October 17, 2023

Alignment of Financial Incentives

There are lots of ways to package and sell your expertise.

Here are three that come up a lot:

The question for today is:

Which of these aligns the financial incentives of both buyer and seller, and which don’t?

Here’s the thing...

I don’t see financial incentives as a binary proposition (i.e., 100% aligned vs 100% misaligned).

I see it more as a spectrum:

But you could go even further toward the “100% aligned” end of the spectrum with models like:

Generally speaking, the more aligned you are with the client, the more risk you’re taking on (and the more reward you are entitled to).

If you’re not sure how to increase your income, one approach to consider would be taking on more risk.



P.S. This message was inspired by an EPIC thread in Ditcherville about the incentives, ethics, trust, profitability, and client satisfaction of the subscription software development model. It’s not too late to join the conversation »