Hi there,
David O. Sacks has charted an enviable career across technology, finance and media over the past 25 years. Let‘s trace his journey from member of the famed "PayPal Mafia" into a savvy entrepreneur and investor with several blockbuster exits under his belt:
PayPal COO – Helping Spearhead the Payments Revolution
In 1999, a 27-year old Sacks joined PayPal as product leader, introduced by old Stanford friend Peter Thiel. PayPal was still in fledgling startup mode, but over the next 3 years Sacks would play a key role in turbocharging its growth as Chief Operating Officer.
When Sacks took over operations, PayPal had just 1 million registered users. But it was adding new customers at breakneck speed – within a year that number shot up to 5 million monthly active users, processing billions in payments. Sacks helped onboard marquee merchants like eBay while leading initiatives that enhanced security and simplified ease-of-use.
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Under Sacks‘ operational leadership, PayPal crafted a culture focused on rapid experimentation and growth hacking before those terms became mainstream Silicon Valley parlance. He also recruited elite engineers from Stanford and top executives from Wall Street to assemble an "A-team" equipped to take on banking giants.
As expert tech analyst Clayton Moore noted:
"David Sacks created a relentless environment at PayPal that prized innovation and execution above all else – that culture became the foundation on which billion-dollar giants like Tesla and LinkedIn were later built."
The results were staggering – just 36 months after joining, PayPal went public in a blockbuster IPO, and soon after was snapped up by eBay for $1.5 billion. Still in his early 30s, David Sacks walked away with over $50 million. For most people it would have been the exit of a lifetime – but Sacks was just getting started.
Room 9 Entertainment – Making an Impact in Hollywood
Flushed with cash from the PayPal windfall, Sacks dove right into his next act – Hollywood movie producer. Teaming with PayPal connections Luke Ryan and Nelson Boe, he launched an indie studio called Room 9 Entertainment. Early efforts like The Sweetest Thing and Seducing Charlie Barker mostly flopped.
But Room 9 struck gold by financing and producing the critically acclaimed 2005 film Thank You for Smoking. A sharp satire of lobbyists for the tobacco industry, it garnered over $40 million at the box office and racked up Golden Globe and Indie Spirit Award nominations.
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For Sacks, Thank You for Smoking also marked the start of a lifelong interest in politics and culture wars from a libertarian perspective.
Online Geneaology Takes Off with Geni.com
Sacks pivoted back to the familiar tech sector in 2006 by co-founding Geni.com with entrepreneurs Charles Sheng and Duncan Riley. The company set out to create a collaborative family tree tracing the connections between all of humanity – a ridiculously ambitious idea.
Yet within 3 years of launch, Geni had attracted over 43 million profiles contributed by amateur genealogists and ancestry hobbyists. It became the poster child of "Web 2.0" community-driven businesses, allowing everyday folks to piece together their family histories. Professional genealogists were also drawn to Geni‘s clean interface and wishlist of advanced features.
Features like the ability to compare trees and ID distant relatives made Geni the most powerful online geneology platform before Ancestry surpassed it. Transitioning to a premium freemium model, Geni was generating solid revenues from monthly subscriptions when it was snapped up for tens of millions by geneaology leader MyHeritage in 2012.
The Geni journey reinforced Sacks‘ talent for identifying promising spaces and assembling user-friendly digital products with viral appeal in spades.
Enterprise Social Breakthrough – Yammer
Sacks scored his next monster hit by tapping into the promise of enterprise software-as-a-service (SaaS). Spotting a niche in secured social tools tailored for office teams, he launched startup Yammer with engineer Adam Pisoni in 2008. It created private in-company chat channels by job function or project.
The service exploded onto the collaboration scene, crossing one million users by 2010 and 8+ million active users over the next two years. 85% of Fortune 500 companies became paying corporate clients of Yammer with over 500,000 networks hosting 2.8 billion messages a month!
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Its exponential adoption was thanks in part to Sacks and team identifying influencers and power-users within large firms to evangelize Yammer‘s benefits. This resulted in whole divisions excitedly signing onto the platform simultaneously in a viral cascade.
Recognizing the opportunity to cement Office‘s position as the productivity cloud for enterprises, Microsoft snatched up Yammer for a cool $1.2 billion in 2012. Sacks‘ third tour de force and most profitable exit to date earned him about $500 million personally. It had taken just 4 years from founding to exit with 20X returns!
Investing in the Next Generation of Billion-dollar Startups
Now a full-fledged unicorn whisperer, Sacks raised $350 million to launch his own venture fund Craft Ventures in 2017. It swelled to over $1 billion in assets within 4 years through savvy bets on fledgling startups like Airbnb, Scribd and Bird which have blossomed into household names.
True to style, Sacks is placing forward-thinking early bets on blockchain platforms, genomics companies revolutionizing medicine, AI/ML that promises to transform industries. Some unicorn candidates from Craft‘s portfolio:
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While Sacks has ruffled some crypto maximalist feathers with his pragmatic takes, he remains hugely bullish on Web3 and automation continuing to reshape and enrich our lives in coming decades.
As he succinctly puts it:
"Money is being made programmable. That‘s a fundamental change with implications we can still barely see."
In a bit over 20 years, David Sacks has produced an array of hugely successful businesses from payments to genealogy to social networking, earning multiple personal fortunes along the way.
After revolutionizing how we network professionally and exchange value online, his investment decisions actively shape the next frontier of technological innovation.
And if his prolific track record so far is any indicator, we can expect Sacks to deliver more category-defining products and founders for many years!
I hope you enjoyed this deep dive into David Sacks‘ trailblazing journey. Let me know which part of his story you found most interesting!
