Why we charge for discovery (and why $5,000 is the floor)

The most common question we get from founders is: “Do you do free quotes?”

The answer is no, and the reasoning is the most important thing we communicate before a contract gets signed. This is the post that explains why.

The economics of free discovery

The standard agency or software-shop model — free pitch, free spec, free estimate — has a built-in math problem.

Discovery, done well, takes 20 to 60 hours of senior time. Architecting a multi-tenant SaaS, sketching the data model, drafting a stack plan, scoping the build, and writing a real proposal is work. It is not “an hour on a discovery call.” It is multiple full days of an operator’s actual attention.

If you give that work away, you need a high enough conversion rate to absorb the loss on every engagement that doesn’t close. Let’s say discovery is 40 hours at a $150/hour blended rate. That’s $6,000 of unrecovered cost per pitch. If your win rate is 1 in 3, every closed deal has to absorb $18,000 of unsold discovery work. That number bakes into your price quietly, and the clients who do hire you are subsidizing the ones who didn’t.

We don’t want to operate that way. We don’t want our paying clients to pay for the prospects who shopped us and went elsewhere. So we charge for discovery and let the price find the right clients on its own.

What the $5,000 floor buys

The number isn’t arbitrary. It’s the price below which we can’t afford to do the work well.

A $5,000 discovery engagement includes:

• One working session (usually 2–3 hours, in person on Oʻahu or remote) to understand the business, the users, the constraints
• A written product specification — user flows, feature list, edge cases, what’s in and what’s out
• A data model — the tables, the relationships, the indexes
• A stack plan — frontend, backend, data store, AI integration, third-party services, hosting
• A phased build timeline with milestone definitions
• A preliminary build budget with line items
• An AI-integration strategy where applicable (which Claude calls live where, what gets cached, where humans stay in the loop)

That output is yours regardless of whether you build with us. We deliver it as a PDF and a Notion doc, and you can hand it to another developer if you’d rather. The thinking is what we’re charging for. The thinking is real work.

$5,000 is the floor for a simple build — a small SaaS, an internal tool, an iOS app with limited scope. $15,000 is the ceiling for the most complex engagements — multi-tenant platforms, multi-product systems, anything with real ML or significant compliance burden. Most engagements land between $7,500 and $10,000.

The credit

The discovery fee is credited toward the build cost if you proceed. So a $10,000 discovery on a $90,000 build means the build invoice is $80,000, not $90,000. The discovery wasn’t an extra cost — it was the first installment.

This matters because it removes the “I’m paying twice” objection. You’re not. You’re paying once. We just bill the planning portion up front, before the architecture decisions are baked, because we want you to take those decisions seriously and so do we.

If you don’t proceed with the build, the fee is non-refundable. The thinking happened. The output was delivered. Both sides did their part. That’s how professional services work in every other industry — architects, engineers, lawyers, accountants — and we don’t see why software should get special treatment.

What the price filters out

The $5,000 floor isn’t a money-maker. The studio’s actual margin lives in the build phase. But the floor does two things that matter more than the discovery revenue itself.

First, it filters for clients who take the project seriously. If you can’t write a check for $5,000 to start a $100,000 build, the build was never going to happen. The number is small enough that any real founder or operator can clear it. It’s large enough to be a non-trivial decision. That decision is the first signal of commitment. We are not interested in pitching tire-kickers, and the floor saves both sides a lot of time.

Second, it filters for clients who understand professional services. A client who reacts to a paid discovery model by saying “we’d want to see a free proposal first” is telling us something important: they think of software work as a commodity. They are looking for the lowest-cost provider. They will negotiate every line item. They will not respect the architecture decisions when we make them. We are not a fit for those clients, and they are not a fit for us. The floor makes that conversation happen in week one instead of week six.

What this is not

This is not a barrier built to extract money from prospects. It is not a paywall on conversations. We do not charge for first calls, for general questions, for “would Ikena be a fit for X.” Those conversations are free — usually 20 to 30 minutes, via Cal.com, and we do them gladly.

What we charge for is the work. The moment we open a blank doc and start writing your specification, the meter is on. The line is bright and we’re explicit about when we cross it.

The kind of client this works for

The clients who hire us under this model tend to share a few traits:

• They have done at least one paid professional engagement before — with a CPA, a lawyer, an architect, a consultant — and understand how those relationships work
• They have a real business with a real problem, not a pre-product idea looking for free validation
• They are working from an actual budget number, not a hope that someone will work for equity
• They want one operator responsible for the build, not a body shop with shifting account managers
• They want the discovery output to live with them — they’ll use it whether they build with us or not

If those traits describe you, we’re probably a fit. Begin a design engagement.

The kind of client this won’t work for

Equally honestly:

• Pre-product founders who want free validation
• Clients shopping for the cheapest implementation of an already-spec’d build (you don’t need our discovery — go straight to implementation)
• Enterprise procurement processes that won’t allow per-engagement fees outside of MSAs
• Anyone who wants us to compete against another shop in a bake-off

For those, there are other studios that fit better, and we’ll happily point you to a few. We’d rather be honest about fit in week one than discover the mismatch in week six.

The trade we’re making

Charging for discovery means we close fewer deals. The conversion rate is lower than a free-pitch shop would have. We’ve made peace with that. The deals we do close are higher-quality engagements with clients who are bought in, who respect the architecture decisions, and who pay invoices on time. That’s worth more than volume.

This is the same logic a finish carpenter uses when he charges for a site visit. The shop down the street gives free estimates. He gets fewer leads. The leads he gets are serious, the clients are pleasant, the jobs go smoothly, and he’s still in business at year ten. The shop down the street isn’t.

That’s the trade. We made it on purpose.

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Ikena Design & Build is a software studio in Honolulu, Hawaiʻi. Discovery engagements begin at $5,000 and are non-refundable. The fee is credited toward the build cost if you proceed. Schedule a free first call or send an inquiry.