Your Five Options When Faced With Unclear Project Scope

I see multiple deer near this road by our farm nearly every time that I pass it. Last week there were six, and two of the younger ones just stood right in the middle of the two-lane road, staring at me, unsure where to go and who was going to make the first move. I wasn't in any hurry and there was no one behind me, so I just waited them out. Eventually one ran one way and one the other and I drove the rest of the way home.

All I could think of was that "deer in the headlights" meme and how this industry stands frozen in the road when a big scope problem asserts itself. Is there any easier way to lose money (besides buying Twitter) than mis-estimating a big project that changes in scope? Especially while you are chained to your own promises and hating everything about a project?

I see five typical ways to attack this issue. See if you see yourself in any of them:

1. Shoot high with a fixed bid to protect yourself. Nobody in their right mind gives a fixed bid on an amorphous project—especially a dev project—unless the prospective client demands it and you don't mind playing the game. But what's the best argument you can make to push back on a new clients who insists on it? "We have to protect ourselves by shooting really high...and/or being very prescriptive with the boundaries, but we'll do it if you want." And then the relationship can become more adversarial than it otherwise would be because you are in protective mode.
2. Shoot low to land the client and then screw them later. You might think I'm kidding, but there's a sizable percentage of firms that do this intentionally, and you've heard about them. Or may even be one! This is kind of unethical, but most importantly, they'll never work with you again. It's better to take the long view and quit with the add-ons like those car dealer people or rental car companies. "Oh, you want a steering wheel with that Camry? Sorry, but that's not included. It's in the fine print, but you are certainly welcome to bring your own to the airport pickup...and then pay our tech to install it."
3. Invest enormous uncompensated time to determine scope in a 60-page proposal, and then hope it's accepted and that you'll make up for that unpaid time in the project itself. This is the classic way we all did it until we came to our senses and realized that the prospect had no incentive to not ask for one of those soul-sucking processes.
4. Switch immediately to a time/materials world of auto-renewing sprints. There are two challenges with this, though. The first is that it requires significant trust on the part of your client that you are doing your very best work for the good of the project. In fact, that's one of those promises you are keeping: "we'll pivot quickly to do what's necessary rather than following a prescribed scope that isn't appropriate any more." The second challenge is that you are protecting yourself on the downside (we can't lose money) by eliminating the upside (we can't value price), because the most money you can make is to get paid for all your time.
5. Sell a paid diagnostic/road mapping exercise in order to reduce your risk of insufficient information but still deliver real value to the client. That real value is that spending 5-10% of the total fee up front makes it far more likely that you'll spend the remaining 90-95% of the budget better. Of the five options, this is usually your best. But how?

If you come to the same conclusion that I have, that no. 5 is your best bet, you'll start to realize that pulling it off requires a slightly different approach than normal:

• You need a lot of deal flow to give you the confidence to hold your ground, even if you lose some opportunity.
• You'll want to fix your positioning so that the opportunities that come your way are more similar from one to the next so that you can eliminate a lot of the surprises that come from working in a new vertical or horizontal. (We can help with this in either a New Business Audit or a Total Business Reset.)
• Your approach to service offering design needs to follow this mantra: "most of our clients should use most of our services most of the time" or we'll have entire departments sitting around losing us money.
• You'll want an off-the-shelf way for clients to start the engagement, partly because there's less spinning of the tires, but also to protect you. We did a 2Bobs episode on that.

Challenges around scope are the easiest ways to lose money, and therefore one of the first things you'll want to solve.