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Bingo Card Creator (and other stuff) Year in Review 2012 (kalzumeus.com)
278 points by Sujan 1756 days ago | hide | past | web | 129 comments | favorite

> partly because I get a lot of leads via voicemail, which I don’t deal with very well. Many of them are poorly qualified, and as a result I find myself dreading listening to voicemail to call back and talk for 10 minutes (at 2 AM in the morning) only to discover that they’re not good fits for AR.

Interesting. I find phone communication to be a frustrating bit of LiberWriter for a couple of reasons:

* It's very time consuming, and clawing back some of the time/effort is more difficult than with email, where I can keep a catalog of standard answers to mix in with a few personalized lines. People find highly automated phone systems to be somewhat annoying.

* It's harder to outsource, since it's difficult to keep tabs on what was said, something that is much easier with email.

* Like patio11 says, it doesn't mix as well with "non US" time zones. I don't want to be answering phone calls when sitting down to dinner with my family.

On the other hand, when you do take the time to talk to someone, it very often leads to a sale, so it's difficult to blow it off entirely.

One advantage of phone calls is that you can have the entire conversation right there. With e-mails you get this back-forth (and of course the constant delay between e-mails) which means that a 15 minute conversation can become a 4 day e-mail exchange.

Why not have the outsourced phone calls go over skype/twillio where you can record them ?

It still means listening in on calls every once in a while, which is far slower than email.

Get them transcribed ?

I'm sure there are ways to handle everything, it's just a lot more time consuming/expensive/complicated, depending on the tradeoffs you make, compared to email.

Patio, Quick question. I have had some trouble getting my first consulting gig. Its not the meeting per se that gets them, I can get meetings with people. They say I lack experience. Should I do pro bono work, or should I lower my prices (I charge a lot because I like to dedicate my time to doing a fantastic job and giving customers (if I had any) exactly what they want (or what they think they want). How do you get the first gig/job?

They say I lack experience.

This is customerese for "You have failed to convince me you are capable of delivering positive ROI on this engagement" rather than being any commentary on your experience. The easiest way to diffuse the objection is by getting better at sales, not by getting experience. Everybody in the industry got a paying gig when they had, at the time, no history of paying gigs.

I'm not generally a fan of pro-bono work for technologists, since the market is hot enough at the moment that you shouldn't need to do it. Also, the client dynamics of pro-bono work are leagues away from the dynamics of paid work. Even offering free work scares the heck out of good clients. Conversely, people who will agree to the arrangement may treat your time as if it is totally valueless, which will frequently compromise your ability to succeed at the engagement. The free engagement doesn't enhance your credibility if it ends up sucking due to lack of "client" cooperation, so that doesn't help you any.

You've got some sort of portfolio, right? Side projects you could show off? Blog posts about the development process? You can turn these into something which visibly demonstrates that you're capable of executing on your promises.

Even offering free work scares the heck out of good clients. Conversely, people who will agree to the arrangement may treat your time as if it is totally valueless, which will frequently compromise your ability to succeed at the engagement. The free engagement doesn't enhance your credibility if it ends up sucking due to lack of "client" cooperation, so that doesn't help you any.

One tactic that generally worked well for me when I was at an early point in my consulting career was roughly:

"Normally I'd charge you $x for this. I am confident that you will receive $y-$z of value from this work. Let's do the work. You decide how much I should invoice for at the end of it."

I was obviously sucking up more risk with this approach - and had to be willing to walk away with zero (and did on two occasions - one of which was justifiable). But since I had picked sane clients it mostly worked out very well (in one case they happily wrote a check for $x * 5 since we'd all radically underestimated the value of the work ;-)

I don't do this now - but it helped get over some "Can you actually do this?" hassles at the point when I didn't have a reputation.

I do have a github with a few apps that Ive messed around (Im a mobile and web guy). Thats very insightful, I never thought about the ROI thing. I guess I need to learn how to convince people Im worth the price. Tons of people in my area undercut by a huge margin just to get jobs. I do write essays too. How do you better at sales? Are there particular things that you say? I know being friendly and available seem to work, but is there something better? What would you recommend to get better at selling?

I'm totally on your side of this and rooting for you. I mention that to soften the following: "a github with a few apps that Ive messed around" does not necessarily suggest to me that you're capable of shipping software projects. (Github is a terrible platform for showing customers you can produce things that they care about, guys. Github shows off source code. Most customers want to buy business outcomes. Source code is rarely a business outcome. If you tried to present a very very compelling business outcome caused by source code via Github, just the nature of hosting it on Github would de-emphasize the business outcome in favor of the source code... which is, by the way, totally impenetrable to many buyers of custom software.)

A better way to present a business outcome is a case study: here's the business, here's the problem, here's (a brief sketch off) what we did, here's the results. (You can write a case study on any blogging platform and it will work better than just throwing the repo for that project on Github.)

Are you capable of shipping software projects? Shipping a software project would persuasively demonstrate that you are. Conversely, if you've never shipped a software project... well, the customers might not be totally crazy about wondering why you'd command high prices.

How do you better at sales?

I wish I had a better answer for you than "Read a little, practice a lot." but I don't.

Hmm, Yeah. You have me pegged there, I don't have any apps on the app store, or any web applications I can pull up and demo to customers. I have a new goal to work towards now, even if it is something simple. I will also make documents about it, and make it a full "business" like solution.

As for you solution about the sales, I had a daunting feeling you were going to suggest that. Oh well, I think life is about reading a little and doing a lot.

Thanks for all your help!

What would you recommend to get better at selling?

One trick that I've found useful is to try to be observant in situations where somebody is trying to sell you something. Pay attention to what works and what doesn't. Tweak and try yourself. You'll see many patterns in the stuff that works well (e.g. listening not talking, stories not feature lists, benefits not feature lists, etc.)

It's got to the stage where I actually quite like wandering around the vendor/sponsor stands at conferences for the learning experience ;-)

I want to double on kirinan's question. I'm not quite in his shoes; I've had a few clients, I've got a couple theoretically lined up but the answers I keep hearing are "we really want to hire you but we have to get the funding approved", which in the cases I fully pursue mainly seem to be some guy holding the purse strings and not caring if the project gets done or not.

This just happens to be my current hurdle. I really wish there was a lot more written from the perspective of "I am trying to make it" than the perspective of "so now you are rich and famous and are looking for how to make a few more dollars...."

I'm not patio11, but I have been a consultant for about 12 years. "We want to hire you but we have to get the funding approved" means you aren't talking to the right people. It's likely you're talking to technical buyers (who have the power to say, "no, don't hire this guy") and not the economic buyer (who has the power to say, "yes, you're hired, send the paperwork to this person in A/P.")

The very first thing I do in any opportunity is make sure I'm talking to the economic buyer. I'm polite about it, but I don't want to talk to technical buyers. Period. There's no point in talking to someone who can only say no.

This takes practice, and chutzpah, and I found it very difficult, and sometimes still do. But I have almost never sold a gig when I wasn't talking to the economic buyer, so I get over it.

Questions to determine if you're talking to the economic buyer: "Who has signing authority on this?" "Once I send a proposal, who will approve it?" "Whose budget is this under?"

Then you have to speak to the economic buyer. Be polite, but firm. Remember, time spent talking to a technical buyer is essentially wasted time. "Okay, let's schedule an appointment with X so we can discuss your needs further." "After you're done with the background info you wanted to discuss, let's schedule a time to speak with X about her expectations." "When will X be available to talk about this project?"

It's a bit trickier than this, but those insights come with practice. For me, focusing on speaking to economic buyers was the single most valuable sales technique I learned, literally turning my consulting business from a failure to a success.

Good luck!

Wow. This is shockingly good and easily actionable advice.

It is great advice -- to complicate the matter slightly, one should also be aware that pitching to the economic buyer is much different than pitching to the technical buyers.

When speaking to technical buyers, they want to know that what you're going to do will work, from a technical perspective. If you're building widgets, will those widgets use LDAP to authenticate via our existing means? Will those widgets support the Oracle DB that we already use, etc.

Your economic buyers generally care much less about this and much more about how much ROI they'll be getting. How will this save time? How will this provide the CTO more actionable insight into operations? How will this empower decision-making.

This is why often the products that large companies buy are not the best technical solutions, because they can sell to those with purchasing power more effectively. If you've ever worked for a big company, you've seen it first hand -- "Why are we rolling out <product_x> when <open_source_product> does everything it does and far better?" - and the answer is that they were better able to speak to the concerns of the economic buyer, generally.

consulting for 15 years here as well.. Ths is great advice. At the end of the day you work for the people who sign your cheques. The sooner you learn and remember that the more you can focus on creating more value than which you're paid.

Hiya guys. Feel free to ask any questions if you've got them. I'm generally happy to answer, to the best of my capabilities.

Why "patio11"? Always curious about nicks.

edit (to avoid comment spam): Thanks for the info!

In first grade, we were given a pointless busywork assignment to test our handwriting skills. I hated writing (I did not have good physical control of the pencil) so I wrote the shortest possible answer to all of the pointless questions. The first question was "What is your favorite number?" I answered "1" My teacher, looking at answers like "1", "red", "a dog", "No.", etc, said "1 can't be your favorite number. Pick a harder number to write." I spitefully picked "11". (Too bad I couldn't write Japanese at the time -- for the same amount of work I could have picked 10.)

In middle school, right when I was first getting involved with online services, my best friend was a Puerto Rican. He hated the hard "k" sound in Patrick and called me "pato" for about a day, but laughed at his oh-so-clever joke, so I asked him to change it. I can't stand "Pat." (There was a movie about a gender-ambiguous character named Pat that year. It was middle school and I was a geek, you can do the math.) He then proposed "Patio." We paled around often enough that it stuck with my family. When I needed a disambiguating number for e.g. AOL email addresses or Warcraft 2 handles, I naturally went with my favorite number, 11.

I'm patio11 on just about every service that I use which I don't mind associated with my real name.

That reminds me of a first-grade story. One morning I had a flash of brilliance and realized that if I didn't have an eraser, I would never make another mistake in my life. We had those big fat red first-grade pencils, so I spent all day making really dark circles and then erasing them as completely as I could. I was really proud of myself at the end of the day when my eraser was completely gone.

I was really confused for a while when I made my next mistake.

"Use the word 'people' in a sentence." -> "'people' is a word."

"Do you know what does 'WWF'[name of a panda conservation organization] stands for?" -> "No."

It really surprised and frustrated me when I got zero marks for perfectly logical and correct answers.

I'm left-handed and spent my learning-to-write time in school attempting to form the letters while holding the pencil differently than everyone else. I could already write and to pass the time I decided to find out whether it was possible to do it differently than the way it "should" be done.

I still don't quite understand why the teacher wasn't thrilled when I discovered that there are indeed multiple successful ways to hold a pencil. She looked at me blankly when I announced my success and said "Yes, but those are not the right ways."

Hey patio - awesome post, I really appreciate it. I wanted to congratulate you on getting married and was also curious as to how that has affected the general run of your business (outside of the obvious time off for the wedding and honeymoon). Do you find this independent lifestyle much more conducive to spending time with your wife since you have such a flexible schedule?

I didn't know my wife back when I was a salaryman (9-to-11 PM days are fairly typical for male Japanese professionals). The best thing that happened after quitting that job and going "full-time" on my own stuff was that I suddenly had time to rediscover human life, including going to the BBQ with friends where I happened to meet Ruriko.

(You might reasonably ask "How the heck are Japanese men supposed to get married if they're working to 11 PM?" and the answer is "Your boss will consider it his responsibility to arrange for everything you need to live the standard salaryman life, such as a salary, a wife, and an insurance card." Funny story about that, ask me some time.)

I think I can guess the answer to this, but I've often wondered: are the ridiculous amounts of hours worked by salarymen genuinely due to the amount of work to be done, or is it a "face" thing, e.g. "if I'm the first one to leave, I'll look like I'm not committed to the company" which results in longer hours for everyone?

AFAICT, it leans more towards face saving, altho not exactly that. If you leave before the little boss who leaves after the big boss, then your coworkers tend to think you're not dedicated (hrs-in = dedication). However, most people 'working' after 6 are not really working, or at least not productively. Lots of the people who are not IMing or chatting or surfing or whatnot are doing things manually (like running reports) which could have easily been automated --but the boss likes people to 'do work'... efficiency is sometimes seen with suspicion.

That's anecdotal and not necessarily representative, but it certainly indicates that not all people are busy till 11. There's also having to go out with the boss and colleagues.

Is it some time yet? :)

Oh alright.

Boss: "So are you seeing anyone?"

Me: "Ahh, erm, I appreciate your desire to look out for me boss. Us Americans are a little quirky with regards to finding young ladies -- we typically look for ourselves rather than getting formally set up by family or coworkers. I'm not seeing anyone at the moment but plan on finding her myself, so..."

Boss: "Oh its not just a cultural thing. If you don't have a wife, you'll go back to America to find one, and then you'll quit the company. We can't have that now can we."

Me: "Erm, I appreciate the concern, but maybe we can meet at the midd..."

Boss: "Yeah yeah, whatever."

3 weeks pass. Scene is a Welcome To The Company party for myself and two other new employees.

Boss: "Patrick, I've got someone to introduce you to. This is K-san, who sits two rows over."

K-san is a young lady, about my age.

Me: "Pleased to meet you, K-san."

K-san: "Please to meet you, Patrick."

The following is word-for-word translated from Japanese and is not exaggerated in the slightest.

Boss: "Patrick graduated from a good school in America, is a bright engineer, and has a solid future with the company. How about an international marriage?"

shocked silence

K-san: "I have absolutely no interest in that."

Now in a just world I'd be able to report that this was a little awkward but we can all laugh about it 5 years later, but a just world would have no Japanese megacorps in it. In the world we actually live in, K-san was given grief by many co-workers. (e.g. "K-san, do you want to come out to lunch, or do you have absolutely no interest in that?") My dimestore psychoanalysis is that a) she shot down the boss in "too brusque of a fashion" compared to socially optimal ways to decline things like "giggles Oh he's far too handsome for me." (or any of the 50,000 ways you could say "Yes" and mean "No") and at least in part because b) some people in my company genuinely believe, to some degree, that K-san should not have said no.

If you're interested in gender relations in Japan, many scholarly books have been written on the subject.

Patrick, I have been reading your stuff for some time now and it is indeed interesting and useful and worth a lot of money to loads of people I'm sure.

But goddamn man, for the greater good, forget this silly software racket and put out a comic book. Perhaps a live action television show, maybe a movie. Your anecdotes are always my favorite part. :)

^what he said. Seriously, I wish you had the time for something like that.

> K-san: "I have absolutely no interest in that."

If this is the Japanese I think it is, I would have had difficulty not laughing out loud.

「。。。国際結婚はどう?」「まったく興味ありません。」 , but I trust my recollection of her response less than of his, since my brain was still reeling.

Oh man.. That is a cold, cold way to say no. Great story!

No questions, just wanted to say thanks for writing your book - I found it amazingly clear with highly-actionable ideas. And this is coming from a guy who doesn't even write software anymore!


How did you initially market bingo creator in it's earliest stages? Did you go after SEO, paid marketing, word of mouth, etc?

I tried posting on the ad section of teacher forums (total bust), using AdWords ($1 a day until I figured out how to make it work profitably, which took about a year), and (overwhelmingly the most important channel for me early and still the source of ~50% of sales) long-tail SEO for niche bingo activities. The specific tactic for that is in the Greatest Hits section of my blog and covered at length.

which article exactly?

A brief look at the greatest hits section of his blog suggests that this might be the article you're looking for:


You started out with product and then started doing consulting after a fairly large amount of time spent on a product. (I've been following your work for awhile, it's been inspiring.)

I'm a programmer who has done consulting before with a keen interest in product and marketing. If I want to become self-employed (preferably in the form of working on a bootstrapped product), should I start by bootstrapping a product or by consulting?

I believe that consulting would mean becoming self-employed sooner, but my concern is that I'd end up on a "get work, seek work" treadmill harming my ability to work on bootstrapping.

Alternately, my concern is that if I focus on bootstrapping a side project while working a full-time job, that will also mean not getting self-employed again for a very long time.

Sorry for the rambly comment, do you have any insights or suggestions to offer?

Can you delve more into how you develop and close your first few enterprise sales? Especially in a market that you haven't been in for a long time already. Apologies if this has been answered elsewhere.

I think Patrick largely answered this question in an email he sent to the mailing list back in October (Selling To The Fortune 500, Government, And Other Lovecraftian Horrors). Will forward you the email.

I wonder if Patrick has an archive of old his emails to that list. I definitely signed up after he sent that one.

Awesome, thanks. I think I signed up for the mailing list after that one.

I'd also like that email

I've noticed your emphasis on doing frequent and appropriate mailings. It's good advice! It works well for us.

But what do you recommend for integrating a B2C CRM with email marketing?

We do detailed segmentation of our mailing list and I can't find a good B2C CRM that integrates sufficiently with an email mktg platform.

I'm currently looking into synching many more fields (needed for segmenting) from Zoho CRM to MailChimp via API with CloudWork/ItDuzzit/Zapier. Their defaults are useless (3-5 main fields), as we need complete contact info in order to segment well.

What's your perspective on other customer acquisition channels (via media buys) outside of search (PPC)? I'm curious about your take on mobile, CPI/PPI and display (outside of the google content network).

FYI: s/Marquis/Marquee/

Any plans for another podcast?

We do them every time Keith and I have both mutual availability and something interesting to say. Sadly, as of late we've both been very busy. Hopefully mid-January. (If you have a burning urge to hear my voice, I'm a guest on other folks' podcasts more frequently than on my own. http://productpeople.tv/ has a recent interview about my business story and Amy Hoy should be publishing a long interview about infoproducts (like our courses), multi-product businesses, and consulting sometime in the next two weeks or so.)

Product People has two episodes with Patio11.

Part 1 has his complete back-story: everything from how he learned to program with graph paper to how he built his first product business with $60. http://productpeople.tv/2012/12/19/patio11-part1/

Part 2 has specific tactics for building your own software business: http://productpeople.tv/2012/12/26/patio11-part2/

Both episodes have full text transcripts, so you can listen or read.

Please do more of these. There is such a shortfall of SaaS podcasts it almost makes me cry. It's like xmas morning when I see a new Kalzumeus podcast appear in my RSS reader!

"I want to explore flying to an industry conference as a sales channel for AR"

Have you ever considered direct mail or advertising in industry trade journals? Or issuing press releases for those trade journals which are always looking for material to fill their pages? Another thought (cheaper than flying) would be to simply write a few articles for those journals speaking about the general problem of appointment reminding and then having the byline be you. It is something that others are doing. The same article could easily be repurposed for different journals. Once you are "published" you can then do reprints of your articles to DM or hand out at shows if that ends up being an attractive route.

In looking for an example of "card packs" which I have successfully used (in a different business) I came up with this which illustrates the direct mail route:


Cost to spray something like this to 10,000 offices is no big deal. You'd have to repeat a few times to the same people I would imagine to get a desirable response.

Love the rundown of how well you're doing!

Since HN comments are a haven for unsolicited advice, here's a few things from me:

$100 per email seems really high for mailchimp on a list of 5k. Looking at their pricing they have a monthly rate of $75 for list sizes between 5k-10k. That may be an easy expense cut for you.

Also, if you're looking at going to conferences to sell the high end membership to A/R, you may want to consider doing sales webinars. These have converted incredibly well for me personally and it seems it would be a great fit for this product as well.

$100 per email seems really high for mailchimp on a list of 5k. Looking at their pricing they have a monthly rate of $75 for list sizes between 5k-10k. That may be an easy expense cut for you.

One of my consulting clients, who runs an email marketing service, nearly went ballistic when I told them about it. ;) The reason I pay per email rather than paying monthly is I have something like 70k BCC emails in the same account which I mail approximately never. That would eliminate the savings from switching to monthly billing over pay-as-you-go. I suppose I could either re-jigger things, purge dated emails, or open a new account, but "I saved a couple hundred bucks on X" is probably not going to be a line item in next year's annual report, right? I want to focus on things that will be.

If I were thinking things through I would have separate accounts for them. (n.b. Sharing SaaS accounts over several lines of businesses seems like a time/money savings when you start doing it but gets crazy later in operations, and God forbid you ever have to de-couple the businesses as e.g. a result of sale. I suggest not starting.)

you may want to consider doing sales webinars

Thanks for the advice. That is, indeed, on the list of things to try.

You made the front page of reddit today, I look forward to reading about how this converts into clients in next years summary ;-)


This practice just seems absurd.

What is the practical purpose of this type of post? Several people have written pieces enumerating their various income sources and listing their enviable accomplishments, and have gotten on the front page. These just seem unbelievably self-congratulatory and conceited. Moreover, why does anyone else have such an interest in the financials of Patrick?

I really don't understand this phenomenon. What is the impetus to write or read these things?

I was in part inspired to actually get off my duff and write Bingo Card Creator because somebody wrote about their experience with making and selling skeet shooting software as a sideline business. Prior to reading that, it was outside of my comprehension that you could successfully run a sideline software business.

If you run or work at a closely held software business, you may have very good estimates of e.g. what reasonably achievable conversion rates are, how expenses break down for a small software business, or what global demand is in terms of unique users for a very niche application. Most people do not run or work at closely held software businesses, which makes a lot of those numbers very non-obvious. They're of interest to people who might aspire to one day running such a business or to people who run a business but would like to compare their experiences to those of somebody else. They're also very rarely disclosed publicly.

I would hope that the six-thousand odd words of narrative in the post and copious linked material contains non-obvious useful tidbits such as "You can increase the sales of a mature, six-year old software company by over 60% solely by A/B testing while keeping all other factors constant. Here's a case study." That is, I'd think, an interesting result which suggests something that many people on HN could propose at their first meeting of 2013 at their workplaces (or start implementing themselves). It is a substantially more compelling result than having me say "You should A/B test. It works well. (People hire me to do that but I usually can't talk about it, but trust me.)"

Those are mostly reasons why some folks might want to read this. As for writing it: I find writing helps me crystallize my thinking, because I'm very capable of bamboozling myself mentally but often less capable when I see the half-formed rationalization in print. Also, even if nobody else ever read them, having seven years of annual reports is useful for me, since it captures at-a-comparative-glance what I've learned over time and how employing that has actually worked.

If you don't like hearing about my businesses, I recommend avoiding posts from kalzumeus.com domains. They're approximately 1/30th of the frontpage, once or twice a month.

I think the wording of the parent is more telling of his, dare I say it, jealousy, than your "conceitedness". If you weren't as successful I doubt people would come out of the woodwork to question your motives.

Really appreciate all of these breakdowns. I'm a young 20-something trying to prepare myself for essentially exactly what you're currently doing and these posts are invaluable- not just for my domain knowledge, but my nerves as well (Now I can show my Mom people can make money doing this!).

But what practical purpose does breaking down your income serve to readers? Will it help them increase conversions, save time, or increase efficiency? Even if it did yield some practical value, expenses and income are so idiosyncratic as to not be applicable to almost everyone.

Also, I wasn't just referring to you. For instance, in Nathan Barry's "year in review," he intricately discusses his travels, personal relationships, etc. This stuff is clearly superfluous to a business-minded audience, and I can only read it as pretention.

But what practical purpose does breaking down your income serve to readers? Will it help them increase conversions, save time, or increase efficiency?

It's true that there is sometimes an irritating level of "hero worship" around these parts, but as another HNer running multiple small businesses, I appreciate Patrick's contributions. Some of his ideas and experiments are relevant to other fields as well. For example, his results from switching to Stripe are very interesting to those of us outside the US, where accepting card payments directly is a much bigger deal (typically a multi-week application process and a lot more tedious integration work). Having some idea of the potential gains over the easy option of using Paypal/Google/etc. is interesting when deciding if and when it's worth spending that time.

It's nice to have numbers to compare against. I'm in the same boat (also selling my own software) and comparing Patrick's numbers to mine gives me confidence that I don't suck terribly at the business stuff.

Also knowing the numbers you can classify his blog posts better. There are many software marketing gurus who tell you how to run your business while they only make $5k year with their flag ship product. At least I know that when Patrick says that something 'was a big increase in sales' he's not talking about making $20 more.

The halmark of HN: a myriad of down-votes with no elucidation.

You've made so many negative comments that I've started to recognize your name.

A few pieces of advice from someone who was once a smart and shockingly arrogant teenager:

Dial down the negative replies and stop commenting on everything as if you were an expert. You lack experience and it shows in your writing. In 10 years you will probably decide the majority of the opinions you now hold are wrong. Try to remember that before you criticize.

Don't use "elucidation" when "explanation" will suffice. The purpose of writing is to clearly convey an idea--using needlessly uncommon or archaic words can break the flow of communication. (I had the same problem when I was younger, and my teenage brother still does.) You'll find that your writing is much more effective if it doesn't read like you spent half of your time flipping through a thesaurus (even if you didn't).

Check out this: Resist complaining about being downmodded. It never does any good, and it makes boring reading from the guidelines http://ycombinator.com/newsguidelines.html.

Your comments in this thread are not adding value.

> What is the impetus to write or read these things?

As I've mentioned in other HN threads, I'm a living patio11 success story.

Over the past two years, the trajectory of my life changed from

"Well, maybe I'll figure out a way to get out of this $70,000 USD a year developer job some day."


"So that's what having six figures in the bank feels like, I guess we can have kids now."

in large part thanks to the example he sets in posts like the one linked here and the advice he gives.

Aside from that, although I don't know him personally, Patrick has been an unreasonably nice human being in any interaction I've had with him, and I'm quite sure other HNers would agree. Celebrating his successes in 2012 I think is a good enough reason for him to post this here.

I really don't understand this phenomenon. What is the impetus to write or read these things?

I read because I find other people's practical experience to be a useful educational tool, with lessons that I can directly apply to my business, and I write such things with the aim of passing on any useful knowledge that readers might be able to pick out from my writings.

and listing their enviable accomplishments

If you have a few minutes, take a quick look through my blog. It mostly lists an awful lot of failures, with my most popular post describing a web app that brings in $500/month. Many other people's blogs also discuss failures. For the vast majority of people, it's a long hard slog before you start making any kind of success.

I realise that some of these posts can seem somewhat self-congratulatory, but would you really prefer that people didn't share information you can learn from, for free and without expectation?

This is an easy one (from Patrick's side): to get a ton of attention and links. To be unique. Or in Seth Godin terminology, to be a Purple Cow.

He just hit the top of Hacker News by posting data he had lying around. This is an obvious win, especially because he's found a way to monetize his notoriety via consulting.

For those of us interested in achieving similar success, it's nice to see transparency and results. If you don't care about this then don't waste your time here.

This still makes it superfluous. Very few people are ever going to achieve the success that Patrick has. If earning such a huge income off of various lifestyle businesses was within reach of most people, they would be doing it. Stories like Patrick's usually involve a rare amount of luck and certain intangibles that most people don't possess (things like a large network, notoriety, etc.) So reading these things is innately a waste of time.

Moreover, the fact that he needs to enumerate his income so thoroughly just makes it makes it insufferable while not contributing to the ostensible point. He does not need to discuss the financials so particularly when educating others on how to run businesses in a general sense. That's why I simply can't believe that he (or anyone for that matter) writes these things for a purpose other than to express their occupational superiority and financial success to everyone else.

I upvoted you for expressing a contrarian point of view and because I think posts should gravitate to 0 or 1 if they are not really rude.

If you've followed "The Patio11 Story" (soon to be a motion picture at a major Hollywood studio), I think one of the key things that sticks out is "Bingo Card Creator". The first time I read that, I thought "that's f'ing ridiculous". And then I read he was making money at it. But not millions or anything absurd, rather, a number that would not really be a respectable salary for a Bay Area based software guy, but just the same was something you could live off of in many places. I think that's what grabbed so many people's attention... this software business that was not "cool" (a Haskell-based file sharing social network!) or innovative (based on 5 years of graduate studies of network optimization algorithms!) or based on a brilliant hack, but on something that sounds, frankly, kind of silly, but opened a lot of people's eyes to the value of making stuff that helps out "regular people".

The story to that point really does engender a feeling of "well... ok, if he can sell bingo card stuff... maybe I can make something that makes money, even if it's not quite the next Facebook", which I think is something more people ought to explore, really. I get a very non-zero-sum-game feeling from BCC.

OTOH, the consulting stuff is based on patio11 being "internet famous", or at least famous in one corner of a part of the internet, and feels a lot more like something that is... not zero-sum (he provides real value, IMO), but more along the lines of "anyone can do it as long as they're internet famous or have some other significant advantage", which actually does exclude many of us, something that bingo cards manifestly do not.

I hope that was somewhat coherent and in no way construed as a slight to patio11, who deserves a lot of respect and gratitude for sharing a lot of ideas.

> this software business that was not "cool" or innovative or based on a brilliant hack, but on something that sounds, frankly, kind of silly, but opened a lot of people's eyes to the value of making stuff that helps out "regular people".

This is it right here. There are so many opportunities for software to help out so many industries, but everyone is so focused on the valley that they miss many, many, many businesses.

From http://www.inc.com/profile/daysmart-software :

> Designs and sells cloud-based, PC, and mobile business management software for salons, spas, pet groomers, and tattoo shops.

Revenues? $4.6 million in 2011.

Very few people are ever going to achieve the success that Patrick has.

Is that critique equally applicable to the 2006 version of this post, which you can find linked? (It is the first one?) Spoiler: that shows ~$1,000 in profits on ~$2,000 in sales.

That does not sound like a towering and insurmountable barrier to me. (Neither do my 2012 results, since I know how I got them and none of it involves being the Dark Lord Of Software Optimization. Plus, they're fairly modest if your reference set includes larger firms in the software industry, from publicly traded titans like Google down to the businesses of many other HNers, which would lose my entire business in the petty cash drawer.)

I would not include those businesses because they do not exemplify what makes your position unique: that you're self employed. For an individual running several smaller businesses, you are in a remarkable position. Just because you are smaller than Google does not mean that you are not incredibly fortunate and successful.

You're deliberately avoiding addressing his point, which is that in his 2006 overview, he wasn't making much at all, yet he still did the same overviews.

If you've convinced yourself that you're never going to achieve the success of a modestly successful consultant with a sideline business in bingo card software, then you're right.

200k in income puts him in the top 3% of earners in the US. If the 97th percentile is "moderate," then I guess few people will ever achieve anything close to "moderate success." (Myself included.)

You are comparing Patrick's income to those of auto mechanics and custodians as if that could be instructive.

Success is not relative. 200k to a mechanic is just as valuable as 200k to a consultant. What is your point?

Forgetting for a second what work someone finds more valuable (or the potential to increase your income or other benefits (social status perhaps) there is one big difference.

A consultant has to constantly come up with new business. Patrick's skills may be in demand now and not in demand 5 years from now (unless he morphs into something else valuable).

One thing I've never liked about consulting (that I like about BCC and AR, in general) is that you are constantly on the hunt for new consulting business. Even if the pipeline is full now you only have so many hours. A missed opportunity to consult (because you don't have the time) can't be fulfilled in the future. It's perishable.

Using the example of a mechanic that earns 200k in which the experience matters and the thing he is useful at doesn't go out of style (2 "ifs") the mechanic doesn't have to wake up in the morning and wonder where the next gig is going to come from.

You say that success isn't relative but just two posts up you said 200k is in the top 3% of earners in the US. Why did you limit that to the US? The same logic that made it sensible to restrict your comparison to the US applies to tptacek's observation.

I chose the US because I had those statistics on hand.

If we widen the comparison to the entire world, Patrick will be even more "successful," considering the prevalence of poverty in the world.

So yes, he is not only more successful than the overwhelming majority of people in this nation, he is also spectacularly more well-off than most people in the world.

Changing the scope doesn't change the conclusion.

Scale, a mechanic can only ever provide so much value in fixing a car which is owned by a single customer. Improving a software businesses conversions by 1% might provide more value than a mechanic can in a year of fixing cars.

>That's why I simply can't believe that he (or anyone for that matter) writes these things for a purpose other than to express their occupational superiority and financial success to everyone else.

You're telling me Patrick published his 2006, 2007, and 2008 reviews to boast about making a minimum wage income?

>Stories like Patrick's usually involve a rare amount of luck and certain intangibles that most people don't possess (things like a large network, notoriety, etc.)

If you want to call six years of work luck, sure. Or as Jefferson said, "I'm a great believer in luck, and I find the harder I work the more I have of it."

The same argument in video form: http://unicornfree.com/stacking-the-bricks/

I'm really bemused as to why anyone would blog about making minimum wage. At this point, though, he wouldn't be publishing his income unless it was something noteworthy that he wanted to express to everyone. Also, your post rests on false assertion that he succeeded based only on work, which is not the case. Plenty of people work tirelessly for years only to fail miserably or never advance in a meaningful way. In success, intangibles always come into play. Any assertion otherwise is indefensible.

You don't want people to blog about failure. You don't want people to blog about success. You don't want people to blog about any endeavors which could be tainted by luck (all of them).

I'm not sure where your extreme negativity stems from, but reading things doesn't seem to be something you enjoy. Maybe pick up a different hobby?

I just don't like people flaunting their success. Even if other do enjoy it as some sort of aspirational motivation, the sentiment is understandable, I think.

The sardonicism and patronization isn't necessary.

The fact that Patrick wrote these sorts of posts even when his results weren't particularly great indicates to me that he's not writing these posts out of a desire to "flaunt" his success.

Flaunting isn't necessarily a conscious act. He may have good intention, but the very fact that he is listing his inordinately large income is going to make a lot of people envious of him or dejected by their own meager success.

Or, it could be inspiring them, as it obviously is if you read through many of the comments here. They can say, hey, he went from making basically nothing a few years ago and now it's making a lot of money. This is possible if I work at it.

I just recently had a very similar conversation with a younger friend who is in school. I showed him a detailed look at my business and what it takes (and importantly) what it doesn't necessarily take to make money. This is extraordinarily useful information to someone who hasn't tried going out on their own yet. People can and do make lots of money selling software. I think it's really awesome to know that someone is making 40k from Bingo Card software.

I really think people should leave ruswick to himself. He seems to live a life of not seeing anything good in others work. So people should not bother responding to him. Read his blog and you would see some negativity about app.net, branch


Another reason why you shouldn't respond to him, is that rather than take people's thought onboard that his negativity is unfounded in this instance, since Patrick did thesame when earning $1000, he is rather seeing it as never say anything negative about Patio11 on HN, which is not the thrust of people's response to him. See his tweet on that http://twitter.com/DanRuswick/status/285136357037326336.

People that want to hate will see reason to hate. People that want to be bitter with whatever positive post others make or whatever success they experience, will find a reason to do and would justify it, just as ruswick is doing.

It is okay to criticize patio11 or anyone if you are not blinded by pessimism and jealousy.

I view it as a subtle way of showing others that if he can do it - others can too. He's making more revenue than 98% of most valley startups - and he's showing you how. (That statistic was 100% fabricated).

SaaS is a relatively new business model, and so the people who practice it rely on trial and error to test their theories.

People with positive and negative experiences to share, such as Patrick, deliver the results of their efforts via blog posts such as these so that the community they enjoy being a part of can learn and provide feedback. I'm sure Patrick also receives useful insights on his findings from the community as a result of his openness.

Personally, I don't care about the financials (although they're useful). I'm more interested in the statistics that lead to financials, such as unique visits and conversion rates. I wish more people were as open about their successes and failures.

Finally, when you say self-congratulatory, I think that's a fairly warped perception based on the fact that the figures for the apps are now so good. Back in 2006 (http://www.kalzumeus.com/2006/12/26/merry-christmas-part-2) the figures were not anywhere near as healthy and Patrick still put them out for all to see.

You get to learn from others. What patio11 does may not work for you o rme, but it will work for some people. And for that only, its worth having.

Congrats, Patrick.

I wish more entrepreneurs were open about their trials and their successes -- It helps demystify the "overnight success" and makes it feel more accessible to those that are a few years behind.

I think one of the reasons people are a bit reluctant to come forward with such info is that it can easily be interpreted as bragging. Personal finances are not something that people usually put out for the world to digest.

>"The prototypical “good fit” for me is an established software as a service company with revenues in the eight figure range, a few dozen employees, and a company culture which focuses more on the product/engineering side of things than on the marketing/sales side of things."

What is it that makes product/engineering companies a better fit for you than those focused on marketing or sales?

My understanding: Mr. McKenzie's ability to add value is weighted heavily to marketing/sales. It's therefore way more likely for him to be able produce large improvements for a company if they haven't already invested a large amount of effort/capital in optimizing that side of things.

Great to hear how you're doing Patrick, thanks for sharing.

> Even in weeks that I have blocked off to work on AR, I often find myself just lacking any desire to do it. The business isn’t intrinsically more boring that e.g. Bingo Card Creator, but the sort of things that I need to do to move it forward seem to hit my desire to work with a damp towel.

I seem to hit this phase with new product ideas around three months in and end up never finishing anything.

I have a web application that gets new (albeit unpaid for) signups daily, but even with a lot of free time[1] I lack the will to develop the product/marketing further.

Two things I will probably try:

1. MTFU, schedule some time, set some goals and force myself to do the work I need to.

2. Spec the work out and hire someone else to do it. Speccing the work out will probably make 1 easier to get started with however.

[1] Though I did just have a baby, so I might be selling myself a little short.

Now I did a google serarch for Bingo Card Creator and kalzumeus domain came first in search rezult, you might consider working on it, it's still a few clicks away for customers.

By the way, haven't you considered moving to a SaS model, make some yearly price instead of a lifetime one?

>Now I did a google serarch for Bingo Card Creator and kalzumeus domain came first in search rezult, you might consider working on it, it's still a few clicks away for customers.

Google customizes results based on a bunch of user variables, so you can't trust that the search results you see are what everyone else sees. There's no one canonical set of rankings, but you can use tools to get an idea of what the generic user sees (e.g. [1]).

From my quick assessment, it looks like bingocardcreator.com is #1 for google.com

[1] http://www.whatsmyserp.com/serpcheck.php


Have you ever done anything with direct mail? It's something we don't hear about in the startup world.

I, too, would love to hear on this from Patrick or anyone else.

NextDoor.com is using direct mail (I know because I got a postcard from them!) and I'm curious whether or not it's working.

I’m going to try to pass off L1 support to a VA in 2013

Can I ask what a VA is in this context?

Virtual Assistant, unless I am very mistaken.

VA = Virtual Assistant.

"I want to outsource 90% of the customer service load for Bingo Card Creator"

How are you going to go about doing this? (I know other people who are interested in a solution to the same problem).

a) Figure out a way to split BCC support email from my main inbox. b) Give my VA access to BCC support email, but not my main inbox. c) Write up a Google doc with the five most common support issues and the responses to send, including instructions for e.g. how to use my homebrew CS admin panel to e.g. send a password reset email or re-generate someone's receipt. Tell the VA that if there's anything not covered she's to mark it for me to answer and keep a running tally of how many times a question like that gets asked. d) Add anything which keeps coming up in Step C to the Google doc.

I think you should look into www.supportbee.com, it's like a smart shared Gmail account (even has the same shortcuts) and it allows for template responses and if you want you can connect with your other systems using their API.

Disclosure: It's run by friends of mine but I use it myself as well.

From article and context it seems you do not have a VA yet--do you mean to assume they will be female?

According to this post he has a VA


Sounds like you could totally automate that!

Wouldn't selling BCC to the school as an enterprise software (rather than for an individual teacher) bring more revenue? Schools have all kind of grants for these kind of products while teachers are more limited and are more often than not forced to use their own money.

Also, maybe a 5$ / month to get the "best bingo card of the month" would be useful for them.

Lastly, why not cut the price a little if the teacher recommends it to a couple colleagues?

Wouldn't selling BCC to the school as an enterprise software (rather than for an individual teacher) bring more revenue?

Yes. I could sell BCC to a school district for maybe $250. For the same amount of work, I might be able to sell a hospital system AR for $10,000. A month. (Six years ago, when I started selling BCC, enterprise sales wasn't an option -- I could never make a phone call with customers and didn't know how to even get started with it.)

Also, maybe a 5$ / month to get the "best bingo card of the month" would be useful for them.

If I were starting the business from scratch today, I would certainly build in a recurring revenue component. It doesn't make sense today, as growing BCC revenues is not the path forward for the business, and the development and CS headaches associated with it swamp the marginal revenue.

Lastly, why not cut the price a little if the teacher recommends it to a couple colleagues?

My experiments with getting teachers to recommend BCC to other teachers have, in general, been crashing failures. For example, I implemented "3 free cards for you and a friend if you refer that friend to BCC", along the lines of the Dropbox two-sided referral incentive model. That was a crashing failure -- it generated very few trials (probably since I didn't work on the UX for the viral spread nearly enough and probably because the market isn't really optimal for it) and of those marginal trials only 2 ever upgraded to the paid version.

Make sense, thanks. Yes.. I admittedly had the question "Why trying to sell bingo cards rather than going after a more lucrative products" but thought you had your own personal reasons for doing so.

Congratulations on a great year and getting married!

Don't forget, BCC A/B test results are usually posted here: http://www.bingocardcreator.com/abingo/results (though I am not sure if it is up to date).

Good for a few little "sparks" to finally get you testing something.

Patrick - When you were starting your video course, how did you figure out how to go about doing it? Did you seek any advise from Ramit, since you're friends and he has multiple video info products?

What does your enterprise sales process look like?

Imagine a blind and drunken rat placed in a very complicated maze with cheese at the end, then take away his keen sense of smell. It looks sort of like that, except the rat can at least write software.

No, seriously speaking:

Most inbound leads are through organic SEO. Customers generally have a few questions to ask me about e.g. pricing, features, or compatability with other stuff they're doing. I answer them either over the phone with the decisionmaker (followed by an email), or directly over email. My main competitive advantages are that I'm reasonably priced, that I have an easily accessible online demo (a surprisingly powerful win) and other scalable sales stuff, and that while I suck at "sales" I'm fairly good at talking about the product in the context of the customer's needs because, to quote a nurse directly responsible for the biggest deal going through, "It is his baby. You take care of your baby!", in a way which is difficult for a sales guy angling for a $500 commission at one of the larger competitors to justify.

If they sound like they're a good fit, I ask if they want a formal quote. If they do, I ask them what I can do to help them move the purchase along. Some number of steps later, money arrives.

There is very little "process" worthy of the name here, hence why I'm hoping to improve on that going forward.

So the lightning thing, did this actually happen?

Who do you outsource your bookkeeping to and how do you manage that process?

I have the same homegrown bookkeeping software which I've used for forever. (Don't do this folks. Use Quickbooks. The only reason I use the homegrown stuff is because it publishes stats direct to my website.) I have a VA in the Philippines who I hired through Pepper. Every month or two, I take all of my credit card statements, zip them up, and send them to her. We have a standing orders document (terribly out of date -- should fix that) of what expenses count as business expenses and how to categorize them in the bookkeeping software. (Expenses are the only part which requires manual entry -- my sites do their own revenue tracking.)

There's a workflow hack or two to ensure that novel transactions get checked by me, eventually. (e.g. I have a personal credit card in the mix, for those rare times when both business cards fail, which means she sees a lot of transactions which aren't business related and should filter them all out. It wasn't obvious from the one-line description that e.g. my wedding venue is probably not appropriate for deduction, but since it was marked as novel (and ginormous relative to my expected expenses for that month), I caught it prior to doing the year in review numbers.

I do a more in-deoth review of the big expense categories (AdWords and travel) prior to doing my taxes and spot-check everything else. If e.g. a $60 software purchase ends up getting missed that's unfortunate, but it is only about ~$20 of unfortunate, and a few slip-ups are substantially cheaper in opportunity cost (and sanity) that having me do line-by-line review of all ~500 entries.

For general advice on how to work with VAs, I strongly recommend Rob Walling's book and have heard good things about the 4 Hour Work Week (but have never read it).

I've heard people talking about using Quickbooks or other bookkeeping software, and I'm unclear why. I'm running a business in Israel, and we have an accountant and bookkeeper. Once a month we send all receipts/invoices to the bookkeeper, who deals with everything. I get reports a few weeks later. I never have to touch any software.

Is this not standard practice in the U.S.? It seems many people talk about using Quickbooks.

Alternatively, am I missing something by not doing the books myself? In general, I still have some issues in understanding the finer points of our finances, and I'm still looking for ways to get better insight into our cashflow, revenue, etc.

> I have a VA in the Philippines who I hired through Pepper.



Do you know how many hours were dedicated to your consulting revenues?

And, thanks :)

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