5 ms·

And a great example of why value-based pricing is almost always better for you (as a seller) than cost-based pricing. Imagine if Jacques had charged for 5 minu

by swombat 14y ago

And a great example of why value-based pricing is almost always better for you (as a seller) than cost-based pricing. Imagine if Jacques had charged for 5 minutes of his time at his hourly rate at the time.

jacquesm 14y ago
I'd have done it for free ;) The funny bit is that he probably said it in jest but out loud in front of four very wealthy customers so rather than cheapening out he paid up and ended up cementing our relationship in trust. Jan is an absolutely awesome guy, I learned more about telecommunications from him than from the CCITT books. His knowledge is literally encyclopedic, even today he's current on the state of the art. Jan single-handedly designed and implemented a clustered system that would scale horizontally to insane volumes of messages (faxes and telexes) and he did that with early 80's technology. Even today, with our current tech you'd be hard pressed to create a system that is as elegant as what he put together, he's both an awesome teacher and a good friend.
- mikecane 14y ago
  >>>a single man behind a computer What was the computer?
  - jacquesm 14y ago
    Jans desktop was for the time pretty powerful, there were quite a few servers there as well (> 30). The machines were mostly powered by 486/33, on a micronics motherboard, adaptec controllers (1542) to hook up drives. Using the 286 version of QnX, all the joys of 'mixed model' programming. QnX took forever to release their 32 bit version (this was the main reason I wrote a clone). Funny that I still remember those details after all these years.
    - powertower 14y ago
      There is nothing like remembering your first host controller. Mine was a Adaptec 2940 (PCI bus, SCSI) that came out in 1994, it was so well made that you can still buy it today, almost after 20 years.
MortenK 14y ago
Value-based pricing in software development is a high-risk gamble though, as it can very easily go either way. The risk of course decreases with experience, but even experienced teams and individuals can burn themselves on value-based, i.e. fixed-price. If the seller overshoots their estimates, you have a regular tug-of-war, where the seller is trying their best to do as little work as possible, because every extra hour puts them further in the hole.
- nthj 14y ago
  I find I like working on existing projects for this very reason. You can scope things into weekly blocks and emphasize the value you're adding to their business. It's easier for the customer to "See" it since it's not vaporware. It's also much easier to get a 1-week estimate right than a 3-month estimate. And even if you really really screw up, all you've lost is a Saturday. When you screw up a 3-month estimate it's more likely to cost you six weeks' billables. Even if you charge hourly, do you think the client is going to give a stellar reference for the contractor that billed $20K+ over his estimate? Short scope, well-defined, less risk, more fun, easier sell for both parties. So I'm with you. I would not want to jump into a 3-month fix priced contract blind.

by swombat 14y ago

jacquesm 14y ago

I'd have done it for free ;) The funny bit is that he probably said it in jest but out loud in front of four very wealthy customers so rather than cheapening out he paid up and ended up cementing our relationship in trust. Jan is an absolutely awesome guy, I learned more about telecommunications from him than from the CCITT books. His knowledge is literally encyclopedic, even today he's current on the state of the art. Jan single-handedly designed and implemented a clustered system that would scale horizontally to insane volumes of messages (faxes and telexes) and he did that with early 80's technology. Even today, with our current tech you'd be hard pressed to create a system that is as elegant as what he put together, he's both an awesome teacher and a good friend.

mikecane 14y ago
>>>a single man behind a computer What was the computer?
- jacquesm 14y ago
  Jans desktop was for the time pretty powerful, there were quite a few servers there as well (> 30). The machines were mostly powered by 486/33, on a micronics motherboard, adaptec controllers (1542) to hook up drives. Using the 286 version of QnX, all the joys of 'mixed model' programming. QnX took forever to release their 32 bit version (this was the main reason I wrote a clone). Funny that I still remember those details after all these years.
  - powertower 14y ago
    There is nothing like remembering your first host controller. Mine was a Adaptec 2940 (PCI bus, SCSI) that came out in 1994, it was so well made that you can still buy it today, almost after 20 years.

MortenK 14y ago

Value-based pricing in software development is a high-risk gamble though, as it can very easily go either way. The risk of course decreases with experience, but even experienced teams and individuals can burn themselves on value-based, i.e. fixed-price. If the seller overshoots their estimates, you have a regular tug-of-war, where the seller is trying their best to do as little work as possible, because every extra hour puts them further in the hole.

nthj 14y ago
I find I like working on existing projects for this very reason. You can scope things into weekly blocks and emphasize the value you're adding to their business. It's easier for the customer to "See" it since it's not vaporware. It's also much easier to get a 1-week estimate right than a 3-month estimate. And even if you really really screw up, all you've lost is a Saturday. When you screw up a 3-month estimate it's more likely to cost you six weeks' billables. Even if you charge hourly, do you think the client is going to give a stellar reference for the contractor that billed $20K+ over his estimate? Short scope, well-defined, less risk, more fun, easier sell for both parties. So I'm with you. I would not want to jump into a 3-month fix priced contract blind.