Jonathan Stark

That could be something like a CTO would do, maybe a software architect, could be a product person, senior product person. You're helping the client decide what to do next. And then you hand some sort of a blueprint or diagrams or some sort of roadmap to an implementation team at the layer below you, the altitude below you. And so you've got these three layers.

And if you want to scale up without a team, it's easiest to do it at the highest level. where you're really selling your thinking, your expertise. You have built up a reputation that people trust to not steer them wrong. So you're helping clients decrease their risk, basically, because what they're going to do after you're done is hand off some sort of a plan to a very expensive team to build it.

In many cases, they want to de-risk that, whether it's a budgetary thing or if it's some sort of hard deadline type of thing. Maybe there's a certain window of opportunity that is going to close because Amazon or OpenAI is about to come into your space. So they're like, oh...

We need to do this right away so that that middle layer where you're building this stuff, it can be very high revenue, but it's not very high profit because you have to pay all these salaries. It's really an arbitrage model where you're buying hours cheap and selling them for more.

So if you want to scale up without hiring, that middle tier, the implementation tier, to me is like a transition phase. Maybe it's what you do now, but the idea is to transition up to something a little bit more strategic and advisory so that you're selling your brains and not your hands.

It's got to be the testimonials, like the actual transformations that I get from people that are in my Ditcherville community or on my mailing list. I got an email yesterday, it was over the weekend, about someone who was just like, oh, it's a longtime reader, first time I've replied.

I just wanted to let you know that I've been reading your list for a long time and it's just totally transformed my business. And I have a page on my site, jonathansdart.com slash testimonials. It's like, I don't know, hundreds of testimonials like that.

That's where it's at because you're like, wow, I'm definitely like maybe I charge a lot of money, but I am definitely having a difference, making a difference or helping people transform from the hourly model to something that is much, much better. Their lifestyle, client relationship is better in so many ways. You have to get it right.

But once you get it right, it's so great for your peace of mind, customer satisfaction, client satisfaction, all of that. And they generally end up working a lot less because when you only get paid when you're working, you end up working a lot because you need the money.

As your standard of living increases over time, you're probably not raising your hourly rates as fast as your lifestyle and inflation. So what ends up happening is... You're like, geez, I need more money. I have to put in more hours. And before you know it, you're 45, two kids at home and you're working 60 hours a week just to make ends meet.

And people in that situation are like, I don't see a way out of this. If I raise my rates, everyone's going to leave me. They're going to go with someone cheaper. I can't work anymore. I'm already burning out. So I can't make more money that way. And either I don't want to hire or hiring is going to be too much work. It's going to take too long to dig me out of this hole.

I'll end up working 120 hour weeks while I try to get a couple new employees spun up. So they're trapped in this, I call it the hourly trap. When they escape and they see the light and then they finally reach the light and they tell me about it, that is definitely what I'm most proud of.

The thing that everybody's scared of when they think about doing a software project for a fixed price is that there's going to be bad scope creep. I've had a few sort of fixed price things happen that seem like, from the outside, they seem like they'd be really bad, but they weren't really.

One of the things that's unusual about giving a price for a project, instead of saying, I think it'll be about this much, but I'll bill you every week as we go, and ultimately we'll find out how much it really cost. The difference with giving them a price upfront is they can pay you upfront. So you don't have to wait. You don't have to wait for that last invoice to get paid.

You don't have to any of that. They just send you a check and you get started. Two instances, one instance, someone sent me a check. The CEO hired me that I don't know if that was the title, but it was basically like the second in command and five figure check. And we get into the kickoff meeting and the CEO rolls into the room and it was immediately apparent that it was not going to work.

Like I was not going to be able to work with this person. I had to send the money back. So that was a little bit weird. It worked out fine, but it's one of those things that people are like, what happens if you get on the project and it's awful?

Another time I had taken this 100% upfront payment and I agreed to do a project with a technology that I was not familiar with, but I knew I wanted to learn it. I felt it was important for me to know this technology. Someone needed this technology in their application and they were willing to pay me to do it, knowing that I wasn't an expert, but I needed to figure it out.

After months, it just turned out that it was the wrong choice of technology for the project. And so I had worked for months and had to give the money back. So that was my own fault, but that's the kind of thing that can happen. As long as it's very rare, it's no big deal.

The one that seems the most dramatic would be one where I thought a project was going to take me about a year, but it ended up taking me about two years.

When you have the experience of working on a fixed price project, if you've never worked on a fixed price project and you've only worked on hourly, when a project goes long, longer than the client expected or certainly past your hours estimate, the client starts to become a monster.