The single most common question on a first call: “What's your hourly rate?”
Our answer is the same every time: we don't have one. Then we explain why. Then we explain how we price instead. Most of those calls end with a calendar invite for phase one. Some end with a polite no. Usually from someone who's been hurt by an open-ended invoice and is looking for a different kind of safety than we offer.
Either outcome is fine. The conversation, though, is always worth having. So here's the long version.
The conversation on the first call.
When someone asks for an hourly rate, they're almost never asking about hours. They're asking three other things, all wrapped in the same question:
- How expensive are you?
- How will I know if you're overcharging?
- How do I cap my downside if this doesn't work?
An hourly rate doesn't actually answer any of these well. €100/h is meaningless without knowing whether the work takes 50 hours or 500. The hourly invoice is a number you can audit, but auditing it means second-guessing every line. Which nobody enjoys and everyone resents. And the cap problem is the worst: hourly billing has no cap by design.
What clients actually want from these questions: a budget they can sign off on, a deliverable they can recognise, and a way out if it isn't working. We can give all three. Just not with an hourly rate.
What hourly actually buys you.
Hourly buys flexibility, for us, not for the client. We can stretch any piece of work, add detours nobody asked for, polish things past the point of return. The hourly contract rewards exactly the behaviour the client doesn't want.
It also creates a small adversarial loop: every estimate is a negotiation, every overrun is an argument, every invoice gets read with a pen in hand. We've worked under hourly contracts. The relationship is colder. The work is rarely better.
Hourly billing rewards the behaviour the client doesn't want: more time spent, more detours, more polish past the point of return.
How we price instead.
Two contracts, both fixed:
Fixed price. Four to eight weeks.
We scope the first phase together: the smallest piece of working software we can ship that solves a real problem. One number. Half upfront, half on production deploy. You can stop at the end of the phase, no penalty.
Monthly. The long arc.
After phase one, a monthly retainer covers small features, fixes, monitoring, and the first-Wednesday metrics review. You can cancel any month. Most clients stay a year or more, not because they have to.
The first phase is where we earn the relationship. If the work is good and the collaboration works, the retainer follows. If not, you have something working: in your stack, in your accounts, written so another developer can pick it up.
The objections we get.
Three, mostly. None of them are wrong. They just have answers.
“What if the scope changes?”: It will. The phase is two-week cycles inside an eight-week container. At every two-week review, we can re-prioritise within the phase. If the change is genuinely new scope, we either swap something out or scope it into phase two. We don't bill extra mid-phase. Ever.
“What if you finish early?”: You get the working software, on time or before, for the same price. We don't refund the “saved” hours because they were never hours. They were a promise to ship a thing. If we finish early, we either polish what we have or start on the next agreed thing.
“What if something goes badly?”: The two-week reviews are real off-ramps. If at the end of week four the work isn't fitting, we say so first. Sometimes by handing the project off to someone better suited. We refund pro-rata when we've caused the mismatch. It's happened twice in three years. Both times we were the ones who raised it.
When hourly would be right.
Two situations, both rare for us:
Truly open-ended consulting. “Spend a day looking at our infrastructure and tell us what you see.” That's an hourly engagement, or, more honestly, a day-rate engagement. We'll do those occasionally for clients we already work with. We don't go after them as new business.
Emergency response. “The site is down, the team is panicking.” We've done one or two of these for retainer clients who needed someone now, and we billed by the hour because we couldn't scope it any other way at 2am. Both times it ended up being cheaper for them than a fixed-fee SLA would have been.
Outside those: fixed phases, every time.
What we ask of the client in return.
Three things. Without them, fixed pricing doesn't work:
- One decision-maker. Someone we can reach by email or Slack who can say yes. Approvals-by-committee make fixed pricing impossible. The scope drifts as different people add small things.
- Roughly two hours a week. A recurring review slot. Without it, we ship something they didn't want.
- Honesty about money. If €15,000 is too much, say so on the first call. We'd rather scope down than spend two weeks pretending the budget is real.
Fixed pricing is a handshake, not a tariff. It only works because both sides hold up the same end of the deal.
None of this is novel. 37signals have been writing about fixed prices for fifteen years, and so has half the studio Twitter timeline. What we've learned, doing it ourselves: it's not about the pricing model. It's about the relationship the pricing model invites. Hourly invites adversarial. Fixed-phase invites collaborative. We'd rather pick the second one and then earn it.
So no, we don't have an hourly rate. Yes, we have a way to tell you what it'll cost. And yes, we can tell you on the first call.
— A.B., from the studio, the morning after sending an invoice.