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That seems to be the point where sunk cost fallacy strikes hard in the post to me. They had paid $X for "80% of the first milestone of work" and that sunk cost

That seems to be the point where sunk cost fallacy strikes hard in the post to me. They had paid $X for "80% of the first milestone of work" and that sunk cost locks them in to everything else that happens. They seemed too fearful from that point onward that if they fired the agency and brought in a new agency or freelancer that they would start from square 1 and do all of the previous work (and spend) over again. The sunk cost fallacy suggests that sometimes is better for you if you should just accept existing losses, accept you've already sunk those costs and won't get them back, and move on. I don't know what their contract looked like with the agency, but an 80% of a logo design sounds like a perfect deliverable that you can safely fire the existing team and take the 80% deliverable to a new designer, not start from scratch, and ask them to do a final polish step. I would have cut losses there, but of course it is much easier to armchair quarterback from hindsight and different perspectives than if you are in the middle of it fighting that gut feeling that you've already invested so much and can't "afford" to cut losses.

bequanna 4y ago
Which absolutely makes me think this was a well thought out con designed to prey on those types of fears and maximize the value extracted from the mark. Those lottery phone scams out of Jamaica which target the elderly in the US are almost the exact same scam as what was described here. Promise something, get them to send money, don’t deliver, tell them you need more time/more money. Keep repeating until the mark walks away.
- nerdawson 4y ago
  Most of my career has been spent at agencies. I think you're attributing malice to what was more than likely routine mismanagement.
  - thayne 4y ago
    Perhaps, but there is an incentive to continue that mismanagement, rather than fixing it.
  - dahdum 4y ago
    > I think you're attributing malice to what was more than likely routine mismanagement. I wouldn't call it mismanagement. Many agencies thrive despite regularly delivering these types of experiences. It's a conscious choice they can easily rationalize because of the money. This agency turned a one off $7k job into $46k by smooth talking and scope creeping an actual developer. I'm sure they're absolutely killing it doing the same to non-technical folks.
    - nerdawson 4y ago
      I'm sure some do have that attitude but I don't believe, for most, that they're choosing to operate that way. TinyPilot is clearly successful and growing. Any smart agency would nurture that relationship, deliver a great product, and secure an ongoing relationship. By contrast, there's a huge amount of reputational risk in allowing things to spiral. They've walked away with more today but imagine for a moment the damage that would have been done were they named in this article. It doesn't take much for a brand to turn toxic and things to implode.
      - achikin 4y ago
        But hey, they were not named :) And that lines up with my experience in agencies - there is always an “Isaac” who’s job is to cool the customer down.
        TedDoesntTalk 4y ago
        Yes, I’m very confused why he did not make the agency.
        bornfreddy 4y ago
        My guess - contractual obligations or some other liability?
        nerdawson 4y ago
        What benefit would the author get from naming the agency involved? There’s a big legal risk involved in doing so and no upside that I can see.
  - xupybd 4y ago
    Yeah my read is they were having some internal issues and were overloaded. On top of that they hadn't done many projects like this. Management threw it out to the floor and the floor ran with it like every other job. Feedback went to management but the people doing the work didn't really understand that this client was not like their other projects. I've been on the other side of this where one bigger client changed the game and we didn't adapt as we were used to things at a different scale. We didn't clean up the mess we inherited fast enough. We didn't put enough resources on the projects and we failed to live up to expectations. We were used to smaller tasks with more limited scope.
  - sizzle 4y ago
    The agency is incentivized to draw out the work to maximize billable hours
- allenu 4y ago
  Maybe "well thought out con" is a little strong here. I see it as more likely the consulting firm has learned this behavior over time and it has rewarded them well. I imagine that if they're normally dealing with large contracts, those companies footing the bill are probably easier to string along like this. Just do enough and promise enough that they keep you on and only budge when they get more serious about potentially terminating the contract.
  - bequanna 4y ago
    I don’t buy this was some mistake in good faith. I think the author is a little naive which made him a good mark. They started work on and subsequently billed for something that was explicitly out of scope. My guess is that the founder of the agency knew early on that he could push this client around to extract $.
    - sizzle 4y ago
      Also they finished the work in a brisk sprint-like pace towards the end, knocking out the pages in record time. I think that was more indicative of the actual effort required to finish the work, not all the hours they billed. There is a perverse incentive when the client has a retainer to bill hours and make up excuses to line their pockets. They finessed the author and preyed on his naivety
  - tomaskafka 4y ago
    I agree, and it takes force to break them out of this behavior. I know of a guy, who forced the contractors to break down the wall they just built because they didn't let him inspect the place behind the wall before enclosing it, as promised in the contract. He knew that if he lets this slide, they'll keep doing it. An analogy here would be forcing the agency designers to completely delete any speculative redesign work, without any backups, to force them to focus on the logo, and send a strong signal that I don't care about the redesign, and won't be paying that work.
- koshnaranek 4y ago
  Such things can happen very easily even when everybody has good intentions especially if nobody keeps the entire team focused.
z3t4 4y ago
The sunk cost fallacy is perhaps the most useful thing you learn in business school. eg. Do I want to pay $9,600 to get the job finished. What would it cost if I hired someone else to finish it ? The same thing if you are going to a concert and lost your tickets, do you want to pay $200 to go to the concert (not taking into account that you've already lost $100, you could have lost that $100 on whatever) eg. you are paying 200, not 200+100.
notahacker 4y ago
Yep. It's not a situation where they're an indeterminate way through building a custom app using a custom framework and you really do lose everything if you start again, it's a case where an agency has designed and handed over a logo and some very conventionally-designed mockups which any competent freelancer with knowledge of Vue should be able to implement on your platform, and revise as requested. And they're citing lack of availability, so it's not even rude to walk away with the deliverables you paid for.
charlie0 4y ago
Pretty sure the agency is well aware of this fallacy, which is no doubt why they treated this guy so well in the very beginning.
ratww 4y ago
This is why I still like Agile and Scrum, as much as other devs might hate it. “Yeah I want REAL deliverables after the first or second week”. Keeps me honest. And will keep me from working with architecture astronauts don’t really deliver anything but hot air and build ultra-extensible structures that are actually impossible to extend beyond the fantasy world of their maker. Or the equivalent for designers.
- jokethrowaway 4y ago
  I'd bet you a large sum of money this agency used Agile. Agile is not a guarantee of deliverables you care about. There is a lot of useless stuff you can deliver.
  - protonbob 4y ago
    Well, if you are doing it correctly, you are supposed to make a sprint goal of a deliverable that has value.
  - ElectricalUnion 4y ago
    Well, waterfall used to not deliver anything at all. Not delivering anything is pretty useless.
    - lelanthran 4y ago
      > Well, waterfall used to not deliver anything at all. Not delivering anything is pretty useless. That's pretty much untrue; had this project been a waterfall project then: a) The devs would not have gotten paid until they hit particular milestones, b) The deliverables would have been scoped upfront, c) The agency would have eaten the cost of developing useless things, not the customer. Because this was obviously an agile/Agile project: a) The payment milestones were not specified upfront, b) The devliverables remained unscoped until feedback was needed (which was well into the development phase), c) The client eats the cost of developers time, whether or not milestones are hit.
  - lmm 4y ago

bequanna 4y ago

Which absolutely makes me think this was a well thought out con designed to prey on those types of fears and maximize the value extracted from the mark. Those lottery phone scams out of Jamaica which target the elderly in the US are almost the exact same scam as what was described here. Promise something, get them to send money, don’t deliver, tell them you need more time/more money. Keep repeating until the mark walks away.

nerdawson 4y ago
Most of my career has been spent at agencies. I think you're attributing malice to what was more than likely routine mismanagement.
- thayne 4y ago
  Perhaps, but there is an incentive to continue that mismanagement, rather than fixing it.
- dahdum 4y ago
  > I think you're attributing malice to what was more than likely routine mismanagement. I wouldn't call it mismanagement. Many agencies thrive despite regularly delivering these types of experiences. It's a conscious choice they can easily rationalize because of the money. This agency turned a one off $7k job into $46k by smooth talking and scope creeping an actual developer. I'm sure they're absolutely killing it doing the same to non-technical folks.
  - nerdawson 4y ago
    I'm sure some do have that attitude but I don't believe, for most, that they're choosing to operate that way. TinyPilot is clearly successful and growing. Any smart agency would nurture that relationship, deliver a great product, and secure an ongoing relationship. By contrast, there's a huge amount of reputational risk in allowing things to spiral. They've walked away with more today but imagine for a moment the damage that would have been done were they named in this article. It doesn't take much for a brand to turn toxic and things to implode.
    - achikin 4y ago
      But hey, they were not named :) And that lines up with my experience in agencies - there is always an “Isaac” who’s job is to cool the customer down.
      - TedDoesntTalk 4y ago
        Yes, I’m very confused why he did not make the agency.
        bornfreddy 4y ago
        My guess - contractual obligations or some other liability?
        nerdawson 4y ago
        What benefit would the author get from naming the agency involved? There’s a big legal risk involved in doing so and no upside that I can see.
- xupybd 4y ago
  Yeah my read is they were having some internal issues and were overloaded. On top of that they hadn't done many projects like this. Management threw it out to the floor and the floor ran with it like every other job. Feedback went to management but the people doing the work didn't really understand that this client was not like their other projects. I've been on the other side of this where one bigger client changed the game and we didn't adapt as we were used to things at a different scale. We didn't clean up the mess we inherited fast enough. We didn't put enough resources on the projects and we failed to live up to expectations. We were used to smaller tasks with more limited scope.
- sizzle 4y ago
  The agency is incentivized to draw out the work to maximize billable hours
allenu 4y ago
Maybe "well thought out con" is a little strong here. I see it as more likely the consulting firm has learned this behavior over time and it has rewarded them well. I imagine that if they're normally dealing with large contracts, those companies footing the bill are probably easier to string along like this. Just do enough and promise enough that they keep you on and only budge when they get more serious about potentially terminating the contract.
- bequanna 4y ago
  I don’t buy this was some mistake in good faith. I think the author is a little naive which made him a good mark. They started work on and subsequently billed for something that was explicitly out of scope. My guess is that the founder of the agency knew early on that he could push this client around to extract $.
  - sizzle 4y ago
    Also they finished the work in a brisk sprint-like pace towards the end, knocking out the pages in record time. I think that was more indicative of the actual effort required to finish the work, not all the hours they billed. There is a perverse incentive when the client has a retainer to bill hours and make up excuses to line their pockets. They finessed the author and preyed on his naivety
- tomaskafka 4y ago
  I agree, and it takes force to break them out of this behavior. I know of a guy, who forced the contractors to break down the wall they just built because they didn't let him inspect the place behind the wall before enclosing it, as promised in the contract. He knew that if he lets this slide, they'll keep doing it. An analogy here would be forcing the agency designers to completely delete any speculative redesign work, without any backups, to force them to focus on the logo, and send a strong signal that I don't care about the redesign, and won't be paying that work.
koshnaranek 4y ago
Such things can happen very easily even when everybody has good intentions especially if nobody keeps the entire team focused.

z3t4 4y ago

The sunk cost fallacy is perhaps the most useful thing you learn in business school. eg. Do I want to pay $9,600 to get the job finished. What would it cost if I hired someone else to finish it ? The same thing if you are going to a concert and lost your tickets, do you want to pay $200 to go to the concert (not taking into account that you've already lost $100, you could have lost that $100 on whatever) eg. you are paying 200, not 200+100.

notahacker 4y ago

Yep. It's not a situation where they're an indeterminate way through building a custom app using a custom framework and you really do lose everything if you start again, it's a case where an agency has designed and handed over a logo and some very conventionally-designed mockups which any competent freelancer with knowledge of Vue should be able to implement on your platform, and revise as requested. And they're citing lack of availability, so it's not even rude to walk away with the deliverables you paid for.

charlie0 4y ago

Pretty sure the agency is well aware of this fallacy, which is no doubt why they treated this guy so well in the very beginning.

ratww 4y ago

This is why I still like Agile and Scrum, as much as other devs might hate it. “Yeah I want REAL deliverables after the first or second week”. Keeps me honest. And will keep me from working with architecture astronauts don’t really deliver anything but hot air and build ultra-extensible structures that are actually impossible to extend beyond the fantasy world of their maker. Or the equivalent for designers.

jokethrowaway 4y ago
I'd bet you a large sum of money this agency used Agile. Agile is not a guarantee of deliverables you care about. There is a lot of useless stuff you can deliver.
- protonbob 4y ago
  Well, if you are doing it correctly, you are supposed to make a sprint goal of a deliverable that has value.
- ElectricalUnion 4y ago
  Well, waterfall used to not deliver anything at all. Not delivering anything is pretty useless.
  - lelanthran 4y ago
    > Well, waterfall used to not deliver anything at all. Not delivering anything is pretty useless. That's pretty much untrue; had this project been a waterfall project then: a) The devs would not have gotten paid until they hit particular milestones, b) The deliverables would have been scoped upfront, c) The agency would have eaten the cost of developing useless things, not the customer. Because this was obviously an agile/Agile project: a) The payment milestones were not specified upfront, b) The devliverables remained unscoped until feedback was needed (which was well into the development phase), c) The client eats the cost of developers time, whether or not milestones are hit.
- lmm 4y ago