6 ms·

Show HN: Is It Worth the Cost?

319 points by osel 6y ago

adibalcan 6y ago
Can I save the parameters in URL in order to send at our customers?
- osel 6y ago
  Not yet, it is on the list of features to implement.
osel 6y ago
A simple check on whether purchasing a service is worth the cost - built in an afternoon in response to a previous HN discussion [1]. A few people expressed interest in embedding something similar in a landing page, so I've open-sourced the code for others to use if they wish. [1] https://news.ycombinator.com/item?id=22497093 https://news.ycombinator.com/item?id=22497093
- Sebb767 6y ago
  That's great! Thanks for taking the time to build it.
- glaberficken 6y ago
  Under "Service cost" it could use an option for "one time purchase fee". Obviously that is going to create special cases for the "amortizations" output
  - koheripbal 6y ago
    Yep... conceptually, you want to quantify, recurring gains, recurring costs, one-time gains, and one-time costs.
  - osel 6y ago
    Cheers, a few people of suggested this. As you note, it rather depends on the amortization period. At the moment it assumes 1 year for training costs to be amortized over, so I guess one-time purchase would be similar - configurable assumptions (or at list, visibility into the assumptions) is on the list of things to do.
- deleted 6y ago
  [deleted]
glenjamin 6y ago
Might be interesting to have a line items for "cognitive cost of having to deal with the crappy in-house tool when you know a good SaaS alternative exists" and "time spent wrangling the finance department"
- glaberficken 6y ago
  I was going to say. The biggest cost for most organizations is the recruitment and training costs of an employee that leaves due to demotivation stemming from having to do "robotic" tasks.
  - afarrell 6y ago
    An employee who struggles with that is, by definition, no longer at the organization. So, there is nobody who would tell a decision-maker about that cost. Another example: Let's say Company Z has a mailing list with all 200 engineers on it. Folks such as the CTO and senior leadership use it to announce important events, to send out recordings of meetings. Let's also say that the company has their alerting infrastructure set up so that whenever any service had an exception (server or browser), it emails the stacktrace to this same list. How does this affect people? There is a wide range: * Group A: Is naturally unbothered by it. Their inbox is always full but it is no big deal. * Group B: Finds it to be a minor annoyance. * Group C: Is seriously frustrated by it, but they just filter all the emails to a folder and accept that they'll miss a bunch. * Group D: Finds it actively difficult to not pay attention to this, especially because they've heard too many stories about Alert Fatigue. They feel bad about just ignoring all alerts, including the ones for services they maintain. Group C is going to be less productive and less tapped-in to whats going on. So they will be less influential at the company. Groups A and B are going to be more visibly productive and successful. they will gain seniority and influence. Any member of Group D who does not teach themselves to ignore the alert emails will be so unproductive that they will be fired. They certainly won't have any influence, especially if they keep bringing up niche issues like emails when there are more important things to deal with. Therefore, from the perspective of Company Z's decision-makers (members of groups A and B), there is not really any cost to continuing to send email this way. For more commentary on this: https://danluu.com/wat/ https://danluu.com/wat/
pagade 6y ago
First thing that came into mind: Is It Worth the Time? https://xkcd.com/1205/ https://xkcd.com/1205/
- andersource 6y ago
  The comic is actually referred to in the "about" section (question mark)
thatoneuser 6y ago
This is great! Walking through the numbers mentally kinda works, but it seems people are always suspicious they're being had. Seeing it live will be very reassuring.
georgyo 6y ago
This seems really flawed. Let's plug in numbers. This says that if a service costs 125$/month/employee and I have 1000 employees ($125000/month) I will save ~5 million a year. However a service costing 1.5 million at such a company has other costs. Namely that a product that costs that much almost always needs an in house support team. I have never seen the case where an expensive product also didn't need 2-3 people in just to maintain and support it. But the employee time savings is still worth it. The next cost is much harder. In the tool we said this will save everyone 1 hour a day. However saving people time is not normally what a tool actually does. PagerDuty for example doesn't save people any time, it just sends alerts. Alerts that come from another tool that must be set up. At 40/person/month for 1000 people, that is 40,000 a month for zero "saved time." The value of pagerduty for very different. But anyone who has been in the field has seen, that list hidden cost is that a paid service isn't normally a perfect fit. It is missing something, or your particular use case doesn't map cleanly. You then have an army of people working around the tool, saving negative time. The business might have reasons to still use that tool. But saving time is not one of them. So seeing this tool tell me that a service which cost $2,000,000 a year is going to save me $5,000,000 feels like naive marketing nonsense. And it isn't even marketing a product.
- whatl3y 6y ago
  I feel you missed the point (or maybe that the landing page for this tool should better communicate the value and when you should use it). If you're a relatively small company looking to use a plug-and-play SaaS product with a modest subscription fee to serve some business purpose this is a great tool to get some quick and dirty numbers on whether it would be better to use or maybe build in house or go another route. If you're purchasing some large, highly configurable enterprise tool (with high implementation and support costs) that all 1k of your employees will use daily and you'd like to understand cost/benefit, other means of calculating this should be used (and it would likely require days to weeks of multiple people's time to make such a calculation).
- irjustin 6y ago
  This complaint seems really flawed. > PagerDuty for example doesn't save people any time, it just sends alerts. Have you tried building a pagerduty in house? That is literally the time save. The "value of pagerduty" is still measured the same way as any other tool. Do I build it custom in house? Do I pay someone else a modest amount? That is what this tool is doing and is geared towards startups who make this decision very regularly. It's got 5 question boxes - of course, there's no way it's going to cover an enterprise consideration that needs 3 analysts to decide whether buying that SAP module is really worth $3mm/year. Someone made a free tool and you're complaining about it as if it shouldn't exist. Very unsupportive. Downvoted.
projektfu 6y ago
I like the idea, but a lot of other factors are missing from the analysis. 1. I’ve yet to find a service that saves 5 hours per week per employee. How do I estimate the actual savings in time? 2. Work expands to fill available time. Will my employee use that time to the company’s advantage? 3. How much does this increase or decrease my personal time required as supervisor? 4. From a financial point of view, I’m still paying the employee and the service, so either I need enough services and time savings that I can eliminate a job, or the service has to have positive ROI of its own. And probably many more. I often receive proposals of this type, that I could be “saving” so much by buying something. The money goes out up front, the savings are supposed to trickle back in these hard to quantify and use ways.
- dijit 6y ago
  > I’ve yet to find a service that saves 5 hours per week per employee. How do I estimate the actual savings in time? Sure you have, albeit by another name likely. GitHub/Gitlab as a service easily saves more than 5hrs a week. I have custom slack bots that easily save me a couple hours a week in aggregate. Then there’s services such as managed CI or, heck even things like the “search” function on a wiki, those are all things that can be provided by a service. But a tool like this will show you much much it might be worth investing in a service vs hiring someone dedicated and running something yourself. > Work expands to fill available time. Will my employee use that time to the company’s advantage? There’s two points to this argument; 1) if I save an employee time, what value does that give me? 2) if I’m an employee, and efficiency is improved; I still have to be in the office 9hrs per day. The first argument is at odds with the notion that most knowledge worker jobs tend to only be around 40% productive.[0] There’s no evidence that it goes lower than that; most of the reasons that percentage is so low, though, is friction. Friction can take many forms such as a bureaucratic process for approvals to change things- all the way to “needing to talk to that one guy who knows the thing, and teams is having an outage”. It’s hard to quantify, but there are so many frictions and there is evidence to suggest that removing these frictions increases productivity, not lessens it. (To a value of 80% which represents a significant increase). (I will supply citations when I get to my pc, this comment is from a phone) Problem 2 goes into the expectation that if you’re in the office you must be busy- there’s no value to you the employee of the company gets more efficient! Except obviously that’s not true in a more macro sense; I wouldn’t argue that. I would instead argue that the feeling of empowerment that comes with doing actual work and not busywork will make people more engaged and not less. You wouldn’t feel motivated in your job if you had to assemble your chair each time you wanted to sit in it, it would be tedious and not challenging and certainly cause you to mentally check out. [0]: https://talentculture.com/how-knowledge-workers-really-spend-their-time/ https://talentculture.com/how-knowledge-workers-really-spend...
deleted 6y ago
[deleted]
Flimm 6y ago
This looks really cool. I put in some numbers for a service that I am considering, and the answer was the opposite of what I was intuitively expecting, which proves the need for something like this. Some feedback: - s/(one person)/(per person)/g - The "cover costs" section doesn't really make sense to me. For example, in one example, the breakdown says that I will burn $10000 extra, but that I will also cover costs with 23 hours of use. How does it know how much use it will take to cover costs? How does it know how much profit is generated per hour of use? Am I misunderstanding something? - It would be nice if the formula used was displayed in small text or in a tooltip or something.
- PascLeRasc 6y ago
  I've been going back and forth on whether or not Hey is worth it for me. I really liked my trial, but $100 just feels like a high price. But according to this calculator I'd only have to value my free time at $3/hour to start "saving money".
- marcosdumay 6y ago
  What I got after messing with it a bit: The "cover costs" assumes your people will use the tool 8 hours a day. By the productivity you gain, it calculates how much you save in salary. The "free up an hour" also assumes your people will use the tools 8 hours a day. The "cover costs with" calculates how much your people must use the tool for it to eventually pay for itself. If it's larger than 8 hours, then the tool will never pay up.
- osel 6y ago
  Thanks for the feedback. For simplicity there are a whole host of underlying assumptions about what a work day is, what time spent means , etc. Explaining at least some of those assumptions is on my list of improvements, but there will never be a 'correct' answer in a generic form like this. It's more intended as a quick investigation/conceptual check.
redwood 6y ago
What's this type of calculator often misses is how nuanced and complex is to estimate the cost of employee time. It's not just the cost of an employee salary per hour... Is the opportunity cost of everything that employee could have instead done. After all it isn't as though with more money you can just immediately get more fully ramped sophisticated employees to add value... All of that is complex.
- bluGill 6y ago
  There is also the cost of not understanding details that you left to someone else. If you save time but no longer know what is happening you can get into big trouble when those details matter.
  - femto 6y ago
    And the related, more general, risk of an additional external dependency: what happens if the service disappears, changes or goes wrong?
ChrisMarshallNY 6y ago
Good tool, but, as someone mentioned, there are a number of other factors. 1) Brand reinforcement/damage. This one is really hard to quantify, but can mean the difference between the life, or the death, of the corporation. If the tool we choose causes some damage to the brand (like not giving us the ability to display the brand in an appropriate manner), or introduces a brand-damaging problem (like causing a particular kind of service to have an extra step or two, or even amplify customer pain), then there could be issues. On the plus side, it could also significantly fortify a brand, by doing things like having the brand appear in places that were disregarded, or considered "out of reach," or it could amplify the advantages of a brand-connected service. Branding is a "dark art" to many literal-minded folks like engineers, but it is unbelievably valuable. It should always be considered, when thinking about things like this. This morning, I had this demonstrated to me in a visceral manner. I made an order yesterday, and asked for expedited delivery. When I made the order, it said the expedited delivery would arrive today, but when I received the confirmation, it said the order would arrive tomorrow. Sound familiar? Amazon is notorious for this nasty little trick. Most of the time, it's Prime Delivery, which means we don't really have much room to complain. It wasn't Amazon. I won't name the corporation, but it is one that is synonymous with extremely high (arrogant, even) quality. This silly little trick, with a cheap, third-party item, caused brand damage with a loyal customer that has spent six figures with them. I won't drop them, and the world won't stop turning because I won't get my item until tomorrow, but the simple fact that they did the "shipping bait and switch" on me, means that I'll never use them again for this kind of purchase. That's brand damage. To add insult to injury, when I tried contacting them about it, I had to run the gauntlet of what I call the "AI Picador," which throws as many roadblocks as possible in your path, before allowing connection to a human. This workflow ensures that I will be steaming mad before I get to the human, and it's all I can do to avoid venting to them (it isn't their fault -it's their bosses'). 2) Staff morale. Will bringing in the service reinforce or damage staff morale? It may help folks do their jobs a lot easier (good), or it may result in a lot of folks losing their jobs (bad, or very bad, depending on many factors, like how the layoffs are done, and how the folks that remain are treated). 3) Dependence/Addiction If bringing in a dependency ties us to a corporation/language/toolset, is that good or bad? It may be quite good, if it's a good service, and a good corporation, but it could also be incredibly bad.
AQXt 6y ago
Feature request: Add "One-time payment" option to the cost of the service. This could be used to decide if you allocate resources to implement a new feature in an internal system.
Abishek_Muthian 6y ago
Good work OP. Any plans to add more variables in the future? e.g. Cost of current equivalent service being used. P.S. I've added your calculator to my curated list of startup tools[1]. [1]https://startuptoolchain.com/#operations https://startuptoolchain.com/#operations
_pdp_ 6y ago
I like the idea. In 99% of the cases, I rather buy the service than develop it from scratch and support it long-term. Most consumer-facing services I've seen are relatively cheap. I only tend to develop existing things if I find there are some functionalities which either I cannot buy directly or they require a special setup that does not go well with security and other constraints.
alecco 6y ago
Missing: gains in time to market.
lukasm 6y ago
This is look at the cost, but what about value? Say, the total cost per hour (salary, insurance, benefits) is 50$, but how mych value does he/she create? I used to do this calculation with 2x assumption. Say, a new IDE plugin saves 100 engineering hours, so it's 50 000 in cost and another 50 000, because they spend time creating features. Is it a good assumption?
saadalem 6y ago
This but for E-commerce will be huge ! It would be cool to calculate a product’s overall cost through its life span.
KerryJones 6y ago
This is looks like a different approach to a tool I also tried to address to answer 'how much time should you invest in training' https://kerryjones.github.io/sharpen-the-saw/ https://kerryjones.github.io/sharpen-the-saw/ Had a whole article that went into this: https://medium.com/hackernoon/how-much-time-should-you-invest-in-training-db4fe5159ca7 https://medium.com/hackernoon/how-much-time-should-you-inves... I like the idea and it's certainly more detailed than mine, but I think some explanation of how this should be used and context is important.
drapery 6y ago
Okay I really like the idea. I think the bottom line whether the SaaS is worth the cost with the premise is that the SaaS saves time. However, time saving (item 4) is pretty difficult to gauge. Therefore, I suggest having a version where time saving is the output. So then the question become, I have to believe that this SaaS will save XXXmin per employee for me to consider buying it.
aisofteng 6y ago
What about the cost of operating an equivalent service in house?
- unixfg 6y ago
  If you're honestly appraising costs, the same evaluation would apply to on-prem as well. 3-year refreshes, software updates, support, power, bandwidth, etc
drapery 6y ago
I think a lot of users are missing the point. I don't see this tool as a final decision maker and it can never be one. The final decision has a lot of nuisances to that it is difficult to capture in one tool, so might as well just open a spreadsheet and bang it out. I see this tool as a quick a simple way to eliminate all the tools that might look shiny and slick or save a few clicks, but doesn't actually save employee's time at all. So the decision becomes, I like the way this new SaaS feels or looks than our current one, but is it really worth the additional cost?
- osel 6y ago
  Exactly, and scale is important too. The initial target audience was small (as in very small, maybe 1-10 people) businesses, whose owners often don't intuitively understand how beneficial small services costs can be.
ponker 6y ago
The two biggest line items are not easily measured and thus not included: The removal of an external dependency that you don't control and may not evolve with your needs, and the loss of the continuous improvement in that dependency without continuous investment from you.
pseingatl 6y ago
Saving money doesn't put cash in your pocket. It will help keep the cash you have there, but is nothing but another cost item.
- deleted 6y ago
  [deleted]
dzonga 6y ago
but there's a hidden cost, that's never spoken of. cost of forgotten knowledge or expertise. say you use AWS RDS | Aurora, on paper it's cheap. AWS runs everything for you. what happens, when one day you need the knowledge to run your own db ? or migrate to something different altogether ?
osel 6y ago
Hey all, thanks for the great feedback! I submitted this just before retiring for the evening NZ time thinking not much of it, it was awesome to find this discussion this morning!
tunesmith 6y ago
ha, awesome! I've had this idea so many times from the xkcd comic (which I see was inspiration). I'm glad someone actually built a tool for it. It could be a fun learning project for a simple mobile app too.

319 points by osel 6y ago

adibalcan 6y ago

Can I save the parameters in URL in order to send at our customers?

osel 6y ago
Not yet, it is on the list of features to implement.

osel 6y ago

A simple check on whether purchasing a service is worth the cost - built in an afternoon in response to a previous HN discussion [1]. A few people expressed interest in embedding something similar in a landing page, so I've open-sourced the code for others to use if they wish. [1] https://news.ycombinator.com/item?id=22497093 https://news.ycombinator.com/item?id=22497093

Sebb767 6y ago
That's great! Thanks for taking the time to build it.
glaberficken 6y ago
Under "Service cost" it could use an option for "one time purchase fee". Obviously that is going to create special cases for the "amortizations" output
- koheripbal 6y ago
  Yep... conceptually, you want to quantify, recurring gains, recurring costs, one-time gains, and one-time costs.
- osel 6y ago
  Cheers, a few people of suggested this. As you note, it rather depends on the amortization period. At the moment it assumes 1 year for training costs to be amortized over, so I guess one-time purchase would be similar - configurable assumptions (or at list, visibility into the assumptions) is on the list of things to do.
deleted 6y ago
[deleted]

glenjamin 6y ago

Might be interesting to have a line items for "cognitive cost of having to deal with the crappy in-house tool when you know a good SaaS alternative exists" and "time spent wrangling the finance department"

glaberficken 6y ago
I was going to say. The biggest cost for most organizations is the recruitment and training costs of an employee that leaves due to demotivation stemming from having to do "robotic" tasks.
- afarrell 6y ago
  An employee who struggles with that is, by definition, no longer at the organization. So, there is nobody who would tell a decision-maker about that cost. Another example: Let's say Company Z has a mailing list with all 200 engineers on it. Folks such as the CTO and senior leadership use it to announce important events, to send out recordings of meetings. Let's also say that the company has their alerting infrastructure set up so that whenever any service had an exception (server or browser), it emails the stacktrace to this same list. How does this affect people? There is a wide range: * Group A: Is naturally unbothered by it. Their inbox is always full but it is no big deal. * Group B: Finds it to be a minor annoyance. * Group C: Is seriously frustrated by it, but they just filter all the emails to a folder and accept that they'll miss a bunch. * Group D: Finds it actively difficult to not pay attention to this, especially because they've heard too many stories about Alert Fatigue. They feel bad about just ignoring all alerts, including the ones for services they maintain. Group C is going to be less productive and less tapped-in to whats going on. So they will be less influential at the company. Groups A and B are going to be more visibly productive and successful. they will gain seniority and influence. Any member of Group D who does not teach themselves to ignore the alert emails will be so unproductive that they will be fired. They certainly won't have any influence, especially if they keep bringing up niche issues like emails when there are more important things to deal with. Therefore, from the perspective of Company Z's decision-makers (members of groups A and B), there is not really any cost to continuing to send email this way. For more commentary on this: https://danluu.com/wat/ https://danluu.com/wat/

pagade 6y ago

First thing that came into mind: Is It Worth the Time? https://xkcd.com/1205/ https://xkcd.com/1205/

andersource 6y ago
The comic is actually referred to in the "about" section (question mark)

thatoneuser 6y ago

This is great! Walking through the numbers mentally kinda works, but it seems people are always suspicious they're being had. Seeing it live will be very reassuring.

georgyo 6y ago

This seems really flawed. Let's plug in numbers. This says that if a service costs 125$/month/employee and I have 1000 employees ($125000/month) I will save ~5 million a year. However a service costing 1.5 million at such a company has other costs. Namely that a product that costs that much almost always needs an in house support team. I have never seen the case where an expensive product also didn't need 2-3 people in just to maintain and support it. But the employee time savings is still worth it. The next cost is much harder. In the tool we said this will save everyone 1 hour a day. However saving people time is not normally what a tool actually does. PagerDuty for example doesn't save people any time, it just sends alerts. Alerts that come from another tool that must be set up. At 40/person/month for 1000 people, that is 40,000 a month for zero "saved time." The value of pagerduty for very different. But anyone who has been in the field has seen, that list hidden cost is that a paid service isn't normally a perfect fit. It is missing something, or your particular use case doesn't map cleanly. You then have an army of people working around the tool, saving negative time. The business might have reasons to still use that tool. But saving time is not one of them. So seeing this tool tell me that a service which cost $2,000,000 a year is going to save me $5,000,000 feels like naive marketing nonsense. And it isn't even marketing a product.

whatl3y 6y ago
I feel you missed the point (or maybe that the landing page for this tool should better communicate the value and when you should use it). If you're a relatively small company looking to use a plug-and-play SaaS product with a modest subscription fee to serve some business purpose this is a great tool to get some quick and dirty numbers on whether it would be better to use or maybe build in house or go another route. If you're purchasing some large, highly configurable enterprise tool (with high implementation and support costs) that all 1k of your employees will use daily and you'd like to understand cost/benefit, other means of calculating this should be used (and it would likely require days to weeks of multiple people's time to make such a calculation).
irjustin 6y ago
This complaint seems really flawed. > PagerDuty for example doesn't save people any time, it just sends alerts. Have you tried building a pagerduty in house? That is literally the time save. The "value of pagerduty" is still measured the same way as any other tool. Do I build it custom in house? Do I pay someone else a modest amount? That is what this tool is doing and is geared towards startups who make this decision very regularly. It's got 5 question boxes - of course, there's no way it's going to cover an enterprise consideration that needs 3 analysts to decide whether buying that SAP module is really worth $3mm/year. Someone made a free tool and you're complaining about it as if it shouldn't exist. Very unsupportive. Downvoted.

projektfu 6y ago

I like the idea, but a lot of other factors are missing from the analysis. 1. I’ve yet to find a service that saves 5 hours per week per employee. How do I estimate the actual savings in time? 2. Work expands to fill available time. Will my employee use that time to the company’s advantage? 3. How much does this increase or decrease my personal time required as supervisor? 4. From a financial point of view, I’m still paying the employee and the service, so either I need enough services and time savings that I can eliminate a job, or the service has to have positive ROI of its own. And probably many more. I often receive proposals of this type, that I could be “saving” so much by buying something. The money goes out up front, the savings are supposed to trickle back in these hard to quantify and use ways.

dijit 6y ago
> I’ve yet to find a service that saves 5 hours per week per employee. How do I estimate the actual savings in time? Sure you have, albeit by another name likely. GitHub/Gitlab as a service easily saves more than 5hrs a week. I have custom slack bots that easily save me a couple hours a week in aggregate. Then there’s services such as managed CI or, heck even things like the “search” function on a wiki, those are all things that can be provided by a service. But a tool like this will show you much much it might be worth investing in a service vs hiring someone dedicated and running something yourself. > Work expands to fill available time. Will my employee use that time to the company’s advantage? There’s two points to this argument; 1) if I save an employee time, what value does that give me? 2) if I’m an employee, and efficiency is improved; I still have to be in the office 9hrs per day. The first argument is at odds with the notion that most knowledge worker jobs tend to only be around 40% productive.[0] There’s no evidence that it goes lower than that; most of the reasons that percentage is so low, though, is friction. Friction can take many forms such as a bureaucratic process for approvals to change things- all the way to “needing to talk to that one guy who knows the thing, and teams is having an outage”. It’s hard to quantify, but there are so many frictions and there is evidence to suggest that removing these frictions increases productivity, not lessens it. (To a value of 80% which represents a significant increase). (I will supply citations when I get to my pc, this comment is from a phone) Problem 2 goes into the expectation that if you’re in the office you must be busy- there’s no value to you the employee of the company gets more efficient! Except obviously that’s not true in a more macro sense; I wouldn’t argue that. I would instead argue that the feeling of empowerment that comes with doing actual work and not busywork will make people more engaged and not less. You wouldn’t feel motivated in your job if you had to assemble your chair each time you wanted to sit in it, it would be tedious and not challenging and certainly cause you to mentally check out. [0]: https://talentculture.com/how-knowledge-workers-really-spend-their-time/ https://talentculture.com/how-knowledge-workers-really-spend...

deleted 6y ago

[deleted]

Flimm 6y ago

This looks really cool. I put in some numbers for a service that I am considering, and the answer was the opposite of what I was intuitively expecting, which proves the need for something like this. Some feedback: - s/(one person)/(per person)/g - The "cover costs" section doesn't really make sense to me. For example, in one example, the breakdown says that I will burn $10000 extra, but that I will also cover costs with 23 hours of use. How does it know how much use it will take to cover costs? How does it know how much profit is generated per hour of use? Am I misunderstanding something? - It would be nice if the formula used was displayed in small text or in a tooltip or something.

PascLeRasc 6y ago
I've been going back and forth on whether or not Hey is worth it for me. I really liked my trial, but $100 just feels like a high price. But according to this calculator I'd only have to value my free time at $3/hour to start "saving money".
marcosdumay 6y ago
What I got after messing with it a bit: The "cover costs" assumes your people will use the tool 8 hours a day. By the productivity you gain, it calculates how much you save in salary. The "free up an hour" also assumes your people will use the tools 8 hours a day. The "cover costs with" calculates how much your people must use the tool for it to eventually pay for itself. If it's larger than 8 hours, then the tool will never pay up.
osel 6y ago
Thanks for the feedback. For simplicity there are a whole host of underlying assumptions about what a work day is, what time spent means , etc. Explaining at least some of those assumptions is on my list of improvements, but there will never be a 'correct' answer in a generic form like this. It's more intended as a quick investigation/conceptual check.

redwood 6y ago

What's this type of calculator often misses is how nuanced and complex is to estimate the cost of employee time. It's not just the cost of an employee salary per hour... Is the opportunity cost of everything that employee could have instead done. After all it isn't as though with more money you can just immediately get more fully ramped sophisticated employees to add value... All of that is complex.

bluGill 6y ago
There is also the cost of not understanding details that you left to someone else. If you save time but no longer know what is happening you can get into big trouble when those details matter.
- femto 6y ago
  And the related, more general, risk of an additional external dependency: what happens if the service disappears, changes or goes wrong?

ChrisMarshallNY 6y ago

Good tool, but, as someone mentioned, there are a number of other factors. 1) Brand reinforcement/damage. This one is really hard to quantify, but can mean the difference between the life, or the death, of the corporation. If the tool we choose causes some damage to the brand (like not giving us the ability to display the brand in an appropriate manner), or introduces a brand-damaging problem (like causing a particular kind of service to have an extra step or two, or even amplify customer pain), then there could be issues. On the plus side, it could also significantly fortify a brand, by doing things like having the brand appear in places that were disregarded, or considered "out of reach," or it could amplify the advantages of a brand-connected service. Branding is a "dark art" to many literal-minded folks like engineers, but it is unbelievably valuable. It should always be considered, when thinking about things like this. This morning, I had this demonstrated to me in a visceral manner. I made an order yesterday, and asked for expedited delivery. When I made the order, it said the expedited delivery would arrive today, but when I received the confirmation, it said the order would arrive tomorrow. Sound familiar? Amazon is notorious for this nasty little trick. Most of the time, it's Prime Delivery, which means we don't really have much room to complain. It wasn't Amazon. I won't name the corporation, but it is one that is synonymous with extremely high (arrogant, even) quality. This silly little trick, with a cheap, third-party item, caused brand damage with a loyal customer that has spent six figures with them. I won't drop them, and the world won't stop turning because I won't get my item until tomorrow, but the simple fact that they did the "shipping bait and switch" on me, means that I'll never use them again for this kind of purchase. That's brand damage. To add insult to injury, when I tried contacting them about it, I had to run the gauntlet of what I call the "AI Picador," which throws as many roadblocks as possible in your path, before allowing connection to a human. This workflow ensures that I will be steaming mad before I get to the human, and it's all I can do to avoid venting to them (it isn't their fault -it's their bosses'). 2) Staff morale. Will bringing in the service reinforce or damage staff morale? It may help folks do their jobs a lot easier (good), or it may result in a lot of folks losing their jobs (bad, or very bad, depending on many factors, like how the layoffs are done, and how the folks that remain are treated). 3) Dependence/Addiction If bringing in a dependency ties us to a corporation/language/toolset, is that good or bad? It may be quite good, if it's a good service, and a good corporation, but it could also be incredibly bad.

AQXt 6y ago

Feature request: Add "One-time payment" option to the cost of the service. This could be used to decide if you allocate resources to implement a new feature in an internal system.

Abishek_Muthian 6y ago

Good work OP. Any plans to add more variables in the future? e.g. Cost of current equivalent service being used. P.S. I've added your calculator to my curated list of startup tools[1]. [1]https://startuptoolchain.com/#operations https://startuptoolchain.com/#operations

_pdp_ 6y ago

I like the idea. In 99% of the cases, I rather buy the service than develop it from scratch and support it long-term. Most consumer-facing services I've seen are relatively cheap. I only tend to develop existing things if I find there are some functionalities which either I cannot buy directly or they require a special setup that does not go well with security and other constraints.

alecco 6y ago

Missing: gains in time to market.

lukasm 6y ago

This is look at the cost, but what about value? Say, the total cost per hour (salary, insurance, benefits) is 50$, but how mych value does he/she create? I used to do this calculation with 2x assumption. Say, a new IDE plugin saves 100 engineering hours, so it's 50 000 in cost and another 50 000, because they spend time creating features. Is it a good assumption?

saadalem 6y ago

This but for E-commerce will be huge ! It would be cool to calculate a product’s overall cost through its life span.

KerryJones 6y ago

This is looks like a different approach to a tool I also tried to address to answer 'how much time should you invest in training' https://kerryjones.github.io/sharpen-the-saw/ https://kerryjones.github.io/sharpen-the-saw/ Had a whole article that went into this: https://medium.com/hackernoon/how-much-time-should-you-invest-in-training-db4fe5159ca7 https://medium.com/hackernoon/how-much-time-should-you-inves... I like the idea and it's certainly more detailed than mine, but I think some explanation of how this should be used and context is important.

drapery 6y ago

Okay I really like the idea. I think the bottom line whether the SaaS is worth the cost with the premise is that the SaaS saves time. However, time saving (item 4) is pretty difficult to gauge. Therefore, I suggest having a version where time saving is the output. So then the question become, I have to believe that this SaaS will save XXXmin per employee for me to consider buying it.

aisofteng 6y ago

What about the cost of operating an equivalent service in house?

unixfg 6y ago
If you're honestly appraising costs, the same evaluation would apply to on-prem as well. 3-year refreshes, software updates, support, power, bandwidth, etc

drapery 6y ago

I think a lot of users are missing the point. I don't see this tool as a final decision maker and it can never be one. The final decision has a lot of nuisances to that it is difficult to capture in one tool, so might as well just open a spreadsheet and bang it out. I see this tool as a quick a simple way to eliminate all the tools that might look shiny and slick or save a few clicks, but doesn't actually save employee's time at all. So the decision becomes, I like the way this new SaaS feels or looks than our current one, but is it really worth the additional cost?

osel 6y ago
Exactly, and scale is important too. The initial target audience was small (as in very small, maybe 1-10 people) businesses, whose owners often don't intuitively understand how beneficial small services costs can be.

ponker 6y ago

The two biggest line items are not easily measured and thus not included: The removal of an external dependency that you don't control and may not evolve with your needs, and the loss of the continuous improvement in that dependency without continuous investment from you.

pseingatl 6y ago

Saving money doesn't put cash in your pocket. It will help keep the cash you have there, but is nothing but another cost item.

deleted 6y ago
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dzonga 6y ago

but there's a hidden cost, that's never spoken of. cost of forgotten knowledge or expertise. say you use AWS RDS | Aurora, on paper it's cheap. AWS runs everything for you. what happens, when one day you need the knowledge to run your own db ? or migrate to something different altogether ?

osel 6y ago

Hey all, thanks for the great feedback! I submitted this just before retiring for the evening NZ time thinking not much of it, it was awesome to find this discussion this morning!

tunesmith 6y ago

ha, awesome! I've had this idea so many times from the xkcd comic (which I see was inspiration). I'm glad someone actually built a tool for it. It could be a fun learning project for a simple mobile app too.