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Patrick McKenzie Profile picture
@patio11
Aug 12, 2019 • 8 tweets • 2 min read • Read on X
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In the category of "It's obvious that there are huge chunks of the economy which need one SFBA-startup quality workflow web app", I give you blend.com , which did that for mortgage origination at banks / credit unions / independent mortgage originators.
It's one of those magically mundane things. The business process here is extremely well-understood; the actual front end and backend processes in the US for mortgage origination are, and this is a technical term, a roaring pyroclastic tire fire.
I went through Blend's white labeled process while trying to get pre-approval to hopefully help a family member out, and literally sent a human two emails "Sorry only have 15 minutes so no possible way this is done today" "Erm ignore the last I think it's ready for you."
This is helped by me being preternaturally organized but sufficient data entry for a mortgage application being collectable in 15 minutes is pretty stunning to me, even with all of the documents ready to go.
If you want to read about mortgage origination and understand why "Hmm this seems like a frontend-heavy web application that one could reasonably deliver in a hackathon" is not coextensive with the actual solution, see
amazon.com/Digitally-Tran…

(Disclaimer: read critically.)
A non-obvious challenge here is that the most important consumer for a home mortgage is not obviously the person buying the house, it is the GSE or other financial system entity which is going to securitize the mortgage.

They have *much* more exacting requirements.
And, structurally, they will *never* talk to the person buying the house, the bank that person has the down payment at, the HR department certifying that that person is gainfully employed, etc etc, *but* they have a lot of very specific questions for *all* of these people.
And so the mortgage loan originator has to have all their paperwork together and pre-reviewed prior to sending it over to the securitizing party.

And if they don't? Well, then they're at substantial risk of either eating the home loan or carrying it on their books for 7+ years.

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More from @patio11

Patrick McKenzie Profile picture
Apr 6
A common model I have is that, like many people, I have some finite amount of consequential decisions I can make a day. This is sometimes a frustration for my wife, who wants me to spend a decision on e.g. “What color should we make…”
There are some classes of non-domestic decisions which still seem to take a slot, and where there are theoretically wrong answers, but where any plausible answer is fine.

I love having LLMs available for this.
Example from earlier: “Should we use X medication for symptom management of a minor recurring condition, or should we escalate to a medial professional for a recommendation?”

I probably could have Googled to kick off a research process, but that’s -1 for the day.
Read 6 tweets
Patrick McKenzie Profile picture
Mar 25
This is broadly important for governmental service design, tech industry UX design, and just understanding the world we live in.

There is an intense aversion to this fact in many quarters, and *it is a fact.* One of best reasons to work retail / a CS job is you'll learn it hard.
Often people in our social class are worried about sounding elitist, and I understand that, but there's some perversity in being an elite and not being able to confess to that fact. The PMC is an elite class in the US political system.
Class membership is defined by being able to pass brutal intelligence and diligence filters. It is not simply "tests well", but you basically have to eat the PSAT for breakfast.

We all had classmates who did not eat the PSAT for breakfast.
Read 10 tweets
Patrick McKenzie Profile picture
Mar 20
LLMs keep winning anecdote.

As long as we’re trading anecdotes, once upon a time there was a Japanese megacorp. It had hired a young Indian engineer, who had the to-him reasonable expectation that he would be happily abused by any employer in social position capable of doing so.
Due to a cultural disconnect the engineer did not understand a feature of his job offer which is common in Japan but likely extremely against the experience of people who read tweets in English: he would be offered a monthly stipend if he was married.
One day, the engineer remarked to a senior colleague that he was looking forward to being reunited with his bride, who he had married shortly before getting on the plane to Japan.

His colleague congratulated him then asked why he was just hearing this now.
Read 12 tweets
Patrick McKenzie Profile picture
Mar 9
There are many, many opportunities up for grabs in ~15 years for people who are, today, making the decision "I could be a normal X or the world's most LLM-pilled [not-precisely-X]."
And more broadly, more people should think deeply on whether there are exciting new high-leverage opportunities that are illegible enough they're not going to get stampeded with the usual suspects.

("But everyone knows about AI." Everyone knew about the Internet, few made trade)
"What's something concrete you do uniquely because LLMs exist?"

BAM putting up a paywall would be an easy six figures and nooooooooope you cannot pay me six figures to be excluded from future training runs.
Read 4 tweets
Patrick McKenzie Profile picture
Feb 24
Stripe’s annual letter is out:



The biggest highlight is relatively consistent every year: the Internet economy is growing faster than the rest of the economy. This has compounded for enough years that it is essentially _the_ growth engine in places.stripe.com/annual-updates…
AI is hot right now (have you heard?) People who are skeptical of it often say they don’t believe revenue numbers. Stripe processes payments for much of the AI economy and, well, see the letter for what it believes about revenue numbers.
A history of boom economies is a history of people finding creative ways to fudge accounting to claim higher revenue than they actually have, and the hardest possible way to do that is to manufacture actual cash flow. Stripe sees the cash.
Read 14 tweets
Patrick McKenzie Profile picture
Jan 29
This week on Complex Systems I'm joined by... Claude Code?

I think people who don't program professionally extensively underrate the discontinuous advance in productivity engineering is going through. So we step through real eng work, basically verbatim, with me commenting.
The specific business problem presented is a real one which a real business (mine) actually lost money over: transient payment failures in collecting annual memberships for Bits about Money. Analogous problems bite almost every Fortune 500 company, to tune of billions.
They largely go unsolved because the problems are illegible to the parts of orgs which are not payment experts. For the parts of orgs which are, like Business Operations or Payments teams, this is not salient enough to draw executive attention to get engineering hours.
Read 10 tweets

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