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I didn't have a lot of bad experience with fixed-price type projects. They were quite small with not too much that can go wrong and those parts were estimated accordingly (average between smooth and completely wrong). Still had a project that took ~180 hours instead of ~120 estimated and a single task that took 40 instead of 4 (and that was one line of code bug fix in an open source project lol). There was also quite the opposite sometimes, like a project done in ~60 hours that was estimated 200+.
Doesn't sound too bad. I don't know what are your margins though, but I've seen here some people charging over 10k for static websites; those take a few weeks to build, so you can imagine the large margins we are talking about. That's why I say the risk of Type 2 projects doesn't pay off to me, given the extra amount of work (which implies a price increase) and the technical risks. But there might be people who still keep good margins with this kind of projects. It's just not what I've seen personally.
We thought of focusing on the team-as-service model. So dedicated developers that the client needs to complete/support his project. But prospects that can afford this are quite big businesses/funded startups with long-term projects. Those are even harder to find and usually requires a small fixed-price project to evaluate our team.
They are hard, but they exist. In some European cities they aren't even hard to find. You need top quality developers though that make a big impact.
I mean that they don't take a big part in the client's decision making. The clients decide what? and why? the developers how?.
Example tasks from the client:
And the developers sometimes don't even know why would a client want that and what value that would add to him or his users. So there's an opportunity of adding more value here too, but that would require some expertise in the client's business/domain.
- Add those fields there, here are the formulas.
- Integrate XXX feed for news
- Make a window that would do XX
The whole point of software development is not building stuff as someone else commands, but understanding the business and domain, so you can not only build the features better, but suggest improvements. There is no other way to really add value and get paid accordingly.
There are even strategies to make more impact in the decisions, like providing less technical roles like business analysts, than can work closer with stakeholders (often, developers can't when clients are big).
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