The two models
There are really only two ways to pay for a software build: a fixed price agreed up front, or an hourly rate billed as the work happens. The difference comes down to who carries the risk.
| Dimension | Fixed price | Hourly (time and materials) |
|---|---|---|
| Who carries overrun risk | The builder | You |
| Budget certainty | High — you know the total | Low — it depends on hours |
| Flexibility | Scope is fixed up front | Easy to change direction |
| Incentive | Ship efficiently | More hours = more revenue |
| Best for | Defined projects (MVPs, sites) | Open-ended R&D, ongoing work |
The incentive problem with hourly
Hourly billing quietly rewards slowness — every extra hour is more revenue for the builder and more cost for you. Fixed pricing flips that: the builder only profits by working efficiently, which aligns their incentive with your budget.
When hourly makes sense
Hourly fits genuinely open-ended work — long-term staff augmentation, research-heavy projects, or continuous iteration where the scope can't be defined in advance. For a project with a clear goal, fixed price is almost always safer for the client.
Our approach
We quote every project fixed-price, with the scope and total agreed before a line of code is written — no hourly billing, no surprise invoices. Get a fixed-price estimate.