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Patrick Mackenzie Law: Software Economics is More Than You Think Even Given Patrick Mackenzie Law

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Background


May 12, 2020 Austin Allred (Austen) tweeted:
“The most interesting thing is that Lambda School constantly stumbles upon all these small software development companies that no one has ever heard of, earning $ 10 million a year with a team of 25 people in some unknown city in Oklahoma.”

Patrick Mackenzie (@ patio11) replied:
“People in their right mind would not have imagined that they could name every company that legally earns $ 10 million a year, but for some reason they believe that every company that makes $ 10 million a year should be at the top of HN or TechCrunch at least least every week, which is fundamentally wrong. ”

Einar Wallset (@einarvollset) continued the dialogue:
“I can give the figures: I found more than 3,000 companies that have earned the most in the last 3 years, and looked at how many of them were mentioned in the“ mainstream technology websites ”(TrchCrunch, ReCode, HN) ~ 7%.”

Patrick Mackenzie (@ patio11) commented it like this:
“I am surprised that * so much *, but this number indicates the amount of dark matter in the universe of software.”

Mark McGranahan (@mmcgrana) summarized the discussion:
"Patrick Mackenzie's Law: Software Economics is bigger than you think, even considering Patrick Mackenzie's Law."

Story


A few years ago, I woke up in Sunriver, Oregon, and went to make coffee.
There was one of these bed and breakfast coffee trays in the house. Drip coffee maker. Pack of filters. Three packs of fried roasted coffee.

I chose one of the packs and threw the grain into the coffee maker. Turned it on. While throwing away the packaging, I noticed that it says “Royal Cup Coffee”.

Royal Cup is a family business in my hometown. I always thought it was a regional company. The fact that they processed, roasted, packed, sold, and delivered packs of coffee to this small house in the Northwest Pacific Ocean made me smile.

I googled them. He told his uncle what big company they had turned into. “You still do not know about all the companies that pre-cut food before delivering it to supermarkets and earn one hundred million dollars from this,” he said.

I am pleased to learn that quiet companies, which few people know about, cash large checks. Software has at times increased the number of such companies. Ten people working remotely can earn millions of dollars a year.

This does not need a huge warehouse.

My favorite example is ConvertKit. None of my friends have heard of them. By the end of 2019, they had earned $ 20 million a year. Their profits are growing at 30% from year to year. They have 48 employees.

Back to Patrick Mackenzie's law.

Austin Allred shared how arranging graduates of Lambda School (a school for teaching programming that students pay only after employment, approx. Per.)at work, he came across a software company from Oklahoma that he had never heard of, earning $ 10 million a year. Being engaged in something like manufacturing actuarial (related to insurance business, approx. Per.) Software for funeral services bureaus.

Not surprising. Of the more than 3,000 profitable companies analyzed over the past 3 years, only 7% were mentioned on TechCrunch, Recode, HN, or other mainstream technology websites.

7%

Most software development businesses operate in the shade. The best of them will not be known soon. Why do you need to get rid of 10 million dollars a year?

Patrick Mackenzie's Law: The software economy is bigger than you think, even considering Patrick Mackenzie's law.

Note: Patrick Mackenzie did not name this “law . " But his blog is just awesome.

Translation: Diana Sheremyeva



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