Heading in the Right Direction

Over the weekend, I had a deep think about what I want to do with Key Bridge going forward. I have been hung up on a mental challenge for years and it’s put me in a position of complacency and drift. The issue has been fee structure. It’s not like the business has raw materials or inherent costs that put a baseline on price; however, what I kept going around and around about is this four letter F word, fair.

What’s fair? A business needs cash flow to operate. If the value add over the different life cycles is high enough, the price can also be high. In the equity markets, anyone can buy and hold a stock forever and get charged very little fees. Even if you own a broad basket of stocks in an index fund, the fee may be as low as $1 per $1,000. Yet, there are still plenty of helpers and people continue to give money to them in hopes they’ve built a better mouse trap. Some have. Most have not. Or, take recruiting for example. What’s the value of a great new hire? Especially if the hire has a ton of options and the recruiter may get 10% to 20% of the salary as a finders fee. Not bad if the salary is $200k.

Fairness isn’t a word that business people should use really. Even though it’s a huge sales closing word. Fair enough? Sound fair to you? blah blah blah. But fairness is apart of it, even if it goes unspoken. Did you get your money’s worth is a fairness question. Yet, no one gets paid on what’s fair. Accounting isn’t done based on fairness. So, if you charge $20,000 for what you do every month, I think the only real question is what happens as a result of that fee? Does the client or your employer trust that something will be accomplished? Is there a result that you can assure by being in that position. That’s why when people complain about the gap between CEO’s and the average worker what many forget is what’s at stake for the CEO is far different than at the bottom of the totem pole. And, those poles have only gotten bigger reaching higher. Sure, the gap was a lot smaller back 30 or 40 years ago, but so were the organizations. I’m getting off track…

So, for me the fairness comes in play because one part of me wants to open up the membership to anyone who can afford it and that may mean people who have competing interests in the same industry and geographical market. I know it wouldn’t be fair to work hands on with two competitors, which limits the amount of value adds possible. If I kept the size small and only open to one per industry then the fees would need to be much higher based on the value added results. And, there goes the circle jerk again. I’ve tried to reconcile it many times and have even tested both paths all the way back to the starting point.

I know I must make a decision and stick to it. That’s what I’ve done.