Before launching 37signals, Jason Fried worked as a freelance web designer:
I charged clients by the hour. I work quickly. But I soon realized that charging hourly penalizes efficiency. If I can finish something in an hour that might take someone else three or four hours, why should I be penalized?
So when he launched his company, he decided to charge by the project:
It worked great. But as the projects started getting bigger and costing a lot more, I noticed that clients became more reticent about signing on. Big numbers and long time frames make people nervous. More money and more time mean more risk, and risk is something all companies would prefer to avoid.
I thought about the problem and decided to try something new. Instead of doing long, expensive projects, we’d do short, affordable ones. Instead of billing $50,000 for a 15-page website redesign that would take three months, we’d charge $3,500 per page and offer to complete the page in a week. If you want another page, it’s another $3,500 and another week. We called it 37express.
It took off. It took the risk out. It let companies try us out before committing to something big. And it was a lot more fun for us — fewer meetings, less stress, fewer decisions to be made. Just a quick one-week project for a fixed price. If you want more, we’ll sell you another.