Throughout my time as a product manager, software engineer, and the CTO of Zentap, a marketing tech startup that I co-founded, I have always wrestled with the decision of building my own version of a service or purchasing it as a SaaS (software as a service; eg. Slack). This kind of a decision may be the single most important and costly decision that can be made by a startup. Startups survive on speed and quality; you MUST be able to provide a quality product fast, if you don’t, you’ll sink the ship.

On one hand, writing out and managing code can be timely and expensive, especially for small product teams. It’s not cheap to manage micro services and layering code on top of an already big monolith repo can bring your DevOps to a halt. If you take too long to build the service on your own, the feature you're trying to put together might not even be relevant to your users anymore, and you would have spent all the time and money for nothing. Not to mention that your competitor might beat you which can result in losing out on potential customers, or worse, your customers may leave you for the competition.

On the other hand, third party vendors can be terrible. If they mess something up, guess what? It becomes your screw up. Your customer doesn’t care that you use Joe’s email SaaS to provide an email marketing feature to them. If Joe has a bug, or his servers go down, it’s on you. You sold a feature to your customer, they expect it to work. Another issue is vendor’s support. Let’s say you implement a feature using another one of Joe’s SaaS tools and one of your customers happens to run into a bug. They report it to you and you report it to Joe, now you’re stuck until Joe responds to your support ticket and fixes the problem. You become a sitting duck, waiting for Joe to get around to fix your bug, meanwhile your customer is getting agitated. As more time goes on, they will begin to consider cancelling. This is one of the WORST positions to be in as a startup; your hands being tied by a bad vendor.

What to do in this situation?

Before making the buy vs build decision, you MUST do a thorough cost benefit analysis. Some questions to ask yourself are:

How long will this take to build?

Don’t know? Hire an expert on UpWork as a consultant for an hour and get their opinion. This is perhaps one of the most effective start up hacks. The internet is your friend, use it.

What am I putting aside to work on this?

Opportunity cost is something people tend to look over. If you’re going to build something yourself with limited resources, you’re most likely going to have to deprioritize another project to get on this one. Is that worth it? Hiring a third party vendor could allow you to get a new feature up QUICKLY without compromising your roadmap deadlines.

Is this vendor reputable?

When relying on third parties, you really want to make sure that you work with the most reputable and highly rated vendors. Sometimes the cheapest vendor might cost you the most in the long run, so choose wisely. Pro tip: ask your colleagues or the internet for recommended vendors, it might save you a lot of time on the vetting process.

Is their support top notch?

If they offer a premium support plan, get it, don’t think twice. It is almost inevitable for any software to  run into a bug during production or an outage. You want to make sure that you can get a response as quickly as possible. In the startup SaaS space, time is money.

What will it take/cost to maintain and update this service if I was to build it myself?

Building your own service is half the battle. You can’t write code and forget about it. It needs to be maintained, updated, and improved upon, or else the feature will most likely get stale and unusable. A huge upside to working with a third party is that the burden of maintaining and updating falls on them.

Conclusion

Do not take the build vs buy question lightly, it can seriously make or break your business. Ask yourself, what do you have to lose and what do you have to gain? Buying seems like it could be an easy solution, but could really hurt your business in the long run. The same goes for building things out yourself. In my opinion, you need to have a good balance of both. Given limited resources, you won’t be able to grow fast enough if you build everything yourself, and you definitely cannot rely on third party vendors to build everything out for you. I personally like to build out core features, and buy ones that are more anscialry. When moving forward in your development, ask yourself the questions I mentioned above and choose wisely!