Charging by the hour punishes you for being an expert

June 24, 2025

Business

This clip was published 7 years ago with an impressive 12K upvotes, and is even more widely circulated today in its IG/TikTok reel format because it so concisely highlights the demand-side zero-sum mindset of hiring creatives, and one of the root causes of the struggle new creatives (especially freelancers) face when learning to earn a living from design work. Having recently evacuated from the LA fires, this was the most important video for me of 2025 Q2 as it got me revisiting how much an hour of my time is worth (not necessarily monetarily, but more in terms of opportunity cost; whether I get paid a salary or by the hour is irrelevant), and on the other side of that coin, how much my expertise is worth.

Earlier this year, I had a stakeholder interaction that made me wonder: What are the factors that influence whether a customer is paying for my effort, or for my achievement? What separates those who see value as a function of effort/labor--the prototypes tested, the lines of code compiled--vs. those who see value in the outcome/problem-solved--the definitive solution, the risk mitigated, the market accelerated, regardless of the labor expended? This translates to the contradiction Chris points out: If I can solve a business problem for you in a shorter period of time, should you value that more, or less?

When you hire an expert to resolve a month-long crisis in ten minutes, you're not paying for ten measly minutes of labor; you're paying for a decade of specialized experience compressed into an instant. True value should lie in the economic transformation of the asset, not the producer's stopwatch. So, the idea of "billable hours" is a classic example of a system that incentivizes the opposite of its intent. And whether the client intended to or not, such a system signals a sort of disregard for the craft and mastery of the expert practitioner.

Someday I want to look into more systems that end up doing (incentivizing) the opposite of what their creators aimed to do. NCLB first comes to mind...