Okay, we're recording guys. Everyone, welcome to Episode three. I'm here with Anthony. Natalie and see Yes, Hello. Right on. So we're just getting into it. Today's episode is sponsored by Scout. See Will tell a little bit more about them later, but I want to just kind of like bringing attention to some amazing things that are happening in the world of technology. One of them is something called Amazon Prime Air. You guys heard about this?

I heard about it from you guys talking about it. It's just the drone thing. Yeah. Yeah, I've heard jokes on the Internet about people shooting, shooting them down to

get free diapers and s So what it is basically is like these drones that come out of, like, the Amazon prime like warehouse. They're like these helicopter things where you can order something and supposedly have it delivered within, like, 30 minutes or something like off of Amazon prime. So, like, these helicopters were flying through the air and, like, landing and and your front door, I guess there's a lot of parts I don't understand about, Like, how did they navigate around trees? And, like, I I don't know, it seems like

it's not gonna work. Do you think they take photos inside your house and start building analytics about this stuff that you like to buy?

I'm scared that flies into your house. And I think that should be something that you need to worry about. True.

If you're sick in bed, can you late open the door? You know,

I was wondering. Know about like how a a mobile app would work with this. Like, I wonder if they'll design a mobile app where you could be, like, just in the middle of a field, like a park or something, and just, like, order something. And that goes directly to your location, like that would be in Saint like what if your outdoor concert and you order some beer? That's what. Or or Morita? Oh, you think what was what eBay now does instead of a drone, it's by messenger.

Oh, eso with eBay now, like you could order like a pizza or whatever you order. And they will follow you until they catch up with, you know,

like, Is that just a person, though? Yeah, it's like a bike messenger. Whoa. You guys always got to use the seamless Web thing was, it was in New York that you guys use that you guys always talk about how awesome it wasin the days when it gets cold. You wish they had it in Austin.

Well, the coolest thing about that was like not having to think about what you want to order you to say. Like ship me the usual,

right? Oh, I've done that with Jimmy John's. But

but yeah, having something delivered by drone I mean that it seems so far fast, right? But, you know, it's pretty soon like that's how things were gonna be delivered. It's crazy.

That's weird. Uh, so that's Amazon Prime Air. I just wanted to bring it up because it's it's kind of crazy. Another thing that I've noticed that is, you know, maybe worth talking about is, uh, kind of a u IE trend that I've seen lately in a couple of APS. One of those ups is Snapchat. Um, Snapchat is like this. I don't know. I don't know if I really get what the draw is. It's obviously very popular, but basically, you take a picture and send it to your friend,

and they get it but they only see it for like, a couple of seconds, and then it disappears. But I mean, really, what it does is not what I'm talking about. What I'm talking about is that you guys like it's, like, cartoony, and it's like playful. Yeah, it's very playful and it's like a ghost is like the logo. So we're so weird is weird

One plane, Uh, I think it's we take for granted are Sensibility. Sometimes, you know, we look att, You know, we like Whereas designers, we like clean lines. Very, very systematic stuff. But, you know, what is it? What is a 12 year old like?

Yeah or yeah. I mean, hope. Hopefully. Well, the other thing I wanted to contract compare it with not contrasted with the compare it with Is Theo you I with ways. I just don't want this at the other day ways, which is like a map app. And he's like, That's reports for traffic and it, you know, works like Google Maps. Does it takes to where you need to go, but the u I with that is also very cartoony. Uh, I mean, it looks nice.

It doesn't look bad, but it looks like kind of like a kid's game. Uh, I would expect like a kid to be playing like a video game When I see the u I. And I thought that it was a ghost to the logo, but, uh, it's not. It's actually like a speech balloon that's like on wheels pleases

the app where you words. It's also community supported. So if if multiple people say there is a cop that this one area like you'll get alerted when you're driving Is it the same product? Right? I downloaded. I've never used it. It kind of maybe like what Rick is saying. Like, it kind of feels more like a garment. Uh, I unrefined a little bit, you know, really Large radius

is and Hughes thick strokes on everything. You know, like I don't know, I just I just thought it was kind of an interesting thing toe point out because, you know, these are both hugely successful APS. I mean, you heard you know, that Facebook tried to acquire Snapchat and they said, No, it I don't know, I guess because they had so many users or whatever, But obviously it's working. It's just not the you guys just sort of like it's a little different. It sort of seems like Kenneth. I know. I would like to see the user testing behind that. Yeah,

well, you know, it's like the other day we were talking a little bit about this. Like, you know, when you're designing a product, you have to the 1st 1 of the first things you do to sell the client on a vision for what it's gonna look like. You know what I think? A lot of times, the designers, we start. It's so easy to start designing things that we like. Yeah, you know, And, you know, obviously there's user testing behind these products that,

you know, you know? You know, Cem user data there that helps people designed something. Sometimes a most successful designed for a product may not be what

we actually thinks is awesome, right? Yeah. Yeah, That's kind of one of the things I wanted to bring up about it. Just like, hey, if I don't know if I saw that, I'd be like, I don't know if that's professional enough or something, you know? But obviously it's working, you know? So it's just kind of an interesting thing. Wait a minute. And, uh,

Natalie, you were talking about a new thing called ibeacon. I've never heard of that. What is that? Yeah, it's pretty awesome. I was just reading about it the other day. What it does is it picks up the Bluetooth low energy from your phone and so say when you walk by, like, a sign of some sort and it's a concert, what it does is like you take out your phone. All of a sudden, you get this message issues like, hey, buy tickets now or, you know, there's a band playing around you or what not seem pretty interesting.

It's kind of like minority report right where you know, someone's walking through the

target. You get a coupon.

Yeah, working through a public mall That was a little bit about you. What you might like what story you might want to go to what a deal is in

gaps like we have genes your size in stock right now, and it's on sale. And there was an article that said something about how it would potentially change interaction design, or was that more about just like how? Like how you interact with your environment. Yeah, yeah, yeah. Crazy.

So wonder if you can, like, just do like a gesture and mid air, Like a thumbs down when it was presented with Yeah, it starts

at just go like that. Wave your finger. No, no, no, no. Good night. Um, cool. So I didn't want to talk about a minute about our sponsor real quick. Uh, this episode is sponsored by scouts. See, And we love Scout. See, a fun size scout, see is ah,

websites Kelsey dot com. You can go to and you can just browse like a huge list to find the right creative talent for your project. There's tons of designers there. Designers. We're ready to work on websites, mobile APS illustrations, anything designed, rated related, really. And then scouts. He does something different. Besides, just like, you know, having a list of designers to look at scout see, actually takes it to be on that point with the project management system, and they'll help you navigate the whole project all the way through to the end.

I've actually used this. It's really cool because, you know, if you think about your freelance hearing, you're trying to find clients. The hardest part is finding someone that's a good match. What these guys will do is they actually actually pre vet and facilitate the process of matching people up.

That's awesome. I mean, it's it's hard to find, you know, I had a lot of clients and as a freelance Web designer that I worked with And, you know, I think one of the questions that had was like, Well, what if we don't like it? I think it was like a local designer Is there for them or something? They're like, Well, what if we don't like I'm like, Well, I mean, you saw my portfolio, right?

Like you like my style, right? You know, And I'm like, kind of wondering if they chose me because it was random or if they like, it actually felt like I was a good fit for the projects. I feel like scouts. He kind of takes that, um, you know, off that pressure off a little bit because they have if they contact you, you know, they have found you a designer. I guess you know that they have found you because they picked you out of a long list of designers, and they think you're the best fit for them. So I think that's really cool.

Um, so you know works both ways. If you're a designer, it's a great place to go on and put your portfolio. It's great place to find work. Um, just scout si dot com See or sorry s c o u t z e dot com and you can go there today. Start a design project.

Scott's. He has a very special place in my heart, you know, and I know that's changed a little bit, but it's primarily mobile product designer, so it's a really great. It's also a really great resource for young young mobile designers to go to to see what is happening in the trends of mobile design. And that's where there's people from all over the world. So you confined like great examples of what's what's trending in Iowa's android windows. And for someone that's just starting out freelancing, it's a it's a it's an amazing place to go to start building your client base. It

sounds a lot better than dribble, too, because I think these most of these projects are actually real. Projects are not just 400 fight 300 shots, you know that are uploaded. That's a good point.

And, you know, when it when fun site before fun size was fun size, it was me as a freelancer. A lot of a lot of my work was coming from Scotty and Scotty did a really great job of pairing me with clients that fit the criteria project that I was looking forward. The budget. Uh, and it was because of Scout. See that we started to get so much work that we finally decided to create an agency. So I thought, that's why

we let him. We love Scout, see, and fun size. Okay, So getting into just the meat of the the podcast today, we're gonna talk about pricing. And why is pricing such a taboo issue sometimes to discuss with other people when you just met him? You know, it's not really it's not really first date conversation. Hey, how you doing? I'm Rick. How much do you charge? You know, it's like it's kind of like you have to peel some layers back before I don't know. I have good friends that I've never actually discuss pricing with because It's a very personal thing and like,

why is that? Um, somebody said, You know, pricing is your livelihood, you know? So to just reveal that is a very like, you know, personal thing.

I think ending it's personal, and I think a lot of people feel like it's something special that they have, that they're scared of other people finding out about how they do it, especially in competitive, competitive worlds. And I think the, you know, another reason why. I mean, it scares me every day, and I've been doing this for a long time. But I think that it's scary because no one knows, like the right way to price themselves or price their work order, how much to invest into something and understanding that values. And, um,

I think it's just something that at a certain point, you just take a stance on. You know, like this is this is the best way for our business, too, you know, to become profitable and to really work. But I know that there's a lot like people, price, all kinds of different ways. There's definitely like a few. There's definitely a few main pricing models, and maybe we could just go over a few of those real quick like there's, you know, everyone knows, like the general pricing, like bullet points. But one of them is fixed

well, to me, it means a fixed costs for a fixed a little. So I'm gonna charge you x amount of money for this tolerable. And I mean, there's a lot to go in there. But when you're doing when you're doing fixed based pricing, it is extremely risky because you are estimating the work and you're putting that figure out there to your employer or to your quiet or whatever. And then you're saying I agreed to do this for this price, and then you have to keep your employer or client in line with what you're doing because the scope can't change. But it's a very fixed go. It can't change. It's not agile. It's very clear, black and white. What if someone is paying for it? Fixed

a little right. And if someone is this kind of risky, right, because you say, Hey, I'll do this. You know this mobile app for 20 grand, right? And then you get in there. And if that starts burning a hole in your pocket. Meaning the amount of time that you have committed to is then starting to cost you more than what you said. I don't know, 20 grand or whatever, but if that starts to, you know, say you've got a couple of freelancers working on that with you, you could really mess yourself up with that,

You know, having a fix Price. You better make sure estimates correct. And it's right on point hurts. Yeah, Not only that, but you have to have a lot of faith in that client. Like to know that they were gonna do it right, and they know what they're doing to begin with. Yeah,

this is a scary way working for me because it's almost like someone is gonna get the shorthand of state Get another today, Right? Like, uh, where there is so much room for miscommunication about what is like, you know, take a response of Web site project, for example, And you do. Let's say you do a statement of working. It says we're gonna design you're responsive website for this much. And then the client, when you're trying to when you think the project's done, the client says Well, this response of Web site isn't working well in this Nexus tablet browser. And then if you if you had forgot to spec that you're gonna end up doing free work, yeah,

you know, isn't it is gonna an example. So it takes a long time to come up with right estimate price to, like, even pull the trigger on something like this. And both people really have to be accountable for at the end of the day for, you know, even approvals on the project management side. If you're saying you're gonna do something for this fixed price, there's usually also a fixed timeframe, So that's true. So, you know, if someone doesn't meet their delivery belong time or if the client doesn't approve it on time, then what happens, right? Like, right. How do you move forward from there? How does this

price change? So the fix pressing, you know, it's kind of risky. So there's an alternate to fix pricing, which is value based pricing. I mean, it's an alter alternate to ah, lot of different times of pricing. And to be honest, it's been really hard for me to understand what valuables pressing is. I was kind of excited, too. You have this do this podcast record this today because I'm not really sure, you know, 100% how it works and everything. Um,

basically, my understanding of value based pricing. Uh, I think of jeans like designer jeans right by You've got a pair of jeans and let's say I don't know who's expendable. Levi is expensive. G star, G start G star genes. Right? And you've got a factory. Make him there. And probably at the end of the day, I mean, cash me, and I can't imagine what the margins are on designer jeans. But you you make these jeans for like, probably something like $4 maybe even less than that.

But how much you charge when they actually hits the retail like floor, You're charging like, I don't know, $120 for jeans or something like it is based on the value of what people are willing to pay for that, I guess. I mean, that's sort of my broken understanding of value. Baseball. What are they

worth? You know, my my understanding of that is we're pretty similar to yours. The metaphor that I use is like a samurai sword craftsman are someone that makes handmade guitars. If you think about it. Like if someone starts their career at the age of 20 setting out to make custom guitars, uh, they're gonna charge a price for that. There's a certain amount of time it takes to do it. And let's say what you know. Fast forward. 20 years. That person is now 40 years old. They've gained all this experience and making handmade guitars. If it takes them less time to do it flushing, it cost. So you're paying for the fact that this particular individual,

you know, I gave you this thing and you're you're paying for the value of it. So I think there's a lot of industries where that makes a lot of sense. It's definitely been really popular lately. Very everyone's talking about value pricing, and it's kind of a catch word. I think there's a lot of people sort of riding that wave, but someone I can't remember who told me this put it to me like this is if a client is coming to you and saying we really need your service is because this product, the future of our company depends on this product's success. So if you use that as a metric for pricing, you can you can reply back to the client and say, Well, if this project is a success, how much money would you stand to make? So if the client says we would stand to make a $1,000,000,000 then you could tell the client, Would you be willing to pay a $1,000,000 to make a $1,000,000,000 right?

Or if is it worth it to you to pay $250,000 to not go out of business? I think that's now my more modern understanding of value based pricing is. And when people have talked to me like even certain vendors have interviewed, fun size of various service is. And they ask these questions because what they're looking for is that nugget of what you've just perceive its value

right. And I that my problem with valuables pricing or just my problem with understanding it is that no matter what, at some point, whatever you charge end ups boiling down to an hourly rate and is there any true just value based pricing, or does it always boil down to what you want to charge because the bottom line is so subjective. You have to kind of go and convince a client that you're worth that. I don't need to pay you that.

We'll just because in a value based pricing world, you would never tell the client. And I are really rate. It's like This is the cost of this. What? I'm worth it, you know, because someone else might pay that or this is what it's worth, you know. So even though that you're looking at the same desire, same design team, they might sell the same type of product to another client for ah, higher or lower price because of the perceived value,

Right? Andi, I learned something today. I was listening to a pod case podcast that Jason Bloomer had done, and I was trying to basically just grab some understanding of value based pricing. And I think his partner, Danny, that the guy that miles it with yeah, who's an awesome guy seems like he put it in a way. And I'm paraphrasing here, but it actually totally like Start. I feel like I got the beginning of what it really means, but you know he he was talking about a commodity because basically, some some clients may look at design as a commodity, meaning It's like coffee or it's like gasoline. It's something you need. Doesn't matter who makes it.

It's This is something that they need. So it makes sense when you're presented with a lot of choices. Just go with the cheapest one. So it's not, You know, value based pricing is more like, Yeah, that's really not what we do. You know, it's, um, it's worth more, even though the guy down the street, maybe charting less, uh, were worth more than that because because a lot of things, because of the quality because of execution because of

the process, the probability of being able to ship on time

and yeah, yeah, there's a lot of things that go into it like this, I guess, is it's more. It's like, What is it worth?

I've just I've had a personally, just a really hard time trying to figure out how to sell that. I just can't get my head around it. I mean, cause also, like, you know, I don't want to just throw a number out of my pocket and yeah, you know, there's something about that that feels very dishonest, kind of right just to meet

personally. Well, you don't feel like you can stand on that right? If they like. How much is it costing you, like this much in there? Like why you like, I don't know. The first number popped into my head. It's what I want, you know. But, I mean, I think that there is, like, a way to actually break down value based pricing to be like something that you can stand on and defend, you

know? Well, 11 example that I can actually really get behind with a now. Hour ago, I was actually on a phone call with Jason Bloomer, right? Jason is someone that I really want to work with, and you know, he's asking. He's interviewing you. Ask me. He's very specific questions. And one of the questions was, Well, what? What is success look like to you? What your pain points?

And so I explained to him, Well, one is actually one of the questions was what keeps you up at night? And it's worth it for me to hire someone that's offering the service that keeps me from having to have that one stress. And for certain things like that, I can definitely see the value, because I I get it right. You know, the it's pretty easy. But in other cases it's really hard, and it's also really hard, like this debate or this conversation we're having right now. If you ask anyone like I don't think anyone knows, you know what this is how to do it. And

I think I think people know people that you know, have sort of paid a lot for the wisdom of understanding what it really means. So Jason former, by the way, is a pretty cool guy. Seems like, um, can you tell me I mean, I know basically he, like, runs like a C p A. For in South Carolina. I only like I've just started hearing a lot about this guy. Seems like a cool guy, but he has, uh, sort of a process that he works mostly with creatives.

Yeah, his. He runs a C p, a firm that focuses their business on a parting with design companies like ours and it and it's not just it's the values that it's not just the bookkeeping. It's business coaching, understanding howto Look at your money. Be a better business owner, make better decisions grow, you know, like they they're far extending. But he also does a podcast. He's you know,

that sounds really smart. I've always thought like it's so hard to crack that, like, you know, translation between designer brain and length financial brain. You know, if somebody could sort of focus on that, they could probably do it. Have a good business.

You know, one

thing that we need help, you know what s

So I think, you know, in terms of design, service is one of the easier places for me to understand where value based pricing Fitz is something like a consultation, like, say it say a client comes to you and they say, We want we want to receive your professional viewpoint on where you think our product should go right? You know, like whether that's an audit, because it's very easy to say. Well, this is the value of that time to do this one, this exercise. But when you start looking at exponentially over like a year six month time frame, it's, um it's a little bit harder. I've never I've never actually found a way that for to make this come pricing,

model work in the kind of work that we do, because the work that we do is very It's hard to pinpoint what exactly you're going to be doing, because the work that we do changes on a month, month we do. We dated a basis. How can you sign a fixed price or a value based

price on? Yeah, it's We'll get in a little bit more later in the podcast about what our approaches to like, you know, giving proposals to our clients and stuff. But I do think it really seems like Jason Blum is a good guy, too. Look up. If you want to learn a little bit more about pricing, invade

his podcast. That business ology show has a has a There's a specific episode called about value based Pressing and recommend is

Listen to that, Yeah, that's that's the one I was listening to today. It was pretty cool. So before we get too far, try getting him back to the pricing models. Talk about fixed. We just discussed valuables pricing. You can do another form of pricing which is just, you know, an hourly structure like, Hey, that's my hourly rate, you know? Yeah, that's what I imagine. A lot of freelancers, you know, the saying age doing?

Yeah, right here. Yeah, well, the mentality is that you're not gonna you're gonna be paid for every hour that you work and that you're not gonna lose money, right? And so there's a more of a correlation or relationship between the customer and the vendor of like, I'm getting this for this cost for whatever.

Yeah, that's hard, though, because yeah, you know, some tasks just take longer and they're not necessarily, like, worth more. Yeah, I don't know. Like I don't view like every hour we spend as equal to the, you know, each each other, our because some stuff is like, really, really important. And other stuff is production, you know? So,

you know, in a I just got back from owner camp, which is one of the most amazing conferences I've been, too. But this was this was a topic that came up quite regularly. Time of materials building. It's in its The model is basically well, you know, you're gonna where every hour you work you're gonna build on. I think we've all found ourselves in this position as freelancers are perfect in a professional setting where, you know, you're judged kind of on that breaking, like if you're if you're talking to a client, you say what my rate is exper our there's number one. There's gonna meet immediate reaction of it, assumptions being built upon you just by saying that and then my fear in hourly. Well,

first of all, I should say that this is the way that I used to work all the time, right? And it for a while. It was It worked really, really

well at first. It's kind of the only thing that really makes sense, you know, because you just you don't want to pull a number out of the area just like, Hey, there's my hourly rate. If you're cool with that, you know, let's let's do this. And I think that's how a lot of people should start is hourly. You know, if you are just getting into, you know, the creative professional world. That's how you kind of like learn how to price is your charge and you see how well it goes You know, I estimated 40 hours on this and, you know,

you know, that wasn't enough, you know? Then, uh, I didn't make enough money off of this. And I can't continue this way unless I either increase my rate or find a better way to Price

The, uh, The other thing is, they there's there's kind of a gray area there, like whether you're doing hourly on a fixed cost or whether you're just purely billing hourly and the the the advantage for someone building hourly is that they can have the frame of the good positive feeling that they're gonna get paid for every hour. Yeah, but the downside is that there's no guarantee how many hours you can build every month, right? So as a freelancer, I constantly dealt with that. Like, some months, I would build a certain amount next month. It might be 20% lower next month. It might be 50% higher, you know, And when people my personal opinion, this is when someone knows your hourly rate there, especially customer. They're gonna try to limit the amount of time because they were trying to control their budget.

Everything is just totally, totally Yeah, connected to that. The other thing is time tracking is something after really, like be a Nazi about Basically, is running your timers on, like, harvest or or whatever. Harvest is a really good at for time tracking, by the way. But I

have a question for fee, like, based on these three pricing models fixed Diabate hourly fee. And here in your career, like which of these have you employed the most as a freelancer or or working in

agency? Who is this fi guy, anyway? Hello, Um, product design here, it fun size. Um, I've been, you know, when I started freelancing off, you know, I've always asked people, you

know, Lauren and who already freelancing on it. And in the industry, Well, you know what they do. And hourly has been part of the the more Yeah,

the biggest use case for them. And so the hourly for me has been, you know, um, how about would use that, right? Well, it's just the easiest way of, like, just getting started, you know, right. Exactly. Yeah.

Yeah. It's a great way for freelancers. You were just starting off, um, to kind of get their foot in the door, right On a scale of 1 to 10. How hard was it to figure out your hourly rate? Uh, probably like party and nine, Because

for me, just starting off, like, just coming right out of school. I mean, I had

absolutely no idea. Um, what's price myself? You know, it's challenging, right? Because you're so I would I would

lowball myself sometimes and oh,

yeah, And then then I would learn from that. And then I would you know, I would share my relate my hourly rate with people who are already in the industry, and they're like, uh, you're lowballing yourself. Like, Why are you charging more? You know, right. That all depends on I feel like your level of expertise and how how good you are to you know. That's right. You can't You can't just come out stuck straight out. It's going be like,

you know how much hard $100 an hour, um, on this, you know, But I guess it all depends on

your experience as well. What you just said I feel a spot on because, um, there everyone is different. You know, there's gonna be people coming right out of school that aren't ready yet. And they're gonna people that air young that already have this really strong talent and maybe value priest Pressing is better, right? You think about it back to this scenario. That guitar maker. If this guitar maker was charging by the hour when he starts out 20 years old and then by the time he's 40 years old it takes them less hours to build a guitar should he be making

less money? But here's the thing, right? I mean, obviously he's gonna increase his rate over time, got cuts more. But at some point, right, let's say Guitar Maker Guy starts out at $50 an hour, you know? But he's new, so it's fine. But then, like 10 years down the road, like this guy's up to $100 an hour and then 10 more years. That's $200 an hour like that's too much to, you know,

to pay for a guitar like what if it takes 40 hours to make a guitar? I don't know. There's a certain point where your hourly rate is just gonna be to You're just going to say that's too high, and I think that's where that's another thing that I got out of Jason Bloomers, I think, was Danny who said it. But there is this a certain point where, like the hourly rate is like just more than thin. Clients are willing to pay it like they see that. And that's the sticker shock, as opposed to let's tell you everything that you're getting. And here's the overall price that value, you know. So the other things that takes out the whole, like surprise factor at the end the Shakers. The sticker shock,

I guess, is yeah, but I mean, because if you're just hourly, you know, if you just run that clock and your clients get it and it's like, Holy cow or they just don't like the price of your hourly rate, you know, to begin with. I know this is a little more tricky, but the value based things don't make sense. I mean, started to for

me anyway. But in the other thing, like because I had had always done Caroline when I started this business before Natalie and everyone else joined, it was hourly, but then when we realized that we had this really cool teen at a certain skill set. We also realized that if we build our early, we would lose money because there are certain people will at fun size. Everyone is extremely senior level and talented, extremely talented. And if somewhat person can complete that task and a certain amount of time, it would be building less. Right. So we realized from being punished. Yeah, so they yet so at fun size. Anyway, when we started looking at this, we realize that if we build, our really would actually lose money.

Yeah. Yeah, that's that's actually interesting point. You just made Natalie about being punished for being like a quick, efficient right, Like you learn and you do it faster. So it's like, Why are you being punished? You know,

And then you have to start like you're saying, Like watching that time clock

for more pat it and starting. Yeah, and then it boils down to what? What did I think I was worth for this project? Yeah, that's what you end up doing anyway, Like what I had I had a teacher in the art institute that was like my flash teacher or something, and he always said that he would always just like wait. He was super fast, Like what he did like he would do quiet, you know, just freelance or whatever. But he said he would do things so fast that he would wait like a day or two before even told him it was done because he didn't want him to think. Oh, wait a minute. You did that one evening. I don't think I should pay you that much or whatever.

So I still remember that, you know, it was just like, Yeah, I just wait a day or two and they're totally fine with it. You know, there's a lot, one last one right in this retainer based right

is our favorite. So I think this is the combination of taking what works really well in value based pricing. And I really pricing and bridging a gap where it's equally beneficial for both parties because it's a little bit of both. It's, you know, a retainer is basically saying like I'm going to dedicate this much time to this project on, and this is what the cost is

gonna be. So everyone knows on both sides what they're getting and how

much they're going for it. It's a little bit of value based pricing because you're saying this is my expertise and this is what I'm This is the probable outcome. It's a little bit of fixed price because the price isn't gonna change. And, you know, every month what you're gonna make in the client knows every month what they're going to spend, right. It's a little bit of hourly because it's based on a raid.

Well, I like that because, you know, if you work with the product companies or whatever, like we do a lot work with product company and then they can sort of, like, put us where they need us, You know, if they have, like, an idea of what they want us to do. But then that scope changes. They can. They can be, you know, agile and move us over to a different focus because things change, you know?

So I do like it because that for sure, I think with that with the retainer pricing, you kind of build a better relationship with the client because there's never gonna be a time where you're like, Hey, guys, sorry, but

we're over budget or, you know, whatever. Whatever

we can't. We have to start working on this now or it's like I'm gonna charge you more for this and it's double the price. When I quoted you before, Yeah, you can just you can front load hours or whatever you know like this is for this month. Let's do it for you. It a square for the whole world retainer

and work on more things to write in a fixed fee or value based in scenario, you're doing a very specific thing, but in a retainer, you're basically telling your client I can do whatever you want. Yeah, in this time frame, like so it helps you in some ways grow like start. If you started with the iPhone out next month, maybe you're working on the website and the next month, maybe working on branding. This has been a really successful way of working at fun

size. I think it's worked for the clients to, you know, like they've been really happy. Thio be able to change things, you know, um, I wanted to just kind of throw in a couple of resource is these are some things that have helped me personally in my freelance career. and I think that they're they're definitely still applicable athletes, most of them today. But these are things that help me find a now hourly rate and just sort of like lift the curtain lifted the curtain a little bit on the mystery of like, what? What should pricing be? Um, there is a book by I'm hoping I pronounce this right. But Mike Monty Aargh. Um,

the name of the book is, uh, Tyler. Book is designed as a job. He has some pretty cool stuff in there. It actually covers a lot of different things, but I really like the section in there about pricing. And it's a lot about what you're worth and thinking about that. And he he puts it in a way that, uh, I don't know. It feels honest. You know, it feels really good to to read. Sort of like validating, like,

kind of some of the things that you're afraid of and what you feel. So I recommend that, um, there's an article we could post this in this show, notes. But there's an article, um, I read a year or two ago, um called. How much does a mobile app cost? answer about as much as a car on. I think that's cool, because it kind of goes through, like, the different tiers like. Okay,

well, us in kind of a broad question. What kind of crap is this? You know, Is this Ah, get you from a to B up. You can probably get it for 5000 bucks from a student. You know, uh, who who's like, trying to learn? You don't get a good deal on, like 84 Honda Civic, which was my first car, by the way, Uh,

you know, but it's not gonna be a nice car, and it goes up, you know, Geo Metro. You know, I don't know. Ality keeps going up and up toe like Lamborghini, you know? And those air all cars, right? These are all APS that everyone's making. But there's not one answer for, like, one one price that they, you know, entail.

That's at least a good start to figure out if you're gonna invest three months of your time to do a nap like at least figure out, have a baseline of where? What? People are paying our chart. What people are investing for

something like that. Yeah,

yeah, And then And then figure out your worth and adjusted higher or lower based on her. You are?

Yeah, yeah. I mean, it's just, you know, it's It's not like a perfect picture of what each app costs, but it's like at least enough to kind of get, like, a hint. And that's a great thing for someone who's a designer to read, or somebody who is looking to hire out, you know, a team to build a mobile app. And then there's also uh, e book written by the people of Harvests called The Harvest Guide to Pricing. So that's another one. Another good one to just It's a good resource if you guys were wondering about pricing, whether you were a designer or somebody who is looking to the higher our design team. These are all really great Resource is to just kind of check out and get like a A

feel for it kind of goes there all these pricing models in a little bit more death, right?

That one that you talked about mentioned before the fuck you pay me. Oh yeah, that's Mike Monty Eros. Well, yeah, yeah, he's got a YouTube video up there. There is also from Goodfellas. Come on.

There's also a book called Ethical Guidelines and Pricing that the graphic artist guilt puts out every two or three years, but ethical pricing, ethical pricing and guidelines. I think itwas caught called, and there's tons of salary surveys and things like that. But the problem is, I don't know if these resource is concave up with a changing landscape.

Right? Right, right. That's that's kind of funny. What if you went and read that? And you're like, Oh, my gosh, my pricing is pricing is unethical. How did they have a term in? Yeah, it's kind of like a brush stroke. Yeah. Uh, well, so we've kind of gone over? Yeah,

I just wanted a plague like cunt. Kind of some of those. Resource is real quick because, you know, sometimes have you no idea at all. It's it's good to just, like, read an article or two, and those are some good ones to just sort of, like, get a feel for it. Um, so there's a lot of like, like way admission before there's a lot of different types of pricing models, and we normally do retainers right Anthony our engagements. You have kind of a cool way of presenting some some engagements to a new a new perspective client you're telling me about. That was kind of kind of need. You had presented them with differently tears that they could choose, friend. Basically.

So, I mean, basically, for those of you who don't know fun, size only works product company so that people that hire us, our engineers and product managers and these guys jobs are to ship products and and the at the core of what their needs are their base. They need effort. They need designers that can help make this happen. And so when we won't, you know, we kind of borrowed a little bit of value based pricing ideals and and all these other things we talked about and way do these way present retainers to clients that are varying degree of engagement. So, you know, like the degrees. So like, today, you know,

today I was on the phone with perspective Client. I'm asking him. Okay. Well, what what like what is it? What? Your short term and long term goals like What is the first benchmark you have to hit like What are you trying to do in a year? What? What's on the table? Like what products coming work on? Like is there just one or is there a few? Um, and then I look at that stuff and we you know, and we First of all, we all talk about this internally, openly with company to figure out if it's a good fit and if it's a really good fit,

then we realize, OK, what is our level of flexibility? If this is a project we really, really want, we're gonna do whatever it takes to get for example. So when we put these proposals in front of a client, it's usually varying degree of how many hours per month there we're gonna give them the, you know, some, you know, some. It's usually three options, like in one particular proposal that I wrote. Option one was slow and steady. The next one was the smooth ship and the other was a pacemaker.

So is the difference in like, very slow progression. All work versus highly dedicated design team. So the client is making a decision on what they want to pay, based on how fast they want to move and how much exposure they want to our team. How many check in meetings? How much federation did they feel like they need? And it also the length of the engagement. So there's a different price for a three month engagement versus a nine month engagement,

right? That's cool. It's so sort of like a you know, obviously, if you want to move real fast and put a ton of ours and right away, you know it's gonna be more expensive than spanning it out over time. Yeah, okay. Any notice? Yeah, like the time is one dance, right? You give them more hours per month first slow and steady, and you kind of break that out. It's just kind of slow and steady

way understand the risks involved. So we understand. Well, you know, for if it's on A, it's on a lower retainer side that we know it's gonna be like incremental work and stress level's gonna be low versus a more more intense engagement where we know that there will be multiple people from fun size involved. It's gonna be hard and fast. We have a lot of work sessions. There's gonna be a varying degree of price. The decline is paying for that because they're paying for that value. That value is how much access do they have? The team, right? How fast can we move? And sometimes clients were just looking for a long term partner. So if someone is looking because someone comes to you and says, You know,

we're looking for someone that can design be our designer or design team for a year, I think about that right, if you can, as it is as a freelance designer, is a design company. If you can wrap up all of your business development needs in one client making a no brainer because you know freelancers will probably spend 20% of their time doing business agencies like ours, even though we're small like that's pretty much all I do. And you have to think about that. You know, if you give someone an hourly rate or value based pricing, how long will it take to close that deal? How many times will you revised the estimate? How many? How many meetings will you have to have to convince them to sign up on? Our mentality is making a no brainer where the cell cycle takes do you so that we could spend our time designing

and kind of, I think, what's funny too. And we might not have done it intentionally. But there is a psychology behind, you know, giving three options or that, you know, the human mind can really only process up to five, I think. Is that the right number? Yeah, I've heard that. Yeah, that's kind of like the apple tactic, right? Like we talked about before.

They give you, like, you know, the highest one we have to order. They give you kind of like a medium one where they have in store. This is a little higher than having a lower end one. And you always seemingly go with the one that maybe with middle, because number why you don't want to pre order the highest one. And it's a nice price. You don't want to pay too much, but you don't wanna be cheap, So just go with the middle and it's sort of like a middle

ground, and it's usually the bet. In the Apple case, the middle line product is usually the best one, right? And so But, you know, for the people that have a budget. This little option makes more sense for people that want toe something else. The higher makes more sense. So it's not like you're pulling the wool over people's eyes. You're basically saying these air three different ways we can work with you. What feels more comfortable, Thio like, Do you wanna do you want lower payments and spread that out over a longer term time? You want, like a lot of intense work and needed a beautiful team and,

you know, and so that's kind of how, like, fundamentally how we think about it. But you know, we don't have a lot hourly rates way. Never show an hourly rate to clients because we don't want clients toe. Think about us as a number. We want clients to think of us. Is it

value right? Yeah, it's not. It's not transactional.

And most of the time, most of the time way will reach. Our retainers will end up doing extra work for these clients in some clients we've given, you know? Well, do you know an extra, You know, strong investment into the company, and so it's We do that because we want to continue that relationship we want. We want to actually build a true partnership. Where were part of the team? Longer time. And sometimes that means working for

free. And not just that, though I think the reason why we do that as well. It's because we're so passionate about these people that we work with. Yeah, you know. So it's like you have this momentum you don't want to just halt, right? Yeah, It's cool to be really, like, excited about the work that you have to do in the clients you have to do it with because, yeah, it's all about just making the best of that time. And

retainer costs were really easy to figure out, too, because you can base it on what a what a salaried employee would make right, for example, So if a client eyes looking to design an app and they need a designer, well, what would it cost to hire a junior mid level or senior designer? And then, you know, you can figure out if you're a freelancer like what you should charge, you can figure out like what would be a no brainer for the client, like what number? What costs would make it easier for that client to work with you versus continue to spend money in HR and recruiting and job post and interviews to, like, bring that person on.

Yeah, that's your point. Um, so usually with, oh, you had an interesting, uh, point about maybe a price point being not necessarily based on hours, but how much access a client has, you know, to you, you know, is it We're not necessarily charging this much, you know, for this many hours. But you know what? We're gonna meet your milestones, but you can only have, like, you know, this acts toe access to us this many meetings

per week. Yeah, that's usually how we do it, you know, because it's not necessarily access to the individual people. You know, everyone usually has access to everyone but

right, not to the specific people.

Yeah, but meetings is one thing, right? Because if you are trying to ship a product and you need you need time to design and the more meetings you have makes it harder, you or make you know, adds more barriers to getting that done. And some people really value the face to face time. Sometimes it's critical in order to get it done. Sometimes it's not. So. Usually with smaller retainers will be less meetings, less work sessions because you know, that way more time could be spent and doing the design work.

Yeah, well, I think we're kind of running a little bit over here, so we have some sort of pricing questions, but I don't really want to, like, lose that. So maybe we could just kind of touch briefly on some of the more important parts of it. But these air sort of, I guess, maybe, like frequently asked questions about pricing. And while we're not, you know the authority on pricing way. Do you have some things that we feel like We've learned about it and we want to share. So one of those things is what's the importance of just having a standard price? You know, charging this person this and this person that but there is right, like always like a a price that you can't really go below. And that's maybe at least like a baseline.

I think it depends on what your work for the year looks like. Right? Right. If you are, If you are focused on Lee on the now you could hurt yourself because you have to look at what can I make this year? And sometimes you have to take less than what you I want to do so that you could get that project that will step up to the next level. Like if you want to do mobile banking app, for example, and you want Citibank to hire you, you need to build a capability of mobile banking right to be competitive. That's Trent. If is long as you balance it out like you might have some projects where you're not make, you're not making exactly what you feel like you're worth. As long as it's balanced out with other work that that is paying it. It's an equation, right? That's fair.

Um, I think it's good, though, to know generally what you're worth and have a good baseline to start from. Right Converse conversation Starter.

A good baseline that you could be flexible on, you know, So that you it's sort of like, Yeah, I like what you're saying about, like, kind of aiming at the long, long view of it, you know,

and any no

like you can't have to do what we talked about earlier with which is like not trying to lowball yourself. Yeah, that's a good don't know. Boy yourself. I mean feet. This is a question for you. Like, why did you feel the need to lowball yourself? Was it because otherwise you didn't feel like you could get that client? That's a good question, I think. I think the thing for me that I

found out really late

in the game was the whole taxes thing. That's so something that of, you know, I'm still trying to trying to pick up on, uh you know, a lot of these feelings is out there like, Oh, you know, You know, I'm charging you $2020 an hour a law, and and, you know, you're only working for a certain amount

of time and then, you know, at the end of the month or then of the quarter when you need to pay your taxes, you cut yourself short. You know, like you get a $10 people kind of like if you have a family or or expenses that you need, you need to pay. You know that you

need to keep a key account for all that stuff when you're when you're charging, you know? Yeah. So that's sort of the other side of it, too, because there's another look at that, which is, like, you know, having a family and all that having a mortgage to pay for. You know, some some people can get them box themselves boxed into a rate that they can't live without, you know, And then that's kind of a scary position to be in because, you know, you've got a lot of overhead, you know, your personal finances. And then, you know, you have to charge a lot because because you have to make a certain amount of money

and that is that definitely is is something that, you know agencies deal with, you know, like, you know, paying overhead and payroll on stuff like that. But, you know, I think you also have to look at the things you do is an investment into your future. Like if you want to. If you want to learn animation, you're gonna best in time and learning aftereffects because that investment will result in your ability to grow right. And, you know, in my career, I've definitely even At some cases I've gone down 50% of what I thought it was worth to get that project that would springboard my career into an area and without make, you know,

without making some of those concessions. Sometimes I don't really think I'd be where I am today. And it is a challenge to and recruiting designers because you mean like, really talented Web designers, for example, are extremely talented. But in the space that we work in where you have to know Iowa's, you have to know iPhone, iPad, Android, Android, mobile Windows. All these things that are part of mobile on someone, uh, has still has a lot to learn, so even at a Web agency,

they might be worth that figure. But at another agency, the values a little bit different, right? There's an investment in

learning it. If you really were passionate about learning it, you would probably need to figure out if you can afford to make that sacrifice.

But, you know, I kind of think that those things all balance out as long as you make sure that you're, you know, balancing, you know, balancing work. You know, there's definitely projects that fun size takes because we I just want to work on him. You know? You know, there's something more profitable than others. There's something that you know, you know, varying that spectrum of stuff. But, you know, at the end of the day, you know, I think we all do a pretty good job of picking projects that we really want to work on.

And that's like, kind of going back to how it's related to agency, too, because I have seen some agencies you know, start small like we have. And they they didn't gross in a smart way. And what happened was that they ended up having to take on the bigger projects because of all the overhead, because of the people they've hired because of things they offer. Um, you know, like you end up taking on less interesting things. So that's it? Yeah, that's that's think, something that's really scary. It's like just getting into the point where you have to take anything that comes your way, like that sucks.

You know, anything is the result of not being careful about managing your overhead. And, uh, yeah, I really appreciate it when you know Anthony really tries to make sure and let the clients that we get, and it's been really good because of that. Uh, there's one thing. There's one question, though, that I think I sometimes ask myself. Still, in a lot of people, probably asking is, Do you do spec work because they're so many opinions around that,

Yeah, it's that's a lot of people really look down on that. But some people like, Yeah, it's like a North or South Pole thing, kind of, you know what I mean? Like, a lot of people feel one way or another on spec work. But it is a very common question with pricing is basically, if you don't know what's better spec work is. It's kind of like going ahead and getting started on a project. When you hear about you know, a new proposal out are a new new project or a new client is looking for an agency. And that's how a lot of like agencies that pitch like commercials and stuff much free work. It's Britt.

You do all the work in order to construct this like elaborate pitch to the client, and the client has like three or four agencies in line. You know, they look at all of them and they pick one and that only that one gets any money from usually on dhe freelancers have their spec work for freelancers, too. You know, there's even websites dedicated to, like spec work for free. What was that one's like spring. You remember that feed? Did you ever use that one? It's like spring something, something Which one crowd spring. It was like a website that was like just for freelancers to basically compete like one person. Be like, Hey, I got 1000 bucks whoever designs me the best logo or something and low But that just sounds terrible. Todo a couple people that I've done that and they actually use a logo to this day. Wow, it's

ah, it's It's, um it's challenging because someone was kind of painting this picture for me, someone that was on the client side actually trying to hire a design bender. And so they they actually did ask for spec work. But you have to consider the position they're in. They don't necessarily want to screw people over basking for free work. No, they're looking to sell someone end to their bosses and they're using their your work to say, See why we gotta hire these guys like these guys are the best. And so you don't really know what the motives

are. Right? But either way did it is a high stakes

game. I don't think we would ever do spec work at the client. Asked us. Right. But we do expect work all the time for things we will work on. You know,

Fi, have you ever done any speck work unsolicited spec work for I don't know, like any kind of airline or anything like that? I don't know. I e don't know. Maybe maybe if you were in there for kicks, kicks and giggles. Yeah, it's ah terrible dot com slash fee apostrophes. Just saying,

guys, Yes, spec work spec work is difficult. It's definitely a lot of emotions of all there because you're like, Well, did you not see my perfect

little like says What work looks like like right it should it kind of It is frustrating. It works out kind of good for the client, but not so good for the designer. What's to say that I'm not gonna take the awesome set that you didn't go and build it. And like,

Do you play Devil's Advocate? It's still a portfolio piece.

It is. But, I mean, you can't do that very often. You know what I mean? Like, you gotta make sure it's the right client and worth it. I want to bring up a scenario in the show Mad men that I always think about when I think about spec work. Because, uh, madman is about, you know, an agency in the 19 sixties in New York on Madison Avenue is, like, really elaborate, you know, agencies back in those days.

But a madman. They had an episode where they had a chance to get a client with, um, American Airlines. And that wood is like, sort of like, you know, the best kind of client for that kind of agency. So they wanted to, But they already had a client with Mohawk Airlines. So there he had an airline, so it was sort of a conflict of interest. So to even engage them, not only do they have to do all this free work to try and get a presentation with American Airlines, they had to fire their client with Mohawk before they could even do all this free work. So talk about high stakes man and the funny,

you know, I don't know. Maybe I don't want to spoil it, but it doesn't go well, but, you know, that's what I think about, you know. But honestly, the thing I take from that story is like, Wow, that was a pretty courageous move. Even though they may be, it didn't work out So good, Man, I really gotta be willing to roll the dice on things like that. And I don't know. It's just it's kind of scary to think about.

I think that it's challenging because you're someone's evaluating your work without you having the time to go through discovery and truly understand

the business. Yeah, that's something you don't really have that much time. It's just so backwards. Anyway. We kind of went off on spec work. It is definitely something that will initiate passionate debate between different, you know, designers, the difference of different opinions on it, but getting back to pricing. We kind of have like, a few questions to go over. But I think the we're sitting down to discussing what this episode was gonna be about how we're going. Thio started just right Like an outline Tico through. Uh, Anthony kept hearing you saying over and over that basically,

don't be so focused on the here and now, Like temporary position, uh, temporary amount that you can get at a short time, be more focused on, uh, securing work in a long term, right? Yeah. I can't speak to that. For example. Say, if you charged a $1,000,000 an hour right and someone's offering like, hey, I can't afford a $1,000,000. How about 900,000 $1,000,000 a year? I think they're offering you a six month contract. Don't I consider that you know, because

yeah, because if we're no longer appear at a higher rate, what's the problem? How many proposal

you win, right. And plus, you spend less time like constantly looking for new work. OK, if you can get a project that's a good price, but can float your business for a month, that's great. But then you have to spend half of that month looking for the next month to set up. So if you get something that set setting you up for, you know, Maura of a long term, it's probably is a wise idea to be more flexible. Your rates. You can get, um, engagement like that so that you can gosh have time to breathe and not just be like business, business business,

especially if you find it. Find a client that you love,

right? Like that's a good point. I just you know, sometimes you want more of that client like that. This works really well. We mesh well, have Harmoko harmonious meetings with the engineering team, and that's a really good point.

I think sometimes if you even though it might seem like you're lowering your rate if you're looking at other kinds of way to engage retainers for one you know, primary example over the course of a year, you would probably make more money than if you were so focused on a

specific earlier. I think you're right. Yeah, it's hard to not look at just the here and now, but I think that's a good sort of message to kind of take home from just like our outlook on on pricing at all. It's just, you know, go for the long term, as opposed to something that short term so I think that's gonna pretty much be it for this episode, guys. It's helpful to everyone that's listening. Yeah, sorry if we've rambled too much, but, I mean, there's a lot to cover, man,

and we even skipped it is give some stuff, but, uh, yeah, I hope Hope Hope it helps someone, somewhere wondering about pricing. Next next episode, we're gonna talk about the product designers, tool belt. You know, we'll get into the specifics of what our fund tips and tricks that we like to use when we're actually in, you know, in our environments creating these things. And I think that's gonna be really fun. Feet. Do you think that sounds like fun?

I think so. She left right on super excited gold guys. Well, that's pretty much it for Episode three. Thanks very much.