September 17, 2022
The Magic Pill
I have a magic pill.
It makes you twice as fast.
Think about that...
You could code apps (or design logos or edit videos or create animations or review legal briefs) twice as fast.
That’s right. Whatever you do for your clients, you could do it twice as fast.
Like I said, it’s magic.
So here’s the question:
How much would you pay me for a year’s supply?
If you bill by the hour, your answer almost certainly has to be, “I would never buy that at any price!” because the magic pill would instantly cut your revenue in half.
Sure, you could increase your hourly rate to compensate. To break even, you’d have to double it.
(ASIDE: And that’s assuming the pill was free! If it cost $10k per year, you’d have to more than double your rate just to break even.)
But what will your prospects say to paying you 2x per hour more than you charge now? I’ll tell you. They’ll say, “$300 per hour for a copywriter?! I could probably get Stephen King for less than that!!!”
What would your response be? How would you justify a super-premium hourly rate? Would you tell them, “But but but... I’m super fast!” Do you think that would persuade them to hire you?
Okay, so maybe you don’t try to double your hourly rate. Maybe instead, you try to do more projects in your newfound free time. To break even (if the pill was free), you’d have to double the number of projects you do.
Could you do that? Are you currently turning down fully half of the projects that you’d like to work on because you don’t have the time to fit them in? Or would you have to somehow scramble to find clients to fill in all that newfound free time?
And now your brain is working overtime trying to prove me wrong or to say I’m stretching the metaphor, or to find loopholes in my argument.
Things like, “What if I increase both my hourly a little and the number of projects a little?!?” or “What if I just want to work half as much enjoy the additional free time?!?” or “Couldn’t I use my ’double speed time’ on admin work or marketing or sales?!?”
Just stop. Stop fighting it for a second. Open your mind to another possibility.
Think about this...
If you were working on even one single project for which you were NOT charging based on time, you’d instantly be able to give me a dollar amount for the magic pill.
For example, if you had just been paid $50k for a project that you think will take you about six months, you’d pay me $5k for the pill in a heartbeat. Million-dollar project slated to take 12 months? $100k for the pill is a no-brainer.
The moral of the story is this:
There is an unavoidable paradox at the intersection of hourly billing and increased productivity. As soon as you stop charging for your time, a specific value for doubling your productivity instantly appears.
It’s like magic.