Haus Advisors

The Efficiency Penalty

When your team gets twice as fast, billing by the hour quietly cuts your pay in half, while pricing on the result doesn't.

Chart: The Efficiency Penalty. When your team gets twice as fast, billing by the hour quietly cuts your pay in half, while pricing on the result doesn't.
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The mechanism

The chart sets two pricing models side by side for the same $120,000 project. On the left, the hourly model: 800 hours drop to 400 once the team uses AI, and at $150 an hour the invoice falls from $120,000 to $60,000. On the right, the value model: the price is set on the outcome, so it stays $120,000 no matter how fast the work gets done. Charging for hours turns every speed gain into a pay cut, while charging for the result lets faster work make you more money, not less.

Part of Productization. How you package and price the work.