Sizing vs Estimating: Why User Stories ≠ Story Points

In product development, one of the most common sources of confusion between stakeholders and engineering is the difference between user stories and story points. Too often, the two are treated as interchangeable, or worse, story points are misused as if they represent exact hours or days of effort.

SimplAI Products proprietary Product THREADS™ process makes a clear distinction. User stories are sized early to guide business decisions, while story points are estimated later to guide delivery planning. Both are important, but they serve very different purposes.

A user story captures what a user wants and why it matters. For example: “As a student, I want to reset my password so that I can regain access to my portal.” When stories are first introduced, the goal is not to nail down engineering complexity. The goal is to understand the value of the story and get a rough sense of its size.

This initial sizing is still provided by engineering, but it is deliberately quick and based on experience. Engineers can usually tell whether a request looks small, medium, or large by comparing it to similar work they have delivered before. This level of estimate is not precise, but it is enough to answer a directional question: is this a minor enhancement or a major investment? That is all that is needed to support a decision on whether to move forward, without requiring hours of analysis.

Product and Engineering aligning priorities

These rough sizes can then be rolled up into broad resourcing estimates. When all the smalls, mediums, and larges are totaled, it becomes possible to estimate the size of the team required to deliver everything over a given period of time. With this in hand, product and business leaders can model different scenarios using the familiar time, quality, and cost triangle. If time is fixed because something must launch by a certain date, then the options are to either add more resources (increase cost) or reduce scope (decrease quality). If budget is fixed, the trade-offs are to push out the release date (increase time) or cut scope (reduce quality). If a minimum scope is non-negotiable, then either resources must be increased (raise cost) or the release date extended (increase time).

Standard Time, Quality Cost Triangle

This ability to model trade-offs before any code is written directly shapes the business case. It helps determine how much must be invested to generate revenue by when, and it can fundamentally change the decision about whether, or in what form, the product should be built at all.

If the decision is made to proceed, the story then goes through a more detailed estimation process. This is where story points come in. Story points are a relative measure of complexity, effort, and risk. They are not directly tied to hours. Instead, they allow the team to compare stories against one another. A three point story should be roughly half the effort of a six point story and twice the effort of a one point story. While teams will ultimately translate velocity into forecasts that resemble hours or weeks of work, story points remain a relative measure first and foremost.

Unlike initial sizing, developing story point estimates is a much more involved exercise. The team discusses architecture, dependencies, potential edge cases, testing needs, and integration points. It is still an estimate, but it is far richer in detail and provides the baseline for planning capacity and forecasting delivery.

Separating the two levels of estimation creates several advantages. It improves efficiency by avoiding wasted engineering time on work that does not progress beyond the business case. It provides clarity by showing that the first estimate is directional, while the second is used for delivery planning. It keeps business decisions about what to fund separate from engineering decisions about how to deliver. This separation is especially valuable for larger releases, where the number of user stories is high and the time required for detailed story point estimation can quickly add up.

Consider a new Partner Dashboard feature. In its early stage, product might ask engineering for a quick estimate, and the response could be that it feels “large” based on prior work. That is enough to highlight it as a significant investment. If leadership decides the return on investment is not there, the idea stops here and no further engineering time is lost. If it is approved, the stories are refined, acceptance criteria are added, and the engineering team estimates them in detail. One story might come in at five points, another at thirteen points. Those estimates then drive sprint planning and delivery forecasts. The same feature has gone through two different estimation steps, each serving a distinct purpose.

When organizations fail to make this distinction, problems follow. Stakeholders expect detailed estimates too early. Engineers spend cycles on work that is never delivered. Story points are misinterpreted as time commitments, which creates unrealistic deadlines and erodes trust.

The solution is simple. Train stakeholders that story size is not the same as story points. Keep the early estimate lightweight and directional. Reserve story points for when the decision to build has already been made.

User stories and story points are both essential, but they are not the same thing. Sizing supports business decisions. Story points support delivery planning. By keeping them separate, the Product THREADS process ensures the right tool is used at the right time, resulting in better alignment between product and engineering, more efficient planning, and fewer wasted cycles.