Monthly Archives: April 2015

Extreme Contracts

The goal

As I wrote some time ago, we want our deals to be compliant with three main criteria:

  • We want to reach a wise agreement, in order to generate value for all the parties involved.
  • We want the deal to be efficient, because time spent searching for a good deal is not generating value: it is pure waste. This implies simplicity. We want the rules to be simple.
  • We want to keep a good relationship with our counterpart over time. Exploiting agreements are fragile, with those people continuously trying to escape towards better conditions if not trying to cheat in first place.

The rules

Extreme contracts are meant to be simple and address all the criteria we want to use to define a good deal among all the parties involved.

Just three rules, everything follows as a side effect:

  • Very short iterations, usually one week.
  • A flat fee for every iteration.
  • Money back guarantee.

That’s all.

The (short) story.

The customer express her needs. A team is set up to address those needs. The team starts working on analysing those needs and one week after delivers anything they think worth the fee. The customer evaluates the deliverable and has two options: accept the delivery and pay the flat fee; reject the delivery and keep the money.

If the customer accepts we repeat this short story one more time. If the customer rejects we can either stop the collaboration or try to run another iteration, maybe – but rarely – after having agreed on a different deal about iteration length or price.

The chat with Greger Wikstrand

On Apr 07 2015 I had a Google Hangout with Greger about this kind of contracts, willing to get his raw feedback. Enjoy our video!