You’ve probably seen David Sacks on the All-In podcast or heard about his new role as the White House AI and Crypto Czar. He’s the guy who seems to have an opinion on everything from the war in Ukraine to the nuances of SaaS valuations. But if you look at the David O. Sacks education history, you’ll find it isn't the typical "dropped out of Stanford to build a startup" trope that Silicon Valley loves so much.
Actually, Sacks stayed in school. A lot.
He didn't just get one degree; he collected a B.A. in Economics from Stanford and then a J.D. from the University of Chicago. It’s a pedigree that looks more like a Supreme Court justice’s resume than a tech mogul's. Yet, those years in the late '80s and '90s were the literal forge for what we now call the "PayPal Mafia."
The Stanford Years: More Than Just Economics
Sacks landed at Stanford University in the early 90s. He graduated in 1994, but he wasn't just crunching numbers in the Econ department. Honestly, his most impactful "coursework" happened at the offices of The Stanford Review.
This is where he met Peter Thiel.
Imagine a group of students who felt like the campus was becoming an echo chamber. They founded the Review to be the contrarian voice. Sacks served as the Editor-in-Chief. This wasn't some hobby; it was a trial by fire in leadership and ideological warfare. It's kinda wild to think that the same guys who were arguing about campus speech codes in 1992 would be running a billion-dollar payments company less than a decade later.
The Diversity Myth
While most seniors were worried about their first jobs, Sacks and Thiel were writing a book. They published The Diversity Myth: Multiculturalism and Political Intolerance on Campus in 1995 (though some sources track its development into 1996). It was a scathing critique of Stanford's curriculum. Whether you agree with the politics or not, the book proves one thing: Sacks was trained to be an analytical brawler.
The Chicago Law Pivot
After Stanford, most people expected Sacks to dive into a hedge fund or a startup. Instead, he went to the University of Chicago Law School.
Why law?
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Basically, it was a way to sharpen the mind. The University of Chicago is famous for its "Law and Economics" approach. It’s rigorous. It’s grueling. Sacks graduated with his J.D. in 1998. If Stanford taught him what to think about, Chicago taught him how to build a logical framework.
He didn't want to be a lawyer, though. He’s been on the record saying he realized pretty quickly—specifically during a summer at a law firm—that the billable-hour life was a soul-crushing dead end for him. He took a job at McKinsey & Company as a consultant after graduation. It was the "safe" elite path. But the itch to build something was already there.
From Law Books to the PayPal Playbook
In 1999, Peter Thiel called. He had this "dumb idea" (Sacks' words, initially) about beaming money between PalmPilots.
Sacks quit McKinsey. His parents probably thought he was crazy. He joined Confinity, which eventually merged with Elon Musk’s X.com to become PayPal.
Here’s where the David O. Sacks education actually paid off in a weird way. As the COO of PayPal, Sacks wasn't writing code. He was designing the "rules" of the system. He used that legal and economic background to navigate:
- Regulatory Minefields: Fighting state banking regulators who wanted to shut them down.
- Product Strategy: Thinking about money as a set of incentives and protocols.
- Corporate Governance: Managing the insane egos of the early team (Musk, Thiel, Levchin).
He often says that managing PayPal was just like managing the college newspaper, only with more zeros. It was about rallying a group of "misfits" who were all "cut from the same cloth"—mostly his friends from the Stanford Review.
The Education Breakdown: A Quick Glance
| Institution | Degree | Year | Focus |
|---|---|---|---|
| Memphis University School | High School | 1990 | Early leadership/Yearbook |
| Stanford University | B.A. Economics | 1994 | Political philosophy, The Stanford Review |
| University of Chicago | Juris Doctor (J.D.) | 1998 | Analytical thinking, Law & Econ |
Why This Matters for You
The "Sacks Method" of education suggests that a non-technical degree isn't a handicap in tech—it’s a moat. While the engineers were building the engine, Sacks was building the map.
If you're looking to follow a similar path or just understand how these "mafia" networks form, here are some actionable takeaways:
- Build your network in the "trenches": Sacks didn't meet his business partners at a networking event. He met them while working on a controversial project (the newspaper). Find a high-stakes project outside of class.
- Master a "Hard" discipline: Even if you don't want to be a lawyer or an economist, the rigor of those subjects teaches you to spot flaws in a business model that others miss.
- Don't fear the "waste": Sacks "wasted" three years in law school and a year at McKinsey. Except he didn't. He used those years to figure out exactly what he didn't want, which gave him the conviction to jump into a risky startup.
The David O. Sacks education story is a reminder that being a "generalist" with a very sharp edge is often more valuable than being a specialist with a narrow view. If you're currently in school or considering a pivot, look for the "contrarian" spots. That’s usually where the future is being written.
To get a better sense of how this background translates to the real world, you might want to look into the specific growth frameworks Sacks pioneered at Yammer, which he often attributes to his "systems thinking" developed during his university years.