May 1, 2020
Min read

Fresh from the Kountable Whiteboard: Price the Problem

Chris Hale

Recently we were asked to submit a proposal for a major initiative aimed at ensuring COVID-19 testing kits got to those most in need.There are billions of people that will undoubtedly lose in a competitive free market for test kits because they don’t have all of the attributes of a strong buyer in a free and open market. They don’t have much money, it’s hard to know who to trust, getting things there isn’t easy, and ensuring they get to their intended recipients is even harder.  This describes about 70% of the global population, and by “lose in a competitive free market,” I mean that people will die.  

We’re not a big company, but we do have unique skills, knowledge and capabilities that a lot of companies much bigger than us don’t have. As a small company it would have been easy to try and undercut everyone and “buy the business,” as they say. This means we could have come in with a lower bid than everyone else and intentionally lost money on the deal in order to buy the opportunity to prove ourselves. That wouldn’t have prompted me to write this post, though.  

The reason I’m writing this post is that our scrappy startup team, in the face of major economic uncertainty, decided that the right thing to do was to price the problem. We looked at what was being asked of all of the bidders, how high the stakes of success or failure were, how quickly we needed to bring the solution to market and how many lives we’d impact if we nailed the solution.  The answers, in order, were: a lot, very high, insanely quickly and 1.7 billion people. We spent the next 24 hours designing a model, a solution, and a proposal that we felt would actually give us a shot at delivering the desired outcome: Get a lot of tests to a lot of places to help a lot of people, now. Our company is small, the price tag was not.  

At the time of this writing, I don’t know how we did. I don’t know if our proposal was laughed out of the boardroom, whether we almost made the cut but were just a bit too expensive, or whether our potential partners recognize the expertise we had in pricing the problem and will come back to us with a contract. That’s why I had to write this post today and challenge everyone reading it to stop pricing based on how inexpensively you can deploy your solution.  Stop selling your solutions. What you have now is what got us here. We need to get there. To get there we need better solutions. Selling what we have is what got us into this mess.  

We, the innovators and risk takers, need to begin pricing and proposing based on outcomes. We need to stop trying to win business based on being “passive” and “agnostic” and “infinitely scalable.” If you haven’t noticed, there is real work to be done. That work is expensive and fraught with risk, and complicated. We need to eradicate diseases, save lives, build infrastructure, feed people, quench their thirst and educate them. That is likely the most expensive sentence I’ve ever written. 

We’re calling on all you innovators and investors out there who are brave enough and smart enough to embrace these challenges head-on to tell the truth and price the problem. We’ve seen lots of you build models that justify massive marketing spend and defend hyper-growth assumptions, we’ve seen you model extreme efficiencies and economies of scale. Now we challenge you to build the model that tells everyone capable of writing “the check to solve the most expensive sentence we’ve ever written” how much it will actually cost — and then have the courage to ask for the order. It’s the most important sale we’ve ever had to make and we need to price the problem.

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Kountable Whiteboard
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