- Working for Microsoft cost me $200 million.
My name's Garry Tan, I'm a Venture Capitalist.
I started off as an engineer, a designer, a product manager.
If you're new to this channel, I'm here to teach you
all the things that I learned the hard way,
starting with the most painful lesson,
which cost me $200 million.
I'd just graduated in 2003,
and my friends were starting a company with Peter Thiel.
They flew me down to have dinner with Peter.
It was about the time Peter wrote the $500,000 check
to Facebook that made him a billionaire.
He was a known great entrepreneur.
He just wasn't the billionaire that you know him as today.
He looked at me and said, "Garry,
"what are you doing at Microsoft?
"You're wasting your time."
Keep in mind, I was 23 years old,
I didn't know anything about startups,
I didn't know anything about finance,
and I definitely didn't know how these things got started.
He said, "Garry, I'm so sure this is the right thing for you,
"you need to quit your job right now."
He asked, "How much a year do you make at Microsoft?"
It was $72,000 a year, really the lowest of the low
coming right out of college.
He got out his checkbook and wrote me that check.
He said, "Cash this check, quit your job.
"This is a zero risk opportunity for you."
I said, "Thank you very much, Mr. Thiel,
"but I might get promoted to Level 60 next year."
Big mistake.
This mistake cost me $200 million in equity, at least.
Palantir is now worth $20 billion or more.
I did end up joining
as employee number 10, I got to build
one of their major product teams from scratch,
I learned a lot, and it still worked out,
but this is a story that you should keep in mind
as you think about where you wanna work.
There are lots of reasons to work at Facebook,
Apple, Amazon, Microsoft, and Google.
I actually turned down a job interview with Google in 2004,
but at the time, and this is what
most Stanford engineers thought, it was obviously useful,
but it wasn't clear that it was going to make money.
In 2019, it's hard to believe any other company
other than Google is going to make money.
Even though these companies pay a lot of money,
in real terms, what software is doing in society
is creating a lot more value than what they pay you.
Goodle's pure profit pure employee
is actually $1.6 million per year, after all costs,
and if you're in the engineering, product, design,
marketing, sort of the builder's side of that organization,
you've got to know that you're creating
a lot more value than that, possibly 10 times,
maybe 100 times that value, and the only way
you can really access that is by owning equity,
and that means either being a founder
or working at an early stage startup
that gives significant equity.
My friend, Bede Jordan of Shelf Engine here in Seattle,
actually said it best, "If you don't work on your dreams,
"someone will put you to work on theirs."
Here are the pros: you get to ship products
to millions of people; that is pretty cool.
Two, it's very stable, and you get to learn some of
the best techniques on how to make products for people.
That's really important.
Three, you're gonna meet a lot of really smart people,
some of whom you may wanna co-found
something with in the future.
Obviously, there are lots of downsides.
If you like to make something new,
it's a lot harder to do that in a big organization.
You have to be good at negotiation,
you have to be good at getting favors from other people,
you have to be good at politics.
Those are really valuable life skills,
but they are a separate set of skills
from being great technically, or great at building product,
and you should probably be aware
of how you spend your time, especially when you're young.
Do you wanna maintain the status quo,
or do you want to make something new?
The two things I really like about working
for smaller places or starting a company is you get
very direct access to users and customers
and their problems, which means you can actually
have empathy for what's actually going on with them,
and then you can directly solve it.
That cycle is so powerful, the sooner you learn
how to make that cycle happen in your career,
the better off you'll be.
If you can make software and make software for other people,
the outcome truly is hundreds of millions of dollars
worth of value if you get it right.
That's where I'm here to try and encourage you to do.
I'm not really saying that you shouldn't
go work at a big tech company.
I am saying you should probably leave
before it makes you soft.
Don't make my mistakes, make all new mistakes.