Goodbye, Lingnu

[Omer Zak]

Nadav Har'El's thoughts below make a lot of sense.

Eliyahu Goldratt, in his books "It's not luck" and "Critical Chain"
discussed the difference in value to the provider (cost+) and to the
client (which has no relationship with the value to the provider); and
the value of finishing a project early.

If I were having such a business today, I'd specialize in certain areas
and accumulate expertise, scripts, tools, know-how in those areas, and
cultivate the ability to finish early&reliably projects in those areas.
Also, the prices for those projects won't be direct function of the
skull hours spent on them.

Why didn't I actually start such a business?  I need a partner who is
people's person, and was unsuccessful in finding such a person.

About ten years ago I worked with such a person and we were successful
as long as the market niche, served by us, lasted.  And we indeed
invested in accumulating expertise and tools and we successfully aimed
at shortening turnaround times of the projects serving that particular
niche.  The business does not exist today because we were not successful
in locating another good niche once the original niche disappeared
(which was far from taking us by surprise).

[DISCLAIMER: Yes, in the above I am self-promoting and am on the lookout
for the missing ingredients for a successful business.]

--- Omer


On Mon, 2011-11-14 at 13:14 +0200, Nadav Har'El wrote:
> It occurs to me that if 250 shekels per hour sounds (as you explain in
> your blog) too much, then maybe the problem isn't with this number, but
> with the basic idea of charging for hours.
> 
> Let me explain: Imagine that I am looking for a consultant to set up
> a mail server in my company, to create a online store for me, or
> whatever (you can replace those examples by something closer to your
> domain). Imagine that I find company A, and company B, as possible
> candidates, both highly recommended (so I can assume the quality of
> their work is similar). I'd be really naive to only care about the price
> per hour that each company charges - maybe A takes 250 shekels/hour, but
> can do the job in 10 hours, and company B takes 100 shekels/hour, but will
> take 100 hours to do the same job? Wouldn't I be stupid to pick company
> B just because of their lower hourly rate?
> 
> So maybe the key to winning over your competitors isn't to charge less
> per hour, but rather to complete the job in less time. (you can of
> course hide this will all sorts of creative marketing)
> 
> You can complete the job in less time if you stop thinking about selling
> time, and instead think about which jobs you can take which will allow you
> to *reuse* things you learned, and code you wrote, while working for previous
> clients. For example, if you just finished setting up a web front for a
> grocery store - and you developped all sorts of scripts and expertese to do
> so - go and find another grocery store as a client, because you can now do
> their job in half the time.
> 
> Of course, this is intuition. I didn't actually try to run a company like
> this, and didn't put my money where my mouth is. So maybe I'm all wrong here.
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