Once upon a time, a young woman noticed Pablo Picasso sitting in a Paris cafe. She plucked up the courage and asked him if he’d be so kind as to scribble something for her on a napkin. He happily obliged.

When she asked how she could possibly thank him, he replied “with $75,000”.

At first, the young woman was speechless but managed to ask how he could possibly justify charging $75,000 for something he did in a mere second.

He replied, “Madam, it’s taken me 70 years to be able to do that in a second.”

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The moral of the story is that price has nothing (and everything) to do with how many seconds or hours or days it takes to create value. Pegging price to time is a hiding to nothing.

So how do you arrive at a price for what you create that’s good for your customer, and for you? Where you end up is down to you, but it’s going to be somewhere between, a floor (what it costs you to make), and a ceiling (the value you create for your customer).

How close you get to the ceiling (or fall through the floor!) depends on how well you understand, a) who your ideal customer is, and b) what she values.

How could Picasso Pricing work for you?

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For another perspective, watch artist Paula Scher (from 3:33) talk about a time when she “drew the Citi logo on a napkin and walked out.