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In indie consulting, some days are all about playing with fancy gadgets like strategometers, or jumping out of helicopters to make emergency deliveries of thought leadership, or hanging out with mystic monks. But most days are just about two minds quietly getting into deep subtleties over coffee. When it is two consultants getting into it, things can get particularly meta.
One such day in 2016, I was sitting across from young Bernie Anscombe in a coffee shop. He was not very happy with me. He had asked to buy me coffee to get some advice on some of his gigs that seemed stuck, and I had just offered him a diagnosis no consultant ever wants to hear, especially from another consultant.
“All your problems are due to one thing: your hourly rate is too high.”
Bernie is the brother of Arnie Anscombe, whom some of you have heard me talk about: the hotshot young consultant I’ve run into in several gigs, who does data-hackery magic with SQL, and sometimes manages to steal clients from me.
Still, I have no beef with the Anscombe boys. Though they make me look old-fashioned with my 2x2s and occasional Excel spreadsheets, so far I’ve managed to hold my own. The way I figure, if a client thinks SQL is the answer, they’re not asking any questions I can help with anyway. It is a market I’m happy to cede to the millennial young ‘uns with their software-eaten transhuman brains.
The Anscombes are an ancient consulting clan. Consulting is a calling that tends to run in families, with secrets handed down from generation to generation. Some consulting clans claim to go back to Ancient Egypt, and claim Pharaohs among their earliest clients. The Anscombe clan is not quite that ancient, but their history does go back to at least the Crusades, according to family lore.
Legend has it that the clan got started when Rexthor de Anscombe, a medieval French dog walker, sold a Capability Maturity Model to the Knights Templars back in 1306. When King Philip IV of France went took a torch to the Templar organization soon after, many blamed de Anscombe’s advice, so he had to flee for his life to England, where later generations of Anscombes slowly repaired the clan’s reputation and became known for their fine hand-crafted 2x2s and capability-maturity models. In the 19th century, the family migrated to the US and set up shop on the East Coast. Anscombes reputedly worked with all of the Robber Baron 100 companies.
Yeah, I’m a bit of a consulting history nerd I guess.
Bernie and Arnie, as it happens, are two members of a set of identical quadruplets, all of whom are indie consultants. The family has always frowned upon corporatization as a degenerative disease, and raises its scions to take pride in indie free agency. Young male Anscombes (yeah, they’re a bit patriarchal) are thrown out of their parents’ homes at age 14 and told not to come back until they’ve accrued at least 10 billable hours. It’s a harsh system, but it has produced some fine consulting talent over the ages.
All four, Arnie, Bernie, Chuck, and David — the Anscombe boys, or Anscombe Quartet, as they’re known along the Acela corridor — are regarded as up-and-comers in East Coast style data-driven gigwork. They can be hard to tell apart, but once you get to know them, they’re as different as four people who look exactly alike can be.
Arnie’s the most established of the four, a relentless hustler who eats and dreams multiple regressions, but Bernie’s the one I like the most, which is why I always say yes when he hits me up for coffee. He’s got soul in the game.
Though he mostly toes the conservative family line, Bernie occasionally plays the family rebel, flirting with West-Coast style narrative consulting methods that would make his ancestors roll in their graves. Alone among his siblings, he dabbles in machine learning, and unlike them, calls himself a data science consultant rather than a statistician. I think he seeks me out for mentorship mostly to annoy his family. An indie consulting blue-blood taking advice from a first-generation upstart descended from paycheck types.
At the moment though, young Bernie was not happy with my mentoring. He looked at me coldly, like I’d slapped him across the face.
“What do you mean my hourly rate is too high? I’m logging at least 20 hours a week at this rate. It’s not like it’s a vanity rate you know… people are actually paying me at this rate.”
I waved the thought away, “Not at all. Not at all. I’m not suggesting that. You charge more than I do, and you log more hours than I do. Whatever your problems, pulling in the money isn’t one of them.”
“And not just from family connections, mind you; I’m getting more inbound leads from random people on Twitter than through the family. And I’m constantly saying no to gigs too. I could log a hundred hours a week if I hustled a bit more like my brother Arnie.”
“Absolutely. Perfect seller’s market. Storm of demand meets pedigreed Anscombe supply. Product-market fit. Congrats on hitting that.”
“Exactly. I have a high-demand skill, and a strong tailwind, why shouldn’t I charge what the market will bear? Why should I leave money on the table, no offense, like you seem to?”
“Why shouldn’t you, indeed?”
“Maybe I will. Maybe I should go higher and cut back on my hours. Everybody else is telling me to go higher. You’re the only one telling me I charge too much.”
“So double your rate and do 10 hours a week. Or 5x it and do 4 hours a week. Live the 4-hour work-week dream. It certainly sounds like you could ride the demand curve anywhere you like, which is a luxury few of us enjoy. What’s stopping you?”
Bernie looked uncomfortable. “Now, hold on, that’s not what I’m driving at…It’s not the quantity of hours, but the quality…”
“So solve for 4 quality hours a week.”
“Well, like they say, you need the quantity to get to the quality. I don’t always agree with the family, but we Anscombes aren’t in it for free rides. We take pride in actually doing the hard work and putting in the hours needed to help make history.”
“Quality of hours, not quantity, and quality follows quantity, help make history, exactly! Couldn’t have put it better myself! In fact, I’m going to steal that line. Hold on, I gotta make a note of that…”
I made a little show out of pulling out my notebook and making a note. Note-taking is the great status leveler in all consulting conversations, including mentoring conversations between consultants. It signals I too am learning from you, see? The gesture seemed to mollify young Bernie a little.
“…Is it though?” I asked, shutting my notebook with ritual deliberation, and putting my pen down.
“Is what it?”
“Is the quantity of hours leading to quality hours? Are you getting, like 2 quality hours for every 20 you bill?”
“I guess not. I mean, I’m getting all this inbound, and more work than I can handle, but none of the gigs is actually, you know… interesting. And that’s what I want to solve for. I’m not overworked or underpaid, I’m underpurposed.”
I opened my notebook again, “…not overworked, underpurposed… you’re on a roll today. I’m stealing that one too.”
“Thanks, I guess. Can’t recall where I heard that line.”
“…So underpurposed… you find yourself wondering whether you should just take a regular job to find purpose, huh? Hang with all the missionary types with cathedrals in their eyes?”
“Well don’t tell my family that, but yeah. I guess I’ve always been the black sheep of the family. I think they already half-expect me to dishonor the clan name by taking a paycheck job. No Anscombe in history has ever had a paycheck job.”
“Your family is right on that one. That’s just grass-is-greener thinking. If you can’t find quality hours as a consultant, you’re unlikely to find them as an employee either. So what makes your hours low-quality? Why isn’t quantity leading to quality?”
He considered this. “I like the actual core of the work. You know, diving into the data, trying out models… it’s putting it into glossy TPS reports and stuff, that’s what I hate.”
“So why not stop doing that? Do the fun part, and let them write their own damn TPS reports? I mean, isn’t that why you don’t want to be an employee? They’re the ones with health plans and job security. Let them earn it by writing the TPS reports. You and I live dangerously so we can have some actual fun between cash crunches.”
“That won’t fly. The reports are what they’re paying for…. Though it’s not like they really read them. Once the executive summary says what they want it to say, they’re happy.”
“Exactly! And they forward the reports with their comments to their VPs, right? Proposing to do what they wanted to all along?”
He looked depressed. “Yeah. It’s just the usual cover-your-ass fodder my family’s been churning out forever I guess. Did you know, one of my 17th century ancestors wrote a report for a pope titled, Dealing with the Protestant Disruption using Logarithms? I’m doing basically the same thing in 2019, just with machine learning.”
“Fascinating family history there, but to get back to you, how might changing your hourly rate change the quality of your billable hours?”
“Yeah, yeah, I see what you’re getting at. It would be weird, but I suppose if I told them I’m cutting my rate in half, but that I wouldn’t do the report writing, that might fly. But it seems wrong somehow, lowering my rates when the demand is up.”
“Demand for machine learning, or demand for reports with ‘machine learning’ in the title proposing the same ideas they’ve been pitching since 1988?”
“I get it, I get it. No need to rub it in. They’re just using me to externalize their risks of riding a fad.”
“Yes.”
“I’m playing in the shoot-the-messenger market.”
“Yes.”
“If it works, they win. If it doesn’t they can try again with the next fad.”
“Yes.”
“And I’m just riding the fad to pay the bills. I get it.”
“Do you?”
“My brother Chuck, all he does is feed that beast. Though somehow he manages to always cover his own ass as well, and never actually gets shot.”
“So what’s the opposite of being a disposable messenger?”
Bernie sighed. “Umm… a…pump-and-dump artist like my brother David I suppose. I have quite the family. Arnie’s a mercenary hustler solving for money, Chuck is a professional punching bag pretending to be a sparring partner, and David’s a pure predator sucking the marrow out of clueless middle managers selling them shit they don’t know they don’t need.”
“What does that make you?”
“The poet in the family I suppose. The one who keeps asking if there’s more to the game.”
“And is there perhaps a poetic hourly rate here?”
“Is there poetry in consulting at all? Either the client is dumping risk on you, or you’re dumping risk on the client. Externalize or be the externality.”
“C’mon! The ancient Anscombe clan didn’t survive since the Crusades without some poetry to its story! Are you and your client necessarily on opposite sides of a zero-sum risk hot-potato game? You can think of no way to get on the same side as your client? Is the game really that bleak?”
“Why don’t you drop this Socratic shtick and just spell it out?”
I gave him an injured look. I like my Socratic shtick.
“Fine,” I said. “I’ll give you a formula: price to partner, raise with risk. It’s not really about pricing too high or too low, but pricing your time right to solve for interesting. Want me to break that down?”
“Yeah, that sounds clever but I don’t know what it means.”
“That’ll cost you another cappuccino…”
Bernie raised his eyebrows at me, “What?”
“You heard me. Touch of sugar in the cappuccino. And I’ll take a cookie too. Oatmeal raisin.”
Bernie shrugged, stood up and went to the counter to order. I checked my email and twitter, shot off a shitpost, and began idly scanning the crowd. The guy at the next table seemed vaguely familiar. He’d been glancing at us talking throughout. I couldn’t quite place him though. Oh well, it’s not like we’d been discussing NDA’ed state secrets.
Bernie returned with fresh cappuccinos for both of us, and two cookies.
I took a sip, and a bite of my cookie.
“Mmm. Good cookie. Where were we? Ahh yes. Price-to-partner means you set an hourly rate high enough that the client can see you as a partner in the risk rather than mere contract labor, but low enough that the client is not tempted to cast you in the role of a pure risk-sink, being paid to take a hit of some sort.”
“And raise to risk?”
“Raise with risk, not raise to risk. Raise to risk means you are moving risk around, or worse, adding risk by changing the price tag of the project rather than the substance of it. Raise with risk means you price your services in proportion to the risk level of the project itself. I’m not talking negotiating a cut of the rewards by the way. I’m talking pricing your services now in proportion to the rewards the client may enjoy later.”
“So if I want to charge more…”
“…You have to pick clients who are taking bigger risks, or encourage your current clients to do bolder things…”
“But what if they can’t afford it? Like an unfunded startup.”
“Then you look elsewhere. That’s why you’re a consultant. You look for the intersection of interesting and has a budget. And some places, there’s no elbow room to make the formula work. But there’s a lot of interesting in the world to choose from.”
“Price to partner, raise with risk, hmm.” Bernie turned the phrase over in his mind, trying it on for size.
“It is a formula for bringing your story and the client’s story into narrative harmony. Mere incentive alignment is shallow play. Narrative harmony is what anthropologists call deep play.”
“How can I tell whether I’m being paid more to absorb more of the risk, or paid more to partner in a bigger risk?”
“If I might rephrase your question, you’re really asking how you can tell whether you’re in shallow play mode or deep play mode. Well, have you ever had a client reject your advice?”
“Of course. Many times.”
“Then tell me this. When they reject your advice, assuming you think it’s good advice and the problem is with them, is it a failure of their imagination, or a failure of their nerve? Do they not get it, or do they lack the guts for it?”
“I guess… mostly they don’t get it. Or rather, they don’t care whether they get it or not. So long as I tell them I get it.”
“Then you’re a risk sink. You absorb their risks of riding a fad.”
I could see him visibly struggle with this thought. He did not like it. I gave it a final shot.
“Think about the phrase, let’s make it interesting. Do you think that’s about imagination or nerve?”
But Bernie was done sparring. “I don’t know. I’ll have to think about it…”
I grinned at him, “Yeah, we all know what that means. That’s fine. I already have my cookie!”
Bernie smiled weakly at me, and got up.
“Well, thanks for the conversation.”
I sat there for a few minutes after Bernie left, meditatively sipping my cappuccino and nibbling at my cookie. Sometimes you get through, sometimes you don’t. So it helps if you make sure the coffee is always fresh, and that there are cookies.
Just as I was about to get up, the guy at the next table, the one who’d been glancing at us curiously throughout, strolled over.
“Sorry, I couldn’t help overhearing. That was an interesting conversation. Do you think your young friend will do it? Try charging less to make things interesting?”
I drained my cappuccino and shook my head, “No.”
“Why not?”
“The hourly rate, it’s The Number for us consultants. And if it’s not always going up, it’s hard to tell if you’re winning. It’s hard to ask a client for more money, but it’s nearly impossible to talk yourself into accepting less in pursuit of mere interestingness.”
“That seems wrong.”
I shrugged philosophically. “He chose money over interestingness. In consulting, a mistake nearly everyone makes.”
The guy smiled and nodded appreciatively. “That’s a good line, I’m going to steal that. I’m Frank Underwood by the way.” He pulled out a notebook to make a note.
“Nice to meet you Frank, here’s my card if you’re ever looking for a consultant.”
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