Are you Buying or Building?



In getting a company off the ground, or in growing an existing company, there is often a decision that needs to be made: “do we buy X or do we build X?” This is a tricky one, but taking the time to arrive at the best decision is worthwhile. There are many facets of business where this decision is important – from hiring v. training, to developing v. licensing. I don’t know that there is ever truly a “right” answer, but there are certainly “wrong” answers.

As one example, imagine a company whose technology product is very specialized, requiring a knowledge set that is less common. The company faces two possible options: a) find and recruit someone who is a perfect match, or b) find somebody that can develop the necessary skills and become that person.

The truth is, the company didn’t really have a wrong choice, but having chosen option “b”, will emerge with leadership that is specialized to their unique product. Furthermore, an individual with the experience and skill set would be difficult to find, not to mention very expensive to directly hire. This is an interesting situation: the more unique your product is, the more likely it is that developing your talent becomes a better choice than buying it.

In software this becomes an even more common conundrum. I have two principle suggestions. When your product is genuinely novel, chances are that developing everything from the ground up is most sensible. But the less novel the product is, the more viable it becomes to explore buying or licensing prior work to repurpose. This might seem obvious, but it isn’t.

Take time to examine your plans and determine the various ways that you can avoid building something from scratch, it’s time consuming and expensive – and often times unnecessary. This brings me to my second point: open-source software is frequently overlooked by the non-technical entrepreneur.

If your product is not incredibly unique, hunt for open-source code similar to what you are building. There is a good chance that somewhere, a zip-file is waiting for you with 60% of your project already finished. Just find the right pieces, and then repurpose them. In some cases this may be frivolous, but it’s definitely worth exploring regardless.

Buy v. Build boils down to understanding the objective facts of your situation. If your needs really are unique, then you are likely going to have to build everything. However, if you can bite the bullet and recognize that not every aspect of your company is that “special”, then you can save yourself a lot of time and money and stand on someone else’s shoulders. Your investors will thank you.

About the author: Maxim Wheatley

Maxim Wheatley is a recent graduate of Georgetown University, having studied Cognitive Science & Psychology. He is currently working to become an iOS development guru. His interests center around startups and new ventures, he has already been involved in three different startups, and started two small businesses before he graduated college. Currently based in Washington, DC, Maxim is always interested in talking about ideas and opportunities wherever they might be.

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