4 Aspects To Consider On Building Or Buying For Your Products

Every Product Manager often comes across this question: Build or Buy?

In this era, it becomes particularly tempting to "buy" because short time-to-market is crucial to fend off competitive forces. Moreover, the provider universe has expanded exponentially.

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4 aspects to consider

Think about the short, mid and long term plan for the feature

Is this a supporting feature that's not bound to change much? For example, a payment checkout which needs to capture funds. Or is it something which might evolve over time in unpredictable ways? For example, a gamification rewards system. Lean towards building in that case.

Assess the opportunity cost

If you do decide to build a feature, what exactly will you be giving up in terms of your roadmap? Are you delaying something that is strategically more essential?

If it's pushing out a far more compelling user story without much gain, then reconsider.

How core is this feature to your product?

Is it going to be a unique selling point for your product or an auxiliary tool? Is it a commodity like an email composer?

Avoid outsourcing your core to a foreign product - always build in that scenario to retain control.

Cost comparison

If you build it, add up the estimate cost of development and project management + some buffer for expected delays, holidays etc. Then, slap on the maintenance, training and operational overheads.

For the buying option, build a time series which considers the subscription fees over time + add-ons. If the product depends on usage, factor that in by creating a steady incline month over month.

Line up the potential revenue stream against this to compare the dividends. Buying should ideally allow you to release early creating a head start.

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Some other considerations to make on either side of the fence

Build

• Do you have the expertise to build the right product? (ex: talent)
• Do you have the infrastructure to build the product right? (ex: tools)

Buy

• Track record of available providers?
• How complex is the integration process?
• How seamless will the experience be? (ex: white-labelling or branding options?)
• How well will it integrate e.g. are the APIs comprehensive?
• Who will own the data?
• How's the user education story? Trainings?
• Are there any backup players? Will you be risking everything on one provider?
• How will the performance & customer support SLAs be like?
• Will data be difficult to migrate out if you plan to build later on?

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Examples:

• If you need a managed communication layer for email, it's cost-effective to buy something like SendGrid rather than invest effort in reinventing the wheel
• Twilio would be a strong contender for taking care of SMS/text workflows
• Similarly, if you need an email or page composer, Unlayer might be a viable "buy". It's a commodity
• However, if you're looking for native dashboards, complex onboarding flows or a workflow builder that will drive central product experiences, you might consider building