Cost Visibility

I’ve been slowly improving the usage data we provide to B2B customers. It started with a lot of conversations to understand what they want to see. Then I used Claude Code to generate custom reports combining our data analytics and database information. Doing so uncovered coverage gaps, so I slowly worked to resolve them. Then I got feedback. I shared the reports with customers, listened, and iterated until I heard less feedback.

The sales team comes to me for reports. The outcomes are much better, but there’s a cost: my time, my energy, and the loss of what I else I could be doing instead.

So I invested time in a better self-serve dashboard with basic data exports. I took the learnings from the extended reports and integrated a simpler version directly into the product admin. But the customers also like the advanced reports, so I needed a better way to produce them without the time challenge.

It started with a process change. Instead of sales sending me direct messages to request reports, I had them submit them to a special email I use for all feedback. The email routes directly into Linear, where I can set up triage automations to route it through the system.

This helped me in two ways:

1. I could manage the requests as tasks.
2. I could quantify the volume of requests.

A better process, yes, but still a cost of time, energy, and other opportunities. I have to jump over to the codebase where the scripts live, run a specific command, review the reports, and send them back to the rep.

It’s easy to calculate the cost of something when there’s a dollar amount attached. You can see the number. But what about when the number isn’t clear? Or when it’s hidden behind an innocent-looking task?

Creation is an input-output exchange. It requires time, energy, money. It requires resources. You use resources to generate something of value in an effort to return value. If you don’t understand the true costs involved, you can’t make sound decisions about where to focus.

This idea is called Cost Visibility.

There are three types of hidden costs:

1. Time Cost when you spend time.
2. Energy Cost when you expend energy.
3. Opportunity Cost when you lose focus.

Time Cost

Time is the easiest cost to see. We’re paid for our time, either through the process of what we do or the product of what we create. Spending time on something is a cost.

Time Cost is finite and measurable.

There are 24 hours in a day. The standard work week is 40 hours per week. If you’re paid a salary, you can do simple math to determine your hourly rate. And then you have a clear number to define the value of your time.

While giving a presentation to the sales team, I talked about the hidden costs of the sales cycle. And I pointed out the Time Cost of the meeting itself, which isn’t just the one hour of the meeting. It’s one hour multiplied by the number of people in the meeting. If you take everyone’s hourly rate and multiply, you have a dollar amount. It’s finite and measurable.

The same applies to software development.

When you work on a project, you start with time because the cost is obvious. It takes X amount of time for Y team members to complete the work. It’s predictable (sort of).

Time as a proxy for money is natural. It’s translated subtext flowing underneath every conversation about what to work on.

“Time is money,” as they say.

Yet time frequently misses the counterpoint value of what is returned. If it’s all an input-output equation, then the Time Cost is only showing your costs (the inputs) without the return value (the outputs). Telling you someone consumes 5,000 calories per day is a different story without the context they’re a professional swimmer.

Outputs matter.

Everyone hopes to make more than they spend. Even breaking even feels like a loss.

But Time Cost is only one factor.

There’s an even subtler cost that requires more experience to see and understand.

Energy Cost

You know how many times I fixed something in five minutes the next morning after toiling through it at the end of the previous day?

Too many times to count.

Why? It’s an energy problem.

Knowledge work requires mental energy. If you have time without energy, you won’t use the time effectively. Time is a treasure chest and energy is the gold you fill it with. Time determines capacity, but energy determines utilization.

Working 16-hour days follows the law of diminishing returns. Your brain’s capacity for thinking is mechanically limited. More time is wasted effort with no return. Stopping, stepping away, and resting is always the better choice in the long run.

Energy, like time, is finite.

Unlike time, energy is a renewable resource.

Energy Cost considers energy across forces that affect how it functions:

1. Entropy pulls energy down.
2. Inertia resists energy deployment.
3. Momentum amplifies energy deployment.

Entropy

A system always drifts toward disorder, and energy in humans drifts toward depletion. When you’re pulled into too many meetings; or you switch contexts too frequently; or you don’t create space to process information—that’s when energy depletes. Even when you’re not actively doing anything, energy is lost. It’s natural.

Entropy teaches us that energy must be protected and actively maintained.

Create space. Space to think, to wander, to process information.

Inertia

Getting started is the hardest part. Once you’re moving, you generate forward progress and the work flows naturally. The first step in the process often requires more energy than any other step. That’s the battle of inertia.

Inertia teaches us to find the smallest way to get started to start moving forward.

Start small. Find what you can do right now and just get started.

Momentum

Overcoming inertia moves energy into a flow state where momentum is built. Habits are powerful because anything done regularly will compound into something bigger than the individual steps of the process.

Writing is a great example.

I started this newsletter and created a writing habit to write a weekly newsletter. I generated momentum to keep writing. You can write one “page” per day and have a 365-page book in a year. Momentum is a powerful force.

Momentum teaches us to stay consistent so energy builds into an unstoppable power.

Be consistent. If you want to be good at anything, just keep going. Keep showing up.

Opportunity Cost

Because we have finite time and finite energy, there’s a limit to the number of opportunities we can pursue. As Steve Jobs put it:

People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are.

I spend a lot of time in sales calls. It’s an important part of my role. But there’s also hundreds of calls going on every day. Without a backstop, I could spend all of my time in them instead of focusing on other responsibilities. And the responsibilities of product work extend across a range of domains: design, engineering, strategy, sales, marketing, finance. It’s important to experience information without drowning in it.

Opportunity Cost is the cost of what you didn’t do.

The strategy work to find the best direction.

The design work to create the optimal experience.

The engineering work to deliver, iterate, and refine value.

When you make a decision on what to do, you’re also making a decision about what not to do. Get clear about what you should focus on.

The Practice

Here’s how you can practice Cost Visibility:

1. Surface the costs. Look across the three types of costs—Time Cost, Energy Cost, Opportunity Cost—and ask yourself “what is this costing me?”. Time is the easy one, but energy and opportunity require deeper thought. Be mindful.
2. Identify the patterns. Is the cost linear or compounding? Is it a cost or an investment? If the cost repeats, it’s linear. If it’s a one-time cost, it creates future leverage. If you look at costs this way, it’s easier to see where you should focus.
3. Choose intentionally. Determine if it’s worth paying the cost. If it is, move forward with intention. Use your heightened knowledge of costs to choose.

The Throughline

At the end of the past week, I finalized the system for automated reports to send directly to the sales team so they can forward to customers. They don’t need my time.

I invested my time, energy, and opportunity in the automated system. It was an investment to create compounded leverage instead of a linear cost. It scales. And I’ll continue to see the interest pay out over the coming weeks.

How? A reduced cost of time, an increase of energy, and more focus for other work.

Cost Visibility heightens your awareness and makes you think about not just your time, but the energy and opportunity cost behind every action. In a world where AI is shrinking execution, energy and opportunity dictate direction in a more indirect way.

It’s important to see all costs so you are equipped to make the better decisions.