Navy CTO Justin Fanelli advises founders to stop asking to be paid for their time and instead price their solutions based on the outcomes and value they deliver. This aligns incentives with the government buyer, rewards impact over effort, and demonstrates a modern, software-defined mindset.

As agencies adopt AI to increase efficiency, clients will rightfully question traditional pricing models based on billable hours. This creates an "arbitrage" problem, forcing agencies to redefine and justify their value based on strategic insight and outcomes, not just the labor involved.

Professional services firms on a billable hour model face an existential threat from AI. As AI compresses work from hours to minutes, clients will demand savings, forcing firms to transition to defensible, value-based pricing models or risk obsolescence.

AI tools drastically reduce the time needed to complete complex tasks, breaking the traditional billable-hour model for consultants and agencies. The focus must shift to value-based pricing, where compensation is tied to the problem solved or the output created, not the hours worked.

AI dramatically reduces the time required for tasks, rendering hourly billing obsolete for service providers. The strategic move is to stop charging for time and instead price projects based on outcomes. This allows you to capture the efficiency gains from AI as profit, rather than simply reducing billable hours.

The consulting giant is shifting its business model from pure advisory work (fee-for-service) to an outcomes-based approach. McKinsey co-creates a business case with the client and contractually underwrites the results, aligning its incentives directly with client success.

A prompt takes seconds, but the expertise to write it effectively takes a career. This '30 seconds and 30 years' paradox breaks traditional time-based billing. Agencies must shift to value- or deliverable-based pricing that properly accounts for the senior human capital guiding the AI tools.

As AI commoditizes routine financial advice, the traditional model of pricing based on hours or assets under management is failing. The new economic basis for financial professionals is proving value through tangible outcomes like tax savings achieved or goals reached.

Instead of billing hourly, consultants should use a 'calculator close' to quantify the total financial value (savings, efficiencies) their service provides. By charging a percentage of that ROI (e.g., 30%), they anchor their fee to outcomes, not time, which can double or triple revenue without needing more clients.