Ludic 🧛Good news everyone! My magnum opus on Scrum just dropped, clocking in at almost 9K words! Prepare a drink, strap yourselves in, and enter the Torment Nexus.
https://ludic.mataroa.blog/blog/tossed-salads-and-scrumbled-eggs/
Iain McLaren@ludicity ha fixed price with no deadline is the meta
@imclaren It really does seem superior in every context where it's not literally impossible. I met some folks from Black Magic who explained that they have deadlines in the form of conferences where they compete with other camera producers, so stuff like that probably makes "no deadline" unworkable.
Peter Toft Jølving@ludicity @imclaren I'm really curious about your take on fixed prices, particularly how to agree on a definition of done (yay, another neologism!), and how to plan for those cases where estimates explode.
When I first started as an independent consultant, I sold a small fixed price project that ended up taking 10x the expected time. I guess you could call me a 10x developer, but my compensation ended up well below minimum wage. That was an expensive lesson.
@joelving @imclaren We don't charge based on "expected time". What we're trying to do is completely stop thinking about time to completion. We try figure out how much value the project has to the business and charge 10-20% of that.
This means we don't sell things that don't have clear revenue/cost implications.
It also means that we're expecting to sometimes charge rates that are eye-wateringly high, and we're banking on people not caring because it's still a clear win for them.
@ludicity @joelving yes I also think that this may be the way as long as this number is always >= (your internal target FTE equivalent cost per hour to complete the project + your other costs) * a reasonable margin. So you don’t starve.
I think that the closer you are to this number (at the low end) the more rigorous you will need to be in calculating this number and/or building in assumptions.
@imclaren @joelving Totally. We have a lower bound based on time, but not an upper bound. But since we're expecting non-linearity in value, I think it would be concerning if we ever work close to the lower bound.
It has also had a really positive effect on client conversations, as we really push them towards formulating a version of the project that has really, really high expected value.
@ludicity @imclaren that makes so much sense. I know a pricing expert who will price his talks simply by asking "what's your budget?" and it works very well for him. This is kinda the same, asking "what's it worth to you?", and I really like it. Of course, the trick then is to find those really great business cases.
@joelving @imclaren Keeping in mind that I'm new at this, "what's your budget?" is better than guessing but is inherently adversarial with anyone that's remotely savvy.
My intuition is that there's a huge difference between "What can you afford?" and "What is it worth?", or even "Can we come up with something worth more?"
@joelving @imclaren For now it's the client's assessment.
And from a more psychological perspective, we keep it simple. I.e, 50% chance of failure loses 10K, 50% chance of failure gains 100K, that's still a bad pitch.
Taleb writes a lot about how losses are felt more acutely, so positive E(V) plays are still bad for sales, rather than lower E(V) sales with higher success rates.
Secondly, failing is bad for client relations! 😢 Most people don't feel like they can inhabit hypothetical outcomes.