Garry Tan: turning down Palantir was a $2-4 billion mistake

Y Combinator chairman Garry Tan said on "The A16z Show" podcast that passing on an offer to join Palantir's founding team was a "$2-4 billion mistake." He could have been the company's tenth employee, and he now regrets that his headcount number is no longer a single digit.

Tan attended Stanford as a member of the Phi Kappa Psi fraternity alongside Joe Lonsdale and Stephen Cohen, who later became Palantir co-founders. At the time, both were interning at Peter Thiel's hedge fund. Tan describes Thiel's approach this way: when you start a company, you write down a list of the smartest people you'd want to hire. Tan was on Lonsdale and Cohen's list.

So Lonsdale and Cohen flew Tan in from Seattle and set up a dinner with Thiel. Thiel told him, "I'm completely convinced this is the right path for you," and offered a $70,000 check — matching his Microsoft salary at the time. Tan turned him down, replying, "Thanks, Mr. Thiel, but I might hit level 60 at Microsoft this year" — and he did.

Today Palantir is a $420 billion company that popularized the "forward-deployed engineer" role — engineers who work directly on-site with clients — a title now adopted by many major tech companies. The stock, which debuted at $10 in a 2020 direct listing, traded above $175 on Thursday.

Tan chalks up his mistake to chasing "whatever was popular and exciting" at the time — he recalls a similar moment when he chose to pursue Windows Mobile instead of web development, right before Facebook's rise took off. "Joe and Stephen were some of the smartest people I'd ever met," Tan said. "If not them, who else would I have co-founded with?" According to Tan, "the universe was signaling to him, but he didn't hear it." He eventually joined Palantir anyway. The lesson he took from it: "All the great things in my life are, in some sense, a kind of cult."