I'd comment but am en route back to Japan in about a minute. If anyone has questions, for example anyone contemplating a sale of their own business, my inbox is always open.
I'm going to be blogging a bit about the sale later but have been holding off to wait for it to finalize (handover day was last Monday) and attempting to not step on a forthcoming Starfighter announcement.
How much time and effort was involved in selling the company? Did you need to engage an accountant or lawyer in order to provide documents for the buyers due diligence? Place domain names in escrow? Does this place a lower limit of the value of a company worth selling, because of the costs involved?
At least three weeks of full-time work, most caused because BCC was excessively entangled in my other businesses and disentangling them was not always straightforward. (Example: running on a VPS in the same Rackspace account used for AR's VPSes. Rackspace support was not responsive regarding account moves, so I ended up rebuilding an entire environment from metal at another provider then syncing/cutovering. Now multiply that by a sixty point checklist.)
If I had had my affairs in better order it would have been closer to one week of work spread over a few weeks of calendar time. Most of the unskippable process was due diligence, which was a real eye opener. Imagine an ex-Goldman employee quizzing you about a CC chargeback which was reflected in Stripe but not in the revenue books, which he had discovered by examining every transaction for 12 months with a microscope.
I'm told, somewhat to my surprise, that BCC was much better documented than most acquisitions handled by FEI, particularly in this price range. While the infra was lacking it was a major help to have nice clean books.
I didn't get my accountant or lawyer involved aside from a mentioning that I was selling BCC, as it wouldn't have been cost-effective. The deal was executed on FEI's standard purchase agreement with 2~3 clauses added at the buyer's request. Yes, the domains were escrowed.
What's the justification in doing three weeks of full-time work, which, at your average published rates is worth roughly $90k, to sell a site for $57k? Wouldn't it be much more sensible to spend the time contracting, making more money and keep the site, which is passive income?
Patrick does not optimize for the money. If he did he would have posted only about consulting for the last few years. He stopped consulting because he valued other things, like lifestyle. Since there are other things he values I think it's safe to recommend fixating less on the dollar amount of this transaction and consider the other benefits more.
His story has been all about contribution to the community. Since the BOS days he's been writing about his adventures and people who have earned far more have used his writings to make money.
One of his writing tricks is to over-contribute. He sometimes responds to an HN question with overwhelming value that often surprises the asker. Fuck 30k a week. Measure something else.
(Primary benefit of his mentioning gig weekly cost: you can probably charge more. Focus on the value you provide and up your rates. That's been his message for years.)
Patrick has been on record for quite some time that he is forgoing his maximum earnings in consulting to focus on his other businesses.
I won't speak for him, but is it really that hard to understand? Once you hit a certain income level, doing work that is interesting trumps maximizing paychecks by several orders of magnitude (at least I found that to be true).
Putting a nice little bow on a hobby project he's run for a decade and getting paid for it sound pretty good to me. Not to mention all the new learning he's just leveled up on.
> your average published rates is worth roughly $90k
What? Sure, saying "I made $30k/week under one engagement" is cute, but that doesn't mean your rate is $30k/week. When the stars align, you take the nice gigs, but clients aren't standing outside your door begging to pay $750/hr every day of the year.
You also seem to think 30k is the 100% bill rate. A successful consultancy looks to be closer to 70% (and successful in this case means that they don't actively seek customers). The other 30% doesn't come from vacation, it comes from overhead.
The Bingo Card Creator falls into the same spectrum of charge out as Patrick's posted consulting engagements. Whether it was more or less is largely immaterial because consulting engagements are things he's been actively avoiding for a long time, while being done with Bingo Card Creator is something he's actively engaged in.
Okay, so 70% of 30,000 is $21,000. Instead of it costing him ~$90,000 worth of time to sell BCC for $57,000, it cost him ~$63,000.
I'm not 100% sure I agree with Stavros' point, and I'd guess that there was a lot of downtime in the 3-week sale in which Patrick was doing other things, but if you read the situation as Stavros proposed it, the economics are the same -- as $63,000 > $57,000, it cost more to sell BCC than to keep it.
The second is that when you've spend this much time working on a project, watching it die because you no longer have the time/focus to work on it is painful.
I've been in this situation several times, and being able to hand a project off to someone who will take decent care of it is far better than seeing it go under. There is a personal connection to projects like this, to the point where the time invested in selling it might not make sense to an outside observer.
Also, he may not have known it would take 3 full weeks at the onset (eg; if Rackspace had waved a magic wand on the accounts it probably would have saved a week)
I don't believe the "one less thing to worry about" argument. If I had to pay $30k to close a side-project, I'd have let it die.
Same for not knowing how much work it would be, it makes sense to stop when you realize it's going to be more work than it's worth, even if it creeps up on you.
Just letting a creation of mine die feels like letting a part of myself die. You can say it shouldn't but that's not important; preferences are preferences ;-) and people are weird.
For certain people, myself and perhaps patio11 included, it'd be worth that $30k of opportunity cost.
Not sure why that has been down voted. Yes it does not add up. If you claim you are able to make 30k/week, you don't spend that much time on closing a 57k sale. I'm a sorry but the level of responses here are fanboism at best. Patio11 might be treated as a god here, but that doesn't hide the fact that this is a huge inconsistency ... Like the previous OP I will be down voted for expressing an opinion that deviates to much from the norm on HN. How can we have productive, constructive, discussion when we can't express an opinion. Take aside the name/popularity of the guy and you'll be left with a simple problem: 30k/week versus 3 weeks/57k, dealing with much much less exciting things (you know what I mean if you've dealt with a purchase agreement and the likes...)
This is why I stopped commenting on this thread too, nobody else will even consider the fact that it's at least a bit fishy that you'd do three weeks of boring work to get what you yourself have said amounts to two weeks of your income, which you can get at any time.
This is a really silly subthread. I can make X0k/wk in steady state with a consultancy up and running, at perhaps 70-80% utilization. But to do that, I have to invest Y number of days of overhead to get the consultancy into steady state: I have to prospect for work, I have to write proposals, I have arrange staffing, I have to spend Z hours every week working on scheduling and logistics, and I have to account for all the "breakage" hours that go into keeping a business running†. It is a significant amount of work. From a standing start --- without preexisting contracts to feed me leads on new work, for instance --- it's a tremendous amount of work. Notice how few people do it.
I don't do any of those things right now because, like Patrick, I'm building a pretty complicated piece of software, and don't want to spend the time and energy it takes to get a consulting practice into steady state and keep it there.
We both decided we wanted a break from consulting. Lots of people do that. It's not suspicious; in fact: thinking that it is suspicious is a pretty good tell that someone hasn't ever run a consultancy.
It feels like lots of people on this subthread chose an extreme interpretation of Patrick's story about his consulting practice: that running a practice with an X0k/wk average bill rate means that he also claims to be able to generate X0k/40 on any given hour. Anybody who claims that also probably hasn't run a consulting practice.
I'm not Patrick so it's a bit weird for me to be chiming in like this, but, on the other hand, it's pretty easy for me to point to a pretty big consulting practice that works the way I say it does (hi, NCC US people!), so maybe I can be more helpful in clearing this stuff up and not ratholing on "I've never run a high-value consultancy at scale and all this stuff sounds pretty fishy to me hmmm" stuff.
† Thinking more about why this is the case, it occurs to me that the consultancy running several years in also generates BATNAs for contract negotiations, which makes it easy to walk rates up --- you pay my full fee, or I have my choice of several other clients to give a discount to.
I was on BOS around the same time patio showed up... It's amazing to see how "far" he has come. What he has mastered is marketing to developers, more than anything else. Of course it doesn't add up, because it's like all marketing: all sizzle, no steak.
I ran a site which earned a few thousand dollars a year, but closed it down a few years ago. Sites like this are not passive income. They require some level of thought and maintenance, even if it's only once a week to clean out spam. That can be distracting especially when you are able to earn a lot more by other means and don't need distractions.
Keeping around BCC and not maintaining it means it continues to lose money and still nag at him. Easy to see how that alone could return positive value, let alone the non-financial implications of dealing it with once and for all compared to taking contracting work he may or may not actually enjoy doing.
> I'm told, somewhat to my surprise, that BCC was much better documented than most acquisitions handled by FEI, particularly in this price range. While the infra was lacking it was a major help to have nice clean books.
Was this thanks to Stripe, or another service, or another way you documented transactions? Or just the fact that you documented them at all?
On a related note, I asked Rackspace what it would take to transfer my VPS image in the event I sold my company. They told me that transferring an image to another customer was not possible. This was about 3 years ago. Are any other VPS providers more friendly about transferring disk images between accounts?
I've found Rackspace to be super unhelpful the moment you make a request that isn't either in their interests (e.g. "can we have another server and pay you more please") or falls outside of what they would normally do. Other VPS providers I've used since have been infinitely more flexible and helpful, including transferring disk images.
It is really easy on Digital Ocean. On Rackspace it is theoretically possible but you have to "self-serve" with the API apparently and it is a %{#+{^#]#{## from start to finish.
In this thread: people who are jealous of patio11's consulting rates and success, so they try to be "skeptical" (i.e. gratuitously negative) and do some kind of reductio ad absurdum about how it "doesn't make any sense" (i.e. he's being fiscally irresponsibly, or lying) to sell a business when he could "just grow it" (i.e. with no mental effort, cause it's magic to them anyway, or he's lying) or "just drop it" (cause who cares about what you do or leave behind when you have $$$ right?).
Scratch all that jealousy. Grow up and be happy for his sake instead! HN is richer because of people like him. Here's my real comment on this news:
Congratulations Patrick! I'm looking forward to hearing more about Starfighter. You said a few weeks ago a couple of months ago, so you better push something soon ;)
I think you might be conflating skepticism with jealousy. Sure, some are probably jealous, but others might be wary of the ebook pimping that was for a time, quite prevalent here on HN, and all from the same circle of folks.
If anything, I think it's preferable that the community engage in pattern matching and question where their heroes come from. It doesn't mean Patrick is a fraud, but it might mean that he's not the god everyone makes him out to be.
I will admit that when I first arrived here on HN, I too believed that his 'status' was a reflection of BCC's success. The way I saw it evolve was that the consulting discussions were only made possible by the fact that BCC was touted as a model product for bootstrapping success.
That could very well be my mistake, but judging by this discussion, it seems I was not the only one to make it.
I think this is why so many people are surprised by the low revenue numbers.
As for the sale itself...3x on a dying business is a pretty good deal if I must say so myself. Questioning the time he put into making the sale is silly. You can't put a price on peace of mind.
But a lot of people rightly view him very highly personally, and view his advice as very good advice.
Some people in this thread are calling it into question, and a few of us are trying to get across the fact that we've known him online for many years, lots of people around here have known him in person for many years, and the accusations that his claims are exaggerated is wrong.
Also, his advice is very good - I speak as a former consultant.
Not you. In fact, prior to today, I wasn't aware you and Patrick were working together. I have no issues there.
I'm not going to name names, but I'm pretty sure most of the community knows the few I am referring to. It just so happens that they've also been speaking at conferences, including Microconf and others like it.
1. Person A builds up a persona on HN as a guru, product person, consulting expert, etc.
2. This person then sells an e-book, leaning upon that reputation.
3. This person's uses the launch as an example of being successful.
4. The cycle repeats.
This is an obvious manifestation of the age old Mass Control, Product Launch Formula, etc, and I have no problem with that. My point above is that it's OK for people to vet the parties behind these products, and I think it's lazy to immediately dismiss criticism as jealousy.
No, I am literally having a hard time understanding why people are so automatically suspicious of ebooks. My bias on the table: writing books is so non-remunerative that making them almost seems like charity to me.
Very often the real return in writing an (e)book is personal branding. It's a pretty effective SEO technique. I don't see why this isn't obvious to you. I literally know more than a handful of people whose primary motivation for writing an ebook was that it would raise their profile. That's half the reason why so many ebooks are free, kind of similar to how and why (partly) people contribute to OSS projects without pay.
What is strangely bizarre it is generally the same crowd who is hyper-critical of MBA types who make decisions based purely on numbers in an attempt to maximize revenue/profit at the expensive of non-tangibles that while not reflected in P&L statements are nevertheless very real.
You may be right, it may be jealousy to critique such a thing when many of those critiquing likely have never: 1. taken an idea and turned it into a viable commercial product; 2. maintained a company in the black for multiple years; or 3. sold an entire company they created from scratch. Then again when one has never done any of the three of those things and they are just seeing dollars (as you say it is magic to them anyway), it is probably very difficult to understand the inherent value in the actual experience of doing any one of those things. In the single comment I saw Patio11 write in this thread, it was very clear he gained knowledge/experience taking part in this exit and moving forward I doubt he is ever going to look back and think to himself, "gee I really made a mistake by selling BCC b/c of the opportunity cost", if anything on his future exit he will probably be thinking "this is such a larger deal by orders of magnitude, yet it is going much smoother, I am glad I have been here before."
Critiques have substance. Destructive criticism is just negativity for the sake of negativity. I do agree though, the bigger figures get their share of undeserved hate around here.
>
The bigger figures become untouchable, above reproach, around here. There are some figures who are literally toxic, but because they've become a part of the core group they can get away with it. And if you doubt or question them, you must be a troll.
Meatball wiki calls this "vested contributor". It is a problem. I sometimes post unacceptable but not flag worthy comments. (I welcome downvotes if you see me doing this - it makes me edit the post or withhold replies. Or email me if you don't yet have downvote privs).
> It would be an interesting exercise to remove names from comments for a while and see how they do. I suspect the exercise would surprise some people.
This is an excellent idea. I would happily use a plugin that provides this functionality. It's make my HN life better and easier. I suspect I would upvote more often.
You think you're making a logical argument, but all I hear is bitterness and rhetoric. Bitterness is toxic and it drips from all of your posts in this thread. Why? You could make the same points with kinder language and get farther with this crowd than you are right now. Also, if you have logical points to make, surely you can back them up with specific examples? I'd be interested in reading what comments other people have made that you think would have been downvoted had it come from somebody else.
Now that I think about it, an HN alternative without karma where everyone is anonymous would be an interesting experiment.
This is exactly the sort of post that you find regarding quick fix solutions and Make Money Fast schemes. Don't believe in the magical cure-all nature of Trend Of The Week? So bitter and negative.
So we're supposed to be skeptical of everyone's intentions but your own? Why should we believe you over anybody else who posts here? The fact you haven't supplied any evidence but instead rely entirely on manipulating emotions flags you for what you are: a troll.
Even more flagging -- tptacek and friends are flagging off posts, leaving their ridiculous replies to things not actually said (the tactic of responding to things not actually stated, and then leaving their aghast reply. This is tptacek's thing). As mentioned they waited until this fell off the front page, when they could, 1984-esque, change the reality of the thread.
I thought Patio11 was an A/B optimization, strategy god...
Why did he abandon BCC?
Reminds me of Tim Ferris and Rich Dad Poor Dad.... those guys make their money selling their brand, seminars, ebooks, etc. and not via the methods/techniques they preach.
It takes a lot of effort to keep multiple projects in the air. Even something that "runs itself" never really does. I've got Draft going while I work on Highrise, and Draft works very well on its own, but I still have to deal with support requests, downtime, upgrades, refunds, and more.
The guy wants to focus on his other projects. Patrick's never hidden the fact that selling Bingo Cards isn't as lucrative as his other projects. He's super honest and open about what goes down. https://www.bingocardcreator.com/stats Tons of good lessons he's learned that he's now applied to other business via consulting, Appointment Reminder, and now at Starfighter (http://www.kalzumeus.com/2015/03/09/announcing-starfighter/)
Look at 37signals. They decided they needed to focus on Basecamp to make it as good as they want. http://37signals.com/
We all should be shedding more and more stuff in our lives to focus on the bits we want to grow and see further through. Nothing at all wrong about that.
Looks like close to ~30% last year (after seeing ARR fall by 30%). [1] I think higher in prior years.
He claims to have spent only a handful of hours on BCC last year. So spending less than say 20 hours on a project and having it generate ~30% of revenue, passively, seems like a pretty good deal.
Another poster mentioned focus, but that doesn't really seem to be the case here.
Patrick is not reporting his full income from AppointmentReminder, he excludes the Enterprise deals.
"Focus" is a very valid reason. Even assuming just one hour per week, that's 52 hours he can spend on something else. Plus having BCC around is a mental burden. Even while you're not working actively on it, you're thinking about it.
Passive recurring revenue sounds like a pretty good deal. Especially when you can plow idle hours (weekends, evenings, etc.) to "optimize" it.
I'm not sure the opportunity costs are that high... especially when you're 1. Only spending a handful of hours on it (his claim) and 2. Your whole schtick for your consulting services is how you deserve $$$$ because using your A/B optimization whatever skills you can improve conversion/traction by xxxx%!
He spent 9 years on BCC that resulted in ~30K (edited, misread as 60K) in ARR.
I think his ideas and insights are valid. I just find it odd the contrast between his curated HN celebrity image as an uber-hacker with his actual results.
Doesn't seem like his skills resulted in much success with BCC but it sure helps his consulting career...
Sorry I'm the awkward guy at the party that makes people feel uncomfortable :)
Patio's street cred doesn't come from the results of BCC, which was designed to be a small low-effort business. It comes from A.) His tremendous skill as a writer-teacher and B.) His track record of consulting success.
BCC seems to have been a learning playground that gave him a real business on which to sharpen the skills he's now known for, and which produced a bit of profit on top to boot. But a small competitive market is still a small competitive market. There's only so far optimization can take you in that scenario--if you have the skills, you're better off seeking a bigger pie to apply them to.
His inflated "profile" comes from being one of few who actually put their numbers and specifics out there. And because there are still loads of aspiring lifestyle-business hopefuls for whom $30k is a fantastic goal.
Not to say I don't find it strange in some ways too - I've had passive projects make more with less effort - but I don't talk about it, thus no profile.
Well, the site was in a year over year downward trend in revenue. Why invest time in it to make it more profitable when he's got other ventures that are making mor or are more promising? He could let it die or make a small chunk of change on it and focus on things elsewhere.
I don't know about the image of uber-hacker, but it would be fair to say that he's been seen as a very good marketer---both of BCC and his own skillset.
Those skills are clearly that which people envy, even though it's not hacking.
> Reminds me of Tim Ferris and Rich Dad Poor Dad.... those guys make their money selling their brand, seminars, ebooks, etc. and not via the methods/techniques they preach.
I just find it interesting that he couldn't apply the very skills he has (which he is certainly talented at - no doubt) to save his business.
I wish he would do a detailed writeup about why. He makes it sound like neglect (only spending a few hours on it last year) and opportunity cost (his booming consulting work), but I wonder if he tried to slow down / reverse the declining revenue and just failed or whatever.
>I wish he would do a detailed writeup about why. He makes it sound like neglect (only spending a few hours on it last year) and opportunity cost (his booming consulting work)
I think the answer is perfectly simple - he's making much more money from Appointment Reminder, launching Starfighter will take up a great deal of his time, and he has just had a baby. Selling BCC now makes more sense than just letting it wind down through neglect. According to his last Year in Review, BCC accounted for only about 15% of his income. Selling up strikes me as a classic Patio11 optimisation.
Selling BCC would make a lot of sense if he didn't spend his equivalent of $90k to make $57k. I don't understand how it makes financial sense now, though.
He didn't though. For one, patio no longer does consulting work. For two, just because he is capable of earning $90k in 3 weeks doesn't mean that's how much that specific 3 week period of time is worth to him.
Imagine this scenario. I consult at $1000/h. On the weekend I need my lawn mowed which will take an hour. Should I do it myself, or pay someone $100 to do it? I guess you could make the argument that if I was consulting all weekend then I could pay someone else to do it. But the likely scenario is that I'm going to carve out an hour of personal time and do it myself.
If Bill Gates drops $1000 on the sidewalk it does make sense for him to pick it up (though whether or not he'd notice..). The 3 seconds it takes him to pick it up isn't actually costing him anything, even though his passive income/worth might be more than $1000/3-seconds.
Opportunity cost is only a cost if there is an opportunity foregone. And sometimes you might come out financially worse, but in a better position strategically, socially, or personally.
I really don't understand this argument, sorry. People tell me I should clean my house, but if the cleaner charges $20/hr and I charge $50, and I don't enjoy cleaning more than twice as much as I enjoy my work, why would I clean my house myself?
This is an actual situation that happens to me, by the way. I don't understand why people suggest this, it makes no sense. Bill Gates also ostensibly enjoys picking up his money more than not, so it's no trouble for him.
I also charge a high hourly rate, and yet I still clean my house and mow my lawn. As it happens, I don't have enough work to fill up 24 hours of each. Also, I don't have any desire to work all 24 hours of each day. Why is this so hard for people to grasp?
Just because Patrick can charge 30k a week, doesn't mean he necessarily had a client lined up to give him 30k that week. Also, when these numbers get thrown around, there is legwork that happens ahead time that isn't actually getting counted (at least not when you state 30k/week rate). It might be a month of discussion and emails and phone calls and proposals and then 30k for a week of "work". Also, sometimes those emails, and phone calls, and proposals get turned down and that time ends up being $0/hour.
Finally, HE DOES CONSULT ANYMORE! He's the CEO of a new startup, and going forward he likely wants to focus his energy on that, and not on BCC.
> People tell me I should clean my house, but if the cleaner charges $20/hr and I charge $50, and I don't enjoy cleaning more than twice as much as I enjoy my work, why would I clean my house myself?
You don't have to do it yourself. You might decide that it's worth paying someone else $20/hr so that you can do something else with your time, whether that is working, spending time on a hobby, or just sitting in front of the tv relaxing. One of those 3 scenarios is better financially, the other 2 are worse off financially but may be better for your health or happiness.
FWIW, I also use the services of a cleaner every couple of weeks because I judge that a worthy expense.
I was trying to make the point that not every hour of every day is "worth" exactly the same financially. My very last sentence was key, and probably should have been more prominent.
> And sometimes you might come out financially worse, but in a better position strategically, socially, or personally.
That works assuming you have your week completely full, every time. There's no time in the whole week where you don't sleep or have some other activity for a total of 30min. Honestly, I don't think that's the case for majority of people. (but that doesn't mean I think you shouldn't pay for a cleaner instead - that's just personal choice)
You seem awfully obsessed with those numbers. What kind of answer are you looking for, here? You certainly seem to be looking for something, but I'm not sure what. Are you looking to understand why somebody like Patio11 would make a tradeoff that seems so alien to you?
Full time consultants do not charge their bill rate 100% of the time they are working. A very good number is 70% of the time and this is in the case where you are NOT spending time finding your next client.
The other 30% goes into time spent that would be problematic to bill for. Writing notes, updating documents, attending conferences, doing specs for the next projects etc.
Finally, even if you can keep your stack full of work, a few things are always true in consultancies:
1) Once you stop it takes some time to fire the machine back up. Patrick has said he hasn't been doing this work. Getting the consultancy started up again would most probably take more than the 3 weeks selling Bingo Card Creator did.
2) You are, of necessity, working on projects for other people. If you've got a burning desire to work on your own projects, you simply can't and keep the consultancy going.
3) Once you become your own boss, the idea of "down time" or "idle time" where you can devote resources to things you aren't interested in or aren't your focus (like Bingo Card Creator) becomes much less concrete. If you truly choose what hours you work and what you work on, why would you spend any of it on work you don't want to do or that is not driving forward your primary goals. Consulting gets in the way of that.
Is this hard? Consulting at premium rates usually involves travel. If you have a newborn and are CEO of another company, travel (likely international) is not appealing.
It probably takes a similar amount of time to increase BCC, Appointment Reminder, or a medium sized SAAS company revenue by 10%, so it didn't make sense for him to work on it anymore.
First, even Rich Dad Poor Dad gets an excessive amount of snobbish criticism. It's a book selling business. But, there's nothing really wrong with that. Either it's fluff and entertainment and no worse than a book about ice skating. Or, it's a self help book about money that is simple and written for an audience that has never thought about investing.
The main message is fairly basic. Spending money and effort on things like investment property is the way to accumulate wealth. He sprinkled in a healthy dose of self help woo and nonsense, but no more than life hacking, dieting, fitness or any other self help best seller type book.
Second (and far more importantly), Patio11 is about 12 rungs above any of that. His level of transparency and mystery-free writing is almost unheard of. This kind of "If you're so awesome why don't you.." criticism is such a pity. It can and does deter people from sharing (I know it would deter me).
You have the full story available to you. The history of this site/business. The stuff that it led to. The financials. The effort required. The eventual sell price. An underhanded comment implying self serving dishonesty is so unjustified and unfair, nevermind uncharitable. It's a cheap shot and it's depressing.
Interestingly, does anyone remember lionhearted's posts from so long ago, where he pondered over the question why patio11 makes so little money, and why he charges so little? And the community reacted very fiercely, saying that he should let patio11 be -- he's doing his thing, money doesn't matter. And now patio11 is the posterboy for "charge more". How things change! It's kind of fascinating.
I was one of the participants in that thread. lionhearted's post got a bad reception because it didn't just stop at suggesting Patrick charge more, it went into armchair psychoanalysis and crossed the line into publicly pitying someone else.
I like Sebastian, so I didn't rip him a new poop chute for his post. I think he unquestionably meant well. But it's a good lesson about being very careful in how you shine a spotlight on what you think someone else's issues are.
IIRC it was tptacek that had a face-to-face with Patrick who changed his thinking the most on what he was worth after Patrick did some consulting for Matasano. tptacek has a pretty deft hand with that sort of thing.
(Upvoted you, even though we disagree on what that thread was about it's still an interesting thing to point out.)
> And now patio11 is the posterboy for "charge more"
I'd say that, if Patrick had believed in charging more from the start, he wouldn't be nearly as outspoken about it now. It is presumably (close to) the #1 thing he wishes he could tell younger-Patrick—but, since he can't, he's telling everyone else who'll listen.
Actually, now that I think about it, I wonder what Patrick would have to say to the HN community at the time, the one who stood up to defend his undervaluation-of-self? I mean, maybe they'd have defended him no matter what side of the coin he was on, given that he's a pretty central member of the HN "tribe"—but I'd be interested in a corollary post to the "charge more" posts that goes more like "don't praise people for charging less."
I think you guys are kind of mixing up his product business, which was a passive income generator, and his consulting practice, for which Patrick never had the problem of not knowing to "charge more".
(I'm one of his cofounders now, and have talked to him a lot about this, so I'll speak up for him while he's on his flight back to Tokyo).
I have talked to Patrick at what I think he & I & Erin would agree is excruciating length on this subject and that name has never come up in those conversations. Many others have: Peldi, Amy Hoy, I think Brennan Dunn, and most especially Joel Spolsky.
I remember Joel Spolsky most prominently for the idea of making a workplace that programmers love, which will bring revenues later. Interestingly enough, Patrick hasn't had any employees in his businesses, and has really modeled it differently in many ways.
Then again, Joel Spolsky has written on many other topics, many of them more business oriented, e.g. the Ben & Jerry's vs. If you're reading this comment and haven't read articles by Joel Spolsky, you should really go read them now.
> I mean, maybe they'd have defended him no matter what side of the coin he was on, given that he's a pretty central member of the HN "tribe"
Are you sure it's HN tribal thinking that resulted in the vehement defense of patio11? Because I have a different theory: I think a slightly different crowd is now the majority (most entrepreneurial, more money-oriented) from the old more hacker-oriented crowd at HN.
That's definitely a false "fall from grace" narrative. Hacker News was previously Startup News. There might be a few more SEO-types here than before, but the business and technology mix has always been pretty equal. (Unsurprisingly, it's about the same mix you'd expect from the cofounders of YC startups!)
I hadn't seen that originally, but, while reading it, I thought "this seems to me exactly what Patrick did". So, it's too bad everyone attacked lionhearted when his advice was basically exactly correct.
Isn't this a different case though? As I understand it, the price/tiers on BCC is heavily A/B tested which was discussed before (I can't find the post, maybe it was on the podcast?) The "charge more" idea is always mentioned in the context of negotiations, knowing what the customer can pay, knowing the no-confirmation level of corporate spending, etc.
I don't think those ideas are incompatible. When you're selling mostly to teachers and people who have fun with kids you're not going to make millions.
I wonder what price could have been achieved had it been marketed as "Patio11's Bingo Card Creator" not "a well-established software business creating bingo cards for educational and recreational purposes".
Patrick's 'brand' certainly has value, at least to me (I've learnt much valuable information from him over the years). And while homo economicus knows this brand doesn't change the underlying business fundamentals, especially as Patrick was exiting, I believe it would have created acquisition competition and therefore a higher multiple than Px3.
The missing 'one more piece of information' in this instance may be Patrick's desire that BCC went 'to a good home', someone who saw potential in what it is, not bought it because of who he is.
Either way, he's now had a successful exit! Congratulations (again) Patrick - feels like only yesterday you stepped out of your salaryman role https://news.ycombinator.com/item?id=1230156
"I wonder what price could have been achieved had it been marketed as "Patio11's Bingo Card Creator" not "a well-established software business creating bingo cards for educational and recreational purposes"."
Assuming it mattered, and I don't know if it does or not honestly, he may not have wanted it to be known that bcc did the amount of sales that it did because that could hurt his brand not help it. Not that he ever called it anything more than iirc "wee" but honestly I kind of expected that the sales and/or profit was more than what the sale page said and that assumes that sales have been going up and not down.
As far as the patio11 brand that only matters to people on HN nobody in the rest of the world cares about that at all. All they care about is what the business will make and what the product is and what they see as the potential. Which, quite honestly given the product (and especially since Patrick ran it) seems nominal to me, given the amount of time it was in operation.
Obviously there was a reason he didn't publicize the sale on HN and the brand. You can draw your own conclusions.
That's true - what is gonna be much harder for any new competitor is to match BCC's SEO. Nine years worth of intelligent, diversified, and Google friendly reputation building is not going to be duplicated quickly.
It wouldn't be an _impossible_ task to outcompete BCC I suspect, especially if the new owner just lets it coast and wind down instead of staying on top of the game (which Patrick readily admits he hasn't done for some time), but I suspect you'd probably need a PPC budget of around the same magnitude that the new owner just paid to kick-start a competitor - even if you already had production-ready code and a suitable hosting platform ready-to-go.
I think you're right - in that assuming "it'll be paid off in three years" is a naive view of the way SaaS businesses age - but I also suspect there are already several "exactly the same product"s out there already, none of which have got the traction BCC has, and that the value here is not in a bunch of code that makes PDFs from lists, but in the business backend and the historical web presence and SEO.
* There's a fairly liquid market for sites of any sort that have a demonstrated ability to generate revenue.
* The valuation of those sites goes up when revenue is recurring.
* The valuation goes up with history/track record.
* That market is not especially oriented towards teachers.
Given the universe of different sites you could build that would charge a subscription fee to serve some niche of customers, it would be pretty weird to compete for the Bingo Card space.
(I was surprised at how liquid the market for this stuff was.)
"(I was surprised at how liquid the market for this stuff was.)"
I'm fairly surprised by this too. Why do you think that market is so liquid?
I will note that in Software, Entrepreneurship == Innovation in many people's minds (i.e. a startup inventing something new).
In non-software entrepreneurship, buying an existing business and running it is considered a very common path to becoming a business owner. As is starting a copy of other existing businesses (e.g. another restaurant), or even flat-out extending an existing business (e.g. the amazingly successful business innovation of "franchising).
I don't know. I personally feel like it shouldn't be as liquid as it is; it seems like an extraordinarily risky way to earn a return that is, after expenses including time, not that much better than what you might get aggressively investing in the market.
I'm shocked by both the liquidity and the valuation (in that it is more liquid and higher than I would expect).
Further, the income generated from BCC is extremely seasonal and its not anti-seasonal with other education based markets. All in all, I'm as interested (if not more so) in hearing from the purchasers as I am from Patrick.
"it would be pretty weird to compete for the Bingo Card space"
I guess the only counter argument is that there's now a "product market validation" that says a Bingo Card site is "worth" $60k to someone. If I had nothing else to do and - for example - a Wordpress plugin that'd let me create one of these in a weekend, it'd be a not insane idea...
Not sure why this comment got downvoted without a reply.
Anyway, I remember hearing the same argument when Youtube exploded. It's one thing to have a product (Bingo Cards, Youtube or whatever) but distribution and an existing client base is another.
I can't stop thinking that if I bought it, even taking a loan of $57k, I could both pay back the loan and live comfortably off the profits here in Eastern Europe. With some effort it might be possible to increase the revenue - if I remember correctly Patrick said he has not been putting much time into BCC lately.
I had the same thought, as I do have some spare cash and am in the market for a low-maintenance, profitable side project. But I did some due diligence on the actual numbers when it was for sale, and... chose not to pursue it any farther.
I wish the new owners luck, but it is definitely a project needing active effort at this point, not just a side income stream.
When people quote high revenue multiples, usually they're in an area that they see high future growth. Patrick's writings on BCC make it seem like a business that is stable to declining. Of course, as you point out, the low multiple (3x annual profits) means theoretically recouping the investment in three years (not including interest and opportunity cost).
Patrick posted that BCC's 2014 sales declined 33% from 2013. If sales keep declining at that rate, $19k turns into $13k for 2015 which turns into $9k for 2016, $6k for 2017, and $4k for 2018. At that point, the business really isn't generating much and it would take well over a decade to recoup even without accounting for interest and opportunity cost.
But it might level off. It might go up if the new owner puts some love into it. However, I think the most likely scenario is that revenue and profits continue to fall. That's not to say $57k is a bad deal for the site, but I don't think it means easy-money. It seems like a sane deal.
I think a buyer doing due diligence would have to look at the site, calculate (or guess) at a declining revenue curve assuming ~$12-18k in profits for 2015 and maybe seeing the rate of decline flatten out in the future and see some profits to be had. I know, $19k/year with a $57k price-tag looks really appealing on paper and makes it seem like easy money ($19k/year forever!). By Patrick's own writings, BCC's visits, sales, and revenue are all declining by a third year-over-year. He hasn't invested in the product for a while. There will definitely be some auto-pilot money, but not $19k/year for three years. It can still be a good deal. It's just important to go into deals eyes-open.
$57k seems like a fair price for BCC. If the new owner does good marketing and customer acquisition, profits might level off quickly, but that also means really working on the project. There's a decent amount of risk in a project this small and so charging too much for it doesn't really account for that risk and the current downward trend. That said, it seems like a bit of work could go a long way and recoup the investment in the 5-10 year time-frame and make a reasonable amount of money. It can be a good business, but it isn't free money.
I think if the profits were stable year-over-year, Patrick wouldn't be selling it (or he'd be selling it for a lot more money). If it had brought in $19k/year since 2010 totally stable, I could see a six-figure price tag on the site (maybe $150k, maybe more). But according to Patrick, BCC "has been on a steady decline since [2012/early 2013]. This decline accelerated in 2014."
* None of this is meant to be negative about patio11. It's just meant to be realistic about the likely future profits of BCC based on the decline noted by patio11 in his 2014 Year in Review: http://www.kalzumeus.com/2014/12/22/kalzumeus-software-year-....
"None of this is meant to be negative about patio11."
I always find it unfortunate that it is necessary to walk on eggshells around a person in any online community for fear of some kind of retribution by other members. It doesn't really serve any learning purpose for people to hold back on comments that might be helpful just because a particular member happens to be well liked.
"It doesn't really serve any learning purpose for people to hold back on comments that might be helpful just because a particular member happens to be well liked."
It's the politics of HN. If you say anything bad about Patrick (no matter how true or constructive) or say anything against the status quo (example: legalizing MJ), you will be down voted.
Being late to the thread, so probably nobody will read it. Anyway:
Looks like there are very few corporations out there, that are able and willing to buy such SaaS products. Remember how long 37Signals tried to get rid of their jobs-site and various non-Basecamp products? Nobody wanted to pay the price despite that the businesses were profitable.
Maybe the USP of those products is tied to extensive niche knowledge and networking. Both is very hard to transfer.
Potential acquirers usually know nothing about the market and also know, that they will need some very good developers and marketers to keep the revenue stream alive, because the previous owners really set a high benchmark for that.
In both cases I personally would have tried to transfer the business to current employees in exchange for a commission based on the future revenues paid over 5 years. Both parties involved know how the business works and can project the future success better than everyone else out there. There is usually also enough trust and communication culture in place.
However, this is not a "quick" exit and the seller is still connected to the business/people for a long time. That risk needs to be covered by the commission, of course.
Patio11 is one of the local celebrities, his articles and comments are very interesting. He is currently the #3 user with more karma, just after tptacek and pg (the very site owner).
It would be interesting to know how much work is required to keep the business running. The multiple is quite low (3x profits) and to me the business seems already established (or even 'finished' if you allow the expression), so either I'm underestimating the amount of work that is required to keep it going, or there is another reason why patio11 would be so keen to offload it?
This feels like a thinly-veiled attack on Patrick McKenzie's character, backed up with zero factual evidence.
I've known Patio11 personally for going on 5 years. He's one of the most honest people I know and I've seen him donate countless hours to helping fellow bootstrappers.
If you don't know him or his story first-hand, and haven't seen the hundreds (thousands?) of hours he's donated to the bootstrapper community, you should familiarize yourself with his story before commenting on this thread.
I've only met patio11 in person very briefly (thaks to rwalling's MicroConf), but everything I saw confirmed the idea that he's a very nice, helpful person.
Harass him? What an outrageously transparent attempt to prejudice the audience, which in this case happens to also be for your own benefit as well: Good judgment would have been that you should stay away from these threads (for those who don't know, tptacek is a cofounder, with patio11, of their "turn HN fame into value" startup), but instead you come rushing in guns blazing.
I found the consulting story incredibly dubious. None of the facts meshed, and I find those sorts of pie in the sky stories to actually be destructive to people entering or in the industry. If you find skepticism "harassment" -- does fame on HN make one untouchable -- you have a very perverse sentiment of what that is.
I think you're having some trouble with the concept of "facts".
Once again: speaking as a consultant myself, and working in a field among many competing consultancies: Patrick's consulting experience is not at all atypical. Patrick was not a top-tier consultant, nor were his outcomes. People start consultancies and do much, much better than he did, or than I did. You seem to imply that you haven't, but I'm not sure why that's something you want to keep highlighting.
(I edited this comment to remove a bit of vitriol from the top, and to add the response to this anonymous commenter's claim that Patrick's experience is atypical, before which mine was a one-line comment.)
> FACT: Patrick's posts about consulting -- which sort of came out of nowhere,
Not a fact. You can go back and read about Patricks consulting efforts at least to 2010. At the time he claimed (and I have no reason to doub) to be billing out around ~5k a week (for his first few engagements).
You can also read through his posts as he mentions walking up his rate.
Again, its possible he was making all this up in a multi-year scheme to make elaborate claims. Personally, I'll take the evidence to read him as being truthful. Especially as it jives with what I've seen paid for consulting on the consumer side.
Speaking as a former client of Patrick's familiar with his rate card, and as a consultant: those are, in fact, facts.
This is the second thread in which you've called Patrick a liar. In the next thread you find to do it in, you'll be calling me one as well.
I don't know why you find it so difficult to believe that people can be as successful consulting as Patrick has, because, in the grand scheme of consulting, Patrick isn't anomalously successful. Regardless, you're wrong, and you should stop writing comments like this.
I'm not sure I understand your argument. It seems like you are saying "Patio11 clearly is lying about his consulting rates and the sale of BCC proves it."
What I don't understand is how you make that leap. BCC is the single most documented thing Patrick has done. The finances are there for review. You'd need to assume that the whole thing was an elaborate multi-year lie to think that he is embellishing the BCC numbers. This sale fits the numbers (though I don't know if we know the sale price) and therefore I view it as evidence that Patrick wasn't lying, at least about BCC. Am I reading that wrong in your view?
Or am I to assume that Patrick, whose writings on BCC are reasonable and backed up, then pivoted when it came to writing about consulting and started making things up? I guess I can see that happening, but how would a piece of data (the sale of BCC) that backs up many of his claims both about the financials and his own motivations help me discern that?
It seems like you are saying "Patio11 clearly is lying about his consulting rates and the sale of BCC proves it."
The root of this thread is someone who is a little surprised at how small of a transaction the sale of BCC was. Despite all of the transparency, a lot of people had a much greater sense of success, and it is a little like finding out that the stock guru had a yearly return of 2%. That is neither here nor there, and I have no comment or interest in BCC and related ventures, and was only tangentially commenting on the notion of inflated success, and with that reputation for wisdom/knowledge.
On the consulting side, I'm not saying that he's lying, however many people defensively jump to that conclusion. More generally I am saying that history has shown that a lot of people do lie (embellish, exaggerate, etc) to get attention, which leads to a situation where the onus of proof is on the speaker, increasingly so when there are extraordinary claims. I found the post about consulting simply extraordinary, and I have no reason to give anyone a pass just because.
> The root of this thread is someone who is a little surprised at how small of a transaction the sale of BCC was.
I think the sale numbers line up very well with what I would expect given the numbers actually posted (if anything I'm surprised the sale price is as high as it is). Is your thesis that people should lower their expectations about how much recurring revenue businesses are worth? If so, I agree.
> I'm not saying that he's lying.
You'd be better off if you were. Instead you are employing classic and cowardly character assassination techniques. There is literally nothing Patrick or his defenders can do to refute your claim (mostly because you refuse to make one). Even if they did, you could fall back to the safety of saying "I wasn't saying Patrick specifically is a liar, I was posting about people generally."
Instead you are employing classic and cowardly character assassination techniques.
This is the "untouchable" argument that attempts to short circuit any critical discussion. If skepticism is a character assassination, then hopefully we're all assassins.
There is literally nothing Patrick or his defenders can do to refute your claim (mostly because you refuse to make one).
Nor is there any specific thing I can do to disprove their claims. A bit of a catch-22, isn't it? As incredibly uncommon as their claims of success in the consulting world may be -- and I'm not saying this out of the blue -- it is possible that somehow they lucked into a series of incredibly generous clients who saw BCC as such a success that they gave a blank check. I have never seen an individual consultant without an incredible reputation (and being famous on HN != being famous) make anything near what they claimed, but it remains possible.
Pretty much anything is possible. If someone claimed to have achieved alchemy (theoretically possible via fusion), I similarly couldn't possibly say "no, they're lying!".
It's possible. I think it's incredibly improbable, but it is simply impossible for me to say that it's a lie.
There is no double standard. If patio11 were insinuating that you were a liar, I'd ask him to come right out and say it as well. Skepticism/critical discussion is no cover for rhetorical techniques that amount to trolling.
So 1) stop insinuating he is a liar or 2) make it more concrete. Do you think he is a liar and if so what do you think he is lying about and why? What would it take to make you stop spreading said accusation?
That would be a skeptical argument that could be critically discussed. As it stands, your position is "in the face of lots of evidence that patio11 has produced that indicates he usually writes the truth, I refuse believe him about this specific thing for reasons I will not outline."
I for one believe him because of his long track record of writing things that are verifiable and my own experience as a consumer of consultant products.
>Do you think he is a liar and if so what do you think he is lying about and why?
I don't understand what you're trying to accomplish. While I don't agree with user=irrigation's comments, I think he's been pretty clear: the claims don't jibe with his experience as a consultant and he's skeptical about the self-promotional aspects. It's hardly ambiguous.
So why are you demanding he come out and call patio11 a liar? That would be an asshole move. Instead he's saying "I don't believe it", and there isn't anything inherently wrong with that. We're all just "some guy" on the internet, who cares?
He hasn't come out and said I don't believe it (or hadn't as I wrote these comments). He's insinuated that it isn't believable, or that patio11 is lying, but he hasn't just made the claim.
That's what I'm hoping he will say instead of insinuation about a specific person. 1) make a claim. 2) put some counter claims along with it ("I've been doing consulting for X years and never seen a charge rate greater than Y") 3) and if necessary point out what it would take to change the position.
You are right though, I probably shouldn't care, but I really dislike the behavior in this case. It seems like simple trolling trying to hide behind dissent. Which is a disservice to all of us.
I've met him once, at a hacker news meetup. I've exchanged 7 emails with him, regarding a phone call he wanted to have with me, about something that is in one of my areas of expertise. We had said phone call that lasted around 1 hour. He asked me questions, I answered them. No money was exchanged (nor expected) and no quid pro quo's expected. Originally, it was meant to be lunch, but that didn't fit in our schedules.
This happened in the last month. Prior to that I had no interactions with him outside of his blog and hacker news. I've been following his blog for a very long time (in fact his blog introduced me to hacker news, not vice versa). I still read his blog via RSS but do not listen to his podcast or subscribe to his newsletter as the topics covered are largely outside of my interests.
I believe Patrick, not because I've met him in the last month, but because his writing is compelling, the things I can verify are truthful, and the things I cannot match my other experiences.
If I had any complaint about his post about money its that he is assuming that his readership understand implicitly concepts such as fully-loaded employee costs, bill rate vs utilization rate and bill rate in comparison to costs of delivery. I think that is largely untrue and he would have been better served with a summary paragraph describing appropriate ways to compare bill rate to employee take home pay.
None of that has anything to do with this particular post, which as I've mentioned, only adds to Patrick's credibility as it is an outside entity stating that the numbers, at least with regard to BCC, are truthful.
Funny how so many people with verifiable backgrounds, who are clearly not related to Patrick except through HN, vouch for him, yet we are apparently "shills".
Not sure what needs to happen for us to not be taken that way.
Dividing the world into "shills" and "skeptics" doesn't seem like a pleasant way to live. At any rate, it's no way to participate in a community, and you should (again) stop doing it.
>> patio11 gave advice on consulting which, as a long time consultant -- rather successfully (but still not enough to start doling wisdom) -- I found completely at odds with the reality I've endured, but it's a big world so maybe I just fly in different circles.
Just a thought, informed only by your comments here: your attitude is probably limiting your success. Nobody likes negativity, or working with negative people.
More concretely, successful consultants sell possibility: an organization can be stronger, faster, better, more successful than their goals if only they hire me as a consultant. Your attitude screams the opposite.
Just my unbiased feedback (I've never met Patrick and don't have a dog in this fight).
I just wanted to chime in quickly. I've found much of the advice given by patio11 to be plain wrong in my experience.
These conversations quickly fill up with Latin phrases barely copied out of wikipedia and I don't have the time or patience to discuss this with people I know nothing about.
Take this as you wish, most of the stuff he says is exactly what a person looking in would THINK, but it is not the truth.
And maybe thats the difference between your experience and patio11's?
He did take the time (and lots of it) to write up his advice (though if you read his earlier stuff it was much less advice and much more "here is this thing I'm doing, lets see if it works").
He also has near endless patience when discussing this stuff with others. It doesn't hurt that he is a persuasive writer, and it is a skill he has obviously and publicly worked at.
I for one would love to hear an opposing viewpoint, especially if it could be as well written and the author allowed as much access as patio11 does.
Yes I am. I make analytics applications for sales&marketing departments. Forecasting/Simulation, Segmentation, Text analytics, etc. Typical client - establishment with 500-1000 employees. Projects are delivered to the clients as a SaaS solution, because they need maintenance. Quarterly invoices, 1 year minimum contract.
Awesome. That sounds like a lucrative space to be in: presumably, everything you get asked to do is directly in the service of making companies more money, and so you can anchor your prices to the value you're providing.
What part of Patrick's consulting advice doesn't ring true to you?
(I spent a little over 10 years as a software engineering consultant, ending just last year when I started this new company; when the consultancy I cofounded sold, we had around 30 people on the team).
Penetration testing is not really software engineering consulting, and security spending is about as far as you can get from anchoring pricing to value. It's closer to selling insurance, but the value is even more dubious.
The exception might be in cases where a company is already spending a lot on security by doing it poorly, and you show them how to do it better. But, that is pretty much none of the market that I've seen.
Our modal project was part of the software engineering budget of a software product company.
I think you may think Matasano was more of an IT shop than it actually was. The term "penetration testing" doesn't do anyone any favors, since it means everything from "running Metasploit" (the kind of work we did not do) to "evaluating firmware".
This is really neither here nor there, right; the more specialized you want to say our work does, the stronger my consulting advice gets.
There are too many little things to sit down and make an argument. That's why I didn't want to get into a debate. You either see this or you don't. It's not easy to show it, but I will make just 1 example not to be completely without foundation.
The context is making (high touch) enterprise sales. In a blog post he reveals "the secret" that departments/teams have a credit card and purchaes below certain threshold are made with it and without allocating budget. He advices the reader to price his product/service to fall bellow that threshold so people in the department can purchase on their own discretion. It sounds logical and $6,000/year is a nice sum if you don't do a lot of custom stuff for clients.
On the other hand, you want your invoice's line to be as high on their books as possible. If your service is on some low manager's sheet, you are nobody there. He gets moved, quits, the company decides to cut costs or a thousand other things - you lose the client. You don't want a nobody pushing the needle for you on their side. You want it sponsored by a Director at the very least, but VP and above are more desirable. You want to be vetted. You want to be on the Approved Vendor List. You don't want payments every month, you want them on lumpier sums.
When reading something, it is a good exercise to think about the opposing situation for a second.
One of the strange things about the software business is that software is an iterative process where the rate of iteration can go from linear to polynomial to exponential very fast. Another strange thing is that if you are a software guy, the whole world is your customer. The third strange thing is the constant reinvention of old wisdom, repackaged in new frameworks, languages, platforms.
These three strange things then combine in weird ways to take on a life of their own.
Had BCC been written in a prior era, it would have been some MFC code that ran only on windows 95 boxes, shipped on a dozen floppies, and purchased by atmost a few dozen people who bought a printed copy of Dr.Dobbs and looked at an ad for BCC and said, Hey, I need to make my own bingo cards.
But because he had a web app and priced it right and iterated upon feedback, the whole world came knocking on his door.
To be fair, when he first started writing about BCC it wasn't a web app. The web app came as part of the iterative process (not that this detracts from your argument).
The reality is aspirational marketing works when you are building a personal brand.
I wouldn't really say Patio11 embellishes or lies, I'd say he employs standard marketing techniques.
I realize you may thing this as a "rationale" for why its okay but I don't think it is. Marketing and selective disclosure is a fact of life. If you don't read between the lines, it really is on you for most things in life regardless of the reality of the situation.
Its a large part of why I'm in favor of regulation. Many, many people get screwed precisely because they can't read between the lines.
I think you're going a bit too far about criticising "standard marketing techniques". What will you do if you want to contract for others? Why is it not "Publish as much information about your research and skills as possible"? (this is the standard marketing technique here)
I'm not really sure what is wrong with this. It's not like he's just publishing infomercial with no experience. He's got lots of experience we see (BCC, conferences, published software, all the blogs) and don't see (contracting) and lots of exposure in programming community. Realistically, he's probably one of the reasons many people on HN know what A/B testing is. It's a huge personal brand... and what exactly is wrong with it?
I'm not even sure what kind of regulation would apply in this case.
I did read your comment. You said the quoted rationale is not ok. So what's wrong with it?
> I realize you may thing this as a "rationale" for why its okay but I don't think it is.
Also if you write that we should read between the lines as a comment on something, I'll will read between the lines that you've got some negative opinion here, but you didn't share it.
Yeah, about that, you realize that all those people suckered into ARM loans they couldn't afford during the housing crisis was precisely because they couldn't read between the lines?
>you realize that all those people suckered into ARM loans they couldn't afford during the housing crisis was precisely because they couldn't read between the lines?
Maybe, just maybe, there were a few who said, "I'm going to flip this house before the interest rates adjust, so who cares what it says between those lines?" or "I'll live in this house while I can afford it, and when I can't I'll mail in the keys and leave the bank hanging for a loan I agreed to pay back in good faith."
I never said they were. But requiring clear, obvious warnings on things is a large fraction of regulation and the relevant part to "helping people who can't read between the lines".
Regulation is rarely an outright ban, especially in this context.
Or he had somewhat passive success with some SEO/other tricks and excitedly shared them to a good feedback loop. Works as marketing but I doubt marketing was his first thought.
...yeah. No offense, but that stuff doesn't "happen" organically like that except with lottery winner odds.
I've had to grow traffic for sites before. Generally, even if its good content, you have to put some effort into driving traffic to it. Which is marketing. At which point, you are doing it to market something. The first thought is marketing.
Explains how it wasn't necessarily his first thought. In the beginning, it was HN comments where the first thought is more sharing content you feel is relevant, or the gamification of karma.
I'm responding to you and at no point do I feel like I am marketing "prawn" or anything I do online. I'd use a relevant username for one thing!
> Works as marketing but I doubt marketing was his first thought.
The fact anybody cares about this at all is a testament to Patrick's masterful manipulation of online audiences.
The fact you believe "I doubt marketing was his first thought" is why it works so well. You don't realize you're being manipulated into internalizing the personal brand of someone more clever than you.
Few years back I had a side project start making $20-30k/yr passive from about an hour's worth of effort, total. I don't talk about it (or wouldn't talk about it further) to market it or me, but just because it's a novel story that people find interesting. From the early days of talking about BCC, I recognised the same wonder in patio11.
> I'm not trying to be overly negative, but I think these dreamy, sometimes delusional posts can lead people astray, thinking that they're missing out on some great riches that everyone else is claiming to be achieving.
I'm not a psychologist, and I don't know you personally, but is it possible that maybe you feel a bit misled because you think you might be missing out on some great riches that everyone else is claiming to be achieving?
I think that, at the end of the day, everyone has a bullshit detector, but everyone's bullshit threshold is going to be determined by how close they are to greatness (whether they themsleves are achieving it, or the people around them are achieving it). For me, HN represents a rare intersection of do'ers and dreamers. Are all the people who claim to be "doing" actually doing it? Of course not, but there are still valuable lessons here. There are enough lessons in Patio11's posts that even if he were exaggeratting his claims to promote his brand (and I don't perosnally think that he is), I'd still consider his contributions to be worthwhile reading.
Skepticism is a healthy thing in moderation, but I for one, would rather be surrounded by a lot of people who are optimistic (if a bit boastful), then a lot of people who are pessimistic and critical, but I'd trade them both for genuine friends with efficacy and cogency.
This sounds like a variation of the "you're just jealous" reply, which is an easy, convenient retort to virtually all skepticism for even the most incredible claims. When we want something to be true, the easiest way to undermine doubts are to cry jealousy.
Super weight loss regime. Visit with aliens. Top secret NSA/CIA/FBI/FSB clearance. Quintuple black belt. No-effort muscle building technique. Endless success with the ladies. Exponential stock market success. All demonstrated by just words?
Doubts and questions = jealousy. It is the charlatan's ally among human denial techniques.
Two wrongs don't make a right, so whatever follows here notwithstanding: your point is fair.
But the GP did say this:
People lie. People embellish. Many people can even contrive rationale for why doing that is okay. Human nature.
That can reasonably be inferred, from context, as an attack on Patrick's personality. Not saying it is for sure, but it wouldn't be unreasonable to interpret it that way.
In that light, shifting the personality blame game back on GP is less damning than you make it sound. It's still not the golden standard of rhetoric, sure. But there is something to be said for it.
Consider it "defending a friend." Patrick's being personally attacked, OP attacks back.
Again, two wrongs don't make a right. But this one is defensible.
You're not "being overly negative" or being "a skeptical sort". You are launching an ad-hominem attack; you are attempting (knowingly or not) to character assassinate patio11 without any basis in fact.
Just because you think there is a lot of bullshit paraded as fact on HN, does not give you a license to do so without people calling you out on it or down voting you - even if you hide behind the "hopefully people aren't uncivilized enough to just down vote here".
I have a very simple heuristic* I use to screen for the BS-factor. More transparency -> less likely to be BSing. Mostly backed up by people that you can see are closely related to the person in question -> more likely to be BS. So in this case I'd say the BS-potential is very low (from just following on the sidelines).
*it was developed to screen poker coaching in the high days of online poker. Turns out many people made wild claims about their winrates that weren't true to paddle coaching. Shocking, I know but very transferable to business consulting, agile coaching and the like.
This is what has always worked in Patrick's favour.
He shared the details of how and why the revenues of BCC grew for many years, figures which were sufficiently normal for them not to appear to be the product of luck or lies.
Similarly he's never pretended to be a proficient corporate ladder climber when writing about salary negotiations; we know his advice comes from reading about best practices and selling consulting rather than his experience of honouring his salaryman agreement. And we know he's more effective amateur than Aaron Ross when it comes to turning some inbound leads into enterprise contracts for Appointment Reminder.
And afaik he doesn't even have a $300 eBook on special offer today at only $199, or a $999 business opportunity also including six webinars totally free. But apparently many people have found his publicly accessible and gimmick-free blog to be worth their time reading.
If it doesn't walk like a duck or quack like a duck, but does weigh in with an awful lot of useful free advice...
> ... on HN -- an endless series of aspirational stories of unending success and riches, then segued into pitching a book or web product/startup.
I've wasted many hours on HN and recall zero stories here of unending riches that segued into pitching a book. Perhaps you could enlighten me with one example?
I've been following Patrick for many years here on HN. Many people have. So many of the things you've written in this thread are wrong, and even worse, incredibly mean or mean-spirited.
This comment is for anyone else who might not have been around HN a long time, and isn't sure what's going on here. Here's the rub - Patrick is a very well known member of this community, has helped an incredible amount of people, and over the last few years has had a lot of success in consulting and building products.
I'm not sure if the parent (irrigation) is "just trolling" or sincerely believes that Patrick is lying about his success (and although irrigation doesn't say so in this comment, irrigation clearly claims that Patrick is lying in other comments).
irrigation - if you really think Patrick is lying, then remember that he's been around these forums (and others!) for many years, many people here know him personally, the engagements he's had have been with other very well known companies - are they all lying? Or is Patrick just somehow manipulating everyone to make these incredible claims, by somehow getting engagements with well known companies, writing about them, the companies themselves writing about them, but he's manipulating all the numbers?
And all this multi-year effort is for what? To market a startup that has nothing to do with his main expertise anyway? Seriously, that is really ridiculous.
"Just as rationally, I can declare that I'm not sure if you're "just shilling".
Fair enough. I apologize, and will continue answering assuming you're talking in good faith.
"I have never said that he is lying. I have implied that the situation might be aggrandized/exaggerated, or a very atypical one-off, absolutely."
Patrick has explicitly said it wasn't a one off, and stated very explicit rates. So if you are implying that this isn't true, I'm not sure how that isn't implying he's lying. (And I will point out that many of the people in this thread also think you are calling him a liar - rationally speaking, if the way you communicate leads a lot of people to a misunderstanding of your statement, I suggest that you might want to change something).
But let's not quibble over semantics. I'm fine calling it "exaggerating" if you prefer, and I'd argue just as strongly that he isn't exaggerating.
"Now you claim that there's all sort of evidence of these $10K, $20K, $30K, $40K per week engagements. There is none. Absolutely none, beyond a cofounder and a serial booster who suddenly claims to have lots of experience being a consumer of consultants."
So, Thomas being Patrick's partner is very new. He was for many years the head of a company, during which time he also said he hired Patrick. Again, this was long before they worked together. You can verify that Thomas' company existed, and was acquired, here: http://www.csoonline.com/article/2135259/security-leadership...
I'm also not sure what a "serial booster" is in your statement, I'll be happy if you can clarify.
I can't explicitly prove the engagement rates, but if you want an example of a very well known and respectable company that explicitly talks about Patrick being their consultant, you can read Patrick's article on Fog Creek Software's blog, which starts:
"Editor’s Note: Patrick McKenzie has done some work with Fog Creek last October and this May, focusing on improving our marketing."
Again, all I'm saying is, rationally speaking, lets look at the evidence - despite your protestations about Thomas being Patrick's partner, this is a very new development. Thomas has been talking about Patrick for years, and verifies Patrick's rate. Thomas is verifiably the owner of a consultancy that was acquired, also making him able to verify those rates.
Fog Creek, a large software company, also talks about Patrick working for them. That's another verificaiton that he's worked with these kinds of customers (not verification of the rate, though).
By the way, Patrick didn't "suddenly" talk about these rates - he's been talking about charging at least $10k per week for a few years, but only recently mentioned the specific prices.
Here's a question - what would it take to convince you that Patrick is not exaggerating? Cause at least from where I'm standing, it looks like all the evidence points in one direction. This is without even looking at the fact that lots of other well known members of the community have met and talked with Patrick, and vouch for his honesty and his methods. Also not looking at the ton of content which a lot of people have used to better themselves.
For the record, I also owned a consultancy, which was acquired by a large company. I didn't charge Patrick's rates, but I have no doubt they are achievable (in certain lines of work, mind you).
Agreed, I think amongst HNers the idea that success can be achieved simply by using focused "analytics" and one's own smarts is particularly appealing.
I'm going to be blogging a bit about the sale later but have been holding off to wait for it to finalize (handover day was last Monday) and attempting to not step on a forthcoming Starfighter announcement.