Reference class forecasting

Estimating from what similar finished projects actually cost, instead of from your own feature list.

Bottom-up estimates miss what nobody listed yet: integrations, edge cases, the second round of changes. Starting from the outcomes of comparable projects (the outside view, in Kahneman’s terms) brings those surprises in, because they already happened to someone else. Bent Flyvbjerg made it a standard method for large projects.

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Related terms

Cone of uncertainty: How wide an honest estimate is at each stage: from 0.25× to 4× at the idea stage, narrowing as decisions are made.
Riskiest assumption: The one belief that, if false, ends the idea. Test it first.

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Przemysław Zalewski · 15+ years shipping software

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