
Never say “no,” but rarely say “yes.” - SRSimko
http://blog.asmartbear.com/how-to-say-yes.html
======
luckyisgood
I remember the first time I discovered this principle. There was a web project
I really didn't feel like doing. A big demanding client wanted a project done
in a very short amount of time. I quoted at 3x our price, and it was
immediately accepted by the client. The project was successful and we did a
great job.

It made me realize one important, no, crucial! thing: If you're mad at your
client for any reason, __it only means you're not charging him enough __. It's
very hard to be mad at a client who's paying you a ridiculous amount of money
for something you're fabulous at.

~~~
ryduh
I can't agree with this quote enough:

"If you're mad at your client for any reason, it only means you're not
charging him enough."

Tripling my cost per hour made working with one of my clients much more
palatable. Please consider raising your cost if you're not happy with your
clients.

~~~
meric
How do you triple your cost with an existing client without sounding too
arrogant / asshole ? (I really want to know.)

~~~
ryduh
I held a meeting with my client and I told him that I had enough work at the
new rate to fill my work week (which was true) and that I didn't want to
create a situation where I prioritize some client work over other client word
because of the different levels of pay. The client wanted to keep the same
rate and quality of service that I had been providing so he agreed. He told me
that he obviously wasn't happy with it but that I was worth it. I went into
the meeting with two options that I would be happy with: not continuing work
for that client, or working at a much higher rate.

------
patio11
Something which is easy to say but non-trivial to execute on (I _know_ I have
to get better at this and it has quite recently cost me thousands of dollars):
do not negotiate against yourself. You'd be surprised -- I've been surprised
-- at how high clients can go when they're sufficiently motivated to solve a
problem. Their conception of money is totally different than your's or mine.
Don't sell yourself short by e.g. assuming that there is a "fair" price which
you can't go above. (Mutual agreement makes any price fair.)

~~~
jamesbritt
It helps to think in terms of selling value instead of hours, though that can
be a tricky thing to calculate. But if nothing else you can assume that if
some client is willing to pay $insane for your time then they have decided
it's at least of that value to them.

Of course, if you have some knowledge that allows you to guesstimate this
value then so much the better.

------
boredguy8
One note: if you're charging enough to cover a hire, make sure you have
someone in mind willing to take the position. Otherwise you'll easily end up
hiring someone you don't really want in order to cover a commitment you made.

------
btilly
One piece of advice that I've seen people learn painfully.

If you're going to name a high price to do what you don't want, make sure that
the price is truly high enough for the grief you'll suffer. Don't just name
something that is high enough that you think they won't take it, because they
just might.

~~~
abalashov
This. This a thousand times. If you could travel back in time about 4-5 years
ago and drill that into my amateur starting-out self instead of leaving me to
learn it the hard way, that'd be great. Thanks. I'll pay you generously out of
the net increase in proceeds arising from adoption of the advice.

------
alextp
This is a great strategy. It also trivially extends to show that there is no
such thing as "too many customers, need to hire out", as you can always
increase the price.

The one problem is that this doesn't transfer easily to things that are likely
to be undoable no matter the resources (i.e., "I want 100% uptime on my blog",
or "the project needs to get done in a month, and a saw a guy on the internet
claiming he could do it in a weekend", etc).

------
pg
Also the motto of unscrupulous VCs.

~~~
param
Let me know if you disagree - but I think the comparison to unscrupulous VCs
is limited to the title of the post(which, IMHO, is mis-titled). In reality,
the post is about something else. I quote: " I never say “no.” But I carefully
qualify “yes.”"

A comparison would really be a VC saying - I will invest in your company if
you give me 80% equity. Or Yes, I will invest if you hit 30% growth in profit
for the next one month. That, to me, may be unfair in some cases, but doesn't
sound unscrupulous.

~~~
bdclimber14
I think pg meant the literal sense. Unscrupulous VCs will waste an
entrepreneur's time by never saying no just in case the situation changes, but
statistically hardly ever give a definitive yes.

------
mcantor
Is there any way to apply this to a full-time salaried job where you can't
change your "price", but are still asked to evaluate commitments of various
sizes over the course of your position?

~~~
crpatino
As a salaried employee, you may be paid money to perform the duties in your
position; but you still gain internal social capital by doing above average
work (or go into debt by failing to perform at the bare minimum standards).

It would be hard to get it right, though. First, you not always have the
freedom to pick which projects get assigned to. More importantly, there is no
quid-pro-quo in the social dimension, so I cannot really see how to "demand
more recognition" for completing an "unpleasant but valuable" task.

------
Travis
The graph of the two different revenue streams is interesting (taking the job
for a lower cost gets you more jobs, but higher cost gets you more per job).
At some point, I bet you can find an equilibrium where gross revenue is the
same with the higher cost jobs.

In addition, if you price yourself so that your schedule isn't booked, you'll
be more open to new clients, which gives you a better opportunity to find even
higher priced clients.

Seems like as a freelancer, at least, your best long term strategy is to price
yourself out of a decent amount of work.

------
abalashov
On a related note, though orthogonal note, never assume anything overly
logical about the customer's math. A lot of pricing issues come down to
something psychological or presentation-related, rather than objective and
quantitative.

I long ago noticed--as many consultants know--that there is only so high that
hourly rates can go for an individual or a very small company, and it's not
really that high. Beyond that, people start googling their eyes, making
incredulous expressions and hyperventilating. They have a certain metric in
their head of how much a glorified typist like yourself should be making, and
if you exceed that metric, they start comparing your contract rate to (1)
their own salary (which is obviously fallacious, since they are not
contractors) or (2) other contract rates they've been exposed to lately, like
when they tried to offshore the project they are now trying to get you to
rescue after it flamed out spectacularly
(<http://en.wikipedia.org/wiki/Recency_effect#Recency_effect>), and (3) the
billing rates of their attorneys and accountants.

"Obviously," in their mind, you can't be charging as much as attorneys and
accountants. You're in a different sociological category from people whose
very profession has always been defined by high costs and high-rolling swagger
in popular imagination; you're just some kind of computer guy. And if you're
charging 8x what the folks in Bangladesh quoted for a team of 10, are you
really worth it? And $250/hr? Good heavens, that's almost 8x the ~$34/hr I
make on my $70k salary as the lead IT guy! Who do you think you are?

The point is, once the impressive-sounding hourly rate has grabbed people by
their egos, you aren't going to be able to re-center them and capture pricing
based on value. You've lost to the dark side of dick size contests and pissing
matches, and as often as not, you're up against some relatively pedestrian
actor who is determined to put you in your place, not a key fiduciary
stakeholder and/or decision-maker. There's really no way to recover from that
nosedive.

So, in practical terms, you can't really get beyond $100-$200/hr rates in the
small to medium contract IT and software development services sector without
crossing a number of irrational psychological barriers. Obviously, this
doesn't apply to the enterprise segment, and doesn't apply to any company that
has successfully fostered the expectation of either elite expertise or high
overhead--ideally both. If you're Accenture or IBM, you definitely don't have
to worry about this, but if you're part of a well-known ninja specialist
squad, you probably don't either.

Notwithstanding outliers, I was very surprised to discover that quoting a flat
price has a good way of keeping the customer centered on the value they stand
to gain and away from judging your swashbuckling billing. There are some
ostensible reasons for this: it soothes the feelings of customers burned by
open-ended enterprise-style darken-the-skies-with-people hourly billing, and
demonstratively puts the risk the consultant. But it also gives them a fairly
opaque number to work with instead of sizing up whether you're "the kind of
person that ought to be charging that." Most importantly, and most relevantly,
it completely disrupts their mathematical circuitry; it is amazing how many
times I've run into customers that get in a tizzy when you quote them "10
hours at $250/hr" but happily sign on the dotted line when you tell them it's
going to be $2500 flat and be done in two days. Even weirder, they'll still
sign even if you _tell_ them it's "about 10 hours of implementation time." I
don't think it's because they can't do division in their head; I think when
the conversation starts out with a fixed-price premise, that computation just
gets routed to a different psycho-social/emotional bucket. This is dissonant
to the basic governing intuition of the hacker brain, but that's often how it
goes.

So, I don't quote projects in hours anymore. I usually provide some idea of
estimated implementation time so they can do the division themselves, being
ethically reluctant about a price-support scheme that is reliant solely on
opacity of cost basis and/or what the implementation actually involves, but it
doesn't seem to matter. The results are undeniably and resoundingly positive.
Something about human nature... I don't know what it is.

All this to say: If you're feeling shaky on quoting something "insane" in
hourly terms, quote it as a fixed-price project. You might be surprised by the
disparity in outcomes.

~~~
TamDenholm
I've also found this and try to whenever possible to encourage the client to
take a fixed price quote over an hourly quote. I also find it easier cuz then
i dont have to track my hours, which is a small irritation.

I find clients have a sense of safety that what i quoted is what it'll cost,
rather than hourly which can be open ended.

------
espinchi
It reminds me of the saying "Everyone has their price".

I do like this principle, and I already identified several occasions in the
past where we said "No" when we should've said "Yes: the price will be X",
being X an amount that would certainly have been bigger than we initially
thought.

------
RBr
Similarly, one of the most important words I was taught never to use was
"guarantee".

------
jodrellblank
Does this imply a heuristic such as:

"To earn more money, I should look for jobs that I can do, but don't like
doing so much that I will charge a lot more than my normal rate, then quote
for a lot of those jobs"?

~~~
reginaldo
I think it's more like:

"For every[1] job J, there is a pay P such that if you're getting paid more
than P, you'll more than like doing J."

[1] Actually, we have to exclude a lot of jobs from the set of possible jobs.
There are many things I wouldn't do on a matter of personal principles, like
designing bombs, for instance.

Edit: not that I agree with the thing, it is just my interpretation of it.

~~~
meric
Would you design a (small) bomb for 2 billion dollars?

~~~
Daniel14
Yes. But I'd donate half of it to starving African children or other people
(more than could be killed with my bomb) in desperate need. Besides, a person
who designs a weapon isn't really responsible for what happens when someone
uses it to kill people.

~~~
jgamman
That last sentence sounds ethically dubious. A knife has many uses so is
arguably neutral but a bomb? Enabling other people to do harm implies
culpability.

~~~
jodrellblank
_Enabling other people to do harm implies culpability._

Guess I'd better not vote and put someone in power anymore then, or pay taxes
which may go on military spending.

------
xbryanx
I've had this very same strategy for a while, but never really noticed I was
doing it. Thanks for putting a name to something I should reinforce in my
practice!

------
jlees
Love the summary. A qualified yes such that if they agree, you're happy, and
if they decline, you're still happy.

------
suarezkop
Always been a fan of long term strategy over short term benefits. Completely
agree with your views.

