David Sacks is a founder and investor who was founding COO of PayPal. This collection gathers his own words from essays and interviews. — About - Bottom Up by David Sacks.

Infographic for "Lessons from David Sacks".

On Startups and Growth

  1. On chaos and growth: David Sacks: "This is one of the few startup problems that growth doesn’t solve — in fact, it’s caused by growth." — The Cadence: How to Operate a SaaS Startup (David Sacks, Medium).
  2. On everyone knowing what to work on: David Sacks: "Rather than having this feeling of disconnected functional areas, everyone in the company knows what to work on." — SaaStr Podcast 349: David Sacks (his words).
  3. On getting the product right: David Sacks: "There's lots of other things you can focus on, but getting that product right is the most important, I think." — SoCalTech 2008: Interview with David Sacks (his answers).
  4. On the Wilderness Period: David Sacks: "Between the time a seed-stage SaaS startup ships its MVP and closes its first few paying customers is the Wilderness Period." — The Wilderness Period (David Sacks, Medium).
  5. On the first penny of revenue: David Sacks: "That first penny of happy unaffiliated repeatable revenue is the first critical milestone for a SaaS startup, as it proves that (1) the team won’t be stuck in the Wilderness forever; (2) the founding idea is not just a good story, there appears to be a market; and (3) the team has the ability to convert promise into traction." — The Wilderness Period (David Sacks, Medium).
  6. On deals that do not count: David Sacks: "The deal that you sell, because you get your friends to buy it or your classmates at YC, I would say maybe it doesn't count, because it's not clear you can repeat that outside of YC or if it's a deal that's coming to you really through any affiliated revenue, it doesn't count." — Pattern Breakers transcript (Sacks's turns).
  7. On a sense of mission: David Sacks: "A sense of mission is important for both internal morale and external marketing." — Your Startup Is a Movement (David Sacks, Bottom Up).
  8. On describing the change you seek: David Sacks: "You need to be able to describe the change you seek to bring about, why it’s important, and why people will benefit from it." — Your Startup Is a Movement (David Sacks, Bottom Up).
  9. On the hybrid software business: David Sacks: "Actually, the perfect software business is a hybrid." — About - Bottom Up by David Sacks.
  10. On working from the bottom up: David Sacks: "Everyone has to start somewhere." — About - Bottom Up by David Sacks.

On Product and Distribution

  1. On the product hook and distribution trick: David Sacks: "I always try to figure out what the product hook is and what the distribution trick is going to be, because it's the combination of those two things that gives you product market fit." — Pattern Breakers transcript (Sacks's turns).
  2. On innovating on distribution: David Sacks: "In fact, I would say that the team innovating on the distribution side is as important as them innovating on the product side." — Upfront Summit 2019: David Sacks interview with Kara Nortman (Sonix transcript; his answers).
  3. On letting the Wilderness Period run too long: David Sacks: "The biggest mistake founders make during the Wilderness Period is letting it go on too long before making fundamental changes." — The Wilderness Period (David Sacks, Medium).
  4. On copycats: David Sacks: "Don’t fall into the trap of seeing copycats as the enemy." — Your Startup Is a Movement (David Sacks, Bottom Up).
  5. On the race to feature completeness: David Sacks: "Enterprise products are constantly in this race to be more feature complete, than their competitors." — Pattern Breakers transcript (Sacks's turns).
  6. On PayPal's product hook: David Sacks: "PayPal started in a similar way: our product hook was to “email money,” which also created the first distribution trick (email virality)." — Product First (David Sacks, Bottom Up).
  7. On one user before a whole team: David Sacks: "Some SaaS products need to figure out how to create a great experience for one user before they contemplate how to bring value to a whole team." — Individuals vs Teams: Who’s the Better Customer? (David Sacks, Bottom Up).
  8. On viral enterprise software: David Sacks: "And so we had this idea from the beginning that we could create viral enterprise software and no one had really done that before." — Pattern Breakers transcript (Sacks's turns).
  9. On growing virally: David Sacks: "Consumer startups typically need to grow virally to get to large user numbers because you can’t afford to spend a lot on CAC (customer acquisition costs)." — Failure is NOT an Option (David Sacks, Bottom Up).

On Operations and Management ("The Cadence")

  1. On an operating philosophy: David Sacks: "What you really need is an operating philosophy." — The Cadence: How to Operate a SaaS Startup (David Sacks, Medium).
  2. On synchronizing the functions: David Sacks: "The Cadence is designed to synchronize the major functions of a SaaS startup so that the team works together in lockstep." — The Cadence: How to Operate a SaaS Startup (David Sacks, Medium).
  3. On two systems: David Sacks: "The Sales-Finance System is oriented around a quarterly close as its central event, while the Product-Marketing System orients around a launch event." — The Cadence: How to Operate a SaaS Startup (David Sacks, Medium).
  4. On offsetting key events: David Sacks: "You want to space out these key events by about half a quarter apart to avoid lighting everyone’s hair on fire at the same time." — The Cadence: How to Operate a SaaS Startup (David Sacks, Medium).
  5. On running the Cadence: David Sacks: "If you run the Cadence quarter after quarter, year after year, your SaaS company will graduate from a chaotic startup into an unbeatable army." — The Cadence: How to Operate a SaaS Startup (David Sacks, Medium).
  6. On sprints, marathons and ladders: David Sacks: "Then finally, like I mentioned, start ups are not a marathon or a sprint, think in terms of ladders, I think you’ll be pleasantly surprised culturally what that does for you." — SaaStr Podcast 349: David Sacks (his words).
  7. On product management as resource planning: David Sacks: "It’s about resource planning — maximizing the amount of stuff that you can push through the system with a fixed amount of resources." — The Cadence: How to Operate a SaaS Startup (David Sacks, Medium).
  8. On deadlines from public launches: David Sacks: "It’s not just about the external marketing value: There’s a huge internal benefit from setting dates and deadlines in order to hit a public launch." — The Cadence: How to Operate a SaaS Startup (David Sacks, Medium).
  9. On product managers and quarterly calendars: David Sacks: "And, just having the CEO running around every day or every week, telling people what to do just doesn’t scale, and so you need product managers, and those product managers, I’ve learnt, work best on a quarterly calendar." — SaaStr Podcast 349: David Sacks (his words).
  10. On admitting you are in a crisis: David Sacks: "Whether you’re the leader of a company or a country, the problem with Happy Talk is that you can’t get out of a crisis until you admit you’re in one." — Happy Talk versus Hard Talk (David Sacks, Bottom Up).

On SaaS and Investing

  1. On month-over-month growth: David Sacks: "Your next critical milestone is month-over-month growth." — The Wilderness Period (David Sacks, Medium).
  2. On faking revenue: David Sacks: "And especially now that everyone knows, what the metrics are that a SaaS company is supposed to hit, but long-term it doesn't do anyone any good to fake that sort of revenue." — Pattern Breakers transcript (Sacks's turns).
  3. On defining the Burn Multiple: David Sacks: "I’ve defined a metric that I call Burn Multiple, which is the net burn in any given period divided by the net new ARR." — Failure is NOT an Option (David Sacks, Bottom Up).
  4. On gross margin and burn: David Sacks: "If the company spends too much on COGS in order to deliver the product or service, its burn will increase rapidly as it scales." — The Burn Multiple (David Sacks, Bottom Up).
  5. On founders doing initial sales: David Sacks: "While it’s best practice for founders to do the initial sales themselves (so they can hear the objections and maintain a tight feedback loop between sales and product), adding sales DNA to the founding team can speed things up a lot." — The Wilderness Period (David Sacks, Medium).
  6. On incentivizing the first sales rep: David Sacks: "Oftentimes, the biggest hurdle in hiring the first sales rep is not knowing how to incentivize them." — Simple Math to Set Up a Sales Team (David Sacks, Bottom Up).
  7. On running out of cash: David Sacks: "Nothing is worse than getting to the end of the meeting only to learn the business is almost out of cash and doesn’t have the degrees of freedom required to execute its plan." — The SaaS Board Meeting (David Sacks, Bottom Up).
  8. On the seed stage: David Sacks: "Again, when you’re in that seed stage, when the founder can just run around and tell engineers what to build, that’s fine." — SaaStr Podcast 349: David Sacks (his words).
  9. On startup demo days: David Sacks: "Well, I would trust the demo days of various accelerator a little bit more, if every single startup that presented didn't present a chart that was showing growth, that was up into the right." — Pattern Breakers transcript (Sacks's turns).
  10. On proprietary datasets: David Sacks: "These datasets are crucial to improve accuracy and performance of AI models, to provide a competitive advantage over rivals, to allow customization and specialization for industry-specific needs, and to reduce reliance on third-party data sources." — The Give-to-Get Model for AI Startups (David Sacks, Bottom Up).
  11. On give-to-get: David Sacks: "Jigsaw is largely forgotten today, but its so-called “give-to-get” model could be perfect for AI startups that need to obtain rich proprietary datasets to train their models." — The Give-to-Get Model for AI Startups (David Sacks, Bottom Up).

On Mindset and Career

  1. On a dumb idea: David Sacks: "I thought it was a dumb idea." — Pattern Breakers transcript (Sacks's turns).
  2. On founders pretending failure cannot happen: David Sacks: "So on the one hand, we do allow for failure, but I think that it’s better for founders to pretend like it can’t actually happen." — Failure is NOT an Option (David Sacks, Bottom Up).
  3. On picking a fight: David Sacks: "If you’re going to pick a fight, just remember to always (1) punch up, not down (it should be against a bigger competitor), (2) stay product-focused, and (3) keep the tone positive." — Your Startup Is a Movement (David Sacks, Bottom Up).
  4. On startups almost dying: David Sacks: "Running a startup is so hard, and I’ve never seen a case where a successful startup didn’t almost die multiple times." — Failure is NOT an Option (David Sacks, Bottom Up).
  5. On movements and politics: David Sacks: "So it’s actually easier to effect change with a startup movement than a political movement." — Your Startup Is a Movement (David Sacks, Bottom Up).
  6. On creating, not coercing: David Sacks: "Startup movements operate creatively, not coercively." — Your Startup Is a Movement (David Sacks, Bottom Up).
  7. On culture and founder psychology: David Sacks: "A culture problem exponentially multiplies the founder psychology problem." — BlitzFail (David Sacks, Bottom Up).
  8. On friction inside PayPal: David Sacks: "I think the thing that people don't know about that PayPal mafia founding era, was just how frictional it was inside the company." — Pattern Breakers transcript (Sacks's turns).
  9. On many founder personalities: David Sacks: "And just to have that many founder personalities under one roof is actually a tough thing to manage." — Pattern Breakers transcript (Sacks's turns).
  10. On politics inside companies: David Sacks: "The country is deeply divided over politics and you don’t want to bring that polarization into your company, where everyone should work well together as a team." — Your Startup Is a Movement (David Sacks, Bottom Up).
  11. On the Silicon Valley template: David Sacks: "Especially as we all move to remote work, but even before this, we were seeing startups pop up all over the world and start to use the Silicon Valley template." — Failure is NOT an Option (David Sacks, Bottom Up).

Learn more:

  1. The Cadence: How to Operate a SaaS Startup | by David Sacks - Medium
  2. The Wilderness Period. Can Your SaaS Startup Cross the Penny… | by David Sacks | Medium
  3. Your Startup Is a Movement - Bottom Up by David Sacks - Substack
  4. About - Bottom Up by David Sacks
  5. Transcript of David Sacks: Legendary Startup Product Expert | Pattern Breakers
  6. The Cadence: How to Operate a SaaS Startup