From Project- to Product- Organisation

Companies are shifting from project-based business to product-organizations to achieve higher margins, easier distribution, and better scalability. In a project-driven model, growth is constrained by human resources—each new project requires more people, time, and effort and most of all: Leadership. In contrast, a product scales with technology, allowing companies to serve more clients with fewer resources, driving up margins and making distribution simpler. I had the chance to interview two ex Palantir employees and ask them a little about how Palantir transitioned from Project to Product.

For years, Palantir was known for its intense, hands-on approach to solving some of the world’s toughest data problems, often described as a consulting company disguised as a tech firm. Forward-deployed engineers (FDEs) worked shoulder to shoulder with clients, building highly customized solutions, sometimes with little regard for scalability. A classical project oriented business as most of the SMBs are going for.

“A Forward Deployed Software Engineer (FDSE) at Palantir works closely with clients to develop and implement software solutions to solve their complex data challenges. They handle full project lifecycles, from coding to strategic execution, and operate in diverse industries. FDSEs often work onsite with clients, requiring adaptability and strong technical skills to deliver impactful solutions in real-world scenarios. FDSEs are embedded with clients to solve real-world problems using data and software, acting like technical leads or startup CTOs. They handle full project lifecycles—designing, coding, and deploying solutions—while working across diverse industries.”

But as the company matured, it became clear that relying on bespoke solutions for each client wasn’t sustainable. Palantir needed to evolve—to transition from focusing on individual projects to creating scalable, reusable products. This shift would allow them to capture more value and build a future-proof business.

In this blog post, I’ll explore Palantir’s transformation through the eyes of two former employees who lived through this critical period. They shared with me the challenges, insights, and hard-earned lessons from Palantir’s pivot to a product-driven approach. Their stories provide a unique glimpse into the complexities of evolving from a high-touch project model to building software that could solve problems at scale for industries around the world.

Project Oriented

In its early years, Palantir operated almost exclusively as a project-oriented company. While its  tech was already making waves, much of its success came from its unique and intensive approach to client engagements. Forward-deployed engineers (FDEs) were sent to work directly on-site with clients, often for extended periods, fully embedded in the customer’s day-to-day operations. These engineers didn’t just deliver software; they immersed themselves in the client’s world, tackling specific problems with tailor-made solutions.

For Palantir, this approach made sense. Its clients—spanning industries like aerospace, defense, and healthcare—had complex needs that required more than off-the-shelf software. These weren’t typical “plug-and-play” solutions; they required an intricate understanding of the client’s business processes. FDEs worked with agility, building custom software quickly and often on the fly resulting in non scalable tech architectures and arguably not the most sophisticated technical solution.

Recognizing the Need for Change

As Palantir’s project-based approach gained traction, the company faced an unavoidable reality. While their bespoke solutions were solving problems, the business model itself was unsustainable. The turning point came when both leadership and frontline engineers started to realize that the company’s high-touch, high-effort model was a bottleneck. Each project required extensive resources, deep customization, and a time-consuming integration process, all of which limited scalability and future growth.

According to the people I spoke with, this realization wasn’t a sudden epiphany but rather a gradual understanding. Palantir’s engineers and leadership began to see patterns in their project work. Many of the challenges they were solving for one client were fundamentally similar to the problems faced by others. The solutions they built, however, were often too customized to be reused elsewhere. This inefficiency was becoming increasingly apparent, especially as the demand for Palantir’s services grew.

One of my interview partner described the shift in mindset as a moment of clarity.

“We had to stop reinventing the wheel every time. Clients loved our work, but it wasn’t scalable. Every new engagement felt like a full reset.”

The forward-deployed engineers (FDEs) were spending huge amounts of time on manual work that could be automated or standardized, and this work wasn’t translating into broader company-wide value.

At the heart of this transformation was dividing engineering into the FDEs and Palantir’s product development (PD) teams. Initially, the engineers who worked directly with clients were seen as separate from those developing the core technology back at Palantir. But slowly, the two worlds began to collaborate and feed into each other. The FDEs, who were immersed in solving on-the-ground challenges, began to feed their insights into the PD teams, who could take these learnings and create scalable, reusable solutions.

The shift from project to product became most evident when Palantir decided to build what would become its flagship product: Foundry. Foundry was conceived not just as a tool for solving individual client problems but as a scalable platform that could be adapted across industries. It took many of the manual processes FDEs were handling—such as data integration, visualization, and decision support—and productized them, making the software available to a much wider range of clients.

This was a significant cultural and operational shift for the company. Palantir had to move from a mindset of “solving this client’s problem today” to “solving this client’s problem today” and “building a platform that can solve many clients’ problems tomorrow.” It wasn’t an easy transition. Many within the company were used to the intensity and immediacy of project work and were hesitant to let go of the hands-on, bespoke approach that had brought them success. However, Palantir’s leadership knew that if they didn’t evolve, they risked becoming obsolete in a world increasingly driven by scalable technology.

The transformation wasn’t just about technology; it required a deep cultural shift. Engineers had to change the way they thought about building solutions, focusing on long-term impact rather than short-term fixes. The company had to rethink its client relationships, moving from one-off projects to selling platforms that could deliver ongoing value.

This turning point laid the foundation for Palantir’s future growth. With the creation of Foundry, Palantir took its first steps toward becoming a true product company, ready to scale its solutions and move away from the constraints of project-by-project work.

Challenges and Lessons Learned

The transition came with significant challenges—both operational and cultural. Shifting from custom solutions to a scalable product model meant rethinking how the company engaged with clients, how it structured its internal teams, and how it approached problem-solving.

One of the key challenges was overcoming the deeply ingrained culture of customization. For years, Palantir had prided itself on creating tailor-made solutions for each client. The forward-deployed engineers (FDEs) were the embodiment of this ethos—building software on the fly, adapting to each unique business need, and working side-by-side with customers to deliver immediate value. Moving toward a product-oriented mindset required a cultural shift. The company had to embrace the idea that not every problem needed a custom solution and that scalable products could still deliver high value to clients.

As my interviewee put it,

“There was resistance at first. The FDEs were used to owning the entire process and solving problems in real time for the client. The idea of handing off parts of that process to a product felt like giving up control.”

This resistance wasn’t just about pride in their work—it was rooted in a fear that a productized approach might dilute the company’s impact. Palantir had built its reputation on solving really tricky problems that involved making unpopular decisions, and some feared that creating a standardized product might compromise that ability.

Another challenge came from the complexity of product development itself. Building a platform like Foundry required Palantir to create software that was robust enough to handle the vast array of data challenges across different industries, yet flexible enough to be adapted to specific client needs. Striking this balance was no easy feat. Product teams had to collaborate closely with the FDEs to understand the nuances of client problems and ensure that Foundry could address them at scale. This required deep cross-functional collaboration, and at times, tensions arose between the teams that were used to working in silos.

Beyond the technical hurdles, the shift also required a rethinking of Palantir’s client relationships. In the early project-based days, Palantir’s engineers were deeply embedded with clients, often acting as an extension of the customer’s own team. Moving to a product-oriented model meant that clients would have to become more self-sufficient in using Palantir’s tools, which required a higher level of trust in the software itself. Palantir had to ensure that its product—Foundry—was intuitive, reliable, and able to deliver value without the need for constant on-site support.

However, these challenges also presented opportunities for growth and improvement. One of the biggest lessons Palantir learned was the importance of scalability—not just in technology, but in operations. As the former employees explained, Palantir’s leadership realized that they could no longer scale their business on the back of human capital alone.

According to one of the former Palantir employees I spoke with, Foundry was built to “automate the cruft work” that engineers had been doing manually for years. Data ingestion, transformation, and visualization—once time-consuming, client-specific tasks—became standardized through Foundry’s tools. Instead of building one-off custom software for every engagement, Palantir’s engineers could now leverage a robust platform that solved these problems at scale, freeing them to focus on higher-level issues.

One of the most impactful features of Foundry was its ability to handle complex data integration—a challenge that most organizations struggle with. Many companies have their data scattered across different systems, formats, and even departments. Foundry solved this by providing a unified platform that could ingest, clean, and organize this data, allowing businesses to make sense of it in real-time. This was particularly valuable in industries like manufacturing and healthcare, where quick decision-making based on accurate data was essential.

Foundry was the proof that Palantir could scale. Not only did it allow the company to standardize much of the work that had previously been bespoke, but it also created new revenue streams. Instead of charging clients for time and labor on individual projects, Palantir could now sell licenses for its software platform, which provided ongoing value without the need for constant on-site support.

This shift had profound impacts on Palantir’s business model and gross margins. As one former employee noted, Foundry “gave us software margins, not consulting margins.” With gross margins approaching 80% by 2023, Palantir transformed itself from a company that relied heavily on human capital to one that could leverage the scalability of software, positioning itself as a leader in enterprise data platforms.

Foundry’s success is a testament to the power of productizing knowledge gained from years of project-based work. It not only validated Palantir’s shift in strategy but also opened the door for further innovation and growth. As the company continues to evolve, Foundry remains a cornerstone of its ability to serve industries facing complex, data-driven challenges on a global scale.

Closing Thoughts

Palantir’s transformation from a project-oriented to a product-oriented organization is more than just an internal shift—it’s an inspiration for any company aiming to scale and sustain long-term success. The lessons learned from Palantir’s journey reflect the broader realities of today’s business environment, where adaptability and scalability are crucial to staying competitive.

For any company looking to scale, the shift from a project-driven approach to a product-oriented one is critical. It’s not just about efficiency or margins, its not about one or the other — it’s about building a foundation that allows for sustainable growth, while still being able to innovate and solve industry-specific problems.