Tech Debt Interest Rates
The technical term for the results of lazy-today decisions that create more work later is technical debt, and when it comes to technical debt, there are two extreme camps:
Those who say that all of this worrying about clean code, good architecture, AI model evaluation, etc., slows you down unnecessarily. While we worry about test coverage, they launch ten new features.
Those who insist you better do it perfectly today, lest it all come crashing down on you.
Smart investments
The right amount and mix of tech debt lies somewhere between recklessly forging ahead and never getting anything shipped.
Like financial debt, where we make a difference between smart debt that finances future growth and unwise debt that finances excessive consumption, we can differentiate between wise and foolish tech debt.
Smart debt has a low interest rate while enabling massive progress today
Foolish debt has a high interest rate and does not unlock meaningful potential
“Interest rate” refers to how much extra work you’d have to do tomorrow because of your tech choices today. There’s a world of difference between “we didn’t want to spend time to nail down a design system, so we’ll have to go back later and replace hard-coded color values with style variables” versus “we picked a dead-end tech stack for the type of app we’re building so we need to rebuild from scratch”.
Some concepts we’ve come to appreciate at AICE Labs:
I prefer tech debt that you can pay down in small installments over time, compared to debt that requires a big lump sum payment. You can fit that work in here and there and immediately reap the benefits.
When interest rates are low and a time-sensitive opportunity is at hand, incurring debt is fine, even advised, especially if the opportunity unlocks additional resources you can use to pay down the debt.
Be honest about why you’re incurring tech debt. Are you being strategic or just lazy?
