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Project Knowledge: Time & Materials Pricing Model

Core Pricing Philosophy (FINAL DECISION)

"Transparent Time & Materials with AI Coordination Premium"

Fundamental Principles:

  1. NO FIXED MONTHLY PACKAGES - Complete transparency on hours and deliverables
  2. NO STANDALONE DASHBOARD SALES - Transparency only through execution work
  3. AI COORDINATION INCLUDED - Not a separate line item, built into hourly rates
  4. SWISS QUALITY PREMIUM - Higher rates justified by quality and cultural fit
  5. COMPLETE TRANSPARENCY - Every hour tracked, explained, and tied to strategic context

Core T&M Structure (Rates May Change)

Hourly Rate Components:

Swiss Marketing Talent Rate: [Variable - CHF 95-140+ range]
+ AI Coordination Fee: [Fixed component - ~CHF 25/hour]
= Total Hourly Rate to Client

Platform Management: [Monthly fixed fee - ~CHF 200/month]
Investor Add-on: [Portfolio enhancement - ~CHF 300/month per company]

Three Pricing Model Variations:

  1. Pure T&M (Default): Pay exactly for hours used, no minimums/maximums
  2. T&M + Success Bonuses: Reduced hourly rates + performance incentives
  3. Capped T&M: Budget protection with monthly spending limits

Strategic Positioning

vs. Fixed Package Competitors:

  • Traditional Agency: "CHF 8,000/month for unknown deliverables"
  • Our T&M: "CHF 145/hour for specific, measurable work with full transparency"

vs. Freelancer Platforms:

  • Freelancer Platform: "CHF 80/hour + coordination overhead + quality risks"
  • Our T&M: "CHF 145/hour all-inclusive with AI coordination + Swiss quality"

Client Communication Framework:

  • Weekly timesheets with task descriptions and strategic context
  • Monthly value summaries showing ROI and deliverables achieved
  • Transparent billing that builds trust rather than creates pricing confusion

Business Model Implications

Revenue Characteristics:

  • Variable revenue based on actual client needs and success
  • Natural scaling as successful clients increase hours/complexity
  • Higher transparency creates stronger client relationships and retention
  • Premium positioning justified through demonstrable value per hour

Unit Economics:

  • Lower gross margins (~18-22%) due to Swiss talent costs
  • Higher client satisfaction due to transparency and value demonstration
  • Reduced churn through trust-building and clear value delivery
  • Scalable with success - more successful clients = more hours = more revenue

Implementation Requirements

Technology Needs:

  • Time tracking system with detailed task descriptions and strategic context
  • Automated reporting showing hours, deliverables, and impact
  • AI coordination that justifies premium over standard freelancer rates
  • Client dashboard showing real-time progress and value creation

Talent Management:

  • Swiss quality standards that justify premium hourly rates
  • Context preservation ensuring consistent quality across distributed talent
  • Seamless transitions when talent changes (strategic knowledge preserved)
  • Efficiency improvement through AI coordination over time

Investor Value Proposition

Why T&M Model Strengthens Investment Case:

  1. Market Fit: Variable pricing accommodates diverse startup budgets better than fixed packages
  2. Competitive Differentiation: Complete transparency vs. black-box agency retainers
  3. Revenue Growth: Natural scaling as clients succeed and increase usage
  4. Quality Positioning: Swiss premium rates justified through demonstrable value
  5. Customer Success Alignment: Revenue directly tied to client satisfaction and results

Financial Model Benefits:

  • Predictable unit economics based on hours and talent costs
  • Scalable margins as AI coordination efficiency improves
  • Lower customer acquisition cost due to transparency-driven referrals
  • Higher lifetime value through trust-building and success-based growth

Key Success Factors

For T&M Model to Work:

  1. AI coordination must deliver genuine efficiency to justify premium over freelancers
  2. Swiss talent quality must be consistently high to justify premium rates
  3. Transparency must build trust rather than create administrative overhead
  4. Value demonstration must be clear in every timesheet and monthly summary
  5. Context preservation must work to prevent quality degradation with scale

Potential Risks to Monitor:

  • Price sensitivity if hourly rates become too high vs. perceived value
  • Coordination overhead if AI doesn't actually reduce management burden
  • Quality inconsistency if distributed talent doesn't maintain Swiss standards
  • Client budget variability creating unpredictable revenue swings

Decision Rationale

Why T&M Over Fixed Packages:

  • Eliminates "unknown service" pricing risk - clients see exactly what they pay for
  • Builds trust through transparency rather than requiring upfront faith in value
  • Accommodates startup cash flow reality - scale up/down based on budget and results
  • Creates natural investor transparency - every timesheet becomes a mini performance report
  • Differentiates from all competitors - agencies use retainers, freelancers lack coordination

Why This Supports Business Model:

  • No dashboard without execution - transparency earned through actual work
  • AI coordination justified - clear efficiency premium over manual coordination
  • Swiss quality positioned - premium rates supported by demonstrable value
  • Investor value clear - portfolio transparency through standardized execution
  • Scaling advantages - quality improves with AI learning, not degraded by growth

This T&M pricing model is CORE to the business strategy and should not be changed without careful consideration of its strategic implications for competitive positioning, investor value proposition, and operational model.

Core Principles:

Business Model Documents: