A few thoughts on estimating. I had a conversation with someone yesterday who asked me how I worked with the engineers on software estimates. My answer shocked him, I think. I wanted to expand here on what was a throwaway conversation:
First, let’s start with this story about the Sydney Opera House, as told by Nicholas Nassim Taleb in The Black Swan. You should know that construction is incredibly well-understood and for some types of projects (tract homes in a real estate development, for example), builders can repeatedly complete them within 5% of the estimated time.
The Sydney Opera House, started in 1959, was scheduled to be completed in 1963 for $7M (Aus). Actual construction took nearly four times the original estimate – it actually finished in 1973 (10 years late!) – and it cost more than 12 times the original budget at $104M (Aus). And of course, the Opera House was only 1/3 of the original project.
If builders can be that far off, simply because it’s never been done before, why should we think that we should be able to estimate software, which always by definition has never been done before?
There is a fundamental disconnect between estimates and interesting things. By “interesting” I mean innovative, creating value for a customer, never been done before, new inventions. Interesting things are unpredictable. User stories are estimatable, therefore not interesting.
Software estimates are not a standard distribution. They are a really screwed up distribution where the likely value is way the heck out there beyond the value you think it should be. (And very occasionally, extremely rarely, things go a lot faster than you expect.)
I prefer timeboxes, and for interesting things, we get done what we get done in the timebox. The art of product management is figuring out what to do in the timebox.
Note: this works much better in software than in construction. Buildings have to obey the laws of physics, but software doesn’t. There is no such thing as a Minimum Viable Product in construction – you can’t build a fancy roof until you build the structure to support it. But you can do that in software. There’s a lot of software out there that is essentially fancy roofs floating in the air.
Think about failure, which is so important in innovation. Failure is, of course, immune to estimates by definition.
For example, let’s assume I can get a decent estimate for doing something interesting (which we know I can’t, but hang on). Then we do it, and finish version 1. It only takes twice as long as we estimated! (That’s a great result.)
Unfortunately, given reality, version 1 is not that good, can’t be released, and has to be done again. It was a failure, but it was a productive failure. We learned a lot. We didn’t get the feature to market when we expected to, but if we’d put version 1 into the market, it would have been bad in oh so many ways.
So we start doing it again, and mostly we have to start from scratch, but we did learn some things in version 1.
We also realize we can get a little bit of version 2 out to early adopters. It’s definitely not a full feature. Customers have to do manual work to get the value, but they are willing because it’s so useful to them.
And with the cut-down version 2 we learn some valuable new insights via customer feedback. This causes us to cancel the rest of version 2, and move directly to version 3. Versions 1 and 2 are sunk costs, and they are PAINFUL. But because we did them, we have version 3, and it’s beautiful. And it only took us four times as long to get the feature out as originally estimated, which is actually a pretty good result.
The title of this post might have been a little misleading. I suspect I may have created a firestorm. I can’t wait to hear what you think!
(See my follow up thoughts in the next post.)
Your host and author, Nils Davis, is a long-time product manager, consultant, trainer, and coach. He is the author of The Secret Product Manager Handbook, many blog posts, a series of video trainings on product management, and the occasional grilled pizza.
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