Time Well Spent
This entrepreneur turns his company's time into money--even when working for free.
Reid Carr has nothing to sell but time, yet finds that giving it
away is sometimes best. Carr's San Diego company, Red Door Interactive,
which had sales of nearly $3 million in 2005, sells web services
based on how much time each project requires.
That's a double-edged sword, says Carr, 29. Because
customers often don't understand the intrinsic value of an
employee's time, they expect too many employee-hours for their
projects. On the other hand, when employees are idle, it costs Red
Door hundreds of dollars an hour in opportunity costs.
Carr has turned this to his advantage in two ways. First, he
regularly prices jobs on a project basis, leaving wiggle room for
overruns. Second, he has idle staff work on pro bono projects for
local nonprofits. "Pro bono work is free advertising, from a
cash perspective," he says. "People on the boards of
nonprofits are influencers, so we said, 'Let's show them
what we can do.'"
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