In Season 2, Episode 10 of Lead Time Chats, Jean Hsu, VP of Engineering at Range, chats with Jack Danger, VP of Engineering at Pathstream, about technical debt — when to take it on, when and how to pay it down, and how to think about it.
Jack and Jean discuss:
Startups must take on technical debt to make smart investments that have higher ROI
“We all have an experience with technical debt and some nuance to stuff that's the worst or the stuff that is the most urgent. But there's not a whole lot of sophistication to measuring it, or we might try, but it's mostly just different heuristics of like how, how much, how fast is it getting really bad or how many of us on the team are impacted by it, or how often do we have to pay the cost? But there's a flip side of that, which is debt financing isn't just people taking on debt. They're taking on debt in order to make investments. If you are wise about this, you could take out debt at a known interest rate, hopefully low, and then make investments at an ROI that's higher. And if you get the numbers right, if you're right about the values, then you profit.
And I think that's actually what we do in software engineering most of the times, particularly in startups, right? Where time is extremely short, so you've got to take on a lot of debt. Financially, the company taking on debt, obligations to shareholders, but also sometimes even a debt finance round.
And then you cut corners in the code and the systems, you have to, in order to do something. But the question is what's that something. And one version of that investment is features you launch today, which is great and definitely useful, but another is something that prevents you from taking on debt in the future.”
Pay down your high-interest technical debt first
“There's a static page somewhere that's in backbone or it's jQuery and, oh, it's so ugly. It works. And nothing depends on it. And it depends on nothing. What is the interest rate on that? It's a 0% loan. You can pay that down tomorrow or in five years, it takes exactly the same amount to pay. But something getting worse, especially if it's in the middle of your system where you have to encounter it a lot, and every day you're making changes in your build system or your development set up. And every day you're paying the price. That is a very, very high interest rate. So if you have some time, pay that down.”
Find ways to align product, design, and engineering behind joint metrics
“One thing that unifies those three disciplines pretty well is this metric that I learned from Alyssa Henry when I was at Square. She leads all of engineering at Square, and before that she was at Microsoft, and before that she founded Amazon S3. This metric that she uses was major features launched per engineer decade. Every organization has to do the work to figure out what is a major feature or what is a feature, what's the value of a feature, are there different tiers? The important thing is that it's something end-user visible. It doesn't matter about the internal changes. It's like what new value has shipped from the company. So that's your numerator. And then just take the entire head count of engineering, or if you want engineering, product and design, and that's the denominator. You track this metric and your engineering, product, and design leads are suddenly very aligned.”
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Season 2 Episodes
» Episode 1: Camille Fournier on making boring plans
» Episode 2: Tess Rinearson on early career engineering managers
» Episode 3: Kim Scott on building for systemic justice
» Episode 4: Sumeet Arora on moving on from a big company
» Episode 5: Rachael Stedman on IC manager work
» Episode 6: Chris Bee on Behaviors of Effective Eng Leaders
» Episode 7: Lynne Tye on the Engineering Hiring Landscape
» Episode 8: Beau Lebens on Distributed Team Meetups
» Episode 9: Indrajit Khare on Getting Acquired by Google
Season 1 Episodes
» Episode 1: Will Larson on the path of the senior engineer
» Episode 3: Cate Huston on working with an external coach
» Episode 4: Juan Pablo Buriticá on common eng manager mistakes
» Episode 5: Gergely Orosz on the decision to go into management
» Episode 6: Lara Hogan on leading effectively in a pandemic
» Episode 7: Kaya Thomas on common early career engineer challenges
» Episode 8: Uma Chingunde on starting a VPE role in a pandemic
» Episode 9: Katie Wilde on supporting your team's mental health
» Episode 10: Akhil Gupta on navigating uncertainty in new roles
» Episode 11: Harper Reed on giving everyone a voice in team meetings
» Episode 12: Marc Hedlund on sponsorship