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Milestone Billing vs. Hourly: Why We Never Bill by the Hour

April 14, 20255 min read

Hourly billing is the original misaligned incentive in software services. When you pay by the hour, you're rewarding time spent — not outcomes delivered. We built AlgoCrew on a different model.

The hourly trap

Imagine hiring a plumber who charges by the hour. Would they rush to fix your pipe, or take their time? Hourly billing makes slowness profitable. It penalises efficiency. And it creates a dynamic where the client is always watching the clock instead of focusing on the product.

In software, this is especially damaging. A senior engineer who solves a problem in 2 hours earns half as much as a junior who takes 4 hours. That's backwards.

How milestone billing works

Every engagement is broken into 2–4 milestones tied to concrete, verifiable deliverables. You pay when we ship the milestone — not before. If we miss a milestone, you don't pay until we deliver.

This means our incentives are perfectly aligned with yours: we want to ship fast, ship well, and move to the next milestone. Speed and quality are how we earn.

What a milestone looks like

  • Milestone 1 — Authentication, database schema, core API endpoints. Deployed to staging.
  • Milestone 2 — Core user flows complete, tested, deployed to staging with QA sign-off.
  • Milestone 3 — Production deployment, monitoring setup, handover documentation.

The 30-day exit clause

For ongoing Studio engagements, we add a 30-day rolling exit. Either party can end the engagement with 30 days notice. No lock-in, no penalties. This keeps us accountable every single month.

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