[btilly]

I am right now contracting, and I am learning a variant on this lesson that I have reason to believe will prove very valuable to me and hopefully others.

1. If the value of what you contribute can be measured, people are happy to pay you ridiculously more on a pay for performance model than they are with hourly consulting rates.

2. A/B testing can provide a way for them to measure the value of your contribution.

Why is this? Well in pay for performance, the company takes no risk. Furthermore it lines the incentives up correctly from everyone's perspective. Suppose that compensation model inspired you to spend 2x the effort that you otherwise would for 1/3 better performance. Odds are that they've just covered the amount they have agreed to pay you and are laughing all of the way to the bank. But if you are compensated hourly, and they are not sure it will work, there is no way that they want you to spend 2x the effort up front, even if there might be a slightly better return.

I am not at liberty to share specific numbers. But keep this fact in mind in the future. It may prove valuable to you.

(I should think about writing this up in a blog post, along with lesson #3. That lawyers systemically fail to place a value on your opportunity cost...)