up. That’s going to be annoying. Can we just make that black? Perfect. Thank you.
Wasniack I would say is a stable. I don’t know the guy. I’m just looking at the data,
but he was totally manipulatable by Jobs in terms of pushing him and trying to in terms
of pushing him in the direction. I think he’s a brilliant design type, but it’s like you
look at everything since then without Steve and what has, what has dazzled you? I think
it was a perfect combination of a stable and a volatile. That’s my opinion.
Other questions? Design, Apple, anything you want to talk about. No? Yeah? In the front
row. (Question being asked).
Um hum. Yeah. Yeah. Yep. Yep. Um, so we, the question is the blitz concept of letting someone
go do something for three months and what you do at the end of that, because they just
had three months to do whatever they want. How do they go back and get back into regularly.
We make it clear up front that they have a contract about how long they’ll be able
to do it. If you’re having, one of the rules around volatiles, if you have someone who’s
not willing to do the dirty work or the grunt work ever, that’s probably not someone who’s
going to really work well on a team. There’s folks that you have, if you’re on a small
team you have to have the folks that are willing to take the licks. So, that’s how we do
it right now. It’s like hey, you’re going to be able to do this for three months and
then you’re going to have to go back on search, because we need your expertise there.
So, that’s how it’s working right now. Answer your question? Cool.
Other questions? Anything else? Too big of a…yeah in the front row? Third row.
(Question being asked). Uh huh. The question is there’s advantages
to being a stable and there’s advantages to being a volatile. Do I have any advice?
You, stay volatile as long as you can would be my advice. The stables are just going to
show up, they’re, you’re outnumbered. So, I would say I’m not saying like be a
jerk all the time, but there’s lots of folks out there that are going to ask you to kind
of fit into the system and into how things work. And the longer that you are a volatile
I think the happier you’re going to be. I feel like this advice is going to come back
and bite me by the way. MBA. (Question being asked).
Sure. Yeah. Yeah, yeah. Right. Right. It, this is…sure, sure. This, this gets into
the why I call it archetypes so much is at the end of the day what I really see is that
people kind of are a mix of the two and there’s times and places where they’re volatile,
and there’s times and places where they’re stable. I am, I, I, I am a volatile that has
really, I can fake stable really, really well and I can switch whenever I need to. I prefer
to be volatile, but the thing is it depends on the situation. It depends on the person
and it’s not black and white. I think there is to the point of the blitz, I think there’s
a time where people whether they’re stable or volatile, you have to have that like blank
slate moment of like refreshingness. Otherwise you’re going to go do it for yourself and
then you’ll leave your job and go do something else. So, it, people are beautiful snowflakes
and it’s, there’s a mix, there’s a mix of people with each one.
(Question being asked). Um hum. Yep. Yep. Yep. Yep. Yeah. So, the
question is it seems like the ratios are varied in the size and the age of the company. I
think, I think Apple is doing really well with I would say like true hard core volatiles,
like thirty to fifty, like folks that are like out there on the secret projects. They
go in that dark place for three months and poof and out comes the I-phone, well nine
months and out comes the I-phone. But that’s like a small set of folks. The majority of
Apple I would say is stable leaning. So, but it varies right. The way that they, the way
that the secret projects work…I don’t work at Apple now. I can talk about it and
not get fired. It’s pretty sweet. Um, um is what they would do and this was actually
in my notes. I didn’t say it. What they would do, what Steve would do is he would
actually create two teams to work on the same problem. So, you’re going to be on I-phone
team 1 and you’re going to be on phone team 2. And this really happened. And they go in
for six to nine months in their places and then they have like a cage fight. Not really.
But they, what it, so those two teams know that they exist. So, what is he doing there,
right? He’s not only does he have them you know it’s kind of cool to be on this secret
project. They have the competition there as well. So, that’s a lot of the way, that’s
one of the ways he actually kind of got, you know things done there (unintelligible).
Way in the back. Yep. (Question being asked).
Oh. I love this question, which usually means I don’t have a good answer for it right
out of the gate. The question is what would you, how would you, how would you vet for
volatility in a company. That’s hard. It depends on the size of the company. If it’s
a really, really small you’re going to interview with him or her and you’re going to know
who they are immediately, because you’re probably not going to like them much, because
they’re going to really grill you on things and they’re not going to do the E Q thing,
they’re going to just like go straight deep on algorithms. And they’re just going to
be brutal about it. In a bigger company that’s a really, that’s a hard thing to do. Where
are the volatiles hiding? They’re probably not interviewing anymore, because they’ve
been pissing all their people off in the interview process. So, in the question, I don’t know.
It’s, in a bigger company I don’t know how it’s, you’re kind of doing it on inferred
data like wow the product’s still incredibly innovative or this buzz around them is really
significant. I worry about this with Palantir. Three years ago if I’d asked you who Palantir
was you guys would have all been in high school, which is sad for me. But you wouldn’t have
known the company at all. We worked really hard at creating this brand and hiring the
best and the brightest for six years now and it’s because they’re trying to hire these
folks. This is like my full time job is making sure these people stay here and continue to
work on the world’s hardest problems. And they, we try to get them into the interview
process, but that’s, that’s deliberately viewing. I’ve seen a lot of times where
there, volatiles are either no longer there or it’s just an (unintelligible). So, I’m
not really answering your question well, but let me think about it some more.
Yeah? (Question being asked).
Yeah. Right. Can I repeat that? Yeah. So, his point is asking how they build products.
I know, you, is it like oh yeah we have a twenty-seven step process approved by the
blah, blah, blah institute. It’s probably not a volatile anyway. They’re, you’re
looking for a little chaos, healthy chaos in the answer I think.
Alright. Other questions? One more question. Or not.
(Question being asked). Umm. Hard question. Wait. So, you’re asking
about going to volatile, stable and never coming back. Is that what you’re saying?
(Question continues). A stable going volatile. Ah. It happens a
lot. Umm. It really, it really depends. I think it goes back to the blend thing. It’s
I think people, the true hard core volatiles that I really know, these people need to not
work with other people. Maybe to be over and inventing the next light bulb by themselves
in a dark place. And to me, it’s, there’s always a blend to actually have them work
in teams, there has to be, they have to at least, a volatile has to be able to appreciate
a stable, which means they have some give one direction or the other. So, I think, I
think there’s probably true, just pure volatile and stables out there. But the ones that I
think are better fits for a team of ones it kind of can vary back and forth, so.
Thank you all. I think I’ll be up here answering more questions and I really appreciate your
time. You’ve got a beautiful, beautiful facility here.

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