[waterlink]

Technical debt is very similar to financial debt.

Don’t get fooled. There is very small, and very important difference:

With financial debt, the business takes on it in hopes of delivering more value quicker that will pay for interest and principal, and have a lot of (monetary) value left after.

Financial debt, if anything, is speeding the process of delivery of value up.

On the other hand, technical debt is slowing the delivery down. And this delivery is what business hopes to speed up.

Well, maybe it makes this one iteration/release quicker, but it slows down the next one, and next one after that, and so on.

So, it seems that they are deceivingly similar, but you need to adapt the tactics and strategies.

[smu]

I fail to see the difference. Financial debt is also a brake on future activities, in the sense that you have to pay back with interest, so less funds are available for other activities.

So in your words: it makes this one iteration quicker, but slows down the next one...

[waterlink]

I see what you mean, and I agree partially.

Follow my thoughts (and please do poke holes in them!):

Financial debt allows you to deliver more -> sell more -> pay down debt quicker -> deliver more (if you got it right and haven’t failed).

So the money itself becomes a mechanism by which you deliver faster, and, as a result of faster delivery, earn more money to deliver even more and faster.

Now, the technical debt.

Earning more money from more feature delivered in current iteration might result in more revenue NOW. But does it result in more/faster delivery after that revenue happened?

Not really.

You can potentially hire more people. But they will only slow the team down at first. There is a delay between “more people” => “faster delivery.”

So financial debt can enable a positive reinforcing loop. Can technical debt do that?

[pmarreck]

Technical debt (like financial debt) DOES NOT slow the delivery down AT FIRST. That is why people incur it! It is pure "GSD" (Getting Shit Done) now, make it clean later.

Financial debt "slows profitability down" later. Technical debt "slows productivity down" later. Both affect company profit. LATER. But arguably increase it NOW.

The analogy is in fact apt.