Patrick McKenzie

Patrick McKenzie (patio11)

Entrepreneur and Head of Community at Stripe Atlas

THIS CHAT HAPPENED ON April 07, 2017

Discussion

Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
Hiya, I’m Patrick McKenzie, better known as patio11 on the internets. I ran a succession of software businesses (like Bingo Card Creator), and write a lot about software, marketing, sales, and general business topics. Now I’m at Stripe, working on Atlas, which makes starting internet businesses easier for entrepreneurs. I live in Tokyo and love karaoke with my kids. Ask me anything! The Product Hunt community has instant access to Stripe Atlas: https://www.producthunt.com/post...
Courtland Allen
Courtland Allen@csallen · Founder @ Indie Hackers
What advice would you give to developers who want to launch their own software businesses but who have no business experience?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@csallen The difference between a shipped product and a shipped product that makes money is a price tag, not any magic thing they teach MBAs or tactic you'll find in the last ~3 million words I've written. Start selling your thing. You can learn the business stuff as you go along. It is far, far easier than you model it as; it is far easier than things you can already do.
Ben Lang
Ben Lang@benln · Shipping
Hey Patrick. Big Stripe Atlas fan here. What kind of things are you most focused in building the Atlas community?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@benln "Whatever our companies need" feels like a cheap and unsatisfying answer to this question, but it is a true answer. The most recent thing we did was a straight-up target of opportunity: many companies wanted support in applying for YC. We bubblegummed the heck out of it: one Google spreadsheet, an inbox, and an email to all Atlas companies asking them to send us their application if we wanted feedback. One (very long) week later, we have hopefully helped some very, very interesting companies get into YC, learned that Atlas companies broadly perceive fundraising as something extremely relevant to their interests, and learned about some opportunities for making systemic improvements in the entreprenurial community. (An example: many entrepreneurs have difficulty being precise about what they are building. That is a useful thing to be able to do; it is indispensable for getting investment, successfully inducing people to join you on your wild adventure, and selling your product to customers. We can feed the fact that we know that that is a problem into our guides and other assorted education about running companies.)
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
Where does the name patio11 come from?
Nichole Elizabeth DeMeré
Nichole Elizabeth DeMeré@nikkielizdemere · Early-Stage B2B SaaS Consultant
@ems_hodge Have been wondering this, too! 😊
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@ems_hodge I've been using the same nickname for 25 years. A Puerto Rican friend of mine in middle school couldn't really handle the hard K in Patrick and started to call me Pato, to his amusement. I was less amused. He switched to Patio; it stuck hard enough that even my family calls me it to this day. Somebody on CompuServe had already beaten me to Patio so I appended my favorite number.
Helder S Ribeiro
Helder S Ribeiro@hsribei · Software engineer and aspiring teacher
@patio11 @ems_hodge is your favorite number an eleven or a three?
Haldun Anıl
Haldun Anıl@haldun_anil · Product Analyst @ SmartAsset
Hi Patrick, Love the idea for Atlas. I was wondering what kind of help the Atlas network will provide beyond the initial startup launch (e.g. equity grants to non-officers, expanding business in multiple states, etc.).
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@haldun_anil We're still very early on in the life of the product, and figuring out both what a) our network partners want to do, b) what they have comparative advantage at doing, and c) what our startups need. At the moment, Atlas companies which are engaged with network partners (accelerators, etc) pretty much get what the partner chooses to provide them. We're going to refine on that model as time goes on. We're experimenting rapidly. For example, many of our companies want funding and other services from YC, so we helped all that wanted to get helped with their YC applications for the S17 class. There exist a lot of potential things that different partners can offer, and if a particular experiment bears good results, expect to see us double down on it.
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
What's your 'go-to' karaoke song of choice?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@ems_hodge I usually go karaoke-ing with Japanese people, and often get asked for their English favorites (for novelty). I'm not the biggest fan of him, but the definitive white guy artist my age in Japan is Eminem. When asked I usually pick Lose Yourself, which is IMHO the best startup song there is. (Though I don't agree you only get one chance.) If I have my own free pick, I usually warm up with Mongol 800's Anata Ni or Chiisana Koi No Uta. For English songs, One Week, Disney songs (I'm particularly partial to Friend Like Me and Under the Sea), and anything by Weird Al. It sadly is never on machines in Japan, but I once found a place in Philadelphia that had White and Nerdy available, which might as well be my personal theme song. I will also sing All The Single Ladies, since my wife told me it was her favorite song on the day we met and I was so smitten that I immediately acapellaed it (in full diva mode) at a BBQ.
Ayrton De Craene
Ayrton De Craene@ayrton · Code @ Product Hunt
What is the number one piece of advice you ever received?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@ayrton It has become my catchphrase: Charge More. There is almost no software business (particular in B2B) that this advice fails to improve, and the degree of improvement is wildly disproportionate to the amount of effort required to implement it. (The original context for it was me ~12 years ago asking a forum whether I should charge $15, $20, or $25 for B2C software. I now realize that what I was *really* doing was asking permission to charge any money at all, since I -- like many entrepreneurs, particularly with technical bents -- was deeply insecure that my "quick hacky little program" actually provided value.)
Jake Crump@jakecrump · Community Team with Product Hunt
What is your number one advice for first time founders?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@jakecrump Common failure modes I see: a) Failing to ship anything. b) Shipping something that no one buys. c) Running out of money before figuring out how to make the business sustainable. I think the first two are solvable. Ship something; if you have an allocation of 100 units of brainsweat, spend 98 of them either building something or talking to customers and only 2 doing things like e.g. reading interviews. I know too many would be entrepreneurs who invert that ratio; if one does, one will still be reading interviews without a product in the market five years from now. Shipping something no one buys is, similarly, mostly solvable. The broad strokes of it are covered in the Lean Startup and a million other places; this is by now reproducible organizational technology. You defer hard engineering efforts until you have (ideally costly) commitments, or other signals of demand, from well-qualified potential customers. You generate those commitments/signals by producing the minimal amount of work which will get someone to either Yes or a disqualification as a prospect. If you cannot get Yes from enough people to give you confidence that there is a market out there, do not build the thing; building the thing will only very, very rarely create the market for the thing. I don't think the final failure is solvable in the general case; operating a business will always involve an element of risk. To the extent that it just involves the meat and potatoes of operating a business, we want to productize as much of that as possible, so that entrepreneurs can go back to building things and selling them to people. I geek out on the joys of e.g. doing business internationally and dealing with exchange rate issues. Your business should not have to. This is one of a thousand things that you should never have to think about, just like you never have to think about how your operating system is scheduling processes, how a piece of mail put in a mailbox makes it to the other end of the world, or how your airline manages to keep its jets engines safe enough to fly you around. We want to build the set of tools that let you skip hard, boring problems so you can focus on hard, interesting problems. There are certainly enough of them in running a business!
Ben Tossell@bentossell · Services for startups
Hey, if you had to swap lives with a tech CEO for a week who would it be and why?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@bentossell There is no tech CEO whose life I would enjoy better than my own life, so if a genie offered me that, I'd politely decline. (Best to be polite with genies.) If a malevolent genie forced me into it, I suppose the calculus comes down to "Where would I do the least damage in a week?", given that I have an appropriate regard for how difficult running a tech company is. I think that answer is probably Google: I'd lock myself in a conference room for a week. This would not meaningfully affect Google's near monopoly of navigation on the Intenet, and hence not cause any lasting damage to the business. Damaging Google would be a very, very bad thing; a world with an undamaged Google is a much better world than a world with a damaged Google. (This answer probably generalizes to any of AppAmaGooBookSoft. God help us all if the genie put me in charge of a business which was not stable enough such that non-participation of the CEO for a week was an existential threat.)
Ben Tossell@bentossell · Services for startups
What is one thing you believe that others disagree with you on?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@bentossell In Silicon Valley? I'd go with "The fundamental innovation in Bitcoin the social dynamics of the gold rush phase, which distribute cryptocurrency tokens widely for almost free. This creates a self-organized distributed boiler room to market Bitcoin. Bitcoin needs nothing else to get as big as it has; this is convenient because it has nothing else. Bitcoin has no utility as a means of transaction or a store of value. The blockchain is the world's worst database. The long line of very smart people on the other side of this bet have been scammed, are scamming, or both. Bitcoin will, accordingly, go to zero with the inevitability of gravity." Something a little less inside baseball? I'd go with "The world in 2017 is the best it has ever been in human history; perceptions to the contrary are purely a deficiency in marketing. The combination of capitalism and technology means more people are living longer, more fulfilling lives. Basically nothing in the news this year matters an iota against the secular trend of progress along those dimensions."
Ben Tossell@bentossell · Services for startups
'Community' is a very grey area in terms of what the role involves, what does community at Stripe Atlas entail?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@bentossell You have to put something on your business cards, right? My actual job is making Atlas successful; I do anything required to make that happen. Sometimes it is writing code, sometimes it is being the team's resident expert on boring business arcana, much of the time it is trying to educate entrepreneurs in a scalable fashion, sometimes it involves input on the product(s) we're building, and sometimes it means "Type a whole lot into a textarea somewhere on the Internet." Ooh a textarea! (Seriously though, I probably have my job because I have some sort of condition which makes it impossible for me to resist answering a question with a textarea below it. This condition served me well on HN and continues to pay dividends.)
Jacqueline von Tesmar
Jacqueline von Tesmar@jacqvon · Community at Product Hunt ⚡️
What’s your favorite thing about living in Tokyo?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@jacqvon The food scene here is amazing. You can get substantially any cuisine you want, with many options available for each, executed at an incredibly high level of craft (*incredibly* high), at reasonable prices, generally without pretension. If you've never been here, Tokyo lunches are an institution of beauty: restaraunts can get away with charging a wide range of prices for dinner, but for lunch you basically have to hit a compressed sweet spot in the 1,000 to 1,500 yen region or you'll be decimated by a million restaraunts willing to do incomparable good lunches for 1,250 yen. For the price of a Big Mac meal you can have something healthy, fresh, beautiful, varied, reasonably sized, and delicious... and if you ordered from a different place every lunch you would probably never exhaust even the neighborhood you work in.
Jacqueline von Tesmar
Jacqueline von Tesmar@jacqvon · Community at Product Hunt ⚡️
@patio11 Wow! I need to book a trip 🍱
Dainis Kanopa
Dainis Kanopa@dainiskanopa · Revenue sharing online
Hi Patrick, what happened to your business and why you chose Stripe to work?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@dainiskanopa I've had four businesses over the last ten years. I sold two (Bingo Card Creator and Appointment Reminder, both small SaaS businesses). Another one (Kalzumeus Software) was a home for my consulting, blogging, and assorted activitis; these days it exists but is radically scaled back, as I am a full-time employee at Stripe. Starfighter (a recruiting startup) did not succeed; my co-founders Erin and Thomas Ptacek left to co-found Latacora (https://latacora.com/), which is the security team a startup should have before it has a security team. Why did I join Stripe? See the answer elsewhere on this page on what success looks like: I joined Atlas, specifically, because I thought that it was the single highest leverage thing I could do to meaningfully create impact over the next few years of my career. Stripe aims to grow the GDP of the Internet. The GDP of the Internet is, to a first approximation, the number of firms on it times their average level of success. Focusing on just the number of firms that survive for a second: you can model the process of founding a company a lot like any interaction on a website, with the funnel metaphor familiar to anyone who has worked in online marketing. Some number of people have a great idea. There is a gateway, and only X% successfully figure out the mechanics of getting a company running. Then there is a gateway, and only Y% successfully get a bank account spun up. Then there is a gateway, and only Z% convince a customer to pay them at least $1. Then there is... a long, long, long series of gateways. Every company you see in the world somehow managed to get through all of them, but they're massively outnumbered by an invisible graveyard. A tiny lift -- a percentage point! -- at any one of these gateways will, to a first approximation, increase the total number of companies succeeding in a cohort by roughly the same amount. If you make lifts at multiple stages of the funnel, they compound multiplicatively. That's the Dream Crazy Big story for Atlas. If we do a lot of hard work and execute well, maybe, just maybe, we change the equation for starting companies enough that it's literally visible on global macroeconomic indicators. Given the opportunity to spend a few years working on that, how could I not.
Dainis Kanopa
Dainis Kanopa@dainiskanopa · Revenue sharing online
@patio11 Awesome answer, thanks!
Nichole Elizabeth DeMeré
Nichole Elizabeth DeMeré@nikkielizdemere · Early-Stage B2B SaaS Consultant
Hi Patrick! Have been following your work for quite a few years. Love your Twitter feed! 💜 How do you define TTV for software/products? How would you go about improving this metric?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@nikkielizdemere Thanks! I remember that we've swapped a few emails over the years. Are you familiar with the character Walsh on Firefly and how he uses the word "Shiny?" When I'm thinking about this in my own head, I think Time-To-Shiny. You're looking for a combination of both a) delight and b) either demonstrably improving someone's life or credibly demonstrating that you have the capability of doing so. Twilio, for example, has among the best Time-To-Shiny of any complicated, development-heavy software product you'll ever use. You can credibly promise a massive improvement in folks lives as soon as their phone rings in response to code they have written; Twilio can have that happening in ~30 seconds or so for a new user if they're being guided; perhaps ~5 minutes or so if they're a motivated self-starter. How to improve it? One, figure out a way to track it obsessively. Two, cheat like a mofo; ruthlessly defer as much as possible about the full experience until AFTER you have achieved that one moment of concentrated joy. Exact tactics for doing this depend a lot on the product at issue; often they involve (e.g.) having fake data pre-loaded in accounts so that someone doesn't have to do weeks of data entry prior to seeing any improvement in their lives, scripted onboarding experiences, etc.
jerod moore
jerod moore@jollymonatx · Co-Founder goKittr & Coffee hunter
How do you help startups with a SaaS platforms overcome initial pricing concerns? Do you have specific metrics you target?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@jollymonatx Pricing is overwhelmingly unlikely to be the highest salience issue early in a SaaS company's life; if they're hearing that feedback from prospects, my default hypothesis would be "They're not talking to the right prospects or they're not communicating value well enough." Software is pervasively underpriced, particularly when software people set prices. For initial pricing, I would generally just throw something against the wall (biased towards the high side) and then start trying to sell it to people. In B2B SaaS sold on the low touch model, I could almost copy/paste $49/$99/$249 a month onto any company's pricing page and that would be good enough to start. The metrics to watch are probably the ones you're thinking of watching if you're sophisticated enough to ask that question. There is no secret sauce here; conversion rate of free trial to paid or, in the high-touch model, general health-of-the-pipeline metrics.
Bob
Bob@2xconversions · Self-employed
Hiya Patrick! I'm good at explaining technical stuff and I really like the vue.js programming language. So I'm considering doing the "blog > email list > ebook" journey that you often talk about on HN. But I have a few questions about this project: - How can I know in advance that people might be interested in new vue JS tutorials? The official documentation is already great... - Is a blog about "Learn Vue.js" enough, or should I try to find a more specific niche? - Where would you market such a blog, besides HN and Reddit? Thanks!
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@2xconversions No official documentation anywhere is as good as people need it to be. Where are the gaps in it relative to things people actually care about, such as shipping meaningful projects at work? Fill those gaps. Knowing nothing about vue.js (if you just conjured it on the spot, good on you), I assert that there is probably almost nothing in the official documentation about bridging the gap between your first Getting Started project and then actually using it to do Meaningful Work In Production. I'd start there, again knowing nothing else about the project. Since I know nothing about Vue.js, and I consider myself at least fairly tech-literate, I think that scoping yourself down to that community is probably already specific enough for a niche. ("Learn Javascript" is probably not.) In some future after you have success, you might successfully create new Vue.js users. In the short-term, you will not; the project attracts the users to itself and you educate them. Accordingly, you'll want to try hitching a ride to the ecosystem which already exists where people consume Vue.js-related things; that might be official community spaces, well-known tech watering holes like HN/Reddit, or even "The Google SERPs for [vue.js react]" (or what have you -- I'm very not conversant about the cutting edge of JS development in 2017).
Joan Boixadós
Joan Boixadós@mezood · Doing things every day at
We need to find a name for all those developers who try to make a sustainable bootstrapped business on their own. Everyone refers to them differently, your choice?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@mezood "I run a small software company." was generally the way I would introduce myself. I think people get far too invested (ba dum bum!) in the Jets vs Sharks of bootstrapped versus funded or battles over "Who gets to own the word 'startup'?" Do these questions build software? No. Do they sell software? No. Does a software company have much space, particularly early, for things which do not build software or sell software? No.
Joan Boixadós
Joan Boixadós@mezood · Doing things every day at
I finished the simplest app ever, https://everydaycheck.com (habit tracker) I posted it on a couple of subreddits and it exploded (>1000 signups, >100 daily users). As a dev, however, I can't see why would anyone want to pay for something that simple. On the other hand, the strength of the app is in its simplicity since it transmits the core idea better, to make chains by doing things every day. Adding features would bloat it. I'm not sure if I'm asking for permission here... should I just charge something fixed or you think a freemium model would work better? My idea right now is to try something different, have users sign up on a $5/mo deal, but getting $1 back (from the next month payment) per each habit they accomplish. In a way, they could see paying as an extra motivation, but I'd be making money out of their failure :X sorry for the long question! thanks
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@mezood You're talking to someone who got his start in business by selling Hello World attached to a random number generator for $25. You're far, far, far overestimating where the bar is for charging money for things. Freemium is a brutal, brutal business model. 1000 signups feels like an incredible amount; wait until that gets compressed by 99% by the brutal realities of funnel math. Conditional payments are a tough model because you're expecting people to be rational (always a risky proposition) and because they're operationally complicated by the realities of taking payments over the Internet.
Joan Boixadós
Joan Boixadós@mezood · Doing things every day at
@patio11 thanks! I think Stripe would help me quite a lot with the payments part, I checked it and it's possible, what I'm not sure about is what you say, if people would make the effort to understand the deal
Shankar Ganesh
Shankar Ganesh@_shankarganesh
If you were to revisit and add to the "Don't Call Yourself a Programmer and Other Career Advice" post today, what key points would you add to it? :)
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@_shankarganesh If you feel like there are holes in it, drop me a line and I'll publish a new essay. I feel like it has mostly aged pretty well.
Emily Hodgins
Emily Hodgins@ems_hodge · Operations @ Product Hunt
Hi Patrick, thanks for joining us today. What top tips can you share with us for growing a successful community?
Patrick McKenzie
Patrick McKenzie@patio11 · I work on Atlas at Stripe
@ems_hodge People can be members of many communities at once, and this is true of nearly everyone you know. Unless your time horizon is long enough that you can achieve growth in your community by literally raising children, your target members are presently involved in other communities. Accordingly, user acquisition for your new community is largely going to be a matter of going to the communities where your prospective users already exist and creating value there, then bringing folks back to your own community. That's the very early stage. The real "and here is where the magic happens!" part of growing communities is a) creating outstanding value inside of the community and b) creating the perpetual motion machine, where community members themselves create the value inside the community, and then bring in outsiders to share in it and potentially become community members. If this were easy, it wouldn't be valuable. Functional communities are really, really valuable because they are really, really hard to do right. (Seen in a certain light the entire history of humanity is basically "How do we build a successful community?" writ large, right?)