February 1, 2025

Agile Estimation 101: Practical Tips for Developers & PMs

Have you ever stared at the Fibonacci sequence on your estimation tool– 1, 2, 3, 5, 8, 13 – feeling a knot in your stomach. As a new developer, you have to assign story points to your tasks, but the numbers felt arbitrary. Was adding user authentication really an 8? Or a 5? You may find myself picking numbers that "sound right" instead of understanding why.

If you've ever felt this way, you're not alone. Many developers, especially those new to Agile, struggle with estimation. We learn the mechanics—Fibonacci numbers, T-shirt sizes, planning poker—but no one talks about why these systems often feel disconnected from how we naturally think about work.

This guide takes a different approach. Instead of diving straight into techniques, we'll start with how your brain already estimates, why some methods feel arbitrary, and how to bridge the gap between intuition and formal Agile estimation.

By the end, estimation won’t feel like a guessing game. You'll understand your own estimation process—and those Fibonacci numbers will start making sense.

Why Estimation Feels So Hard (And How to Fix It)

Have you ever heard someone say "This task should take two days," confidently and you nod, but internally, you wonder: How did they know?

The struggle with estimation isn’t just about technical knowledge—it’s about the mental barriers we build around uncertainty.

Three Common Mental Blocks in Estimation

🔹 The Precision Paradox
Developers work in absolutes—code is either correct or broken. But estimation? It’s a best guess. This shift from precision to ambiguity can feel unnatural.

🔹 The Expertise Illusion
Many assume experienced developers are great at estimation. In reality, coding skill ≠ estimation skill. They’ve just learned to work with uncertainty rather than fight it.

🔹 The Fear of Commitment
New developers often treat estimates as contracts. The fear of being "wrong" leads to inflated estimates or avoiding numbers altogether.

How to Overcome These Blocks

Accept Uncertainty: An estimate is not a promise. Even senior developers adjust as they go.
Reframe "Wrong" Estimates: They aren’t failures—they’re data points that refine your intuition.
Think Relatively, Not Absolutely: Instead of exact timeframes, compare tasks: "This feels like a Medium compared to last sprint’s Small."

Mastering estimation starts with shifting your mindset. Now, let’s connect it to something you already do: estimating in daily life.

You Already Know How to Estimate—Here’s How to Use It

Estimation isn’t new—you do it all the time. Think about these everyday scenarios:

🔹 LEGO Sets: You instantly know a 100-piece car takes less time than a 4,000-piece Death Star.
🔹 Cooking: Making toast is quick. A sandwich takes longer. A three-course meal? A whole different level of effort.
🔹 Home Projects: Changing a light bulb is easy. Painting a room takes planning. A full renovation? Unknowns everywhere.

How to Build Your Estimation Skills

Set a Baseline: Identify a 1-point” task from past work. Use it as a reference.
Compare New Tasks: "Is this more like making a sandwich or cooking a full meal?"
Document Learnings: Over time, you’ll build a personal estimation library to refine your accuracy.

When stuck on an estimate, try translating it into a real-world task—it helps uncover hidden complexity.

Learning from "Wrong" Estimates (Instead of Fearing Them)

Early in my career, I estimated an API integration as a 3-point story. Five days, multiple authentication issues, and API mismatches later, I learned an important lesson: Being wrong teaches you the most.

Common Estimation Mistakes (And What They Teach Us)

🚨 The “Just Code” Fallacy
🔹 Mistake: Estimated a login button as 2 points—but forgot about state management, accessibility, and error handling.
🔹 Lesson: Frontend work is more than just coding the happy path.

🚨 The Integration Oversight
🔹 Mistake: Estimated a payment API connection as 3 points—didn’t factor in error handling, retries, and documentation gaps.
🔹 Lesson: Third-party integrations always take longer than expected.

🚨 The “It’s Just Like Last Time” Trap
🔹 Mistake: Estimated a CRUD screen as 5 points, assuming it was the same as last sprint—missed new validation rules and custom filtering logic.
🔹 Lesson: Similar features ≠ same complexity. Always check for hidden differences.

How to Turn Wrong Estimates into Future Wins

Keep an Estimation Journal: Track estimates vs. actuals. Identify patterns.
Create Personal Multipliers: Example: API integrations? Multiply by 1.5.
Document Assumptions: Clearly state what you included, what you ignored, and what could go wrong.

Every mistake refines your intuition. The goal isn’t perfection—it’s getting better with each sprint.

A Simple Framework for Estimating with Confidence

Step 1: Start with T-Shirt Sizing

Before assigning numbers, group tasks by size:
🔹 XS = Tiny UI tweak
🔹 S = Simple API endpoint
🔹 M = New UI component
🔹 L = Feature with backend changes
🔹 XL = Third-party integration

Step 2: Use Fibonacci for Complexity Scaling

🔹 1 = Tiny (one file change, no dependencies)
🔹 3 = Small (UI updates, single API call)
🔹 5 = Medium (New component, database update)
🔹 8 = Large (Feature with multiple dependencies)
🔹 13+ = Major (Unknowns, third-party integrations)

Step 3: Build a Shared Understanding with Your Team

Use Reference Stories: Keep examples of past tasks to compare against.
Explain Your Reasoning: "I rated this an 8 because of third-party dependencies."
Regular Calibration: Review past estimates vs. actual work. Adjust accordingly.

Estimate Collaboratively with Rally

Use Rally's Fibonacci Sequence for estimation. Get a breakdown of days based on experience level. When in doubt,  estimate with Rally AI.

Making It Stick—How to Keep Improving

Personal Estimation Cheat Sheet

Keep track of:
Your biggest underestimations (and why they happened)
Patterns in your estimates (e.g., do you always underestimate integration tasks?)
Common complexity factors (security, edge cases, unknowns)

Team Growth Markers

Your team’s estimation is improving if:
✅ Planning sessions are faster
✅ Story points align better with actual effort
✅ Fewer mid-sprint surprises