I got my first pair of glasses when I was 31 years old. I'd been struggling with headaches and someone suggested it might be my eyes. When I put on my sweet hipster RayBan frames for the first time, I almost fell down. I couldn't believe what had just happened. The world went from being a flickery 20 year old television stuck on reruns of “Taxi" to being 500 channels of full 4k HDTV. I cried a little. There was sudden clarity. I hadn’t even known that I’d been living in a constant state of blur.
Clarity offers opportunity and minimizes risk.
Making good business decisions requires clarity of mind and vision, clarity of purpose, and a clear understanding of your market. When that clarity happens, the relief and opportunity are astounding — It can really blow your hair back. Running a business, it really feels like we’re constantly in transition from one thing to the next, and these times of transition can cause was was once clear to become fuzzy and out of focus. This often forces a decision point: You can run your business in an out-of-focus, flickery, painful-to-watch way and you may have success. But when your business has a new technology need, or you find yourself in a position where you need to invest in tech, brand changes, or pivot and go in a different direction, you’re forced to examine what's going on and what you're really doing. Is your business doing what you meant it to do? Are you close or far from your intended target? Do you know what direction you're even headed? Is that the direction you want to go in? Does your audience even want what you're selling?
“Making good business decisions requires clarity of mind and vision, clarity of purpose, and a clear understanding of your market. When that clarity happens, the relief and opportunity are astounding — It can really blow your hair back.”
These questions have an innate fuzziness to them, like those old reruns of Taxi I’d been living in — the blur is frustrating and continuous. So ask the question: “Is my business doing what I want it to?” When you ask that, it leads to ten or twenty more targeted, more focused questions. Without spending time exploring and answering these questions and others, it is very difficult to come to that 4k HD and understand your business and make good decisions about your projects and efforts.
Likewise, when Anthroware’s customers have a technical or creative need and they want to know about costs, we go straight to the places where we hear blur or fuzziness; the same principles apply when you're talking about pricing custom web apps, mobile apps, websites, internet marketing, analytics projects, enterprise applications, and on down the line.
What's the point?
We are asked very often what it would cost to build [YOUR IDEA GOES HERE]. Well, without a bit of work, we really don't know. We've covered that here. But one thing we didn’t talk about there is the Anthroware Scale of Blurriness (S.O.B.).
The S.O.B. is a way for us to measure the relative accuracy of an estimate. It is a 10 to 0 scale, where 10 is blurry, and 0 is laser-focused. It correlates the amount of blur or fuzz in the information we have with the possible ranges in the cost.
What are you even talking about?!?!
Imagine you meet a bespectacled me in a bar and we start chatting over a beer. You're a guitar teacher and you want to expand your business by offering a website with online courses, tutorials, and videos. You ask me, "So give me a ballpark...what's it gonna cost me to build?"
I’m going to do my level best to make sure that you understand that whatever number comes out my mouth is probably inaccurate. I know what similarly-sized projects have cost, but I don’t have enough information to guarantee accuracy. This is somewhere around a 7-8 on the S.O.B. You know you want to offer lessons, so probably there’s video, a blogroll, membership, etc. But neither you nor I knows what each of those things mean yet. That means that whatever "Ballpark" I give you is likely wrong by +/- 75%. Based upon my knowledge of similarly sized projects, I believe the ballpark is around $50k. But remember, your range is plus or minus 75%. So, in reality your range of cost is somewhere from $13k to $87k.
Obviously, a range that broad is terrible. You can't make an informed decision about what's good for your business with that information. So, we focus.
This is where Discovery and Requirements Gathering come in. We spend time with you. We ask as many questions as we can think of and most of them generate more questions. We write down your goals - blurriness goes down. Make scorecards for success - blurriness goes down. Define challenges and expectations - blurriness goes down. We work on designs with you - blurriness goes down. We do user-testing to find out, from your market, whether we’re on the right track with the features we have imagined or if they need to change - blurriness goes down. You get the idea. We do this to gain clarity; to remove the blur. Slowly, with a few key pieces of information, the haze will clear. As it clears, the estimate gets more accurate.
Here's a chart that demonstrates what I'm talking about:
As the conversation moves ahead, the clarity comes slowly at first, but then, around a blur of about 5, a couple of things happen: 1. Requirements start coming into focus, 2. Cost variation begins to narrow rapidly.
Beginning to actually execute the project at this point allows it to get to market more quickly, but with a cost variation of +/- 50%, this is understandably still too much risk for most. Consider the earlier project. Our ballpark was $50k. With a possible 50% margin of error, this still gives us a range of around $25k to $75k. That's a range of $50k. Its better than the $87k range from earlier, but it’s still unattractive. So, we spend more time gaining focus.
“The two extremes of the scale, 10 and 0, are essentially unrealistic. Its a simple curve graph, where the points on the graph continually approach the extremes forever without ever actually crossing it. If you’re at 10, then you’re just sitting in the dark.”
Clarity and variation have a steep jump from 5 to 2 as things fall into place more quickly--a lot of foundational knowledge has been covered and much of what has been defined is a baseline for what is happening here--so information comes rapidly. The sweet spot is around 2.5 - 2. Right about there, we have really great information about the product, the business, and the market. Designs have begun, and early user-testing has started; we’ve begun making changes based on early-user-feedback, and you're getting an idea of what your target market really thinks. This is everything you need to make good decisions. And now you're looking at something like a 8% to 10% possible variation in cost. This takes our earlier rage of $32k - $68k and brings it into a tight range of $45k - $55k. This is really narrow and you have a very good idea of what this project is going to cost you. You have a plan on how to move forward and you know how your market is going to react. You’re equipped to decide whether it's a good investment.
Coupling early user testing with design and engineering requirements allows you to narrow down the features you need for your project in order to hit your consumer target before you ever begin production work! Knowing what your market responds to, what it will look like, and how you will build it is what lowers your SOB.
The two extremes of the scale, 10 and 0, are essentially unrealistic. Its a simple curve graph, where the points on the graph continually approach the extremes forever without ever actually crossing it. If you’re at 10, then you’re just sitting in the dark. There’s no idea, however vague. Likewise, we believe that zero-blur isn't really realistic; you can’t have perfect clarity on what’s going to be built, until you’re done building it; that’s a unicorn. Sure, we'd all like to catch one and get magical powers, but its just not in the cards. In reality, even if you think you've reached zero-blur, the first time someone asks a question, you will discover that you haven't.
What's the takeaway?
Early in Anthroware's life, we took on a client whose primary business was providing consumer services (the less you know, the better...). We estimated the job and, given all known factors, we estimated it correctly. But, it turned out over time that we didn't have all the information - we didn't have the whole story. As the project played out, it turned out that what the client wanted was something as technologically advanced as Facebook, as flexible as Amazon, and as fast as Google. For $15k. As the project carried on, it was clear that while we had estimated correctly, the information we based the estimates on was faulty, so the cost and the delivered product were way off the mark. The relationship with our customer went south and we lost our shirt on that project. Had we known at the beginning what we knew at the end, we would have estimated it at almost triple what we had, and most importantly would have strongly recommended that the client not spend that money.
We learned a lot from that project; chiefly, that we need to know all possible information when we make estimates. In order to service our customers well, we need to give them real information and real expectations that they can take to the bank. We want our customers to do a backflip about their experience with us. Using the S.O.B. to help us deliver on time and on budget is tool we use to do that. So when we have a new client, while we’re working to gather requirements and do design, we revisit the S.O.B. often. We ask whether things are becoming clearer and we ask where things remain out of focus. We fight tooth-and-nail to gain focus and let that focus drive the project. This is why we do the discovery as completely as possible up-front: to gather all possible information so we can equip our customer to make good decisions.
And really, that’s the name of the game: we do whatever we can to help our customers make really good decisions.