Tools Are Cheap.
I recently lost a job because the client figured that the company could buy the tools to do the job that I was quoting for about $4500 including the hardware. It was 1/4 the costing that I gave them.
This floored me. I was completely blind-sided by it. A Pretty Damn Good Company had decided that the tools to do the job that I had outlined (and laid down the broad strokes for) decided that they didn't need to engage any outside contractors. They told me that they were going to purchase the tools and have someone (who had never done this type of thing before) design and execute their public face.
So, why was I surprised? I mean, they had a real good point. My general tech outlay has fallen from about $15K to ~$3K per year over the past six years. If it's that cheap to set up a design studio capable of design/web/print, why the hell would a company waste money on hiring me? I mean, any 14-year-old can put together a web site or design a tee shirt. It ain't hard.
What a thunderclap that was. I mean, imagine it. Let's do an exercise together: take what YOU do and reduce it to how much money it would take to set someone up exactly like you are and compare that price against your hourly rate. Since you are reading this I expect that you have a computer; I could replace it with a faster, more capable machine for about $2000. The software you are running wouldn't take more than $3000 (that includes Microsoft Office). By this logic I could replace any CEO of any company for about $5000.
Okay, so that's a bit extreme. CEO's are smart; they Do Things. Let's take a physical example.
Let's say that you'd like to put an addition on your house. It's a nice house, but it's a bit too small. Another ~100m2 would be really swell. My estimation is that the tools to build the addition would cost you only $5500 while those Goddamn Pirates of Construction would put you back ten times that price (at the low end). The tools are cheap. I can go to Home Depot and get everything I need. Why the hell would I pay to have someone else screw me when the tools are so fuckin' cheap?
Let's take that even further. Frank Gehry is a hack. I've seen his drawings. I can't believe that he'd charge a coupla million dollars for that stuff. It's just pencil on paper. I can get a pencil and some paper for less than a buck. The Bilbao Guggenheim was designed with some 8 1/2 x 11 paper and some glue. At Staples I can pick up an architect's toolkit for less than five bucks.
What does it come down to?
The tools to do the job are very, very cheap. The understanding, the experience, the insight, the creativity, the strategy, the feeling are what the client pays for. It's the wetware: the thing you carry around in your head.
This made me feel really quite good. I recently had a hard drive failure and lost a whole bunch of data but, unless I am hit by a bus, I always have everything that employs me. Nestled betwixt my ears is the thing that pays for the nice studio I go to every day.
I still don't seem to be able to communicate that to the client who decided that my worth was just the tools in my toolbox and doesn't attach any value to ideas and innovation.
(apologies to Mr. Gehry; keep doing junk with paper and stuff)