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- 🦄 How to find Unicorns
The Edge Effect
Read time: 2 min 45 sec | September 9th, 2024
Welcome back 👋
Want to know how David Sacks spotted unicorns (startups valued at over $1 billion) before anyone else? The answer lies in understanding people and the hidden potential of their ideas.
Here’s what I found 👇
Today’s Insights
❓ Who is David Sacks?
🏆 What’s his winning strategy?
😎 How you can gain an edge from it
❓Who is David Sacks?
David Sacks has left an indelible mark on the tech industry, notably as the COO of PayPal (part of the Paypal Mafia) during its early growth and as the founder of Yammer, sold to Microsoft for $1.2 billion.
His investment firm, Craft Ventures, has backed over 20 unicorns, showcasing his sharp eye for promising startups.
His portfolio includes notable unicorns like SpaceX, Bird Rides, The Boring Company, xAI, Weka, Grow Therapy, and Perplexity.
David Sacks (left) Elon Musk (Right)
Beyond his business achievements, Sacks is known for his conservative political views, often sparking controversy.
David Sacks is a dedicated Republican
His work on "The Diversity Myth" with Peter Thiel and involvement in "Thank You for Smoking" reflect his influence in cultural and media realms.
David Sacks at an event for Thank You for Smoking (2005)
Sacks' career intertwines entrepreneurial success with a flair for igniting public debate, establishing him as a significant figure in tech and politics.
🏆 What’s his winning strategy?
David Sacks' strategy for identifying billion-dollar startups revolves around several key principles:
He focuses on the product hook, a feature or interaction so intuitive and engaging that it naturally draws users in, similar to how Yammer's workplace social networking concept captivated early adopters.
Sacks also prioritises viral growth design, ensuring products are built to spread organically through user networks, as seen with Bird scooters' easy accessibility via smartphone.
His approach to sales is bottom-up, targeting individual users first to organically scale within organisations, a tactic that propelled Yammer's growth.
Lastly, Sacks excels at timing and market understanding, spotting opportunities for disruption or new market creation, like his early investment in urban mobility solutions.
This combination of strategies allows Sacks to pinpoint startups with the potential for explosive growth and significant market impact.
😎 How to gain an edge using David Sacks' strategies.
Craft a product with a clear, engaging hook that immediately captures user interest, simplifying the core feature for instant appeal.
Design for virality by embedding features that naturally promote sharing, enhancing user acquisition through organic growth.
Implement a bottom-up sales strategy in B2B contexts, focusing initially on individual user value to foster broader adoption within companies.
Finally, stay ahead of market trends by constantly analysing consumer behavior, aiming to lead or create new market categories.
✨ Actionable Takeaway
Focus on how your product reaches users. Create viral loops or integrate with platforms in unique ways to ensure natural, widespread adoption.
Balance sales effort with deal size. Streamline processes for small deals and allocate more resources for high-value contracts to maximise growth efficiency.
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Thank you for reading I look forward to seeing you again!
Thomas 🚀
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