Six-week cycles versus retainers and fixed bids

Agencies usually sell time, a fixed deliverable or a monthly commitment. A Shape Up cycle is a fixed amount of time spent on a shaped problem, so it fits the first and third models naturally and the second with some effort.

Whichever you use, the contract has to say plainly what is fixed and what is flexible.

Time and materials

The closest fit on paper, and the one that most often goes wrong. Hourly billing rewards a project that takes longer, and Shape Up exists to remove that incentive. If you bill by the hour, cap each cycle at the number of weeks you agreed and say the cap holds.

Once a client has seen one cycle finish on time, you can offer a flat price per cycle. That is a commercial decision for each shop. Loupe, listed in the directory, prices each six-week sprint on its own and bills the shaping that precedes it by the hour.

Fixed bids

A fixed bid usually fixes both the price and the scope. A Shape Up bet fixes the price and the time. The scope is whatever fits.

You can combine them by using the shaped pitch as the scope document. The pitch lists a problem, a solution and no-gos. The solution is the intended scope, and the contract acknowledges that the team may cut details to meet the time. Everything the client cares about most goes into the core of the pitch, and the pieces they would trade away are marked as nice-to-haves.

Agree up front what “done” means. A reasonable definition is that the core flow described in the pitch works end to end and has been shown to the client.

Retainers

A retainer is the easy case. The client pays monthly for capacity. Treat a block of months as the capacity for one cycle: a six-week cycle fits inside two months of a small team’s retainer, with the cool-down covering the remainder.

Then the retainer stops being a pool of hours that gets spent on whatever arrives. It becomes a sequence of bets. At each betting table the client chooses what the capacity goes to, and you report progress with a hill chart and drop the hours summary.

What to do when time runs out

The book uses a circuit breaker: if a project is not done at the end of the cycle, it stops. Extending it would remove the pressure that makes the team cut scope, so any new work needs a new bet.

For a client, you need a position on who pays for the next piece. Three common choices:

• The agency absorbs the overrun. This reinforces the fixed-time promise and puts the risk on the shop, so shape conservatively.
• The client places a new bet on the remainder, shaped again with what was learned.
• The client chooses at the end, with a stated limit on the extension.

Pick one, write it down and tell the client before the first cycle. Surprise is what damages the relationship.

A note on the length of a cycle

The book’s big batch is six weeks, and the small batch is one or two. Many client projects fit a small batch and some need a longer shape, split into several bets. If the work needs more than six weeks, the book’s answer is to shape it into pieces that each fit one.

Questions people ask

Can Shape Up work with a monthly retainer?

Yes. Treat a block of retainer months as one cycle’s capacity, shape the work for that capacity and report progress against it. The retainer stays a retainer; the work inside it becomes a bet.

What happens if the work does not finish in six weeks?

The book calls for a circuit breaker: the project stops by default and gets no extension. On client work, decide that rule in the contract. Some shops absorb the overrun and some require a new bet.