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Do Good Work is not a label but a way of living.
It is the constant and diligent effort to achieve a new level of excellence in one’s own life.
It is the hidden inner beauty behind the struggle to achieve excellence.
It is not perfect but imperfect.
It is the effort, discipline and focus that often goes unnoticed.
The goal of this podcast is to highlight that drive.
The guests I have on this show emulate this drive in their own special way. You’ll be able to apply new ideas into your own life by learning from them.
We will also have 1on1 episodes with me where we’ll dive into my own experiences with entrepreneurship and leadership.
Every episode is designed to provide you with ideas that you can apply and grow in excellence in all areas of your life, business and career.
Do Good Work,
Raul
AI is.
Deflationary.
Prices are compressing,
retainers are shrinking.
Execution layer work is getting cheaper
and will continue to get cheaper by
the month, but it's not all that bad.
So let's, I'm an optimist here.
Let's think about what
does this actually do.
I think this is actually gonna
create more demand than we've ever
seen before, but before I dive
into that, I have to tell you.
About a conversation that actually
triggered this entire podcast, this
entire new Substack that I wrote,
and I'm filming here for you.
So I was chatting with an agency friend.
He works with agencies and he told
me that one of the agencies that he
knows recently dropped their fees,
not because the work was getting
worse or because results dipped.
They dropped their fees because
AI can do most of their work.
And they were thinking, Hey.
We're using AI to do some
of the heavy lifting.
We can't justify the same rates.
That's what they're thinking.
So they literally offered an AI discount.
They, and if you know anything about
me, that's not the best framing or
positioning, and I'm not a fan of
that, but this is what we're calling,
and I'm calling the AI pricing trap.
You get better tools, you produce
more output, you deliver faster,
then you charge less because the
machine did the work or even all
of the execution layer and like,
let's think about that for a second.
If you do that, if you really
do that, you just gave clients a
discount for your own innovation.
So let's, let's think
about this for a second.
You gave clients a discount for
you taking the time to innovate and
figure out how to produce results.
Maybe if, if you, if you think
your results are worse off with
ai, then you're using it wrong.
So that's one key thing.
But if you're actually producing
more work, able to do more quality
work and go deeper, you're literally
discounting your innovation.
So this is Jevons paradox
playing out in real time.
So, Jevons Paradox from 1865, he
observed that When coal was more
efficient to use, people didn't use
coal less, they actually used it more.
And the same things that are
happening here now with services,
the efficiency gains are making it
cheaper per unit, which will increase
the total consumption, which is really
interesting and that's happening now.
And AI tokens are gonna be
compressed and be cheaper, and the
models are going to get better.
And we can parallel that
to what's happening in
consulting and agency services.
Just like I discussed in the services
stack in that article, the cost of
producing output is going to drop, but
at the same time, the paradoxes and
the, my hope is, and this is what the
parallels are, is that the demand for
that output goes up if it's good output.
So the main reason I'm mentioning all
this is that agencies and consultancies
who are going to understand this
aren't gonna race to the bottom
and just compete on, on like price.
'cause that's essentially
competing on zero.
I think they're gonna capture the new
value that this efficiency creates.
And if you do drop your prices,
where you're pretty much just telling
the market that the value that you
delivered was always in your labor,
it was just in the hours in the hands.
I'm putting my hands up here
if you can't see the video.
On the account.
So if that's what you were selling,
then yes, your pricing is in trouble.
But if you're selling outcomes,
transformation, conviction, if you're
selling belief, your pricing has nothing
to do with how the work gets done.
I that's very, very, very
important to think about that.
And I wrote about this like I mentioned
in the services stack and I also did
a podcast on that, that the macro
shift happening across consultancy
and agency services where AI is
compressing execution, meaning it's
making it easier for us to execute.
The agencies and consultants that
are going to thrive will sell on
transformation, relationship and belief.
We'll put somewhere here in the notes
to get access to the services stack
so that you can see what happens with
the services stack, how to sell at the
higher level, and what replaces the
traditional consulting and agency model.
So that's the macro picture.
the question that I've been
sitting with and inspired me and
triggered me to write this is.
If we accept this thesis, that value in
consulting and agency services is going
to move up the stack, how do you price it?
Because the old models don't work anymore.
Flat retainers assumed you
had fixed cost of delivery.
That really doesn't exist anymore.
Hourly billing, we always
knew it was an issue.
Hourly billing.
Punishes you for being faster.
And project fees don't account
for the 10 to a hundred x value
creation, net new value creation.
That's possible now when you deploy
your intellectual property with agents.
So I've been working, like I mentioned,
I've been working through this in my
own practice now with clients and the
framework that I'm landing on really
is a quadrant the new value quadrant.
And what I want to do here is
explore each one of these quadrants.
And kind of give you my
take of where we're heading.
And this isn't just like
a, an idea out of nowhere.
Like I'm practicing a few of these at the
same time and I'll share more about that.
So let's dive in.
So the new value quadrant, there
are four ways to price consulting
and agency service in the agent era.
Four distinct quadrants, each with a
different relationship between you, your
AI agents, and the value you create.
The most important thing that
you're gonna take away here is that
you're gonna create net new value.
If you don't, you will be replaced.
So most service providers are still
stuck in legacy pricing models, or even
worse, they haven't even considered
that there are multiple models merging.
Because they're not adapting.
And if you're still thinking
in retainers or hourly rates,
everything's gonna shift under you.
So my goal with the value
quadrant is to give you a map.
Not every quadrant is right for every
client or every stage of your business.
Some of you listening here should just
start with quadrant one and stay there
for a while, to be honest with you.
And others might be ready for
quadrant three or four today.
But I want to put a disclaimer and
a super important note here is that
you can build a beautiful business.
Just operating only in
one of these quadrants.
The goal is not for you to ascend
from quadrant one to quadrant four
or to do quadrant one and three
and then maybe four in the future.
Like the goal is for you to see
where you're at, what you can
do and what you can leverage.
And this is why I'm calling them
quadrants, not stages or steps.
I'm just here to, to share
with you, here's what I found,
here's what I'm working on.
And these are four that exist right now,
so that you can make a deliberate choice
of where you're gonna capture value and
how you're going to change or modify your
pricing model that you've probably been
running for the last 5, 10, 15, 20 years.
Alright, so here's the quadrant.
Quadrant one is the margin play in short.
If you do the, the margin play with
AI agents, your prices stay the same.
Yet the way that you deliver
gets dramatically more efficient.
A la it on tick workflows delivery
that help you keep better margins.
And this is the simplest play because
you really don't change what you charge
and you don't change what you deliver
per se, but you're leveraging AI to
handle a lot of the production or
your team, so your cost of delivery.
Drop significantly, and your margins and
your profit expands and the client can get
same and or better or even more consistent
results that they were already paying for.
Now, if you're a client of mine
listening to this, I know who you are.
But if you're a client, I wouldn't
just allow you to keep things as is.
If you're playing in this quadrant,
I, we would focus specifically, you're
seeing this on creating net new value.
How much more value can you
create under this quadrant?
Because even if you save, let's say the,
the example if, this is a simple example.
I'm not saying this is for everyone,
but if, if a hundred hour work now takes
you 20 hours to do, what are you doing
with that 80 hours of savings or that 80
hours of time you could eat that profit,
like invest it in, in or take it home.
But I think it would behoove
us not to think about how can I
add a more value to the client?
How can I create this breathing room?
Like if I don't have to spend.
The additional 80 hours, how can we
invest that into r and d or how can
we invest that to help the client
go further to end, end goal, to end
state in ways you couldn't before?
And that's what net new
value creation looks like.
So this might look like your.
The time you're saving, you're reinvesting
it back into the client, into the
relationship, into the strategic ideas.
And again, end stage.
You want the client to get closer
to goal accomplished, whatever
that means for your industry, for
your client, and with the agents.
Hopefully you're able to do more
than you could before if you know
how to leverage them correctly.
So this would be new execution,
new strategic thinking, more
proactive recommendations.
More of, Hey, I noticed this thing and I.
Recommend we do X, Y, and Z.
Or where I want you to be is, hey,
if you're telling this to your
client, Hey, I noticed this thing.
We actually already solved it for you.
Here's what we did and here's
what we're planning to do next.
Because in the past to do
that, it would be expensive.
It would take a lot of
time, a lot of thinking.
But what if the doing more
actually doesn't cost you anymore?
' cause in the past doing more
cost, you margin now doing more.
It's almost like, how can you gamify it?
How could you have more fun
and help clients go further?
And that kind of thinking and Val,
like that turns a client from like
a 12 month engagement or for some
like a six month LTV insurance
rate to a multi-year partnership.
And I think that that kind of
value play is only achieved if
you believe in the services stack.
You're selling on judgment,
transformation and belief, and you're
deploying agents to handle most
of the execution work, obviously.
As the technology gets better,
they will get better with higher
quality for you to continue to
offset and do even more execution.
And that's a real reality
we're getting into.
If you're not on the cutting edge
on this, and if you're not testing
this out or tinkering you should
so that you can understand the aha
moment of what's happening here
so we can be on the same boat.
If you don't do this now, if you don't
do this and you're doing the margin play.
In this quadrant, you will feel guilt
and you, you feel like you should
pass the savings on to your client
because now your work is easier.
And sure you can do that.
Like remember the example I
had earlier that an agency
literally gave an AI discount.
You could do that, but remember, clients
aren't hiring you for difficulty.
They're not saying, Hey, I want
you to go through the gauntlet
for me so that I don't have to.
They're hiring you for results.
They don't care how easy
or how hard it is for you.
They're hiring you for end state.
So I'll take it a a step further.
If you drop your prices because
AI made delivery easier for
you, then you're training the
market to devalue your expertise.
You're training every future client
that your worth is tied to how hard you
work and not how much value you create.
And that's a positioning problem
that only can get worse over time.
It compounds.
In the negative over time, even
if you're still getting your
bearings in the age agentic era, I
would say start in this quadrant.
Start here while you can build the
infrastructure for the other quadrants.
If you want to go to the other
quadrants, again, you don't have
to, but if you can start here.
Yeah, because if you want to move
to another quadrant, you must, you
must, must, must believe and know
that you have to move up the value
chain in order to price accordingly
in order to create net new value.
You can't do that if you
don't start in this quadrant.
Which brings us to quadrant
two, which is the volume play.
So this is where things get interesting
and it starts to feel like software as
a service or platforms as a service.
So I think this quadrant is going to
surprise a lot of people because, well.
This is not nothing we've
traditionally done in the services
in consulting agency space.
So if you remember j j v's.
I hope I'm pronouncing right, j v's.
Paradox.
The cost of delivering a unit drops and
the demand increases at the same time.
So this quadrant is billed
directly from that insight.
So in the model that you have here
where a client pays for your services
as an end product and state outcome,
so it's almost like how much software
you're able to do usage based pricing.
Quadrant two here is similar akin
to that, but instead of usage,
consumption means actual outcomes.
They, you're not pricing for a set hours.
They're not paying retainers or
like subscription fees for a set
number of things that you'll deliver
for them or outputs per month.
They're, the base is on actual usage
and the outcomes of your service.
So usage again isn't, oh
we ran 50 ads this month.
You're getting charged per ad.
Usage and consumption based on outcomes
is, Hey, we ran 50 ads for you.
We got these many qualified sales
calls, and they pay for that.
And ideally, you move up the value
chain so that you can verify and
qualify those sales calls because if
you have AI helping you on the delivery,
you can have most of your focus.
And even AI agents, you
qualify and verify on the CR.
We could also look at campaigns deployed,
for example, as another example is end
outcome, maybe research texts delivered.
How many things can you actually are done?
Follow polished, finished outcomes
that you can deliver to a client.
Brand audits can be another one, or
Excel sheets ready for end month close.
You get the picture.
the goal here isn't just focusing on
leading indicators, but going as far
down the value chain that you can.
So this is just selling.
On outputs or outcomes for that.
But unlike traditional software like
the usage model where literally you
can have an fin bill, like I'm not sure
if you're like me, you toyed around
some softwares and they have a usage
based bill and you've accidentally
spent a thousand dollars in 20 minutes.
I know that's happened to me.
That's not a good client experience.
So I would recommend if you're doing
this model for your clients setting a
cap or a tier where above that tier,
they either get a discount rate per
outcome or they effectively, they get
free whatever till the end of the month.
And the thinking here is like,
well, if I do that, am I not
leaving money on the table?
I honestly think we should, revisit churn.
So churn is a real issue I've seen from
three month churns to three year churns.
In some rare occasions, marketing
agencies sticking clients
around for seven plus years.
that's actually rare.
But
churn is an issue.
That's because most people can't
deliver results and we have to address
the elephant in the room to play in
quadrant two, you need to be confident
in your results and be able to deliver
results to clients like period.
Full stop with your ability to
deliver these results now backed
with AI agents for execution.
When you price at this quadrant, you
wanna have your consumable service used.
For the entire lifetime that
your client is in business.
So your lifetime value
effectively becomes, how long
is my client in in business?
What are the things that I can
provide as done, ready states for
them that they will always need?
How do I systemize that in a way where
they don't have to log into something,
they don't have to click through software
and get super complicated and ba extant
licensing fees or pay unlimited amounts.
And I work with them.
They pay for that.
Honestly, they'll need this for
the lifetime of their business.
So it is forcing net new value and it's
also forcing a type of relationship that
I don't think we've, we've quite seen as
much in the consulting and agency space.
We have seen the pay per
performance, but those churn so fast.
I mean, you get span
with 'em all the time.
I could spend with 'em all the time.
Hey, can you, can you handle
50 new sales calls this month?
It's like, okay, everyone is using
that offer because they're probably
doing a thousand dollars deposit.
I think we know the, the secret
behind, it's like a deposit upfront
and then they only refund it.
If you get performance, like they
only make money on the deposit.
They don't make money on the back.
'cause they can't, they
can't fulfill the promises.
So you wanna look at what is the
net new value that you can create.
How can you enable AI agents to help
you get further down the value chain so
that you can get to done end outcome?
And that in is in alignment with
what the business, your clients
are going to need for the rest of
the time that they're in business.
So it's it's shifting from a
traditional services model.
Like, oh, my client only needs
me for three months, six months.
Our average client lifetime value
is 18 months, maybe three years.
It's shifting that for a legitimately
as long as they're in business.
They're gonna be a client.
if that's too big of thinking, like this
is what, this is the type of net new
value that I want you to start thinking
about with AI agents, not just like
running business as, as we used to.
So that's, that's very important.
And again, capping it or not, feeing,
unlimitedly, you might be feeling like
you're leaving money on the table.
To be honest with you.
That doesn't matter.
Your, your whole goal is lifetime
value, not short term profit.
I want you to start
thinking in years even.
Three year, maybe decades, is a little
bit too exaggerated to think about here.
But I, I would like you to start
thinking about in year to date, not
month to month, year to date, minimum.
And that's the volume play, that's
quadrant two more conception, better
experience longer relationships.
It feels like I'm doing
a pizza commercial here.
But more consumption, Peter,
better experience longer.
Relationships extraordinarily longer.
Lifetime value.
And again, that's the level of
value creation that this quadrant
you're able to create and unlock.
I honestly think that this is possible
now if you're, again, selling above
the judgment layer in the, the
services stack and are leveraging
agentic workflows for execution.
Which brings us to quadrant
three, which is the intellectual
property play, the IP play.
This is where I'm most actively building
right now in my own practice, and
I think this is the quadrant where
more service providers don't even
realize that's available to them.
So every agency and consultancy
has their own way of doing things.
You've spent years perfecting
the craft, maybe decades
developing your own methodology.
Your frameworks, your playbooks,
the way they take a client, point
A to point B, that's your ip.
In the past, the only way to monetize
your IP was to sell your time.
Applying it one hour in to one hour
out, your capacity was the bottleneck.
And then we invented info products.
So they started training
people on cohorts.
Started doing digital and started
selling info products so that you can
scale yourself, but you're essentially
selling that IP on a, on a timed
unit and you're just licensing it
out through different mediums and
you could only serve so many clients.
'cause the goal of info products is.
To get people to get to the backend
where you're selling the high touch
services and you can only serve so many
people, go only as not too deep with with
your clients, because every engagement
required you or someone on your team
to personally execute the process.
Those are still valid.
So I'm not saying those are
done away with, but I like to
introduce a third path to package
your IP into a agentic workflows.
Your methodology becomes your operating
system, and the agents used to execute it.
Now, one hour of your strategic input,
one hour of planning, processing, and just
creating the plan and having the agents
run in could equal, and this is no joke.
Like hundreds of hours of human labor.
And this is not an exaggeration.
I'm not being hyperbolic.
I'm giving you real like.
When you have the aha moment,
you'll, you'll realize, you
realize what's possible here.
So I wanna be really clear
about what this actually means.
'cause I don't want
you to gloss over this.
You're not gonna give your client license
to your IP and then have them run with it.
You're not gonna productize it into a
software and helping they figure it out.
You're literally gonna be running
your internal agents to deliver your
service, your way, your methodology,
the way that you do things at scale
that was physically, physically.
Impossible before enabling a client
to get value, faster, higher quality,
and to go further to finished.
I'm calling it finished goal, complete
as possible because the value you can
create goes from 10 x to a hundred x.
And if you work with enterprise clients
or you work with larger clients and you
know how slow they can move, I don't
think a thousand x is unfathomable.
You can truly be in a
thousand X force multiplier.
Because you're condensing time to
get to value quicker, and when you do
that, you're able to go even further.
So I'll give you a real example
of what this looks like.
So I'm currently in discussions
with a potential client.
They wanna grow a division of
their company to significant
amounts, like millions of dollars.
But they're not gonna
go and build the agents.
They're not gonna create workflows.
They're not even, they
don't even care to do it.
Like, it's not that they don't
care, but they're not gonna do it.
Right now they're in what I'm
calling the partner trifecta,
which I can elaborate later.
What they want is the approach, the
strategy, the capability, the execution to
enable them to reach that level of growth.
Using my unique methodology
using a way to get there.
and because I've packaged this into
several a agentic workflows, to be honest
with you, what used to take months, yes.
Months, can be delivered in weeks.
And here's the pricing.
The pricing thing that I wanna bring up
here is that you're not pricing your hours
or your deliverables in this quadrant.
You're not even pricing on how many
people on your team are in the account.
You're pricing the compressed time
to value the net outcome that your
intellectual property creates for
their business and their outcomes.
So yes, this is value-based pricing,
but you're deploying your intellectual
property at scale, not just licensing it.
So if you have strong intellectual
property and you have a proven track
record, like you've actually done the
work to help clients get to where they
want to be, you've done it by hand, you've
done it with teams, then this could.
Quadrant is something
you should push towards.
You just have to ensure that you encode
everything that you know, how you
focus, how you execute to the agents.
Do quality assurance, add a quality
assurance layer to it, and then make
sure that you do sign off on it.
You wanna include human in
the loop just to make sure,
especially for high stakes clients.
I always recommend that it's not, you're
not letting this thing run the wheel.
At least not yet, but you
definitely wanna make sure.
That you're guiding it again, what I
talked about on the services stack, if
you wanna read that so that you focus
that your ceiling isn't tied directly.
To how many people you can serve.
The ceiling is tied directly to the value
that you can create, not how much time
you spend or the team size that you have,
or the hours you spend on a client side.
You're charging based on value, which
naturally leads us to quadrant four,
which is the value capture play.
Now, I have to confess, performance and
outcome-based pricing has always existed.
In consultancy and agency
services, revenue shares, value
capture, skin of the game.
None of this is new.
What is new is your ability to
actually influence outcomes.
The problem with performance deals,
and I've done them, I still have
them, is that the old model always.
Lacked control.
You had the illusion of control.
You'd take on a revenue share agreement,
you'd do everything right on your
side, but the client couldn't close.
They'd fumble the leads.
The founder would change their mindset
or their strategy, midquarter or mid
month or the, the board wouldn't approve
the product pivot or just any changes.
So you'd eat the downside on the
factors you don't even control.
And those are still real variables now.
But
, I want you to start thinking in net
new value, because again, in the past,
if you're a smart operator, you would
probably avoid all performance pricing
unless you controlled every variable and
rarely you had control of every variable.
But again, if you're selling on the
services stack and you're creating
agents to support and handle execution.
And if you're following, it might not.
So subtle cues to leverage your
agents to find that new value and
go up the value chain so you can get
clients closer to goal accomplished.
Then performance models actually
are one of the most natural pricing
models in the age agentic era.
Again, if you're selling at the top
of the services stack, transformation
and belief, so when your agents
are generating pipeline, you're
designed a series of agents or
seen as their workflows to generate
pipeline or produce content at scale.
Running research flows or accelerating
time to market, you now have more
time like we talked about, but
you can also focus on the backend.
What are the, if your, if your
agents are taking care of the leading
indicators, how do you focus on the
lagging indicators to drive performance?
So you're not just advising, you're
actually able to produce, you're able to
look at your strategic expertise, make
the right judgment calls, and then from
there you can actually implement the
changes that need to happen so that we can
reach the goal and produce the outcome.
So like I mentioned, performance
structures aren't new.
You just now have more power,
more time, maybe more breathing
room if you set your services up.
Right.
So here's an example of a
performance structure that I
recently helped the client draft.
Again, these are not new.
These are not like revolutionary.
But just to give you ideas of what's
possible is a base operational fee.
That's your floor.
This could cover operational costs,
strategy layer, ongoing delivery.
This is like the minimum to
maintain the relationship.
You wanna call a retainer,
that's great, but a retainer
usually constitutes the scope.
And we're in the post scope era where,
yeah, you have stuff in the scope,
but you're, you're probably gonna
do more in the scope 'cause you can,
'cause you want to add more value.
And then from there.
Your baseline, you have performance
paid out tied to metrics
that you directly influence.
Again, these could be leading indicators
that can be paid monthly and or lag
and or so, not just one or the other.
It can be one and the other.
And lagging indicators that are
paid either quarterly and again,
a cap, especially if you're
doing like a percent of revenue
generated, you'd wanna do a cap.
Same principle as quadrant two.
The client shouldn't.
The, the number that you charge
to client should never be a number
that they resent paying you.
You want the experience to be well,
because again, if you're gonna help
create massive value, you want that
client for as long as you can, not
just make the, the, the most profit
in the short amount of time, and then
always have the repeat clients or have
new clients churn because they just
don't like the relationship with you.
Again, the services stack stands.
Selling on transformation
relationship and then belief.
Those are the top two things
that you can be selling at.
And the cap, in my opinion,
is a trust mechanism.
This is an opinion, so you can not listen
to me on that, but that's just my opinion.
What I'm not including in this quadrant
is equity splits like you can, and
again, this is another opinion.
I've done equity splits in
the past, and those are great.
They're really cool in the moment.
'cause you're like, Hey, this is nice.
But they don't always pay off.
Maybe one day they will, but the
reason I'm sharing this is that
equities ties your compensation to
factors you don't always control.
I mean, there's a lot of factors
that go into equity and performance.
At least now with Ehn tech era, if
you focus on net new value, go up
the value chain, focus on leading
indicators and have your agents focus
on that, and you as a human judgment,
strategic advisory and actually
implementing those strategic advisories.
The transformation and belief layer, you
can focus on the backend conversion and
ideally you can focus on more control
so that you can get to end state, done.
And you're tying your outcomes to
things that you can directly influence.
You can get paid on the timeline that
matches the value you're creating.
So those are the quadrants, the
four modes of the four quadrants
where you can be pricing your
agency and consulting services.
Now, I do want to give a a few notes
that I think we're in a unique window
of time because markets do take time to
adapt and I think that's a good thing.
So you might.
After going all this, you might
feel a little anxious to implement
something like this or feeling that
you're running behind the eight ball
because yes, changes in the marketplace
and changes with agentic, workflows
are changing at exponential speed.
Honestly, they are.
And to be frank with you, it's
a lot to take in all at once.
But what I'm writing in this section
is hopefully to give you a breath,
a little breathing space, not to
stall you or to have you lolly gag or
contemplate taking action, but ideally
for you to breathe for a minute.
And then strategically act.
And here's the point I wanna make.
Not every market is going to
adopt AI at the same speed.
If you red crossing the
chasm, you know this pattern.
Technology adoption
doesn't happen uniformly.
It doesn't happen all at once.
There's innovators,
there's early adopters.
There's the gap between the
early majority, the late
majority, and then the laggards.
Okay?
We're in the gap right now.
We are in.
The, the most significant gap in
consultant and agency services because
tech forward agencies, like I have them
on my WhatsApp, tech forward agencies
are already building with agents.
When the release came out, they
were already testing day one.
They were restructuring
pricing, moving fast, breaking
things, figuring things out.
Okay.
But the clients, most of the industries.
Might be a few years from fully
integrating AI to their own operations.
I don't know the timelines on that,
so don't quote me on this, but all I
know is that there is a gap right now.
Could that timeline condense
to months from years?
Probably don't.
Don't bet on things, taking shorter
than we're actually predicting.
And if you, if you have that mindset, you
have a builder mindset, an entrepreneurial
mindset, a net new value creation,
mindset changing and challenging
the way the things that we do right
now and why we've always done them.
Honestly, I think this is where you
have a huge competitive advantage, and
this is where you can come in because
in this gap right now, you deliver
outcomes that your clients couldn't
produce in their own timelines.
And if you're using the value that we just
discussed from quadrant 1, 3, 2, 3, or
four, if you're using the value quadrants,
you're able to price appropriately, make
good profits, you know, take care of
a team, take care of your family, take
care of the community, make an impact
thrive, help your clients go further.
You don't have to slash your prices
just because AI made things cheaper.
You just have to challenge yourself.
How can I go up the value chain?
The clients who need you the most right
now are even thinking about AI pricing.
What they're thinking
about is their problem.
They're thinking about the eight month
project that you can deliver in six weeks.
I'm not exaggerating.
They're thinking about their issues
and if you can help condense and
collapse time and deliver more
value, and you actually care.
Then your services will be in demand.
The way you deliver end price will shift.
You will have to adapt, but
your net value is still needed.
And again, to quote Jevons Paradox, your
services may be even more in demand, but
this window isn't gonna be open forever.
Markets do catch up.
Everyone now is on the cloud.
Everyone is using wifi cell
phones now and tablets.
I mean, those are just some examples,
but right now there's a gap between
what's possible with AI agents and what
most businesses are actually doing.
This is enormous gap.
There's also a talent gap.
If you're not testing, if you're not
doing this, you're not training your team.
There will be those who can and are able
to and those who cannot, and that gap
is actually stretching every single day.
It's more exponential than you think.
So.
Who do you work with?
So I know you have your ideal
client profile, you have your
ICP, you have your demographics,
psychographics, firmographics.
Great.
I wanna share with you a, a
few of the conversations I've
been having with agency owners.
I know those who've been in
the game for much longer than
I have, like 15, 20 years.
And just like what's shifted in the
market and what makes like a good partner,
it's also what I'm seeing with clients.
So not every client fits the new value
quadrant, especially quadrant three
and four, where you have real skin
in the game, and you're making a bet.
You're making a bet on performance.
You're making a bet on the client,
you're making a bet on the industry,
and you have to vet all the conditions
before you put your chips on the table.
But like I discussed, who
do you actually work with?
From working with my own clients to
chatting with friends and colleagues
to the, with veteran consultants and
agency owners, I found three simple
characteristics that come up time and
time again about who are really good
fits in this new era we're entering.
This is your ideal client.
These are just three different
conditions or three different
characteristics to think about.
And I do recommend all three be present.
When you're selling and you're pricing
and you're scoping out, again, scoping
out the, in the sense of you're figuring
out where you can add the most value.
So the first condition is.
The client is in a growing
market and data meets conviction.
So this is pretty obvious,
but it's pretty simple.
The client in the industry that you're
working in needs to be in a market that
one you believe in, two is growing,
and three, you can actually sell
unbelief and transformation layers.
'cause again, You're not
selling your services anymore.
I'll say that again.
You're not selling your services anymore.
So I'll give you a real example.
I was recently connected on a call
with a company in the direct to
consumer health diagnostic space.
I never worked in that space and I
was just so excited to meet them and
I was like, dude, this is so cool.
'cause I already believe in the market.
They didn't need to convince me
about where the market was going.
I was a big believer from the beginning.
I had such high conviction and
growth potential that that.
Energy, that excitement
was apparently contagious.
It was like, Hey, you
could actually help us.
Like how, like I, I, I focus
with consultants, agents,
I focus on these things.
No, we, we, there is actually service
providers like you could actually help us.
Like, wow, that's, that's phenomenal.
Again, selling at the top of
the stack, not on, oh, here's my
services, here's what I can do.
Are you a a square peg?
I'm trying to fill a square pack.
Like are you a square pack?
Like, or a round hole, whatever.
So you do need to marry data
to where the market is going.
Where is the market gonna be in
demand for years, not just now.
In a simple filter you can use,
and again, this is very simplistic,
but if you threw a rock in the
industry, would you hit a winner?
Would you hit a growing company?
If the answer is yes, then all tides
rise together, then yes, you'll,
you'll be in, in good hands, but
you also have to believe in him.
If you answer like, oh, I don't know, I
have to actually analyze the company and
think about it, you're overthinking it.
The market has to be winning.
You also have to believe also, if you
don't have a conviction about a per
a specific space or, or a specific
market, don't take on the client
like it's not gonna be a good fit.
If you don't believe in it.
Just, just don't take on the client,
because to run the new value quadrant
on the client, you have to believe, you
have to believe in where the co, the
company's going, where the industry's
going, because you're gonna be forced
to get creative, to find new ways.
To create net new value.
And if you don't do that, you're
just gonna lead to instant burnout.
Like instant burnout.
Alright, so condition number two
for the partner trifecta is the
industry has to be a tech laggard.
Now this is counterintuitive, but it
is critical if the client industry
is already like tech deep and they're
building their own agent workflows.
Unless they're growing super fast
and need more hands on deck, then
they're, they may not lead need you
for long if they're internalizing the
capacity hiring their own AI team.
You will get commoditized.
But if the, and we're actually
seeing that with the layoffs.
By the way, if you've ever seen
like how many people are laid
off because engineering jobs is
because that's being commoditized.
Just keep that in mind.
But if the industry is slower
to adopt then they need you.
Because remember, they're
not buying your agents.
They're not buying your IP workflows.
They're not buying that.
They're buying.
The end outcome.
They're buying the performance.
They're not buying your services.
They don't care about your services.
They can about, they care about end state
and the results that you can provide.
By framing and positioning your outcomes
in one of the new value quadrants,
you'll be able to craft a delightful
client experience that they'll enjoy
and they wanna keep working with you.
And I think it's very
important to keep in mind that.
Tech lag doesn't mean that they're
ancient stone age or they're
never gonna get technology, it's
just that they're not there yet.
They're either growing because of a
condition, one, they're either growing
so fast that they're still focusing on
product delivery and client satisfaction.
Or they're growing so fast, they're
still, they're focusing on new strategy.
Or they're just overwhelmed with growth.
They need more people in there, and if
you can help them get efficiency gains,
that's gonna compound even further than
if they weren't experiencing growth.
So again, it's not because they
don't care, it's just because they're
too busy focusing on other things.
This is where you come in.
And then the final condition
is that the founder or the
person that hires you gets it.
They get your value.
You don't have to convince them.
You don't have to sell them.
You don't have to argue with them.
Non-negotiable.
I don't think you can change
someone's belief on a sales call.
Even if you do like a five hour
sales call, you're not gonna
change their belief if they don't
believe your work is important.
You're done there, there's, there's
nothing that you can do to convince
'em that your work is important,
because when someone's anchored in
a belief, this is their worldview.
This is how they view themselves.
This is how they view others.
This is how they make judgment
calls it how they maneuver and,
and move through the world.
You are not gonna change that overnight.
So if the founder or stakeholder you're
working with doesn't get it, doesn't
get the value that you're delivering,
just end the conversation there.
Peace out.
There's more people that will get it.
Okay.
Or you're in the wrong industry.
But that's, that's really rare.
It's mostly like a, a
leadership mindset thing.
And again, this is because you wanna be
selling on the transfer transformation
and belief layer in the services stack.
And in short, to be honest with you,
like if you do end up hiring that
client or they end up hiring and
working with you, then you'll spend
half your time justifying why you
exist instead of creating value.
That's not a good experience for you.
You'll be treated like a commodity.
The performance conversation
will always be out of a serial.
So you, you want to actually be
able to focus on net new value
because you're still arguing on base
fees or retainers or even hours.
And then you have to explain yourself why.
You know why something isn't going right,
when something isn't going as planned.
And it's just a really bad state to be in.
Versus, you know, focusing on the vision
of what you believe their business can be.
They understand the value and you wanna
work together and you have a track record.
Again, you have to be able to
deliver these results and you have
to have a track record to do this.
So in other words, they need to value
the outcome that you provide, not.
The activity.
If that understanding isn't there from
the beginning, just frankly move on.
And when you find a client who sits at the
intersection of all three, growing market
might be a little tech laggard in terms
of the industry itself and the founder
or the person who hires you gets it.
That's where you're able to go deep.
That's where you're able to do your
best work and add the most value,
make the most profit, and have
the most fun because this window.
This window won't last forever.
I have no clue how long this
window is gonna last, but
it's not gonna last forever.
And eventually industries do catch up,
but we are in a very unique and important
moment where this convergence exists.
And the service providers who
recognize, if you recognize
it and you build partnerships,
you could outlast this window.
So I urge you, I encourage
you to be one of them.
So if you read or if you listened to
the Services Stack podcast or substack.
I talk about the craft model where I
think that this is gonna replace the
agency model where a founder or principal
holding belief in transformation
layers with clients have a small
team of elite T-shaped operators,
and then they manage and orchestrate
agents for production underneath.
I think that's the model
that we're heading into where
everyone's hands on deck.
Obviously it's not gonna be all the
time, but you have a small portfolio
of clients and you're able to deliver
significant value, but in in net
new ways that you couldn't before.
And, and I'm advising working with
founders with this, by the way.
So this is not just imagining make
believe, like I've been preaching
this since like 20 was it 2018 or
19 when I designed a profit model
that this naturally aligns to.
But anyways, the craft model.
Is the engine that makes
this new value quadrant work.
Because when you're running the craft
model with agents underneath you,
you can go deeper, you can do things
with clients and help them grow
in ways that you couldn't before.
And that's what the whole piece of
this net new value creation is about.
What couldn't you do
before that you can now do?
Because in the past you
were limited by capacity.
You had the skills you had to
solve with deeper problems.
You had the knowledge, you had the
judgment, but you didn't have the right
team, the right bandwidth or the enough
hours, or the client blew their hours a
month for, for solving a specific issue.
So they, they had to wait for their their
50 hours to unlock for the next month.
You gotta wait two weeks for that..
In short, you weren't able to focus on net
new value, the new stuff that you can do
for clients and you'd top out at strategy.
You might be pushing high level
consulting, but to execute on that
strategy, to measure, to optimize the
day-to-day, to actually produce the
outcomes, you wouldn't be able to do that.
You would required a new team that you
couldn't, like you need, that you need,
or a team that you couldn't afford.
Or the team that you were afraid
that if you hired them, you had
to lay 'em off because if you
didn't take close new business
next month, you'd have an overhead.
But now with the agent tech workforce
and like a augmented work you do, you
have the ability to do more production.
You have the ability to have your
team focus on judgment and strategy.
You have the ability to fulfill
the requirements or to fulfill
the recommendations that
you're making to your clients.
You're literally unlocking superpowers.
And I know that sounds
really hype, but like.
Once you understand what's possible, like
this is very, very exciting, and it's
not because you lacked the creativity.
You should just lack the
capacity to do it in the past.
Hopefully now you can see how you can.
Do that.
How you can think about the client
relationship, and again, same service
provider that use the top a strategy can
now do delivery and strategy and execution
and measurement and optimization, all
the way down to where the value is
actually created in the client's business.
You can sit in the trenches with them.
You can be a true partner in their
growth, not just an advisor who sends
pretty little the slide decks and waits
for the next quarter to review and maybe
like check in on recommendations once
a quarter or once every six months.
Okay.
And that's where performance based
pricing finally makes sense because you're
not just advising from the sidelines.
You're getting in there with them.
You're producing, you're helping produce
outcomes, you're helping run the engine.
So if you choose, you don't have to do any
of this, but you can choose to do that.
And this is the possibility, what's
happening with net new value creation.
The agencies that run the craft
model in the new value quadrant.
Are going to be unrecognizable
compared to an agencies today.
There'll be smaller, leaner
teams, bigger impact better client
relationships and better margins.
And that's honestly the
future that I'm building.
And I know there's a lot of fear wandering
a lot, there's a lot of change happening.
But that's the future that
I'm optimistic towards.
That's the future that I'm building.
That's the future I'm
helping clients build.
And if that resonates with you, I urge
you to stop discounting your innovation.
The teams that drop fees, because AI
does the work, is pricing the input.
You're not pricing the output,
and that's a race to the bottom,
and the bottom is virtually zero.
I've said this before because
eventually the client will realize
they can just run the agents
themselves or they just say, huh.
Why, why pay you this much
if I can just pay a tool?
So don't do that.
If AI is deflationary on inputs on
value creation, it's the opposite and
it's up to you to identify that net
new value, capture it, help people
go further and price accordingly.
so the question is.
Which quadrant of the new value
quadrant are you gonna be operating in?
And whether you have the conviction
to price the value that you're
creating instead of discounting
the tool that helps you create it.
And that sounds a little poetic.
I'm gonna repeat it.
The question is, which value quadrant
are you gonna be operating in?
And do you have the belief in the services
that you deliver and the clients that
you help in the industry that they're in
and their products and services, do you
have the belief that you can help them go
further to create net new value and price
it accordingly and have the conviction
that, yes, this is the value I create,
and yes, I'm gonna stand by the pricing?
Or are you just gonna give a discount
because the tool that you're using
helps you create it and you're
like, oh, I, I should discount it?
So you actually don't believe in the
product or in your industry, or in
your service or in your delivery.
So build the agents under you.
Choose your quadrant deliberately.
You don't have to choose all of 'em.
Just choose one.
Find your ideal clients using the
trifecta that I mentioned earlier, and
yet let your beliefs drive the bets.
Drive the investments, the
bets that you'll make in your
clients and your services, and
your new r and d and have fun.
I think we forgot about having
fun, literally, and this is
what I believe in an opinion.
This is the most exciting times to be
alive, to create, to find and create new
solutions to help clients go further.
Literally, be creative, have
fun, find new ways to go deeper.
Just tell your client, Hey,
I need to figure out how we
can create net new value.
let's have a chat about that.
That's an easy way to get started now.
If you wanna discuss more intimately
one-on-one, how this affects your
business, how you can create net
new value, and how to think about
your own pricing, reach out to me.
This is a, a subject that's very,
very close to me that I'm helping not
only with my clients, but also looking
in my own organizational structure.
So reach out to me.
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Everything here that I create is
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There's gonna be grammatical
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might have word issues here, there.
But again, this is human.
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And if this is your first time
listening to me or hearing who I.
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I help service founders redesign
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Good work.