Patrick McKenzie

Best quotes by Patrick McKenzie

I work for the Internet, at @stripe, mostly on accelerating startups. Opinions here are my own.

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1

Engagement is a toxic metric. Products which optimize for it become worse. People who optimize for it become less happy. It also seems to generate runaway feedback loops where most engagable people have a) worst individual experiences and then b) end up driving the product bus.

2

The biggest thing people don’t appreciate about large companies is the basic productive unit isn’t an individual it is an engineering team with about ~8 members.

3

Be intentional about who you spend time with, who you work with, who you serve, and who you listen to.

4

If an employer is willing to be abusive to you prior to hiring you, when you have maximum leverage and they are maximally incentivized to play nice, I think that gives you *extremely actionable* signal as to how they'll treat you when you're working there and dependent on them.

5

In addition to assisting remote workers, a commitment to a written culture helps quickly moving organizations by making sure that people execute on decisions made even if they were not yet hired when the decision was made.

6

Rates exert gravity. If you charge more, you’ll spend your time talking to more sophisticated clients, working in better businesses, specializing in projects close to the money. These are compounding advantages. If you charge less, similar dynamics apply.

7

We have not yet scratched the surface of what software can do or what it is worth.

8

There are far fewer conspiracies, and far more emergent behavior, than is popularly imagined. So much so that when people understand they are looking at emergent behavior, they describe it as a conspiracy anyway, because conspiracies are an easier narrative to understand.

9

If you want a problem solved make it someone’s project. If you want it managed make it someone’s job.

10

Distributed communities on the Internet are an *extremely* powerful acculturating force, often derided for being low status, disruptive, or somehow unserious. I think we’re not really anywhere close to reckoning with this, or current and future implications on society.

11

An underappreciated and underpracticed-in-tech part of the hiring loop: candidates should come away from it, regardless of the outcome, willing to talk you up to their friends/coworkers/etc.

12

Founding a funded startup which doesn’t work out largely does not and should not irreversibly damage the founders’ finances. We should stop implying this is routine and stop valorizing courses of action which increase likelihood of it happening, like not taking salary.

13

A thing you’re going to start seeing more frequently: software companies entirely funded by software people, without needing to tap traditional large pools of money (VC funds backed by pensions/universities/family offices) basically ever.

14

One reason some startups exist: how do you allocate engineers to problems where incumbents either can’t achieve organizational conviction to allocate engineers or couldn’t attract sufficiently productive engineers to matter.

15

I cannot overstate enough the productivity improvement good processes or a particularly good working relationship can represent, even for people who are highly productive.

16

Realized some people don’t know this: It is fairly common for founders to give money as a gift to parents or other family members and have them immediately invest the money in a new company, at a very low valuation. This is not to fund the company but rather to assist family.

17

If you work in tech, you are likely underinsured on term life. You should have plural million dollars of coverage, including *outside* coverage offered by your employer. This is so cheap you will barely notice it.

18

Cool concept I heard of today for first time: bank branches as third place coworking spaces. Makes absolutely no sense as a daily coworking space but might be a good loss leader for the bank. The real estate is widely distributed and very underused 90% of time.

19

I really think long-form essay writing (please please please don't call it blogging) for professional audiences is due to make a comeback, ideally tied to a better business model than advertising.

20

“Operating cadence” is one of the most powerful advantages a person or organization can have, and I think that it explains more of the last few months than e.g. “organizational capacity” does.

21

Late check out is such a brilliant business innovation. It takes an industrial byproduct and, simply by naming it and making it available, makes it valuable.

22

I worry that social media has gotten some people addicted to the feeling of being involved in a crisis. To the extent that demand for crises exceeds supply, crises can be either manufactured or pulled out of the dark matter of unfortunate events happening in the world daily.

23

One reason many institutions today are weaker than counterparts were generations ago was that allocation of smart people got more efficient for certain definitions of efficient, and institutions no longer benefit from so much free lunch.

24

There are more people making a living producing art, broadly writ, than at any time in history, certainly by absolute count and almost certainly by percentage of the population.

25

Conversion rate will tend to go down as you get better at marketing, which is extremely counterintuitive to many people (including marketers), and sometimes you're "running to stay in place."

26

Run a portfolio of experiments. Unlike an actual investment, you can increase sizing *after* the results are in at a similar entry price. Do that ruthlessly.

27

Bullying unfortunately has great product/market fit, particularly when you call it something else.

28

It’s valuable to understand the lifecycle of things (peoples’ careers, companies, quarterly planning cycles, etc) because there are often discontinuous jumps in understanding/legibility which one can get ahead of by being a bit more willing to put in the work than the median is.

29

An underdiscussed thing in fintech: as firms get more sophisticated at precision marketing and onboarding gets easier, it has become easier to "skin the cream" of the top e.g. 20% of customers with the best margin characteristics. This has lots of implications, for everyone.

30

I think it is underappreciated by many technologists how many technology companies are, often quietly, building vehicles which have cash flow profiles similar to asset backed securities. The economy structurally wants those assets and capita for them is extremely abundant.

31

Investment is a bet on what the future will look like and a vote on what the future should look like. These two observations are sometime in tension.

32

There are a lot of fintech companies which are a wrapper of varying thickness over an underlying provider which was willing to do a smart bizdev deal but wasn't capable of shipping their own modern mobile/web experience.

33

There are an awful lot of small software companies which didn't need much more than "capable of writing software" and "at least as much sales skill as a clerk at Nordstrom's" to get started. Many of them don't sound like particularly "good ideas."

34

A lot of founders choose markets based on the availability heuristic, which tends to overconcentrate brainsweat in predictable places. Some of them make for poor businesses specifically because they're interesting to young people without money.

35

It is not other people’s job, in most cases, to know consequential facts about you / your offering, and so if you want them to know and remember those things you will have to repeat them.

36

Businesses renegotiate contracts all the time, for many reasons, and the attempt to renegotiate a contract is both a) not a refusal to honor the original contract and b) not a thing you should, in general, be particularly offended by.

37

People generally overestimate how many folks worldwide are working on X specifically, for basically any usefully scoped X.

38

If you’re doing background due diligence on a founder, investor, executive, etc etc, there are far less effective widely used tactics than going to a podcast search engine and listening to them talk for an hour or two.

39

I think people pervasively underestimate podcasts, even with them being sort of the hot thing right now, because moderate engagement with a single podcast exceeds moderate engagement with a university course *very, very rapidly* for *both* sides of that transaction.

40

It’s interesting that YouTube is relatively good for recipes and Google is bad more or less because of the economics of content creation and discovery algorithms more than videos being a better way to teach cooking than text.

41

One of the ongoing searches in startupdom is for: * a new form of economic production * of something which is widely produced and consumed * where the alternative’s price is high enough to compete with producer’s BATNA * and production largely not yet monetized

42

Interestingly, people who are skeptical of the existence of 10X programmers are often extremely convinced of the existence of a 10X+ dynamic range in the productivity of firms.

43

Don’t use “SMB” in customer-facing copy. The people who you think are SMBs do not self-identify as it. The people who have an extremely dictionary correct version of what SMB means and believe their company qualifies are probably higher in your internal segmentation.

44

Speaking at a conference is a form of highly visible, legible social capital. Many people overestimate the economic leverage of it, which is IMHO relatively low for non-professional speakers.

45

A thing I think of basically every time I write something: we so, so, *so* underuse the capability that things written on the Internet are intrinsically executable.

46

I think people overestimate the degree of salary differential between tech employees in the same nation but different offices/working remotely/etc. There are strong process/internal fairness/social reasons to not adjust as aggressively as a cost of living calculator suggests.

47

The shape of the world rewards a kind of curiosity that is willing to look really, really closely at ten boring things to find one worthy of More Examination Than Could Possibly Be Worthwhile, and returns to this sort of curiosity are probably increasing over time.

48

I have discovered the only thing worse than managing a project spanning 3 disparate time zones. It is managing a project spanning 8 disparate time zones.

49

I think one could do a brisk business in a newsletter where you just cover the heck out of annual reports in a sector and then sell the back catalog for a lot more than newsletters typically go for.

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