178. The relationship between hourly and commodity work

On a long drive today, I re-listened to some of the book, The Passion Economy, by Adam Davidson.

It spoke to me the first time I read it. It's about craftsmanship in your business and working on something you're passionate about.

It's about the power of building small-scale, high-quality work instead of mass-produced commodity work that can be scaled infinitely.

The book has a lot of great rules, quotes, and stories. I'll share one quote that came up because it fits so well into how we price our work.

Here's the quote:

“I recently hired a lawyer who told me that he would not charge me by the hour but would, instead, agree to a fixed fee for the work we were going to do together. He explained that charging by the hour contradicted his core values of serving his clients; it would create an incentive for him to spend more time even if it wasn’t strictly necessary. Or, on the other hand, he might choose to rush some work to save me some money. He preferred not to think about time at all but, instead, to focus on providing me with the greatest service. I found this comforting.”— The Passion Economy: Nine Rules for Thriving in the Twenty-First Century by Adam Davidson

Selling by the hour often doesn't feel good for either party, nor is it always aligned with the best interests of your clients.

The incentive structure is broken.

I've noticed hourly is most often the best option when you're doing commodity work, like website support or odd design tasks, for example.

I'm not bashing hourly work or these kinds of support roles. They may be necessary to grow and/or sustain your business. They can be profitable.

But I am pointing to the fact that hourly work—when it is required—is closest to commodity work and therefore should come with an orange flag.

The longer you do commodity work, the harder it will be to do great work.