To Build or Not to Build

As per Marc Andreessen, “Software is eating the world”. More importantly, the endeavor of building dud software is going to eat your money, your mind, and will inflict significant opportunity cost on you. For technology management, the question of whether to build or not to build software is not an easy one, but here are some pointers.

Today, I am focusing on when not to build software. I will tackle the counter pointer some other time.

Cons of Building Software

Significant upfront cost - Before deciding to build your own software, you have to figure out if you have enough developer resources and other experts required. How much will it cost to hire additional resources and how will you go about it? You will realize that building software is always an expensive affair.

Time spent - Another factor that weighs heavily on the cost of building software is the time spent on it. Unless one has the experience, there is always a risk of overshooting the time allotted to building the software. Will you be missing out on the market opportunity? Can you afford to spare your team and resources for such a long time? Would they be more productive in your core business area?

Support and maintenance costs - The costs related to building software just don’t end when you have finally built the software. The software will need to be maintained and updated as per business trends, regulatory changes, third party integrations, or addition of new features. This will again involve more time and effort, or in short, more costs.

Do NOT Build Software When

It is readily available over the shelf - A thumb rule I follow is to go for ready-to-buy software that meets over 80% of your needs.

Your business needs it today - Buy software if you cannot afford to wait for the software to be built. When your business needs it now, get it now rather lose out on market opportunities.

You are not sure about the target market- If your target market is not defined and you do not have a product-market fit, you should not spend your resources on building software.

Your budget is limited- If you need to spend money elsewhere, it is better to go for the subscription model now and build later.