I'm "lucky."
Lenders, vendors, investors, entrepreneurs... people in the business of lending money to the masses call me daily.
They share their wins.
Their losses.
Their challenges and frustrations.
Most importantly, they share their ideas with me.
Why me?
I suppose because I'm transparent.
I'm
straight.
I fully admit my agenda and my biases.
My reputation is all I really have.
Ultimately, that's all any of us own.
As a result, I have the good fortune to access some of the best minds in our industry.
Make no mistake.
I recognize that I'm often the dumbest guy in the room. Frankly, I prefer this role. "Always be learning" is my mantra.
The Problem with Billing by the Hour
Over the years, I've worked on dozens of projects with professionals who charge by the hour for their services.
I've never understood this. The premise that the fee generated by a collaboration between a client and their hired gun should be based on time, materials, number of participants... some commodity... is nonsensical.
The real measure of my collaboration with a client is this: To what extent have I improved my client's condition?
My mentor, Alan Weiss, put it bluntly: billing by the hour or day is intrinsically
unethical.
Lawyers bill in six-minute increments. We all know how well that works. Time-based billing rewards sloth and lethargy.
My value is in my advice, my counsel, and my network. Not
in my presence.
My clients should not have to make an investment decision every time they need my help.
A Ten-Minute Phone Call Worth Ten Million Dollars
Here's an example.
My client needs a bank.
No bank equals catastrophe.
I jump on a ten-minute call with a banker I know who is willing to provide an operating account for my lender client.
If I bill for ten minutes of my time, what dollar amount does that equate to? $166 at $1,000 an hour?
That's the wrong question.
The right question: What value did I deliver?
I enabled my lender client, a company with a $10+ million portfolio, to remain in business.
Think about all the capital, infrastructure,
customers served, employees, vendors, tax authorities, commercial property owners, consumer activists, politicians, lawyers, lobbyists, and industry associations who are dependent on the survival of my client.
I've invested 20+ years building relationships with folks smarter than me.
Relationships that allow me to solve a bank issue with a short phone call.
Relationships that enable me to introduce two unaffiliated lenders, unaware of one another yet operating in the same city, to collaborate, solve their individual challenges,
and achieve an ROI they never dreamed possible.
Who Worked Harder Today?
Seth Godin tells a story about two loading docks at two small companies.
At the first dock, a tractor-trailer filled with heavy boxes shows up.
The sole worker puts on his gloves and begins hauling boxes, one at a time.
He's manhandling them off the truck, straining to stack them to the side.
Eight hours later, he has a strained back, blisters, and an empty truck.
A day's work, hard earned.
At the second dock, the worker looks at the truck and heads next door to a larger company.
He
asks the foreman, a woman he met on the bus last week, if he can borrow their hand truck and ramp for an hour.
It took guts to ask. He might have been rejected. But his calm manner and ability to connect worked.
An hour later, his truck is empty.
Who worked harder?
Godin's point is simple: for most of us, hard work is measured in insight, emotional effort, and
connection.
It's been a long time since the economy fairly rewarded people based on brawn alone.
And now consider a third company, where the person at the dock planned ahead and had
everything ready before the truck arrived.
Or consider two keyboard workers. One performs a repetitive task all day. The other did the labor to find a plug-in that handles it in minutes.
What I Actually Do
- I don't move boxes.
- I find the foreman with the hand truck.
- I make the introduction.
- I solve the problem before it becomes a crisis.
That's the value of 20 years of relationships.
That's what my clients are paying for.
Not my time.
My network.
My judgment.
My ability to connect people who should know each other but don't.
If you're a lender, vendor, or investor who wants access to that network, I'd like to hear from you.
Visit theBusinessOfLending.com and tell me what you're working on.
I read every message. And if I can help, I will.
— Jer
