Build vs Buy: How CEOs Can Make the Right Call at Every Stage of Growth

Build vs. Buy: Making Strategic Tech Decisions That Drive Company Growth

Core Insight: It’s About Strategic Alignment, Not Just Technology

Every CEO I’ve worked with eventually faces the same tough question: Should we build technology in-house, or buy a ready-made solution off the shelf? On the surface, the decision seems straightforward. Underneath, it's a complex strategic calculation that profoundly impacts future valuation, operational effectiveness, and speed to market.

Let’s simplify it. Your decision hinges on three clear strategic elements:

1. Business strategy: What are your core competencies and differentiators?
2. Lifecycle stage: Early stage, growth, or operational efficiency?
3. Investor narrative: How does your decision influence the company’s story and valuation?

The debate isn’t about features. It’s fundamentally about future value and your ability to scale quickly and efficiently.

Defining Your Company’s Goals

To make the right decision, step back and understand your company’s strategic goals. Are you focused on scaling rapidly, acquiring market share, creating defensible IP, or optimizing internal efficiencies? Each goal distinctly shapes the build vs. buy calculus.

Fundraising & Intellectual Property: Investing in Strategic Assets

When you're raising capital—especially in Series A or B—investors focus intently on your strategic assets. Custom-built technology, if defensible, increases your valuation significantly.

For example, consider Square Foot, a Hong Kong real estate platform. The CTO and I debated deeply whether building a bespoke CRM would truly enhance valuation. It quickly became apparent: if our core strategy revolved around basic CRM functions, a proprietary solution wouldn’t offer strategic value. But if our CRM expanded into an analytics-driven Customer Data Platform powered by AI—something investors clearly value—that would differentiate us dramatically.

However, there's a risk here. Investors performing due diligence often uncover technical debt, bugs, and inefficiencies. If your custom-built technology isn't polished, it could hurt your valuation. In this scenario, a proven external solution, integrated effectively, could shield you from such risks.

CEO Takeaway: If your tech doesn’t clearly add investor-facing strategic value, strongly consider buying a proven solution.

Growth Stage: Speed is the New Currency

At the growth stage, your primary goal is rapid scale: more users, more revenue, faster market entry. The key strategic question becomes: Which path gets us to market quicker?

Let's unpack this:

• Business Outcome: Rapid user growth and accelerated market entry.
• Timeline and Costs: Internal development often takes longer and is expensive upfront. Integrating an existing solution is quicker and typically cheaper in the short term.
• Disruption Tolerance: Does your team have the capacity to handle extensive development projects without compromising core operations?
• User Adoption: Proven third-party products often come with built-in familiarity and lower barriers to adoption.

For instance, consider the decision to use machine learning. At early growth stages, building your own AI models from scratch is costly and slow. Leveraging existing ML platforms (like AWS, Azure, or OpenAI) can significantly speed up your product development cycle. You learn faster, iterate quicker, and validate market fit without draining resources.

At this stage, your technology stack should empower speed and execution. Buying solutions allows you to test quickly, pivot when needed, and achieve scale without major disruption.

CEO Takeaway: For rapid scale, buy proven technology to maintain velocity and conserve resources.

Operational Efficiency: Streamlining Your Organization

When efficiency and cost-reduction dominate your strategy, technology decisions must actively reduce complexity and overhead. If revenue growth slows or product usage declines, your first instinct might be to optimize costs. But before cutting back, ensure you've identified the underlying issues—is it product-market fit, user experience, or market saturation?

If efficiency truly is the goal, two key factors emerge:

• Cost Substitution: High-cost internal solutions (like custom AWS infrastructure) might be effectively replaced by lower-cost SaaS services. A well-integrated SaaS platform often drastically reduces ongoing maintenance and frees engineering talent for innovation.
• Resource Allocation: If engineering teams are already overwhelmed, building new systems in-house could exacerbate burnout. Buying streamlined, proven solutions helps reallocate human resources toward more strategically impactful initiatives.

Here’s a practical example: companies frequently spend enormous amounts maintaining internally built data analytics tools. Shifting to a specialized analytics SaaS tool can cut maintenance costs by half or more, reallocating resources toward innovation rather than upkeep.

CEO Takeaway: At this stage, SaaS is often your friend. Choose external solutions to reduce complexity, conserve resources, and sharpen focus.

New Product Development: Core vs. Context

Launching new products presents unique challenges. The build vs. buy decision hinges on whether the product or feature is core or context:

• Core features differentiate your offering and drive competitive advantage. Build these.
• Contextual features support your operations but aren't differentiators. Buy these.

Consider developing a "super app" that includes banking, E-Commerce, messaging, and digital asset management:

• Banking/Ledgers: This is your core business—protecting customer funds is non-negotiable. Bespoke tech provides essential control and security.
• CRM/Customer Data: Salesforce or HubSpot offer mature, secure, scalable systems. Building in-house offers little strategic advantage.
• Chat/Social: Even giants like Facebook opted to acquire WhatsApp rather than build everything from scratch. Purchasing or partnering is smarter and quicker.
• E-Commerce: Companies have spent years on E-Commerce like Amazon, replicating this would be huge undertaking - better to select a company that can onboard sellers with inventory management and provide a platform to integrate.
• Digital Assets: Established custody platforms like Fireblocks manage the complexities and security risks of digital asset management effectively. Building this yourself is costly, risky, and unnecessary.

What you must control is the integration layer—the connective tissue that ensures seamless user experiences across these systems. Building and owning this layer allows flexibility, reduces vendor lock-in, and ensures strategic control over critical interactions.

CEO Takeaway: Clearly define what’s core and context. Build strategically essential tech; buy everything else.

The Strategic Decision: Why Alignment Matters

The reality is, the build vs. buy decision is rarely static. It evolves alongside your company's lifecycle and market demands. In early stages, speed and agility typically trump control. As companies mature, owning critical infrastructure can deliver competitive advantage and valuation uplift.

Always align your tech choices with strategic business outcomes. Technology should accelerate growth—not slow it down. If you’re stuck maintaining complicated, bespoke systems, innovation suffers. Conversely, if core functions rely solely on external vendors, strategic risk increases.

Ultimately, the decision comes down to prioritization:

• Early Stage: Optimize for speed—buy solutions and integrate swiftly.
• Growth  Stage: Prioritize user acquisition and revenue growth. Leverage proven third-party tech.
• Operational Efficiency: Streamline aggressively—replace cumbersome internal systems with efficient SaaS solutions.
• Mature Stage: Focus on building strategic, valuation-enhancing technology internally while buying or partnering for non-core functionalities.

Practical Recommendations at a Glance

Fundraising/IP Valuation Stage: Build defensible IP; focus on technology that investors value.

Growth Scaling Stage: Buy proven solutions to accelerate scale and adoption.

Operational Efficiency Stage: Audit high-cost systems and transition to efficient SaaS solutions.

New Product Launch Stage: Build core differentiators; buy commoditized, peripheral solutions.

CEO Thoughts

I’ve seen countless CEOs agonize over the build vs. buy dilemma. Often, it boils down to speed versus control. Early in your company's lifecycle, speed is crucial—you must move fast, iterate quickly, and reach users efficiently. Buying established solutions typically helps you achieve this.

But as you grow, strategic control becomes equally important. Owning core differentiators allows you to shape your trajectory and narrative effectively. Yet even mature companies risk drowning in complexity if they build everything themselves.

The best CEOs I know continuously ask: “What moves us faster toward our strategic goals?” They ruthlessly prioritize, recognizing that every technology choice has trade-offs. Buying doesn't mean losing control—it means leveraging external expertise so you can focus on what truly differentiates your company.

The bottom line? Always align your technology decisions with your strategic vision. Whether building or buying, let technology accelerate your company—not slow it down.

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