Building an Empire with a Single Brick: Meet Patrick McKenzie
blog.bench.co
blog.bench.co
Thank you Patrick and all the best with Starfighter.
I still remember the first time I read about Bingo Card Creator. I immediately dismissed the idea. But as noted in the article, it was a small brick and he kept stacking them and look how far he has come.
Thanks to his advice, I have also made decent progress in my own career. As a thank you, I wanted to get him a gift as a token of appreciation. And here's what he replied:
"Nope. I tend to just buy things that I want, considering my wants are generally small."
https://twitter.com/patio11/status/334333114912481281
Patrick, you are a role model and an inspiration. Thank you for everything and wish you all the best with your new venture.
Kudos @patio11! Will this pace continue with Starfighter? For your and your family's sake, I hope so.
My favorite two were
1. Software for people who sell and install granite countertops to help their customers preview what their counters are going to look like, doing millions of ARR.
2. Software to help high schools and colleges schedule umpires/referees for sports leagues.
There's so many 'niche' markets around that are worth millions if you can hit them (but they're not sexy like social networking or consumer mobile apps)
I appreciate the sentiments of this community, its unquestioning reverence towards Patrick, but the article is full of misleading statements. What is factually correct, can still be grossly misleading.
I honestly don't. I mean, nice guy, sure, and a great writer, but I don't see that he has built anything I consider particularly inspiring, or successful. In fact he has had quite a few misses, which were announced with the usual self-assured write-ups, only to disappear later.
(I only say this in light of the surprisingly large following patio11 has, he is certainly more accomplished than I or most most posters here will probably ever be.)
I know I'm not brilliant enough to change the world with some new revolutionary invention or discovery, and spending years killing myself to try and build some ultimately ephemeral business empire holds zero attraction for me. Achieving a comfortable lifestyle in which I work for myself and can reserve most of my time for my friends, family, and hobbies is my main aspiration, and patio11's success at building that lifestyle is enormously inspirational.
Care to give an example?
but I don't see that he has built anything I consider particularly inspiring, or successful.
Then what is inspiring to you and what would you call successful?
These are genuine questions.
Jeez, I need to charge more.
Nothing wrong with pushing for higher, just don't get worked up trying to keep up with the McKenzies.
Okay, there was probably a post that explained what you mean here and I missed it. How does "I cost more?" become a specialty?
Unfortunately for me, I'm purely a technology guy, not a people person.
This is bullshit. People can change. You can change yourself. 'I only do tech' is an excuse to not have to go outside your comfort zone. Of course it's a big change. Of course it's scary. Of course you don't know exactly how to get from A to B. But just giving up with a 'this is how I was born' is defeatism.
Patrick was about as well known on the Business of Software message boards as you are on HN when his consulting career started. Those boards no longer exist and were always smaller than HN. Prior to consulting he held what is probably the lowest- status job in software development. What do you think the secret ???'s were for him?
What do you think it is?
That's why my best guess is "luck" — because I've never heard anyone say anything about what they did beyond, "Eh, I found good clients and became a successful consultant" or "I did not find good clients and struggled in my consulting career."
Getting the car past 50% isn't always the desired goal. :)
When I say you mostly make your own luck, I was referring to making decisions and choices so that you don't end up with only a car or a goat as your choices.
I think this is good life advice in general :)
Here's the 200+ point annual report he did with story of him quitting his day job:
https://news.ycombinator.com/item?id=2018816
I'm sure if you look the previous reports up they'd be similarly high ranked.
There is a process to getting business, it's called 'sales'. Take a reputable sales class (3 or 5 days or so). It'll set you back $5k-$10k, and it'll push you way outside your comfort zone, but it works.
Getting business isn't that hard: first, you identify your customers. Then you think of a way how to find those people/organizations. Then you contact them, and set up appointments. Lastly, you convince them (during the meeting) to buy your product (where 'product' can be software you've already written, software you'll write or man hours you'll spend working for them).
The above of course skips over many details. But the point is - selling stuff is not 'luck' or 'magic'. There is a process, although of course it has to be tweaked every time. All you have to do is learn it.
There has to be a limiting factor somewhere.
One of my fiancee's B-school professors specializes in pricing theory. He can make several million dollars in one consulting engagement, because he tells companies where they should price their products to maximize revenue, and so he just needs to charge some fraction of ($new_revenue - $old_revenue), which is usually measured in millions.
I think I spent too much time as an employee, a relationship in which every increase in salary needs elaborate over-justification. Consulting isn't like that.
I think the key idea here is that you can change who you hang with in consulting. The world is a really big place, and it's filled with some people who are willing to pay a lot for the particular services you offer, and a lot of people who are not willing to pay a lot. Raising your rates just means that you will self-select for engagements with the people who are willing to pay a lot.
When you're an employee, your pool of opportunities is significantly more limited, at least unless you're willing to change jobs. So it's a lot harder to convince people to pay you more.
The key mindset shift you need is the ability to a.) put yourself out there and let yourself be found by the folks who are willing to pay a lot and b.) say no to the people who are not willing to pay a lot. (Also c.) get laughed at by folks who think it's ridiculous how much you're charging.) This is uncomfortable for a lot of people; it's still uncomfortable to me, which is why I'm not a consultant at this point, although it's also a very necessary skill for a startup founder and so I'll probably have to learn it and make peace with it anyway on my current trajectory.
When you apply to a job, they see you as a permanent cost center and not as an immediate way to grow their bottom line. In this case the negotiation changes to a large degree. I suppose it's possible to transfer the conversation during a salary negotiation so that you are selling based on the points above, but I think that's much easier said than done.
I think this constantly recurring point about raising rates is based on people who sell consulting services having a larger-than-necessary gap between what a company would pay for the outcome and what they are charging.
http://www.kalzumeus.com/2014/12/22/kalzumeus-software-year-...
http://www.kalzumeus.com/2014/01/06/kalzumeus-software-year-...
http://www.kalzumeus.com/2012/12/29/bingo-card-creator-and-o...
Or do you not mean per diem in the literal sense?
EDIT: And companies routinely pay for it.
If they pay it then it's all the better for the op. I was more curious how much blowback the gp has gotten on a large per diem like that and how they would go about countering it for my own personal use.
That means good hotel and air accomdations, car service, luggage handling, ...
Maybe not so fast.
To me the 30k is (most likely) editorial hyperbole which is not to say Patrick didn't make $30k on some weeks.
If you can make (repeatedly) 30k per week (or even 15k per week) that's a boatload of money on a yearly basis. So I would imagine that while Patrick had 1 or 5 jobs that might have paid that much, he determined that there would not be a continuing stream of work at that rate. Multiply that by 52 and see what you come up with.
If you could continue to charge that kind of money (and perceived a continuing demand) you could most certainly afford to hire someone to offload some of the work that is done (both admin, sales and actual consulting) to less qualified people that you could then oversee. After all not everything that a consultant like Patrick does needs to be done by Patrick. Similar to what attorneys do and other consulting firms do.
It is no secret to anyone who is in business that there is elasticity in pricing such that you can jack up prices on some occasions and some people will pay those rates. As such it's possible that you (the parent comment) are charging (at the rates you are charging) less than your value. But it's also possible that you would get drastically less work if you charged more than your per diem offsite. Even if a large consulting firm is able to charge 5x as much. (Or Patrick).
As a general rule, what I have found with pricing, is that it often pays to charge on a per project basis as opposed to a time basis. I find this to be true in both how I charge (I do a small amount of consulting on the side (not the main thing I do, but close to 6 figures last year)) and how I buy consulting.
If I need something done and the person says "$5000 for the project" that is easier to spend to "solve a problem" then $750 per hour or "$1000 per hour and it will take me 5 hours". See the difference? On the other hand if you perceive the total cost of the project is many hours and you are willing to sell those hours for $100 per hour it may pay to price like that. It all depends on the circumstance.
I'm going to assume that that is a typo (and they meant unfalsifiable) as it doesn't really make sense in the context of what I've heard about Patrick before.
EDIT: I wonder if it counts as misreading or misunderstanding, to not notice that a word is an auto-antonym?
So think of Patricks statement as "always give concrete, measurable goals".
Somehow I didn't make that connection before, even though I follow him on Twitter.
"For example, Bench handles all of Patrick’s bookkeeping. He’s grateful for the freedom to “never think about it again.”"
Wow.
Upon hearing this, The IRS is drooling all over the place.