Episode 39 - Project Risk with Jonathan Stark

Jonathan Stark joins us as a guest to discuss the risks of hourly billing and the parallels between risk in a rewrite and in hourly billing. He explains how hourly billing puts all the risk on the client and leads to stressful relationships and arguments about hours and costs. Jonathan emphasizes the importance of trust and how it can be built through delivering on promises and becoming an authority in your field. He also provides strategies for pushing back against rewrites and making informed decisions based on cost and quality. In this conversation, Jonathan and Jeffrey discuss the importance of taking risks and understanding the business side of software development. They emphasize the need for developers to consider the financial risks their clients are taking on and the value they provide. They also highlight the benefits of speaking in terms of dollars and business outcomes rather than technical details. The conversation touches on the challenges of system rewrites and the importance of considering the cheap and easy options before diving into complex projects. They conclude by discussing the concept of value pricing and providing the best solution for clients. Takeaways - Hourly billing puts all the risk on the client, leading to stressful relationships and arguments about hours and costs. - Trust is crucial in client relationships and can be built by delivering on promises and becoming an authority in your field. - Pushing back against rewrites can be done by presenting multiple solutions and discussing the trade-offs between cost and quality. - Software estimates are important for budgeting and decision-making, and developers should be encouraged to provide estimates for different solutions. Developers should understand the financial risks their clients are taking on and the value they provide. - Speaking in terms of dollars and business outcomes is more valuable than focusing on technical details. - Consider the cheap and easy options before diving into complex projects. - Value pricing involves providing the best solution for clients. Chapters 00:00 Introduction 00:52 The Risks of Hourly Billing 03:14 The Risk Distribution in Hourly Billing 07:15 The Temptation of Rewrites 11:48 The Misalignment of Incentives 15:34 The Importance of Trust 19:02 Building Trust and Overcoming Skepticism 23:41 The Role of Authority in Trust 26:20 Pushing Back Against Rewrites 28:17 The Iron Triangle and Software Estimates 31:47 Presenting Multiple Solutions 34:36 Balancing Cost and Quality 35:44 Taking Risks and Understanding Business 36:38 The Importance of Understanding Business Components 37:35 The Business Value of Speaking in Terms of Dollars 38:42 The Safety of Backend Development 39:31 Moving Up to Become a Trusted Authority 40:33 The Challenges of System Rewrites 42:54 Considering the Cheap and Easy Options 44:29 Value Pricing and Providing the Best Solution 46:34 Wrapping Up the Conversation Jonathan's website: https://jonathanstark.com/ Books mentioned (affiliate links): How to Measure Anything: https://bit.ly/4biRG7q Thinking in Bets: https://bit.ly/3SGbXfQ Superstruct Manifesto: https://bit.ly/3SHfA5o