Don’t Sell Your Creativity By The Hour. Sell It By The Execution
Creativity isn’t an exact science. The best work doesn’t happen on command and when you try and push to make it happen, the work often falls flat.
That’s why you should always try and sell your creativity by the execution, not by the hour. When you charge by the hour, it eliminates the magic AND you’re often giving the exponential upside of the project to someone else. Own your upside and keep the magic alive.
When You Sell By The Execution, You Disconnect Your Inputs And Your Outputs.
If you sell your creativity by the hour, you connect your inputs with your outputs. If you put five hours in, you get paid for five hours at your hourly rate. There’s no chance you’ll make more than that - even if the thing you made creates a ton of value. Even if your hourly rate is extremely high, there are only so many hours in the day you can work.
But when you sell by the execution - preferably something you’ve already created that you strongly believe will create a lot of value, you disconnect your inputs and your outputs. Suddenly, you’re going to get paid for the impact of your project, not for how long it took you to make.
Here’s Naval Ravikant talking about the importance of severing your input from your output in his blog post How To Get Rich: Every Episode:
“This is probably one of the absolute most important points. People seem to think that you can create wealth, and make money through work. And it’s probably not going to work. There are many reasons for that. But the most basic is just that your inputs are very closely tied to your outputs. In almost any salaried job, even at one that’s paying a lot per hour like a lawyer, or a doctor, you’re still putting in the hours, and every hour you get paid… So, what that means is when you’re sleeping, you’re not earning. When you’re retired, you’re not earning. When you’re on vacation, you’re not earning. And you can’t earn non-linearly.”
If you need to get paid by the hour to pay your bills, of course, do it. But make sure you have projects where you own the upside of the value you create. That’s where the money is.
When You Sell By The Execution You Can Raise Your Prices Regularly.
There’s also a simple economic reason to sell by the execution: you can raise your prices to keep up with inflation.
The average hourly salary will probably not keep up with the rising cost of living. If you can adjust your market price with each new project, you can make sure you’re getting paid at a rate that outpaces the falling value of the dollar.
When You Sell By The Execution, You Keep The Magic Alive.
Creativity is complicated. It’s very difficult to summon it on command. It often comes in fits and bursts of intensity followed by long periods of “wasted time” as your mind mixes and mingles ideas.
When you’re paid by the hour, you don’t have the freedom to waste time. And as Nassim Nicholas Taleb says:
“What fools call ‘wasting time’ is most often the best investment.”
But when you get paid by the execution - either in a lump sum or after the fact if you can sell what you’ve made - you give yourself the rope to wander. You allow yourself to go down different, seemingly random paths to see where they lead. And it’s this wandering that keeps the magic and spontaneity alive.
You Don’t Learn By The Hour. You Learn By The Iteration.
When you’re paid by the hour, you’re incentivized to cram the project into some pre-determined period of time. You are optimizing for hours worked, not iterations. If you have a deadline you need to meet (as you often do), this is understandable.
But when it comes to highly creative projects (remember, it must be highly creative or a robot will eventually replace you), it’s the number of iterations that matters. That’s where all the learning happens and where you’ll get massive improvement.
Here’s Naval talking about this on his blog:
“It’s the number of iterations that drives the learning curve. So, the more iterations you can have, the more shots on goal you can have, the faster you’re going to learn. It’s not just about the hours put in.”
This has been true for me in the film and TV industry. You have to put in the hours, but it really is the number of iterations (rounds of feedback and updates) that can transform a bad first draft into a great script.
And the faster your feedback loops, the faster your rate of improvement. You just keep making micro-improvements over time to keep iterating and iterating in the right direction. That’s how you’ll turn something good into something great.
Thanks for reading.