Garry Tan Chose a Microsoft Promotion Over Palantir and Says It Cost Him Billions
Peter Thiel offered him his Microsoft salary to join two Stanford friends. He chose the promotion instead.
The a16z Show · Garry Tan on Taste, Agents and Founder AmbitionThe dinner ended with a check slid across the table. Peter Thiel, who ran the hedge fund where two of Garry Tan's college friends worked as interns, told the young Microsoft engineer he was certain Palantir was the right move for him. To prove it, he handed Tan a check for $70,000, exactly what Tan was making at Microsoft at the time.
Tan, now president of the startup accelerator Y Combinator, had known the recruiters since Stanford, where Lonsdale and Cohen had been fellow members of his fraternity. They had flown him down from Seattle to make the pitch.
He said no. Tan recalled answering, "Thank you very much, Mr. Thiel, but I might get promoted to level 60 this year." Level 60 is a senior rank at Microsoft, a big step up for a 22-year-old engineer. He did get that promotion, and he now calls the decision a $2 billion to $4 billion mistake.
It was the same mistake he said he had made before, choosing the safe map over what was right in front of him. Tan had graduated from Stanford in 2003, just after the NASDAQ crashed. He said there were no jobs he could find in the Bay Area except in Gap information technology, and he had student loans. His two offers were Microsoft, for Windows Mobile, and the travel company Expedia.
He took Microsoft, in part because the web looked dead and mobile looked hot. It was exactly the wrong read. Tan said, "I was getting out of web programming at exactly the wrong time." Around the same time, Mark Zuckerberg was probably working on FaceMash, and Facebook did not exist yet.
The Palantir offer repeated the pattern. He said the universe was telling him these were the people to build with, but Tan said all he cared about was "what was cool, what was hot, what would a really good investor say?"
Thiel, Lonsdale, Cohen, and later Alex Karp had spotted something concrete, Tan said. Tan said they had seen that agencies in the capital lacked the elite technical talent clustered in California. He said he thinks about his decision all the time.
Questions people ask
What is Palantir?
Palantir is a software company that builds tools to analyze large amounts of data for governments and businesses. It was founded in 2003 by Peter Thiel, Joe Lonsdale, Stephen Cohen, Alex Karp, and others. It later became one of the most valuable enterprise software companies in the world.
What does level 60 mean at Microsoft?
Microsoft ranks most employees on a numerical ladder, and level 60 has historically marked entry into senior engineering or management roles. A promotion there usually means higher pay, more responsibility, and more status inside the company. For a 22-year-old engineer, it was an unusually fast climb.
Why was 2003 such a bad time to graduate into tech?
The dot-com crash of 2000 to 2002 wiped out hundreds of startups and caused the NASDAQ stock index to lose most of its value. Hiring froze across Silicon Valley, and web programming in particular looked like a dead end. The next wave, often called Web 2.0, did not take off until a year or two later.