Yahoo Finance Presents: Joe Lonsdale
In this episode of Yahoo Finance Presents, correspondent Jen Rogers speaks with co-founder of Palantir and founding partner at 8VC Joe Lonsdale about investing during the coronavirus pandemic as well as the technology his companies have been using to help fight the virus.
Video Transcript
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JEN ROGERS: Welcome to "Yahoo Finance Presents." My guest is Joe Lonsdale, co-founder of Palantir. He's an entrepreneur, an investor, a CEO and founder of 8VC. It's a $3 billion venture firm focused on critical industries like health care, life science, and logistics. Joe, thank you so much for joining us.
JOE LONSDALE: Thanks for having me.
JEN ROGERS: I want to start with Palantir. Palantir was founded after 9/11, co-founder Peter Thiel. Of course, everyone knows him. And I know you're not on the board. But you are advising the company right now. So what is Palantir doing in the fight against coronavirus? What is it focusing on?
JOE LONSDALE: Sure. Well, I'm a proud founder of Palantir. Palantir was really built to thrive in a crisis. And so you know, if you look at what's happening, there's leaders all over the world in over 34 countries now, over 115 agencies that have stood up Palantir to act as the central data platform to create the central common operating picture. So it's really one of our best weapons in the war against this virus.
JEN ROGERS: So you say it was really meant to thrive in a time like this. And I think if you go back just a year and you looked at stories about Palantir and the general public's perception of it, you know, people say, oh, it's secretive, and it's controversial. The conversation around Palantir has done a complete 180, I would say under coronavirus. Do you think that Palantir has changed? Or has something changed in the perception of the company?
JOE LONSDALE: Well, you know, Palantir has always been built to be able to be stood up very quickly to solve very important problems. A lot of very important problems Palantir was solving were somewhat esoteric if they're working with special forces, if they were working with, you know, different parts of the government that people aren't usually aware of. When people are aware that there's an important problem, and they see that Palantir's the only solution that could stand up and solve it all over the world, I think it all of the sudden creates an awareness of what Palantir's doing it in a way people care about.
JEN ROGERS: So we keep talking about whether that changes in our behavior are going to last, right? Are we all going to stop going to the mall? Are we all going to be working on Zoom? Do you think that the conversations that we're having around privacy are going to last the other side of this pandemic as well?
Because it seems right now people are like oh, sure, track me or contact trace me or whatever because I want to keep my family safe. But does that-- does that hold over?
JOE LONSDALE: Well I'm certainly hoping not to travel as much after this. I think it's been nice to be at home a bit. You know, what's-- what's interesting about companies like Palantir is they're-- they're actually a privacy engine. And that's also what people miss is Palantir itself doesn't give any data.
It actually gives the government the ability to say, here's what we're tracking. Here's who could see it. Here's how to make sure who sees it, who doesn't see it. This is all stuff that was built into it, you know, 10, 15 years ago before these conversations because the people who created it were civil libertarians and so I do think people--
I mean, I hope people are still asking certain about privacy after this. I hope that as government is doing more in our society that we're very careful to watch it to make sure nobody inside of it or tied to it is abusing this information. And so it's really important we use systems like Palantir where that's built into it from the start, you know, to make sure people are protected.
JEN ROGERS: Do you worry at all about privacy issues. And we'll-- let's take Palantir out of the conversation. You're in Silicon Valley. We've got Google and Apple jumping into this as well. Do you think people should be worried about privacy as it relates to public health? Are there concerns there?
JOE LONSDALE: I mean, well, for context, my wife and I are the kind of people who don't have an Alexa or any Google devices in our homes listening to us. We-- you know, we don't fully trust people to have all of our information.
You know, I think-- I think in general, you want to make sure the government and anyone else in the health care system is using systems where it's really clear who can access them, what they're doing with the data, what the rules are with the data. Obviously when you're bringing data together from hundreds of sources, you want to make sure it's tracked and protected so that people can't be drilling in and, you know, searching for their friends, searching for their enemies, whatever they do with this information.
So I'm personally not too nervous about it. But yeah, as a prominent person myself, I would be very frustrated if people are drilling in and spying and using data inappropriately. So I'd want to make sure the government and the health care system was using a system that was very secure.
JEN ROGERS: How do you think the valley is responding overall, as somebody who's an investor right now? The rate of innovation that we hear about in times of crisis can sometimes be huge. Are you seeing that kind of response right now?
JOE LONSDALE: Yes, you really are. I really-- I really think technologists are shining in this environment. I mean, first-- the first response, of course was-- you know, you have to give them credit. I don't agree with a lot of things Google and Facebook do. But they were the first ones to say everyone should stay home. They were the first ones to kind of figure out and set the tone in the valley, well before the governor, to kind of-- And if you look to northern California, our numbers are great thanks in part to that.
And then-- and then on top of that, people are really innovating right now. There's-- you know I'm-- I'm on a board of a company called Citizen which is the top safety network. And there have been a lot of talk people there who built Instagram and Uber and Facebook. They're working 18 hour days to try to help figure out what they're going to do to help with contact tracing and otherwise.
JEN ROGERS: Let's talk about Citizen I've used it in New York City for a long time. It drives my husband absolutely crazy. When I say somebody's getting stabbed two blocks away, he's like, please delete the app. It's driving you mad. But I continue to use it. What is-- what is Citizen's role, do you think, in the coronavirus pandemic? Are they a tool, or are they a solution?
JOE LONSDALE: Well, I think they're one part of the solution. And they're still talking to a lot of governors and a lot of organizations. But because we already have, for example, 19% of New York using the application, because it's the leading safety app, it actually does allow us to partner, you know, with these organizations, with Apple and Google and others and potentially, if people opt in, you know, we get out figure out how to keep you safe and really-- really figure out how to make contact tracing work. So you're going to see some-- some really interesting things coming out of it the next couple of weeks.
JEN ROGERS: Are you writing any checks during this time, like actually making investments? Or are you just advising and managing some of the investments you've already had in play?
JOE LONSDALE: That's a great question. You've really seen the pace of check writing slow down a lot in Silicon Valley. You know, we measured it. I had a call with a few hundred of our investors last week. You know, it was much easier than an annual meeting, much less drinking. But we just did this over the thing. And you know, we measured it.
There's been 12 rounds-- 12 financing rounds that have happened since-- since this occurred. Six of them were actually flat rounds. And so what happened is you go back, and you put more money in at the same valuation a year ago. Even though the company's doing really well, it's realized it's not going to be able to raise enough ground right now. So we're doubling down, kind of supporting our best companies.
A few of them are doing so well that they're taking some more money at higher valuations to grow. And there's been a few cases already where the company was kind of, you know caught out in a bad situation and took money at a little bit lower valuation. And so-- so we are writing some checks. A lot of them, though, are to shore up our existing companies. I think we've done only two or three new checks in the last-- in the last few months. And most of those were early stage, talented people we already knew.
You know, it's really hard to write a check when you don't get to meet people in person and get to know them.
JEN ROGERS: I know you're also really involved from some health care companies. Oscar is an early investment as well. We're all watching sort of this race for the vaccine. There have been a lot of commentary. Scott Gottlieb wrote in the "Wall Street Journal" that it's really important that which country wins this race for the vaccine. Is that something that you've thought about at all?
JOE LONSDALE: Interesting. I hadn't really thought about it the nationalist sense of which country wins. I'd assume that-- I assumed that it would eventually get shared if someone figures it out. I guess it would be nice. I do think America is still the top plate for bio-innovation. We're definitely working on it.
You know, the vaccine is one race. Another race we're doing is the race for a therapeutic. And it's not clear you're going to be able to have a therapeutic. But you know, if you look at it, when someone gets sick from this disease and recovers, there's all these antibodies in their-- in their blood, right?
And so one way you could treat people is you actually take the serum of people's blood who've recovered. And the reason that work is because there's antibodies. Well, antibody technology has advanced a lot in the last 10 years. We've gotten really good at designing and building these things.
One company we created last year is called Swiftscale Bio. Helps bring therapeutics to market faster because it produces antibodies in a cell-free way. So Swiftscale Bio is actually partnering with five or six antibody companies and trying to really quickly bring these drugs to market. You know, it's a bit of a Hail Mary, but I think there's actually a decent chance this year you'll see an antibody therapeutic that works. So that's something worth working on.
JEN ROGERS: Overall, what do you think the role of business is in this time of crisis?
JOE LONSDALE: Well, you know, I've been talking a lot about this with some of my friends who-- who've also been lucky to be able to build a lot of companies. And you know, a lot of times when we launch companies now, the companies we're building, the companies I get my friends to help work on, they're mission-driven companies.
It is a luxury, but when you've done really well. And when you have really top talent in the Valley, they want to work on things that are mission-driven. They want to work on things that are contributing. And so the role of the top of the business world is to say, what can I do in a mission-driven way. How can light harness the market system and the profit systems to stay in something that's a mission that's worthwhile for our society?
And so we're looking at that in terms of how do we make our nation more resilient for next time. What are we going to build to make sure our health care supply chains, to make sure our pharma manufacturing, all of this is really set up to make sure America is strong not matter what it faces in the future, because it is a very scary time right now. A lot of things are close to breaking.
JEN ROGERS: And are you relatively optimistic?
JOE LONSDALE: I'm optimistic we're going to solve these problems, yep.
JEN ROGERS: Joe Lonsdale, great to get a chance to talk with you, CEO and founder of 8VC
JOE LONSDALE: Thanks Jen.
