Make the avocado dip: combine all ingredients in a small bowl. Season with salt and pepper to taste.
Serve potato cakes with avocado dip.
Make the potato cakes: Bring skillet to medium heat. Add a tablespoon of butter to the skillet.
Wrap the shredded potatoes in a kitchen towel and squeeze out as much liquid as possible. Then, combine all ingredients for potato cakes except for butter. Using 2 tablespoons at a time, add batter to skillet pressing down slightly to create cakes. Ensure cakes have at least an inch between them.
Once crisp on one side, about 2 minutes, flip and cook until golden and crisp. Repeat with remaining butter and potato cake mixture.