Comparing Proposals: Don't Fall Victim to Bullshit

Original article published on Forbes.com.  

If you’re planning a new app, web or any digital solution and are requesting proposals from multiple potential partners, get ready. You’re about to be hit with a number of empty promises verging on scams, coming at you in a whirlwind of buzzwords.

As CEO of a software design and engineering company, I’ve seen many clients struggle with evaluating proposals. It can feel overwhelming, but it doesn’t need to be. You just have to know what to arm yourself against, what to look for. And that goes way beyond an appealing cost and time estimate.

The first thing to know is that a company establishes its pricing policy based on reputation, internal expenses and desired business goals. Learn how to analyze what makes these factors fair and you’ve got a clear path to picking the right partner—one that you feel confident will deliver the desired results.

THE DEVIL IS IN THE DETAILS

If a company’s main objective is to close the deal fast, you’ll see gaps in the proposal. Did they take the time to understand what you want to build?

When STRV prepares an estimate, we break down every single feature and component of what needs to be developed. This tells you how we plan to build your product, and how much time we expect to spend on specific activities. If this info isn’t included in a proposal, it’s either a moon shot or you’re just being given a rough ballpark number that someone will have to tackle when building a roadmap. Always insist on having a full breakdown and product specification included in a proposed quote—especially if you are budget-conscious and don’t know exactly what team you need.

A good proposal won’t be ready overnight. My team takes about a week. We consider all information you’ve provided. We plan how things can be done as efficiently as possible. Then, the numbers are validated by relevant experts, from product architects to designers and engineers. Our goal is to present an estimate that we can commit to (+/- 10%) unless there are some major changes down the line.

A REPUTATION STANDS ON EFFORT

I’ve been asked many times if STRV could build a mobile app for, say, $50k. Sure. We could. But do we want to? No. Because that price doesn’t allow for the time and resources to build something that we would be proud of, something we’d love to showcase and, more importantly, something that will bring us business later down the road. It doesn’t result in a high-quality product. It just gets you a product that works. Estimates should be on par with the level of effort that meets a company’s standards.

The better the company, the more effort is applied on every project. Why? Because it’s a long fall from the top. An established company has a lot riding on every delivered product. It needs to protect its good name and attract clients who look for more polished, robust solutions. Plus, with a team of top professionals, every product is someone’s personal calling card. You can bet they want to show off what they can do.

DO THEY ACTUALLY 'GET' YOU?

You’re paying for what a company believes you need, and how its team is able to deliver. When preparing estimates, companies rely on professional assumptions. But jumping to brash conclusions that disregard your ambitions is unacceptable.

As you review the proposal, you should find answers to, What’s the endgame, the composition of the team, the expected hours per individual and per platform? All of this must be reasonably justified. Go over which company may be leaving out information. Notice time estimate discrepancies. If most estimates seem similar but a few stand out, maybe one company understands you a little more. Or it’s the opposite and you can start eliminating.

LOOK FOR CONFIDENCE BACKED BY RESULTS

You can’t fake a strong track record. This is where references come into play. Read the case studies. Contact past clients. Confirm that the positive reviews are based on meaningful partnerships. What’s the level of communication? Will you have access to the whole team, or will it be more like a black box that spits out something once a week?

You’ll notice that companies with solid reputations provide the most comprehensive proposals. Companies with less experience will reveal their shortcomings straight away. They throw around big statements while lacking clarity and depth. In these cases, you get an extra set of hands at a low price, but you have to either figure out the rest yourself or deal with a malfunctioning product that may not even make it to launch.

IF IT'S TOO FAST AND EASY, THINK TWICE

Oftentimes, clients say that they need something to be done within, say, two months. If a company is hungry enough, it’ll present a proposal in a way that fits that requirement, even if it has a negative impact on the product. That’s a huge warning sign. I’d rather lose business than promise something that is either unrealistic or that can only be done by jeopardizing the quality of the outcome.

I’d also warn against fixed prices. They often result in poor quality, leaving you with a product that isn’t able to respond to new ideas and circumstances. The reason most companies go by an hourly rate is that it allows them to tailor their offer to your exact needs. Building digital products is a very agile undertaking, and allowing for flexibility is a great tool in achieving a great product.

Of course, make sure that changes to the budget are consulted with you throughout the project. As long as there’s honest communication, having the option of flexibility rather than relying on the initial spec is always a benefit.

LOOK PAST THE BRAND, AT THE PEOPLE

While you’re still feeling a company out, meet and ask about the team. How do they identify top talent? Do they contribute to their community via open source, conferences, workshops? Check out their published material and past projects. And because you’re about to place a lot of trust into these people, make sure you actually like them. Listen to your gut.

The quality of talent that companies like ours have is one of the greatest benefits of working with external teams. Because if designing and building software is not your core business, it’s extremely hard to create an environment that supports the level of growth and learning that these experts require to stay ahead of the game.

WHAT IT COMES DOWN TO IS...

Always compare references. Understand what you may be sacrificing if you choose something cheaper and/or faster. Check specifications to make sure your potential partner’s plans parallel your own. Really get to know the people you’ll be working with. And always, always think long-term. Because the end goal is to have a product that sticks around.

REACH OUT

Share Article
Lubo Smid

Lubo Smid

Co-founder & CEO of STRV. Forbes 30 Under 30. Startup-minded entrepreneur passionate about cutting-edge technology and an adventurous lifestyle.

You might also like...