DEV Community: Santiago Esteva

Designing my Side Hustle

Santiago Esteva — Tue, 26 May 2020 15:52:46 +0000

This article is the second part of the series I have titled "Finding my Side Hustle". If you are considering a side gig or additional income, I suggest you start from the beginning. It might help you get out of paralysis analysis and jump into action.

Where we left off last week

I concluded the last article stating:

I have made up my mind; a checklist will be my first project. […] Let's review our progress and our next step:

I̶d̶e̶a̶s̶ ̶B̶r̶a̶i̶n̶s̶t̶o̶r̶m̶i̶n̶g̶

S̶e̶l̶e̶c̶t̶i̶n̶g̶ ̶t̶h̶e̶ ̶b̶e̶s̶t̶ ̶i̶d̶e̶a̶

Preparation and Setup

Beta Test

Reflect, Correct, Release

Spoiler alert

During the last nine days, I've spent an average of two hours per day. I completed the "Preparation and Setup," and I have achieved all steps to act on the Beta Test.
Here is the exciting news. Today, right after I had published this article, I'm going to share the first Checklist - "Release WebApps with Confidence" - is available for pre-order. I feel nervous and excited. The market - all of you - will tell me if this idea is worth it or not. Ufff!
You can check it out at https://checklist.works

Preparation and Setup

Be warned if you have decided to go side by side or base your approach on these articles. This phase was dangerous. I had to stop myself from going into rabbit holes on many occasions. So, repeat after me:

"Perfect is the enemy of Done."

Besides, this step made me rethink some decisions I thought I had perfectly planned. So be flexible and open-minded as you go through it.

High Level Flow

Let me walk you across the path I've taken:

Validate the idea
Setup
Market research
Find the differentiator
Define your targeted audience
Identify your communication channels
Create the Offer
Define the pricing model
Write your story
Action Items

1. Validate the idea

In the first part, we did our brief Validation to conclude in a feasible, profitable, in-demand, scalable, and exciting idea.
Go ahead and explain your idea to your partner or a friend, in simple words, in one or two phrases.
Did they get it? What was their feedback? What questions did they have?

2. Setup

How do I sell or distribute this product?
I've chosen to set up a website and seel it via Gumroad. It helps me manage the entire selling experience, customer engagement, analytics, etc.

How do I handle the legal and financial aspects?
I've decided to use the Sole Proprietorship entity. You might wonder why not an LLC. Given this venture is in the explore stage, an LLC would bring overhead to set up, during tax season, and additional cost for legal and accounting services. If this entrepreneurship transitions into a more stable income, I might reconsider.

I've opened a business account in an online bank to keep all inflow and expenses separated from my personal.

I've linked my bank account to WaveApps to keep track and to be able to emit quotes, invoices, and charge via credit card. Gumroad covers the entire checkout process. Ergo, I won't use WaveApps this feature for the digital assets commercialization, but I might use it for consulting services.

I've acquired umbrella insurance. It costs ~200 USD, and it adds protection up to 1M dollars.

3. Market research

How did others succeed at this?
I've been following two pretty successful individuals: Wes Boss and Daniel Vassallo. Wes has found his model a few years back and has been able to sustain it pretty actively. Daniel started - as far as I can tell - May 2019.

Value => Audience => Opportunity

They both agree the first step is to build an audience. To achieve it, we need to deliver value, lots of it, without asking much in exchange. Wes created a series of tech tutorials which he gave for free in exchange for an email address. He also provided tips via twitter. Daniel focused on delivering value via Twitter until he reached four thousand followers.

Both of them agree that paid advertising has a meager return.

4. Find the differentiator

How can I deliver extra value?
While I have a decent amount of experience in tech and leadership, I can't claim to be a pioneer with unique novel ideas. I have always thought of my self more of a roman than a greek. Greeks have invented amazing things. Romans were good at identifying good ideas and inventions and absorb those as part of their toolset.

My first language is Spanish, as I was born in Argentina. One thought is to deliver the content both in English and Spanish. Spanish is the fourth most spoken language in the world.

Mandarin Chinese 1.1 billion speakers
English 983 million speakers
Hindustani 544 million speakers
Spanish 527 million speakers

Note-to-self: send a word to former peers in China to see if one would like to help me with the mandarin translation.

If I were to play devil's advocate, I should remind myself the tech community reads tech material in English. The question is what portion of the audience is left out. It sounds like a swiftly and economically feasible experiment to run.

5. Define your Audience

Here is where I got my first rabbit hole moment. Understanding and formulating the audience is vital. It is also an exciting task which can take days or weeks interviewing people, analyzing an individual's needs and goals at different companies and product stages.

For a software project or any product development, I need user research to assist in decision making at all stages.

In this lean test 40 hours approach, I can't afford going deep. So here is my analysis for the audience I believe I can help.

There are two dimensions - profile and company/product's stage - that create potentially six different Personas.

Many tech companies have two tracks for engineers. In the tech track, we have individual contributors (IC) such as a developer, a tech lead, or an architect. In the people leadership side, we have a supervisor, a manager, and a director. The labels in your
company might differ.

Each company or product goes through different stages. Each phase has different goals and challenges. The tools and techniques to consider definitively varies.
A product starts in the Explore stage - sometimes called Validation - where a team tests different ideas as fast and economically as possible.

The market determines which idea is a hit and so the product is transitioned to the Expand stage. This step opens a fast-paced window where the team needs to seize the opportunity, capture the market while establishing the product or service value and quality.

If successful in the previous step, the product now moves to the Extract stage. Time moves at a regular pace. The game is the Economy of scale. Cost reductions, optimizations, deduplication, and other previously dismissed goals take the team's focus.

If you combine these two dimensions, we get the following Personas:

An IC in an Explore company/product
A leader in an Explore company/product
An IC in an Expand company/product
A leader in an Expand company/product
An IC in an Extract company/product
A leader in an Extrac company/product

I have guided people in each of these contexts from ideation to release. I know they exist and have distinct goals, responsibilities, interests, and motivations.

At this point, I started planning interviews and surveys to understand their age, company type, values, attitudes, interests, motivation, geography. May be putting together a mouth-watering asymmetric clustering matrix. Thanks to the stay-at-home recommendations, my kids were there to "distract" me. When I came back to the pen and paper, I realized I was overdoing it. So this exercise goes into the backlog and will be played when/if it becomes a priority.

6. Identify your communication channels

Given our two main groups - IC and leaders - we could propose the following hypotheses based on my peer and own experience:

IC group consume technical articles via twitter, dev.to, medium, hacker news, Reddit.
Leaders consume content via twitter, medium, LinkedIn.

I have already been publishing my technical and leader related articles to all these different media. As time goes by, I will be able to drive more conclusions.

7. Create the Offer

We are going to use the following formula to create our offer:

Target+Idea + Promise + Pitch + Price

My first checklist offer looks like this:

Target: IC group
Idea: Release WebApps with Confidence
Promise: Deploy often with speed and efficiency, reducing unknowns and unforced errors. Focus on delivering business value using a time tested approach. An astronaut, a pilot, and a surgeon follow the same process to succeed when lives are at stake.
Pitch: Save 5 hours per release. That's 350–500 USD per release. If you release once per month, that's 4200–6000 USD per year per product.
Price: 6–10 USD, see "Defining the pricing model" section below for more details.

Here is another one I have started to think about:

Target: Leaders group
Idea: Engineering Manager's Checklist
Promise: Become the leader your team needs. Understand their needs, set them up for success, follow the right KPIs, promote the right culture of collaboration, and much more. Leverage 15+ years of managers and coaches in a single collection.
Pitch: A coach charges 350 USD rate. Save at least the first ten sessions following proven steps. That's a hefty 3500 USD.
Price: 6–10 USD, see "Defining the pricing model" section below for more details.

8. Define the pricing model

As I'm still building the audience, I've decided to release the first version with a suggested price of six dollars but allowing the buyer to set the price, even at zero dollars.

At this point, I want to demonstrate the value of my experience, the quality of my product. Adding one person to my list of readers who trust me, is worth the effort of this first release and more.

In the future, I will set a minimum price of six dollars and offer a team license as well.

9. Write your story

Explain who you are and why you are doing it. My take on this:
During the last ten years, I have guided 45+ product development teams from ideation to release of web applications. I've conducted the small three do-it-all devs and the massive project with 75+ individual contributors distributed across six time zones and ten different teams.

Each product in its particular stage was chasing different goals.

As time went by, I've started to notice the patterns. A few years ago, I read "The Checklist Manifesto" by Atul Gawande. In summary, the book demonstrates how checklists save time, money, and lives across different industries.

Suddenly, I realized I could document a list of steps to serve as a guide, a baseline for teams to follow without depending on me. Eureka! I was scaling myself.

As the years went by, lessons learned forged the optimizations and evolutions of this list and more to come.

10. Action Items

Here is a review of all the action items in this phase:

Set up a Bank account
Set up a WaveApps account
Get Umbrella insurance
Research your competition enough to identify how you will differentiate
Define your audience
Define your communication channels
Create the offer
Define the pricing model
Write your story
Create and update accounts in defined channels

Beta Testing

For this recipe, we will need:

A Gumroad account
A draft or sample of our product
Peers you trust will provide blunt feedback.
An open-mind and understanding it will probably fail (this time)
(optional) A web domain
(optional) A landing page website and service to deploy it

First, we need to create a proof of our future output. Maybe the cover, a table of content, and one full chapter. Once again, do not go nuts into details. We don't know yet if we have a winner.

In regards to the tools, I used Pages in mac - it could have been Word or Google Docs - and converted it to PDF. I used Unplash for images and Canva to create the cover. I used Grammarly to improve my writing, as English is my second language.

Now, we write our Gumroad's profile. Then, we add our product to Gumroad, adding our Story and Offer to the product description. We set the price and choose the "pre-release" option. You will get a URL you can now share.

Eventually, we share with our peers and ask for straight in the eye feedback. Whatever they say, do not explain or justify. Take notes, ask more questions, and thank them a hundred times.

If Gumroad seems limited to what you need, then you can build your website. I've recorded every minute I spent on coding and setting up my site. I will soon publish and share it. In the meantime, here is the guide:

If you have basic tech knowledge, I highly suggest using GastbyJS + Netlify and an out of the box template. You can get a website within two hours entirely done. You only need to pay for your domain. I paid 7.99 for checklist.works.
If you have no tech knowledge, WIX is one way to go if you want professional results. The Total cost is 13 USD per month, and it includes a domain for a year.

The Fire test

Now let's get uncomfortable and share the news outside of our circle.

Reach out to one of the channels and announced the pre-release. Wait twenty-four hours, then try a different channel. Rinse and repeat until you have covered all your channels.

As mentioned above, today - right after I had published this article - I am going to take the first step. I'm going to share the first Checklist and test the waters. I feel nervous and excited. The market - all of you - will tell me if this idea is worth it or not. Ufff!

Next time I write here, you will know how it went. Will Caesar have his thumb up or down?

If you are interested in this Checklist or knowing when new ones are available, subscribe at checklits.works

Here we go! Cheer for me!

If you like this article, you can follow me on twitter as I continue to document my thoughts and findings.

In Search of My Side Hustle

Santiago Esteva — Tue, 19 May 2020 17:37:12 +0000

I've had a thousand unmaterialized business ideas during my thirty-nine years on Earth. My wife has patiently listened to all of these during the last eleven years or so. From revolutionizing the food industry with chocolate filled grilled bananas - which made her chuckled - to a food delivery app back in 2013, a travel website where you could search by budget, reselling used kids' clothes in South America and many more.

Instead, I continued my career in Technology Leadership, achieving progress beyond what I certainly expected. Whenever one of these ideas tempted me to go full steam, it was simple to make a decision and resume my steady growth in the corporate world. Any of these ideas would require a great effort and a considerable amount of time to reach a comparable income level.

Today my family has expanded, and we have two amazing boys. So, instead of chasing big disrupting risky ideas, I've concluded I may be able to satisfy my business itch having a side hustle.

Like the ten years younger version of me, I have many ideas, but I don't have the time to go at all of them and see which one succeeds. I have also come to appreciate being methodical when approaching work or personal projects.

So this week, I'm commencing My Side Hustle. What is it? Well, I don't know. You will know as soon as I will. I am going to report my progress while following the below methodology:

Ideas Brainstorming
Selecting the best idea
Preparation and Setup
Beta Test
Reflect, Correct, Release

My commitment to myself is to launch while it still feels uncomfortable.

Ideas Brainstorming

In the last three days, I invested 30 minutes each day to come up with feasible, profitable ideas with a real demand/audience.

Feasible: I know how to do it. It does not require big money, and ideally, it does not depend on anybody else.
Profitable: I believe I can make money in the short term.
Real Audience: I know, or I'm able to confirm such demand exists.

Here is the result of such exercise:

There are a couple of ideas that did not meet more than one criteria element:

Rental Property: I have done this in the past. It is a great passive income resource. It works better when projected in the long term. Besides, the current - may 2020 - financial situation in the US is a question mark for me.
Peer to Peer Investment: I have done this in the past. Same as above, the country's financial uncertainty holds me back.
Ads/Sponsor revenue from a blog focused on Accessibility: I have the knowledge, but I believe it is - unfortunately - a very tiny niche

Next, let's dig deeper on the remaining ideas by adding:

Scalability: How easy it would be to grow the business
Excitement: This is my sentiment about the idea

Let's review the group of ideas that are not entirely green:

Amazon Fulfillment: logistics on how to purchase, transport are unknown to me. While I can learn it, it will take some time and money. Buy an online business: the price tag for an already profitable online business is around 50–100k USD. Money at risk, and I would have to learn about the new domain.
Corporate Consulting or Training: I have the knowledge and the understanding of its potential revenue. Given the current situation where companies are resourcing to furlough and reducing contractors, I believe the demand has shrunk.
Ads/Sponsor revenue from a blog About Strenght Training: I've started to do strength training about nine months ago, and I have suffered the complete outage of fitness equipment during the quarantine. The Audience is just growing. I could document my journey. Very soon, I will need others more knowledgeable to participate. The return might be more long-term than I would like.
Mgmt Dashboard: this is a fascinating idea I will not divulge all details since I genuinely believe there is a market gap I can attempt to cover. It would require a significant time investment, and its return would take some time to reach our pockets.

The candidates

Finally, we reach - in my opinion - the feasible, profitable with existing demand, scalable, and exciting ideas.

Publish an ebook
Publish a checklist (e.g. "New Manager first 30 days plan", "WebApp release production checklist", "Reusable Component Readiness checklist", etc. )
Publish training videos

While I would love to do all of these, time is always a constraint. It's time to review the profitability one level down.

I have the knowledge, software, and hardware to accomplish any of these. The fourth element is my time.

Which rate should I use?

I can't use the same rate based on my salary as Director of front-end. Neither the rate if I were consulting for a company on a multi-million dollar project. Instead, I'm going to reverse engineer it. In the first year, I would like my side hustle to produce fifty thousand dollars. If I allocate every business hour on twelve months, I would have to charge 25 dollars per hour. Given I'm only a beginner in doing any of these activities, I think it is a fair starting point.

How many hours do I need to invest?

To write the first release of a management or front-end development short ebook, I estimate it would take me between 320–500 hours. At a 25 dollar rate, that adds to 8000–12500 dollars.
For a checklist, I estimate 20–40 hours or 500–1000 dollars.
For a training video series, I estimate 160–320 hours or 4000–8000 dollars.

How many units do I need to sell to break even?

Ebook: at a selling price of 30 dollars, it would take 266–416 sold units to achieve the point of balance.

Checklist: at a selling price of 6 dollars, it would take 83–166 sold units.

Training Video series: at a selling price of 69 dollars, it would take 58–116 sold units.

And the Winner is

While the training video series has the best economics, the checklist has a shorter time to market. I can fail fast, really fast, as in a week from now.

I have made up my mind; a checklist will be my first project. Once I publish it, I can write another one or go into the second-best idea.
Let's review our progress and our next step:

I̶d̶e̶a̶s̶ ̶B̶r̶a̶i̶n̶s̶t̶o̶r̶m̶i̶n̶g̶
S̶e̶l̶e̶c̶t̶i̶n̶g̶ ̶t̶h̶e̶ ̶b̶e̶s̶t̶ ̶i̶d̶e̶a̶
Preparation and Setup
Beta Test
Reflect, Correct, Release

If everything goes according to plan, I should have an update in the form of a new article next week. Cheer for me!

If you like this article, you can follow me on twitter as I continue to document my thoughts and findings.

This article was published first in Medium

How To Stay Current In Software Engineering

Santiago Esteva — Thu, 14 May 2020 15:11:40 +0000

Getting the company to sponsor your learning time

During the last five years as Director of Architecture, contributors' career development has been one of my goals and focus. Along the path, one question has popped up as a constant:

How do you stay up to date?

When I was a child, I had a friend whose father was a doctor. This man - in his mid-40s - was always attending conferences and studying at home. Medicine is in an infinite, ever-changing topic which we - as humanity - are still researching and learning.

Are all professions like this? Well, I believe that software engineering is similar in that aspect. I would even ask whether it is more challenging to keep up to date than medicine, given the number of companies relying on or selling technology nowadays.

Constraints

Time - this precious limited resource - is definitively a natural limitation when we want to stay current.
Paralysis Analysis from infinite branches of which should be the next topic to pick.
Ignorance about what topics or trends are going on in the industry.
Fear of failure at doing something new.

Try this Strategy

We are going to solve the time, and paralysis analysis challenges first.
Get a pen and paper. Lay it horizontally. If you are a digital-only person, then clone this Google Sheet.

Divide the paper into four columns.
In the first column, write a list of all topics and trends you would like to learn or invest some time on. I know it can be unlimited. So stick to ten items. We will call this our "Personal Agenda."
In the second column, write down your company's goals. If you don't know or you are not sure, talk to your boss. It is a good sign for your boss. It shows your interest and an opportunity for him/her to fulfill his/her duties as a manager.
In the next column, write down your boss's goals. Ask your boss, "What problem are you trying to solve in the short term? What keeps you awake at night?"
In the last column, write down the goals your boss has set for you this year.
From your Personal Agenda, from top to bottom, try to match your interest with an item in the other columns. If you found a match, circle your interest. Keep going across your list.
On a new paper, extract the items you mark as matches, noting down what goal corresponds to.
If you have more than one item, it is time to set priorities. Next to each item, note down your preference as in 1,2,3.
Looking at the goals (company, boss, etc.), note down the priorities (1,2,3)
Pick the top 2 priorities from your work's goals.

Most probably, you expected to read we should be picking our top choice. Here comes the trick. Time is a limited asset. Chances are, you already spend:

thirty percent sleeping,
thirty percent at work,
five percent commuting,
another ten percent eating,
and - if you are lucky - you get the remaining twenty-five percent to play with the kids, relax, read, you name it.

So if you are going to spend any portion of your precious twenty-five percent, you go ahead and pick from your "personal agenda". If this is you, feel free to jump to the Resources section down below.

Go for it

If you are still here, then here is the tactic. Your mission is to get your boss buy-in to allocate some percentage of your work hours to learn. Ideally, you want to aim at twenty percent of your work time with the caveat that some weeks it might not be possible.

Our next step is to prepare our proposal. You don't need slides or a document. Nevertheless, it is a good idea to write down your pitch. Make sure to include:

the known goal,
what are you going to invest time on,
why is this relevant to the target,
how many weekly hours you plan to invest, what artifact - lunch and learn, presentation, proof of concept - will you be delivering at the end,
and a due date.

Why is this a win-win-win proposal?

No matter which work-related goal you pick, you know your boss is already interested in achieving it as it is most probably part of his goals as well.

We could argue you may have picked one item which is not on your manager's top priority or at least not in the short term. That is why you will present two options for him/her to choose from.

Be prepared to get less time allocation than you asked. Once you complete this round, granted you had proved value, your manager will be more inclined to match your request.

If the discussion does not go as planned, it is an indication you may not be clear on your boss' goals. So take your loss and use the opportunity to gain clarity on the topic. You can regroup and come back in a couple of weeks.

If high stakes are on the play and no time can be spared on learning, then it is better to park this item and jump into understanding where and how you can collaborate solving the urgency your boss just shared with you.

Deliver value

While it is always exciting to play with a new toy, remember your investment must return value to the business.

Like any hypothesis, the outcome can undoubtedly refute the premise. For example,

"After doing the research, this technology is not a good fit to solve problem X. The tradeoffs on quality are higher than…."

Make sure to share with peers as soon as you have a draft. They will provide perspectives, their experiences, or questions that will help you improve your conclusions.

Don't forget to document and publish your research so future individuals can access, learn, update if something has changed, or at least avoiding duplicating the effort. You can find some inspiration or adopt the ADR (Architecture Decision Record) template.

Writers Block

Just like writers face anxiety in front of an empty page, you might feel uneasy before coding or playing with a new library.

This fear of failure is pretty standard. Remind yourself everybody can learn new libraries, frameworks, languages, etc. It takes time, sometimes more than others. Nobody is born with Functional Programming skills. (Although I have a friend that seems to be unnaturally fluent at it). So yes, you will fail, it will not compile, you will get errors until you don't.

My advice is two-fold. First, give it a try. Second, search for help even you are afraid of asking a silly question. Ask your tech lead, a peer, your manager, in a forum, stackoverflow. You can create a fake account if you want to remain anonymous.

Resources

Finally, we come to a more manageable challenge to overcome. What if I have no idea what the trends are out there.

Here is how I do it:

Podcasts are a great source as every installment they touch on different topics. I consider podcasts my primary source of knowing "what is out there". Currently, I try to listen to: React Round Up, Real Talk Javascript, Scaling Software Teams, Software Engineering Daily, Shop Talk, Syntax, Front End Happy Hour, Full Stack Radio, Indie Hackers, Codepen Radio. React Podcast.
Twitter is where I pick up news and conferences I did not know about. People retweet those who are references in a topic, so you start picking up the names and mentally modeling some kind of ever-growing social graph.
Reddit, Medium, and Dev.to are where I pick some interesting popular conversations or articles about topics.
Spectrum Chats and Slack specific workspaces or communities is where I ask specific questions about a topic I'm working on researching.
StackOverflow used to be the place where I would ask most of the questions. Later on, it became a destination to return value to the community, trying to answer questions.
Youtube channels and Conferences (recorded or purely online) are a great source to get a quick update on a specific topic.
Paid Services - such as Egghead.io, FrontEnd Masters, Pluralsright, SafariBooksOnline - are not strictly needed, but it is my favorite place to go once I know what topic I want to go deep in. I know I will get curated content that a writer already spent a significant amount of time putting together, thinking about how to explain and illustrate it, what examples to use, etc. It saves me from looping or getting stuck.
Github Trends is where I can see what projects are getting popular in specific languages.

If you like this article, you can follow me on twitter as I continue to document my thoughts and findings.

Standard Agile Tools Can Be Risky

Santiago Esteva — Wed, 13 May 2020 15:18:13 +0000

Why I dropped story points, estimations and burn-up charts

Hint: close to the end, section “Fast, Good, Cheap solution”, you get access to a tool that solves the described challenge. First among many to come. Enjoy!

Let’s talk about two common concerns in a project, especially in large complex ones:

How are we doing?
When will it be done?

Let’s commence by focusing on the second question, as it may translate into a problematic or challenging situation.

One standard answer is burn-up charts. A visualization of a team’s work process, displaying the scope of a project, and the completed work. Here is an example from Broadcom’s Rally Software:

Based on historical progress and assuming nothing will change, the chart extrapolates our growth’ trend until it meets the total scope’s line. The estimated projected date becomes Aug 21st.

Oops! Our target date is Aug 1st.

Risk 1 — Promises are like babies: easy to make, hard to deliver.

A stakeholder might not be immersed in the daily, weekly activities and context of a large project. So when this chart shows up on a project’s dashboard, the first immediate understanding may be the project has identified the release date. And given the presenter is the project’s representative, the next thought maybe he/she is confident and committing to this target date. Otherwise, why would he/she provide this information?

Risk 2 — Are we confident our future performance will be similar to our historical delivery? 100%?

While we might have a high-level understanding of the remaining backlog, we have to remember that we usually discover the item’s actual size once we are rooted in its execution. On this note, I’ve enjoyed Basecamp’s Shape Up chapter, “Work is like a hill.”

Every piece of work has two phases. First there’s the uphill phase of
figuring out what our approach is and what we’re going to do. Then,
once we can see all the work involved, there’s the downhill phase of
execution.

Future performance is full of uncertainties. Uncertainty manifests itself as a multitude of possible outcomes. Some of the events and factors that could trigger these outcomes include:

the scope could be more complicated than we know, carry yet undiscovered dependencies contributors’ focus and performance might deteriorate as times goes by adding more contributors to one team will make its communication more complicated, ergo its performance gets affected adding another group will complexify the project’s communication, ergo its delivery will slow down we might be entering summer in some of our workforces’ location. Vacation leaves will undoubtedly impact our capacity external factors such as our customer’s iteratively feedback might push us to rework some screens, logic, or having to increase or change the scope.

How can science help us improve our forecast?

Douglas Hubbard’s How to Measure Anything explains observations help us reduce uncertainty providing both a range and a probability of that range occurring.

The book presents different estimation techniques. In one example, we pour a number (e.g., 534) of small glass balls in a transparent bowl and ask a person in an office to guess how many. He/she might say 250. Then you ask another 100 peers. When analyzing the data, the correct result (534) is found within a specific range (500–600) that matches the answer provided by the majority.

Based on that example, we could say the above chart represents only one possible scenario among many. We need to consider other variations and deviations. Besides, we could provide a forecast, including the range of the most commonly found results across all variations/simulations. That would better represent what is most probable to happen with a higher confidence interval.

The commonly available burn-up charts are great to explain the past. We saw Rally’s screenshot first. Here is JIRA and VersionOne’s version.

JIRA’s burn-up chart

VersionOne’s burn-up chart

What-IF

As stated before, a range is a better way to express what is probable. The less information we have, the broader our range might be, which indicates a lower confidence interval.

So how do we include these what-if variations into the burn-up chart?

In simple terms, we need to include our best and worst scenarios. Now, let’s imagine we are writing the requirements for one of these agile software tools from scratch.

First, let’s calculate our forecast, the single line we see in the above charts. We first calculate the average of our historical velocity. Now we add such value to each future iteration and draw a line across each new data point.

Please consider only the last three iterations to calculate the average. It is rare for a team to have a consistent velocity or performance across long periods. If the team was rocking it the first few iterations of the project, but the last few it was not, then you are better off forecasting using the current or recent performance.

We have achieved the same features as the charts presented above. I always feel itchy anytime I use an average in forecasts.

“If Bill Gates walks into a bar, then on average every person in the
bar is a millionaire.”

Let’s now enhance it by adding High and Low forecast lines. First, we calculate the deviation in the last three iterations. We add such value to our forecasted value to get the High bound and subtract it to get the Low bound. Then draw the lines, and now the chart should display a cone shape between the two lines. It should look like this:

Great! The software I’m using at work does not provide it. So now what?

VersionOne burn-up chart offers a single possible end date using linear forecasting based on the average OR the best iteration OR the worst OR the most often. Not exactly what we are looking for.
It does offer the“Portfolio Item Burn Up Monte Carlo Simulation” which displays different confidence levels and its corresponding possible delivery dates.

I have only used JIRA for defect tracking. From the documentation, I could not find an enhanced burn-up chart that would offer what we are looking for. Nevertheless, Atlassian Marketplace provides a plethora of plugins that certainly included and exceeded our requirements. Here is one that looks interesting judging by the screenshots:

Agile Reports and Gadgets

Fast, Good, Cheap solution

Here is a straight forward way to achieve the same result without spending a dime.

Step 1- Clone/Copy this google sheet
Step 2 — Update your MVP and Total Scope in terms of points or stories or whatever you choose as your unit of work.
Step 3- Enter the historical performance of your team using the same unit of work as in step two..
The template takes care of everything, calculating the forecast cone and creating the release burn-up chart for you.

Now you can set better expectations with a higher degree of confidence. So looking at the chart, we could say:

Based on the last three iterations’ performance, it is most probable that we will achieve our MVP between sprints twenty and thirty-four.

I’m not going to lie to you; this will raise eyebrows. Your Stakeholders want precision. A spread of fourteen iterations might be interpreted as a lack of confidence. Some will quickly highlight the forecast line that crosses MVP in iteration twenty-five. While tempting to use that prediction, we know it represents only one among many probable futures.

A forecast is a moving target, and it can be accurate in the short term. If we are looking far in the future, the uncertainty grows, and so does its range of probable results. The good news is, as we keep updating our progress, the forecast will be recalculated, and the cone will start closing down.

Conclusion: While I have witnessed teams succeeding using points, estimations, and out of the box burn-up charts, it usually carried risks of unintended delivery date commitments, under and overestimations, teams feeling the pressure of a strict single sided forecast, stakeholders getting frustrated and other pain points. Today we saw how to improve the forecast so we can set proper expectations for our stakeholders. Let’s call that step one.

Disclaimer: I originally thought everything I had to say — why I dropped story points, estimations, and burn-up charts — would fit into a single article. I thought I could summarize the problem and the solution. I was so wrong. So I’ve decided to do agile writting and deliver why standard agile tools burn-up chart have failed me and what can be done — with or without money — to improve it while leveraging the data points these provide.

What’s coming in the rest of this series?

Do you remember the story about asking 100 peers to help us estimate the bowls’ content? In a future article, we will leverage the Montecarlo algorithm to run thousands of simulations to improve our confidence level on our probability.
A model is as good as its input. Are points and velocity the best unit of measurement? Is there a better one? For a single team? How about for a large complex project with 10+ teams?
A burn-up chart also requires all our entire backlog to be estimated. Do we have the time and knowledge to evaluate all of it? Are estimations accurate? Is there an alternative?
Montecarlo, TAKT, Little’s law and much more

If you like this article, you can follow me on twitter as I continue to document my thoughts and findings.