Turning a budget into an appetite

In the book, an appetite is how much of the team’s time an idea deserves. It is decided before the solution, and it is the reverse of an estimate: you start with a time box and design something that fits.

A client rarely says “six weeks.” They say “we have sixty thousand dollars” or “this has to launch before the conference.” Both can be converted, with some care.

Price the time box

Start from your own side. A small team of the size the book describes, a designer and one or two programmers, costs your shop a known amount per week. Multiply by the length of the cycle and add what you need for management and margin. That is the price of one big batch.

Do the same for a small batch of a week or two. Now you have a short menu of time boxes, each with a price. The client’s budget lands somewhere on it.

Ask what it is worth

A budget describes what the client can spend, not what the problem is worth. Ask what the work is expected to change: revenue, hours saved, a deadline met. The book treats appetite as a question of value: how much the problem is worth to you. A client who says “this saves my team ten hours a week” has told you more than their budget did.

Paul Boag makes a similar argument in a piece on pricing projects: open with what the project is worth, and let the figure follow.

When the numbers disagree

Three cases come up.

• The budget is bigger than one cycle. Do not stretch one bet to fit it. Split the work into bets, each shaped on its own, and let the client decide after each cycle whether to continue. The total budget is a ceiling, not a plan.
• The budget is smaller than a small batch. Shape a smaller problem. Often the client’s real need is narrower than their request, and the appetite shows it.
• The budget matches, but the idea is bigger. Say so before you start, and write the extra pieces into the no-gos.

Keep the appetite in the contract

Put three things in writing: the length of the cycle, the team that works on it and the shaped pitch the work answers to. Say what happens if the work does not finish, which chapter five covers. Fix the price and the time and name scope as the flexible part.

Some clients will read “flexible scope” as “we might not get what we asked for.” The pitch answers that. It shows what was agreed, and the rabbit holes section shows the work you did to make sure the core of it fits the time.

Discovery as its own bet

When a project is too uncertain to shape, sell the shaping. A short, fixed-price discovery that ends in a pitch is a small batch by another name. The client pays for the pitch, and then decides whether to bet on building it, with you or anyone else. Inovo Studios, listed in the directory, describes opening projects with a discovery phase.

Questions people ask

What is an appetite in Shape Up?

Shape Up uses appetite for the amount of time you are willing to spend on a problem. It is set before the solution is designed, which is the reverse of an estimate. The book describes small batches of a week or two and big batches of a full six-week cycle.

Can you price a Shape Up project as a fixed bid?

You can fix the price and the time box and leave the scope flexible. What you are selling is a team for a set period working on a shaped problem. Be explicit in the contract about what is fixed and what is not.