Jack Waterhouse

A few years back, during the cybersecurity #consulting boom, I had an interesting experience that taught me some lessons about protecting intellectual property and pricing strategy. Everyone was rushing to establish their cybersecurity practice. The market was filled with both opportunities and opportunists.

The Heist

Two sales executives reached out for a coffee meeting. They were polished professionals representing themselves as a new player in the cyber space. The coffee was expensive (they insisted on paying), the conversation was flowing, and they were clearly skilled at relationship building.

Then came the interesting part.

The Proposition

“We're doing $40 million in revenue,” they casually mentioned, “and we're looking to give 3% to a consultant who can develop our cyber offering.”

That's $1.2 million on the table. A tempting offer, but something felt off.

The Discovery Process

I did what any good consultant would do – I let them talk. The more they shared, the clearer the picture became:

• They had significant revenue but no cyber capability
• They needed a complete market entry strategy
• They wanted my entire business methodology
• They needed it fast

Enter the Shit Test

If you dated in the 2010s, you know what a shit test is. It was that seemingly innocent question your date would drop to test your confidence or intentions. “Does this dress make me look fat?” “How many people have you dated?” These weren't really questions – they were tests to see how you'd handle pressure and reveal your true character.

Turns out, those awkward dating years taught me more about business than I realised. Who knew that understanding shit tests would help me protect my intellectual property years later?

I quoted them $5K for three days of work. Here's why:

• High enough to require real commitment
• Low enough to be negligible for a $40M company
• Perfect price point to expose true intentions
• If they're serious about $1.2M, $5K is pocket change

The Pricing Strategy

Here’s where I realized I could’ve been clearer:

What I Did (Not Optimal)

Item	Value
Standard day rate	$1,900 per day
Number of days	3 days
Subtotal ($1,900 × 3)	$5,700
First engagement discount	-25%
Urgent fee	15%

This presentation caused confusion because they assumed $1,900 was my rate for all future work, rather than just for the specific package I was offering. In reality, this was a custom rate for the business methodology transfer package.

What I Should Have Done

Instead, I should have presented it like this:

Item	Cost
Complete Business Methodology Package:	$5,700
This includes:
– Market Segmentation Strategy
– Pricing Models
– Sales and Service Framework
– Implementation Playbook
Professional Design & Presentation Materials	(included)
Early Engagement Discount	–$1,425.00
Expedited Delivery Fee	$855.00
Total Investment	$5,596.75

This would have made it clear that this was a one-time fee for transferring the full business methodology. Any future consulting or implementation support would be scoped and priced separately.

But that wasn't the point. Like any good shit test, the response mattered more than the actual price.

Red Flags

Looking back, the signs were clear:

• New company claiming significant revenue
• Sales executives, not technical leaders, leading the cyber initiative
• Promising huge returns for “just a presentation”
• Rushing the timeline
• Pushing for complete methodology transfer upfront

The Protection Strategy

Look, I'll be honest – when someone dangles $1.2M in front of me, I don't just walk away. Anyone who says they would is either lying or has never run their own business. The key is finding that balance between chasing the carrot without getting hit by the stick.

Here's how I played it:

1. Start With Free Discovery

The coffee meeting was actually perfect for this. I let them share their challenges, their vision, and what they thought they needed. This initial discovery cost me nothing but time and gave me crucial insights into:

• What they really wanted
• How serious they might be
• Where the potential risks lay
• What would need protecting

2. Paper Up Before Value Drops

Before sharing anything of real value, I got the foundations in place:

• Comprehensive NDA (because IP has a way of wandering)
• Detailed scope of work (clear boundaries matter)
• Clear payment terms (no room for “maybe later”)
• Professional proposal (showing I took their opportunity seriously)

3. Structure The Engagement

Instead of dumping my entire business methodology at once:

• Started with high-level methodology overview
• Planned the detailed frameworks for phase two
• Full implementation only after proving commitment

4. Value Communication

When protecting your IP while pursuing an opportunity:

• Focus on risk reduction for their business
• Demonstrate proven frameworks without revealing mechanics
• Show success patterns while protecting client confidentiality

The goal wasn't to block the opportunity – it was to test if they'd back their big talk with even a small commitment. If someone's serious about sharing $1.2M, they'll understand the need for basic business protections.

Key Learnings

1. Package Value, Not Time

   • Focus on deliverables and outcomes
   • Price based on value, not days
   • Structure offerings in logical phases

2. Clear Price Positioning

   • Separate IP transfer from standard consulting rates
   • Package pricing vs. day rates
   • Clear scope boundaries

3. Strategic Testing

   • Use price as a qualification tool
   • Loss leader strategy when appropriate
   • Long-term positioning

The Takeaway

In consulting, especially in hot markets like cybersecurity, your methodology and IP are your business. When someone offers you massive returns for “just sharing” your complete methodology, remember:

• If it sounds too good to be true, it probably is
• Real clients respect your IP and will pay to protect it
• A small upfront commitment is a reasonable test
• Professional documentation protects both parties
• Clear pricing structure prevents confusion

So, Did They Buy?

Well, that's commercial in confidence, but I'll tell you this – they bought the coffee, and that's all they got. But writing this now, I realised something: that seven dollar cappuccino was designed to cost me seven figures. Sometimes the most expensive coffee isn't the one you pay for – it's the one someone else insists on buying.