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Time Isn’t Money — It’s Inefficiency and Waste

Editorial Note: This originally started as a rant for Twitter.  But, as regular readers can attest, my keyboard tends to outrun the medium I’m in.  So I figured I’d repurpose this into a blog post, since it’s been a while.

I haven’t quit posting, either, BTW.  I’ve got draft content for the next couple of weeks.

Time is money.

The business world accepts this as basically axiomatic. But it’s really kind of nonsense.

Time isn’t money. In the context of commerce or value, time is, at best, a measure of your inefficiency and, at worst, a measure of waste.  (And I would argue that my interpretation actually squares with that of the man who coined it, Benjamin Franklin.)

I recognize that this is an extremely contrarian position and that it requires some justification.

So let me justify it.

Should I incorporate? The monopoly guy here thinks the answer is yes, and so do I.

Opportunity Cost != Money

When we say “time is money,” it’s really shorthand for something subtly, but importantly, different. We’re describing opportunity cost.

Really, we mean, “I could do other things with my time, so if you want me to do your thing with it, you need to give me money.” We then reduce this in lossy fashion to “time is money.”

Notice the perspective here. “I could do other things with my time….”

“Time is money” is solipsistic reduction and abbreviation of the real meaning.

This is important because “time is money” does not expand back out to a concept of equitable currency. If you ask me to pick my brain over coffee and I demand a fee because “time is money,” you don’t then counter with, “perfect, I also demand that same fee because the same amount of my time is worth the same amount of money, so we’re even!”

Claiming That Your Time is Money is An Understandable Form of Posturing

“Time is money” is essentially posturing. But that’s not really my issue with it, since posturing is the backbone of negotiation, and negotiation makes the business world go ’round.

My issue with this circles back to my original claim that time is a measure of inefficiency in good situations, or waste in bad ones.

Bearing in mind that “time is money” is a bit of posturing about one’s own opportunity cost, let’s consider time and money from the other party’s perspective. And let’s do it with an admittedly obtuse example that should serve to drive the point home.

A “Time is Money” Shoe Purchase

Let’s say that I lamented one day, “every time I walk outside my feet get so hacked up by the pavement, dirt, rocks, and even broken glass everywhere I go. If only there were something I could put on my feet that would protect my soles from abuse!”

You, then, say to me, “I can help you with that! There’s this thing called ‘shoes’ and if you put them on your feet, your life will be much improved.”

“Great!” I say. “Can you sell me some of these ‘shoes’?”

“Well, sure,” you say. “But, it’s gonna cost you. Time is money.”

“And I have to drive all the way to Foot Locker, two towns over, to do it. So you’re going to need to pay for:

  • The cost of the shoes
  • The cost of my gas
  • Wear and tear on my car,
  • And the time I spend driving to Foot Locker, looking for shoes in Foot Locker, talking to the shoe salesman, checking out, and driving back.”

Now, being some kind of cave man that doesn’t know about shoes, I obviously agree to this ludicrous proposition. And so what is “time,” in this scenario, from my perspective?

Well, at best, it’s a measure of your inefficiency. If you’d had the shoes with you, I’d have paid only your cost (or your cost plus some fixed markup for your shoe-carrying-selling business). But instead, I paid a premium because you’re inefficient with your inventory.

But at worst (and in reality), your time is a measure of waste. You (or I) could have gotten the shoes on Amazon and had free shipping with a Prime membership. The time you spent driving and shopping is pure economic waste.

Implications for Time-Based Billing

You free agents out there that charge by the hour should think about this. It’s a shot across the bow, and it’s uncomfortable, but it also touches on a subtle bit of cognitive dissonance that I bet you feel.

When you do your thing — when you cite your dollars-divided-by-hours(inefficiency/waste) rate and provide an estimate — what you’re really doing is saying, “you’re going to pay me in proportion how inefficient I am/how much time I waste, but you should accept my proposal because I’m the least inefficient/wasteful compared to the other RFP respondents.”

Search your feelings. You know it in your heart to be true.

It’s why you’re constantly bidding on stuff and arguing that you’re “better” even though the other guy is cheaper per hour. What you’re really saying is “sure, you’re paying me more per increment of inefficiency/waste, but I’ll offset it by being a lot less inefficient and wasteful than the other guy in the end.”

Now there’s one last obvious objection to tie up here.

Buying shoes on Amazon or in Foot Locker is a solved problem, but most hourly, “time is money” work is on custom things with nebulous scope! There’s no other way to be fair about something like that!

So let’s take a hard, honest look at “custom projects.” For any of you freelancing/employed veterans of the software industry out there, raise your hand if you’ve ever been deployed to work on a reinvention of the wheel.

Custom Project Work is Inefficient/Wasteful on Its Face

Ever rolled your own ORM or logging framework because “proprietary code?” Ever decided that the first 20 headless-whatevers weren’t quite perfect enough and that you needed to write number 21?  How about building a feature or product that never shipped?

How much labor on “custom projects” actually needs to happen? What percentage of app dev is true trail-blazing versus running out to buy shoes and calling yourself Amazon? Or worse yet, building something completely useless, in the end?

And through that same lens, can’t we get our heads around the idea that maybe — just maybe — custom app dev is, in some sense, a failure in the first place? If you think about what custom app dev really is, it’s a study in inefficiency and/or waste. It’s a peculiarity of an industry (software) that devalues domain knowledge in favor of tool knowledge.

Custom app dev, at its core, is “hey, I have no relevant experience building this thing, but I’m good with my tools, and I estimate that, while I’ll be inefficient and wasteful, there’s a good chance I’ll be less inefficient and wasteful than everyone else. So hire me!”

(To back away from a purist argument, I’m not saying that there’s never cause to build brand new software — of course there is.  Rather, I’m saying two things: one, the legitimate calls for custom work are a lot less than the total calls for it and, two, the legitimate custom work is still inefficient — but its inefficiency is offset by the market opportunity for the new thing.)

Waste and Inefficiency May Be Inevitable, But Let’s Stop Celebrating Them

And that brings it all back home to time as inefficiency and waste, rather than money.

Time is a precious commodity in human life.

“I could do other things with my time, so if you want me to do your thing with it, you need to give me money,” is a perfectly rational and ethical sentiment.  “Time is money” is a perfectly self-absorbed and shortsighted sentiment.

They sound similar, but they aren’t. Only you value your time.

Stop trying to sell your time. If you want to have sustained career success, sell people what they value, not what you value.

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Dan
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Great post, thanks!

Krzysztof Mańkowski
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Krzysztof Mańkowski

A little side note about custom software. Since every company can have their own cms-like system, just using facebook, there’s not much value in having your own page. But demand is still there for many reasons (but much smaller than years before). That leads me to another point – there are solutions that are so trivial (for tech people), that you wouldn’t even bill for giving them out. But at the same time, non-tech people won’t think about them. And for me this is a conundrum – should you give away good solutions for free? Or do you just watch… Read more »

Nils
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Nils

It may be effortless for you that doesn’t mean it’s not valuable to someone else.

Erik Dietrich
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Erik Dietrich

To echo what Nils said, I think there’s trouble tying value to effort. I mean, if someone asked me for help, and it were trivial to me to do so, I’d probably do it. Meaning, I agree with you — I wouldn’t have demanded money for telling someone about templates or iOS functionality, basically as a matter of conscience. But then, think of an info product or a SaaS. Every time someone buys a copy of my book, my dollars per hour rate for the labor of producing it 4 years ago goes up. Or, to put it another way,… Read more »

Charleserymn
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Charleserymn

Hello

Erik Dietrich
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Erik Dietrich

Hi there.

Olivier
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Olivier

This really resonates with me. Back when I was still a contractor I always charged a flat fee, against the prevailing wisdom among contractors (and self-styled gurus advising contractors) precisely because I didn’t want to get into sticky discussions about my efficiency or lack thereof. What is your take on that, Erik?