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How Much Are Your Ideas Worth? The Art Of Pricing Creativity

The Power Of An Image

In 1971, a young designer named Carolyn Davidson was commissioned by a shoe company to design a logo. Davidson at the time charged $35 per project for logo design, which is $234.85 in today’s money. She produced for them the most iconic logo of all time, the Nike swoosh. Later in the 80s Nike gave Carolyn more money as well as stock in the company which obviously did very well. The questions that this story raises are, what are ideas worth? What model do we use when pricing creativity? The physical effort Carolyn put into designing the logo was minimal. The time was probably not very extensive. But the result was a logo so powerful it has transcended the brand and gone on to first become synonymous with sports in general, and ultimately with the concept of victory itself.

The battlefield of artistic pursuit is littered with the casualties of those who never figure out how to sustain a living off of their creativity. As artists we feel that because we enjoy what we are doing and we create our work out of thin air it’s somehow worth less than a product made from material parts.

I don’t know what the material cost of the MacBook I am typing on right now is. Apple keeps that information to themselves. But as I lift it up and examine the components, give it a shake and a sniff, I see plastic and metal. Thats all that seems to be here. Maybe $100 worth of material? Maybe $200 tops? The value of the components all together is why I paid over 10 times that for the machine. So where is the jump in value? Well, even though I have extensive I.T. training, I still have no idea how to build a CPU. Let alone an LCD screen, camera, WiFi antenna, you get the point. The baked in value that I am buying is all the ingenious ideas it took to compile the plastic and metal into the machine. 

Ideas Vs. Time

We know that people are completely fine with paying handsomely for ideas when it comes to tech. We see it in other areas where most people don’t ever dare try to understand what’s inside the magic box. For example the field of car repair. So why don’t we see our art in the same light? Wether you are a writer, painter, designer or musician, you are producing your ideas for the use and enjoyment of others. So what’s the hang up? 

The hang up is that most artists don’t charge based on their ideas, we charge based on time. This drastically changes what we are actually providing for the client. When we charge an hourly rate we are selling our time and not our ideas. This should never be the case as it puts the value of what we provide in a completely malformed context.

Pricing Creativity

Here at Nighthouse we charge by project. This allows us to fully invest in the outcome the client deserves, unchain ourselves from the clock, and avoid the inevitability of a client telling us what the project needs and doesn’t need in order to cut cost. When we are committed to hourly billing and submitting our time to clients we are essentially letting the client dictate the flow of the creative process. Most clients have no idea how to even open an Illustrator file or code a basic HTML email, so why are we putting them in the drivers seat of the entire project? I think when we look at it this way most clients would even agree this is a silly way to do things.

Order Takers Are Not Creating

Just as important as knowing how to value your work is knowing how to conduct your work. As the designer Chris Do teaches, when we meet with a prospective client only to have them tell us exactly what they need we become an order taker. We are not creating anything. We are simply manufacturing something that has been dictated to us.

As I said in my earlier post about design thinking, design is about solving problems. If the client could design a solution to solve their own problem, then they wouldn’t need us. So why do we approach design this way? When we go to the mechanic, do we tell them exactly what to repair? Does the mechanic then do the repair we tell them to and give us back the car? Of course not!

We go to the mechanic because they know how to fix whats inside the magic box. We would never tell them how to do their job because we operate under the assumption that they know how to solve the problem better than we do. I don’t think anyone could even trust a mechanic that took orders. What about a doctor who took orders? That would be malpractice! If we approach our ideas like this we see how strange and silly it actually is.

Conclusion

When we know what the healthy relationship between designer and client looks like and we commit ourselves to only operating within that model, we will deliver work that is exponentially better as time goes on and amaze our clients. When we see the value of our ideas and we price our work accordingly we raise the bar together to make sure that we all get the compensation we deserve for our artistic thought. Not for our time. The more designers stop billing hourly, the more it will break that model in the client’s mind and benefit all of us. Because the reality is the client is fantastic at their business, but they have no idea how to work what’s inside the magic box. And we do.

Books for encouragement. Both by the great Blair Enns- 

The Win Without Pitching Manifesto

Pricing Creativity

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