Invest Like The Best
Episode 234 How to Operate a SaaS Startup
Invest Like The Best

Episode 234: How to Operate a SaaS Startup

Invest Like The Best

Episode 234

How to Operate a SaaS Startup

David Sacks is a General Partner at Craft Ventures and founding COO of PayPal. We cover the ways in which operating cadence applies within an organization, what makes for a magical product launch event, and what key growth metrics David uses to measure success.

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[00:03:32] - [First question] - Defining what it means when a company can explode

[00:05:41] - What it would look like if a company didn’t have what it takes to explode

[00:06:19] - Key factors that make for a strong product hook

[00:08:53] - Whether or not there has been a divergence at the early stage of B2B investing compared to B2C

[00:11:38] - Why products that make people collaborate are always stronger

[00:14:16] - Nuances between team subscriptions and team product use

[00:15:39] - Describing the burn multiple metric and how it can be applied to companies

[00:18:20] - The gross margin problem and issues for businesses in this area writ large

[00:22:36] - Common practices amongst sales programs that have and haven’t worked

[00:24:24] - What about new founders makes him most excited

[00:26:00] - Explaining cadence and why he groups product and marketing as one bucket and sales and finance as another

[00:30:46] - The anatomy of a great product launch 

[00:32:19] - Ways in which external dependencies can be landmines for growing companies

[00:34:08] - Whether or not he’s willing to invest in a business with regulatory variables

[00:37:01] - What he’s seen in company culture that breaks a company as they scale

[00:39:57] - Things a founder actually does in order to reign in and tame their culture

[00:42:10] - Unique traits of founders who are both investors and operators

[00:44:14] - Peter Thiel’s superpower 

[00:44:59] - Max Levchin’s superpower

[00:45:40] - Elon Musk’s superpower

[00:46:09] - Roelof Botha’s superpower

[00:47:17] - Reid Hoffman’s superpower 

[00:47:45] - Keith Rabois’ superpower

[00:48:43] - What zones of change in the world have his attention writ large

[00:51:45] - Why teams want to be pushed and how we can apply that to business

[00:55:27] - The kindest thing anyone has ever done for him

How to Operate a SaaS Startup

Introduction

Patrick
My guest today is David Sacks, general partner at Craft Ventures and founding COO of PayPal. During our conversation, we explore what differentiates enterprise SaaS from DTC subscriptions, what makes for a magical product launch event, and what key growth metrics David uses to measure success. David has written extensively on his idea of operating cadence, and we explore how that applies to various functions within an organization. As time goes on, I am more and more impressed at the talent that existed within the original PayPal mafia. And I couldn't help but ask David to highlight the superpowers for a few of his early partners. This was an incredibly informative conversation with fun threads throughout. Please enjoy my conversation with David Sacks.

David's Investment Criteria

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