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Comment by nrivadeneira | Hacker News Reader

I think Nathan's got the meaning of the phrase mixed up. The idea isn't to promise your standard output and then run yourself into the ground trying to exceed that. The "under-promise" part means that you promise less than what you know you can deliver. Having done that, you deliver your standard output and thus have "over-delivered". In this manner, it's sustainable.

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The trouble with actually under-promising on a project is that unless you have actually done almost that exact project in the past, or are a fantastic pessimist, you will fail to under-promise. See http://lesswrong.com/lw/jg/planning_fallacy/

Which is why you're under-promising. So that when inevitably things don't go as well as planned, you have a buffer.

Hofstadter's Law: It always takes longer than you expect, even when you take into account Hofstadter's Law.

Actually, you just get better at estimates. 10 years in I am finally starting to get the estimate formula... and it's about as simple as someone told me:

every time anyone gets an estimate, double it. so, you estimate yourself, double it before you give it to a manager. the manager should double it before they give it to a client. the client should double it before they give it to their finance department... and you'll come out on budget for the project.

A friend who is an architect says that pretty much every project they do gets a 3-5% allocation for 'contingencies'. Then the client usually starts trying to 'trim the fat', and the first thing out the door (over protests) is 'contingencies', because 'they're not giving us stuff'.

Sure enough, when the soil is getting turned, there's a need for more cash to do unexpected -foo- or increased price of -bar-... and now the project is 'over-budget'. And almost always wouldn't have been if the contingencies fund wasn't removed.

In the proposed contracts, is the contingencies portion refundable if unused?

Contingencies in construction should be reduced or eliminated as the project proceeds from conceptual phase to design and more information is gathered. The contingency line item should almost never be carried over into the construction phase for vertical construction and if the project comes in over budget it speaks more to the failures of the design team at estimating than to a budgeting failure.

Other types of construction may indeed carry contingencies through construction phase but it must be made absolutely clear to the owner of the project that the contingencies are for X unknown and not just a "we can't estimate very well so hit it with 10%".

I may have inserted the 'turn soil' part - thinking back, he didn't mention anything either way about the phases, just that routinely it was the first thing sliced out, and it came back to bite them later each time that happened.

Is there a name yet for the fallacy of calling everything a fallacy? Back then, that word used to mean something.

Either that or he thought that they were under promising and with the over deliver they would be at standard workload. I think it turned out that it was harder than expected to continue their over delivery pace.

I think you misunderstand, not he. By under-promising he lowered the value of his standard output, because the client adjusted their cost expectations downward.

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