Palantir’s secret sales strategy: No salespeople, just software boot camps

In a tech landscape booming with AI frenzy, Palantir Technologies Inc. redefines the sales playbook with a bold stance: no salespeople. CEO Alex Karp's unconventional approach turns heads as the company's software garners immense demand. Enter the innovative solution: software boot camps. Part hackathon, part conference, these events transform customers into advocates, driving exponential growth. Amid scepticism, Palantir's strategy thrives, reshaping how businesses embrace AI in a whirlwind of innovation and demand..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..By Lizette Chapman.Palantir Technologies Inc. Chief Executive Officer Alex Karp once said that the only way he'd hire salespeople was if he were "hit by a bus." The company's software, which organizes and analyzes troves of data for companies and governments, was so good it would sell itself, he reasoned. .___STEADY_PAYWALL___.Fast forward to the current AI frenzy, there's so much interest from potential customers that not having a traditional salesforce is a problem. "We don't know what to do with the onslaught of demand," Karp said after the company reported earnings in February..Getting businesses to buy, install and use a new generation of AI-fueled software — the corporate version of the products that government agencies use to pinpoint drone targets or locate landmines — requires a lot of legwork. But instead of capitulating and building up a sales staff to recruit, onboard and maintain relationships with customers, Palantir has adopted a novel approach: software boot camps..The events are part hackathon, part conference and part party. Lasting from one to five days, they feature demos from engineers, work sessions for attendees and presentations by existing customers on how they use the tools. If the software works the way it's supposed to, the effect is that customers and engineers become unofficial salespeople..At a boot camp this winter in Pontiac, Michigan, about 100 people gathered in a conference room in a sleek building just off of the M1 Concourse racetrack. During a presentation, Komatsu Mining Program Manager Atticus Clark talked about the potential for AI to help his small team prioritize tasks — for example sorting tasks by urgency instead of by date — which he called a "game changer." .Near the back of the room, Kevin Kawasaki, Palantir's global head of business development, watched Clark speak. Kawasaki nodded toward the stage. "When people try our product, they wind up up there," he said..Read more: Palantir jumps 30%, most since 2020 on first annual profit, AI demand.The company has heavily featured boot camps in its presentations to analysts — mentioning the events 21 times during the most recent earnings call — and describing it as "the" way it will sell its Artificial Intelligence Platform, or AIP. Yet some analysts are skeptical Palantir's boot camps are enough to support its growth. "Right now they need more manpower," said Morningstar technology equity analyst Malik Ahmed Khan. "If there's unrelenting demand, they should be investing significantly in sales and marketing to pull those new customers on." .While the company has been increasing its sales and marketing in recent years, "they're not exactly throwing the kitchen sink at it," Kahn said.."No Salespeople".Karp, billionaire Peter Thiel and some software engineers from Stanford University co-founded Palantir in 2003 with the goal of helping three-letter intelligence agencies in the US prevent another 9/11-scale attack. From the beginning, the company was hostile toward both Wall Street and traditional sales methods. In 2017, Karp declared: "Almost everyone here is an engineer. I'm a Ph.D. in philosophy," and, "We have no salespeople." It took the company until about 2019, on the cusp of its initial public offering, to start adding genuine sales employees..As the company has rolled out its newest AI software, investors rejoiced. In February, the stock jumped 31% in one day after Palantir reported robust AI demand and strong earnings. AIP has helped more than double Palantir's stock in the last year. And the company added about $12 billion to its market value in six months. .The AIP software uses Palantir's tools powered by large language models — AI systems trained on vast quantities of data, created by companies like OpenAI and Anthropic. Karp has talked extensively about the potential of AI both in the military and at companies, calling the tools so powerful that "I'm not sure we should even sell this..Read more: 🔒 Top tech CEOs gather at Palantir's Davos talk on Israel attacks.The company sells mostly to government agencies in the US and allied countries, but corporate interest in AIP could change the way it makes money. Next year for the first time, analysts expect commercial revenue to overtake government sales, according to data compiled by Bloomberg. Of course, that hinges on Palantir's ability to sign up customers..Palantir credited boot camps with helping drive US commercial sales revenue up 70% in the fourth quarter to $131 million. "We can't do enough of them," Karp told analysts in February. "We're limiting the number of people who come. It's like a rock concert." .Last year, the company held more than 500 boot camps, mostly in the second half, Karp said. This year, Palantir is slated to host an average of about five a day. Most will take place in the US, where the demand is so great that the company is bringing engineers from Europe to help work at the events. .At the boot camp in Pontiac, audience members seated at round tables watched speakers, whispered to their colleagues and new acquaintances, and worked with the software on their laptops. Onstage, customers described using AIP to solve specific problems: A user from an automaker said the tools revealed links between quality and purchasing. A J.D. Power executive talked about using AI to analyze communication between repair shops and customers to better evaluate vehicle quality. And Palantir engineers sat shoulder-to-shoulder with attendees on laptops, showing other engineers the types of products they could build with the software — if they become customers. .Palantir recorded some of the presentations and memorialized the event in a sizzle reel it posted to YouTube (accompanied by an AI-created song). .After his presentation, Komatsu Mining's Clark said he's been using Palantir's AIP since he attended an earlier three-day boot camp in November. During that event, he saw how other companies were using the software, played around with the tools himself using mock data sets, and decided he liked it enough to pitch his bosses. Komatsu executives greenlit the use of Palantir's tools with their actual data, and Clark has been building modules ever since. "You can literally do anything with this," he said..Read more: 🔒 Palantir secures £330 million NHS contract amid trust concerns and controversy.Exponential Demand.Still, analysts are skeptical, with some saying there's a good reason software companies have always employed troops of salespeople — to ensure their products are being understood and adopted properly. "They say with the boot camp method it's easier to get it up and running; that's not what we've seen in our checks," said Rishi Jaluria, managing director of software for RBC Capital Markets. "This is very complex software.".Jaluria's conclusion: Selling the software through boot camps "is a pipe dream.".Asked about analysts' resistance to the company's sales strategy, Kawasaki rejected the idea of hiring a large salesforce for both cultural and logistical reasons. "We can't target linear growth," he said. "The demand is exponential." .By "exponential," he means that some customers who attend a Palantir boot camp can then turn around and host their own events for their own customers — in theory, allowing the model to proliferate indefinitely. For example, J.D. Power executive Doug Betts said his company will soon put on an event for its clients, showing off the software and teaching people how to use it..His customers are interested in trying out the latest in AI, Betts said. And there's plenty to talk about. Properly structuring data is a "constant issue," Betts said, as is writing prompts and adjusting settings. "There's a lot of finesse in these things, but we're figuring it out," he said..At the end of the event in Pontiac, attendees showcased tools and modules they'd built or were working on, and the company handed out a few awards. During happy hour, the focus shifted to the concourse outside, where a professional driver in a cherry red Ford Mustang Mach 1 was taking passengers around the racetrack at almost 100 miles an hour on the straightaways..As Joyson Safety Systems Vice President Jeffrey Deevey waited for his ride, he said he hadn't heard of Palantir before the event, but he liked playing with the software. His company, which makes seatbelts, airbags and other safety gear for vehicles, has similar needs to some of the presenters..Getting approval to purchase new systems could take time, though, Deevey said. His recommendation to his bosses when he gets back: Proceed with Palantir, or "at least attend another boot camp.".Read also:.🔒 Boardroom Talk: Palantir (+5%) bucked Nasdaq's September slide (-10%). Here are reasons why.From South Africa to the moon: Control systems crafted by Stellenbosch's CubeSpaceMalema's Cuban dream for SA: A basket case nobody would want to live in.© 2024 Bloomberg L.P.

Palantir’s secret sales strategy: No salespeople, just software boot camps

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