Joe Casabona:
I remember the first time I was asked what my exit plan was for my business. I thought it was such a weird question because I wasn’t in business to exit. I was in business to have freedom and work for myself. And as a result, I’ve. I’ve had no employees and a handful of contractors, and I want to keep it that way, which is why I’m so excited to have today’s guest on the show. Hey, everybody. Welcome to the streamlined Solopreneur. Today, I’m here with Jonathan Stark.

Joe Casabona:
Jonathan, how are you?

Jonathan Stark:
Great, thanks for having me.

Joe Casabona:
Joe, you are a solo consultant, coach and former software developer on a mission to rid the world of hourly billing. I absolutely love that mission. But the reason I told my opening story is because you also equip soloists with tools to thrive without building a team. Is that right?

Jonathan Stark:
Yeah, I certainly teach them ways to do that.

Joe Casabona:
Yeah. Awesome. Now, the first thing I want to talk about here is I was perusing your website and I found a talk proposal you did called the Billion Dollar Solopreneur. This is a term I first heard Sam Altman, the CEO of OpenAI, say. What was really compelling about this description was you said that the next unicorn won’t be a startup with 500 employees, but a solo operator with a stack of automations. Can you tell me a little bit more about that? I mean, automations is like my love language.

Jonathan Stark:
Well, I suppose I was careful not to say AI right there, but the. Well, first of all, the talk didn’t get accepted, so take it with a grain of salt. But the general concept that these unicorn companies seem to be getting smaller and smaller and smaller. So it seems like fait accompli that eventually they will be down to one person. And there have certainly been examples in the tech space of one person companies or very small companies getting acquired for quite a bit of money. Instagram was, was the big one. It when I was doing tech, that was. They were really small.

Jonathan Stark:
I don’t remember how big they were, but there are plenty of other companies, Even from Web 1.0 where it was a small team. So when you fast forward to a world where everybody’s got a supercomputer in their pocket that’s connected globally to billions of people, and you’ve got automation and AI and social media, like all of these things that didn’t exist back then, it seems inevitable to me where a solopreneur creates a business that is valued at a billion dollars. And I love that as a. As a sort of a thought experiment, because it Forces individuals, especially service providers, they really think of their time as money. They feel like they might not think, oh, I’m selling hours, but that is what they’re selling. And turns out you run out of inventory pretty quickly when you’re selling hours and you don’t have employees.

Joe Casabona:
Yeah. And I think it’s a really important one, by the way, one that sticks out in my mind as like a solo creator who sold for apparently a low seven figure number as the creator of Wordle. Right. John Wardle.

Jonathan Stark:
Oh, yeah.

Joe Casabona:
Really small game to insult it to New York Times for a small fortune. That was really simple, right? That if, if New York Times had just paid him for the number of hours, even if they paid him $500 an hour, it would have been maybe six figures, right?

Jonathan Stark:
Yeah.

Joe Casabona:
Some. Something else I came across on your site was talking about the four technology super cycles, Internet, mobile payment, and now AI. I think it’s just worth kind of exploring this idea because we are more enabled than ever to, I don’t want to say accomplish more faster, because faster isn’t better, faster is just faster. But we are enabled to accomplish more and provide more value maybe for the people we’re serving.

Jonathan Stark:
Right. So I think the key piece here is the reach, because it was sort of a joke in the early Internet days, which I was already like well into my adult years when that happened, that it was sort of a joke that like, oh, if I could just get everyone on the Internet to pay me a dollar, I’d be a billionaire or whatever. And. But that’s kind of. It’s becoming realer and realer because the reach is so extreme that if you can create a little bit of value for someone and capture a tiny piece of it, and it’s something that a lot of, you know, lots of people want, then the market is almost the whole world depending on what the thing is. So you don’t have to necessarily. Your price doesn’t necessarily have to be astronomical if the volume is enormous. So the question is, well, where would the.

Jonathan Stark:
I guess a question is how would you get the valuation for investors to kind of like. I mean, the billion dollar thing is. It’s more of a thought experiment than anything. It’s like, how do you separate your time for money? How do you create a little. Using those four big waves or whatever I called them in that article in AI, I’m not necessarily pro or anti AI. I use it a lot. If it went away tomorrow, I wouldn’t care. But I was front and center for the mobile wave and I wrote a book about it at the time and it was very successful and I made a lot of money because of that.

Jonathan Stark:
Nothing since then. That was basically 2000. IPhone came out in 2007. And then the big wave really started in mid-2009, 2010, big companies started getting on board. Mobile, Nothing. Crypto, blockchain, AR VR, web, 3nfts. Nothing in the tech space has felt anything like mobile to me since then, until ChatGPT was released. And then I was like, oh, here comes another wave.

Jonathan Stark:
And so it’s not hard to imagine some combination of AI and automation and reach allowing a single individual to create value for a billion people. I mean, I don’t want to go too far down this rabbit hole because it’s so speculative.

Joe Casabona:
But don’t hear what we’re not saying, right? We’re not saying if you do these things, you’re going to make a billion dollars. But it is. The idea is that solo creators, solopreneurs, small business owners are enabled more than ever to do it. Let’s get into the nuts and bolts. I was pricing out something and I, I caught my. I try not to sell hourly rate. Right. I said a long time ago, especially when I had kids, I don’t want to trade my.

Joe Casabona:
I don’t want to trade my time for dollars.

Jonathan Stark:
Right.

Joe Casabona:
I don’t want to trade hours for dollars because I could not build the kind of lifestyle business I want where I can take the last 17 days of the year off because my kids are also off. Right?

Jonathan Stark:
Right.

Joe Casabona:
But I still found myself doing the. I mean, well, if I only charge this and it takes me 10 hours, it’s like a $400 hourly rate. Is it really worth it to the client? Right? So how. How do we, first of all, maybe like, what’s the psychology of the hourly rate? Like, how. How did we get there first?

Jonathan Stark:
How do we get. There is a long story about that. It could be inaccurate. But the story that you’ll find if you dig for it is that it was basically scientific management applied to the legal space and the bar association got involved or whatever the equivalent was at the time and decided that that was a more transparent way to price things. And it became, you know, the way that legal services were bought and sold. Fast forward to, let’s see. When I left my corporate job and started at an agency where we billed by the hour, that would have been 2003. It was.

Jonathan Stark:
There was no. It was like, that’s what you did. There was like, what option was there? There was no other Option. It was like when you, when you hung out your shingle and decided you were going to be a software developer or whatever. The question wasn’t should I bill by the hour? It was, what should my hourly rate be? And it’s still like that. I know it’s when freelancers first start out, the first thing they ask is, what should my hourly rate be? They’re not thinking like, what should my business model be? Or how should I price things? Or how should I package my work in a way that I can sell it at a fixed price? And they certainly aren’t thinking, what’s this worth to the client? And how can I charge a small fraction of that to make it a no brainer for both of us? So, the psychology of hourlies. First, it’s the obvious thing. It’s what everyone expects.

Jonathan Stark:
It seems like the only option. It’s the only option most people are aware of. It’s the option that most clients are probably expecting. So it’s not like they’re asking for some other thing. And it’s really, really safe because you can’t lose money. If you are honestly tracking your time and not eating hours and you’re actually billing for your time, you can’t lose. But with no risk, there’s no reward. So your margins are extremely low in most cases.

Jonathan Stark:
It’s very rare for people who are billing hourly, even with employees, to have good margins.

Joe Casabona:
On top of limiting yourself by the literal number of hours you have to work, human beings are also famously bad at estimating, like, how many hours something takes them.

Jonathan Stark:
Yes. And it actually gets really complicated very quickly. So if you are rewarded for being slow, which you are financially rewarded for being slow at your job, then you’re not going to come up with ways to be faster. Even if you enjoy the feeling of being, being very efficient, which I certainly did when I built by the hour, I felt like I was really efficient. I have a musician background, so I would practice things like on a guitar. It would be like fingerings and stuff. But it was the same with the computer. I would literally do that on the keyboard and come up with keyboard shortcuts and I would practice.

Jonathan Stark:
I wanted to feel like I was playing the computer and it was very frictionless and I could get in the zone. None of that was in my financial best interest. That was all just me doing that for fun. And there’s probably people listening who feel that way too, where they just really enjoy the feeling of being in the zone and nothing getting in their way. No friction. And they can Just get into flow and really crank stuff out. And then they look up two hours later and they’re like, whoa, I just made 300 bucks or 500 bucks or whatever. Before, when I was billing hourly, every time I worked an hour, I made 150 bucks.

Jonathan Stark:
After I switched to a fixed price, every time I worked an hour, I was losing $150. Because if I could solve this problem in one hour instead of two, it’s kind of like making $150. So I was like, so some, some background process in my brain started thinking about how can I get even more efficient? Because now I had a financial incentive, I was directly benefiting from being faster. It’s things like that that you’re just not going to think of. I joke. Like, why would you even buy a faster computer if you’re getting paid by the hour? Doesn’t make sense. You’re going to spend $3,000 to lose money.

Joe Casabona:
Yeah. It’s like how Charles Dickens would get paid by the word. Right. And so he would have these really long.

Jonathan Stark:
Is that true?

Joe Casabona:
Seemingly random descriptions in it. Right. I feel like, I Wonder if George R.R. martin got paid by the word too. Like, the amount of food he describes in his books is wild.

Jonathan Stark:
Yeah. Yeah. It’s like it has nothing to do with the quality.

Joe Casabona:
Right. So, so how do we make this, like, how do we make the switch from thinking about hourly to. I don’t know if we’ve formally introduced the term, but value based pricing.

Jonathan Stark:
Right. Okay, so it’s. First I’ll define value based pricing, and it is an approach for setting a price for, in this case, a service based on the value to the client. So it’s right in the name. You’re basing a price on the value. Okay, what does value mean in this context? So the definition of value is. One definition that I like is from Ron Baker, and he says value is the most the buyer would pay for the thing. So it’s pretty simple.

Jonathan Stark:
It’s totally subjective. It would be different from buyer to buyer if I said, hey, do you want to buy a 73 Camaro? It might be worth a thousand bucks to you. It might be worth negative dollars to me because I don’t want it in my yard leaking oil or something. It’s going to be worth something different to everyone. There might be a market value for it where you’re pretty sure you could sell it for $5,000. In this particular condition, you know, there’s someone out there. It’s a high probability. But that is not how much the car is worth to any individual buyer.

Jonathan Stark:
To any individual buyer, it will be worth something different. So value is totally subjective. And now the word based, when you go to price something, an engagement, you can base your price that you set. You can base it on different things. A lot of people will base it on their cost, which is their time and almost completely their time. In a case like this, we’re not buying two by fours. There’s no materials really. And you already own your laptop probably.

Jonathan Stark:
So it’s not like time and materials, it’s just time. And if you’re going to give a fixed price, you might say, well, I think it’s going to take me about 10 hours. Maybe I’ll multiply that by 1.5 or 2 and say, well, the estimate, then I’ll multiply my rate by that double number of hours and say, here’s a fixed price. That price is cost based or time based. So in this model we’re talking about value based. So how much would this be worth to the client? Set a price that is a fraction of that, not the whole. You don’t want to take all the value, so you just set a price that’s a fraction of that. And then last you think about the scope that you could do for that price.

Jonathan Stark:
So it’s 180 degrees different than what most service providers and independent professionals do. Certainly what I used to do, I would sit in a sales meeting with a potential client and I’d be planning to write an hourly estimate, a quote that was like some number of hours of proposal and say, ah, this is probably going to be about 100 hours or whatever. And since I knew I had to do that when I was talking to the client, I would be almost frantically trying to uncover as much scope as I possibly could. That in my experience, often not even just the majority of the time, but almost all the time, led to us underbidding the job because it’s impossible to uncover all the scope in a one hour meeting. So you’d end up always disappointing the clients because you, you know, be 90% done and had 90% to go. And they’d be like, oh, you know, we’re going way over the estimate here. It’s like, well, it was just an estimate, so it’s a horrible situation to be in. So that’s the normal way you think about it.

Jonathan Stark:
Scope first. When you start with value, you start with the client, you start with what are they trying to achieve. Like, okay, you want all these features and I’ll, and let’s Say I deliver all those features, what happens next? How does that make your business better? It’s going to, you know, why give me a million dollars to do this thing or whatever it is without knowing that you’re going to get $2 million or $10 million in return. So like, what is the thing that you’re going to, how’s your business going to be better after I’m done? If I hit a home run and I was done tomorrow, how’s your business going to be better? And when you find that out, you know, oh, we’re going to, I don’t know, 10x our throughput right now we’re doing a million dollars a year, but we haven’t got enough employees to serve all the demand that we have. There’s plenty of demand. We’ve got access to the clients. We just, we have this bottleneck because we can’t hire fast enough. So we want software automation or AI thing to do something to increase our throughput at this bottleneck.

Jonathan Stark:
And I say, okay, so for a situation like this, let’s just say back of the napkin, I calculate well, for a company like this, for a buyer like this, at a company like this, in a situation like this, anything I do has got to be worth $100,000. I mean, easily. So that, and if we say that would be the value, that’s what it’s worth to the buyer, that would be the value on which I would base a price. Usually I would do three prices, small, medium, large, good, better, best, and say, like, okay, if it’s worth $100,000 to this person and they believe that I can move the needle for this 10x of the throughput, let’s say, and they do believe that otherwise they wouldn’t be wasting their time talking to me. So they believe I can help them at least a little. So I’d say, okay, so for $10,000, I’ll set a price of $10,000. And then, and only then, based on our conversation and my understanding of what their success metrics are, what scope would I put in that $10,000? So what would I be fist pumpingly happy to do for $10,000 that I can propose to the client in a way that credibly to them will move the needle that they want to move. And so that might look like something smaller than what they originally asked for.

Jonathan Stark:
So they might have asked me to build some internal workflow automation. But the value is only, you know, the value is not that high. Maybe $100,000 not that high. Doesn’t Give me a lot of wiggle room. What can I do for $10,000 to actually move this needle? Well, I can increase their throughput by interviewing all the end users, finding out what their processes are and writing them down in a three ring binder and passing them out. Even though I’m a software developer, that might move the needle, it might be worth $10,000. And it would also be the kind of thing I would have to do if I was going to do. If I was going to have a bigger budget to actually build the software, I still have to do that discovery with the end users, kind of like the product research piece and say like, okay, so option two, let’s say I’m going to do $22,000 and for that I’m still going to do the initial analysis, but instead of writing it down in a book, I’m going to actually build the business logic.

Jonathan Stark:
And then option three, for $50,000, what scope could I would I be super happ. That’s going to move this needle. So I’m still setting a fixed price, just like with cost based or time based. But I’m working backwards from what a successful outcome would be worth to this buyer and coming up with scope that would create a price that would be acceptable to both of us. So it takes some time to get used to it.

Joe Casabona:
Yeah. And I want to touch on like two real world examples of this happening. Right. One is I love baseball. I’m a huge Yankee fan. People who listen to the show regularly are sick of hearing it. Right. But my dad would always say these baseball players are getting paid all this money and teachers barely get paid anything.

Joe Casabona:
And I am a teacher myself, I think that teachers should get paid more. However, there are a thousand guys in Major League Baseball, like approximately that’s how many there are who can play at that level. Right. So the guys who are getting tens of millions of dollars to year to play baseball, that’s certainly not an hourly rate, that’s how much value that. Right. Shohei Ohtani, biggest contract in history. And there’s a claim that the Dodgers made that money back in their first year. Right.

Joe Casabona:
So like that’s one example of there’s a very small pool of talent you’re pulling from until you’ve got to pay those guys the big bucks.

Jonathan Stark:
Right.

Joe Casabona:
And the other is I, you know, I, I work with Justin Moore and I help coach creators to get sponsors. And one of the things they say is like, well, a TikTok video wouldn’t take me that long. And I’m like, Yeah, I mean, it probably doesn’t, but what’s the value to the brand? They don’t have to hire a person to make the video. They don’t have to put it on their channels. They don’t have to put ad dollars behind it to get people to see it because you’re publishing it to your audience. So, yeah, maybe it takes you a half hour to make that video, but if the brand wants it, it would have cost them several thousand dollars to make that video and get it in front of people. So that’s how much you should be charging because that’s how much it’s worth to them.

Jonathan Stark:
So that brings up a bunch of really cool directions we could go in. So the scarcity one I want to come back to the, the TikTok one is the one that is super insidious, which is that people. So buyer and seller. When the seller, in this example, if the seller thinks that this thing is so easy for me, I can do it so quickly. And then they price based on that because it’s not hard for them. It’s really easy. If they’re thinking that way, then what they’re going to end up doing is building a business for themselves where the only thing they get paid for or the main thing they get paid for is stuff they stink at, that they hate doing. You should be looking for the things that you’re great at that are easy for you, that create lots of value for your client that the client can’t do themselves.

Jonathan Stark:
In fact, that is the biggest win. That is the win mode where something that’s so easy for you you’d almost do it for free is worth a lot of money to someone else who can’t do it. Doesn’t believe anybody else can do it better than you. So if you’re the one and only at this thing that you absolutely love doing, then. And the value is there. There’s examples abound in the logo space like or architecture, Frank Lloyd Wright. And there’s like, if you’re famous at this thing that you’re super good at, you love doing it. It’s very easy for you and it creates a lot of value.

Jonathan Stark:
You can set your price really high based on the value. The time it takes you to create the TikTok video completely ignores the reach, the value. Like what’s going to happen next? Like the time. If you’re just measuring by time, it’s just so completely the wrong thing.

Joe Casabona:
Trust you. Yeah, I mean, I mean, Jony I’ve is one of those gu. You know, as you’re talking, I thought about that Picasso story. Right, yeah, right. I mean, you know the story, right?

Jonathan Stark:
Yeah. The napkin.

Joe Casabona:
Yeah. Right. A woman pays him to do a sketch, and that’ll be $5,000. 5,000 francs, I guess. And she said, it took you five minutes? And he said, no, it took me my whole life. Right.

Jonathan Stark:
Like, the thing I don’t like about this story is he should have given her the price up front and then she would have said no, and he could have gone back to having his tea. So.

Joe Casabona:
Yeah, right then. Yeah, right. Then he would have saved him five minutes in an argument.

Jonathan Stark:
Yeah. There’s another, you know, knowing where to tap it, where the nuclear power plant is down and.

Joe Casabona:
Oh, yeah, or the squeaky board.

Jonathan Stark:
Right, exactly, exactly. And the problem with all of those stories is that they don’t. The. The seller didn’t give the price before the service was rendered, which takes away the. It takes away the agency of the buyer because it’s too late. So. Right. So they didn’t have a chance.

Joe Casabona:
You’re not taking time to understand the value. Right. Like. Yeah, I mean, we both made websites. Like, we’ve both made websites or did software. Right. I always struggled to sell my security and updates package before the client had a security event.

Jonathan Stark:
Right. Yeah. So they want to close the door after the horse is gone. Yeah, Right.

Joe Casabona:
Only after they lost data or their site got hacked did they see the value in paying me to prevent that from happening.

Jonathan Stark:
Right. Because now it’s worth more to them because they’ve had the experience of how much it really costs. And I mean, that’s a whole classic. That’s another whole classic thing. One more thing on the Picasso story. And then I want to get back to the scarcity one, because they’re similar, they’re tied together. A key feature of both of these apocryphal stories is that the service provider, the seller, was famous. So Picasso was famous.

Jonathan Stark:
She was walking through the park and saw a famous artist. She didn’t see some artist painting a picture. This is a Picasso story. It’s not a some guy in the park story. And the same story with the power plant, knowing where to tap it. It’s like some worldwide expert professor giving a talk. It’s always some famous professor that comes and does this. It’s critically important that you’re well known, you’re an authority.

Jonathan Stark:
Like I. The term authority to me means a recognized expert. It’s not enough to just know you’re an expert and be an expert. You need to be recognized as an expert to be considered an authority. And you probably wrote a book on it, which is where the author piece comes from. Authority. So back to. So this brings us to the scarcity piece.

Jonathan Stark:
There’s only one Picasso. There’s only one nuclear power plant scientist, maybe one in town. Back to the baseball story. A lot of value is being created by Major League Baseball, and it’s dependent on players that can operate at a high level having winning teams. Right? So that. And as you said, it’s a very small pool of talent that can operate at that level almost by definition. Now, what does this mean for the Solopreneur? If you aren’t meaningfully different from your competitors? Meaningfully different from your competitors. And when I say meaningfully in a way that matters to your buyers, then you are going to be competing on price, which means anybody can undercut you.

Jonathan Stark:
Because if the buyer is not sophisticated, if you’re an expert at something, almost by definition, the buyer is not also sophisticated at that. So you’re almost surely more sophisticated at it than they are. So they maybe can’t tell how much better you are than the next graphic designer or the next web designer or the next landscape architect, because it all looks the same to them. You’ve got to come up with a way that your ideal buyers can see that you are different. So they’re not making an apples to apples comparison between you and someone else. It’s a bunch of apples over here, and then you’re a watermelon. So for folks that are listening to this, if you’re a service provider and you maybe are a little older, maybe a little grayer on top like me, and you’re starting to notice that you’re losing jobs to people that are just getting out of college or people on upwork or something like that, and you have a lot of experience and you know, you’re way better than these junior developers or whatever they are, because they don’t have the experience, they’re going to make mistakes that the clients are going to end up paying for. The message that you should be receiving is that these buyers cannot tell the difference between you and them in any way that matters to them.

Jonathan Stark:
So it’s your job to make it clear that there’s something different about you that nobody else has. In baseball, it’s really easy because the metrics are so obvious and you’re like, what’s your batting average? Or whatever? It’s so easy to measure, right? So but with a web developer, how do you do that? Right. And that and the process by which you do, that is marketing and specifically strategic level marketing is positioning yourself as the one and only of something, some kind of specialization, or you solve a particular kind of problem, or you work with a particular kind of audience or segment of the population. It could be a vertical, it could be a psychographic, it could be a demographic, it doesn’t matter. But you need to be different from everyone else in a way that matters to these people that you want to serve, people you want to work with, spend your time with. And if you don’t do that, you’re, you’re going to get undercut, like forever.

Joe Casabona:
The core thing here, right, is like people, the buyer wants to feel like you understand them. Right. I like talking to parents because most people, most advice for small business owners is like hustle and work and hard and hustle. And I’m like, you can’t, you can’t work. Your brain is mush after bedtime until you can’t stay up late and work because you’re Gonna get a 5am Wake up call or whatever. So, yeah, that’s, that’s really what it is, right? You’re, you’re letting the client know I, I see you and I like truly understand your problem.

Jonathan Stark:
Yeah, it’s just like I, I think the, the most visible model to copy as some kind of expert or consultant or authority is a really good gp, like your doctor, where you wouldn’t want to walk in there and they take one look at you and say, here, take these and call me in the morning. You want to be able to explain what’s going on and think about it. At least my doctor, you go in there, it’s like, hey, how you doing? Is there anything wrong? Go for my annual physical. Anything wrong? How you been feeling? Whatever happened with that ear infection? And they’re really getting to know your situation and they’re like, what are your concerns and what’s your current state and what’s your desired future state? And if I don’t trust that that’s been communicated clearly as the customer or the client in this situation, I’m going to be really nervous about any prescription or therapy they prescribe. I’m going to be like, wait, did they really understand me? So to bring it back to a regular service provider, if you are focused, if you’re specialized on something, it doesn’t have to be dentists or it doesn’t have to be, you know, I don’t know, landscapers. It could be swifties or skeptics or third trimester women who are in their third Trimester, it could be like something that’s not a vertical. It could be other things. But this, this segment of the population that you can just, you know you’re going to hit a double every time you get to bat, and you are pretty good at hitting home runs and every once in a while you hit a grand slam, you’re not fouling all the time.

Jonathan Stark:
And every once in a while you get on base. It’s like, it’s like if you specialize in some market, some subset of the population, it increases your ability to hit home runs. So that, what does that do? It increases the value for them because they’re getting their outcome faster. They’re getting, yeah, their outcome faster. And it lowers your cost because it’s so much easier for you because you just know how to do it. You’re not like learning everything every time from scratch. So every time you work with a client and then the next client has a lot of similarities because of this thing that they have in common. It makes it way easier for you to deliver outcomes faster.

Jonathan Stark:
And they’re more valuable outcomes because they’re getting them sooner. Rush service costs more for a reason. So you can decrease your cost and increase your price at the same time, which means you can serve more of these people more profitably. So what’s cool about this is that you end up doing less work and making more money so you can scale your solopreneur business, you know, without adding headcount, without increasing your hours inventory by hiring people who have hours to sell through you. And, and it’s just more fun. You know, it’s like this judo. It feels like a judo move where you know, this, this person comes to you. They’ve got this similar type of problem to all the other kinds of people that come to you.

Jonathan Stark:
And so you already know what you’re doing. You already have know a lot. There’s still going to be something that’s personalized to them, but you’re not learning the whole shebang every single time. So your expertise compounds, your authority grows. Eventually you write a book or a workshop or you go on podcasts or people hear about you and you become the go to person for this kind of person, the go to guy or gal for the sorts of clients that have this exact problem. So it creates this virtuous cycle where you can start packaging your expertise in smaller and smaller ways and reach more and more people to get back to the billion dollar solopreneur thing. So let’s say I’m like a hand surgeon or something. Let’s totally go nuts.

Jonathan Stark:
And I’m really well known for this, whatever for hand surgery. And maybe it’s even a particular kind of injury and maybe to get back to baseball, maybe it’s major league pitchers. And I can charge a crazy amount of money compared to what I could charge some regular person for some kind of surgery on their hand after some kind of repetitive motion injury that they probably is specific to this kind of person, this kind of athlete, but also getting them back to a level of use of or physicality that is way higher than it needs to be for an average person. So if you become super well known for that, then you could come up with preventative, perhaps preventative ways. Video course, or some kind of. Maybe a book or something where every little league pitcher in the world can read this book and say, like, okay, here are the things that cause major league pitchers to have these problems with their hands. So packaging your expertise, first of all, having the expertise, that’s table stakes. Being well known for it is almost certainly going to come from specialization.

Jonathan Stark:
I can’t come up. It would be impossible to come up with a way like, oh, you’re a generalist and that’s the solution. Like, no, that’s where everyone starts.

Joe Casabona:
Yeah. So why don’t we actually. Like, how do we. I mean, I have a vague idea of how I got there, right? Like, how, how I’m helping, like, specialize in building automations and general podcast workflows mostly. But, like, it really comes from, like, talking to people and listening to their problems and kind of reacting to that and doing that over and over again.

Jonathan Stark:
Right. Empathy.

Joe Casabona:
Is that the way. And how do we figure out where we want to go?

Jonathan Stark:
The way that you grow, if you want to make more money or have more impact and you don’t want to hire people, is to solve more and more and more expensive problems. You want to find problems that are very expensive for the buyer. And if you can find those problems that are very expensive for the buyer, especially if they’re very easy for you to solve because you have a kind of expertise that they don’t, then you can set your prices really high if you’re basing them on value and create an effective hourly rate of like, you know, anywhere from 2,000 to 10,000, like, it becomes ridiculous. So that is what you look for. If I was a hand surgeon and I can operate on just some random, I don’t know, electrician and fix their hands so that they can get back to work, that is only going to be worth a particular amount of money to that person, it is a much more expensive problem. For some pitcher in the major league, it is a major, majorly expensive problem. So if you’ve got this expertise where you can fix the hand of an electrician or you can fix the hand of major league baseball pitcher or the elbow or whatever, it’s a way bigger, it’s a much more expensive problem for that person. And so like my specific definition of expensive problem is it is a thing that a buyer would gladly write a gigantic check to make go away.

Jonathan Stark:
It is a problem that someone wants to write a big fat check to you right now to make the problem go away as fast as possible.

Joe Casabona:
One of my chronic problems is I like to help people who would write a gigantic check if they could write the gigantic check. So how, how do, how does one, you know, I like helping, I like helping solo solopreneurs. You like helping solopreneurs? It sounds like. Yeah, but like there’s, there’s definitely a limit on what a solopreneur would pay me to build out a set of automations for them. Or the other thing I do is like I help them build their, their studio, their gear, because the gear is really important part of having a good workflow that doesn’t kill all of your time. So what if your target audience that you’ve built doesn’t necessarily have the money?

Jonathan Stark:
Sure. So let me, let’s back up a tiny bit. So one of my business strategy basically is help people you like get what they want. It’s a whole strategy. So what if you want to help people that don’t have that much buying power? That’s what you’re saying? Yeah. Well, money’s not going to magically materialize and you probably don’t want them to go into debt over it. So the buying power is the buying power. It’s like they’ve got X dollars, they have this problem.

Jonathan Stark:
Maybe it’s not that expensive of a problem. So, okay, how can I package up my expertise in a way that they can afford and is very profitable for me? So it’s profitable for both parties because they’re going to give you a thousand bucks and it’s going to be the best money they ever spent. And it took you 10 minutes and you got a thousand bucks. So both people profit because the thing they ended up with was worth more than they traded away. So you traded away 10 minutes or you know, your whatever you packaged up, you traded that away and they traded away $1,000 and they got something that was worth $10,000 to them and you got something that was worth 10 times whatever you put into it. That’s the ideal scenario. What that means is if you are solving a not so expensive problem, you need to come up with a very inexpensive way to help them with that problem. So, and when I say inexpensive, I mean to you, the seller.

Jonathan Stark:
So very low cost to you, the seller. So it could be that you. There’s a couple different models, but one would be come up with new ways to package the expertise. Like maybe you sell a desk plan of here’s where our mic should go, here’s where your lighting should go. I could use that right now. Here’s a map of what your desk should look like. Or maybe they just take a picture of it and you do it on the picture and you just draw it. Like I would put this here, put this here, move this back, you need a bigger desk, whatever, and you send that back to them.

Jonathan Stark:
500 bucks. So it could be something like that. Is that the optimal way for you to help them if money was no object? No, you could help them all way more. If you went to their office, you brought all the gear with you, you set it up for them, that would be great. But that would be very expensive for you to do. And they haven’t got the buying power. So the cost is higher than the value. No sale cost has to be lower than the value.

Jonathan Stark:
The cost to you has to be lower than the value to them. So you have to come up with creative ways to package it so that it’s a no brainer deal for them. But they’re going to have to do some more work than getting your full service soup to nuts, top tier option. A completely different approach would be, and I get this a lot with people who say they want to work with nonprofits. A particular kind of nonprofit is to charge really high dollars to big nonprofits like, I don’t know, the Humane Society, they’re Red Cross. There are plenty of really, really big nonprofits so that you can do pro bono work for smaller players that are in the same space. So the pro bono work will be excellent. Free marketing, you’ll have all sorts of wins and stuff and also good vibes and connections.

Jonathan Stark:
And some of these people might end up at big companies and bring you in later or they might have connections at the bigger orgs. So it’s a real good marketing thing for you. But how do you help these smaller players that don’t have the budget to afford you? Well, you work with really big ones and you have so much profit that you can afford to do pro bono work for the sort of smaller fish. So maybe there’s even a model there for you, even though it’s not nonprofit.

Joe Casabona:
Yeah, no, yeah, that’s really smart. I really like that. I think it stems from what you’ve been saying this whole time, a deep understanding of the problem you’re solving. Right. So that you can get creative. But I think the other thing that I was hearing in there is multiple different pricing at or multiple different offers at different prices, which is a product ladder.

Jonathan Stark:
Right.

Joe Casabona:
And, and I, I forget this came up in my research, but I don’t know how often you talk about. You yourself talk about a product ladder.

Jonathan Stark:
Yeah, quite a bit. And really I should have called it. Well, I didn’t make the term up, but in our space it’s usually a combination of products and services. But I just say product ladder, but it’s usually a combination of products and services. And it could be actual products at the lower end, like digital products, ebooks, workshops, video courses, that kind of thing. And then it would move probably into productized services, which are a hybrid between products and services. And then at the high end, what I would call the helicopter option or the Mercedes option would probably be whatever you currently do. Anyone who’s listening, they probably only have a helicopter option, the top tier thing that is the most work for them, but it also produces the most results for their, for their customers.

Jonathan Stark:
So in a case like that, you can build down from the top tier and build rungs underneath that, that package your expertise. Same expertise for the same people, more or less, but in smaller price points and in ways that are less effective and require more elbow grease from the person who’s buying it to achieve the results. But if they can’t afford the top tier one, then, well, at least they can afford the video course or at least they can afford the ebook or whatever or the one phone call or something like that. And the reason for the latter metaphor is that when someone first hears of you, maybe they’ll buy the $10 book. And if they really like that, then they’ll go up to the $100 course. And if they really like that to go up to the thousand dollar phone call, and if they really like that, they’ll go up to the $10,000 workshop or strategy engagement or whatever and work their way up the ladder. Yeah. So the, It’s.

Jonathan Stark:
So one thing that’s important that I didn’t say there is that or I mentioned briefly, is that you would want for the ladder to work, you want the buyer to be roughly the same kind of buyer. So, like, you wouldn’t want to write a book about knitting and then have a course on web design.

Joe Casabona:
Right.

Jonathan Stark:
So it has to be for the same people. It could be that people at the bottom of the ladder are earlier in their business journey than people at the top of the ladder. So, like, Solopreneur’s doing $75,000 a year. Maybe they should buy my book. Solopreneur’s doing $250,000 a year. Maybe they should buy my private coaching because they’ve been stuck at $250,000 for five years and they want to get to 500 or 750 or whatever.

Joe Casabona:
The last thing I want to say is something that you alluded to kind of in the green room before we hit record is you’re. You’re working on. You’re working on another book, right? About productivity.

Jonathan Stark:
Yes, that’s right. Time management Productivity. Like, I’m picturing it kind of like if Atomic Habits and Getting things Done had a baby. It’s sort of like this, but specifically for Solopreneurs, because what I’ve been teaching people probably for Almost the last 10 years now is how to stop trading time for money. Different ways to stop trading time for money so you can grow your business without growing your headcount. Okay. What ends up happening is that the faster you can get things done at a high level of quality, the more money you make. So.

Jonathan Stark:
So once people do make the leap, then. Then being really effective and efficient is super important. It’s. It’s your financial incentive is to be able to snap your fingers and have clients say, like, oh, my God, that was amazing. So how do you do that? How do you do that without a va? Without, like, I have an accountant and stuff, but I don’t have meetings with them. It’s just like they. They log into my stuff. It’s invisible to me.

Jonathan Stark:
I don’t have any employees or VAs or anything. And I have this system that I’ve now taught to three different. Of my kind of really advanced coaching students that was like life altering for them. It’s like an event loop that I run through all day long, which is just the way that it made sense to me when I went solo. Where I have. Are you familiar with the book Getting Things Done by David Allen? I think it’s from late 90s, early 2000s.

Joe Casabona:
Yeah. Yeah. Most to do. Most task apps are basically based on that.

Jonathan Stark:
Based on that book. Yeah. And I disagree with. There’s some things in GTD that I strongly disagree with. But one thing that I really like is to minimize. First of all, keep nothing in your head. Don’t have to remember anything. You should not have to be like, oh, I got to remember.

Jonathan Stark:
I got to remember too. I got to remember too. So that’s a definite. That’s huge for solopreneurs because you’ll go insane with all of the things that. Right. So you have to have an inbox to put those things. That thing I have to remember goes in a particular place. And I’ve got basically two places where I put all those things.

Jonathan Stark:
Maybe three. One’s kind of a subcategory. And then I go through this cycle all day long, every day. When we get off this phone call, I’m going to do the cycle again. First I check on the lock screen on my phone. Are there any emergencies? If there’s an emergency, deal with it. If there’s not, I go to the next step. The next step is check my calendar.

Jonathan Stark:
Do I have another appointment coming up? If there is, I prepare for that. If not, I don’t have to do anything. Then I check my to do list. On my to do list, I look at the things on the list and I pick the one that I feel like doing. It’s not. And that feeling is based on a lot of things, like priorities, what the promise was to the other person, a lot of things. What time of day is it?

Joe Casabona:
Energy, right?

Jonathan Stark:
Yeah, energy level, all that. How much time I actually have before my next appointment. Maybe my next appointment’s only 45 minutes away. So I’m going to pick a 30 minute task or something. And so then I do that. And then when that’s done, check the lock screen on the phone, check the calendar, check the to do list, check the lock screen, check the calendar, check the to do list. And what ends up happening is if you do that every day, you’re always working on whatever you feel like, whenever you feel like. It’s like the most amazing feeling.

Jonathan Stark:
It’s like surfing through your day doing whatever you want. And there’s so there’s some serious nuances on there, but that’s the basic core of this event loop that I go through. And I probably do that like, I don’t know, 30 times a day, 50 times a day, something like that.

Joe Casabona:
This sounds like it’s what I thought at least part of buy back your time by Dan Martell would be where like that book could have just been called hire people.

Jonathan Stark:
Yeah, I. I don’t it’s not that I don’t think that I didn’t read that because I don’t want to hire people, right?

Joe Casabona:
And I thought, like, somebody sent it to me and I thought, oh, this is going to be cool. It’s probably going to talk about hiring. And then also, like, automation. And then the whole book was just like, hire somebody.

Jonathan Stark:
Yeah, it doesn’t. I mean, it’s like, duh. So for me, there’s a couple of. Couple of things. The term is when I taught this process to the couple of people I’ve taught it to so far, the word ruthless keeps coming up. And it’s because of. In a case where a lot of times people would hire a va, I say, you know, like, delegate it to someone. I’m like, no, either do it, automate it, or delete it.

Jonathan Stark:
So I. So one of the things that. One of the things that was notable when I was working with these other people and I was kind of exposing them to the way that I run things, they were like, wow, you know, everybody says you’re supposed to do this thing, and I’m like, well, I don’t do it, and everything’s going fine over here. So I think what ends up happening is there are a lot of. There’s a lot of advice about these nice to have things. And it’s a lot of busy work that doesn’t produce really any results. Like, a silly example would be like, I’ve been podcasting for a decade.

Joe Casabona:
This is the exact example that I was going to ask you about because my VA publishes my podcast, and I think I know what you would say to me.

Jonathan Stark:
So I teach this podcast challenge, and the very first thing in the very first lesson on the very first day is, here’s a list of 20 things that everyone tells you you have to do, and you don’t have to do them, at least to get started. You don’t need music, you don’t need advertisers, you don’t need ID3 tags. You don’t need this. You don’t need this. You don’t need this. Are they nice? Yeah, they’re nice, but you don’t need them. What you need is to get started. Start booking guests, start recording the things and posting them.

Jonathan Stark:
You can add music later if you want, after, you know you’ve got 50 episodes under your belt. If you really want to go back and do episode art for each one and add the ID3 tags and all of that stuff, fine. But, you know, don’t worry about that stuff right away. And if you, you know, my ditching hourly podcast, there’s no music, no ads, no sponsors, never has been, never will be. And I’m not saying it’s not worth something, I’m saying it’s not worth me doing it. So that falls into my delete category. Could I easily get someone to do that stuff for me? Yes. But what’s the trade off? Do I really want to spend that thousand dollars a month that way or whatever it is, or would I rather spend that on, I don’t know, Facebook ads or something? You know, like what something else.

Joe Casabona:
So, so do you, so do you publish your podcast yourself? Because this is like one thing I like. I batch and then I just. My va, like once I’m done recording, my VA just kind of does it all for me.

Jonathan Stark:
Yeah. So I’ve done both. I’ve done both. I like editing it because I find that the edits are light. I’m really good at it, I’m really fast at it and I take notes on it as I’m doing it. And it creates way more content for me. So for me it’s almost like a continuous improvement process for my expertise. Did I like it when like we paid people to edit the business of authority when I did that with Rochelle? And that was fine.

Jonathan Stark:
It’s fine. It’s funny though, because it creates different problems, right?

Joe Casabona:
It creates a whole, like, it’s not like you’re scot free now, right?

Jonathan Stark:
Yes. You’re not scot free.

Joe Casabona:
You have to manage the process and, and so that you do need to think of the trade off. What I’m hearing from you though, is like the, the type of work you’re doing because you’re doing value based work frees up a lot of your time to do things instead of having to manage people doing those things.

Jonathan Stark:
Right. I’ve experimented with vas. I’ve had people edit the podcast and guess what it turns into? It turns into meetings. And I don’t want meetings. I’d rather listen to the podcast and just edit it than have an hour long meeting about, like, well, what’s going to be the direction for the theme music next year? Like the episode art or them emailing. It’s like, oh, we had an emergency in the family. I can’t do it. It’s going to be late next week and all of that stuff.

Jonathan Stark:
It’s like, I’ve tried it, I just don’t like it. And if I got sick of, if I got sick of editing the podcast, I’d stop doing the podcast. I wouldn’t hire someone to edit it for me or I’d switch to live streaming. Like, I would just, I mean, I actually on the verge of just switching to live streaming.

Joe Casabona:
I, you know, I think, like, I think we could probably have a whole episode where we talk about our different processes. I, I love the idea of your process. I have, I don’t have meetings. I just, you know, I record a video, they do it and like that’s, that’s fine. But I also do. I have a podcast that I completely produce on my own because it is easier than delegating it. Right. The bigger conversation.

Joe Casabona:
Maybe I can have you back on and we could talk about this is the importance of like relational or like connective content. Right. Like in a world of, of AI, someone was like, oh, I just, I just put the transcript in AI and have it summarize it. I’m like, cool. You’re like a tourist in your own life. That’s so weird.

Jonathan Stark:
Good way to put it. Yeah, I use AI pretty much every day for certain things. It’s really good for, for other things. It is awful and a lot of people are using it for the awful things because they can’t tell the difference and it’s just like swamping. It’s like this is the end of social media. Probably because it’s just so much garbage. I mean, it was bad before, but now it’s like comical. But yeah, I would actually love to do that.

Jonathan Stark:
It’d be fine with me.

Joe Casabona:
Awesome. Well, I will follow up, but if people want to learn more about you, where can they find you?

Jonathan Stark:
I would go to valuepricingbootcamp.com where you can sign up for a free 6 day email course that goes into like detail about different aspects of value based pricing and comes from my personal email. You can reply to any message. I’ll get it, I’ll respond to you. So if you have any questions, that’s the best way to kind of introduce yourself.

Joe Casabona:
Jonathan Stark, thank you so much. It was great talking to you.

Jonathan Stark:
Same here. Yeah, that was a blast. Anytime.

Joe Casabona:
Awesome. And thank you for listening. And until next time, I hope you find some space in your week.