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Re: [XP] Contractor Rate Based On Velocity

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  • Adam Sroka
    ... If you needed your bathroom remodeled, why would you chose a contractor who charges more? Not everyone would, but there are all sorts of reasons that a
    Message 1 of 59 , Mar 7, 2010
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      On Sun, Mar 7, 2010 at 6:37 PM, Ron Jeffries <ronjeffries@...> wrote:
      >
      >
      >
      > Hello, Adam. On Sunday, March 7, 2010, at 8:26:36 PM, you wrote:
      >
      > > I still wouldn't take less money for my team's work than what I think
      > > it is worth, unless there were some competitive advantage to doing so
      > > that I thought it would pay off in the longer term. I would have to be
      > > very deliberate in my negotiations so that my customer knows what they
      > > are getting and why they are paying more for it. So, the conflict you
      > > are expressing does exist, but I don't think it's an absolute black or
      > > white thing.
      >
      > > I think this is the nature of competitive markets, and I think it is a
      > > challenge for suppliers in most industries. Software is not as highly
      > > competitive as it should be, IMNSHO.
      >
      > It's a lovely dream. But given one team that pays its members a good
      > wage, therefore producing features at a fixed cost per (unit)
      > feature, and another one that wants to charge me more just because I
      > want some feature more ... why would I pick the latter?
      >

      If you needed your bathroom remodeled, why would you chose a
      contractor who charges more? Not everyone would, but there are all
      sorts of reasons that a savvy customer might do so. Usually, it boils
      down to having greater confidence that I will get the job done and
      that my work will be high quality, but it can also be a status thing
      (i.e. "This was done by the best contractor this side of town...")

      I have a buddy back home who owns his own concrete business, and a
      close family friend down in San Diego who is a plumber. Both charge
      considerably more than the mean for their line of work, and both have
      a reputation for successfully delivering high quality without over
      charging. I would love it if the software business were more like
      that.

      I think that folks like you and me and many of the others around here
      would do very well in such a market. I think that the folks who put
      butts in chairs would still do well, but only if they changed their
      model to one that actually focused on delivering working software.
      That sounds like a win-win to me, though it is certainly a pipe dream
      in the short run.
    • Jeff Anderson
      Agreed, on both points ... -- Sent from my mobile device Jeff Anderson http://agileconsulting.blogspot.com/
      Message 59 of 59 , Mar 14, 2010
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        Agreed, on both points

        On 3/13/10, George Dinwiddie <lists@...> wrote:
        > Jeff,
        >
        > Yes, it's certainly sometimes true that a client will find it easier to
        > stick with a supplier in spite of disappointment. But the universe of
        > possible contexts is so large and varied that I find it difficult to
        > generalize from that. Sometimes it's quite easy for a client to drop
        > one supplier and start with another, or to drop the project completely.
        >
        > It would be more interesting, to me, to talk about what would give the
        > client more confidence and freedom. What can the client do to enhance
        > that? What can the supplier do, and why would the supplier do it?
        >
        > But that, I think, is a different thread from this one.
        >
        > - George
        >
        > Jeff Anderson wrote:
        >> Maybe I'm speaking to simplistically for that I apologize, where I'm
        >> getting at is that its often difficult to pull out of a job once work
        >> has started even of you receive new information from the supplier that
        >> you don't like. Its often easier to just stay with that supplier, and
        >> maybe not use them the nexy time round.
        >>
        >> I feel this is often the case with software, its hard for a client to
        >> just tool down mid project, its expensive and disruptive, things need
        >> to be really bad before this is considered.
        >>
        >> I wasn't implying that all vendors do a bad job just that customers
        >> won't switch mid project as soon as something happens that they don't
        >> like.
        >>
        >>
        >>
        >> On 3/13/10, George Dinwiddie <lists@...> wrote:
        >>> Jeff,
        >>>
        >>> I'm not sure what you say is generally true. Certainly the last time I
        >>> took my car in for work, they found it needed some other work not in the
        >>> estimate. In fact, that other work was about twice the cost on top of
        >>> the initial estimate.
        >>>
        >>> But I didn't feel held hostage. For cashflow reasons, I postponed the
        >>> additional work and just stuck to my immediate needs. And, in fact, I
        >>> may look for a cheaper place to get this additional work done (not
        >>> wanting to put a huge investment in a 16 year old car). In the mean
        >>> time, I'm happy with the value I received.
        >>>
        >>> - George
        >>>
        >>> Jeff Anderson wrote:
        >>>> In non programming industries, if a feature is found out to be more
        >>>> expensive once work has already started the customer usually feels to
        >>>> be held hostage to get the work finished regardless.
        >>>>
        >>>> No one wants to take a broken car to a new repair shop mid repair, nor
        >>>> get new contractors to work on your kitchen floor half way through a
        >>>> project.
        >>>>
        >>>> The client needs to feel reallt violated before switching mid project,
        >>>> of course he will think twice before starting a new project if he
        >>>> hasn't received good value.
        >>>>
        >>>> Q
        >>>>
        >>>> On 3/11/10, Adam Sroka <adam.sroka@...> wrote:
        >>>>> On Thu, Mar 11, 2010 at 1:46 PM, George Dinwiddie
        >>>>> <lists@...> wrote:
        >>>>>>
        >>>>>> John Maxwell wrote:
        >>>>>>>> When your car repairman gives you an estimate, what happens when the
        >>>>>>>> actual turns out to be higher
        >>>>>>> He calls and asks if I still want the work done.
        >>>>>> Exactly. When the cost is discovered to be higher than anticipated,
        >>>>>> it's time for a conversation. It's still paying by the feature--or
        >>>>>> deciding not to get the feature.
        >>>>>>
        >>>>> Yep. Also, savvy folks in these industries have specific contracts and
        >>>>> conventions that stipulate what constitutes a change in price, a
        >>>>> defect in workmanship, normal variation in labor costs, etc. For
        >>>>> example in the automotive business the price of a part is not supposed
        >>>>> to change after it is quoted (unless we have to get a different kind
        >>>>> of part, e.g. a new one vs a remanufactured one, etc.) Also in the
        >>>>> automotive business labor charges are based on a "black book" which
        >>>>> says how long a job is supposed to take. Most of the time it actually
        >>>>> takes less than that, but sometimes it takes more. In either case you
        >>>>> are supposed to charge the standard number of hours. If I install a
        >>>>> defective part and have to replace it I am legally obliged to absorb
        >>>>> that cost.
        >>>>>
        >>>>> If we did software more like that we would have to develop some
        >>>>> similar conventions of our own.
        >>>>>
        >>> --
        >>> ----------------------------------------------------------------------
        >>> * George Dinwiddie * http://blog.gdinwiddie.com
        >>> Software Development http://www.idiacomputing.com
        >>> Consultant and Coach http://www.agilemaryland.org
        >>> ----------------------------------------------------------------------
        >>>
        >>>
        >>
        >
        > --
        > ----------------------------------------------------------------------
        > * George Dinwiddie * http://blog.gdinwiddie.com
        > Software Development http://www.idiacomputing.com
        > Consultant and Coach http://www.agilemaryland.org
        > ----------------------------------------------------------------------
        >
        >

        --
        Sent from my mobile device

        Jeff Anderson

        http://agileconsulting.blogspot.com/
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