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Asking that would signal a profound miscalibration in your understanding of how businesses work (unless the only thing your company does is sell your billable h

by e1g 5y ago

Asking that would signal a profound miscalibration in your understanding of how businesses work (unless the only thing your company does is sell your billable hours). For example, nearly every startup is losing money until they become a unicorn (and often, well after) - this doesn't imply that what their developers/ops people do all day is worth either "nothing" or "billions".

kqr 5y ago
But someone in the business ought to have estimated the impact of a task, and it's very useful for developers to be in on that discussion because then they can suggest alternatives that are way cheaper but still worth just as much, or that cost slightly more but would also be worth so much more. And that's just the immediate benefit. It goes beyond that to organisational learning and being able to calibrate past estimates and get better at picking high value fruit rather than just the low-hanging ones or the ones someone has a good gut feeling about. But in my experience from organisations both small and large, new and old, is that it's actually a huge mental shift required to go from "this sounds neat let's do this" to - How exactly do we actually think doing this will help us in the long run? - How would we express that in dollars to be able to compare it with other things? - How soon will we be able to tell that we were wrong?
- e1g 5y ago
  Say you're building an enterprise SaaS, and several of your VIP customers ask for a button to "Export this table into Excel for offline analysis". These customers are paying >$100k p.a., and not threatening to leave or anything, but it's a feature you think would be valuable for the core product. You ask a developer to build this, and they ask, "How long can I spend on this before we're losing money?". There are several ways to answer, but few are polite. While every business has some prioritization matrix/process, rigorously estimating the "marginal revenue" for each movement in the dance would add friction and internal transaction costs that make the business not viable.
  - kqr 5y ago
    The nice thing about estimates is that you can make them at whatever confidence level is sensible. If a precise estimation (which is what it seems like you think of) adds too much friction and internal transaction costs, make it at a different confidence level. So in your specific example, you might go, "I can't give you the exact tipping point right now, but I'm 98 % certain it's worth more than five days. So if you end up spending four days on it and it's still not done, come back to me for a more precise estimate."
    - e1g 5y ago
      As a thought experiment: even though it's impossible to meaningfully answer "how long can we spend on this without losing money on it?", imagine some omniscient Business Analyst does the math and confidently declares, "I expect this button to increase our profit margin by $300k p.a.". Presumably, the developer now has the commercial guidance to announce, "My salary is $200k, so yes, I will create this button in the next 12 months, and it will be my only job to oversee The Button as long as it exists, and the business still gets to keep $100k p.a. Great planning session." Estimations and prioritization systems are entire complex fields we could debate. I'm not trying to do that; I'm saying that asking "how long can we spend on this without losing money on it?" will not be a productive addition to most (all?) discussions with developers/product owners/executives/clients.
      - kqr 5y ago
        How do you define "meaningfully answer" to arrive at the conclusion that it's impossible? To me, meaningfully answering that is just as possible as meaningfully answering "when will Tobias die" which is something life insurance companies have done for a very long time.
        e1g 5y ago
        We're getting quite off topic here, but the "duration of a human life" follows a narrow, predictable, bell-curve-shaped distribution. "Impact of this feature" does not - it follows the power-law distribution. Life insurance companies can meaningfully estimate when you'll die, but they cannot meaningfully estimate the value of attending any given party/meeting/trip/conversation. Most of those will be meaningless by comparison to the few that cause an inflection point and make your life worth living, often by accident.

by e1g 5y ago

kqr 5y ago

But someone in the business ought to have estimated the impact of a task, and it's very useful for developers to be in on that discussion because then they can suggest alternatives that are way cheaper but still worth just as much, or that cost slightly more but would also be worth so much more. And that's just the immediate benefit. It goes beyond that to organisational learning and being able to calibrate past estimates and get better at picking high value fruit rather than just the low-hanging ones or the ones someone has a good gut feeling about. But in my experience from organisations both small and large, new and old, is that it's actually a huge mental shift required to go from "this sounds neat let's do this" to - How exactly do we actually think doing this will help us in the long run? - How would we express that in dollars to be able to compare it with other things? - How soon will we be able to tell that we were wrong?

e1g 5y ago
Say you're building an enterprise SaaS, and several of your VIP customers ask for a button to "Export this table into Excel for offline analysis". These customers are paying >$100k p.a., and not threatening to leave or anything, but it's a feature you think would be valuable for the core product. You ask a developer to build this, and they ask, "How long can I spend on this before we're losing money?". There are several ways to answer, but few are polite. While every business has some prioritization matrix/process, rigorously estimating the "marginal revenue" for each movement in the dance would add friction and internal transaction costs that make the business not viable.
- kqr 5y ago
  The nice thing about estimates is that you can make them at whatever confidence level is sensible. If a precise estimation (which is what it seems like you think of) adds too much friction and internal transaction costs, make it at a different confidence level. So in your specific example, you might go, "I can't give you the exact tipping point right now, but I'm 98 % certain it's worth more than five days. So if you end up spending four days on it and it's still not done, come back to me for a more precise estimate."
  - e1g 5y ago
    As a thought experiment: even though it's impossible to meaningfully answer "how long can we spend on this without losing money on it?", imagine some omniscient Business Analyst does the math and confidently declares, "I expect this button to increase our profit margin by $300k p.a.". Presumably, the developer now has the commercial guidance to announce, "My salary is $200k, so yes, I will create this button in the next 12 months, and it will be my only job to oversee The Button as long as it exists, and the business still gets to keep $100k p.a. Great planning session." Estimations and prioritization systems are entire complex fields we could debate. I'm not trying to do that; I'm saying that asking "how long can we spend on this without losing money on it?" will not be a productive addition to most (all?) discussions with developers/product owners/executives/clients.
    - kqr 5y ago
      How do you define "meaningfully answer" to arrive at the conclusion that it's impossible? To me, meaningfully answering that is just as possible as meaningfully answering "when will Tobias die" which is something life insurance companies have done for a very long time.
      - e1g 5y ago
        We're getting quite off topic here, but the "duration of a human life" follows a narrow, predictable, bell-curve-shaped distribution. "Impact of this feature" does not - it follows the power-law distribution. Life insurance companies can meaningfully estimate when you'll die, but they cannot meaningfully estimate the value of attending any given party/meeting/trip/conversation. Most of those will be meaningless by comparison to the few that cause an inflection point and make your life worth living, often by accident.