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January 20, 20266 min read

Vendor Economics for Web Platform Leaders

The vendor contract you sign in year one becomes the ceiling on your platform in year three. Design accordingly.

Code theme

The time-and-materials trap

T&M feels flexible. It is not — it aligns incentives to hours, not outcomes . The right structure blends a small T&M pod for discovery with outcome-priced delivery for known scope.

Outcome pricing that actually works

  • Define the outcome in the CMS itself (a shippable template, a launched market).
  • Price against a small number of measurable acceptance criteria.
  • Reserve 15% for change orders; anything less is a fiction.
ts
1type Outcome = {
2 id: string;
3 acceptance: AcceptanceCriterion[];
4 price: number;
5 changeReserve: number; // 0.15 * price
6};

References

  1. [1]Every vendor I've worked with will tell you privately that T&M is their preferred model. That should tell you something.

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