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On December 13, 2015, Ben commented on The misalingment of elections and representation :

Interesting post Luca. However, I am not sure where the quote “dependent on the people alone” originates from. Is that our business model? Public interest groups have been involved in influencing government since the beginning of the Republic. James Madison, one of the founding fathers, felt this was healthy for the representative democracy. What separates their activities then from campaign donors today?

While the need to raise funds distracts from the business of government, it is not clear that the Supreme Court’s decision around campaign finance was the only or even chief factor leading to a poorly-run government. In fact, you haven’t quite made the case that the government is poorly-run, although you seem to imply it. Certainly, donors don’t have a stranglehold on politicians either; just look at what is happening in the Republican nomination. Bush raised $100 million months ago, way ahead of everyone else, and has yet to break 10% on any polls. Others who have raised far less are doing much better. We could see the same with Clinton and Obama back in 2008. The campaign finance is but one issue that good governances faces in the US.

On December 13, 2015, Ben commented on In-Q-Tel: How to Keep Your Spies In the Know :

Very interesting post. Given that In-Q-Tel’s business model is accelerating the development of technologies rather than maximizing return on investment, how well have they actually done at delivering on their mission? Does or can the government even track the counterfactual scenario of how fast the technology would have been developed without IQT’s support? For all we know, IQT could be a waste of money.

It also sounds like the interests of the employees are not aligned with the interests of the organization. If the employees earn money based on a traditional VC model, but the company doesn’t operate on one, then it would seem that their is a misalignment in interests. The only factor that could subsequently drive alignment would be the mission or purpose of the organization driving the interests of the employees. But which is a stronger driver: money or mission?

On December 13, 2015, Ben commented on Palantir: The Hottest Startup You’ve Never Heard Of :

Very interesting perspective. Having spoken to some Palantir engineers, they have always said that the greatest differentiator separating them separates them from the big 3 consulting companies, is their operating model. Palantir has a couple of core products, e.g. Palantir Gotham, which are then customized to fit client needs. The big 3 consulting companies, on the other hand, are entirely reliant on their personnel with a linear function underlying the number of projects they can do given their number of employees. In contrast, Palantir’s model is less linear than the consulting companies because of their product being the core.

I also wonder whether your view of Palantir’s operating model is all that unique. Many companies do contract work for the government, e.g. Booz Allen Hamilton or Monitor Deloitte. Are all of them also engaged in labor arbitrage? Expanding past the government example, would you then argue that any company that contracts for another organization is engaging in talent arbitrage? Is the only difference with Palantir then that they have top flight engineers?

If you look at the long-distance passenger rail in most developed countries, e.g., France, Japan, etc, they are typically funded and managed by their respective governments. This is because almost all of them are money-losers. While particular individual lines may be profitable, like the DC-Boston corridor in the US, most others are perenially not. It would not make sense, however, for the government to privatize the profitable lines, while retaining ownership and control of the profitable ones. Instead, the government must come to terms with the fact that certain lines will always be unprofitable and that, therefore, they should either close those lines or provide further subsidies so they can operate effectively. The government is not in the business of capturing value so much as creating it.