Venture Voice – interviews with entrepreneurs

Entertaining Entrepreneurship

VV Show #34 – David O. Sacks, Co-Founder of PayPal and Producer of Thank You For Smoking

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What do you do after building and selling a business for $1.5 billion in the course of only a few years? That’s the question David O. Sacks, one of the co-founders of PayPal, faced after eBay bought his company. It didn’t take him long to find the answer: Go to Hollywood and make movies. David didn’t waste much time. He recently produced Thank You For Smoking which won critical and audience acclaim. Now you can hear about his journey and get his unique perspective on the convergence of media and technology.

1:30 Clip from Thank You For Smoking

2:45 Interests at Stanford

  • Graduated in 1994
  • Went to Law School: “The default path for people who are smart but don’t know what to do with their lives.”
  • “I thought I missed the whole Internet boom.”

4:10 Coming back to Palo Alto in 1999

  • “When I was in school there, Palo Alto was a pretty boring, sort of yuppie town.”
  • “There’s just this whole sense of a crazy, money-soaked, carnival frenzy in the air. And about six months later it crashed.”

6:30 Getting involved with PayPal

  • Original idea for PayPal: Beaming money from Palm user to Palm user.
  • “In fact, I think PayPal was voted the worse VC-backed idea that year.”
  • “I originally came on board being the vice president of strategy, which was a licence to interfere in any part of the company I wanted to.”

8:00 Winning with PayPal

  • “If you didn’t have a good product, you didn’t have anything.”
  • “There were all these companies out there running around making lots of business deals. The problem with that is you can make deals all day long but if you don’t have a great product that attracts users and does something they want to do, it’s all pretty much irrelevant.”
  • “What I really started focusing my time on was figuring out how to make PayPal a really simple, intuitive application for people who wanted to send money online.”
  • “What was different about PayPal, and I know it seems really obvious, is just that we decided we were going to be based on dollars — were weren’t going to try to create a new currency, we thought dollars worked really well — and we’re going to make it really simple and intuitive to use, so there’d be nothing you’d have to download on your end.”

11:00 Relationship with eBay

  • “[PayPal] essentially compressed the amount of time it took for a buyer to complete the transaction from two weeks to a minute. And that tremendously accelerated the volume of commerce on eBay and was very beneficial for them.”
  • “At the same time eBay kind of felt like they didn’t own their own cash registers.”
  • “For about two years PayPal and [eBay-owned] BillPoint competed head on and eBay users stuck with PayPal.”
  • “It was very intense.”
  • “[PayPal] is the fastest growing financial service, I think, ever in history.”

15:30 Surviving

18:00 Exit

  • “I did reasonably well.”

25:00 Moving from Silicon Valley to Hollywood

  • “Hollywood’s very notorious for taking those people’s [people who come from outside the movie business] money and then emptying out their pockets and sending them on their way.”
  • Set up Room 9 Entertainment.
  • “This company’s read over 1,500 scripts.”
  • Produced Thank You For Smoking based on the Christopher Buckley book of the same name.
  • Worked with first-time director Jason Reitman.
  • “It’s been about 10 years in Hollywood development hell.”

29:30 Producing Thank You For Smoking

  • “Spin is a way of protecting us from political correctness.”
  • “On some level, people want their vices.”
  • “That’s the fundamental hypocrisy: We want these vices but we’re not willing to take responsibility for them.”

Clip from Thank You For Smoking:

33:00 The message of the movie

  • “I think the common denominator between the movie and the other things I’ve done in my career is there probably is a somewhat libertarian bent to them.”
  • “One of the things animating PayPal is the thought that we can make the world freer by creating a frictionless monetary system.”

35:30 Ambition

  • “We are going to look at some of the places were you’re getting technology and media converging.”
  • Interested in companies like MySpace and YouTube.
  • “They call them disruptive technologies.”

39:30 Cities of disruption

  • “If I had to bet on Silicon Valley vs. Hollywood in terms of shaping future of entertainment, I’d probably bet on Silicon Valley just because that’s what it does.”

41:40 David’s movie and angel career

  • “You want to work with people who are under recognized.”
  • Making a movie about Salvador Dali.

See you at the Venture Voice Startup Workshop.

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