E22: Why Hourly Billing Is Nuts with Jonathan Stark

On today’s episode, we’re talking to Jonathan Stark, one of the top mobile experts in the field. He’s worked with big-name companies to help them establish their mobile strategies.

A three-time author, Jonathan has an essay and book called Hourly Billing Is Nuts. That’s what we’re going to be focusing on in today’s show. You won’t want to miss it!

Some of the highlights of the show include: 

  • A bit about Jonathan and what he does in the course of his mobile strategy work, as well as how he has evolved his company as times and technology have changed.
  • Why Jonathan specializes in helping credit unions with their mobile needs, including the benefits of specializing and why he chose that particular niche.
  • Why hourly billing just does not work for either the agency or the client and why a value-based approach works better.
  • The methodology Jonathan uses to come up with a fixed price for any given project: questions he asks potential clients, the amount of time he spends on the sales process, and how he decides when a project is not worth taking on.
  • How to get the right person on the phone to give a good proposal.
  • How Jonathan got to the point of ditching hourly billing and instead of going with project-based or value-based billing, as well as what the transition was like.
  • Why Jonathan doesn’t track his hours at all anymore and how he decides whether a particular project is profitable.

 

Links: 

Hourly Billing Is Nuts
Expensive Problem
Zoom
Value-Based Fees

Quotes by Jonathan: 

“[Hourly billing] misaligns the direct financial incentives between the client and you. The longer it takes, the more you make, and the more cost to the client.”

“Pricing is more art than science.”

“When I went solo… I doubled my income overnight and reduced the complexity and administrative red tape of my business.”

“When I was younger, I looked for interesting problems. Now I look for expensive problems.”

Tools & Resources