Monetising introductions and other non tangible services.

[northernladyuk]

Well I asked the question. Was told that they would have paid €80k possibly more. The advice given was to aim for 10% of the 1Y value of an introduction & settle at 7.5%, which makes my margin less than most pimps, but hey, the customer came to me and no admin - so little effort. Still no idea on how to figure out a 1Y valuation though.

The other good thing is that I pitched my car event package at the semiconductor company and have woken up to an email confirming 15 people for a long weekend, so stand to make more money off the introduction than the 50k fee. Also my first major client so am happy.

That's a nice roll you are on.

[clearedforlanding]

Well I asked the question. Was told that they would have paid €80k possibly more. The advice given was to aim for 10% of the 1Y value of an introduction & settle at 7.5%, which makes my margin less than most pimps, but hey, the customer came to me and no admin - so little effort. Still no idea on how to figure out a 1Y valuation though.

The other good thing is that I pitched my car event package at the semiconductor company and have woken up to an email confirming 15 people for a long weekend, so stand to make more money off the introduction than the 50k fee. Also my first major client so am happy.

[madame SasGuru]

Uh tulip. I feel so naive. It is sales, I just thought of it as "introducing". I have been doing this for over a decade, if anything it stoked my ego that people would actually take my calls.

The thing is I do have the contacts.

Hmm, as I have a very good relationship with the guy who paid me 50k, I shall ask him how much he would have paid. I am guessing a lot more.

Every circumstance is unique. given what you described it wouldn't surprise me if more than the first year revenue from that customer was an option based on their need to have a quality customer paying money.

Looking at the things I'm working on (a specialized change to the internals of some commercial software to resolve a gap that impacts suitability in some market sectors) my pricing / sales related notes state:-

1) Price base on the value for the customer not cost plus anything and ignore the monthly fee from the supplier for the core product.
2) No discounts beyond volume and annual payment (this rules out a particular cheapstake customer who needs it but tough for them).
3) 10% commission to partners but they will need to be trained up - that means longer term a course with exam.
3b) short term that means they need to sell consultancy from us as well to ensure things are handled correctly - that means sell consultancy and recruit possible consultants.
4) ensure you keep your existing excellent relationship with the original software producer

If you don't already you really do need to read Patrick McKenzie https://twitter.com/patio11

[clearedforlanding]

Welcome to the world of sales. Lets face it you can have the best product in the world but it is worth nothing if no-one knows about it.

As techies we tend to pour scorn on marketing, but one thing I have learnt is marketing is everything. A good example is music, has nothing to do with ability, "all you need" is a TV programme with national reach and whoever you stick on there will be a hit, i.e. 99% marketing 1% ability. There are tons of musicians who have what it takes.

I suspect the main problem in continuing this, is getting the contacts, i.e. it's all about marketing.

Uh tulip. I feel so naive. It is sales, I just thought of it as "introducing". I have been doing this for over a decade, if anything it stoked my ego that people would actually take my calls.

The thing is I do have the contacts.

Hmm, as I have a very good relationship with the guy who paid me 50k, I shall ask him how much he would have paid. I am guessing a lot more.

[vwdan]

This is how it works in the defense industry.

You need 200 rifles and 10,000 rounds of ammunition delivered to a country with questionable governance?

A dozen fast jets to a Middle Eastern kingdom that needs lots of clearances and paperwork where the sale may need to be "incentivised"?

Talk to the right person for the right price and it can all be arranged.

I knew a guy who worked in, uh, marketing for a very large tobacco. Seemed to spend most of his time in countries of questionable governance "establishing supply routes"

[BlasterBates]

Welcome to the world of sales. Lets face it you can have the best product in the world but it is worth nothing if no-one knows about it.

As techies we tend to pour scorn on marketing, but one thing I have learnt is marketing is everything. A good example is music, has nothing to do with ability, "all you need" is a TV programme with national reach and whoever you stick on there will be a hit, i.e. 99% marketing 1% ability. There are tons of musicians who have what it takes.

I suspect the main problem in continuing this, is getting the contacts, i.e. it's all about marketing.

[DaveB]

Item 1: Telephone calls €100
Item 2: Knowing who to telephone €49,900

This is how it works in the defense industry.

You need 200 rifles and 10,000 rounds of ammunition delivered to a country with questionable governance?

A dozen fast jets to a Middle Eastern kingdom that needs lots of clearances and paperwork where the sale may need to be "incentivised"?

Talk to the right person for the right price and it can all be arranged.

[northernladyuk]

I guess that is some kind of uber-consultancy.

50k for a days work (that doesn't sound like 7.5 hours work) is an incredible consultancy fee. I can't imagine there are many people that can pull that off consistently, but maybe I just don't move in the right circles.

If I could double my day rate, I'd feel like a "real" consultant

Item 1: Telephone calls €100
Item 2: Knowing who to telephone €49,900

[jmo21]

Former sales guy who had worked his way up to Global Head of Strategic Alliances in a household name tech company. Now is sitting on boards of startups when VCs need someone experienced - just called me up and asked me if I knew of a quick win and to name a price once I suggested someone.

There is some history to this. A few years back I got a contract after introducing a construction company to him (Head of Buildings EMEA, was at school with me) and his company so that they could collaborate on smart cities. The CM company awarded me a WFH contract at a stupid rate that ran in parallel with some other work I was doing. In fairness there was not actually too much work to do, it was kind of accepted that this was a fee, but never officially said - I just invoiced to a massive project code where it was just a drop in the ocean.

So nepatism I guess.

I guess that is some kind of uber-consultancy.

50k for a days work (that doesn't sound like 7.5 hours work) is an incredible consultancy fee. I can't imagine there are many people that can pull that off consistently, but maybe I just don't move in the right circles.

If I could double my day rate, I'd feel like a "real" consultant

[clearedforlanding]

How was your 50k one done?

"I know a company that could help you, but I want 50k before I tell you"??

Where do I find companies like this?!

Former sales guy who had worked his way up to Global Head of Strategic Alliances in a household name tech company. Now is sitting on boards of startups when VCs need someone experienced - just called me up and asked me if I knew of a quick win and to name a price once I suggested someone.

There is some history to this. A few years back I got a contract after introducing a construction company to him (Head of Buildings EMEA, was at school with me) and his company so that they could collaborate on smart cities. The CM company awarded me a WFH contract at a stupid rate that ran in parallel with some other work I was doing. In fairness there was not actually too much work to do, it was kind of accepted that this was a fee, but never officially said - I just invoiced to a massive project code where it was just a drop in the ocean.

So nepatism I guess.

[northernladuk]

Just ask them for an iPad.

[jmo21]

How was your 50k one done?

"I know a company that could help you, but I want 50k before I tell you"??

Where do I find companies like this?!

[clearedforlanding]

When it comes to introducing other contractors to gigs I am a true believer in scratching each others back. Over the past couple of I have seen an increasing numbers of companies who want to use CFL's Golden Rolodex. As opposed to helping out fellow contractors, this is something I no longer want to do for "free".

I used to be happy to make introductions on the basis that they may turn into a contract further down the line. I used to have great conversion ratio doing this, however over the past couple of years it has been shocking.

The first filter I apply is: is the product / service any good? I would not like to burn my contacts by introducing tulipe. Once I have passed this filter I am good to go.

I just made €50k by introducing a startup that needed an "anchor store" to a semiconductor company. This is a number that I simply pulled out of a hat and it got me thinking, how does one price this kind of stuff? I really don't have any experience in invoicing other than time/materials or on a per project basis.

€50k for a days worth of phonecalls and emails is a hell of a lot of money and I hope I am on to something. Commision structures are difficult to calculate on something that is not tangible, and pulling numbers out of a hat and seeing if people blink is probably not a long term strategy.

How would you approach valuing something like this with a view to moneterising it? I am fully aware that it is completley case by case and a real "how the hell would we know?" (Looking at you NLUK), I am struggling to find the starting point. How would one invoice?