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I don't like the metaphor. With financial debt, you get $X up front for $Y (where Y >= X) and pay $Y amount over N months. It's known up front what it's costi

by spc476 7y ago

I don't like the metaphor. With financial debt, you get $X up front for $Y (where Y >= X) and pay $Y amount over N months. It's known up front what it's costing you (Y - X) over what time span (N). If the difference between Y-X is low, congrats! You got a great interest rate. If it's large, well, good luck! But in both those cases, the pain is known up front. The discussion here seems to be no one knows what X is, nor Y, but it's expected that Y > X by some large amount that you may or may not have to pay off. Crazy!

munk-a 7y ago
I disagree about the pain being known up front - you are aware of an obligation and that obligations units in dollars, but how those dollars translate into future missed opportunities is unknown... additionally you always have some risk due to currency fluctuations if you're operating an international business, if you're primarily operating in AUD and payroll is in AUD but the loan repayment is in USD then a profitable quarter may end up being much less able to pay down your debt. I agree that money is much more comprehensible, but there isn't so as stark a difference in knownability as it might initially appear.
theptip 7y ago
The aspects of debt that you're focusing on aren't really relevant to how I use this metaphor. Rather than trying to use the tech debt metaphor to actually calculate the interest rate, I think it's more useful at a higher level of abstraction. When faced with the product decision to do more work now and build something better, or less work now and cut corners, what are the consequences of doing less? Without some way of conveying the long-term costs, your stakeholders will always push you to do the least work possible to tick the box. The debt analogy is a universally-understood way of conveying the fact that if you cut corners, you'll likely pay interest later in the form of slower development speed. And if you take on too much debt, then all your spend will be going to paying off your interest, and your progress will stall. Non-technical people understand this analogy, and so it's a useful way of conveying the shape of the problem without having to start from first-principles.

by spc476 7y ago

munk-a 7y ago

I disagree about the pain being known up front - you are aware of an obligation and that obligations units in dollars, but how those dollars translate into future missed opportunities is unknown... additionally you always have some risk due to currency fluctuations if you're operating an international business, if you're primarily operating in AUD and payroll is in AUD but the loan repayment is in USD then a profitable quarter may end up being much less able to pay down your debt. I agree that money is much more comprehensible, but there isn't so as stark a difference in knownability as it might initially appear.

theptip 7y ago

The aspects of debt that you're focusing on aren't really relevant to how I use this metaphor. Rather than trying to use the tech debt metaphor to actually calculate the interest rate, I think it's more useful at a higher level of abstraction. When faced with the product decision to do more work now and build something better, or less work now and cut corners, what are the consequences of doing less? Without some way of conveying the long-term costs, your stakeholders will always push you to do the least work possible to tick the box. The debt analogy is a universally-understood way of conveying the fact that if you cut corners, you'll likely pay interest later in the form of slower development speed. And if you take on too much debt, then all your spend will be going to paying off your interest, and your progress will stall. Non-technical people understand this analogy, and so it's a useful way of conveying the shape of the problem without having to start from first-principles.