Hourly billing is broken. Here's why we charge fixed prices.
Most software agencies bill by the hour. It's the industry default, and for the agency it makes sense: track time, send invoice, get paid. The risk sits with the client.
We think that's backwards.
How hourly billing actually works
An agency gives you an estimate. "We think this will take 200–300 hours at €100/hour. So somewhere between €20,000 and €30,000." You sign a contract and work begins.
Three weeks in, the unexpected happens. An API doesn't work as documented. A feature is more complex than it looked on paper. You add a small request that shifts the architecture. The hours stack up.
The final invoice arrives at €35,000. Or €40,000. Nobody lied and nobody planned badly. Software is just complicated, and under hourly billing, you're the one who absorbs that.
The incentive problem
Hourly billing rewards slow work. Not on purpose — most developers are honest and hardworking. But the structure doesn't push toward efficiency. There's no financial reason to find a faster solution when the clock is running.
Hourly optimizes for time spent. Fixed pricing optimizes for results.
Why clients hate estimates
An estimate is a guess with a handshake. "Probably around this much" isn't a number you can budget around, especially if you're spending your own money or working with a fixed annual budget.
"€20,000–€30,000" sounds precise until you realize that's a €10,000 gap. That's another developer for two months, or a year of marketing for a small company.
And the range almost always expands upward. Nobody ever says "the project came in 30% under estimate."
How fixed pricing works
We quote a flat number before work starts. €4,900, €9,900, or €19,900 — depending on what you're building. That's the price. If it takes us longer than expected, we eat the cost. If we find a faster way, we keep the margin.
The incentives line up: we want to build efficiently because our profit depends on it. You want a working product at a known cost.
"But what if the project changes?"
It will. Software projects always shift once you see working code and realize what you actually need.
Small changes that don't blow up the scope — moving a button, renaming a field — are part of the process. They're included.
Big changes that reshape the project — adding a new user type, bolting on a payment system that wasn't in the spec — get requoted. We tell you the cost before we do the work. You decide. No surprises on the invoice.
This is actually better than hourly, where those same changes get absorbed into the billable hours and you only see them when the bill arrives.
"Don't you just pad the price?"
Fair question. Fixed-price agencies do build risk into their quotes. We take on the risk of overruns, so the price reflects that.
But hourly agencies have overruns too. They just pass them to you. With fixed pricing, you pay for certainty. The total might be slightly higher than a theoretical perfect hourly estimate, but perfect hourly estimates don't exist.
Think of it like hiring movers. You can pay by the hour and hope they're fast, or pay a flat rate and know what it costs. Most people prefer to know.
Who this works for
You have a clear idea of what you want built. Not a technical spec — that's our job — but you can explain what the software should do in plain language.
You have a budget. Not unlimited funds and vague ambitions, but a real number. Fixed pricing lets you plan around it.
You want to know the total before committing. Not an estimate, not a range. A number.
Who it doesn't work for
If you don't know what you want to build yet, fixed pricing is hard. We can't quote what we can't define. A paid discovery phase (1–2 weeks, also fixed price) helps sort that out first.
If you expect unlimited changes without cost implications, this model will frustrate you. Changes are fine — we just requote when they're big enough to matter.
Why we switched
We used to bill hourly. Clients liked the work but stayed nervous about cost. Every status update triggered a silent calculation: "how much have we spent so far?"
That anxiety doesn't make for good working relationships. With fixed pricing, people relax. Conversations focus on making the product better instead of watching the clock. It's a better way to work.
Datahivemind builds custom software at fixed prices. Starter projects from €4,900, full products from €9,900, complex platforms from €19,900. Get a quote →