April 30, 2019

Buying vs Building - Anybody had to make this decision?

Nil @NilMostChill

Hello, long time lurker here, thought I'd start actually getting involved in some things.

I've got an idea, a target niche, a few validation/sales/marketing things just about ready and while I'm not committing to any solid product development yet, I've been looking around at possible alternatives to having a bespoke product made.

There are a few saas based platforms that i could whitelabel and it would get me maybe 70-80% of the way there as far as functionality is concerned.
The buying and branding cost, on the surface, is a far better prospect than building from scratch; it'd be quicker, cheaper and much less hassle in the short to mid term.

The problem is, i think some of the more unique (and potentially profitable) functionality can't be viably achieved using the bought platform as a base, meaning a potentially significant hit later down the line to migrate/build.

Anybody faced any similar decisions before? how did it work out for you ?

  1. 3

    My company sells Customized Platforms that can be white-labeled so I have a few insights to share. If you are just starting out, don't build your own YET. If you can find a middle ground i.e. use a SAAS that could be white-labeled and it gets you the 70-80% goodies, go for it. The reason is simple. You need to spend a lot more time doing market validation, sales and marketing. Until you have a matured user/customer base, you wouldn't know what you really need to build on your own anyway. So don't overthink it.

    We get a lot of customers for our B2B White-Labeled SAAS who tried to build their own product prematurely. They spent thousands of dollars before they realized it was still not good enough and they spent money on the wrong things. Instead, they should have spent time and resources on validation, sales and marketing.

    Moreover, we had some customers successfully transition from using our white-labeled SAAS where they paid a few hundred bucks a month to asking us to finally custom build them their own platform for thousands of dollars. The reason: They finally knew what they needed after 12 months+ of solid business. Anything before that is an overkill.

    1. 2

      Apologies for the hugely late reply.

      Thank you for your answer it was very helpful in deciding on going with the pre-built solution.
      Even more so because the comment about market validation made me go back and check the validation i'd already done.

      Long story short, i tried out a limited scope version of what i was planning and it worked great.....at proving there wasn't really any demand for it..at all.

      Also i didn't really want to run a business doing it.

      Just a failure on all fronts really.

      On the plus side, no 6 months to a year of building something that nobody wants.

      So...success ?

    2. 1

      FWIW, I don't sell anything related to this decision but this is good advice. Avoid building if you can, because often the opportunity cost against being in the market and learning more about customer needs is higher than most people estimate.

      And, usually the user doesn't care. If you can solve a problem (or 80% of it) they'll tell you how they want the problem solved further.

      Also, I've seen more than not that the estimated hit down the line by going live with a non-custom build is actually a) not as expensive as you thought, b) doesn't look like you thought it would, and c) doable, because you have a real business.