Complex Systems with Patrick McKenzie (patio11)

Patrick McKenzie (patio11) reads an essay about the business of check cashing, a misunderstood industry. He explains why cashing a check is actually a "new credit extension" where the bank bets on both the writer and the payee, and why profit-maximizing institutions often decline to bank individuals who represent even a "material risk" of a single bounced check. From the manual "rituals" of endorsement to the way fintechs like Ingo Money and Cash App use persistent identity to narrow the risk envelope, Patrick examines the technical and social reasons why some people pay to access their own wages, others don’t, and whether we can do anything about that.
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Full transcript available here: www.complexsystemspodcast.com/check-cashing/
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Presenting Sponsor: Mercury
Complex Systems is presented by Mercury—radically better banking for founders. Mercury offers the best wire experience anywhere: fast, reliable, and free for domestic U.S. wires, so you can stay focused on growing your business. Apply online in minutes at mercury.com.
Mercury is a fintech company, not an FDIC-insured bank. Banking services provided through Choice Financial Group and Column N.A., Members FDIC.
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Links:
Bits about Money: www.bitsaboutmoney.com/archive/the-business-of-check-cashing/ 
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Timestamps:
(0:00) Introduction
(2:15) Check cashing
(2:57) An oversimplified explanation of check presentment
(5:48) Depositing a check requires an extension of credit
(10:47) How cashing a check works if you're not banked
(12:16) A brief aside about endorsement
(14:39) Many people hate check cashing and everything about it
(17:06) The internal logic behind that pricing grid
(19:59) Sponsor: Mercury
(21:36) The internal logic behind that pricing grid (continued)
(23:10) Persistent  identities as a KYC possibility
(25:12) A brief discussion about class distinctions in America
(30:45) Check cashing on phones
(34:28) Outro

Patrick McKenzie (patio11) walks through a coding session with Claude Code to demonstrate what the fuss is about. The business problem: recovering failed subscription payments that required coordinating APIs across Stripe, Ghost, and email providers, and the surprising experience of watching Claude read documentation, resolve dependency conflicts, and make sensible security choices. The episode offers a pedantic level of detail on why the sharpest technologists use words like “fundamentally transformed” to describe the impact of LLMs on coding.
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Full annotated transcript available here: www.complexsystemspodcast.com/claude-code/
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Sponsor: Framer
Building and maintaining marketing websites shouldn’t slow down your engineers. Framer gives design and marketing teams an all-in-one platform to ship landing pages, microsites, or full site redesigns instantly—without engineering bottlenecks. Get 30% off Framer Pro at framer.com/complexsystems.
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Links:
Odd Lots episode with Noah Brier: https://open.spotify.com/episode/2fd3hvYmplEnQzxYZaxPg3?si=ylFxFe3HQ4uivH29uqC_rA
Bits about Money: https://www.bitsaboutmoney.com/ 
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Timestamps:
(00:00) Intro
(02:21) All engineering work happens in a business context
(03:47) Payment failures briefly taxonomized
(08:25) Now follows a conversation with Claude Code
(20:37) Sponsor: Framer
(21:53) Conversation with Claude Code (continued)
(39:07) My final thoughts on this
(41:15) Wrap

Patrick McKenzie (patio11) is joined by Ruxandra Teslo to discuss why drug development keeps getting more expensive despite revolutionary new treatment modalities from GLP-1 agonists to gene therapies. They discuss Eroom’s Law (Moore’s Law in reverse) and Ruxandra's Common Technical Document Project, which aims to build the "Stack Overflow of clinical development" by making regulatory submissions publicly accessible. This will fill a present hole in the education of researchers, lower barriers for small biotechs, and accelerate drug discovery.
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Full transcript available here: https://www.complexsystemspodcast.com/ruxandra-teslo/
 
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Sponsor: Framer
Building and maintaining marketing websites shouldn’t slow down your engineers. Framer gives design and marketing teams an all-in-one platform to ship landing pages, microsites, or full site redesigns instantly—without engineering bottlenecks. Get 30% off Framer Pro at framer.com/complexsystems.
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Links:
Eroom's Law (original paper): https://www.nature.com/articles/nrd3681
Ruxandra’s writing: https://www.writingruxandrabio.com/
Ross Rheingans-Yoo on drug development: https://open.spotify.com/episode/4GiO0KYqxJNCIdltCyhN6m?si=2znQniZ3RXKuX8keNcwWtw
Ben Reinhardt on science and development: https://open.spotify.com/episode/0GHegWgLSubYxvATmbWhQu?si=pVCJVITYTqaq65BiST2d0Q
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Timestamps:
(00:00) Intro
(00:56) Challenges in biopharma productivity
(03:12) Understanding clinical development
(04:59) The role of basic science in drug development
(07:39) Clinical development process explained
(09:25) Issues in clinical trials and development
(19:33) The role of information in clinical trials
(20:30) Sponsor: Framer
(21:42) The role of information in clinical trials (continued)
(32:55) Proposed solutions for clinical development
(40:31) Consultant opinions and regulatory documents
(41:28) Streamlining the regulatory process
(43:06) Understanding FDA interactions
(45:35) Building a public library of regulatory documents
(48:18) Encouraging novel approaches in biotech
(50:06) Addressing risk aversion in the industry
(51:52) Analyzing FDA consistency and reviewer heterogeneity
(01:02:15) The importance of courage in professional growth
(01:06:39) Supporting young professionals and catalyzing change
(01:16:14) Wrap

Patrick McKenzie (patio11) sits down with Intercom co-founder Des Traynor to examine customer support through the lens of Conway's Law, Goodhart's Law, and several decades of accumulated organizational scar tissue. They discuss how AI agents are democratizing white-glove service, why modern LLMs have retrained user expectations around “chatbots” very quickly, and the surprisingly liberating effect of talking to something that will never judge you for missing a loan payment.
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Full transcript available here: www.complexsystemspodcast.com/des-traynor/
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Sponsor: MongoDB

Tired of database limitations and architectures that break when you scale? MongoDB is the database built for developers, by developers: ACID compliant, Enterprise-ready, and fluent in AI. Start building faster at mongodb.com/build
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Timestamps:
(00:00) Intro
(00:29) Intercom and its evolution
(00:51) Challenges in customer service systems
(02:54) Scaling customer support in startups
(04:53) Organizational inefficiencies and customer experience
(06:53) Metrics and their impact on customer support
(12:40) Human capital issues in customer support
(15:53) AI's role in customer support
(17:01) Future of customer support roles
(20:09) Sponsor: MongoDB
(20:53) Future of customer support roles (continued)
(26:19) AI and customer interaction
(26:55) The myth of artisanal customer support
(27:45) Fin Guidance: Evolution and user behavior
(29:10) Fin's impact on customer support efficiency
(33:30) Expanding Fin's capabilities beyond support
(42:50) AI in government and other sectors
(49:20) The future of AI connectivity and integration

Patrick McKenzie (@patio11) reads his latest Bits about Money essay explaining why he “loves Regulation E more than any rational person does.” He explains how Reg E created a privately-administered legal system processing over 100 million complaints annually—dwarfing the formal U.S. court system—and why banks are now trying to avoid these obligations for Zelle's nine figure fraud problem.
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Full transcript available here: www.complexsystemspodcast.com/the-magic-spell-reg-e/
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Sponsors: MongoDB & Framer
Tired of database limitations and architectures that break when you scale? MongoDB is the database built for developers, by developers: ACID compliant, Enterprise-ready, and fluent in AI. Start building faster at mongodb.com/build
Building and maintaining marketing websites shouldn’t slow down your engineers. Framer gives design and marketing teams an all-in-one platform to ship landing pages, microsites, or full site redesigns instantly—without engineering bottlenecks. Get 30% off Framer Pro at framer.com/complexsystems.
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Links:
Bits about Money,  One Regulation E, Two Very Different Regimes
Full version of "Doesn't Matter, That's Reg E": https://suno.com/song/173bbd67-92f7-4868-930f-efeca4b373c0
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Timestamps:
(00:00) Introduction
(02:46) These newfangled computers might steal our money
(12:45) The contractual liability waterfall in card payments
(20:35) Sponsors: MongoDB and Framer
(22:23) The contractual liability waterfall in card payments (continued)
(23:47) Enter Zelle
(25:46) Zelle is an enormous fraud target
(32:23) Banks may attempt to extend the Zelle precedent
(35:02) Reg E encompasses almost every technology which exists and many which don't yet