Capacity-Based Pricing (the Jedi Mind Trick)
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 8
- Confidence
- —
Robin Waite's live pricing method for coaches and service businesses, built on two mechanisms. The first is the Jedi mind trick: because people try to solve pricing intellectually and land far below their real value, you escalate a price out loud and watch for the moment the poker face breaks — that is the subconscious telling you what you actually believe you are worth. The second is capacity-based pricing: start from the income goal, divide by the price, and check whether you physically have the hours to serve that many clients. When capacity falls short of the goal, the answer is a higher price, not more clients. Higher prices also select for invested clients, who do the work and therefore get better results.
Origin
Extracted from Deep Dive with Ali Abdaal
How to run it
- 1
Break binary pricing thinking
People treat price as yes/no, in/out, too cheap/too expensive. Between £200 and £5,000 there are 4,800 other numbers. The job is to find the right one, not to pick a side.
- 2
Run the escalation and watch the face
Say the numbers out loud in steps — 200, 500, 800, 1,200 — and watch where the person can no longer keep a straight face. That break point is where their subconscious values the work, not where their intellect argued it should be.
Pro tip Do this with someone else present; you cannot read your own poker face.
- 3
Price at the stretch, not at comfort
Take the number just above where you are comfortable. You do not learn much inside the comfort zone, and the higher price is what recruits committed clients.
Watch out Underpricing quietly makes a decision on behalf of every client you will ever have, based on your own value system rather than theirs.
- 4
Start from the income goal, not the product
Decide the number you want the business to make — say £24,000 a year — before you build or price the offer. Most people build the product first and hope buyers appear.
- 5
Divide goal by price to get client count
£24,000 divided by £1,200 is roughly 20 clients a year. This turns an abstract revenue target into a concrete, checkable number of humans.
- 6
Test the number against real capacity
Twenty weekly-call clients is twenty hours a week of coaching. Ask honestly how many you can hold concurrently alongside your existing job — and factor in overlap and churn across the year.
Pro tip Five concurrent clients typically means around ten across a year once churn and overlap are counted.
Watch out Capacity, not ambition, is the binding constraint on a side-hustle service business.
- 7
Close the gap by raising price, not volume
If capacity delivers only ten clients but the goal needs twenty, raise the price. Ten clients at £2,500 hits the same number as twenty at £1,200 — and can mean dropping to a three-day week.
- 8
Pitch enough people to let conversion work
Pitch ten to twenty people at the new price. Across 700+ business owners, a typical coaching conversion rate is roughly one in five to one in three — 20 to 40%.
Pro tip If nobody in your immediate circle would pay it, that is a signal about audience fit, not about the price.
In the wild
Ali says he would feel weird charging a person £40 an hour, and initially suggests £10 an hour — roughly £200 for a six-month programme. Robin escalates: 200, 500, 800, 1,200. Ali's poker face breaks between £800 and £1,200. Robin then works the capacity maths: a £24,000 goal at £1,200 needs 20 clients, or 20 hours of calls a week, which Ali cannot service alongside hospital shifts. He can realistically hold five concurrent, about ten a year. The resolution is to raise the price to £2,500, which hits the goal at ten clients — and Ali admits the prospect is emotionally transformational.
→ Price moves from £200 to £2,500 for the same programme, and the income goal becomes reachable within actual capacity.
Common mistakes
Pricing from your own value system
Deciding you are 'only worth' a low hourly rate makes the buying decision on behalf of every client, and may not serve them justly — cheap things are not coveted, cherished or acted on.
Build first, hope buyers come
People approach it from the wrong end: build the product, then hope someone buys. Start from the income goal and work back through price and capacity.
Testing the price on the wrong people
Concluding the price is too high because colleagues would not pay it confuses your existing circle with your ideal audience.
From the transcript
“it's much better to be at the more expensive end of it because then what you get is clients who are invested in the process”
“so what we've done is this this called capacity based pricing right”
“we don't want to stay in Comfort Zone because we don't actually learn that much in there you've got to stretch yourself a little bit”
From the episode
5 Skills to Level Up Your Life - Season 6 Roundup
Season 6 Roundup