A fixed-price fallacy

Productised services and fixed-price projects are not the same thing.

In fact, I’d go as far as encouraging productised services, and discouraging fixed-price projects.

The fixed-price projects I’ve either offered myself or seen others offer – that have gone badly – are just built in the wrong way.

1. It creates scope for a custom project based on a consultation with a customer
2. Applies an estimate of time
3. Adds a buffer for variations
4. And applies a fixed price based purely on estimates (time, cost, etc).

It often starts to go bad from the very first step.

Based on the knowledge you gather at the start, plus your experience, you believe you understand everything that’s needed to nail this project… assuming the scope has been chiseled into a stone tablet and shall not budge.

But custom projects don’t have boundaries – the scope can shift at anytime, in any direction, for any number of reasons.

And when it does, your steps topple like dominoes…

❌ The time estimate is shot;
❌ The buffer is irrelevant;
❌ The price is this comical number that needs to be unpicked and reworked.

With a productised service however, the scope is just about set in stone because you created it.

• The scope is fixed
• The price is fixed
• The timeframe is fixed

It promises a very specific outcome for a very specific commitment from the customer: “If you need this exact thing, then pay this much, wait this long, and I’ll give it to you, guaranteed”.

There’s a place for fixed-price projects, and plenty of examples I’m overlooking.

But if it’s just you, and you want to make life simpler – productised services are an easy path in that direction. I guarantee it.

If you build a productised service and it’s not easier, email me – I’ll help you fix it.