A more comprehensive approach?

Lessons learned with a potential client that claims they really wanted to hire my firm. If only I had proposed what they actually wanted...

As a reminder, you’re getting this email because you’re a customer of MSABundle.com.


It’s Obie again. Hope you’re doing well and staying safe going into the holidays.

I’m writing to tell you about a new project opportunity from a couple months ago that I should have won. Before I dive into that story and why I found the whole incident ironically educational, I want to thank you for being a subscriber and let you know that this is the only time I’ll be sending such a long email to the entire MSABundle list.

Don’t get me wrong, I think you’ll like the story and I have plenty more to tell, but only to those of you who enthusiastically opt-in. More information about that offer at the end of the email in a section called The Pitch.

For now, enjoy my story and some choice excerpts from a real-life client proposal.


PS: I completed the first redesign of MSABundle.com last week, in case you want to check it out. Sending a big thank you to everyone who responded to my recent call for feedback and testimonials—you rock!

The Story

The project involved building out a full mobile application platform for a US-based health care provider forced to shift their care model entirely from physical locations to online consultation by the pandemic.

As a lead, this potential client was as good as they come. Their need was urgent, and they appeared to be well-funded and ready to get started. We connected based on a strong personal referral from one of our existing clients and they were super friendly.

How friendly? So friendly that when I lost the deal, I even got a personal phone call and apology during which I found out which competitor had won the business and why. But I’m getting ahead of myself.

The Situation

My consulting agency does high-end staff augmentation and project-based work. We typically offer staffing on a monthly retainer basis and projects as fixed-bid quotes. In theory we do projects on a time and materials basis too, but I’ve been on a value-pricing kick lately so I steered this client towards a fixed bid.

After a series of meetings to review expectations and get to know each other, I had a strong sense of what they needed, but only a fuzzy idea of their budget. Nevertheless, I jumped into drafting a proposal, convinced that I would be able to mitigate that uncertainty using a special technique that I’ll explain in a minute.

The Proposal

Here is the cover letter for that proposal, introducing the options-based approach.

If you read it carefully, you noticed that there was also a separate CTO consultant proposal, which I sent directly to the CEO. They didn’t have any experienced technical leadership to guide their partial transformation into a software company, so I figured I might be able to play the part myself.

The Options

After a situation appraisal, my project proposal presented the client with three options, starting with a minimum amount of work (and lowest cost):

I’ll leave out Option 2 for brevity, but here is Option 3 so that you get a sense of the services I was offering, and also so that the pricing makes more sense.

Yes, the option names are What About Bob? references. (Gives you a sense of the type of health care they were providing.)

The Price

Here’s how I priced the options. Note that this proposal is short and executable, just like my Retained Services Agreement. The idea is that if they like it, they sign and that’s it, the project is good to go.

Why three options?

Well, at the time I had been itching to try Jonathan Stark’s Goldilocks Pricing scheme. The formula is 1x, 2.2x, 5x and if the buyer goes for it, they’ll usually choose Option 2. He says you should use Goldilocks “when you don’t really care whether you get the sale.”

If you had asked me that week whether I cared about getting the sale, I would have told you absolutely! But in retrospect, maybe not. Our bench was empty, which gave me anxiety about being able to delivery the project on the kind of timetable I was promising. More on that in a moment.

The Outcome

The client made it clear they were evaluating other agencies, so I sent the proposal and told them I’d follow up the following week.

They called me first. Literally on the phone without warning. I didn’t recognize the number but I was in an Uber and kind of bored so I picked up, and my buyer very nicely explained that they had decided to go with another firm, one based in New England.

Shocked and dismayed I blurted out “Really? Let me guess, you went with ______________???”

There was some flustered laughter on the other end of the line, and after a pregnant pause she was like “yeah, how did you know?”

I gently explained that I’m long-time friends with the owners and several directors of said firm, and that it made sense to hire them for this work. I also revealed that my biggest surprise was that they would go with someone so expensive.

“Yeah, well… not sure what to say about that.”

I took my cue, and conceded the sale gracefully, of course.

“Listen, you’re in great hands with them, seriously. It’s an honor to lose to them. But you gotta tell me why, considering they’re probably charging you double what we proposed.”

Her reply humbled me, when she said “We were leaning towards you guys, but they gave us a more comprehensive offer, and in the end we felt better about doing everything with one shop.”

Humbled, not in a good way. In a terrible, no good, bad way.

I politely asked her if she meant that this other firm had quoted a price for a finished product. And yep, they had. Design and implementation with a single dollar figure attached. So I thanked her and wished her the best of luck with her project.

Key Lessons

So here are my takeaways from this experience, in brief.

Don’t get too clever and ignore fundamentals of a deal

I usually fight like hell to gain understanding of a prospective client’s budget before making a proposal. It’s fundamental. No faster way to kill a deal than to seriously under- or overbid.

What happened here is that I latched on to the idea of trying Goldilocks Pricing way before I should have. It felt like hacking the sales process, so once I decided to try it I stopped trying to get indicators of how much the client wanted to spend. Instead I assumed that the cost spread of the options would cover a reasonable min-max on the deal. Bad assumption.

Don’t be timid when it comes to pricing

There’s no better time to raise prices than when you’re sold out. This proposal was a prime opportunity to double our normal prices, because I literally had nobody to do the work. I know that. I really do, with all my being. I advise others to do it all the time, and yet didn’t apply that advice to myself. So frustrating!

The trap is that when I considered the right price for Option 3, I ended up saying to myself, this is the most I can imagine paying someone to do this work. Operative word in that statement being “I”. I forgot one of the prime commandments of pricing, that it’s not what I would pay for it, it’s what the client would pay.

There’s also the sticky little double-edged sword nature of referrals. I was well aware that this client was talking to us based on a personal recommendation. I remember worrying that maybe that referrer had also mentioned what we were charging him, and that it could get awkward if we produced a much more expensive quote.

That was dumb. (Again in retrospect,) that referral came from a staff augmentation client that we’ve been working with for five years, so it would have been an apples and oranges comparison.

What I wish I had done was to look at Option 3 and have asked myself: What is the most that I can imagine someone paying the best firm in the world to do this work? Swung for the fences. Because if I had won at that price, I might have had to scramble, but I could have hired the most expensive talent available on short notice and still turned a healthy profit. Or subbed out normal talent on some of my existing projects, and used our best people to deliver this new one.


There’s just one more thing, which is that I probably would have still lost the contract by pitching it in phases, because in the end they wanted to contract the whole thing all at once. Mind you, they didn’t explicitly tell me that on any of our phone calls, but probably I should have picked up on it. Which brings me to the most ironic lesson learned in this failure.

Higher pricing would have made me less risk-averse on scoping

By artificially limiting the cost, I ended up constraining my offering. I even alluded to it in the first two bullet points of the Risks & Assumptions section of my proposal.

Once I locked into a pricing strategy, the fear of overcommiting took center stage, and compelled me to suggest breaking the work up into phases. If there were signs that it was the wrong approach, I totally missed them. So badly that I proposed myself as part-time CTO to help them manage the work correctly on their side! I would have been better off taking that particular role and baking it into the project even though it would have ballooned the cost.

“We were looking for a more comprehensive approach,” is how she explained it to me in that final phone call. Could I have offered her that more comprehensive approach?


We’re talking about a project that would have taken at least 6 to 9 months to deliver in minimal viable form, way longer than what I normally feel comfortable bidding on a fixed-cost basis. But I didn’t even get into that thought process until after the deal was lost, because at the time I completely ignored the possibility of bidding the project on a time and materials basis. It wasn’t a principled decision so-to-speak, I just took the path of least resistance, which was to offer the phased approach and pitch it as the “more agile” way of accomplishing the project.

Watch Boiler Room (2000) | Prime Video
True story: Upon graduating high school in 1992 my first sales job was as a junior broker at Investors Associates, one of the firms that inspired Boiler Room

The Pitch

So… that was my story, but now I have a proposal for you to consider.

Do you sell consulting and contracting, especially in the software field?

If the answer is yes, then I’d like to help you become more successful and make more money by improving your own proposals and contracts.

My sales experience dates back to Thoughtworks (one of the most famous custom software shop’s of all time) and my own firm Hashrocket in the 2000s, further back if you count other kinds of sales. (Read the caption on the pic above, the one with Vin Diesel.)

I don’t only have my stories though. I also have a cache containing hundreds of real proposals and contracts, plus a constant stream of new proposals and contracts that I’m writing every week as the partner in charge of business development at my new web design and development agency, MagmaLabs.

But how do I expect to help you?

I’m launching a paid version of this mailing list. Paid subscribers will get real-life consulting sales stories along with real proposal and contract documents from me once a week.

I’m not talking about templates like the ones I sell on my website. I’m talking about actual proposals and contracts with real project descriptions and contract terms, including dollar values. Only the identity and confidential information of the clients will be removed.

This is truly a unique offering that you can’t get anywhere else. The monthly subscription costs $50 and the yearly subscription nets you a 17% discount at $500.

Ready to sign up?

Not quite?

Okay, well here’s my persuasion. Assuming you’re in a position to take advantage of the information, then you’re absolutely going to turn it into more money in your pocket. At the very least it’s going to help you understand how to raise your rates, and I also have plenty of stories about what not to do. You just can’t get this stuff anywhere else, especially including real prices and project descriptions.

There’s very little risk to trying it out with a monthly subscription, because the first documents I’ll be sharing this month are the ones excerpted in the story above (both the project and the CTO-for-hire proposals) and those are definitely worth at least $50.

What’s that, you want a more comprehensive approach? 🤓

Okay, check this out…

Supporter Subscription Plan

Substack has this feature called a supporter subscription plan with an premium annual price. I’m calling my version of this plan a Retainer Membership.

In addition to the paid mailing list content, Retainer Members will be get to use me as a personal, on-demand proposal consultant. Anytime you have a proposal to send, all you have to do is shoot it over to me to review via email. Unless I’m completely off the grid, which is super rare these days given the pandemic, I’ll annotate your document with critical feedback and suggestions within 24 hours. I’ll even hop on a quick phone call to discuss strategy with you if it makes sense.

The Retainer Membership is limited to a few people and costs $1000 per year, plus I’ll commit to honoring that price in future years even if I end up raising it or discontinuing the service. What a great way to use up leftover budget or get a quick extra write off with the end of the year coming up, right?

Why on earth would I offer you a retainer costing a paltry thousand a year, without knowing how much work you’re going to dump on me? Well, I admit that there’s some incentive in terms of getting a look at how other people propose their services, but mostly I just really enjoy this stuff and willingly spend hours and days carefully writing and rewriting proposals every week. Just yesterday I spent the entire day writing up a $250k fixed bid proposal for a new startup’s web platform. And you guessed it, you’re going to see that one too, but only if you subscribe.

Like this admittedly crazy idea, but not sure if it’s for you? Or any other questions or comments? Please don’t hesitate to hit reply and let’s discuss.