Story Points

Story Points are the most widely used relative estimation unit in agile teams, particularly those using Scrum.

Unlike time estimates (hours/days), Story Points are an abstract measure designed to represent the overall effort required to complete a backlog item (such as a User Story).

This effort is evaluated by considering multiple dimensions, not just time.

They use a non-linear scale to reflect the increasing uncertainty in estimating larger jobs and are based on relative comparison with other items, not absolute values.

Abstract Concept: Combining Time, Complexity and Uncertainty

Story Points are deliberately abstract and do not translate directly into hours or days.

Their value lies in the fact that they allow the team to estimate relative effort by considering three key dimensions simultaneously:

• Time/Volume of Work: How much work needs to be done?
• Complexity: How difficult is the work technically or conceptually?
• Uncertainty/Risk: How many unknowns or dependencies exist? What could go wrong?

By combining these factors, story points provide a more holistic view of the effort than a simple time estimate.

Crucially, they estimate the work itself, regardless of who performs it, making them more stable in the face of changes in task assignment or team composition.

The Modified Fibonacci Sequence (1, 2, 3, 5, 8, 13, 20...)

To assign story points, teams often use a non-linear scale, often based on a modified version of the Fibonacci sequence.

A common scale is: 1, 2, 3, 5, 5, 8, 13, 20, 40, 100.

The reason for using this scale, where the intervals between numbers increase as the numbers increase, is to recognize that estimating large jobs accurately is inherently more difficult and uncertain than estimating small jobs.

The difference between 1 and 2 points is significant, but the practical difference between, say, 34 and 35 is minimal and difficult to justify.

The scale forces the team to group larger items into broader effort categories, reflecting this inherent uncertainty.

Relativity and the Importance of a Baseline

Story Points are a purely relative measure. A "5" has no absolute meaning; it just means that it is more effort than a "3" and less than an "8" within the context of that specific team.

To establish this relativity, the team needs a baseline. Normally, when starting to estimate, the team selects a user story of medium size, well understood by all, and assigns it a value (often "5").

From that point on, all other stories are estimat