
Kalzumeus Software Year in Review 2014 - JayNeely
http://www.kalzumeus.com/2014/12/22/kalzumeus-software-year-in-review-2014/
======
davidw
> I work mostly on what I want to work on, take a day off whenever I feel like
> it, and optimize the business for quality of life rather than for any
> particular growth or financial targets.

There was some thread here where patio11 kind of snickered when someone called
his business a "huge success"; probably because he knows a bunch of people
that earn one or more magnitudes more money. But the above quote probably sums
up "fantastic success" for me, and I think, a whole lot of the world.

~~~
derefr
Sure, but then "fantastic success" can be relative to cost of living, too. You
can earn an order of magnitude _less_ and still be experiencing "fantastic
success" if you happen to live in e.g. Cambodia.

~~~
count
Given that he lives in Tokyo, which has one of the highest costs of living on
the planet, I guess that's an important point as to HOW fantastic his success
has been :)

~~~
mc32
I think he's mentioned Nagoya pref, which is kinda countrysideish and less
expensive to live in. (and also houses can be of better build.)

~~~
csa
He moved to Tokyo earlier this year. This is mentioned in his post. For
example:

"Appointment Reminder’s key stat of interest is monthly recurring revenue on
our publicly available plans, since this is the most predictable revenue in
any of our businesses and thus lets me make consequential decisions like “Move
the family to Tokyo, where rents are 5X what they were in Ogaki” (that
happened, more later” or “Bring on help” (that also happened, more later)."

~~~
mc32
Ah, ok, thanks for the correction.

------
porter
Hey Patrick, thanks so much for your honesty in all of this. It's never easy
talking about things that embarrass us. Not to mention _in public_. You'll
probably get some haters, but just know that I look forward to your annual
updates and they have encouraged me to quit my job and start my own software
business too. This has been one of the best decisions of my life. I'm sure
there are many more here who can say the same thing. So, to you good sir,
thank you.

~~~
eo3x0
I'm also very impressed with Patrick's ability to disassociate business
success and failure from his personal success and failure. What I mean: if
something I worked on "fell off a cliff" I'd be a lot more panicky and less
likely to step back and say "that's ok" as he did in his post. I'd probably
take it as a personal failure rather than rationalizing it as a matter of time
investment trade offs.

Lesson to learn: it's okay to let some things decay so that attention and
focus can be paid to the right things.

~~~
ericd
Yeah, I've let projects die off in this fashion, but I still feel a pang of
regret when I think about them and all the time I sank into them. It always
feels like maybe I should have sold them off/given them away so that someone
else could have helped them reach their potential.

Then again, BCC seems to have reached much higher heights than I would have
thought its potential was, so maybe it's more of a "Mission Accomplished"
there.

------
toumhi
I completely understand for your neglect of Appointment Reminder. I've also
had my share of projects I'd start but lose interest in it because, well, I
was not consumed by the problem I was solving.

So during the years I worked sequentially (or sometimes at the same time) on a
gift certificate template gallery, a travel insurance comparator, a body-mass-
index calculator website, a file sharing solution for businesses targeted at
the french market.

The reasoning behind all these projects was to make "passive income". And by
running multiple websites I would make a nice income from them all combined.

After developing and marketing the last of these projects (file sharing one,
post-mortem here: [http://www.sparklewise.com/post-mortem-5-mistakes-i-made-
wit...](http://www.sparklewise.com/post-mortem-5-mistakes-i-made-with-my-
first-online-product/) ) I realized that the most important thing is not to
have a "good idea" but to work on a problem you want to solve and with people
you can relate to or at least that you enjoy working with. That's why I now
focus on serving SaaS businesses, because that's actually something I care
about and will likely care about for years to come.

Thanks for all the transparency Patrick and for setting an example for the
rest of the HN crowd. And good luck with the fatherhood :-)

------
mherrmann
I have been working on an AR clone in Austria since mid September
([https://www.terminerinnerung.org](https://www.terminerinnerung.org)). I
focus on getting enterprise customers. My website is hardly visited (so far).
I got my first two customers by simply walking into their offices and asking
whether they'd be interested. I asked them to pay me for 12 months in advance,
so I have earned 5368€ (6565 US$) since I started. I'm hoping that I will earn
this again in 2016, when it comes to renew the contract for these first two
clients.

My approach is more high-touch - I don't rely on people searching for
"Terminerinnerung" ("Appointment reminder") and then coming to my website. I
think most doctors don't do that. I go out and talk to them.

I also by default offer to develop integrations into the customer's existing
appointment reminder system - because the majority (~66%) of my potential
customers here already have some computer system. This means reverse
engineering the customer's existing system to be able to continuously export
its data. I did this successfully for one of my customers (it was a Java/MySQL
application). The other customer I developed a web calendar for.

I have now completed the development for my first two customers (I hadn't
completed development when I sold the service to them. I just pretended I had,
to make the sale). At the beginning of next year I'll start to acquire more
(enterprise) customers.

I'm happy to talk about this via email if anybody's interested. My address is
[my first name]@[my last name].io (Michael Herrmann).

~~~
dietervds
I'm doing the same for Belgium actually, and possibly The Netherlands, in
time. ([http://afspraakherinnering.be](http://afspraakherinnering.be))

It's in it's early stages. I'm waiting to e-mail Patrick when I can say
"Thanks to you I now have >500€ MRR" :-)

I sent you an e-mail to talk about it some more and share experiences! Always
great to learn of similar endeavours.

~~~
mherrmann
I already replied to your email :-)

A few other people also got in touch. Cool! :-)

------
wallflower
> Ruriko and I were blessed by the birth of our daughter, Lillian.

Congratulations patio11!

~~~
trcollinson
I really hate to "me too!" on comments. But I have followed a lot of what
patio11 says on HN (I've gone through his comment history even, to learn quite
a bit!) and I am a fan. Thank you for all of your information and
congratulations to you and your wife on having Lillian! Many happy returns.

------
jakobegger
Thanks for being so open with your feelings. I always find it hard to talk
about my own feelings, and it's great to hear how you are struggling with and
overcoming the pitfalls of self-employment.

Your open sharing of actual revenue numbers is invaluable. The tech press only
loves to talk about all those billion dollar companies. But your blog posts
put that into perspective, giving us a glimpse of how much money a small
business can realistically make without shooting for the startup lottery.

------
saturdayplace
> The only time in recent memory I used it myself was when a Redditor asked
> for anti-Bitcoin bingo cards, a request which I am unquestionably the best
> qualified person in the world to answer.)

Apropos of nothing, it seems that if you're interested in piquing the interest
of someone busy, discovering the venn diagram for which they're one of a small
population in the intersection might be the way to go. Or, it might just be
really creepy.

------
chrisan
Thank you for sharing your story

> I’m taking my own advice to charge more, and re-aligning those numbers with
> actual customer behavior rather than the numbers I guessed four years ago.

How do people normally handle this?

1) Take it or leave it price hike

2) Give a X month grace period before new price

3) Grandfathered in and price only changes if they need to upgrade

4) ??

~~~
unreal37
Actually, I'm always disappointed to see useful software priced out of the
reach of small businesses - and low priced plans disappear in 1-3 years after
a cool tool launches. Visual Website Optimizer, Hubspot, Leadpages, etc all
get priced out of the reach of people making less than $10K per month online
because its more profitable to go after lawyers and accountants.

~~~
siddharthdeswal
Visual Website Optimizer just introduced a $9 plan (I work there). I agree
with your point in general, but the truth is most SaaS tools make far more
profit when serving bigger customers.

~~~
unreal37
I didn't know that, and I'm happy to hear that.

And I agree that it's more profitable to serve the bigger customers, but it's
a shame nonetheless that I see things that I would love to try to use myself,
and would pay for, just not worth $99 a month to me.

------
manto
Patrick's writing serves as a great supplement to PG's essays: real world
analysis of "slower" growth software businesses. For engineers interested in
alternate models of creating a company, these annual write ups help one
develop an outline for the financial, business, and engineering lifestyle
required to get something off the ground. Thanks Patrick, after working at VC
backed startups, these types of posts actually encouraged me to go out on my
own!

------
mooneater
I am a huge fan of yours patio11, you have gifted us so much useful knowledge.
How do we ever repay you? =)

~~~
patio11
Tell me what advice worked or didn't work when you implement it in your own
business. It makes me happier than anything else, businesswise.

~~~
ufmace
I used your salary negotiation piece, among other sources, to negotiate a ~15%
boost in my offer at the company I started at about a year ago. Most money I
ever made from a 3-sentence email and a 5-minute phone call.

~~~
NamTaf
It was also the first thing I looked up when negotiating on my position I
start next month. I've secured a 10% raise upfront, with a further 15% +
access to a max. 25% yearly bonus arranged once I get a qualification in the
first quarter of the new year.

It took a little bit to map the software eng. assumptions to a mech eng. role
such as my own (especially given the market is terrible for me right now where
I am) but it paid off in dividends for me. So thank you so much!

------
ThomPete
You can burn or you can last, but you can't do both.

Patrick is a wonderful example of a person who takes the middle road and
actually put quite a lot of effort into making sure he stays there rather than
letting himself be sucked in by the grow like crazy game or the never launch
anything game.

He is happy, he is not trying to be happy. That alone is something most people
will never experience and measured in that he is a billionaire.

~~~
talltofu
'or the never launch anything game'

I just realized that I am a part of this :(

------
simonswords82
Hey @patio11, hopefully you'll lurk a bit later...

Congrats on the kid! Balancing a newborn and any amount of business is no joke
(source: I have two startups, a software company and an 18 month old).

I wanted to ask about this:

> To build out that software and get the team spun up, I had to actually sit
> down and document our business processes

I'd love to here a bit more about how you went about that. You've got a great
approach to documenting your thoughts and I'm sure I could learn a thing or
two. I'm scaling our app
[http://www.staffsquared.com](http://www.staffsquared.com) in 2015 and working
hard to share knowledge across our growing team.

Keep up the great work!

~~~
jcr
You may have missed it, but Patrick talked about it earlier this month.

[https://training.kalzumeus.com/newsletters/archive/sales_aut...](https://training.kalzumeus.com/newsletters/archive/sales_automation)

[https://news.ycombinator.com/item?id=8773472](https://news.ycombinator.com/item?id=8773472)

------
gknoy

      [H]aving numbers publicly available would complicate 
      [taking investment money in the future].
    

I don't understand why having publicly available numbers would complicate
getting investment in the future. Would someone be gracious enough to explain
that to me as if I have no knowledge (true in this case)?

~~~
hayksaakian
Information is leverage in any negotiation.

Patrick basically has all his cards on the table, and can't give much more
than that

~~~
clarky07
while true, is there someone in venture capital that isn't getting the numbers
contained in this post before giving people money? revenue, profit, expenses,
etc seems pretty basic. I can't imagine investing in a company without asking,
hey, how much money did you make last year?

------
shostack
Re: your SEO comment:

 _" AR is virtually guaranteed to be a mortal lock on the query [appointment
reminder] due to the combination of the exact match domain bonus and the fact
that most links to it naturally cite the name of the company."_

Wasn't that largely made irrelevant a while back? I'd be willing to bet the
majority of your relevancy comes from the backlinks and content on their pages
vs. your exact match domain. Hopefully you're not building a link profile
focusing on that link text as there have been reports of people getting dinged
for that.

~~~
AznHisoka
No, he's 100% correct because in his case the keyword is the same as his brand
name. And when you search for a brand, Google shows you the brand homepage
99.9% of the time.

In his case, his brand is also highly relevant to the term 'appointment
reminder', which pretty much locks up the #1 spot for that term.

~~~
the_rosentotter
A shame the website is so utterly horrible though. Sorry, but it's true. Huge
walls of text, stock MS Office clipart, "news" a year and a half old. It looks
amateurish and smells of abandonware.

~~~
noahc
And your point exactly? He already knows it could be much better, obviously.
It is his business after all.

And yet despite your finely tuned ability to detect amateurish abandonware he
managed to bring in ~$75,000 revenue in on public plans, and if I had to take
a guess anywhere between 1x - 1.5x in non-public plans.

As a general rule, we shouldn't use the obvious to tear someone down.

------
Permit
>Most of our customers are on the Professional plan, which annoys the heck out
of me, but it’s my fault. Since I was thinking personal services, where 100
appointments a month barely sustains a sole practitioner (it implies $3k to
$8k gross revenue), I thought any sizable business would be forced to pay more
meaningful amounts of money. It turns out that you can run a nice boutique law
office with sales in the high seven figures or an architectural consultancy
with millions in revenue on less than 100 appointments a month. Believe me, I
know several examples.

If you could go back in time how would you change the pricing model here?

Would you remove the professional plan altogether? How could your pricing
model differentiate between the small personal services with < 100
appointments/month and the law firms with < 100 appointments/month?

------
daxelrod
Bravo for candidly writing about your failures as well as your successes. I
don't think a lot of us would have the guts to write publicly about times that
we didn't measure up the way you have; but your doing so is wonderfully
instructive.

Congratulations on fatherhood!

------
billsossoon
The comment about BCC being Hello World with a random number generator is
amusing, but the fact that you were able to generate profit from a simple web
app is really a testament to your marketing and business skill.

------
unreal37
I bet it must be an amazing relief to be able to talk specifics of AR, after
so long of having to be quiet about the details. Congrats on your success,
Patrick.

~~~
patio11
It is, oddly enough. Partly it's that -- I love talking about things and
having AR be the exception made me feel phony. (That's irrational, but there
you go.) Partly, in recent I finally feel like I know what I want from having
that business in the portfolio and I have some idea of where it goes from
here. Partly that frees me up to think "OK, aside from fatherhood, what
happens next?"

~~~
unreal37
I totally get that. Not odd at all.

------
tome
Patrick, if you're reading I have a question about Appointment Reminder. The
website says this:

> We do our level best to answer all emails within 24 hours. All questions are
> answered by our lead engineer. (Your business is too important to trust to a
> call center.)

This sounds like it won't scale well. How do you plan to cope with support
when your number of customers grows?

~~~
Cass
Not Patrick, but I could see at least two good ways to scale this:

\- Make it a selling point for the higher tiers of accounts. "If you choose
the Serious Business plan, all your questions will be answered by our lead
engineer. (Your Serious Business is too important to trust to a call center.)"

If you want to keep the selling point of competent and personal support for
all customers:

All questions are answered directly by our highly-trained customer support
reps, Anna and Thomas [Picture of Anna and Thomas smiling winningly and
looking nothing like That Anonymous Incompetent Dick I Get Every Time I Call
The Phone Company.] In the rare cases where they can't solve your problem,
they'll immediately refer you to our lead engineer."

------
UtahDave
My favorite quote from Patrick's post:

"The slip date shipped repeatedly."

------
JunkDNA
This might be one of my most favorite posts of Patrick's ever. It's often so
much easier to start something new than it is to sustain something old.
Hanging around HN too long makes you an addict of "new". Guess what: growing
and sustaining a business for the long haul is _hard_ , even for patio11.

------
bbcbasic
Patrick,

Have you thought of launching an affiliate program for the BCC ?

You can connect on forums like WarriorForum and find good affiliates. They
will love that you have a proven product. Then give them 50-75%.

Some will advertise on their existing sites, to their lists and may even pay
for advertising. You take no risk and may get a lot for sales.

Another option is Clickbank where affiliates may find you. There are
alternatives like JVZoo, DigiResults etc.

You could hire someone part time to do the customer support and bugfixes.

In short you could keep BCC going nicely with very little effort on your part.

And then after a few months, you have a low maintenance business that you can
sell, rather than something that will slowly die.

I know it may not seem worth your time, as you have bigger fish to fry.

However all of this could be done in a couple of days, and maybe an hour a
month to maintain. You may be able to sell it for $100k or more once it is in
good shape again.

~~~
shostack
I think one of the considerations here is what degree of professionalism he
wishes to portray with this.

The info products sold on sites like WF and such are what I'd lump into the
"guru" category, and are oftentimes just lots of fluff or something the writer
paid someone off Odesk to write for them. Overall, they don't come off as
terribly professional and can quite readily be identified as living within the
"Get rich quick" bucket.

Affiliates can be helpful, but I'd be _really_ careful about picking ones that
won't damage the brand image and credibility he's built for himself.

~~~
chatmasta
I made my first money online in the SEO/IM scene at
Wickedfire/Digitalpoint/Sitepoint/etc. Those guys are really good at what they
do.

It's funny to hear you call the WaFo products "guru" here on HN (I would agree
they are), because HN itself is subject to the same kind of guru-bullshit.
There are multiple people on HN who make money selling info products purely to
the HN crowd. I would classify them as "guru" as well. I enjoy watching it
play out, because as HN builds as a community, it seems a lot of trends are
evolving in the same way the IM community did. Someone makes money, makes a
blogpost, gains a following, writes an ebook, makes more money. I would call
that "guru", but people on HN pay for it. I will say, however, that the
content the "gurus" on HN produce is far better than 99% of the shit coming
out of WaFo.

Relatedly, it's amazing how quickly people on HN will dismiss the SEO and
affiliate marketing industry. It's a massive market. The "marketplace" forums
on WF, WaFo, and BHW process five figures of transactions per day. That's
mostly SEO services, some spammy, some not. Outside of that, there are
multiple affiliates on those forums doing six figure daily revenues. The AM
industry as a whole is ~6billion annually.

Despite all the money in SEO/AM, commenters on HN are quick to degrade the
industry as spammy/blackhat/assholes/whatever, and yet most of those people
are making more on their own than anyone here. It's quite funny, honestly.

~~~
shostack
I agree with many of your points, and have recognized the same pattern here
before in terms of info products like you mentioned. Can spot those a mile
away now.

The distinguishing factor is that a large % of the businesses here attempt to
really add tangible value, vs. just selling a dream that they hope some newbie
suckers buy into.

Again, quality over quantity. For example, Mike Hartl sells an info product.
It also happens to be the definitive bible on Ruby on Rails and has helped
numerous people start learning the language, including getting jobs as
developers. Contrast that with some random person's "WaFo Special" and I think
the difference is pretty stark.

I'd further add that I'm not dismissing SEO at all. I think it is quite
important under the "Content" umbrella, but trying to game it is not
sustainable and a waste of resources in the big picture. These days it is
about creating linkable, high-density/value content, and then getting relevant
backlinks for it. That has never really changed in the SEO space. A lot of the
random attempts at gaming the signals you send search engines has.

~~~
chatmasta
Good points.

The distinguishing difference between the crowds seems to stem from the
differing skillsets. WaFo has more non-programmers than HN, and consequently
differs in market dynamics from HN.

"Gurus" on HN, considered in a context parallel to that of WaFo, enjoy the
privilege of writing actionable content because most readers can program, and
therefore can take a different route to profit from non-programmers. Thus
books from HN authors can simultaneously promote profit and add value, unlike
those from WaFo authors, which create a bullshit-cycle by selling things to
each other. Then again, maybe that's just good business...

------
xzlzx
"...a lot of folks have wanted me to roll the dice on a funded startup with
big put-a-dent-in-the-universe ambitions. At times, I wanted to want that for
myself, but for the moment I was content to keep running my business in the
traditional fashion. I work mostly on what I want to work on, take a day off
whenever I feel like it, and optimize the business for quality of life rather
than for any particular growth or financial targets."

We share the same viewpoint. Well said.

------
applecore
Why is Appointment Reminder on a .org top-level domain?

~~~
saturdayplace
SEO. It's a an exact match for the search term he was gunning for, and the
.com wasn't available but the .org was. Exact-match domains get hit with the
+15 wand of visibility in search results, and the whole .com vs .org
distinction isn't as black/white as it used to be.

~~~
itsprofitbaron
There was an EMD (Exact Match Domain) update in September 2012 to fix this.

~~~
unreal37
That's a myth. It "reduced" the bonus, but the bonus clearly still exists. But
I love that others think that domain name is no longer relevant for SEO. Keep
thinking that. :)

~~~
shostack
It's reduced to the point of not being worth insane prices for EMDs. The
majority of his ranking is likely due to his backlink profile and relevant
content vs. the domain. I'm sure it doesn't hurt things though.

~~~
unreal37
Can't speak to "insane prices". But Patrick got AppointmentReminder.org for
$8. He classifies it as the best ROI he's ever made.

"cars.com" is still the #1 result for searching "cars". And "business.com" is
still on page 1 for searching "business". The death of the EMD has been
greatly exaggerated, IMHO.

------
fdsary
Congrats on the kid & move to 中目黒！

~~~
adregan
Nakameguro is a great area, but I'll bet those rents really do sting. I've
always been partial to Nakano, Koenji, and Kichijoji. I'll always be a Chuo
liner in my heart.

------
mattste
As a young software developer interested in what happens on the business side
of things, this was a fantastic read. Thanks Patrick.

------
sogen
Is there a way to reach patio11? I emailed him while taking his course but
never got a response.

~~~
patio11
Email is generally the best way to get in touch with me. Twitter works as an
escalation method. In general, while I try to response to everyone who emails
about stuff I write for free on the Internet, it can get bumped from the
priority list by a lot of things, including (in the instant case) being at
home with a baby.

~~~
sogen
thanks, escalating!

------
krschultz
Glad to hear Patrick is using Bench, those guys are awesome.

~~~
ian_crosby
Thanks Kevin <3

------
staunch
Congrats on the baby!

------
curiously
Is it better to have a low churn rate per month with lower MRR or a higher
churn rate with higher MRR ?

Can you counter churn rate by acquiring new customers?

~~~
sunir
Low churn rate is better. The longer you have a customer relationship the
longer they think about you. You have an opportunity to sell them more value
as you develop it and get them to refer you more customers.

------
sadpanda5
This may be a unpopular opinion, but this guy needs to cofound a company with
someone else. He is one of the smartest dudes I know for optimization, but
seems to have some of the most tame/boring ideas for 'startups' (if you can
call them that). Bingo card creator? Appointment reminder? He needs a
cofounder who compliments his skills. Mainly, good ideas and good sales
skills.

The bottom line is you can only optimize so much via a/b testing and whatnot
from marginal ideas at best.

~~~
mooneater
I feel his $ numbers are shockingly low given his obvious calibre.

~~~
liquidise
I would expect that "publicly available plans" excludes enterprise offerings,
where i would anticipate a considerable income given his past posts.

~~~
unreal37
He said in that post that his enterprise revenue was "$50K < X < $100K".

------
dennisgorelik
> Ruriko ... does not love Ogaki ... and wanted a change.

Did she consider US cities?

Tokyo is very expensive and an unusual choice to move into for family with a
child.

Any US city would put you in a better touch with your business and would be
less expensive than Tokyo.

~~~
paulsutter
Tokyo is a wonderful place to live, and I can assure you there is nothing
unusual about families with children in Tokyo.

Life is about making choices.

~~~
dennisgorelik
What's wonderful about Tokyo?

5x price increase, small apartments (instead of houses), higher babysitter
costs -- these are all downsides.

What is better in Tokyo than in, say, Austin, TX?

~~~
veidr
Tokyo is expensive, but its the best city to raise kids in that I have ever
seen.

Its high density and superb transportation mean you don't need a car -- go
almost everywhere with your kids by walking, bicycle, or extremely frequent
convenient train. Riding in the car sucks for kids (and adults, IMO).

There is access to all kinds of world-class health care, and all of it is free
for your kids.

Tons of great educational institutions from the best universities down to
preschool (and although the preschools can take some time to get into due to
capacity, they are by and large terrific).

Great food of virtually every variety except Mexican. Most of Tokyo is
extremely clean, safe and crime-free. Multiple always-open industry-redefining
convenience stores, same-day Amazon prime deliveries, synchronous 1Gbps fiber
optic Internet connections for $50 a month, a regular taxi system that is
better than the Uber you always hear Americans raving about, one-hour cold
beer delivery... in other words, the kind of fundamental lifestyle convenience
level that is good when you are single, but becomes _way_ more important once
you have kids.

Source: I live in Tokyo with my wife, 2-year-old, and 2-month-old.

~~~
dennisgorelik
How do all these wonderful family benefits explain that Tokyo has the lowest
fertility rate in Japan [1]?

\---

[1] [http://www.japantoday.com/category/national/view/japans-
fert...](http://www.japantoday.com/category/national/view/japans-fertility-
rate-rises-to-1-43-in-2013) Tokyo has the lowest fertility rate in Japan by
far, hovering just above 1.0.

~~~
veidr
Well, if I had to hazard a guess, I would say the main factor is the high cost
of living, especially rent/mortgage expense. I have several friends who moved
out of Tokyo to have kids for financial reasons (but usually not without some
regret).

Tokyo is pretty awesome, but you do have to be able to afford it. I would
assume it's a lot more expensive to live here than Austin, TX, but I know it
is cheaper (and IMO _way_ better for raising kids) than say, San Francisco.

~~~
dennisgorelik
> Tokyo is pretty awesome, but you do have to be able to afford it.

Are you saying that for the same $120K/year a family would be better off in
Tokyo than in Ogaki (or Austin)?

Lower cost of living means that you can afford other things, such as bigger
house, better neighborhood, better doctors, babysitter, better car etc.

I see though how Tokyo could be better than San Francisco or NYC - thank you
for your explanation.

~~~
veidr
It is instructive to think about those 'other things' \-- because each person
will value those in different ways.

To some people, a smaller house is a good tradeoff if it comes with abundance
of extremely awesome restaurants, shopping, and riverside parks nearby. For
others, having a big personal space is more important.

Some people get a lot of satisfaction from having a Porsche or (more likely,
with kids) a well-appointed Audi Q7. I think the best car is not having a car
at all (at least until the robo-cars arrive) -- but to me that means public
transit + bicycle is literally so good that I can get where I am going faster
than I could with a car. The only cities I have lived in where that is true
are Tokyo and Amsterdam.

So yeah, depending on what you value most, you might be better off in Tokyo
even on $120k. But if you want the car and big personal space, then probably
not.

