Microsoft just bought Yammer, the social-enterprise startup David Sacks founded four years ago, for $1.2 billion.Sacks is famous in Silicon Valley circles, but most have yet to hear of him. Here’s a crib sheet.
Career: Briefly worked as a McKinsey consultant; COO of PayPal, 1999-2002, until the company’s sale to eBay; Hollywood producer (Thank You For Smoking); founded Geni in 2006 and Yammer in 2008.
Age: 40, as of May 25; celebrated his 40th birthday in grand fashion.
Family: Married Jacqueline in 2007; two daughters.
Residences: San Francisco and Los Angeles.
Claim to fame: He doesn’t get as much public credit as Peter Thiel, Max Levchin, or Elon Musk for PayPal’s success, but insiders agree he’s the one who held the company together through rocky times in 2000 and 2001 and helped come up with the brilliant business model and unique culture that turned PayPal from a money-losing dotcom into a financial powerhouse.
Connections: Sacks is a card-carrying member of the PayPal Mafia, the tight-knit clique of early PayPal executives and employees who have backed each other’s ventures. (For example, Square COO Keith Rabois, a former PayPal executive, was a Series A investor in Yammer.)
Hits: When eBay bought PayPal for $1.5 billion in 2002, as best we can calculate from SEC filings, Sacks held shares and vested options worth about $20 million. (If he held onto his eBay shares and sold during the 2003-2005 runup, he could have realised much more, but it’s not clear when he sold.) It’s not yet clear how much he’ll make from the Yammer sale, but it’s clearly going to be far more. Geni is still private; Sacks continues to serve as chairman.
Hollywood hitmaker: Through Room 9, Sacks produced Thank You For Smoking, a huge hit that had some people wondering if Silicon Valley types might be better than Hollywood at picking films.
Feuds: Sacks doesn’t seem to accumulate many permanent enemies.
According to executives there at the time whom we’ve spoken to, Sacks led a coup against PayPal CEO Elon Musk in October 2000 and replaced him with cofounder Peter Thiel. No hard feelings! Musk later said that “no significant animosity” remained from the episode, noted how he’s on the board of Sacks’s Room 9, and credited Sacks for coming up with PayPal’s highly profitable business model where businesses, not consumers, bear the cost of most transactions.
When Sacks first showed off Yammer at a TechCrunch conference in 2008, Salesforce.com CEO Marc Benioff declared that he’d like to buy it. That deal never happened. In 2011, Sacks slammed Benioff for copying Yammer with a product called Chatter. And yet last month, the two buddied up and coinvested in a startup called Mixpanel.
If he has a bête noire, it’s ex-Yahoo CEO Scott Thompson, who previously ran PayPal as a unit of eBay, long after the original crew had left. Sacks railed against Yahoo when Thompson ran it for its patent lawsuit against Facebook, offering a $25,000 bounty for any Yahoo engineer who left to join Yammer. (The offer was only good for 60 days, so it’s over—just like Thompson’s Yahoo career.)
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.