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Jake Prieur 00:20
Today, our guest is Jonathan Stark. Jonathan is a former software developer who is on a mission to rid the world of hourly billing. He's the author of Hourly Billing is Nuts, the host of Ditching Hourly and the Business of Authority and writes a daily newsletter on the pricing for independent professionals. Welcome to the show, Jonathan.
Jonathan Stark 00:38
Hey, thanks for having me you guys.
Kap Chatfield 00:40
Jonathan, I don't know if you intended to speak to the audience of like professional services, legal, accounting, things like that. But as we're, as Jake's mentioning some of your background, and really, I feel like is a strong niche for you and your thought leadership, of helping creatives particularly, move away from doing hourly billing, to doing things more like value based pricing. I know theres, there's a lot of other types of pricing that you can do. I think you could probably provide a lot of value to those kinds of bill- by- the- hour industries in general. So I'm excited to see who's who's impressed and impacted by what you have to say today. But before we start talking about your shows, please share with us a little bit about the the Ditching Hourly concept. What got you into kind of crafting this, this new perspective on how to price your work?
Jonathan Stark 01:34
Okay, yeah, in the sort of mid 2000s, I was managing a small DEV shop, we did FileMaker development. And we had lots of leads, we were well known, got lots of business, but we were billing by the hour, and there were about about 10 developers. Our hourly rate was a blended rate at $150 an hour. And a huge part of my job was dealing with hours one way or the other. It was, you know, interviewing new prospects and trying to estimate how many hours it was going to take to do the things they were asking us to do, then I'd write a proposal or an estimate, I should say, with how long we thought it was going to take. And I'd assign it to developers, and then they would guess how long they thought their piece was going to take. And it was just hours all the time, you know, then they track their hours. And then I'd have to make sure that they got onto a timesheet and into an invoice. And so I was constantly on Fridays, and be like, "Everybody get your hours, and we have to do invoicing on Monday", you know. Just and then eventually, you'd start to go over the estimate, because it was just an estimate, but it did kind of happen every time. And the and if you go far enough over an estimate, turns out, the customer is not super happy. And they start to turn into, you know, micromanaging kind of monster, but you can't blame them, really, because now all of a sudden, there's this sort of leak in their checking account, and they don't know how to stop, you know, fill the hole. And so they start micromanaging you. They start certainly disrespecting your ability to estimate how long it takes you to do something, or to control scope creep, or to do all these other things. So then I end up fighting with customers about hours. And how come it took you two hours to do the database import this week, but it was only an hour last week, we're not paying for that hour. And then you get into these three hour long conversations debating if whether or not they should charge for an hour. And it was a nightmare. And and I'm sure I know from talking to 1000s of other software developers, this is not an uncommon situation, or this is a common situation. So that was the sort of the situation when it occurred to me one day that our best developer, who I usually called Fred, was probably we were probably losing money, or at least weren't making any money on Fred because he was really fast. And he had a really high salary. And we were making tons of money on an on our sort of junior developer, who I call Barney, who made half as much money salary wise, but was still billing out at $150 an hour. And he had a great bedside manner. So he his clients were perfectly happy. And it would take him forever to do stuff. So we'd have a project that would take that would have taken me in, lile, "That should have only taken you 10 hours or something". But it would take him 50. And, and the client was happy. They ended up paying like what they paid. And I was like, "Wait a second. So if we were going to air quotes, "grow the business", and we can talk about why I'm air quoting that later. But if we were going to get more profitable, let's say we should hire a whole bunch of Barney's". Which made no sense to me because Fred was like, we were lucky to have Fred. He was great. He's great developer to do this. He's still doing development today. And I just couldn't square that. I could not square that. And I tried to do some gymnastics like, oh, well, you know, Fred helps the other developers and like, Well, no, that's still losing us money because he's not billable. And now they're spending less time and it took me, it's embarrassing to admit, but It took me at least two weeks before I even questioned the business model or essentially the hourly billing piece. And I was like, "oh, wait a second, if we were giving fixed prices, instantly, Fred would be by far our most profitable developer. I mean, he did stuff well, and quickly, and if we were getting $100,000 for something he did in two weeks, that would that's, that would make it work". And, and all of a sudden, Barney would be a liability, you know? Someone to train up and eventually, you know? So so I really, once I saw that our financial incentives were misaligned. Even as the employer, our financial incentives were misaligned. I was like we have I can't not do this, we have to do something about this. And, and I went to the the owner, who I'm friends with to this day, great guy, explained the situation. And conceptually, he got it. But he asked, how would we do that? And I, like I don't know. So rather than kind of risk, you know, the mortgages of 15 people, I went solo, and started my own company. I started out value pricing immediately and it was great. It was absolutely great. I didn't do it perfectly the first year, maybe even the first year and a half. But you know, it takes some practice to get it down. But even the first year when I was kind of, you know, blundering my way through it, it was a fantastic year. I made quite a bit more money, just about double what I would have made in my salary. It might have even been more than double. It's kind of apples and oranges, though, because salary and project, it's different. But but the really shocking thing, the thing that surprised me was that my quality of life, just it got so much better, because I went from, from chasing developers for hours and fighting with customers about hours and sending out estimates that I knew were too low, but I didn't know how high to make them, I would have just been making it up. I was doing my best on the estimates, but they were always wrong. And all that stuff went away. And then and then there was no such thing as going over estimate anymore. So like when it started to take longer than I thought it was the customers like, "whatever, it's not costing us any more money, just keep going". And so there was no fighting, there's no tension. And even when things did take me longer than I expected, it didn't feel like torture because the fight was gone. So you know, my out my effective hourly rate was slightly decreasing. But when you take away all the stress, you don't really care and then next time around, you do a better job, pricing it. And now all of a sudden there's an incentive to get good at pricing instead of trying to get good at estimating and just trading time for money. So probably longer than your longer of an answer than you were looking for.
Jake Prieur 07:46
Oh, that's great.
Kap Chatfield 07:47
No, that's a great story. That's I think that's what's so nice, because we us in a creative business as well. We've experienced kind of saying the same thing. And yeah, I don't know if it was like we found you first or if we found Chris Doe first. I think it was a Chris Doe video or Blair Yeah. Yeah. I remember seeing a video from Chris Doe on like, it's one of his most viral videos about how much does a logo cost?
Jonathan Stark 08:15
Yeah, that was a great one.
Kap Chatfield 08:16
Oh, dude, it just, like it's very simple video, not a ton of pizzazz. But just the the concept was like so earth shattering. And it made, it made us realize, because we were doing some, you know, billing by the hour practices a lot earlier in our business. Well, what there was a phrase that you probably could agree with, and it's "billing hourly penalizes efficient work, and it rewards inefficient work". And that's the problem because
Jonathan Stark 08:45
We're punished for getting good.
Kap Chatfield 08:46
Right? Yeah, no, Fred was your, he was a killer on your team. Yeah. But he was, you know, he wasn't bringing in the revenue that his skill set was, yeah, it should have been bringing in. So I think that in
Jake Prieur 09:00
In a downturn, he might get fired.
Kap Chatfield 09:02
Yeah, sure. Right. Sure. Right.
Jonathan Stark 09:05
That's the, that's the craziest part. Like if I was gonna fire someone it would have to be the best developer?
Jake Prieur 09:10
It makes no sense.
Jonathan Stark 09:12
It makes no sense. But that's what your numbers point to.
Kap Chatfield 09:16
And your MO as a as a, as a company leader is not to produce a ton of mediocre work, right? I'm sure that your your goal was, we want to do better work every year. We want to be an excellent company, provide provide an excellent product. And if we're not if we're not, you know, doing our pricing correctly, we're actually shooting ourselves in the foot. Because we're, you know, we're actually we have to multiply the Barney's rather than the Fred's as you said. So, thank you so much for that, that analogy. Now, I want to ask how this you know, you went on your own, you started developing this, this, this concept on your own. A little trial and error. And then not you've kind of gotten to this place where you've, you've codified this, this, this method of doing pricing for particularly creative, particularly the creative development, web development, that's or is it DEV or coding? How would you describe your industry?
Jonathan Stark 10:16
Yeah, my background is in software development. So yeah, so it's so it's initially, my sort of core audience, or still, my core audience is software developers who work for themselves. So they're either they might call themselves freelancers or consultants. Some are contract developers, they people call themselves all different things. But the, you know, my, my, I have 20 years of experience or so 15-20 years of experience, developing software, either as a manager or as a developer. So that's where most of my examples come from. So most of the people I attract are either software developers, because I'll tell so often, you know, like, spaces, or tabs, hahaha, you know, everyone gets the joke. But as you pointed out earlier, the the things I'm teaching apply to anybody who bills by the hour. So over time, especially after going on Chris's YouTube channel, I attracted a lot of designers who have a tendency to charge by the hour. It even even things like lawyers and accountants, CPAs, and landscape architects and regular architects and photographers and illustrators. So it's become sort of half software developers have a mishmash of people who typically charge for their time.
Kap Chatfield 11:33
That's really cool. I love that you've been able to expand the people that you reach with that, because yeah, there's so many different industries that that would should touch. So that the question that I wanted to ask next was, how did you begin to codify this new way of doing pricing? I know that you had written a book, but just take us on that journey of documenting that stuff?
Jonathan Stark 11:56
Sure, well, I read a lot I looked, I was reading like crazy trying to find some alternative. The first book I found was Value-Based Fees by Alan Weiss. It's, it was written in the 80s, and I don't think it's been updated. So it took a little kind of modernizing in your head. And and it's, it's applied to management consulting, and not software development. So there are a lot of there are a lot of idiosyncrasies of managing a software project after you have given a fixed price that it doesn't touch on that are pretty important. But probably 80% of that book was sheer genius. It's still applies today. And and I urge people who are thinking about this to read that book, it's really good. The next, I think the next person I found was Michael Port, and Book Yourself Solid, which talks about it's, I think that one's more about lead gen. But that was an important book for me, but it might not have talked about pricing very much. But it did talk about something that's critical for profitable pricing, which is having a niche. Picking a niche market to go after, it's extremely, I'd say the first half of that book is a must read for anybody who's thinking about niching down. Then Ron Baker, and and let's see, which I've read so many, I'm not sure which one I read first. But like Implementing Value Pricing, and there are a bunch of them. Yeah, those are those were, you know, I read, I read those books multiple times. And did start to get my head around the idea of, of coming up with the what it's worth to the client first, the value, what it's worth to the client first and then working backwards. And I started to codify that, as you said, back in, let's see, I went solo of January 1st, 2006. And I was fairly well known in our space. So it was it was it was it was news that I was leaving this firm, because the firm was well known. And I was relatively well known because I spoke at the conferences, and I wrote a monthly column and a actual physical paper magazine back then we still had magazines. And, you know, and I had lots of connections and friends and you know, so so it was a lot of like, what are you crazy? Why would you quit your dream job? Why would you quit? And I'd say, "Well, I'm gonna start doing fixed pricing". And they were like, "you're bonkers. We tried that". So there was a lot of, you know, I think there's a lot of like, peanut gallery being like, this is gonna fail or if this doesn't fail, I want to I want to pay attention to what's happening here. So then by I think it was 2009 when, you know, the experiment was over, and for sure, it was a great move. People were like asking me to people from that community were like, well, could you come to the conference and talk about that? Or could you come to come to a meetup and talk about how you did that? And there was one particular meetup in Boston where, where it was clear to me that I was bad at explaining how to do this. Like I was, I had kind of internalized what needed to be done. And I have a personality that's conducive to it in the first place. So when when I, when people asked me to explain it, I found that I was, I was telling them what I did, but there's just a lot of head scratching in the audience. So, you know, when the questions were still coming in, and were over time. So I said, "Here's what I'll do for the next, you know, however long it takes, every Monday, I'll do a blog post about something I did in the previous week or something". That's an important piece of it. And I'll try and explain it better. And I did that for I don't know how long, maybe 20 weeks or something like that. And that's what ended up being the heart of Hourly Billing is Nuts, which I eventually published many years later. So yeah, that was the beginning of me actually trying to write it down and teach it to other people.
Kap Chatfield 15:49
Wow. So you, I think, recognize if I let other I'm gonna show that one thought, Jake, sorry to interrupt you. But just just to clarify. So you, the reason why you discovered that you needed to practice the discipline of documenting this more clearly, was because you kind of you had an opportunity to share it publicly at this conference. And you realize, like, oh, my gosh, like this is, this is a lot clearer in here, in my brain, than it is when I'm communicating it.
Jonathan Stark 16:17
Correct. 100% Awesome. People were like, what about this? What about that? What would you do if if this happens? And I was like, "Well, I wouldn't do any of that stuff". You know? So they were like asking really practical questions about the way that they run their business, which was never the way I. Because I started with a clean slate. And so they had all of these, they were kind of like when I was still at the firm, where they had all of these like, I mean, hourly billing infects the entire organization. It's like a cancer that just gets into everything. Because there's this core foundational, tacit assumption that everything is going to be based on a billable hour. So you come up with systems and policies, compensation, all based on how billable things are, or how we're going to track this, or how it touches every single piece of the business. So for people who weren't starting from scratch, they would say, well, well, if I'm paying employees by the hour, how do I not charge my clients by the hour? And I'm like, I don't know, don't have employees like me? You know, that's not a good answer. So, right, so just fire everyone, you know, what's the big deal? Yeah, so so I had to come, I had to come up with ways to implement this stuff for people who weren't like me, or businesses that weren't like mine. Which is to this day, I still strive to get better at that, especially as I attract lawyers, like there's like regulations about it, you know, so it's different. It's there lots of different complications in each of the different niches.
Jake Prieur 17:44
So when you started your your blog post, did that was that the impetus to continue obviously, to write the book, but then to move into different avenues of content creation? Was that really the first foray into content creation?
Jonathan Stark 17:59
Hmm, that was, I had a, like a terrible blog, like everybody had before that, you know, yeah, to 2003. Maybe it was when I first started blogging, but really, it was like, every once in a while, I'd want to rant about something or there was no rhyme or reason to it. Nobody read it. It was it was it was just like a fleamarket of things that were important to me on some random day. Like every post started with, "boy, it's been a long time since I blogged", you know? So I don't even count that, other than to say that I had the mechanics in place to have a blog. It I wouldn't, it was just silly, it was silliness. But so I had a place to put the stuff when I I actually had an audience I was writing for instead of just like, spouting off publicly. But I don't think I but I stopped doing that after a while it was it was really hard, like blogging weekly, I find very difficult. I wouldn't think about it all week. And then on Sunday, I'd remember that I forgot to post the article. And I'd be like, wouldn't even have thought about what was going to write about. So now it's like midnight on a Sunday, and I'm like thinking back over the week, like, what am I gonna write about? But having a I did notice. So I noticed, I think probably two important things, maybe 3. One was that people were starting to read it like, Hmm, imagine that. Trying to write something helpful instead of something self indulgent, and people actually read it. Another Another thing was that it was really hard to blog weekly, very hard. Just from a writer's block standpoint. It didn't it wasn't fun at all. And I like writing it. It wasn't fun at all. It felt like torture. It was always last minute. So that was a drag. And there was another thing but I guess it wasn't important. No, there was another thing but I didn't I didn't start I didn't see it like that. And it and it. I didn't see it as like content creation. I was just I was just like I told a group of people, I would do it. So I did it, you know? I guess, Oh, that's the other thing! That's the other thing, is that is that kind of having a public promise to do something? That is the thing that caused me to get over the, you know, stay up after midnight on a Sunday to actually tough through the writer's block and get something published because I said I would. So that that was those three things, I think are what I learned from that. But I wasn't doing any kind of serious content creation. I didn't start podcasting until years later. And it wasn't even about this stuff. It was just like to have a fun podcast with a friend about geeky tech stuff.
Jake Prieur 20:38
Got to scratch that itch.
Kap Chatfield 20:40
Yeah. Tell me, tell me about that journey. So tell me tell me about how you first got introduced to podcasting?
Jonathan Stark 20:47
Oh, I actually remember this I so I had an iPod. Like with the wheel that actually turned way back. You know, I'm 52.
Kap Chatfield 20:56
Button in the middle, right?
Jonathan Stark 20:57
Yeah. So, the best iPod in my opinion. And that's when you know, that was that was one of the early devices, you know that the old black and white, no touchscreen iPod was where podcasting started. And it was really clumsy to get anything on there. But it was it was that, there was something about that device that really captured my imagination in terms of like, how do I get my own content on here? Because, we don't have to talk about it, but I have a background in professional music, you know, professional musician, and and so at the time, the pot, the iPod was just music, really. And it was like, what if? What if I could get my music on here? So that was kind of like I was super interested in that device. Fast forward to not that far, I don't remember the year, but it would have been if people wanted to like, check the math. There was a podcast called Boag world, which was primarily for web developers and and people who ran websites. And the the co-hosts were Paul Boag and Marcus Wellington. And they were like, I loved that show. Cuz I, you know, way back then I don't know what I can't even guess what year it was. It must have been when I was in Atlanta, which would have been between 2003 and 2006. So somewhere in there, started listening to this Boag World podcast, don't ask me how I found out about it, I have no idea. I don't even think that I don't even think there was like an iTunes directory at the time. I'm not sure I think I listened to it on my laptop, not on my iPod, or whatever I had at that point. But at any rate, I became a giant fan of that show. They're hilarious. And they were talking about a subject that I really liked. And Marcus was a musician. So there was a whole bunch of it felt like you're hanging out with two really cool friends. And also learning about work stuff and joking around and everything. So that was my I was like, This is great. Love this show. And at a certain point, since I have a performance background, I was like I could do this. Like I have a set of skills that would allow me to do this. And I didn't think about it consciously. But later when I wanted to start podcasting, which is probably I think it was 2011 or 12. With my friend, we did a tech podcast. I was already aware of how I reacted to Boag World as a listener, and how it felt like I was friends with these two guys, and I trusted them and they didn't know me from a hole in the wall. You know, it was like, I was like, if I ran into these guys, I eventually did meet Paul, but and be on the show and all that stuff, which was like a huge bucket list item. But yeah, I mean, I was starstruck by these two guys who just like dopey guys that talked into a mic in a farmhouse in England. You know, so I was aware of the effect that podcasting could have on the listener for sure.
Kap Chatfield 23:52
That's, that's really cool. And so then what at what point did you decide to transition from doing it as more of a hobby, to how can I how can I use this to actually develop my business?
Jonathan Stark 24:04
Mm hmm. So I think at a certain point, let's see, well, the the first time I did that was Ditching Hourly. So at some point, I did this, it's called NITCH N I T C H is the old podcast and we talked about super nerdy coding things. Like, oh, what IDE are you using these days? And, and then we, we, we did we got that sort of ran its course at about 250 episodes. And then we started a new one together, we actually just, like shut that podcast down. And they were like, geez, we kind of miss talking to each other every week. So let's start a new pot new podcast, and a we started a new one, a sort of a future tech podcast about all the stuff that's coming out and like what implications that would have on society and he called that Terrifying Robot Dog. And that, that, it at the time, I was still doing mobile strategy consulting, which was where my business had morphed after the iPhone. So long story, but to answer the question, it felt like me and Kelly talking about fun tech stuff, just like the old one was, but this one was about future stuff. And it was more accessible. And my clients started listening to it. And, and so I would go to meet with them for some meeting or whatever. And then, you know, before after the meeting, they'd be like, "Oh, the last episode of TRD was amazing". And I'm like, you're listening to my podcast? Yeah. You know, the AI thing or the VR thing, or whatever acronym you want. acronym of the week, which seemed like that's what that show was. I was like, wow, they're and they're reacting, the way that people would react when I would come off stage when I used to be, you know, a singer, songwriter, whatever they were, like, not starstruck, but you know what I mean, they're just like, Sure, kind of wide eyed and impact. It's just me. Like, yeah, you know, but but it creates I, I eventually called that effect, "asymmetric intimacy", where they feel like we have an intimate relationship. And I don't even know who they are. Yeah. And it but so I blogged about that, and someone told me there's an actual scientific term for it called "parasocial relationships". And you can google for parasocial relationships. And there's like studies about this effect going as far back as like the 50s. With early television, radio and television, and why it works to have The Rock selling laundry detergent. You know, there's like studies on it. So it's, it's a scientific, I mean, anybody that's listening to podcasts, or really anything knows this is true. But it didn't occur to me that it wasn't some, some function of the charisma of the person. And it's, it's more of a function of the style of the medium. Sure, which is shocking. Yeah, it's not the person's the medium.
Kap Chatfield 26:52
That's fascinating. I feel like that is for people who are listening to the show, our ideal audience for the show would be people who are professionals who maybe wouldn't say that they're thought leaders, some might. But they know that they have a perspective that they want to share with the world, their market, the industry, or industry. But they might be hung up from even starting because they think, "Well, do I have the personality for it? Do I have the charisma?" And you know, what, you're what you just said, really kind of pops that balloon. It's not really about that. And no, I think the ability to do a show, as you said, provides a very, it's a unique format of communication of content development, where you can hold somebody's attention for 15, 30,60, even 90 minutes or more.
Jonathan Stark 27:43
I mean, Joe Rogan's shows like four hours long.
Jake Prieur 27:46
They're great. I listen to all the time.
Kap Chatfield 27:48
And yeah, it's, it's there's there's not there's not really any content like that, besides maybe writing a book and reading someone's book.
Jonathan Stark 27:57
Yeah. Right. And it's so much easier. I mean, just just so happens that I, I do transcripts for Business Of Authority. I do transcripts so Rochelle can do the show notes. And I just happen to notice that over the past, you know, whatever, a couple dozen episodes, we in an hour, we say about 10 to 12,000 words. And like you know how long it would take me write 12,000 words? Like, write them? But it's like, so easy. You're just like having a conversation. If you have a co-host or a guest, Yeah, stream of thought you you'll have like, you'll realize stuff. The like, if you have another person on the show, if it's a solo show that's solo shows are a little, I actually find solo shows harder, in a certain way or took it took me more practice to get comfortable doing a solo show and not just going off into a total ditch of tangents. But if you have a little bit of a structure to it, you can do it. But I find I find doing a show with one other person, either a co-host, or a guest is probably the best fit for newbies, because there's a million reasons we could go into if you want, but I find that that's the best fit for people who are just getting into podcasting. And if you don't feel like you're charismatic, it doesn't matter. It doesn't have to be perfect. If you go back to almost any show, and listen to the first couple of episodes, they sound like garbage. It's like that's the way you end up with a great podcast is you do a bad podcast and you make it better. You don't start out with an amazing podcast. So really good. It's like listen to anyone mobbin bam, they have like five or 600 episodes you go back. To it sounds like they recorded the first ones in a shower stall. It's it's like unlistenable. Yeah. So, it the thing that you have to do, you don't need charisma. You don't need a good mic. Whatever you're using for zoom is fine to get started. But if, you do need to show up and genuinely want to help the audience, even if you don't have an audience yet you need to know who the audience should be, and you need to show up and want to help them. And if you can do that, they will not care if your mic is a little tinny, or you have a lisp or English isn't your first language, because you helped them. They're just gonna be like, that was amazing. I want to see if he can help me more next week, or she can help me more next week.
Jake Prieur 30:20
Yeah, there's this thing to to your point of that you might not have charisma, you might not be the best present have the best presence on video. But even if people don't like your voice, you're still niching down, you're still segmenting your audience, because they might not like you. And okay, now you've whittled down to your, your, your audience even more. So you get to that, that really, that close knit tribe of people that you really want to speak to, to begin with. And so there's some advantage to people not necessarily liking your presence, if you will.
Jonathan Stark 30:55
Yeah, that's, I mean, I think that's great. I mean, there's so many, I mean, we could get into I suppose we are going to get into the business aspects of this. But if there are people who don't like your, the personality piece, or the charisma piece, or just your worldview, or if they just don't like something about your vibe, you don't want them as clients. I mean, they're not going to like your vibe there, either. If you're, if you're just yourself on your podcast, and it maybe takes a few episodes to relax enough to feel like you're just having a normal conversation with your family or friends. Then, if they don't click with that, you don't want them because it will be frustrating and uncomfortable. And that's when that's I've seen software projects anyway, big six, seven-figure software projects blow apart, and then the lawyers come out and people get fired. And if you're, but if you're friends with your clients, my business philosophy is help people you like, get what they want. And if you're working with people you like, and they like you, they're not going to sue you. They're not going to freak out when something goes in an unexpected direction. That's always going to happen. They're always surprises on a big project. But having that core trust at the center of it, mutual trust. It solves a lot of problems later. So so so repelling people who just don't click with you, or don't get your vibe, or don't think you're funny, or smart or whatever? That's good, because that's saving you some lawsuit down the road probably.
Kap Chatfield 32:23
Yeah, that that quote, I had to write it down, to help people you like get what they want,
Jonathan Stark 32:29
Not what they need, and not people you don't like.
Jake Prieur 32:31
Yeah, what they want
Kap Chatfield 32:33
That's so Oh, man. I want to respect your time. Like we could talk for hours, you're just this has been such a great conversation. But you did make a point of, we'd probably get to like the business side of Yeah, the show and how that can, you know, I love that you started a show, though, for really for kind of more personal fulfillment. Like let's do something fun. Like let's, you know, already consumed with a ton of work, like let's do something that's life-giving, I guess you could say. Yeah, right. And now you're you're you're kind of finding how, you know, you're finding that same sort of satisfaction while pursuing a content development endeavor that's actually it's actually contributing to the growth of your business. So how have you seen doing these different shows, particularly, you have a couple, I think you have the Business of Authority you have Ditching Hourly, you also have a YouTube channel. So you're all over your, you're crushing it. How have you seen some quantitative, or I guess you could just go whatever direction you want, How have you seen some results for that have led to the growth of your business through producing this show?
Jonathan Stark 33:40
Right. So I would say when I self, so when I when I publish the show, let's just stick with like, I don't know, it doesn't matter Ditching Hourly, just to pick one. Cool. When I produce that, it's not about it's not about awareness, or top of the funnel stuff. I don't know how technical we can get in terms of marketing speak. But it's not about really attracting attention. Like I don't think I don't think Ditching Hourly. I don't even look at the stats. I think a couple 1000 people download it every time. But I don't know, I don't look I don't care. Because the the metric that I track is when someone comes into my mailing list, which is the key piece of my entire business. It they already trust me. So if they came in through a podcast, they trust me, they feel like we're friends. I don't know them yet, and maybe we will be friends. But they already give me the benefit of the doubt on anything related to anything that's the subject of the podcast. Same with the Business of Authority. Rochelle gets the same thing. She went a lead does come in from the podcast, it's question of like, do they have enough money to buy something from you like? They're not even looking at anybody else. So the key piece of the podcast from a business standpoint, and this isn't why I do it, but I am aware that it happens, is that it massively builds trust. And you know, they believe in your expertise, they see you as an authority, which to me is the level above an expert. Like, you can be an expert, and no one know it. Like, you could be amazing at like scrimshaw, or, you know, whatever Romulan calligraphy, I don't know, you could be amazing at that. But if you're not, you're not an authority on it, if no one knows. So once you become an, I think that's sort of a level up. That's good. So once having a podcast turns you into an authority in the minds of the listeners, because as far as you're concerned, you're, as far as they're concerned, you're famous for this. Like they can't believe when someone else has heard of you. Which is absurd, of course, I was just at a family thing. And my niece's were like, like, are you gonna see the new Dune movie? And I was like, yeah, that book was amazing. And I even liked the David Lynch movie, and I was like, they were like David Lynch? And, and I was like, but why are you interested in it? And they were like because Zendaya is in it. And I'm like, what's in it? She's like, Zendaya. And I'm like, I'm just blanking. Right? And there's like, three of my nieces there. And they're like, do not try and tell us you don't know who Zendaya is. And I guarantee you that, that Zendaya, he or she is way more famous than me if if that person is in a Hollywood movie. Yeah, but, but I still don't know her. I haven't or him. I think it's a her but it's a her so yeah. Okay, so no, no clue. So someone that famous. People don't know, or her or whoever, it doesn't matter, name anyone. But whoever this person is, but it's the same with me. Not everybody's gonna know who I am. But it doesn't matter. Because the people who do know, are going to, they're going to trust me, they're gonna spread the word a little bit. I don't think podcasts don't I have never seen podcasts in, you know, in a niche, or a specialization like mine, I've never seen them blow up. I mean, you know, get like millions of downloads. It's, I don't that to me, that's not the goal of this kind of a podcast. Sure. The goal of this kind of a podcast is I mean, ones that I produce is so that people first that I'm helping people, and they're getting educated. And if I can do that, then I know that they're going to trust me as as an expert, or a recognized expert or an authority on this subject. So when they need help with this subject, there is no other name that's going to pop into their head, or maybe a list of three or four names. Yeah. So then they're going to, then they're going to be like, I'm ready to get deeper into this. But yeah, so So from a business purely business standpoint, when someone comes into your sales process they're going to buy. If they can afford it, they're gonna buy like, there's just no, this is a foregone conclusion.
Kap Chatfield 38:05
Man, that's so good. You know what? One thing that I think is interesting is I love that you can use a couple of phrases. One was one that you kind of coined yourself "asymmetric intimacy". So I love that. But then the the actual, more, you know, publicly accepted term would be "parasocial relationships".
Jonathan Stark 38:27
Yeah. It's sort of gross terminal.
Kap Chatfield 38:29
Yeah. There's, parasitic. Yeah, I don't like that. I like "asymmetric intimacy". Yeah. So they should, they should listen to you on that. So I'm gonna use that term. I'll give you credit for it. But one, one thing that I think is so interesting about the buying cycle, particularly in B2B today is when when when you're doing a B2B sale, it's not it's not transactional. I mean, you usually have a handful of different decision makers who are all weighing in on whether or not they should invest in partnering with another firm to help them through some legal counsel or partnering with a dev team that's going to help them develop an app or a software. And so and that's a journey, it's not a it's not something that you just you don't just decide to marry somebody in an instant. And I watch I see a single Facebook ad, right? So what what this content allows you to do, is it allows you to, to to demonstrate that expertise, demonstrate your value proposition, particularly though, in a way that's not salesy. You know, you mentioned it's like, it's, it's not about creating content that has some sort of self indulgent motive behind it behind it, but you're just trying to be helpful. And what that what that does for your audience is it allows them to bring their guard down. It allows them to feel like as we say play that like feel like they're playing offense, rather than playing defense against the sale. And that's what allows them to eventually approach you and say, Hey, like you might, you might not realize it, but we've been actually having a conversation for months now. Because I've been listening to what you've been saying, and I'm ready to speak up. And so it's, it's, I think it's just such a beautiful way to do business.
Jonathan Stark 40:15
Yeah, I mean, it's the, you know, I mean, you mentioned, I mean, it's the the thing with content creation, is like, I'll get people who say, like, "How do I, how do I blog or do podcasting in a way that's gonna maximize my SEO?" And I'm like, I have no idea. I couldn't care less about SEO. SEO is irrelevant. If you're, if you're selling, if you're selling a commodity, SEO is critical. But the number one, the number one, by a mile, search term, that leads to my website, when I used to track that, which I don't even track it anymore, was my name. So they Google for my name, and I come up. They're not looking for a business consultant, they'relooking for me. If they're looking for if they're looking for just one of many, and you're trying to position yourself as just one of many web developers or illustrators or coaches or whatever. If you're just one of many there, then you do need to care about SEO. But but the next lower price option is one click away. So you need to be the one and only not just one of many. Be the one and only, and then you don't have to worry about SEO, because they're going to search for your name, or your business name, whichever one you use. So yeah, so I don't worry about SEO. And I don't think about content. If you look at my blog, it's just a handrolled thing. It probably doesn't even have meta tags, or whatever. Whatever the Google gods want from my blog right now, I don't think about that at all. I just focus on turning the light bulb on for the people who I know are reading or the kind of people I wish were reading, if I didn't have an audience yet. And if I can turn that light bulb on, they're going to spread it. The word of mouth is going to spread it. They're going to share it on Twitter and LinkedIn, Instagram, and all over the place. People cool folks like you are gonna ask me to come on their show and share these ideas with other people. Yeah, I don't care SEO. And I laughed before when you said like paid ads, like give me a break. Like if you have a business like this, and you're doing paid ads, it's like, that's a waste of time and money, unless you unless you have a lot of money and you don't care about it, you want to do an experiment, and you have another person doing it for you. But for someone who's an authority and has, you know, your currency is going to be insights and being able to, to communicate those insights to an audience in a way that produces action. And spending an hour trying to figure out Facebook ad manager is like a complete waste of your time. So if you can outsource the entire thing, and drive ads to your you know that there's going to drive traffic to your free podcast, then maybe that's a super high top of the funnel thing that you could do. But you think me spending a minute of my life thinking about Facebook ad managers is too much.
Jake Prieur 42:52
No, thanks. That's funny. And to your point, I mean, you're we reached out to you to be on this podcast, because you're an authority in your space. We reached out to you specifically. Yeah, in our mind. And you know, we didn't Google search: "Who's the best person for this sort of thing?" We're like, no, we want Jonathan Stark on our on our podcast, because there's trust that there. We've spent years viewing your content. And so there's trust has been built up through your authority in these sorts of topics. So just to double down on what you said, I'd love to
Jonathan Stark 43:30
It's a long game. It's not for the impatient. It's not it's absolutely rote growth hacking. Yeah. You know, it's like showing up every day and trying to help people, and eventually, you're going to be able to fund that mission, because certain people are going to want more attention. And then you can charge for that, you know? Like one on one something or other? Yeah. Yeah.
Jake Prieur 43:50
Do you so to your point of you don't track you don't you don't look at your your metrics, or anything like that, do you track anything quality quantitatively or qualitatively at this point anymore?
Jonathan Stark 44:02
Yeah, profit, and mailing list subscribers. Those the only two numbers, I look at.
Jake Prieur 44:08
Only two that actually mattered to you at this point? How long did it take
Jonathan Stark 44:12
Anything else is a vanity metric.
Jake Prieur 44:13
Yeah, then how long was that process for you to get down to those two?
Jonathan Stark 44:18
I goofed around with. I mean, like, I mean, I was a web developer for many years. So by default, I added Google Analytics to my site a long time ago, but I never looked at it. And when I did look at it, I couldn't make heads or tails of it. And would I rather spend a week getting good at Google Analytics or would I rather spend a week writing seven emails for a group of people who were going to benefit from it? You know? It's an easy decision, so I just took it off my website. So in fact, there are numbers in my email service provider that I asked them to turn off like open rate. I don't need to see that. I don't care about that. It's wrong anyway, and it's it's just getting worse. So, but it's hard not to see it because they put it like boom, like front and center in the interface. Like, can you just get rid of that? Get rid of opens, get rid of clicks. I'll know if people are opening the emails because they're buying stuff from me or they're sending me emails like, "Wow, that was" they'll reply. They'll say, "Wow, that was an amazing message that came in just the right time". I love stuff like that. It was a, you know, quote, qualitatively I don't track numbers on it. But I have a sense of like, when I hit a homerun with a daily email, because I'll get, you know, 20 or 30 replies to it. Sometimes I'll get like 70 replies to an email. And I'm like, wow, I guess that touched a nerve. So you want to make note of that, but it's not. It's not in a spreadsheet somewhere.
Jake Prieur 45:41
Kap Chatfield 45:42
You said though, before we hopped into this recording, that you said, you said that you do track qualitative and you do have a spreadsheet. Is that, are those connected? Are you, have you created a spreadsheet to measure that sort of thing? I'm just super curious.
Jonathan Stark 45:56
Yeah, I mean, we could go, I mean, I can talk for as long as you want. I don't know what time it is. But the Yes, so to answer a specific question, the one that sort of dashboard for my business is it's just a spreadsheet with like, down the the left-hand side is like a list of things I offer. And then across is, you know, January, February, March, April, May each column for each month, and the end of the month, I've got a you know, in the first of each month, I've got a reminder, my calendar to like put the numbers in the spreadsheet from last month. So I just run a run a download, and I put in the numbers. And I'm like, and add on each one of those things, each one of the offerings. So that is like private coaching is the most expensive thing. And, you know, all the way down to like an inexpensive ebook for 29 bucks. So I've got all the products and services that are available. And column next to that I have a drop down that has two options in it easy and hard. And so to me, that's, to me, that's the qualitative piece where it's like, this is it easy and hard in my head is kind of a mishmash of a couple of sub things. But since it's just me, I can pick it. So like, hard is something that takes a ton of attention or emotional investment, or has lots of appointments. And combined with or maybe is multiplied by, or I guess divided by how much impact it's going to have on the mission. So the overall mission is to rid the world of hourly billing. So if I look at something like my private one-on-one coaching program, which I could just do full time and be a millionaire, easy, easily. It's like, well, but that's really hard. It takes it's a lot of appointments in my calendar. It's it, it only touches, I mean, the most I can really handle at a time is like 10 people. And if I had, if I booked out every quarter, 10 people, 10 people, 10 people, I could have 30 people a year. And then it's like, you know, it's like, that's only 30 people. So all of that, and I wouldn't have time or energy to do much else. So all of that combines for me to just label that hard. Another way to put it just like not that effective, or the leverage is low, the leverage is low. So then if you look at, but so instead of doing that, I can make a million bucks selling a whole bunch of ebooks done at the other end of the spectrum that are easy, every single one of them it's easy. It's like you wrote it, and that was hard, but that's over. And that stuff just sells itself. There's like a Buy Now button, boom. Buy now, I don't have to do anything, I don't have to show up and have an appointment. Occasionally someone will be like, oh, there's a typo on page 52 or whatever. And I'll fix that or somebody needs a special invoice or something. But there's no, it's very easy, and it has a huge impact. So the the sort of impact divisor in my gut instinct is, is much smaller. So it has a much bigger impact because I can reach more people with that stuff and fund the mission front, you know, just like fund my lifestyle with a much with something that's sort of extremely low price point that is accepted. Accessible, yeah, to way more people than like a $25,000 coaching engagement. And you get a $25 ebook, and try that first. And that to me. So that's the qualitative thing is this gut instinct mishmash of whether it's a good good thing for me to pursue or a less good thing for me to pursue. Or it's hard, or it's easy, or it's got high impact or it's got low impact. Yeah, I could use any of those labels for the for these things. But then when at the end of the year, when I look back at my revenue mix or really I mean, my profit and revenue are almost the same because my my costs are the same every month. So this is basically the same thing. As long as my revenue goes up, my profits are going up. So if I look at that, and I look back and I say well, you know, if I made if I just got rid of all the hard stuff, how much would I have to increase the easy stuff so that I don't have to tell my wife that we're gonna have a budget this year? And I say like, you know, how can I like, maintain the lifestyle, always growing, it doesn't have to be I'm not like one of these, I have a very modest lifestyle, I don't need to have even a BMW, I don't care about stuff like that. So it's like, as long as the as long as everybody's happy in the house, and I can reach more people, have a bigger impact. And that means spinning, you know, probably ramping down on the hard stuff, even though I love doing one-on-one coaching, because it's extremely rewarding, you can have a really big impact, but it's only on one person at a time there. And it's it's life changing for them often, but it's not aligned with the mission. So yeah, so like ramping those things down and ramping the other things up. That's what the qualitative column helps me, helps me do when I'm, you know, in January, when I kind of set my strategy for the year, then that's, that's when I really look at numbers.
Jake Prieur 51:00
Yeah, cuz you could, you could almost, you could almost put in 80% of, I'm making up numbers, obviously, you could put an 80% of the effort with your lower hanging fruit product offerings, but have a much larger impact. And so it makes sense to spend a lot of your effort there. Assuming the revenue makes, you know, the numbers make sense as well.
Jonathan Stark 51:23
Hmm, yeah, Rochelle and I talked about this a lot on the Business of Authority where it's not about, I don't care about being a billionaire, like, I just couldn't care less about that. It would probably just mess me up. I'm much more interested in I do like, you know, I like nice things, don't get me wrong. But it's not like, you know, this is not a Rolex, I don't care about that stuff. So the, the I don't think about growing the business. Like, I like to talk to people like well, you want to grow the business, but grow what? Like what what piece of the business? They almost always say revenue, sometimes they say market share, sometimes they mean headcount. And all three of those things to me, maybe the market share one I could I could get behind personally, because that's kind of like spreading the word but but leading with revenue numbers is backwards to me. I see money as funding the mission. So start with the mission, or the purpose or the goal, or the big idea, whatever your objective is, and not a financial objective, and then work your way backwards from that and say, like, Alright, how can I do that and fund my ability to come back tomorrow and do it again? Yeah, because if you run out of money, you're done. Obviously, I'm gonna go work at Starbucks. Yeah. But you know, to be able to get a, you know, corporate job. Yeah, it's just it's gas in the car. You don't buy a car to have something that will consume gas. Like, you don't, you don't need like, jeez, I'm gonna burn up all this gas, what should I do? Let's buy a car that'll burn it up. It doesn't. It's not about accumulating gasoline. It's fuel. It's fuel. So money is you wouldn't hoard gas. So I don't understand why people hoard money. It doesn't make sense.
Jake Prieur 53:01
I love that perspective that you've that you just talked about, too. Because for people who want to get into who want to start podcasting, who want to start creating content, for their business, or their brand, it should be first and foremost about helping people. The mission should be leading, education, helping making an impact, it should be led with the mission and not the money. Those things should not be. Should be. It's like the Zig Ziglar quote, "If you help enough people get what they want. You'll find that you always had everything you wanted as well". Or something. Or anything. Yeah, exactly. It's true. leading with the mission and let the money follow.
Jonathan Stark 53:37
It's easy for you to say, easy. Everybody says, "Well, yeah, it's easy. You're famous". And I'm like first of all, I'm not famous. And second of all, I wasn't born with an audience. You know? If you're not well known, get well known. Yeah. Like step one, get well known. Step two, if you help, you know? I mean. people always act like, "oh, that won't work for me, because I'm not well known". It's like, Well, neither was I in 2016 and then I wrote a book, you know? So it's Yeah, you should. You should have seen me when I was in a band. Talk about not well known.
Jake Prieur 54:11
Yeah. Anyway. Yeah. That's funny. I. quick tangent, and then I'll ask you one last question that we can close up. I've watched your videos for years. I always assumed being transparent, I always assumed the guitar in your corner was a prop. Now I know that you actually use it. You're a good, good musician.
Jonathan Stark 54:34
I graduated from Berklee cum laude.
Jake Prieur 54:37
That's incredible. Super cool. Yeah. All right. Let me let me pivot just a little bit that we can close this thing out. How have you seen your expertise, your authority grow as you create content? Has there been sort of evolution of your thought and your expertise through the creation process?
Jonathan Stark 54:57
Yeah, so it's funny because the more there's sort of this curse of knowledge thing where the more you know, the more you realize you don't know. So it's this weird crisis of confidence. As you you know, I've been writing a daily email since 2016. So it's like, it's like, I just passed my five year anniversary. Wow. So you know, yeah. So what's that? 1500, 2000 emails? Yeah. So. And I recently built a search function, because there's so many of them, and there's no way to search my site except for Google. So I recently created a search function for my community, so that they could look for keywords that were just limited to my site. And so I was testing it. And some really old stuff popped up. And I would read it and I was like, wow, this is really good. Like, but it was, it was simpler. Like, my, my, it was more vanilla back then, it was less nuanced back then. And, and so I noticed that, that as I go on, there's a lot more, it depends, or, well, you know, what, what's your exact situation so I can really answer this? Where back then I was just like, here's how it works. Because back then I was only thinking I was only aware of my circumstances, now I'm aware of hundreds of differences, different types of circumstances. So so it gets it's almost like harder, the more you know, in a sense. So I have to work harder to abstract it into something that is going to still be useful, but not not like for one person on the list. So if you're on on my list, something that is kind of effective is that people will ask me questions, and I'll get permission from them to use their question as the jumping off point for that email, so that the message is interpreted in the context of the question. Instead of me just putting the answer and then getting 100 emails about like "but, that won't work for me". And it's like, I know, I was answering this person's question. yeah, so. So. So that's, that is an interest-- and I've heard this from other people who have really showed up every day for a long time on a particular subject area that it gets it almost in a certain sense, it gets harder, the more you know, because you're also aware of like way more barriers. Sure. Another thing though, is that I find this is especially helpful when I'm working with people in group coaching, is that you see patterns from people that a software developer and designer and an architect, where there'll be this, they're there, they're all experiencing a similar symptom in their business. And it causes me to go deeper, beyond pricing, which is what I mostly think about is pricing. And I find that I end these business concepts, and you start to find that the common denominator or self help kind of con content, like, like confidence, imposter syndrome, productivity, perseverance, you know, risk taking, like, like, traditional self help book type stuff. Yeah. And it's like, Well, I gotta read this in there. Yeah, right. Now I'm gonna read this. Or now I have to, how do I solve this problem? Because I'm not really good with the psychiatrist stuff. So when it's so but but I am, but I know people are and I asked him to, like help, like, what would you do if you had like three people like in a situation like this? And they'll point me to a book and then I read the book. And then who knows? Maybe someday I'll have a like, you know, live your best life book. I don't know. It feels very out of character. But I can see, as as you get into the specifics, these problems, there are these underlying, it's often confidence. There's just confidence thing that's underneath setting. I mean, imagine, imagine if you're used to sending out a proposal for $5,000. And I'm like, You should this proposal that you've got is clearly a $50,000 proposal. And they can't even they'll just laugh like there's no way yeah, like, all these all of these, you know, personal relationship with money and little kid like stuff from your parents. And it's, yeah, it gets pretty hectic. Yeah, it gets pretty hectic really fast. If you're increasing your fees found.
Jake Prieur 59:07
Yeah. So you almost have to unclog the, the deeper root. So like, say, for instance, oh, they don't want to go value based pricing because they're worried about losing a job. And job security is important to them, because their dad got fired when they're a kid. And so now you're having to dislog the clog of their parent issues. To the value. Wow,
Jonathan Stark 59:29
That's not uncommon. Not uncommon. A lot. There's a lot of people out there that are like charge more, and they're like, Yeah, I charge more. But there are also a lot of people who are like, that's not fair. I'm gouging the customer. And it's like the customer doesn't have to buy it. They could just say no, it's like, Oh, I couldn't not say yes to a client. That's another one. Not being the inability to maintain set and maintain boundaries between the client and you. And like there's, yeah, it gets it gets. I mean, it gets pretty. I don't know squishy, very quickly. You know that it's it goes from numbers and pricing and stuff like that very quickly, like, Oh, I could never send that. I could never send that. I could never say that. Yeah, it's like, well, that is all right.
Jake Prieur 1:00:09
Let's dive into that.
Kap Chatfield 1:00:11
Jonathan Stark 1:00:12
Yeah. So so maybe I found myself in the sort of beginner's mind of a new topic area, because beginner's mind is what I had in 20. When I started the weekly blog, I had beginner's mind, where I was like, Oh, this isn't that hard. You just need to know a few things. And those things worked for me, but they don't work for everyone. So then I end up with the curse of knowledge. But now I have beginner's mind with like, how to say no to customers or stuff like that. So we'll see.
Jake Prieur 1:00:38
Yeah, so in 2024, we should expect to see Living Your Best Life and Value Based Pricing.
Jonathan Stark 1:00:46
Super woowoo. Yeah,
Jake Prieur 1:00:48
Right? That's great.
Jonathan Stark 1:00:50
Yeah, I see it now. Like that stuff sounded like, you know, BS to me a lot of times that stuff. But but so does, you know, but I don't know. So there's a lot of other stuff. And like, when I when I look into this, the more and more I'm like, wow, there is literally a confidence problem here. Yeah. How do I fix that? Or how do I help? But I can't fix it. Yeah.
Kap Chatfield 1:01:10
Man, Jonathan, I can't thank you enough for everything that you shared. Well, we'll wrap it up with that. Because, man, we really could go on forever. This has been such a great time. You're a remarkable businessman. Love the content that you're putting out. And thank you so much for taking time to share your story, your journey, some of the things that you care about with us and how the show that you've been doing is going for you. Just to give something to help you out, as if you need our help, you do such a great job. But if you if you if there's people listening right now who want to learn more about you follow your content or even jump on your email list. How would you direct them to do that?
Jonathan Stark 1:01:50
Yeah, we talked about value pricing a little bit here, but we didn't go in depth too much. So if you know the next time somebody asks you what your hourly rate is, stop what you're doing. Don't tell them, stop what you're doing. And go sign up for my Value Pricing Bootcamp. Just go to valuepricingbootcamp.com, and it'll redirect you to a page on my site where you can get a free six-day course on, it goes into in depth on six topic areas underneath value pricing.
Jake Prieur 1:02:19
Awesome. That's wonderful,
Kap Chatfield 1:02:20
Jonathan. Thanks again, man. We're so glad that we could have you on the show.
Jonathan Stark 1:02:23
Thanks for having me. I really appreciate it.