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My First MillionFrom Flipping iPhones To Selling Oculus For $2 Billion To Facebook | Palmer Luckey (#378)
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EVERY SPOKEN WORD
105 min read · 21,304 words- 0:00 – 6:45
Intro
- PLPalmer Luckey
I remember there were times where the thing I needed, it would cost like $50, and it was just like, it was, it was inconceivable that I could afford it. I mean, like honestly, Oculus owes more to the iPhone than anything else. I mean, like th- if the iPhone wouldn't have existed, there wouldn't have been broken iPhones for me to buy-
- SPShaan Puri
[laughs]
- PLPalmer Luckey
... unlock, repair, and sell on eBay. Like, and I-
- SPShaan Puri
[laughs]
- PLPalmer Luckey
... 'cause I made tens of thousands of dollars as a teenager on, on that, on that side hustle. Like, like if, if that had not happened, then Oculus probably wouldn't exist today.
- SPShaan Puri
That's it. [upbeat music] What's up? We got Palmer Luckey on the podcast. Palmer is a billionaire. He created Oculus, which he sold to Facebook. He's created Anduril, which is now one of the biggest like government... They make weapons for the government, and um, super interesting guy. I'm gonna call it right now. I think this is a all-timer episode. I don't know what's... I don't... You know, you guys know I don't hype it up like that unless it's legit.
- PLPalmer Luckey
[laughs]
- SPShaan Puri
This was an all-timer episode. Sam, what are some of the things that we talked about?
- SPSam Parr
So early on we asked him basically what he did with his money. So he made hundreds of millions of dollars at the age of like 23 or something like that, and we said, "Where did you put your money?" And he was very clear on what he did with it. Uh, he talked about some of his early crypto investment, so he bought, uh, 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 like four, five years after just making minimum wage. What else?
- SPShaan Puri
Uh, we talked about a, a couple different things. Where he likes to hang out on the internet. We're like, "Dude, where do you, how do you know about all this stuff? Where do you learn this stuff? What are your subreddits? What are you, what are you listening to and reading? 'Cause I need to start doing some of that." So he told us some of his f- favorite places to go there.
- SPSam Parr
By the way, do you remember he actually said a Facebook group that he liked.
- SPShaan Puri
Yeah. [laughs]
- SPSam Parr
And he actually named the Facebook group.
- SPShaan Puri
Yeah, he had a specific Facebook group.
- SPSam Parr
Which I have a feeling is gonna get a lot more popular.
- SPShaan Puri
[laughs] And then, um, yeah, he talked about basically, like, is World War III gonna happen, right? He's, he's supplying, you know, uh, th- his company builds tech for the Defense Department, uh, the Department of Defense. And so is World War III gonna happen? Is there gonna be a nuke? What is a tactical nuke? Um-
- SPSam Parr
Well, you asked him a very specific question. You go, "Is Russia gonna drop a nuclear bomb?" And his perspective is interesting. I thought it was a good question.
- SPShaan Puri
And then the best part was we said, "All right. You sold Oculus and then you created Anduril, which is an even bigger success." Uh, I think it's like valued at $8 billion or something. "But there was many years in between. Did you consider doing any other ideas?" And he opened up and he's like, "Yeah, actually there were these two or three other ideas." He had an idea about, uh, creating a new kind of prison. He had an idea that would try to solve obesity. Uh, he ha- he had a couple ideas and we go into depth brainstorming with him. So he had it all, man. He had the, the crazy backstory, the success story, but he also brought ideas and then he also argued with us about why he flies coach even though he's a billionaire, and, um, why he may or may not get into a fight with Jason Calacanis. [laughs] And so this episode had it all. It had fighting, had ideas, had success stories. It's got it all. All right. Enjoy this episode with Palmer Luckey. I, I don't know, you don't need too much of an intro, but I'll do it anyways. Palmer Luckey is here, um, created Oculus, created Anduril. Uh, m- really interesting dude, and, uh, and I think, you know, we have a bunch of topics so I'm not gonna kind of belabor the intro. Sam, I know you've been itching. We, we just... You probably can't say the DM you, you, you, you sent to try to get Palmer on here. You really wanted this man on the podcast. Why? My f- my first question's to you, Sam. Why?
- SPSam Parr
So Palmer, I am like the king of left-handed compliments, at least that's what they say about me, but I, I mean them as full-handed compliments or right-handed compliments. But basically, I love freaks, I love weirdos, I love extremists, not like in the political sense but, uh, in the sense of, like, people who just go all in on stuff and are, are just passionate about maybe, like, nerdy or unconventional things. And you go all in on things, and I love that. I love people... Even if I don't like what they're going, going all in on, I, I'm crazy fascinated by that, and you seem one of those guys who just goes all in on things. You've done a lot at a young age, and I like weirdos, and I, I put you in that, in that category.
- PLPalmer Luckey
Thank you. I'm happy to be, happy to be a weirdo. You know-
- SPShaan Puri
[laughs]
- PLPalmer Luckey
... I'd, I'd rather be... I'd rather, I'd rather, I'd rather be a person that, uh, that, that, that people think ill or, or, or well of than somebody nobody thinks of at all.
- SPSam Parr
Sam had a, uh-
- SPShaan Puri
I think well of you, by the way. I think well of you. [laughs] Sam had a poster at his office that was, like, for his employees. It was like, "Let your freak flag fly." That was like, you know, one of... There's, like, co- you know, corporate values are typically, like, integrity and, like, determination, and his was like, "Be a freak." Um, all right. So, so let's start with, um, I don't, I don't know. Let's start with some of the kind of... It- we're gonna try to, as much we can, avoid VR and avoid the Facebook stuff because mostly just because you've talked about it a bunch of places. I'm ac- frankly, I'm interested 'cause I am actually a VR fanboy, but Sam has, has tried to forbid me from, from asking those questions, so we're gonna 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 and 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 you-
- PLPalmer Luckey
Oh, I know what you're talking about. Yeah, you know, we're not, we're not doing it here for the money. You know, this-
- SPShaan Puri
Yeah
- PLPalmer Luckey
... money, money's, you know, money, money's not the real objective. I actually tell my own employees at onboarding that if, if, if you work at a place where your boss is saying that, you should be worried.
- SPShaan Puri
[laughs]
- PLPalmer Luckey
'Cause it's, it's one thing, it's one thing to say that to the press, it's one thing to say that in your marketing materials, but y- y- you know, if, 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 ef- effectively telling them, "You could be making more money elsewhere, and your financial success is not my priority," you should be concerned.
- SPSam Parr
Hm.
- 6:45 – 13:57
How much did you make from the Oculus sale?
- SPSam Parr
How much did you make off the Oculus sale?
- PLPalmer Luckey
Oh, man. I probably shouldn't say, 'cause this is also one of those complex things where, you know, th- there was the, there was the sale, so there's what they believe, they call th- the merger consideration form of, uh, you know, p- portion of the, of the, of the, uh, compensation. And then they, you know, you cut an employment deal where they say, "We're going to pay you, you know, this much for five years." I can say that. I, I was locked, I was locked up on a five-year vesting schedule, so typical would be four. Most of our employees were four. I got locked up for five 'cause I was a key guy. And, uh, th- that, that money technically is not for the acquisition. It's just what-
- SPSam Parr
Yeah
- PLPalmer Luckey
... you're being paid for.
- SPSam Parr
I had that too.
- PLPalmer Luckey
Um, yep. So and of c- and of course, you know, you, you can't, you can't pretend, you can't say they're the same thing or they, they're supposed to be treated differently tax-wise, compensation-wise. And then of course there's the bonuses we had. We had an earn-out that was a, it was a, it was a ... It was actually a, a huge earn-out. It was hundreds of millions of dollars for the founders of the company if we could hit certain sales targets and user, uh, user, like, hours, hours of time targets, and we actually had four years to hit those targets, and we g- we hit them within less than two years. So we actually did ... It, it's kind of funny. People are 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, uh, because we were, we were, we were kicking butt. But, uh, anyway, I ... It, it was in the hundreds of millions of dollars, I can tell you that.
- SPSam Parr
So-
- PLPalmer Luckey
In the healthy hundreds of millions of dollars.
- SPSam Parr
Were, were you-
- PLPalmer Luckey
But-
- SPSam Parr
Were you-
- SPShaan Puri
So a bunch of people who listen to this ... Uh, s- sorry. I, I'll go real quick. A bunch of people who listen to this are founders and, and, like, would want to sell their company someday, and, uh, both me and Sam, we started this podcast right when we both exited our companies 'cause it's like, all right-
- PLPalmer Luckey
Right
- SPShaan Puri
... we're kinda earning out. Well, we can't start another company right now, but, like, oh, we can start a podcast. That s- that sounds kinda fun. And, um, and a- actually, ye- just yesterday I just closed on another sale of a company. But th- these are small-scale compared to what you did, right? Like-
- PLPalmer Luckey
Congratulations.
- SPShaan Puri
Thank you. But you, you sold for, I don't know, two or three billion bucks. How does that happen? Does somebody c- you know, Zuck c- uh, comes over to your house and is like, "I'll give you $3 billion for this"? Like, how does that-
- PLPalmer Luckey
[laughs]
- SPShaan Puri
How does that even... How does that conversation go down, um, when, when, when it, when you're talking about the sort of, like, the grand slam type of outcomes?
- PLPalmer Luckey
Well, it's a l- it's a long story, but, you know, you know, I, I know, I know Sam didn't wanna talk all about VR, but-
- SPSam Parr
No, I c- th- th- this shit's interesting to me.
- PLPalmer Luckey
Oh, great. Then we, we, we won't, won't, won't talk about VR optics and, and, and the Metaverse then. [laughs]
- SPSam Parr
[laughs]
- PLPalmer Luckey
Um, but I, I guess on, on the business side of it, the, the interesting thing about the acquisition is that we didn't have any of intention of selling initially when we first had our conversation with Facebook, and I think that really wa- was a positive thing. Uh, because w- actually, first time we talked, I think ba- basically we were offered a billion dollars to sell. Uh, and we said, "No, we're not interested. We think this company's easily gonna surpass that value. We think it's not gonna be a problem for us to make more money, and, uh, yeah, we, we, we're, we're happy to work with you guys, but we, we don't wanna b- buy anybody."
- SPShaan Puri
By the way, was that, was that easy to say no to a billion dollars? I mean, you started this thing, like, on a Kickstarter, dude. Like, you know, at some point were you like... Was it hard to say no or was it not a, not an issue at that point?
- PLPalmer Luckey
It wasn't an issue for me, and I think, I think, uh, uh, different people had different opinions. I mean, look, if you, if you look over my career, I've made a lot of similar decisions. Like, when I was starting Oculus, when I was deciding whether I was gonna do a Kickstarter or work for someone else, I actually had a job on, uh, a job offer on the table from, uh, from Sony to run a PlayStation VR lab, uh, you know, out of PlayStation Group. And when I turned them down, they actually doubled the offer, and then I had to turn them down again. And a lot of people were wondering, "How could you have done that?" You know, "How could you 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 billion dollar offer. Like, I almost could not have said yes. You know, like, that, that, that, for 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. Um, 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, uh, but I certainly do because it was a big deal in my mind. The day that we announced... No, the day we fi- 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, we'd actually even shown each other prototypes and stuff. Uh, but it really reinforced this was a serious thing. We were gonna have some of the biggest games companies in the world putting hundreds of millions of dollars into competing with us. And, uh, you know, that, that made, I think, our, the, the... That made the, the pitch that Facebook came back with, which was, "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 a, 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 w- they were willing to commit billions of dollars a year for a period of a decade or more, and that's, that's a really tough thing to turn down when you really believe in something.
- SPShaan Puri
And is this, like, literally Zuck coming to your house and talking to you about this? Or is there, like, an army of lawyers in between you guys that are, like, you know, bankers and, and corp dev people?
- PLPalmer Luckey
It was a very small number of people. I mean, it was, it was ... I mean, I, I think that the, the, the, the, the lawyers and the accountants are much more likely to be involved in a deal when the deal is contingent on, uh, you know, your, your revenue and your multiples and your PNLs. Like, that, that, that's where you need to drag those people in to really make a, 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 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 and you're working and you're playing? And then most importantly, do you believe this is the best team in the world to do it? And I didn't know this at the time, but I found out later that Mark had been going around and talking to various, uh, university research labs, government research labs, talking to a, you know, seeing what other companies were doing, and their conclusion was we were way ahead of everyone else, and that if, if this was going to happen, this shift to immersive computing, the final computing platform arguably, uh, that we were the people in the best position to do it. And 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, it's, it's a, it's a very high-level bet.
- SPSam Parr
What was your personal financial situation when you turned down the billion-dollar
- 13:57 – 18:08
Palmer's journey from minimum wage to millionaire
- SPSam Parr
offer?
- PLPalmer Luckey
So at the time, uh, early, early in Oculus ... So y- I, I mean, I started Oculus using my own money, and at that time I was working a minimum wage job and living in a 19-foot camper trailer. I was 19 years old. So for people who aren't familiar with the story to that degree, I mean, I had almost no money, literally had a few hundred dollars in my bank account because I spent all the money that I made putting myself through school and working on virtual reality technology, and I was extraordinarily ir- ... And I, I had a minimum wage job. I was also fixing computers on the side. For a while, I'd been buying broken iPhones, put, fixing them and unlocking them, selling those for spare cash. And so I, you know, I'd, I'd, I'd burned a lot of money on my, on my, on my nutty hobby. Um, and when we started Oculus, uh, we, 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, we were paying the CEO $100,000. Uh, I was getting paid $100,000. And, uh, to me, that, that actually felt in- incredible. I was like, "Wow, $100,000. This is absolutely crazy. I can, I can afford anything." Uh-
- SPShaan Puri
You're like, "You know how many cell phone-
- PLPalmer Luckey
[laughs]
- SPShaan Puri
... how many iPhones I'd have to fix to make $100,000?" [laughs]
- PLPalmer Luckey
Heck of a lot.
- SPShaan Puri
'Cause you were fixing iPhones-
- PLPalmer Luckey
That, espe-
- SPShaan Puri
... and, like, scrubbing boats or something I read?
- PLPalmer Luckey
That's, yeah.
- SPShaan Puri
Is that what you were doing?
- PLPalmer Luckey
Yeah. Well, I mean, when I started working on VR stuff, I was ... I worked for a few years in a boatyard, so yeah, yeah, scrubbing boats, repainting, repainting the, the, the, the, the bottom paint, uh, sweeping the boatyard. You know, the, that, that type of stuff. Um, so, so, s- so to me, the money was not, was not a huge motivating factor also because, maybe, maybe too optimistically, I believed Oculus was going to be worth tens of billions or hundreds of billions of dollars. So d- it really wasn't the, the mo- I know, and I know this is what, contrary to what I said before, but it wasn't the money that was motivating me to make the sale. The, it, it was the pitch, "Hey, we're gonna get you billions of dollars right now." Like, not, not the, not the compensation for the, for the, for the acquisition, "But we're gonna give you, your, your organization billions of dollars a year to go out and make virtual reality actually happen, and 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." Uh, that, that was kind of the situation we were in, and Facebook was one of the very few companies that had a strong incentive to make virtual reality and immersive computing writ large to come about as quickly as possible because unlike Google, unlike Microsoft, they did not benefit from the status quo in the hardware space. So i- if we kept using mobile phones and normal computers for, you know, the next 20, 30 years, Google and Microsoft are gonna do just fine. Like, they, they're, 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 wanna call it, uh, it could be that Microsoft is one of the top players, and it could be that Apple and Google are, are some of the top players, but it's unlikely that all of them are gonna remain the dominant players, and that's an opening for a company like Facebook to come in. And even if they're not first place, forcing the reset puts them in second or third place instead of being totally subservient to the operating system, uh, vendors and to the hardware vendors. So it, it was one of those things where there were other companies that were interested. None of them actually had a strong incentive to put billions of dollars into VR on an ongoing basis. And 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, it, it's a, it's a, it's a, it's a tough business, and I'm not convinced that Oculus would still be around if we hadn't had those resources.
- SPSam Parr
I'm gonna, uh, move on from, like, asking you these money questions, but I wanna ask one more because I do think it's fascinating because you went from, like, maybe not having a lot to having a lot, and you're also, like, an oddball-
- PLPalmer Luckey
[laughs] Yeah
- SPSam Parr
... which I like. D- uh, when I'm h- sold my business, I put everything into bonds and just Vanguard total index funds and just did, like, a normal 80/20 split and then eventually some real estate and then HubSpot stock and, uh, just normal, like, basic stuff.
- 18:08 – 26:16
What did you do with your money when you sold Occulus?
- SPSam Parr
What did you do with your money, and what have you... 'Cause I know you bought, like, a, a marina, I think, or you tried to buy it. I don't know if it went through.
- PLPalmer Luckey
[laughs]
- SPSam Parr
Uh, but, like, what, what, what does, like, someone like you do with that amount of, uh, liquidity?
- PLPalmer 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 do game the financial market. So actually, yeah, Van- Vanguard funds, like Vanguard 500 total index funds. Um, 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's informed mostly by John Bogle's Little Black Book on investing, where he's 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, uh, than, than [laughs] than the market. Um, 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... It- so this is getting a little into the weeds on something probably very few people care about, but just so you know, um, 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, uh, you know, wi- without getting into, without getting into, you know, my, my, my whole seasteading delusion, I think that you're gonna end up needing, uh, i- 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, uh, 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. Uh, you'll see. You all see.
- SPSam Parr
[laughs] See, I bought my house just like, I like the cl- the walk-in closet was nice, and I was like, "Oh, that's a good enough reason for me."
- PLPalmer Luckey
[laughs]
- SPSam Parr
I didn't have to, like, you know, go into international waters, uh, [laughs] to make it happen.
- PLPalmer Luckey
Well, no, in, in that case, I, I did buy a h- I mean, I, I did a, I did a few things. Like, as soon as I had money, I immediately started learning to fly helicopters for real because I'd always wanted to be a helicopter pilot ever since being a little kid. So, like, it was, like, it was, like, two weeks after The Wire completed I was, I was flying helicopters, so that was really cool. Um, I bought a '69 Mustang convertible. That was really cool. And, uh, I bought a first generation Tesla Model S. That was cool. And then I bought a house for my parents. You know, it's like the, the, the... It's like the basketball player contract move.
- SPSam Parr
[laughs]
- PLPalmer Luckey
You know, you, you, you get the money, you buy the, you buy the house for- for- for your parents. And then I bought a house for myself that was close to my grandpa, actually. Uh, and unfortunately, we then ended up having to move up to S- Silicon Valley because of the acquisition, and then he passed away while I was up there. So one, one of my, one of my regrets, but I'm still in that house.
- SPSam Parr
Wow. Uh, okay, that's amazing. And, um, one other thing I had seen was that you... I don't know if this is even a real thing or it's, like, some Twitter fake, you know, fake photo or whatever. Did you buy Bitcoin in 2013?
- PLPalmer Luckey
No, no, I bought Bitcoin much earlier than that.
- SPSam Parr
[laughs]
- PLPalmer Luckey
I was a very... The... 20- 2013 is when I was on, I, I was in the Forbes 30 Under 30, and they asked everyone on it for a quote for the print edition, and it was... The, the theme was: What is your advice to other young founders? And my quote was, "Buy more Bitcoin." Um, Ed, but I, I'm, I've actually been involved in Bitcoin since before there were any exchanges. I, like, I, 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. Uh, and then I ended up, uh, I ended up buying someone's, uh, Samsung, Samsung Galaxy Vibrant, which was the T-Mobile variant of the first Galaxy phone, uh, for 800 Bitcoin, I believe, uh, which at the time was, you know, well, well under a dollar per Bitcoin.
- SPSam Parr
Right.
- PLPalmer Luckey
So I, I've, I've actually been in-
- SPSam Parr
16, 16 million today, probably
- PLPalmer Luckey
... so that's the, the very early days. [laughs]
- SPSam Parr
16. Oh, my God. How do you... H- so, like, all right, you, you, you... We had Balaji, you know Balaji, uh, on the pod, and, like, he was one of these guys where he would, like, give an analogy. He was like, "Oh, you know, Bitcoin is kinda like the Battle of Thames." And I'm like, "Bro, I, you can't... You... I need an analogy for your analogy. Like, I can't tell you about the Battle of Thames-
- PLPalmer Luckey
[laughs]
- SPSam Parr
... in World War II. Like, I can't have that conversation with you." And you're a little bit like that, where you're talking about, like, uh, you're just, like, throwing a few f- lines, like, oh, this gaming forum I have. When I was like, "Well, I could have gone down that path," but... And then you're talking about, like, this boat marina thing, and I'm like, "That, that's a whole conversation, like how on earth you discovered that." And then I'm sure you have strong opin- you, you just have a, a very sh- and then now obviously you're doing government stuff, and you've done, uh-
- PLPalmer Luckey
Yep
- SPSam Parr
... and you, you know a bunch about polit- whatever. How are you becoming so well-versed and also so opinionated on such a broad set of topics?
- PLPalmer Luckey
Because you have to. Most of the time, like, the, the best things that I've do- 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, a- a- an example here would be, uh, with this, 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, you know, 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, as just one example, rather than focusing on trying to make these- ... optical stacks that cost thousands of dollars and weighed a bunch, and that was really what was making these headsets, uh, weigh many pounds and cost tens of thousands of dollars. It 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, uh, 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, uh, 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. Uh, 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, ex- 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, uh, in enough areas to pull from one area and solve the biggest problems of another. So I, I mean, I, I make it a priority. You asked, how do I do it?
- SPShaan Puri
[laughs]
- PLPalmer Luckey
You make it a priority to know a little about a lot.
- SPShaan Puri
So, uh, two questions. One, just go back to the Bitcoin thing for a second.
- PLPalmer Luckey
Sure.
- SPShaan Puri
What... How did you get into... Like, why were you on the Bitcointalk forums, or why did you see it even before, you know, almost anybody? Uh, so what were you doing there, and why did it catch your eye? Um-
- PLPalmer Luckey
Yep
- 26:16 – 29:18
Palmer's crypto investment
- SPShaan Puri
now?
- PLPalmer Luckey
So, I mean, I, I think I got into Bitcoin, it would've been mid, mid to late 2010. Um, and, and I, I, I, I was really fascinated because I w- 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, g- cy- cyberpunk concept. The idea of, you know, a 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 [laughs] science fiction. Um, and so that, that was... I, like, I bought into the, the very original cool vision, not the, "Oh, this is gonna be huge for everybody one," but like, "This is, this is, this is cyberpunk incarnate. I have to be a part of this." Um, and when I started, uh... Like my 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 skyro- 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, this financial markets play that I've never believed in. I've, 'cause I always believe in, you know, investing in the whole market. Um, 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, uh, without any, without being beholden to any, any centralized authority or centralized power. And, uh, 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, ev- every time there's a Bitcoin crash, it's like, "Oh, no, it's crashed to only 10x what it was two years ago." Every single time. Every crash is like that.
- SPShaan Puri
[laughs]
- PLPalmer Luckey
Um, but more importantly, it's still a good way to move value around. And, uh, that said, my prediction in 2013 was that Bitcoin will go to about $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.
- SPShaan Puri
And wow. Okay, amazing. And then did you, um-
- PLPalmer Luckey
Oh, by the way, I have, and I have to throw out there, I'm one of those guys who lost a bunch of coins-
- SPShaan Puri
Mount Gox
- PLPalmer Luckey
... in the Mount Gox hack. Oh, man, I got Goxed good.
- SPShaan Puri
[laughs]
- PLPalmer Luckey
Um, and it was, it was one of those things where there was no... Like, looking back, everyone's like, "Oh my God, I can't believe that, you know, you would have..." And I had most of my coins in, in my own wallet. Uh, but I had a significant amount on, on Gox because people were transferring coins to my Gox, to my Gox account. And, uh, now everyone's like, "Oh my God, of course you would never keep your coins in an exchange." But, like, I was 16 years old, and like, you know, there was, there was no, there was no, like, I- idiot's guide to Bitcoin back then. It was, it was the type of thing you only used if you were a, a crazy, a crazy internet nutter.
- SPShaan Puri
And
- 29:18 – 38:18
What are the online forums that people should be hanging out in?
- SPShaan Puri
so you've mentioned forums, and I'm a big forums guy. Like, I still... I remember, you know, BBS, uh, I wasn't, like, before-
- PLPalmer Luckey
Yep
- SPShaan Puri
... whatever was before BBS, that's not me, but I've been on forums, and I love forums. And you talked about-
- PLPalmer Luckey
Amen
- SPShaan Puri
... the Bitcointalk forums. I went and read a bunch of your early posts on the... What was the name of the, like-
- PLPalmer Luckey
Odd retro?
- SPShaan Puri
No, no, no. The, the headset one, the head mounted display.
- PLPalmer Luckey
MTBS3D?
- SPShaan Puri
Yeah, exactly.
- PLPalmer Luckey
There we go.
- SPShaan Puri
Like your old, your old posts there. I went and, like, stalked them just to be like, 'cause I like to see the origin. I'm like a-
- PLPalmer Luckey
It's fun
- SPShaan Puri
... I'm like, what are the, like, archeologists for, like, the internet?
- PLPalmer Luckey
Yep, yep.
- SPShaan Puri
I like to go find the original shit. And so, um, you know, I saw you posting there, and you're like, "Hey, I'm trying to build this thing. I'm, I'm thinking about doing this." Y- you did a bunch of, like, kind of really cool crowdsource stuff. I think you even, like, asked Reddit, like, you know, "Should I buy th- should we buy Vibe?" Or something like that. [laughs]
- PLPalmer Luckey
[laughs]
- SPShaan Puri
You did a bunch of cool stuff on forums. And I thought about that, and some of them, like, I, when I learned poker, I learned it through forums.
- PLPalmer Luckey
Yep.
- SPShaan Puri
If you think about today, like if, who's the s- the 16-year-old version of you today, what forums do you think they're hanging out in? What's the thing... 'Cause when you were doing this, this is 15 years ago. Like, VR is still early, and you were-
- PLPalmer Luckey
Yep
- SPShaan Puri
... early, early, early. Same thing with Bitcoin. You were early, early, early. And so what do you think are the interesting forums today that people
- PLPalmer Luckey
... are hanging out in that you think will play out over the next decade or so?
- SPSam Parr
And, and also-
- PLPalmer Luckey
Uh, I mean-
- SPSam Parr
... what are, what are, what are some of your favorite pockets of the web and, and forums that you're hanging out in?
- PLPalmer Luckey
I mean, much to my chagrin, I like, I love forums too. I think they are more or less the pinnacle of asynchronous communication. Like, if you are doing collaborative pro- the, all of the incentives are correct. Like, so, so I like, I, I ran a forum, the ModRetro 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 64s, and Super Nintendos, 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 NiCd back when, back when I started, started, you know, working on portables. Uh, b- you know, putting in LCD screens that were designed for portable DVD players and the like, and building these self-contained units. And, uh, it, it, 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, al- you know, algorithmically driven that you don't have the same incentives in terms of long-term sustained engagement and, uh, you know, collaborating with people. There's a lot more incentive to do things on your own, do one big push in a forum that will cause ordinary people who are not necessarily technically competent to, you know, watch it for at least three 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. Uh, so, like, one I like, like, I'm a member of a, of a night vision group where people build their own night vision, uh, night vision goggles, and, uh, it's got a l- a couple thousand people. But it's, it's a private group and very, very much not virally driven. Uh, you know, it's not like the TikTok, TikTok technoheads, it's not like the YouTube technoheads. But man, I, I really miss forums. You know, ModRetro, we had a core group of a few thousand active members that were, that were doing stuff in the heyday, and we were doing a few, a few million page views a month. Uh, and you would, you never see those ratios these days, you know, of, of, of, I mean, of, of engagers to, to, to watchers.
- SPSam Parr
One thing that, um, that, uh [clicks mouse] I thought was actually really i- interesting, I don't know-
- PLPalmer Luckey
Oh, wait, wait, I have to, I have, I have to interrupt. I have to interrupt. One last thing I forgot. Um, actually a huge fraction of the people that I hired for Oculus in the early days were volunteer moderators on the ModRetro forums. Like, y- y- people always, you know, they hire their network, right? They hire the people that they know-
- SPSam Parr
[laughs]
- PLPalmer Luckey
... that they can trust and that they know are competent, and that was my network when I was a teenager.
- 38:18 – 56:20
What ideas were you pursuing after you sold Oculus (prisons, food)?
- SPSam Parr
we get to that, what ideas were you pursuing? Or, uh, y- I bet you if you're like us, I imagine you have a list of like things that you're contemplating. What was, uh, what was on that list, uh, prior to starting Anduril? I know there was like a prison thing and but what, what else like pr- were you interested in?
- SPShaan Puri
Well, what was the prison thing?
- SPSam Parr
Oh.
- SPShaan Puri
Start, start with that one 'cause that, that one sounds interesting.
- PLPalmer Luckey
Also, th- th- there were two things I was seriously considering and then one thing that I'm, I'm, I'm gonna do someday. So C-setting is off the table right now. It's too long term. But there were two short-term things that I was looking at, uh, aside from Anduril. So the three choices were fix national security, solve obesity, or solve incarceration. Uh, and th- th- yeah, I tried to think about, you know, what are the ways that I would tackle these issues. And the way I solved defense was I wanted to build a defense products company that upends the incentives that typically exist in the military industrial complex. But the, the prison one was that I wanted to basically take out the incentives of the private prison complex that exists today. Right now, private prison companies are, are growing. There's 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, and perpetuate laws that incarcerate people for the longest period of time for the least serious crime. In other words, they don't want murderers and terrorists. They want, they want non-violent 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.
- SPShaan Puri
Right. They want good, good tenants. They want good-
- PLPalmer Luckey
That's right
- SPShaan Puri
... high occupancy, good tenants.
- SPSam Parr
Yeah. [laughs]
- PLPalmer Luckey
And, and the incentives they've set up with the government where the government pre-pays for these beds, 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." You know, it's a, it's a very bad set of incentives. So my idea was that I could start a private prison company, uh, that would run as a non-profit organization, and we would use the tax advantages of that to out-compete private prison companies, and more importantly, we would have a business model that would incent everybody towards the right set of incentives. So what I wanted to do was go to the government and say, "Listen, I'll lock up your prisoners, uh, 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." Uh, and the idea is that now all of a sudden I'm motivated and ev- you know, my, 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. And that, I mean, that would've been, that would've been a game changer, and it would've been a very attractive business model to these governments that are always, you know, looking to delay their expenditures. The, the biggest problem that I ran into as I looked into this is it wasn't a technological problem. It was a lobbying and marketing and government affairs problem, and it wasn't at a federal level where you can basically convince a handful of people and then achieve success. It, it was going to be this like this lo- locale by locale thing where you have a lot of people who depend on prisons for jobs. You have a lot of politicians who are very involved in it. It was... A- and 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- we're gonna recompete this deal in 35 years. And so it, it would, it would've been this thing where I, I just couldn't have made an impact fast enough. And so I've been involved with other people who are making impacts in other ways. Okay, so that was one.
- SPSam Parr
You, you... Well, you couldn't just have like some Silicon Valley guy wearing like tight jeans and brown shoes like every other salesperson sitting down like-
- PLPalmer Luckey
No
- SPSam Parr
... "Hey, so we'd like to have a conversation about your prisoners. We'd like to have your business." Like, you know?
- PLPalmer Luckey
No, it, it-
- SPSam Parr
"Give, give, give me some of your guys."
- PLPalmer Luckey
Unfortunately not.
- SPSam Parr
[laughs]
- PLPalmer Luckey
Uh, yeah, yeah, unfortunately not. And, and the thing is the people who make the decisions, uh, would not have benefited from us succeeding. So i- in business, like when you're... And this is a big th- We can get into this with Anduril, too. One of the biggest problems with selling to the government versus, uh, businesses or private, private individuals, with, with, with private individuals and businesses you just have to convince them that, uh, it'll be, that it'll be a, you know, that, that, that it'll be a good thing for them and then they'll buy them. The people who are in charge of purchasing for government, they often don't benefit from saving money or reducing their manpower or any of this. Like, in many cases, the guy in charge of making the buying decision, his political Power and earning power are directly tied to his ability to keep costs high and to keep manpower up and to not allow anything to displace that. So that was actually the big problem. I realized that you ... It's, it's nice to think you can solve any problem, uh, with, with new ideas through disruption, but some things are kind of self-reinforcing, very hard to fix. The, the other thing I was looking at is obesity. You know, obesity is, uh, is one of if not the leading preventable cause of death in the United States. Uh, there's, there's so many, there's so many other health problems that are the result of, of obesity. And some people say that we need to make exercise more popular. Some people say that we need to stop normalizing obesity. Some people say we need m- medical treatment for it or, you know, we need to make eat, healthy eating better. I, I took a pretty cynical view of it. I said, "No, obesity's not going away unless you let 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 parts whatsoever." And so within that constraint, what could you do to, to solve this issue? And, uh, the, the, the, the result, the, the, the idea I came on was, uh, long-chain hydrocarbon-based synthetic food. So in other words, oil-based foods. Uh, you, you guys are familiar with Impossible Burger, Beyond Burger? Have you had them?
- SPSam Parr
Yeah, yeah.
- PLPalmer Luckey
So I mean, it was probably better than the worst beef burger you've ever had, right? It was, it was at least at that level. It's wor- it's better than the worst one you've ever had.
- SPSam Parr
Yeah. It, it was a whatever, I'll eat this.
- PLPalmer Luckey
Yeah, a whatever, you'll eat this, but certainly not up to the level of the best beef burger you've ever had. Um-
- SPSam Parr
No
- PLPalmer Luckey
... and, and so one of the, one of the interesting, th- this is where I was drawing from outside, you know, in an outside world. All these people trying to make fake food, they're all trying to build fake food out of food. And 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's trying to solve, you know, how it feels in your mouth, how it comes apart in your mouth, how it, how it sears, how it cooks, how it changes texture when it's cooked. If I was a chemical or material engineer trying to build, let's say it's not food, just a th- you know, a, a paste, a substance with a certain set of, of parameters, what am I gonna use? Is it, is it beans? Is it chickpeas? Is it corn? No, of course not. I'm gonna 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. And so I said, "Well, let's leverage that." Let's leverage everything we know about making inert hydrocarbons that are non-toxic and use that to make fake food for people that tastes and feels like real food, but has zero caloric value, that cannot be absorbed by your body. It just goes right through you just like fiber. And the thing is-
- SPSam Parr
It's like a-
- PLPalmer Luckey
... it's not that crazy
- SPShaan Puri
Taco Bell
- SPSam Parr
... a Diet Coke for a, a ... Yeah. [laughs]
- PLPalmer Luckey
[laughs]
- SPSam Parr
It's a ... [laughs] Yeah, that exists, dude. It's called White Castle. Uh, but you're-
- 56:20 – 1:17:56
What does Anduril do?
- PLPalmer Luckey
it didn't.
- SPSam Parr
What does, um, what does Anduril do, and what made you realize that the, the, the, the approach to solve that problem was the approach that you picked? Because that seems like such a grand... I mean, I, 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 kinda get that. You can kinda tinker in your garage and come up with a nifty product and whatever, and like, no one's gonna, like, get hurt really, and it's like a pretty simple process. Hard, but simple. Anduril, I'm like, "Oh my God." I don't even know where to start. I mean, I get, I've seen the movie with Jonah Hill where he's like a war dog or whatever it's called, where he like buys and sells weapons, and I'm like, "Is that what Anduril does?"
- PLPalmer Luckey
War Dogs. [laughs]
- SPSam Parr
And, yeah, yeah. I'm like, is that what Anduril does? And how on earth does-
- PLPalmer Luckey
[laughs]
- SPSam Parr
... 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? You call like, "Hey, uh, hey Barak, uh, I was thinking, you know, maybe we could try this-"
- PLPalmer Luckey
[laughs]
- SPSam Parr
"... like MVP..." You know what I mean? I don't even know how you start that.
- PLPalmer 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 v- very big picture, Anduril is trying to build the next major defense prime, meaning we, we're the prime contract holder. We're not a subcontractor to existing primes, like Lockheed Martin or Raytheon or Northrop Grumman or Boeing. And, uh, you know, w- I th- 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 plus 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 II to basically take over the US war machine, or sorry, the US industrial machine, turn it 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, uh, 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, uh, 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 c- companies. I mean, s- 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 could start small and get big if you had the best stuff. But in the last 35 years, there were only two 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, the, 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 capitalists say, "I'm not gonna invest in a defense company." There's no examples of success in the last 35 years, less the billionaires, uh, who can do anything. I'm sure they could've done whatever they wanted with their billions. Uh, and so the VCs don't want, want to invest in it, and it, this is... And then smart employees don't wanna 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, uh, I, I, I said, "Man, you know, if that's really what it takes, uh, it, it re- it, you know, if it really does take lots and lots of money and lots and lots of influence and really smart people, then I'm in a position to start a company that very few people are." Very few founders have experience running a multi-billion dollar company with thousands of employees, man- mass manufacturing millions of pieces of hardware, uh, and h- 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, if I would've just left Oculus by retiring on my own, it would've 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 wanna 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, you know, 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. Uh, the, 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 a war, it's 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, uh, you guys probably remember how things were, you know, I guess about, you know, about five or six years ago. It was, uh, 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, uh, land borders are not fixed. And, uh, the... Like, I mean, look how wild it is that Europe is still buying billions of dollars of goods from Russia, even as Russia literally invades Europe. I mean, like, that- that's- that's how screwed, [laughs] that's how screwed they are. Um, and I think pe- people, people did not see this a few years ago, and I felt, I felt a little bit like a crazy person. Um, 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 it, so I'll say it again. You know, that we're living in the first time in US history where the most innovative, powerful, and large technology companies in our country refuse 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, I mean, whether you're talking about Google or, in particular, Apple, I mean, Apple's got 95% of their manufacturing in China. Uh, they a- agreed to invest, uh, they've invested hundreds of billions of dollars in manufacturing capacity there. They've agreed to invest a further $275 billion 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, they're 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 trillion company. Like, they, they, they are not masters of their own destiny, not by, by any means. And I, I, I guess I want to stress this, 'cause it's never been the case in history, and that had me terrified. You know, I, I... Five years ago, I could see we were on the precipice of war with advanced powers who had fully suppressed our most advanced technology companies through economic tools. And, you know, they've... 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 on that. I know that was a long ramble, but I've, I've got a lot of, lot of emotion all built up inside o- [laughs] on, on it.
- SPShaan Puri
No, I mean, that's why we wanted you on, is to hear what you're doing and why. But, and you also flipped... And, like, the common denominator with either the prison thing, the food, the, the, the oil-based foods, or this, is that you kind of looked at it from another angle, and also f- maybe flipped the incentives, so the cost structure. So what you were saying was, you know-
- PLPalmer Luckey
Yeah
- SPShaan Puri
... let's say with the prison thing, you wanted to be incentivized to keep people out of prison rather than in prison-
- PLPalmer Luckey
Yep
- SPShaan Puri
... for as long as possible.
- PLPalmer Luckey
Exactly.
- SPShaan Puri
Sounds like for Anduril-
- PLPalmer Luckey
It sounds so simple, right? [laughs]
- SPShaan Puri
Yeah. Sounds like for Anduril-
- PLPalmer Luckey
Well, it, it, it is simple, but it's not easy.
- SPSpeaker
No.
- SPShaan Puri
Yeah, and well, and it, what, it sounds like what you ran into there was the incentive, uh, for the local official who, you know, um, who decides on these things may have been to have a, a bigger budget and not a smaller budget.
- PLPalmer Luckey
[clears throat]
- SPShaan Puri
And so, you know, your incentives were sort of clashing.
- PLPalmer Luckey
Right.
- SPShaan Puri
Whereas with-
- PLPalmer Luckey
And he doesn't, 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-"
- SPShaan Puri
Right
- PLPalmer Luckey
..."and this one really has a lot more experience, and we don't wanna take a risk on a new vendor." It could literally be that simple. He... 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. Like, you-
- SPShaan Puri
Right
- PLPalmer Luckey
... you, he could just be like, "Nope, I, I... Too at risk."
- 1:17:56 – 1:26:32
Jason Calacanis vs. Palmer
- SPShaan Puri
wait, wait, I forgot.
- PLPalmer Luckey
But, uh-
- SPShaan Puri
Do you wanna rip a WWE style promo at Jason Calacanis, who's coming after you?
- PLPalmer Luckey
[laughs]
- SPShaan Puri
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 wanna rip a, a WW style promo, this is, this is the place. There are 100,000 entrepreneurs ready to back you here if you can get them on your side.
- PLPalmer Luckey
I mean, maybe this is because I al- like, I, look, I'm, I don't know if you can tell, but, like, I'm actually a pretty big guy.
- SPShaan Puri
[laughs]
- PLPalmer Luckey
Like, I weigh about 250 pounds. I'm six feet tall. Um, like, I, uh, it's kind of... I understand the mechanics-
- SPShaan Puri
[laughs]
- PLPalmer Luckey
... of fighting well enough, and I've, I've done enough of it recreationally to understand that th- th- it's unlikely that somebody who's like-
- SPShaan Puri
[laughs]
- PLPalmer Luckey
... you know, 5'5" and 140 pounds-
- SPShaan Puri
[laughs]
- PLPalmer Luckey
... is gonna, is g- is gonna have a, a, a good shot. But I, I, the thing is I don't, I'm not, I'm not a, I'm not a physical violence kinda guy. I, I, I think it's weird to be like, "Oh, yeah? Y- you, you, you, you, you, you, you, you, you don't like me? Well, I could beat you in, in hand-to-hand combat."
- SPShaan Puri
[laughs]
- PLPalmer Luckey
It's like, well, I mean, maybe, but, like, your ideas are still bad.
- SPShaan Puri
[laughs]
- SPSam Parr
[laughs]
- PLPalmer Luckey
It's, this is, it, it, it doesn't, it, one doesn't, one doesn't solve the other. Um, so no, I, unfortunately I don't think I'll be throwing, I don't think I'll be throwing down the gauntlet beyond, beyond noting that just, you know, if- Statistically speaking, you know, if, if you just look at the fights between people of, of, of one bulk versus another, uh, yeah, there's, there's a, there's a clear trend.
- SPShaan Puri
Yeah, there's weight classes for a reason.
- SPSam Parr
Is this the most Silicon Valley... [laughs] Dude, is this the most Silicon Valley call-out ever? [laughs] That's awesome.
- SPShaan Puri
I am, I know the mechanics of fighting. [laughs]
- SPSam Parr
[laughs] I, I, I'm, I'm in okay understanding of it.
- SPShaan Puri
Physics, physics is on my side, bitch. [laughs]
- SPSam Parr
[laughs]
- PLPalmer Luckey
[laughs] But, uh, yeah, you know, I mean, a- a- and for, and for people who are listening and don't know, the very short version is J- Jas- Jason Calacanis said a bunch of really awful stuff about me for, for years, starting back in 2016, wh- you know, when he said that I'm a terrible person, that I don't care about my family or my... I think he said, "Palmer Luckey is a complete moron who doesn't care about his employees or his families or his friends." Uh, and then, oh, you know, "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, he celebrates it over and over, "Oh, man, I'm so glad they fired Palmer. What a terrible loser," et cetera, et cetera. Anyway, then he just didn't, th- then he just didn't talk to me for years, never reached out, and then he invites me to go speak at, uh, uh, on his podcast and then at his conference. So I went there, and I, I basically just told people, I'm like, "I can't believe Jason invited me. It's only because I've clawed my way back to having a second unicorn before the age of 30." Like, this guy treated me like total garbage for years. He's never apologized. He spread a bunch of li- even insult aside, he spread a bunch of lies about me. And then, uh, at, at the con- and I say, "Hey, here, look at all this shit he said about me." Like, this is awful.
- SPShaan Puri
Yeah, you had like a-
- PLPalmer Luckey
This is terrible
- SPShaan Puri
... you had like a slide deck. It was amazing. [laughs]
- PLPalmer Luckey
Yeah, yeah. Uh, and, and then, uh, and it, I did that at the end of my talk about, you know, basically the, the future of conflict and particularly the war in Ukraine. And then, uh, 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." Um, and I w- and so th- I, now people, people keep hitting me up, they're like, "You guys need to bury the hatchet, you know? Meet in the middle." I'm like, "I didn't do anything to..." Like, [laughs] you, you can't meet in the middle, like, you're right, maybe, maybe I don't care about my family, but, you know, we can admit I, I care about my friends.
- 1:26:32 – 1:32:59
Flying coach
- SPSam Parr
Go.
- PLPalmer Luckey
Uh, I, I, we, we, we, we, we, we, we got, we gotta talk about the, the tweet you made where you said that, uh, there's no way that there's any billionaires out there-
- SPShaan Puri
[laughs]
- PLPalmer Luckey
... that actually fly coach and don't fly private.
- SPSam Parr
Oh, yes. Good. You have got a good memory.
- SPShaan Puri
[laughs]
- SPSam Parr
Do you, do you fly coach? Oh, you, you do fly coach. You said that. You're an idiot. What are you doing? JCal was right.
- PLPalmer Luckey
No, it, it-
- SPShaan Puri
[laughs]
- PLPalmer Luckey
It ... I mean, so, so I, I, I, the reason I wanted to chat about it is 'cause, yeah, I, I think I responded. I told you, like, "Hey, you're, you're wrong." Like, I, I actually do. I don't fly private, and I do fly coach. Uh, for me it's, it's, it's a, it's a, it's a reasoned thing where, uh, we, we, with exceptions for long ter- like long, long international travel, we only cover coach travel for our employees. It's like, look, it's only a few hours. Like, 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, of our, uh, of our resources on just people traveling in slightly better seats. And so ... And it's especially, especially bad when it's like, oh, am, am I really gonna pay you to like, you know, fly business class for three hours to a place where you're then going to like sweat it out in the desert for, for a week?
- SPSam Parr
[laughs]
- PLPalmer Luckey
Like, you know, it, it's only like-
- SPSam Parr
Yeah, but-
- PLPalmer Luckey
... you know
- SPSam Parr
... so, so you and your-
- PLPalmer Luckey
The coach seat's better than the desert
- SPSam Parr
... you and your wife or your girlfriend or whatever, if you're going to Europe, you're gonna fly coach?
- PLPalmer Luckey
Even when I use my own money, I fly coach. And people say, "Well, why don't you just fly first class? Why don't you fly business?" And here's why. Because I expect my employees to fly coach. And even ... Like, yes, I have a lot of money, but it's, if I don't also do it, it feels like I'm out of touch, or I don't know what it's like, or, you know, "Oh, it's easy for you to say that we should fly coach because you don't have to do it because you happen to have a bunch of money." And so for, for me, a lot of it's setting example. Like, look, it's not actually that bad. I am willing to do it even when I pay for my own travel, uh, because that's, that I, I, I think it's just not that bad.
- SPSam Parr
But are, are, aren't you, don't you have like people who wanna like kill you or like hurt you? I mean, aren't you like a, I mean-
- PLPalmer Luckey
[laughs]
- SPSam Parr
... like, like you've got the whole anti-Trump crowd who sees you, and they're like, "Go F yourself." And then now you're like dealing with Lockheed Martin stuff. Surely they wanna like kneecap you. You, you're got, you're, you're, I don't know what your stance is on China but-
- SPShaan Puri
All in podcast fanatics. [laughs]
- SPSam Parr
Yeah, you got Jason Calacanis is gonna come put you in a noogie.
- PLPalmer Luckey
It's kind of-
- SPSam Parr
Like, something's gonna happen.
- SPShaan Puri
[laughs]
- SPSam Parr
You know what I mean? Like, surely like there's like some type of security risk. Also, uh, maybe you have life insurance or something like that. If they're gonna insure you, I'd be like, "Dog, you're doing, you're, you gotta have this, a security person with you, or you gotta like have someone with you." Like, surely there's some type of se- security risk where you gotta think like beyond just like, "Hey, guys, I'm in solitude with you on this flight." Like, I get it. Like, I mean, surely there's some type of like-
- PLPalmer Luckey
So you're, you're to- you're, you're to- you're, you're totally right. And I, I mean, it depends on the trip, where the trip is and what I'm doing. And like I, I'm, I, I make sure to keep myself safe. Um, and I probably don't wanna get into the specifics because, you know, like you said, there's people out there who, who are, who are, who are not fans of me. And like they ... You, you mentioned, you know, Jason Calacanis and the Trump people, but like th- what about the Mexican cartels that we've cost hundreds of millions of dollars in drug trade? What about, you know, all the people who have been foiled in attacks on US military forces because of our stuff? And, you know, like there's, there's actually a long list of people who are m- more s- who are scarier than, than Jason Calacanis-
- SPShaan Puri
[laughs]
- PLPalmer Luckey
... if you can believe it. Um, but uh, yeah, look, you, you, you're right that to some degree that, that's a worry, but I also think that in general, if someone's gonna come to kill me, it's probably gonna be a place where they know I'm going to be, and there's, there's, there's actually much higher ... Like, to me, the high-risk place is actually not-
Episode duration: 1:32:59
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Transcript of episode dBeosjr7PyY
