What is Story Points estimation?

Story Points are a relative estimation unit used to measure the effort, complexity, and uncertainty of Product Backlog Items — NOT time or hours. They capture three factors: (1) Effort — how much work is involved; (2) Complexity — how complicated the problem is; (3) Uncertainty/Risk — how much is unknown. The key insight: story points are relative. A 2-point story should take roughly twice as much overall work as a 1-point story. Typical scales: Fibonacci sequence (1, 2, 3, 5, 8, 13, 21, 40, 100) or T-shirt sizes (XS, S, M, L, XL). The Fibonacci scale is popular because the gaps grow as uncertainty grows — there's no meaningful difference between 6 and 7 hours of work, but 5 vs. 8 points reflects meaningfully different complexity levels. Story points decouple estimates from calendar time, making them more stable across team members with different speeds. They enable velocity tracking without committing to specific hours.