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Free Palantir? Karp's Plan To Reboot An Entire Economy

Summary

    Though it has received little media attention, Palantir CEO Alex Karp announced last week that Palantir will be offering Foundry to major companies for free.

    We discuss our view on why Palantir made this decision and the economics behind it, adducing our thesis with insight from experts in VC.

    This is a coup de grâce move to take market share as a number of startups and new entrants seek to build products similar to Palantir.

    This seems to be the moment Palantir has spent many years waiting for, so this aggressive and bold move appears well received by investors. Palantir has bounced ~5.5% since the announcement.

Palantir has learned the marketing lesson* of the digital age: get the customer hooked and then you can create the revenue stream. The cost of software is in the making.  Once made it cost almost nothing to replicate.  If a company can get backing to tide it through the lean period and it can break through to capture a big enough market the company becomes a money machine. Google, for example, had a total of $957 billion of total revenue from 2011 to 2020.  

* much like drug dealers

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Thu Apr 29th, 2021 at 04:04:36 PM EST

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