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You’re describing a dysfunctional arrangement in both cases. If the only way to ensure that your requirements are met is by paying hourly so that you and the pr

You’re describing a dysfunctional arrangement in both cases. If the only way to ensure that your requirements are met is by paying hourly so that you and the provider have the shared expectation that you can say “just do it, I’m paying you to do it so do it” then you’re working with bad people. The problem with hourly is that it is a totally different way of running a project from fixed cost: fixed cost front loads the challenges and provides a great opportunity to assess the suitability of your provider, it demands clarity, a shared understanding, it is immediately apparent if a project is going to go to shit: a fixed cost project (managed properly) can’t start without understanding the end. If someone can’t give you a fixed cost that you can rely on: find someone else. If someone can’t give you the confidence that they’ll actually deliver what you want: find someone else. As a software engineer, I bill a day rate for most of my clients because that’s their preference, and it’s easy money for me so I don’t refuse the work, but I actively discourage it because it is terrible economics for clients: it’s burning money. On a fixed cost project, 100% of my time is spent delivering. On a day-rate project, 50% of my time is wasted — because if you’re paying for my time, the dynamic is exactly like that of an employer employee relationship… and to spend a day in any office anywhere in the world, and you’ll find at least 50% of everyone’s time is wasted.

poulsbohemian 4y ago
>I actively discourage it because it is terrible economics for clients: it’s burning money. Here’s how I did this on software dev projects in the past that I thought was very fair. I did a monthly retainer of $xx,xxx, where that number is equitable for everyone and is actually discounted off the equivalent hourly rate. Why? Because it’s a pain in the ass to track hours, to argue with you in advance over how many hours each task is going to take, to argue after the fact about why it took more hours, etc, etc. So for me, it’s worth a discount to just bill the client monthly, do the work, and everybody wins. But more often than not, clients still wanted to pay the hourly rate premium.

poulsbohemian 4y ago

>I actively discourage it because it is terrible economics for clients: it’s burning money. Here’s how I did this on software dev projects in the past that I thought was very fair. I did a monthly retainer of $xx,xxx, where that number is equitable for everyone and is actually discounted off the equivalent hourly rate. Why? Because it’s a pain in the ass to track hours, to argue with you in advance over how many hours each task is going to take, to argue after the fact about why it took more hours, etc, etc. So for me, it’s worth a discount to just bill the client monthly, do the work, and everybody wins. But more often than not, clients still wanted to pay the hourly rate premium.