Patrick McKenzie: The Software Entrepreneur Who Went From $100/Hour to $30,000/Week

What would you do if your side project, built in your spare time, started earning more while you slept than your grueling 19-hour workdays? For Patrick McKenzie, the answer was clear: quit and never look back.

McKenzie, better known online as patio11, has become one of the most influential voices in software entrepreneurship. His journey from exhausted Japanese salaryman to successful entrepreneur and Stripe executive offers a masterclass in building sustainable software businesses. But his most famous piece of advice can be distilled into just two words: charge more.

The Breaking Point: When a Side Project Changed Everything

In the mid-2000s, Patrick McKenzie was working at a Japanese organization, putting in brutal hours. He would check into hotels at 2 AM because the trains had stopped running, only to wake up at 7 AM and do it all over again. The pay was minimal. The burnout was real.

During this period, he built Bingo Card Creator, software that automated the creation of custom printable bingo cards for teachers. It sounds almost trivially simple, and that was precisely the point.

The turning point came when McKenzie realized something that would change his life: his five hours of sleep were generating more income from his software than his 19-hour workdays at his job. In April 2010, he quit.

The Philosophy That Built an Empire

McKenzie did not build a billion-dollar company. He built something arguably more valuable: a sustainable, profitable business that gave him freedom and time. His approach challenges the conventional startup wisdom of growth at all costs.

Work Smart, Not Hard

One of McKenzie's most counterintuitive insights is his rejection of the hours-to-results correlation that dominates entrepreneurial culture. He works only 20-25 hours per week, achieving more through automation, outsourcing, and strategic delegation than most people accomplish in double the time.

This is not about being lazy. It is about recognizing that effort without leverage is just expensive exercise.

The Intersection of Skills

McKenzie identifies a specific sweet spot for entrepreneurs: the intersection of marketing and engineering. As he puts it, he is not the best marketer or the best engineer in the world, but he is a better engineer than almost all marketers and a better marketer than almost all engineers.

This combination, he notes, "prints money in a very intellectually interesting way."

Charge More: The Two Words That Changed Software Pricing

If you spend any time in software business communities, you will encounter McKenzie's most famous advice. It sounds almost too simple, but the reasoning behind it is sophisticated.

Why Developers Undercharge

McKenzie explains that most developers dramatically undervalue their work because they come from modest backgrounds or because they can see all the flaws and compromises in their code. They judge their software against an imaginary perfect version rather than against what actually exists in the market.

But here is the reality: the rest of the world does not want to program your program. If customers had the skills or desire to build what you built, they would be programmers. But they are not. They are teachers, real-estate brokers, heart surgeons, and small business owners. To them, everything inside the computer is black magic, and you are the expert they rely on.

The Numbers Speak

McKenzie's own journey illustrates the power of this principle. He went from charging $100 per hour for consulting to earning $30,000 per week. His rate progression was methodical:

• First consulting gigs: $100/hour
• Mid-career: $8,000/week
• Experimented with higher rates: $12,000/week
• Highest accepted proposal: $50,000/week

The key insight is that each rate increase did not just earn more money. It changed the type of clients he worked with, the sophistication of the problems he solved, and the respect he received in those engagements.

Price Out Problem Customers

One underappreciated benefit of charging more is customer quality. As McKenzie explains, the best reason to charge more is to make more money, but the next best reason is that higher prices "price out pathological customers."

Anyone who has dealt with demanding, difficult customers who paid very little knows this pain. Higher price points attract customers who value their time, understand business economics, and treat vendors as partners rather than servants.

Beyond Software: Lessons for Every Business

McKenzie's principles extend far beyond software. His framework applies to consultants, freelancers, service providers, and anyone selling expertise.

Position Yourself as a Problem Solver

McKenzie advises against positioning yourself as a mere technologist or freelancer. Instead, present yourself as someone who solves business problems. This subtle shift in framing transforms how clients perceive your value.

A freelancer executes tasks. A consultant solves problems. The difference in how these two roles are compensated reflects the difference in perceived value.

Target High-Margin Businesses

Another strategic insight: target businesses with high margins. McKenzie suggests looking at lucrative industries like healthcare, financial services, and professional services (accountants, lawyers). A lawyer billing $600 per hour is far less likely to balk at your $500 per hour rate than a small business owner operating on razor-thin margins.

Additionally, target businesses where online presence is core to their operations, not just a small component. For these companies, improvements you make translate directly to revenue.

The 80/20 Approach to Learning

McKenzie advocates an 80/20 approach to skill development: 80% leveraging established knowledge and 20% experimentation and learning. This prevents the analysis paralysis that traps many aspiring entrepreneurs while still allowing for growth and innovation.

Building Something That Matters

After nearly a decade of running his own businesses, McKenzie joined Stripe in 2017 to work on Stripe Atlas, a product designed to help entrepreneurs start internet businesses more easily.

His reasoning was characteristically strategic: "The activation energy required to start a business remains higher than necessary." By reducing that friction, he could help more people become entrepreneurs, multiplying his impact far beyond what he could achieve alone.

McKenzie spent six years at Stripe before transitioning to an advisory role. His proudest professional accomplishment, however, came outside of Stripe: running VaccinateCA in 2021, which provided the United States vaccine location infrastructure during the COVID-19 rollout.

Current Work and Continued Influence

Today, McKenzie writes Bits about Money, a newsletter exploring the intersection of technology and finance. He also hosts Complex Systems, a podcast examining how modern institutions and infrastructure actually work.

His influence continues through these channels, reaching a new generation of entrepreneurs who benefit from his hard-won insights about pricing, positioning, and building sustainable businesses.

Key Takeaways for Entrepreneurs

Patrick McKenzie's journey offers several actionable lessons:

Start small, but start. Bingo Card Creator was not a revolutionary product. It solved a specific problem for a specific audience. That was enough.

Charge what you are worth. Your customers cannot hold the fact that your product was built quickly against you if they do not know how long it took. Price based on value, not effort.

Leverage your unique combination. Most people have unusual skill combinations. Finding the intersection where yours creates outsized value is the key to standing out.

Build for sustainability. McKenzie never raised venture capital for his early businesses. He built profitable companies that gave him freedom, which he valued more than theoretical unicorn status.

Under-promise and over-deliver. Set clear expectations with measurable success metrics. Then exceed them.

Persistence compounds. As McKenzie notes, "You work on something for nine years, and you eventually get pretty decent at it." The power of consistent effort over time cannot be overstated.

Keep Your Financial House in Order

As you build your business, whether you are starting a software company or launching a consulting practice, maintaining clear financial records is essential for making informed decisions. Knowing your true costs, understanding your profit margins, and tracking where your money goes enables the kind of strategic pricing McKenzie advocates.

Beancount.io provides plain-text accounting that gives you complete transparency and control over your financial data. No black boxes, no vendor lock-in, just clear visibility into your business finances. Get started for free and build the financial foundation your business deserves.