2Bobs—with David C. Baker and Blair Enns The Barbell of Pricing Risk
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Dec 18, 2024 Dive into the intriguing concept of the barbell of pricing risk, blending finance with fitness for creative agencies. Discover how to balance low and high-risk pricing strategies while challenging traditional notions. Explore the complexities of venture capital and risk management, and how calculated risks can lead to growth. The discussion also touches on the broader applications of this strategy across various domains, emphasizing thoughtful risk-taking and personal risk tolerance in business decisions.
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Barbell Pricing Strategy
- Nassim Taleb's barbell strategy suggests balancing risk.
- Apply it to client portfolios: most clients (85-90%) low-risk, time-based billing, few (10-15%) high-risk, performance-based.
High-Risk Investment Success
- A client, successfully using the barbell approach, made a high-risk investment.
- This single investment significantly boosted their top and bottom line.
Missed Equity Opportunity
- Blair's friend chose cash over equity in a growing company.
- The equity he declined would now be worth $250 million, illustrating a missed high-risk, high-reward opportunity.