Gun.io ROI Analysis
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Summary:
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This model provides a risk-adjusted ROI calculation that compares Gun.io's professional freelancer team-based approach with a traditional shop or agency approach to software project delivery. The model allows for what-if analysis for executive sponsor consideration and education. While no model is perfect, we have done our best to include reasonable assumptions relative to industry norms, and our own data analysis based on more than 30,000 hours of project work
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Quantitative Deal Metrics:
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VariableValueNotesTypical RangeAssumptionsSource
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Shop or Agency Hourly Rate$150.00Even on a "fixed-bid" basis, all parties are ultimately calculating an hourly rate based on the required utilization of staff.$60-$100/hrsenior; full stackPayscale.com
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Shop or Agency Attrition and Replacement Cost Risk Premium10.00%Having left your project (either via termination or attrition), the cost of replacing a shop or agency as a percent of the hourly rate (includes recuiting and retraining a new group of people, and going through onboarding again).10-20%Knowledge workersZaneBenefits.com
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Shop or Agency Transfer Risk Premium5.00%Termination and transfer of assets with a shop or agency is far more cumbersome than Gun.io's immediate transfer for IP and assets, with potential to slow down projects and incur substantial opportunity cost, especially relative to deadlines.5-15%
Knowledge Management Research & Practice
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Shop or Agency Knowledge Risk Premium10.00%Risk premium for one shop or agency with a fixed bench not having the range of skills and knowledge brought by a team of senior software/product professionals backed by an enormous virtual bench.10% - 25%Gun.io Data
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Shop or Agency Speed Risk Premium15.00%Risk you inherit by working at the speed of a fixed group of individuals who have an increasing list of other new clients. They must booked new clients, which means you constantly move down the priority list. By using a team that has multiple backups and redundancies you reduce this risk because there is no client contention.15-30%Gun.io Data
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VariableCostNotes
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Shop or Agency Hourly Rate$150.00Either hourly or fixed-bid translated.
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Risk Adjusted Shop or Agency Attrition and Replacement Cost$15.00
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Risk Adjusted Shop or Agency Transfer Cost$7.50
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Risk Adjusted Shop or Agency Knowledge Cost
$15.00
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Risk Adjusted Shop or Agency Speed Cost$22.50
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Risk-Adjusted Hourly Cost of Shop or Agency
$210.00
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Gun.io Proposed Hourly Cost$130.00
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ROI of Gun.io -v- Shop or Agency61.54%
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Note that cells highlighted in yellow above are variable and can be changed
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Qualitative Deal Metrics:
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With Gun.io you are accessing a team of proven professional to deliver your project. There is no single point of failure due to systematic back-up staffing with the Gun.io elastic bench.
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Gun.io has a documented 7% defect rate, of which we refund 100% to the client. The aggregate failure rate of IT projects industry-wide is 68%, representing a substantial existential risk that this model does not include.
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Fixed-bid deals are a sales technique utilized shops to continue to fund ongoing payroll obligations. They must continue to bring in new business in order to exist, making for substantial insolvency risk.
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The team approach implicit in the Gun.io solution includes superior business continuity to a single person working on the project, including no sick time, no vacation time, and multiple coverage points in multiple time zones. No small shop or agency can match this.
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With Gun.io you immediately own your IP (all your code, all your hosting). There is zero risk of code escrow (i.e. "code hostage") situations arising from fixed-bid, shop, or freelancer disputes.
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Shop or Agency
Single Freelancer
Full-Time Employee