David Sacks: Silicon Valley's Rainmaker

**Caemin** (0:10)
Morning, folks, and welcome to today's episode called David Sacks, Silicon Valley's Rainmaker. And Sacks is a very interesting and powerful figure. He started his tech career with PayPal, and it was Sacks, together with other PayPal founders, who organized the coup that got Elon Musk fired as PayPal CEO. He went on to start up genie.com and Yammer, selling Yammer for $1.2 billion. He then set up a venture firm, and he has risen to prominence, you could say, through the All In Podcast. And then in 2024, President Trump made him AI and crypto czar.
So it's Sacks who is advising Trump on the type and amount of regulation required for AI. A very powerful and important position. So who is Sacks? How did he get to where he is? This is a cracking episode. Enjoy. So David Sacks, born in Cape Town, South Africa, in May 1972, his father was an endocrinologist. And in August, 1977, when Sacks was just five years old, you had the Soweto uprisings. They happened the year before. There were international sanctions were tightening in South Africa. So the family left and they moved to Memphis, Tennessee.
At school because of his accent and the fact that he was an outsider, he gets bullied and Sacks credited Stowe's early hardships, I suppose, with giving him this self-reliance and this tendency to question rules. Now, he excelled academically. And in 1990, he went to Stanford to study economics. And it's there, of course, where he meets Peter Thiel. And Peter Thiel had founded the Stanford Review, this conservative libertarian college paper.
And Sacks is appointed editor-in-chief. And he frames the editors and writers as the real radicals on campus. He targets political correctness.
He targets what he calls dumbed-down admissions. The whole structure, I suppose, of campus multiculturalism. But the most controversial thing he produces at Stanford is a book that he co-wrote with Peter Thiel and it's called The Diversity Myth. And you can tell by the title what it's all about, because it's fair to say that Sacks was really anti-woke well before the term was even invented. But one section of that book really came back to haunt him. And this is where he and Thiel asserted that date rape was, and I quote, belated regress.
Now, in 2016, Sacks walked back and he issued a public apology. This is a quote from him. This is college journalism written over 20 years ago. It does not represent who I am or what I believe today. I'm embarrassed by some of my former views and regret writing them. And I think that's fair enough. Like I think it's nearly a rite of passage to have beliefs in college that you look back on now and you think, jeez, how stupid was I? I know, I do. Anyway, after graduating from Stanford in 1994, he went to Washington to work as a legislative aide, drafting policy briefs. But he found this stifling, slow paced. He saw that there was too much compromising in politics, and so he enrolled at the University of Chicago Law School in 1996 He finished that in 1998 And initially, I didn't know this, he went to Los Angeles with a job offer. But he decided, and this is a quote from him, that it was so brutally competitive, I didn't want to be another random producer with no resources. So stick a pin in that, because he does return to LA when he has resources. But for now, he moves to San Francisco, joins McKinsey as a consultant, but he stays in contact with Peter Thiel, because Thiel wants him to join his startup. Now, it was initially called Confinity, but it becomes PayPal, so I'm going to stick with the PayPal name. So the whole story of PayPal, it is remarkable. I think it's the best startup story ever. And if you want a great read, then buy Jimmy Sonny's book, The Founders. It's all about it. And myself and Keith did an episode on PayPal in June 2024 So I really recommend going back and listening to that. So basically, the foundations of PayPal was that they were developing a product that would allow PAM pilots to beam money to each other. That was their main product. But to enable people who didn't have PAM pilots transfer money, they also developed a secondary email money transfer product. Now, the founders of PayPal, they had very little interest or regard for the email money transfer product. But Sacks saw straight away that this should be the focus. This email product should be the main product. So he said to Thiel, he joined PayPal, if the email product was going to be the main product. Thiel assured him that it would be, but this was kind of a fudge. For a while after Sacks joined, both products were given equal status. So initially, Sacks is pissing off a lot of people by being very vocal about what he thought of the PAM pilot idea. In other words, it was a shit idea. He was telling them that and he was right.