Sent by Jonathan Stark on May 31st, 2018
Yesterday, you learned that Paul Newman’s “Paul Newman” Rolex Daytona wristwatch sold to an anonymous buyer for more than $17 million dollars.
Why would someone pay that much money for a watch?
I think this selling price - and perhaps all selling prices - can be roughly expressed as a function of three considerations:
( BUYING POWER * DESIRE ) / AVAILABLE OPTIONS
In the case of Newman’s Newman, the buyer’s buying power (e.g., personal wealth, access to capital) was clearly very high. The buyer’s desire was evidently pretty high. And the number of available options was exactly 1.
Given this formula, we can posit three situations in which prices will stay relatively low:
If you want to increase your prices and still close deals, you have three needles you can try to move:
I’ll talk about each individually over the next few days.
P.S. Friends don’t let friends bill by the hour. Send my book to a colleague. Gift options available at checkout -> Hourly Billing Is Nuts