I. This post outlines Patrick McKenzie - a brilliant technologist and entrepreneur - how he's done such amazing things and learned so much, and why he's getting drastically underpaid and how it's his own fault. This post will be most valuable for technologists who underestimate themselves and undervalue themselves.
II. Hacker News is the best tech community on the internet, and patio11 - Patrick McKenzie - is the best contributor there. I don't even think that's controversial, I think it would be near universally agreed by the HN crowd that Patrick has made as many or more important contributions as anyone.
If you're from Hacker News, you know Patrick already. But for my readers that don't know him, let me give you a quick overview.
III. Patrick is a multi-faceted genius, and I don't throw the word genius around casually.
Patrick McKenzie is many things - he's an expatriate to Japan, he's a talented coder, tester, metrics/split-testing/analytics user, a great writer, extremely modest and helpful. He can recruit people, evaluate talent, and manage people well. He understands ROI very well and is good at purchasing advertising. He's good at customer service. Outsourcing. Automation. Coding. Ecommerce.
Most importantly, he's got such a great understanding about all of these things that can write about them very clearly and straightforwardly.
Don't take my word on it. Go read his recently published best-of list. It's all good. All of it. It's so sharp. By the way, before we go further - I'm not friends with Patrick. We're distant internet acquaintances. Never even swapped emails. Which is good, because I'm going to be forced to be a jerk and say some mean and terrible things about him very shortly. But before I do, let's get back to him being a genius -
He understands both technology and business at the most fine-grain, detailed level, and he understands it at the very high, conceptual level. This is incredibly rare:
*He understands the down to Earth, nitty-gritty, details of technology. He coded the de facto standard for Ruby on Rails split testing called A/Bingo. He can break down code at a fine grain level.
*He understands technology at a very high, overarching level. He knows the merits and tradeoffs of pretty much all the key ecommerce software.
*He understands the down to Earth, nitty-gritty, details of business. He purchases Adwords, does the ROI numbers fundamentally well, knows how to do the math and optimize time. He recruits people and outsources, and makes a good money-per-hour rate.
*He understands business at a high, overarching level, the entirety it. Well, almost. More on this in a moment.
*He understands statistics very well, he's a fanatic about tracking and optimizing time, revenues, return on time, return on investment.
*He writes well. Very clear, straightforward, helpful writing.
*He cares about people. At least, that's the impression I get - he talks a lot more about his customers than the vast majority of businesses do. It's not lip service. He puts tons of time into improving his product instead of just trying to get more sales. Really good guy.
*He can identify and recruit talented people. Read his posts and comments about hiring outsourcers.
*He can manage, set milestones, and make sure his people deliver. He's got good info on this too.
*His people stay loyal to him and stay onboard with him once recruited. Ditto that.
Honestly, I'm not even doing Patrick justice here. He understands business at a fine grain level, and a high overview level. He understands technology at a fine grain level, and a high overview level. And he does it. He executes. And he writes about it clearly! He's amazingly talented, I can't even explain how talented he is. Just go read his writing to see, if you don't already know.
But all is not rosy...
IV. However, unfortunately, his story thus far is a story of tragedy and wasted potential.
I assumed he was making a lot of money, or at least very happy with his finances. He's amazingly talented, more talented than me. Then I read this comment Patrick wrote earlier today -
"I have not enjoyed getting teachers who make $60k explain to me why I need to subsidize them (haven't hit $60k in my entire life)."
This makes me sick to my stomach. Seriously, I want to vomit. This isn't hyperbole. This makes me ill. Patrick is talented at high level business, fine grain level business, high level technology, fine grain level technology, he executes, and he explains well.
There's only three potential explanations for this. Either...
1. Patrick has identity issues about making lots of money, or,
2. He refuses to be a self promoting asshole, or,
Okay, I'm about to get myself into trouble. I'm being incredibly presumptuous. But! Realize I have good motives. If this is offputting to you, I understand, but I feel like this is really important to be said.
Patrick's first product was Bingo Card Creator. It, apparently, has never made $60,000 net profit over a year. Patrick fine-tuned it to an incredibly high level, with masterful ability, and he made a great product. Again, his best-of list is here to read the whole story, it's all really good.
Okay. So, guy builds a business making $30,000 per year or so, and in the process learns all the skills of technology at every level. He knows how to advertise, how to do SEO, how to outsource, how to manage people, how to promote, how to blog successfully, he cares about people, he helps people, he can code well, he can hack different technology services together - now he's ready to make millions, right? No, I'm not exaggerating, I think he has a $1,000,000 skillset, easily. All he has to do is apply it to the right discipline. I know people who've made asinine money in banking and finance, and Patrick is more talented than them at every possible necessary level of business.
So, time to cash in on all those skills by building something in the most important area, right? So Patrick chooses...
Appointment Reminder. Pricing: Personal for $9, Professional for $29, Small Business for $79 (featured), Enterprise for $669 (seems geared for hospitals/medicine).
Okay, allow me to pause for a moment.
Okay, I paused.
Let's look at that $79/month pricing, the featured one. For simplicity, let's say that's $75 in profit. Okay, so you want to make a modest $10,000 per month. You're going to need 134 sales to get that. Let's assume a 3% conversion rate on every business you pitch to (I think that's on the high side for a conversion rate for this sort of thing, but let's assume). If so, you're going to need to get 4400 relevant businesses to find you.
Patrick, dude, with your skill at fine-grained work, you could be working to make a 1% edge in manufacturing, finance, consumer products, shipping, scheduling, engineering, things like that. You know how much an airline would pay you to shave 30 seconds off their average turnaround? Well, I don't know, but it's a hell of a lot more than $120,000 per year. And you could do it. You're a genius, dude. I mean, I don't want to tar and feather you with the genius label. Allow me to say, instead, that you're producing genius quality work with genius quality execution and apparently some mix of genius quality efficiency/work ethic.
And you're trying to sell appointment reminder software to hair salons, nail salons, and chiropractors? WTF?
Don't get me wrong. I think that could absolutely be a $120,000 per year in net profit business really quickly. But I also think you could make $200,000 in 2011, and $1,000,000 in 2012 if you set your mind to it.
Now, a lot of people don't think of this, because they're not smart. But you are, you're very smart. No flattery here, I don't flatter people. You're smart enough to come up with the right answers to, "What's the fastest way for me to make $1,000,000 doing something enjoyable?"
Yet, this hasn't happened. This suggests identity things to me. Like, not comfortable making lots of money, being wealthy, being powerful, etc.
Well, let's talk about all of that really fast.
If you think, "I'm simple. I don't need lots of money," then I understand, because I feel the same way... My favorite food is tuna on brown rice. I don't like luxury. But first, dude, you've never made $60,000 according to your own comment. You're WAY below the diminishing returns line still. And second, even if you don't want the money for yourself, there's a lot of cool things you can do with it. Fund research, fund science, build hospitals, build a better school system, be a patron of the arts and make the world beautiful, build a private army and go dismantle the North Korean government... seriously, there's a lot of things you could do with money. Anyone who says, "I wouldn't have any use for money more than $XX,XXX" obviously hasn't thought about it very much.
Likewise, being wealthy means independence, it means you can pick and choose your projects, and so on. It's a good thing, across the board, if you made your wealth honestly. How much better is the world because Paul Graham can spend his time writing essays, running Hacker News, running YCombinator, painting, hanging out? MUCH better. How much WORSE would the world be if he wasn't wealthy? Honestly made wealth in the hands of a good person (and you're like an ultra-good person) is so, so good for the world.
Power gets a bad rap, but power is just mastery over yourself and mastery over your environment. The word power has all sorts of connotations - but power exists, man, if not with you than somewhere else. Most people don't have much power and don't use it well if they do. But I think if you came into more power (more mastery over yourself and your surroundings), that would be again a good thing. You're virtuous, man. You should become wealthy and powerful. You'd gain, the world would gain, everyone would gain.
At the risk of upsetting people, I'm going to go out on a limb here - were you raised Catholic? I was. So I know how it goes. I'd wager anyone at equal odds that Patrick was raised Catholic, maybe went to private Catholic school? I don't know, this isn't some parlor trick, I'm just guessing, but I think I see it. I hear some words here and there that are very Catholic-sounding. Maybe I'm wrong. I like the Catholic Church by the way, my Mom's a pretty devout Catholic, but Catholic beliefs about money and wealth and power aren't always such a good thing...
Either Patrick's got bad beliefs about money, and/or he's afraid to be a self-aggrandizing asshole. Unfortunately, the world pays self-aggrandizing assholes, because people are idiots who can't recognize real talent.
Dude, Patrick. Your branding. This was your tagline on your Mixergy interview -
Patrick McKenzie is an ex-Japanese salaryman who currently runs a small software business. My main product at present is Bingo Card Creator, a product aimed at making elementary school teachers’ lives easier.
Here's your About page -
My name is Patrick McKenzie. I’m an ex-Japanese salaryman who currently runs a small software business. My main product at present is Bingo Card Creator, a product aimed at making elementary school teachers’ lives easier. These are my stories. (Sorry, I’m a die-hard Law & Order fan.)
Dude, you're one of the most talented people in testing, analytics, in a hot programming language and framework, you're an entrepreneur in one of the hardest countries to be an entrepreneur, you're a top user at one of the most respected technology communities, you run one of the most popular tech blogs among a super important tech crowd...
Here, let's try this again.
Patrick McKenzie rose to international celebrity on his journey from ex-Japanese salaryman to entrepreneur. He coded his own educational bingo software from scratch, outsourced and automated operations, and published all his results with amazing transparency. He's happy to help educate people across the world, both using bingo software, and teaching how to sell your technology products effectively. His website is kalzumeus.com.
How many more Mixergy readers would click on you if you had that instead of what you had? Too modest, dude. "rose to international celebrity", well, isn't that umm kind of sort of arrogant almost?
Anyway, I understand. I'm a reforming overly modest person, so I get it. I really do. You're a legitimately good guy, you don't want to be self-aggrandizing asshole. But dude, you're so far away from self-aggrandizing asshole it isn't even funny. You're a bloody amazing expert on software, ecommerce, coding, Rails, security, all kinds of stuff, but no one would know it. You're crippling your own reach and impact, you're making yourself poorer, and you're making the world poorer. "rose to international celebrity" - well, yes! Much more so than other jokers that claim that. You know why people write that? Cuz it works, that's why. And it's true. Yeah, yeah, it's kind of lame. I think so too. But it works. Split test it if you don't believe me. Now, let's do some surgery on your About page -
My name is Patrick McKenzie. I’m an ex-Japanese salaryman who currently runs a small software business. My main product at present is Bingo Card Creator, a product aimed at making elementary school teachers’ lives easier. These are my stories. (Sorry, I’m a die-hard Law & Order fan.)
Hi, I'm Patrick McKenzie. This site details how I went from a Japanese salaryman working 70 hours per week, to running my own educational software company. I did it selling a program called "Bingo Card Creator" to make elementary school teachers' lives easier, and I built my company in only 5 hours per week of fast-paced coding. I had to use lots of outsourcing, automation, metrics, analysis, and tracking to do this. I'm happy to teach it all and share it all with you - I believe in transparency. All my numbers are here. My conversion rates are here. All my methods are here. This site is to make programmers, entrepreneurs, and good people more successful. Thank you for visiting.
Seriously. Let's say the head of a medical research company gets linked to kalzumeus.com to an article. It's a good article. They click to your About page. What is this? Ex-Japanese salaryman, bingo, what? Back button. You lose.
The new version - by the way, I wrote that in 15 seconds, I'm sure you could do much much much better - well, maybe the head of the medical research is probably much more intrigued now. Lots of benefits, lots of cool stuff, lots of reasons to stick around.
You already know all of this. It's some misplaced, mis-guided, false sense of modesty or something that's holding you back.
VI. Hello, readership, you should probably recruit and hire Patrick.
So, I got some important people reading here. If you like making money and doing important things, you should probably reach out to Patrick McKenzie and recruit him now. He will go through the mental shift soon where he realizes what he's worth, and then he'll cost a lot. For now, maybe you could get him at $200,000 a year. He'll make you a lot more than that, I'm sure of it. I'd stake my reputation at evaluating people on it. Really, I'm as sure about this as I am about anything.
Here's some thoughts:
If you're high up at an airline or know someone who is, Patrick could probably reduce your turnaround time by 30 seconds to a minute per plane pretty easily. (What's that worth? Like, a hell of a lot?) I bet he could single-handedly increase the conversion rate, speed, and ease of use of your site for booking too. I mean, just a tiny bit. But, how much is that worth?
If someone from TechCrunch reads this, tell Mr. Arrington that Patrick could go through TC, identify where TC-related topics are being searched for, find Evergreen content in past articles, and SEO it. Alternatively, I bet for a reasonable fee he'd give a crash course to all TC writers on optimizing articles to rank in Google. I bet he'd do this for a plane ticket to the head office, a nice place to stay, and a ridiculously underpriced amount of cash for a week.
Ditto 37Signals. You guys have tons of content that he could turn into revenue generating. Also, he's very solid with Rails - what are a fresh set of brilliant eyes worth to review and see if he can pick up any places for potential optimization. Heck, maybe you could cut a deal where he gets some sort of commission if he makes an impact. That's really a win/win, because he would probably would find something, and he'd probably be a fun guy to connect with some too.
If I was VC with any kind of web software companies, I'd want to hire on Patrick ASAP for a base salary, and then give my portfolio companies the option of getting him to spend X hours per week advising and testing with them, and teaching them, in exchange for equity. By the way, if you're a startup and you're looking for advisors, try him.
Again, he's not a friend of mine. I just recognize talent, and currently there's someone with a millions-per-year skillset who hasn't made $60,000. This suggests massive opportunities to me.
VII. To all technologists who underappreciate themselves, and closing thoughts.
At the risk of bean-spilling, I'll mention my next company sells to old world companies that are underinvested in technology, and our pricing is high. It's somewhat labor-intensive, but the packages we put together range from $5,000 to $20,000 to $100,000. Well, at first this wasn't true. At first I was talking with my partner about doing something that would help pizza shops get more kids to buy pizza. Then I realized I was being a fucking moron and I should go where money already is, in a space that people are used to making huge investments, and a huge leveraged impact can be made.
I presented last week to the Director of Sales and Marketing at one of the most prestigious companies in Saigon. I did a poor job presenting on a number of levels, and it didn't fly. But that's not why I mention this. I mention this because he didn't know what analytics were.
Oh, he vaguely knew that numbers are important. But I was chatting about analytics, like, in what I thought was the most simple, basic way I could. You know, like, Analytics 101. I only realized after I'd been running my mouth for five minutes that this fella, really really really smart guy, has probably never tooled around in analytics himself in his entire life, nor has he had a detailed tutorial. Old world, dude, old world business.
Most technologists of any stripe greatly underestimate how powerful and important the skills they know are. It's easy to feel like you're just so-so when you're hanging out at Hacker News. I'm probably one of the least technically inclined people that's on the leaderboard. But I think our crowd underestimates how much fast impact can be made. Do you guys realize how powerful the tools you have are, and how underutilized they are? Do you realize what a small tiny push on an established billion dollar industry does? Do you realize how many tiny little pushes can be made?
Unfortunately, people still mistake brash confidence, self-aggrandizement, and self-promotion for talent. I used to violently resist this. This is akin to saying, "I would like to make myself less effective and make myself less available to people that I could really help, in order to prove a point."
Patrick - you're not an ex-salaryman. You're one of the most talented people at sorting the numbers out, and making things run like a well-oiled machine. You're clockwork. You're effectiveness.
To all technologists out there, especially the introverted and not self-aggrandizing ones - start promoting yourself a little more. Learn how to do this. There's a way to do it without bastardizing all your principles.
To anyone doing anything important - go to Patrick's best of and start reading. Then offer him first class airfare, a premium hotel, and some cash to meet with you. It'll pay for itself.
To Patrick again - dude, make more than $60,000 this year. A lot more. Start thinking $1,000,000. That's your skillset. But Christ, man, at least more than $60k. Stupid people that can't execute, self-motivate, and work neither hard nor efficient make more than $60k.
In your Mixergy interview, you said you managed to build Bingo Card Creator in five hours per week by being ruthlessly efficient with your time. Thus, you've ruthlessly efficiently built a $30,000 per year business. This is amazingly fantastic, a great feat, and it's been a boon to education and all of your regular readers, myself included. You've done something that very few people will ever do. Many people are in your debt. I am, and I'm grateful.
Now, I think you haven't adjusted your expectations upwards enough. Do you realize you're one of the top people in the field? Do you realize how much everyone respects you?
You've got 99% of business down so solidly - but you're not going to where there's massive amounts of opportunity, silly ridiculous opportunity. How much more effort does it take to make $600,000 than $60,000? I don't know, but it's less than 10 times. Heck, it might even be easier once you cross a certain point.
What the hell do I know? Well, I don't know. But I do see a man of tremendous ability, that should you decide to become wealthy and powerful, and make it known that it is your intention, it will happen. And I think it should happen, because the world will be much better off if it does.
Update: This post set off a huge controversy. You can read all the details and an analysis of what happened at "Lessons Learned from the Firestorm of Controversy" - it covers mistakes and strong points made here, and gets into differences between how Americans received the post and how Europeans did. Check that one out next.
You are making a number of strong assumptions about him from a few comments on HN. If you really wanted to help this would have worked better as a personal e-mail.
seriously he is a good example of the poor dad in rich dad poor dad. except that he was successful on his own terms (if being smart is his definition of success). cheers to this post!
Just to update: he's now a married man.
Which in a way illustrates Sebastian's point! Even if we were to grant a claim like he is making the optimum amount now, the world is always changing. Whatever the optimum was, it's now changed because he's married. And it'll change even more if he has kids, or if he gets cancer, etc.
What more money can buy you is, in part, security & safety & insurance from future changes.
Patrick is very talented. I have followed him for awhile. While I might have made different choices than he did. I refuse to criticize him or his choices.
One of his choices was to share all of his financial data to the world, which is extremely helpful to anyone starting out. No one else before or since has done this to this detail. This was a selfless move that took courage.
We all have our faults, but he is giant in my book.
More important to our community than many so called wonder boys.
I like your writing style, it is conversational, fresh, and manic. However, it is very difficult to follow your train of thought without considering many of your definitions about things like 'what is good for society' as primitives.
It would be cool to see a post where you lay out your general ethical/political stance in concrete terms. Because I get a sense of what that might be, but am not certain whether or not that sense is accurate enough to inform a fair reading of your articles.
Certainly Patrick is happy. He's been offered the kind of thing that Sebastian suggests here -- I've seen Joshua Schachter offer to fund him on anything he wants to do next, basically no questions asked. I am *sure* Joshua is not alone in that.
And Patrick's response was that Joshua should look through his rolodex of founders and funders and whatnot - that Patrick was already happier than any of those people, and that he didn't want to change that. I'm forgetting his exact phrasing.
I don't know exactly what makes Patrick happy, but Patrick seems to think he's got it figured out, and that what he's doing now is how to serve it.
With that said, yeah, he's totally underpricing himself. Hugely. And he's aware of that, at least in general terms.
Absolutely agree that Patrick is one of the brightest sparks amongst the already bright community that is Hacker News. This article doesn't strike me as an attack at Patrick - instead, it's a kick to self-deprecating geeks everywhere to realise how much of this freaking world runs on the backs of their hard work.
Patrick is a public person, explaining everything about his business, therefore it is not at all unfair to publicly citicize him, especially not because your article is highly on-topic for your site.
I thought you were fair and did not try to kick Patrick for kicking's sake or self-glorification. Those that have a problem with this article are terribly immature. They do not see that your article is not just linkbait, it is also written in frustration that talent is often wasted due to certain brain-related factors. I am about as talented as Patrick, worked as hard as him but made even less money until I understood my potential. I understand Patrick's position and his position is 100% OK, however yours also is 100% OK.
Those calling to ban you on HN have the same mindset as the Spanish Inquisition.
After all the negative comments you've gotten about this post, you still keep it up?
Decide - Do you really want to "help patrick" or you'd rather wait for some online magazine, having a slow news day, to pick up what you've started and give your blog some exposure?
Karma is a bitch. You'll learn.
Two days ago I wrote the Genius and Tragedy post. It was extremely controversial - very popular on one hand, but got some very strong visceral negative reactions. I'd like to share with you what I've learned about writing, so I can step my game up and improve. Also, I got some downright hateful comments made about me, some really bad and terrible stuff. If this has never happened to you, maybe you don't know what it feels like, and I've got some advice on how to deal with it. I also did some detailed reading and analysis of the kinds of comments I got, and there was some fascinating results that I'll share.
So, first and foremost, I made a mistake - If you're writing to help someone, it can be pretty presumptuous to do it without touching base and clearing it with them first. I made that error for a few reasons - first, two of my best posts have come from the same format, and both achieved their desired objective. ("How do I write so much, you ask?" and "I think greatness is something you do, not something you are" both publicly called people I like out - and both times it worked) - so that's the first thing, I'd had a good track record with this, however those were people I'd been touching base with already.
Second, as a general principal I believe in working really quickly. I analogize it to "fighting out of formation" - quick, lightly edited writing is always worse than well-edited best practices. But, the more you do of it, the better you get at it. And by producing anything really quickly, you get better faster. If someone produces 10 times as much content, how long until their lightly edited work is superior to the other person's highly polished work? This isn't a rhetorical question - check out "Quantity Always Trumps Quality" on codinghorror.com sometime. If you produce quickly and of lower quality at first, you can iterate and improve, and eventually your quick production work is better than the obsessively refined person's work who isn't getting as much done (and thus not learning the lessons). Pablo Picasso talked about this quite a bit, if you're particularly interested on the topic.
The downside, of course, is that you make mistakes. And I did - I should've touched base before writing that post, or had it vetted, or at least, spent more time editing it to be clear, concise, and unambiguous, and even more polite. Mea culpa - my mistake! It's okay for me to work quickly and bring errors upon myself because of it, but I need to be more careful when involving others.
Then, why is that post still up? This is what I wrote as the episode was winding down, it was well-received by the community -
I was talking with a really accomplished photographer the other day. The guy is an immense talent, has been hired by all sorts of celebrities and productions, and has a very impressive body of work. And he was thinking about quitting photography.
He was also incredibly humble and open to advice, which I have to admit that I didn't expect from a high-profile LA photographer. He talked about his background, his goals, and his current situation. His problems were the good kind, specifically the too-many-good-options variety.
Ahh, I understand, I said. You're in the hustler's trap.
A hustler is someone who can create something from nothing, usually in a pretty short amount of time. If he finds an opportunity, he'll jump in head first. This photographer found a toy that was selling well before Christmas, so he started ordering containers of them from China and selling them on the internet. That was one of many of his hustler exploits.