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by lelanthran 1210 days ago
> One approach is value-based contracts: "we'll work with you and charge X% of the value we deliver."

Which still loses to the other bidders who say "$X in $Y months for $Z dollars".

1 comments

No, not necessarily. It depends on how often and badly the org has been burned on past project failures.

Typically, the intermediate step is to tie some compensation (such as a bonus) to a particular metric, but why not just go whole hog?

Even if X% is projected to be larger than $Z (and in fact, the better the project succeeds, the larger the %X total ends up being, but you can cap it, or make the % progressive up to a point and regressive above it), the advantage for both client and vendor being aligned on the upside is considerable.