David Yuan is the founder of the growth equity firm Tidemark. This collection gathers his own words from podcast conversations. — The Platform Journey, episode 25: Dave Yuan, Tidemark.

Visual summary of operating lessons from David Yuan of Tidemark.

On Investment Philosophy and Strategy

  1. On control points: David Yuan: "Generally, there are certain systems, either in the front office or the back office, or both, that have what we describe as data gravity, workflow gravity, and account gravity, to be the control point." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  2. On unfair right to sell multiple products: David Yuan: "And so, we find these control points have the unfair right to sell multiple products." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  3. On capturing value and competition: David Yuan: "To capture that value, it depends on competition." — Practical Founders Podcast #162: Dave Yuan (quote on the episode page).
  4. On multiproduct platforms: David Yuan: "And really this idea of multiproduct, this control point to build a multiproduct platform, has been the offset to that thinking." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  5. On struggling with it: David Yuan: "I think most great vertical SaaS companies are both thinking about this and also, in some degree, struggling with it." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  6. On paying up for category leaders: David Yuan: "I worked under a guy named Jay Hoag who was the founder, and Jay just had this really strong conviction of paying up for category leaders." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  7. On energy of ideas and community: David Yuan: "We want to build the firm on the energy of ideas and the power of community." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  8. On the right to sell multiple products: David Yuan: "So if you have that control point, it not only affects your retention, which obviously is great financially as we all know, but it gives you the right to sell multiple products." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  9. On slow waters: David Yuan: "I think the other construct we have is slow waters, where these are jobs that are really important but no one wants to do it." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  10. On a vision for another growth equity firm: David Yuan: "I think every firm, when you’re starting out, you have to have a vision for why the world needs another growth equity firm, right?" — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).

On Founder Mindset and Company Building

  1. On the learner and the CEO who has it figured out: David Yuan: "I have been fortunate to work with a number of companies have reached significant scale, as have you, and there's such a difference between the learner and the CEO who has everything figured out." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  2. On humility and ideas: David Yuan: "So that humility to be able to engage with people on the basis of ideas, not their revenue scale or their title, I think makes a big difference." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  3. On scaling faster: David Yuan: "And I do think those are the CEOs that are scaling and getting to that next level that much faster." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  4. On playing good defense: David Yuan: "I think initially, we first think about playing good defense and so make sure you're fully financed, make sure you control your destiny, and largely all of our companies are fully financed, so that's a good starting point." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  5. On founders who start with the CEO: David Yuan: "I think most times it starts with the CEO." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  6. On focusing on one or two initiatives: David Yuan: "And, more importantly, even a great software company can really only focus on one or two big initiatives at any given time." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  7. On tinkering: David Yuan: "One is this idea of tinkering, which is it doesn't even have to do the job fully." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  8. On stewardship: David Yuan: "I think what we’re trying to do at Tidemark is really lead with, in some ways, stewardship." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  9. On building an ecosystem: David Yuan: "And if we do that right, we’ll build an ecosystem around us." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  10. On two personas of founders: David Yuan: "I've seen two personas of founders, and one persona is, 'I just want to start something." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).

On AI and the Future of Software

  1. On the AI wake-up call: David Yuan: "You can wave it off, view it as a toy, and say that no one’s going to trust that outcome or use it." — Practical Founders Podcast #135: Dave Yuan (quote on the episode page).
  2. On improving AI with your data: David Yuan: "Lots of smart people are making it better every month, and you have a massive opportunity to improve it with your data and workflow." — Practical Founders Podcast #135: Dave Yuan (quote on the episode page).
  3. On integrate surround: David Yuan: "We call it integrate surround, where you have a great wedge, it's a great feature, it's a flashy thing that gets users excited." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  4. On systems of record and action: David Yuan: "Over time control points, they may remain systems of record, but they may no longer be the system of action." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  5. On SAP as the ledger: David Yuan: "It might be the ERP construct from 20 years ago where SAP got pushed into the back office where the business applications where businesses were creating value and ultimately SAP was just the ledger." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  6. On not being asleep with AI: David Yuan: "Vertical SaaS founders should not be asleep with AI." — Practical Founders Podcast #135: Dave Yuan (quote on the episode page).
  7. On forward investing into AI: David Yuan: "But I do think there is this, I don't want to call it generational, but there is this moment in time where you really have to forward invest into AI capabilities even if you don't fully know what the payback is yet." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  8. On jumping into AI: David Yuan: "Jump into it to control your destiny." — Practical Founders Podcast #135: Dave Yuan (quote on the episode page).
  9. On a point solution subsuming a control point: David Yuan: "There's a common pattern by which a point solution will compete with a control point and ultimately subsume a control." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  10. On not sleeping without AI: David Yuan: "Don’t get caught sleeping without AI in your product in a useful way." — Practical Founders Podcast #135: Dave Yuan (quote on the episode page).

On Go-to-Market and Product Strategy

  1. On the most important systems: David Yuan: "Vertical SaaS oftentimes sells to small businesses and we usually find within a small business a merchant, there's one system or two systems that are the most important systems." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  2. On disconnecting from the pricing model: David Yuan: "I think the second piece is disconnecting those products from your current pricing model." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  3. On outcome-based pricing: David Yuan: "There are a handful of examples where software companies with AI-powered solutions are getting two to five times what they got on a software seat with new outcome-based pricing." — Practical Founders Podcast #162: Dave Yuan (quote on the episode page).
  4. On a material product: David Yuan: "Oftentimes, if you’re going to build a material product, it often takes one to three years to really build this thing and to deploy it through a salesforce in a material way." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  5. On moats from third parties: David Yuan: "Because I think opening up your platform to third parties not only can provide other revenue opportunities that you can serve, but also really contribute to your moat." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  6. On not judging initially upon revenue: David Yuan: "I would not judge the ecosystem efforts initially upon revenue." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  7. On offering quite a few products: David Yuan: "If you really are the control point for your end market, you really can offer quite a few products." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  8. On being the operating system: David Yuan: "If you're the control point, you have a right to sell multiple price to be that operating system for the restaurant, for the trades person, for the lawyer, and that's a really powerful piece." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  9. On the last system you turn off: David Yuan: "A control point is the most important system, very pragmatically, it's the last system that you might turn off before you go bankrupt." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  10. On workflow gravity: David Yuan: "The owner knows what the system is, the customers know what the system is, it has workflow gravity." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  1. On optionality: David Yuan: "Because optionality is quite difficult to give up." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  2. On engagement: David Yuan: "But I initially would really think about engagement, specifically customer engagement and customer success." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  3. On what to hold on to: David Yuan: "Because you need to know what you’re willing to give to others and what you want to hold on to in the long term." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  4. On codifying what we learned: David Yuan: "And so we have a bunch of these learnings and pattern recognition about what makes a great Vertical SaaS company, and so pretty early days we decided to codify that and share that with the world." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  5. On being part of the flow of ideas: David Yuan: "I think if we can be known for being a contributor to this community, if we can be part of the flow of ideas, that's super fun, that will create to our investment returns, all that." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  6. On writing as learning: David Yuan: "I really wanted to use the other side of my brain, which is the thinking, the conceptual, the analytical part, and I believe that writing is learning." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  7. On showing not telling: David Yuan: "I think this also aligns to what I believe investors need to do more and more in the marketplace, which is to show not tell of value." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  8. On the intertidal zone: David Yuan: "And the tidemark is in actually the intertidal zone, which is the most rich and prolific part of the ocean, so all that stuff came together and it felt like a good name." — Orbit podcast: AI, control points and the next wave of vertical SaaS (Dave Yuan's answers).
  9. On starting in 2000: David Yuan: "I first started investing at a biofirm, actually, in 2000." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).
  10. On general partnership at TCV: David Yuan: "I was a general partner at TCV for about 15 years." — The Platform Journey, episode 25: Dave Yuan, Tidemark (his turns).