A signal of market failure in translating opaque knowledge into impact. *

Agency Nil, describing themselves in their Twitter bio:

Will work for what it’s worth. Supply and demand says so… Agency Nil: Cheaper than freelance, better than interns.

An example of a professional services firm (in this case, advertising) using the “pay what you want” pricing model.

My take?

• As I told a friend, less a sign of the times, more of an admission that the traditional up-front structuring of business relationships hinders the formation of new business contracts in a world where we are increasingly fooled by the quality of our predictions, hampered by heavy up-front transaction costs, wasted resources spent on negotiating allocation rather than creation, stunted by the difficulty of valuing opaque knowledge a priori.
• And it’s a big reason why we’re seeing standardized investment term sheets become more popular and accepted, a realization that largely one-off, customized transaction structures and terms is an awesomely dominated strategy by standardized and openly-known structures.
• And at the same time, an innovative way to approach marketing, a recognition that the agency bid process is wasteful, a small effort to win back some of the control in the process by changing the game, and an attempt to reduce the deadweight loss associated in the bid process.

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* Modified from an earlier post on Tumblr.