The Art of Estimation: Making Smart Guesses for Successful Planning

TLDREstimation is the process of guessing and predicting the outcome, time, and cost of a project. However, it is inherently prone to error. To improve planning and decision-making, a simpler and pragmatic approach called CD3 (Cost of Delay divided by Duration) can be used to prioritize work based on the value and effort required. This approach focuses on the user's perceived value and the cost of building the feature, rather than on precise estimates. By working in small steps and constantly reevaluating the value, organizations can make better choices and avoid wasting time and resources on less valuable features.

Key insights

💡Estimation is a fancy word for guessing and predicting the outcome, time, and cost of a project.

📊Traditional estimating methods are often inaccurate and fail to consider the value and effort required.

🎯CD3 (Cost of Delay divided by Duration) is a simpler and pragmatic approach for prioritizing work based on value and effort.

🧩CD3 focuses on the user's perceived value and the cost of building the feature, rather than precise estimates.

⏰Working in small steps and constantly reevaluating the value helps in making better choices and avoiding waste of time and resources.

Q&A

What is the CD3 approach?

—CD3 is the Cost of Delay divided by Duration, a pragmatic approach to prioritize work based on the value and effort required for each feature.

Why are traditional estimating methods often inaccurate?

—Traditional estimating methods fail to consider the value and effort required, resulting in inaccurate predictions of outcome, time, and cost.

How does CD3 help in making better choices?

—CD3 focuses on the user's perceived value and the cost of building the feature, allowing organizations to prioritize high-value features with minimal effort.

Why is it important to work in small steps and constantly reevaluate the value?

—Working in small steps allows organizations to gather feedback and adjust their priorities based on the evolving value and market conditions.

How does CD3 simplify the estimation process?

—CD3 replaces complex and precise estimates with a qualitative and approximate assessment of value and effort, reducing the need for extensive calculations.

Timestamped Summary

00:00Estimation is the process of guessing and predicting the outcome, time, and cost of a project.

01:46The CD3 approach prioritizes work based on value and effort, rather than relying on precise estimates.

05:17Traditional estimating methods often fail to consider value and effort, resulting in inaccurate predictions.

10:29CD3 helps organizations make better choices by focusing on user value and avoiding wasteful efforts.

12:28Working in small steps and constantly reevaluating value improves decision-making and resource allocation.

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