Scaling a business requires build vs buy decisions - a 2x2 framework resource

Eren Koont
by Eren Koont LinkedIn
Apr 2, 2019 4:19:00 PM

As companies scale, especially in this SaaS-dominated economy, management teams will sooner or later be confronted with a build vs buy decision. All companies large or small, tend towards wanting to control everything they can. Compounding this natural inclination, if something is painful but “working,” they push making hard choices down the road. It's difficult to uncover what an organization is best suited to own fully, and what is worthy to hand off to external partners.

Trying to take on too much at any stage of your growth means you are burdened with maintenance costs and frankly ending up with a substandard portion of your offering.

Build vs buy 2x2 framework

Here is a simple 2x2 decision framework chart we use to make choices on what we’re going to build or buy at Ordway. It is useful for both the product development and business development sides of our house. Hopefully it will help you as you think about decisions for your business.

twoxtwo_2

Important definitions on using the the 2x2 decision matrix

  • Build it - use your talented team to design, build, test, and maintain it.
  • Decision time - do some rough (or precise) total cost of ownership analysis and think hard about whether this provides you a platform for differentiated value in your market
  • Find vendor - find a rock-solid, but arms-length vendor. Optimize for cost/performance
  • Find partner - find someone with aligned incentives if possible and be willing to pay a premium. You get what you pay for, right?

It just happened that one of our customers, Everhire, was going through a similar debate as they started to scale their tech platform which is designed to help growing companies recruit top talent.

Watch a two-minute video about how Everhire decided whether to try to build billing, contract, and revenue management into their platform. Read their full case study to learn more about what they chose to do.

Topics: billing, SaaS, recurring revenue, automation, careers, startup, build vs buy

 

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