Never say “no,” but rarely say “yes.” | Hacker News Reader

Never say “no,” but rarely say “yes.”

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295 pointsSRSimko36 comments

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.

Reminds me of a friend of mine doing the same thing for a short project. He did not want to do it, but he did want a new airplane so he quoted a ridiculous price; which they accepted. He once referred to the project as building the airplane which I suspect completely changed his perspective on the whole 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.

I totally agree. It really helps you prioritize projects based on what's more important to the client (whose proxy is their willingness to pay), and make both of you happier.

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.

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

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.

Prove yourself first. Then it (should) be rather easy. If they don't accept, time to find another client.

This is some great advice to live by. Sort of goes back to the old mantra of making sure you're getting paid "what you're worth." If something's not worth the headache, then either make the headache worth it or dump the headache.

I'm only echoing what others have said, both here and elsewhere, but I've yet to take this advice myself. Perhaps I need to find more bad clients so I'm forced to try this...

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.)

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.

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.

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.

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.

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).

Also the motto of unscrupulous VCs.

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.

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.

And Hollywood execs, if the stories are true.

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?

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.

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.

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.

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.

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.

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

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"?

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.

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

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.

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.

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.

And if your bomb was detonated during the Nobel award ceremony, or at a TED conference, killing a few brilliant minds who could save a hundred times as many children?

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!

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

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

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