From Flipping iPhones To Selling Oculus For $2 Billion To Facebook | Palmer Luckey (#378)

Billionaire, Bitcoin, Oculus, Anduril, National Security - October 25, 2022 (over 2 years ago) • 01:33:00

This My First Million episode features billionaire Palmer Luckey, creator of Oculus and Anduril. He discusses his journey from minimum wage to immense wealth, sharing insights into his unique approach to business and life. Luckey also delves into his investment philosophies, including his early adoption of Bitcoin and his contrarian views on national security.

Palmer's Financial Journey: Palmer Luckey details his path from working minimum wage and living in a camper to selling Oculus for hundreds of millions of dollars. He discusses turning down an initial $1 billion offer from Facebook, ultimately accepting a later deal due to the resources it provided to accelerate VR development. He reveals his investment strategy, primarily focused on index funds, and recounts his early Bitcoin investments, starting before exchanges existed.
Online Communities and Idea Generation: Luckey emphasizes the importance of broad knowledge and cross-disciplinary thinking. He credits online forums, like his own Mod Retro forum, for fostering collaboration and sparking innovative ideas. He also highlights the value of personal projects and how they can attract talented individuals. He shares that many early Oculus hires came from his online forum.
Alternative Ventures and Anduril's Origins: Before founding Anduril, Luckey considered tackling obesity with petroleum-based synthetic food and disrupting the prison system with a nonprofit model. He explains why he ultimately chose national security, citing the urgent need for technological advancement in defense. He discusses Anduril's business model, which prioritizes efficiency and innovation by investing their own capital upfront.
Geopolitical Insights and World War 3: Luckey offers a sobering perspective on global conflict, predicting the likely use of a tactical nuclear weapon. He argues against appeasement and emphasizes the importance of maintaining credibility in deterring aggression. He also expresses concern about major tech companies' reluctance to work with the military and their dependence on China.
Contrarian Lifestyle Choices: Luckey defends his decision to fly coach, even as a billionaire, citing the importance of leading by example and staying connected to his employees. He also addresses security concerns given his high-profile status and involvement in defense. He closes by discussing the shift in public perception of him, from "boy wonder" to controversial figure, and his commitment to a mission-oriented company culture at Anduril.

Transcript:

Start Time	Speaker	Text
00:00	Palmer Luckey	I remember there were times when the thing I needed would cost like $50, and it was just inconceivable that I could afford it. I mean, honestly, Oculus owes more to the iPhone than anything else. If the iPhone wouldn't have existed, there wouldn't have been broken iPhones for me to buy, unlock, repair, and sell on eBay. I made tens of thousands of dollars as a teenager on that side hustle. If that had not happened, then Oculus probably wouldn't exist today.
00:29	Shaan Puri	That's it! What's up? We got Palmer Luckey on the podcast. Palmer is a billionaire; he created Oculus, which he sold to Facebook. He's also created Anduril, which is now one of the biggest companies that makes weapons for the government. He's a super interesting guy. I'm going to call it right now: I think this is an all-timer episode. I don't know what's... I don't... you guys know I don't hype it up like that unless it's legit. This was an all-timer episode. Sam, what are some of the things that we talked about?
01:01	Sam Parr	So early on, we asked him basically what he did with his money. He made $100,000 of $1,000,000 at the age of like 23 or something like that. We asked, "Where did you put your money?" He was very clear on what he did with it. He talked about some of his early crypto investments. He bought crypto way, way early, like in 2010, I think he said. He talked about how he was making minimum wage and then became a billionaire just 4 or 5 years after making minimum wage. What else?
01:26	Shaan Puri	We talked about a couple of different things, like where he likes to hang out on the internet. We're like, "Dude, how do you know about all this stuff? Where do you learn this stuff? What are your subreddits? What are you listening to and reading?" Because I need to start doing some of that. So he told us some of his...
01:39	Palmer Luckey	way do you
01:39	Sam Parr	remember he actually said a facebook group that he liked and he actually named the facebook group which I
01:44	Shaan Puri	was feeling is gonna get a
01:45	Sam Parr	lot more popular
01:47	Shaan Puri	And then, yeah, he talked about basically, like, is World War 3 gonna happen? Right? He's supplying, you know, his company builds tech for the Department of Defense. So, is World War 3 gonna happen? Is there gonna be a nuke? What is a tactical nuke?
02:01	Sam Parr	Well, you asked him a very specific question: "Is Russia gonna drop a nuclear bomb?" His perspective is interesting. I thought it was a good question.
02:08	Shaan Puri	And then the best part was, we said, "Alright, you sold Oculus and then you created Anduril, which is an even bigger success." I think it's valued at $8,000,000,000 or something. But there were many years in between. Did you consider doing any other ideas? He opened up and said, "Yeah, actually, there were these 2 or 3 other ideas." He had an idea about creating a new kind of prison. He had an idea that would try to solve obesity. He had a couple of ideas, and we went into depth brainstorming with him. So he had it all, man. He had the crazy backstory, the success story, but he also brought ideas. Then he also argued with us about why he flies coach even though he's a billionaire and why he may or may not get into a fight with Jason Calacanis. So this episode had it all: it had fighting, it had ideas, it had success stories. It's got it all! Alright, enjoy this episode with Palmer Luckey. I don't know, you don't need too much of an intro, but I'll do it anyways. Palmer Luckey is here; he created Oculus and Anduril. Really interesting dude. And I think we have a bunch of topics, so I'm not going to belabor the intro. Sam, I know you've been itching... You probably can't say the DM you sent to try to get Palmer on here. You really wanted this man on the podcast. Why? My first question is to you, Sam: why?
03:23	Sam Parr	So, Palmer, I am like the king of left-handed compliments. At least, that's what they say about me. But I mean them as full-handed compliments or right-handed compliments. Basically, I love freaks. I love weirdos. I love extremists—not in the political sense, but in the sense of people who just go all in on stuff and are passionate about maybe nerdy or unconventional things. You go all in on things, and I love that. I love people, even if I don't like what they're going all in on. I'm crazy fascinated by that. You see, you're one of those guys who just goes all in on things. You've done a lot at a young age, and I like weirdos. I put you in that category.
04:01	Palmer Luckey	Thank you. I'm happy to be... happy to be a weirdo, you know? I'd rather be a person that people think ill or well of than somebody nobody thinks of at all.
04:13	Sam Parr	I think well of you by the way I think well of you
04:15	Palmer Luckey	had a poster
04:16	Shaan Puri	At his office, that was like for his employees. He was like, "Let your freak flag fly." That was like, you know, one of those corporate values. Typically, corporate values are like integrity and determination, and his was like, "Be a freak." Alright, so let's start with... I don't know, let's start with some of the kind of... we're going to try to, as much as we can, avoid VR and avoid the Facebook stuff. Mostly just because you've talked about it in a bunch of places. I'm actually, frankly, interested because I am actually a VR fanboy, but Sam has tried to forbid me from asking those questions. So we're going to leave that at the end if I get a little extra time. But this is a podcast that started... it's called "My First Million" because we're interested in money. We think it's really funny that people are... tap like money's like, you know, the Silicon Valley thing is you have to pretend you don't like money and like...
05:01	Palmer Luckey	you I
05:01	Shaan Puri	know what you're talking about yeah you know we're not we're not
05:03	Palmer Luckey	Doing it here for the money... You know, money is not the real objective. I actually tell my own employees during onboarding that if you work at a place where your boss is saying that, you should be worried. It's one thing to say that to the press; it's one thing to say that in your marketing materials. But, if your employees don't believe that at the end of the day you're trying to make their job a fiscally responsible decision, if you're effectively telling them they could be making more money elsewhere and your financial success is not my priority, you should be concerned.
05:35	Shaan Puri	Yeah, exactly. You kind of did the best of both. For all the ironic people who are like, "We're trying to change the world with this... like, you know, HR onboarding software," you actually kind of did and still made a bunch of money doing it. So, you know, it's not like an either-or situation.
05:52	Palmer Luckey	100%. I mean, when I started Oculus, it was not because I thought it would be the thing that would make the most money. There had never been a successful VR company in history, to be clear. I did it because it was something I was really passionate about. Now, that said, one of the things I'm most proud of in my whole career is that everyone who worked at Oculus achieved financial independence. We were able to build something incredible, and I feel great that everyone who was part of that mission and who supported me early on was able to make a bunch of money. A lot of them have gone on to do incredible things. But, you know, Oculus was not done because I thought it was the best way to make money. It was because I thought it really was going to be the best way to change the world in the long run. Andral was a little different. That one wasn't just, "Oh, this will be fun. I want to do something really cool." Andral was like, I felt like I had to do it or things were going to go really poorly. So, more of a stick than a carrot on that one.
06:45	Sam Parr	how much did you make off the oculus cell
06:48	Palmer Luckey	Oh man, I probably shouldn't say this because it's also one of those complex things. You know, there was the sale, and there was what they believe they called the merger consideration form, which is a portion of the compensation. Then, they cut an unemployment deal where they said, "We're going to pay you this much for 5 years." I can say that I was locked up on a 5-year vesting schedule. Typically, it would be 4 years; most of our employees were on a 4-year schedule. I got locked up for 5 because I was a key guy. That money technically is not for the acquisition; it's just...
07:24	Sam Parr	what you're being paid for
07:26	Palmer Luckey	Yep, so, of course, you can't pretend they're the same thing or that they're supposed to be treated differently tax-wise or compensation-wise. Then, of course, there are the bonuses. We had an earn-out that was huge. It was $100 million for the founders of the company if we could hit certain sales targets and user hours targets. We actually had four years to hit those targets, and we achieved them in less than two years. It's kind of funny; we'll be like, "Oh man, the acquisition must not be going as well as people expect." It's like, no, we maxed out the top bracket of our earn-out because we're kicking butt. But anyway, I can tell you that it was in the healthy range of $100 million.
08:11	Sam Parr	what were you so were you
08:12	Shaan Puri	Who listened to this? Sorry, I'll go real quick. A bunch of people who listen to this are founders and would want to sell their company someday. Both Sam and I started this podcast right when we both exited our companies because it's like, "Alright, we're kind of earning out. We can't start another company right now, but we can start a podcast. That sounds kind of fun." Actually, just yesterday, I closed on another sale of a company, but these are small scale compared to what you did, right? Like, congratulations! Thank you. But you sold for, I don't know, $2 or $3 billion. How does that happen? Does someone like Zuck come over to your house and say, "I'll give you $3 billion for this"? How does that conversation go down when you're talking about the sort of grand slam type of outcomes?
08:56	Palmer Luckey	Well, it's a long story, but I know Sam didn't want to talk all about VR. But no...
09:01	Sam Parr	I the the this shit's interesting to me
09:03	Palmer Luckey	Oh great, we don't want to talk about VR optics and the metaverse then. But I guess on the business side of it, the interesting thing about the acquisition is that we didn't have any intention of selling initially when we first had our conversation with Facebook. I think that really was a positive thing because the first time we talked, I think we were basically offered $1,000,000,000 to sell, and we said no. We're not interested. We think this company is easily going to surpass that value. We believe it's not going to be a problem for us to make more money. Yeah, we're happy to work with you guys, but we don't want to be...
09:41	Shaan Puri	By the way, was that easy to say no to a $1,000,000,000 offer? I mean, you started this thing on Kickstarter, dude. At some point, were you like, was it hard to say no, or was it not an issue at that time?
09:52	Palmer Luckey	It wasn't an issue for me, and I think different people had different opinions. I mean, look, if you look over my career, I've made a lot of similar decisions. For example, when I was starting Oculus, I was deciding whether I was going to do a Kickstarter or work for someone else. I actually had a job offer on the table from Sony to run a PlayStation VR lab out of the PlayStation group. When I turned them down, they actually doubled the offer, and then I had to turn them down again. A lot of people were wondering, "How could you have done that?"
10:21	Shaan Puri	you know how could you
10:22	Palmer Luckey	have decided to do your own thing it was so much higher risk and I think that a lot of it is is social programming you know I I grew up watching media that conditioned me to believe that when you have an opportunity you have to take it when you know when when you almost have to follow the narrative and looking back I'm not sure I could have done anything else like could I have stayed in school instead of starting oculus once I realized I had this breakthrough in vr technology I think I could not have possibly done it there's it it it's almost to the level of free will not existing I could not have chosen that could I have gone and worked for sony looking back I don't think so I think I couldn't have made that decision and I think it's actually the same thing with that $1,000,000,000 offer like I almost could not have said yes you know like that that that that first offer I I like narratively it makes no sense it doesn't align with what I've been trained is what you do when you're a you know when you're a a free thinking iconoclast and so I I couldn't have done it I think what what what happened is a few things changed over over time after that initial offer you know we didn't talk to to facebook for for for a few months after that and a few things happened one it became clear that our competition was not only serious but was going to be putting massive dollars into their success it's something not a lot of people remember but I certainly do because it was a big deal in my mind the day that we announced no the day we find it wasn't that we announced the day we finalized the facebook acquisition was the same day that sony announced playstation vr and we had known that it was coming for a while we you know we we had actually even shown each other prototypes and stuff but it really reinforced this was a serious thing we're gonna have some of the biggest games companies in the world putting 100 of 1,000,000 of dollars in it competing with us and you know that that made I think our the the that made the the pitch that facebook came back with which is listen you maybe you could make more money as an independent company but if you're with us we're gonna make vr happen much faster so at you yes you'll you might make more money but you're going to go much slower than if we were able to artificially supercharge your growth far beyond even what you could do with venture capital and they they were willing to commit 1,000,000,000 of dollars a year for a.
12:28	Palmer Luckey	Of a decade or more, and that's a really tough thing to turn down when you really believe in something.
12:34	Shaan Puri	Is this like literally Zuckerberg coming to your house and talking to you about this? Or is there like an army of lawyers in between you guys, like bankers and corporate development people?
12:43	Palmer Luckey	It was a very small number of people. I mean, I think that the lawyers and the accountants are much more likely to be involved in a deal when the deal is contingent on your revenue, your multiples, and your P&L statements. That's where you need to drag those people in to really make an assessment. This was such a high-level bet. It's not like, "Oh, I think that you have this margin on your headset and you've sold this many development kits." It was so early, and the technology is so nascent. The real bet is: do you believe in the metaverse? Do you believe that there's going to be a virtual world parallel to our own where you're living, working, and playing? And then, most importantly, do you believe this is the best team in the world to do it? I didn't know this at the time, but I found out later that Mark had been going around and talking to various university research labs, government research labs, and seeing what other companies were doing. Their conclusion was that we were way ahead of everyone else. If this was going to happen—the shift to immersive computing, arguably the final computing platform—then we were the people in the best position to do it. That's not something that a lawyer can really give an opinion on. It's not something that an accountant can put a value on. It's a very high-level bet.
13:53	Sam Parr	what was your personal financial situation when you turned down the $1,000,000,000 offer
13:58	Palmer Luckey	So, at the time, early in Oculus, I started Oculus using my own money. At that time, I was working a minimum wage job and living in a 19-foot camper trailer. I was 19 years old. If people aren't familiar with the story to that degree, I had almost no money—literally just a few hundred dollars in my bank account—because I spent all the money I made putting myself through school and working on virtual reality technology. I was extraordinarily limited financially. I had a minimum wage job, and I was also fixing computers on the side. For a while, I had been buying broken iPhones, fixing them, unlocking them, and selling those for spare cash. I burned a lot of money on my nutty hobby. When we started Oculus, we didn't pay ourselves very much. By the time the acquisition happened, I had given myself a raise. We decided that nobody in the company was going to make over $100,000. We called it the "100K Club." So, we were paying the CEO $100,000, and I was getting paid $100,000. To me, that actually felt incredible. I was like, "Wow, $100,000! This is absolutely crazy. I can afford anything!"
15:06	Shaan Puri	You know how many cell phones, how many iPhones I'd have to fix to make $100,000? A heck of a lot! Because you were fixing iPhones and like scrubbing boats or something. I read, is that what you did?
15:15	Palmer Luckey	Yeah, well, I mean, when I started working on VR stuff, I worked for a few years in a boat yard. So, yeah, you're scrubbing boats, repainting the bottom paint, sweeping the boat yard... you know, that type of stuff. To me, the money was not a huge motivating factor. Also, because maybe too optimistically, I believed Oculus was going to be worth tens of billions or hundreds of billions of dollars. So, it really wasn't the money that was motivating me to make the sale. It was the pitch: "Hey, we're gonna get you a billion dollars right now." Not the compensation for the acquisition, but we're gonna give your organization a billion dollars a year to go out and make virtual reality actually happen. That's what you're going to need to compete with Google, to compete with Sony, to compete with Microsoft—all of which have seen what you're doing, bought in, like they've drunk your Kool-Aid, but they're gonna try to kill you over it. That was kind of the situation we were in. Facebook was one of the very few companies that had a strong incentive to make virtual reality and immersive computing, writ large, come about as quickly as possible. Because unlike Google and Microsoft, they did not benefit from the status quo in the hardware space. So, if we kept using mobile phones and normal computers for, you know, the next 20 or 30 years, Google and Microsoft are gonna...
16:39	Palmer Luckey	do just fine like they're they're already
16:39	Palmer Luckey	The winners in that Microsoft are going to do just fine. They're already the winners in that paradigm. If you can shake everything up and force a reset with immersive computing—AR, VR, MR, whatever you want to call it—it could be that Microsoft is one of the top players. It could also be that Apple and Google are some of the top players, but it's unlikely that all of them are going to remain the dominant players. That's an opening for a company like Facebook to come in. Even if they're not in first place, forcing the reset puts them in second or third place instead of being totally subservient to the operating system vendors and to the hardware vendors. So, it was one of those things where there were other companies that were interested. None of them actually had a strong incentive to put $1,000,000,000 into VR on an ongoing basis. I mean, you can see Google killed their VR program first. They killed their PC VR team, then they killed their mobile VR team. Microsoft is winding down their internal efforts. I mean, it's a tough business, and I'm not convinced that Oculus would still be around if we hadn't had those resources.
17:42	Sam Parr	I'm going to move on from asking you these money questions, but I want to ask one more because I do think it's fascinating. You went from maybe not having a lot to having a lot, and you're also like an eyeball...
17:53	Shaan Puri	yeah
17:53	Sam Parr	When I sold my business, I put everything into bonds and just Vanguard total index funds. I did a normal 80/20 split, and then eventually some real estate and HubSpot stock. Just normal, basic stuff. What did you do with your money? I know you bought like a marina, I think, or you tried to buy it. I don't know if it went through. But what does someone like you do with that amount of liquidity?
18:19	Palmer Luckey	so most of it I did what you're talking about I generally don't believe in trying to beat the market through market market transactions I mean it's one thing to build like I think you build wealth by building companies that's where you should be focusing your effort not trying to be smarter than all the finance guys who are sitting around and using every tool at their disposal to try and to game the financial market so actually yeah vanguard funds like vanguard 500 total index funds my my grandpa taught me a lot about investing and about how you shouldn't try to beat the market probably the the my investment philosophy is informed mostly by john bogle's little black book on investing I was like look you know keep your fees low keep your costs low and just go with the market and you know if if the market goes so poorly that I become poor then united states has bigger problems than than than than the market so that was that was that was most what I did I bought the marina not as a financial investment it was actually it was one of the only marinas so this is getting a little into the weeds or something probably very few people care about but just so you know in california almost all marinas the water is owned by the state or by the feds and then they do long term leases like 30 or 40 years to operators that are allowed to operate those marinas and they might own let's say the parking lot the operator but they do not own the water they do not own the docks it's just a long term lease and they redo that over there's only a small handful of marinas in the entire state of california where the underlying land under the water and the water itself is deeded to a private title and the marina that I bought was one of those and you know without getting into without getting into you know my my my whole seasteading delusion I think that you're gonna end up needing if if you wanna have transport ferries that are operating from land out to international waters you do not wanna be in a position where the place you're doing that from is totally dependent on state government bureaucrats choosing to renew your lease on a particular on a particular marina so that was actually that was actually a a purchase that'll it'll it'll it'll pay off someday you'll see you all see
20:26	Shaan Puri	See, I bought my house just because I liked it. The walk-in closet was nice, and I was like, "Oh, that's a good enough reason for me." I didn't have to, you know, go into international waters.
20:34	Palmer Luckey	To make it well, in that case, I did buy a few things. As soon as I had money, I immediately started learning to fly helicopters for real because I had always wanted to be a helicopter pilot ever since I was a little kid. So, it was like two weeks after the wire completed, I was flying helicopters. That was really cool. I also bought a '69 Mustang convertible, which was really cool, and I bought a first-generation Tesla Model S. That was cool too. Then, I bought a house for my parents. You know, it's like the basketball player contract move. You get the money, you buy the house for your parents. After that, I bought a house for myself that was close to my grandpa. Unfortunately, we then ended up having to move up to Silicon Valley because of the acquisition, and he passed away while I was up there. That's one of my regrets, but I'm still in that house.
21:25	Shaan Puri	Wow, okay, that's amazing. One other thing I had seen was that you... I don't know if this is even a real thing or not.
21:31	Palmer Luckey	it's like
21:32	Shaan Puri	Did you buy Bitcoin in 2013? Some Twitter fake photo or whatever.
21:38	Palmer Luckey	No, no, I bought Bitcoin much earlier than that. I was in there in 2013. I was on the Forbes 30 Under 30 list, and they asked everyone for a quote for the print edition. The theme was, "What is your advice to other young founders?" My quote was, "Buy more Bitcoin." But I've actually been involved in Bitcoin since before there were any exchanges. I was a true OG on the Bitcointalk.org forums. There were no exchanges; you could only do direct transactions for goods. I actually sold a banner ad on my game console modification forum. It was a one-week banner ad on this forum with almost no traffic, and I sold it for 400 Bitcoin. Then I ended up buying someone's Samsung Galaxy Vibrant, which was the T-Mobile variant of the first Galaxy phone, for 800 Bitcoin, I believe. At the time, that was well under a dollar per Bitcoin.
22:36	Sam Parr	so
22:36	Palmer Luckey	I've I've I've actually been in 16,000,000 the very early days
22:40	Sam Parr	Oh my god, how do you... So, like, alright, we had Balaji, you know, Balaji on the pod. He was one of those guys who would give an analogy. He was like, "Oh, you know, Bitcoin is kinda like the Battle of Thames." And I'm like, "Bro, I need an analogy for your analogy!" I can't tell you about the Battle of Thames in World War II. I can't have that conversation with you. You're a little bit like that too, where you just throw in a few lines, like, "Oh, this gaming forum I have." I was like, "Well, I could've gone down that path." But then you're talking about this boat marina thing. I'm like, "That's a whole conversation! How on earth did you discover that?" I'm sure you have strong opinions. You just have a very... And now, obviously, you're doing government stuff, and you've done a bunch about politics. Whatever. How are you becoming so well-versed and also so opinionated on such a broad set of topics?
23:35	Palmer Luckey	because you have to most of the time like the the best things that I've done that I have done in my career have not been going super super deep on one vertical and then finding the really really hard gains that are at the end of a long fight that everyone's made like an example here would be with just like optics technology most people are fighting way at the end of the spectrum where they're trying to like oh we're using new cutting edge materials that increase the ability to control light more precisely by 2% and we're we're trying to figure out the physics of how we can manufacture these polymers most of my best ideas have not come from that they've been from knowing things in totally different fields that have nothing to do with the field or at least people don't think they do and then pulling ideas from those fields and applying them in a new way like the the the really key thing that made the oculus rift work is just one example rather than focusing on trying to make these optical stacks that cost 1,000 of dollars and weighed a bunch and that was really what was making these headsets weigh many pounds and cost tens of $1,000 was the high end optical stack that was able to project images on your retina with minimal distortion but you needed you know a bunch of lenses they're all very very expensive very high precision what I did is figure out that you could just render a distorted image basically render your image distort it on the graphics card in the inverse way that the lens distorted it and then basically you would render an image that looks terrible on the screen but after viewing it through the lens that I had which was optimized for high field of view low weight low cost but not optimized to have low distortion low chromatic aberration or geometric aberration it would come out looking looking perfect and like that that's something where an optical engineer someone who's working on just optics would not would not think of that you know that's very much like a a a software idea but the software people are also not necessarily thinking about how they could obsolesce expenses of expensive pieces of optics and of course there are people who do that do that I think that some of the best entrepreneurs are people who have understanding that is sufficient in enough areas to pull from one area and solve the biggest problems of another so I I mean I I I make it a priority you asked how do I do it you make it a priority to know a little about a lot
25:48	Shaan Puri	So, two questions: 1. Just go back to the Bitcoin thing for a second. How did you get into it? Why were you on the Bitcoin talk forums, or why did you see it even before, you know, almost anybody? What were you doing there and why did it catch your eye? 2. Today, 10 years later, there's a whole bunch of people that are disillusioned by it. They say, "Oh, it's all... all this time's gone by, 10 years, didn't work out." Other people are more bullish than ever. Where do you stand now? So, what caught your eye initially, and then where do you stand now?
26:16	Palmer Luckey	so I mean I I think I got into bitcoin it would have been mid mid to late 2010 and and I I I I was really fascinated because I I mean look I'm a guy who was into virtual reality and the metaverse this is just adjacent to that it's another super cool you know cyberpunk concept the idea of you know untraceable internet currency that is based on only the consensus of all of the cyberpunks who are using it cryptographically verified and secured with no nation state controlling it or issuing it or diluting it or manipulating like like what what a cool thing when you're a when you're an anti authority teenager who who who loves who loves cyberpunk science fiction and so that that it was like I bought into the the very original cool vision not the oh this is gonna be huge for everybody 1 but like this is this is this is cyberpunk incarnate I have to be a part of this and when I started like my my initial thinking was not that it was a good store of value that was that's actually been I think the most contentious thing about crypto is after it started skyrock I I didn't buy it because I was speculating nobody was even thinking about that back then like it's it's crazy to me to watch all these new crypto kids get in and it seems like it's all about just having having coins pumping the value dumping them it's really just you know these these financial markets play that I've never believed in I've because I always believe in you know investing in the whole market but to me it was always value as a as a means of moving wealth around it's not as a store for years or decades it's a way that you can move wealth around without any without being beholden to any any centralized authority or centralized power and I think today like even for all the issues bitcoin has and people you know putting it down because of it crashing well first of all every time there's a bitcoin crash it's like oh no it's crashed to only 10 x what it was 2 years ago every single time every crash is like that but more importantly it's still a good way to move value around and that said my prediction in 2013 was that bitcoin will go to about a $100,000 and then stabilize I'm sticking with it I I I think I think it'll get there I'm I'm not I'm not sure that it in particular has the has the appropriate utility to reach a higher store of value
28:32	Shaan Puri	and wow okay amazing and then did you
28:35	Palmer Luckey	Oh, by the way, I have to throw this out there: I'm one of those guys who lost a bunch of coins in the Mt. Gox hack. Oh man, I got "goxxed" good. It was one of those things where there was no looking back. Everyone's like, "Oh my God, I can't believe that you would have..." I had most of my coins in my own wallet, but I had a significant amount on Gox because people were transferring coins to my Gox account. Now everyone's like, "Oh my God, of course you would never keep your coins in an exchange." But I was 16 years old, and there was no "Idiot's Guide to Bitcoin" back then. It was the type of thing you only used if you were a crazy internet nutter.
29:17	Shaan Puri	And so you've mentioned forums, and I'm a big forums guy. Like, I still... I remember, you know, BBS [Bulletin Board System]. I wasn't like before BBS, whatever was before BBS, that's not me. But I've been on forums and I love forums. And you talked about...
29:31	Palmer Luckey	amen
29:31	Shaan Puri	The Bitcoin talk forums. I went and read a bunch of your early posts on the... what was the name of the... like?
29:36	Palmer Luckey	odd retro
29:37	Shaan Puri	no no no the the headset one the headset
29:40	Palmer Luckey	3 d
29:40	Shaan Puri	Yeah, exactly! Like your old post there, I went and stalked them just to see the origin. I'm like an archaeologist for the internet; I like to go find the original stuff. So, you know, I saw you posting there and you're like, "Hey, I'm trying to build this thing. I'm thinking about doing this." You did a bunch of really cool crowdsource stuff. I think you even asked Reddit, "Should we buy Vibe?" or something like that. You did a bunch of cool stuff on forums. I thought about that, and some of them... like when I learned poker, I learned it through forums. If you think about today, like, who's the 16-year-old version of you? What forums do you think they're hanging out in? Because when you were doing this, it was 15 years ago. VR was still early, and you were early, early, early. Same thing with Bitcoin; you were early, early, early. So, what do you think are the interesting forums today that people are hanging out in that you think will play out over the next decade or so?
30:36	Sam Parr	And also, what are some of your favorite pockets of the web and forums that you're hanging out in?
30:43	Palmer Luckey	I mean much to my chagrin I I love forums too I think they are more or less the pinnacle of asynchronous communication like if you are doing collaborative all of the incentives are correct like so so I like I I ran a forum the mod retro forums it was a forum for people who modified vintage game consoles in particular with a focus on turning them into handheld self contained units so cutting apart nintendo 60 fours and super nintendo's and playstations and then replacing like the power electronics with modern power electronics running them off of the latest lithium battery technology although it was nicad back when back when I started started you know working on portables you know putting in lcd screens that were designed for portable dvd players and the like and building these self contained units and forums are interesting because your your currency is is attention but you can only get attention by getting people to come in and you know respond and engage with you and so there's a strong incentive to update people on what you're doing to to to write really interesting things and to you know get people regularly coming back and engaging with your stuff I mean that that's the dopamine high right it's other people care about what I'm doing today it's been so algorithm you know algorithmically driven that you don't have the same incentives in terms of long term sustained engagement and you know collaborating with people there's a lot more incentive to do things on your own do one big push in a form that will cause ordinary people who are not necessarily technically competent to you know watch it for at least 3 minutes so that it's seen as you watch it long enough and I like I think the pockets which is what you asked like there's great pockets on youtube there's great pockets on reddit there's actually a lot of private facebook groups so like one I like like I'm a member of a of a night vision group where people build their own night vision night vision goggles and it's got a a couple thousand people but it's it's a private group and very very much not virally driven you know it's not like the tiktok tiktok techno heads it's not like the youtube techno heads but man I I really miss forums you know modretro we had a core group of a few 1,000 active members that were that were doing stuff in the heyday and we were doing a few a few 1000000 page views a month and you would you never see those ratios these days you know of of of of of engagers to to to watchers
33:01	Sam Parr	one thing that that I thought was actually really interesting I don't
33:06	Palmer Luckey	I know... oh wait, I see. I have to interrupt. I have to interrupt one last thing I forgot. Actually, a huge fraction of the people that I hired for Oculus in the early days were volunteer moderators on the Mod Retro forums. People always, you know, they hire their network, right? They hire the people that they know, that they can trust, and that they know are competent. That was my network when I was a teenager. It was other loser gamer teenagers on the internet. Some of our lead electrical people, our lead hardware people, and our lead mechatronics people were all people who had been moderators on Mod Retro.
33:41	Shaan Puri	you're like
33:41	Palmer Luckey	In fact, the first person I hired for Oculus was one of the other moderators. I actually sent him a message and said, "Hey, what are you doing this fall?" He replied, "Oh, I'm starting college." I said, "No, you're not. You're going to come work for me." I told him that on a Friday, and I literally drove out in my minivan to pick him up from his mom's house on Monday. He had all his stuff in like four boxes. I picked him up, we got in my van, and we drove to the condemned motel that I was living in. I mean, it was wild. That was my network. It's always funny when people say, "Oh, you know, your network is your net worth." Look, we had all the Stanford kids, we had the Ivy kids, and we were just a bunch of internet losers. Yet, we did better than any of them.
34:30	Shaan Puri	You're like, "I'm hiring HMD alumni." They're like, "Oh, is that Harvard Medical?" No, no. It's Head Mounted Display Forum alumni.
34:39	Palmer Luckey	That was it. It was actually the guy that I was hiring. His name's Chris Dicus, and he had never built a head-mounted display, but he was very accomplished in the field.
34:47	Palmer Luckey	what what are you doing horribleizing scene he had built a
34:47	Palmer Luckey	lot of handheld vintage game what a horribleizing scene
34:51	Palmer Luckey	he had built a lot of handheld
34:52	Palmer Luckey	Vintage game consoles and... I knew he was very competent. I knew exactly... You talk about a job interview where you meet someone for, you know, whatever... maybe an hour or something. But I had been seeing this guy's work published on the forum over the course of years, and so I knew he had skills. I knew he had work ethic.
35:12	Sam Parr	We, Sean and I, have hired so many people on Twitter. I tell people all the time when they say, "I want to get a job," I'm like, "Man, you just need to post your thoughts so people understand your texture, your taste, and your character." It is significantly better doing it there and then just DMing someone. They're just going to click your profile and think, "Oh, this person is tweeting all this interesting insight that aligns with [our values/goals]."
35:32	Palmer Luckey	What I think... well, that's harder to fake too. If you have somebody who has a history of building things for themselves, of doing things because they want to—not because they're getting paid to—you can't fake that the way you can fake an interview. It's easy to say, "Oh, I'm passionate about X, Y, and Z." Well, show me your years of work that you've done for no money, showing that you really are. I mean, we still hire a lot of people like that at Anduril. We have benefits that are intended to lure people like that. One of our benefits is that we will buy anyone in the company any tool they want for their personal projects as well as work projects. That's the type of thing where people who don't have personal projects—who just show up to their wage machine, clock in, and clock out—are not attracted by that. But the types of people who want to create for the sake of creation, to those people, that's a golden ticket.
36:24	Shaan Puri	On that note, we did the same thing. My co-founder is a lot like you. At age 15, he started working at a dot-com during the dot-com boom. He had a job and was like, "What the hell is going on?" He was always just doing his own thing. He used to buy 3D printers and robotics, and we were building social apps. It's like we didn't need any of this stuff. I was like, "What are you doing? Why are we doing this?" He said, "Because, A, I want it. I want to come to a space, and when I'm done with work, I'm just going to go downstairs to their lab and build a drone or take this Raspberry Pi and shove it over here to figure something else out." He also said, "That's how we'll get great people. I want to work with other hackers who like to tinker on this stuff." He had an exit, so he was doing very well. His last company went public. He mentioned that when he was 16, 18, or 21, he just couldn't afford the $1,000 thing that you would need to have. He got lucky that the guy down the street would let him come over and play with his equipment. That was a life-changing moment for him. He said, "I just want to do that for people. I'll make it free; anybody can come in and use this stuff." He was totally right, even though our CFO was like, "Hey, we can't justify this." He said, "Don't worry, I'll pay for it all out of pocket." And it was like...
37:38	Palmer Luckey	And I know that struggle. You know, we're... it doesn't even have to be $1,000. I mean, I remember there were times where the thing I needed would cost like $50, and it was just inconceivable that I could afford it. Honestly, Oculus owes more to the iPhone than anything else. I mean, if the iPhone wouldn't have existed, there wouldn't have been broken iPhones for me to buy, unlock, repair, and sell on eBay. I made tens of thousands of dollars as a teenager on that side hustle. If that had not happened, then Oculus probably wouldn't exist today.
38:12	Shaan Puri	that's amazing
38:13	Sam Parr	I want to ask you a bit about Anthro, but before we get to that... What ideas were you pursuing? I bet if you're like us, I imagine you have a list of things that you're contemplating. What was on that list prior to starting Anthro? I know there was like a prison thing, but what else were you interested in?
38:33	Shaan Puri	well what was the prison thing
38:34	Palmer Luckey	so let's
38:35	Shaan Puri	start with that one because that that one sounds interesting
38:37	Palmer Luckey	Also, there were two things I was seriously considering and then one thing that I'm going to do someday. So, sea setting is off the table right now; it's too long-term. But there are two short-term things that I was looking at aside from Anduril. The three choices were: fix national security, solve obesity, or solve incarceration. I tried to think about how I would tackle these issues. The way I would solve defense is by building a defense products company that upends the incentives that typically exist in the military-industrial complex. For the prison issue, I wanted to take out the incentives of the private prison complex that exists today. Right now, private prison companies are growing. There are more and more people being housed in privately operated prisons. They're publicly traded, and those companies have a strong incentive to lobby for and perpetuate laws that incarcerate people for the longest time for the least serious crimes. In other words, they don't want murderers and terrorists; they want nonviolent drug offenders who will be in prison for a long time. And when they get out of prison, they want them to come back and be a repeat customer.
39:47	Shaan Puri	they want good good tenants they want good that's right high occupancy good tenants
39:51	Palmer Luckey	And the incentives they've set up with the government, where the government prepays for these beds, is problematic. The government basically says, "Well, we've already paid for the beds, so if they're not full, then we're not locking up enough people." It's a very bad set of incentives. So my idea was to start a private prison company that would run as a nonprofit organization. We would use the tax advantages of that to outcompete private prison companies. More importantly, we would have a business model that would incentivize everybody towards the right set of incentives. What I wanted to do was go to the government and say, "Listen, I'll lock up your prisoners, but you don't get to pay us up front. In fact, you can't pay us up front. You have to pay us after the person serves their term and then stays out of prison for five years. Then you're going to pay me." The idea is that now, all of a sudden, I'm motivated, and my whole organization is motivated to get people through as quickly as possible, release them as quickly as possible, and then have them stay out of prison and not return to crime. I mean, that would have been a game changer. It would have been a very attractive business model to these governments that are always looking to delay their expenditures. The biggest problem I ran into as I looked into this was that it wasn't a technological problem; it was a lobbying, marketing, and government affairs problem. It wasn't at a federal level, where you can basically convince a handful of people and then achieve success. It was going to be this low locale-by-locale thing, where you have a lot of people who depend on prisons for jobs and a lot of politicians who are very involved in it. Also, the deals are not recompeted very often. This isn't like enterprise software, where people are always on the lookout for a way to get an edge or move to a new provider that could reduce their costs or risk. It's like, "Oh yeah, we're going to recompete this deal in 35 years." So, it would have been this thing where I just couldn't have made an impact fast enough. I've been involved with other people who are making impacts in other ways. Okay, so that was one. Well, you...
41:47	Sam Parr	Couldn't just have like some Silicon Valley guy wearing tight jeans and brown shoes, like every other salesperson, sitting down and saying, "Hey, so we'd like to have a conversation about your prisoners. We'd like to have your business." Like, you know, no. Yeah, give me some of your guys.
41:59	Palmer Luckey	Unfortunately not. Yeah, unfortunately not. The thing is, the people who make the decisions would not have benefited from us succeeding. In business, look, when you're... and this is a big topic we can get into with Anduril too. One of the biggest problems with selling to the government versus businesses or private individuals is that with private individuals and businesses, you just have to convince them that it will be a good thing for them, and then they'll buy it. However, the people who are in charge of purchasing for the government often don't benefit from saving money or reducing their manpower. In many cases, the person in charge of making the buying decision has their political power and earning power directly tied to their ability to keep costs high and to maintain manpower. They do not allow anything to displace that. So, that was actually the big problem I realized. It's nice to think you can solve any problem with new ideas through disruption, but some things are kind of self-reinforcing and very hard to fix. The other thing I was looking at is obesity. Obesity is one of, if not the leading preventable causes of death in the United States. There are so many other health problems that result from obesity. Some people say that we need to make exercise more popular. Others say we need to stop normalizing obesity, or that we need medical treatment, or we need to promote healthy eating. I took a pretty cynical view of it. I said, "No, obesity is not going away unless you let the American people eat whatever they want, whenever they want, as much as they want, with no lifestyle changes, no exercise, and absolutely no effort on their part whatsoever." So, within that constraint, what could you do to solve this issue? The idea I came up with was long-chain hydrocarbon-based synthetic food. In other words, oil-based foods. You guys are familiar with Impossible Burger and Beyond Burger. Have you had them?
43:57	Sam Parr	yeah yeah
43:58	Palmer Luckey	So, I mean, it was probably better than the worst beef burger you've ever had, right? It was at least at that level. It's better than the worst one you've ever had.
44:06	Sam Parr	yeah it it was a whatever I'll eat this
44:10	Palmer Luckey	yeah whatever you eat this but certainly not up to the level of the best beef burger you've ever had
44:15	Sam Parr	no
44:16	Palmer Luckey	And so, one of the interesting things is where I was drawing from the outside world. All these people are trying to make fake food. They're all trying to build fake food out of food. I said, "Well, wait, let's think of this from first principles." If I'm a materials engineer and I'm trying to solve the set of problems that a fake burger manufacturer is trying to solve—how it feels in your mouth, how it comes apart in your mouth, how it sears, how it cooks, how it changes texture when it's cooked—if I were a chemical or materials engineer trying to build, let's say, not food, just a substance with a certain set of parameters, what am I going to use? Is it beans? Is it chickpeas? Is it corn? No, of course not! I'm going to use oil. Because man is a master of oil. We can make it into anything: waxes, gels, solids, anything in between—rubbers, pastes. We can do anything with oil. We can make it into truly anything with almost any material properties that we want. So I said, "Well, let's leverage that. Let's leverage everything we know about making inert hydrocarbons that are nontoxic and use that to make fake food for people that tastes and feels like real food but has zero caloric value. It cannot be absorbed by your body; it just goes right through you, just like fiber." And this is not that crazy, Taco Bell.
45:38	Sam Parr	Diet Coke? Yeah, it exists. Dude, it's called the White Castle. But you're just saying like the Diet Coke cheeseburger.
45:49	Palmer Luckey	Yes, exact diet. Diet Coke, cheeseburger, the Diet Coke, dairy products... So, I actually started making prototypes of this. I was messing around with frying foods and mineral oil with high flash points because mineral oil also has no calories. I made some paraffin-based cheese, so it was basically like a paraffin wax-based fake cheese product that you could still use to make grilled cheese sandwiches with. It tasted great but had almost no calories. There were a few other wild things that came with it. I also built a device that injected soda syrup through a stream onto your tongue directly as carbonated water flowed over it. Because it turns out you can only detect... it's a weird perceptual thing. People think of optical illusions as the main type of illusion that's out there, but there's also physical illusions. For example, if you put pudding in your mouth, your body assumes that the full mass of the pudding is comprised of whatever is touching your tongue. But if you can create physically structured foods where the part that's touching your tongue is different from the bulk of the rest of the material, your body still thinks that the entire bulk of it is whatever's touching your tongue. Anyway, dude, I went down the rabbit hole for a while.
47:03	Sam Parr	what does your house look like
47:06	Palmer Luckey	Well, I mean, it's a little more boring now, but at the time when I was acquired by Facebook, I moved up to the Bay Area. We had about 10 people living in a 13,000 square foot home that was built in the thirties on 6 acres. We turned the dining room into a machine shop. There was like a ballroom for dancing, and we turned that into an assembly area and welding room. I mean, we had a soft goods room in a little sunny area. As someone does, what is a soft goods room?
47:40	Shaan Puri	I don't even know what that means what are soft goods
47:43	Palmer Luckey	oh so it's like so like
47:44	Sam Parr	cheap cheese
47:47	Palmer Luckey	I mean, like the traditional example that people have for a soft goods engineer would be items like tennis shoes and bras. These are things that incorporate fabrics and also apply to other products. For instance, a tennis racket is an example of soft goods engineering, where you've got the handle and the shock absorption, and all that. But in our case, it was for head-mounted display stuff. So, we focused on head-mounted display straps and the fabric associated with them. We were also cosplayers, so we were building our anime costumes as well. There was a lot of soft goods stuff involved.
48:20	Shaan Puri	The more you talk, the more I realize you do the one thing that we celebrate the most on this podcast. People are like, "I don't get it. You and Sam do a certain style of entrepreneurship." For example, I optimize for just wanting it to be me and one other dude. I don't want any employees, I don't want to go to an office, and I just want maximum leverage. I'm not trying to be a billionaire; I don't want to raise money. I want to own the whole thing and just do it my way on whatever projects are fun. But then sometimes we'll celebrate people like you and Elon Musk, who are going huge. And sometimes we celebrate this dude who's making a Chrome extension; he makes $20,000 a month and lives in Bali, and he's having fun. So people don't get it. They're like, "Which one do you admire?" I get it; TechCrunch admires this thing, and VCs admire that thing. But you guys seem to be across the board. We're like, "We like people that just define winning on their terms and then actualize it." So, like you having a house with 13 other people that has an assembly room and a soft goods room and whatever, it seems like you're living your best life in that state, maybe.
49:21	Palmer Luckey	Oh, 100%! I mean, it's the weird thing about what I get to do now. These all sound like fun things, but I'm still getting to do that. And, you know, we have all kinds of stuff like that going on. Actually, the tough thing is that the coolest projects we're doing here, I can't even necessarily talk about. The most successful projects that are going in the coolest directions are the ones that we have to keep kind of under wraps. Oh, I have to say, on petroleum food, just in case anyone's wondering why I didn't pursue that one. I thought national security would be a better use of my time. That's because I realized tech national security was a technological problem in addition to being a lobbying, marketing, and sales problem. The problem with petroleum foods is that it was not sustainable. Using new oil as a feedstock would just consume too much. The good news is you can recycle hydrocarbons, but then, I mean, if you can see where this is going, it means you're going to literally be centrifuging oil out of the sewer system and then reusing it to construct new food. I realized, have you seen all the media coverage of pink slime at McDonald's? That's what I'm trying to say. Going that way looks kind of gross. Do you think people want to buy food that's literally remanufactured from sewage? That was kind of the main problem. I said, you know what? I'm pretty good at marketing and sales, but I am not good enough to sell sewer food to people.
50:50	Shaan Puri	yeah you you sound I need
50:52	Palmer Luckey	I need to figure that out
50:52	Shaan Puri	You sound like you're a bad guy in Batman. If you're like, "Yeah, he's going through the sewers and recycling it, turning it into food in the city," it's... it's... it's...
50:59	Palmer Luckey	Like, it's almost too good of a story, right? Sometimes I think the media is unfair, but could you expect them not to sensationalize literally a guy who's selling reprocessed sewage as food? They have to cover it in a sensational way, and I can't even blame them for it. I decided I would rather work in an area where technological improvement would be the main way to compete. We didn't need to do crazy marketing; you just had to be competent and be better than all of the other players, which was not necessarily that high of a bar.
51:36	Shaan Puri	I can't find this client info
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51:51	Shaan Puri	Do you... you talked about the media for a second. When I was doing research, I found this great Silicon Valley post called "The Hands of Time of Social Media" or "Of Media in Silicon Valley." It starts at noon, and it's like you're born; nobody's ever heard of you. Then at 1, you're emerging. At 3, you're the star; everybody loves you. It cycles all the way back to midnight, and it's like you're evil, you're ruining society, and you destroy democracy and whatever else. This happens with every hot company and every hot founder. When I was looking at your media coverage to do research, it's all like, "This is the boy wonder. He's 19 years old, making virtual reality real. He's doing this out of his garage in his house," whatever.
52:37	Palmer Luckey	yep
52:37	Shaan Puri	And then it turns into, like, this guy is, you know, the MAGA super evil guy. He's getting fired by Facebook, and then it's like the defense stuff. So you've seen kind of both sides of the media machine. Does that make you kind of jaded? Like, where do you trust the media today? And how do you think about, you know, the media?
52:54	Palmer Luckey	well there's an interesting quote that people often misuse from the nolan batman movies you either die a hero or live see yourself live long enough to become the villain and a lot of people misunderstand that they think that it means you start out as a hero and then eventually descend into into being you know a bad guy and they look at harvey dent and they that they they think that's the moral but that's not what was what what harvey dent was saying harvey dent had actually always been a kind of crooked power seeking political type what what what he was saying is that he had always been the same person fighting for the same ideals and that he just lived long enough to see the world change around him that so that people started saying that what he was was a villain you know he didn't say that you become the villain you use liberty to to see yourself become the villain in the eyes of everyone else and I I I feel like I've definitely been through been through that been through that a little bit I mean it's worth noting I'm not inclined to dislike the media naturally a lot of people assume that that must be the case I I don't know if you know this I was a journalism major at cal state long beach I was actually the online editor of the of the school paper the daily 49er so I I by no mean like there was a time where I thought I was going to go into a career in tech journalism and so I I never really had had any issues with it as a as you know I thought it was a very a very honorable thing to do you know to go out and and be the guy who dig dig digs and gets the truth and lets people know what's going on that they otherwise would not have the ability or the time to suss out themselves and then unfortunately I've had quite a few experiences with the media it's like do I trust the media it's like well I mean I've had like literally dozens of major outlets post literally fabricated quotes from me literally you know literally like things that never happened they said they all we did all these terrible things that just never even happened and then refused to correct them for years on end so it's one of those people like oh palmer why do you attack the media it's like I don't know like there's not any real way to to get to get around this I mean like we're not talking about tiny outlets like the new york times posted a quote for me that I literally never said and I I told them like hey you you said that I said this I never said that they said well it's it's it's it's more or less what you said we don't think the meaning is different and I was like yeah but your your your ethics guide I know I know what it is I was taught the new york times style guide when I was in journalism school it doesn't it doesn't say you get to quote me and paraphrase me and you think that it is it doesn't mean anything different and then of course everyone requotes their fake quote
55:33	Sam Parr	You're like, "I don't think a quote means what you think it means." You know, you're like... those little signs in the paper that say it's a quote? That means something different than what you guys were saying.
55:44	Palmer Luckey	Well, I explained to them. I said, "Your quote for me is literally missing six of the words that I said, but you have it in quotes." And I never said that. It was actually... well, there was no context because it was part of a longer run-on argument I was making that did not even have a clear point. They're like, "Oh, well, we don't think it really changes the meaning." So, just without belaboring the point, I think you can't trust the media to do the right thing. If you do, you're probably going to get burned at some point.
56:17	Palmer Luckey	It worked for me for a while until it didn't
56:21	Sam Parr	What does Andral do, and what made you realize that the approach to solve that problem was the one you picked? Because that seems like such a grand... I mean, I understand the high level of what you do, but it's so grand that I think, well, like Oculus was fairly grand, but I kind of get that you can tinker in your garage and come up with a nifty product. No one's going to get hurt, really, and it's a pretty simple process—hard, but simple. Andral, I'm like, oh my god, I don't even know where to start. I mean, I've seen the movie with Jonah Hill where he's like a war dog or whatever it's called, where he buys and sells weapons. I'm like, is that what Andral does? Yeah, yeah. I'm like, is that what Andral does? And how on earth does even a rich guy who's 28 in his apartment or his big house come up with this? This is crazy! Like, who do you call? Do you call like, "Hey, Barack, I was thinking, you know, maybe we could try this MVP?" You know what I mean? I don't even know how you start that.
57:16	Palmer Luckey	I mean it it's tough and it is such a big problem and so unapproachable that very few people do approach it I mean like very big picture annerl is trying to build the next major defense prime meaning we were the prime contract holder we're not a subcontractor to existing primes like lockheed martin or raytheon or northrop grumman or boeing and you know I 80% of the us defense budget goes to just a handful of companies these big primes that just completely dominate the industry and they get paid on what's called a cost + basis they get paid for their time materials fixed percentage of profit on top which means that they're incentivized to move slowly they actually make more money when they come up with more expensive systems more money when they sell more of something more money when it even breaks more often because they get to sell more parts for it I mean it's it's a it's a really bizarre contracting system that we created in world war 2 to basically take over the us war machine or sorry the us industrial machine turn into a war machine because companies like ford were saying hey I I can't even quote you what it's gonna cost to make a tank because I've never really you know this has never really been my business and they said okay fine we'll pay you whatever it costs and then a fixed percentage of profit on top to make sure that you are able to keep running your business and then unfortunately we just kept doing that even though we were no longer in an existential war mode and so in the last 35 years since the end of the cold war the government had completely lost its ability to grow small defense companies into large defense and it comes companies I mean you know samuel colt went from working in his tiny garage workshop to arming the entire western world that's that's that's what we used to be able to do you can start small and get big if you had the best stuff but in the last 35 years there were only 2 unicorns before anduril in the defense space and 35 years not just being chosen arbitrarily it's basically since the end of the cold war during the cold war we did turn small defense companies into into major players but since then it's palantir spacex both founded by billionaires and then nobody else that's it and so it did it's so hard to get in you know founders say I have no idea how I could possibly start a defense company so they don't start a defense company a venture capitalist say I'm not gonna invest in a defense company there's no examples of success in the last 35 years less the billionaires who can do anything I'm sure they could have done whatever they wanted with their billions and so the vcs don't wanna wanna invest in it and this is and then smart employees don't want to go work at defense startups because they look at the landscape they say look this might be a cool lifestyle business but it's never gonna grow to a scale where the equity that I'm given is a significant is a significant way to generate money for me and my family and so I I I said man you know if that's really what it takes it it really you know it really does take lots and lots of money and lots and lots of influence and really smart people that I'm in a position to start a company that very few people are very few founders have experience running a multibillion dollar company with 1,000 of employees men mass manufacturing millions of pieces of hardware and are and are willing to give up the adoration of their peers in the media like that was actually probably the most important factor if I would have just left oculus by retiring on my own it would have been much harder for me to go into an area like building weapons for the us and our allies because so many people got so angry about it you know friends that I had who didn't want to talk to me anymore investors who said that not only would we never make money but that what we were doing was morally reprehensible and wrong and I was trying to explain to people listen we live in a world where our major strategic adversaries are rapidly building advanced technology that has no peer here in the united states war machine the the major conflict is imminent in asia in europe with a lot of our strong allies and partners and we need to be ready not just to win those wars the goal is not to win awards to deter a war from happening in the first place and if we don't have the tools we need to deter them then war is inevitable and I you guys probably remember how things were you know I guess bat you about 5 or 6 years ago it was a very very popular to believe that we're at the end of history and that peace is too profitable for anyone to rock the boat and that that was the thing that would keep everybody in line I think that russia invading ukraine finally woke up a lot of people to realize that history is not over land borders are not fixed and like I mean look how wild it is that europe is still buying 1,000,000,000 of dollars of goods from russia even as russia literally invades europe I mean like that's that's how screw that's how screwed they are and I think peep people people did not see this a few years ago and I felt I felt a little bit like a crazy person and if I'll I'll ramble on one more thing you've probably heard me say this before elsewhere but it could be that you know your your your viewers haven't has had heard me say this I'll say it again you know we're living in the first time in us history where the most innovative powerful and large technology companies in our country refused to work with the military that's never been the case our most powerful companies have always understood that they had a responsibility to aid with national security but now I mean whether you're talking about Google or in particular apple I mean apple's got 95% of their manufacturing in china they agreed to invest they've invested 100 of 1,000,000,000 of dollars in manufacturing capacity there they've agreed to invest a further $275,000,000,000 in chinese manufacturing in exchange for being allowed to operate as an independent company in china instead of being nationalized into a joint venture majority owned by china I mean they they they are in a position where if they do anything to upset the chinese government the one person in china could sign one piece of paper that would wipe out the most powerful company in the entire world instantly a $2,000,000,000,000 company like they they are not masters of their own destiny not by by any means and I I guess I wanna stress this because it's never been the case in history and that had me terrified you know I I 5 years ago I could see we're on the precipice of war with advanced powers who had fully suppressed our most advanced technology companies through economic tools and you know if I I I don't understand why more people were not scared by that but I felt like I couldn't do anything that was more important than starting anduril to start help solving that problem and thanks for letting me ramble for so long than that I know that was a long ramble but I've I've got a lot of lot of emotion all built up inside of on on it
01:03:48	Shaan Puri	No, I mean that's why we wanted you on, is to hear what you're doing and why. You also flipped... like the common denominator with either the prison thing, the food, the oil-based foods, or this is you kind of looked at it from another angle and also maybe flipped the incentives, so the cost structure. What you were saying was, you know, let's say with the prison thing, you wanted to be incentivized to keep people out of prison rather than in prison for as long as possible.
01:04:11	Palmer Luckey	exactly sounds like for andrew riddle so simple right
01:04:14	Palmer Luckey	yeah sounds like
01:04:15	Palmer Luckey	for andrew
01:04:15	Palmer Luckey	riddle you
01:04:16	Sam Parr	it is simple but it's not easy yeah
01:04:19	Shaan Puri	Yeah, and well... Then what it sounds like you ran into there was the incentive for the local official who, you know, decides on these things. They may have been incentivized to have a bigger budget and not a smaller budget. So, your incentives are sort of clashing.
01:04:33	Palmer Luckey	Right, whereas with... and he doesn't have to say, "I'm not buying your thing because my incentives are wrong." He'd be like, "Oh, we've done an assessment of all the vendors, and this one really has a lot more experience. We don't want to take a risk on a new vendor." It could literally be that simple. People are like, "Oh, but how would they justify the business model? You know, it would be so much better." It's like... he doesn't have to. You... he could just be like, "Nope, I... too at risk."
01:04:54	Shaan Puri	And so, what's the business model with Andrew? Because you're not doing cost-plus; you're doing something else. So that's the first question. We're a...
01:05:02	Palmer Luckey	Defense Product Company I mean, we work in a way that's not even a revolutionary business model. It's the way every tech company works: you use your own money, you build a product, you make it work, and then you go to customers and sell it to them. That is a very hard thing to do in the defense space, but we've basically bet that we will be able to pick the right things to work on. We will be able to find the right partners in government to help tell us what we should be investing our own money in ahead of time. In the end, when it works, we'll be able to sell most of the time to the government. Now, there will be times where we get screwed. There will be times where we don't build things that work, and it's our own money that we burned instead of taxpayers'. But on the whole, we're very incentivized to be efficient. We don't want things to drag out. We don't want it to be a 10-year R&D program on a cost-plus basis when we can get it done in 6 months with some really, really smart ideas. So we've got the right incentives, and we're basically out there trying to convince the Department of Defense and politicians that this is the way all defense companies should be working. Everyone should live in fear, looking over their own shoulder, knowing that if they fail, they're the ones who are going to get screwed, not the taxpayers.
01:06:10	Shaan Puri	So when you get a contract that's like, "We got a $900 million contract," that's after you've already produced the product and they're basically just agreeing to buy the goods at that. Is that what that means in your case?
01:06:22	Palmer Luckey	Yeah, I mean, we recently just won a $1,000,000,000 contract with SOCOM (Special Operations Command) to do all of their counter-drone work. So basically, we are protecting and building the hardware and software that defends them from drones that are attacking their installations and positions. We started working on our counter-drone system using all of our own money years ago, before we had any customers. We just began building the hardware and the software, developing our interceptors and jammers. After we invested a ton of our own money and proved that this was the right way to solve the problem, we were able to go and actually compete in a full competition for who they were going to select for this contract. They did a shoot-off between all these different companies. Some of the companies we beat were actually getting paid by the government to develop their systems using government money. However, we had invested quite a bit more money and moved much faster. There were literally contractors complaining, saying, "This isn't fair! We have to compete with Anduril, and they've been investing their own money for years. How could we possibly be expected to compete when the government's only given us tens of millions of dollars over the course of the last two years?" I'm like, "Guys, of course this is how it works! You could've won if you had spent your own money. If you had spent your own money for five years, you probably would be able to compete with us on an even playing field. But you can't take no risk and expect all of the reward." We spent a lot less than these companies developing much better capabilities because we have the right incentives.
01:07:51	Sam Parr	So, you're... I think you're 30 years old. We're all about the same age. You're sitting there with a Hawaiian...
01:07:57	Palmer Luckey	30 a few weeks ago
01:07:58	Sam Parr	Well, happy birthday! You're sitting there in a fucking Hawaiian t-shirt with a goatee. You're probably the type of dude who walks around barefoot all the time, and you're talking about cosplay. Yet, you just said, "We just won a $1,000,000,000 contract from the government." How do you work up the huevos, the confidence, to think, "I'm gonna go in against all these gray-haired suits, and the government is eventually gonna take me seriously. I'm gonna sell this thing." I mean, do you have people selling on your behalf? That's just a reach for me to understand.
01:08:32	Palmer Luckey	Some people think that I should dress differently and try to appeal to the government's sensibilities. They suggest that I should be dressing in a suit, being very straight-laced, and serious all the time. However, I believe that one of the most important things that NREL is doing is not just building technology ourselves, but also inspiring other companies to work in defense. This includes inspiring companies that aren't in defense to pivot into that sector and encouraging people to start new defense companies. If they see me becoming a boring guy who has to make himself super lame to sell to the government, that's not a lifestyle they’re going to want to lead. We need to show them that they can be successful and that it can be fun. Now, I also want to keep wearing flip-flops and Hawaiian shirts, so maybe this is just post facto justification. No.
01:09:20	Sam Parr	I'm aboard
01:09:21	Palmer Luckey	I I I feel like I'm doing everyone a disservice if I were to change
01:09:24	Shaan Puri	Yeah, I think it's working now. You know, the podcast is all about the future. We're always brainstorming ideas and opportunities, but none of that matters if there's not really a future. If there's about to be World War III and there are nukes flying everywhere, you're kind of a lot more in the loop than any guest that we've ever had on this. What's going to happen here? What are the odds of, like, you know, this sort of Ukraine-Russia conflict breaking out into something a lot more serious? And, you know, is there going to be a nuclear weapon in our near future?
01:09:55	Palmer Luckey	so I mean it's very hard to predict there's people who are better at this than me like what I always tell people is like our role is to build the tools and then you have to trust in democracy to deploy them correctly and people are like oh you know when would you stop supplying weapons to you you you ukraine and you know is there a. Where you'd be too you know where you where you think that we should where you would make sure that you're not part of a nuclear escalation and I say listen if you believe in democracy at all then you should not want us foreign policy to be dictated by the ever changing whims of technology executives like what an extraordinarily dangerous precedent to set that you know you'll build weapons for the people you are politically aligned with and then you'll suddenly drop it despite the u like what it really is is I will sell to the people that the us state department and the us dod want me to like if if that that that need because they have information that I don't they have intelligence that I do not and I cannot second guess that and say oh you know I I would stop supplying if I thought there was this level of of escalation but you know with that out of the way I think that we are going to see a tactical nuke get used and and for people who are not familiar with the difference tactical nuclear weapons are designed for tactical use as part of a battle for basically conventional warfare tactics so blowing up you know you're blowing up an armored division or taking out a wing of bombers or maybe even destroying an airfield strategic nuclear weapons are used to deter mass nuclear exchange and to engage in you know strategic level annihilation of cities and the like the united states disassembled all of our tactical nuclear weapons a long time ago we decided that our war doctrine did not allow for tactical nukes nukes are only something you use at a strategic level to deter other people from using them against you that is not the case for russia russia has tactical nuclear weapons it they train to use them they it is part of their doctrine that they will use them in conventional conflict and they are like even just having that in their doctrine shows that to some degree they are willing to bet that the united states and nobody else would respond with strategic nuclear weapons in response to use of a tactical nuclear weapon and the the you know some people say oh even saying that they'll use a nuke is akin to supporting russia and saying we shouldn't support ukraine it's I'm not saying that at all I think actually appeasement has the the the longer that they're actually the the greater risk I mean if you can show if you show to the world that if you show to a world that even the threat of small scale tactical nuclear weapons is enough to deter any kind of intervention in any kind of in any kind of conventional warfare you actually hugely incentivize the nations of the world to obtain their own tactical nuclear weapons like you you you you don't really actually want the calculus to tip that way where countries look and say wow all russia had to do was threaten to use their tactical nukes and then they were allowed to operate with impunity in a conventional invasion and nobody was willing to stop to do anything about it or even stop buying their exports like that that's the that that that that'd be a very very bad precedent to set even beyond this war and so for that reason I I think this is a little contrarian and not everyone agrees but I think that the odds of a tactical nuclear weapon are very high it will not be used on the united states it will not be used on a nato ally it'll probably be a tactical nuclear weapon used to strike some inarguably military target like it probably they're not gonna they're not gonna nuke kyiv it it's much more likely that it would be a port or a you know or or an air installation or or something like that and I the reason I would like to talk about this is I want people to get comfortable with this because there's this idea that you know you use you use an you use use a nuclear weapon and all of a sudden you're in world war 3 I think that's actually probably the wrong the wrong way to look at it because if you do that you're tacitly admitting that tactical nuclear weapons deserve a strategic nuclear level response and if you set that up as you know the the nice lubricated path we all slide down yeah things can get really bad really bad
01:14:08	Sam Parr	This sounds selfish and trite, but I think it's important to me and I bet it's important to a lot of people: What does that mean for me, a wealthy American with money in the stock market who lives a nice life? Does that mean that: - Inflation is going to get huge? - My investments are going to go down? - People I know are going to get hurt? I don't know anyone in Ukraine, so I care about them, but... what does that mean [for me and people I know]?
01:14:37	Shaan Puri	for me
01:14:38	Palmer Luckey	it's a fair question you know I'm in a different position I know I know people who are from ukraine I I know people who are in ukraine so for me it all it does get a little bit personal and we we have employees here who are who who are deeply deeply you know involved in one way or another with the people of ukraine but I I think mostly you need to boil it now not to necessarily ukraine specific question but the the broader geopolitical question is the united states the world place are we going to help our allies and to what extent and I I'm not saying that that necessarily means that we need to throw ourselves into world war 3 over every conflict but we do need to very carefully weigh like what what will happen in taiwan if we completely pull that like there's a million ways to tackle this so I'm not trying to set up a straw man here but I'll I'll throw out one that is actually very popular with certain politicians they say we should completely pull out we should not engage this is not our problem let the let the ex soviet guys duke it out they can do whatever they want well one the their the first issue is our european allies are gonna be in pretty bad shape if they have russia right on their border able to move deep deep deep into europe without any kind of buffer more importantly what do you think china's gonna do if they see that that's the united states' attitude they say wow like there there there is a price they will not pay there is there is a certain level they are not willing to get engaged at if we can raise the cost above that level then they will make the short term decision to not get engaged that's very dangerous for taiwan which is in turn very dangerous for semiconductors and for our entire economy like I if taiwan actually gets invaded by china you could see a 30 or 40% drop in the stock market beyond what we've already seen like that that's not even that's not even a that's not even a a crazy assumption that's like a pretty well backed up by all of the the boring establishment economics guys prediction so that that that the way that I see it is you know your question why should I care because if we want to maintain credibility as a player that can deter wars not just win wars then we have to take actions that maintain our credibility there if we if if we were to say the ultimate version of the street is you're on your own world we're all and we're gonna do our own thing we're going to get screwed by that very very quickly and so there's something between 0 engagement and you know d day 2.0 that we have to do
01:17:12	Shaan Puri	This is great, Palmer. Where can people find you if they want to go work at Andrew or, you know, read more of your stuff? Your blog, your Twitter... where should people follow you or find you if they like this?
01:17:23	Palmer Luckey	Oh man, well, my handle across social media is Palmer Tech. You can find me on Twitter under the handle @PalmerLucky. There's my website, palmerlucky.com—the number one Palmer Lucky blog on the internet.
01:17:37	Shaan Puri	and there is also in the old wordpress site split up I'm I'm coming for you
01:17:41	Palmer Luckey	uh-oh well hey my mine's wordpress too great tool
01:17:44	Sam Parr	Yeah, could you all tell me about PalmerLucky69.com? It's this new project he's working on.
01:17:50	Shaan Puri	yeah it's got a lot of promise
01:17:52	Palmer Luckey	oh man I gotta check this out that sounds right up my alley
01:17:55	Shaan Puri	Oh, wait, wait! I forgot. Do you want to rip a WWE-style promo at Jason Calacanis? He's coming after you. He's challenging you to a fight. Why would you challenge a guy who builds weapons for a living to a fight? I don't understand this. But if you want to rip a WWE-style promo, this is the place. There are 100,000 entrepreneurs ready to back you here if you can get them on your side.
01:18:18	Palmer Luckey	I mean, maybe this is because I... look, I'm not sure if you can tell, but I'm actually a pretty big guy. I weigh about 250 pounds and I'm 6 feet tall. I understand the mechanics of fighting well enough, and I've done enough of it recreationally to know that it's unlikely someone who's, you know, 5 foot 5 and 140 pounds is going to have a good shot. But the thing is, I'm not a physical violence kind of guy. I think it's weird to say, "Oh yeah, you don't like me? Well, I could beat you in hand-to-hand combat." It's like, well, maybe, but your ideas are still bad.
01:19:01	Shaan Puri	it's it's it's it doesn't it's one doesn't one doesn't solve
01:19:03	Palmer Luckey	The other... so, no, I unfortunately don't think I'll be throwing down the gauntlet. Beyond noting that, just statistically speaking, if you look at the fights between people of one bulk versus another, there's a clear trend.
01:19:19	Shaan Puri	yeah
01:19:19	Sam Parr	This is the most Silicon Valley dude. Is this the most Silicon Valley call-out ever? That's awesome.
01:19:26	Shaan Puri	I I know the mechanics of fighting
01:19:30	Palmer Luckey	I I I
01:19:31	Palmer Luckey	I'm physics
01:19:31	Shaan Puri	is okay physics is on my side bitch
01:19:36	Palmer Luckey	but but
01:19:37	Sam Parr	yeah
01:19:38	Palmer Luckey	You know, I mean, for people who are listening and don't know, the very short version is: Jason Calacanis said a bunch of really awful stuff about me for years, starting back in 2016. He said that I'm a terrible person and that I don't care about my family. I think he said Palmer Luckey is a complete moron who doesn't care about his employees, his family, or his friends. Then he said, "Palmer's an idiot. He's a moron. Zuckerberg should fire him. Get rid of him. What a useless waste of space." Then I get fired, and he celebrates it over and over. "Oh man, I'm so glad they fired Palmer. What a terrible loser," etcetera, etcetera. Anyway, then he just didn't talk to me for years. He never reached out. Then he invites me to go speak on his podcast and at his conference. So I went there, and I basically just told people, "I can't believe Jason invited me. It's only because I have clawed my way back to having a second unicorn before the age of 30." This guy treated me like total garbage for years. He's never apologized. He spread a bunch of lies, even insulted society, and spread a bunch of lies about me. Then at the conference, I said, "Hey, look at all this shit he said about me."
01:20:44	Shaan Puri	it's like a slide deck it was amazing
01:20:47	Palmer Luckey	Yeah, and then I did that at the end of my talk about, you know, basically the future of conflict and particularly the war in Ukraine. Then, at the conference, he said that he was sorry if he said anything that offended me. But then, when he put my video up, he said, "Actually, I take it back. Everything that I said was accurate, and I don't regret exactly what I said about him." Now, people keep hitting me up, saying, "You guys need to bury the hatchet, you know, meet in the middle." I'm like, "I didn't do anything to you. You can't meet in the middle." I'm like, "You're right. Maybe I don't care about my family, but you know, we can admit I care about my friends. Let's meet in the middle." It's like, "No, no, it's not gonna happen." Anyway, now Jason's saying that he can beat me up. And, you know, look, maybe he could, but the odds don't seem in his favor.
01:21:36	Shaan Puri	I do think he trains jiu jitsu so you know he does have that going for him if I recall correctly
01:21:41	Palmer Luckey	Hey, you know I did karate one time when I was a kid. You know, you eventually... you eventually get old. Yeah, well now it's been wild for me because I mean, my whole career, I've been a whiz kid. You know, it's like the Palmer Lucky value proposition is: > "Wow, look at that guy! He's improbably successful given his age!" And now it's just: > "Look at Palmer. He's... yeah, he's successful, I guess." You know, 30 [years old].
01:22:08	Shaan Puri	yeah I would really wanna cut him
01:22:09	Palmer Luckey	out of you dealing with the psychological impact that anything
01:22:12	Shaan Puri	And also, you know, I find Jason very entertaining. I don't know him personally very well or anything, but he's entertaining. However, I think he was totally wrong in this circumstance. I remember when I first heard him say all that stuff, I looked it up. I was like, "Man, Palmer must've..." Well, actually, [he] called you Parker Lucky. I was like, "Oh man, this Parker Lucky..."
01:22:30	Palmer Luckey	that's right
01:22:31	Shaan Puri	This plucky little guy must've done something really messed up. Then I saw what was actually done and I saw the coverage, and I was like, "Oh, he donated $10,000 to... you know, like this thing or whatever." And you know, you were right... whatever.
01:22:45	Palmer Luckey	but jason was out there saying he said palmer's paying trump supporters
01:22:48	Shaan Puri	extreme terror trolling or something
01:22:50	Palmer Luckey	Yeah, extreme terror trolling. He said, "Not quite violent, but close to it." And he's posting anti-Semitic memes and misogynistic hate attacks. It's like, dude, it was $9,000 for a billboard. You've given a heck of a lot more to...
01:23:06	Sam Parr	yeah
01:23:07	Palmer Luckey	to to spicier political stuff than that
01:23:09	Shaan Puri	A billboard, you know, in a political cause or a political donation is nothing like... I think that's one of the big hypocrisies.
01:23:17	Palmer Luckey	it's not as mainstream as you can get
01:23:18	Shaan Puri	One of the big hypocrisies with Silicon Valley is like it's all about open-mindedness... unless you disagree with us. Unless you believe in the thing I don't agree with, then it's "How dare you believe that?" You know, "How dare you support that candidate I don't like?" "How dare you..." you know, [support] that half the country votes for or whatever. It's one of the great hypocrisies.
01:23:33	Palmer Luckey	It's so foreign to me too because, I mean, one of my best friends is a socialist. We strongly disagree politically, but, you know, running Oculus, I was never... I had my political beliefs, but they were like 1% of my time and thinking. 99% of it was on VR and my company. It's actually very funny where there was a story recently that said, "Yo, Palmer Luckey, you know, a very outspoken Republican." I'm like, I mean, I've literally tweeted about politics two times in eight years. You know, I'm not outspoken by any means. But to them, it means like, oh, there was this story years ago where he privately donated, not using his name, and that means he's an outspoken Republican. You know, imagine if people were like, "Mark Zuckerberg, outspoken Democrat, does X." Nobody would ever...
01:24:25	Shaan Puri	would be like you must have made a mistake this sentence doesn't get typed
01:24:31	Palmer Luckey	yeah but you
01:24:31	Shaan Puri	know I I mean that but that that's
01:24:32	Palmer Luckey	The best part about Anduril is that, you know, I have my political beliefs. Our CEO, Brian Shimp, he's very much a Democrat, and we have a huge mix of people at Anduril across the entire political spectrum. What we've done is say, "Listen, we might not agree on everything, but we agree on the importance of national security. We agree that the United States needs to have the tools that deter Russia, China, and other aggressors from getting into fights with our partners and allies." We also agree that we can save taxpayers $100 billion a year while we make tens of billions of dollars a year. If we agree on those things, we need to put aside our differences and focus on what’s the same. I think that's been a really healthy company culture. A lot of other companies, you know, they want to take one political side or the other. We've been very clear: no, we are not a politically oriented company; we are a mission-oriented company. To the extent that if a Republican does something that's bad for our mission, we're going to push back on it. If a Democrat does something that is bad for our mission, we're going to push back on it. But it needs to be about our ability to, you know, defend the West, not our personal opinions on how the country should be run.
01:25:40	Shaan Puri	exactly so that's that that's I
01:25:42	Palmer Luckey	I highly encourage people to set that tone when they're starting their own companies. If you want to be able to attract people from all over the country, all over the world, of all different political persuasions, you should avoid picking sides. Because if you pick a side, you're alienating huge swaths of people - not just the people who disagree with you, but also people who don't want to be at a company that's partisan and might not even care one way or the other. I know there are a lot of people who think, "Look, I don't even really have a strong set of political beliefs, but I do know I don't want to work in a place where that's the thing that drives all our decisions."
01:26:12	Shaan Puri	You're like, "Oh, we got the office socialist just walking around giving away snacks." It's awesome! It's great! You need a diverse workplace like this. This is awesome.
01:26:18	Sam Parr	Dude, you're awesome, man! I'm so pumped that you came on. This has been amazing. I would love for you to come on again.
01:26:26	Palmer Luckey	well wait I have to bring up one more thing I have to bring up one more thing
01:26:29	Shaan Puri	I I
01:26:30	Palmer Luckey	so I I get a chance to bring something up
01:26:31	Sam Parr	fine go ahead
01:26:32	Palmer Luckey	We've got to talk about the tweet you made where you said that there's no way that there are any billionaires out there that actually fly coach and don't fly...
01:26:43	Sam Parr	oh yes good you have
01:26:44	Shaan Puri	got a good memory
01:26:45	Sam Parr	Do you fly coach? Oh, you do fly coach. You said that you're an idiot. What are you doing? JCal was right.
01:26:53	Palmer Luckey	I mean, the reason I wanted to chat about it is because, yeah, I think I responded. I told you, "Hey, you're wrong." I actually do not fly private; I fly coach. For me, it's a reasoned decision. With exceptions for long-term international travel, we only cover coach travel for our employees. It's like, "Look, it's only a few hours." It is a very bad use of company money for us to be buying business or first class for people because we have so much travel at the company. We could easily spend a very serious fraction of our resources on just people traveling in slightly better seats. And it's especially bad when it's like, "Oh, am I really going to pay you to fly business class for three hours to a place where you're then going to sweat it out in the desert for a week?" You know, it's only like about...
01:27:43	Sam Parr	you know it's so so
01:27:44	Palmer Luckey	you and your coach seats better than the desert
01:27:46	Sam Parr	you and your wife or your girlfriend or whatever if you're going to europe you're gonna fly coach
01:27:50	Palmer Luckey	Even when I use my own money, I fly coach. People say, "Well, why don't you just fly first class? Why don't you fly business?" And here's why: I expect my employees to fly coach. Yes, I have a lot of money, but if I don't also do it, it feels like I'm out of touch or I don't know what it's like. You know, "Oh, it's easy for you to say that we should fly coach because you don't have to do it; you happen to have a bunch of money." So for me, a lot of it is about setting an example. Look, it's not actually that bad. I am willing to do it, even when I pay for my own travel, because I think it's just not that bad.
01:28:22	Sam Parr	And so, don't you have people who want to kill you or hurt you? I mean, aren't you... Like, you've got the whole anti-Trump crowd who sees you and they're like, "Go f*** yourself," and then now you're dealing with Lockheed Martin stuff. Surely they want to kneecap you. You've got... you're... I don't know what your...
01:28:39	Shaan Puri	state is on china but fanatics
01:28:41	Sam Parr	yeah you got jason calacanis gonna come up
01:28:43	Shaan Puri	put you in a noogie
01:28:43	Sam Parr	Like something's gonna happen, you know what I mean? Surely there's some type of security risk. Also, maybe you have life insurance or something like that. If they're gonna insure you, I'd be like, "Dog, you're doing... you gotta have a security person with you." Or you gotta have someone with you. Surely there's some type of security risk where you gotta think beyond just, "Hey guys, I'm in solitude with you on this flight." I get it, but... surely there's some type of [concern].
01:29:09	Palmer Luckey	You're totally right. I mean, it depends on the trip, where the trip is, and what I'm doing. I make sure to keep myself safe, and I probably don't want to get into specifics because, you know, like you said, there are people out there who are not fans of me. Like you mentioned, Jason Calacanis and the Trump people, but what about the Mexican cartels? We've cost them hundreds of millions of dollars in drug trade. What about all the people who have been foiled in attacks on U.S. military forces because of our stuff? There’s actually a long list of people who are scarier than Jason Calacanis, if you can believe it. But yeah, you're right that to some degree, that's a worry. I also think that in general, if someone's going to come to kill me, it's probably going to be in a place where they know I'm going to be. To me, the high-risk place is actually not on a flight in the secure zone. It's not on Southwest in the secure zone of an airport. It's probably more likely to be the restaurants I go to too much. Anyway, I guess I want to explain that's why I do it. If I'm going to ask my employees to do it, I need to do it too, even when it's my own money, even when it's my own cost. Because otherwise, I would literally be out of touch. Look, maybe one day it gets so bad that I tell everyone, "Guys, you know what? I hear you. We're all going business now." But I think today is not that day.
01:30:35	Sam Parr	You're crazy. I've agreed with everything you've said, except for that. You are crazy. Yeah.
01:30:40	Shaan Puri	No, I'm actually glad you said this because I was feeling like, "Man, this guy's great. He's funny, he's smart, he's just really big thinker." I'm glad you have something you're totally wrong about. It makes me feel so much better about this interview. That's a great service you did for everybody here by having this absolute nonsense policy for yourself. You know, like if I go get you a billion-dollar contract and I'm flying back in the C zone of Southwest, I'm rioting the next day at work.
01:31:09	Palmer Luckey	I'm telling you, I love the back of the plane by the window. Nobody bothers you. You can get on and let everybody get off the plane before you do. You don't have to fight anybody; you just let everyone look and feel... Now, I gotta throw this in: my grandpa was a pilot for United Airlines for over 40 years. I grew up around commercial airlines, and to me, there is a certain romanticism to mass-market, mass-available air travel. What an incredible thing! We did it. America did it. We figured out how to make it economically viable, and we built everyone else's airplanes. It is an American thing. Even when you're on everyone else's planes, they're mostly made by Americans. The ones that are made by Europeans were made with American technology. So, I... hey look, I also like...
01:31:57	Shaan Puri	Sales as a reward. I think feet are gross. You're into Coach? I think Coach is gross. Well, yeah, to each their own. I think we'll leave it at that. Agree to disagree, to each their own.
01:32:06	Sam Parr	No, look, I disagree with that opinion, but I respect it like hell, and I respect you. You're the best, man. I would love for you to come on if you want, like in a few weeks, a few months, whenever, and talk some more about ideas. You're... I'm a fan of yours, so this feels really cool that you're here. Maybe we...
01:32:22	Palmer Luckey	thank you I appreciate that this has been a lot of fun we covered some good ground today
01:32:25	Sam Parr	Yes, and maybe we've suckered you into becoming friends with us. If you ever want, you could DM us on Twitter. We can have hobbies... who knows? I don't know, maybe we'll invite each other over and hang out. You could show us a thing or two. I don't know, we'll see what happens. But this has been awesome.
01:32:38	Palmer Luckey	come on come on nick come on down anytime
01:32:40	Shaan Puri	alright sweet thank you so much
01:32:42	Palmer Luckey	alright see you guys later

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From Flipping iPhones To Selling Oculus For $2 Billion To Facebook | Palmer Luckey (#378)

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