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There are two angles at play that got a little mixed together in the video. The first is the hard bargain during initial negotiations (ala the CD for much less)

There are two angles at play that got a little mixed together in the video. The first is the hard bargain during initial negotiations (ala the CD for much less) the second (and much uglier) is the restaurant, where after the work is done the client flat refuses to pay. I'm fine with the former, you get what you pay for, the latter however, really makes me mad.

netcan 16y ago
The in between one is the woman at the hairdresser. Get past the point where negotiations usually happen and the deal appears done and your counterpart is committed, then bargain. We're used to it happening as consumers. There we call it bait & switch.
softbuilder 16y ago
The difference is that a CD is a commodity. People are not. Certainly there is a marketplace at work, but even if you do view programmers or designers as commoditized, no one wants to be treated that way. It's ugly behavior. (Although in my experience that is usually ignorance, not malice.)
- eof 16y ago
  CD?
  - dholowiski 16y ago
    Shiny things they used to put un-ripped MP3's on.
    - noonespecial 16y ago
      Un-ripped MP3's? I thought they were just how AOL mailed software.
      - InclinedPlane 16y ago
        AOL? Is that some sort of mass-market related startup?
        billswift 16y ago
        Not a startup, more a winding-down. By the way, is AOL still doing that? I used to get a couple every year, but I haven't received one in several years now.
        InclinedPlane 16y ago
        The joke is that AOL is so out of the game and so irrelevant to the modern internet that people might not have even heard of them at this point, mistaking them for some sort of startup that focused on mass-mailings. Though, as far as I can tell, they don't do that anymore.
      - noahth 16y ago
        for a while I tried to start a collection of those "free install!" discs from various ISPs. it got too depressing.
    - deleted 16y ago
      [deleted]
- daniel-cussen 16y ago
  I'd be fine with being treated like a commodity as long as that commodity is a type of bullion. I find that the term "commoditized" refers to goods or services that one, are all identical and b) are really, really cheap, like most commodities in the late 90s.
trotsky 16y ago
It does go both ways, though. I'm a software developer/consultant and am sympathetic to the video but lets look at from the other side. Most pro level consulting teams work open ended time and materials contracts. There's very good reasons for this, but this definitely gets abused to deliver a project that was never expected to come in on budget. It also exposes the client to the effects of bad management or other incompetence without a lot of redress. Imagine if you were buying a hamburger and they told you that because they burned the first one you're going to have to pay double. The hard bargaining can go both ways too. I've included what I considered ridiculous rates in a first draft of a proposal (to give me room to negotiate) only to have them often accepted without a blink. In fact, I'm quite sure not having a standard rate card has been responsible for hundreds of thousands of extra money over the years. It sounds to me like the creator of the video probably does fixed price bidding, at least in part. In my experience that's never a good idea or worth doing - even if you can manage it OK (extremely unlikely) you end up alienating the customer by having to be so anal about scope creep. If you have a contract where's the after the fact negotiation come from anyway? Are they really willing to say then sue me?
- kls 16y ago
  It sounds to me like the creator of the video probably does fixed price bidding, at least in part. In my experience that's never a good idea or worth doing - even if you can manage it OK (extremely unlikely) you end up alienating the customer by having to be so anal about scope creep. I whole heartily agree with your summation. Fixed price just sets it off on the wrong foot in the first place. What I generally do, is provide my best estimate of what the project will take. I also agree if the project runs past my estimate by 15% that I reduce my rate to my bottom dollar rate. This way I am not handing it out for free, but they understand that I am not trying to run up the clock as well. The other thing we agree on is that any feature creep pushes the estimate back by the size of the feature. I have found that this works well, gives the customer a comfort level, and though it is my rock bottom rate, I am not eating costs left and right for a project that goes bloody. It cost me opportunity costs but not hard out of pocket costs which are far harder to swallow.
  - 16y ago
sliverstorm 16y ago
I'm fine with the former, you get what you pay for, the latter however, really makes me mad. Seriously. Even though I know it's all mocked up, every time the video cut to the restaurant my pulse started to rise.
- jrockway 16y ago
  It's pretty stupid to let someone eat your product before you even check to see if they brought their wallet, isn't it.
  - cubicle67 16y ago
    It's not getting people to bring their wallets that's the problem, it's getting them to open them
  - bendotc 16y ago
    Are you saying people usually ask you to produce your wallet at the beginning of a meal when you eat at a restaurant? By ordering off the menu, you agree to the price on it. Similarly, when you sign an agreement to pay someone for work done, one would hope you'll pay that person when the work is done. Sadly, reality teaches us that this is not always the case.
    - jrockway 16y ago
      No, I'm just saying it's weird. People tried this (+) with houses and it didn't work very well. Why meals? (+) this == "You saw the price and consumed the product, now it's time to pay." "But I don't have any money." "Oh fuck. I'm fucked, not you, even though you're the asshole."
      - mquander 16y ago
        If you have to pay the money up front, you're less likely to buy; that's true for houses because they cost so much, and it's true for meals because there are lots of small individual charges in the course of a full meal. I guess restaurants find that the money lost via dine-and-dashing is not as bad as the money lost to misers.
run4yourlives 16y ago
If the latter is happening to you, you're doing it wrong. 25% retainer, equal installments of 25% at respective milestones. End of story.

netcan 16y ago

The in between one is the woman at the hairdresser. Get past the point where negotiations usually happen and the deal appears done and your counterpart is committed, then bargain. We're used to it happening as consumers. There we call it bait & switch.

softbuilder 16y ago

The difference is that a CD is a commodity. People are not. Certainly there is a marketplace at work, but even if you do view programmers or designers as commoditized, no one wants to be treated that way. It's ugly behavior. (Although in my experience that is usually ignorance, not malice.)

eof 16y ago
CD?
- dholowiski 16y ago
  Shiny things they used to put un-ripped MP3's on.
  - noonespecial 16y ago
    Un-ripped MP3's? I thought they were just how AOL mailed software.
    - InclinedPlane 16y ago
      AOL? Is that some sort of mass-market related startup?
      - billswift 16y ago
        Not a startup, more a winding-down. By the way, is AOL still doing that? I used to get a couple every year, but I haven't received one in several years now.
        InclinedPlane 16y ago
        The joke is that AOL is so out of the game and so irrelevant to the modern internet that people might not have even heard of them at this point, mistaking them for some sort of startup that focused on mass-mailings. Though, as far as I can tell, they don't do that anymore.
    - noahth 16y ago
      for a while I tried to start a collection of those "free install!" discs from various ISPs. it got too depressing.
  - deleted 16y ago
    [deleted]
daniel-cussen 16y ago
I'd be fine with being treated like a commodity as long as that commodity is a type of bullion. I find that the term "commoditized" refers to goods or services that one, are all identical and b) are really, really cheap, like most commodities in the late 90s.

trotsky 16y ago

It does go both ways, though. I'm a software developer/consultant and am sympathetic to the video but lets look at from the other side. Most pro level consulting teams work open ended time and materials contracts. There's very good reasons for this, but this definitely gets abused to deliver a project that was never expected to come in on budget. It also exposes the client to the effects of bad management or other incompetence without a lot of redress. Imagine if you were buying a hamburger and they told you that because they burned the first one you're going to have to pay double. The hard bargaining can go both ways too. I've included what I considered ridiculous rates in a first draft of a proposal (to give me room to negotiate) only to have them often accepted without a blink. In fact, I'm quite sure not having a standard rate card has been responsible for hundreds of thousands of extra money over the years. It sounds to me like the creator of the video probably does fixed price bidding, at least in part. In my experience that's never a good idea or worth doing - even if you can manage it OK (extremely unlikely) you end up alienating the customer by having to be so anal about scope creep. If you have a contract where's the after the fact negotiation come from anyway? Are they really willing to say then sue me?

kls 16y ago
It sounds to me like the creator of the video probably does fixed price bidding, at least in part. In my experience that's never a good idea or worth doing - even if you can manage it OK (extremely unlikely) you end up alienating the customer by having to be so anal about scope creep. I whole heartily agree with your summation. Fixed price just sets it off on the wrong foot in the first place. What I generally do, is provide my best estimate of what the project will take. I also agree if the project runs past my estimate by 15% that I reduce my rate to my bottom dollar rate. This way I am not handing it out for free, but they understand that I am not trying to run up the clock as well. The other thing we agree on is that any feature creep pushes the estimate back by the size of the feature. I have found that this works well, gives the customer a comfort level, and though it is my rock bottom rate, I am not eating costs left and right for a project that goes bloody. It cost me opportunity costs but not hard out of pocket costs which are far harder to swallow.
- 16y ago

sliverstorm 16y ago

I'm fine with the former, you get what you pay for, the latter however, really makes me mad. Seriously. Even though I know it's all mocked up, every time the video cut to the restaurant my pulse started to rise.

jrockway 16y ago
It's pretty stupid to let someone eat your product before you even check to see if they brought their wallet, isn't it.
- cubicle67 16y ago
  It's not getting people to bring their wallets that's the problem, it's getting them to open them
- bendotc 16y ago
  Are you saying people usually ask you to produce your wallet at the beginning of a meal when you eat at a restaurant? By ordering off the menu, you agree to the price on it. Similarly, when you sign an agreement to pay someone for work done, one would hope you'll pay that person when the work is done. Sadly, reality teaches us that this is not always the case.
  - jrockway 16y ago
    No, I'm just saying it's weird. People tried this (+) with houses and it didn't work very well. Why meals? (+) this == "You saw the price and consumed the product, now it's time to pay." "But I don't have any money." "Oh fuck. I'm fucked, not you, even though you're the asshole."
    - mquander 16y ago
      If you have to pay the money up front, you're less likely to buy; that's true for houses because they cost so much, and it's true for meals because there are lots of small individual charges in the course of a full meal. I guess restaurants find that the money lost via dine-and-dashing is not as bad as the money lost to misers.

run4yourlives 16y ago

If the latter is happening to you, you're doing it wrong. 25% retainer, equal installments of 25% at respective milestones. End of story.