Product development often involves a multitude of ideas and potential projects, making prioritization a significant challenge. The RICE model provides a systematic approach to this issue, enabling product managers to evaluate and rank projects based on four key factors: Reach, Impact, Confidence, and Effort.

Here's a brief explanation of each factor:

• Reach: This refers to the number of people a project will affect within a specific period. It's quantified in terms of people or events per time period, such as "customers per quarter" or "transactions per month".
• Impact: This estimates the effect of a project on an individual. It's measured on a scale ranging from 0.25 for "minimal" impact to 3 for "massive" impact. In other words, a project with a "massive" impact is given a score three times higher than one with a "medium" impact.
• Confidence: This is a percentage that reflects the degree of certainty in the estimates for Reach and Impact. It's a tool to control enthusiasm for exciting but ill-defined ideas. High confidence is marked at 100%, medium at 80%, and low at 50%.
• Effort: This represents the total time a project will require from all team members. It's estimated in "person-months", the work that one team member can do in a month. The estimates are kept rough, using whole numbers and a minimum of half a month to avoid getting into the weeds of estimation.

The RICE score is calculated using the formula:

RICE Score = (Reach * Impact * Confidence) / Effort

This score measures the total impact per time worked, which is the ultimate goal of prioritization.

While the RICE model provides a structured approach to prioritization, it's not an absolute rule. There may be instances where projects with lower scores are prioritized due to dependencies or specific customer requirements. However, the RICE model ensures that such decisions are well-informed and justifiable.