Friday, June 15, 2012
Seth Godin is wise to pricing talent
You may be purchasing services from people with magical talents (artists) and it's a mistake to confuse them with vendors.
As we get more and more service oriented, it's an easy mistake to make. You're busy buying cleaning services or consulting or design, and sometimes the person you're working with is a vendor, and sometimes they're not--they're an artist, "the talent."
A vendor is someone who exists to sell you something. It doesn't always matter to the vendor what's being sold, as long as it's being sold and paid for.
The quality of what's being delivered is rarely impacted by the method of transaction. The turnips will still show up, the house will still get painted. You can send an RFP to a vendor, bid it out, get the lowest price, sign the contract and if you write the contract properly, will get what you ordered.
The quality of the work you get from the talent changes based on how you work with her.
That's the key economic argument for the distinction: if you treat an artist like a vendor, you'll often get mediocre results in return. On the other hand, if you treat a vendor like an artist, you'll waste time and money.
Vendors happily sit in the anonymous cubes at Walmart's headquarters, waiting for the buyer to show up and dicker with them. They willingly fill out the paperwork and spend hours discussing terms and conditions. The vendor is agnostic about what's being sold, and is focused on volume, or at least consistency.
While the talent is also getting paid (to be in your movie, to do consulting, to coach you), she is not a vendor. She's not playing by the same rules and is not motivated in the same way.
A key element of the distinction is that in addition to the varying output potential, vendors are easier to replace than talent is.
Target understood this when they reached out to Michael Graves to design a line of goods that sold hundreds of millions of dollars worth of items. When I interviewed Michael a few years ago, he had nothing but great things to say about the way Target invited him in and gave him the ability to do his work. Threadless embraces this when they treat the designers of their t-shirts in a non-corporate way. Etsy is built on this single truth.
Most industry is built on vendor relationships, and vendors expect (and sometimes value) the impersonal nature of their relationships. This scales... until you lump in the talent.
Should you treat vendors with respect? No doubt about it. Human beings do their best work when they're treated fairly and with enthusiasm. But when the provider is also digging deep to put something on the table that you can't possibly write a spec for, you're going to have to respond in kind.