The 2x Rule

Rule: Everything you sell, including yourself, should deliver at least twice the price in value to the buyer.  

We’re all selling things every day.  It is important that the buyers of our products (including those employing us) are very satisfied with what they purchased.   If buyers feel like they got at least a 2x return, they will be happy and keep coming back for more.  If they get less than 2x, they’ll be skeptical of what they bought and start reconsidering their options.  

Let’s say I sell you a piece of software for $10,000.  After using it for a year, it is very important for me that you feel you got at least $20,000 in value.  If not, you are going to be upset.  In business, all people need to feel like they are getting a 100% return on their capital.

Similarly, let’s say you hire me for $80,000/year.  It is important that you feel you are getting at least $160,000 in value for that money.  If you are getting less, then my job is in jeopardy.  

This goes into price.  People inherently feel they get more value out of things they pay a higher price for.  We all know that.  But getting a 2x return on a $1000 meal is much harder than getting a 2x return on a $10 meal at In-N-Out.  So it is important you keep your prices low enough to ensure the buyer gets a great return.

Of course, if a buyer is getting a 10x return, then your prices are way too low.  In that case, you should raise your prices or ask for a raise.

Summation: Everything you sell, including yourself, should deliver at least twice the price in value to the buyer.  

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