HomeBlogAgileFibonacci Agile Estimation- How does it work in practice?

Fibonacci Agile Estimation- How does it work in practice?

02nd May, 2024
view count loader
Read it in
7 Mins
In this article
    Fibonacci Agile Estimation- How does it work in practice?

    In this article, my focus is on sharing my experience as a Trainer/Mentor/Coach to Agile teams with respect to Agile estimations; and on using the Fibonacci sequence as scale to size the Story. 

    What will you learn in this article? 

    Agile practitioners mostly use story points as a measure for estimation, typically using the Fibonacci scale. In this article, we are going to understand the top reasons why we use the Fibonacci series for estimation, and how it works in practice. 

    Before we get to the details, let us try to understand some of the fundamentals. 

    Why do we need to estimate?

    Estimates help the project team to: 

    • Identify the time & effort required to arrive at the project schedule 
    • Identify the right number of people required to do the work 
    • Arrive at the budget by rolling up the cost of all activities required to complete the work; and 
    • Prioritizthe work in conjunction with the value that will be delivered. 

    Some software developers fear to provide effort estimates as they are accountable to complete their work within the time.  Hence, they take so much time to get into the details to make sure they have enough information to provide the estimates. This sometimes may not be possible during the beginning of the project as the team may not have enough information on hand to provide the effort estimates for all the tasks to be performed. Hence the order of magnitude (ROM, Budget or Definitive) will be applied at various stages during the project based on the available information to predict the effort needed to complete the activities. 

    Agile Estimation  

    Typically, in traditional project management, effort estimations may or may not be agreed upon by the entire team. Estimates may either be given by the Project Manager/Tech Lead to the team or the developers/testers may estimate for the piece of work that they have been assigned. This way of estimating a project does not provide an opportunity for the team to collaborate. There may be a difference of opinion with the team members in the effort that need to be spent on an activity. 

    The way the estimations are done within an Agile team is little different. It is just not about the measure used to estimate the effort (for example Story Points), but ensures that the team collaborate among themselves, thus providing an opportunity for knowledge sharing. This helps the accuracy of the estimates when compared to doing individual vs group estimates as the team members come from different backgrounds and roles (developers, testers, quality analysts, business analysts). 

    An Agile team effort estimate focuses on relative sizing of user stories and does not focus on the duration; hence it is faster. The team learns to size the story relatively and accurately over a period of few iterations (sprints), thus improving the predictability (arrived through establishing consistent velocity over a period of few iterations) as well.  

    Planning Poker is commonly used as the planning exercise for the team to collaborate and size the stories. Planning Poker uses Fibonacci sequence to assign a value to the epic/feature/story. 

    Agile Estimation

    What is Fibonacci Series?  

    According to Oxford dictionary, Fibonacci Series is : 

    “ a series of numbers in which each number ( Fibonacci number ) is the sum of the two preceding numbers. The simplest is the series 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 etc 

    The formula to arrive at a Fibonacci sequence is: 

    Xn = Xn-1 + Xn-2 

    This sequence will be slightly modified when used in Agile estimations: typically, it will not have values beyond 100 and may have 0, ½, 1, 2, 3, 5,8, 13, 20, 40, 100. Some teams limit the highest value as 21 and use 0, 1/2, 1, 2, 3, 5, 8, 13, 21. 

    Reasons of Using Fibonacci Sequence for Estimating Tasks  

    1. Weber–Fechner law: 

    “The Weber–Fechner law refers to two related hypotheses in the field of psychophysics, known as Weber's law and Fechner's law. Both laws relate to human perception, more specifically the relation between the actual change in a physical stimulus and the perceived change. This includes stimuli to all senses: vision, hearing, taste, touch, and smell” 

    Applying the law to Numerical Cognition,  

    Psychological studies show that it becomes increasingly difficult to discriminate between two numbers as the difference between them decreases. This is called the distance effect. This is important in areas of magnitude estimation, such as dealing with large scales and estimating distances. It may also play a role in explaining why consumers neglect to shop around to save a small percentage on a large purchase, but will shop around to save a large percentage on a small purchase which represents a much smaller absolute dollar amount”  


    The Fibonacci sequence very well corresponds to Weber’s law. The values in the Fibonacci sequence are about 60% higher than the previous value, and hence applying relative sizing is much easier. 

    It is very challenging to distinguish the size of two numbers which are adjacent to each other, by just looking at the objects. Let us take an example of a football and cricket ball. The approximate diameter of a cricket ball would be 2.8 to 2.86 inches whereas the diameter of a football would be 8.66 inches. It is easy to distinguish the relative size of these two (i.e., approximately the diameter of a football is 3 times that of a cricket ball). 

    However, it is very challenging to distinguish between two cricket balls that vary 1 inch in diameter, unless you measure both. If you look at the Fibonacci sequence, the relative size between two adjacent numbers is more than 60% and this helps us to be able to size them accordingly.   

    2. Reflect Uncertainty 

    The smaller value assigned from the Fibonacci sequence to a user story usually means that the story is well understood, and the user story follows INVEST (Independent, Negotiable, Valuable, Estimable, Small and Testable) guidelines. Whereas the largest value denotes the story is not well understood or it needs to be broken down further. Smaller stories can be confidently estimated by the team in detail. 

    A general practice from matured Agile teams is that the Fibonacci sequence is restricted up to 21 (0,1,1,2,3,5,8,13,21) and any story which is of size beyond 21 will have to be broken down further. This ensures that the team is not giving any room for greater uncertainty and good practice for the team to write better stories under the INVEST guidelines. 

    3. Comparison 


    Though it is not mandatory to use Fibonacci sequence for story point estimations, the sequence is easier to understand and adoptable by the team. Individuals are better at comparison than estimation.  

    The easy sequence and distinguishable values of Fibonacci sequence helps to estimate by not measuring the objects but by comparison. 

    Upgrade your expertise with our convenient PMP classroom training. Our expert instructors and comprehensive study material will equip you with the knowledge and skills needed to ace the exam and advance your career. Enroll now to take the next step in your project management journey.

    How Does Fibonacci Agile Estimation Work in Practice?  

    When do you think is the right time for the Agile team to estimate user stories that are prioritized by the Product Owner in the product backlog? 

    In my experience, I would say that the estimates (story point sizing) should happen during the Iteration/Sprint backlog grooming sessions. This gives the team the time to go through the user stories in detail, collaborate and mutually agree using the Planning Poker exercise.  

    Then what do we do in Sprint Planning? – This ceremony should be used to pick the stories from the product backlog (fulfils Definition of Ready), that can be completed within the iteration/sprint and then breakdown the stories into tasks and do one more level of estimation which is effort estimation denoted in hours. 

    Let us say a team is assigned a task to estimate a reporting module to be developed: 

    • The team would agree that it is a difficult task to provide an effort estimation and it would take longer time to complete; but how long will it take? 
    • Using Simple, Medium and Complex categorization would simply mean that the estimate falls into the Complex category; but how complex is it? 
    • Breaking down the requirement into granularized tasks, getting to the minute details and then arriving at an effort estimation would be a complex process and time consuming as well. 
    • Can the team take linear sequence (1,2,4,8,10,12,14,16….) and size them for a high-level estimation? Is it possible to size between 50 and 52? What can be defined as the highest scale? 
    • Using Fibonacci series helps the team to size the stories which have a distinguishable value and as discussed earlier, matured Agile teams use modified Fibonacci series and have highest scale of 21 to size a story. 
    • As discussed above, the Fibonacci numbers are 60% above than the previous number, and that helps in relative sizing. 


    There are various methods to estimate user stories, like T-Shirt sizing, Dot voting, Affinity Mapping etc. Story points is the widely used measurement for sizing the user stories. Fibonacci series helps the team to compare between two storiesand its very nature of distinguishable values helps them to fit the story into the right size that reflects uncertainties, which further helps the team to refine the story to remove those uncertainties. 

    Hope this article was useful to you.


    Lindy Quick

    Blog Author

    Lindy Quick, SPCT, is a dynamic Transformation Architect and Senior Business Agility Consultant with a proven track record of success in driving agile transformations. With expertise in multiple agile frameworks, including SAFe, Scrum, and Kanban, Lindy has led impactful transformations across diverse industries such as manufacturing, defense, insurance/financial, and federal government. Lindy's exceptional communication, leadership, and problem-solving skills have earned her a reputation as a trusted advisor. Currently associated with KnowledgeHut and upGrad, Lindy fosters Lean-Agile principles and mindset through coaching, training, and successful execution of transformations. With a passion for effective value delivery, Lindy is a sought-after expert in the field.

    Share This Article
    Ready to Master the Skills that Drive Your Career?

    Avail your free 1:1 mentorship session.

    Your Message (Optional)

    Upcoming Agile Management Batches & Dates

    NameDateFeeKnow more
    Course advisor icon
    Whatsapp/Chat icon