July 8, 2024

Price Determines Cost

All else being equal...

If Alice paid me $150,000 for a talk, I’d probably spend 3 months and $15,000 preparing for it.

If Bob paid me $150 for a talk, I’d probably spend 3 minutes and $0 preparing for it.

Why the difference in my investment of time and money?

Because price DETERMINES cost.

Price comes first.

Cost comes after.

Cost doesn’t determine price.

Don’t believe me?

Here, I’ll prove it:

If I told Bob that I was going to spend 3 months and $15,000 preparing for his talk, would that convince him to increase his offer from $150 to $150,000?

Heck no!

Bob doesn’t care what my costs are.

He only cares about the expected outcome and what that outcome is worth to him.

No amount of time or money I spend is going to change that.

Yours,

—J

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